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tv   Bloomberg Markets Americas  Bloomberg  September 6, 2019 10:00am-11:00am EDT

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economy is very strong, probably much stronger than all of this rumor mill media narrative would suggest. these are strong numbers today. jonathan: i know you watch this program religiously, but you are probably busy about an hour ago. mohamed el-erian said the participation rate looks good. average hours worked looks good. wages look solid. we cannot get away from the anxiety around the trade i think people found it encouraging that talks are going to happen. can you walk me through the timeline? i am trying to find out if these talks are contingent on tariffs not going up again in october. have the chinese asked for that? mr. kudlow: no, not at the moment. it is very positive developments. secretary mnuchin, ambassador lighthizer on the phone with vice premier liu he, they decided to chinese team would come to the u.s.. that will be preceded by a
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deputies meeting. the chinese deputies team will come to the u.s. in a week or two in september to meet with our deputies. they will hammer out an agenda with key discussion points, and then i guess in early october, the precise date is yet to be set, our principal negotiators, secretary mnuchin and ambassador lighthizer, will sit down with vice premier liu he and others to talk about the deal. throughried to maintain a kind of long summer here that, while president trump continues his defense of the american worker and the american economy, president trump is a very tough negotiator. i hope people appreciate that now. the other part of the story is that we are talking. it's always better to talk than not to talk.
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president trump has indicated he would take a deal as long as it is a good deal for this country. the president also believes that china once a deal. coming back to the job numbers, you made that important linkage. our economy is humming. the chinese economy is not. we believe that they want to make a deal, so let us see how these negotiations turn out. i don't want to forecast. i don't want to predict. all i can say is sitting down and talking is always a good thing. the phone calls were very constructive, so let's see. let's keep an open mind. let's even try to be optimistic. jonathan: i want to get a bit more clarity on the process. the talks that will happen in a few weeks in the united states, do you need to see anything come from them to get to the talks in october, or do the talks in october happen regardless of what happens at the ministerial level in the coming weeks? mr. kudlow: there are no
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conditions. there are no conditions. they are coming to talk, and we welcome them with open arms to talk. look, a bit of context here, jonathan. we thought we were close last may, you may recall. you and i have talked about this in the interim. we thought we were close, maybe 90% there. the key issues remain on the table, the so-called structural issues. ip theft, force transfer of technology, cloud technologies, cyber interference, and of course, the tariff and nontariff barriers regarding commodities, energy, agriculture, and so forth. close, thene were the talks broke off. china pulled back for whatever reason. i'm not here to second-guess it. i don't even want to get into motives. we would like, i can say this, our team would like to go back
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and pick up where we left off in the may talks. whether that will be possible remains to be seen. i don't want to predict it. all i want to know is we got a new round of talks, and i think that is a very hopeful to the element. jonathan: just to jump -- a hopeful develop. jonathan: just to jump in, do you think there's any chance the tariffs could be pushed back? mr. kudlow: i don't want to speculate at all on that. that is the president's decision. it may be a part of the conversation. i'm sure tariffs will enter into it, along with all the other issues i mentioned. jonathan: the reason i asked is there will be ministerial talks before the high-level talks in october, and of course, we would have to make that decision in the next couple of weeks. is that on the table for the ministerial talks in the coming weeks? mr. kudlow: i will simply respond by saying president trump is, as i think we know
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now, a very tough and crafty negotiator. he has shown his willingness to use tariffs as part of this whole negotiating process. to best i can do is paraphrase what he has been saying. want to see results. we would like to see results in the near-term. when we don't see results, we take additional actions. on the other hand, if we do see results from these upcoming meetings, then progress will be made. that's best i can tell you. ago, i said a few moments from these job numbers today, america is working, america is producing. our economy is quite strong. productivity is rising, as well as wages and so forth. we need to protect that. we are the world leader in technology, invention,
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innovation, application, and new business starts. we are the world leader. jonathan: all important topics, and i know you are going to address them. mr. kudlow: technology is our family jewels, and we need to protect them on that. jonathan: this is what i what you to weigh in on -- what i want you to weigh in on. a mouthpiece for the communist party tweeted this earlier this week. "personally i think the u.s. is worn out by the trade war. there's more possibility of a breakthrough between the two sides." just how wrong is that statement, larry? mr. kudlow: my response to that is never underestimate, never underestimate the strength of this country or the strength of this president. president trump is doing what presidents have not done in the last 20, 25 years. he sees the unfair trading practices, he wants to protect our country, our workforce, our
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technology, our farmers, whatever. he is not going to relent. in sheere way, political terms, i think the president has enormous support with respect to a rebalance and a big change in our relationship with china. jonathan, this is an economic issue. this is a technology issue. this is a fair trade issue. this is a national security issue. this is also a human rights issue. those people in china or anyplace else who underestimate the strength and determination of the united states, they are making a very, very big mistake. jonathan: larry kudlow, i'd love a final word for you on the federal reserve. former new york fed president bill dudley was quite
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controversial about the fed's role enabling the president to go harder on trade. i've been one to defend the federal reserve's independence. the president tweeted once more about, "where did i find this jerome guy?" is it incredibly unhelpful to go after the fed in this way? how complex is it right now? is this something you are pushing back on in the white house? mr. kudlow: no. look, the president has made his views clear. he's very outspoken. he's very well-informed. our view has always been that , eight orry policy nine rate hikes, way too tight. we had severe monetary headwinds. it is a wonder we are growing at 2.5% to 3% with these monetary headwinds. that is one key point.
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with respect to bill dudley, whom i have known for many years, bill dudley went over the clift. what bill dudley's statement suggested is that the federal reserve should adopt a monetary policy geared towards defeating president trump in 2020. the most is politicized statement i have ever heard, enda curran federal reserve board disavowed it, -- and the current federal reserve board disavowed it, walked away from it. mr. dudley has been criticized heavily democrats, like my friend larry summers, for example. the idea that you conduct monetary policy towards somehow influencing an election outcome is just utter nonsense. the fed is an independent agency. we've always said that. but then again, we have our
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opinions about the state of monetary policy. the market is telling us the fed is going to lower rates in september and october. i think that is a good thing. we shouldn't have an inverted yield curve. we should normalize that. i think we get to a normal position, it will actually help the economy get back about 3%. dudley then wrote a second article on bloomberg which did not recant the first article. he's trying to politicize this election and lead some sort of anti-trump revolution or whatever the heck it's called. that is nonsense. he has so far off the charts. he is over the cliff. he has no support i hope, but in any event, the fed is professional. they are independent. they are going to do what i think they need to do, and that is going to help the economy. i will go back to today's job numbers. america is working. american workers are coming back
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into the labor force. they are getting paid. they are spending. they are saving. they are producing. we are in pretty darn good shape, if you ask me. jonathan: final question for you because bill dudley did refine that piece. he tried to walk it back somewhat. i am trying to understand difference between what larry kudlow is pushing back on and what larry kudlow in the white house is doing with regards to respecting the political independence from the federal reserve. there's not a big gap between that piece and what you guys are pushing for. mr. kudlow: i just couldn't disagree more, with respect, jonathan. i'm sorry. there's no moral equivalence between the two. we have never's adjusted that pad policy -- that said policy should be geared towards elections. what we have suggested is that fed policy should be geared towards maximum economic prosperity, and we have noted many times there is no inflation. i mean, the inflation breakeven, as you yourself know as well as
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anybody, is down 1.25%, which is what rich clarida said and what the chairman has said. that is a different issue. we want maximum prosperity, job creation, and staying with lower inflation. we are not out there talking about a camping. jonathan: every with that, -- about a campaign. jonathan: i agree with that, you're not talking about 2020. mr. kudlow: dudley linked it's pacifically to the election. that is a new low -- specifically to the election. that is a new low. he is a former fed official. the fed board disavowed, properly so, and i can tell you internally from my conversations, they were horrified. jonathan: you will get zero pushback from me on that point, but where i do see a link is the president himself has linked federal reserve policy to the democratic party that came before him, and suggested that the fed kept policy easy for the democrats.
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the fed kept policy easy for the democrats. that is making the political link, is it not? mr. kudlow: no. the president has been very consistent, and with my wholehearted support. i talked to him almost every day on this and other matters. we want to remove obstacles to economic growth. we want to remove upper schools -- we want to remove obstacles to economic growth. the premature hiking of interest rates last year and maybe the year before generated an obstacle to economic growth. let's remove that obstacle, and you will see this economy with low taxes, low regulations, free trade reforms. europe, we are making tremendous gains on trade while we protect america with respect to china. those are the factors that will lead to 3%, 4% economic growth and keep this jobs story as strong as possible. those are the issues. this is geared to help this
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country. this is not just about an election. it never is about an election. there is a vision here, jonathan. there is a vision here. the president's vision has always been liberate the economy from unnecessary regulations and taxes, give us a level playing field, give us plentiful energy, let us use our economic resources, let us use our god-given talents, let us reward success, not punish it. that isn't a vision just for a year or two. that is a vision that would keep this country on a high trajectory for the next 20 years, the next 40 years, the next several generations. this is a transformational president, and i think the early returns are pretty darn good. night everyone agrees with me. i respect that, but that is his reality. this chap dudley is playing like a party hack on politics for the next election. that is nonsense. that is utter nonsense.
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look, my first job at the new york fed in open market operations was 1973, so i've been watching this story for almost 50 years. i've never seen anything like the deadly statement. there is net -- like the dudley statement. there is no excuse for it. jonathan: we've got to leave it there. larry kudlow, always appreciate and respect your efforts to articulate the views from the white house every first friday of the month following the payrolls report. councildlow, economic director, joining us from washington, d.c. that doesn't for me. 45 minutes into the session, let's get you up to speed on some of the price action. in the equity markets, we are a little firmer, up on the s&p 500. and the bond market, this is what we look like for treasuries. yields unchanged at 1.56% on the 10 year. what a week this has been. coming up at 12:30 eastern,
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chairman powell delivering a speech from zurich. full coverage here on bloomberg tv and on bloomberg radio. from new york, this was "countdown to the open." this is bloomberg tv. ♪ ♪ vonnie: it's a little more than 45 minutes into the u.s. trading session this jobs day from new york -- this jobs day. from new york, i'm vonnie quinn. guy: i'm guy johnson. welcome to "bloomberg markets." vonnie: some incendiary comments therefrom larry kudlow. first, some breaking news. the department of justice has started an antitrust investigation into four automakers. these automakers, ford, honda,
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and volkswagen, according to the dow jones newswire. they are looking to determine if the automakers violated federal competition law by making an independent agreement with california on vehicle emissions standards. general motors is not named in this report, but ford, bmw, vw, and honda are. back to jobs. larry kudlow -- back to jobs, larry kudlow's comments, and lots more. the jobless rate held steady, 3.7%. average hourly earnings were up 3.2% year-over-year, topping forecasts. larry kudlow stressing the positive data. he also had a lot to say about federal reserve chair and former fed officials. riccadonnaed by carl
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of bloomberg, and susan schmidt, aviva investors head of u.s. equities. carl, there were a lot of positives. just summarize for us the consensus view of this jobs report, given that we know august is generally revised higher. we can look at what treasury yields have done in response to this report. this was a weak report. you take out that when he 5000 incenses hiring, and we are talking about -- that 25,000 in census hiring, and we are less hiring. to be sure, the economy is resilient. the beleaguered manufacturing sector is still leaking out some job gains, while the ism sunk below 50 this week. the u.s. economy is resilient,
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but nonetheless, it is showing signs of strain due to not only trade tensions, but economic uncertainty more broadly. the pace of hiring is slowing. the diffusion index is dropping. i think trade negotiators should be very careful as they convene in october. the economy is holding up fine for now, but there's questions as to how many more straws we can put on the camel's back. vonnie: thank you for that. susan, let me ask you about the equity reaction to the jobs report this morning. we are getting a small gain, but nothing really's ignatik and. -- nothing really significant. susan: it is really status quo. the jobs report was a goldilocks number. it wasn't too strong. it reinforces the belief we will see a 25% -- a 2.5% drop at the fed meeting, and we see the market take comfort that this is enough support for the fed to act. there is still a hope that the
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fed will drop things 0.5%. i think this is a nonevent for the equity markets right now because this is supporting their view of what needs to happen from the fed, and things go on as planned. vonnie: susan, the china headlines from the larry kudlow interview were interesting. he said the key issues remained. "all i know is we have a new round of talks." he mentioned everything we already know. does that mean we are nowhere yet on china? susan: i think it does, and i think the market is reacting to the short-term. investors are incredibly myopic when it comes to the china trade issue. we are reacting off of tweets and short-term data, and statements from both governments. the problem is we are not looking at the bigger picture. this has become incredibly complicated. are xi -- both xi in trump trying to take a hard stance in this negotiating.
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this isn't something this is going to get resolved. we are all happy talks are continuing, but there is no solution yet, and i don't expect a solution in october. i think the market has moment where it is reacting as if a solution might be forthcoming. guy: susan, it's guy in london. i've got 74 basis points of cuts priced in by january 20 from the fed. does that sound about right to you? susan: i think that is optimistic. i think we put additional pressure on the fed to act when we've got comments from the , andistration coming out the fed desperately wants to be seen as independent. i think they are there to support, but not indicating anything they will do, and probably backing off any on future directly rate cuts going forward. he's got to be very careful in maintaining his independence right now. i think we saw from the minutes in the last fed meeting that the
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fed board is still very divided. we did not see general consensus for a rate cut. we saw differing opinions. i think it will take a while to get everyone on board. i think the market is worried about how that is going to impact earnings. ultimately, this does trickle down to affect the u.s. consumer, and that is what is holding us together right now. people are employed, they are still spending, but we are seeing moments of nervousness when we get the pmi numbers dropping. guy: susan, yields are backed up pretty sharply over the last couple of days in the treasury market. if the fed is going to back away from maybe that 74 basis points and we see yields backing up even more, when does that affect the equity market? susan: i think the equity market right now is going to have a bolstering effect because we are getting company earnings. we are nearing the end of the september quarter. we are going to hear companies start talking about the market. we have seen support in retail we have seen support in retail
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and industrial. certain companies are doing very well. i think we see a dispersion and how individual companies react based on their earnings. the market seemed to stabilize, reduces, and i think that company data really helps. don't forget, we have a slew of conferences. back to school for kids is also back for investors. we have conferences across the country where industry groups are meeting, management firms talking about the business, how it is impacting them, and that is going to be data and commentary that the market clings to. vonnie: what are you doing at aviva, and what has been the primary driver of what you've been doing? susan: we are very cautious going forward. you have to remember the big picture items. we are fortunate that we think to the long-term. we are not short-term traders, so i can ignore knee-jerk reaction in the markets pending on but the sentiment is around trade.
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positioning for the long-term, we are looking for companies that really have an ability to grow through this. trade is going to slow, and things are going to come back a little bit. we've been in a recovery for a long time. ultimately this flattens out, and you have to worry that things are going to get hit in this electoral process. we are going to see a lot of topics, particularly around health care, perhaps coal, clean fuel, in this process that will have some immediate reaction for stocks. vonnie: guy? guy: i just want to ask susan about corporate issuance of late. we seen an awful lot of it. this week might even be a record. there's one school of thought that says companies are worried. they are beginning to see may the end of the cycle. they are beginning to worry about what happens next, and they want to get out in front of that. any evidence in what you do to that thought? susan: i think management commentary backs that up. we are hearing from management
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teams that they are concerned. they don't know what is going to happen. this has now extended beyond the timeframe that they thought it would. they are not sure how this is going to impact them on their input costs, and they are getting concerned. when you don't know what is coming, you have smart management teams prepare for all eventualities. i think they are preparing for that. you hear it in the commentary, being cautious. it doesn't mean business is bad. it means they are preparing for potential outcomes. vonnie: how much does a move in china like we saw today cause you to marginally change your thinking on international investment or supply chains, or whatever it maybe? susan: it is relevant. the move in china today was important because it shows that china is digging in. they think they can continue to support their own economy, unlike kudlow's statements where they think the chinese economy is weak. i don't believe that. i believe the chinese economy
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can be very strong. the government is making efforts to support that strength so they can maintain a strong position in negotiating around trade. vonnie: susan, we have to leave it there. susan schmidt, think you for joining us this jobs day. susan is head of u.s. equities at aviva investors. guy: in hong kong, we are getting reports that protesters are surrounding a station on the mainland. we are keeping an eye on what is happening here. we are getting reports that the situation is beginning to flare up once again as we go into the weekend. we will continue to monitor the situation out of hong kong. this is bloomberg. ♪ from the couldn't be prouders
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designed to save you money. save up to $400 a year on your wireless bill. plus get $250 back when you buy a new samsung note. click, call or visit a store today. i'mie: live from new york, vonnie quinn. guy: from london, i'm guy
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johnson. this is "bloomberg markets." time for our weekly etf segment. one to discuss what is going , bloomberg intelligence's etf analyst in washington. what are some etf's that tracks the video games and e-sports segment? reporter: there are three e-sports and videogame etfs. two more recent funds are focused on the e-sports segment of the market. interestingly, collectively these funds only manage $120 million in assets, which we think don't reflect how big this industry is, how much growth there is. this is a $140 billion industry. we looked into this more, we think advisors may be hesitant to recommend these products because they may sound trivial for clients, but
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the most recent fun to come to market, nerd, has used illegal digital entertainment ash has used the label digital entertainment -- has used the label digital entertainment. the fund that has gained the most is an e-sports etf. it is up 28%, which is outpacing medication services in the market overall -- outpacing communication services and the market overall. this is the type of outperformance we think may bring in other investors. what happens of here, can i think about this alongside some of the cord cutting that is going on? how do i put this into context? this feels like a trend we are seeing away from traditional media into these types of products. do analysts look at them in a similar sort of light?
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should i think of them in the same way as stocks that contain may netflix and amazon as well? morgan: interestingly, some of the larger tech names have smaller plays in this space, but these etf's offer a basket of more focused companies, some that trade internationally, and a lot that are digital platforms for streaming, multi-casting, e-sports franchises. these are really dynamic businesses that you can get together in an etf. there is a lot of traction here that we see. more traction in asset growth after the "league of legends" world cup and some of the other big tournaments this summer, but investors haven't really seen this industry for a way to get exposure. vonnie: thank you for that etf friday. guy.
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guy: let's get back to brexit. the drama continues. in the latest move, u.k. prime minister boris johnson has w on another case on the suspension of parliament. us --rrespondent joins gina miller joins us from london. expect a different outcome at the spring court? -- at the supreme court when it comes to the suspension of parliament? guest: no one can say for certain because this is such an unusual case. because we have an unwritten constitution, we are arguing about the very fundamentals of our system and abuse of power. this is a very unusual case. what is very positive today is that the case wasn't dismissed.
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we were actually granted an ,ppeal up to the supreme court and they said that the case has merit. so i would argue that the case needs to be heard in the supreme court. also, what is very unusual is the supreme court in the u.k. doesn't normally sit until october, so the nine judges we suspect will be called back will be called back early. this is very unusual, to hear the case on september 17. it is by no means over, and it does show you how important this case is. needwhy does parliament you and john major and all of these others to protect it? if parliament wanted to get rid of prorogue think, allah would have to do is -- get rid of proroguing, all it would have to do is have a vote of no-confidence. parliament doesn't want to seem -- doesn't seem to want to do this. shouldn't the emphasis be on
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parliament and not you? gina: i wouldn't disagree with that. it shouldn't be up to me. unfortunately, the way this prime minister is operating is actually shutting down the options from the ministers in parliament. looks for a vote under the fixed term act for a general election and doesn't get that, he could prorogue parliament because he already has the queens signature saying he can prorogue parliament between some number ninth and 12 for five weeks -- between september 9 and .2 for five weeks that is why now, more than ever, this has become even more important than i originally anticipated. vonnie: for context, let's remind viewers that you brought and won the case that stopped ministers triggering article 50 without the parliamentary vote in 2017, so you've been along
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for the ride, as it were. boris johnson argues this is political and not legal, and that there is no reason for courts to be involved in the decision and the deciding of this. what are you trying to convince the court? gina: boris johnson would say that, but we would argue that this is an abuse of his power. we are not arguing that a prime minister doesn't have this power to prorogue parliament. we are seeing it is an abuse and misuse of that power. no prime minister has prorogue parliament for this time. fundamentala time in our history as we drift towards a no deal brexit, ministers want to be able to have their say, and he is denying than that voice. that is in abuse of power because we are a parliament re-democracy. i have a platform from with i
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can, from a civic point of view, fight against the tyranny that he is trying to exercise in our country. vonnie: is there a point to be made, and i'm sure boris johnson would make the point, that the to enact the will of the people that was voted upon to carry out brexit by october 31? gina: i'm sorry, but this has nothing to do with brexit. this is so much more fundamental than brexit. because we have an unwritten constitution, if he gets away with this, it sets a precedent that any prime minister in the future can decide if they don't like the scrutiny of parliament, they will just shut it down. this is so much bigger than brexit. it is not about one moment in political history. this is about our entire constitution. vonnie: in this particular case, it just happens to be about brexit, and he is saying he needs to prorogue parliament in order to carry out the will of the people. gina: he would say that, wouldn't he?
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but it is still in abuse of power. no prime minister is above the law. just to say that excuse, the effective it would be to shut down parliament, he doesn't need to shut down parliament to get a new session and get a queen's speech. he could do that in the normal way, which is about three to four days or a week. he does not need five weeks. there is no justification for shutting down parliament for five weeks. guy: is the only way that this ultimately gets resolved with legislation that basically changes the terms around which this can happen? is that the long-term trajectory here that we see parliament enacting legislation? gina: i think if parliament wishes to do so, then they can do so, but we got a long way before we get there. there are rumors flying around that if he doesn't win the vote on monday for a general election, he may have to resign. there are so many other moving parts. there is no to your path ahead.
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all i'm interested in is that the prime minister abbe's the law and does not abuse his powers, but apart from that, i don't think we can with any certainty say how this is going to end. guy: thanks for your time, as ever. gina miller joining us, scm private sounder. vonnie: coming up, and exclusive interview from italy with the five president of turkey. this is bloomberg. ♪
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vonnie: live from new york, i'm vonnie quinn. guy: from london, i'm guy johnson. this is "bloomberg markets." now time for an exclusive interview. "bloomberg surveillance" cohost
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francine lacqua is standing by in italy. francine: thank you so much. this is one of the interviews we've been most looking forward to today. this is slightly different to the economy and monetary focus on geopolitics. we are with fuat oktay, vice president of turkey. thank you for being with us. are we risking another migration crisis? vp oktay: unfortunately, yes. especially in syria and especially in idlib, the situation is not that good. for thebeen trying hard past couple of years to keep the peace intact in that part of the region. we have a process with russia and getting iran into the picture.
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we were able to get a secured area, and cleaning up that area from terrorist groups, providing a safe haven for the civilians. unfortunately, the syrian regime remains too much civilian catastrophes. how is the european stance on this issue? vp oktay: unfortunately, i am not sure whether there is a european stance. is so much into its own issues in a way that they have .orgotten the migrants the way that europe looks at it
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is mostly from the foreign fighter point of view. it is an issue out there, but all of the european countries have to deal with their own foreign fighters, not in syria, 19 -- not in syria, not in idlib , but make sure they deal with their own foreign fighters through their own governments and forces. with the attacks of the regime to the civilian side, claiming that they are attacking the terrorists, but indiscriminate bombing to everywhere, bombing hospitals, schools, civilians, so what we have is somewhere 600 to one million idp's in the region.
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there are 7 million syrian refugees. is the largest refugee hosting country. hagglingcing a risk of another million if the idlib issue goes up. turkey ise is clear, hostnd will not be able to anymore refugees coming from the idlib side. risk, sos to face that turkey cannot bear that alone. to thee: what happens jihadists in syria? if russia bombs them, where did they go? vp oktay: it is not a matter of jihadists or others. his radical
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terrorists. the way we describe terrorism is we do not discriminate terror by religion, by geography, by whatever it is. terrorist is terrorist. those jihadists, whatever you want to call them the they are terrorists. foreign fighters are coming from all over the world, from european countries and from everywhere. francine: there's a stronghold of terrorists in syria. if they get bombed by russia, is there danger that they spread to other countries? do they spread to your country? vp oktay: rather than spreading them to other countries, the best way is somehow to get them somewhere in syria, make sure these countries get hold of their own terrorist groups and deal with it.
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civilians, the syrian civilians, should not pay the price. think about a kid at school. think about a patient in the hospital. what do they have to do with the terrorist groups? they are paying the price on behalf of the source countries, so it has to be dealt with another strategy, with another policy. this is not the right way of getting rid of terror or terrorists. indeed, this will increase the level of terrorism, as it has so far throughout the regional conflict. talk to be about the relations with russia. withrkey serious
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generating weapons with russia? vp oktay: on the matter of weapons from our relations with the same way that our relations with italy, for example, or our relations with germany, or any other country around the world. we are two neighbors. member.s a nato we are committed to our nato allies and committed to our obligations with nato. indeed, turkey is one of the nato numbers who supports the problem from that point of view. kind of --, we have we have in many areas, in terms of having relations, most of the
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tourists would say we receive most of the tourists from russia. francine: on the fifth generation weapons, which is a thing a lot of people want to know about, how close are you to signing something or looking at intensifying that relationship? vp oktay: it is not the fifth generation weapons. we would be talking about is 400. turkey has the right to defend herself. you know how the area is, how fragile it is. so you do not leave it to time. so we have to keep our country clear from the terrorists and also attacks from any other country, or whatever it is.
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especially from terror, terrorists. a need for turkey. defense systems was a need for turkey. it is still a need for turkey. [indiscernible] -- so then russia came into the picture. they have come up with a good deal. wise isis relationship it is a trade relation. nothing more. francine: how would you describe your relationship with the u.s. right now? vp oktay: likewise. owney looks at it from its interests. the u.s. is our strategic as, likeso we see you russia, there are issues.
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,here are areas that we agree like creating a security corridor in the northern part of syria. but we disagree. our goal is to increase the level of trade to one hundred billion dollars, so president erdogan and president trump have a very good relations and very .trong ties somehow, i guess the u.s. side is having some problems.
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so that's how we see it. we are still strategic partners, and that's the way we see it. there might be areas where we disagree. francine: could you quickly elaborate on that? presidents seee i to i come about the dr chrissy -- see eye to the eye, but the bureaucracy doesn't? vp oktay: that's how we see it. this is -- we make it very clear to our counterparts as well. francine: vice president, thank you so much for your time today. that was the vice president of turkey, mr. fuat oktay. we will have plenty more. vonnie: we are looking forward
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to it. our thanks to bloomberg's francine lacqua. time now for futures in focus. men -- alan joins us from the cme. what do you make of treasury market moves this month? guest: treasuries have been on a tear for a lot of the wrong reasons, but obviously, what is driving that market is the yield. the yields around the world have been on a race to the bottom, so we are still a decent yield when you look at treasuries. but to take it out of that context, that really emphasizes the difference between the yield you can get in the treasury market and the yield you can get in the stock market. the s&p yield has actually surpassed treasuries, which is odd in itself, but you are going to see the money flow into the stock market, and i think it is all about the macro market right now. the s&p is 1% away from the all-time top, even after all of
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this instability. vonnie: what did you make of larry kudlow saying this morning that we are at square one with china? that doesn't bode well for equities, and yet they are continuing to rise, as you say. alan: i think we have baked in the worst case scenarios. we are in a trade war. who would have said five years ago that that wouldn't crush the markets? we've overcome some anything's in the last decade, the last five years. the dow is 5000 points off the low from december. the fear factor, the vix, is 55% off of that high from last december. even though things don't feel more stable, slightly -- more stable, mathematically they may be. i think wins, and people are under the impression that eventually, something will get sorted out. it has to get sorted out for these parties involved. their future and their self-interest are based on it. vonnie: thanks for joining us today.
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alan knuckman there of a agoura financial. guy: mexico and venezuela have long been the oil powerhouses of latin america, but with are set to they transfer the region. alix steel dies deep -- alix steel dives. alix: venezuela is in crisis, and mexico is too hard to invest in. >> you see these declines starting to take form in my scope. alix: now it is up to the next generation of oil countries to transform latin america into a production powerhouse. >> the most rapid growth is
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going to be in brazil. for 37e been in colombia years. it is the most underexplored country in south america. >> the third region that stands out is guyana. is a hugeerta opportunity in argentina. >> you want to be involved in the vaca muerta. it is the most important place of the future. alix: will they be toppled once again by political strife and unrest? nexte: tune in for "oil's big boom" at 9:00 p.m. eastern. this is bloomberg. ♪ here, it all starts with a simple...
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european trading day. from london, i'm guy johnson. vonnie: from new york, i'm vonnie quinn. this is the european close on "bloomberg markets." guy: it's a defensive bias in the market today. names like nestle trading reasonably strongly. stoxx 600 up by 0.2%. also seeing gains when it comes to the bund market. we saw some very weak german ip data earlier on. another thing i want to highlight, we also had a russian rate decision today. the governor sounded really dovish and hinting at more cuts, at least one in the future. already seeing gains for the ruble today, up by 0.8%. vonnie: in the u.s., we saw treasury yields top 1.60% on the 10 year. down to 1.56% now. mixed data


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