Transcripts For BLOOMBERG Whatd You Miss 20240714 : vimarsan

The aftermath of the imf report i want to report the dollar did move lower. In talking to analysts across the street, the agreement is that this is a speed bump and the ultimate in the ultimate rally for the dollar. Look at the bloomer an index the bloomberg index, lower today but still higher than levels from may 2017. One reason is the unwind of risk on hedges. Tariffst weekend the were not delayed and the ecb meeting next week, potential for last,sh shift, and Interest Rate differentials. One source said, why overthink it . And other places as well. They roughly 30 decline, big rally out of the 2016 lows for stocks, but last year we had a debt cross, em dropping more than 20 . Not recently, this one, knowing how bearish it could be. Right now we have the em equity indexed 10 below its recent peak, however these last two debt crosses are a tell on what could be ahead and suggest more declines ahead for emf, and further out on the risk continuum, may be a bearish sign for u. S. Equities over the medium term. Joe still with us, asset and luke kawa and patrick pelfrey. Is anyone bullish on stocks outside the u. S. Anymore . It is hard to become bullish on stocks outside the u. S. With the fact we have this industrial sold out. Look at korea, china, data continues to be weakened without the incremental buyer, where is the demand coming from . Scarlet but we have a dollar that might be weaker today, but it is headed higher. As long as the dollar heads higher, other currencies in the emerging markets will be weakened that will be good for exporters, so that is their right have hope, right . Patrick it would be helpful of goods are cheaper but they need the demand component and that is what is ultimately going to drive it. Factoring in china or korea, if they dont have an item or outlook to sell it to, it is unlikely they will make that sale. That is ultimately what matters. The financial channel stresses of the dollar higher will weigh on the incremental boosting exports that you might get. Lyft doing so bad, emerging markets also in the drawdown, probably from data exposure and how little you want it to be outside the u. S. Romaine when you gauge the Economic System and how it ties to the markets, what are you looking at . What are the metrics you are trying to get a read on . Patrick we are focusing on the industrial side of the economy and the consumer side. The industrial side is manufacturing, production, durable goods and all those remain weak. The bright spot is the consumer remains quite healthy. We are seeing wage gains come through, while its getting fatter, willingness to spend, job gains are strong, that is underpinning the strength of the economy. That do you spend 800 at the Container Store this weekend . That thethe hope is economy, which is being driven by the consumer right now, is going to be the outlook which prevents us from heading into a recession. If you want to be a negative nancy, the channel through which manufacturing leads to the real economy or the Services Sector is through employment dendrite know if you look at employment, all those major pmis, very few of them are above 50, most below, so that might be a sign that if that continues, you have a conduit for manufacturing to seep in and hurt the broader economy. But you havent seen anything close to that yet. Scarlet we are getting a jobs report friday. The consensus now is 100 60,000 jobs increase in the month of august after 154 thousand four july. What would a disappointment look like in the market and what would happen, what reaction would we get . Patrick the number we Pay Attention to is not actually a payroll number, but how fast Wage Inflation is coming through. That is also coming out friday. That really shows you how successful the consumer is likely to be. That is where we push our hopes. Right now it is around 3 . We would like to see that continue. It is not a problem for Profit Margins currently, so it is contained in that sense but still allows the consumer to spend money. News. E breaking about 7 . Software up aseven and i haves and 7. 5 stake in the company taken, talks, we know what that means, star board taking that steak inbox inc. And may seek talks. Joe you dont see a lot of activism in these tech companies. It will be interesting to see if this becomes a trend. which is more important jobs are jay powell . I would say jobs. Wage gains are fine, but not gangbusters. The data will be hard to break that narrative. That is the last day before blackout. If the fed wants a huge hint that we will have a 50 basis point cut or something of that nature, that is where it is going to come, more likely than the data. When you think about powell and points he has raised about what the fed is looking out in one whatted looking at and prompted the last rate cut, highfrequency data is not part of that. Patrick if he is looking at the data we are seeing hes going to want to be more accommodative. The midcycle adjustment is a worrisome comment in that it shows he is not at moving as devilishly as people are hoping. Romaine can powell save the market . Market hasge the discounted a lot of what the fed has been trying to communicate, and we have the resident pushing back on anything they do. Can he save the market . I dont think so. But what he can do is bring liquidity in line to demand and on inverting the yield curve and uninverting the yield curve will remove a lot of the risk investors are focused on. were told not to over think essentially. Why would President Trump want to drag us into an election your . What about that logic . We have a rising superpower. Trade is a convenient outlet for the two of them to debate on the world stage. Are we talking about real issues . Yes, equal access to chinese market, safeguarding an electoral property, ideas many investors and politicians would agree with. Areher this is a deal we going to get to that will allow markets to move higher or solve the problem, this is something we will be talking about for many years. Scarlet even if there is no deal, the president will claim victory before the election. Joe seems likely. Luke, thankrick and you. Whatd you miss . Whatd you miss . Up next, up next, whatd you miss . The upcomingat brexit vote in parliament. This is bloomberg. Romaine live from bloomberg World Headquarters in new york, im romaine bostick. Scarlet joe im joe wiesenthal. Whatd you miss . Boris johnson loses his governments majority as he faces off against tory rebels. Trade talk woes. Stocks fall as negotiations between the u. S. And china hit another stumbling block. We look at why the selloff in bonds in argentina will still attract investors bidding on a bargain. Showdown. T u. K. Prime minister Boris Johnson lost his governments ruling majority as he faces off with members of Britains Parliament determining the fate of the u. K. Exit from the bloc come halloween than the possibility of a snap election. We leave the eu by october 31. Be no further pointless delay. It is becoming increasingly clear that this reckless government only has one plan, to crash out of the eu without a deal. Scarlet i want to welcome new law joe i want to welcome marcusry felt and ashworth. Marcus, im confused. If the government loses the vote they might call snap elections but then maybe the opposition might not accept the snap elections . What should be watching . Marcus you are definitely right to be confused. No one knows what is going on. But we are going to see almost certainly the government lose the votes, between five and 10 votes. Yes, it lost its overall majority. This is well known, well one mp said he was going to switch to the social democrats. What is going to happen is the government will be more aggressive and take the win away from the socalled rebel tory includingve mps, Winston Churchills grandson. This is the tactics the government uses, quite aggressive, expects a vote tonight. It will probably lose the bill vote tomorrow as well, and then it will almost certainly introduce its own bill to try and call for an election probably on october the 15th now. Bait may not be taken by Opposition Leader Jeremy Corbyn, but it is a changing dynamic because Jeremy Corbyn and hard left supporters probably do want an election, but the vast majority of the main labor mps dont. Fro tooing to be too and decide whether they want to hold Boris Johnson to the threemonth suspension. Romaine give us a sense of how the market responded. It seems initially there was a pricing in for this idea of a no deal brexit, right . Absolutely. You saw the pound break below 120 for the First Time Since 2017 after johnson said he would call the snap election. Thats when you saw fears of a no deal brexit intensify. That is the markets worst nightmare. News that he lost his governments ruling majority sent the pound act up to 121, reducing the odds of a no deal brexit. Anything that takes us away from that possibility is going to be good news for the pound. Joe you heard about the pound orest on the weakening of johnsons position. It reminds me of when a ceo steps down from a company and the stock goes up and igo, the market must really not like that ceo. Is the market in your view that negative on Boris Johnson unleased, and appreciates the fact when he is constrained a bit . Think theactually reason the Sterling Rose was that loss of majority, very well flagged end, and it happened several hours after Sterling Rose. Sterling rose right when new belowame in, seeing it 120 and thinking this is a a bargain, but there are some strange things going on. This is a no deal brexit rising equals pound down. But there are strange things going around, there are low levels here, this 120, 122 area where we have had sharp training and they range of one point and a half where we were close to inverting, which doesnt make much sense if the government is he in as much confusion as you have. I wouldnt read much into sterling right now, but tomorrow is just as big a day if not a bigger day, it could go anywhere. I would agree with marcus. Tomorrow is a huge day. If you look at overnight volatility in the pound, it spiked to its highest in april. People anticipate the votes to deliver a bit of turbulence. Tonight johnson is expected to lose. The focus is really on tomorrow. The what do people says potential downside for the pound . Talking to analysts, it is hard to find an optimistic voice. It is all gloom. Morgan stanley said their best cases that i snap election is called and they see the pound at about 115 in that scenario, shocking because the level everyone is watching his 118 41, the 2016 low. If we break below that we would be at the lowest level since 1980. There are bit calls floating on it is hard to find an optimist. Marcus, talk about constitutional issues. Some say this amounts to a constitutional crisis. No matter how these votes shake out over the next few weeks, do that the british constitution is still being honored . Sides have stretched it as far as it can go. I dont think the government did a smart thing by suspending parliament. I think the reaction to that was overblown. Acted in a has certain way by allowing this bill to even be started. The reality is that the british political system is working and in some ways is dreamily efficient, but we are airing a debate and having a clear expression of deliver of differing views. The question now is, if Boris Johnson does not get a chance to call a general election tomorrow when he loses the second of these votes, and heavy doesnt get that passed, and he has pushed for a general election the whole time, then maybe the conservative party will have to do something quite strong on the constitution. That will be to essentially ignore what parliament is saying and call up an election, entering into different territory. Romaine thanks to Marcus Ashworth and catherine here in new york. Coming up, stocks and the day in the red as investors worried the u. S. And china are further apart on trade than earlier thought. The next step in those negotiations, with a former acting u. S. Deputy trade representative, wendy cut worth. Thats next. This is bloomberg. On tysonbreaking news foods, meat producer, or lowering guidance for a full year, 530 to 570 the new range. It had been saying 575 to 610. The company says these are short term challenges including margin compression, issues on green derivatives, commodity market volatility. This ceo is scheduled to present tomorrow at an investment conference. Joe u. S. Stocks lower as trade talks between the u. S. And china hit a stumbling block. The s p 500 index dropping for the first time in four sessions today, officials in washington and beijing struggling to even agree on a scheduled for talks to resume. China is supposed to send a delegation to the u. S. This month but no date is set. We are joined by wendy cutler, former acting trade representative and former acting president of the asian trade society institute. They cant even agree on a date to restart the talks . Wendy this underscores how difficult these negotiations have become, when you need to negotiate about how and when and the terms you are going to hold the negotiations. You are not in a good place. Romaine a lot of folks are looking ahead to the apex summit and this idea that when you get a room,d xi together in that will work things out. You are a former trade representative. When you talk about getting these deals done, is that done at the highlevel, with someone like the president s of the nations, or is it more folks on your level . And where is the discussion . Experience has shown these meetings between leaders present an important actionforcing event, but for them to really be successful, these meetings need to be preceded with substantive negotiations between the upotiating teams, who tee the issues for agreement by the leaders. That is why it is so important for negotiators to meet and talk about substance, if indeed we have any chance of a possible aipac meeting between xi and trump leading to success. Analyst at b of a came out and said, dont over think this, it is an election in your an Election Year next year, trump will find a way to get a win in an Election Year, and anything else is too smart. Do you think everyone reads these headlines that they cant even agree, and then it is an Election Year type cleaning it up and making it happen . Wendy i think everyone is overthinking this. But you could also argue, what is a win . Is a window agreement with china , some in the administration and in town think yes, that would be a win. That is unclear. I am in the camp that a negotiated settlement this possible. I have not ruled out. But with every passing day as and and as we put in place new tariffs that are matched by china, it just becomes increasingly difficult to undo these actions and get back to where we were last may, when things look like they were headed in the right direction. Romaine with both sides digging in their heels for a variety of reasons, if you are in the room, what sort of concession gets made on the u. S. Side or chinese side that could intentionally get a handshake agreement . Need the first thing we our goodwill gestures on behalf of washington and beijing. For example, putting off the next tariff increase of october 1 by the united states. For china, perhaps announcing a big soybean purchase, or taking back their promise to increase tariffs on automobiles. There are a bunch of things both governments can do to show goodwill. If one were to do that, hopefully it would be matched by the other side and that could enor fora positive t an actual negotiating settlement negotiation actual negotiating session. But a lot of us expected that after the g7 meeting. Scarlet w y think it does joe what you think iinty . Wendy the globaly e tariffs img countries around the world, but it is all the uncertainty and all the unpredictability associated with this trade dispute. It is having repercussion and consequences that we cant even measure. Wendye our thanks to cutler, former acting deputy u. S. Trade representative joining us from washington. Rejectionsafter many from the sec, a company may have found its work around for a retail etf. How the companies did it. This is bloomberg. Lets get the first word. An island in the bahamas home to 50,000 people is 70 underwater after Hurricane Dorian battered it for two days. Government Officials Say many people are trapped in their homes and need to be rescued. Others braved the floodwaters and swam to safety. Dorian has weakened, but still packing winds of 110 Miles Per Hour. The United Nations says 60,000 people in the bahamas will need food after Hurricane Dorian. The red cross says they may face trouble finding clean drinking water. Officials say about 45 of the homes on grand bahama island and a neighboring island were severely damaged or destroyed by the hurricane. In southern california, the search for survivors is over. Officials say 34 people are presumed dead after a dive boat fire. 20 bodies have been recovered. The fire broke out early monday off santa cruz island. Crew members escaped by jumping into an inflatable raft. The cause is under investigation. British Prime Minister Boris Johnson suffered key defections from his party today, losing a working majority in parliament and weakening his decision as you tried to prevent lawmakers from blocking his brexit plan. Lawmakers return from summer recess to confront johnson over his insistence that the u. K. Leave the European Union on october 31 even without an agreement. The speaker of the house ruled that lawmakers opposed to johnsons plan could try to seize control of parliaments agenda, clearing way for a vote tonight could give the rebels more power to set the agenda. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im renita young and this is bloomberg. Finding a regulatory workaround, van eck and solid acts today announced that the Interest Rate<\/a> differentials. One source said, why overthink it . And other places as well. They roughly 30 decline, big rally out of the 2016 lows for stocks, but last year we had a debt cross, em dropping more than 20 . Not recently, this one, knowing how bearish it could be. Right now we have the em equity indexed 10 below its recent peak, however these last two debt crosses are a tell on what could be ahead and suggest more declines ahead for emf, and further out on the risk continuum, may be a bearish sign for u. S. Equities over the medium term. Joe still with us, asset and luke kawa and patrick pelfrey. Is anyone bullish on stocks outside the u. S. Anymore . It is hard to become bullish on stocks outside the u. S. With the fact we have this industrial sold out. Look at korea, china, data continues to be weakened without the incremental buyer, where is the demand coming from . Scarlet but we have a dollar that might be weaker today, but it is headed higher. As long as the dollar heads higher, other currencies in the emerging markets will be weakened that will be good for exporters, so that is their right have hope, right . Patrick it would be helpful of goods are cheaper but they need the demand component and that is what is ultimately going to drive it. Factoring in china or korea, if they dont have an item or outlook to sell it to, it is unlikely they will make that sale. That is ultimately what matters. The financial channel stresses of the dollar higher will weigh on the incremental boosting exports that you might get. Lyft doing so bad, emerging markets also in the drawdown, probably from data exposure and how little you want it to be outside the u. S. Romaine when you gauge the Economic System<\/a> and how it ties to the markets, what are you looking at . What are the metrics you are trying to get a read on . Patrick we are focusing on the industrial side of the economy and the consumer side. The industrial side is manufacturing, production, durable goods and all those remain weak. The bright spot is the consumer remains quite healthy. We are seeing wage gains come through, while its getting fatter, willingness to spend, job gains are strong, that is underpinning the strength of the economy. That do you spend 800 at the Container Store<\/a> this weekend . That thethe hope is economy, which is being driven by the consumer right now, is going to be the outlook which prevents us from heading into a recession. If you want to be a negative nancy, the channel through which manufacturing leads to the real economy or the Services Sector<\/a> is through employment dendrite know if you look at employment, all those major pmis, very few of them are above 50, most below, so that might be a sign that if that continues, you have a conduit for manufacturing to seep in and hurt the broader economy. But you havent seen anything close to that yet. Scarlet we are getting a jobs report friday. The consensus now is 100 60,000 jobs increase in the month of august after 154 thousand four july. What would a disappointment look like in the market and what would happen, what reaction would we get . Patrick the number we Pay Attention<\/a> to is not actually a payroll number, but how fast Wage Inflation<\/a> is coming through. That is also coming out friday. That really shows you how successful the consumer is likely to be. That is where we push our hopes. Right now it is around 3 . We would like to see that continue. It is not a problem for Profit Margins<\/a> currently, so it is contained in that sense but still allows the consumer to spend money. News. E breaking about 7 . Software up aseven and i haves and 7. 5 stake in the company taken, talks, we know what that means, star board taking that steak inbox inc. And may seek talks. Joe you dont see a lot of activism in these tech companies. It will be interesting to see if this becomes a trend. which is more important jobs are jay powell . I would say jobs. Wage gains are fine, but not gangbusters. The data will be hard to break that narrative. That is the last day before blackout. If the fed wants a huge hint that we will have a 50 basis point cut or something of that nature, that is where it is going to come, more likely than the data. When you think about powell and points he has raised about what the fed is looking out in one whatted looking at and prompted the last rate cut, highfrequency data is not part of that. Patrick if he is looking at the data we are seeing hes going to want to be more accommodative. The midcycle adjustment is a worrisome comment in that it shows he is not at moving as devilishly as people are hoping. Romaine can powell save the market . Market hasge the discounted a lot of what the fed has been trying to communicate, and we have the resident pushing back on anything they do. Can he save the market . I dont think so. But what he can do is bring liquidity in line to demand and on inverting the yield curve and uninverting the yield curve will remove a lot of the risk investors are focused on. were told not to over think essentially. Why would President Trump<\/a> want to drag us into an election your . What about that logic . We have a rising superpower. Trade is a convenient outlet for the two of them to debate on the world stage. Are we talking about real issues . Yes, equal access to chinese market, safeguarding an electoral property, ideas many investors and politicians would agree with. Areher this is a deal we going to get to that will allow markets to move higher or solve the problem, this is something we will be talking about for many years. Scarlet even if there is no deal, the president will claim victory before the election. Joe seems likely. Luke, thankrick and you. Whatd you miss . Whatd you miss . Up next, up next, whatd you miss . The upcomingat brexit vote in parliament. This is bloomberg. Romaine live from bloomberg World Headquarters<\/a> in new york, im romaine bostick. Scarlet joe im joe wiesenthal. Whatd you miss . Boris johnson loses his governments majority as he faces off against tory rebels. Trade talk woes. Stocks fall as negotiations between the u. S. And china hit another stumbling block. We look at why the selloff in bonds in argentina will still attract investors bidding on a bargain. Showdown. T u. K. Prime minister Boris Johnson<\/a> lost his governments ruling majority as he faces off with members of Britains Parliament<\/a> determining the fate of the u. K. Exit from the bloc come halloween than the possibility of a snap election. We leave the eu by october 31. Be no further pointless delay. It is becoming increasingly clear that this reckless government only has one plan, to crash out of the eu without a deal. Scarlet i want to welcome new law joe i want to welcome marcusry felt and ashworth. Marcus, im confused. If the government loses the vote they might call snap elections but then maybe the opposition might not accept the snap elections . What should be watching . Marcus you are definitely right to be confused. No one knows what is going on. But we are going to see almost certainly the government lose the votes, between five and 10 votes. Yes, it lost its overall majority. This is well known, well one mp said he was going to switch to the social democrats. What is going to happen is the government will be more aggressive and take the win away from the socalled rebel tory includingve mps, Winston Churchills<\/a> grandson. This is the tactics the government uses, quite aggressive, expects a vote tonight. It will probably lose the bill vote tomorrow as well, and then it will almost certainly introduce its own bill to try and call for an election probably on october the 15th now. Bait may not be taken by Opposition Leader<\/a> Jeremy Corbyn<\/a>, but it is a changing dynamic because Jeremy Corbyn<\/a> and hard left supporters probably do want an election, but the vast majority of the main labor mps dont. Fro tooing to be too and decide whether they want to hold Boris Johnson<\/a> to the threemonth suspension. Romaine give us a sense of how the market responded. It seems initially there was a pricing in for this idea of a no deal brexit, right . Absolutely. You saw the pound break below 120 for the First Time Since<\/a> 2017 after johnson said he would call the snap election. Thats when you saw fears of a no deal brexit intensify. That is the markets worst nightmare. News that he lost his governments ruling majority sent the pound act up to 121, reducing the odds of a no deal brexit. Anything that takes us away from that possibility is going to be good news for the pound. Joe you heard about the pound orest on the weakening of johnsons position. It reminds me of when a ceo steps down from a company and the stock goes up and igo, the market must really not like that ceo. Is the market in your view that negative on Boris Johnson<\/a> unleased, and appreciates the fact when he is constrained a bit . Think theactually reason the Sterling Rose<\/a> was that loss of majority, very well flagged end, and it happened several hours after Sterling Rose<\/a>. Sterling rose right when new belowame in, seeing it 120 and thinking this is a a bargain, but there are some strange things going on. This is a no deal brexit rising equals pound down. But there are strange things going around, there are low levels here, this 120, 122 area where we have had sharp training and they range of one point and a half where we were close to inverting, which doesnt make much sense if the government is he in as much confusion as you have. I wouldnt read much into sterling right now, but tomorrow is just as big a day if not a bigger day, it could go anywhere. I would agree with marcus. Tomorrow is a huge day. If you look at overnight volatility in the pound, it spiked to its highest in april. People anticipate the votes to deliver a bit of turbulence. Tonight johnson is expected to lose. The focus is really on tomorrow. The what do people says potential downside for the pound . Talking to analysts, it is hard to find an optimistic voice. It is all gloom. Morgan stanley said their best cases that i snap election is called and they see the pound at about 115 in that scenario, shocking because the level everyone is watching his 118 41, the 2016 low. If we break below that we would be at the lowest level since 1980. There are bit calls floating on it is hard to find an optimist. Marcus, talk about constitutional issues. Some say this amounts to a constitutional crisis. No matter how these votes shake out over the next few weeks, do that the british constitution is still being honored . Sides have stretched it as far as it can go. I dont think the government did a smart thing by suspending parliament. I think the reaction to that was overblown. Acted in a has certain way by allowing this bill to even be started. The reality is that the british political system is working and in some ways is dreamily efficient, but we are airing a debate and having a clear expression of deliver of differing views. The question now is, if Boris Johnson<\/a> does not get a chance to call a general election tomorrow when he loses the second of these votes, and heavy doesnt get that passed, and he has pushed for a general election the whole time, then maybe the conservative party will have to do something quite strong on the constitution. That will be to essentially ignore what parliament is saying and call up an election, entering into different territory. Romaine thanks to Marcus Ashworth<\/a> and catherine here in new york. Coming up, stocks and the day in the red as investors worried the u. S. And china are further apart on trade than earlier thought. The next step in those negotiations, with a former acting u. S. Deputy trade representative, wendy cut worth. Thats next. This is bloomberg. On tysonbreaking news foods, meat producer, or lowering guidance for a full year, 530 to 570 the new range. It had been saying 575 to 610. The company says these are short term challenges including margin compression, issues on green derivatives, commodity market volatility. This ceo is scheduled to present tomorrow at an investment conference. Joe u. S. Stocks lower as trade talks between the u. S. And china hit a stumbling block. The s p 500 index dropping for the first time in four sessions today, officials in washington and beijing struggling to even agree on a scheduled for talks to resume. China is supposed to send a delegation to the u. S. This month but no date is set. We are joined by wendy cutler, former acting trade representative and former acting president of the asian trade society institute. They cant even agree on a date to restart the talks . Wendy this underscores how difficult these negotiations have become, when you need to negotiate about how and when and the terms you are going to hold the negotiations. You are not in a good place. Romaine a lot of folks are looking ahead to the apex summit and this idea that when you get a room,d xi together in that will work things out. You are a former trade representative. When you talk about getting these deals done, is that done at the highlevel, with someone like the president s of the nations, or is it more folks on your level . And where is the discussion . Experience has shown these meetings between leaders present an important actionforcing event, but for them to really be successful, these meetings need to be preceded with substantive negotiations between the upotiating teams, who tee the issues for agreement by the leaders. That is why it is so important for negotiators to meet and talk about substance, if indeed we have any chance of a possible aipac meeting between xi and trump leading to success. Analyst at b of a came out and said, dont over think this, it is an election in your an Election Year<\/a> next year, trump will find a way to get a win in an Election Year<\/a>, and anything else is too smart. Do you think everyone reads these headlines that they cant even agree, and then it is an Election Year<\/a> type cleaning it up and making it happen . Wendy i think everyone is overthinking this. But you could also argue, what is a win . Is a window agreement with china , some in the administration and in town think yes, that would be a win. That is unclear. I am in the camp that a negotiated settlement this possible. I have not ruled out. But with every passing day as and and as we put in place new tariffs that are matched by china, it just becomes increasingly difficult to undo these actions and get back to where we were last may, when things look like they were headed in the right direction. Romaine with both sides digging in their heels for a variety of reasons, if you are in the room, what sort of concession gets made on the u. S. Side or chinese side that could intentionally get a handshake agreement . Need the first thing we our goodwill gestures on behalf of washington and beijing. For example, putting off the next tariff increase of october 1 by the united states. For china, perhaps announcing a big soybean purchase, or taking back their promise to increase tariffs on automobiles. There are a bunch of things both governments can do to show goodwill. If one were to do that, hopefully it would be matched by the other side and that could enor fora positive t an actual negotiating settlement negotiation actual negotiating session. But a lot of us expected that after the g7 meeting. Scarlet w y think it does joe what you think iinty . Wendy the globaly e tariffs img countries around the world, but it is all the uncertainty and all the unpredictability associated with this trade dispute. It is having repercussion and consequences that we cant even measure. Wendye our thanks to cutler, former acting deputy u. S. Trade representative joining us from washington. Rejectionsafter many from the sec, a company may have found its work around for a retail etf. How the companies did it. This is bloomberg. Lets get the first word. An island in the bahamas home to 50,000 people is 70 underwater after Hurricane Dorian<\/a> battered it for two days. Government Officials Say<\/a> many people are trapped in their homes and need to be rescued. Others braved the floodwaters and swam to safety. Dorian has weakened, but still packing winds of 110 Miles Per Hour<\/a>. The United Nations<\/a> says 60,000 people in the bahamas will need food after Hurricane Dorian<\/a>. The red cross says they may face trouble finding clean drinking water. Officials say about 45 of the homes on grand bahama island and a neighboring island were severely damaged or destroyed by the hurricane. In southern california, the search for survivors is over. Officials say 34 people are presumed dead after a dive boat fire. 20 bodies have been recovered. The fire broke out early monday off santa cruz island. Crew members escaped by jumping into an inflatable raft. The cause is under investigation. British Prime Minister<\/a> Boris Johnson<\/a> suffered key defections from his party today, losing a working majority in parliament and weakening his decision as you tried to prevent lawmakers from blocking his brexit plan. Lawmakers return from summer recess to confront johnson over his insistence that the u. K. Leave the European Union<\/a> on october 31 even without an agreement. The speaker of the house ruled that lawmakers opposed to johnsons plan could try to seize control of parliaments agenda, clearing way for a vote tonight could give the rebels more power to set the agenda. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im renita young and this is bloomberg. Finding a regulatory workaround, van eck and solid acts today announced that the Bitcoin Trust<\/a> will issue shares to qualified institutional buyers. , headg us now is ed lopez of etf product at van eck. You along with several other companies have been pushing the idea of bitcoin etf for a while. The sec has never been persuaded. They have ejections, including transparency of the underlying market. You are launching an etflike product without the secs blessing, so explain how it will work and why you believe it is legally kosher. This is taking advantage of rule 141a of the securities 1933 allowed forasically Restricted Securities<\/a> to be traded broker to broker. We are taking advantage of that opportunity to offer shares of the trust to qualified institutional buyers. These are the largest of the large institutional buyers, not just accredited investors. Romaine when the institutional buyers have this, is there some secondorder effect, or the transaction has to be limited and it stops when it gets to that institution . One of the reasons it is likened to an etf, because it has the openend creation and redemption ability like an etf. It will be quoted on otc links, overthecounter market, so there will be a secondary market. It could look like an etf in that form as well. Joe does the grayscale Bitcoin Trust<\/a>, kind of similar . That is also an Exchange Traded<\/a> bitcoin product that is otc. That trades overthecounter as well, open to private placements on a periodic basis, but that is where qualified or certain High Net Worth<\/a> investors. This is for qualified institutional buyers. It will trade openly in the secondary market, daytoday liquidity, and there is the openend creation and redemption facility, which should allow the market to trade closer than that. Gbt often trades with a this should be much tighter . It should be over time. Joe on the retail side, have you completely given up on that . Why do you think it has taken so long . Sec hasnk the legitimate concerns about transparency, underlying markets. I think the industry has made a lot of effort and has progressed quite a bit in addressing those products. Our market also addresses those issues. But we havent abandoned this is a parallel path, we have been working on this for quite a while. I wouldnt look at it as a workaround, but a step forward. Joe lets talk about the demand for this product. If you talk to crypto people, they are always like, institutional money is coming. That was the mantra at the end of 2017, through 2018. There are more custodial solutions that would theoretically allow institutional money. How much of a market gap do you think this product will address in terms of money thats theoretically on the sidelines, not in bitcoin, that would be with the right product . We believe this could be a game changer for institutions. There has not been an institutional quality vehicle for bitcoin access. Bitcoin does not have traditional Custody Solutions<\/a> yet and it forces institutions to open up accounts on different otc platforms. What this does is bring all of that into one security that they can trade on theres additional brokerage form, use the same trading and clearance processes they are used to with any other security. Romaine what type of security or assurance does this provide to make sure folks have some sort of confidence . Thats one of the main aspects of this product, is storage. The trust is using best practices in terms of bitcoin storage, plus insurance. One of the key features of the trust is insurance from a syndicate of arated raters. Joe do you see yourself doing more coins down the road . Potentially. I think this structure provides a framework for more institutional level product. Joe going back to the pure retail one, that track continues. How far do you think the gap is between what the sec wants to see in terms of the development of the market, transparency, and what you and other companies are trying to offer this product have right now . Do you believe that is getting narrowed . It is getting narrowed. There are avenues with which to price bitcoin in a more consistent way. The Custody Solutions<\/a> are developing and i think in the coming year, we will see more viable Custody Solutions<\/a> that will be an option for a retail product. Ed thank you very much, lopez, head of etf product at van eck. Coming up, as the selloff in argentina continues, we will talk to an emerging Market Strategist<\/a> about possible containment risk to the broader em space and where they see opportunities. Joe time for a look at stories trending across the bloomberg universe. Goldman sachs has named mark mack men cohead of the trading division. A 25 year veteran of the of thed has been head Investment Banking<\/a> business since 2017. Chavez was moved to a training row last year as part of the executive shuffle. Bloomberg. Com has a story on the american dream, set to open after 16 years west of manhattan. Built in newl jersey, which hosts some of the most congested highways, former landfills, and commuter downs. Even with an expected 40 million visitors, there are no plans to build new train services. Tictoc on twitter is reporting that the netherlands is home to the Worlds Largest<\/a> bicycle park , more than 12,500 bicycles and even has its own oneway traffic system. The speed limit, only 10 Miles Per Hour<\/a> and it is funded by the local government as well as a railway company. There are now more bicycles than people in the netherlands with almost every household owning at least one. You can follow those stories on your terminal, bloomberg. Com, and at tictoc on twitter. Joe argentinas president imposing capital controls and a blunt policy aimed at containing the countries escalating financial crisis. The announcement coming as a selloff in the countrys bonds leading to vulture funds bedding there is money to be made in the short term. I want to bring in lale akoner. Thank you for joining us. Where to start with argentina . Are we getting to the point where for daring investors, the risk reward may be favorable for some bonds trading at . 40 on the dollar . Too messy and better to avoid . What we want to say is wait and see. What we are worried about, if there will be any spillover effects to the rest of the emerging markets. We see argentina as separate from the rest of the emerging markets as we dont see a spillover threat to emerging markets. Romaine if there is no spillover risk, why do you think the reaction we have been seeing in the peso and some other currencies . Are there broader macro concerns . Markets are very fragile because of the u. S. China trade war and we Global Growth<\/a> outlook. All, the market is very fragile and any sort of perception of risk makes it very nervous. Joe big picture, beyond argentina, et cetera, weakening data out of china, taiwan, south today. Of course u. S. Ism is there any good news out there for em . I think good news these days comes from the u. S. We think the u. S. Consumer is still very resilient. Sentiment is still very strong. There is no sign right now that whatever is going on in the world in terms of a recession has not hit the u. S. Shores as well. Joe you guys had a note saying you dont expect a resolution to the trade war until 2021, which seems far off because most people say, we are in an Election Year<\/a> in the u. S. , trump will want to get something done by election day or prior to that. Can the economy whether a trade war that extends another two years . The trade war will depend on three things. The first one is the perception of the u. S. Consumer to absorb additional tariffs, how the China Economy<\/a> will be able to export these tariffs, and also the Election Campaign<\/a> by the u. S. Administration. These are the three factors we are monitoring closely. Joe what do you look for in terms of when a em is sufficiently beatendown to be worth buying . What do you want to see . , we aremerging markets in an interesting environment. On the one hand, there is global easing Monetary Policy<\/a> cycle going on, which historically has always been positive for emerging markets. On the other hand, something we did not expect two years before, the u. S. China trade war. What we think is it is time to be when we talk about emerging markets, but that is global Monetary Policy<\/a>. Can selectively take on risk romaine ago, you had some saying this wasade of d we have reached the bottom with particular currencies and d ebt. What are you looking for where you can call that bottom . Everyone things we will rebound, it is just a matter of the timing, and that is the real detail. The timing depends on which country we are talking about. There are countries we have been very positive about, those countries such as indonesia, india. Right now brazil and mexico look like they are more immune to the tariff war the u. S. And china. These are the countries we think are offering opportunities right now. Romaine what about european em . We are not so optimistic about because their economies are tied to the european economy and as you know, there is a concern that germany might go into technical recession and the emerging markets are dependent on that. Joe i want your take on the big picture conversation. Really kicked off in jackson hole about the role of the u. S. Dollar and the problems that poses. You get a tightening cycle like 2018, not what ems needed. s forced to hoard dollars in the good times. I am notoverall and talking about a trade, but to thrive sustainably does the world need to be moving more towards something not so dollardependent, at the whims of u. S. Monetary policy . Absolutely. What we see now is the u. S. Dollar strengthening. We see the u. S. Dollar will be finishing the year stable with a very minor strengthening bias so long as this holds, so long as the u. S. Dollar doesnt strengthen a lot, we think emerging markets will be able to perform well at the end of the year. If the u. S. Dollar gets more strong, i think that will put pressure on the emerging markets currency. Romaine earlier you mentioned the idea that Central Bank Policy<\/a> around the world would be accommodative, but then you have the fed, the elephant in the room. If the fed were to get more aggressive, rather than these cuts two months apart, and they really went hard, do you think fedould sustain that if the cut 25 basis points all at once . On theink it depends reason the fed will go to that path. If it is a concern of a global recession, i think emerging markets would suffer. If it is more like insurance cuts, we would see emerging markets would take it as more optimistic. Romaine thanks for joining us, lale akoner, emerging markets strategist. Lets get a check of the latest business flash headlines. Walmart says it is going to discontinue the sale of handgun and short barrel rifle ammunition. It is asking customers to refrain from open carrying inside the store, even when state law allows it. The announcement comes after a mass shooting claim seven lives in odessa and follows two backtoback shootings last month, one at a walmart. Saudi aramco aims at underwriters for its ipo as soon as this week. Global investment banks are finishing up a week of pitches to the stateowned energy giant. The ipo is expected to be the biggest ever. That is your business flash update. Joe coming up, back to this. The road to brexit is getting bumpier as a snap election could be on the horizon. This is bloomberg. Joe we have been keeping and i on brexit and the u. K. We know that Boris Johnson<\/a> the u. K. Prime minister, lost his governments ruling majority, pushing the possibility of a snap election further on. Headlines moving right now. s are beginning a vote on a brexit motion in parliament, a vote expected this evening u. K. Time, which is to determine the path forward for what johnson is trying to do. There is going to be separate motions scheduled for tomorrow on wednesday in the u. K. That will potentially allay a path for johnsons vision. The mp motion they are voting on tonight could potentially block the plan johnson has been trying to put forward. Joe the theory is we were talking about this with marcus and katie if johnson loses todays vote, the threat is that he would call an early election in october. The possibility is because he would be expected to win, maybe labour romaine a good point from bloomberg opinion. Johnson likes to roll the dice, but this could be a gamble he could lose. There is also a concern if he does lose, that would allow the labour party potentially to us and, then you get Jeremy Corbyn<\/a> leadership and some folks are not enamored with that. Joe it is also possible obviously i think labour would like another election, but it is possible they dont allow him to call that election. Romaine the reaction we saw today in markets, when you saw the initial selloff in the pound and when it became clear Boris Johnson<\/a> was going to lose that majority and you had the factor from the tory party joe so dramatic with the defector from the tory party, that moving markets in itself. Romaine it gives you a sense of how much the markets and businesses i dont want to say they want to stay in the eu, but i think they want more clarity about whats going to happen if you get a new deal brexit. Months where you have this uncertainty, something we talk a lot about. Additioneal brexit, in to lack of rules for businesses, a pretty serious question, basic stuff about things like medicine. Pretty in our mess potential ramifications depending on how it goes down. Romaine mark carney is supposed to testify before a committee i believe on wednesday, where he is going to face questions about that. There are contingency lands that have been floating around about how the government is going to deal with it. We do have someone on the phone who probably knows more about this. Emma Ross Thompson<\/a> with Bloomberg Joining<\/a> us on the phone. Can you give us an idea on whats happening right now in parliament . And theey are voting rebels are trying to seize control of the parliamentary agenda from the government. The rebels have been told it is a matter of confidence and they have been threatened with essentially losing their membership. Be we have a few dramatic days, but we could be heading towards an election. Against the goes government, Boris Johnson<\/a> would on to go through an election october 13. There is still a question whether he would be able to get through parliament the attempt to call an election because of the way the rules work here. He would bring his two thirds majority to get that through. It is not clear the labour party would back his call unless they have managed unless they are sure they have managed to take the no deal brexit off the table. The prospect of no deal for the economy is pretty dramatic and many in the labour party, that is their priority to prevent that happening. Joe go back to the question of whether he might not even be able to get a new election if he called for one. How does it work . ,f he calls for a new election does it need to pass a majority of parliament . Emma it would need two thirds majority, and thats why its a question mark. You would expect the labour party to say, yes, please, we would like an election, we would like to govern. But there is not yet a clear picture that the labour party would definitely win an october 14 election, because they are worried that would not necessarily avoid no deal. Imagine you go to an election on october 14, imagine the conservatives win with or without help from the brexit party. Whether they would win is a massive question, but if they did, you could end up with a no deal. Talk about the potential cooperation or lack of they might give. We have headlines with the irish finance minister, saying they have no doubt about the irish backstop. Can you give us some sense as to whether we could see ireland given on this at all . Emma it is interesting. The u. K. Hasnning, thought that ireland would given. Ireland has received unconditional support from the eu side. The eu, reporting out of brussels today, eu officials reckon that no deal is the most likely option. Ireland and the eu have backed themselves into a corner by really to favor the country thats leaving over the country thats staying would send a poor message about the value of eu membership. It is true that the irish after the u. K. , the irish have the most to lose from a no deal brexit. The position of the eu is pretty solid. Joe i have a really ignorant question, and i am sorry to ask. I thought the Prime Minister<\/a> had suspended parliament and that was this huge controversy, so how are they voting . Indeed iament is parliament is of further down the line. Romaine lets talk about some of the contingency plans. We know we had this document, operation yellow hammer, to prepare for the worst case scenario. Can you give us an idea of what that document lays out . Whats the plan here . Emma we were talking about earlier, pharmaceuticals, health. There is so much of the uks crucial imports, things like food, drugs, all come through dover, that port. 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