Where does kkr see value in the market these days . Head of global Asset Allocation will join us, saying there is opportunity in japan and emerging markets. About 30 minutes into the trading day in the u. S. Abigail doolittle is here to give us a breakdown. Abigail ge is dominating. Right here with the major averages, looking downsides and the lows following last weeks bearish trading action. In. Sellers are stepping when you put it together with bitcoin and highyield credit, both considered on the far yen far end of the risk premium relative to the s p 500 has done something not done until august. Moving back below the level. Turning now to ge. Looking at a intraday chart of ge. Has been allock over the map. The news came out that they are cutting the dividend to . 12 per share. The second time they have done that since the great depression. The stock could trade higher than 2 and then fell off a little bit. As news came out that they were divesting in assets and cutting the board from 12 to 18, we see share steadily climbing. If ge can hold 20 per share, perhaps this will prove to be an inflection moment. Time will tell. But another chart of ge is interesting. Really underperforming for the year. We see ge down 35 . Worst year since 2008. We have the s p 500 up 17 . Of the industrial sector up 13 . Ge really underperforming. Them outline ae very strong turnaround plan. It is monday and an m a monday. Mattel is soaring. Are higher, which could be on the fact that there could be a deal with mattel. That could be a bit of that. Up about 12 . There is a pretty big short gp. Erests on gp food and beverages the only Industry Group rising. Worst run since man lowest since september of 2016. Biggest weekly decline since august. On the second weekly dispelling only the second weekly decline. Theresa may facing new challenges to her leadership. The e. U. Casting doubt on prospect of a December Brexit deal. Said, nearlymes enough to provide a leadership challenge, agreed to sign this letter of confidence. Raising the prospect of brexit talks failing to reach a breakthrough by the end of the year. This is the measure of sterlings implied volatility. Themselves bracing for many speeches this week. For five members of the boe speak this week. Sterling is down today. Biggestbritains company, better investment than their smaller peers. The ftse 250 trades at a higher valuation based on 12 month estimated profits, even though their Earnings Growth will ofely come under pressure lower Economic Growth and political uncertainty. That is according to libra him. They show the midcap gauges priced above the ftse 100 the First Time Since 2011. I am bombarding you with facts. The proportion of london house fellows dropping their asking prices is rising as the property markets goes further. Expectations. Decline back in 2014, julie. Looking year on year gains of 20 . How things change, julie, in the space of a few years. Julie yes, indeed. We will be talking about the u. K. Economy and brexit at 11 00 a. M. New york time. Lets get back to the General Electric story. That company is getting smaller. It is cutting its Quarterly Dividend and have to . 12 a share, saving almost 4 billion a year as a result. The company is also exiting 20 billion of assets, and will lower their Board Members from 18 to 12. The stock price is getting smaller. A columnist for bloomberg gaslight joins us. Obviously, brooke, traders, investors dont think it is not a big step with all of the other things we were talking about. This is the first step if you are going to do a radical be said, but you have to follow through on the rest of that. Why you saw the stock price initially is that ge took this cut to its dividend. There was some concern and maybe they would not because some analysts were expecting a dividend cut to come last week. When we did not get it, there was a little bit of concern there. In the rest of it is really sort of uninspiring. You mentioned that 20 billion of businessess that make 20 billion in revenue, which in the context of ge, is not really that big. We are sort of talking about small potatoes here, and the businesses that the earmarked for divestiture, transportation, lighting, industrial solutions. In the case of industrial solutions, they already sold that and lighting has been on the block for a while now. None of this is really surprising, nor is it all that new. That is what people are grappling with here. The company had its Earnings Call not too long ago. Aboutannery talked cultural changes come aboard changes, 20 billion in divestitures. Why are we having this meeting if it is a reiteration of the same things that were talked about on the Earnings Call . Mark divestitureswise, what more does ge need to get rid of . Their are a bunch of different ways you can do this. Do a this is the time we radical breakup of ge when you think about what does this Company Really want to be . The Growth Opportunities are in health care and aviation. A healthjust be in care and Aviation Company, or just an Aviation Company . We have seen a real drop off the power business in terms of demand. There are increasing there is increasing competition for the demand business. Ge is saying that they think they can get the business back on a sustainable path and want to two years, but analysts are skeptical. There is a question of are we resetting to a new normal of lower profitability . If that is the case, do you want to be in power . Mark is flannery the man to do it . Managesyst said if he to turn this ship around, it will go down as one of the greatest chief executive he will go down as one of the greatest chief executives . It is too early to tell. But, you know, he is a 30 year veteran of the company, and i think that caused initial hesitation among investors. Is he willing to go far enough . Is he willing to do what is necessary to get ge on the right path . He is a product of this culture of this company and he was responsible for some of the businesses that ge brought that they are now looking like not such great oppositions acquisitions. Julie thank you so much, brooke. The meeting is ongoing and it is possible we will get more commentary from the company throughout the day. Ges updatesall of on the bloomberg. Lets check in on the first word news with emma chandra. Emma in manila, President Trump and the philippines leader have bonded over the dislike of former president obama. That is according to a spokesman. He said that mr. Trump seemed empathetic when discussing the war on drugs. Earlier, President Trump says he has a great relationship. Meanwhile, President Trump has made his choice of the next secretary of health and human services. It is alex zazr. If confirmed, alex will replace tom price who resigned following a scandal over his use of private jets. A deadly earthquake has struck the iraniraq region. More than 6000 injured and more than 400 killed. The earthquake had a magnitude of 7. 3 and hit a rural mountainous area. In saudi arabia, senior official is rejecting speculation that the king may save his son. He says they have not given up power in the past, even when they have been suffering from ill health. Is believed toe be behind an anticorruption drive that led to the arrest of dozens of prominent officials. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Im emma chandra. This is bloomberg. Julie thank you. Coming up, wti crude trading around 25 a barrel. Futures in focus is next. From new york, this is bloomberg. Mark live from london, im mark barton. Julie and from new york, im julie hyman. This is Bloomberg Markets. Time for futures in focus, oil is trading near 50 a barrel. Signaledsingled has rebalancing. Risk off tone his the market. Joining us is alan to discuss and bullseye option. Has been interesting. 57 seems to be a stumbling block, if you will, for oil prices for wti. We have risen above it a couple of times and then installed out kerry wood you make of that . What do you make of that . Where we traded for a long and 53 dollars, it is holding about that, so that is important. I saw a stall, but we saw the crude climbed continue. It has been five straight consecutive positive week in crude going up from 43 to 58, or below 58. The big picture, crude is trading between 45 and 55 for the last year, so this target is another 15 above. This has happened impressively with the recent dollar strength. Julie i am curious if oil is fully priced in potential mideast tensions . What do you think . Good point because there is a bit of a risk premium in oil that had typically been there except for the last two years. Any reaction to any geopolitical concerns or volatility. Now it is coming back into play. And to be a little conspiracy theorists, i think the aramco ipo in the future and all of the saudi action is going to add some underlying support to the oil market. They want while to be at a high price when it happens to make the ideal much more valuable. Julie lets switch to gold quickly. We will discuss your Conspiracy Theory indebted other time. But gold had a breakout and installing out. What do you think is the next move . Very disappointing for gold last week. Lastly should have been a catalyst to push above. Failed on friday, came back down, only of five dollars on the week, so gold is disappointing right now. It was its first attempt that had been trading sideways. The Euro Currency is starting to firm. It is trading sideways, so use that as an indicator. 117,e euro can pop above that can help gold breakout. It had fallen 100 from its high. Julie thank you, alan. Mark great stuff. Time for the biggest business stories. In an energy trade venture, bloomberg spoke with the chief executive bob dudley. We signed the agreement that will go through exchanging shares for interest. That has been great for bp. The value is up. Both of us are very happy about that. Trading is something that we do on a very largescale around the world. If we can find a way that can help abu dhabi and be consistent, we would love to do that. Will sell said it shares in its retail gas station division. The justice with department over the time warner deal is heading for a thanksgiving showdown according to people familiar with the matter. Officials have told at t to address their concerns about the 5 billion merger before the holiday. If not, the government could file suit to block the deal. And that is your latest Bloomberg Business flash. Still ahead, a crucial week ahead for tax reform as the house and senate try to resolve some big differences between their plans. Will have the latest next. This is bloomberg. [applause] [laughter] mark this is Bloomberg Markets. I mark barton in londonderry julie and from new york, im julie hyman. The turn to washington. It is a big week for tax reform. The house and senate are working to resolve the differences in a plan, but President Trump had has named alex azar to lead the department of health and human services, or at least nominated him. Joining us is kevin cirilli. Thank you for joining us. This gentleman, formally an. Xecutive at eli lilly this is another industry veteran potentially coming into the administration. Will there be any hiccups for his another duration . Kevin this is a safe pick, someone who has that private sector experience, but that government experience. Of course, following the tom price controversy, this is a pretty safe pick. The question becomes if you will have a significant role in crafting alterations to the Affordable Care act or obamacare. Those are firms have alluded this administration so far. Julie lets get to tax reform, that will big that will be the big fight of the week potentially. Highlight some of the differences between the senate and house proposals. Kevin big differences. State and local tax deductions, first and foremost. The senate plan would eliminate that. The second big difference is a number of tax brackets. The house version has four. The Senate Version keeps it at seven. To some extent, the timetable for the house flooring the corporate the house lowering the Corporate Tax rate from 35 to 20 , while the house version the Senate Version would wait. There are some differences. The white house is saying essentially that there are no major tweaks in the Senate Version to cause them cannot support it, but the house version and the backandforth between the house and the senate is something we will be closely monitoring. Vote one is supposed to its version on its bill as thursday and meetings are underway in the senate. Julie we will be checking in with you frequently. Kevin cirilli, thank you so much. Mark lets turn to the latest on the brexit debate. The pound is falling today. Prime minister theresa may getting attacked on all sides over a key piece of brexit legislation. Formerheresa mays attorney general calling it thoroughly stupid. Joining us is a u. K. Reporter to make sense of the brexit bill. Why is it such a hurdle for Prime Minister may . Because it is one of the ways and members of parliament can show opposition to the way brexit is being handled. Even though this does not set up her plan, only a key of the negotiations that we have seen have cost so much opposition and a last few months. A number of amendments have been tabled. A couple of the amendments target specific areas. One is the socalled henry viii clause that would transport that would transfer u. K. Law into very little scrutiny. Then there is the governments on amendment that would set a date for brexit, which is referred to mark wife a problematic . Why is it problematic . They say it ties our hands to a certain time. We know that the exit is before march 29th. But putting an exact date to which stops the leeway to try and, we can just finish this early, or could we buy a bit more time of talks are deadlocked . Mark are we approaching the point where leadership challenged is denied or not reading other outlets over the weekend . I cannot possibly say no because it has been going from crisis to crisis. At the same time, if you asked me the six months ago, i wouldve said, two cabinet resignations, all the other stuff that has happened, the deadlocked talks, rebellions within her own party, the letter know, iis sent you dont know what else you need. There is very little alternative and it is not that simple. It takes some planning. And then it is quite a process. Mark Business Leaders meeting today. They were concerned at the slow pace of negotiations. Julie thank you so much. Both said. Well said. Still ahead, kkr says now is the time to lean into Investment Opportunities in asia. Next mcveigh will join us with more investment insight. From new york, this is bloomberg. Live from bloombergs World Headquarters in new york and london, im julie hyman. Mark and i mark barton. This is Bloomberg Markets on bloomberg tv. Another capitol hill, sign that house and Senate Republicans had major differences over taxes arm. The houses chief writers is the thee will not accept senates bill. Found of talks begins in mexico city. It is the first meeting since canadian and mexican officials abandoned trumps previous deadlines. They are expecting to put out some contentious issues. Slowedia, the economy more than expected in the Third Quarter despite a bull market rally in oil. Gdp rose 1. 8 . Russias worst recession of the century. And in germany, chancellor Angela Merkel is in preliminary talks to form a new government. She is talking with three other parties including the green. It raises the prospect of a minority government or another election. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Im emma chandra. This is bloomberg. Julie thank you. Economic growth is advancing around the world creating new opportunities for global investors. Bloombergs Erik Schatzker is giving us a look in a playbook. Mcvayim here with henry henry mcvey. Great to see you. Backdrop seems healthy, supportive around the world since the crisis, the word to keep hearing is synchronized. What i would like to know is how you describe the macro environment right now and what signals you get from kkrs portfolio and Equity Investments . Henry thank you for having me. We have one hundred 20 Portfolio Companies and i travel a week per month talking to ceos and different executives. What we see right now a strong growth. I would suggest europe is ahead of plan. That is the area where we see monetary stimulus having the greatest impact. It is just starting to ignite the cyclical parts of the economy. When you look at earnings in europe, the top five years typically it is behind, but right now, it is about five years. Remember also, in 2012, the government was contracting gdp by 150 basis points. Now austerity is at a tailwind. That is a major growthdriver, but i would get back we would do a lot of modeling around growth. We are seeing the quantitative, ignition switch is turning on the cyclical parts of economy around industrials, financials, and consumer businesses are doing better. Erik . It is real it is real. That is what i was driving at. You see will things happening. Henry i do. And mario draghi gave a very dovish, recently, essentially saying he is going to go very slow. When you look at rates, nominal gdp, which is real gdp plus inflation growing almost 4 and year up and you have a 10 year german bothered at 20 basis points german bonded at 20 basis points, that is a backdrop. Erik what observations did you make in the u. K. . Henry a tale of two cities. There is a lot of noise. Is they are say quite different. We think spain could grow 2. 5 next year. We think the u. K. Will be about half of that. The other thing i would say is in the u. K. , inflation is high. It is going faster than wages, selling the look at consumer backdrop, that is that something we want to see, which is inflation running above incomes. That is typically when you see pressure on the consumer, which is our base the for the u. K. Erik in the edit estates, financial conditions have been tightening. Henry they are actually easing now. Erik very, very recently. Henry with rates being down until recently, the fed is an action. But to date, financial conditions are easier today than when the fed started raising rates at the beginning of this cycle. And so, our view is the fed will continue to raise rates i think. Economic growth is solid, but net worth is at a record. There are things they want to do to send a signal that were credit spreads are, that they are not going to leave the punch bowl at the party for too long. Erik when you look at the backup that we saw last week and highyield spreads in particular, do you draw any conclusions from that . Henry i do, i do. Is onehigh yield spreads of the single biggest indicators we look at. Two, we run an imply default monitor. Before last week, it was saying that imply default rate was 1 . In just to put that in context, in january of 2016, it was 8 . For the market has gotten quite constructive. As an asset class henry complacent erik complacent . Henry yes, that is a good term. Haveortfolio managers moved into other areas right now. That is true in your. If you look at europe today, the highyield bond is yielding less than the dividend yield on u. S. Stocks. If you take a step back, that seems a little bit offsides to me. Henry ok. Erik ok. [laughter] henry notwithstanding this back up and credit spreads. Spreads on a relative basis, still very rich . Henry that is the headline, but i will give you a more optimistic view which is this environment reminds me a lot of the late 1990s. 2006s inlike the 2007s. Had left things that problems around things. Today, that is what is happening. We are nine years into a bull market. Of have half of the rest 2000 trading less. But relativeheap, to a nineyear bull market, that is pretty incredible. Erik i will never forget that. Henry the consumer net worth looks incredible, but when you look underneath, the majority of americans have not had real wage growth in two decades. Mantra is to our buy complexity, sell simplicity. The one area in equity market, we are quite constructive on asia. Japan is a very big market for us. We talked about this last time, we have been calling for a turn in emerging markets. We think we are entering a midcycle of emerging markets. [laughter] henry if you snooze, you will miss it. But things are happening fast. We think that will continue for the next couple of years. Implicit in what im saying is the view on the dollar. We think the bull market in the dollar is largely has largely run its course. Erik you mentioned that complexity is over simplicity . Kkr,goes back further for but you have been talking about , privateexperiences markets versus public markets. Is all that stuff still working . Henry i would say there are a couple of things better changing. Today, the news on ge, you look at honeywell, what is driving that is corporate want to improve their footprints. Amount of money that is, to activism, and that is helping to move the footprints of global corporate. That is really exploding in japan. That market with big household names, the nikkei 400, 25 of those companies have more than 100 subsidiaries, and many of them have more than 300. That is highly inefficient relative to europe or the u. S. That is an area where we are active and we are doing more around experiences with things like travel, health care. I was recently in China Environment to me ranks as high as job growth in terms of government priorities. That will really drive behavior. Which irivate credit, know is an area we hit on before, we are seeing more opportunity today in performing private credit really against where there are assets pledged against collateral. That could be housing, commercial construction, airplanes. As the banks are doing better, they want to sell some of their performing credit. We have been able to partner with them. That is active for us and europe. Those are good, unless it returns those are good returns. Up a percent or 9 , that is a healthy return. Erik lets rank this at 1, 2, 3. If you compare the outlook with valuations, where you getting paid to take risks . Henry in the corporate sector around spinouts. Youre getting paid in performing private credit, and we are seeing interesting things in the mlp space. On the cautious side, growth and defensive stocks look expensive. Highyield looks expensive to me. And government bonds, in my mind, there Asset Allocation their goal and Asset Allocation is to provide a coupon, and to be a shock absorber. We are entering an environment that they will lose their effectiveness on both those fronts. Erik back to highyield for one second. Still looks expensive after that selloff . Henry i think that highyield can still back it up. Erik henry, great to see an thanks for coming. Mcvey ofis is henry kkr talking to us about the macro environment and where, and there are not me please is what our opportunities. Julie by complexity, sell simplicity. Thank you so much. Mark coming up, qualcomm rejects bull,s offers. A proxy fight looms. More news. This is bloomberg. Live from london, im mark barton. Julie and in new york, im julie hyman. This is Bloomberg Markets. Qualcomm continues to be in the news rejecting broadcoms acquisition offer, kicking off what would be the Largest Technology takeover in history. Qualcomm shares are trading higher after that rejects and after that rejection. Joining me is taylor riggs. That theyindicate will negotiate a higher price . Said the 70ny dollars a share significantly undervalues the company. You have to go back over a year to see the shares trade in a 70 range. That camean analyst out of the the weekend, saying that something in the mid 80 range could get some qualcomm shareholders more on board. Even before this formal rejection, the broadcom ceo says he was going to wage a proxy battle and go to qualcomm shareholders directly. There was some speculation that may be something more in the 80 share range would be more appropriate. Im interested in what this means for the supply chain when we look at the story of what this means and how it would play out. They would be a leader in some of the chipmakers for apples iphones, which would give them some or pricing power, so you have broadcom competing with sky works. And buying qualcomm would put them in competition with someone like an intel. You see some of those dynamic shifting through the supply chain. Julie this a be the largest Tech Acquisition ever. Put this in more context. Taylor it is well above the second largest deal, which happened back in 2015, which was dells purchase. Big asan three times as the third and fourth largest deal, which is 3230 4 billion. You know that qualcomm is purchasing xp. Regardless ofaid how that goes, they are still interested, so there are other acquisitions down the road been need to be handled as well. Julie thank you so much, taylor riggs. , a look at the biggest business stories in the news right now. Shares of mattel sarin today. Hasbro has discussed by the company. That is a deal that would unite the two biggest toy makers in the u. S. Uber is setting the stage one of the biggest private startup deals ever. The right Healing Service has approved stocks banks offer to buy a multibillion dollar stake. Softbank and other firms will be allowed to invest up to 1 billion in a uber. And then they will be able to buy up to 9 billion of shares from existing investors. Catching a big victory, the emirates have agreed to buy four boeing 787s. Airlines generally get big discounts on huge orders. The deal is a blow to boeings rival airbus that was counting on a good quarter. That is todays Bloomberg Business flash. And oil company is launching an ipo of its retail fuel station unit. The chief executive spoke to our. Representative in abu dhabi. As you know, we are expanding. We are adding another 60 at least to our capacity. In order for us to do this in a very smart way, we also need to be open as far as our financing. We cannot continue to depend on our own Balance Sheet or cash flow for our operations. We have to be smarter on how be better manage our cash, and as such, we are engaging with National Investors as well as sound, robust financiers mull over the world. You mentioned the financing and you soldier first bond. That is a huge to partner for adnoc. Is that a huge sell for the population . Do they understand what you are tapping the bond market . This was a great signal that had a very positive rift on the domestic market. Adnoc isat extent going to go as far the transformation is concerned. Effect inery positive the market nationally and internationally. I heard the man was very, very high. Very high. It was almost four times. What is your optimum sense of the capital structure of adnoc . Be a very sound, financiallyrobust organization that manages its cash and cost of money in a very smart way. Adnoc is going to grow. And it is going to grow. I dont think a fast approach with International Partners we have to adopt a model that would allow for interNational Investors as well as financing mechanisms that will allow for us to enhance our value, and free up cash to fund our sustainability portfolio acquisition. Cash to fund her growth. Does that cash to fund your growth. What areas are you looking at . We will be announcing more details about it for a Capital Expenditure program for four years. The market to be very strong. We have a positive perception of the industry. As such, adnoc will be investing in the upstream, and the midstream. Mark that was a chief executive of adnoc with Tracy Alloway in abu dhabi. Toie still ahead, ask bitcoin, still on a roller coaster ride following an Technology Upgrade cancellation. We will talk about the ups and the downs. From new york, this is bloomberg. Live from new york and london, im julie hyman. Mark and i mark barton. And im mark barton. This is Bloomberg Markets. Bitcoin community opting not to increase transactions, setting some investors off. The shares of bitcoin have been climbing. Are European Tech reporting joins us. Not for the fainthearted trading bitcoin. Not at all. We have known that for some time, but these last two days have an two days have been hyper volatile. Mark tell us what bitcoin cash is and why it has taken center stage in the last week or so . Bitcoin cash is a new interest that worked off from the original bitcoin in august. What the community is trying to do is solve this problem of scalability. Processd bitcoin to transactions faster, and process more volume in transaction. This is key to its growth. There is a community that created bigger block sizes, by that i mean he could process more transactions faster than the traditional bitcoin. And they have formed a new entity called bitcoin cash. So, i am trying to wrap my head around all of this. Bitcoin cash is still bitcoin, right . It is just a different way of trading it, or an entirely new cryptocurrency, right . Right. They are two sides of the same coin, if you will. Bitcoin cash is processing. The underlying Database Software that is processing the transaction in a different way than the original bitcoin. And that is where you have this fork, the separation between the two. Large, they are treated as separate coins now. You can buy the coin separately, but they amount to the same thing. Julie all of this gift of one of the central challenges with bitcoin, which is pointed out in a column. It is governed by committee. You have this community that ff, end thehive o decision is made by a community. How does it work exactly if there were to be a split and bitcoin . Who makes these decisions . Well, julie, it is unprecedented and governed by community. It reminds me of the well, this that was set room up in Northern California before the internet took cold. Took hold. It is this very organic, communitydriven style of Community Style of decisionmaking. As we see with bitcoin, the science wins out. Bitcoin has established itself as a viable currency or entity that is working. They are working with something that is functional, but there is all manner of different debates taking place right now in this community. Julie mark which is reflected in this chart right here, the cryptocurrency. This is since june. We have had three, sizable 39, 39, 29 through this morning. But every time it seems to be viewed as a buying opportunity . That is what it has shown so far. That is september and that is when china outlawed initial coin offering, so a lot of investors freaked out saying there was going to be this massive crackdown. It did not last for long. Mark it went very fast. There was an 80 uptick in six days of the september lows. Mark well done. You will be back again. European tech reporter. We are following stocks with less than 34 years with less 34 minutes to the end of the session. The worst run since may the 31st, down three quarters of 1 . This is bloomberg. Is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Mark its 11 00 in new york. Theres 30 minutes left in the trading day in europe. From london, im mark barton. Julie in new york, im julie hyman. This is the european close on Bloomberg Markets. Mark here at the top stories covering from the bloomberg and around the world. Sterling falls as the going gets tough mr. Theresa may. Shes facing sterling falls as the going gets tough for Prime Minister theresa may. Where can you find pockets of value . To nicholask melhuish. Is globalization in trouble . We will your comments exclusive from imf director Christine Lagarde on how the debate could ship Global Economics longterm. Have a look at where european equities are trading right now. 30 minutes away from the end of the monday session. Look