Joining us from sunny arizona. Your clients havent done too badly this year. Jeff its been a great year, and what a difference a year makes. Vonnie why is that, jeff . Jeff the reason for that is because this year, we had a lot of very supportive factors pushing the market higher. First and foremost, weve got a very strong and resilient consumer, and that is evidenced Online Retail sales. Next, weve got Central Banks. Central banks have been supportive and accommodative here in the u. S. And overseas. Next, weve got earnings. Earnings are looking like they are going to improve not only in the end of this year, but into next year. Finally, and probably most importantly, shortterm, weve had improvement on the trade front. It looks like we have that phase one trade deal ready in the nottoodistant future. Vonnie you say what a difference a year makes. Obviously, a lot could happen in the coming year as well. What are the greatest risks for 2020 . Jeff the greatest risks we see are policy risks. Central bank policy errors, and then trade issues. On the central bank side of that, we believe those risks are very minor, and thats because Central Banks have been in this easing and accommodative mode here in the u. S. And worldwide, and if you look at worldwide rates, global rates have really fallen this year. 2019, 67ird quarter of rate cuts worldwide. That is the most since the great recession. We move over to trade policy. Thats more of a wildcard or work in progress. It looks like we are getting relief on that, but you never know. We could be one tweet away from a reversal on that, and an escalation in the trade issue. Finally, we do have the president ial election, which is always out there. That is a factor for investors, but not so much in the near term. Vonnie you say Central Bank Policy error. What would make you believe anything Central Banks do would be an error . What is the greatest possibility of error, and where in the world would it come from . Jeff the greatest error would be a reversal in this accommodative stance. A reversal might come with and a centraling, bank in europe, japan, or emerging markets overreacting and reversing course, and raising rates faster than necessary. That would be a big central issue. Right now, Central Banks are very supportive to markets. Thats because inflation worldwide is low, and growth worldwide is tepid, but it looks like Economic Data is starting to stabilize. It improves here in the u. S. And overseas, especially in emerging markets. Vonnie when did everybody change their minds . It feels like for the longest time, everyone was complaining that the central bank was being too accommodative, sending rates lower and lower into negative territory. Todenly now people we speak want the Federal Reserve to keep rates low. Did a seachange happen . Jeff the reason why investors changed their mind is if you go back to last december, remember it was one of the worst decembers on record. That was on the back of the fed raising rates last year several times. There was really fear of recession. Central bank here in the u. S. Was on the wrong side of the trade, raising rates going into possibly a recession. So the fed reversing their stance 180 degrees and cutting rates gave investors assurance that the fed is going to be there and be supportive, and now theres really a view out there that we are not going to be giving them we are not going to be going into recession in 2020 and probably not in 22 anyone. That is probably whats changed. Vonnie so you could say the Federal Reserve did the right thing, and there should be plenty of trust in the fed . Jeff we believe the fed did the right thing. The fed really looked at the data. They listened to markets. What is most important for the fed is really inflation. Inflation just hasnt consistently been able to hit that 2 mark. As long as inflation is tame and growth is ok, but not great, the fed can be in that accommodative mode. Markets,s adjusting to and the last thing i want to mention is the yield curve. Remember at the beginning of this year, we had the issue with the yield curve, some inversion. The fed straightened out the yield curve. The yield curve looks like an upwardly sloping, healthy yield curve, and that is transmitting to investors a positive sign for credit markets. Vonnie you are actually just a little bit defensive on fixed income, but you are still portfolio, sothe what do you do about the fixed income . Jeff thats a very important issue because this year, essentially all Asset Classes went up. Equities, bonds. Bonds went up tremendously this year because of the rate cuts. So now in 2020, but we are advising our clients is that you still need to have bonds in your portfolio to provide income and stability, especially when markets get strapped. Right now, we believe it is time to really rein in the risk in your bond portfolio and focus on higher credit quality bonds rather than reaching for yield in the junkbond or lower credit quality space, in case we run into any volatility. Also, we are pretty late in the cycle here. Fixed income, that you should have a fixed Income Portfolio that acts like a fixed Income Portfolio and take the risk in the equity market. Vonnie speaking of obviously, the equity market has done well this year. 60 , ands up more than yet you are very bullish on Technology Stocks. Where would you go . Jeff thats right. Technology has had a great year, but we believe Technology Stocks can still run in 2020. Thats because theres a lot of attention and capital expenditures, especially in the software sector. Like ourrs that we companies which are levered to artificial intelligence, machine learning, and cloud computing. If you look across enterprises, they are making those upgrades to benefit from those innovative technologies. Vonnie is there any way to insulate yourself from what might be a more negative outcome to the u. S. China trade negotiation, even in terms of intellectual property or security . Jeff thats a great question. Our view on the trade negotiations the past year and a half is its been a work in progress. Its very difficult to get a Competitive Edge trading around what is going on in the trade negotiations. Many times it is two steps forward, one step back. It is a very fluid situation. With regard to insulating your portfolio against the negative outcomes that could come from trade, the best antidote for that is really to stick to your longterm plans with regard to asset allocation, and not get too rattled by shortterm volatility with regard to u. S. china trade. Vonnie jeff, thank you for joining us this morning. Jeff kravetz, u. S. Bank Wealth Management reason Oil Investment director, from scottsdale, arizona there. Lets check in on first word news. Heres of the on a hurtado. Heres viviana hurtado. Alaska public and senator Lisa Murkowski has told the washington street journal that she is disturbed on Senate Majority leader Mitch Mcconnells stance on the upcoming impeachment trial. Partya rare dissent in a that is largely behind President Trump. Swap willprisoner take place december 29. The russian and ukrainian president s agreed to the exchange at peace talks held earlier this month in paris. It remains unclear how any people will be included in the swap. In indonesia, thousands as a ring today to mark the 15th anniversary of the indian ocean tsunami, one of the worst natural disasters in modern history. 26,tsunami was on december 2004. It was triggered by a magnitude 9. 1 earthquake off the island of sumatra. About 231,000 people in multiple countries. 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. Vonnie coming up, Israels Benjamin Netanyahu facing a leadership challenge today after his failure to form a government. We are live in jerusalem, next. This is bloomberg. Vonnie live from new york, im vonnie quinn. This is Bloomberg Markets. Lets check the markets with abigail doolittle. Abigail very small moves on this holiday shortened week. In europe, extended holiday closing those markets. In the u. S. , small gains. The s p 500, dow, and the nasdaq all extending the rally that we have seen in 2019. Another set of alltime highs. You can probably expect continued quiet trading into the end of the year. However, the santa claus rally, many are talking about the fact that santa came all year. The official santa claus rally starts today. It appears to be taking effect come about when we go into the bloomberg terminal, there may be reason to think that santa may officially pass on it. Here is a threemonth chart of the dollaryen in red. When that rises, it is risk on. It tells you the haven yen is not getting a bid, or less of a bid relative to the dollar. 500. Een, the s p the last three months have been very risk on from across asset class standpoint. However, take a look at the yen. It appears as though more so on tuesday, that still today, there could be a bit of a process that when this has happened over the last three months, weve seen the connection back down to that trendline. Should that occur, that could see stocks fall. If we see that, the santa claus rally starting today, ending next friday, might not happen. That is true for another group of the risk assets. If we look at commodities, we see gains for some of these metals, as well as crude. Copper, a tell of the global economy, gaining. Gold also higher. You have some of the growthier commodities trading higher, and gold, considered a haven, also higher. Investors bidding up lots of different assets, even with the dollar about flat. On the year, a monster rally for stocks. The s p 500 on pace for its best year since 2019. That is very risk on, but another area of the risk asset complex not doing as well, but hitting a 12 month high. This is the bloomberg commodity index. Commodities a risk asset because the signal Economic Growth and demand. The rally this year, 8 relative , suggests 500 at 28 that not everybody is a believer on 2020. But right now, you do have the commodities putting in a 12 month high come up or in this risk rally. Vonnie yes indeed. Thank you. An interesting year, absolutely. In israel, Benjamin Netanyahu is defending his leadership of the likud party after twice failing to form a government for israel this year. The challenger to his run as party leader is a former cabinet minister. Lets crossover now to our middle east Senior Writer in jerusalem. Gideon has won a number of key endorsements, but does he actually stand a chance in the race . Reporter he only stands a slim chance of winning, but as one analyst told me earlier today, the fact that netanyahu is up against his first serious rival ever shows the beginning of the end of the netanyahu regime, which is 10 years as prime minister, 20 years as the head of the likud party. Even if saar loses this time, we still have a change in the balance of power to some extent. Netanyahu is losing his hold on power, losing his shine as the kind of king of israel because he failed to form a government twice, and also because the attorney general has recommended an indictment against him. R willthe reasons saa probably not win is that the likud is very loyal to its leaders. They have never voted a leader out, and right now they see net not who is a leader besieged they netanyahu see netanyahu as a leader besieged, under attack. Uncertain things, palestine, for example, they hold the same position. Reporter some people say that saar is more hawkish then netanyahu. Of course, it is very hard to know what netanyahu really thinks, what his policy really is, because it changes according to what he needs to do to stay in power. Can you still hear me . I just lost my vonnie yes. I think we will leave it there because we got a lot of great information, although now it seems like the line might be to hear rating, so thank you. We have a few more hours in voting. 11 00 p. M. Is the official time the polls close, and it is 5 20 right now in israel, so another almost five hours of voting. Our thanks to Gwen Ackerman in jerusalem. We will be back with her after those polls close. Still ahead, an exclusive conversation with the ceo of linkedin on the companys performance in china. This is bloomberg. Vonnie live from new york, im vonnie quinn. This is Bloomberg Markets. Lets bring you a highlight from 2019. Linkedin is one u. S. Social Media Company that does operate in mainland china. Bloombergs taylor riggs spoke exclusively to the ceo about doing business in china three years on from being acquired by microsoft. Have a listen. It is still early days for us in china. If by operating in china, you mean how we have been so successful, our vision is to create Economic Opportunity for every memory of the global workforce. Other companies who have a different sense of purpose or a different mission or overarching objective have probably found it difficult to do business in china because it is inconsistent with what it is they are trying to accomplish. The creation of Economic Opportunity is something essentially every country in the world can get behind. Our operation in china is still very early days. We have an account team in place. We have greater focus in terms of local development that we do in other markets around the world, trying to understand the market fit, the cultural differences, and we will continue to invest. Taylor do you feel any more pushback being a u. S. Tech company in china . Jeff not with regard to the nature of our business. With microsoft and some of the larger companies, theres different implications, but by the virtue of the fact that we are a professional network, the tariffs arent impacting us to the same extent. Taylor theres been a lot of talk that may be china wouldnt company, but set up more red tape, more limits, and that would put more backlash on u. S. Tech companies. Would you feel any of that . Jeff i dont know that that is anything new, per se. Compliantred to be with the law in china and a whole host of different ways, whether that is new regulation, additional friction, things beyond the regulatory purview. The committed of land scape in china is extremely intense. We continue to see that. Operating there is very different than, say, operating in the united states. That is part of our commitment to being in business in china. Taylor we have seen more and more probe investigations into big tex over monopoly, data privacy. How have you managed those headlines . Jeff we made a commitment roughly a decade ago in terms of putting our members first, which is arguably our most important codified value. Maintaining the trust of our members. Without that trust, our ecosystem really doesnt exist. We put together some First Principles with regard to how we would leverage data dating back about 10 years. Those were all about clarity, consistency, and control. As a result of not just talking about that come about walking the walk and codifying that early on in terms of how we prioritize strategies, how we execute, where we make changes, that has served our members very well, and ultimately served the company very well. Weiner linkedin ceo jeff speaking to bloombergs taylor riggs back in september. It is time for your Bloomberg Business flash now. Without the leadership of carlos ghosn, the partnership between nissan and renault is starting to crumble. Since he was arrested in november 2018, insiders at the companies sadie partners have been in a better fight that threatens the viability of both carmakers, with both of their share prices down by 1 3. Tiffany is reporting a rebound in sales, a welcome develop it for french luxury conglomerate lvmh, which is acquiring tiffany. Sales rose 1 to 3 over the and year between november 1 december 4. Tiffany has been expanding in china with a fly chip store in shanghai with a Flagship Store in shanghai. There is a rise in maritime crime in the shanghai strait. Law enforcement in that area to step up patrols. Six unauthorized people were found in the engine room of a tanker. 30 incidents have been reported this year. That is your latest Bloomberg Business flash. Still ahead, bowing in more trouble. A new batch of messages has been turned over to the federal Aviation Administration on the develop at of the 737 max the development of the 737 max. 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. Vonnie live from new york, im vonnie quinn. Is is Bloomberg Markets lets check in on the first word news. Heres viviana hurtados. Heres viviana hurtado. Viviana an Aircraft Carrier sailed through the Taiwan Strait today. There are disputed claims in taiwan and the south china sea. In australia, firefighters battling bushfires are hoping to make headway before this weekends extreme heat wave. Firefighters in New South Wales are taking advantage of cooler weather. More than 70 fires are still burning. Acres have2 million been destroyed nationwide. Nine people have been killed. Interest, Notre Dame Cathedral may not be saved. The landmark is still so fragile, theres a 50 chance it may be beyond repair. Scaffolding is