Transcripts For BLOOMBERG Bloomberg Markets Americas 2024071

Timeline solidified for putting the max back into air, and get everything going again. Guy why now . Why not later, and why not earlier . George this is sort of the season where you see some of these changes happen. It seems like it was a little earlier than we thought it would happen. I personally think the faa timeline we got a couple weeks the pushing things into earliest midfebruary to get the max back into fleet, i think that had something to do with it. I think the star liner might have accelerated some of this. I think the star liner makes boeing look bad. It makes it look like things arent getting executed correctly at the company. Maybe that accelerated the change. Guy does this excel or at the process of getting the 737 max back into the air, though . George i dont think it shortens it at all. The risk we had is without boeing working for the faa, you extended that timeline, and i think they dont want to extend that timeline. To have a new face in the ceos chair and approached the faa ,ith a very collaborative style a very engaging style, is where boeing wants to be in 2020. They really need to put this max issue behind them, so i think that had a lot to do with it, but it doesnt shorten the timeline. It just probably ensures the timeline doesnt extend. Guy what strikes me as over the last few months, boeing has tried time and time again to lead the narrative rather than let the faa lead the narrative. Is that the kind of genesis of this problem, that boeing thought it was in charge of the process when the faa was . Is that the mistake that dennis made . George i think it is. He resisted giving a timeframe for the max for a number of months, but as we got to the end of the year, he continued to reiterate his timeframe for the end of the year reentry into fleet. When that didnt happen and the got called to washington to discuss it, they came out with the big surprise for the analyst community, which was a midfebruary at earliest final review for the max. I think that really indicated that boeing and faa werent talking together, werent working well together. I think that was a big surprise for the marketplace, and that is really what they are trying to fix right now. Guy lets bring in justin backman, Bloomberg Aerospace reporter, from dallas. Let me ask you the same question i just put to george. What effect does Dennis Muilenburg going have on this critical question of when the 737 flies again . The max getting back into service has got to be the entire game now. Is it a question of the change of leadership allowing that to happen earlier, or is it that maybe it just wont be pushed even further forward . Jason i think george is probably correct, but i think the biggest change today was the fact that relationships with the regulators, not just in washington, but other places, as well as with other people in congress, was a big factor here. It had become clear that boeing had some issues with the people in d. C. , that they really needed to keep happy. I think boeing is hoping that they can get a fresh start with a different leader. Guy what does this mean for the airlines, do you think . Thisn i dont know that changes the timeframe as much for the max because the faa is doing their safety review and still waiting on some things from boeing. The safety aspect is going to be paramount for everybody in making sure the plane is redesigned correctly. In terms of what it does for airlines, they are ready to keep waiting, essentially. Last week, we saw united say they wouldnt have it in their. Schedule until. June airlines are looking for a bit of certainty it in their schedule until june. Airlines are looking for a bit of certainty. The max is getting pushback from their own operational point of view. Guy in terms of what this means globally, weve been watching to whatnd understand exactly the european regulator is lucky to do. Will it treat the aircraft any differently than the faa . Where do we stand between the relationship with the faa . George it sounds like they have been fairly positive on the relationship over the last couple of weeks, even months. It sounds like they are ready to review the max pretty quickly. Fter the faa i think that is a big positive. I think the regulators dont when a rift between the u. S. And european regulars. I think they want to be back in a world where they can count on each others work. I expect that the will have to take a lead to put the airplane back into fleet, but i expect the european regulator to come after and saytly we are ready to let this airplane fly in europe as well come eight think takes boeing the long way towards getting all the International Regulators on board. Guy so things are starting to get lined up. What did Dennis Muilenburg do wrong . He approached it from a very analytical engineering point of view. In a lot of ways, that did not speak to what people in d. C. Wanted to hear. It did not speak to what families of the people on those two crashed air flights wanted to hear. I think a lot of this was seen as a technical issue. We will get the engineering right and move forward. Really, people in d. C. Were hoping to hear a bit more of a human oriented, compassionate message. This was not just a problem to go out and fix. There were real issues here with the airplane. Guy thanks very much indeed. Bloombergs George Ferguson and justin backman joining us on the news weve had, that Dennis Muilenburg, ceo of boeing, is going to step aside, and dave calhoun will step into his shoes. Lets get the bloomberg first word news with viviana hurtado. Viviana new documents show President Donald Trump asked about u. S. Military aid to ukraine for his call with the countrys president. The center for Public Integrity obtaining heavily redacted emails that show the administration ordered a hold on the aid just after the phone conversation. That july call is what ultimately triggered the impeachment investigation. U. S. Senate Majority Leader Mitch Mcconnell isnt ruling out witnesses at President Donald Trumps impeachment trial. Mcconnell telling fox news hes not opposed to witness testimony. He says the trial should be handled in the same way as former president bill clintons in 1999. Senators decided on witnesses to call after going through opening arguments and a written question period. Eight people were found guilty in the brutal assassination of journalist jamal khashoggi. Five people will be executed for the crime, another three imprisoned for 24 years. Last year, he was killed at the saudi consulate in istanbul. The convictions are unsatisfactory because they dont reveal who ordered the killing. Hong kong getting back to work this morning after hundreds gathered to show support for minority. Ghur 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 viviana hurtado. This is bloomberg. Guy thank you very much indeed. Coming up later in this program, we speak to draftkings ceo basin robbins on the company ceo jason robins on the companys plans to go public. You can check us out online, click on the charts and graphs we are using, and interact with us directly. This is bloomberg. Guy live from london, im guy johnson. This is bloomberg markets. Lets turn our attention in little more detail to those markets and what we should expect in 2020. Downinghleif, abbot deputy chief investment officer, is joining us. We great shoe we greatly appreciate your time. Talk to us about what you see in 2020. In some ways its been a great year, 2019. You see some great returns on equity markets on a yeartodate basis. What does 20 20 look like to you . Carol you are exactly right. Interestingly enough, and the last week or two, weve had an awful lot of clarity on issues psyches saraorket 2019. 2020 psyches throughout 2019. Moderate gdpke a growth path, a moderate Market Growth path, and continued low inflation not only here, but around the world. Hopefully we get some sort of level stabilization and up stick and uptick. Guy do you expect anything like 2019 in 2020 . The s p has done circa 30 this year. Presumably next year cant look that good, can it . Carol you are exactly right. If you took 2019s performance and tracked it back to the beginning of 2018 and took out the Fourth Quarter unexpected near bear market you had in the Fourth Quarter last year, youre really talking a nice, gentle trajectory of 7 to 8 . To stay on that gentle trajectory from here, we are not necessarily looking for 7 to 8 , but someplace in the midsingle digit range is a viable outcome, which would be an amazing outcome after the last couple of years. Guy you would agree with that. Reporter i think thats exactly right. If you look back at the end of q3 last year, the s p is up Something Like 5 . On that trajectory, its been fairly steady. We had a bit of volatility in atween, and the problem is lot of 2019s gains were built on a more dovish fed. We were expecting at the end of , and wer three hikes had cuts in the meantime. Even if the fed does the same sort of thing next year, they wont get the spectacular results they did this year. Weve gone from expecting 10 year treasury yields to go to somewhere above 3 at the end of last year, now we are sitting at 1. 9 and expect that to go even lower next year. The same dont see momentum going into next year. Youve got to worry about the u. S. Expansion becoming a bit long in the tooth. Employment is at full levels. We will see with the latest trade deal and so on, if it is enough to stave off a recession, but i dont know. Im a little bit more bearish than carol. Guy lets address that issue. A lot of the gains, at least in the last 12 months, have been driven by multiple expansion at the fed, which has gone from hiking to cutting. Our earnings going to be enough next year to keep the market on trajectory, the kind of trajectory youre talking about, of 5 7 . Do you think earnings are going to allow that to happen . Carol i think the one linchpin you have here is improved Capital Expenditures. You have a lot of company sitting on a lot of cash in the last year. They have been spending on tech, advertising and marketing, and doing some things tangentially, but they really havent had the confidence or the clarity to be able to spend. Quite a bit of that has clarified in the last few weeks, in particular with detente in the trade war, not only between the u. S. And canada or the u. S. And china, but canada, mexico, and the eu as well. Youve got a new head in Christine Lagarde at the ecb talking about more growth oriented things, and youve actually got some clarity on brexit, like it or not. That helps in a lot of those business decisions, and businesses could be the ones that drive us through another year of nice, moderate gains. Guy i think we might have to wait a little while for more clarity on brexit, but we will leave that to one side now. There are two big questions. One of them is whether we see the data harden up on the back of the trade deal thats been agreed, and some certainty on brexit and so on. The other is whether that was enough to stave off a recession. Theres two things i agree with carol with. Lagarde seemshat to be willing to talk up the european economy a little bit more than draghi was. I think you came out of a draghi press conference, you felt negative about the world, and that didnt seem to be the case with lagarde. Lagarde seems to be trying to put a positive spin on that. Whatever her policy decisions are, we will see. I do think that in the u. K. , brexit, some sort of clarity that we have on brexit, the pent up demand we have in terms of Capital Expenditure is important. I think if we see growth elsewhere, we could see a boom in the u. K. Guy lets just aggress politics from a different angle, and that is the 2020 election. At an Industrial Company in the United States invest money with the election this close . Carol because i think a piece of it is the ceos, like longterm investors, know that come in text know that politics come and go. You owe your responsibility to shareholders and all sorts of other stakeholders to continue to invest in the future, and our economy is going to go on regardless of who is in power. Promises made on the campaign trail may or may not get kept elsewhere. To just sit on the sidelines for nine months trying to prognosticate where an election is going to come out isnt something a ceo can afford to do , particularly not if your competitors are moving and shaking in a market like this. Guy it happened in the u. K. , didnt it . Everyone was worried about may the labour party winning, and the effects of what a corbyn government would do. A lot of the rally in u. K. Assets over the last week or so have been driven by more pricing pricingcorbyn risk than and brexit risk. Eddie and small caps catching up with the idea of the u. K. Spending a bit more money locally and so on. But also, even in the u. S. , we definitely did see a bearing back of Capital Expenditure purely because of Political Risk. Think if 2019 taught us anything, it is that Political Risk is real and markets take it seriously. Guy just going to wrap it up there. Thank you, both of you for your time. Carol schleif, abbot downing deputy cio, and eddie vendor lt. T and eddie van der wa lets get a check on markets. Abigail small moves around the world. Take a look at the nasdaq and the s p 500 in the u. S. , slightly higher, but again, like volume. Stoxx 600 in europe down fractionally. 1. 4 hanghai composite down during the asian session. That bearishness not carrying through to the rest of the world, but that really came on some technology weakness. This is an interesting dynamic that is not exactly the same on the year, but similar. Lets take a look at a yeartodate chart for the s p 500 and the shanghai composite. We see nice gains for both of these indexes. In orange, the s p 500, in white the shanghai composite. For the early part of the year, the shanghai composite really outperforming, up 30 at one point at the s p 500 was up less. As the year has gone on, it is really the s p 500 winning of that, on pace for its best year since 2013. The shanghai composite up about pony percent, headed for its stillear since 2014, but if it bit of a lag. As to whether there is outperformance on this day, not surprising leak, the big story you have been talking about our morning, boeing is helping out the industrial sector of the s p 500. Beneath the surface, the aerospace and defense index is really outperforming, up 1. 3 . Named is up 2. 3 as they the new ceo, David Calhoun, replacing Dennis Muilenburg. Investors clearly like that. What investors are not liking, unless you are bearish, natural gas. It is pretty warm in new york, and natural gas is down 1. 74 , headed to its worst day in almost a month. Of course, on warm weather, some traders of the cool weather that had been around last week was heading forward. Not the case, the forecast in new york is warmer for the next nine days at least. Natural gas suffering as a result. Guy a warm christmas. Abigail, thank you very much indeed. Still ahead, tesla trading higher as the electric vehicle maker secures 1. 4 billion in financing from china. More on that story ahead. This is bloomberg. Guy 24 minutes past the hour. Live from london, im guy johnson. This is bloomberg markets. Time for a Bloomberg Business flash. Lets kick things off with what is happening in switzerland. Credit suisse is again blaming its former chief operating officer for a new spying incident. The statement from the bank says used a contractor to spy on the companys Human Resources chief, and allege that he acted alone in ordering surveillance on another top manager at credit suisse. The company says there is no indication that Tidjane Thiam or any other Board Members knew about the case. Tencent wants to boost investment in europe to more than 10 billion a year, according to the tech giants european cloud chief in an interview with the german newspaper with a german newspaper. Germany as its most promising cloud market beyond china. Than 1. 4 secured more billion dollars in financing from local banks for a shanghai factory. Sources tell bloomberg an announcement will probably be made as soon as this week. Tesla is looking to build on recent momentum as it prepares to begin deliveries of the china made model three sedan in that country. That is your Bloomberg Business flash. Lets check on the markets and see where we are. Like volume definitely a feature today, unsurprisingly. The s p is up just 0. 1 . In europe, we are absolutely flat. Not Much Movement on the u. S. 10 year despite very disappointing durable goods number. Brent down by 0. 2 . Some suspicion that saudi arabia and kuwait will get together on a strip of land called the neutral zone, which has been disputed. That would bring another 500,000 barrels back to the market. Theres boeing, up 2. 2 of its earlier highs on news that Dennis Muilenburg is ousted. Our exclusiveon conversation with bank of america chairman and ceo Brian Moynihan. This is bloomberg. Guy from london, im guy johnson. This is bloomberg markets. Lets check in on the bloomberg first word news with viviana hurtado. Viviana russian president a put in inaugurated a Massive Railway bridge to president Vladimir Putin inaugurated a Massive Railway bridge to crimea. It is meant to encourage the flow of tourists and cargo. Russia annexed the peninsula from ukraine into any 14. The former National Security advisor john bolton describe strategy of the white house toward north korea. He suggests they Trump Administration is not fully committed to stopping north Bloomberg Aerospace<\/a> reporter, from dallas. Let me ask you the same question i just put to george. What effect does Dennis Muilenburg<\/a> going have on this critical question of when the 737 flies again . The max getting back into service has got to be the entire game now. Is it a question of the change of leadership allowing that to happen earlier, or is it that maybe it just wont be pushed even further forward . Jason i think george is probably correct, but i think the biggest change today was the fact that relationships with the regulators, not just in washington, but other places, as well as with other people in congress, was a big factor here. It had become clear that boeing had some issues with the people in d. C. , that they really needed to keep happy. I think boeing is hoping that they can get a fresh start with a different leader. Guy what does this mean for the airlines, do you think . Thisn i dont know that changes the timeframe as much for the max because the faa is doing their safety review and still waiting on some things from boeing. The safety aspect is going to be paramount for everybody in making sure the plane is redesigned correctly. In terms of what it does for airlines, they are ready to keep waiting, essentially. Last week, we saw united say they wouldnt have it in their. Schedule until. June airlines are looking for a bit of certainty it in their schedule until june. Airlines are looking for a bit of certainty. The max is getting pushback from their own operational point of view. Guy in terms of what this means globally, weve been watching to whatnd understand exactly the european regulator is lucky to do. Will it treat the aircraft any differently than the faa . Where do we stand between the relationship with the faa . George it sounds like they have been fairly positive on the relationship over the last couple of weeks, even months. It sounds like they are ready to review the max pretty quickly. Fter the faa i think that is a big positive. I think the regulators dont when a rift between the u. S. And european regulars. I think they want to be back in a world where they can count on each others work. I expect that the will have to take a lead to put the airplane back into fleet, but i expect the european regulator to come after and saytly we are ready to let this airplane fly in europe as well come eight think takes boeing the long way towards getting all the International Regulators<\/a> on board. Guy so things are starting to get lined up. What did Dennis Muilenburg<\/a> do wrong . He approached it from a very analytical engineering point of view. In a lot of ways, that did not speak to what people in d. C. Wanted to hear. It did not speak to what families of the people on those two crashed air flights wanted to hear. I think a lot of this was seen as a technical issue. We will get the engineering right and move forward. Really, people in d. C. Were hoping to hear a bit more of a human oriented, compassionate message. This was not just a problem to go out and fix. There were real issues here with the airplane. Guy thanks very much indeed. Bloombergs George Ferguson<\/a> and justin backman joining us on the news weve had, that Dennis Muilenburg<\/a>, ceo of boeing, is going to step aside, and dave calhoun will step into his shoes. Lets get the bloomberg first word news with viviana hurtado. Viviana new documents show President Donald Trump<\/a> asked about u. S. Military aid to ukraine for his call with the countrys president. The center for Public Integrity<\/a> obtaining heavily redacted emails that show the administration ordered a hold on the aid just after the phone conversation. That july call is what ultimately triggered the impeachment investigation. U. S. Senate Majority Leader Mitch Mcconnell<\/a> isnt ruling out witnesses at President Donald Trump<\/a>s impeachment trial. Mcconnell telling fox news hes not opposed to witness testimony. He says the trial should be handled in the same way as former president bill clintons in 1999. Senators decided on witnesses to call after going through opening arguments and a written question period. Eight people were found guilty in the brutal assassination of journalist jamal khashoggi. Five people will be executed for the crime, another three imprisoned for 24 years. Last year, he was killed at the saudi consulate in istanbul. The convictions are unsatisfactory because they dont reveal who ordered the killing. Hong kong getting back to work this morning after hundreds gathered to show support for minority. Ghur 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 viviana hurtado. This is bloomberg. Guy thank you very much indeed. Coming up later in this program, we speak to draftkings ceo basin robbins on the company ceo jason robins on the companys plans to go public. You can check us out online, click on the charts and graphs we are using, and interact with us directly. This is bloomberg. Guy live from london, im guy johnson. This is bloomberg markets. Lets turn our attention in little more detail to those markets and what we should expect in 2020. Downinghleif, abbot deputy chief investment officer, is joining us. We great shoe we greatly appreciate your time. Talk to us about what you see in 2020. In some ways its been a great year, 2019. You see some great returns on equity markets on a yeartodate basis. What does 20 20 look like to you . Carol you are exactly right. Interestingly enough, and the last week or two, weve had an awful lot of clarity on issues psyches saraorket 2019. 2020 psyches throughout 2019. Moderate gdpke a growth path, a moderate Market Growth<\/a> path, and continued low inflation not only here, but around the world. Hopefully we get some sort of level stabilization and up stick and uptick. Guy do you expect anything like 2019 in 2020 . The s p has done circa 30 this year. Presumably next year cant look that good, can it . Carol you are exactly right. If you took 2019s performance and tracked it back to the beginning of 2018 and took out the Fourth Quarter<\/a> unexpected near bear market you had in the Fourth Quarter<\/a> last year, youre really talking a nice, gentle trajectory of 7 to 8 . To stay on that gentle trajectory from here, we are not necessarily looking for 7 to 8 , but someplace in the midsingle digit range is a viable outcome, which would be an amazing outcome after the last couple of years. Guy you would agree with that. Reporter i think thats exactly right. If you look back at the end of q3 last year, the s p is up Something Like<\/a> 5 . On that trajectory, its been fairly steady. We had a bit of volatility in atween, and the problem is lot of 2019s gains were built on a more dovish fed. We were expecting at the end of , and wer three hikes had cuts in the meantime. Even if the fed does the same sort of thing next year, they wont get the spectacular results they did this year. Weve gone from expecting 10 year treasury yields to go to somewhere above 3 at the end of last year, now we are sitting at 1. 9 and expect that to go even lower next year. The same dont see momentum going into next year. Youve got to worry about the u. S. Expansion becoming a bit long in the tooth. Employment is at full levels. We will see with the latest trade deal and so on, if it is enough to stave off a recession, but i dont know. Im a little bit more bearish than carol. Guy lets address that issue. A lot of the gains, at least in the last 12 months, have been driven by multiple expansion at the fed, which has gone from hiking to cutting. Our earnings going to be enough next year to keep the market on trajectory, the kind of trajectory youre talking about, of 5 7 . Do you think earnings are going to allow that to happen . Carol i think the one linchpin you have here is improved Capital Expenditure<\/a>s. You have a lot of company sitting on a lot of cash in the last year. They have been spending on tech, advertising and marketing, and doing some things tangentially, but they really havent had the confidence or the clarity to be able to spend. Quite a bit of that has clarified in the last few weeks, in particular with detente in the trade war, not only between the u. S. And canada or the u. S. And china, but canada, mexico, and the eu as well. Youve got a new head in Christine Lagarde<\/a> at the ecb talking about more growth oriented things, and youve actually got some clarity on brexit, like it or not. That helps in a lot of those business decisions, and businesses could be the ones that drive us through another year of nice, moderate gains. Guy i think we might have to wait a little while for more clarity on brexit, but we will leave that to one side now. There are two big questions. One of them is whether we see the data harden up on the back of the trade deal thats been agreed, and some certainty on brexit and so on. The other is whether that was enough to stave off a recession. Theres two things i agree with carol with. Lagarde seemshat to be willing to talk up the european economy a little bit more than draghi was. I think you came out of a draghi press conference, you felt negative about the world, and that didnt seem to be the case with lagarde. Lagarde seems to be trying to put a positive spin on that. Whatever her policy decisions are, we will see. I do think that in the u. K. , brexit, some sort of clarity that we have on brexit, the pent up demand we have in terms of Capital Expenditure<\/a> is important. I think if we see growth elsewhere, we could see a boom in the u. K. Guy lets just aggress politics from a different angle, and that is the 2020 election. At an Industrial Company<\/a> in the United States<\/a> invest money with the election this close . Carol because i think a piece of it is the ceos, like longterm investors, know that come in text know that politics come and go. You owe your responsibility to shareholders and all sorts of other stakeholders to continue to invest in the future, and our economy is going to go on regardless of who is in power. Promises made on the campaign trail may or may not get kept elsewhere. To just sit on the sidelines for nine months trying to prognosticate where an election is going to come out isnt something a ceo can afford to do , particularly not if your competitors are moving and shaking in a market like this. Guy it happened in the u. K. , didnt it . Everyone was worried about may the labour party winning, and the effects of what a corbyn government would do. A lot of the rally in u. K. Assets over the last week or so have been driven by more pricing pricingcorbyn risk than and brexit risk. Eddie and small caps catching up with the idea of the u. K. Spending a bit more money locally and so on. But also, even in the u. S. , we definitely did see a bearing back of Capital Expenditure<\/a> purely because of Political Risk<\/a>. Think if 2019 taught us anything, it is that Political Risk<\/a> is real and markets take it seriously. Guy just going to wrap it up there. Thank you, both of you for your time. Carol schleif, abbot downing deputy cio, and eddie vendor lt. T and eddie van der wa lets get a check on markets. Abigail small moves around the world. Take a look at the nasdaq and the s p 500 in the u. S. , slightly higher, but again, like volume. Stoxx 600 in europe down fractionally. 1. 4 hanghai composite down during the asian session. That bearishness not carrying through to the rest of the world, but that really came on some technology weakness. This is an interesting dynamic that is not exactly the same on the year, but similar. Lets take a look at a yeartodate chart for the s p 500 and the shanghai composite. We see nice gains for both of these indexes. In orange, the s p 500, in white the shanghai composite. For the early part of the year, the shanghai composite really outperforming, up 30 at one point at the s p 500 was up less. As the year has gone on, it is really the s p 500 winning of that, on pace for its best year since 2013. The shanghai composite up about pony percent, headed for its stillear since 2014, but if it bit of a lag. As to whether there is outperformance on this day, not surprising leak, the big story you have been talking about our morning, boeing is helping out the industrial sector of the s p 500. Beneath the surface, the aerospace and defense index is really outperforming, up 1. 3 . Named is up 2. 3 as they the new ceo, David Calhoun<\/a>, replacing Dennis Muilenburg<\/a>. Investors clearly like that. What investors are not liking, unless you are bearish, natural gas. It is pretty warm in new york, and natural gas is down 1. 74 , headed to its worst day in almost a month. Of course, on warm weather, some traders of the cool weather that had been around last week was heading forward. Not the case, the forecast in new york is warmer for the next nine days at least. Natural gas suffering as a result. Guy a warm christmas. Abigail, thank you very much indeed. Still ahead, tesla trading higher as the electric vehicle maker secures 1. 4 billion in financing from china. More on that story ahead. This is bloomberg. Guy 24 minutes past the hour. Live from london, im guy johnson. This is bloomberg markets. Time for a Bloomberg Business<\/a> flash. Lets kick things off with what is happening in switzerland. Credit suisse is again blaming its former chief operating officer for a new spying incident. The statement from the bank says used a contractor to spy on the companys Human Resources<\/a> chief, and allege that he acted alone in ordering surveillance on another top manager at credit suisse. The company says there is no indication that Tidjane Thiam<\/a> or any other Board Members<\/a> knew about the case. Tencent wants to boost investment in europe to more than 10 billion a year, according to the tech giants european cloud chief in an interview with the german newspaper with a german newspaper. Germany as its most promising cloud market beyond china. Than 1. 4 secured more billion dollars in financing from local banks for a shanghai factory. Sources tell bloomberg an announcement will probably be made as soon as this week. Tesla is looking to build on recent momentum as it prepares to begin deliveries of the china made model three sedan in that country. That is your Bloomberg Business<\/a> flash. Lets check on the markets and see where we are. Like volume definitely a feature today, unsurprisingly. The s p is up just 0. 1 . In europe, we are absolutely flat. Not Much Movement<\/a> on the u. S. 10 year despite very disappointing durable goods number. Brent down by 0. 2 . Some suspicion that saudi arabia and kuwait will get together on a strip of land called the neutral zone, which has been disputed. That would bring another 500,000 barrels back to the market. Theres boeing, up 2. 2 of its earlier highs on news that Dennis Muilenburg<\/a> is ousted. Our exclusiveon conversation with bank of america chairman and ceo Brian Moynihan<\/a>. This is bloomberg. Guy from london, im guy johnson. This is bloomberg markets. Lets check in on the bloomberg first word news with viviana hurtado. Viviana russian president a put in inaugurated a Massive Railway<\/a> bridge to president Vladimir Putin<\/a> inaugurated a Massive Railway<\/a> bridge to crimea. It is meant to encourage the flow of tourists and cargo. Russia annexed the peninsula from ukraine into any 14. The former National Security<\/a> advisor john bolton describe strategy of the white house toward north korea. He suggests they Trump Administration<\/a> is not fully committed to stopping north Koreas Nuclear<\/a> ambitions. He believes the u. S. Could do more to tighten sanctions on north koreas economy. This would force the hand of leader kim jongun. Bloomberg has learned israel hopes to conclude a freetrade agreement with china in early 2020. Amidwo have been in talks heightened scrutiny between israel and china. The u. S. Is pressuring israel to be cautious with the role of china in its economy. Also, the ongoing political deadlock in jerusalem is slowing negotiations. 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 viviana hurtado. This is bloomberg. Guy thank you very much indeed. Lots to talk about in the transport space today. Boeing ceo Dennis Muilenburg<\/a> is out, and chairman eva calhoun will take over chairman David Calhoun<\/a> will take over. We have seen tesla share prices rise as it looks like the chinese are going to be putting money into the company. Inla, when it ipo to back 2010, they have seen a bonanza. That is the subject of a column out a little earlier today from our editorinchief emeritus matt winkler. He points out that tesla is the best performer in the auto sector this decade. He joins us now. Can i put tesla decide for one moment . Lets talk about boeing. You have covered so many crises such as this at companies around the world. What does the new Ceo Dave Calhoun<\/a> need to do to put this company back on track . He he needs to matt needs to say things that will be deliverable. That was the failing of his predecessor. He repeatedly said things that werent livable, and lost the confidence ultimately of his board, which is why he was replaced. There were obviously other thats, like the disaster boeing has been caught up with, two plane crashes. The ceo lost the confidence of his shareholders because he repeatedly failed to deliver in the manner he said he would. You cant do that forever. Guy Dennis Muilenburg<\/a> was an engineer, and he approached the anblem of the 737 max as engineer. Is there some sort of message we can take away from that when it comes to elon musk and the way he approaches problems . They are both engineers. They both approached problem from an engineering point of view. Is that i problem in a ceo . Matthew i dont think so. Our wonderful founder at bloomberg is an engineer, michael bloomberg. Hes been a next ordinary ceo. So i dont think you hes been an extraordinary ceo. I dont think you can hold it against engineers for what goes wrong in a company. I think theres more to it than that. And icing theres a lot of value to having engineers involved because they are involved in the things that we need to be really paying attention to, which is science, climate change, and i believe it takes an engineer to figure a lot of that out. Guy but in dealing with capitol hill, in dealing with customers, im curious as to the skill set that you think is required. Many people have argued that Dennis Muilenburg<\/a> approached it from the wrong point of view. He tried to approach this problem as an engineering issue, and try to solve it that way. It has not turned out to be the correct way of dealing with it. People have died, and it has been a very difficult journey for boeing over the last few months. How, and your mind, as you look at a case study that is going to be in business schools, should you approach this kind of issue . Matthew matthew i think it is more about integrity. The leaders who are perceived to have integrity have longevity because they mean what they say, and they say what they mean. Over time, that counts for a lot. I dont think it has as much to do with you or engineer to do with you are an engineer or an mba. You can be both. Neither one is going to determine whether you succeed or fail. What will determine your success is whether people trust you, and if people do trust you, you are likely to be a successful leader. That is really the essence of it, i think. Carol why has guy why has tesla outperformed so successfully over the past 10 years . Matthew one word that excites all investors, and is growth and it is growth. Tesla sales growth since it introduced the model s is orders of magnitude greater than the sales growth for the entire automobile industry, which is 38 Companies Across<\/a> the globe. Nothing excites investors more than growth, particularly sales growth. That is what tesla has going for it. To put it in the context of where tesla is today, it started with the model s, then came the and now the model 3, the cybertruck, of which there are more than 200,000 preorders after its unveiling earlier this month. Is literally doing transforming the entire industry with a product that is distinctly different from everything that has been offered to date. In i interviewed elon musk october 2013, and we talked about a lot of things. One of the things he told me in that interview was that part of the purpose of starting tesla was to awaken the german engineer, to get the germans convinced that they needed to produce electric vehicles, and he helped that tesla would act as a catalyst. The germans have woken up. It took diesel and tesla to make that happen, but they are awake now. Volkswagen in particular is spending a lot of money on electrification transformation that needs to be gone through. What does that mean for tesla in the next 10 years . Matthew first of all, he did succeed because if you look at model three sales in the u. S. , it is the number one selling vehicle in the entry luxury category. That means it is out selling everything from germany come out from japan. So elon musk did deliver on that aspiration that you just mentioned. The second thing is, as you said earlier, one thing about tesla that sets it apart is its dna is entirely zero emission and fossil free. That is a big contrast with the rest of the industry, which claims they can kill tesla, but is of their dna or more internal combustion engine. There is a profound difference. When you have hundreds of thousands working on automobiles every day, and their mindset is the internal combustion engine, and you have tesla on the other hand, the mindset is completely fossil free. It is a profound difference. Should volkswagen and all of the others produce electric vehicles , batterypowered electric vehicles, which they will . That will probably be good for tesla because a rising tide lifts all boats. As it becomes increasingly clear that the future is a fossil free, zero emission vehicle, tesla is going to be a huge beneficiary. That is why the stock is where it is. Guy its a great piece. Matthew winkler, thank you very much indeed. Bloombergs editorinchief emeritus matthew winkler. Consumers are driving growth in the u. S. Economy. And of americas ceo chairman Brian Moynihan<\/a> speaking exclusively to bloombergs david westin about what is going to happen next, and whether recession fears are slightly overdone. We will talk about that next. This bloomberg. This is bloomberg. Brand that was the debate raised in 2019. The worldwide slow down was another aspect. We were are going from 3 growth rate to 2 , whatever it ended up being. 1. 7 is our estimate for next year. The debate was will it keep slowing down. Guy lets get back to that bloomberg exclusive. Bank of america ceo and chairman Brian Moynihan<\/a> spoke to david westin about why consumer strength should continue into next year. Brian the idea is the economy is slowing down, and could people be assured it would keep going. That was the debate in the middle of 2019. The yield curve inverted, and other things went on, and the worldwide slow down was another thing. Whatevert from 2. 5 to it ended up being. 1. 7 is our estimate for next year. So will it keep slowing down . It was clear that wasnt the case, but everybody was starting to talk themselves into that was the case. Then you add into it a couple of major geopolitical discussions going on, and think about it. Just in the last four months, you have seen things resolve even know we had something that people said would affect it, which was impeachment. It hasnt changed to the view of the market and the view of growth. That comes down to the u. S. Consumer. David david we also had three rate cuts from the fed. How much did that slow the decline . Brian i think as the fed said in their minutes, it was about insurance to put a little more accommodation in the economy to make sure that the decline in growth rates bottomed out, or people thought it was going to bottom out. What you have seen is as you look at the statistics, they all started moving back a little more. They have started moving back. Still a little tough on the institutional side, the commercial side, in terms of there was a true inventory recession the first part of the year, the classic working through the trade issues, but on the consumer side, i think the fed moves gave the confidence that they were ready to put that insurance policy on the table. David the fed seems to be indicating they will probably stay pat unless things change through 2020. Do they need to keep cutting to keep growth going . Brian i dont think so. We were talking about the yearoveryear growth rate. The Holiday Spending<\/a> is up double digits from last year, see you are seeing it now through cyber monday, and you will have great discussions uput how many days are christmas. And. Theres a lot of spending going on. We feel very good about the consumer in the u. S. , and that is 2 3 of the u. S. Economy. Those are big anchors, and in europe, the consumers are spending also. It big part of the economy is solidly moving forward. David you have a Vantage Point<\/a> that very few have. When you look below the top line numbers in the consumer, do you see any over performance or underperformance, either geographically or socioeconomically . Brian i think you are seeing that wages are growing, especially in the medium income area. If you go back to what the fed was trying to do, they are trying to make sure that the market translates to peoples income growth. That has gone from chair yellen to chair powell, the same thought process. That is a good thing because that means theres more money for more people, and more people are spending. That is a good thing. So that insight you see translate into broadbased spending. Difficultytle bit of about spending on things versus spending on experiences. Youre seeing them both remain strong, with additional emphasis on experience and electronics and things. There are things people can consume. David from what you see at bank of america, can we keep this going with respect to the consumer . Say youy, economists have to have more people working or more productivity. Youre not getting much more people working in terms of the population side. David youre kind of in this nice brian you are kind of in this nice equilibrium which brings people into the labor market, and you are seeing the per dissipation rate and the underemployment rate keep coming down. Those are all good things. If you hear the experts talk about it, theres still a lot of potential slack out there. Theres a lot of people who could work that were pulling back in. The question longterm is you will run out of those people at , and you will start to run out of people. Thats the question about immigration, getting a bipartisan thing that feeds the issue into publishing growth into population growth and away from other things. Guy Brian Moynihan<\/a>, bank of america ceo. Public. Gs is going the move is part of a sale that the Sports Betting<\/a> company says will give it a market value of around 3. 3 billion. Join me from new york is draftkings ceo jason robins. Youre basically using a special Purpose Vehicle<\/a> to roll up your company and another company into one business. Why are you doing it this way . Jason we had three objectives. One was to be able to combine with sb tech, which we think is going to significantly catapult our product and Technology Forward<\/a> in the coming years. The second is to raise capital to enter new states that are rapidly legalizing Sports Betting<\/a> online. The third was to get public. This allowed us to do all three in one transaction. Its a bit of a complicated transaction, but it was also efficient in the sense that we could accomplish all three objectives perfectly, and do so in a pretty short timeframe. Guy was this always the plan . Did you always see yourself going down this road rather than down the ipo route . Jason if you had asked a hero to ago, i would have guessed ipo. The way we looked at it, we started with what are those objectives and what are we trying to accomplish. Is the rightwhat financing vehicle . What is the right structure to accomplish those objectives . Really, this 50 bill perfectly. A really great tea we get to work with. Pitched one of the targets as Sports Betting<\/a>, so we think they will be excited about the deal. It really, it was much more about figuring the objectives first and meeting the objectives rather than the other way around. Is Sports Betting<\/a> going to be in the United States<\/a> . We are pretty comfortable with it here in the u. K. , and regulations have gotten better and better as time have gone. How they will industry be in the United States<\/a> . Which sports do you see yourself focusing on . Jason the real question is how many states legalize Sports Betting<\/a>. That more than anything is going to determine the market size and potential. It is an industry that could reach into the tens of billions. We think it could ultimately end up being be largest Sports Betting<\/a> market in the world. Very excited to see that there is momentum behind that in the states. You mentioned the u. K. It is nice for people to be able to look at other markets and see that on a per capita basis, or whatever other metric you want to look at, to be able to come up with some kind of range of how big this could be in the United States<\/a>. Guy i have friends of mind at that on everything from golf to darts. Do you focus on specific sports, or do you see yourself taking everything in . Jason we offer dozens of sports now, so we will continue to do that. We think it is the most important sports for the u. S. That are going to be basketball, football, baseball, hockey. We think those, and many ways, have been underdeveloped from a Sports Betting<\/a> perspective because they are not as popular in other parts of the world, where much of the Sports Betting<\/a> technology and Market Making<\/a> has been created. We think there is a real opportunity to fill out the most robust markets and products for fans of u. S. Football, baseball, so on and so forth. Thats a big part of the strategy behind the combination. Guy just a final quick question, how will 5g change the nature of the way people consume sports and bet on it . Jason i think the thing was 5g that is going to change is that streaming and other sorts of things are going to become much faster. Data will be able to be much more realtime, and everything will be much more interconnected , with smart cities and smart homes likely coming about. What that will do for our industry is everything is going to have to connect with each other, so am going to want to be potentially making it at on my phone, but i walk into my house and tell my Smart Speaker<\/a> or some other device, make this bet for me tonight. I want everything to know what im doing, and then when i live, i have the bet go have other devices to let me know what i am interested in watching. I think what you see in the coming years is that 5g and other sorts of technology are going to enable this incredibly interconnected experience, and that is really what the consumer is looking for, i believe. Guy thanks for joining us. Really appreciate it. Jason robins, draftkings ceo. This is bloomberg. Guy lets turn our attention to what is happening in chicago. Time for futures in focus. Lets kick things off with oil. Rallied last week, faded friday. What do you think happens next . I think we are caught in a very tight range going into year end. 60 is a positive, but there is still the story of oversupply. We are getting good Economic Data<\/a> in the United States<\/a>. We are starting to see better data of china and the United States<\/a> in the moves on trade. Inwill watch crude estate about a two point 5 range, and we could see some pickup as we get more transparency on the trade deal. At 66 right now. Next year, do you see from where we are now prices significantly higher ors ignatik and lilo where . Do you think higher or significantly lower . Do you think we will get this years highs . I think we will get this years highs unless we see Significant Movement<\/a> with the trade deal in china and the u. S. Consuming a been lot, and we have seen record builds in shanghai. Lets just go as high as more train now. I am only seeing maybe a 9 range in crude. With brent, you could see a challenge may be at the 70 level, but we are going to meet some really positive news out of china, and we are going to need some serious stability in europe. Vix is at the average of 15. Would you be a buyer . Right now it is cheap. This is an opportunity to go into that first quarter, especially in the primaries here in the states. You can look around the complex. Vol is cheap. That is maybe an opportunity to hedge into year end going into the Fourth Quarter<\/a> of next year. Guy have a great holiday. Thank for your time. , ceo ofp, bilal hafeez macro hive come on what 2020 has to offer. The european close is next. 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. Rise as ceoshares Dennis Muilenburg<\/a> is forced out, replaced by David Calhoun<\/a>. Can he repair relations with the faa . Investors heading for their best returns in a decade, so what is the outlook for 2020 . What are the events that should be on your radar screen . We are going to talk about everything from washington to apple buying disney. Live from london, im guy johnson. We are counting you down to the european close here on bloomberg markets. Guy its checked the markets on both sides of the atlantic. A reasonably quiet sessions from the volume point of view. The s p trading a little higher on boeing on the news that ceo Dennis Muilenburg<\/a> is out. The u. S. 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