There were glitches this morning with the launch of disney , but disney has come out and said there was so much demand that that is what caused the difficulties, so the market is rewarding disney for perhaps what is to come in terms of numbers as opposed to performance so far on disney . Tyson foods started in the premarket lower on a miss, but is upping its dividend to . 42, and it is up 5 . Guy lets take a look at what is happening here in europe. European markets getting a little bit more traction from an equity point of view, trading on very light volume, though. Telecom stocks one of the main drivers today. Vodafone getting some traction off betterthanexpected numbers. Eurodollar getting very close to the 1. 10 level. We are waiting and watching, trying to see what the president is going to say. No significant leaks thus far. Detailslso getting coming through from boeing. A big bounce yesterday on an announcement related to when it expects the 737 max to get back into service. This is a really interesting number from my point of view. Fell i19backlog jets, but you have to appreciate the size and scale of that order book. 4387 jets still on order at this point in time. The max order book falling a barely swappedr airleasefter swapped 15 dreamliners. But considering the size and scale of the order but, it is amazing considering what has happened. Vonnie president donald trump, as weve been saying, preparing to take center stage and deliver an address to the Economic Club of new york in the next hour. Lets bring in bloomberg trade reporter shawn donnan in washington. Will he stick to prepared remarks . Shawn thats always the question with the president. What we are hearing is that those prepared remarks will, and the words of one person i spoke to this morning, contain a lot of orthodoxy. That, of course, comes from and on orthodox from an unorthodox president. We will be looking for two things in the speech. One, any update on the state of china talks. I am told that we are hearing down here that we shouldnt expect any firm signing dates out of this speech. News on thoseor auto tariffs that the u. S. Has threatened to impose on National Security grounds come on imports from europe. Recent daysd in that the president is likely to delay a decision for a further six months, but until we get that decision firmly announced, who knows what will happen . Tradingwn, the s p is at 3100 right now. We are in record territory. Do you think that is going to embolden the president to be a little bit more hawkish when it comes to china . Shawn potentially. We seen signs that when the markets are dipping, the president seems to pull the foot off the accelerator a bit, but broadly remove or the direction of travel here in terms of the president and trade policy has been towards this smaller phase i deal, to try to get something in the books. That is not just about the markets. Thats also about the broader economy and how its been slowing. He wants to get some positive signals out there, but we should certainly expect him to hail the records that we seen in equity markets in recent days. He certainly does that on twitter. Guy he was doing it early on today, and is probably taking something of a victory lap later new york. Thank you as ever, bloombergs shawn donnan. We are joined by Alberto Gallo, algebris partner and Portfolio Manager. Are you expecting a trade deal anytime soon . Alberto we are not expect in a finalized deal with china. We are expecting discussion and potentially a reduction of tariffs for the last batch. Guy that is not deescalation, is it . Alberto it is a path towards deescalation, but it is a very long path. Sometimes the market jumps on a very optimistic view that things are going to be resolved. However, because the china front still open, we are probably going to see earlier approval of usmca, so positive for mexico and canada, and a delay of anything about europe, and he tariffs, because the u. S. Economy has been slowing. Anarly we think there is urgency to focus only on one front rather than three. Is there aerto, motivating factor in the sense that the election will be taking a lot of Time Next Year . Will the president want to have something to say thats positive about negotiations . Will he want a full deal . The ideal scenario for next year is to achieve a full , but its going to be very difficult because we think the Chinese Government now knows that, essentially, they have the upper hand when it comes to longterm planning because they dont have elections. They are going to push for more ,eeway on intellectual property which are red lines for the u. S. Is going tose two be much harder to achieve in 2020. We will also have more volatility from elections. To see whoave is the democratic candidate, but we think some of them could give trump a very hard time in 2020. Vonnie is it ultimately up to Corporate America to somehow convince President Trump to get this done, given that his advisers are not on the same page as Corporate America . Alberto im not sure this is going to change. Politics works in a nonlinear way. There are tipping points, and above 2 growth, but we understand is that the tipping point, the focus is not the economy. It is the voter base, which is definitely not aligned with corporate interests. Below 2 growth, the economy becomes a priority. Growth in a dip in the u. S. In the first half below 2 annualized, may be a deal with china would be an easier solution to reach. However, there are some but the mental issues regarding intellectual property there are some fundamental issues regarding intellectual property that are not easy to solve even if both parties are willing to cooperate. The market now is in a very hopeful phase, and we dont know if it is going to last the whole of 2020. With think it is a q1 rally, not a structural improvement in the market. Guy the european auto sector in the last month is up by 11. 5 . In anticipation, im presuming, partially for the president , going to possibly delay auto tariffs. Is that a bit much . Alberto European Assets are cheap, and everyone has forgotten about them. Theres a very strong overweight on u. S. Assets. One of the reasons for this was the negative tail risk associated with brexit, and the fear that europe was going to a recession. Having taken out that negative tail risk, the market has focused a lot on upside. In a world where yields are very close to zero or negative, where there is 17 trillion of bonds in negative yields, european bonds are still yielding positive in the periphery, and incorporates and banks and european stocks, much lower multiples than u. S. Stocks. So whenever there is a bit of momentum in the economy, acceleration or some hope of iseleration, the data ated, we could see more of this rotation out of the u. S. Vonnie for that dry powder, where would you be anticipating it is put to work most . Alberto we like nonus assets. We think that some european banks are still interesting in the credit world. We also like emerging market bonds in hard currency, but also sometimes local currency. We think some emergingmarket banks are behind the curve and will need to ease more. For example, and mexico on thursday. We are more concerned on the corporate sector and highyield corporate as we go later in the cycle. We see signs of weakness in Corporate Bond sheets, and this year we have an increasing number of restructurings across u. S. And u. K. Highyield. So we are keeping a positive carry, but we have one foot out of the dance floor because the cycle is very late, and fundamentals are deteriorating. Guy the music is still playing, though. Alberto is going to stick around. Partnergallo, algebris and put fully manager and Portfolio Manager. We will have full coverage of President Trumps remarks at the new york Economic Club at 12 clock at 12 00. Markets,ever a look at heres abigail doolittle. Abigail take a look at the s p the s plagging 500, lagging a bit. They stoxx 600 in europe doing fairly well, up about 0. 5 . A bit of a risk off tone ahead of those remarks from President Trump. All eyes and ears are certainly going to be tuned in. As far as what we have for money market assets, we do have stocks higher on the day and on the year. Very nice rally for the s p 500, up 25 . We have money market assets at about 3. 5 trillion. This is liquidity, haven assets, approaching the high we saw during the financial crisis of 2008. Some haven assets are also gaining ground. Theres an interesting article in the bloomberg today saying that a ubs survey says some of the worlds wealthiest are preparing for a downturn of sometime. Now for the movers driving stocks higher in the u. S. , some of the big cap winners including microsoft and disney, of course, launching that highly and as a Disney Streaming service. Investors cheering that possibility of what it could bring. Those shares up more than 1 , similar to microsoft and facebook. Finally, lets take a look at the twostens spread. It is interesting, we have the yield curve steepening here out of the august flows. Of course, there had briefly been an inversion. That typically is a longerterm signal of a recession ahead, but again, the twostens yield curve is steepening. Vonnie abigail doolittle, thank you for that. Do rim, the function gtv on thebloomberg do remember function gtv on the bloomberg. You can check out all the charts, save your favorites for future reference. Back with Alberto Gallo in a moment. This is bloomberg. From london, im guy johnson. Vonnie from new york, im vonnie quinn. This is the european close on bloomberg markets. Lets check in on the first word news with mark crumpton. Aheada lawsuit will go against the maker of the rifle used in the Sandy Hook Elementary School shootings in 2012. Justices rejected an appeal from the gun maker remington. The company argued that federal law shields firearm manufacturers from most lawsuits when their products are used in crimes. Elizabeth warren is proposing a corporate perjury law to combat misinformation. The democratic president ial candidate is taking aim at companies such as exxon mobil. Warren says exxon has spent millions to spread miss information about fossil fuels and climate change. Exxon has rejected those claims. In spain, acting Prime MinisterPedro Sanchez is forming a coalition to break the political deadlock. Sanchezs socialist party will team up to put an end to months of squabbling between spains leading leftwing parties. Former president jimmy carter recovering after a surgery to relieve pressure on his brain. Hes in a hospital in atlanta. Mr. Carter has fallen ill at least three times this year, and had hipper placement surgery in the spring. He is 95 years old. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. Back to you in london. Guy thank you very much indeed. The idea of a brexit may be hitting the u. K. Labor market. Jobs were lost in the third quarter. It comes as the campaign for the december election intensifies. ,till with us, Alberto Gallo partner and Portfolio Manager at algebris. Is this a clear victory for one party . Do we need certainty more than we need ambiguity, despite the fact that ambiguity may lead to a second referendum or whatever that might ultimately be . Do you think in the near term, certainty is better than that . Alberto i would say that we a new plan to create growth model for the country. Brexit is obviously against that because the u. K. Growth model has been based on importing goods and exporting services. Whether you do a soft brexit or no brexit, or rather you do a hard brexit, this is not fixed. If you do a soft brexit, you cushion the blow [no audio] alberto because while people were spending, now they are starting to feel the pinch, as you said, from a weaker job market. They are spending less, so it is going into the main street. Guy can you see a situation where the bank of england hikes rates . Do you think, given that data you just talked about, is there any scenario in which the bank hikes rates . And did you think the cut is significantly more likely . What is the symmetry . Alberto the bank of england has been saying may be in a hard brexit, we will hike rates. Theres no chance of that. Its very hard for the economy to sustain higher Interest Rates in this environment. Guy how much lower do they go . Alberto they could make a cut if the european economy is weakening. They could go down to zero in an emergency. They wont go there. The bank of england and the fed would not go to negative. However, lets remember that this is a very bad environment for investors because it means lets remember that inflation is relatively high because of a weaker pound. You are any sort of stagflationary environment. Cpi going towards 2 , so you get very negative real returns. Vonnie when did you ask a client exactly when they are when do you tell a client exactly when they are going to get more certainty on brexit and the u. K. . Alberto the u. K. Needs a broader overhaul of its growth model. Services are too big a part of the economy. Finance is too big a part of the economy, so you need an industrial policy. That is going to take a long time. But with the vote on december 12 and what will happen afterwards, re certainty mo on regulations for financial services. We dont expect a big disruption there, where things stand now. However, where we are worried that the sectors we are worried about the most comedy part of the u. K. Depending on investment worried about the most, the part of the u. K. Depending on investment. That is where you go into diversification out of the u. K. And into europe. We will probably see more weakness in that sector, particularly in the small and midcaps. Vonnie do you have any confidence that the chancellor, may or may not be chancellor postelection, that this fiscal plan he comes up with will offset some of this slow down due to uncertainty . Alberto we will have some spending. Theres been a good Budget Surplus in the last few years achieved by the conservative party, so we will have some money to offset this for some time, the impact of brexit. But we try to focus on the structural picture. You would probably have a dovish bank of england. You will have a sustained inflation rate because of a weaker pound, and the imports here are 50 of goods, so we are a net importing country, and he will have some spending, which will mean more supply of u. K. Gilts. U. K. Gilts are looking like a pretty bad place to be in fixed income today. Investors should look for other solutions for other things rather venn investing in rather than investing in u. K. Government bonds. Vonnie Alberto Gallo is staying with us. Coming up, boeing remains optimistic over the 737 max coming back very soon. What still needs to be accomplished for the plane to return to the skies. This is bloomberg. Vonnie its time for your latest Bloomberg Business flash, a look at some of the biggest business stories in the news right now. Dean foods has filed for chapter 11 bankruptcy reorganization. The company is also in advanced talks with Dairy Farmers of america about a potential sale. Dean foods has been losing money since it lost its biggest customer, walmart. In recent years, americans have been tricking less cow milk. Competition has squeezed margins. Nissan still struggling to get struggling to get back on track a year after the arrest of former chairman carlos ghosn. The japanese automaker missed its Sales Forecast for the full year and withdrew its dividend outlook, a blow to top shareholder renault. That is your latest Bloomberg Business flash. Guy. Guy we are nearly done with the european session. This is what it looks like. Spot the eyed one out the odd one out. The ibex down in madrid as we between the democrats and the socialists. The european close is next. This is bloomberg. Guy lets take a look at where european markets are. It you can see italy is outperforming the spain, which is underperforming it. With start off recently volume low today. It was quite low yesterday. We have climbed the wall of worry a little bit as we await the president s speech. That will be 6 00 on the continent. Lets take a look at what is going on. There is an obvious market today, which is spanning out. It is the madrid market trading down by 0. 7 . Is it isnt tracking lower as they put a socialist coalition forming. There is no desire for another election. We will see how long that lasts. Trading. Eing stocks will further pushed on the idea that there will be tariffs put on to europe. The ftse is trading up quite strongly. Part of that is because of the bestperforming sector in europe. , most sectors are in positive territory in europe. In the united states, telecom is leading. Financial services are doing well. In the bottom of the market, the food and beverage sector. Those are the ones that are moving down. Youve got to have amazing eyesight to read that. Take it from me, thats what tapping. Doese stocks, vodafone good numbers in the market is pleased with that. Is lifting the entire sector. , look at howack the market has greeted that. We are up by nearly 20 on that stock today. Another stock that is rising, the tech sector is relatively small. Big, trading strongly on the backside of its number. We are waiting for the president. Vonnie the president will make his way to the Economic Council of new york. Markets are waiting. Tomorrow, we have fed chair powell. Tomorrow, weve got some optimism. The 10 year yield is not moving so much after yesterday, veterans day and the bond markets. We will see if that changes during the speech. The mexican peso is at 1922. Its not weaker by a phenomenal number, its been dragged down by other currencies. They may lower rates by 25 basis points. I want to point at the chilean peso as well. It hit 800 at one point. Will move to the s p stocks on the move. Technology,xt investors are liking that. Disney in spite of the glitches today with disney plus, it is very popular and thats why it is sending the stock up 1. 5 . Lets turn our attention to spa