tv Bloomberg Daybreak Americas Bloomberg November 5, 2019 7:00am-9:00am EST
negative rates have not allowed acceleration. alix: negative rates don't work. david solomon, ceo goldman sachs, in exclusivity view, talks about negative rates and profit for unicorns. uber wins on earnings, fails on outlook. in bookings and monthly active users. u.s. equities continue their record rally as chinese president xi talks up imports. welcome to "bloomberg daybreak" on this tuesday, november 5. i'm alix steel. in the market, you have this optimism continuing. you have a record rally for the nasdaq on hundr -- for the nasdaq 100. also record highs for the dow and s&p. yields up by about four basis points.
do you save this rally or buy into it -- do you fade this rally or buy into it? those are the questions throughout the next two hours. for now, it is time for global exchange. we will bring you today's market moving news from all around the world, from shanghai to berlin to london. we begin in shanghai, where president xi jinping address global investors for the first time since china and the u.s. resumed trade talks in september. he were a firm set the country would open itself up to trade even further. in order to boost growth at home and create more , chinar global growth will give greater importance to import. we will continue to lower tariffs and institutional transaction costs. alix: joining me now is bloomberg's china correspondent selina wang in shanghai.
president trump wasn't specifically mentioned, but it was almost like he was there. a: that's right. i'm here at the shanghai second annual import expo conference. there are thousands of countries here from from alibaba to astrazeneca, all trying to target china's emerging middle class. this is an opportunity for china to show it is committed to its reform. ctly mentionre the trade war, but did say that china is here to advance multinational institutions and isn't here to put its interests over others, but companies here are going to want to see tangible results. we saw hundreds of deals last year, especially in the energy sector, but according to a survey by the european chamber of commerce, half of those deals never came through because chinese partners did not follow
through, according to their report. they want to see more than empty, vague promises and rhetoric. real action. much.thank you very we go to berlin now come over goldman sachs is celebrating its 150th anniversary. the ceo spoke to bloomberg's matt miller on a wide range of topics, from negative rates to ipo's. >> there is no question that growth in this part of the world has been lagging, and negative rates have not allowed acceleration of that growth, and my opinion. alix: matt miller joins us. it was a superb interview. what were your biggest takeaways? matt: one of them was that david solomon wants to see these big growth companies which, to be fair, goldman sachs has made a lot of money. early,t in on uber very with a $10 million share stake. he now wants to lay out a clear
path to profitability. he says he thinks there's a lot more market discipline coming into play right now. we see that after the failure of wework. we see that in uber's shares since they've come to market. the question is whether we will see that in aramco as well. obviously, they make a ton of money, but the market discipline question will be interesting to see as we have valuations ranging from as low as $1.2 $2.3on and as high as trillion. it will be interesting to see how that goes. he also talked a little bit about negative rates, and said if we look back in history, we won't view this experiment as a success. that negative rates aren't constructive, and that it might light isn a negative not helping to accelerate growth and inflation, which are the key
reasons for moving rates that low. alix: matt, really appreciate it. we want to go to london now, where opec publishes its annual world outlook on expectations for the industry. one highlight, it sees demand for oil sliding by about 7% over the next four years as it competes with u.s. shale. going to me for more is bloomberg's, reordering. give us the -- bloomberg's annmarie hordern. give us the highlights. it doesn't look good for oil if that is the opec take. annmarie: certainly not if you are looking to invest in aramco. market share looks like it is declining 7% over the next four years. what the note highlights is overwhelmingly, they are seeing that u.s. shale, this is in the face of u.s. shale, and others coming from the likes of norway, guyana, and brazil. so what do they do in december
when they meet in vienna? there's been a lot of speculation that they will have to cut deeper. there arearkindo says some bright spots in 2020. when you have prices in the 60's, it is nowhere near what some of these governments need to battle's -- need to balance their budget. you have to think that these oil ministers are looking and saying, it is -- and saying, is our strategy backfiring on us? this is exactly the warning former saudi oil minister al niemi had said. you're just making more room for other suppliers. alix: 100%. thank you very much. finally, we want to end on uber. third-quarter revenue came in better than expected. investors, though, disappointed with user growth. 20 me from london is alex webb, bloomberg get pendant -- joining me from london is alex webb,
bloomberg opinion columnist. seeing aare very much company influx right now. the ceo trying to demonstrate to investors that it is a company that can really generate value, and it is not just a growth stock. it was the growth that was really a cause for concern. were the bookings slowest rate on record, but there was an increase in revenue a treatable tuber itself -- attributable to uber itself. it comes at a time when today, we are going to see the end of , so the ipo lockup reflow to the company is going to grow perhaps fourfold. there's concern that that will prompt a selloff. therefore, he's trying to lock investors in and say i have a good story for you to see good returns. whichs something
investors have really been hoping for, given the trajectory that the stock had taken since that ipo six months ago. alix: thank you very much. here is something else i'm watching this morning. apparently, hedge funds are piling money into boris johnson as he heads into a general election. $516,000 in a little over a year from hedge fund executives, who made up half of his donors. there were secret fundraisers aimed at capping fund managers. some argue it's not about brexit, but politics. crispin o'day, for example, really once a smaller government. compare that to the u.s. back in mid-october, senator elizabeth warren said she would refuse any contributions over $200 from executives at big tech companies, big banks, private equity firms, or hedge funds, plus that was retroactive.
you have to ask who at this point would be contributing to senator elizabeth warren, but something fun for you this morning. pelotonllet on -- also, earnings are coming out. first quarter subscriber growth psalm 143%, a big jump. revenue also at a beat. looking forward for second quart of revenue, they see on the high-end $420 million, also beating what the street was expecting. see see as -- they subscribers added in the second quarter. we will compare and contrast their to uber. coming up, more more -- coming up, much more on your trade and analysis. this is bloomberg.
alix: time for bloomberg first take. joining me from our in-house team of wall street veterans and insiders is gina martin adams, vincent cignarella, and joining us is sylvia jablonski, direxion investments head of capital markets and institutional strategy. i feel like it is yesterday, but maybe not. vince, what are traders looking at? what you care about today? vincent: so under the radar, the regional economic cumbrian's of partnership that is likely to be signed at the end of the year which india just backed out of, which is a 15 nation partnership to increase trade in the southeast asian sphere. it is, in my opinion, the reason why xi is so involved in pushing
back on trump to eliminate not just the tariffs in december, but all tariffs, or he won't sign the deal. this is the trump card, no pun intended, but pun intended. this is where i think the president has himself backed into a corner. xi is going to make incredible demands on the united states to make this trade deal happen. i don't know that he can actually do it. if he does, it is going to be a really watered-down deal. i do not think the market is going to handle it well. the stock market will because they see this goldilocks scenario, but the macro world will not take it well. alix: to that point, let's xi and whatesident he said overnight on broader global cooperation on trade. pres. xi: not to be resolved by a single country alone. we must all put the common good of humanity first rather than place one's own interest above
the common interest of all. alix: does that mean that this is not a real breakout? if we take vincent's point of view, is it a real breakout? gina: in terms of the s&p 500, i think we did make a breakout out of a range trade we've been in for two years. stocks were sort of captive to policy, captive to a fed which acting --ing qt, and enacting trade, policies. . improvement and it does probably concerned that we've broken out of that range trade into some sort of new realm. obviously, there's always the chance that you get pushed back in. i do think that we have made a material breakout when we pushed past the 3065 level. i do think it is related to qt.
the fact that we will go over the course of next year into more normal balance sheet operation, the balance sheet is going to extend again and shouldn't be ignored. i think that normalization is pretty meaningful for stocks. alix: sylvia? sylvia: i think the s&p is continuing to rally and stocks are hitting new highs, and the question is why. weren't we worried about a recession? wasn't this sort of doomsday? what happened was we have some optimism out of the china trade deal. it looks like something is going to happen. for now it feels like baby steps come up got -- baby steps, but we would get something for the end of the year and have some resolution, but i think the consumer is driving the market. you nietzsche a politics to be stable and you need the fed to continue supporting the markets. consumersve refinancing. hopefully they are taking extra
cash and going out on spending. although some of the products are higher because of the tariffs, we would hopefully see some positive results out of retail spending this year. i think that continues to drive the economy. if to consumer things geopolitics are stable and the fed is supportive, and we have growth slowing down, i think the market will continue to rise and people will continue to invest. earnings are 70% positive for the most part. expectations were low, but surprising on the upside. that is really good. vincent: i think you're are both right. alix: there's a but coming there. [laughter] vincent: i think six months from now, when the world realizes that the agreement china has made with the united states is irrelevant, it's where we were two years ago, that china is making incredible strides to build trade relationships elsewhere and move growth outside the united states. it's the exact opposite of make america great again because all of these jobs will continue to move overseas, wages will
continue to be depressed. we had the fed loan survey come out yesterday and say banks are tightening standards in lending to lower income consumers. that is a large part of what drives growth in the united states, and the demand is not there. it's the consumer that does not have huge disposable income that kind of drives the economy because they are just going as they go. the wealthy people by wealthy things when they need, but it is the average consumer that drives growth, not the wealthy part of the curve. sylvia: also, ferrari just crushed earnings. [laughter] vincent: even in a downturn, there's going to be consumer growth in that sector. but i think when you look down the road, china sees the situation with the united states, and they are making every effort they can to float boats of other countries and push goods elsewhere. it's why india backed out of this pact.
they saw that we could happen would happen to india, and i think that is detrimental. alix: to that point, david strickland had a really good piece on the bloomberg that basically said you have a tech cold war following a global trade war. "to that point, you have china and u.s. is basically forcing everyone to take sides, so you have this post-world war ii u.s. and wel plan thing shouldn't welcome that, even though a pact regionally in asia is a good thing. how do you guys look at that? danger inink the real the u.s.-china trade negotiations is not trade it self, but technology and the deployment of technology globally, 5g in particular, a huge point of tension between both countries. it is creating this divide of east versus west on a technology front. the question remains as to
whether or not you can actually operate in a world where you technologynters of development. however, it is determined to sleep disruptive because you have u.s. tech providers that cannot manufacture out of china in that kind of environment. it results in tremendous force of capital spending necessary to keep the develop and going in the u.s. because all of these companies have to relocate out of china to other locations in the world. the question remains whether or not they relocate to some other place in asia or if these trade relationships present that. alix: and then all of a do you go? -- and then all of a sudden, where do you go? gina: the question remains how long it goes because we very well could have a change of administration next year. does that change the whole game? this is a huge question mark. it is restraining capital investment, investment in general, because companies don't know what the playbook is. they don't know what the
geocoded -- but the geopolitical situation is going to be. alix: is a ceo really going to put down $1 billion of capex somewhere? sylvia: i think they have been spending to relocate out of china. there's been huge growth in manufacturing and develop it out of vietnam, for example. but the fact remains that china and the u.s. are the two largest global superpowers, and for now, we need china, and china needs us. that could change, but i think it will take a decade before it changes. we are better served coming up with some sort of deal. i think both sides will look for alternatives to prevent a gridlock in the future, but i don't see that really impacting the market in the short term. thatur point, i get it long term, if things fall apart, we will be bac where we started. do your point, we are kind of just going back to where we were. vincent: i think that perception will carry us into 20/20. i'm not so sure about a decade
-- into 2020. i'm not so sure about a decade. there's a lot more to that. 2025.mao zedong's it is a 50 year plan. 2025 doesn't bounce out of nowhere. following the greatest leader in china's time, following this economic 50 year plan. i think it is going to happen a lot sooner than people think. alix: we've got to leave it there. great conversation. gina martin adams and vincent cignarella, thanks a lot. sylvia jablonski of direxion investments will be sticking with me. a reminder, any charts we use throughout the show, you can go to gtv on your terminal, browse the charts and save it. this is bloomberg. ♪
"bloomberg daybreak." xerox is ending a 57-year-old joint venture with fujifilm. it is selling 20% of fujifilm to its japanese partner. the partnership was one of the oldest tieups between an american and japanese firm. last year, there was talk xerox and fujifilm would merge, but active us to investors opposed a deal. one of wall street's best known hedge funds reportedly ramping up its push into private equity. according to dow jones, pulsing ---- dow jones, pulsing or dow jones, paul singer's elliott management raised $2 billion. uber shares lower in premarket trading, disappointing with the latest quarterly results, disappointing in bookings and monthly active users. , uber beatingenue
and pledging to post a profit. that is your bloomberg business/. alix: thank you so much. still with me is sylvia jablonski of direxion investments. what is your take on this? do you like uber? sylvia: i am sort of lukewarm on uber. i am not commenced they are going to be a preferable company -- a profitable company. we will see, i think. they claim if you strip out interests and depreciation and stock compensation, that they would have been profitable to the tune of $681 million. uber eats is up 60%, uber freight 70%. they are trying to diversify their business portfolio. but it remains to be seen. i think uber and lyft where these supposedly unicorn ipos that were supposed to be profitable quickly, and
investors expected a lot more, but i don't know. i have to see some profit. alix: you need profit or growth, or both? sylvia: both. alix: where do you get that? sylvia: cutting a lot of expenses, laying off a whole lot of workers. alix: do you get that was big tech right now? now?a: sylvia: oh, i see what you mean, where else in the market. i think you get it in health care. it's been outperforming the s&p 500 this year, expecting to see a percent or more in growth. i do still like tech. look at apple, the goldilocks of the market. alix: we will come back to that in terms of value. sylvia jablonski of direxion. this is bloomberg. ♪ this is bloomberg. ♪
forward on trade, but do you want to buy into it or sell it? here are some question marks coming into it. hsbc says you want to sell the risk rally. you also have a curve of 20 basis points. at some point, do the higher yields hurt the equity market? yuan breaking above seven per dollar, so gaining steam on that weaker dollar. does that continue? what does that mean? the momentum unwind rolls on. the popular quant strategy dropped to a two-year low yesterday as investors pulled back. what led the s&p higher is value. still with me, sylvia jablonski of direxion. do you buy value? sylvia: i think you want to diversify your portfolio for sure, but if you look at the expense of stocks or moment of stocks, they have done better
than the value stocks in the last two years. --re's been on this rhetoric there's been all this rhetoric that the market is pulling back and we are get in closer to a recession. i think there's enough uncertainty and the thought that the market will be range bound in the coming year or two, but we have reason to believe that companies and corporate profits will continue to grow for at least another six months, maybe a year. you have a supportive fed. if you got positive news out of the trade war, that would keep consumer confidence high. i think you pick your stocks. pick your momentum stocks, pick your growth stocks that are doing well, allocate to value, and diversify your portfolio. things like health care, the cheapest sector out there, we are expecting a percent growth in the coming years. if you look at some of the single names come the darlings of health care that are up 20% on the s&p this year. merck pays a different -- pays a decent dividend, pfizer pays a decent dividend.
in terms of momentum, there is still room to run. maybe it is not so wise to buy on highs, but if you own those stocks, maybe it is worth holding on a little longer since earnings expectations have really beat. alix: so don't sell momentum, but are there any amendment of names -- any momentum names you want to buy if it has underperformed value? sylvia: having a longer-term horizon makes a little more sense, but hang on to your momentum names. hang on to some of those growth names. some of these high beta techs, particularly semiconductors with a software mix and a push towards ai and cloud business and things like that, those can still run. there's a huge growth in cloud computing and autonomous driving and artificial intelligence, robotics. anything in that space that --ds t touch some i semis and tech.
tactically, when do we start to worry about higher yield, or vice versa? usually you say buy value, but you need a steeper curve. when did you see that? sylvia: coming back to value, i would look at the names that are the cheapest, but longer-term, have potential. i think health care is probably part of that, and banks have shown some resilience as well. i think investors have a hard time finding yield right now in fixed income. if you look to equities and you can still find 2% to 4% yield in some of these companies, that may be where you look first. companies paying higher yields with stable earnings and the potential for higher earnings outlook based on what we've seen this quarter. i would probably look to equities and yield. alix: to that point, china raised 4 billion euros in a three-part bond offering, and it
was way oversubscribed. clearly -- sylvia: investors are hungry for yield. you can't find it. alix: sylvia, thank you so much. really good to see you, sylvia jablonski of direxion. we now want to turn to women of wall street. today we are going to take a look at venture capital firm. morgan stanley surveyed nearly 200 u.s.-based vc's and diverse entrepreneurs in the past five years to better understand the funding gap that exists for funding in women and multicultural founded startups. the survey says vc's are missing out on $1 trillion of opportunity by not prioritizing such investments. joining me to take us through the findings is carla harris, ofgan stanley vice-chairman the global wealth strategy group. thank you for joining us. carla: thank you for having me. alix: i was struck by many
things, but one of those is that we still don't think diversity is a huge priority. what do you make of that? carla: there were lots of vc's who said they believe they can continue to maximize returns by investing in women and multicultural entrepreneurs, yet they weren't making it a priority. i think it is important that people start to think to themselves that we could be don'tng our lps if we give access to all of the opportunities out there. there were three things in particular of note. first of all, using about fit. when vcs are thinking about investing, they say in most cases to women and multicultural entrepreneurs it is because the product or process or opportunity doesn't fit, yet when they are thinking about going into new areas, think 20 years ago, software as a service , 10 years ago, cloud computing, all of those things were new, and they took the expansion risk. on average, 20% of the portfolio represents expansion risk.
maybe they expanded the definition of expansion risk when they are thinking about products and services that serve a specific demographic or ideas that are brought to them by women and multicultural founders. then, in fact, they might invest in more of those. then, going to cloud, for example, did it take that kind of risk? was it as big of a leap as it is for them now to look at investing in women or multicultural entrepreneurs? carla: i would say it is a great analogy because there wasn 't a lot of information about cloud. you had to access your network, read everything you could. you spent your time to learn about it to get yourself comfortable with taking that risk. we happen to think that women and multicultural founders aren't really risks at all. alix: it is different. carla: they are just different, and they have astounding ideas. alix: you need to have the people making the decisions --
do you need to have the people making the decisions be diverse? that is the second recommendation. make sure you have women and multicultural investment professionals at the table. they can introduce the entity, the vc, to other networks or opportunities. they can get you comfortable that it is not really a risk. alix: are you people to go -- are you able to track this vc, and say this is the return you got because it wasn't a fit, because it was different? or do we not have that information yet? carla: there's lots of data out there. if you look at the capital report earlier this year, that's all they did for the last six and a half, seven years, was invest in multicultural and female founders, and they beat all of the indexes. that's just one report, but check that one out. alix: when you tell people, what is the reaction? what is your experience? carla: that is one of the reasons we are talking about it. that is one of the reasons we
are offering these white papers. we have a podcast called access and opportunity so we can amplify this conversation because the more data that is out there, the more the tide will turn, no question. alix: do you think that when it turns, it will be full steam ahead? how much money could be in it for these entrepreneurs if they get the commitment? carla: if you think about the fact that women only get 4% of vc dollars and people of color get less than 2%, depending on your sources, moving to 10% or 15% in both cases could make a huge difference not only in job creation, because everyone knows small businesses create more jobs, but also in wealth creation, not to mention what it could do for our economy and society. alix: so it is the fit, having more diverse people on the boards making decisions, and what is the third? carla: accountability. you have to make sure you have a target with respect to how any businesses you went to see that are founded by women and multicultural entrepreneurs, how many you want to invest in. you cannot manage what you
cannot measure. alix: so what is the pushback? carla: the pushback is there hasn't been enough data, and the tradition is -- and the pushback is tradition. i'm doing fine. my lps are happy. but perhaps -- alix: it could be better. carla: exactly. that's right. alix: so you want to push to make these different choices? carla: they made a big difference in private equity. the more of this data that is in the market, the more they will start to make an impact in the vc community. alix: i introduced the segment as women in wall street, but trying to be more inclusive of multicultural, lgbtq, and women. how do you hire? how do you mentor people? carla: the first thing is look for the best people for that specific role, but also to be intentional about making sure you are casting your net as wide as possible. alix: do you have a quota? like, for every job opening, i need to see x amount of women,
of minorities? do you thing that way? carla: i don't have to have a quota because i am plugged into all of these networks. if you are not, you have to find organizations where there are people of color, lots of women trafficking in that space, and insert yourself into that. once you do that and people know that you are serious about making sure that you give them a shot, and that is all they are asking for, then you will find that you are in that ecosystem. you will get the right candidates. then you have to be intentional about how you hire. when you get them, you have to make sure you invest in making sure they are successful. drop someone if you are hiring laterally. if you are hiring laterally, you have to guard against organ rejection. when you get a kidney or liver transplant, the surgeon gives you 20 different drugs to make sure the body holds onto the organ because the body will naturally reject that which is foreign. so when you are bringing
somebody in from the outside, you better overinvest in making sure they are successful because the body will naturally expel that which is foreign. alix: that is a perfect analogy. carla, such a pleasure. i really appreciate your time. carla harris, morgan stanley vice-chairman. we want to get an update on what is making headlines outside the business world. viviana hurtado is here with first word news. viviana: beijing once the u.s. to roback tariffs on as much as $116 billion of chinese imports in an interim trade deal with the u.s.. in return, china could remove tariffs on farm products. both sides hope to wrap up the deal this month. a vote of confidence for hong kong's chief executive from china's president xi jinping, saying he has a high degree of trust in carrie lam's leadership despite five months of antidemocracy -- of pro-democracy protests. fire in nigeria, a massive
in the country's capital lagos. no reports right now of any casualties. global news global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. alix: thank you so much. coming up, profit matters. that is the message goldman sachs ceo david solomon what's to drill into investors. more from our exclusive interview with him, coming up next. if you have a bloomberg terminal, go to tv . click on the graphics, interact with us. this is bloomberg. ♪
daybreak." activists at google want the company to scrap its deals with oil and gas companies. since 2017, google's cloud computing unit has announced deals with schlumberger and chevron. google employees are asking the company to drop contracts dealing with fossil fuels. investors are suing wework over the $1.7 billion payout to founder adam neumann. ruinedt claims neumann we work. no comment yet from either neumann or wework. kkr raising $6.5 billion for its largest european buyout fund. ae firm, cofounded by billionaire, will focus on transaction in western europe. kkr already has taken a stake in german publisher axel springer. the firm also invested in
soderbergh and partners. i'm viviana hurtado. that is your bloomberg business flash. alix: we turn to wall street beat. first up, david solomon says profit matters. or i should say, solomon says profit matters. goldman sachs ceo david solomon says markets are correcting themselves after years of pursuing growth at all costs. then, softbank sets new standards according to a report. the company is outlining new governance rules after the breakdown of wework. founder is paying the price for his startup bets. the network takes a massive hit. joining me is bloomberg's sonali basak. in the exclusive interview with david solomon, he talked about public valuations. here's what he had to say. david: it is important for people to grow, but there's got to be a clear path to profitability, to earnings of
some sort. over time, a company can only be worth the discounted future value of its earnings. so it is important you have a business model that can generate profitability, and i think there's more market discipline coming into play. and i think that is healthy for markets. alix: what did you make of this part of the conversation? sonali: goldman is coming to a reckoning that everyone is coming to, that not every company is amazon. you do hear some people saying, well, amazon wasn't profitable. come on. thisis point, he is saying to a lot of -- he is saying the same thing is a lot of investors. there are 70 people across wall street saying that investor sentiment has changed as there are so many people across wall street saying that investor sentiment has changed. interesting, and someone brought it up yesterday, remember, goldman came out
with a $5 million investment in uber in 2011. when uber went public, they cashed out pretty well. what i don't know, and what a lot of people don't, if you look at google's entire portfolio, what are the returns? at the end of the day, you're going to hit some zeros. that is the nature of venture-capital. but if you are choosing some great bets that payoff off an overall return is ok, then you are all right. alix: i wonder if they take more or less risk now. sonali: it is growth, not profitability. that's what he is saying. type of the investments they make. i think that is what you see. alix: there was a really interesting article in "the ft" about how softbank is going to be reworking how they structure their investments and doing more due diligence on how they spend the money. sonali: more due diligence, and also governance changes. that is a really important part of this. they are going to ask for a board seat, an independent
director, no super voting shares for founders, not allowing founders to cash out so quickly. adam neumann cashing out with a big point of contention. i think that is a very welcome change to silicon valley. i've been asking top vcs what they thing about all of this big money coming in. es, all of thishs big money coming further down the spectrum. aix: i think there's probably couple of ways to look at it. if you are a startup, does this prevent you from getting the funding you need to go and play? part of it is you have an idea and you go play, versus you get companies that may be have a path to profit ability faster than they would otherwise. sonali: a couple of founders have decided to take less money. think about it. the minute you start selling some of your company, it is not just your company
anymore. you are beholden to shareholders. investors have their own clients. alix: i was talking to someone yesterday who is starting his own hedge fund, and he was saying something he learned was when a hedge fund guy came to him and said, you don't have to take the money. you can turn down the big check. you can take a smaller check. sonali: scale comes with problems of its own. just because you get bigger doesn't mean all of a sudden you are making more money. asset managers, if you are rushing to zero, your margins aren't better. if you may be stay smaller with higher octane businesses you can put more work to come perhaps you can mcmoran a. alix: -- you can make more money. alix: rounding it out here, my son in a- masayoshi big drawdown. he is still a billionaire. sonali: it is a big deal to lose that many billions of dollars.
remember, this is not including $8.3 billion worth of shares he pledged as chorale of -- he pledged as collateral for margin loans. it tends to make the bankers that have loaned to him a little bit nervous. but like you say, still $13.8 billion. it is not that big of a deal. alix: i wonder what that says about his relationship with saudi arabia. so far it's been pretty tight. i wonder how long that stays. sonali: we haven't heard of pif or abu dhabi say they are not going to invest in vision 2. they have so much exposure to vision fund one. maybe this is a matter of keeping confidence up. they haven't pulled back, but they haven't made a decision yet either, at least not publicly. alix: thank you so much, so and ali bassett -- so much, sonali basak. coming up, today's trader's
take.tom now for trader's joining me is vincent cignarella, voice of the bloomberg audio squawk. you can listen to vincent all day on the terminal. you are looking at emerging markets. vincent: i am looking at the msc i.e. emerging markets stock index. cis captures -- the ms emerging markets stock index. this captures where stocks are going, where global markets are going. in may, the emerging market index fell down. markets bit
are feeling really buoyant about a trade deal, this is where we are climbing up here. that 1059 level has held pretty solid since july. the real question is, do we go higher or fall back down again? alix: and do you play it? vincent: there are some any different ways you can play this. i would look at this and say, this is my sentiment index. this is what i want to watch every day. if this starts to improve, one would expect emerging-market currencies to improve. you would think that the dollar is going to roll over at this point if this continues. believe it or not, treasury yields will go higher because of the global growth picture. you would also see flows moving out of the united states and into other emerging market equity and bond issues. so not good for treasuries, not good for the dollar, not especially good for the u.s. stock market, but more on the large-cap international companies rather than solely domestic companies because they
are going to gain from that international exposure in emerging markets, where local based domestic companies most likely will not. alix: if we get to that 1096 and but up against it, what does that mean? vincent: it means you are probably rethinking the situation. that would be a standard deviation move. if you are in this trade and fortunate enough to catch it at the lows, or even catching it now, you probably want to take some profit and rethink the situation. alix: thanks a lot. always fun to have you on the show. coming up, frances donald, manulife investment management chief economist and had of microstrategy will be joining us. do you fade the route -- head of microstrategy -- head of macro strategy will be joining us. do you fade the rally or join into it? this is bloomberg. ♪
november fifth. i'm alix steel. let's take it from the top. >> china will give greater importance to import. alix: the u.s. and china closing in on an interim trade deal. >> we heard xi really write those comments, that no country should put their unilateral interest over those of others. alix: chinese negotiators want the u.s. to rollback tariffs before there's an agreement. negative rates have not allowed an acceleration of growth, and my opinion. alix: the ceo of goldman sachs blames negative rates for holding europe back. >> when we look back in history, we won't view this experiment as a success. alix: david solomon spoke with bloomberg in berlin. opec is being swamped by a flood of u.s. shale oil. the cartel slashed estimates for the amount it will need to pump in the coming years, and
estimates demand will fall by 7% in 2023. >> the challenge for uber is really a forecasting challenge in a lot of ways. alix: uber came up short in bookings and monthly active users. >> we very much think a company influx right now. the ceo trying to demonstrate to investors that it is a company that can really generate value, and is not just a growth stock. alix: shares of the ride-hailing service are falling today. in the markets, do you fade the rally? do you buy into it? that is the real question here. equity futures up 0.2%. we did have some easing coming up from china. we had some positive trait headlines. --e that continuing the buy all of that continuing the buy equities theme. joining me for the hour is bloomberg's romaine bostick.
last week,ading into there are three things that traders were looking for. decent earnings, a little bit of selloff in bonds. we got that. the third was some kind of rollback of the tariff situation. we have reports out from "the journal" and "ft" saying that is being considered by the white house, the roback of december tariffs and potentially a pause or elimination -- the rollback of december tariffs and potential he a pause or elimination of those for december 15. but: i look really cheery, i'm really a negative person. but to that point, the moment, unwind keeps rolling on. investors pulled back bets and the winners will keep winning, so the s&p led higher by value. romaine romaine and i are
frances donald, manulife investment management chief economist and head of macro strategy. frances: i am a lot more bullish now than i was even two weeks ago because of a single message from the federal reserve which i don't feel is getting enough attention. chair powell told us he is not going to hike rates until he sees really significant inflation. any economist bring a for five-year inflation outlook is seeing inflation that looks really significant -- is not seeing inflation that looks really significant at all. to me, this is much more structurally bullish on equities then we could have been even two weeks ago, when we had to worry about the normalization of interest rates over time. romaine: is that going to support the structural theme? frances: it might. what really matters is do we get a bottoming out in global manufacturing, and does the manufacturing recession lead into weakness in the consumer? if it can hold strong, if the consumer holds strong, we don't see that contagion, then i am certainly bullish.
but we need a couple more data points to confirm that. romaine: we always talk about how the consumer is going to hold us up, and he manufacturing will eventually catch up, but there is still a sort of imbalance we are dealing with within the economy. alix: wages, for example. unbalanced ande slow growth over time, but it is not a recession. the consumer is structurally strong enough to keep us out of that negative gdp territory. but it is entirely possible we get something that looks like 1% gdp growth in the first quarter of 2020. that is rough growth. that is nothing to cheer about. the question is, do markets look through that? if we keep getting trait headlines like this, i think so. alix: what happens to bond yields? about the move into value.
haven't we seen that, a stabilization of pmi's, for example? what kind of steepening yield curve do we need to see? 20 basis points, nothing to sneeze at. frances: we are out of vertedion, but we've unin before every recession in the past. when it comes to the pmi's, what we really need to see for stabilization is the china component. china has been sub 50 on the pmi. that's not a good sign. we need that china recovery. romaine: all of this talk about popping the cork for the bond market, it is 1.81% on the 10 year. about a year and i have ago, people were predicting 3%, 3.5% by the end of 2019. obviously we are not getting there this year, but do you think that bottom is in in bond yields? do we get back to more reasonable levels? frances: what is a reasonable
level win our growth forecasts are just below 2% and inflation forecasts are just below 2% for the next five years? we don't just have tariffs. we have a structural change in geopolitics and the way that trade is being enacted. that pushes down our long-term neutral rate estimates, and that is actually fairly bullish. romaine: not to be glass half-empty, but why are you optimistic heading into an year where a lot of this could depend on the outcome of the election? frances: a lot of this is the new normal. whatever happens with the election, we know we are in a structural change when it comes to the concept of globalization. this is not something that is going to go away. but we are going to operate over a structural period with 2% growth, and this is our new normal. we are still going to have asset classes that rally. is this a straight line higher for equities? no, but there's still a lot of
opportunities in this market. alix: i know we are all talking about the trait headlines and how that changes the narrative, but you also have the pboc reducing costs for one year funds for banks. they haven't done that since 2016. are we underestimating what central banks are actually doing, and that is really supporting the global economy/markets, versus a headline here or there? frances: see ny dipped below 7 -- cny dipped below seven this morning. u.s. dollar is weakening. that is very good for global financial conditions. if we get another couple of percentage points down in the dollar, that is also going to add to those calling for a continued rally and help growth in the united states. alix: we have a viewer question coming in on the i.b. chat. until the equity market turns down, credit should continue to do well. do you agree with that? frances: this is part of the whole recession call. if you call for a recession, it is really difficult to get
excited about credit. we are calling for slow growth, a little more difficult in q1, not a straight line higher when it comes to risk, but overall a favorable outlook that we expect markets to look through that is also favorable for credit. romaine: what do we see for some of the other sectors? we haven't seen transports regain their highs, small caps regain their highs. frances: from an economist perspective, what i am looking at is some of these data points like the ism services or the pmi we get later today and later this week that show us that this weakness in manufacturing is very well contained, that we aren't seeing any bleed through. if services start to re-accelerate backup, it is much easier to be more optimistic more broadly. alix: frances donald of manulife investment management will be sticking with romaine and i. ceong up, goldman sachs
and we are expanding our market share here. if the right acquisition came along, we would certainly consider it, but we see good organic opportunity by growing our people and our footprint to expand our wealth management kit abilities here in europe. europe,re broadly in there's a lot of talk of bank consolidation. there are of course a number of regulatory hurdles, but do you expect a banking consolidation? is it coming for european banks, and does goldman sachs want to play a role in that? david: on the question of banking consolidation here, i think that there are lots of compelling reasons why some consolidation here would benefit the strength of the european hard,, but i think it is and it is not clear that it will actually happen. i do think it will be good for the european market, for the european capital markets region, if you had more avail her opinion leader in some way -- if
you had more of a european leader in some way. whether it is local politics or the business rationale that allows that to happen, i'm not sure, but i wanted as you do. i do think there is certainly an opportunity to strengthen one or two players here through some m&a or consolidation, but it is hard. it may not happen. his: mario draghi, and final ecb press conference, said that we are happy with our negative rates experience. christine lagarde now taking over the same line. our negative rates helping the economy in general, helping general, helping people's inflation and bring growth back? david: i think when we look back on negative rates, when the book is written, it is not going to look like a great experiment. i don't think negative rates are bringing the benefit we would like to see. there is no question that growth in this part of the world has been lagging and negative rates have not allowed acceleration of that growth. i don't think negative rates are really constructive, but we will have to wait and see how this plays out over years, but i
worry we look back on this experiment and we are not going to like what we see when it is all unwound. matt: one of the things bankers say is that fiscal stimulus is needed to me gate the unwanted side effects -- to mitigate the unwanted side effects. surely you will also want to talk about infrastructure spending that they think is needed. do you feel like fiscal spending is needed? do governments need to chip in more? david: if you talk to people here in germany, there is a significant amount of fiscal stimulus being spent if you look at the ambitions around sustainability and some of the capital being spent to move germany toward a more green economy. there's no question that is a relatively sick the fiscal stimulus. ceo: that was goldman sachs david solomon, an exclusive conversation with bloomberg's matt miller. with us still is frances donald
of man u like investment management -- of manulife investment management. what do you think? frances: does anybody like negative rates? alix: mario draghi. frances: apparently. romaine: he loves them. [laughter] frances: when you look at why economists have slightly less gdp forecasts for the next few years, it is because we have bad productivity statistics. we need to productivity channel to come back to life. that is going to be fiscal stimulus. but it can't just be any fiscal stimulus. at has to be appropriately targeted, productivity enhancing. it has to be specific to help boost growth over time. romaine: is that the path out of negative rates, the fiscal side? or is there a monetary policy element that can act on its own? frances: i suspect we have to get back to a place where we can grow faster than 2% to escape
the negative rates environment. we now know that our neutral rate is being revised down constantly for a host of issues, including trade policy. there's a lot of issues that have to unwind. i just can't see that happening in the next three to five years, which is why in my view, we had a flat curve and low rates that extend over a long period. david: how do you -- romaine: how do you get us to 2% or higher? frances: you can essentially say, like powell did, we are not going to raise rates until we get to higher inflation. alix: there was a paper that came out from janet yellen that said, basically, the overshoot is not going to work. frances: clarida will say things like we have to have 2.5% inflation. we are going to let inflation run hot before we raise rates again. they need to remove the fear of higher interest rates from the market. i think powell did that last week. this is the beginning of a new attempt to normalized interest
rates. for now, this concept of normalization, and my view, is over. alix: i also have to wonder, how many ceos are going to be like, great, we have another quarter-point cut, we are going to go do something? i wonder what the actual feedthrough is. romaine: that will be interesting. this is one area where i am more glass half-full. if you listen to the earnings calls, you are hearing a lot less pessimism. i guess that is a lot less bad, or however. but you are hearing more confidence about the future, which is a huge change from the q1 and q2 conference calls, where a lot of them were saying we don't know what the heck is going on. you are seeing them look to 2020 and see that light at the end of the tunnel. i don't necessarily think that is a rate cut aspect per se, but a lot of these overhangs are being sorted out. it at least gives them some sort of clarity, some picture to work with. frances: i can't believe any ceo
is saying, you know what my big problem is? the cost of capital right now. the issue is we don't have clarity on our trade relationships. we've had 18 months of trade demand destruction across the world. there are supply-chain adjustments that have to occur. officere senior loan survey from the fed, when you have weaker demand, and not only that, but they also tightened their credit standards for lower credit rating borrowers, what did you make of that? frances: this is consistent with the yield confidence being at record low levels, business confidence being lower. this is not a time to aggressively invest when you have the new york fed probably the ever session at 35%. boards are not building on the extension project. no. we have to have better clarity on trade policy. when we do, i expect we see business investment reaccelerate. wagene: but you are seeing
gains. frances: when you have a labor market that is this tight, and you know it is really hard to attract workers, you don't want to let anyone go. what we need to be looking at is the average hours worked. we are keeping workers on, but not having them work as much time over the week. that is more important to me. we seen stagnation there, and that is what we need to monitor closely. romaine: you don't want to know what my average hours are here. alix: how do we average hours? do we also average at home? how about time not at work? [laughter] alix: frances donald of manulife investment management will be sticking with us. coming up, more on uber's earnings scorecard. this is bloomberg. ♪
selling 25% to its japanese partners. the price, $2.3 billion. partnership was one of the oldest tieups between on american and japanese firm. last year, there were talks that they would merge, but activist investors opposed a deal. one of wall street's best-known hedge funds reportedly ramping up its push into private equity. according to dow jones, paul s raised 2.3 billion dollars for buyouts of publicly traded businesses and carving out divisions of companies. shares of uber lower in premarket trading. the ride-hailing service disappointed investors with its latest quarterly results. iny showed lackluster gains things and monthly active users. still, by 2021, the company ledges to turn a profit.
that is your bloomberg business flash. alix: thank you so much. for more on new birth, mandeep singh joins us. really, they see a pastor profitability, andy -- a pastor path toility? -- a profitably? at the: you have to look reasons why. at the end of the day, both uber and lyft are trying to find profitable niches within ridesharing, which is a big market. they are focusing on corporate rides, airport rides. so i don't think it is a bad thing. romaine: when you look at uber, they've got all of these side businesses. he clearly are trying to get users to be in uber eats and all of these other services. if those users don't gravitate to other services, does the business model still work? mandeep: we know the business
model works in the u.s. and canada when it comes to core ridesharing. ebita margins are close to 22%. it doesn't work yet in food delivery because the food delivery market is very fragmented. everyone is trying to grab market share using subsidies. eventually it will, once the food delivery market is consolidated like the ridesharing market in the u.s. to be the are going other headwinds? we have california, and potentially some labor issues there. we have the lock up tomorrow. what are the headwinds? mandeep: once you have more shares trade on the market, eventually stocks should trade on fundamentals, which is what we expect will happen, given the sentiment. the other thing is there will be overhang in california. uber can't get out of important cities like san francisco, so
they have to work with the regulators and figure out a way in terms of minimum wages. at the end of the day, the core ridesharing business is ebita positive. they just have to work with the regulators and smooth things out. romaine: if you are an investor comparing lyft to uber, why wouldn't lyft be the better pure play if you believe in the core ridesharing business? mandeep: because lyft is still not even a profitable. uber -- not ebita profitable. uber is still the bigger play. if you think these businesses will gravitate towards a subscription or advertising model eventually, the scale player with network effect wins. alix: wrapping up before we let you go, peloton up over 5%. what do you make of their earnings? mandeep: whenever you have an
ipo the first quarter -- alix: that was a skeptical moment right there. [laughter] mandeep: with any ipo, you always see first quarter results that are good right off the bat. it problem for peloton is still caters to a very niche market. i'm not sure how long a runway they have in terms of maintaining that growth. alix: do you have your peloton yet? romaine: i rode my peloton into work. alix: i'm so gullible. i was like, how do you write a stationary bike? [laughter] alix: coming up on this program, record highs plus optimism, and we get china trade data. this is bloomberg. ♪
ride it out? and equity, you're probably selling bonds. yield curve, about 20 basis points. breaking that seven level as the u.n. climbs higher. ok. data out right now. so the trade balance actually came in at negative 52.5 billion and also you had august was revised out a little bit more. so it narrows to 52.5 be. it hard to say narrow when you say you're dealing with numbers that's $52 billion in. terms of some of the details, imports were down by 2%. exports were down by 1%. u.s. goods that were imported from china were down by about 5%. $37 billion. lowest in more than three years. romaine: test same story. it's interesting because a lot
of this is skewed by a lot of the policy decisions that the trump administration has made and that skewed thedale. you're not seeing a huge reaction here on the market. most of the market right now is pricing in essentially what's going to happen on the policy front rather than on this particular data front. alix: that's a good point. michael mckee and frances donald still with us. so trade deficit, five months snow what are you thinking? michael: well, obviously t an impact on g.d.p. a little bit but the biggest thing that it's telling us that it's status quote. we are seeing imports decline. we're seeing exports dedelifpblete trade war is on. we saw a new round of tariffs imposed. alix: are we over the stockpiling senator michael: we should essentially be over the stockpiling part. we'll have to wait for inventories to come in and see whether they have risen or starting to be worked off. it went down a little bit in the third quarter. but at this point wharktse looks
like is what you would expect in a trade as a whole is declining. and there's less going on. romaine: when you look threant though over the past couple of years, at least during the trump administration, has there been much oof shift in terms of how that trade number, what sort of made up in that trade number versus what we saw in prior years? michael: well it's not so much a shift as just as i said, an overall decline. we're not seeing any different categories move one way or another other than everything is generally lower. and this is over a period of time. but it definitely shows that we are seeing less trade. we're becoming less open to the world and that's having an impact on american exporters and it has an impact on what we buy rom other countries. frances: what worries me is the
import numbers. imports are down 2.8%. that's very important. but there are some fees that are in. we talked about wanting to make sure that the manufacturing crisis face? manufacturing and doesn't bleed through. to me, this is a little bit of a worrying sign. nothing be overly concerned about but something that we would want to watch very closely. romaine: this is the time of year when retailers start to bring in products from overseas for christmas and we've been hearing how they're expecting to a blowout in christmas. frances: consumer goods were down 4.4%. so that would imply not in that month. romaine: in my neighborhood, all the christmas stuff went on november 1. michael: your neighborhood is late. romaine: yeah. i went in there looking for discounted halloween candy and
they had all the santa claus out. maybe they avoided the tariffs. michael: one other is not wlooth the trade balance with china tbs down 14% from this time a year ago. so you can really see the impact on china from the u.s. trade war. romaine: and buy negative soybeans bump that back up? michael: not really because they're not buying that many. they are buying more but not a huge difference. warp about europe? i've been trying to dig through some of the european numbers. yirpse there will a spotlight. we will also getting a little bit on that. what's your take on that, frances? frances: we talked about what the u.s.-china trade war is doing but there are other factors slowing down the world commitment china was showing before we applied the tariffs and we had a really strong dollar with the united states with all countries. and if you want to look at u.s. trade with china t down. but u.s. trade with the rest of the world is also slowing. so this is a total the entire
pie of global trade getting much smaller in this particular environment and the trade data doesn't suggest we hit the bottom just yet. romaine: particularly sort of china being the supplier neo-to the world and how that relationship has broken down and you're starting to see things parceled out to other nations in africa, vietnam, bang zpesh the sort, is that fragmented approach going to be enough to replace the world order that we have? frances: it doesn't seem like it's doing it just yet. and we spend a lot of time think a the supply chain and europe being at the center of the upply chain. germany, fourth biggest economy in the world in recession. manufacturing in europe, really in recession. this is the trade war that's wining that particular economy but if we are going to change our supply chain from u.s. and china, this takes time. this takes c.e.o.'s getting on opposite, going across to the other sthifed world to meet new people, new businesses. this is a transition that's
going to take not just one headline or one year but a multi-year period. alix: this is a very happy phone chime there, mike. michael: sorry. [laughter] alix: to that point, we talk about supply changers romaine, you look the first nine months of the year, the trade deficit with vietnam sorts of blew out 40%. went from negative $30 follow negative $41 billion same thing with taiwan. 60 p. i wonder how much that is is supply chain moving over. mike what, do you think? michael: we're seeing some signs but what you get is sort a teething here. the chinese shift things -- ship things to vietnam and relabeled as shipped from scram and sthonaltyimentse that's the big reason we're seeing a big changing from the numbers from vietnam and some of the other numbers southeast asia. so it's going a while till we see actual factories in those
countries producing many of the ghoots the chinese produce. romaine: do i have one question. the u.s. policy right now is a lot more insular. can economic growth in the u.s. sort of get back to 2%, 3% levels without a more sort of global integrated approach? frances: what you need -- so we can get back to 2% or 3%. are we going book the 1970's when we had potential 4% or 5%? probably not but we need productivity focus went need fiscal sexush we need businesses to take the baton. if the consumer's going to plateau here, some other segment of the any economy has to take over to produce that grovement it doesn't like it's going to trade for the next six month or so. this data confirms that. alix: thank you so much for joining us. we do want to get a quick update on what's making headlines outside of the business world. here is viviana hurtado. viviana: bloomberg has learned beijing wants the taos roll back u.s. tariffs on as much as $360
billion on chinese import to sign an interim trade deal with u.s. in return, china will remove u.s. tax. opec exomptse the next four years dan for oil will fall by about 7%. opec saying the big reason the flood of u.s. shale oil supplies leading them to cut production even further. and today, president donald voters to g kentucky re-elect the governor. governors races in mississippi and louisiana are seen as pests of the president's popularity. so are races in virginia for that state's legislature. global news 24 hures day on air and on tiktok on twitter in more than 120 countries. i'm viviana hurtado. this is bloomberg. alix?
alix: thank you. so frances, how do you look at the election? when do you start get worried? like how do you view it from an economics point of view? frances: a couple of things. big bharkse got us into the recession scare? it was first trade conflict. two, a drop-off in fiscal spending after a sizable fiscal push and three, tighter monetary policy. any time i'm looking at these structural factors, i want to know how can an election outcome change one of those three things? we have sector considerations that we need to be mon timplingt that's going to be more important. but what i want to is no what is fiscal spend look like and what is fiscal going to be on and is trade policy going to change? and so far, i haven't seen any evidence that we could see a dramatic 180 in trade. romaine: definitely on trade policy there, seems to be the consensus that the democrats are not that far apart with trump and on the fiscal jirksde not seeing a huge pull fwrak the republicans use would normally expect them to do and we know on the democrats side, they want to
spend a great dean a lot of social program. doesn't really matter to the markets whether trump gets rere-elected. frances: like president trump and senator warren said they take the polar op sit, they're somewhat similar. they're pop throws two different ovendse the spectrum. romaine: leon giving these zpwoom doom predictions swasme president trump and same with bahama when came in. and at the end of the day, the policies don't change much for presidency to president sit. there's things around the edges but the core remains the same. alix: markets will care in the self-fulfilling progressivity. this is not just a u.s.-based issue. there's evidence of this in europe. we're seeing protests bouncing up against across the entire world. is there definitely heightened
geopolitical risk that extends beyond who the next president xi is going to be. -- president of the united states will be. so we when who do these estimates on what the long run g.d.p. is in the united states or aboard, does this impact it? yes. we have to monitor the policy but is it a game changer? probably not. alix: and how do you wind up looking at it? what is your take on that? frances: when we all started getting tariffs and we were modeling them. if you put a tariff on a good, then the demand for it drops by x percentage points and really sophisticated models to tell you the conditions. what's been so deprl economists to model is confidence shocks and what confidence does to business investment. if c.e.o.'s and c.f.o.s are itting around the round table. that uncertainty creates more caution in the business community. incredibly difficult for us to run draw model and difficult for us to predict.
alix: frances donald, thank you so much. and coming up on this program, chesapeake down more than 10% in premarket. they have bigger than forecast loss. more on how the natural gas trying to dig itself out of debt. and remember, bloomberg grires ahead and interact with us. go to gtv go. this is bloomberg. ♪ ♪
the company reduce its sales targets. some of the decision may come to a single delivery provider. grubhub. since 2017, google's cloud computing unit has announced deals with schlumberger. more than 1,100 google employees signing the letter asking the company to drop contract dealing with fossil fuels. k.k.r. raising $6.5 billion for the european buyout fund. the firm will focus on "private practice" -- private equity ransactions in western europe. --edirm invested ined soer soerberg. alix: live that google story. it's not only shareholders now
you have to worry about, it's like diverse -- like your employees. romaine: i know, employees are just the worst. alix: it's not only like they want certain things like we want solar panel fours office. you can't do business with these companies. romaine: i mean, you think about these companies were founded a lot on the so she is and this ideal and they created this employee combace that bought into it. alix: very good point. alix: we're going to look at three companies. first off, i'm looking at chesapeake. one of the downers here in the s&p, down by 6% premarket. the company reported a loss of 11 cents. it also had a slash of spend for 2020 by lamb third. it's getting tweets on multiple fronts. it wants to be an oil producer but they wind up selling its assets lord in to do that.
but ten you still have to grow. so it's this really tough, tough spot for these companies to be in. romaine: yeah. i know nothing about chesapeake. alix: excellent! we can talk about that. romaine: i know about shake shack. they need a chicken sandwich. alix: if chick-fil-a gave them their chicken sandwich, they could merge. romaine: we would have a bloomberg sandwich. what are are you looking that? romaine: adobe. remember adobe? photoshop, all of these creativity -- creative sort of software items? and a lot of people wrote this company off as dead couple of years ago. they made switch to a much more subscription based model. they're back trading near their highs. the highs are around 311, up by 5% premarket. they said they would have a total market first products $128 billion better-by-2022. that's up by $108 billion now
and the huge bulk is going to be on the marketing experience software. the one caveat to this is at last concern that they are only catering to sort of like not professionals so to speak. not companies. they're doing more sort of mid-level people. and they move into the corporate space more. this is a stock that continues to defy expectations and if i had asked you you what the number one best performance software sthoveg past four or five years was? alix: in no way that i would choose adobe. romaine: i know. that's the point though. [laughter] alix: ok. but you know what, it's view from but it's the old school tech. romaine: and it's outperforming all of the hot stocks. and at last reason why. take a look at their earnings today. alix: we're looking at emerson. down to .2%.
>> they were suggesting that emerson make some improvement and that was where the jet and helicopter came into play. so emerson is sort of offering a bomb, an olive branch. they have said they're going to conduct a strategic ruoff their businesses -- review of their usinesses. like maybe in-- there is no update on them. romaine: eight of them. that's-a-like a love. but only one helicopter? what's the story there? brooke: only one sexopt they have more than 40 employees and an intern. so if you're looking for internship opportunities. alix: for the private jet. brooke: yeah, not through the whole company. romaine: oh, if this tv thing doesn't work out. it doesn't sound bad. alix: is it going to be enough? brooke: i don't know. so they released their 2020 guidance and it is not great.
the numbers move around a little bit. they may not compare exactly ith estimates. their-the-c.e.o. is a pessimistic read on the economy. concern about trade tensions and ongoing and they will keep peep on the sidelines, especially as it relates to policy and gas companies. they are feeling the foskets that slowdown. romaine: one quick serious question. brufment are we going to see these companies broken up? brooke: probably be two parts. and this is something that's long been talked about. there's not a lot of overlap here. you have the automation equipment equipment and the
commercial dwiment. this does not really need go together. you're never going to sell all of that to one customer. the question is how much value are you going to create by that? so that's been the pushback from analyst so this activist investor analysis. they don't see that price of the it depends on cost cuts and how much you think these companies can cut independently versus when they're part of this larger conglomerate. alix: i feel like we need do a piece on private jet exeafpblets i feel like there's tons of companies that are cutting in private jets. would you rather have private jet yours own driver your own island? romaine: own driver. brooke: both. romaine: driver. brooke: both. romaine: driver. [laughter] alix: that's no longer an option. [laughter] driver. all right. brooke, thanks a lot. romaine, thank you for joining my me for the hour, romaine bostick. coming up, uber's thinking
alix: we were just talking about uber earlier in the show. what are you looking that? >> uber is durend 7% in the premarket since the i.p.o. traded sideways on this august plunge. 50 days now resistance. maybe there's some support on he all-time lows around 2. 28, we'll see if it happens. alix: if we do bounce up above that, you're looking at the 50 day?
william: exactly. >> we talk about shake shack. they should have a chicken option. what is the track telling you? william: shake shack down 17% in the premarket. the potential support zone starts around 66 which is a retrace. level to the 200 which is at 71. if that fails, you next focus is down here at 56. but 66 to 71, you initial support zone on the open. alix: cowell could be really ugly. alix: tapestry came out with earnings. what do you have? william: tapestry is a little change in the premarket. first resistance is going to be around the 100 day which is at 2665. second resistance up at 200 day. but maybe it's trying to find a bottom down here. it's basically down from 55 a share. you had this big high volume sell-off in august. been an uptrend since. maybe we're trying to find a bottom.
but resistance at the moving averages. alix: if you break out, is the move swift or do you bump up against those levels? william: i think you have you bump up against those levels. alix: bill, good stuff. for your raise of the day, bill maloney. that wraps for me. open is up. -- "the open" is up. that curve continues to bears defense. this is bloovement happy tuesday. ♪ the game doesn't end after that insane buzzer beater.
because with nba league pass on xfinity you can watch the out of market games you want- all season long. and with the all-new xfinity sports zone, you get everything nba all in one place- even notifications about your favorite teams. watch the dropped dimes, monster blocks, and showstopping dunks. plus get instant access to your teams with the power of your voice.
jonathan: coming up, u.s. equity markets climbing to all-time highs. trade optimum dons build. whether to roll back existing tariffs. supporting risk appear tirktse driving the chinese currency back below 7% against the u.s. dollar. good morning, good morning. here is your tuesday morning price section. a record high closing yesterday. we add some weight to it. and the fx market, the dollar stronger. and treasuries very much on offer. curves steemplet 1.84iss your yield on the u.s. 10 year. l