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