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tv   Bloomberg Markets European Close  Bloomberg  May 8, 2019 11:00am-12:01pm EDT

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european trading day. from london, i'm guy johnson. taylor: from new york, i'm taylor riggs. this is the european close on "bloomberg markets." guy: stoxx 600 not really doing much. apparently the president of the united states thinks the chinese are coming for a deal. the markets not quite so convinced, stabilizing come about not doing much more than that. the british pound is trading $1.30. at dealrospect of a brexit with the labour party seems to be fading. we did seee market, a substantial draw on the eia data out of the united states. we are seeing some price action to the upside, brent trading back above 70 elders a barrel -- above $70 a barrel.
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taylor: looks like a bit of an improving picture here in the u.s. we knew the s&p 500 was right around the 50 day moving average. perhaps some of the buyers coming in today. starting to see a bit of an improving picture after the big selloff monday and tuesday. the vix is also coming down. , it is really easy to get panicky, so perhaps some of that fear coming down a bit. it looks like that has been lifting up. you're seeing price down, yields up around 2.46, where we were yesterday. an improving picture over here in the u.s.. guy: stabilization certainly seems to be the order of the day right now. we will see whether it continues. the question of the day, our markets still too complacent
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about the prospect for trade peace? >> market for dissidents are a veryy all pricing in high probability of a trade deal being reached as early as this week. >> i think markets are probably underpricing the prospects of a resolution. >> the equity markets, unlike the bond markets, have been pricing in a strong rebound in global growth in the second half of the year. >> probably this is too early to expect that in the trade territory, everything will be safe and completely trouble-free. guy: some of the views. let's get another view from blongerg markets' live editor. i would have thought bond markets would have responded more positively. why are we not getting that? reporter: a couple of reasons.
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one, we already know the vice premier was coming to the u.s. as part of the chinese delegation. depending on the reports that you look at, we knew the chinese are trying to get a deal. there's obviously speculation that perhaps the hard-liners in this were putting out reneging on the proposed deal, and maybe now that is being rethought. the fact that they would come here is not exciting or infected new, so wen fact don't have a lot of new information to work with and the downside is rather robust. taylor: talk to me about that downside. we've been hearing for the past few weeks that markets were priced to perfection. we've been pricing and 100% of a trade deal. then we hear from jamie dimon, may just 80%. if we don't get a trade deal, what is the downside risks to the equity markets? reporter: our macro strategist
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tried to answer this question this morning. he thinks 2800 is perhaps a rough guesstimate of where stocks might initially fall because he would need to price in a range of outcomes. it is not just yes and no to a deal. , perhapsou get tariffs you get a change in the composition. perhaps you get a deferment in the talks, meaning a delay, but no actual outcome as to whether we are going to get a deal or not. the range of possibilities here is rather large. to put possibilities on it, jamie dimon may have the right estimate here, 80% yes, 20% no. but again, we think that binary outcome is not the right way to think about this. you want to think about more of a bell curve of possibilities. managerst of portfolio probably were behind their benchmarks into this selloff. are they going to see this as an
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opportunity to maybe get more fully invested? andrew: there is certainly that chance, absolutely. people are trying to catch up to where they would like to be. any time we've seen the s&p pullback, it has been seen as an opportunity to get in. we continue to have these questions about the valuations. what exactly are you paying for? we are about 3% away from where the s&p was a couple of weeks ago, which was a record high. earnings estimates look like they are turning around, but of course that is all predicated on having a deal in place with the chinese. of course, no big blowup with the europeans, with the mexicans or canadians over that stalled trade deal, and japan is now in the mix in terms of talks. you might want to get back in here, but there's a lot of open, large macro political questions that need to be addressed, and you need to then think about the valuation to put on those risks.
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guy: we will leave it there. , thank you very much indeed. taylor: we will be shifting gears from markets and the impacts over to trade. president trump saying china is coming to the u.s. to make a trade deal. white house press secretary sarah sanders reiterated those comments just moments ago. the delegation arrives in d.c. with reports that they could retaliate if the u.s. imposes higher tariffs. we are joined now by sarah mcgregor. you have to bear with me. i've spoken to you every single day this week, and so far we are not getting a ton of new information. what changed this morning? reporter: trump's tweet was interestingly timed. it was just before the markets opened. he announced sunday that tariffs as of thiscalated
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friday. at the same time, he sort of railed against the trade deficit, and even introduced the idea that china might be stalling because they might see themselves getting a bit of a better deal with democrats. democrats might go weaker if they keep these talks going on to the next presidential election. guy: there was some reuters reporting earlier suggesting the chinese have been pushing back in all areas of negotiation. if that is the case, where are we in this process. the chinese are pushing back, the u.s. is pushing back. should we see that as a negative?isn't this just what you normally would expect to the endgame? sarah: our reporting shows that china has actually rolled back language on changing some of its to messick laws, particularly related to forced technology transfers, which was a key thing
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the u.s. has pledged to help u.s. companies with. i think there is some back-and-forth, but when china starts already rolling back commitments in a very solid way, that is where things get tricky. we also heard from lighthizer earlier this week that there was no grand plan on tariffs, which will remain in place, which will be removed. -- key key demand at the demand is that these tariffs put in place during the trade war be removed. sarah, as we tie-in economics and trade, it all comes down to who has the upper hand. we knew that china's economy up to this point had started to show signs of improvement. we were using that as fodder to gain the upper hand in negotiations. though they've had a few days of a bigger selloff then we've had here in the u.s., which arguably
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might give us a little bit of time to gain the upper hand again. as wes the upper hand kick off negotiations and try to finalize them by friday? sarah: that is a great question. the markets go up and down depending on the trade news. some might not have their eye on that as a key indicator of what a trade deal might do for the economy. the u.s. is a pretty good position now. we have better first-quarter growth than expected. trump might feel pretty confident about that. china's economy is a little bit on the upswing, but over and over again, we see economists and people like the international monetary fund saying these are key risks. both of these economies are trade dependent. it would be very unsettling. taylor: thank you. that was bloomberg's sarah mcgregor.
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as we await some comments from sarah sanders, i want to get a check on the bloomberg with courtney donohoe. courtney: a major escalation in the fight between the white house and white house -- and congressional democrats. the house judiciary committee prepares to vote on holding attorney general william barr in contempt for not providing a full, unredacted version of the mueller report. iran will no longer comply with elements of the 2015 nuclear deal. rouhanipresident hassan is giving european nations 60 days to reaffirm their commitments, and response to new u.s. sanctions. rouhani: we did not initiate the violation of commitment, and we will not initiate any wars. we have never, ever given into
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bullying, and we will never succumb to bullying. we will respond to any aggressor. courtney: the trump administration had refused to extend waivers allowing eight countries to import iranian oil after bailing out of the deal a giver echo. british prime minister theresa may says she is sticking to her timetable. she plans to deliver the first phase of brexit, getting the actual divorce done, and then she will quit. talks with thes opposition labour party today. 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 courtney donohoe. this is bloomberg. taylor: you had some movement in down.nd market earlier, to 2.4 for now it looks like they are paring some of those losses. sarah sanders has said the u.s. has received china deal
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indicators. in the meantime, a lift equity markets today. 0.3%.p up the stocks get most of revenue for china, so some of this helping support these markets. more on this next. this is bloomberg. ♪
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♪ from new york, i'm taylor riggs. guy: in london, i'm guy johnson. this is the european close on "bloomberg markets." let's check the global markets with abigail doolittle. abigail: we are starting to see some interesting whippy action here.
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earlier the nasdaq and the s&p slightly down, slightly up. sarah sanders of the white house is saying there is optimism that perhaps there will be a trade deal. resturopean indexes lesson -- is less impressed, so just slightly higher. let's take a look at the emerging markets, down for a third day in a row. this is the worst three day stretch for the emerging market index since early december. this tells you some investors are still skeptical that a trade deal will occur. as for some of the big movers in the u.s., really moving the s&p 500 to the upside and the up.side, diamondback energy a strong quarter and outlook. trip advisor down 14%. they missed and offered a mixed outlook. devita health down 8%. it appears that reimbursement issues are at play.
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let's bring it across asset class, and bring emerging markets into the picture. this is a 30 day chart. oil, and blue the s&p on a rally,as been outpacing the other areas of the risk continue one further out on the spectrum. we see that back beginning in the middle of april come of other areas doing down. we see clearly, especially in that shanghai composite, pulling back. what will that mean for the s&p 500 and u.s. stocks? guy: plenty to think about. let's get a bloomberg exclusive conversation right now at the salt conference in las vegas. erik schatzker spoke to the billionaire investor sam zell. >> i am originally a real estate
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guy. estatethat active real tax returns, frankly, don't tell much of a picture. a more relevant picture is really following cash flow, and i doubt that the materials that "the new york times" has given us is anything other than net results. for a real estate guy to have ownsdeductions, who a lot of brick-and-mortar, is not unusual. ,rik: so the fact, for example and i am picking the "new york now," story as fact right is that he would have reported losses of $250 million in 1990 and 1991. it doesn't say that much about the success or not of his business.
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sam: he might have been a disaster, i don't know. but using this as a measure of whether he's successful or not, there's not much to measure. the interesting question, and hopefully they will maybe find other basis for entering it -- for answering it, but tax returns from a real estate guy not really relevant. erik: when you were developing real estate in the 1980's and 1990's, were you availing yourself of some of the same provisions in the tax code that donald trump seems to have done? sam: absolutely, as did every other real estate enter in the united states. erik: is it unusual for any real estate developer at that time to have paid no tax because of the losses you are having to report through those provisions?
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sam: i think the answer depends on what each individual portfolio presents and what else is going on. i am not opining on anything other than the fact that it is using those numbers that doesn't tell us only thing -- then the fact that using those numbers doesn't tell us anything. erik: if that is the case, one has to wonder why president and other members of this administration and family have been so reluctant to make those details public. if in fact it is an easy story to tell, and the story that it tells isn't one that is representatives say of what the rest of us would think of us as either personal or public reality, why not make it public? the -- far be it from
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me to criticize the media. the administration, for reasons i know nothing about, have chosen not to release this information. considering the way the media handles any information that has the word trump attached to it, i probably would want to produce the least amount of information. everything is an accusation. i have no opinion as to the veracity. i have no opinion as to anything other than that the tax returns of a realistic person is not that out of line in any way. erik: and kind of irrelevant and what it tells you. sam: yeah. if you gave me just that, i would have a hell of a time figuring out that it meant something. erik: this country was born in a
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tax revolt. effort you make of the that a number of different jurisdictions, new york city extract, are taking to more taxes out of the real estate industry? thatwell, i think everybody is trying to figure out how to get more taxes out of every industry, and real estate is no different. and wealthy people. greatthink there is any answer to anything as a result. in 1896jennings bryan was the first class warfare guy who ran for president. we've had it in one form or another ever since.
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erik: using we are entering into a class warfare? samuel: do you not think this is class warfare? erik: well, maybe it is, but you would maybe associate it with people carrying pitchforks in the street. samuel: the answer to that is that getting tax returns doesn't say anything until you actually understand what they mean. when i use the words class warfare, i am not suggesting anyone is walking in the streets. i am saying we have created an environment where there is enormous focus on relativity. erik: i only ask the question because ray dalio himself said if we don't address the inequality problem, we might have a revolution on our hands. samuel: i agree with him. iybe the differences, and don't know that i differ risk ray,- that i differ with
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but what solved the end of quality -- the inequality problems in the past and in the future is you have to raise all of the boats, and then everybody benefits. trying to take away from one group and give to another group, by definition, is a formula that doesn't make sense. taylor: that was billionaire investor sam zell speaking to erik schatzker at the salt conference. more next. this is bloomberg. ♪
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taylor: president trump is saying that general motors will sell their ohio plant to work course. the president is saying he just gm, whoth the ceo of has informed him that they will be selling their lordstown plant workhorseurse -- to
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to build electric trucks, and spend about $700 million in ohio. not independently verified yet, but those are the tweets. horse shares soaring, about 33%. that is the news in the headlines. guy: big jump. we are also getting a bit of a lift when it comes to european equity markets right now. a big chunk of that is what is happening with siemens, rallying quite hard today, up by around 5%. higher, the cac trading but the dax leading the charge here in europe. this is bloomberg. ♪
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guy: 30 seconds to go until the end of regular trading in europe this wednesday during a negative session starting to be more positive. germany bright green.
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france is trading higher. the u.k. is up as well. other markets not as much. the iberian peninsula still negative to flat. the same story in italy during the markets have been getting a lift. ftse up .1%. the pound has had a negative day. pay attention to that. around 40 dividend stocks in europe, major ex dividends. the dax is trading up. wirecard is having a solid day but siemens is by far the biggest points gainer in the dax. the numbers from the company earlier and the decision to split out the power unit adding impetus to this deconstruction we are seeing of the conglomerate that is siemens. the dax trading higher, up .9%. the cac 40 having a solid day. what is interesting is when you
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dig into the details of stocks like lvmh which are adding points to the market move, they have been lower. the luxury sector more broadly and lvmh in particular that the trade narrative would get more negative. lvmh pumping back, maybe just below the surface there are indications the market is turning more positive on the trade story. let's take a look the sector breakdown to give you a look at what is going on. technology not a big sector in europe but it is having gains today. media is doing reasonably well despite the itv front. industrials doing well. health care trading higher. a look at the bottom of the market. some of the brakes being applied to these markets. travel leisure is trading down. some of the utilities have gone ex dividend. real estate trading down around
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.8%. let's show you some of the single stocks. siemens is up 5%. itv, this is the uk's biggest commercial broadcaster, one of europe's biggest commercial broadcasters, suffering from a number of things, including the ongoing netflix effect. the other story is brexit. companies are spending money on brexit preparations and not spending it on advertising. itv is suffering. imperial brands is trading down sharply. 5.63%. an incredible volatile story as late as we watch the legislation and regulation changes that have been taking place around the world having an effect. it does seem this is a stock buffeted by news out of the united states on whether or not menthol will or will not be allowed. the future for this company lies
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away from tobacco come into some new products coming through. imperial trading down 5.63%. that is a look at where europe is finishing today. taylor: we want to talk about news coming out of the u.s. in the last 30 minutes, headlines that the u.s. did receive an indication that china was coming here to make a trade deal. you did see more gains in the equity markets. we did note the softer the chipmakers have been, the big outperform on a year-to-date basis relative to the s&p 500. that turned around in the last two days. definitely the outperform are today. the most exposure to china, all of the chipmakers. crude finally trading above $62 a barrel after eia data showing that barrels fell more than expected, taking supply out of the market. if the smart money is in bonds, the 10 year yield hovering mostly unchanged at a 2.45.
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guy: south africa going to the polls today. , butnc is expected to win the margin of victory is crucial. the president will be able to 55%, a if he gets over clean break from the corruption that dodged the zuma era. here is the ceo greylock capital management. if he can deliver more than 55%, what will he be able to do with the south african economy and how much of that is currently priced? >> i think there is still some margin. obviously there has been a lot of volatility around the headlines coming into the election. there has been a lot of coverage in the media around the incoming inequality, and certainly the corruption scandal that has happened. with the president is
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he is still dealing with a lot of zuma people, not only within the mc but within his cabinet. his personal popularity is higher than that of the amc. if he can deliver the margins he will have the latitude to put his people in their -- in there and you and external display that south africa is about the rule of law and will not succumb -- the paranoia is that south africa goes the way of symbolic way. he is the right guy to do this. if you talk to people on the street, they trust him. he is already a billionaire, he does not need to steal money. he needs to bring the right people in to demonstrate to the market that the policies he is going to implement are going to be investor friendly, creditor managey, that he can
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issues like south africa airways in a way that will not damage the credit of the country or investor confidence going forward. you bring up some of the issues. let's talk about the power company. the current plan is to break that group up. do you have confidence the new is able to deliver on that? is it the right plan? scenario, ifase they mismanage this it will have a direct impact on the credit rating. it will make managing the economy going forward much more difficult. in short, i do have confidence they can manage the crisis. there are a lot of elements in the trouble that might allow them to form a plan for creditors to get their way out of it.
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they do not want to put the debts on the balance sheet of the country, but they can probably craft some sort of solution that will benefit creditors and lay the groundwork for decent management. creditors are going to have to be understanding of some of the issues. in short, south africa has strong people on their team and they have strong advisors with the issue. taylor: as we talk about politics with emerging markets i want to bring more politics out of the u.s. china is now saying it may take countermeasures on the u.s. tariff move, perhaps not surprising. we did note perhaps they're going to be taking countermeasures after we announced hours, set to kick off on friday. those are the headlines. coming back to south africa. , twoke a look at the rand days of strength in their currency showing the market is optimistic.
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on the longer-term basis you are getting weakness. did they finally have the ability to start implement some of those structural reforms we are talking about? hans: absolutely. this election should be the pivot point. if from a pose a can -- if grandma pose a -- if rhama ,hosa can come out of this the issue for south africa is that it be seen by the investor community as a grown-up economy, that they have strength of institutions, they have independence in the central banks. pivotal point for ramaphosa to show he can bring that kind of structure and confidence. the strength in the rand in the last few days, if there is a decent margin and the rhetoric out of the back of the election
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is positive, i think you will see continued strength in the rand and probably see good performance in south african assets going forward. this is not a clean path. they have a lot of structural problems and they have a lot of mess to clean up from these human years -- from the zuma years. i think this should be a turning point if it is managed properly. i think the biggest thing is that ramaphosa not be beholden to that element of the anc that split off to become the eff. cronies are going to be working more with patronage less about the strength of the institutions. if he gets the margins, he can put the structure in place. taylor: across the, if we pulled his back into the markets and
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where we can buy dollar-denominated debt or local currency debt. as you look across, even with the turkish lira and the rand, still weakness. now that the fed has said they are maybe on pause, that we are not sure what the fed will do, does that give you confidence that as emerging markets start to cut interest rates it is time to start cut local currency, or are you still a dollar? hans: what you put your finger on his there are broad themes going on in the market that will impact emerging markets. in those cases, you can make a broad argument that maybe the pressure will come off some of the domestic currencies. you're are also getting into a point where you have to do your homework for the research on the ground, the fundamental analysis of each case. if you take a look at south africa, while this could be a turning point, turkey is contesting their local election,
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contesting istanbul, your trading a lot of reasons for the domestic corporations to dollar rise. if you can say the dollar might be more liquidity in the system, tightening phases might be over, dollar strength might not be as much of an issue, you still have the issues in turkey. people are afraid of what is going on on the ground. still trying to hold on to power, contesting elections, negotiating with the russians. he is a bit of an international provocateur and he is steering the rest of the world to sanction him or press on him like the eu is with the call for the new elections in istanbul. i would be more of a buyer of the south african rand then turkish lira. turkish has been one of the best em shorts this year. not sure i'm seeing many reasons to take that short off.
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guy: can i go back to the china story taylor was mentioning? the correlation of the rand to that story is high at the moment. you take a look at the correlation of the rand to the fx index, it is .6, it might be higher. to what extent, when i try to analyze some of these countries, do i need to ignore the domestic political story and take a look at what is happening more broadly? the radically, these are idiocy -- theoretically, these are idiosyncratic events, but there is a strong correlation and trade seems to be the biggest narrative. is trade be in out moment? if we get a trade deal, you're in, if we do not, you are out? hans: you make a good point. you have to do the analysis on the broad trends in the macro markets. at what point are we on dollar
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strength? at what point are we on headline risk? areoint -- my feeling is we -- we are not in a tightening cycle. maybe we are longer-term but for the shorter term the next 6-9 months, those pressures are coming off. if you feel those forces are not as pervasive as they were at the beginning of last year, then you have to take a look at the situation on the ground. it is always a balancing act in our world to analyze what is important fundamentally and then sometimes you have to say the fundamental developments will get overwhelmed by the overall market conditions. to your point, you have to pay attention to the broad market themes, but at this stage in the market, you need to do your homework with what is going on on the ground. thanks for much for joining us.
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hans humes. greylock capital ceo. let's check where european stocks have settled. we are through the auction process. higher for the london market. the german market dipping but still outperforming. the dax up .7%. siemens a big factor behind all of that. the tradingaving desk in getting into the car and want to carry on the coverage, you can tune in to bloomberg radio, jonathan ferro is in new york. i will be joining him in london. you can find the cable show live on dab digital radio in the london area and around the world on all of your bloomberg devices. this is bloomberg. ♪
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taylor: from new york, i'm taylor riggs. guy: in london, i'm guy johnson. this is "european close was quote on bloomberg markets. -- this is the european close on bloomberg markets. we've been speaking to the presidency of germany's banking regulator. thoughts about the challenges facing those companies. >> it remains on the agenda. with or without a merger, it has to be tackled. both banks will have opportunities to address that issue on a standalone basis, or thinking about other strategic options. it is their responsibility, not or thetes responsibility authorities responsible to come up with strategies. the germanhufled, finance regulator speaking to bloomberg earlier on.
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the pressure is mounting on theresa may as she faces lawmakers in parliament. the two options you may face are another extension -- the option she may face are another extension or a canceled brexit. bloomberg senior executive editor joins us now. >> she did not look like a woman about to stand dime anytime soon. down anytimeand soon. this is may's greatest strength. she was repeating i will put together a deal through parliament. the evidence does not look great that will happen. what is happening right now is the tory party management committee are meeting behind closed doors. what are they talking about? how to change the rules to remove mrs. may or allow another leadership challenge. one last year. they may decide to change that.
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so many of her own size wanted to go. we had calls today of people asking her to resign. ,owning street being firm saying the prime minister has said we have to get brexit over the line. there is very little chance of that happening anytime soon. taylor: i said here a few months ago and i kept hearing analyst calls about 1.32 for fair value with the pound. we have taken a break from the hysteria around brexit but revisiting today. from all of your analysis and research, does a 1.32 feel like a fair value? we have seen weakness recently. david: we saw the pound rally as both sides were talking up a sense of across party deal. it seems like all of that has been misplaced. sterling took dated yesterday and has fallen again today. there's a chance that deal seems
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to be slipping through fingers. if you step back and looked at sterling's moves over last few weeks and what traders are saying, it is pretty range bound. we are not seeing big moves because the big deadline has been kicked all the way to the end of this year and there is an opportunity to extend even further. there is no decision and there is still uncertainty, but the cliff edge is no longer an option. parliament has made that clear. if anything, there seems to be an outside chance that brexit gets canceled altogether, through a referendum or endless extensions. the disaster scenario seems to be averted for sterling traders. guy: we'll leave it there. david, thank you for much indeed. taylor: disaster is not averted for one stock. that is corvo. one of the best performers in stockp 500, shares of the up 6.5% after quarterly earnings beat forecast.
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60% of the revenue comes from asia, so some of the trade talks and relief we are getting playing into that as well. you are seeing the rally pickup steam with talks about possibly getting a trade deal. the midpointseeing of their guidance on eps about 25% higher than the street was looking for. what is going to be the revenue driver for them, because we are still contending with murkiness in the global smartphone market will be 5g. vo makes qor radiofrequency trips -- tips. -- chips. that will be a big boost. 2020o much in 2019, but by five g smartphone shipments are expected to pick up 16 fold. a big boost will be apple, which is qorvo's largest revenue
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driver. apple cleared to have a 5g phone by 2020. taylor: all about 5g. we'll be hearing from intel as well. thank you. that was kailey leinz. we will have more coming next. from new york and london. this is bloomberg. ♪
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guy: it is time for our global battle of the charts. today we have special guests. we will start with james today. what have you got? james: with a down market i will look at the biggest movers. one of the biggest movers was the vix index. if you look the most popular fix etf, you saw 25% increase. i want to look at why that is happening. to do that we will look at the commitment of traders, the yellow line at the bottom.
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people were selling volatility and yesterday. at the end of april, we saw the largest net short positioning for futures trading we have ever seen before. a lot of people were caught offguard by trumps trade tweet. this led to a bunch of volume going into tvix so we saw the largest volume ever yesterday. guy: the market getting squeezed. tom, what have you got? tom: i want to talk about factory etf's. when the market goes down, stocks will fall sharper than the market. we are seeing the opposite. here we are seeing the momentum is doing better. why is momentum doing better on a down market? look here, you see the correlation between momentum and low volatility. it has been highly correlated all year. momentum rebalanced late last year and became a low volatility. before look to the performance of momentum and low volatility,
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they are the same this year. guy: a big shift away from some of the tech names we have been watching. momentum and where we are seeing it turning into a very different product. two fantasticen charts. i like the squeeze we are seeing in the vix. i will give the win to tom. i like the ship we are seeing into momentum stories and the changes we are seeing in the nature of that product. also, he is standing next to me, which makes life more difficult. you can watch etf iq on bloomberg tv at 1:00 in new york. taylor and mark -- from taylor and myself, this is bloomberg. ♪
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david: from bloomberg's
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washington bureau, i'm david westin. welcome to "balance of power." on the brief today, shawn donnan, bill very on iran's threat to resume its nuclear program and david welch on gm's plan to sell its plant in ohio. shawn donnan, give us a sense of what we should expect when the vice premier arrives with the delegation. shawn: a big question over what we should expect. the president tweeting the chinese indicated they are coming here to make a deal. at the same time in the last hour we have had the chinese commerce ministry put out a statement saying they are ready to impose countermeasures if the u.s. goes ahead with its increase in terms in the first minute of friday. it feels like a showdown. bill, there have also been developments in iran.


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