Vote for a cut now. Host another cluster of Companies Bring out earnings reports. They are going to write down wework that severely. We can adjust our set up to manage the situation. Everyone is getting a little more scared by the quarter. Sebastian the ceo of Goldman Sachs speaks exclusively to bloomberg. When we look back on negative rates, it is not going to look like a great experiment. Sebastian the current state of u. S. Monetary policy. I would say that policy is not that far off neutral. It is accommodative. We are slightly accommodative. I worry about the policy space we have. Sebastian that is all straight ahead on bloomberg best. Sebastian hello and welcome. This is bloomberg best, your weekly review of the most important Business News, analysis and interviews from Bloomberg Television around the world. Lets start with a look at the top headlines. Sunday, saudi aramco announced plans for an initial public offering. On monday, there was speculation about the valuation of the company. Saudi aramco finally launches its ipo, the 2 trillion valuation, potentially not likely. Big banks estimate the company is worth far last, one point 2 trillion coming from bernstein overnight. Saudi aramco announced its intentions after building up for two years. So the train has left the station now, i guess. All we know is there is going to be a listing on the saudi stock exchange, so the International Listing that had been talked about isnt in the cards immediately. There is no sign of how big a stake in the company the saudi government plans to float. The government is not talking about what sort of valuation it hopes to achieve, and we dont have any firm date on the timeline, beyond the fact we are expecting the prospectus coming out on november 9 or 10. So investors have still got a lot of things, questions they are going to be asking around this offering, and how big the stake is going to be, and the valuations. Uber is out with earnings, not a pretty picture for the stock, shares falling in after hours trading monday after a thirdquarter loss per share, and bookings that missed analyst estimates. Also, uber eats bookings and monthly active platform consumers down. The revenue number was really strong, and what the takeaway tells you is that uber is cutting down on subsidies and that is coming in rides and eats. Revenue growth all being aligned as a sign the company is curtailing subsidies and focusing on profitable revenue growth. A wave of trade optimism is a sweeping markets again as china is said to be reviewing locations in the u. S. Were president xi would be willing to meet donald trump to sign the first phase of a trade deal. It seems to underscore determination by the chinese to think this first phase of the trade deal, but we are still looking for a location and the date as well. It has yet to be fully confirmed, but the fact chinese officials are looking at it is significant. Potential states include iowa, alaska and hawaii as well. President xi jinping says china will give imports more importance. We will continue to lower tariffs. You didnt hear xi mentioned donald trump, but he emphasized the importance of global trade order and multilateral institutions, and said countries shouldnt put their interests above those of other nations. He talked about enhancing trade frameworks in china and said he is interested in signing more free trade agreements with other countries around the world. Xis speech is meant to emphasize the fact china is ready to open its economy further, more than just rhetoric and promises. I want to point out as well that amid the trade war, according to official reports, u. S. Companies actually occupy the most exhibition space here, showing that despite trade tensions between the two economies, they are still here looking to enter the chinese market. We do hit new record highs for the dow jones and the nasdaq. Joe a selloff across global bond markets deepening amid optimism on u. S. China trade, betterthanexpected data in the u. S. Services sector, denting investor appetite for safe haven investors. Assets. 10 year yields are up eight basis points on the day, a big move, but not 2015 temper levels. It is really just the Global Nature of the move that has investors rattled. China is setting its sights for any interim trade deal with the u. S. , drop the tariffs. Beijing has reportedly asked the white house to rollback duties imposed in september and withdraw the threat of any new tariffs. What exactly is china pushing for when it comes to tariff removal . China has made sure that from the very beginning, what it sees as the ultimate goal of negotiating the trade talks is to get all punitive tariffs remove. Both familiar with the negotiations have told us is that for right now for the phase one trade deal, china is trying to get the u. S. To drop the ones imposed in september, and also want the other to raise on the tariffs imposed last year. China wants some commitment from the u. S. That tariffs are going to be rolled back before president xi jinping gets on a plane to the u. S. To sign a trade deal with President Trump. Trade uncertainties back. Possible signing locations have been ruled out in iowa and alaska. The longest that the longer the longer this drags outcome out, the more opportunities there are for things to fall apart. If they can get this done in a quick manner, it would have been ideal for both sides to sort of just really take a good well goodwill they have and that momentum, and just run with it. But now things are starting to deteriorate. Even something as simple as not agreeing on the location, it sours the mood, you could say. Trump himself said he wants the signing in the u. S. And some may raise the question, why does it matter . It is symbolic. It might indicate an upper hand if the deal is being signed in the u. S. The Trump Administration can take the lead in saying that they were the big winners out of this deal. China perhaps doesnt want that, and right now, iscussions are moving towards the idea that this would happen on neutral territory, perhaps sweden, perhaps switzerland, details are still being worked out. The bank of england Rate Decision is out, no surprise, they dont change benchmark rate, coming in at 75 basis points, but you had two dissenters voting to cut rates by 25 basis points. Over the past 18 months, Global Growth has slowed and investment has been weakened trade has contracted. We are seeing a Global Economic slowdown in that, plus in that, plus brexit uncertainty, seems to have put the bank of england in position where two members need to vote for a rate cut now. The rest of the mpc certainly seems to be moving in that direction. The governor talks about the fact we have this global uncertainty, and he talks about the entrenched frexit brexit uncertainty as well. If those two factors get worse, the bank could be looking at rate cuts to support the british economy. China and the u. S. Agreed to lift tariffs in phases as the trade deal progresses, according to a chinese official. They say if china and the u. S. Reach a phase one deal, both sides should roll back existing tariffs simultaneously, an important condition to get it done. The development and talks did come from china earlier today. We did have a u. S. Official confirming there is talk of rolling back tariffs. If this deal can be reached, these are a lot of ifs, but it is a significant comment for the sides to make. I think a lot of people are asking, what is china going to get out of any phase one deal . Chinas number one demand is for the tariffs to be rolled back, no new ones to be put in place, but also for existing ones to be repealed. It would be significant and suggest the fact that this is going to potentially keep china at the table, to wrap up the these these talks. Trade data has bright spots, exports declining less than expected in october but rising on trade optimism. But imports did contract for the sixth straight month as weak demand continues to bite. The emphasis on getting a deal remains. Larry kudlow confirmed with the what the chinese were saying earlier in the day yesterday, that may rollback tariffs. Here is what larry had to say, if there is a phaseone trade deal, there are going to be agreements and concessions. Peter navarro followed it up and people are taking this as him disputing it with kudlow, saying there is no agreement, we will remove any existing tariffs as a condition of the phase i deal. The only person who can make that decision is President Trump, it is as simple as that. Peter navarro may be wrong about a lot of things, but he is right about the decider in this case, and that is the president and we need to hear from him before markets can price and what is likely to happen. Price in what is likely to happen. I havent agreed to anything. China would like to get somewhat of a rollback, not a complete rollback because they know i wont do it. But we are getting along very well china. They want to make a deal. They want to deal a lot more than i do. I am tired of the tweet policies we have from president donald trump. So much seems to hinge on a little issue about whether we get a deal or not at this stage. This is the fundamental direction of trade between america and china, it is not a positive one and i am reluctant to think trump is about to reverse his position fundamentally. Sebastian still ahead as we review the week on bloomberg best, a conversation with the south african president and interviews with fed president as well. David solomon speaks exclusively about european banking. Up next, a busy week of earnings reports. We are profitable in our u. S. Business. It is not an either or for this. Sebastian this is bloomberg. Sebastian this is bloomberg best. Earnings are in the spotlight. Lets round up the results from a highly anticipated set of numbers from softbank. Finally disclosing the damage from softbanks bet on wework and uber. The Japanese Investment powerhouse reports its first quarterly operating loss in 14 6. 5 billion after writing down a string of marquee investments. How much of a surprise . We knew the losses were going to be substantial, but nobody predicted it would be this large. I certainly didnt, and i ran the numbers. I knew they were going to make a 4 billion to 5 billion loss on publiclytraded shares. I didnt know there were going to write down wework that severely, so it is well above my expectations and most were taken by surprise. A steep decline in equity trading revenues, sliding 20 in the Third Quarter from a year earlier. The French Investment Bank is grappling with negative Interest Rates adverse Market Conditions in august and weak demand for products. We are getting an impact on revenue next year, slightly, and saying that, we think that we can adjust our set up to manage the situation. Commerzbank has downgraded its outlook as the chief executive officer grapples with rockbottom Interest Rates and increased competition. We are all still sitting here and believing we would have rate hikes by the ecb throughout 2019 and none of that has happened. That is obviously one part. Everybodys getting a little more scared by the quarter, because it is unclear how to reverse the situation to something that allows Interest Rates, at the end of the day, to do what they are supposed to do, which is steering capital to the economy. A negative Interest Rate doesnt do that properly. That is clear. Westpac caps a rough year for australian banks, worst earnings since the Global Financial crisis per the countrys second largest lender will raise 2. 5 billion australian. What we have just seen is a lot of the Current Trends we have seen coming through, it has been battered from all sides, the cost of misconduct, low Interest Rates crimping margins and finding it harder and harder to recap against an environment where regulators want us to hold more capital. We have grown accustomed to earnings just keeping growing among all the big lenders. Now this year westpac has seen its first drop since 2009 when it was struggling with the aftermath of the crisis. Sao paulo relied on trade income to post a profit above analyst expectations as a sluggish Italian Economy weighed on income from lending. Showed some pretty resilient results, growth net income, 42 coming from Wealth Management. Is this your better area for the future, Wealth Management . Yes, absolutely. And in this negative Interest Rate environment, we will have the speed of Wealth Management areas because we have a lot of italian clients, italian families coming back to Wealth Management. At we are in the unique position where we have this opportunity, our Wealth Management assets by 52 billion euros. So very good opportunities for us. German industrial giant siemens expects a decline in market volume for some sectors next year, highlighting weakness in software and automation divisions. The group warned in august downturn would weigh on its forward earnings goals. Questions are being asked about whether we have found a bottom in global manufacturing. Do you think we had a bottom in the Manufacturing Sector in germany . The big question is, is that going to be a solution to trade war activities, how well brexit turns out eventually, but there are uncertainties. On the other hand we believe there is enough strength in the economy to get this right, especially on the export factor. The economy is still growing, we see china with some uptick, we must not forget about india. And the companies that are strong and competitive will be separated from the ones that are weak, and we will see consolidation challenges. Shares of peloton are falling. We are profitable in our u. S. Business. We have probability, now we are investing in new growth. We are investing in new growth in the u. K. , canada, germany next month, we are investing in digital, content in new york and london. We feel great about not just prioritization of growth, for us it is also prioritizing profitability. It is not an either or for this business because the fundamental model is gorgeous. Refining guidance at ryanair to 900 million euros, 737 max 8 deliveries is on record. Second quarter profit rose 8 as revenue was boosted. Speedy boring boarding and reserved seats outweighing the impact of lower fares. How do you see the road ahead into early 2020 . This winter will be challenging, manus. We have seen consolidation in europe, the failure of thomas cook, other airlines have gone bust, norwegian is teetering on the edge, and also the delay in the max aircraft, we are looking at getting not getting 20 of those, if any, that means there will be less capacity next summer on the back of oil prices. The next two quarters through the winter will be tough. Disney shares late trading after reporting fourthquarter earnings citing Strong Box Office performances for films like the lion king, and games. The key insight in the report, losses in the Company Direct to consumer unit widened to 740 million in part reflecting costs for the disney plus streaming service, which launches tuesday. Disney is always able to pull a rabbit out of a hat, or a mouse in this case. Earnings down but they beat wall street expectations, and some drivers in the past, espn profits were down. Tv was down overall profit wise, but the Film Division is soaring, the theme park and Consumer Products saving the day. So people are going to look at the numbers and cheer. Writing in the financial times, the german finance minister outlined a fourstep plan for the Banking Union. Among the proposals is a mechanism to shield depositors when banks collapse. Building the Banking Union is key to growth in europe. We need the Banking Union because we want to have more growth, more jobs. The proposal is a very positive step, because we know the german position is always being very reluctant on a common postguarantee scheme. And now they are saying we should move in that direction, so that is very positive. Probably in any case where very long and difficult negotiations, the willingness to recognize there is a deadlock that needs to be accounted for is positive. Debate continues on european financial integration. Goldman sachs ceo was in berlin this week and had plenty to say about banking and investment. He spoke exclusively with bloombergs matt miller about prospects for consolidation of european banks. There are lots of compelling reasons why some consolidation here would benefit the strength of the european market. But it is hard, and not clear it would actually happen. I think it would be good for the European Capital markets region if you had more of a consolidated european leader in some way. Whether the local politics or the business rationale allows that to happen, i am not sure, but i watch it as you do. I do think there is certainly an opportunity to strengthen the position of one or two players through some m a or consolidation. Mario draghi, i was at his final ecb press conference, and he said we are happy with our negative Interest Rates experience. Christine lagarde, taking over, expected to tell the line, are negative rates cupping the helping the economy, helping to boost inflation and bring back growth . Negative rates, when the book is written, it will not be a great experiment. Negative rates are not bringing the result we would like to see. Growth in this part of the world has been lagging a negative rates have not allowed an acceleration of that growth. I dont think negative rates are constructive. We will have to wait and see how this plays out over years, but i worry when we look back on nega