The white house says theres no chance of meeting halfway with china and beijing slams protesters acting like terrorists in hong kong as satellite images seem to show Chinese Forces massed new the border. Talk about wework and its race for an ultimate unicorn ipo. For now, lets get you started with a quick check of how markets closed. We saw the dow lose 800 points, the s p 500 think almost 3 . Sink almost 3 . Every sector almost in the red. We had the nasdaq also losing 3 . It was all of this anxiety over the economy really sending those stocks down. We also had some api data showing that crude stockpiles were rising so that did not help the price of oil. Its about haven demand. The 30year yield also fell yield ands record finished just below that point. U. S. Futures also under pressure, down. 2 , as we continue to see this economic recession fears really gripped the market. Sophie with those recession , the nikkeig large posting a loss of nearly 3 . Haven buying has the yen hovering your 6 and treasurys sparked by growth. We have already seen that moving kiwi 10year yields lower. We take a look at the region, it. S a dilemma were looking at jba futures now, seeing them tick higher. Guys, keep a close eye on what is going on in the markets this morning. Thank you so much for that. To our top story, the bond market sounding the alarm on the Global Economy. The much washed much watched u. S. 10year yield l below the twoyear the First Time Since the crisis. Investors fled for safety. The direction has been clear for. While we have been flirting with an aversion for a while, so to see it finally break was something of a relief. Made me maybe not for stock investors, but would actually pushed us was weak data overseas. We got very weak retail sales and production out of china, followed by a contraction in german gdp, which just reignited years about Global Growth and the health of the Global Economy, and thats why you saw such a strong bid into long data treasuries. Paul yield curve inversion sometimes but not always means recession. Rush for thely to exit . I think it is telling that , theres a lot of different factors going into bond markets right now, including fears of that global recession. Its hard to draw a conclusion about the probability of u. S. Recession when what is pushing it over the edge are these Global Factors and this global slowdown. We finally saw this yield curve briefly invert, but i was talking to a few folks today that said it probably does not change anyones economic thesis that it dips down to negative one basis point, but it will be interesting to see what happens from here. We have retail sales out of the u. S. And so far the u. S. Consumer has been the bright spot of the u. S. Economy, so that will be important to watch. Shery thank you so much for that. When fear is driving the market, what do you do . Lets ask the founder and cio of oka capital partners. Great to have you with us. We talked about the yield curve 2 10. Ion, the does this change your strategy, or do you need to see more severe and prolonged aversion to adjust your portfolio . Our portfolio gets adjusted over time and kind of naturally as the stocks that we bought low are high enough and we think the Growth Potential the fed reached when you sell them and put that capital to work again. If anything, i think these sudden drops really give you the ability to go shopping for stocks on sale. I will say this probably not today. Whatever the market is selling off like this, it is best to get out of the way and let things occur and then maybe go shopping tomorrow. That is an interesting point. If you were to go shopping, where would you go . You go into the areas that have been affected most and the areas that you know best. Those would be Consumer Discretionary and then technology. Technology is something that never goes out of style, unlike clothing, right . Seriously, companies are always looking for productivity, and it is generally technology that delivers that. My conductors, again, something that is very cyclically driven, but if you know the companys well and you know their product line and what they are going to be able to achieve, you go shopping for those companies and pick them up when they are on sale with events like this. you say dont go shopping today, maybe tomorrow, but how do you know it is not maybe next week or next month or next year . There is a risk with that strategy that you just end up catching a falling knife. How you know when the bottom has hit . Sure, well, you have to do some work. You look at what your own risk tolerance is and if you can live with the price you are buying at. You dont know what tomorrow brings. I dont care about any kind of technical analysis. None of us truly know what tomorrow is going to bring in our lives or in the market. You just have to be able to live with the prices you have spent. That is pretty much it. in terms of being unconcerned about technical analysis, i want to bring up the chart here. Two recessions have not occurred while the yield curve was inverted. It is not 100 reliable when it comes to predicting a recession. What do you look at for warning signs on a personal level . Well, its more, i guess, the tone of the conversation or the earnings calls of the companies that i listen to. If i hear a whole lot of know kind of, you they are having trouble selling their products, and that happens generally before a recession is acknowledged. You have to Pay Attention to that. I think that as well as walking ifund the world and seeing there is a lot of people that can be a really great indicator as well. Especially where Discretionary Spending is involved, like sporting events or concerts or vacation destinations. It sounds really kind of trite, but it really does work. I noticed in 2007 when i went on , it was really like traffic, and indeed, the recession had started. To your point, i was really surprised to see ciscos Chuck Robbins talk about this. We had known that cisco was pretty resilient to the latest trade tension. They had been able to absorb the cost, but it seems they are seeing a turning point as well and the chart on the bloomberg showing that although we had strong gdp numbers out of the u. S. , we saw Business Investment seeing the first drop since 2016, so despite most of the far,umbers being good so how long would it take for this to quickly turn you can it would mean more business is getting anxious. Thats just it. Theres herding behavior in , and we arenimals animals. I think businesses look at other businesses that are their competitors, and they noticed these slowdowns. One note of warning the Second Quarter is not generally a great quarter for technology. Thirdlows a season where and Fourth Quarter are generally stronger than the Second Quarter. The commentary about what they are seeing in their pipeline now is probably a little bit more germane than the results for this quarter. Many people and markets are hoping Central Banks will come to the rescue, something that some of them have already done. Theident trump slamming fed, saying it is clueless, again, tweeting that out, saying he is placing the blame for that crazy inverted yield curve on the central bank. The bond market seems to be agreeing that the central bank is behind the curve a bit. What can the fed realistically do . Especially when we just saw surprisingly strong numbers on inflation recently . Right, well, i think they are kind of down by their own chatter, which is that they are datadriven. If you go with that and they are supposed to assure that americans enjoy full employment eitherw inflation, once one of those things start getting out of control, by definition, the fed is behind the curve, right . How they can really shoot to that without being behind the curve. Its a littled, i would say the bond market has already pushed them lower, right . The rates . They just have to follow along at this point, the fed does. Does loveident trump to blame the fed. Theres the often trotted out cliche that markets dont die of old age, they are killed by bankers. It seems the fed is trying to fight the fire. I think they are always trying to fight the fire. That is kind of their reason to be, right . I do think that the old saw is if youre pointing a finger at someone, its one finger towards people and three back to you, right . I think the whole trade issue is really the driver of any kind of downturn in the markets and any kind of longerterm downturn in the economy. Lesswo countries that had than wonderful news today were germany and china, and both of those art exportled countries, and i think the trade war really is starting to impact them and we are a connected world. Going to come all around the world. Paul cio and founder of bokeh capital partners. Thank you for joining us. New images may show Chinese Forces amassed new the border with hong kong. Forces amassed new the border with hong kong. Photos from a u. S. Satellite Imaging Company seem to show vehicles from the Peoples ArmedPolice Parked in a sports stadium in shenzhen. Meanwhile, hong kong airport is restricting Public Access after days of protests. Only passengers with valid tickets and airport staff will be allowed to enter for the time being. China is sticking to plant trade talks in washington next month, indicating negotiations are on track, despite an abrupt escalation of terror threats. But he described recent talks on the phone is very productive with President Trump saying he thinks china wants to do something dramatic, but sources in beijing are not optimistic and are unlikely to make major concessions. Indias trade deficit continued to narrow in july as imports declined for a second straight month and signaled a deepening economic slowdown. The gap between exports and imports was just over 13 billion last month. 2 billion less than in june. The reserve bank has cut its growth forecast for the year and cut Interest Rates four times in a bid to spur growth. Britishbased banks are being warned to accelerate. The ecb says lenders are slow walking towards the split and have moved significantly fewer critical operations to the eu than was originally foreseen. Cannotnce that banks continue to rely on heavily servicing eu clients from within the u. K. Global news 24 hours a day, on air, and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Paul thanks. Come, tencents results reflect challenges it is facing amid rising competition and a sputtering domestic economy. Plus, a look at what might be achieved at land trade talks next month when expectations are already so low at planned trade talks next month. Paul the reprieve from President Trumps tariff delay seems to of been shortlived. Chinese officials said to be sticking to planned talks in washington next month. Lets cross to our senior trade editor, sarah mcgregor. The chinese are sticking to the appearance, but we have one official saying they do not expect to be making any concessions themselves before october 1. Say the pile is set fairly low in terms of the bar is set fairly low in terms of expectations . This temporary reprieve, this the tariffse of until september 15, that will is motivated by the fact that the Trump Administration did not want to hit Holiday Shoppers or the businesses that imported goods from china. Big takeaway is we heard from commerce secretary wilbur ross who said there was no quid pro quo. It was not that china promised to do something in return for the delay of tariffs. Where we stand right now is that it is hard to see a path forward. Talks will continue. We just do not know where progress can be made right now. No wonder we saw such a poor reaction from markets today. Despite that, President Trump insisting we are winning against china, though china is not the problem. He problem is with the fed Industry Groups are not happy. Absolutely. And try toweet today never it attention away from china because we are seeing a lot of weak data coming out of europe. A lot of the weakness in the Global Economy right now is being attributed to the trade tensions. Course, trump probably wants to change the narrative a bit and blame the fed, saying they have not been cutting rates quicken up to his liking, which he has been saying for months now. We hear from American Business groups. Some are happy, some benefit from the tariffs being delayed until middecember, but ultimately, they are saying the whiplash we are getting with trade policy uncertainty is a real killer for businesses. They need to be able to know what the environment is to plan ahead for investment, for hiring, and that is impossible right now. For joining us. Lets get you across some breaking news out of australia now on the bloomberg terminal. For ae fullyear results telik medications company. Fullyear net income coming in at 2. 15 billion, down 40 . They did signal back in may there was going to be a writedown on some of its legacy assets, 100 million. 200 million for restructuring costs. All of that weighing quite heavily on net profit. There were some questions over the final dividend could be sustained. The answer is no. The final dividend coming in at eight 10s per share. One will be an interesting to watch at the open. Plenty more to come here on daybreak australia. Stay with us on bloomberg. Paul this is bloomberg echnology global link. Lets take a look at the top global tech stories. Emily cisco extended regular session losses in late trading after a lackluster Sales Forecast showed the trade war and global slowdown are leading companies to hold off on Computer Network updates. Sales in the fiscal First Quarter will be flat to 2 compared to year ago. Tencents come back taking longer than expected. Secondquarter revenue was not enough to impress analysts as ad revenue struggle to outpace forecast. Many days trading below its ipo price. It fell to a record low on fears of a global slowdown, adding to lingerings appointment was last weeks secondquarter results. Those are the top global tech stories were watching. Shery thank you. An ipo,as filed for giving potential investors the most detailed view yet of its finances and revealing breakneck growth on the back of massive losses. Lets take a closer look at the filing. What, if anything, do we know . Out the companys valuation nothing yet. What we learned from the filing was a lot of the pieces behind the underlying economics of the , the interrelations between the ceo and the company, but we did not get any real feel for the valuation. That is going to be parsed out over time. Emily talk to us a little bit about the massive losses here and its investors can get on board with it. This is a company that has a andue corporate structure, the vast majority of its buildings are less than two years old. The potential for profitability is going to determine what kind of valuations the company receives. Is this a Real Estate Company that secures longterm leases and subleases it on a shortterm basis, or is it a tech company that where profitability is less important, and its a matter of going out, finding more spaces and growing revenues by 100 a year . Right now, they are certainly on that Revenue Growth track, but its unclear how they get to profitability. Shery really quickly, what do we know about why they are planning to ipo now when markets are so unstable . I think when it comes down to is the window may actually be shrinking. If they dont come out now, when might they be able to . Obviously, with the weight uber and lift cap traded since their lyft the way uber and have traded since the deal, it does not scream time to go public, but it might not look any better down the road. Paul thanks very much for joining us. That is Bloomberg Technology global link. Dont miss Bloomberg Technology at 7 00 a. M. In sydney, 5 00 a. M. In new york. Up next on daybreak australia, another night, another standoff between police and protesters in hong kong. This is bloomberg. Paul eight 30 a. M. Thursday morning here in sydney, the market open 90 minutes away. Hold onto your face. Futures pointing lower by more than 2 . Looks like we are still up for a day of fairly heavy selling after we saw u. S. Equities markets all end up in the red. Shery on the new york where it is 6 30 p. M. Lets get to first word news. Dark clouds are building over the World Economy with more bad threat oflacking the a serious downturn. China reported its weakest factory growth since 2002. The German Economy shrank as exports slumped whilst euro area production fell the most in more than three years. On top of that, the u. S. And u. K. Bond markets are sending their strongest recession warnings since the financial crisis. Canadian Prime MinisterJustin Trudeau is being dragged back into the biggest scandal of his time in office. Just weeks before the nations ruled hetchdog has entered a bid inappropriately by seeking to help an Engineering Company settle corruption charges outofcourt. Trudeaus poll numbers sank on the initial accusation but have been recovering. India marks Independence Day later thursday with the disputed region of Jammu And Kashmir under lockdown. Claimsia challenging life is returning to normal despite an indefinite curfew and total communication blackout. The report cites enormous anger and anguish in the region and t