Say cuts are needed to pick up momentum. Lets turn the page. Lets look at where currencies are at this point in time. Dollaryen, taking a look at 1. 0939. Taking a look. The shock of flooding. It consolidates in. Pretty much a subdued session. At 1197. R index rishaad lets take a look at india. The session is about 43 minutes away. Futures at the moment down a fraction. Getting you up to speed with what happened. A very topsyturvy day in mumbai. At the end of it, we were pretty much where we started, flat, but we did have some pretty big deltas. Rupee continuing to weaken. Against a little bit of Dollar Strength among some of these emergingmarket currencies. Thething which had gone by wayside a couple of weeks ago when we saw the reserve bank do nothing with interest rates. 50, bute looking at they did not do anything. Some of the verbiage has turned more dovish. As a result, people have been sending yields down. 6. 57 in the 10year note. Lets move things to first word headlines out there. Thanks. South koreas new property rules criticized as negative. Their effectiveness in curbing prices is being called questionable. They were announced as dirk owning and attempts to rein in indraconian attempts to rein skyrocketing home prices. China will further lower the amount of money banks must put aside as reserves in a bid to reduce the cost in small firms. The pboc will cut the reserve ratio and explore increasing rediscounting. The plane as part of official efforts to ease the liquidity crunch. Hackers are being accused of using increasingly Sophisticated Technology to spy on regional rivals. A Cybersecurity Research firm, crowd strike, says the main Vietnamese Group is believed to be linked to the government. Experts say it specifically targeted the Automotive Industry and american businesses with links to the vietnamese economy. Almost 1. 5 billion in financing secured from china, the money coming from local banks, and an soon. Cement may be coming tesla climbed to a fivemonth high. Global news 24 hours per day. This is bloomberg. Lets get to our top story. Muilenburg,g dennis they are struggling to announce the 737 max crisis, boeing is telling to halt shipments. Our correspondent is watching all of this. Where are we with this . We have the chairman becoming the ceo. That is the position Dennis Muilenburg used to have. Dennis muilenburg is out. David calhoun is in. For how long he will be in, we dont know yet. He is 62 years old, he is nearing the retirement age. Is he the right person to lead them Going Forward . Perhaps, he is being brought in d repairr the damage an the damage with customers. A lot of customers here in asia, they have tona, repair relations with suppliers, as you mentioned. Dennis muilenburg repeated the mantra and part of that was driving a hard bargain with suppliers, driving down cost. Dennis muilenburg had a laser focus on reducing cost, in cash, and return on equity,. Some say perhaps at the expense of safety. Obviously,s 20 20 given the couple of crashes. In the long list of things that he must do in addition to repairing relations with the faa, customers, suppliers, and the flying public. Haslinda it is a long, long list. Be david calhouns first order of business . Thet probably has to be regulators, the faa. We are getting word that a second batch of emails have also been turned over to the faa. Again, there was another set of emails in october which shed light on there might have been some hiding of information. There were definitely some simulator tests that pilots had system, about the mcas the pitch augmentation system that was employed in the 737 max. Perhaps that information was not passed on as early as 2016, 2015, on to the regulators. There was a lot of animosity to Dennis Muilenburg, and the regulators. Within hours of Dennis Muilenburg stepping down or retiring or ousting or whatever you want to call it, the faa did put out a statement saying the first order of business for the new leadership is to repair the relationship with the regulators. That would be number one. You need that before you can get airworthy certification for the 737 max, if at all, i might add. Rishaad it is interesting here. The instant messages that were not disclosed, that perhaps got down to the deepest issue. One thing that Dennis Muilenburg was perhaps in implicated , the the closeness coziness of the relationship to the regulator. Thats right. That is part of the criticism. Historically, boeing has had wide latitude with regulators, including the certification process for the 737 max. They also had warm relations on capitol hill. Is being reviewed right now in light of these two accidents and the subsequent relationship that has not improved between the boeing csuite and washington, d. C. , regulators, and lawmakers. Haslinda thank you so much for that. A couple of headlines crossing right now. Sale. Igh tiktoks they would prefer to maintain full control of tictoc tiktok and the majority stake. That would stretch much more than 10 billion. We know that the u. S. Government is threatening that particular success is officials in d. C. Want them to address the security threat. Still ahead, the reserve bank of india has been finding new ways to push money into the weak economy. This time, there is a twist in the tale. More on that next. Rishaad first coming up, the s p 500 closing higher for the eighth time in nine sessions and analysts see that rally continuing. This is bloomberg. Rishaad vanguard sees a 50 chance that the u. S. Stock centric correction next year. The head of Investment Strategy says the risk of a strategy selloff is greater than usual because the optimism of reflation. Out because broken too much optimism essentially has been priced in here. Our next guest sees a continuation of the current equity rally at least until the end of january. Guest. Ring in our he joins us from los angeles. I was the weather . , youing of the correction are seeing a correction, as well, no . Perhaps that the end of the First Quarter, second quarter. All right, so we expect to the good mood to continue at least until the end of january. That is because of three main factors. Geopolitical risks are abating. The u. S. China truce being signed. We will likely see some kind of provision with respect to the brexit saga and a lot of investors have been on the sidelines and are still on the sidelines and they will have to put their cash at work at the beginning of next year. This together with the accommodative Central Banks and potential for skill stimulus are likely to make equity markets start on a good foot with respect to next year. Then as often happens, the market might get a little bit ahead of themselves. Therefore, we would be a little bit cautious around the First Quarter of next year with potentially some profit taking and correction materializing. Haslinda you take a look at vo l, it is looking pretty cheap. Vol is cheap. Take advantage of that. You can take advantage of that into ways. Had your portfolio. Also take advantage in the long side. Going those long data calls will add value to your portfolio. That is in terms of hedging your portfolio. When you take a look at emerging markets best performing in the 10year, going , what does that rally depend on . Will it depend on china, chinas growth . It will be two main factors. First of all china. You are absolutely correct. We know that is one of the main factors. After this truce and the fact that we see the white house having a little bit of motivation to find an additional agreement around q3 of next year, before the election, that could bring an additional leg up for emerging markets. It is going to be very important of the u. S. Dollar performs. We know very well that a strong u. S. Dollar goes against emerging markets economies in general. As we expect the dollar to week and next year, that should add additional fuel to emerging market rallies that we have been seeing. Haslinda we heard from china that go ahead, rish. Rishaad yes, we want to get to our question of the day from the mliv team. If wer could stocks rise get treasuries reaching 2 yields and beyond . Factors that i thatoned before, the fact it is going to be the beginning of the next year, we think the Global Equity index can increase another 3 5 . Even if u. S. Treasuries do go to that kind of value, we dont see that as being a huge stumbling block with respect to equity performance. Should it increase further than that, it might start being a problem. Keep in mind that once again, we have been worried a lot the last year of the 10year spread becoming negative. Now the longer term are going up. The spread is becoming more positive. You could see that as a good sign. We think equities can keep going quite a bit. We mentioned 3 5 to the end of january with nasdaq continuing to be the outperform her with our view. Rishaad many people we have have seen theing emerging market space as the destination in 2020. Are you in that camp as well . Selective emerging markets having a lot of value. We agree with that. A lot of that has already been done, i would say, it is already priced in to the current valuation. We continue to like u. S. Markets, even though from a valuation perspective, they are a little bit on the expensive side. We think that will keep going. In the emerging market space, china is not exactly and emergingmarket, but chinese equities still have quite a lot of room to go, even from these levels. Overall, basically a lot of people will be thinking about emerging markets. We think in the shortterm it will be supported. You dont want to get into a crowded space too much. When everybody goes for the exit, the door for the exit is a little bit small. We would probably remain bullish for the shortterm. We would not advise to go heavily overweight emergingmarket space. Rishaad do you think the areral reserve and the fomc going to have a fairly quiet few months anyway . What does that mean in terms of for stimulus and does it give you an idea of what that kind of dovetails into with markets for Market Participants such as yourself . I definitely hope it will be relatively quiet. That should keep doing quite well. Overall, we think the fed will not act much next year. We still see our base Case Scenario being one more cut. That is because Global Growth remains elusive for the rest of the world. Even though u. S. Data remains robust and is likely to remain relatively robust Going Forward, we expect there to be a gradual decline. It will probably not want to risk and will basically err on the side of caution. We still do see one more cut into 2020. A slight risk of maybe two cuts. We definitely do not see a hike in the fed. That is likely to continue supporting global valuations overall across the board. Rishaad one more cut for the fed. The ecb seems to have its hands tied. Very little they can do running out of ammunition. Fair assessment . Absolutely. We dont think they will do much more than what they are currently doing. Potentially an increase in the current qe, but we do not see that is the base Case Scenario. We think they will keep the current accommodative package. They will hammer the need for fiscal stimulus, which is required in europe, which most of the European Countries have space for. Politically, it is a little bit harder to implement than monetary stimulus. We do not see the ecb acting much. That would be the little difference into next year, why we might see eurodollar moving a little bit higher. Haslinda all right, thank you. Joining us from los angeles. Of course, happy new year and Merry Christmas to you. Plenty more to come. This is bloomberg. Just a few lines at the moment. That pboc officials have been talking about saying that there should be fairness in terms of how companies actually deploy how they are treated. To thell issue guidance chinese news agency. That is currently what we have coming from the peoples bank of china and through the china news service. Have oneith china, we of the rare global hits, tiktok. The American Government is threatening that success. Bloomberg has learned that the company may be weighing a majority stake sale to ease that pressure. Of the options that they are considering at the moment. Thats right. Bytedance is weighing a range of options, including aggressive legal defense, possibly spinning off tiktok as a separate unit that is completely operated out of the u. S. , and even selling a majority stake in tiktok. All of these talks are very preliminary and the company has not really made any decision. Rishaad what about the headquarters . That is another story. Bytedance thats right thats right. Bytedance is operated out of beijing. The company is looking for a Global Headquarters outside of china. They are in the process of looking at that. This started because the u. S. Is doing a review of the acquisition of the business that became tiktok, which is musically. In 2017. Part of that is because the company has become so huge, taking the u. S. By storm, especially among teenagers. They are saying this app is dangerous because it understands what your child is doing in their bedroom. If the Chinese Government wants to access that data, there is the potential. Bytedance is denying that and saying it is operating and storing its data out of the u. S. How would this affect its potential ipo next year . Theiktok is very much Central Business that is underpinning bytedances humongous valuation right now. If they want to take advantage of that, ideally, they would have to go public as soon as possible before even more clouds start gathering over there u. S. Business. I think it is quite essential that they figure out the right strategy and then also what we have been told is the company does still want to control, maintain its control over tiktok , even if it sells a majority stake to outside investors. Rishaad thank you very much indeed for that. Bytedance and tiktok. You are looking at airline surrounded by controversy because of notrage nutrage. [laughter] rishaad remember the haslinda remember the nutrage incident . Criticizing how her brother has been running korean air. She says her brother is ignoring and disobeying the wishes of their late father. The first time any member of the founding family has voiced public discontent. Take a look at how the stock is doing. Your to date, down 14. 5 . Buys, one hold, one cell. Forget the rage, it is delayed by it is still a buy. Go in your bloomberg. Rishaad thank you very much. Lets have a look at what is happening with the Chinese Markets as we get into the lunch break. Getting a bit more conviction. The shenzhen composite up by 0. 2 . As we go for that 90 minutes of lunch. Elsewhere, the little change weve got. Volume already thin. Half an hour before the Trading Community goes off for its lunch break in hong kong. Taking a look at what else we have going on. The s p 500 losing higher for the eighth time in nine sessions. The seasonal factor. Some volatility. That is china markets. Generally speaking, muted christmas eve. Just to say weve got global msci world index at successive record highs. Will we have another one today . That is the question right now. 0. 2 . That is the shanghai composite. This is bloomberg. Rishaad we are looking at live pictures haslinda we are looking at live pictures out of chengdu. It is where the trilevel summit is being held amid fresh threats. North korea said it may fire a longrange missile. This is the first meeting in 15 months of the three countries. We know that the Nuclear Talks have stalled as we inch closer to the yearend deadline set by kim jongun. We are seeing live pictures out of chengdu, where the trilateral summit involving japan, south korea, and china is being held. For now, lets get our first word headlines. Boeing has ousted ceo Dennis Muilenburg after a tumultuous year that has seen two fatal air crashes, the grounding of the companys most popular plane, and a failed mission to the International Space station. He leaves after being publicly rebuked by the aviation regulator for his handling of the 373 max crisis 737 max crisis, boeing pushing too strongly for the plane to be allowed back into circulation. Narendra modi is set for an election defeat in the eastern state. He struggles to contain nationwide anger at his religion based citizenship law. Violence has seen at least 24 people killed. The economy growing at its lowest pace in six years and unemployment at its highest in four decades. Five people sentenced to death for the murder of journalist jamal khashoggi. The saudi court ruled that the killing was not premeditated. It said it did not have enough evidence to incriminate two senior officials close to the crown prince. He has repeatedly denied sanctioning the killing, but the u. S. Says it could not have happened without his knowledge. Credit suisse has blamed its ousted coo for a scandal at the bank. They painted him as a rogue operative. Wasas been blamed and allowed to resign in october. He has now been declared as having been fired and is set to lose millions in stock. Global news 24 hours per day on air and on quick take on twitter. Im paul allen, this is bloomberg. Lets have a look at what is going on in the markets. Japan just coming back from its lunch break. Down a fraction. That still remains the case. A bad time of it at the moment. Korean air. A family feud has been simmering theover the last few days, share price of korean air has been falling. Kospi has been dragged down because of that. Lets take a look at what is going on in chengdu. This is where weve got this trilateral summit taking place between south korea, japan, and china. A joint meeting briefing. One of the reasons they are together is to discuss trade and also perhaps trying to resolve the differences which have been causing a big rift between seoul and tokyo and the chinese perhaps leading a mediation rule with regard to that. Haslinda thats right. It is important that the two countries, south korea and japan, ease tensions between the two sides. To give us a sense about the two