But the bond proxies are back and they are big, the car sector an similar stories like that are selling off. German tenyear yields catching more of a bid. Something i want to highlight this afternoon is we are seeing emergingmarket currencies being sold off, including the russian ruble and the south korean south american rant. South african rand. For a bloomberg scoop, sources saying Chinese Stateowned entities are in talks to invest 5 billion to 10 billion in aramcos ipo. This comes as saudi arabia seeks commitment from friendlier governments to shore up the sale. We are joined now by our bloomberg reporter. How much is this impacting u. S. Markets and analyst today who might be interested in the ongoing deal . We knew this was going to get attention from a lot of the big sovereign wealth funds, they were going to be the folks to put their money behind it. This is a huge deal for china. Most people want to wait to see what kind of dividends saudi aramco is going to have. They have committed to a minimum of 75 billion. At the top and of their range, we are talking a dividend yield of 7 , 7. 5 , more than you get out of a western oil company, which is about 5 . An em oil company, 6 . If they come in with a dividend yield and the 7 range, money will flow out of some of those western Oil Companies, out of emergingmarket Oil Companies and into aramco, if those other companies do not also boost their dividend yield. Guy i wonder if whether or not actually you will see some of the western investments flowing in that direction, romaine. It will be fascinating to see. You have been seeing a lot of outflows from World Companies recently, and that might have to do with climate concern. Do you think that western investors are going to be putting money to work here . Romaine i think so. We have heard from several analysts, including at Sanford Bernstein and seek u. S. And cqs, if you have any weighting in the oil and gas industry, you will be looking to make room for saudi aramco, whether you like it or not. The question will be Going Forward whether you build on those positions, particularly when it is not clear what direction oil prices are going in. Even right now in the 50 range brentnd 60 plus range on , it is not clear that that will be sustainable over the long term, if it falls below 60 and holds below 60 for any amount of time, that calls into question the valuation that the saudis wants to put this ideal in. Western Money Managers have been pushing back on the companys valuation, and i am wondering if this series of investments from Chinese State own entities, if that would change the metrics on valuation at all. Romaine it does, and gets to the political side of the equation. Once the scoop roque, what other nations, what other sovereign wealth funds are saying, we are not going to let china gain control of this company or have a meaningful stake in this Company Without us also having a meaningful stake . So look to sovereign wealth funds first and then some of the big pension funds, and see if they are willing to come in and play. I think they will wait until december 11, wait to get the ipo out there and see what stake china puts in, and you will see some of those other funds follow, whether they want to are not. Guy lets talk about uber. A big lock today. At a discount i expect they would have probably had to have been at a discount. Romaine, what does this say about where we are and give us a better understanding of what uber is doing, but what is the translation for softbank as well . Romaine you are seeing two things, folks who want to exit their positions who have been in their positions for quite some time, but when you look at the price action this morning, you are seeing a lot of demand for the shares. This is a huge lockup, the biggest we have had, and when you talk about hundreds of millions of shares coming into the market, it will depress the prices. Percent, 4 hat, two at the moment and buyers are willing to come in and scoop up some of these shares. I think there is a longterm play when it comes to ridesharing, and people look at the core business and see a future. Whether this says something broader about softbank and its investments, you have some people who are willing to take a flyer on these shares. They are looking at a stock down from its ipo40 price, and they see a bargain, relatively speaking. Vonnie does it mean that standards are getting higher for when these megagrowth companies see profit . Absolutely. You saw that in regard to some of the Earnings Releases we have seen already out of uber as well as the unicorns that have come out. There is an idea that you have to have the revenue growth. We have known they always had to have that, but they want to see a path to profitability and profit growth. There is a sense with uber specifically that they cannot turn off the faucet of spending and turn on the faucet in regards to raising prices on customers, and that will get them to profitability, which uber says 2021, 2022, they are going to be asked. Atyou believe them, you buy 29 a share. If you do not, you wait it out longer. Guy lets talk about some breaking news crossing, china pacific discussing buying a 2. Illion stake in swiss re we will get more on this story as we get it. We will come back to that story. Story, walk usp through what we know . Romaine the wall street journal and other publications are reporting that hp excuse me, xerox, is putting together a bid for hp. Xerox is about the third the size of hp, but we know their future is going to be tethered to another company. Hp, we are talking about hpq, is the one they are going after. They have lined up financing. Bloomberg is reporting they have financing lined up with citigroup and they are willing to go out there and make a bid. You are talking about two legacy type is mrs. , some businesses that folks have already , some type businesses businesses that folks have already written off, but they are making their own monopoly where they can survive and they can thrive. Vonnie the stock is up only 10 . Is up 2 . Xerox stock hpq is up 10 . The Trump Administration is optimistic about reaching an interim trade deal with china. Thats according to commerce equity or a wilbur ross. He spoke with reporters in indonesia, insisting that chinaent trump insisting President Trump rollback tariffs before the deal is signed. President trump and the Republican Party suffered setbacks in two states in off year elections. In kentucky, governor matt bevin faces what could be an upset loss in his reelection bid. The race has not been called. In virginia, democrats seized both houses of the legislator from legislature from republicans. Prime minister Boris Johnsons reelection bid has been rocked resignation. Johnson formally began his campaign today, for the summer 12 election. And india, the u. S. , and china saw some of the biggest rises in Greenhouse Gas emissions last year, according to a report from a consulting firm. That is because of booming byrgy consumption dominated fossil fuel. A similar story in south asia. In missions jumped emissions jumped due to a growing use of coal. 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. Im ritika gupta, this is bloomberg. I want to come back to this story relating to swiss re, stocks spiking is coming down again on a bloomberg report. China pacific looking to discuss at 2 billion stake in swiss re, swiss re being very keen to find a situation where it can expand in asia. The stock up by 1. 64 . We are, though, trying to figure out exactly what the details are here. They are also looking for another anchor investor. Softbank was pursuing a stake in wrist swiss re. Thats the stock right now, up 1. 64 . This is bloomberg. \ vonnie live from new york, im vonnie quinn. Guy and from london, im guy johnson. This is bloomberg markets. Look at the markets with abigail doolittle. Abigail not a lot of direction to the trading we are seeing this when they. Makes moves in the u. S. , the s p 500 fractionally higher, the tech heavy nasdaq down about 2 . The day is young and it seems as though maybe the bulls are going to try to push through, but without a lack of trade headlines and some disappointing Economic Data earlier today, productivity dropping for the First Time Since 2015. That is true for the german dax, everything ag little bit risk off, as we have bonds trading higher, yields lower for the first time in four days, influencing sectors beneath the surface. If i use the bloomberg i can show you what i am talking about. More risk on than it has been from half an hour to go half down. 3 . O, now perhaps going to turn that around into today, the best three days for energy going all the way back to 2015 or 16, on top, some of the rate sensitive sectors and high dividend looking good for investors with yields lower. Lets take a look at the movers in europe bonding. Hp up 9. 7 . The possibility of a buyout from 18 . At the highs, tapestry, a disappointing quarter. Investors do not like that they a review. They boosted in a key capital view, and Dialog Semiconductor down 6. 6 , they are quarter they they beat, quarter but investors are selling their shares on the day. One of the largest players in global and commercial real estate since the stock soaring. It is back a little bit today, but up about 4. 5 over the last few days. That this is due to sf. Acquisition of broker h we want to welcome our guest this morning welcome, christian. More than 40 of your business is in the new u. S. What are your thoughts about how strong this can continue to be . Christian the cycle has been a very extended one. The u. S. Market is the strongest market in the world and we saw nice rebounds on the Capital Market in the Third Quarter, 22 up yearoveryear, so we have room to grow in that cycle and we are very optimistic about that. The u. S. Youde of have already developed Something Like 5 million square meters of logistics warehouses in places like japan and other asian nations, and youve got a lot underway in china right now as well. Since the trade war started, what do you know about the china what have you noticed about the China Economy . Theirian china is making play forward. They have a longterm view of how they develop their economy and we have seen them being very focused on that. The market in china was very robust in the Third Quarter. You saw it in our own numbers and also in the market numbers, where we saw slight constraints on the leasing side. Uptake is sluggish at the moment. It is not as good as it was, but it is still moving ahead nicely. Guy good morning, guy in london. Lets talk about wework. What effect is the wework crisis having on property markets both in new york, london, and elsewhere . Wework has received obviously lots of attention. I would like to remind everybody that we have about 8000 flex Space Operators that are delivering their services to corporate clients and occupiers overall, so we work has had a great run in making themselves prominent and raising the attention for that sector, but others are there as well. I do not think the impact of the Current Situation is that strong. Is overall flexbased market around the offices world. It will continue to grow significantly over the next 10 years. Wework is still there and what they want to do, others will do. I do not think this is any kind of turning point to the cycle, just because of wework. In many buildings we have seen wework acting as an anchor investor, they are an anchor in that building and as a result of which i kind of wonder what happens now that we work is not going to take as much space on board, how that is going to affect new building development, how those buildings are attracting other clients, it must have a significant sort of affect in certain key properties. Christian well, the takeup is very, very strong around the globe. Record lowtes at a globally, so the market is in a very healthy state. Where wesome pockets work has been particularly strong, here in new york is one of those pockets, but the leasing market is strong here and i would caution to overstate the impact of the situation around wework. Investment markets have had this billion of those actions, and wework is a very, very small part of that. The market will be able to digest the situation. Acquired hsf, right after you mentioned there was going to be a lot of consolidation in the base. Those who have over 5 billion to invest would have to look in one or two markets. Do you see other potential acquisition targets . Growing firstare and foremost organically, and when we have an opportunity to leapfrog with an acquisition we do so. Hsf was a brilliant opportunity for us and we are very pleased with how it is coming in, and you saw it in our Third Quarter results. Predominantly, we tried to move on in an organic way, and there is a lot of things going on at this moment in the world. It is a good situation to be a little bit cautious, to see how things are moving on. Footprint here in the u. S. , but we also have a pretty significant footprint in europe and asia, and the political situation is not everywhere that is [inaudible] guy a quick question from london, what kind of brexit are you looking for . If we get a Boris Johnson break the deal, what effect will that have on the London Property market . First and foremost, we need certainty. Whatever is coming now as a deal, we need certainty for the markets. The level of uncertainty in the past couple of quarters has been unbelievable, and has really hit the london market. Transaction volumes have collapsed and that is not a good thing for the u. K. And it is not a good thing for europe overall. We only hope that they decide on something. I would still like to see them stay in the eu. It only creates losers, that situation. Out,f they want to get they should get out as soon as possible and ideally on a contractual basis with the eu. Vonnie thanks for joining us. We are out of time, but congratulations on your continued success. Jll ceo christian ulbrich. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy and from london, im guy johnson. This is bloomberg markets. Time now for muni moments. Lets join taylor riggs. Taylor im joined by julio bonilla, a u. S. Fixed Income Portfolio manager at schroders. We talked about increasing supply recently, pushing up that ratio. Are those now attractive compared to treasuries . Julio they are moderately attractive. , we you think about munis look at the entire fixed income universes for our clients. When you think about them versus other alternates, like Mortgage Backed securities, the real driver behind that is the fact that we are in low absolute yields. For our clients, it is a function of, you are not getting paid to take Duration Risk, so we are focused on the frontend of the curve. It is that where we do not think munis are quite as attractive. But if you are looking at treasuries, there is value there. Taylor with the low absolute yields, you highlighted that you think of Duration Risk the same as credit risk. What do you think at this moment . Julio when we are thinking about Duration Risk, our target is a three to four year type range, and that is our best value when we are thinking about breakeven analysis. That is the staggering part, when you think about how much you can lose with a few basis points when you are buying at the long end of the curve, but at the front end of the curve we are finding more value, whether it is more traditional Mortgage Backed securities, highlevel corporate bonds, and even in the money market instruments in the muni space. We are finding value there as well. Taylor what percentage of your portfolio is cash to take advantage of any potential q4 selloff . Its tbills, municipal securities, beauty which we consider to be a second form of liquidity in the fixed income universe. That will give us the opportunity to take advantage of nuances in the market that might create value further out the curve. Taylor and quickly, you know that munis typically lack industrials. Walk me through that correlation . Julio absolutely. For munis, a lot of the Economic Activity that takes place today, we will not see that in fundamental data from issuers for the next 12 to 10 months. For us, it is easy to look at the Economy Today and say ok, this is a model we will see for municipal issuers. When i look 12 months ago and fastforward to today, they look ok for municipal issuers. I do not think it is municipal data that will drive that, it will be the move in rates. Fixed julio bonilla, income manager at schroders, thank you for joining us. Vonnie still ahead on bloomberg markets, run a process speaks. The South African president tells bloomberg why he wants the u. S. China trade war to end. Have a look at the major indices, struggling to find direction. Lindsay of movement underneath and in individual stocks. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy and from london im guy johnson. This is bloomberg markets. Vonnie lets take a look at the price of wti, 57. 59. There has been a buildup. Markets looking for another build this week end of the client in glass lean inventories gasoline inventories and for a final utilization to come in at 7. 7 . We got the build, but it was bigger than anticipated, an 8 million barrel build in wti and as you might anticipate, that is taking off some sense of the barrel right now, 57. 42. Build in almost 8 million barrels. Refinery utilization was down and gasoline inventories down as well by 2. 8 million barrels, more than the market was looking for. Lets take you to the bloomberg first word news, heres ritka gupta. Outputs decrease at an annual. 3 in the