Best performing index in the s p and that is more than get that going to is sending the likes of las vegas sands, caesars, and all of the gaming stocks higher. The volume, as well, is massive in those stocks. The 10 year yield at 1. 88 following the ecb this morning. That is a pretty good incline in. Ields we were at 1. 85 just a couple of days ago. Definitely selling in bonds with more positive outlook for the economy. The dollar index repairing some of its declines. Guy stocks here in europe off their highs, but higher on that trumped week. Bonds selling off, yields higher. The pound is trading lower. We are down by 0. 6 percent. The polls close at 10 a click p. M. London time tonight, 5 00 p. M. New york time at 10 00 p. M. London time tonight, 5 00 p. M. New york time. President trump indicating that we have a very big deal on the way, getting very close to a big deal with china. They want it and so do we. It is that last bit that is important. The s p leading an alltime high a little earlier on. Just off that high now, but we are moving up. Dow jones are reporting that negotiators have offered to canceled tariffs on chinese goods that were set to take effect on sunday. Brendan murray, who leads our coverage of global trade, joins me no one trade. It sounds like we have a deal. Brendan it does. When trump used the word deal today and said china once it and we want it, that sent a signal scenariomost bullish for investors might play out. He seems to be setting the table for an announcement soon, and the next 24 to 48 hours, in that regard. Theres a meeting at the white house today with the trade team, where presumably they will hash out some of these issues, and by the looks of things, any escalation in the trade war we put on hold and a deal will be announced. Vonnie of course, that was clearly the way for a santa claus rally, i suppose. With this just be a phase i deal . Is it possible to tell what it involves . Chris it is the phase i deal brendan it is the phase i deal that was more or less announced. The chinese meeting a deal to purchase u. S. Commodities, and it would include presumably some rollbacks on u. S. Tariffs, something china has said must be part of any sort of deal. We are looking at not just a ceasefire in the trade war, but a deescalation in the amount of tariffs. Guy brendan, thinks very much indeed. Brendan leads our global trade coverage. Lets bring in our next guest to get some analysis. Chris watling joining us on set come along view economics ceot, long view economics and chief market strategist. Rollback and we see some of the tariffs coming off come give me a sense of the economic impulse that will generate. Chris i think if you look at a lot of markets and economists this year, the kind of been stalled by this trade deal. There are lots of other things going on. Theres a mini cycle playing out under the surface. The main trend, really, and the tariffs have confused it a bit. I think it will help with that, and i think it is already developing. The markets are saying that some of the data is starting to turn to green shoots. If you get a trade deal as well, it is just a little more icing on the cake. The cherry on top, if you will. Vonnie Central Banks have been busy the last couple of days. Anything out of the fomc or the ecb, madame lagardes first news briefing, to give pause to this market . Chris i would actually say the rivers. I thought some key comments out of Jerome Powell last night about allowing inflation to run a little bit hot were absently what the market needed to hear in terms of no rate hikes for an awful long time, and there may even be i dont think we are going to get more stimulus, but i think point is we leave it in the system for a long time. The primary Market Driver this year has not been earnings. Earnings havent really moved much. They are sort of contracting, the pinning on where you look and how you measure it, but call it flat. What has been driving the market is liquidity. Powell made it pretty clear last night they are not ready to take it away. What is the stock market continuing to risk . Chris there are always risks out there. We could get tomorrow, and suddenly there isnt a deal viviana you never know isnt a deal. You never know with this trade situation. But markets look very attractive, and have done over the last few months. Really, i thought markets look pretty overbought in early to mid november, and actually, they consolidated quite well as they unwound that excessive exuberance signal we saw back at the beginning of last month. That is very impressive price action. Theres always things left of center. Who knows . But the underlying picture with a mini cycle of swing, with portfolios that are defensively positioned, it is very positive for equity markets. Guy what caught my eye this afternoon was the dollar went up on the back of this trade news, which is in some ways a bit of a surprise. It is going to benefit the u. S. Economy, but the biggest casualty in the trade war has been europe. The biggest casualty has been germany. I would have thought that germany, and by extension the euro, would be the highs on this. Chris theres an argument for europe, but i think the dollar backed up as the yield backed up. Its the same trade, really. More yield and dollar reflecting it would be my guess. I think on a three to six month view, i think it might be a bit soggy or, but 12 months and beyond, we are in a secular bull market. The reason for that is the u. S. Is the best growing economy sustainably in the world. Europe has its swings in the global cycle. The u. S. Has much more to it. Much more yield. Its the one region in the world where people should put money for the longterm. Do, if what would you you got specific purposes that you would use that money for . Chris i think cyclicals will do well. Weve seen theyve been building at a relative base globally. They are starting to break to the upside, i think. It is happening with some of the global cyclicals as well. I would do that, and maybe some tech on the others. The thing not to have, of course, is its quality defensives. Really, the stock market is andnsives, cyclicals, longduration growth. I think bond yields go a lot higher from here, and the Global Economy swings up and favors cyclicals with some tech at the other end. Vonnie the thing about yield going higher, though, if Neither Central Bank is seeing inflation anytime soon, why would yields continue to rise . Its a curve steepen her. Basically, the curve into spitting more growth coming through relative to the expeditions weve had, plus over and above that, it is unwinding risky version. The trade deal as part of that. Thats why yields are up and equities are up. But also, the yield mover is telling about the market seeing some green shoots. Look at the semiconductor sector. That has been trending on a global basis, and that is the best decatur out there. I think it is just into spitting more growth coming through. Guy chris is going to stick around. Chris watling come along view watling, longhris view economics ceo and chief market strategist. Vonnie lets get a checkup markets with the kailey leinz. Kailey the stoxx 600 in europe higher by just about 0. 6 percent. We are seeing outperformance in u. S. Equities, with the dow higher by over 200 points. The nasdaq 100 up about their nasdaq and the s p up about 0. 9 . If we look at oneday percentage moves, we havent actually had a move of that magnitude in two months, since back in october. It has been a struggle for the s p 500 to see a gain of over 1 in recent weeks. We see it is the sectors heavily sensitive to tariffs that are really outperforming come of the likes of apparel and auto stocks, each of those indices up about 1. 8 and 2 respectively. Semiconductors are heavily sensitive to each and every develop meant as it relates to china trade. Right now the socks index up by about 2. 25 . The Kbw Bank Index up by more than 2 , in tandem with the massive moves we are seeing in yields to the higher degree, up about eight points. Those higher yields are good for bank stocks. Such take a look at the farm space, both in terms of farm equip and Companies Like deere about 1. 5 today, as well as corn and cotton. Agriculture is front and center in a phase i trade deal, and the market is feeling pretty up to those odds. Vonnie are thinks to kailey leinz for that market update. Remember the function gtv on the bill burck on the bloomberg. Catch up on kin analysis, save your favorites for future reference. This is bloomberg. Vonnie live from new york, im vonnie quinn. London, im guy johnson. This is the european close on bloomberg markets. Lets check in with the first word news. He could go to has the details. Ritika u. S. Negotiators reportedly marking a new deal in the interim trade deal with china. According to the wall street journal, theyve offered to cut existing tariffs on 350 billion of chinese goods, plus willing to cancel new tariffs set to take effect sunday. In return, the u. S. Wants Firm Commitments by the chinese to buy more farm products. The House Judiciary Committee set to conclude a debate on articles of impeachment against President Trump today. The likely result is a partyline result that would send the measures to the floor of the house. This morning, the democrat majority is expected to be back a number of republican amendments. North korea is lashing out at the u. S. For its criticism of pyongyangs Ballistic Missile tests. The u. S. Called the action hostile provocation. North korea called the comments foolish, and said the u. S. May have blown its chance to salvage their negotiations. This comes weeks ahead of a deadline set by leader kim jongun for washington to offer mutually accessible terms to revise nuclear talks. Aramco shares rose again on their second day of trading. At times, the saudi oil giants market value surpassed the 2 trillion mark, which alienated global investors. It ended today at slightly less than five or put at slightly less than 5 higher. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Vonnie thank you. The European Central bank sees rate policy unchanged at Christine Lagardes first meeting as president of the bank. Words forfamiliar first, while seeing the policy review since 2003. Risingarde protectionism and vulnerabilities in emerging markets remain tittle to the downside come up remained tilted to the downside, but have become somewhat less pronounced. Vonnie we saw european yields react as well to those statements. Back with us now is chris ceoing, longview economics and chief market strategist. Im curious as to where you see european yields go following this obvious sort of announcement that the European Central bank continues to be very supportive. Chris its good they are supportive, but it is also good she talked about the risks somewhat dissipating, i think is somewhat the tone of the clip you just showed us. I would agree with that. Globally, the economy is picking up. We see that in u. S. Yields, and bund yields will follow that sort of trend. Dont seem to trade up with as much volatility as treasuries, so i think that gap will widen the bit, but you see bund yields making their way back closer towards the zero level. That would be my expectation. Vonnie what would that mean for any government that would intent none some kind of fiscal stimulus, the German Government being the obvious one . Negativeelds are still , so if they go above it, it will not be that far above it. Basically money not costing much at all. Think it is very encouraging. It shouldnt change the game much to whatever we are now. It is actually still very good for the German Government to issue into that. For germany, the issue is really whether they need it for growth, not the price they are going to pay for it. I think that is the real question. What will be interesting is what lagarde does in terms of trying to get some Climate Change this goal may be paid for by the central bank. The comes out of the Strategic Review they are talking about. Theres clearly a shift globally to accommodate fiscal and Monetary Policy in some kind of helicopter money that is actually an infrastructure project, or whatever it is. Clearly the worlds policymakers are moving the way they think. Guy a still helicopter potentially. A stealth helicopter potential he. [laughter] guy do you think Christine Lagarde is more open to buying different forms of assets then perhaps draghi was. Talk seen von der leyen about a new green deal. You could see a link up with the ecb potentially taking some of that green debt in talked about. Chris it seems they are shifting that way. Personally, i thank this is quite dangerous. It is really the central bank moving into actually making policy. Guy thats why they picked lagarde, wasnt it . Chris i think it is crossing another line. Plenty have been crossed over the last decade, but we are edging ever closer to stealth helicopter money, if you like. The signals have been quite strong this year. Thought the paper that sam fisher coauthored earlier was quite a mark in the ground. Guy does this get the ecb to its mandate of close to 2 inflation . The new projections today, we aint there yet. I am wondering if this gets us there. Chris it may get us there temporarily, but they havent really got the inflation projections for the last decade. Their models have over forecast inflation pretty much at every central bank around the world. Im not sure we get any sustainable basis. We might touch it, but i wouldnt focus on that. The system is clearly broken. Vonnie so what about the fed . Do we see any Interest Rate increases next year . Chris out of the states . I dont think we get the fed increasing rates next year, but i do think towards the end of the year, they may be in a position to Start Talking about raising rates. I think what will be interesting is what they do with the repo program. That liquidity is definitely providing a lot of upside momentum to markets. It concerns me that when they remove it, there may be some challenges. I would watch the repo program closely, but by the end of the year, i wouldnt be surprised if they are starting to talk a hike into the curve. Vonnie do you think there are actually imbalances here, that the Reaper Program could start repo programthe could start something . Chris i think it is another example of some brokenness in the system that needs to be addressed properly. Doing more of a semipermanent program. Its qe, but not qe. All of these factors worry me, that there are some real issues under the surface that reflect the financial is asian of the world system that reflect the financialization of the world system. Over the last 10 years, the s p has done annualized 10 . Over the next 10 years . Are we entering a decade of low returns, similar returns . What can i expect if i am planning my pension or whatever it is . Higher or lower than the last 10 years . Chris i think we are in a secular bull market for u. S. Equities, and maybe halfway through, so i would say the sameish, but there will be a bear market somewhere, and that will be painful. I think youve got to time it and u. S. At a location around it, but yes, the u. S. Is still the place to be. Guy sounds easy. Chris watling, longview economics, thank you very much indeed. We will bring you special coverage of the u. K. Election right here on Bloomberg Television. Dont miss the action that kicks off when polls close. 5 00is 10 00 p. M. On time, p. M. 10 00 p. M. London time, 5 00 p. M. New york time. This is bloomberg. Vonnie its time now for the latest Bloomberg Business flash, a look at some of the biggest business stories in the news right now. Bloomberg has learned Fiat Chrysler and psa group are aiming to sign a formal agreement next week to combine into the worlds fourth biggest car manufacturer, according to people familiar with the matter. Progress being made on a memorandum of understanding. Meantime, there may be a bit of a teteatete between Fiat Chryslers unionized workers. They have a new contract. The uaw says 70 of voting members approved the new deal, the last of three agreements negotiated this year by the union. Fiat chrysler promised 9 billion in investment and that it would create 7900 jobs. Shares of lululemon lower after another quarter of doubledigit sales growth, but that wasnt enough to boost the stock has already almost doubled this year. The market expected lululemon to be flawless. That is your latest Bloomberg Business flash. We saw a nice bounce at the beginning of the session, holding for the most part, although author highs of the day. 1 . S p 500 up about 2 3 of the nasdaq still up 0. 5 . Guy european stocks are higher. We are up by anywhere between 0. 5 and 1 . The ftse 100 outperforming slightly. Cars, sector resources being bid. On the bottom half of the market, it is the bond proxies. Utilities, food and beverage, real estate trading lower. The european close is coming up next. We will analyze all of the action today. This is bloomberg. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Guy we are nearly done with regular trading in europe. Of green asa sea equity markets catch a bid on the back of the trump tweets earlier on. You are seeing markets trading up on the back of this expectation we do get a deal. There are mixed messages from other parts of the u. S. Administration. There is only one key voice you need to listen to, and that is the president. This is the session. For a weight on the stoxx 600. You can see the effect the president had in the United States. Negative before that week came out. It has driven the market up. We are up around. 5 . Relative to where we were, this has certainly turned around. Individual markets look li