sending stocks tumbling on the first day of the second quarter. we have got the s&p 500 index dipping below its 200 moving day average, heading for its lowest close in five months. you want to see the price action but you know there is nowhere to hide, if you look you have got500, discretionary 3.4%, financials 3.4%. underwater, not one sector in the green. i think this is a critical point. if you look at what is going on in the 10 year earlier in the session, not really behaving -- catching up. modest we aretty lower on 10 year yields. a safe haven asset because they're panicking. >> for more, let's ring in capital markets chief investment strategist ryan. great to have you with you -- with just. >> great to be here.

kind of. when will the winter and? >> you do not look like it is winter and your world. >> i was on holiday. people are losing perspective. people are losing different months here this year. january, go, go, go. i am missing the market after a 21% last year, january comes and we have got to buy stocks. february comes and the exact ops it happens. then march, a combination of not only people worried about higher later inrates, but march, you talk about recessions and yield curves and things like that. what does this mean? on a near-term basis, people are taking profits. in terms of volume, it is not great. we are not necessarily seeing a lot of selling. what is telling his you watch the last couple of hours and

that is when it starts to really get worse. people have been on vacation, passover, a lot of things are going on. the true test of the market from a fundamental perspective will really be seen and said when we start see first-quarter earnings. of the factu make that we are not see much of a flight to traditional safety? year, remiss in of what we saw an early february. >> it is interesting to talk to your viewers because you are not seeing wholehearted selling and moving into defensive areas. we saw true yield areas like securities and telecom. that is not a true trend. those areas have dramatically outperformed for several years. the next true fundamental return those yieldss, cannot possibly outperform. those are clearly more of a knee or -- more of a near-term trading.

got a lot going on whether it is concerns about trade war, earnings season, and the pressure we have seen in particular. today.ly continued for thertant is it, fundamental underpinnings of the stock market, getting increasing pressure in light of affected has in a crowded trade? >> it is a fundamental underpinning. our work shows technology in the last 10 years, it has consistently become the most consistent burner in the market. -- the the faith facebook machine, these are google type machines. we were neutral in the last few months principally because the sector became one point 25% of the market, always a problem. were going to see some sort of a pullback in the sector.

stocks like the chips that were up 100 percent last year, where they went down more than the market in the february, and then they were up more in the market. joe: are we just getting distracted by all of these? facebook's data, amazon, and it .s as simple as, you put it >> what comes up must go down, live by and die by the sword. let's throw in the phrases. stock market remains strong. in february and march, earnings went up not only for two dozen 18 the 2019. companies are the true wherewithal. this is silliness. it is all part of the stock market. far, 2000 >> are you

saying actually, stock solidifies the market. you start to check out the numbers. we haveovided by what seen. >> take a deep breath. the areas are going to do well in this type of environment and financials and industrials, materials. we now see enough weakness in the tech sector to say, maybe it is time to get some of these technologies back. >> even at this point? >> i could never want to time the market but you see this come back into you especially the cash flow generators and strong balance sheets and consistent earnings. nothing has changed with them. got a little out of whack. they got too big for the market. the run-up in your view kind of crazy but fundamentally, they are the same businesses and you are not worried at all.

>> fundamentally, maybe they have become stronger. i think people become enamored with pricing and go go go, but they miss the fact that stocks like apple and microsoft, they are increasing dividends. equities, they major set of trend. growth is a 10 year yield. investors simplified equity income needs by looking at telecom where we prove fireworks that those companies that pay dividends and increase over time, are able to increase dividend overtime. a lot of the companies are clearly financials. >> talk to me about the flattening of the yield curve and how focused we need to be on this because we have seen the front end of the curve pretty well anchored in light of expectations for what we get with the that right now.

we see a continuing softening of the 10 year yield. quickly need a prolonged inversion over several weeks if not months before we say, now we need to worry about this. see -- the market can see and understand and do quite well under the market. i think that is what people are missing were all of a sudden, markets are on the yield curve and heading in a recession. i think that could lessen the fears a little. >> interesting. brian belsky, great to have you with us here thank you and welcome back. coming up, the day for chipmakers just got worse. bytesters with a plan to use 2020. why they are looking in-house for two chips next. from new york, this is bloomberg. ♪

>> you can see the nasdaq at the epicenter here, 3.4% losses right now. 2.9% breaking below the 200 day moving average. that is the snapshot and we are 20 minutes away. it is down below session lows. the privacy is heating up.

>> spotify is becoming a public company but don't call it an ipo. -- ♪ typically, when a company goes public, management decide on a valuation embark on a marketing roadshow. they judge interest for potential shareholding. set ase the input to final price and a number of shares to be sold to investors. spotify is skipping that and being straight to the trading part. you sell the stocks to the public -- public market investors. companies rarely to the lifting.

spotify's betting its reign over the streaming music market will get investors and's -- excited. the streaming giant was valued privately at eight point $5 billion in its march 2016 funding round. --ce 2017, shares have rate changed hands anywhere from 6 billion to $23 billion. going public will mean more investors will have the potential to bet on the future of the music streaming company. spotify's promising investors big things, up to 96 million subscribers by year-end. more than it currently has. this year,2230% more potentially reaching 6.5 billion u.s. dollars. investors will also keep a close eye on operating losses.

spotify expects to be $283 million this year. new shareholders cannot count on having much of a voice. according to people familiar with the matter, spotify cofounders will -- after the listing. with the streaming music market addicted to hit $34 billion by 2030, you can and that investors hope they plug into the market winner. >> that is the overall backdrop pressure. is going after that but more specific, mark zuckerberg's debt recently participated in a podcast and

two keys of important information came out. he first indicated this will not be a quick fix. the data privacy issue could take years. that is reason for investors not to like it. he went into a war of words with of apple, tim cook. mark zuckerberg basically defending their advertising revenue model. the fact that he was in that suggests that he does feel the heat and pressure. investors are not taking kindly to it. joe: very interesting the way he defended facebook's business model. we give away something for free but don't interpret that as us thinking clients are the products. likening to yourself debt yourself to more amazon and efforts to give away discounted goods. >> it is interesting, even defending it and in what i read, it was talking about the fact that you don't have really wealthy clients that you have to come up with a different strategy. somehole conversation, in

ways, was odd. the overhang here is the potential for regulation. a super simpleom standpoint, something is going on, everyone is talking about the 200 day moving average on the s&p 500. but here, people may start talking about the idea that we will see a death cross and facebook. we have a mini one, and the stock remains confirmed to go below 140 the big question is do investors think earnings are a mattern, it is this of valuation? there could be a nice buying opportunity ahead and i say that because if we take a look at the bloomberg at the et rv, relative valuation function, a 45% basis,t trading at a -- still he bit of a premium, but also, historical levels trading at the lower end, from a valuation standpoint, the stock has taken a big hit.

it may suggest there is a big buying opportunity of earnings and revenue are not affected by what is ahead. >> this is one of brian belsky's, we have got to wait for the arms report and see what it will provide a great work. thank you for that. what did you miss? apple making a move to move in-house for computer chips. they are planning to use their own processes in mac computers as early as 2020. the news was a blow to the current chip provider, intel, sending shares down by their biggest intraday drop in over two years. broke theer who story, bloomberg's tech reporter joins us now from san francisco. a great scoop and rate work as always on this. talk us through the project and what it means terms of timing and the likelihood of them bringing the chipmaking in-house? >> what we have to think about here is why would apple be doing this question mark why would you want to move away from what was up until recently the world's chipmaker, they dominate the market and the answer is not

so much on the financial side of it. case of apple really wants to paddle its own canoe and differentiate itself. remember the markets work around what intel is doing every 18 months, they come down with a new design, more speed and more memory and whatever. apple is locked into that and that is not something to help them differentiate their products. joe: it is one thing to want to move away from intel chips and that, but what will it take scale wise to actually deliver those products for itself? julia: can you hear us or have we lost you? i think we have got an issue. i do not think he could hear your question. great question as it was. joe: you always hear about companies that will want to do this or that, and a credible challenge of building up the scale, even if you can get the technology and design you want to. julia: and this is the point made in the article. they are saying this is hoped to

,e achieved by 2020 but partly part of the rationalization, the hope is that it gives more flexibility to adapt and i don't have to run to the intel timetable in particular. >> new businesses that other players have been doing for decades, it will be tough. julia: great point to hopefully we can get him back to talk more about his scoop and we will do that to her for now, time for the business flash, a look at some of the biggest is the stories in the news right now. the pipeline network has been shut down due to a cyber attack. say theransfer partners pipeline will be unavailable until further notice. the shutdown could affect those pipelines running from michigan to texas. the attack was on the system it digitally processes customer transactions. the pressureeeling from china'25% pork tax and downgrades from pivotal research groups. the firm expects these to cause a backup in supplies which will

drive pork, chicken, and beef prices lower. posing the largest decline since may, down more the 6%. espn is debuting a new suite -- streaming service which will cost four dollars and 90 nine -- 4.9 nine dollars per month. live sports including hundreds of mlb and h m -- games. also including college sports, boxing, and tennis. that will debut on april 12. espn faces subscription and video-on-demand and those will launch in late 2019. that is your bloomberg business flash. i am still getting to grips with all the acronyms as far as sports are concerned. ian, i think you are back. from san francisco, can you hear me? we asked a question because it was an important one.

joe: it was one thing to want to be able to do their own ships, but once again, what does it take to develop the infrastructure needed to do it? >> the already have it and they make the processes for the iphones, a lot more iphones in the world than pcs in the world. they already have the scale and already work with them and already have shown they can switch between suppliers and that should not really be a problem. the key is, you have to believe samsung or your other supplier is now as good at manufacturing because that is where we got in trouble in the first place. talking about this, the time flexibility, that they do not have to rely on intel and the speed to produce an update. it gives them more flexibility and the ability to integrate as far as software and hardware are concerned with all the different products in the system. surely, this is critical.

>> that is right, you want to bind people into the system because ultimately, you want them to buy her hardware and software and you want them to use your services. the more time they spend on your plat, the more valuable they become. the more integrated you can make better for you. the less likely they are to go off and use other things, other services. >> yes. great points. we apologize for that. ian king from san francisco, thank you for that. a quick look at the major u.s. averages. that when bouncing off the lows heading toward the last 10 minutes or so of the session, you have got the s&p 500 down 2.3% earlier in the session. we were down 3%. this is important woman talk about price action particularly as we head toward the close right now, the underperformer is still the nasdaq, down but it is a similar story here. we're pitching up -- picking up

speed and taking back some losses as you can see still red across the board. plenty more to come. this is bloomberg. ♪

joe: risk assets under siege pushing investors to turn to a last line of defense. lou is here. three that you don't want to miss. all around the world, lines are intersecting with other lines, particularly yellow lines causing a lot of people trouble. let's break through them. we talked a lot about the 200 day moving average. but there are actually two key lines that s&p investors are looking at. what have we got in the chart? >> there are a couple of things i would like to say in this chart here at pointed out the 200 day moving average was also lining up fairly well with a two-year trend line from the january lows. it is kind of like double trouble if we were going to preach that.

that is what we got here it if using back out, and this is pointed out.en she said worrying death worry about the 200 day moving average . when it rolls over, it becomes very strong was a distance for the indexes, trying to get back above that. right now, the 200 day moving average right now is just barely moving up but like less than one point per day. we are on the verge of that rolling over and -- that could be the next scary line development. >> that is important. can choose whether it is tech weakness we have been talking about for several assions, but there is potential trade skirmish, trade tariffs situation playing and -- playing in as well. me, the chinese market is fascinating. talk about what we are seeing as far as technicals.

>> trump is on the verge of issuing 50 billion in tariffs, as soon as that happened, the shares based in china, csi 300 which went right down below the 200 day moving average, the top chart, it stayed there completely and has not been able to go above it. the bottom chart, what you have is guggenheim's china tech or today, it breached its own yellow line p or we might be worrying about tech stocks in the wrong part of the world with all the focus in the u.s. you look at a lot of the chinese names, your baidu in your alibaba. right now, those and if you throw in samsung, japanese names, if you throw in those, the equal about more than 10% of waiting on your index. talk about a broad global rally in emerging market, a lot of it is linked to the tech stocks.

>> this is important to remember. they certainly think of various commodities producers, formally state owned, things like third typical plates, but it is important to remember how much of it is now in tech. >> and that is what you see and that is why the danger might be acutely especially as tensions surrounding intellectual properties acutely related, this could be a big problem. >> we were talking about the relative resilience we have seen and also the local currency bonds as a you look for weakness and then you have got a bigger problem. a critical point. thank you. >> we hit the s&p and the u.s. and asia. also a chart here, and german ten-year yields. another line about to intersect with another line. what is going on? >> it is crazy. we had a very low base the german bund yields on the 10 year, more than doubled in the

-- in the first six weeks of 2018. then we had basically around trip and nearly just a little above 10 year, 200 day moving average. what this speaks to is, i don't really think people are changing growth estimates like crazy in europe but we have had a rollover and people questioned the second derivative of growth and questioned the longevity of the synchronized expansion as their doing so. that is what the chart shows, just the idea that maybe is -- the rest of the world is not providing as much support and that is provided in the downward trend of the german bund -- bund yield. >> the white house is set to hope -- host negotiations in d.c. this week. trump will push for a deal within two weeks. this follows what we got over the weekend with accusations that mexicans are not doing

enough to clamp down on people, and on drugs, costing the border between mexico and the united states, and we have seen weakness in mexico and canada in particular the canadian and mexican currencies. are getting headlines that perhaps we will push in the next few weeks. joe: a little late day on the lows, still getting hammered that a little bit. >> following the progression. overall, talk about price action. we talked about the increasing violence we have seen in a number of sessions over the past, a week to a week and a half. today, a bit of a bounce back as we head toward the close. joe: it is nice to see that at of end of the day, that kind bouncing off. what i am seeing and really looking at is where might stocks find valuation support? past four years, we had the s&p 500 kind of bottom out

anywhere from 15.2 215.5. the nasdaq still far away from areas where it was in the past. it seems julia: a great point, at the finish of the first session for the second quarter. 2% --w is lower shy of , theasdaq also once again tech stocks at the epicenter with 2.74% lower. and tesla and all of these names continue to be in the spotlight. intel continued to have a tough session. and the nasdaq erasing gains we saw for the year. has been a tough session. earlier we talked about this being the worst start to the second quarter on record. we have found a little bit off -- and at the end of the session. thatfor anyone hoping

volatility we saw at the end of q1 was a weird and of quarter stuff and it was going to be back to normal -- julia: it is a good point to make. ilan, hong kong -- volumes have been strong. let's look at individual names. fitbit.apple, tesla, tweaking that our aney-losing cost office loses fortune and it is not a level playing field and amplifies the pressure on amazon. the biggest gainers we have seen, particularly in the past 12 or six months off 5.2%. investors questioning if indeed when we get to ending season advanced support, but not for now.

apple off 6/10 of 1%. at one point intel was losing more than 9%. apple is said to be using its own chip and mac computers beginning in 2020. the earlytive is in development stages and will talk to tells with ian king as well. it gives some flexibility as far as the ecosystem and hardware software is concerned. and fitbit in the spotlight today. morgan stanley recommending investors sell this one as they focus more on software instead of devices. it is worth to take time to bear fruit, but the point you were making about the switch these guys make and how long it takes to come to fruition. these guys have been squeezed i apples high and watch, and cheaper options as well as those

in china. tough cells, missing analyst estimates for the year. the earning season critical. let's look at the bond market the u.s. two and ten. the real story is the lack of movement anywhere on the curve. a little decline on the short end. the short and is sensitive to near-term expectations, and the pace of fed rate hikes. what we are not seeing is a big decline on the expectation of rate hikes. the two-year yield is down 2.25%. -- 10 year yield unchanged 2.74. we are not saying that classic long and flight to safety, kind of like we saw earlier in the year when people are not buying long treasuries. let's look at a year to date

chart of those 10 year yields. 3% mark,lose to that but still pretty elevated and not much treasury buying. julia: we were talking about so let's look at the dollar index in light of what we have seen in terms of broader risk. right now the dollar -- you can than weief spike higher saw at 10 a.m. eastern time. the potential bullish capitalists seem to be growing and u.s. data is relatively strong as the rest of the world. the european pmi, stronger levels but softening slightly. aboveg as euro-dollar is -- it should be played for the short side so this is interesting. there is your dollar index, it

has been choppy but relatively range bound since the start of the year. i will give you the session chart to give you a sense of what is going on. that mexico and canada is weaker, and we had those headlines crossing the bloomberg that the white house perhaps could see the president pushing for a nafta deal with in the next two weeks. this coming after the weeks he sent out lambasting mexico for not doing enough to control their borders. campaigning begins over in mexico for the presidential election, and i want to point out what is going on as far as the dollar yen and dollar korea is concerned. slight the quality being shown in the japanese yen, and the dollar korea, in light of a trade deal signed by south korea and the u.s. administration,

keeping an eye on that one. joe: finally on commodities, the big winners are the precious metals. updid see a bit into gold, 1.3%. the loser is crude oil, and the as a is that crude acts risk on and risk off barometer. to date with the risk off move in equities we saw that there are in crude. and those are today's market minutes. julia: for more on the price action we saw in the first trading day of the second quarter -- let's bring in chief investment strategist joining us from sarasota, florida. equities below the 200 day moving average in the s&p. how closely are you following this to start? bruce: certainly we are

following it. does it mean the market is headed lower, as a matter of fact will see several false breaks, and it does it mean a whole lot. it is something to keep an eye on. joe: in addition to the overall index getting hammered as the whichf in tech stocks -- for so long were the preeminent sector of this market -- what do you make of that? is this the end of that story or is this a return to a more normal volatility for stocks that returned so much? bruce: i would think it is a return to normal for volatility. don't forget the technology sector had a huge run for the past 18 months, virtually uncorrected. not too surprising that you would see a setback at some point, and this is probably it. the tech sector has garnished a lot of attention

and it is now 25% of the s&p 500. past with seen in the energy and financials, when any sector gets that popular, it is subject to a correction. joe: we were talking about it, we haven't seen much of a decline in expectation for fed policy. even with the pickup and volatility and selling of assets, people don't think this is going to change the fed's path much at this point. you think there is a point we would see that and we get an ongoing selloff and reprice the short end? not too surprising that expectations haven't changed. don't forget recently that consumer confidence is at a 15 year high. small business confidence is that a 15 year high, so it takes time to break that confidence if that indeed is going to happen. i would suspect that we would need something more of a 10% rate in the stock market to influence in that direction.

maybe something closer to 20%. we are not predicting a 20% decline but it would take something of that nature to really change expectations. about thek to me consumer confidence data last week. if you look at the component expectationssumers and were stuck prices would be in a year, it felt dramatically. admittedly from lofty levels. , isn't amportant translation that the volatility and choppiness we are seeing in stocks is fitting into consumer sentiment? bruce: i think it is somewhat important. after the big surge in early january that took the market to new highs, confidence soared and it is hard to break that. -- in some correction things like call ratios. we don't see pessimism coming into the market. typically it takes a large amount of pessimism to create a

real good bottom in the market. that is something we are watching and waiting for, and it is a possibility in the coming weeks. julia: i am showing a chart right now, expectations of stocks to rally, that is the white line coming back from above 50% levels. are you starting to see the signs of the end of this correction? if you look at the volumes we are seeing in the public of price action -- you said in the coming weeks you expect to see that. we are not there yet, is that your point? some indications best doubt and industrials met a 2000ow, but the russell that not and the nasdaq, until today, did not. those are positive developments. what we are looking for is a

change in momentum. by that i mean after the january and february correction momentum, it all went to the downside. we had four or five sessions were downside volumes overwhelmed upside volume a ratio of nine to one or more. even in subsequent rallies we haven't had the reverse. we haven't had an upside explosion in volume. what we are looking for to --nal the correction is over it is for that to reverse with a big explosion of a volume in the ratio of nine to one. that would give us an indication that the coast is clear. until that happens you have to consider all rallies are suspect. julia: that is a great point. great to chat with you, bruce bittles. think you for joining us. analysis ofill have what is driving the beginning in

a tight flight tech sector. that is coming right up. this is bloomberg. ♪

>> let's get first world news this afternoon. president trump went after the justice department and fbi on twitter, accusing them of withholding information and lighting over submitting augments to republicans in congress. a weekticism comes after after christopher wray a site than 50 employees to work around the clock. the president could expedite the release of documents on his own by declassified information in full. in agency ethics official at the apa says administrators in a capitol hill condo did not

violate ethics rules. watchdogs have been pressuring federal investigators to white in april into prewitt's travel and security detail after what they called an unorthodox rental of property. that epa director is looking through his travel arrangements and trips to his home state in oklahoma. russian foreign minister says russia is more interested than anyone else in finding out the truth about the poisoning of a former spy and his daughter. at the joint news conference with the blinded -- foreign minister, he denied russian involvement and said the u.k. had taken the line and spreading disinformation. britain insisted the russian government was behind the nerve agent poisoning. is therico governor fight calls to implement more measures to mitigate an 11 year recession. it is expected to unveil a fiscal plan on thursday and is refusing demands from the federal control board to include options for labor reform and a 10% cut a pension system facing

nearly $50 billion in liabilities. he says the people of puerto rico suffered too much in the aftermath of hurricane area, and the storm caused an estimated billions of dollars in damages. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am kailey leinz. this is bloomberg. could the stock market not the second quarter with steep losses as continued weakness in popular tech stocks start selling on wall street. let's look at what drove losses. mike reagan is with us now. action, terms of price we're talking about session performance and if we will see with this in the close, and we saw the opposite here, we set a pickup and bounce off the lows. how important is that? mike: i don't know if it is

super important but it is better than going the other way. [laughter] have --another week" julia: and light of the 200 day moving average. when that trendline rolls over and you get trapped under 200 day,y rising however faith you put, people look at today and say it is easter monday and a weird day. don't take out too much. joe: a lot of talk about tech stocks. is it important to zoom out and look at the big picture that is that they had an incredible rally or you pay attention to the tweets and scandals? mike: i think tech is still fundamentally where the most reliable and strong growth is expected. s&p year and for 2018 and stocks is 30%.

isonder exactly what spooking people out of tech stocks. was it over crowded trade or is there genuine concern about this backlash from the public and scrutiny from regulators? that is hard to say and predict. facebook, amazon or services that are so ingrained in our daily lives it is hard to imagine people rejecting them wholesale because of political reasons. joe: we are starting to see on the credit side of things some weakening. for a wild was holding in there, and there was distressed funds underperforming. information -- underperforming. julia: this is an important story when you look at tech stocks and to what extent these guys are underpinned by the credit market as much as they have in the equity markets and the rally we see there. yield is widening in some credit

bonds, and it is tied to the story closely. are: mega cap tech stocks strong balance sheets that you have to worry about too much. netflix inc. the outlier. tesla,and also significantly further down the capital, but you have investors take 6% the last time they raised money saying they want off to 11 and that nervousness creeps in. first toouldn't be the point out elon musk's bankruptcy joke. julia: did you laugh? mike: i did not. julia: you are a liar. [laughter] welcome to the new generation of ceos. mike, thank you so much. pursuing tradea

pursuits and the trade war to into economic powers. from new york, this is bloomberg. ♪

julia: china is showing the u.s. it will make it on its trade threats. the chinese government said tariffs of $3 billion of imports going into effect today, picking up 128 products ranging from fruit, pork, and wine. this sparking fears of a broader trade war. for a sense of where this goes next, we welcome brad setser. pull there, i argue it is not the case at all in the

chinese are being muted in their response when talking about $3 billion worth of tariffs. think? you restrained, it is the warm-up round. it is the play in him for the ncaas. julia: are you surprised china said they want more talks? tois almost a desperation bring everybody to the table, i spoke to the commerce secretary last week and i said to him if steve mnuchin is going to had off to beijing, and there was no sense if there was a plan to get around a conference table and flesh something out. brad: i do think there will be trade negotiations. the u.s. is in the process of putting together its 301 tariffs lists. fors some once that list

the bigger 301 cases out there that there will be some form of negotiations. the chinese have been signaling all along they are open to negotiations. there's a lot of back channel diplomacy over the last several months. the u.s. has been reluctant to start talks quickly. joe: what is something interview china can possibly agree to that the trump administration and claim as a victory? which is what china has been offering is more opportunities for u.s. companies to set up shop in china. is that a victory for the trump administration? debatable. the big win would be if china agreed to reduce auto tariffs, which are objectively high and that is what the trump administration is pressing. joe: could you see them doing that? brad: they will want something in return, it won't be easy. on macadamiaffs

nuts and ginseng, really minor stuff. what could escalate the real macro effects? brad: if the u.s. goes ahead of the proposed 60 billion and 301ffs in response to the investigation. it is over 10% of imports and china, and if china tried to respond fortunately, they would have to hit roughly one third to one half of u.s. goods exports to china. that would be hard to do without hitting one of the big three. aircrafts, and autos. julia: further ratcheting up tensions committees that the u.s. is reluctant to engage on the diplomacy side of coming to a trade deal. why? does the president what to make a big progressive/ahead of

midterms? why are they unwilling to come to the table? brad: i think partially it is politicking. i was a big is a desire by the trump administration to signal that china has to go beyond its usual offer. china has to come to the table with something you. the u.s. isn't going to settle for extremely animal concessions. butp can change his mind, like kaiser has been critical of modest deals that hasn't moved the needle. that is part of the signaling. joe: let's go closer to home with nafta. on one hand you have trump tweeted that he will threaten to rip it up, and we have headlights moving 20 minutes ago about let's wrap this deal in the next few weeks. julia: two weeks. joe: what do you make of where things stand? brad: i am confused as everyone else.

if you keep immigration out there is possibly a deal, but the u.s. estimate concessions. julia: can mexico agree to this prior to election? that the mexicans in a major campaign mode for the presidential elections and mexicans cannot compromise on a wall ahead of elections. agreed, and that is why yet the separate trade negotiations from the broader discussions around immigration, the wall, and so on. on the other hand i can imagine u.s. might want a quick deal because the u.s. might want to have this congress rather than the next congress ratified. julia: a very good point. joe: let's go back to the intellectual property transfer, one of the key things that could be the contributing factors why people aren't anxious about tech companies. is there more that china could possibly do on that and's or

something concrete on the ip theft and related topics that would be a meaningful step? unquestionably, but it goes into tough negotiations. let's separate the tech transfer from tech companies because a lot of the tech transfer has involved aerospace or semi conductor manufacturing, or electric vehicle may fracturing, or pharmaceutical production. necessarily internet companies which don't necessarily have big business in china because china but that's its national champions. wicked china do? -- what could china do? it could allow google and facebook free access to the chinese market, unlikely but possible. or it could scale back some of the china 2025 policy goals and really signal that it is more open to importing high-tech goods. joe: we have to have a whole show on this.

julia: thank you so much. thank you for your insight. --ing up, this is exciting we are awaiting space x resupply mission to the international space station. you are looking at life pictures of the air force station in florida or the space x falcon nine is set to launch, sending 5800 pounds of supplies. besides its permit to the international space station. for now let's bring in silicon valley -- cofounder and managing us.ctor, sean casey joining it is a business exit the rater for new business entrepreneurs. talk us through how exciting a launch like this is even as we continue to track them.

this is a phenomenal occasion and a great opportunity for space x to develop technologies and also fantastic for those scientists and business entrepreneurs and students will have payloads on this crs 14 mission. spacex the 14th mission has done, and it is always exciting to watch a launch. joe: compared to other payload delivery launches, what does spacex bring to the table? underthey have a unique the hood payloads to go directly from the dragon capsule into the international space station that having to go through the interior of the space station. julia: we are seconds away from the launch.

you can see the smoke billowing from the bottom of the rocket. 3, 2, 1. we hear account. the you are looking at is launch.lcon 9 you have the dragon capsule that is attached to it and stay in orbit and creep closer to the international space station for meeting with the station early on wednesday morning. the capsule will remain attached for 30 days. you are looking at the blast. joe: and this is unlike other launches in which it is going to return with a impressive l anding. julia: i believe they are capturing data on a landing in the ocean, and part of the collection of data attached.

sean, you are watching life teachers of the falcon 9 rocket. they are collecting aid to on the way back. sean: this is absolutely essential and part of masses new paradigm they implemented over the last couple of years. this is their commercial orbital system, and it is a cost paradigm for nasa where the risk is associated and held by the government. it is up to individual companies or sierra is spacex nevada to deliver a loads at a fixed price. delivering, this is a great cost savings for the taxpayer and enabling technology for space entrepreneurs on a global scale. julia: we are looking at

incredible pictures. look at the feet at the top right hand side of the screen. we will try to talk about the space because it is moving so fast. per hour.kilometers julia: talk to me about the recycling. nasa isthe second time relying on the rocket to get to the space station. this is the second time to have used the cargo carrying supplies -- even simply being able to use this equipment is pretty groundbreaking. sean: it absolutely is. invested into a billion dollars of reusability of first stage launch vehicle.

based on what they have done. sleep is a 50% cost savings versus cranking out a new first age. you are also saving on the reuse of the dragon capsule's. is working on a $6 million cost savings. down forringing cost u.s. companies to make it extremely competitive for russian and chinese and european launch competitors. julia: this is such a critical point. is, thist how risky it process we see of the separation from the capsule. sean: every step of the launch process is a risky process. we have seen launch failures in the past of a different kind. all of these failures are unique and their sources.

what is important is we reduce the risk through reuse. spacex is doing that right now. joe: tell us more about the process. you mentioned the business process and the number of companies are doing this new relationship with nasa that shifts the risk. explain to us a little bit how this contract is structured. sean: the contracts are paid on performance. previous contracts, nasa would carry the risk. so if a schedule for doubt nasa would pay more money to those companies, whereas spacex is paid for the delivery. nevada. is for sierra investors are putting money into spacex and expect a return on investment based on the

performance to these nasa contracts. --ould also add that spacex and 60%% are payloads, are commercial payloads and the nasa payloads. julia: you are looking at live pictures of spacex launching out of florida. a science experiment to the international space station, using one of the spacex dragon capsule that has already phoned to the international space station once. this idea of recycling and financingticle to the to the space missions. talk about the return journey because the dragon capsule takes back precious cargo from the

, andnational space station it has been on the space station since 2011. robonot 2 was delivered and engineers identified the problems, and what the dragon capsule docks to the iss will remain docked for 30 days for a variety of payloads going up today that will return with the dragon capsule 30 days from now. the payloads going out, yet to realize this is the equivalent of nine grand pno's going up to the iss. these payloads are earth observations, and testing of entering in the microgravity environment. crops onthe growth of

the iss. there are business payloads made in space developing a fiber-optic manufacturing facility that has a microgravity laboratory. and also a european company that is going to deploy a large test, capture, the reentry of smaller satellites into orbit. and there are educational payloads. yet a whole host of experiments going up right now. docked,e dragon is astronauts are going to reload the module and the results of which are going to come back. we mentioned the farming experiments they are going to do on the international space station is going to produce edible crops. the current johnson program is for lettuce and some of the astronauts may eat the lettuce that is produced.

what is not consumed is going to come back. and well very exciting, are on the cusp of 21st century spaceflight. julia: you are looking at live pictures. absolutely incredible. some of the science experiments that are going to be on board and will continue once this lance. ds. talk to me about the idea of recycling. i believe this the third mission that want attempt a recovery of the vehicle. it is in the midst of transitioning i've the last --sion and then will move block 5.me about lock sean: what is unique is the continuous improvement of launch vehicles. we have gone through block

and five.r, when you build a gift to learn how it operates, and what you learn is that is gone to be mishaps and problems to uncover and have an opportunity to correct those problems. they are focused on reusability, and anyone who has flown across the country -- nobody flies from here to new york and disposes of the aircraft. the key to cost-effective spaceflight is reusability. in the past we have seen that with the falcon, and with the dragon capsule. these are phenomenal breakthroughs for the industry that is going to help drive down the costs and enable the exploration of our solar system through space technology and technology of other companies. and an investigation into the future, and we hear they

will pause now for a few moments before we see the falcon separate from the dragon capsule. we will bring you those live pictures. joe: we have been watching a lot of these launches in recent in all of the technical breakthroughs these companies are able to accomplish. this appears to be the separation. there you go. julia: absolutely incredible, the separation of the falcon 9 from the capsule. that will continue to float once the falcon has launched. it is creeping ever closer to the international space station for meeting up with the station early on wednesday morning. suppliesit will unload and remain attached for around 30 days. it gives meictures,

goosebumps watching this. history and the making. sean, talking about the significance not just for spacex and space travel, but redefining going forward for nasa. sean: what we have seen over the last 10 years is not only the success of spacex, but the growth of entrepreneurial space of what is a global scale. --ther it is entrepreneurs billionaire entrepreneurs that people follows. elon musk and jeff bezos and paul allen and richard branson. in silicon valley i like to focus on the mere mortal entrepreneurs for not billionaires and pulling in money from investors in silicon valley. it is not only happening throughout the u.s. with disruptive technologies for

earth observations. but also, lunar exploration. just a couple of months ago, we had the lunar payload workshop. you could see half a dozen companies, lunar base, aress -- ice japanese team, part-time scientists -- these are engineers and scientists that are turned entrepreneurs and building capabilities to get us back to the moon. spacex is part of that. entrepreneurs are part of this. it is truly exciting to see these companies secure funding in the last couple of years. we have seen a good series of funding of $20 million. there is no stop to this industry. julia: this is exciting, and as

you point out, spacex is one component. and i read on bloomberg there is a company that is virtually collapsing the cost nasa was paying to produce this. ,hen you look at this industry the cost of the individual components is coming down as technology really fees the industry. aboutentrepreneurship is individuals taking disruptive ideas and finding traction in the marketplace. we have had a lot of press about adding to manufacturing, whether plastic or metals. making're not just components for the automobile industry, but you are making components for the spaceflight industry. spacex has a number of any factoring facilities and their hawthorne facilities.

entrepreneurs are taking those technologies and applying them to engines, and whole rockets. investors have been in trade i want is happening in this growing commercial space sector. i believe with the investors in we reach a point where demand is driving supply, so investors will look at a company like rocket the lap and say, we see the demand is there for small satellites and the there -- the demand is and it makes sense from a silicon valley perspective. julia: more and more as far as i am concerned. i love space. sean casey, thank you for joining us. i could see you have a passionate view on this as well. "what'd you miss?" pressure escalates and tesla's elon musk took to twitter jokingly saying the company had gone bankrupt. he tweeted despite intense and

efforts to raise money including a large last page sale of easter eggs, we are set to report this to has gone completely at totally bankrupt. joining us from detroit with more, he is bloomberg's auto reporter. when i saw this tweet i did laugh and then i had a hesitant moment. talk us through it. >> it wasn't so funny to me, and i missed easter dinner next to elon's tweeting. it is not so funny for investors. intoaw today the selloff tesla shares and they continue -- they had a brutal last week and a terrible march. the worst since december of 2010 with the stock dropping more than 20%. you have seen this widespread concern that the company is not only far behind on their model three production, but they are

not anywhere close to resolving this and getting to a sustainable position where they can make enough of these to truly be a mess market car. that is problematic for the company. joe: do we know when we get the model three number is for the quarter? >> i am looking at my phone every few minutes and waiting -- the here for my friends in palo alto. the expectation is we will get it tomorrow as opposed to today, but with elon we never know. there is a general sense of consensus building over the last few weeks that when those numbers come out, the company want be able to hit the number they put out there in january when they said during the last week of the quarter it would make.500 model threes in the last week of the quarter. sayingthere was a report model to production is just past

the rate of 2000, and you have to wonder if it wrapped up if that is true. bloomberg is also reporting late last week that they were pulling production from other areas of business to wrap up and make some headwind on those numbers. asit going to be some losses a result of the next month and next quarter and gives back was wrapped up to try to save the day the short-term? confirm theny did exclusive reporting about that -- this i get the are moving limited workers from the model s and ask assembly lines to make the model three to the end of the quarter. there is stockpiling batteries and pulling out stops at the end of the quarter to make this number in the next week of the quarter look as good as possible. but caution along with that

speculation from analysts that this going to- is be sustainable and are they any were close to making 5000 a week, which is something they said they would be able to do in the second quarter. joe: is anyone nervous about build quality when you rush to get these out the door and pull in workers who don't build that particular model? tesla was concerned about the optics of our reporting and emphasized that they are pushing to hit their target, but not come from isaac quality. you see mixed reviews were some folks say this car is the best thing since sliced bread, and you see other reviews come out to have been critical about body panel gaps and glitches with the touchscreen that controls a lot of the car. it is a mixed picture out there and we haven't seen a whole lot of quantitative analysis of the quality from the likes of jd

power consumer reports. they have definitely had problems in the past, particularly with the model x. julia: delighted by the deliveries -- and how long patience lasts. craig, thank you for joining us. up next, donald's employees are not living wages and white the company has not kept pace. this is bloomberg. ♪

julia: back in 2015 donald's announced will pay u.s. workers at least one dollar and our above the local minimum wage.

fast forward three years later and some workers are saying the fast food giant hasn't kept up with times. joining us to discuss his josh idol's and. explain what they promised in 2015, and was at a one off bump? >> that is what this story turns on. thanks for having me. mcdonald's got depressed when they announced they are raising wages of the corporate owned stones in the u.s. so that all of the direct mcdonald's employees will be making at least a dollar about the local minimum wage. this story turns on the conversation of paste ups from a number of workers in municipalities where the local minimum wage has been going up in recent years, who pointed out to me their pay has not state a dollar about that higher minimum

wage. when they contacted mcdonald's about this was say they are making less than a dollar below minimum wage and they feel betrayed or manipulated, mcdonald's said this was never a policy in perpetuity about keeping up with local minimum wages. they said the policy was on july first, 2015. that they roamed wage would be a dollar below what we will pay you. the realing us to economy and how they compare to competitors like burger king and wendy's when we looked at the data we get this week, talking about having unemployment at a three handle, it is going to be more of a challenge to bring workers and the door, particularly if you are not competitive as far as wages is concerned. reported,y coworker there is real pressure on mcdonald's on a tighter labor

market and the number of changes they have been making in trying to win back consumers. workers have said it makes their job more stressful and more difficult, and without the staffing or pay increase to go squeezedmcdonald's is in some ways and this is a moment of record high turnover in the fast food industry. there's lots of reasons for concern. you combine that with rising local minimum wages, as viewers may know. the national federal minimum wage has been frozen for nine this aboutthe f these and states galloping towards double that. womaned in chicago to a who worked at donald's three years ago was making $11 when the minimum was $10. has had hs later she l for the first time she is supporting and the minimum wage in chicago has gone up a dollar, or her pay over the three years

has gone up $.40. julia: thank you so much for joining us. joe: coming up, what you need to know. this is bloomberg. ♪

julia: a tough day for the first

session of the month and the quarter, you can see the nasdaq the and a performer, and tech remains the focus and the s&p topic below the 200 day moving average. don't miss this, spot the fight tomorrow in the new york stock exchange. joe: and don't miss this, the new york fed debuts the security overnight financing rate for silver. julia: that is all for "what'd you miss?". "bloomberg technology" is coming up. joe: this is bloomberg. ♪

>> president trump last out

that backup provides temporary reduction to immigrants to the u.s. as children, and trump gave congress six months to pass new legislation. the lighthouse -- the white house has confirmed that a summit meeting between president trump and lonmin putin is in the works at a spokeswoman says the two presidents discussed a number of potential venues for meeting in the not-too-distant future. in agency ethics official at the epa says administrators lease of a condo did not violate federal ethics rules and lawmakers and watchdogs have an pressuring federal investigators to widen april into prewitt, the epa inspector is also looking into his trips to his home state of oklahoma by a and winnie mandela, the ex-wife of nelson mandela has died at the age of 81. though her legacy was