Investors, adding two more seats, separating the chairman and ceo positions. Guy here in europe, we are approaching the 400 mark on the stoxx 600. The s p already through its record. We are monitoring what is happening on both sides of the atlantic but that is a really big level here in europe. We are up by 0. 3 for the moment. Hsbc doing what it is doing, down 4 . Biggest pointhe drag on the stoxx 600 this morning. The other store be are watching is happening with the british pound. We will see a vote later on this evening to see if Boris Johnson can get a vote. That is not likely to pass. The expectation is that we will get an election this year. Speaking of elections, voters in argentina choosing Alberto Fernandez to be there next president. What does the result mean for a country on the brink of default again . We are joined by Nick Bennenbroek of wells fargo. The peso certainly starting the note, then a up bestperforming against the u. S. Dollar, but this does not mean that we will stay on an upward directory for the peso. What does the election result mean . It will still be a challenging outlook for the peso. Administration, will they look for more populist policies, what will be the relationship with the imf, who have been an important financing source for argentina. How will that flow through until investor attitudes . T is still very challenging a weaker peso is likely. Vonnie the central bank chief change controls will not the trade relationships between argentina and the rest of the world, but it is hard to imagine argentina not defaulting. Do you see it ever been that . Nick we are looking for default in the First Quarter of next year. Approximately 90 of the debt is in nonpeso currency. The argentine currency has been very weak through the course of the year. Given the difficulties in the economy, hesitation on International Investors, theres a good chance we could see default next year. Guy how big of a haircut will it be . Nick on the bonds are currency . Guy on the bond. Some are in the region of 60 to 70 . Guy wow. Ok. That is significantly more than fernandez is talking about, 20 . The market is expecting more. Do you think that is a straight up principle haircut . Nick a combination of both. Principle haircut and extension. That 70 will be baked in over a long amount of time. Slow pain, but pain nonetheless. Vonnie a little bit of action on argentinian stocks. Down this morning, seeing some reaction in the pay so. 10 t of it already big baked in . We know that fernandezs policies will skew toward kirchners policies. Nick primary elections took place earlier in the year and it looked like the fernandezkershner ticket would win. The marginal defeat for the outgoing president was less than expected, but the important thing is, macri is no longer in power and the president elect is fernandez. Even if it is a marginal defeat, we are still looking at a change in policies, potentially change in relationship. Vonnie the central banking chief this morning was trying to reassure markets that he would be looking toward the fed this week and what the fed does will have a knock on effect for em. What is the wells fargo call . We expect a 25 basis point cut this week. The third in a row. Hard to keep track. , so a lot ofdots it will have to do with what the Federal Reserve says, do they leave the door open for further rate cuts. I think the market has gotten very aggressive, bullish in terms of looking for more reserve cuts. The risk is the Federal Reserve is not dovish enough, as opposed to being too dovish. Which would be hard work for emerging currencies. Guy does the dollar go up on that . Nick it does, against particularly some of the emerging currencies. I know brazil is working well through today. Brazil,a, turkey, emerging currencies in general, would struggle in the shortterm term, if you got a more hawkish than expected dovish than expected Federal Reserve commentary. Guy do you think the market is pricing and already the phase one deal . It is not your area but stocks are at record highs. Do you think the market is already there, pricing that in as a reality . They are close. I heard one of the previous guests mentioned there is some caution because we have been here before. We want to see something written down on paper, something more concrete than just words from the u. S. Or chinese administration. I think there is a general expectation that we will achieve some kind of agreement in the near term. I would not expect a positive reaction from the chinese currency. I think it is largely priced into this point. Vonnie we will come back and talk to Nick Bennenbroek. Still want to talk about brexit and more. Lets check in with first word news. Donald trump got a Political Boost just when he needed it. The president announcing a rate killed the governments most wanted terrorist. Being cornered by u. S. Special forces in syria, Islamic State leader blew himself up. Drawn praise from Congressional Democrats but it is unlikely to slow their impeachment investigation. President trump says the u. S. Is ahead of schedule to complete a trade do with china. The president reiterating its possible the agreement could be signed next month in chile. President trump and xi jinping will be there for the asiapacific Economic Corporation summit. The European Union agreed to give the u. K. A threemonth brexit delay. That will prolong the uncertainty for businesses and citizens but also ends the risk of a damaging no deal exit. Boris johnson pushing his own plan to resolve the deadlock. Commonshe house of votes on his call for an electionnorthern california, wis are blazing out of control. In los angeles, a fire is threatening several thousand homes. At the same time, pg e slowly restoring power, after the biggest delivered blackout ever. About 2 Million People have their power shut off. The blackout was aimed from keeping power lines from starting more fires. Global news 24 hours a day, onair, and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Guy thank you. Quick check on what is happening in argentina. We are watching what is happening. Markets are open in buenos aires. Markets are up by 4. 5 . This may be because fernandez did not do as some thought. This may strain the ability of fernandez and kirchner to do what they want. About up, we will talk what is happening with the brexit story. Boris johnson pushing for an election, another vote tonight. That is coming up next. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. Lets talk about the markets, go back down to argentina, where we are seeing the markets trading higher. E are now up by over 6 the markets climbing sharply from the getgo around 15. Inutes ago this seems to be a reaction to the idea that fernandez did not get such a big victory that he will be uncontrollable. We will see macri have an experience influence in terms of constraining policy, and as a result, the market is taking that reasonably positively. The other story is the s p, fresh records. Abigail doolittle has the details. Abigail as for those fresh record highs, up 0. 6 . Also a new alltime high for the nasdaq 100. Up 0. 7 . The stoxx 600 up 0. 4 . The gains not as great but some u. K. Assets undervalued. You have to wonder at least on the day if there is catch up potential. As for some of the big movers, looking at those big movers on the year. 6 on at up 2 contract that they won over amazon. The top point boost for the s p 500. Investors that optimistic, similar to 2009 out of the financial crisis. On a plan which includes boosting the 2022 guidance. As for movers overseas related to global markets, tiffany up 29 , the best day going back to 1987. That on a buyout offer of 120 per share by lvmh. Other bidders could enter the situation. Hsbc falling, missing profits, also cutting jobs. Finally, confirming the risk on tone, we have haven bonds. The yen and gold glover. Lower. Guy certainly feels that way. Thank you. That stock about brexit. The eu agreed to a threemonth delay that will take us to july january 31. Emma chandra has more from westminster. What now happens is that Boris Johnson tries to get an election. Do we have any idea whether he will get it . Emma you are absolutely right. There action returns to the houses of parliament behind me. We will see parliament sit this afternoon. As you mentioned, porous johnson seeking once again for the third time in early general election. He is due to open debate around 5 30 local time, around 1 30 in new york. Debate will last one hour and a half, maybe longer, before a vote is taken by members of parliament on whether or not they agree to an early general election, which Boris Johnson is saying would take place december 12. As we understand, it would be a closed about. Boris johnson and the conservatives dont command a majority in the house. Sayingn Opposition Party that they will not support that early general election. They seem to think there is the risk of a no deal brexit happening even with that Extension Granted by the eu. We are hearing from the likes of the liberal democrats, more opposition parties, that they may be minded to vote for an early general election. That is because they have also put forward their own option to bring early general elections. That would be slightly earlier in december. There could be some room for maneuver with those opposition parties. Emma chandra at westminster. Our thanks to you. We are back with Nick Bennenbroek of wells fargo. What is your base case for sterling . Trading at 128. 56. Does it depend on brexit and the outcome that we see in the next couple of weeks . It does but we think it will gradually hire from here. One important thing that took place was the second reading vote, where parliament agreed on the concept of the deal, even if it did not agree with the motion. That has changed the discussion a little bit. From one meal we see an orderly brexit with a deal as opposed to, we will see. We will have some uncertainty and headlines, but the chances of a no deal brexit have probably gone down at this point. Its just a case of when and how we achieve that orderly exit. Vonnie still a tugofwar between brussels and westminster. When brussels is happy, westminster is less happy, vice versa. Do we see a general election to throw the cards up in the air again . Nick i think we do. Some uncertainty, but having said that, looking at the political polls, the conservative party had been leading. Part of our base case is we suspect that that might ceo the conservatives or the prebrexit powers gain more voting on the parliament. That would be sufficient then for them to get parliament to approve the deal that has been agreed between Prime Minister johnson and the rest of the eu leaders. Again, it will not be smooth, but from here we would see gradual strength going into next year. Guy lets talk by gradual strength. We have had the no no deal trade. You think we grind higher from here. What takes us to 140 on the cable rate . 135. We will look for what takes us there is a general election, one that the conservative party and its prebrexit partners and do relatively well, where they secure a parliamentary majority. By the time we get up to the 31st of january or before, we finally get to agree on a deal between europe and the u. K. The key obstacle to the brexit and orderly deal has been difficult for the u. K. Parliament, u. K. Politicians to agree among themselves, or to get a majority of a deal on that side. That is why you have at least a majority of parliament agreeing to this new arrangement, if we can get enough lawmakers in the u. K. Parliament, that will push us up to the mid1. 30s. Guy that sounds straightforward. As you indicate, it is not. Presumably, it matters if we get a deal done before the election or after. If it is before, the liberal Democratic Party still be trading on the idea that we can caps on brexit. The brexit party will be trading on a hard brexit mandate. If we get a brexit done and then we have an election, both of those tails disappear. How different a set up does that represent in terms of sterling, going into that election . Probably getting the brexit deal done before hand, because there is a wider range of outcomes as you say, the hard brexit type of scenario by the smaller Political Parties or maybe some looking for a different approach, it would be more uncertainty. We would probably look for more volatility and weakness around that. Waiting until after the election for a brexit deal to get struck, that is probably going to be more straightforward. Essentially, you would want to see conservatives and whatever allies they have in Parliament Get the numbers, endorse the agreement and deal thats been struck between the eu and the u. K. If it looks like conservatives are not doing so well and the others are doing better, and we are achieving this brexit deal ahead of time, the headlines will still push the pound around because we are not sure where that brexit deal will end up. Vonnie thank you for your time today, Nick Bennenbroek, wells fargo head of strategy. He is apparently rooting for england in the rugby world cup. Microsoft shares surging after the company wins a 10 billion pentagon Cloud Computing contract. But amazon may contest the decision. That is next. This is bloomberg. Guy live from london, im guy johnson. Vonnie from new york, im vonnie quinn. This is bloomberg markets. Guy shares and microsoft are moving sharply to the upside, currently trading at 144, after the company won a pentagon contract for cloud services. Amazon was considered to be the front runner. For more, lets get to taylor riggs. This is a little controversial. You are right, amazon was seen as the front runner here. Microsoft with their azure cloud product coming out with a surprise. Interestingly enough, as we talk to people on the street, citigroup analysts saying it is not the number. 10 billion is a big deal, but it is incremental. It is really the fact that it was the department of defense contract. Amazon had a cia contract in 2013, and this is seen as a big win for microsoft, given amazon is seen as the leader, even though microsoft is a close number two. Both of them leading in the cloud space. This could open up a flood of additional government contracts for the company. That is where all the excitement is coming from. I mentioned the citi analyst coming up with a positive note. Just howthis shows competitive the environment has become, particularly within the public sector. This will highlight some longterm pressures for amazon web services. You have some other analysts at cowen saying lets wait until the window closes for the protests. You have the potential for amazon to come and maybe challenge this. Are employees at microsoft not thrilled to be a part of this defense contract, but all in all, seen as a win. Briefly, we have alphabet reporting today. They have a Cloud Business, and that will be a focal point. Taylor it will be. In google, its all about the Cloud Business and ads. They have been struggling with broader cloud adoption. Amazon and microsoft are the clear winners. The cloud space is growing bigger and it is up to google to start to show some strength and gain some market share. We know that they need to be buo do so, it will cost. You have to spend and compete on price. That is where they will be focus on the google cloud, but also how the spending impacts those margins. Vonnie taylor riggs, thank you from san francisco. The bid for the blue box. Lvmh looks to add tiffanys to its profile. We will talk about that next. This is bloomberg. The game doesnt end after that insane buzzer beater. Because with Nba League Pass on xfinity you can watch the out of market games you want all season long. And with the allnew xfinity sports zone, you get everything nba all in one place even notifications about your favorite teams. Watch the dropped dimes, monster blocks, and showstopping dunks. Plus get instant access to your teams with the power of your voice. Thats simple, easy, awesome. Say Nba League Pass into your voice remote to check out a free preview. Dont miss out. York, imve from new vonnie quinn. Guy and im guy johnson from london. Trumpa president donald scoring one of the biggest successes of his presidency the killing of an Islamic State leader. It is not likely to blunt the impeachment inquiry. Today, another slate of witnesses will testify before three u. S. House committees. President trumps tariffs are weighing on the economy. The u. S. Merchandise trade deficit unexpectedly narrowed. Exports were the lowest in a year and a half, and imports have not been this low in almost two years. Now to trade talks. The president says the u. S. Is ahead of schedule to sign a big portion of the deal with china. U. S. Energy secretary rick perry saying u. S. Shale production is turning the world on its head. He will be speaking to bloomberg in dubai. We are awash, if you will. The u. S. Developed the technology, put the technology into place, and we are reaping the benefits. The world is reaping the benefits of this. Cheap energy is a good thing for the world. Viviana the u. S. Is one of the worlds Biggest Energy producers because of the oil and gas from shale fields. In chile, Alberto Hernandez will be the next president. He won 48 of the vote, enough to avoid a runoff next month. Voters say no to the Austerity Program of the promarket president. It is a return to veronismo, which traditionally favors workers over business owners. Argentina slashing the amount of u. S. Dollars its citizens may buy. Than 20 700ore journalists and analysts in more than 100 20 countries. I am viviana hurtado. Lvmh, 14. 4 14. 5 billion is the price tag for tiffany. Thinks theylearly have to pay more. The question is how much more. Innie delivery stocks europe have b