Underperformed. Joe i thought the fed would have to cut again. [laughter] japans u. S. Treasury holdings falling 28. 9 billion, the latest number here. 1. 15l by 28. 9 dollars to trillion. This is according to the treasury department. Nonetheless, japan remains on top as the biggest holder of u. S. Treasuries. Caroline lets dive deeper into our market reporters. At the close, what were you watching . Luke scarlet had a good reference with treasuries in the past. Lets look at treasuries in the future. We have a chart showing the 10 year yield in the one year forward yield. The difference between them on the bottom panel here. But we have got here is that throughout the course of the year, people became very much doubting around the time of the first rate cut and the time that the u. S. Dollar offshore yuan broke seven. A strong move downwards in the yellow line and purple line. That is when people started to think we are in for a global recession, world is over. Since then, you see those measures picking up but one more than the other. Expecting about 10 basis points of a rise over the next year even though the u. S. Dollaroffshore you want has not weekend that offshore yuan has not weakened that much since then. There is something beyond that, the global data getting much worse to change that picture. At crudeaking a look oil. It looks like the bears are taking control of the market. Intermediate crude closed lower, just around 57 per barrel. Again, it is the trade war really weighing on oral really weighing on oil. If you jump into my terminal, i want to show you another chart. , a session spread that really signals weakness. We are seeing price weakness, spread weakness. We want to see if this weakens. Taylor i am looking at shares of apple. They seem to continue to make more record highs. The first was on friday after dan ives raised his price target. Today, more data that official Government Data was showing apple shipped 10 million iphone elevens in china during september and october. That would give us the first indication of how the phone is doing. If you come and take a look here, last week i mentioned how apples market cap was higher than the energy index. Today, showing that apple and microsoft have a higher market cap then the entire Consumer Staples sector. On friday, they had a market cap about 2. 3 2 trillion, more than the 2. 1 4 trillion of the Consumer Staples sector, up now from those december 24 lows by about 900. About 900 million. Scarlet still with us, sean matthews, chief Investment Officer and Bloomberg Cross assets reporter sarah ponczek. At the marketing doing just about nothing, jay powell had a meeting with Steven Mnuchin today. It would take a lot for the u. S. To get to negative Interest Rates even as the u. S. Pushes for it. Shawn i would be shocked if we had negative Interest Rates in this country. Europe is in such bad structural position that they had to move there and clearly it did not work. ,apan, 20 years of not working europe, going on a decade of not working. It is a horrible outcome because thenking sector interesting thing with powell, where they talking about a trade deal that is not going to happen , that it does not happen is one of the conversations. Scarlet probably a circular argument. Peter coy had an argument that the president s views are shaped by his time as a real estate developer. Joe national Interest Rates, very different dynamic from a private entity that needs to borrow. That jumped out to be it is market is that actually having a pretty good 4 , slacklyft up over have any good day, balaton peloton over its ipo price. Maybe they are darting to attract attention. Sarah i thought you were going to say profits did not matter anymore. We are at this point in time that people do believe we are in the late stages of the economic cycle. It is important to invest in. Ompanies people do continue to preach that over and over again. The ipo price, pretty unbelievable. , idiosyncratic micro news as well. There is talk that they might be willing to take on more risk over the past couple of weeks. If you truly do start to see formal start to see fomo creeping into these markets, you might see people start to creep back to those growth names just because of the narrative. Caroline what did not do well today was the oil stocks. The energy stocks. Oil down. Could you eke out a few Percentage Points growth in the u. S. Next year. Shawn you are looking at a scenario where people are going to look for earnings will look for safety. If you think you can make 20 , you are willing to take more risk. If you are willing if you think you will make 5 or 7 , you will be willing to take less risk. People are looking at the riskadjusted returns. Joe are you concerned at all that trade keeps getting closer but then that doesnt happen . Shawn we are a year and a half into this. Every month, same thing. There, thewe get market keeps rallying based upon the fact that the market keeps rallying. Anemic at been pretty best, if not flat. At the end of the day, peoples expectations of this being a the agricultural piece, which is the easy piece. This is a 10 year phenomenon, not a one year scenario. Caroline we are like three years into that scenario and there is still no outcome. Geopolitical tensions when it came to brexit, trade, all seemed to get rosier. Hong kong protests getting worse over the weekend. A u. K. Election has thrown some of it into doubt. They are still being brought up. Still talking about risks of hong kong, the election. It is u. S. China trade. Yes, you have to obviously worry about the economy. , we havenal risks pretty much baked into the market now a phase i trade deal. Industrials closing friday at an alltime high. Areas of the market that were really seen as being in the middle of all this back and forth. If we get to the point where a deal cant get done, more tariffs go into effect before the election, that could certainly be an issue. Sarah and shawn, thank you both. Whatd you miss . Is up next where we will be looking at the escalating protest violence in hong kong. This is bloomberg. Caroline we are live from bloomberg World Headquarters in new york. Joe Romaine Bostick is off today. Caroline here is a snapshot of how u. S. Stocks just manage to post more record highs. Protest escalation in hong kong. Hundreds of protesters remain trapped at a University Campus surrounded by police. The stock market looks to shake it off. Pleato saying he welcome he will complete the embattled sprint merger. A Company Planning to buy 51 of Kylie Jenners startup 500 million. Protesters in hong kong university. The u. S. Has weighed in with mike pompeo saying they are gravely concerned about the violence. They put the onus on the Hong Kong Government and called the protesters to keep presentations peaceful. For more on markets, lets bring bloombergtrategist intelligence. We saw the stock market eke out gains today, many wondering why, whether it was the chinese home team coming into support. I think it was relatively low volumes. A lot bullish sentiment. I have not seen or heard any real tangible evidence of beijing coming in and supporting hong kong equities. You can talk about short covering, the yields of hong kong stocks. For me, you have to look at the shortterm of the fixed income to really get a sense of these dislocations. Hong kong basically revising down gdp. As 1. 5. Be as much you have got three months. Dollarhong kong yields. What does this open the door for . It shows that you will have real volatility on the front end. Joe for more on this, lets bring in rory green, china economist at ts lombard. Thank you for joining us. When we got the last batch of Economic Data out of hong kong, worse than the most pessimistic expectations, what are you paying most attention to right now, whether it is funding market data, what do you have your eye on . In terms of real Economic Data, we are looking at the Financial Sector. We have got consumption, domestic and tourism, then we have exports obviously taking a hit. The only thing that has been a positive driver this year has been financial services. Now we are seeing banks unable to keep their doors open. Maybe your bloomberg guys having to work from home. It is really concerning if the Financial Sector starts to feel the pain, then hong kong will flip much deeper into recession. Caroline what about in terms of Economic Data or some of the stats you have been looking for in terms of telltale signs . Unemployment, private consumption off yearoveryear. For me, it is the declining tourism. Hong kong is built on tourism. The airline hub is the biggest port of call for any airfreight globally. You will see trade come off, tourism come off. Really negative for the economy. Joe is anyone buying condos in hong kong right now . Rory transaction volumes are low. The key for me on the Property Market is when chinese mainland starts fine. A lot of businessmen and politicians are connected. If chinese mainland starts selling hong kong property, they will be real trouble there. Many were talking about that stocks managed to post a gain today. Maybe some of the chinese home Team Starting to buy into real estate developers. What about the actual executive action coming from beijing. Will they start to move in to hong kong, do you think . They are still really reluctant to get involved. They dont want to put boots on the ground. Sending the pla or even the Peoples Armed police into hong kong. They are hoping the police can eventually get a handle on things. Very reluctant to send in the pla. Rory for pete joe for people who are not as well versed, that cap between three year yields in hong kong and the u. S. , what does that really tell . The fact that imports are. Onetary policy damian you need to get a higher yield to invest in hong kong. If im just going to park my cash for one month, three months, that yield is going up. What i think is really interesting, if you just look at default swap curves, it should not move anywhere near argentina or turkey or anything. But if you are looking to buy some protection, that could be one place to look. The curve really hasnt moved since the pro text started months ago. When you see the event risk, the jump, the asymmetric return reduces ilso will save you the grief. But it also produces the negative carry. You are basically not carrying negative is if you are buying may beions outright beijing does come in, maybe there is violence. I think they have to be protecting against it. Caroline rory saying may be beijing does come in. We are seeing more of a systemic issue. They have been interviewing money managers, analysts, saying they are worried of the knock on impacts of trade talks if we do see the u. S. Have to retaliate in some way to further aggression in hong kong. We are also seeing bets being taken on hsbc, for example. Affect dof a systemic you think hong kong could have . Rory things would have to go pretty wrong for it to have a systemic impact on china. The key, really, it is still the hub, the port really for chinese , ipo flows going through hong kong. Access to the offshore dollar markets. Joe we really appreciate both of your perspectives, damian and rory. Coming up, tmobile ceo leaving the wireless carrier after more than seven years as a company. What the transition means after tmobiles on a merger deal with sprint. This is bloomberg. Joe tmobile Ceo John Legere leaving as part of a long plan of transition. Since he was named chief executive in 2012, tmobile has seniors welcome Telecommunications Analyst john butler. He had a great run at tmobile, no doubt about that. Before we talk about what he is going to do next or maybe the tmobile achievement,atest in my mind, was becoming the face of the brand. When he took over, it was basically a dead brand, very low Brand Awareness, offering what i would call sort of me too mobile services. He came in and upended the whole industry, introduced what he plans, no on carrier contract service, and literally took to social media to become the face of what became sort of a consumer friendly counterculture brand. Aroline he is great at being showman. Was an ideas guy behind it. Was he coming up with a lot these novel ways of disrupting the market . Easier the easy answer is yes. The chief marketing officer worked closely with john legere to craft a strategy and the narrative and message that went out with their marketing. Mike has done a great job. I think he has big shoes to fill but big enough eat to fill them. Joe given what he was able to do with tmobile, does it make sense for him to be at another consumer friendly brand . B2bould have to think a type company, it would not be as useful. What you expect for him to go somewhere where he would be the ceo face of the company. John he is really good at turning things around. Tmobile is not the first but definitely is best. Number two, he owns social media. Do to bell you have to ceo to tweet . John he was even on periscope. Doing everything. Facinge is a consumers turnaround situation would be his best bet. Caroline not wework. John he said he is not speaking. Caroline john butler of bloomberg intelligence, good to get your insights. Chrysler has little room to maneuver with the United Auto Workers union. Been rivals at General Motors and ford, and it does not want to hear please of poverty from a company that has just had record profits. For airbus big deals today. Bloomberg has learned it is poised to announce an order for nearly 100 narrowbody airplanes from air arabia. Emirates announced an order of 50. The first major deal to be unveiled at the dubai air show. Coming, we have got great sound from boston Federal Reserve president Eric Rosengren speaking exclusively on the economy and the 2019 rate cuts. This is bloomberg. Whether youre out here on lte. Or here on a wifi hotspot. Xfinity mobile has more coverage to keep you connected to what matters most. Thats because its the only Wireless Network that automatically connects you to millions of secure wifi hotspots and the best lte everywhere else. And now get 250 off when you buy a new Samsung Phone during Xfinity Mobile beyond black friday. Plus, you can save up to 400 a year. Click, call or visit a store today. Mark secretary of state mike on pao announced mike pompeo announced today that the u. S. Is softening its position on settlements in the west bank. He also criticized the legal opinion made during the Carter Administration. Pompeo in 1978, the Carter Administration categorically concluded that israels establishment of settlements was inconsistent with international law. President reagan disagreed with that conclusion and stated that he did not believe the settlements were inherently illegal. Subsequent administrations recognized that unrestrained settlement activity could be an obstacle to peace but they widely and prudently recognized said theretary pompeo u. S. Would not take a position on the legality of specific settlements. In that it would not create a precedent for other territorial disputes. Discussed protests in hong kong which have turned increasingly violent. He called on hong kong chief a probee carrie lam for of protests there. Text of the fourweek spending bill released to avert a Government Shutdown on friday. The measure would extend funding through december 20. House plans to vote on the bill on tuesday. Mitch mcconnell said the republicancontrolled chamber would also vote on the measure this week. Funding runs out at the end of the day thursday. Defense ministers from the 10 asean countries met in bangkok today with their partners including united states, china, japan, and russia. Venuemeant to provide a to discuss security challenges. The region is the scene of two of the worlds biggest financial biggest potential flashpoints, the South China Sea and korean peninsula. Stalled Nuclear Talks ahead of north Korean Leader kim jonguns deadline for the Trump Administration to salvage the diplomacy. Global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Am mark crumpton. This is bloomberg. President Eric Rosengren thinks the u. S. Economy is doing fine but he is concerned that the central bank has been unnecessarily accommodating with the rate cuts. Target, core pce is just a little bit off from where we want it to be. The Unemployment Rate is still quite low by historical standards. Gdp is growing roughly at what we would expect, around potential. In terms of Economic Data, the outlook has been good. Saying it is in a good place, would you agree . I would. We are in a good place. The composition has been a little bit different than we expected. A expected exports to be little stronger, we didnt expect consumption to be quite so strong. Global slowdown resulted in both exports and business fixed investment being weaker. Would you think it might have been that way without the feds rate cuts . We would have been a little softer in some areas. Residential investment looks like it is picking up. One of the challenges, what the side effects are of low Interest Rates. One is how much room we have if we actually do get an actual slowdown as opposed to a concern about a slowdown. In that case, we dont have much more concern. The second concern is that the stock market has been doing quite well. Other Financial Markets in some areas have been quite at beal and quite ebbulent. The two Financial Markets, i am not so sure that is necessary. You are almost saying that the fed is almost out of ammunition . The fed funds rate was pretty close to where i would expect it to be over the longer run. Since then, we have reduced the federal funds rate by 75 basis point. And fiscalry policy policy are accommodative right now. Im not sure we need quite so much at this time. What we otherwise would have if we were to have a negative shock and i would say it is not just the short and or the long end of the market, it is a lot lower than what we are experiencing prior to the last recession. Some limited effect given that we get down to zero more quickly than expected. I think we need fiscal policy at that stage. It becomes a much more important tool. It also highlights that this is a time we should be thinking fort buffers including capital ratios for banks and in general, fiscal policy, you would like to have a little bit more of a buffer. The federal government, you would hope they would be able to weather the storm and not have to cut back. In washington these days, there is no guarantee you get any fiscal policy, so what would happen then . We would have a longer recession than we prefer. Caroline that was boston fed president Eric Rosengren. U. S. Stocks at fresh records at the close as investors continue to look at signs for progress in the u. S. China trade negotiations. Us, christine hurtsellers, great to have you with us. There was talk of recession, but is this something that is even on your radar. Into 2020, are we just grinding on as we have been . We felt all along that fears of the u. S. Recession were really overdone. But when you thought about things in place for darkening of the economic view, you really need the u. S. Consumer to be fearful. When you think about wage growth, savings north of 8 , the u. S. Consumer is in great shape and therefore recession will not occur. That, as that mean long as we are not going to have a recession, that the u. S. Is the place to invest . Christine we believe that assets across the board are in great shape. Equities and credits, although i would say equities a little over credits. We think about u. S. Equities, we have had a great return and a lot of our clients feel like they have missed the trade and there is still cash on the sidelines. We think more money will come in. Given that, our portfolios, we have tilted out of u. S. Equities to some degree into offshore equities. When you think about the sentiment, the u. S. Has been very strong relative to the world. Foreign countries you want to be getting into, is it time for the emerging markets are still too early . Christine it is a little bit risky still for emerging markets but some of the action out of china certainly helps that story. For now, it is more developed markets. When you think about all the institutional assets that have been fleeing europe over the last year and a half, sentiment has been very negative. Yet, when you look at global pmis, not that europe will be strong, but it is just enough when you think about bottoming growth to have Strong Equity return. Joe just to be clear, your view is, the sentiment on international, people are so pessimistic that even with the rally that european stocks have , literally modestly decent pmis and other data is enough to power the region further. Starting point, europe and even japan look very attractive. Goes,ne steady as she are we talking sovereign debt, starting to look at credit as . Ell christine maybe tiptoeing into sovereign debt in emerging markets. Within the u. S. , we still like the u. S. Consumer credit story. When you think about assetbacked securities and see yellows and clos. The markets that have been battered down. When you look at triple clos, where they are, very attractive. If the world were really to turn dark, within clo structures, equities shut off and get no cash flow. Joe this is the highgrade, top of the trench part of the credit market. Christine certainly within clos but even within bank loans and highyield. Single b bank loans have been so battered via negative sentiment that you can find some of these securities at . 90 on the dollar. We are starting to think that maybe loans are attractive to high yields. Youve got to be careful, do your due diligence, but there are pockets within loans that have good value. Caroline it might be time to look abroad, but if we are going to see a wall of cash come in or something on the side, is the rotation back in play . Where do you see the value . Christine definitely value ashin the u. S. , sectors such technology. Are we favoring smallcap, that has gotten a little bit battered compared to largecap. And equityhe u. S. Valuations, when you look at history, Retail Investors went bonds last funds in year, and they tend to lag equity rallies by about a year. We have already started to see a shift inflows out of incomes back into the equity market. Joe our thanks to christine hurtsellers, voyeur investment managementestment ceo. Bolivias ousted president eva morales speaking out. More on that interview next. This is bloomberg. Joe unrest in bolivia. Leader evo morales stepping down just days ago after being accused of rigging the president ial vote in late october by the president ial opposition. Morales made waves by speaking bloombergbergs bureau chief, saying off camera t he is in mexico but give us your impression of how involved he is politics. N domestic he is in mexico, he says he wont participate in any upcoming election for the presidency. He tells us he is not in contact with the military. As much as he tries to distance himself from kind of getting leftved he literally the country in part because he wanted to prevent any more clashes. But he cant fully drop the subject. Aboutps talking to us other, kind of other elements that are happening in bolivia, kind of inserting himself once again in the politics by, for example, represent recognizing his scented his senator from his party as the rightful legal president. Caroline cant quite tear himself away. Of some asked morales of the factions of the armed forces currently against his administration. No contact at all. I only get information via the media or social networks. I have seen images of some of them, officers, ncos marching with the people in their uniforms. I have not had any contact with any commander. I do have many friends though, aides, highly reliable people. I have not had any contact from an institutional level. I have seen support messages from lieutenants, lower ranked officers. They sent messages, you did not reply. I did. Let me tell you, on the last day , november 9, i visited the cochabamba tropic area. An officer from the armed forces calls me, a bit nervous, he shows me the message and tells me about the phone calls where he is asked to turn me in for 50 grand. They wanted to pay him 50,000 u. S. Dollars to turn me into the opposition. Caroline fascinating insight from him. R perspective on how he you say he still cant quite tear himself away but what are his viewpoints on how we see peace in bolivia at the moment . What is his exit strategy . He talks about trying to get the u. N. , the church, and the European Union to mediate, and that there are the beginnings of conversations with these institutions. Himn, another example of state his distance but still not being able to fully disengage. Much, a thank you very great interview you were able to conduct with the previous bolivian leader. Start says job cuts will this week. They said this week that cuts will improve efficiency and accountability. Bloomberg has learned 2000 jobs could be eliminated. Employees have expected cutbacks since the company withdrew its ipo in september. Dell is back in the market earlier this year. Now, while the toymaker is back with a bigger deal, 600 million it wants to refinance. Kylie cashes in. This is bloomberg. Caroline kylie jenner just cut a major deal. Has agreed tod sell a majority stake in her cosmetics line to coty. Our luxury reporter joins us now. More on how this deal came together. She keeps the communications, the Brand Awareness part of the does all of the portfolio. Kylie is staying on in a creative role. She will still be in charge of marketing and communications. It has done quite well domestically in the u. S. The big point of contention now ultad kylies own website, 1100 storesh has across the country and kylie is in all of them. Joe some are saying she is famous, her family is already rich, she is take advantage of that. Most people who come from famous, rich families dont found billiondollar companies. What has she been able to do to create this juggernaut . Theoretically, one of her sisters could have done this with the same name recognition. Theyay influencers work, connect with people directly. The shopper interacts with that person directly. She found a really good way to do that through what started as a single product company. All they sold were lift were lip kits, a liquid lipstick paired with a liner for your lips. They expanded, more products. They would ask their customers what they would like to see. Caroline was coty alone . Thishere a fight for . Articular asset there has been quite an acquisition spree in the beauty space lately. The biggesteven beauty deal this morning. A koreander bought skincare brand, two thirds of it for 1. 1 billion, this morning right before the kylie deal. White joe why is there so much consolidation in the space right now . I think the old Beauty Companies are trying to figure out what is hot. This estee lauder deal, they bought two more in the last year. These are all geared toward youger shoppers that may be go out and try to find these hot, yum brands and these and try tobrands, build them up. Joe pretty impressive. Caroline dont miss this. Tomorrow, home depot and t. J. Maxx reporting earnings. Joe and i will be watching u. S. Economic data, building permits, and housing starts, all out at 8 30 a. M. Caroline that is all for whatd you miss . Bloomberg technology is next in the u. S. Joe have a great evening. This is bloomberg. Taylor i am taylor riggs in for emily chang and this is bloomberg technology. Wework layoffs are set to begin this week in the u. S. Are lookingawmakers to make life harder for the chinese owners of the video app tiktok. And, t