Ft Still Holding ground in the big apple. First, to our top story u. S. Markets posted a dramatic slide today as global trade has spooked investors. The endt weekly losses of last year while treasuries rallied for the fourth year as the trump administrations trade spats are on multiple fronts. And the s p had its worst month of the year. We want to bring in Michael Regan from new york. A lot of Different Things going on. Where did we see the bloodshed . The bloodshed was widespread. Nine of the 11 main sectors in the s p 500 were down. Theeally stems from surprise announcement of potential tariffs on mexico. No surprise that the president is ratcheting up the immigration rhetoric with mexico. U. S. Mexicocanada have a trade deal that i think most of the market had assumed was near the finish line. It was recommended to go to the senate in mexico by the president there last night. It was believed that the u. S. Congress would be voting on is soon. That calls that into question and it tests the shadow of the future of u. S. China trade negotiations since it is unclear if President Trump is capable of a major surprise even when it seems a trade deal is ready to be signed. Be another could triggering event here . Actionsa lot of new being taken by the chinese and also some new threats. As you mentioned at the top of the show, china overnight basically warned that it will create its own blacklist of u. S. Companies that it deems to be unreliable trade partners. I suspect that even without the mexico tariff announcement that we would see some weakness in technology specifically chipmakers and equipment makers because of that news. China did not say what companies would be on the list but it is widely believed to be in reaction to the blacklisting of huawei so the assumption would be Technology Companies would make up a pretty large amount of the companies on this list. We will have to wait and see if china actually does release the list and who is on it that investors are not taking any chances and our of avoiding the tech stocks in case the one they own is on the list. Mily talk about chipmakers they have been hit by the blacklisting of huawei. There are broader issues facing Chip Companies in general given the tariff issues. I have a chart in my bloomberg that shows what the chip sector theooking like, set for worst month in 10 years. Tell us about some of the dynamics in chips in general. Mike it speaks to the uncertainty and the market right now. It is hard for companies to sue to plan their supply chain right now when they do not know if these tariffs are permanent or temporary. Theers specifically companies are having a hard time planning their supply chain so investors are having a hard time deciding which one to on, if they should own the space at all or go into a tech hold. Emily talk about the Big Tech Companies in particular apple thealphabet both ending day down. Apple has a huge presence in china. Alphabet less so. Mike i think you have to look at the performance of these ll as the and their ro and their role in the markets. People worried that if the tension as the legs and spreads to mexico and the chinese situation is nowhere clays to being resolved, the whole market is coming under pressure. When you look at apple and amazon, pretty widely owned in a lot of portfolios. Been, at leaste until recently, have been strong performers. It is the type of thing that will lead on the way up and lead on the way down when we see this kind of mass selling as we did today. Andy given the uncertainty the u. S. And china seem to be digging in their heels, we have seen a big drop but could it also mean that if things got better, a correction could be imminent . Mike certainly, i think right now there is so much guesswork being done. A lot of people assumed that weakness in the stock market would lead President Trump to back off on the trade rhetoric. That is clearly not the case. Howt of people talk about much they think the stock market would have to fall in order for President Trump to rush a trade agreement with china and back off on some of the other trading partners. That it is not where people thought it would be. They expected a few percentage point drop in the s p would prompted the president to tone justhis rhetoric but it is escalating. If you are going to use that as a metaphor, it is also important date. K with a about a the president can afford some market weakness now because he can afford to get tough. As the election draws closer and the Campaign Season draws closer later this year and early next year, it will be interesting to see if he sort of gets a resolution on these issues by then in order to have the stock market as a tailwind for his reelection hopes again. Emily Michael Regan, we will see what this brings next. Thank you. In the meantime, according to regulatory numbers, the company revenue. 9 million ball grew 67 . , which charges company for special features for its messaging software is planning a direct listing on the New York Stock Exchange in the coming weeks. We should mention that bloomberg is an investor in slack. We have new details on how china plans to retaliate to the u. S. Ban on huawei. If you like bloomberg news, and out bloomberg. Com bloomberg radio. This is bloomberg. Emily it has been a week dominated by trait. On friday, the president on importsariffs from mexico in retaliation for people crossing the u. S. Border illegally. In the meantime, china announced it is compiling a list of unreliable entities. In retaliation for the blacklisting of huawei. Making good on its promise to retaliate against president pence latest round of trade duties. Giles and is tom rebecca, the founder of silla icondragon sill dragon. Rebecca, the chinese are digging in their heels and preparing for a longterm fight. Experts are saying it could last until 2035. What is your take on the level of seriousness here . Rebecca i think it has gone from beijing and washington, d. C. And spread out to other aspects of our Economic Life and i think we are just at the beginning. The rhetoric has certainly become much heavier and i think we are really in for a long run. Emily this list of unreliable entities is rather vague and could expand to Multinational Companies not based in the u. S. Where based in japan or elsewhere. Tom the sky is the limit. It is very vague. We do not know who was on the list but it could include any number of companies that are doing business between these two countries including intel and qualcomm. Apple could be drawn into this in a profound way. Chipmakers are exposed. And thethe ambiguity vagueness is part of what makes this so terrible for u. S. Companies. This degreecreates of uncertainty that is really weighing on the stock throughout the market today. Of howwhat is your sense this could materialize or be executed on the part of the chinese . Rebecca what we are starting to techsthat separation of ears. China will become more dependent on its own technologies and Silicon Valley u. S. Will become more dependent on its technologies. We will see a separation of the Technology World and it is not a good thing for consumers or businesses because prices will rise and we will all suffer. Innovation will suffer as well. I think this is definitely not a good trend. Emily i also want to talk about what is happening with mexico. The pair the president threatening 5 tariffs starting june 10 if mexico does not take effective steps regarding illegal immigration. I sat down with an official from go for from gopro. Take a listen to what he had to say. We said, let us go and research where else we would build our products for the u. S. Market. We ran around mexico. And through our research, we learned there were also financial benefits, logistical elements to doing so anyway regardless of tariffs or no tariffs. Whether or not the tariff threat to our product becomes real, we are happy to be moving our u. S. Bound production to mexico. Threat on tariff china israel and we do not know what is going to happen with mexico now. Now, they are stuck between a rock and a hard place. Whatu are seeing and youre going to see is the emergence of different supply so much of production, particularly in Consumer Electronics, a topic that we think and talk about all of the time, has happened through china. Given the trade tension between the u. S. And china, Companies Like gopro have to look elsewhere. Where can we source our products . Where can we finish our products . How can we moved the supply chain out of china . We talked accompanies every day who are looking for increased capacity outside of Mainland China whether that is taiwan, southeast asia, or mexico. They are doing that and now what no, mexicoeeing is oh is not a safe place either. That will affect automakers and a lot of consumer electronic companies. They do some of their production south of the border. Emily we talked a bit of this and of two tech industries, to some extent, it already exists with the firewall in china. If, let us say somehow a deal is struck down the line, can they ever return to the prior sort of state of affairs . Warill this dispute, this essentially, the fresh . Be fresh . Isecca the uncertainty causing companies to freeze restratee the to gize their plan. Global supply chains now are so intertwined. Even that will be hard to break apart. Anyhow, it is a very complex time. Emily in the meantime, the president is planning to visit the u. K. And have a talk with outgoing Prime Minister theresa may about huawei specifically and to express his concerns because the u. K. Is at a fork in the road where they are considering using huawei equipment in some of their commercial networks. What do we expect . You have a huge buildout in five g technology that will enable this ubiquitous coverage and a lot of companies and countries are still really leadernt on huawei, the by a longshot in this area. And the u. S. Has had a hard time getting european allies on board with their you must ban rhetoric. Their view is that it is better, more economical, and you have not proven to us that huawei really represents a National Security threat to us in these countries outside of the u. S. And even inside the u. S. , by the way. There are a lot of European Countries not on board right now and that is what i think his message will be. Yet on board. Huawei get on board. Huawei is a threat. Emily so many moving parts. Thank you very much. Tom and rebecca. Orders foraking model three by tesla. Mackenzie m bloombergs Tom Mackenzie has all of the details. Tom 7,000r cheaper than the imported version. The cars are to be built at teslas biggest factory in shanghai and will have a range of 460 kilometers per charge. They are expected to be delivered in 610 months. Tesla said it will introduce superchargers in china. Cutting charging times to 15 minutes. Elon musk is counting on teslas shanghai factory to bolster competitiveness in a country crowded with hundreds of electrically a goal rivals. In beijing, Tom Mackenzie, bloomberg. Emily coming up, a new report says amazon is considering getting into the wireless industry. Far for 1ridge too wall st analyst. We will explain why, next. This is bloomberg. Emily could amazon be eying yet another new business . Telecom . The Online Business is reportedly interested in prepaid wireless service. To deal would allow amazon use it the network of the combined entities for six years. The idea however is a bridge too far for 1 wall st analyst. He has 30 years of experience in the telecoms nest. He calls this crazy. He joins us on the phone along with our bloomberg tech editor. Craig, first of all, you did not call it just crazy you called crazy. Letive] let us back up and remember what they are trying to do here. In order to get the splinttmobile merger done, the Justice Department will require the creation of a fourth competitor. What you are talking about is making amazon a fourth competitor. The point i was trying to make was making amazon the fourth competitor in the market is not sensible either for sprinttmobile or for amazon. For sprinttmobile, or let us say tmobile, the idea of taking a four player markert market down to three and then going back up to four is not a better situation. Just strategically, this is not a terribly sensible idea. And for amazon, the problem is you cannot differentiate a Telecom Network that is a private prayer he proprietary network and still have cost advantage. Cost advantage and Network Operations requires system loading, opening the network to everyone. You cannot have it both ways. It strategically does not make sense for anyone. Been we know the doj has leaning against approving the. Mobilesprint deal what is being reported about amazons interest . Report which had several unidentified people familiar with the situation. Is whathave confirmed craig mentioned is that the dha says you can do the deal but you have to make some concessions. Basically, they have to do ivest. That would be selling the existing network, spectrum. Amazonters story says would be interested in boost mobile and spectrum as well. Would be a negative for all wireless carriers. That said, amazon has branched out into unexpected businesses in the past and has transformed them including clouds and whole foods. Why would this be Something Different . Let us remember that we are talking about the perspectives of all of the different parties here. From the perspective of the amazon intoviting your industry is not something that people are particularly wanting to do. Think it is understandable why the Market Reaction from all of the other telecoms was so negative. Even the suggestion that amazon might enter the Telecom Business is not a terribly attractive idea for anyone in telecom. And for amazon, to try to maintain a National Network remember, at t and verizon, to examples, have each spent 200 Million Dollars in Capital Investment and spectrum purchases. You are talking about a pretty , even for aante company like amazon. No one in wireless has earned much more than the cost of capital. A low return. And that is even before amazon comes in with an aggressive price strategy. And once again, in order to make want to usee you this for drones or driverless delivery vehicles you are going to have to load that network with other peoples traffic lest it not be sufficiently utilized and therefore have excessively high unit cost. If you are going to load it with other peoples traffic, it is not a basis of competitive advantage anymore. Crazy. Ll, expletive words. Thank you. Coming up, as the u. S. China trade were continues to ask delay, Venture Capitalists may be forced to change their strategy. We will tell you how, next. This is bloomberg. The latest innovation from xfinity isnt just a store. Its a save more with a new kind of Wireless Network store. Its a look what your wifi can do now store. A get your questions answered by awesome experts store. Its a now theres one store that connects your life like never before store. The xfinity store is here. And its simple, easy, awesome. Emily this is bloomberg technology. Im emily chang in san francisco. Lets recap our top story. May turned out to be a month to forget for u. S. Equity investors. The s p 500 posted is worth month of the year. The benchmark delivering is worth may of return in seven years and the second worst since the 1960s. For traders watching the nasdaq, no better. Falling to the lowest level since the end of march and the worst month since december. Tesla, qualcomm among the biggest laggards. Meantime, 2018 was a recordbreaking year for Venture Capital. With the rise of supersized funding rounds and astronomical deals. This year, one Venture Capital firm said no to more cash. It Just Announced its seventh fund, another 180 million. Awayon says it turned 70 million. It is backed by several Companies Including ebay. Joining us to discuss is the maveron partner. Thank you for joining us. Why turned down 70 million . Guest in an era where funds are raising more and more money, we thought for us, it is about being disciplined, being focused. It is being a small fund size, focus only on consumer and living on that. Turning away 70 million and focusing on the 180 million fund was a way to example of buy that. Emily do you think you could have farmed more goods to invest in if you had taken that money . Anarghya the ubiquity of what to do, there is a ton to do. Maintaining our small fund size allows us to be focused on what really matters. We believe every year, there is going to be one to two top consumer deals that matter and we focus our time, effort on those deals. Emily what are the top two deals right now . Anarghya we are spending our time looking for those. We are looking in very specific categories and think there is a lot to happen in Legacy Industries and brands, where there is no consumer loyalty, no consumer interest. You could think of Industries Like health care, insurance. The way people think about their finances. Ripe for strong consumer brands. Emily where have you put that money in the last year . Anarghya we are looking quite broadly in a number of categories. Consumer health care is of deep interest for us. You think about the reproductive rights of women and the number of different areas in a womans life that she things about her reproductive system and different ways she accesses it. We are invested in modern fertility. It is entirely focused on a w