Really solid quarter. Beats in equity trading. Joining me is bloombergs sonali basak. What is the bigger stand out for you . Sonali this is five straight quarters of outperformance. They are doing a good job, while also investing in digital and growth. Likeeturn on equity, i that number because we can compare across all the banks. That is a lot far behind jp morgan. But they can lean on the consumer for growth, and their Net Interest Income in light of the Interest Rate expect asians we have for the rest of the year are Holding Quite strong right expectations we have for the rest of the year are Holding Quite strong. Alix they are factoring in just two rate cuts. Sonali their outlook is going to be very important. Jp morgan premuch told everybody it is not a big deal for the end of the year. Jp morgan pretty much told everybody it is not a big deal for the end of the year. Investment banking up 27 year on year. Advisory fees were up. Debt underwriting up. Equity underwriting a little soft. What did you make of the numbers . Sonali bank of america had a lot of changes at their Investment Bank in terms of challenges. Tends to doica also very well in the middle market. You see big deal m a slowing down, but the Market Holding strong in bank of americas numbers. Jp morgan in that regard, as well. You see Goldman Sachs now pouring into that market. Not enough to get their numbers up for yesterday. Big, consumer deposits up up 3 . Water eluding what are we learning in terms of numbers . Sonali jp morgan said even though they are worried about the economy in the longterm, the consumer is not one of the things they are worried about. We want to see that china through bank of americas commentary today. Brian moynihans initial statement, they do caution a moderately growing economy. Compared to some of the stuff we heard yesterday, its a muted negative from some of the bankers yesterday. Thank you very much. It is time now for global exchange. From hong kong to brussels to new york and ohio, our bloomberg voices are on the ground with this mornings top stories. Hong kong chief executive carrie lam outlined longerterm fixes for the citys structural problems in her annual policy address. She admitted the city has likely entered a technical recession in the Third Quarter. The question is how long it will last. Lam the hong kong economy has registered a technical recession. In midaugust, the government lowered the growth forecast for 1 . To 0 to alix joining me is yvonne man. What was the response . Yvonne it is still up for debate just how far these measures go in trying to arrest the slowdown in the economy. This was the latest attempt to stop these protests that have gone on for four months now, and which have escalated of late when it comes to the violence. This was all about the economy, in particular housing, which some say has been the source of discontent and why people have hit the streets. This was about boosting supply to try to bring down property prices, and also, as an upside surprise, relaxing some of those mortgage limit dealings. What she didnt mention was the politics of what weve been talking about. No mention of electoral reform, universal sovereign. Much. Thank you very british and european you know officials are pessimistic now about the chances of securing and European Union officials are about theic now chances of securing a deal. Tadeo is inmaria the eu building in brussels, where negotiations are taking place as we speak. Hour. Now at the 29th what is expected at this point . Maria the reality is we do seem to be moving away from a deal. The truth at this point is that the europeans are not sure that the Prime Minister has the numbers he needs to get this deal cleared by the u. K. House of commons. The europeans do not want to commit to a legal text that will not clear the house. When you look at the u. K. Side, they still tell you they want to get this deal done, but the Prime Minister is not in the position to guarantee that the dup will back the final deal. Essentially, we are looking at disagreement over what to do with the irish border, what to do with customs, and issues regarding an imposed brexit world. The europeans say there is not enough to endorse a text. Theres already major speculation that there will be another summit next week, and of course, the big focus, what is Prime MinisterBoris Johnson going to do on saturday . He has said he will respect the law and ask for an extension. Alix thanks so much. Now, china threatening unspecified strong countermeasures if the u. S. Congress enacts legislation supporting hong kong protesters. Issued Foreign Ministry the warning, saying, china urges certain members of the u. S. Congress to immediately stop the advance of the bill interfering in Hong Kong Affairs to further avoid damaging u. S. China relations. Put this into context for us and what it means for trade. Enda it is the ever it is the deteriorating trade. It underscores just how many fronts there are now two tensions in relations. Its human rights. Its gone into a culture war in terms of the response to the nba last week. The Big Conversation is we dont know how china will respond of the passage through the house. Will this spill over and impact trade talks in any way . So far, they seem to be on a sort of parallel path, trade talks continuing despite tensions. If both sides can stay on track. Alix thank you very much. Democratic president ial candidates debated last night in ohio. The need for an impeachment inquiry into President Trump was one of the few things all of the candidates agreed on. Particularlyh, former Vice President joe biden and senator Elizabeth Warren. Biden im the only one on this stage that got anything really big done. Sen. Sanders you got the disastrous war in iraq done. Sen. Warren i have an idea for a Consumer Agency that will keep banks from cheating people. Mr. Biden i got votes for that bill. I convinced people to vote for it. Sen. Warren this is about knowing its broken, knowing how to fix it, and getting out there to fight for it. Mr. Biden tell people how much its going to cost. The question is how to get it done. Alix Kevin Cirilli joins us from westerville, ohio. Very different tone than the last couple of debates, kevin. Kevin very different tone. Former Vice President joe biden taking it to senator Elizabeth Warren, drawing that stark contrast. But in the spin room, all chatter was not just about senator Elizabeth Warren, but also senator Bernie Sanders, who picked up a key endorsement that hes going to unveil later this weekend from freshman congresswoman alexandria omar. Cortez and ilhan they say that will help unify the youth vote and the Progressive Movement of the democrat party. For Elizabeth Warren, this was the first time she got experience on a debate stage as being a democratic president ial frontrunner. She has surged to the top of the polls. In contrast, there was another person on that stage last night whom the Biden Campaign is likely waking up with a new reality. That is south bend mayor pete buttigieg, who shined last night as he sought to portray himself as an alternative to biden, but also someone more levelheaded in tone and rhetoric. You also saw that from senator cory booker. During that debate, the biden withigns cash on hand regards to their campaign is about 9 billion is about 9 million, significantly less than other toptier candidates. This is now entering a new phase, one that the Biden Campaign is going to have to position themselves for the longterm as saying they are ready for this to be a marathon, not a sprint. Buttigieg, booker, harris to some extent, are jockeying to get in that lane. Alix thank you. Coming up on the program, much more on your morning trade and analysis of the markets in todays first take. This is bloomberg. Happy wednesday. Alix time now for bloomberg first take. Joining me from our inhouse team of wall street veterans and experts is Romaine Bostick, Vincent Cignarella. Also joining us, dean curnutt, Macro Risk Advisors founder and ceo. It looks like a very positive readthrough. Im curious as to what people are saying on the street over the last 24 hours for banks. Romaine they are saying never bet against the banks. Alix now they are saying that. [laughter] omaine no doubt the picture has weakened for them, but they continue to find ways to squeeze out profits. Citigroup, which everyone had low expectations for, managed to find its footing. Even wells fargo, which has its own idiosyncratic problems, still managed to show some strength on the credit card side and mortgage origination. Stop me if youve heard this before, but the consumer is propping up a lot of these banks. Vincent i am going to stop you right there, actually, because i think thats where it ends. I think the consumer doesnt do well in the first half of 2020. The trade situation and the threat of pushing the tariffs back to december as brought a lot of buying into the fourth quarter, and i think that has drained it from the first quarter, and he will see Net Interest Income become an issue. I think the banks, particularly goldman and wells, are going to be on the short end of that. Dean i think a lot of the concerns about flat income and thetening rates, when consumer is robust and gainfully employed and spending money, chargeoffs are relatively benign, business is pretty good. I think the concerns about margins arent as big a deal. Its about the economy. We step back and look at the Global Economy in the u. S. Economy, and we are quite concerned. The trends dont look fortuitous. With the overhang of uncertainty, i think theres potentially more downside to come. Romaine the other thing i will agree with partly alix gloom on this side, positivity on that side. [laughter] romaine it ties into what dean was talking about, the idea that the consumer may be tapped out. Huge imbalance with regards to refinancing. Refinancing has kind of weighed on profits. Something like a 20 jump in new originations. It does make you wonder if the consumer is going to run out of steam on that front. Alix on trade related basis, though, literally trading, i wonder if we learn something about how markets are positioned. Thanks stocks had a big run. Aboves. Bank index moving a moving average. Weve also seen the cable rate with no good news priced in. I think the rates businesses have done pretty well. I think on the equity side, volumes are relatively flat. They are not great, at least from our perch, what we see. You dont see a gigantic rush from clients and endusers to hedge and trade. Weve been stuck in this roughly 2900 to 3000 range for quite a bit. Its uncertain as to whether we will break higher or lower, but i think in terms of equity trading volumes, i think its been flat. Banking is obviously one of the bright spots are some of these large banks are reporting continuing robust levels of profits on the Investment Banking side. Vincent i think part of that is the reason the banks havent really passed along the Interest Rate savings from the fed, borrowing at next to zero and still charging relatively high rates to the consumer. Not so high to squeeze them out, but high enough to keep the margins good. One of the things we can tie into the debate last night is what im hearing from the street. No one is pricing in the probability of an Elizabeth Warren presidency, what that can do to the consumer, the economy in general, and Global Economy. If lauren becomes president come of the initial reaction on the becomes if warren president , the initial reaction on the street is going to be negative. It is not going to be good for equities. It is not going to be good for the consumer, at least for the start. Alix you are not hedging that, but also not hedging upside risk. So i am leaning more towards the romaine campus this morning the romaine camp this morning. Hugene you still have economic overhangs here. The imf cut their growth forecast. Beyond that, opec revised its outlook, which was clearly a revision in terms of their outlook for demand. It was premuch focused on the output side of the equation, but it was pretty much focused on the output side of the question, but you had the bank of japan overnight giving more of a pessimistic outlook. Youre not hearing anything positive amongst the policymakers, at least not anything substantive. I think that is weighing on sentiment as well. Until you get a little more upbeat tone and action, because weve gotten upbeat tone from powell, but not upbeat action. I saw more, its on you guys. Go fix it. Dean that was a particularly do men gloom focus from the imf. I thought they were particularly doom and gloom focus from the imf. I thought they were particularly downbeat. Alix more doom and gloom than you guys. [laughter] dean we can have little profit recessions are growth storms and work our way through them. We did that in late 2015, early 2016. Some of the trade structures we look at our upside calls. One of the things in the last couple of weeks is implied volatility has come down quite a bit. With the view that may be seasonality, which tends to be kind to markets in november and december, you can buy these upside calls that would reflect a reawakening of risk appetite, a simmering of trade tensions, and the seasonal uplift that tends to happen in markets. These are very cheap options you can position in your polio. To me, it is better to rent the stock market, which is what options are all about, rather than buying it. Vincent i totally agreevincent . The one thing we havent really talked about is trade and what has gone down in the house. We saw how china reacted to the nba. That is nothing compared to what they were going to react to if the house passes a bill protecting hong kong protester rights versus china nationalists. When the Foreign Ministry says fall off the cliff, this trade deal will not get done. The people i talked to in asia are looking at this and saying this could be the entire end of the trade deal doing it to 2020. That bill will absolutely cater the trade deal. The interesting part, no one is looking at the political end of this and how this could be spun. The house is democratic. If this si the u. S. Theomyb if this sinks u. S. Economy in the first half of 2020, the republicans can easily play that into the election. Theres a lot of republican senators that are supportive of this bill. Whether trump signs it or not as a whole other issue, but you have a congress now that is at least willing to push back on some of these things. We talked about this before. The china thing gets put into trumps corner, but we tend to forget theres a lot of democrats that align themselves trumps ideology even if they dont like his methods. They are in the same camp. Or aer its trump democrat, we could see the same kind of tone with regards to china, just somewhat different methodology. Alix Romaine Bostick and Vincent Cignarella, thank you. Dean curnutt of Macro Risk Advisors will be staying with me. You can find those charts we used and more on the terminal, gtv. This is bloomberg. Viviana youre watching bloomberg daybreak. Bloomberg has learned lack stone and carlisle teamed up for a potential bid for thyssenkrupps elevator unit. Theres no certainty they will proceed with a formal bid. Thyssenkrupp is trying to raise cash. The elevator unit is estimated to be worth about 16. 6 billion. Roche boosting its outlook for the second time this year. Warning excessive significant increase in the number of people suing over round up. As of july, more than 18,000 lawsuits had been filed. They are losing three lawsuits in the u. S. Claiming the weedkiller causes cancer. The company inherited the problem when it bought monsanto. That is your Bloomberg Business flash. Alix thanks so much. Economists going coated tow over the question, is the phillips curve dead . James bullard says yes. His colleague Frederic Mishkin disagrees. Based on some views i think are just wrong but the phillips curve is dead i do not think this idea is dead. The empirical phillips curve looks like it is zero, but the structural phillips curve could still be alive and well. I think that is a very tangible thing. Alix bullard joked that the debate reminded him of a fed policy discussion. I feel like for economists, that was probably the liveliest you will get for debate on the phillips curve. Coming up on this program, the democrats take the debate stage and take aim at big tech, health care, and more. We will discuss how to hedge risk in the 2020 election cycle. We are a little bit weaker, with bank of america delivering solid margins. This is bloomberg. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of Wireless Network, designed to save you money. Switch and save up to 400 a year on your wireless bill. Plus, get 250 back when you buy an eligible phone. Thats simple. Easy. Awesome. Call, click, or visit a store today. Alix this is bloomberg daybreak. Im alix steel. Happy wednesday, everybody. Its the micro versus the macro playing out in markets here. S p futures still down by about 0. 2 . Bank of america really holding up quite well, particularly their Investment Banking unit. A different kind of story when it comes to the macro environment. The dax also up by about 0. 2 . The yen gaining a little bit on some safe haven demand. The cable rate continuing to wean on a brexit deal. Still seeing rotation into the bond market. Here in the u. S. , the curve really wanted to be steeper, but continues to go flatter. Got 12 democratic president ial candidates that took the debate stage in ohio last night, sounding off on issues ranging from health care to a wealth tax. Taxes. Tax. Tax. Taxes. Sen. Warren right, erica the top 1 10 right now in america, the top 1 10 of 1 have so much wealth. Anders we cannot continue to afford this billionaire class. A wealth tax makes a lot of sense in principle. The problem is that its been tried in germany, france, denmark, sweden. We are going to raise taxes on the wealthy. We are going to reduce tax burdens on those who are not. Why is it that everyone else on this stage thanks it is more important to protect billionaires than it is to invest in an entire generation of americans . Alix still with me, dean curnutt of Macro Risk Advisors. When do you hedge 2020 elections . Dean if you watch the debates last night, you will see a theme that is not really promarket. Obviously, folks have got very strong opinions either for the better or worse for donald trump , but his impact on asset prices , at least initially with the tax cuts and some of the deregulation, has been unmistakably positive. It started to get more negative as the trade uncertainty has built, but the democratic motif seems to be less favorable to the markets for sure. ,s a look at, for example implied odds of war in winning have just gone up and up, at some point the market has got to confront this. Shes not going to be good for asset prices. I think it is probably around january or february where, if that momentum continues and there is a very democratic populist to the farleft candidate emerging as potentially a winner here, the markets are going to have to start to discounted. Two discount it. Alix you mentioned that you want to rent the stock market. What about for health care . If we drill down into 2020 a little bit, this is the skew on a threemonth basis for the Health Care Index on the health care etf. How do you see this view evolving in the next six months . Dean i think it really depends on how the plan evolves, even amongst the candidates yesterday. Theres grandiose plans, and im not here to comment on whether thats good or not, but its very undefined. It is difficult to know which asset prices will move even within health care. There were very big winners and losers with obamacare. To me, its very difficult to say. What we try to do is step back and look at the broader themes. To me, one, the Global Economy is slowing. I think we are really looking for more evidence that that is either true or not. We have a raft of data coming, and the market is very attuned right now to profits. On ism report comes out november 4, a monday. Two days later, the nonmanufacturing service part comes out. The market is attuned to the data because it once collaboration. Of course, said policy is going to matter a lot. Markets are starting to get worried that the efficacy here is just lower and lower, so even if the market if the fed gives the market what it wants, the question is is it enough to counteract what looks like a growth slowdown. The other angle in all of this is tech. I spoke at a panel the few days ago, and one basically said tech regulation. Bill gates did sit down with David Rubenstein and talk about the role that government should play in regulating tech companies. There will be more regulation of the tech sector, things like privacy. There should be at some point Better Regulation that relates to that. The fact that now this is the way people consume media has really brought it into a realm that we need to shape it so that the benefits outweigh the negatives. Alix you can watch that whole interview tonight at 9 00 p. M. New york time. What do you think . Dean i think there would only be one issue in the entire world that donald trump and Bernie Sanders would be on the same side of, and that would be regulating Something Like amazon. Alix and Elizabeth Warren. Dean so there is this bipartisan view that tech needs to be regulated. Warren posted that ad with a fake headline on facebook saying that Mark Zuckerberg endorsed donald trump just to make a point. As this election comes into full swing, the use of social media, the total the potential for misinformation is going to be signet again. Is going to be significant. Basis . Heap on a querrey on a querrey basis on a carry basis . Not really. They are about fair. Theres always a premium amount of implied volatility. On a forwardlooking basis where the market has to digest and respond to what i think its a very unique set of uncertainties , politics, the slowing global , overhaulsregulation of things like the tech sector and health care sector, on a forwardlooking basis, options are very interesting to use. Better to rent than own. Alix fair enough. Just to wrap up the segment, President Trump just tweeting, the economy would crash like 1929 if a democrat was elected president. Just to wrap that in, you know as it gets toward the actual election, those headlines are going to come much faster and much more serious. Dean im so happy to be able to respond to a live trump tweet on tv. Alix are you . [laughter] [laughter] dean exactly. Alix great to get your perspective. Good day for it. Dean curnutt of macro biscuit visors come i think you very advisors, macro risk thank you very much. Joining me now is alison williams, bloomberg senior bank analyst. Market share gains and better costs are the key things we are looking for at bank of america. They delivered on both of those. We cant really protect what is going to happen with the rate environment, so what we are looking for is banks that can execute, banks that have levers to offset some of those challenges. Bank of america cost came in below guidance. Agile is a big opportunity for bank of america, and market share gains, i would say trading beat. We seen a beat now across the peers, raising the bar for Morgan Stanley to borrow come of the Investment Banking fees, they did have an easier year for comparison, but still impressive, especially in the m a line, and thats been the area that investors have been a little more worried about. So one, can this continue . Can the strong Investment Banking we seem continue next quarter . Alison volatility is not good for fees, so that is a risk into the quarter. Weve already seen weakening in equity fees. We heard some of the banks talk about that. We did see a benefit for bank of america and j. P. Morgan from the underwriting environment. You look at some of the work from our credit strategist, he would tell you a lot of the refinancing that would have come due next year has already been done, so anyway, we are pulling forward a bit. I think it will really depend on what happens with stocks from here. Alix overall, consumer deposits hit a 709 billion. Where did bank of america come out on this . America, as well as j. P. Morgan, have been expanding into newer markets, so they do have the biggest retail franchises, along with wells fargo, nationwide. The one metric we thought was interesting over the last couple of quarters is an acceleration in mobile accounts at some of these bigger banks. Has still beeni growing strongest. They have a bit of a different footprint, but that shows you they are growing not just in branches, but these lowercost channels. That is helping efficiency. Alix good point. Thank you really appreciate it. Now we want to get an update on what is making headlines outside the business world. Viviana hurtado is here with first word news. Viviana the European Union and the u. K. Pessimistic about reaching a brexit deal. The big problem is Prime MinisterBoris Johnsons allies from Northern Ireland. The dup is resisting plans from brussels. Johnson will give the green light on a deal unless he is absolutely sure the party will back it. Turkey rejecting the Trump Administrations demand for a ceasefire in syria. President erdogan also says hes turned down a u. S. Offer to broker talks between turkey and the kurdish militia. Erdogan says turkey wont sit at the same table with what he calls terrorist organizations. Despite some highprofile defections, facebook vowing to carry on with its digital currency. Sayingial Media Network it will continue. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im the vienna or tonto. A imviana or todd Viviana Hurtado. This is bloomberg. Speak toing up, we beth ann bovino, s p global chief u. S. Economist. If you have a bloomberg terminal, check out tv. Watch us online, interact with us directly. Its all at tv on your terminal. This is bloomberg. Alix this is viviana this is bloomberg daybreak. Coming up in the next hour, Paula Campbell roberts, kkr head of alternative data and analytics. Now to your Bloomberg Business flash. The European Union reportedly will unveil interim antitrust measures against broadcom. According to the Financial Times, regulators will tell broadcom to stop inhibiting clients from buying computer chips elsewhere. That would be the first time in almost two decades the eu has told a company to stop activity before an investigation is over. Foras a big setback Franklin Templeton and its star money manager. In the Third Quarter, the fund losing 3 billion as biggest , argentinianoured bonds and a short position on u. S. Treasuries. Alix thanks so much. We turn now to wall street beat. We cover three things wall street is buzzing about this morning. First up, wework. Investment bankers explore easing weworks cash crunch. And money manager ken fisher acing even more consequent is from his inappropriate comments. Fidelity investments is said to be reevaluating the relationship. And women rising to the top of the corporate ladder. Joining us is sonali basak. Lets start with wework. Trying tooftbank figure out how they should be dealing with wework. Sonali when things get tough, everyone tries to cover up their trucks and make sure they have their own advisors. Have softbank and wework hiring to find out what their liabilities are in their best path forward. Board is looking at what decisions to make, how to handle the financing packages, how much debt comes from the environment. Loki they will be figuring out the leases, figuring out the Balance Sheet and the accounting practices. Alix lets go to our second story, fidelity. Theyre looking at their investments into ken fisher. The reaction that has been so fast. Alix abigail sonali it is pretty workable pretty remarkable. Fidelity had a fund that was subbed advised by the fisher investment. They are still reviewing their relationship. You have a Philadelphia Fund that has already pulled some money. People are not only making decisions quickly. They are ready to really pull that money out. Are a lot about Corporate Governance and environment. Sonali i had my doubts. Alix me too. Lets get to our third story, women climbing the corporate ladder. They still cant get there. Making inroads, but not quite there yet, particularly when it comes to the csuite. Sonali something i thought was interesting about this, but they were looking at was not just the glass ceiling, but now some thing they call the broken wrong , with the broken rung, which is the lower levels. In the first promotion, theres two men to one woman. It is hard to bring women up when they are not rising at lower levels. Alix and particularly africanamerican women. Staying on that, sonali basak is going to be staying with me. We want to turn now to women of wall street to shine a light on women moving in shaping the world of finance. Theres a new report from s p global that outlines the impact of women in csuite roles, with emphasis on how companies actually earn more profits. Joining me as beth ann bovino, s p global chief u. S. Economist. Good to talk to you. It has been a while. Walk us through the actual facts, the reporting that you learned, of firms and their profits when they have a female ceo. Beth ann sure. I wish i could take credit, but my colleagues at Market Intelligence actually wrote the report. I had done an earlier report looking on women in the workforce, having more women in the workforce over the last three decades, making the u. S. Economy bigger, about 1. 6 trillion bigger than it is today. The question that my colleagues asked was what if women did not only enter the workforce, but with more women in the socalled csuite . What they found was that more female cfos in the firms that they studied over 17 years, they saw that those firms were 1. 8 trillion bigger than the market overall. They also found that looking at female ceos in these firms, there was more diversity. About twice as many women were on the board than the overall market. Study ishis interesting because theres almost 6000 companies that were studied here, versus the report that only had about 300. Empirically, can you tell us a little bit about what you found, about how discerning boardman burrs were about choosing a female ceo . I spoke to your economists on this yesterday, and he mentioned that women have a harder time getting the job in the first place. Beth ann i think theres a couple of factors at play here. Something you discussed earlier on, i do think that in order to csuite,male for the you need a bigger population. It is that so called if that socalled rung is broken at a lower level, theres fewer women to choose from. Economics likes a sort of likes assorted have mating. Comparing zeballos of female leaders versus the male count comparing the bios of female leaders versus the male counterparts, the woman who made it up this high had very strong bios, stronger than the overall ceos. Stronger bios, stronger experience, and stronger credit. Sonali can you talk about some of the other findings here . It wasnt just outperformance in terms of stockprice. There were some other metrics that women were able to push up in terms of company performance. Beth ann i think women executives were able to push of a number of factors. As i mentioned a little while ago, you saw more female diversity. That certainly increased the levels of the market. Im sorry, of the overall firm relative to market peers. With more female diversity, what does that mean . That means more seats at the table, a different viewpoint that gives that firm a little more of a focus not just on the male focus, but on the overall economy, both female and male. That, i think, is a real plus for that firm as it competes with its peers. Alix we just showed a chart talking about the average returns 36 month out from when a female ceo took the helm. It is underperformed. The returns are lower than if a man did it. But in the cfo world, it is actually higher. What do you make of that distinction . Beth ann keep in mind, correlation is not causation. When you do comparison over a 24 month period, comparing female ceos versus cfos, youre going to have distortions. I do think one thing to point out if you also want to look, for example, by sector to get more details on that, and the volatility in the markets. We all know what happened the last we four months. That also adds some distortions as well. Alix it covered a lot of companies. Sonali basak, think you very much. Beth ann bovino of s p global, good to see you as well. Coming up, where is the resistance level for sterling . And if you are heading out, jumping into your car, tune into Bloomberg Radio, heard across the u. S. On sirius xm channel 119 and on the Bloomberg Business app. This is bloomberg. Alix time now for traders take. Joining me is Vincent Cignarella of the bloomberg audio squawk. Vincent it is amazing, the optimism from yesterday has turned to pessimism in just 24 hours. The talking to traders yesterday, this was a really this was really interesting. Soon as cable broke up, you see the spike in the last one he four hours from 1. 22 from hours from 1. 22, basically. Now a triple top. I would basically say i was optimistic yesterday morning, thinking we could absolutely leapfrog one dollar 20 eight cents with an agreement and start at 1. 30 in sterling. That is not looking likely any longer. Alix is support now 1. 22 . Vincent if we get through the next couple of days with Boris Johnson asking for an extension, we are going to trade towards 1. 22. I wont say all the way back, but as pessimism is mounting, 1. 22 is likely did a base case. You kind of have to price it more 1. 22 than 1. 32. The risk is to play it to the downside. A buddy said to me this morning, the volatility smile of cable is starting to look like theresa mays. You all thought you could get this done without me. She probably has a little but of a grin on her face. Alix i think shes on vacation right now, i hope. Oh, shes speaking in parliament. Oh well. Vincent cignarella, thank you very much. You can ask him questions throughout the trading day. Coming up on this program, Morgan StanleyInvestment Management head of Global Fixed Income will be joining us. Do you want to buy into the bond rally . This is bloomberg. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Call, click, or visit a store today. Alix welcome to bloomberg this wednesday, october 16th. Im alix steel. Heres everything you need to know at this hour. The eu and the u. K. Are downbeat about the chances of a brexit deal. Prime minister Boris Johnsons political allies in Northern Ireland may stand in the way. Turkey has shut down the Trump Administrations demand for a ceasefire in syria. President erdogan also said no thanks to the offer to broker talks with the kurdish militia. China threatening to retaliate if the u. S. Congress passes a bill supporting protesters in hong kong. The house has approved a package of measures backing a prodemocracy movement that that would subject it to an annual review. Criticizesieg Elizabeth Warren for not giving a yes or no answer. Sen. Warren i will not sign a bill into law that does not lower costs for middleclass families. Mayor buttigieg we heard it tonight, a yes or no question that doesnt get a yes or no answer. This is why people in the midwest as far midwest are so frustrated with washington, and capitol hill in particular. The Washington Nationals alix the Washington Nationals going to their first world series ever. Will wait to see whether they face the Houston Astros or the new york yankees. Yankees hopes markets, some draining. The cable rate down by 0. 3 . Yields down in the u. S. By about three basis points. Is it hopelessness, or just this is how we trade . Theres lots of different opinions, and this is what happens over 48 hours in the markets. At a macro level, paying attention to banks, bank of america climbed in the premarket after the Company Posted a solid Third Quarter and a 27 jump in investment backing revenue. ,0 me now is david George BayardSenior Research analyst. David george, baird Senior Research analyst. What was your take . David i thought the outlook was good. He macro in particular. The reactions weve seen so far is not only a reluctant a fairly good earnings, but i think its indicative of an economy that is growing in the 1. 5 to 2 area. Think theres been a lot of macro concerns with trade and so on. Alix do you have to start rethinking your price target, considering that no good news has been banked in has been baked into these bank stocks . David i am not really at liberty to talk about what we may or may not do with them, but suffice it to say that in terms of bank results broadly, i would expect the market to reward be of a today with generally pretty good numbers, as you said. Alix is that breakout sustainable . David i think theres a mild amount of upside from here, perhaps something on the order of 4 to 5 . And not of the view that we are on the cusp of a major breakout, but i think these numbers are pretty good broadly, and this is a group generally not particularly well owned. Weve been in a market that has an affinity for growth stocks, so i think Institutional Investors are generally underweight banks, and this is a reluctant of that as well. I would imagine weve got some upside, but not as ignatik in the amount not a significant amount. Alix when you look a little deeper, equities a little bit light. You expect that kind of strength to continue . David i think so. The m a environment remains very good. The markets are, despite all the gnashing of teeth and concerns about trade, we are flirting 1 to 2 off of alltime highs, and i think that is fairly constructive for Capital Raising activity, both in the bond in the equity market broadly. Alix what big banks do you like the best right now . David our favorite is more on the regional side. We like pnc. We also like cfg, citizens financial. We are of a view that the regionals are trading at a bit of an unwarranted discount relative to the big guys currently. Alix great stuff. Thanks a lot. Really appreciate your take. Big Bank Executives did way and on the economy on their earnings calls and statements. Jp morgan noted that gdp slowed slightly. Goldman cited a mixed operating environment. Bank of america called the economy moderately growing. Is that good . Is that bad . I dont know. Brian weinstein, Morgan StanleyInvestment Management head of Global Fixed Income, what do you think . Brian i think it is a conservative take. People are afraid to say what the future looks like with all of the uncertainty. The headlines of the same. Brexit. [laughter] tell me about it. Brexit. Alix [laughter] tell me about it. Brian you know better than anybody. We are not in the best part of the credit cycle, but we are not plummeting. We are just coming off of it. But the operating environment is so uncertain, if you are a ceo, what do you say . Alix so do you buy into the on rally . Brian the bond rally since last october, 140 basis points. So i think the bond rally has happened, more or less. , you wouldontinue need some real bad news. You would need to see deterioration. Weve gotten centralbank help and some fiscal help globally, and we havent seen that impulse move. So i think the bond rally has happened, for the most part. Alix overnight, we did learn that china had a surprise injection into the market, like 200 billion like 200 billion yuan. Do you see that in the market . Brian we do. Started the year super bullish. Without with that having faded, you would need the dollar to come off, you would need some of this uncertainty to fade. But it is hard to say you will make all of your money being long the 10year note. Alix any trade you have on in terms of steepeners . Brian on the margin, yes. But that trade also sort of happened. We got trade really flat. We priced and a lot of fed cuts. Theyve cut up some. On the margin, we think the curve could steepen if you start to get some of the survey data to stabilize and move higher. Alix in emerging markets, where do you go . You have china, south korea cutting rates to a record low. So what do you do . Brian we look to wards emergingmarket corporate debt, similar to highyield in the u. S. You get a decent amount of youll just for sticking around. This companies and countries tend to be treated more harshly. They are less liquid, less wellknown, but emergingmarket corporate debt is a good place in fixed income where you can still earn a coupon without taking specific Interest Rate risk. Brian what areas stash alix what areas alix what areas . Brian areas that have been beat up. As soon as you see headlines about trade war escalation, the first thing people sell our places that have a lot of business with china. As those headlines fade, you will get some opportunities, or there may be opportunities now to invest in countries nearby. It really depends how much risk you want. You certainly can find dollardenominated. If you want the really highoctane trade, you wouldnt hedge the currency. We would tend to hedge the currency and just earn the straight up coupon as opposed to the full currency risk. Alix do you have to do that and also by protections and also buy protections . Or do you feel more confident taking on more risk . Brian a little bit. In the beginning of the year, we thought you should by duration or some thing very safe. Now it is not clear if that is helpful. Having some protection, some duration to be on the front end of the yield curve, is helpful. Alix kind of sounding like a bank ceo. A little cautious, but ok. Brian weinstein of Morgan StanleyInvestment Management will be sticking with me. Coming up, eu and british officials playing down the odds of making a brexit agreement. The pound weaker because of it. Lots of volatility for the cable rate. This is bloomberg. Alix british and European Union officials now pessimistic about the chances of securing a brexit deal. Irishjohnsons northern allies resisting. Eu chief negotiator shall barnier is now optimistic negotiator Michel Barnier now optimistic. Brian weinstein of Morgan StanleyInvestment Management is still with me. When i look at a headline, they are going to change, like, 18 times before they get to air. Are you up to domestic at all . Brian its really bashar you optimistic at all . Are you optimistic at all . Brian its really hard. No one really has a clear path as to where this goes. We look at credit in the u. K. Or structured securities. You can analyze those. You can have an idea of what the Downside Risk is. Goodund weve found opportunities in the u. K. , but not directly in trading sterling. Say, securities backed by u. K. Real estate. Sometimes people will just sell things because it says u. K. In it or they feel at the uncertainty is too great, so luckily it has died down over the last six months, but there were a lot of securities for sale that we thought were cheap enough, given the noise. Alix is that dependent at all on a brick that resolution, or onely a good value at all a brexit resolution, or purely a good value . Brian you would get your principal back and with good coupon. Alix i am pulling up a chart of the cable volatility is to illustrate a point. I wonder if this speaks to the broader issue that nothing is priced in. Nothing good is priced in, so if you get one little headline, it can really move asset classes. On the flipside, it drains out really quickly. I feel like you can truly see that in the oneweek fall for the cable rate. How do you deal with that . Brian for us, i think it is a good thing. We take a really long term view, so you can avoid some of those, if you dont have an edge, or if the markets says we cant give you an edge one way or the other. But you can then look at securities related to it and find great value if you dont mind the noise that happens in the interim. If i were running a hedge and trying to trade it, that would be much more difficult. Alix this is a microcosm of the other issues in the Global Economy we are seeing. The chief imf economist, she talked about the risk to the Global Economy. , a combination of factors including the trade tensions, but also some country specific factors in emerging and developing economies. To get to a position where we have more countries in a recessionlike environment, that is when Global Growth goes below 2. 5 . We certainly dont have that in our projection. On globale you stand growth, optimistic or pessimistic . Brian i would say more optimistic than the average. Below 50,m surveys which people dont like. You need to get some resolution on these issues, or at least the noise to die down, but as i said earlier, with monetary stimulus globally, it is hard for us to believe that you continue to see this data deteriorate. You dont have to be super bullish to believe you can get a bounce in some of these survey data situations. Alix fair. It brings us to the imf projections. They keep lowering their forecasts. That wasnt a surprise to me. Do you feel like investors have rerated to a world where we just grow to percent, 2. 5 . It doesnt mean we are not growing. It is just not going to be 3 , 4 , 5 . Has the mindset shifted . Brian we think it has. The 10year note would be a good indicator. Think youve convinced people that growth is not going to go gangbusters, that Central Banks can help extend the cycle, but cannot drive us to a new high in growth. Alix i feel like the hope was that during the imf meetings, we would have some sort of coordinated meetings on fiscal policy. Heres the statement. Theres no room for policy mistakes. Risks seem to dominate the outlook, but if trade tensions between the u. S. And chinese and a no deal brexit is averted. Monetary policy couldve made a difference. What you think . Policy couldry help a little. Fiscal policy is probably a better place to look if you want there to be more sustainable or higher growth. Alix do we get it . Brian not yet. But theres enough to extend the cycle a little more in the hopes that we get some fiscal stimulus next year. Alix do you play countries that have room for fiscal . For example, japan is having retail tax hikes that weve seen. India pursuing fiscal stimulus. Are you playing countries like that . Brian in emerging markets, yes. You want countries in this environment to have fiscal room that have the flexibility to do it. We are just not sure that it is a theme. We see the headlines occasionally of countries willing to do fiscal stimulus that tend to come when the market feels shaky. Its not clear if there is a real impetus to move yet sweet closer to elections, if growth does fall and monetary stimulus falters. We would be bigger believers that there are places that can do it. Alix where there was some stress for investors yesterday, basically negative rates kind of make sense. That we could see them in the next cycle. They analyzed work it reaction, showed the entire yield curve for government bonds and the economy shift lower. Therefore, easing financial conditions is not the worst thing in the world. How do you think about that in the San Francisco fed paper on this . Brian never underestimate central bankers ability to have more ammunition. Would you sit there and say, i cant do anything else . No. You would think about what else you can do. I do wonder if the system can handle negative u. S. Interest rates. Theres no question the u. S. Tenyear could trade negative. We could figure it out. But its different. Could we price in a situation where u. S. Investors and corporations want to accept negative rates and all the other things weve heard and can continue to go on as normal, with the holder of cash having to pay for it . I thick it would have to be a pretty germanic situation, but i wouldnt is counted at zero. Alix do you like your about all . Brian yes. Alix where . Brian i go back to my comment about the u. K. When people are pessimistic about growth, you can always find securities backed by assets in the fixed income markets that get thrown out for no good reason. , i wont comment directly, but we like european banks. In fixed income, we like places that are delivering. Places that have more capital buffers. Banks certainly fit that categorically. Alix Brian Weinstein of Morgan StanleyInvestment Management is going to be sticking with me. Idiosyncratic risks are at work. This is bloomberg. Viviana you are watching bloomberg daybreak. General motors and the Auto Workers Union slowly moving towards an agreement to end the strike. Yesterday, gms ceo stopped by talks. The union summoned local leaders from around the country to detroit for a meeting that could be in preparation for a vote on a deal. The strike is in. Week five for the third time this strike is in week five. For the third time this year, roche boosting its outlook. Its drugs for multirole sclerosis and blood clotting continue to perform. To debt markets reaction rescue plans for wework werent encouraging. Existing bonds fell the most on record. At one point, the yield rose to more than 13 . Both jp morgan and softbank are trying to put together bailouts. That is your Bloomberg Business flash. Alix thanks so much. Still with me, Brian Weinstein of Morgan StanleyInvestment Management. Not only did he get to 13 , but the coupon jp morgan is looking at, 15 . Incredibly high yield. Is that some thing you would want to buy . Is the idea of that much risk for that much reward something that you want . Brian that is what we have credit analysts. Without commenting on that specifically, you are at a point in the cycle where idiosyncratic risk is picking up. We see no the headlines about covering light loans, be access to credit markets that werent normal. As you pick through different earnings, you will see companies that took different risks in their own books. So we are very careful when we find an opportunity. We are not distress investors. We are not waiting for opportunities to buy things at 15 . We are trying to avoid having them when they go there, and the second question is has the market mispriced the risk. Alix has it . Brian the highyield market has actually done pretty well. Its been waffling around in a pretty tight range. On the margin, we still like highyield. It does have carry, and we think the credit cycle is fine. Whats interesting is there are the names that trade great, and anyone with any question about it gets punished harshly. The thing for an active investor like us is to avoid the potholes. Alix there are some different conversations. One is that you want to go into the safest part of the highyield market, and the other is cccs that can move more violently. What do you do . Brian there have been times this year where we only wanted to buy bbs or things that were very safe, and times like this where the trade has kind of happened, and there are opportunities in ccc space. If our analysts can help us find value, we are out of fade to buy cccs at this point in the cycle. Alix where you stand on leverage loans . Brian we continue to like the Higher Quality portions. Loans have had a pretty subpar year. Of been forgotten about. But we still like them. Theres a lot of names, especially older names that have better covenants, that have great carry, in still give you awesome yield in a world where yield is hard to come by. Alix if you see banks having a hard time offloading some debt, private equity having a hard time offloading some debt they made for an acquisition, windows that turn into a broader conversation of the risk to the credit market versus this particular deal . Brian we had this conversation in december of last year. We had a lot of talk about, is this it . Is this the end of the cycle . Everyone is waiting for that to replay again at the end of this year. I dont know if thats going to happen. I think we are still in more of an idiosyncratic story. Theres no such thing as a bad deal, only a bad price. Do your homework. If you like the credit, it might be a very goodbye a very good buy. Alix thank you so much for joining me. I want to highlight some news out of europe. The dup, the Northern Irish party, is accepting the latest proposal on consent. That is moving assets now. The cable rate around the highs of the session. Action. Ippy the irish Prime Ministers saying that no brexit text has stabilized yet. Moving on headlines of brexit, but maybe we are seeing the irish come around to a brexit deal . Coming up, u. S. September retail sales data out in just a few moments. We will break it down with Paula Campbell roberts, kkr head of alternative data and analytics. Alix this is bloomberg daybreak. I am alix steel. U. S. Retailng for sales in just a few seconds. Flat asres pretty much you are seeing the cable right fall back. Brexit deal optimism percolating in the market. Honestly, who knows . You are seeing buying across the bond market in europe and the u. S. The curve little bit flatter. It did what to perk up speaker steeper. Retail sales are out. Gas,u back out and backout coming in at 0 . On the month up by month basis, still down. 1 . Margin, that looks a little grim for the consumer. The control group is what economists wind up looking at. In at 0 reading coming for september. Trying to dig through the details now in terms of what fell. Lets see. Food services and auto dealers and building materials, and that is what did not grow at all. The expectation was for it to rise by. 3 . Does not look great. Michael mckee joining me now. Numbersush, how the look, not good . Michael you are doing a good job picking up the numbers. She is not an economist but she plays one on tv. This is all based on prices. If prices fall, retail sales do not do as well. There was a weakness in motor vehicles. This is different from the unit sales reported by the manufacturers. Motor vehicle sales down. 9 . Nonstore retailers down. 3 . I am not sure the last time we had a decline in nonstore retailers. Alix that is like amazon . Michael amazon, walmart, things like that. If that is down, that suggests consumers pull back. We did not have a great month in august and we have been through the backtoschool season. You have to wonder what is going on. Nttores down 1. 4 . That is something to watch. I brought along a chart that is interesting. You take a look at what has been happening with nonstore retailers and Department Stores and you see the nonstore retailers going up, the Department Stores in blue going down. Isk at the yellow line, that jobs at Department Stores. They have been losing workers for eight consecutive months. It is the retail apocalypse everybody has been talking about. That is not good for the economy of the long run. You have to wonder if people are beginning to read the headlines of everything that is going on from trade to impeachment to the middle east, and starting to get worried and pulled back. To get a bigger read, what is the next data point you need to see to confirm or deny that thesis . Michael you cannot get too much out of sales because it is a smaller part of spending than we used to. We spend much more on services and experiences. When we get the Monthly Consumer spending report that pulls in retail sales, we will see if that is holding up. It was not great last month. There is some reason to watch these things. Speaking of services, let me see if i can pull this up. I brought along another chart that is interesting. This number just out as well from the new york fed. Service industry businesses declined for the first time in more than two years last month. We are starting to see some rollover, Something Else to be concerned about. Alix i have definitely stopped shopping but im definitely going to eat, so that is not reflective of what i am doing. Michael a rise in eating intriguing establishments, people like to watch that. It is discretionary. Alix bloombergs michael mckee, thanks a lot. Retail sales falling. 3 . That control group, 0 . Mike raised the question, are these the good input data points to judge the health of the economy . Joining me for a deeper look is Paula Campbell roberts, kkr head of analytics. Thanks for being here. Is it the right metric to look at, and if not, why . Paula it is an important metric. I agree with your economist it does not represent all of Consumer Spending, but it is the good part of Consumer Spending, which is the cyclical indicator. It is an early indicator of how healthy the consumer is doing. Something you are looking at is housing, how housing is reflective of a changing consumer base. It has a big implication. Paula it does. We focus on a dismantling of the american dream. 35 of u. S. Households now rent instead of own. Homeownership has been the engine of growth in the united states. If you think about investing in new businesses, job loss or health care needs, that is what consumers have drawn upon. Now we no longer have that. When your rent is higher than inflation and higher than wages, you may have less money to spend now and at a downturn in particularly. We are concerned about the fact that the significant portion of society now renting is facing higher costs. Rental costs have grown much faster than wages. You, you do the report because you want to provide analytics, what is the offset . There are offset is tremendous opportunities in multifamily housing and affordable housing. In real estate, in private credit, and a number of areas we are investing behind the scenes. Alix what about the implication from the consumer. The read from the consumer is they do not have is not as much money. How are spending differently. How do they capitalize on that . Paula consumers no longer have any savings. If you are renting out a regular basis, your savings is zero, which means you cannot afford to buy a home. That means this transition in Consumer Spending behavior where they are not only renting their homes, but they renting clothing, cars, ridesharing apps. It is a complete transition in the profile of the consumer. Alix you broke down airbnb versus clothing versus ridesharing. I have three charts. One is the ridesharing issues. If you look at growth. No, this one. The sharing economy of airbnb versus hotels. It is huge and major cities. Many of your anybody you might want to do airbnb versus renting a hotel. It means this kind of Business Model is sustainable. Paula absolutely. This is one of the major drivers of shared models. It is often cheaper. If youre going to a city you need a hotel, it is cheaper to rent in airbnb. These are sustainable models. Other opportunities . Low hanging fruits. You will not want to invest in airbnb now, it is about to go public. Are there more opportunities . Paula we are longterm investors at kkr. We are not as looking at where valuations are today, but where there demand drivers that will sustain growth over the long term . Alix what about the clothing industry . How has this been up disrupted and what is the implication on the investor level . Paula when you think of Companies Like rent the runway or others, they have come of age in an environment where clothing utilization has declined. We are in an environment where you are photographing everything you where, so you cannot get caught wearing it twice. That means consumers are trading in and out of their clothing all of the time. These models allow you to keep your costs low while still be able to go through a closet pretty quickly. Advicehen you are giving to the Portfolio Manager at kkr and the manager says sustainable . Where is the opportunity . Paula these models are disruptive. If youre investing in a traditional player, be careful if it is true the cost of owning an asset is high, consumers do not want to hold onto an asset and maintain it for a long time. Highvalue, low usage type of products. That areas likely to be disrupted. On the other hand, from an opportunity perspective, if a sharing platform can make access to a product or good more convenient or accessible and the costs are low, and moreover if there is an impact angle to a given product or service, that is an area you should lean into and lean into a sharing economy model. Alix we want to wrap it up talking about women of wall street, hearing from the key women in finance. I want to get your take. If you are building a team, how you hire . What you do to build the best team . Paula building diverse teams guarantees superior outcome generation. It is often easier to run a team where everyone thinks just like you. The reality is, particularly in the environment we are in right now where youre seeing disruption from so many different angles, the environment is so dynamic it behooves you to have people who think differently so you can anticipate and damage the tail winds. Alix how do you do that . Untraditional education or people with diverse resumes . How do you do that . Paula a number of angles. There is not one single bullet. Look at different types of colleges and activate your network. It is about diversifying the funnels so you are still getting the highest potential talent but getting them from a diverse set of sources. Alix thank you so much. Great to get your perspective. Paula Campbell Roberts of kkr joining us. You can European Assets getting whipped. The dup denying it has accepted the latest brexit proposal, and the party saying discussions are continuing. Joining me from brussels is maria tadeo. A lot of action in the market. What can you tell us about where we are right now . Maria we do have the leader of the dup saying a deal is close and the dup has started to agree on some of the fundamental sticking points is nonsense and the negotiation continues. At this point, what is clear is the europeans will not sign on to any deal until it is 100 clear it will clear the u. K. House of commons. The Prime Minister is still obviously not in a position to guarantee he has the votes he needs. We are moving away from a deal. The two things at this point that matter is the fact the europeans do not want to negotiate tomorrow. They want to have a clear blueprint today so the Prime Minister can say i have the votes, we can get this done. The problem continues to be london. It is not clear whether the dup will agree to anything today. That calls into question the entire deadline. It does put a lot of pressure on Boris Johnson to ask for an extension to brexit. You remember this is the one thing he said he would never do. This was do or die in his eyes. There is a lot of pressure that way now. Alix will be harder to get the deal through the u. K. Parliament or the Eu Parliament . Maria no question it is the u. K. Parliament. Once european leaders endorse a legal text and they say this is the final deal, this is the best deal, the European Parliament will likely say we agree. The europeans have a strong incentive to get the deal done before the end of the year. They want to remove the Political Uncertainty for europe and focus on the new commission, which will take place in november. They want to move away from the brexit story. They feel it is taking everybodys energy and we have been here too long. The issue is the u. K. Parliament, where you have a Prime Minister who does not have a majority. You have the dup saying we are not happy with the final deal, and a very strong precedent that every time we put something to a vote, it has been rejected. It is a country very divided. On the european side, it is clear they want to get this done, preferably with a deal. Alix good reporting. Thanks a lot. Fascinating 24 hours. Coming up, bank of America Media call coming as we speak. Ceo Brian Moynihan saying corporate sentiment has held up. We will get more next in todays bottom line. U. S. Retail sales unexpectedly dropping as the consumer stays shaky. Overall retail sales down. 3 . The standout was nonstore retailers was lower as well. This is bloomberg. Viviana this is bloomberg daybreak. Im Viviana Hurtado in the hewlettpackard enterprise greenroom. Hour, up in the next binky chadha, Deutsche Bank chief global strategist. Now to your Bloomberg Business flash. The eu reportedly will unveil interim antitrust measures against broadcom. According to the Financial Times , regulators will tell broadcom to stop inhibiting clients from buying chips elsewhere. That will be the first time in two decades the eu has told companies to stop activity before the investigation is over. While Way Technology while way is shrugging off Trump Administration sanctions. During the first quarters of the year, Global Smartphone shipments jumped 26 despite curves on the import of crucial software components, while way managed to grow. Wei managed to grow. David marcus telling us he is moving forward with the cryptocurrency libre. We will move forward and add more members going forward, and then we will work hard to get other together to address the legitimate concerns raised by regulators and stakeholders around the world before this to move forward. Viviana that was david marcus speaking to us earlier. Im Viviana Hurtado. That is your Bloomberg Business flash. Alix time for bottom line. We take a look at three Companies Worth watching. And sonali basak of Bloomberg News joining us and Brooke Sutherland of bloomberg opinion. Emma chandra is looking at bayer. A potential settlement but more losses. As thehe stock moving company says it expects a significant search in the number of lawsuits against the company, suing it over its roundup weed killer. It says it will give us the number of the cases when they report earnings at the end of the month. The last time they told us how many lawsuits were against the company was july. 18,400. We stalled the sop the stock fall 1 on the news it has pair the losses, but we are still in the red. This goes back to the roundup weed killer issue and whether or not it causes cancer. Since those claims emerged, bayer has lost market value to the equipment of 30 billion. It has also lost three trials in the u. S. Bayer says roundup is safe and will continue to fight those. There is a lot of pressure with mounting lawsuits for the company to settle those claims. Alix absolutely. Thank you very much. Sonali, youve been on bank of americas paul. What did you learn . Brian moynihan is saying even though the world is afraid of recession, his clients do not show for it. There are more transactions among his client, more people borrowing. The health of the consumer is still strong, which is in line with jp morgan, he has a better view of the economy, more optimistic than what we have heard so far. The other thing he has been speaking about his defensives. With bank of america, despite a onetime charge, expenses have been in line with where they were last year. Even with investments, 3 billion in technology, new branches, and the head cap going up. Paul did not forget was talking about card balances. Dinofrio was talking about card balances. Pretty healthy there, too. Alix the Third Company we are looking at is Johnson Johnson. Totally different than when we talk to to the cfo yesterday. Brooke it is a big shift from their strategy. They have been focused on winning these appeals and have had some success. Yesterday you had a judge in missouri reversing 110 million judgment for the baby power people claim causes cancer. They seem to be recognizing that dynamic is different when it comes to the scope you lawsuits and they will have to put up money. Now we are talking about 4 billion in conjunction with the settlement the drug distributors are proposing for 18 billion over the course of 18 years. Alix i wonder how 4 billion measures up versus some of the other distributors you mentioned . Brooke it is very manageable for the companies to pay off these amounts. I looked at some of the revenues. You are looking at half 1 trillion in annual revenues. I think they can handle a one milliondollar combined settlement per year. Johnson johnson also has a lot of firepower. What is interesting is you have that in the mix, much more dire straight. With moreoming up creative approach. They are offering to give 15 billion in free drugs, of course narcan, that can help treat addicts. Alix it does not look good for the j j brand which is babies and baby powder. This does not help its image, but i do not know if that matters to them. Brooke i wonder if this is a sign of a shift where youve been putting the money to settle this and get it out of the headlines, take this off the table. Typically their strategy has been to pursue the lawsuits. That does add up over time. That creates a brand problem. A lot of the lawsuits have to do with baby powder, hip replacements, things that cater to population that garner a lot of sympathy. I wonder if Johnson Johnson is shifting its calculus and this is a sign of a different strategy. Alix thank you very much that. Coming up, we take a look at what is moving this morning in todays technically speaking. If youre heading out and jumping in your car, tune into Bloomberg Radio heard across the u. S. On sirius xm channel 119 on the Bloomberg Business app. This is bloomberg. Alix time for technically speaking. Bill maloney, voice of bloomberg equity squad joints me now. I want to kick it off this morning with united airlines. They upgraded their 2019 profit outlook. What you see in the chart . Bill you want to look for resistance around this 90 to 92 area. That was the september peak. If we can get above there, look at 96. Today, 90 to 92 looks to be good resistance. Alix lets get to bank of america. We sop jp morgan closing at a record. Bank of america now having a nice pop in the premarket. What are the levels . What is the breakout potential . Bill bank of america up 2 in the premarket. You want to look at the june highs, which brings you around 31. If we can break above that, look for 32, which takes you back to 2018. 31 looks to be good resistance for bank of america. Alix if we fail there, where do we go . Lets get to the next stop, abbott. They narrowed their earnings forecast. That was apparently not good enough the street. They just met their target. Kissing the 200 day moving average. Bill down around 2 . We talk about trading ranges, this is not a stock in trading range. It has been going higher since 2017. Has held the 200 day. That,or it 79, and below 79 is your key number today. Alix thanks a lot. You can listen to bill all day on the bloomberg. He goes through the stocks in the trades throughout the trading day. That does it for me. Coming up on the open, binky chadha will be joining him. U. S. Sales disappointing and bank of america on the upside. The macro and the micro. This is bloomberg. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of Wireless Network, designed to save you money. Switch and save up to 400 a year on your wireless bill. Plus, get 250 back when you buy an eligible phone. Thats simple. Easy. Awesome. Call, click, or visit a store today. Jonathan from new york city for our audience worldwide. Im jonathan ferro. The countdown to the open starts right now. Jonathan coming up, u. S. Retail sales posting the first decline in seven months. Congress pursuing legislation pursuing supporting hong kong protesters. China threatening retaliation. Fears resurfacing brexit tops may fall short of a breakthrough. 30 minutes until the opening bell, good morning. Futures down six points on the s p 500. Lower. 2 . The euro slightly firmer, 1. 1040 on eurodollar. Treasury yields lower by three basis points to 1. 74 on the u. S. 10 year. Lets begin with the big issue. Can the consumer keep the economy afloat . The consumers are driving the economy. Consumer sentiment. The consumer continues to underpin the economy. A healthy consumewi