But nothing to write home about. A five day basis is down circa 3 . The stoxx 600 is higher today. We are getting a little bit of a positive bounce, but it is only less than 0. 5 . Considering what weve seen throughout the week, german yields are reasonably flat at the moment. I think its been at the front of the u. S. Curve this week we seen the biggest shift as the market has gone from pricing the possibility of a cut in october 2 the certainty of a cut in october a cut in october to the certainty of a cut in october. Boris johnson under clear pressure now to figure out a way of meeting a deal work. Parliament seems to be getting on his side, but maybe the eu less so. The cable rate trading at one point. 5 vonnie in the u. S. Trading at 1. 2295. Vonnie in the u. S. , the payrolls report has something to do with it. We will talk with erik nielsen about that in just a moment. At 1. 52 . Ar yield spread, weve stopped looking at it above 11 107s points, and well below on the yen. Total number rising less than the expected one her 36,000. Meanwhile, wages grew at the slowest rate in more than a year. Still, the unemployed into rate fell by 0. 2 to 3. 5 , the lowest level in half a century. Larry kudlow, National Economic council director, addressed the numbers a little while ago. Mr. Kudlow i think the economy is now in a turning zone, and i think we had a soft two quarters, but i think we are moving into a much Stronger Economic story. Guy larry kudlow thinking things are going to turn a little more positive from here. Does our next guest agree . Erik nielsen, Unicredit Group chief economist. Erik no, i disagree. I think youre seeing the beginning of the slowdown in the u. S. We are running out of fiscal stimulus that kept us artificially high. We see all of the survey data. Also, the labor market data. They were not terrible, but they are weakish. We are forecasting a mild recession in the u. S. Mid next the second half. The chance that we are on the up again, i will bid happily my money against that. Guy what changed this week . We knew manufacturing was having a hard time. That come up together with the fact we had some bleed across may be manufacturing into it hass, seems like completely changed the perspective on the u. S. Economy. Erik the market tends to be a little blackandwhite, but in my opinion, thats exactly right. Weve had a very weak Manufacturing Sector in the u. S. And globally. Some countries are clearly already in recession in manufacturing. The big thing we are looking out for, when does this shift over to services and households . Households have had a good time so far. Places like france and spain, very high. Very strong. What we see now in the u. S. And in germany are the first signs that the manufacturing crisis is getting to services, and that starts to get universe. If that hits, we probably also get households down the line. Vonnie will the Federal Reserve protect us from a recession or even a severe slowdown . Erik no, that is impossible. We havent figured out yet how to avoid cyclical ups and downs in life, but they can cushion them and delay them. I would suggest that if we end up changing our forecast of a u. S. Recession Second Quarter, Third Quarter next year to a little bit later in the year, it is precisely because the fed has been early out. Why we dont think they are going to cut in october the numbers and labor were not quite were notfer that quite weak enough for that. If you look at todays report in isolation, it wouldnt seem so bad, particularly when you include the revisions for the previous month, which were revisions higher. Im curious as to how much is being pulled forward. Earlier, pimco was saying because activity is going to slow as the trade war continues, what we are seeing is a pull forward of activity that we can expect to be offset in coming quarters. Erik thats right, and i agree, the revision of the past couple of months numbers certainly gives a boost to that story, but if you take the numbers from the census surveys, other extraordinary intake, and just look at the private sector, i today belowre down the normal number that would keep the u. S. Economy afloat. Trend is very clear to me. How fast it goes down, usually it takes three or four quarters running at these 1. 75 , 2 growth. Thats why im a little nervous that we get to zero in the Second Quarter next year or a little later. Guy if we get a trade deal, would that resolve things . Erik if we got a great trade deal, everything would be fantastic, but the probability of that is so low. We are worried about when the auto tariffs will be announced. In the best of circumstances, i think you get trump saying i delay by three months and i want the europeans to do this and that. He would never go back and say i was wrong, tariffs are a terrible thing. It is not good for business. It is not good for sentiment and protect ability. And predictability. Unfortunately, this is what we have to live with for the time being, and it is not good news. Guy is the impeachment story and economic event . Erik i doubt it. Guy it doesnt affect confidence . It doesnt affect the president s ability to enact usmca . It doesnt affect health care . It is a Second Derivative of some of this that worries me. Erik my impression is that policymaking for markets have not been, and america these past few years, a process as much as what trump wakes up in the morning and decides to tweet. Theres a certain impossibility. As you get more and more nervous about impeachment, he fires more out thatcrazy tweets confuses everybody what hes going to do. Timehave a very hard seeing think ability come into this seeing predictability come into this. Maybe it is more about corruption or whatever he wants to talk about than economic policies. Vonnie we were saying earlier the fed cant protect us from recession. What about the president protecting markets, and that having a secondary effect . Can the president keep markets going up even if Economic Activity is slowing . Erik i couldnt imagine how that would work. It is clear that the fiscal expansion the u. S. Undertook and he was able to do should have boosted markets for a number of reasons. Some of them good, some less good, but the market liked it. You should have gotten additional activity for quite some time. My feeling and our estimate is that that is about to peter out. Could he do another one . Could he go to congress and say we are getting a little bit weaker neighbor market data now, and by dont we give tax breaks for the working poor or something that the democrats would have a hard time saying no . Yeah, then you would get a boost. So it is not completely inconceivable, but markets fundamentally work on fundamentals. How much are earnings going to be . What is your dividends . What do you think is going to go Going Forward . The president certainly boosted this with the tax breaks. Hes also added an awful lot of volatility to markets, and thats not good. Lets turn our attention to what is happening in europe and figure out a little bit of what is going on there. I want to start with brexit. , heier this week in madrid feels we are underestimating the effect on the euro zone if there is a hard brexit. If you get a hard brexit, what is it worth to the euro zone economy on the downside . The data are already bad and getting worse. Are we underplaying the effect . If politicians say we are ready are we underplaying the effect if politicians say we are ready . Erik if they somehow get out at the end of october, no deal, no nothing, we will get big disruptions, which would be stressful for anybody who needs to move goods or anything over the border. This is very bad. It is far worse for the u. K. Then for the euro zone, but in some worst case scenario, over a year or two you can estimate maybe the euro zone being hit i up to 0. 5 gdp or Something Like that. Areou are already down, you close to zero suddenly. Its bad. Its a major economy, and if you are deciding to shoot yourself ,n the foot or commit suicide those around you are going to suffer also. Vonnie on that note, we are definitely coming back. Erik nielsen, Unicredit Group chief economist is staying with us. With the latest on markets, heres kailey leinz. Kailey the risk on sentiment being aided by the jobs report we got this morning, even at the headline number missed. Maybe it was better than some of the market had feared after what was a string of really does abutting data. We can see the toll the data has taken on the equity market. We take a look at a fiveday chart of the s p 500, really being whipsawed by every Economic Data point. Even though we are higher for a second day, on the week we are still down by more than 1 after the early aggressive days of selling we saw earlier this week datae weak manufacturing and fears of a slowdown. We are seeing yields lower for a seventh consecutive day. You can see that bonds did spike higher the guild, rather, spiked higher off the back of that jobs report, but we are now down by about two basis points. Maybe it is the reality that the fed will cut rates in october. The odds of the fed cutting at the meeting this month now priced in around 75 . Lets take a look at some movers on the day, some equity winners. Apple is up by about 2. 5 on a report from nikkei that the company is boosting its iphone 11 production by about 10 to meet stronger than a speck in sales. Have edwards life, clorox, and pg e up. Vonnie thank you for that. Room number the function gtv. That allows you to browse all of the charts featured on bloomberg tv, catch up on analysis, and save your favorites for future reference. This is bloomberg. The president of the United States speaking, but ago. Lets go to him. Pres. Trump the numbers came out, 3. 5 unemployment, and that is a german does number, the lowest in over 50 years that tremendous number, the lowest in over 50 years. Before i was president , wages were going nowhere. They were having to have three jobs. Now wages are up, so we are very happy about that. Thing, poland. We have a lot of polish americans in the United States. I will soon be signing certain preliminary applications. We will be giving a full visa waiver to poland. That means people from poland can easily travel there, and people from here can easily go back and forth. People from the u. S. , people from poland, can very easily go back and forth between the United States and poland. Theyve been trying to get this for many, many decades, and i got it for the polish people in honor of the polish people in the United States and in poland, so we are very happy with that. S byou got four pinocchio the post this morning for lying. Pres. Trump i heard that. Thats a nice question. Let me shake your hand, come here. Thats very nice. I figured that was a trick question. What does your letter to pelosi say . Pres. Trump we will be issuing a letter. As everybody knows, weve been treated very unfairly, very different from anybody else. Not only history. You go over any aspect of life, you will see how unfairly weve been treated. Weve done a fantastic job. Everything to me is about corruption. We want to find out what happened with 2016. As you know, theres a lot of work going on on that. I dont care about bidens campaign, but i do care about corruption. I dont care about politics. I think i made clear, and yesterday somebody asked me a question, and i gave an answer, but always in the form of corruption. But i want to do, and i think i have an obligation to do, and probably a duty to do it, corruption. We are looking for corruption. When you look at what biden and his son did and when you look at what other people have done, and i believe there was tremendous corruption with biden, but i think there was beyond, i mean, beyond corruption having to do with the 2016 campaign and what these lowlifes did that hurt 70 people in the trump that hurt so many people in the Trump Campaign was successful despite all of the unfairness. We are looking at corruption. We are not looking at politics. [indiscernible] pres. Trump i dont know. Somebody said that a long time ago, was that 2017 . I dont know. All i can tell you is this. When i speak to foreign leaders, i speak in an appropriate way. If you notice, they dont mention the call that i had with the president of ukraine. They dont mention that because it was so good. The only time they mentioned it was when adam schiff made it up. He talked about pinocchios. That should get 10 pinocchios. He made up a story. It was a phony story. Adam schiff. They dont talk about that anymore. When this came out, it was quid pro quo. Well, there wasnt. Yesterday, the ambassador, who i heard was tremendous, and a german dispersant, he was 100 for what we are saying and a tremendous person, he was 100 for what we are saying. He also said there was no quid pro quo. Thats the whole ballgame. The democrats lost. They never thought i was going to release the phone call between the ukrainian president and myself. , they release that call were jumping around like you wouldnt believe. They didnt know how to respond. And then they found out that the call itself was so bad for them. It was a perfect call. There was nothing. Weve handed the call out to people, and they say wow, this is incredible. We are very proud of that call. When i speak to a foreign leader, i speak in an appropriate manner. We are also doing trade deals with china. We are doing deals with a lot of people. Involvelooking to people, but we could probably figure that out. [indiscernible] pres. Trump no, i had nothing to do with it. I want to do a trade deal with china, but only if its good for our country, and it could happen. Veryu know, they are much coming over next week, as i understand. I would like to do a great deal with china, but only if it is a great trade deal for this country. Will the house proceed with an impeachment inquiry . Pres. Trump the way they have done it, theyve taken away our rights. So if they proceed, even though many of them dont want to, they have to follow their leadership. This will get to the senate and we are going to win. The republicans have been very unified. This is the greatest witchhunt in the history of our country. We went through two years of mueller, and that came out perfect. A few days ago, they start this nonsense. This is just as ridiculous. So the democrats, unfortunately they have the votes. They can vote very easily, even though many of them dont believe the accuser. And i do believe that because of what they are doing, with pelosi and their real leaders, aoc plus three, thats their real leaders i believe they will play a term it is price at the polls. We saw the first glimpse of it two weeks ago in the great state, north carolina. We saw a great clips of whats going to happen because in north carolina, we had two races. One gentleman, dan bishop, was down by 17 points a few weeks ago, and he won easily. The other man was up by a very little bit, and he won by a massive amount, someplace in the 20s. 20 or something, may be higher. So i think you got your first limbs of what is going to happen your first glimpse of what is going to happen. But if you look at what happened in north carolina, we won both of them, and we won them easily. Lead, andm was a big it became a landslide. [indiscernible] pres. Trump well, i dont know about mitch. I have a lot of respect for mitch mcconnell. I saw the statement that he thinks this is ridiculous. He thinks its unfair. I saw his statement yesterday he put out where he read my phone conversation, and he thought it was a wonderful conversation, and it was. But the democrats dont talk about that anymore. They try and go to other things. These people are looking for anything they can get because they know theyre going to lose the election, and we are in election season now. For them to be doing this now, its never been done. [indiscernible] pres. Trump what . Korea. Dealing with north they want to meet, and well be meeting with them. Its probably being set up as we speak, but we will let you know. When north korea would like to do something, iran would like to do something, we have a lot of countries that are in a very good position right now, despite the witchhunt, which hurts our country, and it hurts america. But iran wants to do something. North korea wants to do something, and china would like to do something. The Justice Department said today that joe biden pres. Trump i dont know. Is the Justice Department investigating joe biden . That you would have to ask attorney general barr. But i can tell you as an observer, when i saw observer, what i saw biden do with his son, hes pillaging these countries and hes hurting us. How would you like to have, as an example, joe biden negotiating the china deal if he took it over from me after the election . He would give them everything. He would give them everything. How would you like to have that . Joe biden would just roll out the red carpet. Hed give them everything. So again, this doesnt pertain to anything but corruption, and that has to do with me. I dont care about politics. I dont care about anything. But i do care about corruption. To have somebody take out 1. 5 billion out of china who is totally unfit, hes unfit, to have him get 1. 5 billion, and now im hearing the number 50,000 a month, now im hearing the number 50,000 a month, it is very low. It is a much higher number that biden was getting per month. In fact, it was much higher. [indiscernible] for him, as a totally unqualified person, to be getting hundreds of thousands month, again [indiscernible] pres. Trump is the Justice Department investigating that . I just dont know. Do you think the democrats have devotes for impeachment . Pres. Trump well, they follow the leader. A lot of them dont want them. A lot of them are from trump districts where i won, and they came in after i won, but we are going to win them big. If you look at what happened with the fundraising, we set a record, the republicans, because people are sick and tired of it. I got a call the other night from pastors, the biggest pastors, evangelical christians. They said we have never seen our religion or any religion so electrified. They say theyve never seen anything like it. Churches are joining, hundreds of thousands of people, and thats to a large extent because of you and your partners, the democrats. Do you think it will pass the house, sir . Do you think it will pass the house and die in the senate . Pres. Trump i think this. We have a great relationship in the senate. I have a 95 Approval Ra