The performance of wells fargo, which is proving to be a drag. The 10 year yield in the u. S. Is down to 1. 82 . Wells fargo down more than 4 , one of the worst performers in the s p 500. Plenty of other stocks we will talk about. Tesla is close to that 1 billion valuation mark. Delta boosted on its earnings and also the 737 max grounding, which it doesnt have. We just saw boeing delivery numbers, and for the first time in its 45 year history, it has seen its worst performance against airbus, fewer than half what airbus managed to deliver last year. Guy it will be interesting to see what the 2020 numbers look like this time next year. In europe, volumes are ok today. European equity markets going nowhere in a hurry, up by just 0. 2 . In terms of where we are with the german tenyear, we are now only down by one basis point, so we are a little bit better bid on the bond market today than we were yesterday. But are we going to continue to track back toward zero . 1. 1122. Ar trading to the big story this week is definitely going to be from a foreignexchange point of view what is happening to the United States and china. This time tomorrow, we are going to be seeing that trade deal signed. Yesterday we got news that the chinese are no longer being labeled a currency manipulator by the u. S. Treasury. Ofphen gallo, european head fx strategy at bm oh capital markets, now joining us on set. What is the outlook for the chinese currency . Where does it go from here . Stephen it is important to run number that pboc is always going to remain a currency manager, even if it doesnt get the identification by the u. S. Treasury as a manipulator. It is always going to manage the currency. Guy but is it managing it stronger, or trying to . Stephen recently, yes, but the rally in the renminbi is very much related to risk appetite. We are still a good 4 to 5 below where we were in trade rated terms when the trade war kicked off, when it intensified in 2018. We are still quite a ways lower in the rmb. Two, iswe go into phase this part of the story, or will he chinese adhere to whatever agreement the putdown in phase one . Stephen thats the problem with the relaxation we have seen in global markets. The problem is it is going to take a very long time to verify whether or not phase one is being adhered to. I think the big picture for the global economy, for the trade situation, for the u. S. Dollar, for china. It doesnt really change to 2020. You have geopolitical chess pieces moving around in unprecedented ways all the time. The dollar is the linchpin of the Global Financial system. Theres always constant, steady demand for dollars, and you have a president in the United States who wants to shrink the u. S. Trade deficit. At the same time, the u. S. Is running surpluses in petroleum goods, basically in oil. This is not a parish dollar environment. That is what it looks in a bearish dollar environment. That is what looks like to me. Vonnie nevertheless, some of the other asian currencies potentially, given supply chains and so on, what are your favorite ideas right now . Probablyi would say more so in g10. Dont think there are no opportunities in em. I certainly think there are opportunities in some asian credit markets and some asian stock markets, maybe even a am, but thein lat Bigger Picture for me is if you are looking to get long of these markets, why take the additional fx risk . If you are a dollarbased investor, why take the additional fx risk when term premia across the globe are low, getting lower . The capacity for fiscal policy throughout the globe is very limited, and some cases it is nonexistent. Are generally against tightening, so why take risk further . Right now i think in g10, cable is a buy below 1. 30. I think eurosterling is probably a sell. Will probably outperform the indian rupee over the next one to three months come on the basis that the chinese economy is probably getting close to bottoming out, while indias headwinds are a constant steady force for the indian rupee. Vonnie that is fair. Explain the cable trade, below 1. 30. What would push it to 1. 30, and how long do we have . Roomen i think theres a i think theres room in a one to three month basis. I think the market is underestimating Boris Johnson and the extent of the Foreign Policy shock we could see in the united kingdom. On the whole, i would say the pound has two positives going for it in one negative. Then you negative the negative being that ultimately, the u. K. Will do less frictionless trade with the European Union. Over time that wont matter as much. But probably by the end of 2020, the eu and the u. K. Will probably have the barebones of a trade deal. Guy lets dig into this a little bit more. This carney cut before he goes . Stephen if he does, it is going to be a kneejerk move lower and you buy the dip. I dont see why it matters. Of one to twoe years, you are going to see a much more dynamic fiscal and Monetary Policy coordination in the u. K. Guy so they work handinhand with the treasury, basically. Stephen and the Debt Management office. I think you see more coordination and more in fiscal policy. Johnson has a whole load of new constituencies up north he needs to spend money on, and it looks like the budget is really going to rip up some of the old rules in terms of the Economic Impact some of these projects are going to have. You talk about the market underestimating how much money is going to be spent. By what order of magnitude . Stephen i dont want to put numbers on it. Im not an economist. I think it is going to be big. Think some of it is going to be staggered. I think boris is probably going to save ammunition for during the eu negotiations or whatever you want to call it during the transition period, after the transition peirod, so i think some of it will be staggered. But he needs to get the pipeline going. I think you are public dont to see a focus on Infrastructure Projects. He said all of this. Think thats where the thats where the repricing has to be on a one to three month basis. I think this is what the market is underpricing right now. Vonnie if it gets fiscal packages in britain, do we also get them in germany . Stephen good question. Germany is in the eurozone, so that makes things infinitely more difficult. Right now, i dont see any sign of that happening on a grand scale. I think certainly, if recession risks were to increase dramatically in 2020 or 2021, the risk would be towards looser fiscal policy. That being said, the coalition is, as far as i can see, in disarray, to put it lightly. I think for the time being, the is that we get a fiscal policy move in germany, but after there is more slowing into the mastic economy, if that occurs. In the domestic economy, if that occurs. So i think the issue is that in the euros zone, there is a distinct lack of fiscal maneuverability because of the strictures of the single european currency, which is now 20 years old. Vonnie you could say that germany is trying to find a sort of escape route should it be necessary with its green plan, for example. Lets move on, then. 1. 11 he arrow at the euros at 1. 11. Stephen just to go back for a moment, you mentioned the green bonds. Certainly, green action is a good thing. We shouldnt be negative on green action. That is a good thing. But this is a compromise because it is too politically sensitive for one country to be seen to be funding rightly from its budget Infrastructure Projects in another country. I understand that the eu budget does these things, but for germany to be seem to be funding infrastructure funding in italy or subsidizing italy is lyrically difficult. Is politically difficult. But the size of stimulus you are talking about, they are relatively low relative to the size of the economy. Guy thanks for stopping by to cs. Really appreciate it. Stephen gallo, head of fx otrategy joining us from bm capital markets. Check on markets. His kailey leinz. Kailey in europe, the stoxx 600 lower, but the s p 500 the stock 600 higher, but the s p 500 and the nasdaq lower. Up the screen and take a look at an intraday chart of boeing, we got the delivery numbers for 20 out just a moment ago. We can see a spike for 2019 just a moment ago. On thesee a spike number, 380 planes. The market sees that is better than expected. But take a look at it relative to deliveries last year. It is less than half. Last year, boeing delivered 806 commercial airliners. That is also less than the 863 planes delivered by airbus this year. This is the first time airbus has topped boeing since 2011, and the widest difference between the two and the entire 45 year history. Clearly, the grounding of the 737 max taking its toll, although the shares are in the green on that report today. Big banks, we got a trio out with earnings this morning. Jp morgan is higher by a little more than 2 . Fic trading came in more than 1 billion stronger than traders were estimating it, making it the strongest year for any u. S. Bank in history. Citigroup also moving high by 2 today. Fic trading rose 49 year on year, which was double what analysts were looking for. To the downside, wells fargo falling nearly 4 . 1. 5 billion in litigation charges a big issue there. Vonnie thank you for that. That is kailey leinz. Member the function tv allows you to browse all of the charts featured on bloomberg tv, catch up on key analysis, and save all your favorites for future reference. This is bloomberg. Bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is the european close on bloomberg markets. Lets get first word news. Lets go to courtney donohoe. The u. S. Pushing for stronger wto rules a day before the u. S. And china are set to sign phase one of a trade agreement. The u. S. On the European Union squaring off on their own fight over trade. Be eus new trade chief will in washington, trying to head off a transatlantic commercial war on several fronts. These prospects for thats success looks slim. Both sides have revived all disputes and triggered new ones. House Speaker Nancy Pelosi has had a vote for tomorrow on whether to trans has set a vote for tomorrow on whether to transmit the articles of the beach meant to the senate. A trial in the senate could get underway next week. President trump is charged with abuse of power and obstruction of congress. Iran arrested a number of people in last weeks shooting down of the ukrainian jet. President Hassan Rouhani said u. S. Policies towards iran where the root cause of the mistake. Still, he says that does not excuse iranian officials from responsibility. 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 courtney donohoe. This is bloomberg. Vonnie thank you. Wall streets biggest banks are reporting their latest round of earnings, and it was an especially big quarter for jp morgan. Profit jumps 21 percent, fueled by a rebound in fixed income trading. For the year, it posted the largest income of any bank in u. S. History. Morganbasaks was on jp sonali basak was on jp morgans call with analysts. There must have been something negative in there. Abigail sonali generally sonali generally, wall street seems to be shrugging off any fears that had existed on income pressure, rising tensions in the middle east, even trade tensions. Jamie dimon said things are good for now. So we will see whether those things actually become issues, but for the time being, they really eat home the point that things are really good right now, and they were got across almost every business line they were good across every business line. Guy how much of this was about taking market share from wells fargo, and how much of that can continue . Sonali wells fargo results today were also largely due to litigation costs. What will be interesting is how long a grace period the market gives wells fargo with their new ceo charlie scharf. We did have some analysts today talk about how they feel that wells fargo id actually be a great investment for them just because they think that wells fargo might be ready to grow again at some point under charlie scharf. Vonnie right, and just to mention, Tony Scherrer is from sneed capital. The question around jamie dimons succession never goes away. Is he getting a little frustrated by the amount of times asking when he will be leaving . Sonali this was a very big day for the rising stars of wall street to really show their stripes. We had the cfo of jp morgan with the call again. Jane frasers business at citigroup also. So youre right, at what point do these stars start to take the homes of these banks, and will any of them be a woman . Jamie definitely said another five years for me is on the line. Guy not giving up yet. Fixed income did really well. What does that tell us about Goldman Sachs . Sonali people are expecting goldman and Morgan Stanley to have stronger figures in terms of a yearoveryear rise. Lets see if we can hit those estimates. Jp morgan blew it out of the park by 1 billion over wall street estimates. Citigroup was very similar, with about 600 million or so over wall street estimates. Whether they can beat at that margin will be interesting. It is worth mentioning equities as well. Jp morgan made it a point to highlight some gains in equities and prime brokerage. They took some share from Deutsche Bank in that space in the last couple of quarters. Morgan stanley is the number one Equities Trading house on wall street, the number one prime brokerage. Lets see if jp morgan made a dent there. Point that jps a morgan is overrated by three notches, that it is only one notch above Deutsche Bank. There are some inefficiencies out there when it comes to the profile of jp morgan. Sonali it is interestings you mention that. If you look at stock analysts, they have a weaker sentiment on jp morgan just given how much it has risen, but jp morgan cost of capital is low, they have 70 return on tangible equity, they are diversified, so as a credit story, they are enormous least wrong. At some of the banks in europe, we are seeing a lot more trouble. Vonnie as always, pleasure speaking with you. That is bloombergs sonali basak. Guy we are going to stay with the financial perspective in just a few minutes. We will speak with xavier musca, chairman of amundi, on blackrocks Climate Change announcement. This is bloomberg. Guy from london, im guy johnson. Vonnie from new york, im vonnie quinn. This is bloomberg markets. Is really seeing the fallout from the 737 max crisis. It also suffered the biggest of feet in there for a fiveyear dual. Than halfivered fewer of airbus total of 806 d3 planes. Shares of delta are rising. The carrier posted betterthanexpected fourthquarter profit. The credit goes too strong domestic demand, lower fuel , and bets on continued gains in American Travel from its domestic cups. Its domestic hubs. Oracles chairman bought a 1 billion take in tesla before joining the board in 2018. That stake is now worth 600 million more than it was. Year has risen 25 this and deliveries beat estimates. That is your latest Bloomberg Business flash. Thats check u. S. Markets now. We are seeing a couple of major indices in the red, but trying to grapple with getting back to zero. Of 1 . Is up about 1 3 it is an earnings story today. A of earnings beating, plenty of earnings missing. Just look at the banks as a microcosm of what is going on in the market. Citi beating, wells fargo missing. Guy here in europe, to be honest, at a headline level, the indices are not getting much action. The ftse a little but higher, dax a little bit lower, cac 40 a little bit lower. Some of the weight coming off of the market, sanofi is down in paris. The Health Care Care conference still very much underway. Vodafone is having a good day in london. Lvmh helping the paris market. The oil stocks are leading us down. The european close is coming up next. This is bloomberg. Hey. Hey. You must be stevens phone. Now you can take control of your home wifi and get a notification the instant someone new joins your network. Only with xfinity xfi. Download the xfi app today. The 30 seconds to go until end of regular training in europe. I am not going to lie. At a headline level this does not look like the most exciting session. Gray, is gray, germany is london was gray a second ago. Italy is gray. Nothing is happening at a headline level in europe. This was the session that was. This is the stoxx 600, up. 2 . We dipped out of the ages session and then we come to this incredibly trite trading range, particulate we dipped out of the asia session and then we come into this incredibly tight trading range. This is what the headlines look like for the ftse, the cac, and the dax. The ftse is up. Vodafone is a weighted stock in the ftse 100. The dax is absolutely flat. , lvmh is having a good day. We are going nowhere. From a sector point of view, it is a little bit more exciting. I am stretching to try to find something. Let me show you with that grr function on the bloomberg looks like. Travel and leisure is up at the top. Construction is having an ok day. Lvmh is having, an ok day. The industrials are trading higher as well. Retail picking up. It has been weak for the last couple of sessions. Bottom end of the market, oil and gas trending down. Minors in london are exhibiting weakness. Gas down. 4 . The Mining Sector is down a little bit. The autos are down again today. It is a factor weighing on the german market. Individual names, let me show you if you. Forni making another offer cap tracks. A lot of analysts have suggested they will not go above 14, that is it. There was a Court Case Involving an ceo that was trying to get reinstated, there might be a appeal. I bring up barclays because it is probably the European Bank that will react most to the earnings story coming out on the wall street banks. It did pick up a little bit when the jp morgan numbers came out, but it is negative on the day. Down. 2 . That is the european close. Not riveting. Vonnie i would like to think it is very riveting in the u. S. , even if not moving at a level overall either. We have had fantastic earnings report, not the least of which jp morgan and citigroup. And 2 those are up 2. 5 a