crime. >> we must keep our country and every single community safe. not one neighborhood, not one block, not one streetcorner can be lost. >> the 12 cities are birmingham alabama, minneapolis, indiana, memphis tennessee, baton rouge louisiana, buffalo new york, cincinnati, houston, texas, kansas city, missouri, and springfield illinois. the u.s. treasury secretary steven mnuchin says the trump administration will not be economic with 2% growth. that is lawmakers continue negotiations behind closed doors on tax reform. mnuchin spoke with david gura in washington.

>> think we are pretty consistent in saying we are working every week really closely with the house and the senate. plan.ave a joint when they release the combined plan it is going to get past, it is going to get passed by the house and the senate. it is our focus to get that done this year. it is critical to the economy. administration is committed to unlocking the economic capital needed to create jobs, improve wages, and getting growth above 3%. it is a sign of the trump family's growing influence over foreign affairs. according to people familiar with the matter china has invited ivanka trump and her husband, white house adviser jared kushner, for a visit later this year. prepare for ahelp visit by president trump himself.

protecting financial services at the heart of his plan for brexit. mention howl speech, he says breaking up financial services, such as derivatives and lending would hurt both the u.k. and eu. controllingom -- that is the latest from bloomberg. i am mark crumpton. julia: i'm julia. scott of thing i'm scarlet fu. joe: i'm joe weisenthal. giving u.s. stocks retreating from all-time highs. joe: what you miss?

's got a thing we will look at three charts that will give you serious pause. announce itswill decision on whether to include chinese mainland stocks. we will bring you that right to live. maybrexit negotiations amend the attention of the euro elite but greece is still in a painful bailout. we will speak with that country's economy minister during the sour. -- during this hour. toward the close. abigail doolittle is standing by. abigail bank -- abigail: we are looking at major declines heading into the close. a bit of a flip-flop earlier. the dow did put in an all-time high. nasdaq about 2/10 of 1% down. all of these averages are near session lows. it is worth noting for the s&p 500, only two of 11 sectors are higher. let's look at the best, health

care, that is s&p 500 health index, putting in an all-time high, rising for a third day in a row. being helpedeld -- out by biotech and pharmaceutical sector. the hospital, the bloomberg hospital index. this come a bloomberg intelligence analyst told our team earlier, he thinks it is a senate republican health care bill. we did have sent majority leader mitch mcconnell, this afternoon saying we should discuss a draft on the build thursday. turning to what is really dragging on the market, energy. four out of the last five days. scarlet was mentioning a bear market. the dollar is trading higher, putting some pressure there. there is the worst sector for the s&p 500. it is dragging on the emerging markets. down 1.5%. they are sensitive to commodities.

if we hop into the bloomberg quickly we will see this is an exception, this is a year to date chart. up about 9% on the year. the emerging market etf. up 17% and very interesting the big split happens to be around the first version of the health care bill in the house. just a: siddons they are perhaps but nonetheless an emerging market on the year is outperforming u.s. stocks in a big way. scarlet: thank you for that set up. we are going to stay with emerging markets. argentina has made quite the come back on international markets after spending 75 years of its 200 years in existence in default. the government sold 2.7 $5 billion of 100 year bonds. what is that signal about global emerging-market assets? marketsead of emerging

strategy, when as abigail is just showing us there was a lot of money and attention going to emerging-market stocks. influencers are certainly high and spreads are very low. conditions are ideal for argentina to solve this kind of death. what are the risks? .- this kind of debt what are the risks? guest: the risk of complacency. we are in a low volatility global backdrop right now. pushing money out into markets. buyer it is tough. what could possibly go wrong? >> 100 years, that is pretty extraordinary bond maturing in the year 217. probably none of us are going to be allies unless there's some sort of medical breakthrough. story or aargentina global appetite for yield story?

>> argentina has come back very strong. has had decades of economic mismanagement and bad policymaking. it's a great story. obviously what markets and investors are forgetting are when you go out your taken on extra risk. i'm an old timer. plentifulen this global liquidity. something happens, whether it is a shock of some sort. shrink.d to >> 8% yields where it comes in. in the heyday in the 90's, we talk about double digits, 12%, 14%.

to back our expectation on a fair yield. sort of the bad byproducts of this qe. zero interest rates in the u.s. and ecb. very -- rd is we have to be aware of it. what the fed is doing with the fed raising interest rates. of some at the behavior of these emerging markets and even in that kind of environment , feel free to lower interest rates. it would be an ultimate no-no. rising interest rates in the fed. massive to emerging markets. >> the rest of the world is still pumping out liquidity. the ecb is doing qe.

the fed is withdrawing stimulus. in general countries compete for capital. reward. risk right now liquidity is plentiful that we don't have to worry about malaysia having to get more capital in. we are talking about ecb removing qe next year. we are reaching an inflection point. i don't know when that tipping point is but i'm pretty confident it is out there. >> there is a huge distinction between removing accommodation and actively tightening as well. i want to talk about that liquidity because every but he is keeping and i on this afternoon. theave been focusing on

return of mainland or the chinese stocks. i want to mention argentina before we get there. could return to emerging-market status as well. if you look at the positioning of emerging markets, you can see that short interest has been going up in this etf. there is this tendency to pile in before the announcement and selloff when you get the news. kindabout long-term what of demand that would mean for argentinian assets overall, whether it is currency or response. >> he has basically gotten pushed down in the front here in the first place. ifould be very surprised that is not emerging tonight. it is sort of part and parcel the chicken ndx.

to me they are going in because of the mst. undertaking the performance that needs to be done to put the economy back on track. the 1930's, one of the top five, top 10 global economies. back on the path. i hope the rest of -- china duet 4:30 this evening. what would be the significance if finally china gets the nod on this? guest: what they have proposed would be a 0.5% increase. they kind of dialed it back. increased by five

percentage points. it is not a huge amount. it would be a net knowledge meant the china continues to move -- china continues to open up its market. it is almost 50-50 because there are three different areas not fully addressed. >> some suspense on the show. >> global head of emerging-market and strategy. julia: coming up, what is next for the greek economy. we will talk to the greek economy minister about the biggest headwinds and where he sees opportunity for redemption. from new york this is bloomberg.

julia: greece will need additional debt relief to gain

the trust of investors, even though it exited a lot with a $10 billion cash offer. that according to the european commission and a roth support -- roth report obtained by bloomberg. greece's economy minister joins us now in an exclusive interview from washington. thank you so much for joining us. the european commission still saying the country needs debt relief. your government saying this has been crucial for the economy to see some kind of turning point and really accelerate. itmust be frustrating that is not going to happen in terms of discussions until next year. guest: we just completed the and what isw, decided is certain opportunities for greece. it provides a roadmap to fiscal balances. .t provides debt relief

it provides a plan for investment and support for accessing the markets. i think we are looking to greece for a road to recovery. results, wearter will see all the trends are positive starting with the industrial production. the exports have been dramatically increased for the first three months of the year. on theall i think we are road to recovery. the imf and the government which givenund 2%, most likely context in the u.s. and other people who are very much interested look like it's

achievable and we would be there. >> how important is it that to thegets access european central banks asset purchase program? do you believe that is essential for investors or will they invest in greece without it. is morenk the access symbolic in nature them actual credit. limited to how much credit we can get through a qe program. it's a decision done by an independent institution. i believe based on the expression of interest i have seen, greece will be able to access the markets, even without -- >> with the election of emmanuel macron and france there has been about europeism

continuing along reforms, perhaps down the road some shared the school responsibility. about thestic are you eurozone in terms of resuming that path forward? are veryk the voices welcome. the eurozone has some difficulties facing it. what macron is suggesting and what others will probably continue to suggest is something for the improvement of the architecture of the eurozone. now than iptimistic was before without the election of mr. macron. this depends on the elections of germany. i think there is a realization that things have to change. even indicated we need to have our own european imf. so we do our own things about

of solutionsnce that we perhaps do not know as much about the eurozone. >> you mentioned greece should be able to access the capital markets without qe. when do you think greece may be of of go back to the capital markets with a bond issue? >> the expectation is by the end of the year, the end of this year the beginning of next, as you see the spread is dropping dramatically. as well as the 10 year bond. it depends where we are after the program begins. the second-quarter growth rates because of tourism and other activities that take place. i believe at the end of the year we will be ready to go in the markets.

given their support from the european union in terms of the cushion, i think we will be ready to do that then. julia: critics at this stage say the government pushes it right to the last moment to enact the kind of reforms like tension, like labor reform. there still seems to be an element of distrust in your administration. does that frustrate you? >> this government has found so many structural reforms. the fast and exceedingly large number of reforms. there are only 24 remaining. i think the proof is in the pudding.

i believe the realization will come that greece is normal. >> greek economy minister, thank you very much. the bloombergr business flash, a look at the biggest business stories in the news right now. ford has scrapped plans to build a small car in mexico, opting to import vehicles from china instead it that starts at the second half of 2019 and will face $1 billion. the odd makers investing $9 million in upgrading its kentucky truck plant to build and navigators. the move secured 1000 jobs at the louisville plant. the winning streak has come to an end. the investment firm hosted a 33% drop in bond trading revenue, fixed revenue fell to roughly $158 million with total trading declining 7%.

big -- s conclude how if the billionaire steps down next year as chairman of pk hutchinson holdings -- the empire includes telecom, retail and poor businesses. the wall street journal faced the elderly sat down by july when he turns 90. 32 point $5 billion, second only to jack ma. that is your bloomberg business flash. scarlet: for a little more context, this is rich go on the bloomberg. and number 22 globally you get a snapshot overall, including his nickname superman for his business acumen. the fact he is number one ranked in hong kong.

when you look at net worth uplysis, tk hutchison makes almost half of his net wealth. then you have this purple slice here, property development also a big source of his wealth. rich go on the bloomberg. next, crude's leading to a 10 month low entering a bear market, more concern the global glut will -- this is bloomberg.

joe: i'm looking at a technical chart i saw from mark rant at hilltop security. you can see breaking this green channel, some moving averages. oil just over 20% down from a high. so much opium is

pumped right now. this is the four-week trailing average, which smooths out numbers. earlier this month the buildup forhed 1 -- reached a high 2017. it's really true that opec cuts are not having much of an impact. julia: i tracked a chart at the high-yield energy index. the you remember when everyone was concerned about the exposure of the debt within the energy sector, some of the smaller names in the shale players. i tracked back when oil was down around 43 dollars per barrel, and look at where the high-yield energy spread is at. what this shows is that wereyield energy spreads 250 basis points whiter when oil was left at these levels. scarlet: complacency seems to be a common theme. the market closes next.

that close is next. the dow and s&p retreat from the record highs. from new york, this is bloomberg. ♪

♪ julia: "what'd you miss?"

u.s. stocks dropping as oil slides into a bear market. fed officials continue their rhetoric. i am julia chatterley. scarlet: i am scarlet fu. joe: i am joe weisenthal. if you are tuning in live to twitter, we want to welcome you to our closing bell coverage. scarlet: we begin with market minutes. the dow and s&p retreating, pulling back from record highs made yesterday. offaq, the lead reporter, to the downside 0.8 percent. alas is intensifying its trading came to a close, with indexes finishing at session lows. in terms of industry groups, we have been talking about the drop off in oil prices 10 minutes ago. energy stocks among the big decliners, off by 1.2%. four industry groups losing more than 1%.

a sizable move after a period where many did not move much. joe: especially around securities. scarlet: discretionary contains retailers. amazon announces it will enter the subscription business with retail apparel. that is of concern to retailers. rig off of individual, by the most -- the lowest since almost 1995. the drop today, 2.4% in tandem with falling oil prices. at the lowest level since 1995. comcast has its worst day since february of 2016. craig moffett said cable shall rally.es had a recent the market no longer views cable operators as contrarian investments. chipotle losing more than 7%.

higher advertising and cybersecurity costs eating into its margins. a company that is still struggling to get back on track from its food disease outbreak. 's biggest gain in a month, up more than 5% after a rival that competes with its did less wellver, than expected in a trial. joe: government bond market yields lower today, sitting with the risk off sentiment. 2.16%. a bit of flattening in the curve. which brings us to a bigger term perspective. here is a chart of the 5-30 spread. i'm not suretoday, where closed, but the lowest level since late 2007. you go really far out on the curve and see an incredible

amount of flattening. incredible chart. julia: it is. the losses we are seeing an basis points, not impacting the dollar, rising a second day. the pound helping that rally. a post-u.k. election low. there was a survey on how they thought brexit would play out. --turous, drawn out in negotiations with delays. that is the likely scenario. bit bank ofm england governor saying it is too late to setback trade policy, even with the concern of inflation, given the outlook for brexit. i want to take a look at the commodity area. defensively, in light of what we are seeing in oil. some of the steepest losses for the ruble. joe: speaking of those commodities, let's take a look at oil and gold. we talk about oil entering the

down 2%.et, below $43 a barrel at one point. here is the chart, it is really ugly. rising supply out of libya, the u.s. it is taken the wind out of the sails of that opec cut story. everyone is focusing on the supply side of the picture. good if you were a driver, but not an oil producer. julia: "what'd you miss?" senate republicans may be asked to vote on health care reform next week. many have not seen the bill despite mitch mcconnell's comments earlier today. >> i expect to have a discussion draft on thursday. we will go to the bill once we get a cbo score. julia: let's bring in a bloomberg reporter from capitol hill. all of the secrecy surrounding this bill has literally enraged the democrats.

but many of the republicans have not seen it, either. how can we vote on this next week? >> we are seeing rand paul, who took a copy to the house side, when that bill was written behind closed doors and now saying the same thing. many are complaining about the process. the chair of the finance committee should've seen this bill said, i have not seen it yet. the question is, how can you vote on a bill if you do not know what is in it, what objections you will have to it? that is the question mitch mcconnell has played. we have to vote on this before the joint recess, or do we wait and worry about senators going home, coming back, finding out that americans know what is in the bill, they are not happy about it? joe: let's talk politics, a big vote happening in georgia. explain what we should watch for and how does the result tonight impact legislative tasks going

forward? arit: it will be a close, close contest. pulled show it is within the margin of error. george is a state that takes a while to get votes in, so it will be a late night. in terms of what this election means, it is not going to change the control of the house. and youre a republican see jon ossoff win or come closer than it should, you will ask yourself, what happens if a well-funded democrat runs against me next november? well i have to fund raise more, work harder, watch what bills i am voting for, should i retired? those are the questions we will be looking at in the next few months. if jon ossoff wins, how will congressional republicans in an endangered district acted next month? julia: the republicans have held this district for 40 years, haven't they?

realis going to be a message that voters send to the administration and to donald trump if they decide to swing this to the democrats. it hasretty critical and become the most expensive house campaign in history. arit: by far. the previous record holder was the 2012 race in florida. you are right, this is the launch band for speaker -- former speaker newt gingrich. it is a message to say, democrats are so enraged with trump that they donated millions and millions of dollars to an unknown a 30 rolled former congressional aide -- 30-year-old former congressional aide to tell the president we are not happy with how things are going so far. john, a quick point i want to make. republican john mccain was asked whether he saw the bill, he said, no. nor have i made -- met any

american who has. i bet the russians have hacked in and seen that. scarlet: a bit facetious from senator mccain. dolby reporting $ earnings of1.02, beating the highest estimate from our analyst. 1.02 compared with a consensus basis of $.95. revenue higher than expected, 1.73. billion joe: if you have a bloomberg terminal, be sure to check out dayb . you can watch live or previous episodes. here is us from earlier doing our oil round where we talked about oil charts really fast. even click on charts to see yield energy debt and all that stuff julia showed. it is the best way to watch tv,

really dive right into it. you can even emails suggestions or complaints. this is bloomberg. ♪

>> i am mark crumpton, it is time for first word news. reporting aa are person wearing an explosive belt and backpack has been shot and neutralized at a police station in the city. you are looking at a live shot of brussels. the shooting followed an incident where people reported explosive sounds. the belgian prime minister charles michel's spokesperson says he is monitoring it closely. it is too early to say whether it is a terrorist incident. president trump met with

ukrainian president in the oval office today. the talks of the first between the two leaders, taking place two leadersen the taking place before a meeting with president putin. was confident ukraine is a success story. house speaker paul ryan said a tax overhaul plan must happen this year to rebuild u.s. confidence and get the economy growing more robustly, giving his first major speech on tax reform this afternoon at an event for the national association of manufacturers in washington, the speaker was confident about the timeline for tax reform. we willere to tell you, get this done in 2017. ryan also argued for a tax overhaul that is permanent and does more than simply cut rates.

angela merkellor vowing to seek a wider agreement on trade at next weeks g20 summit. she told business leaders she will not give up on a free-trade deal between europe and the united states. inco will host leaders hamburg next month amid widespread concern over the trump administration's america first approach to trade. former u.k. business secretary -- he wantssays he -- he has perhaps highest program -- profile against liberal democrats in the house of commons. the party made gains in areas that support staying in the european union. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton, this is bloomberg. joe: "what'd you miss?"

the u.s. is in the midst of two extraordinary expansions, the bull market and economic recovery are among the longest on record. what ultimately could bring them down? here to give perspectives on what the market and economy is doing our columnists. thanks to both of you for joining us. you both recently wrote about what could bring these good times to an end, from a different perspective. couldistorically, what bring the bull market and equities to a close? >> it is typically twofold. one would be we would see a recession, that is pretty simple. the other, the fed is too tight with monetary policy. those two things are intertwined. if you look at every recession since world war ii, fed hikes, the difficult thing when you try

to handicap these things is that the fed is coming from a 0% interest rate. there is no precedent to what is going to be too high or too low. that is what makes it challenging right now. joe: connor am a from an economic perspective, how do expansions and and how similar are the factors to what been described when you're talking about the end of the bull market? >> typically over the last four cycles, unemployment lower than 4%, you see oil spike before the rig -- the recession. drove theat recession. we see oil in a bear market and interest rates low, neither factor seems to be going on. joe: i am curious,conor mentioning oil -- i am curious, conor mentioning oil. what is the relationship

between oil and equities mean these days? ben: the big thing is, why are the oil prices rising? if we have higher inflation, that could take the equities market down. not many people are preparing for that these days. forof the worst periods 1992.managers was 1986 to stocks were still up 7% nominally, inflation took away the entire return and that period. if oil prices are rising from higher inflation, that could be a key risk to the market. joe: conor, what is your read on inflation? we have talked for a long time about generalized inflation or raise -- wage inflation. it tends to disappoint on headline numbers. do people need to change their

models or is it a matter of getting the time wrong? conor: we are seeing it on the unemployment rate. we have not seen it, or there are mixed views on wage growth. after that would be inflation. the next phase of the higher wage growth and lower profit margins. if we see that pressure, it would give the impetus to corporations to raise prices. i think we are two steps away from that kind of inflations. this is again one of these stories people have been concerned about for a while. years ago, i wrote about whether we would see peak margins. it has not panned out. is that a threat to stocks, or margins in themselves not a story, not really a determinant? conor: if you are expecting margins to go to 1940's and 1950's level, you'll be waiting a long time. it is possible, because of the

makeup of these companies, with tech companies as monopolies. it'll will be harder to spam the profit margins. does that mean profit margins will stay elevated forever? they'll be pulled back, competition will still come in. -- profitible we're margins will be higher than they are in the past. joe: i want to switch gears, the weather looks terrible in the window behind you. there is a big vote happening down there. a, what is that whether doing to traffic and the polls, putting you on the spot -- you have a guess for the georgia election tonight? conor: fortunately, if you are jon ossoff, there's been an early vote. it should be less turnout that we saw in the first round. may be lowered turnout is better for republicans and democrats. but we are counting on a big turnout today to get over the top. by one, but itff will go either way. joe: thank you both for coming on.

you, yourappreciate perspectives. check out their columns on bloomberg news. scarlet: breaking news fedex, the package delivery company. they also consider themselves a logistics company. adjusted earnings per share of $4.25. consensus estimate was for $3.88. -- for $3.88. i am not sure if we are comparing apples with apples. on the revenue line, better-than-expected numbers, $15.7 billion, versus a consensus number of $15.56 billion. $13.25. from $12.45 to at&t $13.20king for

a share. fedex currently down it looks 1%,, 2% -- or i should say, off by two dollars and after-hours trade. julia: we will bring you highlights from our interview with steve mnuchin. what he thinks ultralong bonds may extend. this is bloomberg. ♪

scarlet: a quick correction, fedex shares are rising and after-hours trading. they had closed down earlier. a report came out in which fedex earnings per share beat analyst estimates. julia: "what'd you miss?" spoke toavid juras

steve mnuchin from the investment summit near washington. he asked them how government plans are creating a strong and dependable dollar. >> the dollar is the reserve currency of the world. it is not our focus where the dollar is in the short-term. there are certain negative aspects of a strong dollar as it relates to our exports. on the other hand, the strong dollar is a vote of confidence in the u.s. economy and the trump administration, similarly to what is going on with the stock market. this is one of the most important economic investment opportunities in the u.s. and we are seeing a lot of attractions. this is what the conferences about today. >> they suggested ultralong bonds make a difference. do still believe that, or are you walking back from that? >> i am not walking back. it is something we are seriously considering.

i do think it is a tool the government should strongly consider. we are reaching out through the committee and investors to see what the demand is. what we do not want to do is one-off program, a program. we wanted to be an important part of our borrowing capabilities. >> in the past, people in your position have been advisers to the president. as the president solicited your advice on who the next said chair should be? >> on all of these positions, gary cohn and i are working closely together in making recommendations to the president. he and i have interviewed all the people and have made recommendations to the president. >> what you think constitutes a good fed chair? what do you think the president should be looking for? >> we have not made any decisions yet on the fed chair. whether we will have a new one or not. we will be working closely with the president as we consider all the issues. >> what is your relationship

like with mr. cohn? we hear palace intrigue within the white house. what is your sense of how the economic team is working together? >> i think back in on the team could not be working better together. that is a combination of my self, gary, wilbur ross, rubber zer.thizer -- robert lighthi gary and i have known each other for a very long period of time and worked closely in the past. >> the number of congressmen becomingns are controlling members of the sick go. what are concerns for have that means for sanctions, having so much sanctions under russian control? >> first of all, i do read my mail. i cannot comment on any specific cases.

i can assure them and others that i take my role as chair very seriously. we will use it solely for the purposes of protecting our national security. any transaction within our jurisdiction we will look at carefully. >> a last question about an op-ed gary cohn wrote to "the wall street journal." it is less a community where countries are against one another. in, what is the role of multilateral institutions? >> there is a significant role. there are a lot of common objectives we have, whether it is the world bank, the imf, or others. there is a role for us working with our allies, these institutions. it is to create fixes for problems around the world. we have been working with the greats on the debt crisis. we are pleased we have come to an agreement, for the europeans

have come to an agreement. i've have worked closely with the imf and there were partners. though it is fundamentally a european issue, we wanted this done. we are pleased with the imf's role in those negotiations. julia: that was steve mnuchin. coming up -- scarlet: the annual decision by include chinato stocks in the emerging market indexes. lots of money at stake. joe: it is the fourth time they have tried. scarlet: this is bloomberg. ♪

♪ scarlet: i am scarlet fu. we are expecting a decision anytime from msci whether to include chinese shares in its emerging market index. let's gave you a recap of today's market action. we're looking at a pullback in u.s. equities. the dow and s&p 500 retreating from record highs. nasdaq closing down 0.8%. tech shares in the lead, once again. joe: the big story was oil closing at its lowest levels since december, entering a bear market at $43 a barrel at west texas intermediate, dragging

down of energy components. scarlet: they got to $42.75. julia: down 21% since the february high, having an impact on commodity currencies. the dollar managing to eke out gains. scarlet: as we await the msci announcement, let's bring in our reporter and a chairman of holland and company. announcement has been long-awaited, three years now. what kind of chatter have you been hearing from folks you have been talking to? >> more so than at any time in the past three decisions, making 2016, we still have that backdrop over the 2015 summer crash were chinese stocks later pretty important role. a little more optimistic this time around. michael holland, the

difference is that they have changed their plans. the inclusion is made this time around, with that inclusion bring a flood of influx into china? michael: to the contrary, it is something that would be miniscule. if you go through the numbers, index0.5% of the msci allocated to chinese shares. it is 170 companies, about -- out of about 3700 share companies. it is 5% of the free float. we are talking tiny numbers. it is important for listeners , it willrs to hear happen because they made a step in the direction of joining world markets in a legitimate way. joe: michael, i wanted to follow-up on that point.

there isthe point that not going to be automatically much money coming in. from a signaling standpoint, does this get more people comfortable with the idea of investing to china? michael: quick answer is yes. dollar was describing the last three attempts when they failed. that was not helpful. reasons forots of the china market to be valued where it is, which is quite low relative to not only the other markets in the world, but where it used to be. this is one of them. the whole legitimacy of the system is transparent. julia: michael, are you still there? we just heard a dialing noise. you mentioned when msci turned theybefore in june 2016, laid out some of the reasons than what they wanted china to address, including the removal of the repatriation limit.

and preapproval limits needed for the exchanges and a couple other things. as far as i can see, they have not complied with all of these requirements. how close of a call with us ?efore msci -- be for msci michael: the numbers went from 60%.to some people say it is a tossup. but leaning toward it will be included in a favorable decision. you are right, a lot of things they promised to do they have not done. it is first things first. if the chinese do it, good for them. if it makes this -- if it makes sense to hold off, they will. --y have done and number of a number of other things. there is some progress. you mentionedglad

that. all of our, you'll been tracking the movement of stocks. chinese ishares have been lagging behind, not doing all that well. it is not like anyone has been missing out not having them in the emerging market indexes. oliver: you are right. this iso the terminal, putting in perspective these 169 shares. scarlet: msci will include china a-shares. after three previous attempts, msci has decided to include in its emerging markets index. we're still waiting to hear from other countries like nigeria. argentina to delays decision on the reclassification of msci argentina. good news for china, not so much for argentina.

still waiting for nigeria on that one. as we wait, all of our to what you were saying. it is important to make a distinction between what we're talking about in terms of yuan -denominated shares and u.s.-denominated shares. oliver: right now, if you look at the msci, china is a big part of it. it is largely symbolic. one, it gives president -- ecedent to-- pr president xi paying. jinping. there was criticism over their ability to handle china as a global currency and questions about manipulation of stocks. that says, outl of the different equity markets we are tracking, we view china as having the same constitution.

it used to be you could have a trail mix of stocks and find a job rigor in the middle -- in the middle, it was a big shock. joe: michael holland, one your reaction to the news. we mentioned earlier that china shares are undervalued on a global and historical perspective. what is the best way to play along china? michael: i will go for the easier question first. it is positive, to state the obvious. market, iton for the is happening and it is good stuff for the chinese markets. having said that, the market there is 12 times earnings. their earnings we have been investing, we had a china front board meeting investing in the fund for over 20 years. cheap a valuation as

we have seen. for all the reasons we've been talking about, transparency and so on, have plagued to the market. having said that, there are a lot of companies, if you can find a right manager, and i would not do index funds, i would find them at -- manager who has been successful for decades, resident in shanghai, beijing or somewhere else in asia, and have that manager pick the companies. there are a number of companies there. aina has shifted from commodity universe and service and automation. there are a number of small and medium-size companies who are benefiting dramatically and growing faster. these are trading at mid teen and top teen valuations. find a good manager on the ground whom you can trust

because of the record. julia: we want to point out there is a delay on the nigerian stock's inclusion to the msci, as well. a delay on nigeria, argentina. more positive for china. scarlet: michael, before this afternoon's announced it -- anduncement, blackrock others said they support chinese inclusion and others say they do not. what changed in the last year? michael: they missed a few things they were going to be doing. they have done a few, not some others, but made progress in opening the markets. jinping has opined they will open the markets. they will have the world's biggest and best economy and

they know it is a step to move in that direction. i believe they will continue to do that. joe: we are seeing an uptick in the chinese yuan. chinese large-cap stocks will be added to the msci. you thei wanted to ask same question. when people talk about getting exposure to china, that can be done through all kinds of different avenues, and looting u.s. domestically listed. when they want chinese exposure, how to they go about it? oliver: there have been a lot of tons to get to that end, invest in china. direct exposure is one way now. at the end of the day, you see more and more individuals and institutions taking part of the path of markets. this is been a situation 10 years ago where we were talking about investing every day, it would be less impactful. we are in an environment where

more and more money will pass the flow. even if it is just half a percent of the total index weighting, it is still meaningful and means money tracking over -- overseas strategies will include those companies as well. the market reaction is important, too. iu pointed out the yuan, think we will see positivity in shanghai stocks. period of adjustment as people get used to what to add into match. scarlet: msci has added china a-shares. 222 china large-cap stocks. may of 2018,t in the second in august of 2018. thank you so much. a quick programming note. henry chairman,

fernandez, will be joining betty liu to talk about this. lots of questions for mr. hernandez -- fernandez. let's eat you to first word news with mark crumpton. >> belgian media are reporting a person wearing an explosive belt and a backpack has been shot and "neutralized" at a train station in brussels. this followed an incident where people reported hearing explosive sounds. the belgian prime minister charles michel's spokesperson says he is monitoring the situation closely. they will not say whether it is a terrorist incident. a spokesperson for george's of voting in the state's closely watched six congressional district is going smoothly, but some issues have been reported. thevoting locations had wrong equipment used to check voters in. workers had to use paper lists as a backup. it may turn out to be the most

expensive race ever for the u.s. house of representatives. voters are deciding between democrat jon ossoff and republican karen handel. president trump is blaming the bier squarely warm on north korea. he spoke about the student in the oval office today with the president of ukraine. president trump: it is a total disgrace what happened to otto. that should never, ever be allowed to happen. if he had been brought home sooner, i think the result would've been different. he should have been brought home that same day. the result would've been different. what happened to otto was a disgrace. >> warmbier died monday afternoon less than a week after he been returned from north korea and a coma. he suffered brain damage but they did not say what triggered it. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg.

joe: coming up, "what'd you miss?" is going back to a simpler time. check -- go back to goldman 1985 trading floor. this is bloomberg. ♪

joe: "what'd you miss?" to get a sense of how much markets have changed in the past decade, watch this amazing goldman sachs reporting video from 1985. it was put on youtube, it it lord's pitch to recruit people into the exciting world of extend him trading. check this out. ♪ >> a leader in selling and trading, fixed income

securities. institutions having excess capital -- in recent years, we extended the securities market and have experienced rapid growth. to the size of the market and products available. it decreases the amount of government debt, higher interest rate, -- do not think anyone could watch this video not want to be there 30 years ago and trade fixed income at the time. the hair, the ties, the glasses, people on phones, it is all great. scarlet: you know what it is missing? the bloomberg terminal. joe: i would hate that. julia: and not many women, or diversity. --pplied to decades later two decades late, quite frankly. the mid-1980's fixed

income seen. is now. then, this a look at how hedge funds have evolved. we will not ask you about hedge funds back in the mid-1980's. we will talk about hedge funds today. you write about how they are taking over hedge funds. they have a recruiting video to show how things have changed. buildave their quants robots to win a in conde. a ping the new -- to win pong game. that is the new recruiting video. technology has affected every industry and it is coming to finance. we are at a record. these numbers come from barclays, $500 billion in quants , 17% of the hedge fund

industry. joe: is there an agreed-upon definition of quants strategies? >> know, is the simple answer. it is like talking about a hedge fund strategy, so many things can fit under that umbrella. theree talk about quants, are a few general things we will say. one, you're using some sort of automated process. single security agnostic, looking over patterns from a wide swathe. different kinds of funds. that is not even counting discretionary managers who are increasingly taking on quant -type strategies. julia: the beauty of these markets, is that the correlation

orrelation with the s&p 500. how important is that? they have had a tough couple years. >> that is the main pitch. one has done particularly well, they returned 55% year to date. but before they had that track record, how did they attract flows? he said, through diversification. he is on a hedge fund database and investors look to how they can diversified and look for uncorrelated portfolios. berger bringing us the stats on quant. you can read more on bloomberg.com. julia: definitely worth reading the article. we will talk to sheryl sandberg

about how the largest and smallest phones are marketing and new ways. this is bloomberg. ♪

joe: "what'd you miss?" facebook coo sheryl sandberg spoke to caroline hyde about the changing nature of advertising. >> we see more adoption of global platforms, there are 70 million small businesses using facebook on a monthly basis. and, 5 million advertisers. on instagram, we have 8 million instant graham profiles, of which one million people are advertisers. from the smallest companies to the largest, they are investing in mobile because that is where people are spending their time. >> do you feel optimistic about

what these currents show you about the u.s. and global economy in general? are we seeing jobs being created, brands spending money and therefore wanting to? can you give us a gauge about what you see out there? to make sures businesses spend money and get a return. it matters to marketers that when they use marketing, it rings a cash register both online and off. we see small businesses playing an important role in the global economy. the majority of job creation around the world is actually small businesses. even the most off-line small business can use the power of technology. when i was last in europe i went to berlin and visited a company, a furniture manufacturer. they are manufacturing wooden furniture, a very traditional business. family came into the business without knowing anything about manufacturing but onrted growing the business

facebook and google. now they have five more locations, including outside germany, grading jobs and growing their business. technology can power innovation both at the core of the business but can also support any business out there. >> when people worry about tech eroding jobs, are you seeing the other point of view? >> technology is changing the economy, it is certainly replacing jobs, and technology can also be used to grow jobs. it is our responsibility to help small businesses and large businesses around the world use technology to grow their businesses so they can grow jobs. >> interestingly, at a time when we're seeing perhaps a drive toward job growth, we are also seeing valuations as technology companies go through hard times. does that ever affect you or the way in which you look at the world? is to workvery day

on growing facebook, helping more people use facebook and instagram and messenger and whatsapp, more people get value from products and services and more businesses. i feel like as a business leader, if i focus on our business, that is where my focus needs to stay. joe: that was facebook coo sheryl sandberg. julia: what you need to know for tomorrow's trading day. this is bloomberg. ♪

this, queen miss elizabeth ii prevents parliament with the government program. joe: i will be looking at u.s. existing home sales. julia: don't miss oracle reporting fourth-quarter earnings after the bell tomorrow. joe: that is all for "what'd you miss?" bloomberg technology is next. this is bloomberg. ♪

alisa: i'm alisa parenti from washington. you are watching "bloomberg technology." let's start with a check of your first word news. a person wearing an explosive

belt and a backpack has been neutralized at a train station in brussels. soundsreported hearing of an explosion. officials say it is too early to say whether this is a terrorist incident. calling this incident a disgrace, president trump is laying blame for the death of on northbier firmly korea. he spoke in an oval office meeting today with the president of ukraine. woulds warmbier's death have been avoided if he had been brought accident. the 22-year-old came back in a coma. the cincinnati coroner's office is investigating. meantime, vice president mike pence had a drop in with president trump and h.r. mcmaster trump is expected to. meet with vladimir putin . . pulling in georgia is going smoothly. the bitter runoff between karen handel and john