were in a the shooter relationship that ended recently. the justice department announced criminal charges and sanctions against iranians accused in a government sponsored hacking scheme. >> this alleges the defendants worked on behalf of the iranian government. specific -- they hacked the computer systems of 120 universities. in 22 countries. 144 are american universities. >> the justice department added they were affiliated with an iranian company which prosecutors say contracted since 2013 with the iranian government to steal scientific research. spain, separatist politicians

have been charged with rebellion. a supreme court judge issued the indictment. it has to do with their declaration of independence last year. tokyo, hundreds of protesters gathered to speak out against shinzo abe's and ministration. abe torators called on step down and light of a school land sale scandal. the japanese parliament will hear testimony on that case next week. global news powered by more than 2700 journalists and analysts in 120 countries. this is bloomberg.

scarlet: life, i'm scarlet fu weisenthal. joe scarlet: and shaping up to be the worst week of early february. -- since early february. president trump funds the federal government for the next six months. he has a message for congress. he will never sign another bill like this again. and the trade war keeps investors on edge to close the week. a shakeup and the trump administration continues. addedonal drama surrounding the white house. get to a market check. >> we are looking at steep declines for the major averages. the nasdaq down 1%. steep losses here, a real

reversal of a we had happening early year in the day. we had bonds at that time selling off. the buyers simply could not hold on. lots of headline risk from a potential trade war and fallout from facebook and d.c. drama. let's take a look at where it started. this is a five day chart as scarlet was mentioning. we have stocks on pace for the worst week since early february. the nasdaq and s&p 500 their worst week since 2016. the nasdaq almost hit a bear market. 2%see we had a big dip down on the facebook data crisis. wednesday, a small decline. the trade war fears continued. a big decline. more selling today. again a little more on

what is dragging on the nasdaq and s&p 500, facebook down 14% on the week. the worst week since july 2012 because that week the stock was down in such a big way because it was the first quarter as a public company. that is the selling pressure we are saying. the possibility of regulation and big tech. alphabet trading down in sympathy. we have macron down sharply on the week. they reported beating estimates but the sales guidance disappointed, putting fear into investors. are we going to enter a cyclical demand or is this a new normal wear pricing will continue higher on the cloud? western digital, 50% of their revenue comes from them as well. these are the big drags along with the s&p 500.

the s&p 500 is broken or in the process of being broken. this is a one-year chart, a beautiful uptrend. buyer is in control and this year this volatility between the major averages, telling you there is uncertainty, a battle between buyers and sellers. average is now starting to rev down. some would say that is more bearish them below the moving average. the near-term buyers are a really exiting. thean ugly gap headed for moving average. thise been talking about me you can see this diamond pattern. ofthey go below that low 25-33 it would confirm this down to 2200.

it has not happened yet but something to keep in mind with all of the uncertainty. finally just in case anyone has any doubt as to whether it is risk off or risk on, it is certainly risk off. we want to confirm that cross asset class. bonds are rallying in the big way. take a look at the vix. i talked with the possibility of a technical spike. it is still alive. stay tuned. a lot happening. julie: we do have some breaking news crossing the bloomberg. information commissioner office has gotten a warrant to search the cambridge analytica offices in london. they are of course the ones who worked with facebook to use some of the data from facebook customers. joe: they said they were going

to seek a warrant. they do now have one. >> the judge has given the want to search the company, one part of the probe into the data used. there will be further steps to come. we will keep you posted. facebook shares are down off by better than 3%. in decline, at session lows, line with the equity market overall that this news does not help facebook and mark zuckerberg who has been called to testify before congress. 2000 pages that no one read but is now law. sign the omnibus spending bill. >> i will never sign another bill like this again. nobody read it. it is only hours old. even know what't

is in it. the second largest ever. president obama signed one that was larger which i am sure he wasn't too happy with either. budget: $1.3 trillion -- the president says he has no choice but to accept. is the president right to be concerned? our gas, itelcome was a trillion dollar number i meant to say. the president indicated he does not know what is in it. he started to say those words. what is in this bill? >> everything. appropriate our defense money, all of the we spend on education, infrastructure, federal employees. this is a gigantic bill.

one readle complain no the bill and you can find these things that are good for getting people outraged. rand paul is good at finding that stuff. is there any prospect of changing the appropriations process? >> i hope so. we have a committee formed as a result of this. their job is to come up with a better appropriations process. this wish is massive. $150 billion higher. huge deficit busting increases. it is not acceptable. president trump saying he was never going to sign a bill like this again. is that realistic? >> i hope so. we have put in place cap for

next year to allow for further increases in spending. i hope democrats, republicans agreed just because we have the room doesn't mean we have to spend all of this money and we can have a more thoughtful process. you have to fund the government. so, who knows. scarlet: let's talk about the numbers. talk about the might of interest spent to keep the government going and how that compares to a share of gdp. >> interest on the debt is not large. we are dealing with the low interest rates. debt is rising though. quadrupleayments will from $250 billion to a trillion dollars within a decade. that is huge. higher than any time in our

history, even after world war ii when we had massive debt. >> people have been warning about the effects of blowing up the deficit for quite a long .ime, basically my entire life nothing bad ever seems to happen in the sense that interest rates are pretty low. why would that change? for the most of your life even though deficits have been run our debt ratio has been stable in the 30 to 60% range. right now, it is 77% and rising. we have been benefiting from quantitive easing from the global recession but that is i think it is certainly going to increase interest rates. it is also going to crowd out investment and put the u.s. at

risk. no country can and definitely have their debt rise last year than the economy. scarlet: we are funded for the next few months. goldline, thank you for joining us. coming up, china is one of president trump's they write punching bags. -- by the president president could lose the most. this is bloomberg. ♪

scarlet: u.s. stocks accelerating losses. we have 16 minutes of trading left.

we have stocks picking up momentum to the downside. the nasdaq off by 2% read s&p losing 1.8%. -- fairys are feeling a little better. joe: a trade war type of thing but overall sloppy into the day. >> if you look at this index breakdown you have financials off by two and a half percent. technology often by 2.2%. energy only down by half of 1%. we will keep you posted as things develop. beijing fighting back after president trump imposed $50 billion of tariffs. perhaps it is trump country that is in the greatest danger.

for more, let's bring in sarah mcgregor. >> what is it looking like in terms of who in the u.s., what kind of industry, what kind of workers might get hit the hardest? >> that is a good question. if you look at who trump described as the forgotten man and woman, the farmers, workers and agriculture with those are the people that could be hit by these tariffs that would be countermeasures from the chinese back against what president trump announced yesterday. tariffsese would impose on which could impact iowa for won in 2016.esident other products could be in the crosshairs. soybeans, which there is a large

amount of those that end up being exported to china, if we ended up in a trade war. trump country could be part of the country that experiences the most significant blowback from a trade war. the chinese have started to roll out new tariffs they could roll out in the future against what trump did yesterday. scarlet: it is important to remember even though he announced these tariffs they haven't gone into effect. talk us through the process. there is a response. there are open questions about the tariffs so far. is drawing up a list of products. telecoms, airplane makers could be hit by these. in the find that out

next 15 days. trumportant saying is ordered the treasury secretary to address the chinese acquisition of sensitive technologies. that is an area we could see more of an economic impact than these tariffs which are actually quite nominal. a clampdown directed at china, this could spark a stronger reaction. the wyatt -- joe: the white house announcing those tariffs. in the tariffs got progressively weaker. there's all kinds of internal debate. it doesn't feel like they have a lot of teeth anymore. in thee see this process white house with the china stuff

where what starts out looking strong due to various political things end up being weaker? >> that is a pattern we have seen. they have tried to start off with a hard-line offer and then progressively get more reasonable or closer to the middle. these could happen with these chinese tariffs. they have this lead up. they had a two-week lead up during that time. some started lifting different countries that were exempt. we could see the same thing happened with china. if the estate tough line at the beginning other countries come to the table. negotiatingbe a tactic. we will have to see if it works but it is something we have seen in the past and i would not be surprised if that is what happens.

scarlet: and negotiating stance from the president. a busy week for both of you. thank you. you another give update. 11 minutes ago of trading, we see the index losing ground quickly. as. the nasdaq off by 2.2%. not as bad as yesterday but certainly momentum has accelerated and volume picking up as well. joe: it is still pretty ugly right now. still off.is weakness abounds. i'm new york but this is bloomberg. ♪

pacelet: u.s. stocks on for the worst week since january 2016. the dow falling 12 level we have

not seen since november. in tom, we areg star we had to drag you away from your vacation but everyone is pending this on a confluence of factors can whether it is higher interest rates, the appointment of john bolton, the facebook privacy. what do you see as the biggest drag? above arethe undermining investor confidence. what this is pointing to is liquidity is draining at the stock market. that is why it is not taking a big jump to cause these huge drops and the volume is it nearly as significant as it was in the other corrections this year. but it is to pin it

people just taking liquidity out of the markets. joe: when does it end? >> i know our clients, when you start to see selloffs like this month a attention to the technicals. the early lowsng and wondering if we are going to undercut those. the intraday.ing we are seriously sold down. in a daze falling almost 8%. youe are the days where if you need to start thinking like a contrary in. liquidity does it mean fundamentals are changing. underlying fundamentals are still good. ,ven a case like facebook facebook has an opportunity to

improve trusts with customers. i don't think you have to say butbook is no longer a by uncertainty is going to cause a buyer strike. it may not be active selling so much as reluctant buyers. that&p really hitting moving average. that yellow line, we are sitting on it. a lot of people watching that yellow line. were theng tech stock pinnacle of strength pulling everything up. people start to question the degree to which society will allow them to maintain the business models they have. how much of a threat is that? >> it is a concern in the short term. it doesn't really change this

huge secular shift. so much of the growth in the economy is native digital. in the next 10 years, 30% of global gdp growth will be on pure digital platforms. this is a huge tail wind for tech. we have a labor shortage. tech will be at more than an all-time high. i would still be a by your of tech broadly especially on days it is getting punched in the gut. to theirwe are going lows. what happens monday? get very know, people worried about this because they start to think of black monday. there is always a chance for policy surprise over the

weekend. we have a fed chairman that understands the risks that if markets get -- scarlet: we have to leave it there. this is bloomberg. ♪

♪ scarlet: "what'd you miss?"

u.s. talks wrapping up their first week since january 2015. the s&p 500 falling on the day, now off 3% on the year. i'm scarlet fu. joe: i'm joe weisenthal. julia is on assignment. if you are tuning in live on twitter, we want to welcome you to our closing on coverage every weekday from 4:00 to 5 p.m. eastern. scarlet: let's begin with our market minutes. it is like groundhog day because we have stocks falling into the close once again for a second straight day. for the s&p, the fourth declined this week, the 8th decline in the last 10 days. the nasdaq it was performer of the bunch, off by 2.4%. tech losing some of that leadership or the leadership is to the downside. financial shares even worse falling about 2.5%. volume much higher than a 20 day moving average. what is interesting here is we got economic data, which was not terrible. joe: it was good.

trump signed the bill after some jitters. it looked like today was going to be a quiet or perhaps even an up day but a very rough last hour of the day. scarlet: i want to highlight the outlier, dropbox. today,ing its debut getting a pop as well. up. also helped the start 36%. kind of an outlier because most of the moves are in tech to the downside. joe: right. -it bucked the trend. thes take a look at government bond market, and people were buying bonds all over the world. not automatically, but in the u.s., under 2.25 for the two-year yield. the tenure yield lower -- the 10 year yield lower.

not like there was a huge bid that came in for u.s. treasuries and then fell off. one of interesting to mystics of the volatility we have seen since the beginning of february, which is not very impressive bds for the safe haven assets -- bids for the safe haven assets. japanese 30 year yield fell as well. the china 10 year yield, which we do not talk about very often, not active, but down as well in the wake of some of this trade war activity. scarlet: let's look at the currency market. the u.s. dollar weaker versus nine of the 10 currencies in g10. the exception is the norwegian krone, which happened in the last hour or so. against the yen, euro, and the pound, losing strength. one or two rate increases per year because of record low unemployment justifying the removal of some of the stimulus. certainly, we also have the loonie under scrutiny. it was stronger after canadian cpi top economists estimates,

but the story today is the dollar is weaker as the trade war threats continue to loom. joe: finally, let's take a look at the commodity markets. gaining today. this is something we haven't talking about. oil getting a ban on supply data up 2.5%. goal of getting a bit on the safe haven buying. bid on theting a safe haven buying. futures, this is one commodity heavily traded in asia. concerns about what a trade war might do. rubber futures down 6.3%. those are today's market minutes. scarlet: for more on today's market moves and the week that was: let's bring in peter. joe was just observing that fixed income treasuries are not getting the bid you might have imagined given the selloff. why do you think there is that

asymmetry? >> what will china do? we are clearly picking a fight with china. if they decide they will go on a fire strike or sell, is that part of the reason that treasuries are not rallying the what you would expect them? joe: even in february, that was the defining characteristic of that selloff. you have written a lot about risk parity or risk parity like portfolios. it is just not working that great. peter: that is correct. anything that you on equities and long data bonds, they had to against that. that works phenomenally well. last year, it was a phenomenal year. very strong returns. not working well this year. as volatility increases, the strategy gets a little more tenuous. that is what we're getting these days where they are both moving down in the same direction. that has been happening a little bit. scarlet: was the distention of this round of selling? what sets it apart from what we saw in february? we nearly volatility etf were

contributing to the sense of panic, but we are not seeing the same dynamic this time around. peter: right. that is why i am more concerned right now. back then, we will all over what is going on with the vix. we saw it as a central threat. everyone, including myself, was fine with fundamentals. we just had the tax reform. everyone was suitable that the fundamentals were good. now there are tax issues. some tech companies are having trouble. the case for fundamentals being strong is a little less so this around. from a technical standpoint, this be a third time we touch this 200 day moving average of the futures. if that happens again, i think we fall through right now. scarlet: in a cash market, too. the s&p 500 sitting at the 200 day moving average at least during the intraday. the last time we fell below that was february 9. joe: going about the fundamentals, there has been tellstory that the bulls is whatever happens at the white

house, whatever happens with the fed, you just cannot deny rocksolid earnings and a global synchronized recovery. ultimately, everything else is a distraction besides the fundamentals. what you are saying is maybe the fundamentals story is getting less compelling. peter: if we are going to go against china and have whether a trade war, i ultimately leave our goal is to sit at the table and negotiate with china about intellectual property. trying to protect intellectual property rights, that is where the market has missed. this trade war is the start of it. trump is very serious about this. korea, heoks at north says 20 years ago if we had done something when we could have, we would not have a google rise north korea so i think he is a bit more adamant about resolving intellectual property rights in china. the market has been giving him credit. that is why the selloff is real and probably continues. scarlet: investors are taking everything he says literally as

if we are going to enter a trade war tomorrow. part of that is because he has been unpredictable and likes to keep that hanging over people's heads. peter: yes, he has been unpredictable. china tends to be unpredictable as well. we don't know how they will respond to this. we are at all-time highs so it is not like we are selling off from very low levels. there was a lot of room for maybe some froth in the market. scarlet: i like the way you put that.part of it as there is maybe not compelling reasons to buy stocks the way it was 3, 6, 8 months ago. peter: the service came out on individual investors and they loaded up on stocks last week. there might not be that much money left on the sidelines to buy stocks. scarlet: this is a good point. this is another chart i want to bring in here. it takes a look at the s&p 500 dividend yield, the blue line, and the treasury yields, the white line. you can see they are intersecting here. it used to be there is no alternative. there clearly is an alternative now.

peter: i have been pulling out charts as we talked to investors. the biggest threat to the equity market is the two-year treasury yield. as that was higher, we have been forced to chase yield and return. all of a sudden, i'm am not saying everybody will shift to can takeear, but you some other risky assets and put in the two-year and look at the income you're looking for. that is why we are seeing that. that was really for many people more of an income alternative than a true equity play. this equity weakness will make them more nervous. joe: let's talk about that similar because it feels like that is becoming the big thing everyone is talking about. the fact that for the first time, you can get paid. the first time in like a decade or whatever that you can get paid by holding cash. who does that hit the hardest? is in the high-yield? what is the first area people pull money out of to put money in short-term products? peter: to be honest some of these dividend, stocks and low those are stocks,

powered by really weak hands. high-yield would normally fall under this, but i think high-yield companies benefit so much from the tax reform and the increase regulation that that is why it is not getting hit as hard. we are seeing more m&a activity, and that tends to benefit high-yield companies. they are the ones that get bought and their bonds do well. i think you have to look at the equity proxies. they have been under forming again -- underperforming again. joe: the other thing that people are talking about maybe a cousin of the increase in short-term rates is the spread. of it due to the mechanical increase in rates, but i cannot explain the entire pickup we have seen. what do you think is going on here with libel? what is your favorite explanation? what are the effects? peter: i think you can largely ignore the libor ois spread.

as repatriation is a gri money is coming back from offshore to on short. some of that will deposit. some of that will buy back equities. it is taking it out of the money available for that. at the same time, you saw a lot of asian banks expand in the u.s. over the past several years. a massive growth from particular japanese banks as a whole. i think there is demand for that. the treasury one, a lot of competition for the short-term money. to behe first to be happy bearish. i just keep looking, and it was no other indicator i see the credit markets that tell you there is a big problem. small problems, yes, but some very tight levels. ois isation on libor overdone. i am not worried about it. it will be bound. we are seeing smart investors

start buying product because they want the extra pick up. scarlet: for investigators like yourself, that makes sense, but there is a lot of people who have entered the market lately, and what they remember is the critical proxy in the last downturn. that is what everybody talked about. that pre-staged all the downsides, especially the financial side. you see the financial stocks under pressure.are people going connection with her should not be any ? peter: yesterday if you buy looking back and saying this happened in the past and this is a buy signal. there were a lot of other indicators that there was pressure in the funding system. this is so unique. i think you can trace it to really the fact that we have issued so many bills, the repatriation has taken money away, and the japanese or asian year-end. in april, i think my theory will be right. if i do not see that releasing pressure in april, i will have to rethink a little bit. scarlet: specific external factors. peter: very much.

some of this started really talking about a weak dollar. if you own dollar assets, you better find yourself in dollars because you do not want the fx risk. joe: you mentioned financial stocks, and it is notable that for all the talk of facebook and all that, financial stocks have done worse than the big tech stocks lately. what is the story in your view? peter: that is what am struggling with to be honest . -- honest. most of the big banks are benefiting from the rise in libor. the rise is mostly with their earnings, so i think the market is a little bit off. having said that, we had such a great money financials that it is hard not to see a pullback. we are seeing people so what they can and a little bit of pressure. anything a larger etf. the etf's drive a little bit of this. i think we confuse etf's hostile taxes -- docile taxes.

scarlet: they do so much. peter: thank you. scarlet: coming up, trump takes a hawkish turn picking john bolton as his new national security adviser as he ditches the moderates in his inner circle. we will have the latest on the trump circle, next. this is bloomberg. ♪

mark: i'm mark crumpton with first word news. president trump reversed course after a threat of the tell when he signed a massive spending measure that funds the government for six months and avoids a government shutdown. the president calls the legislation a ridiculous situation. president trump: i say to congress i will never sign another bill like this again. i'm not going to do it again. nobody read it. it is only hours old.

some people don't even know what is there. $1.3 trillion the second largest ever. president obama signed one that was actually larger, which i am sure he was not too happy with either. mark: the president signed the measure, he said, because in his words, we had no choice but to fund our military. the u.s. says it looks forward to work with the new peruvian president, who was sworn in today after peru's congress voted to accept the resignation of the former president. the state department spokesperson praised peru for what it calls its constitutional transfer of power. president trump plans to attend the summer of america's in lima this april. france isn said that airport has taken on a wi-fi network after disabled parts of its website as a precaution following a ransomware cyberattack on the city's

computer attack. the airport was not affected by the attack, but included the inclusion of some city data. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. scarlet: "what'd you miss?" ashakeup in the west wing president trump takes a sharply hawkish foreign policy turn. his appointment on john bolton as national security adviser leaves behind moderates and create an inner circle that champions some of the policies he has divided on the campaign trail. here now to shed some light is alex from washington. alex, just fill in the blanks. trumpolton and donald both are against the iran .uclear deal what happens now? how are they going to meld? the iran deal does not

look like it is on safe ground anymore for sure. i think john bolton will the president to pull out of the deal entirely. the president may very well ugly with him and do that. and then we are in sort of uncharted territory. i don't know. i really don't know what happens with our relationship with iran after that. i think the president was able to look past john bolton's very well documented history as a hawk, i guess, if you want to say it in a nice way, because the two of them are in such agreement on iran. that is a pressing issue for the president. he has expressed many times that he does not like the iran deal and would like to pull out of it. joe: big picture. in the early days of the white house, we talked about how there was the davos crew led by gary cohn or the globalists, and in the nationalists. that was steve bannon and his people.

now it seems like everyone on all the different sides are gone. how would you sort of characterize whatever the ideological makeup of the new cast of characters in the white house? alex: good question. i don't think i have given it a lot of thought. guy whovarro, the trade is quite an opponent of china, he is still in the white house. he can be described as a nationalist. hisushed trump to protectionist trade policies lately. a lot of his it ministers and has become more establishment. john bolton is an example of that. he is pretty much in the mainstream of washington republican party. his appointment was criticized by democrats and more or less supported by republicans in congress, which is what you expect at most presidential appointments. mike pompeo kind of out of the same boat is an establishment guy. scarlet: john bolton has been

described as a neocon. the question is whether he will bring prompt along to his way of thinking. i just want to highlight one of the things john bolton has said korea. he said it is perfectly legitimate for the u.s. to respond to the necessity buy north korea' nuclear weapons by striking first. this is troubling considering donald trump's meeting with kim jong-un. will president trump bring bolton around to his way of thinking? alex: john bolton has advocated attacking north korea and iran very recently, in fact. i would expect him to come into the white house as a proponent of those views. i think that is something to worry about. action in north korea has not gotten any easier in a passable months. it would still likely result in the destruction of seoul and the

death of tens of thousands of koreans. john bolton seems to sort of whitewash that problem when he talks about military action on the peninsula. the same with iran. any kind of a military strike has all sorts of spillover effects. he is a guy who does not seem to think too much about what comes after the attack. scarlet: all good points. alex wayne joining us from washington. thank you so much. coming up, libor to its highest levels since 2008. it is now at 57 basis points. more striking is the rate of change, literally shooting up since early february, more than doubling this year. we will discuss that, next. this is bloomberg. ♪

are not onlys focusing on the equity's a lot but giving an eye on the surge in u.s. dollar libor rates. the three-month rate rising to its highest level since the financial crisis. with us now by phone to discuss the increase is liz. thanks for joining us. lots of debate about what this means. everybody remembers libor because it blew out and lie dormant for a wild. if i don't but not that high by historical standards. liz: hi. you are right. a lot of theories in thinking. first, number one, which everyone seems to agree on, we have had a huge surge in treasury bills in the u.s. because of the rising deficit and the fed backing off with their balance sheet rolloff. ,hat pushed the treasury yields which has made banks have to compete with higher rates and commercial paper.commercial paper, especially now , a lot of people say there is

less internal ending -- inter-bank lending. as commercial paper is still off the back of the treasury bills, the libor rates are going up. that is one piece. then there is a lot to do with tax reform. we have a new note today i' on t -- new note today on that. scarlet: this is something in fact that will persist because of the way that the tax structure is now set up. what is the libor ois spread useful now for? i think it is kind of like recalibrating. it is a gauge. we need to get used to a new normal where the wider spreads whereas in the old days, we would be flashing credit crisis alarm.

we are not at the 2008 levels, but we should still keep an eye on it. we should be aware there are these structural forces likely t-bills, tax reform, some of the ways to ask affected company repatriation. the u.s. is trying to tax the earnings made in this country, and that is also creating more commercial paper issuance. all of that is not going away. that is their point. we should watch it. if it goes so far as to see a canary in the coal mine of some credit issue, we should be recalibrating. scarlet: we saw financials lead a selloff in u.s. equities today , and a been the case the last two days. do you think there is some misunderstanding about what libor and libor ois is indicating and people are using that as an excuse to selloff banks? liz: remember we talked about this before. banks are getting hurt. rates going up has hurt equities

overall. of course, banks usually like steeper yield curve, but some of this is what we were trying to talk about that there is concern a lot of people talking. issues with the banks. that is why addressing this is important. spoke to an analyst yesterday on this saying banks are very capitalized now. has had a lot of reforms. that is the issue since the crisis. almost over capitalized, so it is not an alarm on u.s. banks, but it could be people who are not clear saying we have all of these other things going on, tariffs, credit issues flashing red. it is concerning, but that is why people say, hey, calm down. scarlet: liz gorman centcom down to the investors in market. thank you for joining us. up, we will dive into

apple's major move into education. this is bloomberg. ♪ mom, dad, can we talk?

sure. what's up, son? i can't be your it guy anymore. what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. seems a bit long, but okay... set a memorable wifi password with xfinity my account. one more way comcast is working to fit into your life, not the other way around. retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store

near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. mark: i'm mark crumpton with first word news. sts famousati possibility for an incident in southern france where an armed man killed three people and wounded 16 others. the suspect who was told by police reportedly was known by local authorities as a smalltime drug dealer. meantime, french president praised macron the police officer who was wounded after offering himself in a hostage swap. he says the officer is fighting for his life. the european council president says european union nations will take more steps against moscow over the nerve agent attack in the u.k.. in brussels today the 28 nation

bloc will recall its ambassador from moscow for negotiations. >> in the circumstances, i am personally especially pleased that despite the tough brexit negotiations, the european union -- inmonstrated unanimous the face of this attack. mark: it is highly likely that russia was behind the attack on a former russian spy and another in salisbury. both remain hospitalized. federal officials are not say much about how they chose swx to build $11 million section of border while in california. they are not saying if they knew of the company's connections to a construction firm flag in the government audit for potential fraud.

a committee wants answers from the department of homeland security on what betting was used. curiosity hasver no marked 2000 plays on the planet read it is a big milestone for scientists eager for curiosity to begin drilling again. on a slopehe rocks on mars. the rover has been exploring the planet since 2012. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. let's get a recap of today's market action. a lot of selling here, especially headed to the close. u.s. stocks resuming -- to the close. u.s. stocks resuming their losses. s&p losing ground for the fourth time this week. the dow at a four-month low. the s&p 500 wiping out all of its gains for 2018. joe: absolutely.

not as bad yesterday in the final tally with the dow down over sovereign hundred points -- over 700 points. but still pretty bad. just a sloppy day all around. "what'd you miss?" apple is set to return to its roots in the education market. the tech giant is preparing to introduce a low-cost ipad with education software next week, for the ramping up the competition for the classroom. joining us now to discuss from san francisco is mark gurman. why is this an area that apple is re-pursuing? it is interesting because you would think the education market is not so huge, but we looked into it, and it is a multibillion dollar market. apple only has 70% of the market when you combine their global devices like iphones, ipads, macbooks, and imax. windows pcs are 22% of the market and google perhaps the largest competitor is 60% of the

market so they have some room to grow here, and it is basically like you said a tenant that the company was founded upon, education. scarlet: it is not just hardware. apple has the ipad. google has the chrome work -- chrome book. i think of my kids and how they do all of their work on google classroom. the work is submitted through google classroom and a teacher sets of assignment on google classroom. is that where apple is headed? mark: apple has a program like that spread it across many different apps. they have three or four different ipad applications that everything is across. for have the classroom have teachers to manage the ipad industry of them. we have another app where you andsubmitting classwork there is another one for teachers and students. a little bit all over the place, to look for apple to integrate everything together and have a better more comprehensive and integrated solution next week.

joe: i have been a macbook user for a long time, and i still use them. they are pretty good. also kind of expensive. the other day, i bought myself a chrome book. i guess i wanted to experience it. it is pretty great and a lot cheaper than an apple product and it seems to work fine for basically everything i need to do. this market. are they going to have to go down the price scale further? is that becoming a competitive threat? mark: apple is saying we are coming out with a cheaper device in order to appeal to a new market. what they have really done in all truthfulness is upgrade older products very slightly or just drop the prices on older designs. the macbook air is the poster child of that strategy. it is $900 now, but it is the same design that was introduced. this is how old the macbook air design is.

it was introduced by steve jobs in 2010 about 10 months after the ipad came out. that is how long ago it was since the last macbook air revamp. look for them to come up with a solution for that problem but not next week. a little further down the road, likely around the time of the developers conference in early june. scarlet: you can talking about next week because there is an event that apple is hosting. what about closer to home? do schools near apple in silicon valley and peninsula, do they use apple technology, ipads, various assets that you listed for us? do they use the apple platform more readily than other schools? mark: yes, i guess that is the billion dollar question here. why am i going to chicago? i am happy to, but there must be a reason why apple is holding the meeting in chicago versus the new awesome steve jobs theater they opened last year. our understanding is there will be lots of demos in various classroom settings.

ironically, i checked apple's website, and they are not on the list of 400 schools that apple certified as these distinguished schools that leverage apple tech , use these applications they have currently, have ipads for every student so maybe we will see down the road this will become a part of that, but it is interesting that it is not a designated apple school yet but we are going there for an apple event. scarlet: marked with another scoop. thank you for joining us. apple shares are up for a sixth straight day -- off 46 straight day. 6thng up -- off for a straight day. .ow china plans to respond joe: also, listen to our weekly podcast. you will find our best content each friday. the new one is out right now. lots of interesting stories this

week. we will talk about tech and facebook. you will definitely want to check out the latest episode. from new york, this is bloomberg. ♪

scarlet: "what'd you miss?" china's ambassador to the u.s. said he would not ruled out the possibility of the asian nation scaling back treasuries, treasury purchases. earlier to talk about his potential actions. >> we are clearly against any unilateral and protectionist moves.

we don't want to have a trade war with anybody. we are still trying to avoid one. we have to fight back. >> how are you prepared to fight bac? >> well, we will take all the measures necessary. i think you have already seen the announcement made by the chinese minister of commerce. we will see what we will do next. believeareas do you there are for cooperation between the u.s. and china? >> i think there is a great forntial and good prospects cooperation between china and the united states. haveey is that both sides to take a cooperative and constructive approach. a confrontational one will not help anybody. besides a lot of accusations, made this time are not supported by evidence. for instance, chinese laws

protect intellectual property rights. we are ready to help. that is the violation. there is no evidence provided. it helps nobody to make sweeping accusations. >> there are some laws in china that one foreign firms have to work within china, you have to transfer some of the technology know-how, which is one of the points that the trump administration is fighting against. the you believe there are no areas of cooperation when it comes to intellectual property, theft, or allegations of it? >> there is no law or regulation in china that would force technology transfers. there is no such a law. i think businesses will only make the deals that they believe are good for them. if they have any complaints, they should resort to chinese law and we will help them. >> the u.s. representative has

yet to come out with a list, a final list of terrorist -- tar iff items. do you expect any concessions or coordination on which items can be included or left out? that anyays believe disputes, any differences between the two countries should be worked out by dialogue. but we certainly will not yield to any threat, coercion, or intimidation. >> the sort of u.s. actions, will they have any impact on china's support in dealing with north korea? i think these two issues are different ones. anything istime, if done that would undermine the

broad mutual confidence between the two countries, it might affect other areas, but we will have to wait and see. >> those areas include foreign policy. we will see what is done by the u.s. side. then we will decide. >> china could be considering cutting back on its purchases of u.s. treasuries. that would be an economic action. would that also be included in your thoughts? >> we are looking at all options. that is why we believe any intellectual and protectionist moves would hurt everybody, including the united states itself. . the leader that the daily life of american middle class people and the american companies and the financial market. >> how will the economies that depend on chinese trade be affected by the latest u.s. actions? >> well, you see, in today's

world, economies of various countries are closely interconnected. there is a community of shared interest among different economies. scarlet: that was china's ambassador to the u.s. speaking with shery ahn. coming up, the fate decision -- first rate decision made this week. we break down what we learned from the conference. this is bloomberg. ♪

scarlet: "what'd you miss?" the fomc hydrates this week -- hiked rates this week. the panel discusses what this

decision tells us about powell and his thought process. >> i think he pleaded say a little bit during this first meeting. it was an inaugural meeting so it was important to get through it with minimal volatility but it was interesting because during the meeting, it was perceived as dovish the message that he was sending out, but in the announcements subsequently perceived as more hawkish, but the reality is i was writing some comments before the meeting had happened and i said i am writing this as we are sitting a day away from the fed and it does not matter whether it is going to be three or whether they indicate more than three. >> why not? >> as long as these are continues to shrink the balance sheet and continues on the right -- the path of high rates, as long as markets continue to grapple with additional supply not only from what the government is doing but from the less regulated banks, which are huge holders of treasuries, the technicals for the treasury

market and generally everything with it is not constructive. >> does the argument that she represents resonate with you? >> i think it does. we often get focused on the dots. the key methods is they upgraded their growth and inflation forecasts. also, the terminal rate forecast. they are giving you a clear message as to where they think they are headed. we get too caught up and are they doing to our three additional hikes. that is probably a mistake. these are forecast. we are talking three years in the future. dots, we need to remember they are not actual forecasts. they are where the fed thinks things will work out based on their models and citations. these are models that have been largely wrong for many years. a lot of uncertainty still remains. we can bring this up on the

screen very quickly, the big wager going into the federal reserve meeting looking for the spread between december 19 and 2020. the fed delivered the volume that was looking for, which is the race higher for 2019 and 2020. at the front end, of session between whether we go from three to may before, but ultimately, we are pretty much almost there. we are drifting towards 4. 4,we are drifting towards but there is a lot of messages chairman powell said in this meeting. i think the fed is only going to move one more time this year. i really throw the dots out the window. >> that is a huge call. what underpins it? >> lack of inflation approaching with different like. i think powell alluded to the fact that the forecasts are just

forecasts. they are no better or worse than anybody else. i did find it intriguing when you look at the dots and saw one who had a terminal rate of 480. that was pretty impressive. but the bottom line is i think we will see the data continue to be moderate and disappoint. i think powell really laid it one loop, onemade decision at this meeting, and i was to raise rates are basis points. everything else gets me as a decision of further meetings. >> there is no downside to risk. certainly not many people calling for one more this year. what do you make of the argument? oksana: let me throw some stats out there. this is really interesting. over the past two years, from march of 2016 to march of 2018 where we are today, we have seen $300 billion thrown into , andegies, more in history the return over this time, the

benchmark that all of these strategies track, have rarely been over 1%, 1.1%. this happened over a time when the fed was in the early stages of removal of the accommodation so we are now in the two starting to enter perhaps the latest stages of the accommodations. what are those returns going to look like? ultimately, we have to bring this back for what this means for portfolios and where investors get that diversification. struggling in the course of this year with every part of the market. scarlet: that was earlier today on bloomberg real yield. you can catch that show next week at a new time and on a special day, thursday 1:00 p.m. in new york. a half hour dedicated to everything fixed income. joe: "what'd you miss?" columbia was once the economic rising star of latin america. today, a long list of challenges. theeconomy grew 1.8% in

last year, the slowest rate of growth since the financial global crisis a decade ago. 2011, it was going at 6%. that i president of the country is going to try to reverse that trend. in may, colombia's will go to the polls to elect a new president. we are joined now by someone who may will the top -- win the top seed. thank you for joining us. >> thank you for having me. joe: i want to get your sins of the world to start off trade. you by theed are apparent turn away from free trade that we are seeing? obviously in the u.s., but elsewhere as well. the concept of trade wars is not good for the world at this moment. we want the u.s. economy to grow. if it starts going about 3%, that will help emerging markets and latin america a lot. but if you start having measures in order to limit free trade or for additional tariffs, it would

hurt emerging economies. if you want the whole economy to grow in a conference of way, you need to get the biggest economies growing and do not blockade the development or access to free markets. scarlet: what kind of relationships the university columbia having with the u.s. under president trump? ivan: there is an important thing that columbia has always had bipartisan support. we got support from the clinton administration, the bush administration, the obama administration. now president trump is visiting columbia a few weeks from now. anti-drugorting our agenda, but i also believe that we need to strengthen commercial ties, trade ties. we want columbia to participate actively in aggregated value change. we want also to expand and diversify our expert offered to the u.s..that is part of my goals . colombianpercent of exports to the u.s. are limited to very few products. we want to broaden that so we

can have better opportunities of growth in specific sectors. joe: as i mentioned in the intro, columbia's growth not very impressive. under your administration, what would be the central plank of reviving that growth? ivan: first of all, tax rates in colombia are pretty high. when you look at corporate tax rates in colombia, we are above the average of oecd member countries and above latin america and the world average. part of the things i am proposing is to eliminate unnecessary spending, do a reform in central government so we can be more efficient, use but a technology, and eliminate duplicity's in many work that we have among agencies, and also fighting tax evasion on corporate taxes. we can lower the rate, increased investment, and make that the trigger of productivity and new formalization and job creation. scarlet: when it comes to the tax cuts, are the trump or bush or reagan tax cuts a model for you to look at?

ivan: i don't think you could have a one-size-fits-all agenda cuts, but what we should do it to libya is become more competitive in tax rates for corporations because they are the generators of a formal labor force. if you ask me about a competitive rate, it should be below 30%. as we have seen in other countries in latin america. chile has taken a reduction, and also peru. we should follow that trend to get the economy and investment reactivated and be able to generate the type of employment we need at all so put the target of getting the economy growing above 5% of gdp. joe: you mentioned paying for tax cuts by doing a better job cracking down on tax evasion. ivan: and reducing evasion. joe: how do you do that? it is going to say he will reduce evasion, but what steps can you take? ivan: the usage of technology, big data, blockchain, and supervision of accounting, corporate accounting helps a lot. peru is doing good work.

detected mr. should in mexico is doing good work. a recent study from m.i.t. shows the right accommodation of technology and facilitation officials can be more efficient in terms of reducing evasion and corporate tax. also, you need to formalize and maybe have three levels of taxation for micro, small, medium, and large size so you can get the right incentives for formalization in the way companies are registered in a country like ours. scarlet: if you look at the equity market, a lot of people use that as a gauge for have economy is doing. president trump likes to do that. colombia's benchmark stock index is the worst performer over the last five years according to bloomberg data. we track more than 100 primary indexes here.what has been the root of the problem ? certainly employ to inefficiencies and government spending but i had spent -- but that has been the case for longer. ivan: the development of local capital markets was highly dependent on oil. we had the oil companies being

the ones who had more trading in our local capital markets. there are two objectives i want to achieve. first of all, i want the local capital markets to develop. we need to have more ipos. we need to develop new instruments that are attractive for investors not only on government funds but all areas. scarlet: our thanks to ivan. thank you for joining us. ivan: thank you. scarlet: we have some rain news. the president says a bump stock will will be issued. once again, this is on

mark: i'm mark crumpton. you are watching "bloomberg technology." citing national security, president trump said he reluctantly signed a $1.3 trillion spending bill today to avoid a government shutdown. president trump: while we are

very disappointed in the $1.3 trillion, nobody is more disappointed than me because the number is so large, start coming down, we had no choice but to fund our military. the president added he is not happy with the measure because it does not include protections for dreamer immigrants and does not provide enough money for his portable. the u.s. says it looks forward to working with the new peruvian president sworn in today after peru's congress voted to accept the resignation of the former president. the state department praised peru for what it called a constitutional transfer of power. a 16-year-old girl shot this week at a maryland high school is dead. the st. mary's county sheriff's office said today she died last night after being taken off life support. students from marjory stoneman douglas high school and many others around the country are in washington