president. in his first public remarks in the two years since he was named special counsel, mueller told the justice department "if we had had confidence that president clearly did not commit a crime, we would have said so." the special counsel also said he found "insufficient evidence to charge a broader conspiracy on election interference in 2016." the president tweeted, nothing changes from the mueller report. there was insufficient evidence, and therefore, in our country, a person is innocent. the case is closed, thank you. jerry nadler, who's been negotiating with mueller on testifying to his panel said " the constitution point to congress to take action to hold the president accountable. ." there has been a rare outburst of tornadoes in the united states in the last month. forecasters have longer reports of more than 500 twisters.

the severe weather has hit an area stretching from the rocky mountains to the mid-atlantic. yesterday was the record 12 straight day with reports of at least eight tornadoes. the european union says turkey continues to distance itself from the block and its values and says it sees no reason to unblock the country's eu membership talks. the eu says turkey has been backsliding in the area of law and human rights. turkey has been involved in membership talks since october progress has been slow. family and friends gathering at a cathedral in vienna to pay respects to f1 driver niki lauda. won two of his formula one titles after an horrific crash in the 1976 german grand prix, which left him with serious burns. lauda returned to racing six

weeks later. wasrival me with james hunt featured in the ron howard movie "rush." 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. live from bloomberg world headquarters in new york, i'm shery ahn. amanda: live in toronto, i'm amanda lang. we are joined by our bloomberg and bnn bloomberg audiences. here are top stories from around the world. in version asked. global bond yields drop with portions of the ju yield curve inverting the most.

we will talk to an analyst to says apple's earnings could drop 26%, should china banned the iphone. and the rare earth gamble. china threatens and export ban to the u.s. on hard-to-find commodities using everything from electronics to wind turbines. let's get a quick check on the market here. we are seeing jitters continue, --de concerns in looting including escalation of the lights we mentioned. across-the-board declines. s&p 500 week. energy is leading the decline. perhaps a read on the outlook for economic output. a tiny bit of strength and chip stocks. for the most part you are seeing negative action across the board here. as we mentioned, tied to the inversion of the yield curve. stocks to keep an eye on, johnson and johnson, canada goose.

j&j kicking off an opioid trial, one of the first that could dig into the information about the claims being made against the drugmakers. canada goose warning it will invest and its future but it will cost on the profit side. almost a 30% decline today. shery: we continue to see the bond rally worldwide. the 10 year yield now at the lowest level since september 2017. are we going to see relative value in the stock market? we are talking about the s&p 500 earnings yield. more than three percentage points above the 10 year yield. every time in the past we have been involved at 3% threshold, we have seen positive stock .eturns in the next 12 months on the issue right now is when you have low bond yields, high stock prices, how do you reconcile that? the only way that can be reconciled is if the fed continues to cut rates in order

to avoid a recession. this time around, it may not necessarily mean we could see stock prices go up. of course, we have seen the fed pretty reluctant to cut rates. amanda, it doesn't seem to be the only one at the moment. the boc also refraining. amanda: on hold for the bank of canada. i spoke to the central bank governor recently. we talked about how to find the right path, that so-called neutral rate. as before, we are feeling our way, we are data dependent. the economy in some ways is having a slow down. otherwise strong. the natural tendency is for interest rates to go up a bit. i don't know how much a bid is for with the timing may be, but it depends on our forecast. getting through all of that, getting back on track we were a year ago. it is interesting

because our central bank governor continues to insistently signal the natural path is higher. neutral is higher. even though the market is suggesting other things, our central bank governor is insistent, if he is leaning anyway, it is that. shery: reluctant to fully discard interest rates going higher, although they seem to point to three risks. the trade war between the u.s. and china, perhaps higher inventories in the first quarter, not to mention enola exports being banned in china -- canola exports being banned in china. given all of this, not surprising that we are seeing yields come down. that crucial part of the yield curve also getting inverted. the gap between the three-month and 10 year rate dipping to a -12.3 basis points, sounding alarm bells for many on the street. for more, let's welcome our central bank reporter. sense, is this bond

buying frenzy justified, given what we're seeing outside? >> i was just having a conversation this morning about how treasuries are overvalued at this point. it is hard to dispute that. wall oface of this uncertainty you have around , ite, brexit, eu relations is hard to make the case that you should not be bonbons at this point. it is really anyone's guess as to where yields can go from here but i think it's incredible we are having conversations about, could we see 2% on the 10 year, when a year ago we were talking about 3% on that same tenor. amanda: meanwhile, that thirst for bonds have some more written about the quality of this part of the credit cycle. a clip- i want to play about their concerns about the credit market. what we worry about is we

have seen a major dovish ship from the fed at the beginning of the year. this may set us up for the building up of excesses and financial markets over the next few years, especially if we remain in his new neutral low interest rate environment. we will continue to search for yield. investors will move into risky assets. you could see these excesses building. once they correct, they could have negative repercussions for the real economy. the next recession may be caused by a financial event rather than a real economy event. amanda: it makes you wonder if that is not the beginning of what we are seeing here, where it is the financial market and financial events, not a real gdp slowed down that causes a recession. >> that's a great point and lines up with what the yield curve is telling us. if we are inverting now and you get to the point where you have to start paying attention, 12 basis points in version is a

much different pace than two basis points. that speaks to 18 months from now, we could be having that conversation about, is this the start of the recession question that lines up -- recession? that lines up with pimco's view. amanda: great to have you with us, katherine greifeld. tune in next hour at 2:00 new york time. an exclusive interview with the pimco-ceo and cio from -- ceo and cio from california. morgan stanley says the u.s. yield curve indicates a downtrend is coming regardless of the outcome of trade negotiations. for more on the markets, we have kevin nicholson him riverfront investment group. i wonder if you are that bearish? we have seen in version before in these markets, lots of technical reasons why it's different. morgan stanley is saying this

means a slowdown, recession. what are your thoughts? >> we are not that bearish right now. one of the things we have to look for is how long we stay inverted. if this is a short-term scare, only last a few days, i don't think it is sending a signal. we will have to reevaluate and take a closer look. it may be sending a signal. as of right now we are not that bearish. we think there is still value in the u.s. equity market, obviously today, they broke down and traded to below the 200-day moving average. that does bring a little bit of concern, however, at lower levels, there could be some dog you in the market. shery: can stock markets continue their march higher without a rate cut? what are financial conditions telling you? >> a couple of things at play.

if we get a trade deal, i know everyone has discounted the likelihood of a trade deal happening until later in the year, if at all. but if you get the trade deal, there's a possibility you could see markets rebounding here. right now what the market is really afraid of is a loss of growth, slowing everywhere else around the world. standk where we currently , the multiples are not bad. the thing that has really held up the u.s. market has been jobs. , goodave been plentiful growth, wages have been growing ok. that could propel stocks to go higher, if we get a resolution to trade. right now, it doesn't look like we are going to. i think people are concerned about that. amanda: so where do you hide in

these markets, what do you advise in terms of sectors you want to be? >> for us, we still like technology, even though we've been playing the software mostly. we have stayed away from semiconductors. we have been in software and services. we still like technology. i think there will be value to be had as some of the trade issues are wrapped up. liked financials. obviously, regional banks have suffered, but diversified financials have not. they are not going to be affected as much by the yields coming down, as regional banks have been. so we still like financials. shery: what about regions? we have not seen anywhere to hide in this. inthe old saying goes, sell

may. you can see the downtrend in this chart. europe also in white, losing more than 4% in this month. we are seeing the trading happening in europe. some speculation we could see a more hawkish ecb. what would that mean for european assets? ecb think a more hawkish will be bad for european assets at this juncture. europe has suffered with slow growth for the last couple of years. you have a very fragmented parliament, political system over there right now. hawkishif you have a ecb, you are just going to pressure the slow down even more. what you need in europe is more dovish ecb. if they end up being hawkish, it

will be a problem. the assets in europe have been disappointing, and slowing all year. continued to has hardciate, fall, while the data has improved somewhat, but not enough to get things turned around there. shery: kevin, thank you so much. coming up, apple could see its profits fall by 26% if china bans sales of the iphone. that is according to one analyst. we speak to him about his dire call. apple, during our exclusive interview with the founder of huawei, he talked about his affinity for the company. >> apple is the world's leading company. if there was no apple, there would be no mobile internet. if there was no apple to show us

this world, there would be no beauty in this world. apple is my teacher. as a student, why should i oppose my teacher? ♪

shery: hitting apple at its core. the u.s. electronics maker could see earnings fall 26% if china bans sales of the iphone. cowen says that represents an extreme case an area for how the trade war could play out. to talk about this, we have the managing director and senior research analyst at cowen. an upper form rating on apple. great to have you with us. ut perform rating on apple. ,hat happens if chinese people

as patriotic as they are, start boycotting apple and their products? >> it's a valid question and has been the core question that most investors have been asking. we saw a similar trend in january right after the huawei story, a nationalistic feeling, where most chinese were buying huawei phones instead of iphones. that diver to a little bit in february when apple started to give a discount over the chinese new year. tim cook mentioned how china was strong. we believe a lot of it was driven by sales of iphones and also sales on the gaming side from the chinese. something that most investors ask. the reality is we don't know the real outcome. everyone can speculate on it. we tried to lay out a scenario demandfight to 100%

destruction. amanda: we have seen stock come off sharply. how much is supply chain concerns that are already a problem because of the tariffs in place right now? >> i would say there are two main reasons the stock is down. one is definitely the 25% tariffs which increases the cost for apple, even if they don't caps on the cost to consumers. the second one is concerns around demand in china. both of them are a big factor in the price draw. a lot of it happened after the last earnings call, peeking, and then you saw the negative news come. i would say a lot of the stock andon has been tariff demand, rather than true fundamentals. we could potentially see sales decline in china. could that be upset by other --

offset by other countries, like india? >> that is something that investors have been asking. a lot of the sales in china and india have been driven by price concessions. from that vantage point, you could argue they could see incremental sales in india. at the end of the day, even in the last couple of quarters, you see right now it is not a supply constrained business. last year they did over 200 million units. this year is lower. they could argue they can reallocate iphone from one geography to another. if it is more than an, that is a real challenge. to the we pay attention iphone because it is such a massive part of apple's business at the moment, but other fast-growing places are pretty sizable. maybe not as dependent on the consumer market in china. is that a strength for apple, that it can continue to steal market share in places like the u.s.? >> wearables are growing nicely,

ipad has been holding up. services is a long-term growth story. the reality is, over the next 6, 12 months, the iphone will still play a fact in apple. introduced in 2007, so for the last 12 years, it's been an iphone story. now it is starting to slowly transition away but it is like that don't happen overnight. the iphone headwind is still a near-term headwind for the stock. shery: given these tensions around huawei and other tech companies, should we be concerned about other hardware companies? >> we have been seeing that happening. some semiconductor companies that ship directly to huawei. arereality is many of them having difficulty handicapping the outcome. it is something that is an overhang in the near term.

honestly, most company management is trying to figure out how to figure out what the outcome will be. amanda: we will leave it there. appreciate it. shery, we've been talking about beijing gearing up its dominance of rare earth, basically, politicizing these mines that it owns. 80% of u.s. imports come from china. ban, that could affect all sorts of industries. it is a scare. maybe it is a rational thing for china to do, but who knows whether they will do it or not. shery: they have been hardening their rhetoric. risks losingates the supply of materials that are vital to sustaining its technological strength. rareyone wants to use

earth imports against china, the chinese people will not agree. so they have been upping the rhetoric here. plenty more to come. this is bloomberg. ♪

amanda: this is bloomberg markets. i'm amanda lang in toronto. shery: i'm shery ahn in new york. it is time for the business flash. they have agreed to buy the semiconductor business of marble technologies. the dutch company will pay $1.8 billion in cash. says it expects the revenues to double by 2022. rk is in talks with banks about arranging a credit line of almost $2.8 billion. jpmorgan is leading the potential financing. says they want the

credit line in place before the planned initial public offering. you can airlines pilot more in the carrier of the dangers with the month before the fatal crash. bloomberg reviewed documents and showed the pilot told the airline more training and better communications were needed. he was concerned after an crashedan 737 max 8 into the java sea last october. in a tweet, if you can airlines says it complies with all regulatory requirements and also said the allegations are false and incorrect. that is your business flash update. this is bloomberg. ♪

mark: former special counsel robert mueller broke his silence about the russia investigation today. he said there was not enough evidence to charge a broader

conspiracy election interference in 2016 so he stopped short of delivering a full exoneration of president trump. >> after that investigation, if we had confidence that the president clearly did not commit a crime, we would have said so. we did not, however, make a determination as to whether the president committed a crime. mark: mueller did not take questions and said he would not make for -- further comments. he also announced his resignation from the justice department so he can "return to private life." in london, the men who could be the you k's next prime minister is order too. in court. tounprecedented attempt privately prosecute him over allegations of misconduct in office. the case against johnson centers on his campaign claim that the u.k. sent $442 million per week