Qualcomm up 8. 5 on a better earning quarter. Down 26 . No improvements throughout the session. Whoalked to the ceo earlier seems to not be worried but analysts on the street are calling out the unit. Airbnb, google not placing it as high in the search results and saying there is a lot of uncertainty ahead for expedia. Year is up by30 nine basis points right now. Were seeing a similar move over in the United States as these are substantial moves in the back end of the bond market. We are also getting several moves of the 10 year. The 30 year, absolutely i watering. As you can see, a nine basis points selloff here in europe in germany. The pound has been under pressure as well, two members of the governing council in the United Kingdom voting for a rate cut. Trading higher. We await news from the white house, confirmation possibly that we do have the potential for a rollback of tariffs if we do get this deal done. Nothing yet. Lets talk about what has been happening in the u k. Governor mark carney yet again policymakers unexpectedly voting for Interest Rate cuts today. The risk around production for potential supply had growth and therefore gdp growth is skewed to the downside. Reflecting the uncertainty around the exact nature but with the transition to it. All of this comes of the European Commission warns a worse fate might be yet to come what it comes to europe. But spring in the head of u. K. Investment office. Thats talk about banking first. 2020, do we get a rate cut . We are pretty much headed in that direction. You can find uncertainty in all of our global numbers. In respect to what is happening today, weve not been able to guess next year for the first half in the stabilization. Even if we go trade deals. We always say the u. K. Is an economy that has leveraged the global outlook. But it has leveraged germany. That is the issue right now. Are we going to see a pickup in the european economy . Circumstance, the euro is not doing well. Your overall reaction to mark carneys statements today to the News Reporters talking about brexit and fiscal policy and growth. Less than 1 right now. Well, i think its election season. Well, i think its election season. So the governing job is hard enough during normal times and today, we had launches of Spending Plans. Season, alllection policy members are going to take Spending Plans with a grain of salt in respect to what is happening with the s p. Boe may beay that surprisingly unbalanced, but again, that is not different to what other banks have been doing with National Developments justifying a bit more of a dovish stance. Been been a bank where there has been a lot of comfort. You have been plenty of centers over the years, we got a little more to spend now. How convinced are you that the bank is doing the right thing as a group and that there should not be more attention paid . It is interesting that you it more of a feature, you build a consensus first to make sure communication is clear. You dont want to bring in that uncertainty. I think because of the boe nature, markets are comfortable with it, but we also know that well in thetion as next coming months or so. Ultimately, they are data dependent, and right now, they are basing their judgment on how things are going on and they have preferred to air on the side of caution. He is worried about what the Spending Plans are likely to do for the supply. Not the greatest record. With any Government Bond runner, we started to see. It is less about what happens on an individual basis. If we avoid what happened in cuba, we have credited at the same time. A different story. Such rotation, that is what the expectations are. Would you be buying bonds at this point . Down 2. 4. 0 year german 30 year, are you a buyer of that . We have removed some in terms of bonds right now. Emerging markets, thats where you get the better bank for your buck. Have you done any trades since we spoke to you last . Well, Material Change of sorts. Overweight an starting position but now you dont need to be underweight with equities anymore with national investors, you can actually be without a foreign currency hedge. You can put that Currency Exposure on top of the corporate exposure but overall, the consensus is we stay on the cautious side of equity risk especially in the eurozone and emerging markets. Now, you say you dont need to be underweight. Is that across the board . There particular area that you would be interested in . I think that is across the board, you can be at benchmark in the u. K. I think we have seen a bigger move in the domestic space within the u. K. But lets just say we can have it favorable with the European Union and some of the more internationally exposed, especially across the eurozone. Its the u. K. Nk position, u. K. Equities in general should be more comfortable with. What about europe . Do look at what the germans and it is absolutely roaring ahead. Is the trade narrative delivering as the market thinks it would . Does germany continue to outperform . There are some elements that germanys numbers are not going to be firing on all cylinders. Sometimes, we underway europe, for example. There are clients who are zero weight. To move from zero weight to an underweight, that in itself is going to drive price action. We cannot dismiss the positioning element there. The fundamentals, i would be more than happy to be proven wrong. Jeffrey is going to stick around. News from the United Kingdom, football again. Comcast, looking to bid for the Champions League. Fact, havell, in been doing very well in the Champions League as a result of which they emboldened to potentially make this very expensive move in the United Kingdom. Not much reaction in the share price, it continues to climb as you can see. Trading up on the session. Stark of course, speaking with the discovery cso who chose sports as a way to expand, we all know the importance of idols and football. Lets check the markets now. We do have a healthy rally underway, climbing to new record highs on trade optimism with china saying that the u. S. Has agreed to rollback tariffs if they should sign a phase one trade deal that has the dow and the nasdaq up with the s p 500 slightly slower gains. Still, a solid gain. Europe not sitting up as well. About 10, heading for the fifth consecutive day of gains. I want to take a deeper look at the health of this rally. Talking to the terminal. At blue line we are looking at the s p 500 rallying, up about 23 . The white line is percentage of members in the index of over 200 day moving average. Right now its about 75 of those companies above that longterm support level, so that indicates the market is actually looking pretty healthy. First at take a look other companies with a pretty strong be in the third quarter. , taking backower those estimates nonetheless. Although they did lower the demand forecast, that stock is still up by 7. 6 and also leading, u. S. Steel and alcoa by 1 . T 6 , 40 , and lets take a quick check at qualcomm. The best day for that Company Since april. Strong revenue maybe indicating demand coming in the coming quarter next year. Also, the number one performer in the s p 500 today up about 12. 5 . Interesting, their performance in asia was a little bit weaker. An interesting story. A better part of 6 , Strong Quarter and that Company Setting up billions for a potential opioid settlement. Thank you. The bloomberg your ahead summit is underway in new york city today. Ou can follow along lets have a quick listen in as they speak with the macys ceo. A wider cash flow. Ultimately, its very sad and tragic, but the best thing that is going to continue to rejuvenate and reposition is that as we get Sears Real Estate back, the ability, and jeff is wary very aware of this, many of their properties together, the ability to diversify and bring in entertainment, health and wellness, bring in restaurants. Historically, weve been hamstrung because we have not had the real estate. Now we get the real estate. That is really the next leg of the business. Again, just because the mall goes out of business does it mean the mall product isnt very sustainable with future test growth characteristics. Where do you look . Where do you think you are focusing your efforts on . What are the types of places you are looking for . Wewhat we are looking at, are looking at how to use our existing portfolio to make it stronger. Theres Many Properties that we had. Weve invested in 150 stores. We are getting growth in aggregate. These are all renovations we are doing. Were not doing that without asking david. Your Blood Pressure numbers to change your life. Talk to your doctor about creating a plan that works best for you. Start taking the right steps. Robin hood believes now live from new york, im vonnie quinn. And from london, im guy johnson. Lets catchnnie, up. The u. S. And china may be one step closer to an interim trade deal. The countries have a great where rollback of tariffs on each others goods. China has demanded that trump lift tariffs. European Commission Warns the worst may be yet to come. The executive arm of the European Union with Economic Resiliency that will last forever. The forecast calls for growth in 2021. Germany and italy are seen as the slowest economies this year. Giuliani undercutting the white house claims that he was advancing u. S. Foreignpolicy. Giuliani said his controversial work with ukraine was done fully as trumps defense attorney. The network is now the center of the house impeachment investigation. May change policies on political advertising in the midst of a raging public debate on the topic. Its not clear if they would rule out campaign ads altogether. That is what twitter just did. Global news 24 hours a day on air and tictoc on twitter. Powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Still with us is jeffrey, Wealth Management head of u. K. Investments. Jeffrey, talk to me a little about emerging markets right now. How please are they with the situation . How certain is the environment for emerging markets . I think they will be breathing a sigh of relief but whether they are going to be pleased or hoping for an uplift, that remains to be seen. Mind, china is not going to be very strong. Lead the way in emerging markets. The second thing to consider, maybe they will help emerging markets strengthen a bit. Do emerging markets want their currency to be strengthening during such an uncertain environment . There are quite a few challenges and we are not really up to say china is going to get back in yet. I think we need more data validation. Which in the meantime, are the safe or risky ones . The safer ones, its not like we are running for the hills. That is a market that we have had for some time now. What we do not see, any major balance or payment issues. Not like last year where there were currency problems in the midst of key markets. Again, equities will be more defensive. Are the bulk of the people youre talking to fully invested . Do you think they are feeling a bit worried about those positions are they comfortable . Do you think they are worried about the rally we are they comfortable sitting there waiting for eventual fall back . I had to choose, probably comfortable. That is where they are. Not just by private side, but the institutional side. We just dont have the earnings expectations to back up what the rally is right now and also, what about the trade deals . Lets talk about that a little bit. What is really interesting is that we get positive trade news, the market reacts quite strongly. You look at the bond market, to reference that, a very big move as things go up. You dont get asymmetrical move for the downside when you are getting a negative piece of trade deals. That has got to tell you that this market wants to go up despite what youre saying. It does want to go up that maybe due to the cash positions on the sideline. What i have an issue with right i question if there is something more comprehensive. A change in the chinese regulation. That is really far off, i think. Are we pricing one deal and then some . Even if it is just a phase one deal, rolling back tariffs, you cant unlock that yet. This point, would there even be a reaction . Been off they has radar. One thing i have been concerned about over the last 12 to 18 months is the weaponization of tariffs. Korea actually has just been something where a historical issue which two countries have been compelled to use trade to counter each other. But nowt normalized it if we are unwinding this process of normalizing trade as a weapon in international relations, that can only be positive globally. I think that will go some way to calming global expectations. We have more time with jeffrey, and we thank him for it. Hes the head of the u. K. Investment for Wealth Management. Stocks are higher now, the dow up, the s p up. This is bloomberg. From london, im guy johnson. This is bloomberg markets. Its time for the latest Bloomberg Business flash. Weeks, second time in the fullyear outlook. German bank is struggling with negative Interest Rates. There seems to be competition. It is getting a little bit more scared by the quarter. Is to reverse the situation something that allows Interest Rates at the end of the day to do what they are supposed to do which is a negative Interest Rate. In italy, meanwhile, the threeyear Transformation Plan is showing results. Riseterthanexpected 26 in quarter three profits. Higher trading income more than offsets lower earnings. Now sees a full year of upgrading profit toward the lower end of guidance ranges. The British Company expects to take a charge. Engines made the one airline temporarily ground the boeing 787. That is your latest Bloomberg Business flash. Markets, we are seeing a bit of Risk Appetite in u. S. Equities. Also on some great earnings reports today. The dow was up 8 10 of 1 . The s p 500 is up more than half a percent. The nasdaq is up three quarters of 1 and in the s p 500 were seeing followed by discovery which is at session highs now. Here in europe, trading at session lows. Barely higher, as you can see. 7400 basically is where we are trading. This is where the damage is being done. Today, it isongly the cyclical car sector leading the charge. The close is next. This is bloomberg. Guy 30 seconds until the end of trading in europe. Most of the markets are higher. The london market is not. Absolutely flat into the close. Stocks like bp doing the damage. A lot of talk about when it comes to the u. K. , especially with the bank of england pointing firmly in the direction of a rate cut. Lets show you how the session has developed. We hit our lows around lunchtime. We are beginning to fade as we come through toward the end of the session. The stoxx 600 north of the 400 mark. A line in the sand and then easily surpassed. 406 is where we are trading. Lets show you how we are breaking down from a sector point of view. The ftse 100 is absolutely flat. The dacs up. 7 . The cac 40 up. 3 . It is the dax story i want to dive into. The grr telling us the auto sector doing very well today, trading up nicely. 1. 7 . Germany outperforming on the back of that. We also have the banks in europe outperforming. The curve is beginning to steepen. We do have good numbers out from unicredit. We will talk about those in just a moment. Commerzbank having to downgrade its targets. The travel sectors are doing well. The bottom end of the market is rotating out of the bond proxies, understandable given the scale and size of the moves. We will get the bond proxies on both sides of the atlantic. The u. S. 30 year going through 2. 4. Real estate, telecom, food and beverage, the classic sectors you would expect to move are moving sharply to the downside. The bond prop the utility sector down 1. 9 . Let so you single stocks. , a Strong Demand for wind turbines. What is happening is the market is happy with the top line. Against the middle of the p l, margins are being squeezed. Markets are looking past that. As a result, it is a plotting todays numbers. Unicredit being applauded, up 5. 68 , certainly showing better numbers. Npls being dealt with. Itll be interesting to see whether this can be sustained considering the exposure the italian banks have to the btp market. Commerzbank, at a day where youre seeing markets moving sharply to the upside, only get away with. 5 downside, considering what has been said today is commendable. Toding at 5. 74, having readjust its targets as it struggles to get through its restructuring program. Commerzbank 5. 74. That is look at the european close. Vonnie in the u. S. , a grind higher in u. S. Equities continues. The Dow Jones Industrial average just off its highs. Up. 9 . The major movers are the industrials exposed to any kind of china headlines. We did get some of those with china saying the u. S. Has agreed to rollback the tariffs in phases before phase one is finished. Close to the 30 100 mark on the s p 500. Off our highs but still up more than half a percent. Earnings pleasing to investors. We will get to some of those an amount. The 10 year yield up to 1. 92 . Some of that is issuance. At 57. 43 after inventories up another. 9 . Another 1. 9 . Panoply of movers up and movers down. Ralph lauren is the best performer, up 11 . It did well domestically. It was hit hard during the hong kong protests. Investors were expecting that it would show that in earnings. The domestic market made up for it. Discovery at session highs, up 10. 5 . Still looking for potential smaller acquisitions. Also doing a lot of deals when it comes to partnering with youtube, with hulu, and lots more. Then there is the director Consumer Service starting up. It will be an interesting play to see how discovery continues. Lets look at some of the negatives. It is all of the expedia type companies. We had the expedia ceo on earlier. Dragging down trip, booking. Com, and so on. It is not able to optimize in the Search Engine space. It will have to spend more. Google is not favoring it, it is shoving it down. Google favoring its own types of booking services. That is impacting, as well as rebrandedhat verbal the airbnb style part of its business and people are not getting it. It is not being used good booking. Com down as well. Nielsen is an active story. Elliott management putting pressure on nielsen to spin off and it caved, now splitting into two. Guy lets talk about what happened in the bond market. A big morning in the United States. For the u. S. 30 year, now north year, now north of 2. 4, a nearly nine basis point move. The german 30 year is up over nine basis points. A huge selloff in the 30 year segment. A similar move at the 10 year level. Lets carry on the conversation and figure out what is going on and try to put it in context. Geoffrey yu still with us from ubs. Also joining us is Marcus Ashworth from bloomberg opinion. But in context the scale of the move we are seeing. Driven by a is classic risk on for move. Classic allocations back into equities. We are seeing the china trade deal, a number of things. There is no new news. This is an investor shift and i think the key thing in europe is the france 10 year went through 0 . Triggered people saying, particularly italy which is up 15 basis points or 14 basis points, taking money and what wouldve been the big trade winners in the last few months. People are getting further out. The whole shape of fixed income has risen. You are seeing massive moves between countries. It is a whole sweep away. I think that rotation play is absolutely in place right now and it is comforting for me we can have the steepening in the yield curve without massive volatility. Fixed income volatility has always been something weve been concerned about. The next phase, the nest risk so to speak is can highyield hold . Sometimes it is not totally symmetric. You get a steepening in the treasury curve, can highyield hold both spreads . Assets are safer, bonds are safer, there is a yield to be had rather than being pushed into the ground for the riskiest stuff. For now, things are calm, lets hope it stays that way. Vonnie marcus, talk about the amount of issuance and how companies are taking advantage of these yields before we get that major move higher and whether you think therell be any kind of a gap move at some point . Searchingat is a very point that jeffrey is just saying. Bbb have been the best performers this year. The safe step has been performing, and the week stuff down to ccc. Bond,apple did agreed extraordinary outperformance. There was still demand for investmentgrade credit and the single as and bbb level. That is because everybody is running a barbell strategy. They do not want to buy negative yields and bonds. They want to asset allocated in certain things with longer duration and then into Corporate Bond credit in the middle, which is why it has done so well. At some point it will change. For the moment spreads are hanging on, and we are sort of ok. Seeing no real volatility. This is an acrosstheboard move without any scary stuff going on. Vonnie on that point, if you are a company, why wanted you invest why would not you invest . With yields it is low and a clearly big welcome for the likes of apple and other corporations. Why wanted to issue a bunch of debt question why would not you issue a bunch of debt . Geoffrey there is debt on the others. That is the question. Wage markets have been praising them for some time. For companies, to get that investment going, lets look at one key figure. Up, then prices going they have Pricing Power and can preserve their margins. I think that is the missing link. Company Balance Sheets are healthy. Household Balance Sheets healthy. Invest,ds will not companies will not invest, what we need to shortcircuit that process . It all seems to go back to fiscal. Marcus can i go back to the credit story . The market is in bbb. How many of those issuers are capably applying significantly higher yields . Marcus they do not need to because they have borrowed so much money. In the corporate treasury, if you are not ahead of the game in raising money then you are asleep at the wheel. That is why i think therell be less pressure that there mightve been because the banks are on the uptrend than they were 10 years ago. Corporative been on the fund cheaper and longer. That is why there is less worry about bulking into the bbb area. If economies do pick up, then you can see why spreads might be what surprises me is why credit spreads have done so well up to now, with what looks like a potential recession in europe. That is the odd bit. Geoffrey the other link is at what point we have had clients ask this today. The risk on move at what point does the fed split again . Will the fed flip after having flipped just recently . I think the fed will be allow things to move. Lets get the escape loss of the inflation could guy guy pal basically ruled out raising rates. Going to rep jay powell basically ruled out raising rates. Geoffrey yu joining us from ubs and bloomberg opinions Marcus Ashworth. Summit ise bloomberg underway in new york city. Ust run the function live we are talking with howard marks, the chairman of Oaktree Capital management. Howard in this particular cycle, you have not seen a lot of factory building ahead of demand and so forth. What about Balance Sheet access . Howard that is different. I said in the real economy. Youre talking about finance. In finance there has been. I think the ultra low interest below, haveand worked a lot of calculations and in the small picture sense, it makes sense that companies have taken on more debt because it is so cheap. You can borrow money and it cost you almost nothing per year. Why wont you . The answer is the more debt you have the less likely you are to get through a period of economic difficulty. In the meantime, there has been a lot of levering up at all levels. Where you see evidence of work calculations . Howard for example, the pension 7. 5,that needs a return of cash, moneyse markets, high grades, or even get what it thinks it needs from stocks and bonds, pushes out to alternative investments. Private debt, private equities, venture capital, things like that. It has been great for oaktree and brookfield. Howard and our peers. When we started oaktree we left the firm, we left a firmware we were managing 7 billion and our hope was we would get back to 7 billion. Now we are at 120 billion. That gives you idea. When we started oaktree the world the word alternative did not exist, and now is extremely affordable. That is an area of access. Capital has flowed to the alternative markets. Youve heard me describe the people doing it as hand cut volunteers. They are doing something because they think they have to. You worry because of the fact we have negative Interest Rates, we have quantitative easing, that the old rules of the game do not apply any longer, and if they do not, what you do . Howard that is one of the most important questions. I wrote a memo two months ago called this time it is different, and historically, the words this time is different have been used to rationalize bullishness that did not work out in the past and violations of the norms that prevailed in the past, like valuations and that kind of thing. Erik schatzker speaking with howard marks, cochairman of Oaktree Capital management. You can catch the entire conversation on the bloomberg at live. Interesting he was just talking about the same thing we were speaking about, companies financing when debt is so cheap. Guy there has been a huge raft of it coming through this year and a lot of it has been u. S. Companies taking out the very cheap rates we found in europe. How much longer will that last . The french 10 year goes positive today. Lets look at where we are with european stocks. Astrazeneca, bp and dragging. The dacs having another the dax having another solid session. Lets check what we will see next. At the top of the hour we will go over to the table show. Jonathan ferro is a new york. I will be joining him in london. Vonnie will continue on Bloomberg Television. Later we are on dab Digital Radio around the world on all of your bloomberg devices. This is bloomberg. Guy from london, i am guy johnson. Vonnie from new york, i am vonnie quinn. A big day for streaming stocks and travel planning stocks. Lets bring in bloombergs dave wilson to explain it. Lets start with the travel planning stocks. We had the ceo of expedia on trying to put a brave face on, but the stock is down almost 25 . It is dragging down others. Dave it is not just expedia, it is trip advisor. They both had numbers out that did not go over well with investors. The stocks are taking a beating. Youre talking about the two worst performers on the day in the s p 500. This is what happens when you have to go up against google. In the past quarter, they tweaked their hotel and flight information, moved away from an app called google trips, build it more into Google Travel and google maps. They are making a push to have it easier for people to be able to go right to them to do their bookings as opposed to having to go out to these other Services Like tripadvisor. Like expedia. Does it bleed across into the likes of airbnb . We are trying to figure out what airbnb is worth. The picture gets more and more confusing. Dave that is where we are at this point with the kind of competition that is out there and trying to figure out what airbnb is worth is going to be a challenge. Lets face it. There is a kind of company we have seen go public this year and struggle. The idea they are going to be able to do better than the likes of uber or lift coat or any of these or lift coat or any of these otherr any of companies does raise a question. About theo worry extent to which google takes away that business down the line. It is always an area they could choose to move into. You have a lot of backandforth going on. Vonnie he was absolutely holding onto the idea that they will continue with their strategy. On the others have the coin, we have discovery at session highs. They are doing extraordinarily well and a time when people are very concerned about streaming and what disney plus will do to the market. Dave and these Companies Like discovery have responded. In the past quarter they came up with this Food Network Kitchen app. You could cook alongside the stars you see on television, doing more in that area with this new network they are building around for home improvement. In terms of the natural history, you have programming as well. They are trying to figure out the best way to go about moving into the streaming world. So far, it looks like it is catching up. The challenge is when you get disney plus, which starts next ,eek, and then Nbc Universal the peacock following april of next year. That is on top of netflix and everybody else. It is going to be a challenge to get people to pay attention. Guy that is the thing. Does size matter . Do you have to have incredibly deep pockets to make this work . Can niche players exist in this kind of environment . Dave we are certainly going to find out. Netflix has spent so much on programming over the years that they have tried to make that a way to get people to watch them as opposed to everybody else. As opposed to everybody else. Disney is talking about spending 1 billion next year on programs related to their disney plus. The price tag is seven dollars a month. When you figure that netflix is at 13 . They are willing to take losses to build that business. What can the likes of discovery due to compete with that . We will certainly find out whether going for niches as discovery is planning to do will work out. Vonnie niches and ip and deals. It is seven dollars a month. That is a good deal for the year. Dave wilson. Check out and i wilson on the bloomberg. Wilson on the bloomberg. Coming up, find out why qualcomm is our stock of the hour. This is bloomberg. Vonnie live from new york, i am vonnie quinn. Guy from london, i am guy johnson. This is the european close on bloomberg markets. Time for our stock of the hour. Qualcomm shares rising. Here with the details is taylor riggs. Taylor it is all about earningspershare. At least in the First Quarter of the fiscal year you had top and bottom line numbers that were good. Is there physical First Quarter. Revenue guidance look strong. You will see a return to topline growth for the companies as they do hit the numbers. You have a Management Team guiding revenue for the physical First Quarter. For the fiscal First Quarter. A lot of this is coming from the big boost from 5g. Interesting enough, that is where you have the pieyou will t where you have the technology, the 5g, the actual chips that provide the revenue. Qualcomm is unique because they have the licensing that only gets 25 of revenue but is a big portion of their profits. Analysts happy is not only in the big chip segments, looking at guidance up 15 . You are also seeing licensing revenue up about 4 . Vonnie taylor riggs with our stock of the hour. Thank you so much. Join taylor later on for Bloomberg Technology at 5 00 eastern. Powerup, balance of with david westin on Bloomberg Television and radio. He will be talking trade and health care with democratic senator tom harper of delaware. Interesting markets today. The Dow Jones Industrial average 8 . Those gains coming from stocks exposed to china. There has been positive headlines on china overnight. The s p 500 off its highs of the session. 5 . Up about the likes of discovery pushing the s p higher. The nasdaq up. 66 . This is bloomberg. David from bloomberg World Headquarters in new york to our tv and radio audiences worldwide, i am david westin. Welcome to balance of power, where the world of politics meets the world of business. On the brief today, Michael Mckee in new york on a possible reduction in chinese tariffs. David powell from london on continued concerns over european growth, and from washington, fairies on new development. The United States says the first china trade deal would include terrible back. That seems like confirmation. Michael we did hear from the minister in china overnight that if there