fbi director christopher wray testified before a senate panel last week that he was not aware of any improper spying. on twitter today, the president called it treason and said his campaign was conclusively spied on. the trump administration is backing off of tariffs on two fronts today. the was will lift steel and aluminum duties on canada and mexico, in exchange for a stronger enforcement action. that should clear the way for a new treaty that would replace nafta. meantime, president trump is blaming auto tariffs -- delaying auto tariffs. that will give negotiators a chance to work out a deal respecting imports. japan and china have agreed to boost their ties ahead of a planned visit by xi jinping to japan in june. china's top diplomat met with the japanese prime minister shinzo abe today. the asian powers have some disputes but their relations

have improved recently amid the u.s. trade war with china. hermann wall, the pulitzer is dead atng author, the age of 103. hisas just 10 days shy of 104th birthday. according to his literary agent and was working on a book until the end. he died in his sleep in palm springs, california where he settled after spending many years in washington, d.c. he was among the last of the major writers to emerge after world war ii and the first to bring jewish stories to a general audience. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg.

>> >> high from bloomberg, -- world headquarters in new york, i'm vonnie quinn. amanda: i'm amanda lang in toronto. we are now joined by our bloomberg and bnn bloomberg audiences. bank of canada governor stephen poloz warns of a trade war escalation and headwinds in the canadian economy. my exclusive interview with him in a few minutes. opec lustily gets are set to meet in saudi arabia. that amid growing tensions in the middle east. the u.s. is set to lift steel and aluminum duties on canada and mexico. the latest move to clear a path for the usmca deal. let's get a quick check on the major averages. stocks have been buffeted today by computing news on a trade file. that news it seems out of china, better news elsewhere.

in and out of positive territory. energy not helping much. it is a big decline are on the s&p 500. move asie did get a stephen poloz spoke a moment ago on bnn bloomberg. we are seeing reaction for some of these steel stocks. diversified aluminum plays. big move to the upside here. that weaiting for word will see aluminum and steel tariffs lifted across north america. that should come in the next half hour. market reaction ahead of that. vonnie: we will be speaking in detail about that. i want to point to ipo go. this is the one that we are watching, the largest. coming in as the second biggest ipo of the year, even superseding lyft in terms of shares outstanding.

$2.9 billion is what it raised. if you look at the performance as largeo's this year, as we can fit here, performance has been extraordinarily divergent. uber down 4.4%. 62.4%, evenup though it has had a bad day today. on the marketre impact and trade talks, we have joe doe with us. it appears we have a resolution here. we knew there were talks going on ahead of this ratification of the so-called new nafta. be for thel this companies involved in the production side of things? >> pretty massive when you look at canadian, american, mexican steel and aluminum producers. what is giving support to the markets, although the stocks

bounced off the lows. part of the agreement is they will take off the tariffs but there will be stronger enforcement from all sides. essentially making sure that anything coming off shore, outside of north america is tracked better by all three nations to make sure all of that metal coming off is still tariff ed, and that they prevent too much of a supply coming online. american,d help canadian, and mexican producers. vonnie: sounds like it was in everyone's interest to do this, but the negotiations were very hard-fought. the u.s. will have the ability to impose new tariffs if some of these are broken. who gave in? like a larger discussion about tariffs and where the president has wanted to go. what our team has been reporting the last few days, whether it is auto tariff s, or what is going on with

the presidents and his team wanted to reach a conclusion, but it goes further. it is about the usmca deal. one of the things that was clear was that usmca would not be passed by the canadians and mexicans if a deal was not reached on aluminum and steel tariffs. all the parties have realized we are getting close to the expiration date and a decision had to be made. ultimately, this is what they came down to. the enforcement is very in the weeds. people outside the industries with an understand, but that was critical to getting all sides, especially the american industry side, to agree to this. amanda: great to have your thoughts on this, jojo. trade tensions definitely a risk , highlighted by the bank of canada. i spoke exclusively to the bank of canada governor stephen poloz. the actual direct effects of the trade war are quite modest. of course, they are big in some

sectors. i don't mean they are modest for everybody. macro wise they are modest, global. the main thing they have done is slow done investment. the good news is if we get a resolution that is a sentiment driven slowdown, sentiment can turn run quickly if there's a resolution. that is why the stock market goes up every time it looks like they have a deal. sentiment goes up, investment will recover. back into the positive scenario where the global economy can grow for a long time. if we continue to escalate down, we are asking for trouble. we will deal with that when we come to it. right now we have to play both sides of this. both sides are similarly likely. amanda: something that jumps out in the review is corporate debt, the concern about the level of debt. in the review, hunger for higher-yielding products, has companies offering it to us.

for canadian not financials, a lot of u.s. debt. what is the fear here, what are you worried about? >> pulling that down to a more theular level, we see for non-financial, non-commodity sector, business as usual. .ockets have been pretty solid profit margins have been widening. -- prophets have been pretty solid. profits have been pretty solid. the energy sector has been going through some difficult periods. lower prices but also delivery constraints, etc. that is where we see that additional indebtedness. that is because of the ability to service. that is where the u.s. dollar debt is concentrated. not just their. re.

often a company does that because it is a hedge. particularly true in the energy sector. not necessarily a higher risk. in fact, a risk reducer for many of those companies. we are just trying to identify those forces, balance them out. we will watch that with some interest. certainly the pressure is coming off lately in the oil sector. amanda: we clearly identified there are certain types of loans taking off, leveraged loans are very popular. we hear you talk about covenant light. we are talking about very risky situations here. how big of a risk is that do you think to us here in canada? >> all we know really is that is existing, is more of a u.s. story. we have companies participating in that market. look at it from our financial

system's point of view. those are almost private deals. --are looking at something risk is will spread through the system. is it risky for companies? perhaps. less so because there are no covenants. from the company's point of view, if they were to bump into a covenant, that could cause a waterfall in it. if there is none, it doesn't. it is more about the lender than the borrower in that case. they are all professionals, i assume they know what they are doing. amanda: we do see them being collateralized which invokes the echo of the financial crisis. re-ollateralized but not collateralized. back in 2007, that was more leverage skyrocketing in the background. that is not happening. amanda: we have seen banks around the world. . pivot. we were going to withdraw

stimulus. you say we were still stimulative at these levels. the way we look at it is, we think neutral is about where we are, where we would not be stimulating. we are still stimulating. however, enough headwinds in the economy holding us back, then you need stimulus just to be where we are. pushing something up a hill. those headwinds could be things like household debt. we have to keep measuring that affect. how much can interest rates move without causing too much problems. we have the slowdown done in investment because of the uncertainty around nafta. the bigger uncertainty around the u.s. trade war with everybody. all those things are holding things back. lower interest rates back and keep us at on unemployment of a 40, 50-year low.

that balance can shift when some of those headwinds dissipate. amanda: the u.s. federal reserve similarly pulled back. you got in front of other central banks, actually, so you normal. little more was it too soon for some central cease all kinds of withdrawals? >> i don't think so, given the data we had. this was a pretty abrupt turn, and a very synchronous one. 47 countries in the world where everything rolled over at exactly the same time. that never happens. it happened after the financial crisis -- i should not say never -- and it's happened now. we think the common denominator is the trade war and sentiment on investment. as i said, that sentiment can turn a pretty quickly if we get a deal. that is the good news.

i don't think, given what we knew, these were sentiment driven, soft things. you cannot model that mechanically and expect to predict how much of a trade war and rhetoric will affect those things. people had assumed there would be a downside risk. we didn't think it would hit us all at the same time. i don't think it is fair to think that was too early. we had very strong signals all around the world that we were on the right track. that was stephen for lots of the bank of canada. up, will anng upcoming opec plus gathering in saudi arabia be overshadowed by a dilemma facing a member that is not even there? this is bloomberg. ♪

vonnie: this is "bloomberg markets." i'm vonnie quinn in new york. amanda: i'm amanda lang in toronto. more on this breaking news story about steel and aluminum tariff s. we have a joint statement from the u.s. and canada announcing the tariffs will and no more than two days after the release of the statement. in place since june of 2018 on steel and aluminum. countervailing tariffs the other way. these will not be lifted, there will be preventative action taken to avoid dumping and dumping and shipments of cheap steel from other trading partners. good news for those in the industry and those who use the inputs from the industry. we did spec to hear more about this as the afternoon goes on. vonnie: both currencies strengthened when we heard whispers of this happening today.

holding on to their gains for the most part. a meeting of opec plus in saudi arabia this weekend will be dominated by a member not in attendance, iran, this as tension between the u.s. spikes. crude poised for its biggest weekly spike since april. joining us now is an analyst from raymond james. do we see further strength from here, what is priced in? >> we see further strength from here. getting to $100 a barrel in 2020. that would be a cyclical peak. we have not seen those levels in about five years. demand globally for crude is quite strong. growing probably 1.5% this year. this,, you alluded to from iran is down because of sanctions. down from venezuela because of that country's domestic problems.

down from libya because of the intensified civil war. there are some non-opec countries as well like mexico, where supply is down just for their own internal reasons. obviously, we have to balance that against supply growth in places like the u.s. and brazil. all in all, the global oil market is undersupplied in 2019. we think it will stay under supplied for at least another year in 2020 when the imo low sulfur fuel issue gets added on top of this, further tightening the market. that is a recipe for higher prices over the next 12, 18 months. amanda: you are not expecting any big decisions from this meeting? >> not this meeting. this is just a technical meeting. the big ministerial summit is in june in vienna. that is where opec will decide do they does -- extend the supply cuts which date back

until the end of last year? we think they will probably not precisely because of the iranian issue, venezuelan issue. sibley put, saudi arabia needs to pump more. uae needs to pump more. russia needs to pump more. not to balance the market but to keep it from -- to keep inventories from falling down into the depths. vonnie: a very convenient meeting of certain countries. will they only talk oil this weekend, will there be other alliances talked about? opec has plenty of divisions within the group. important one,st as you noted, is saudi arabia versus iran. long-standing ethnic and geopolitical differences there. they are wealthy countries and also low income countries.

middle eastern and south american countries that don't always have the same priorities. for the most part, this meeting will be a technical one. the bottom line for all of these , the one common denominator all of them have, they want to see higher oil prices. amanda: thank you. appreciate that. we just want to recap the breaking news. it is official, the u.s. and canada issuing a joint statement. they have reached a deal to lift all metal tariffs which had been in place since june 2018. they will drop all tariffs within two days of the relation of this statement. they will prevent subsidized or dumped medals, and reserve the right to reopen consultation, if the import of any of these products surge in the future. this is bloomberg. ♪

vonnie: our next guest says silicon valley giant apple's stock is already reflecting the tariff hit on its iphones. buy ont guest has a apple. action,s latest huawei how much more could apple take a hit? >> thanks for having me. we have written about this extensively. we think apple has tremendous upside from these levels. the reason is, the stock is already reflecting the big impact from tariffs. when we think about the big impact from tariffs, it boiled down to the fact that even if the 50 million iphones exported from china to the u.s., each of

which takes a hit of two cents per phone, if they don't get anything on pricing, if we extrapolate that to the entirety of what the west does, that is $1.50 in earnings. the multiple is mobic into the stop. we understand the downside risks are baked into the stop. the potential upside has plenty of room. amanda: you brokered out in a great way. looking at much time the iphone because it is the giant inside apple. you note its wearable business is the same size as netflix and growing twice as fast. when you see what they are doing with innovations, and mixing bullish on the stock? >> absolutely. it is a misnomer to classify apple as not innovating. the iphone business is the size of general motors. the expectation that they come out with a hit product like a once at in a generation iphone

once and again is a little stretched. if you look under the covers, there is plenty of innovation going on. we looked at hundreds and hundreds of patents. we see wearable technology, health and fitness, autonomous are some of the key areas, not to mention augmented and virtual reality, which we will hear about at this developers conference. all of these are real commercial opportunities. could the action against huawei hurt apple more than that? everything you laid out would suggest to me that it would be the perfect target for china, were china to retaliate in the same way. >> that is a great point. i believe apple is one of those unique companies that has significant exposure both to china and the u.s. markets. they are very important to china. if you think about the level of employment apple provides in

china, we see as many as one million people being employed at foxconn during peak production times. it is not an insignificant amount that apple contributes to the chinese economy, but we think there will be a lot of hesitation indirectly targeting for retaliation. vonnie: thank you so much. deal,ews right now on the cbs has made an informal offer for starz four $5 billion. cbs has made an informal offer to acquire starz for $5 billion. this is bloomberg. ♪

>> missouri legislature has approved a let's -- abortion ban.

allowsposed ban exceptions only in medical emergencies not in cases of rape or insist. the legislation comes after alabama's governor signed a bill wednesday making performing an abortion of felony in nearly all cases. kentucky, mississippi, ohio and georgia have approved bands on abortions once a fetal heartbeat is detected which can occur in six weeks of pregnancy. build at trump wants to border wall. theirst must get past courts. today a federal judge in california will consider arguments into cases that take to block the white house of from spending defense and treasury money for wall construction. the cases claimed the emergency declaration was an illegal attempt to ignore congress which authorized far less wall spending than the president wanted. in the u.k., the labor party

leader says compromised brexit talks are over. theresa may's party has gone as far as it can. theresa may had hoped to reach a deal that would ensure passage in parliament. declined have already theresa may's deal three times. >> we have not been able to overcome the fact that the labor party position about brexit or holding a second referendum. sanctions,comes to china is in iran's corner. during a meeting in beijing today, china's foreign voiced opposition to the sanctions and to safeguardpport interest. the trump administration revoked -- global news 24 hours a day on air and at tictoc on twitter

powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ vonnie: it is 2:00 in new york, 7:00 in london. i'm caroline hyde. >> i'm scarlet fu. collects there are mixed messages and mixed markets. tougher talk coming from china. don't forget the latest ipo. raises twol maker point $9 billion in the second largest ipo of the year. we talk the ceo in the next hour.

>> stocks are fluctuating. you do have utilities and health care leading to gainers in industrials on the downside. >> the chinese us that continues to intensify. that is why you are looking at chinese shares. >> china signals tougher trade discussions. bitcoin is also pulling back. it has been a monster rally. we have also seen crude oil give up earlier gains.

let's take a closer look at the action beneath the numbers and check in with our reporters. >> i want to take a step back and look at the relative value. what the proposition is to own the u.s. equities. if you take a look, it is not that great compared to an asset. you are looking at the yield that owners are earning over three months. you can see it is getting back down to a post crisis low. you can see that it steadily climbed in over the past week

has gotten over $400 million to the inflows. >> cash is still perhaps king. >> taking weekly advance since april. also the drawdown and gasoline inventories propelling oil. china said that it is not entirely sure about the future of the future trade talks. the vti up 1.8%. trade tension will turn to the opec meeting in saudi arabia over the weekend. the alliance has cut production even as we see american output sore over the past year or so. the question now is whether or not the cartel will look to fill the supply caps following the u.s. sanction on iran.

it is a critical issue. >> not rising today or on the week, the chips are down. we have the u.s. threats against huawei. the supply chain is so closely tied to china, we have the stock down not just this week but over the last two weeks. technical damage has been done to this weekly chart. we see a range for the stock but this year's monster rally breaking about it to an all-time high. on these two weeks of decline, we see the uptrend snapping. we also see the weekly momentum coming down. it may suggest we could see more weakness ahead for the chip. tell onuld be a bearish

the broader markets overall. we have to stick with trade of course. tensions are becoming more heightened with beijing similarly -- signaling -- slowce announcements, economic data out of china and the u.s. huawei on a blacklist. on one side, we are getting more of engagementes coming from china. i want to focus on where we are dialing down in terms of tensions first and foremost, it looks as though things are easing when it comes to mexico, canada and europe. >> i think we need to break this down more. more complicated than that. we are definitely getting an

easing in the north american trade wars. just announced in the last hour, there has been an agreement between the u.s. and canada. to lift and aluminum tariffs in return, those countries those neighbors will lift their retaliatory tariffs which have had a lot of american farmers hard. mexico for example, a big destination for u.s. pork producers. also corn growers. those tariffs will go away. also agreeing to withdraw their challenge to the united states steel and aluminum tariffs at the wto. real dialing down there. across the atlantic and pacific, this gets into the eu and japan. we have seen the president delay auto tariffs for six months. up 180 days of negotiations with the eu and japan with the eu reducing their andrts of cars to the u.s.

a proclamation this morning, the president declared that imported cars into the united states are a threat to u.s. national security. we have a positive on the trade wars there. statementsvocative that sets the basis for tough negotiations. scarlet: a pause in the trade negotiations with china. this is the white house trying to play the country's off each other or was this ongoing the entire time and it is just a coincidence that everything unfolds now? -- part ofare seeing this is an effort by the trump administration to at least ease tensions that were some big u.s. allies as it wraps up with china. at the same time, this is also a lot about domestic politics. the trade wars with china, we have seen a lot of concerns in the agricultural particularly in the

united states. soybean farmers and others have taken a lot of pain from chinese retaliatory measures. been hurt by mexican and canadian retaliatory measures as well as. the one egg deal that donald trump has sealed is nafta. he wants to get that through congress. a lot of people in congress including chuck grassley, and a lot of democrats as well were very opposed to these steel and aluminum tariffs on canada and mexico. he is ramping up the trade war with china, settling things down with the allies but also taking care of domestic politics. caroline: plenty of but for trump but you say he is wrapping it up with china. china is throwing rhetoric] the u.s.. >> yes it is fascinating. the viceo, we saw

premier leave a washington and there were smiles and handshakes. stress that the two sides were continuing to talk. we have seen an escalation in tariffs. donald trump threatening to increase tariffs further on chinese goods. to impose a 25% tariff on all imports from china. the chinese threatening more retaliation. pretty sour words from the chinese media today saying no deal was likely unless the u.s. was likely to give. a downbeatgain expectation for the next coming weeks. a are all getting ready for big meeting between xi jinping and donald trump at the end of june. scarlet: thank you so much. for more on the impact of trade on the markets this week, we are joined by capital management

ceo. she is a top ranked international fund manager who continues to outperform her peers. headlines have been driving the markets this week. today, we are pretty much flat. this is a reflection of the idea that you have the trade war with the eu and japan over auto tariffs on pause? yet we have progress in north america when it comes to lifting the steel tariffs? it is all a wash. >> maybe. it is very difficult to say. we do know that the increase in tariffs from 10% to 25% is damaging. the additional goods would be very damaging. there thatthreat out does overhang a number of industries. it is hard for us as research

analysts to know how much of a discount on valuation for an automotive company like volkswagen which we think is doing a great job in operational restructuring is due to trade concerns. those doubts linger over these stocks. caroline: given we have seen a pullback in the market, is there opportunity to be buying? you have exposure to china. is it time to stick with the stocks or keep buying them? >> china mobile, the telecommunication stock we own on behalf of our clients is very defensive. one third of their market cap is in cash. the market is very cooperative.

it is a great dividend, almost percent. with think about it like a bond. there are ways to get access to china and still get some expansion in average revenues. china mobile is a good company. there are other chinese stocks that will get hit very hard with trade concerns. those would be very interesting to add. there is a company that is investing for the future that has over 70% of search market share in china. great balance sheet. while that strength is there, there may be a reason for us as investors to be confident in these businesses. when it comes to china, you mentioned china mobile. investors tend to buy into a

company through a sector. is there a sector or theme in china's that looks attractive right now? as opposed to an individual name? perspective, as much as we like the idea of investing alongside the growing consumer wealth, some of that is quite expensive. and health care, for example, there may be many opportunities because of the need to provide health care to an aging population. i think insurance is another area where the population needs to save for retirement. goodntial u.k. is another example of a company expanding their business in china at a very low valuation. interestingat is

that you mentioned international-based stocks that are just entering china. you mentioned volkswagen. also they are notably being eaten up because of the tariffs that might or might not be within 180 days. how do you write that out and have you keep your investors confident? >> our clients know that we are value investors. this has been a really tough about of pain for value. i mentioned earlier having the financial strength is really important. with theirkswagen net cash. that is after paying tens of billions of euros in fines and litigation costs. these companies are so well grounded in their own financial abundance that they have the room for spending on electric

vehicles and expanding the fleet and doing a great job in china with their own battery factory. china is an important market to them and they are not going to let it slip. caroline: great to get your perspective. coming up, the college entrance test taken by 2 million students per year is adding and adversity score. our guest ways in this hour. plus, the second-biggest ipo of the year. the theory behind why ipos may have flopped. coming up next. this is bloomberg.

scarlet: uber is recovering losses. if i would blame anything on morgan stanley. >> investors want high growth and profitability. or a clear path. >> investors are telling you what that is worth in the front -- public market. in the private market, they were willing to pay more. >> the trillion dollar opportunity is in going after car ownership. >> investors what profitability and you will get that here soon. our guest joins us to talk about this more. for you are looking scapegoats, morgan stanley gets listed a lot. is forher group vehicles. these are investors who came in

partly because the company has been private for so long explain what this is. >> oftentimes, these are set up when a bunch of employees of the start of that is still private and there is no hope of them going public anytime soon, they want to sell the stock that they have been given as compensation. it is common for them to be set up to let the investors by the stock from the employees. uber, --se of to interrupt. here is president trump talking about the real estate market. [cheering usa] thank you very much. it feels real good.

we love that business. every time i go down in the world's most expensive tank. it rides better. i love the real estate. it is in our blood. please sit down. i tell you to sit down because otherwise they will say he got no standing ovation. they will say it is make news. they will say the crowd like his performance. they said it was not one of his betters speeches because he got a standing ovation. i love you people. they have people here and in the

ballrooms all over this beautiful hotel and people outside. you people know real estate so you know you have the best location. i am happy to be here with the people who help american families live the american dream. at incredible members of the national association of realtors area a name i know very well. friendto thank my secretary ben carson for his tremendous leadership. [applause] he is a great guy. in charge ofm housing in earnest -- urban development, he is very adaptable. i said what do you know about real estate? he said not much. i said how would you like to

lead hide? they are doing a great job. thank you. [applause] i also want to thank the president of the national association of realtors. where is he? please stand up. great job. [applause] where is ceo bob goldberg? thank you, bob. he is a respected guy. casper.sident tracy and it your entire team for everything you do to support realtors around the country i guess that means me also.

i took a little sabbatical for eight years. [applause] i miss you but we gave you one hell of a tax cut. the regulation cut may be more important. you couldn't build jobs and you can build anything. that is president trump speaking with the national association of realtors and washington. we were looking for him to make comments on trade. caroline: the latest headline being national medal tariffs.

scarlet: harsh words between china and the u.s. and it doesn't look like trade negotiations back on track anytime soon. have indexes lower, the s&p and nasdaq down along with emerging markets. this is not a selloff. caroline: not in the u.s.. the dollar is higher. the pound continues to sink as well. this is bloomberg.

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take your business beyond. >> the battle for he was economic future is being waged on its beaches and resorts. the country has launched an effort to tourism revenue

higher. i have a goal of drawing 5 million tourists this year. at the trump administration is trying to scale back tourism to the island. celebrations broke out outside of taiwan's legislature after they voted to legalize same-sex marriage. that's a first in asia. lawmakers pressured by lgbt groups as well as by church organizations opposed to the move approved most of a government-sponsored bill that recognizes same-sex marriages and gives couples many of the tax, insurance and child custody benefits available to mail female marriages. tweeted we took a big step toward equality and

made taiwan a better country. the council of europe adopted a declaration that allows russia to stop voting again as the company's main human rights body. foreign ministers from the councils 47 member states voted overwhelmingly to some or a declaration that says all members should be entitled to participate in the councils two main bodies on an equal basis. and months foreign minister chaired today's meeting. he said russia said it wants to stay as a member of the council of europe. that alleans obligations including -- must be paid. that is very clear. they indicated they want to stay and that means that they will fully follow all of the obligations. lavrov welcomed the

declaration. he said russia values the positive contribution of the council of europe has made in resolving humanitarian issues as well as improving russia's justice system. onlobal news 24 hours a day air and at tictoc on twitter powered by more than 2700 overalists and analysts in 100 20 countries. i'm mark crumpton. this is bloomberg. let's return to washington where president trump is delivering remarks. a hundred million dollar house can you believe it? the broker did a fantastic job but i told him, i am paying you more than your supposed to get. he got millions. it forit for 39 and sold a hundred. it wasn't immediate. it took a couple of years,

that's ok. had to paint a little inside. a little paint [laughter] . [applause] i call it a turnaround. i had a beautiful house mar-a-lago and this one came into the market through a tragedy. a sad situation where the you owner had a tremendous problem. i got it and i flipped it. i had a great broker. i paid the more money than they asked for. done that a lot. i have also done it the other way where i am not so happy. i won't talk about that today. we will save it for another time. [laughter] there is nothing like a good broker. president is currently talking about housing. willntioned that the u.s. sell products to canada and mexico without tariffs and he to called on congress

approve the u.s. mexico canada trade agreement. now let's turn to geopolitics area the theresa may is agreeing to set a timetable for her to karcher. what might a government under the labour party leader look like? >> you certainly have to include the possibility of a jeremy corbyn government. if you do put something like that on it, it does make all else equal these banks are worth less. caroline: what is the latest on brexit? you have a great piece out discussing what is happening in terms of the leadership of the conservative party. the latest has been an agreed timetable will occur when theresa may takes her agreement

back. what does this mean in terms of unity? we are going to see quite a heated battle for the leadership there. bute not as many candidates it is not far off. is problem is the party fundamentally divided over what kind of brexit they want to see. some people wanting a second referendum and others wanting to leave with no deal at all. simply changing leaders is not going to make a big difference to that. the other thing is not going to make a big difference to is the eu position which is that there can be no deal if they don't the question of the irish border and how to keep it open. and resolve the divorce payment.

that sounds familiar. before that happens, before theresa may steps down, there is still the ongoing negotiations between the conservative party and the labour party on some kind of brexit deal that can be put to parliament. what is the latest on that? we heard that labor what's to .eep the customs union >> jeremy corbyn has put those negotiations out of their misery today. he announced they had reached the limit of what they could achieve. because itlking away is a lame duck. it's like negotiating with the company that is going out of business. there is no point to continue the negotiations now.

they also have parliamentary negotiations coming up. i don't think it means that they are off for good but the labour party wants to see who takes over from the conservative party . >> next week is the start of the european election voting. we will get some sort of outcome if not next week but the week after. completeoing to be a obliteration for the conservative party and the labour party? >> both of them will be severely --ished by voters who feel voters say we feel betrayed, we voted for brexit and it's not happening. only is a brand-new party a few months old called the brexit party that seems to be

winning a lot of conservative votes. he will do well out of this. have onact does that the broader picture political dialogue? he will certainly have an impact on what the tories do? thank you for joining us by phone. speak to the will college board ceo on a new score s.a.t..ded to the from new york, this is bloomberg. ♪

for stock of the hour.

let's talk about under armour. is up untilg deal today, they were neutral are underweight. the increased conference -- confidence in their marketing products shift along with the sales and innovation sounds to me having been on the street is like code for something else they told him he is not saying online the passing along off-line. they have limited exposure to supplyhrough their chain. they are trying to bring more shoes into it now. if we take a look at the stock, going into the bloomberg we are going to see that most analysts

-- the stock had been $60 in 2015 then down to $12, we see the last year why we are looking at the under armour share price. they are well above the average price target. -- henalyst and jpmorgan has a big posture change and investors are taking it seriously. under armour is the biggest performer in the s&p 500 by a long shot. >> it was announced on thursday the as the atv will assess students socioeconomic back -- background as well as test scores. it will take into account a student's high school and poverty rate of their neighborhood. explain this adversity score and how your environmental context dashboard that you are making makepublic is designed to

the testing process more fair. >> i hate to disappoint you but we are not providing an individual score for each student. we are providing a general context. officersdmissions general information about their high school for neighborhood and it will be the same for all of the kids for that high school our neighborhood. we use that to give context because what we are seeing if you look at the s.a.t. and contacts, you can witness a third thing which is resourcefulness. the students who do a lot without being given much. that you caning build the same. the pilothow has helped you decide how to do this? to getols today try school profiles. they already try to from the high schools that send them students to learn what kind of high schools they are.

admissions officers worked with us about what they want to learn about high schools. with admissions officers to get a common profile so they can compare more easily. then we asked them what kind of factors about a neighborhood would help you understand your students? they were struggling to collect this on their own. we are giving them a shared evidence base. we partnered with a college in mississippi. same asscores were the the applicant pool but when it looked at the context of this young woman in a rural school, she scored were hundred person hired -- 400 points higher. rife with poverty and does not offer a line of advanced courses. it allows a general context. >> admissions committees will get the score and use it to help

them evaluate the student. what about the students themselves? >> we are thinking about it. we just disclosed exactly how we calculate the neighborhood and school characteristics because we don't want it to be a black box. there will be no prize to the student. it is just how their school and neighborhood stacks up. what is not surprising to families is that they have limited means. what is exciting is for admissions people to see the achievement of students side-by-side with that. consider if it helps people to show that general information. >> if it's not available to itdents and their parents, becomes a factor that college is used to admit students but on wheremake decisions to live based on these things. >> if you are deciding to go to a higher resource school for your child, this would not

affect you because those better resources are going to help your child excel and perform better. this tool doesn't mean it's better to go to one school or another. all it is saying is that with more resources, kids will be able to show more. it is not saying to change her real estate plans. is on the mind of many is the college admissions scandal. do think this can help prevent the sorts of scenarios? >> we have taken a security step to close the loophole that a few you celebrities have used to cheat. i don't think that's why america cared about the scandal. they care less about a few celebrities breaking the rules then feeling the whole system is rigged. the real reason we are working on this is there is so much mortality talent in this country than we can see.

ways to seeto find students of exceptional talent whatever race they are from. these are all big and diverse communities and within them, there are students with a lot less it achieve a great deal. >> does the university school apply to international students? >> we are figuring out how to do that. is really not a score for each kid. it is a general context. as u.s. universities have the room to recruit more low income store -- students internationally, this will become more relevant.

>> i find it is a positive conversation. what about the ways in which you are preventing adverse uses of and closing the loopholes? what other ways will we see changes to ensure that this new system can't be gained? there will always be some group that will take extraordinary measures to cheech for their children. america has a much different problem. are two worlds in this country. the top 20% or 30% that is a very different world than the vast majority lives in. this is trying to eliminate 70%. there will be an edge of cheating somewhere but my core task is to make sure the kids are seen. canome students are

thinking about going optional for test scores. why are test like the sac necessary? >> two reasons. you will not see the young woman in mississippi without seeing her test scores. gradesond reason is both , if you don't use test and only rely on grades, i would never just rely on one or the other. we see grades arising at wealthy schools much faster than test scores. >> one more question. how quickly will this be implemented? >> it is currently being piloted in schools. don't want to overdo this. it is a massive new factor in admissions. they had always looked for kids who overcome challenges. rely on the personal

essay. we are just giving them a more careful way to look at them. ask what a great conversation. please come back. which cannabis ceo is the number two highest-paid ceo after elon musk? this is bloomberg.

caroline: it's not just the leader of the u.k. under pressure. angela merkel is being pressured to step down after the european elections. her democrats are expected to lose a bit of ground. someone else has been urging the chancellor to resign.

they would suggest that she runs for presidency of the european leaders council instead. plenty of plans afoot and changes to come. it's so interesting that the u.k. is not the first story to come to mind. as soon as you said changes and pressure to resign a thought of theresa may. lower againsto the dollar. it has not moved much on these headlines. less than one year ago, tilray became the first to list its shares on the u.s. stock exchange. made the ceohas the second highest-paid executive in 2018. his $256 million compensation package only trails behind that of elon musk. this is on paper. it's not as if he has art of and

paid out this amount. >> that's right. most of it is tied up in stock options. that has ballooned in value as investors poured into the stoxx. 250 6 million is a cool compensation package. this is what happens if you are an entrepreneur who makes a bet it makes a successful ipo. case, i found an old bloomberg interview with him in which he said this is a very long-term bet. it will take several years to pay off and it might or might not. for him clearly it has paid off well. the shares rose more than a thousand percent. so far, so good. the shares have been down so far this year but he is still hopeful that we will see more legislation come forward in terms of medical and

recreational marijuana use and that should boost the company's chances. tied up ins money is stock options. is there any way he could get paid even more than that? >> absolutely. if the shares turned back and go up again, the sky is the limit. that makes these plans -- there is so much leverage as a result of that. see these you incredible compensation figures. when the stock market is booming and the company is doing well, there is no limit to how high it can go. who is coming up after these two? >> the ceo of disney is number three. case, the pay is tied to performance metrics. if disney's share price does

very well than he could make a lot of money. scarlet: what about women? >> we have to go down to the top 35 to find the first woman. i believe it is the ceo of oracle. top 100, we only have four women. none of them are in the top 10. berlet: a lot more needs to done to them. thank you so much. we will have more coming up. we have a market that is pretty much flat with the s&p in the red and the doubt slightly higher. ♪

♪ trump announced a with canada and mexico to

scrap major tariffs. the president called on congress to act. >> hopefully congress will approve the u.s. in ca quickly mca quickly and make our economy more successful than it already is, if that is possible, which is possible. >> the president said the united states would drop tariffs and canada would drop retaliatory duties. the president is threatening long prison terms over what he calls spying on his 2016 campaign. christopher wray testified that he was not aware of improper spying. the president called it treason and his campaign was "conclusively" spied on.

in syria areations calling for an immediate in the to the fighting. the violence has displaced 180,000 people in the last two weeks. the crisis shattered a cease-fire in place since september. the pulitzer prize-winning is dead at thes age of 103. agent,ng to his literary he was working on a book until the end. he died in his sleep in his home in palm springs, california, after many years in washington, d.c. he was among the last of the to emerge after world war ii and bring jewish stories to an american audience. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries.

i am mark crumpton. this is bloomberg. ♪ >> i am caroline hyde. >> i am scarlet fu. fluctuate amid moves of the trump administration to dial down tensions and pushback on automobile tariffs. at a record yuan is low as a downplays chances for negotiations with the u.s. a chemical maker raises $2.9 billion in the second biggest ipo of the year. all that and more is coming up. >> first, a check of the

markets. . down day the nasdaq is the worst performer of the three indexes. we have seen the indexes take away go lower. the dow is now negative. the two-year yield is unchanged, to almost theg lowest in the year-and-a-half. caroline: it has been a war of words when it comes to china. we are seeing rhetoric out of the chinese, trump saying farmers are backing him on the trade talks. all of this feels as though the line of fire seems to be caution in the market, and the bond market not moving much on the back. scarlet: we now see iron or moving.

talking about a tractor maker in the crossfire of the trade war. they feel the pain of farmers not being able to invest. scarlet: in the meantime, let's check in with our reporters. mentioned deere tractors are in the crossfire. sample, walmart, retailers, and walmart saying they have the best sales quarter in nine years. their cfo said they have to pass on the price to consumers. similar stories for other retailers. said the tariffs a situation is a stay tuned

situation. --ph marin was the retailer ralph lauren was the retailer to kickoff earnings. down 8.5%. that after they beat on earnings. their ceo noted the issues they will have as it relates to tariffs. we will see how this unfolds. there has been one group of stocks consistently down, the away -- hua while wei. one supplier is now banned from exporting products. analysts and strategists saying investors may be underestimating the damage this can do to the various companies. chips selling off, but one group of investors might see this as a

buying opportunity, the etf investors. record inflows this week. and million between monday thursday. it has been an interesting week. three updates, starting to fill bullish -- feel bullish. the dow down 0.5%, its fourth week in a row, the first time since may 2016. the russell 2000 down, underperforming 2%. not a haven or defensive area around trade concerns. investors moving into haven assets, the bond and the yen. the dow, s&pome 500, nasdaq on a weekly basis. up 18% year to date two weeks ago, but right now on pace for

the first two weeks decline going back to last year's brutal decline. weeks the down down four in a row. this is important to monitor because it could be a shift to the neutral side or downside. caroline: thank you. markets, let's bring of the regan, editor markets live blog. all three benchmarks now in the red. it feels like there is some appeasement on the trade front and doubling down on the others. >> nervousness tends to set in before a weekend. it is also options expiration, which can cause some hard to explain back-and-forth and markets. given how this market started , you have to call it a

success. you would almost call it risk on given the rebound from monday. utilities, real estate, that sort of thing, consumer staples, that animal spirits, risk on moves for those. >> we talk about risk on>>, risk off. you could pretty much go into risky assets. whenere such a dynamic you're talking about trade, headlines, and the slow progress there. >> it is one of these occasions where someone puts a half a , the of water on the table stock market looks at it and says that is half full. gravitateople tend to

-- the bond market is harder smarter, thinking the bond market is correct. who knows. it is an unpredictable event. if you look at all the scenario analysis being done, there are so many ways it could go. could this ramping up of pressure quicken the resolution and get us closer to a deal, push it further away, make it worse? getting back to getting risk on this weekend, i don't feel like we have the retaliation from china yet that everyone has expected. people were expecting something caroline: it is interesting that the rhetoric from china is really dialed up.

blogs was saying that if anyone thinks the chinese side is just bluffing, this will be the most significant misjudgment since the korean war. how much should we be looking at these analogies? >> analogies only take you so far, but it is an interesting historical comparison. the reason is because the korean war was nasty fighting, but peace talks happen simultaneously. korean troops were propped up by the chinese government. that is as far as the comparison goes, but i find it fascinating war onvoked the korean this obscure blog that is somehow the official stance of , nowhinese government where everyone is going to to look for the official state opinion on these things. scarlet: an indication of what

we might get. thank you so much. coming up, hewlett-packard enterprise buying supercomputer maker cray. will it strengthen their position? tractor troubles, deere tractor slumping. it is the second biggest ipo of the year, and you may not have heard of the company. we speak with the ceo about going public. this is bloomberg. ♪ his is bloomberg. ♪

scarlet: it is time now for these stocks making their way in social media today. up, tesla touching a two-year low after a call for a focus on costs. elon musk saying it will

scrutinize every part and make sure it is critical, underscoring the first quarter loss. -year baidu near say four low. analysts have cut by do in terms of recommendation ratings, accelerated by weaker than expected second-quarter guidance and departure of the key executive. -- is buying crate come of supercomputer maker cray. wants to stay competitive in high-end computing. investors get $35 a share in cash, representing a premium of 17%. your social media climbers. today, the second-biggest ipo of the year, i've into her -- have into her

-- all into her we are joined by michael stubblefield. congratulations. where is the money going. you are paying off debt, jobs, products, e-commerce. >> thank you for having us. it is a really exciting day. the back of this transaction, we are really excited about the flexibility we will have to invest aggressively in innovation and acquisitions. we are poised to accelerate our growth. scarlet: you will be using the proceeds to buy stock in repaid debt. compare and contrast the fundraising environment for debt versus equity. is a different set of investors. to tell an fantastic

really exciting growth story. we are one of the key players serving the life sciences industry. if you look at the technologies today, we are able to help patients in a way we have never been able to before, so it is an exciting time to serve the life sciences industry. caroline: i want to ask you about the road you have been on. it was bumpy. how much did you have to keep talking about the fact that yours is in the line of sight when these other key companies are falling in the public market. >> we are a much different company. a 115-year legacy, well-positioned in markets, and serving global customers around the world. we do have a strong financial profile. when you read through the noise

and financials, it is a profitable business. we are strong, generating $500 million the year ago, so we enter the market from a position of strength. scarlet: when do you turn profitable? >> the business itself is extremely profitable. operating margins are expanding. there is a lot of noise associated with interest payments and one-time charges associated with big transactions. will seeleans up, you a really profitable come exciting business. can you talk about how the banks will support the stock in the first day of trading. you are now trading higher. did you want to know about the inner workings we had the disaster case? super exciting process for somebody running a business. this is not part of for normal

day, understanding how our markets work is super interesting and exciting. it is hard to speculate what will happen in the marketplace. have been more excited about the quality of investors that have chosen to act us. -- back us. it allowed us to turn the offering into the largest health care ipo in the history of the country. you did lower your price range to $14 from $15. what help to drive that decision from the turbulence in markets because of things like trade concerns, or perhaps the not so wonderful reception uber got? >> it is hard to speculate what gets in the mind of the investor and how they are thinking about valuing the company. what was encouraging was the quality of investors we were able to put a runner business

that are some of the more significant investors in the health care space with the intent to partner and grow this business over the long-term. caroline: let's talk about the growth and m&a. you have done deals before. on now?ll you add >> we have a lot of optionality. our core markets are life-sciences. half the revenue is in the bio/former space. -- bio -- pharma space. there are exciting new technologies being developed around the world, celgene therapy is an opportunity where we are investing in infrastructure to bring innovative solutions to that space, to help make good on the promise that our customers are .etting out of the lab scarlet: thank you for joining

us. this is bloomberg. ♪ bloomberg. ♪

>> time now for options inside. happy friday. what a week it has been. we had that big selloff monday. the last week was the worst week of the year. we are looking at declines kleins for the major averages. the first time we are seeing a four-week decline for the dow. what do you make of this, especially the yen of since april and the havens and smart money going in that direction and we could have more weakness. >> even before we had some headlines late this afternoon, giving us another reason to sell stocks, havens were performing as stocks rebounded. 2.4%, year is below

strength in jpy consistently. that there isll macro risks being priced into cash. you don't see that same risk in the options market. >> that is interesting. andere chatting before hand have a great chart we have not looked at in a long time but a chart we have looked at many times before and what we are looking at here as you know is bond volatility index, and the currency volatility index, and something to always look at is currencies, the foundations of asset classes, no volatility. >> we are talking about a trade war and currencies are the terms of trade. even the pairs were talking about, not moving, even when the cross does. movelace you are seeing it is the six-month volatility. with all the short-term volatility acting up trying to

price in a trade war with that deadline, this week has been the acting up back end with a six mike bliss reversals, so that is assigned traders are starting to push the bullis bets on the u.s. start thinking the renminbi are the offshore model --might be a release about. the volatility is localizing content inequities. it will be interesting to see if that continues, especially the yuan. this is another favorite chart that we showed a few times on options insight. the s&p 500 and blue in the index in white. the vix, kevin kelly calls of the real fear index, it is subdued. what does this tell us? noisys index can get because it is geared on the out

of the money stuff. if you look at skews closer to the money, the one-month or all of them, those are still fairly perky this week, but they have also come down, a testament that systematic volunteer -- volatility sellers are back. we have seen the call in vix options expand less than the put side, so everybody is looking to sell volatility. >> luke, great stuff. hope to have you back soon. back to you. scarlet: thank you. let's check the latest business flash headlines. amazon ramping up its drive to the european food and grocery business. the largest online retailer is leading an investment in a london-based startup that competes in the meal delivery business against uber and just eats. it has raised $1.5 billion so

far. thatchrysler learning winning pickup drivers means more than just a big engine. it is putting that knowledge to use in the ram 1500. it has a 12 inch touchscreen in the center console, helping the line move into second place in the u.s. market. display is smaller than the tesla 17 inch display, but everything is bigger inside a pickup truck. caroline: and apparently there are more female buyers. scarlet: i was in a pickup truck. it was compelling. from new york, this is bloomberg. ♪

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15% off and two free pillows. go to leesa.com today! mark: i am mark crumpton with first word news. president trump announced a deal with canada and mexico that would scrap tariffs, ending a trade dispute that began when the president imposed tariffs on imported steel and aluminum. meantime, at an event in ontario , justin trudeau called the u.s. tariffs on steel and aluminum the biggest obstacle to ratifying the new north american free trade agreement. >> obviously these continued tariffs