mexico says the confeion of is beginningople to disperse but the associated press reports some at the camp maintain they will try to request asylum in the united states. president trump criticized the caravans over the weekend and also criticized mexico for allowing it to proceed. the caravan is symbolic and usually held around easter and israel -- has reportedly never left san francisco. some traveled farther north on their own. the white house is calling on to cease further escalation after a saudi led coalition battling the rebels oilthey attacked the saudi tanker. sarah huckabee sanders said in a statement today the u.s. is very concerned and urges them to demonstrate their commitment to the peace process. today, the discovery of 80 billion barrels of shale oil,, its largest find ever.

in an offshore basin also contained an estimated 4 trillion cubic feet of gas. confident on the ability to produce gas prices and a very large consumer of gas, we depend on it for industrials and for power in the nations. it is very exciting to add a new resource. mark: not a major oil producer but experts say the fines have the potential to submit me raise the company's's profile and boost the economy. a spacex capital carrying experiments and other items for has arrived at the international space station after a two-day journey. it's 6000 pound shipment was captured the robot arm today and

will remain attached to the space station for about one month, returning to earth in may. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪ >> live from bloomberg world headquarters in new york, i'm julia chatterley. julie: i'm julie hyman in for scarlet fu. julia: we are in the united states. stocks taking back earlr loes. the nasdaq now up from 1.3%. joe: the question is, what did you miss? >> tit-for-tat it on trade, president trump chinese imports took tensions even further. it will levy an additional 25%

on around $60 billion of u.s. imports. but -- between the u.s. and china would do a number on soybeans. hitting trump's rule supporters the hardest. and facebook faces up to 87 million people now affected by cambridge analytica. mark zuckerberg is set to speak to reporters in the next hour. regardingeaking news nafta. president trump is set to soften a key automotive command, something already hinted at in earlier headlines, and all of branch on arguably the biggest sticking point as the u.s. pushes to reach a stop cap deal this month. lower 85%sal set to demand on some parts to a lower content produced in the united states. watch that.nuing to

speaking of the effect of it, the peso as well as the canadian dollar, as these headlines come looks perhaps more likely that we will get some kind of a deal on this. >> let's bring in jeff -- josh to get perspective. i have no idea what a preliminary nafta deal looks like but it feels like a breakthrough. talks are the details and the contours of this seemingly backed down from the united states looked like and whether that means progress toward a deal. that is not john. there we go. josh, carry on. thank you. >> the whole nafta thing will come down to cars. the biggest proposal in cars, the u.s.anted 85 of every car

traded in ftto be made in nafta company -- nafta country. want 85%. your guess is as good as mine. canada and mexico and -- >> absolutely. all comes after the drop a separate demand, a u.s. content demand that they put on the table earlier.

brimstone landed october. however come we have a lot of nafta commentary and a lot of it is positive. little to even know movement. i want to hold off a little longer but this is a good sign.

irrespective of what is going on , talk us through it. >> i think what we want to see in look for in the trump see if they can find through nafta. at the nafta companies, there is a lot with the chinese trade.

get a win, it might alleviate some concerns from trump's own political base. >> what is a win on nafta? what does it look like for the president? what kinds of measures would have to be in it? is a good question. we see so much noise around it. we see the auto proposal that the u.s. had, the start of them. speedms to have picked up and things get attached to it now. it you're going to get a deal on nafta, it gets all and meshed in a much larger issue.

>> it got soft and. nafta are nowg going to get soft and. is this a playbook we have got to remember as negotiations and .et weakened down the road >> i guess everyone is holding their breath to see if this is actually what the tactic is. today, we're hearing from the top economic officials from the is asaying actually there track here for china to negotiate its way out of the tariffs as if they are using them as a bit of a carrot instead of a stick at this point. it seems like the pattern has actually unfolded over time.

>>ind the scenes who knows as far as auto issues are concerned, i feel we're making good progress but we are not there yet. wrap it up. you said even with what we're seeing now, we are reporting in terms of the softening of demand for the united states, it still is a real challenge. ultimately, the key unlocks the provisional and preliminary nafta deal, the auto issue. to get the preliminary deal? >> the is a lot of work.

sack withally get a nafta in a topline agreement -- it is a tall order. and happening in the current congress, is a tall order. there are a lot of hurdles left on nafta but things are certainly looking more positive than previously. >> though thereyou so much in c. this far as the dollar declining , there we are seeing more of a reaction rather than ambiguity. green andg in josh mike. now that we have got josh

straight, i want to pose the same question to you as i post a moment ago. game, the exact goal of tariffs from the united states -- united states? we have -- the president says we have gotten a bad deal from the united states for years or what specifically are we looking for? >> i did not know if trump is looking for anything specifically. he is this really on their side. the trouble is taking some measures will prop up countermeasures like china. that has potentially damaging effects for the entire republican party. >> quite interesting when we look at what is going on as far as the chinese are concerned. they have matched in terms of the $50 billion and they have with the percentage in terms of the tariffs. they have said look, we want to

have dialogue year. they are very strict as well in terms of hitting some of the key states, those that produce soybeans, for example. thatu think the risk of this does not turn the tide as far midterms is concerned as we just considered new to see a rushing up of tension here? >> very much. i published a piece on bloomberg looking at the damage this potentially causes republicans. it does three things. if you take a look at the biggest u.s. soybean producing states, these are not soybean areas where democrats live. this is the u.s., trump country. it hits states that will be pivotal in the senate and in the house and in statehouses across the country. it could potentially determine control of the senate. you have states like illinois, the largest producer of

soybeans, and embattled republican incumbent this will make his reelection challenge much tougher. flipside, this potentially helps democrats quite a bit. if you assume an angry voter will punish trump and his party, the three most vulnerable democratic senate candidates right now are all big soybean producing states, indiana, missouri, north dakota. they are all breathing a sigh of relief looking at the damage they could potentially due to opponents. >> an extraordinary market comeback paired down futures are down from the lows of the morning, when it was red across the board. we talked earlier with sarah about the idea with the initial thing and the walk back. going to learn this or realize this? what is the deal? i >>ink a suspected. china is a diffenstory. china was the focus of trump's campaign.

the market has kind of been trying to find a bottom i mean for the last two weeks we have been hitting the lows very close to february. they bounced back and another weekday. this is the first back-to-back in the s&p 500 in almost a month. it sounds trivial that it is are finally we seeing a today sustained rebound. i'm not sure anyone is too confident that the volatility is over and it will be a reshape recovery back to the records. forward to next week, we have the banks of the end of the week with really some fabulous 30%, 25%, theh at big bank of america citigroup, jpmorgan. a backdrop that will help the bottom, a bottom

on bad news, which is a cliche. >> just come back in here quickly. the equity market in particular. at what point does the volatility actually impact what goes on as far as policy is theerned, a tie-in of prospect of a preliminary nafta deal in the next few weeks, it feels critical. >> that is the question everyone in washington is asking. nobody knows the answer to it. hass clear a lot of this been a direct result of the president's actions and his tweets and the focus of the administration. there have been cases as with steel and aluminum tariffs that trump walks things back that provides a little bit of relief. we have not gone an indication that that will happen with the new china tariffs. we will have to wait and see.

>> very quickly. are you surprised it happened so dramatically earlier as far as ?nterest rates are concerned they were kind of like, it is more of the same. >> it is not for futures to overreact. that said, a swing on the dow. 1:00ybeans and tariffs, p.m. and 6:00 in london. we will talk more about soybeans in particular and the bread basket that josh green was talking about. illinois, iowa, the heartland.

what is the effect on the agricultural markets p are we will have the latest. this is bloomberg. ♪

>> the largest buyer of american grown soybeans are joining us with more from washington is bloomberg's agricultural -- reporter, alan. always great to have you with us. were you surprised break it down for us, who are the biggest winners and losers here.

>> there is a prospect that u.s. stock buyers -- stockpiles could be popping up. in chinaport dependent or cotton. you saw livestock isis going up a bit. when he think about it, it is higher profits because producers are eating corn and soybeans that will now be in greater supply. >> we keep talking about the bread basket of the united and farmers in the heartland who will be potentially hit by these prices and tariffs. have you heard from any of them directly? i'm curious what you are saying -- what they are saying. you will farmers stick with president trump? rural voters and farmers voted for the president in overwhelming --

the president was more focused on rust belt convert -- concerns, i.e. trade policy than what benefits farmers. even though this could theoretically create an opportunity for democrats in elections to say we are more pro trade and we are with you, these are still very conservative voters and a lot of farmers say, we know this could hit us in our pocketbooks but it still has not happened and is only a threatened retaliation he are willing to stand with the president until it plays out. >> talk to us about the economy of farmers in the context with which the tariffs may be coming. bloomberg reported early talking about farm income in a 12 year low. what is going on? you see agriculture having profit levels that are half of what they were five years ago. comingr farm bills are before congress, the commodity prices don't seem to have any end in sight. nursing several global commodities.

the sovietector -- union back in 1980. there was a fear that has an echo base. is more liberal and one is -- remind what they are saying. >> it tends to be conservative and in line with party interests. a lot of folks were associated with the farm bearer. there are always in line for

democrats and they called for a tougher trade line on china. left not like folks on the . they are criticizing how the administration is approaching this. why this isering any kind of fall back plan. >> allen, thank you so much. since 20 14. i have got a chart to show you this. got is payroll. ons calls -- causes the --

friday, we know, 180. keep parker over at ubs thiis a reason for optimism. that is the measure of bond market volatility. he says that this is a good thing because when you see the pattern before, it is good news. i want to know how well in

the rest of the world. that would be more extreme, relative unique surprises, the yellow line, the blue line is europe, europe is really rolling over and is getting a little more attention. is clearly some of the momentum seems to be fading a little bit. the gap between the two is the highest in several years in about this level since early 2012. europe is still growing and europe is coming off a little bit. >> concerns for the multilevels. >> the market close is next. let's give you a look at the major averages. less than four minutes before we wrap up. a heck of a volatile trading session. as far as equities are concerned, we are 1.7% higher

for the nasdaq and we see the dow higher by 1%, just more than 1%. what a trading session. >> the s&p 500, down 1.5%. this is bloomberg. ♪

[closing bell] stocks in the green, but boy, they were volatile. chatterley. >> on julie hyman. >> and i'm joe wiesenthal. we want to welcome you to our coverage on twitter. huge swings and stocks we saw over the course of the session, all three major averages finishing in the neighborhood of 1%. it certainly was not a foregone conclusion. as joe was pointing out a few moments ago, not only was there a big point drop in the cash open, but the futures were just murdered overnight on these chinese tariffs. joe: when i woke up and i look at my phone in bed, i thought it

was going to be an ugly day, but it turned out to be a very nice day. julia: the s&p 500 fell as the low of the session and now it is finishing up a little bit better than 1%. in terms of the groups that turned around on the day, consumer discretionary, the leading gain on the day, along with consumer staples and health care, information technology. energy still finishing the day lower along with oil prices, though that was really the exception. some of the stocks hammered by the tariff concerns, still finishing lower, which let's look at them right now, shall we ? boeing is still down 1%, we didn't see that turnaround. they get about 13% of revenue from china, accounting for a large share of the commercial as market in that nation well. lennar, leading gains on u.s. homebuilders after they reported robust home growth on revenue for its fiscal first quarter, which could signal a strong start of the spring selling

season. we were also watching amazon and oracle, though this was more or less and intrigue story. the oracle co-ceo met with president trump at a dinner last night. apparently peter teel was at the dinner and brought her at his guest. she brought up the bidding process for that big pentagon cloud contract with the president, complained about the process, said it perhaps should have been more open. the president said he wanted it to be a fair process. interesting response on that. as i say, it's more of an intrigue story than necessarily affecting the stocks. got to love the executives throwing fuel on the fire. let's take a look at the government bond market. if it's in with his big theme, which is that all the action right now in equities, rates, currencies, all of that,

the 10 year yield, a little bit up to the intraday on the 10 year. i think it's interesting. , aroundthis morning 9:00, 6:00, 4:00, when i first started looking at the markets. there was all this equity volatility, but these are not big moves. even during the peak of equity selling, it's not like we saw inflated treasuries. which is a theme we will talk more about in block. but it was sort of the dominant theme. julie: the bond market got involved when the x market got involved. you kind of so my thunder. [laughter] joe: currencies are always exciting. julie: very exciting. of perhaps astory softening in the united states position as far as a nafta position. we have the headlines over the past couple of days that a

preliminary deal is in the works on nafta. a softening for the u.s. stock on the car section, which canadians have called the key to unlocking. the canadian dr is higheby 3/10. automakers did turn around, though boeing and dear did not. julie: really important point. let's take a look at the chart for the currency market. this goes back to what we have been saying and what joe was alluding to. just after the middle of march, i'm showing you volatility. this is the global volatility index. while equity markets have been kind of bananas, actually, fx market not so much. let's take a look at what's going on in the dollar-yen. obviously it's in line for the response that we got from china overnight and a flight to quality of some sort and a safe haven that you might see.

we do see the dollar higher now by 2/10 of 1% versus the japanese yen, tied into what we saw in the later half of the session for equities and bond markets. dollar korea weaker, finally succumbing to some of those growing trade tensions, you can see it dropping. it is one of the region's most liquid currencies. it is where you go if you want to take risk and reflect the risk. when he's dollar has strengthened in the past month, despite what we have seen as far as the rhetoric has been concerned. joe: finally, on commodities, interesting, oil ended up unchanged throughout the day. with all of that volatility, it doesn't look like a commodity war. be corn and soybeans. price they got hammered. must've been something with the ticker. copper, also selling off.

>> want me to tell you how they did? >> corn and soybeans fell a lot. [laughter] right, for more on today's market moves, yeah, i was trying to look it up and got something wonky as well. please, save us, david schawel. volatility,s market is it a duck and cover kind of market? doesn't appear so. we are seeing a bid to gold, somewhat, but not to treasuries. good point. an interesting phenomenon happened in the first quarter and i highlighted that this weekend in that it was the first quarter since 2008 where both of the barclays add -- aggregate and s&p 500 had a total negative return. as soon as i read your post, i made up a chart showing how rare it is over the last 30 years where both went down.

my question, when i saw this, and that's so far this quarter, does this tell you as an inveo hold the line and that the diversified strategy is still good? or does it tell you that this strategy is only still good when you are in the bond bull market and we have to rethink diversification? tough to say. are you an individual? a gets into the behavioral bias of loss aversion. investors tend to be more averse to loss then risk and short-term. funds, individuals, i think they focus on the markets to frequently and they really want to avoid losses at all cost and i think they wind up looking at the market too much, trading too much, they try to reposition to frequently to just avoid short-term losses.

i think that sometimes there just is nowhere to hide in markets and that's ok. julie: it's not ok if you're losing money. butd: that's a fair point, over time there not always an asset class to go to. that goes into risk parity where bonds shoulddown, go up, but that's not always a relationship that will hold and other relationships that people go into, managed futures, commodities, other things that went down in the first quarter tended to be diversifiers to save people in times like this and it didn't happen. do you do? you just hold the line and try not to get chopped around? the risk in over trading is you end up buying high and selling lo you make some classic and understandable mistakes where you keep crossing the bid off the spreads and paying away money. toid: you don't always have

be a regular in the markets. you can be a visitor. sometimes you can visit the market and wait for times for a fast pitch. doesn't mean that stocks are going to go down a lot or that bond yields are going to take off, but sometimes it makes sense to play it more conservative. maybe over the longer term. there were areas within assets, despite the turmoil, text finished the first quarter higher. does it make sense then, too, not that anyone would usually tech, but hiding in do you take the warren buffett approach? where you look for something that is just a good investment over the longer term and that is where you concentrate your i think that's: a good philosophy, but you have to be willing to enter drawdowns and volatility. people think they are a bad thing, but over the course of time in investments, it's a

normal practice that i think that people need to get accustomed to after the long bull market of low val. joe: one thing i find interesting about the volatility pickup we have seen is the sheer multitude of narratives. in early february it was inflation. then it's like the 210 spread is flattening again. is there a recession worry that has to do with trade? facebook, is this killing the hotomtum tech trade? is there a grained unified theory that you have that says enough with this noise? it's very exhausting to try to figure out the narrative and ascribe it to whatever's happening that day. there's not a lot of value to that. focusing on the longer term valuations and risk reward objectives, that's a much more prudent strategy to do. andar as talking points

shooting the breeze, it's a lot more fun to talk about narratives. we want to know when the market -- why the market was down. i wanted to know why it was happening. as far as constructing portfolios and managing money, that's not always helpful in constructing portfolios and managing risk. julia: we aren't helping. is thingdavid schawel with us. why he thinks there isn't always somewhere to hide in the markets . we will explore that a bit further. what does an optimal portfolio look like right now? from new york, this is bloomberg. ♪

mark: i'm at mark crumpton with first word news.

the trump administration has pulled back one of its more controversial proposals and naa talks, according to people familiar with the niations to say that the u.s. is now seeking 85% north american content for only certain auto-parts. it's a potential auto -- olive branch on potentially the biggest sticking point as they push to reach a stopgap deal. the president is working with the governors of the nation for the immediate deployment of national guard units to the southwest border. made the nielsen announcement at the white house today. the president announced yesterday that he planned to use the military to protect the a wall is built. san bruno california police chief at barbary says that authorities are still working to determine what security measures the youtube shooter had to get through so that she could enter the company headquarters. three people were wounded and the shootersay that then killed herself yesterday

afternoon. >> the suspect is believed to have parked her vehicle to the rear of a neighboring business and access to the campus through a parking garage. the vehicle has been secured and is expected to be processed over the course of the next few days. investigators will also be working to gain access to and review also shall media related posts associated with the suspect in order to further comprehend the motive for this crime. said that shef visited a gun range yesterday morning before heading to youtube and that her anger is " the motivation we have identified." france has flagged 7500 people as security threats in a database that allows european police to share information on the continent's most dangerous residents. more than all the other european countries put together, according to an analysis by the associated press. a member of the german parliament says that it could indicate misuse of a system used to monitor dangerous criminals.

global news, 24 hours per day, powered by 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. julie: david schawel is still with us. just before you were saying to us that sometimes there is simply no place to hide and you have to get over that. but what if you are someone who is just about to retire or someone who is looking at their pension and going -- now i have a real problem and i don't perhaps have the time to adjust and take that much longer term view. at this stage, with cash and cash like instruments not looking as good as they once were, what would you do? correct. some people don't have the time horizon. people forget that a 50-50 stocks and bond portfolio in 2008 fell about 15%.

people become accustomed to andt prices being stable going up, stocks being pretty gentle on the way up. they just have to know the downside they are dealing with. i think that if they can't handle that, they need to be in a different allocation. something we've talked about before is the duration and meworky crit fra. seeing what appears to be cheaper than the oths. looking at the market right now, does anything look dislocated to you? where people are over concerned about some particular fassett? facet? durations are looking cheaper. three to five-year treasuries and the like will probably be ok . it's possible that the fed hikes more the fed hikes more than expectation but there is enough built-in at that stage where you

can feel ok about that. it's not exciting, but sometimes there isn't always something exciting in the market. corporate credit spreads are still pretty tight. glaring assets no class, i feel like, in the risk market that is screaming cheap. julia: during the break we were talking about the rush into very short duration. what is the outcome of that? you think that's a wise move for people right now? david: in their minds they are saying that if they can get 2%, 2.4% overnight, six months in, it will roughly adjust if interest rates go up close to 141 and it will give me exposure to rising rates and a little bit of income and i'm not really losing out opportunity cost wise . the interesting thing is they have probably not thought about something that investors haven't thought about in a long time,

reinvestment risk. that if rates fall, they won't have the ability to reinvest in that area. taking a little bit of duration at the stage where there are a number of hikes already priced in, really, yields are at their highest levels in quite some time is not a bad thing. andpendulum has swung a bit now they are rushing for the front end of the curve where a few years back they were happy to bite ten-year treasuries at 175. julia: good to the -- see you, david. appreciate it. "what'd you miss?" mark zuckerberg's hold -- zuckerberg holds a rare call with reporters. let's talk to emily chang, who has been listening in on the call. we heard a potential worst-case 'senario of 87 million people data being compromised. what are we hearing from him so far? he just addressed that

number, he said that's the most conservative estimate, the most possible accounts that cambridge analytica could have accessed. he said they don't actually have log stating that far back but the used various information to come up with these kinds of accounts that they would have had access to at this time. he said it's comp confident that it's not more than that, but that it could be much less. cambridge analytica came out in the last hour saying they got access to something more like 30 million accounts. there is a bit of a disconnect there. he started off the call by expressing sympathy for the folks at youtube after the shooting yesterday, but then took a deep dive on what they are doing to keep people safe and to clarify their policies. what we have heard so far today, they are making the data policy clearer, updating the plan to protect people's information better. he acknowledged stight off that they didn't take a broad enough view of the responbility it was a huge

mistake and it was his mistake. he talked a little bit about the russian related pages they have taken down over the last 24 hours. he was asked why users should trust him. he said that look, it's an arms race. we didn't invest in it enough in the beginning. by the end of the year there will be 20,000 people working on security, but he said we are never going to be completely eliminating this problem. these bad actors simply aren't going to give up, they are going to keep doing what they can to exploit the platform. i should add that he is taking questions for the next 40 minutes or so from reporters. this is very unprecedented, to have this kind of access to mark zuckerberg. inia: we will check back with you. it's interesting that he's taking responsibility for all of this. we will check back in to hear

more about what he has to say. julie: after-hours trade, 2/10 of 1%. we will continue to watch that, to. tech stocks rocked by uncertainty. take your pick on what's going on. tesla has to prepare for another potential setback after china included a electric cars among american products that it would hit with additional tariffs in that counterpunch to the u.s.. with us now to discuss from the neapolis, gene munster. it's always good to get some time with you. how serious of risk is this for tesla? >> i think it's pretty small. let's look back at econ 101. a comparative advantage is the concept that if you stick to what you are good at and share, everyone will be better off. and openpt of free

trade. i think that at the end of the day, every economist agrees on comparative advantage. going to make the bet that donald trump also agrees with comparative advantage. the reason why that is an important perspective when you think about the impact to tesla is that if he does believe in that, ultimately instead of going through the painful details of what is being proposed by both countries here, ultimately this is probably just going to be negotiated and ultimately i think that the tariffs will be reduced. i'm making the bet that this won't be a problem for tesla. let's quickly take the other side of the equation and assume i'm wrong, that these tariffs kick in, what does it mean for tesla? a negative creates a significant headwind for 17% of their business, the china market. surprisingly, the second-biggest market for china, even though

they don't have stores or a way to maintain them, it's a big market for them. if the tariffs kick in right now, people who purchase tesla's in china pay a 25% tariffs, sounds like that would be additional, a 50% increase in the cost of a tesla in china, which would not good for demand. most open about china.g over access in bring it back to the ultimate story for tesla and the output numbers that we saw this week. we saw the ramp up where the model three is concerned and the forecast that we got from them. do you think that the headlines we see at the moment are just a distraction, ultimately, from the bigger story? gene: i'm definitely a believer.

think about an analog clock. a one hour, one minute, and one second hand. when we think about the news day today and tesla's terrible week, that's really focusing on the secondhand and it largely misses the bigger point. the bigger point, a bigger point is the minute hand. in this case, the mile three production. missed of the targets they had out there. they did 2000, exiting the quarter at 2000 per week when the target was 2500. what gets missed in the conversation about the disappointment is that they doubled the output of the model three in one quarter and they probably will double it again next quarter. i'm a believer because i think that ultimately they will get the model three production squared away and that this is going to be a transformative moment. but using the clock analogy, as time ticks away, doesn't it give competitors more of a chance to gain on them? probably not.

the oblems that they are are thearound ev, they largest manufacturer in the world in terms of cars. from a competitive standpoint, all the issues that have slowed down production model three or the recall with the steering, the battery charges -- challenges initially, those are all similar challenges that other automotive makers are going to have. yes, the clock is ticking, but for other automakers they will have to go through this same difficult manufacturing the tesla is going through. i think that that is when the true metal of these other car , when it goes beyond press releases and model announcements and when it gets to producing these electric vehicles and batteries at this scale, that is when you will start to see that this is a much more difficult thing that tesla has gone through. joe: are you concerned about

capital market access and the difficulty that will pose? gene: i'm not. their mission statement seems to resonate with study, large, investment hands, to accelerate normal energy. it's not about making a great car. if they are successful at doing that, everything from energy capture from storage panel and usage in the car, if they are successful at that they will be able to garner investor support. not to mention the whole autonomy peace, something that tesla is going to eventually play a role in. in other words, it is such a big opportunity they are going after, i think they will get investor support. don't get lost in the message -- e noise, that's the message. up next, we have the deutsche bank cohead of global strategy, alan ruskin. from new york, this is bloomberg. ♪

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mark crumpton, with first word news. president trump said that the u.s. lost a trade war with china years ago. the president tweeting after china announced a list of u.s. products that might be subject to a 25% tariff. the president said the trade war andlost by the foolish encumbered of people who represented the u.s.. china announced tariffs worth $50 billion on a series of american products, including soybeans, whiskey, and cars. the british opposition labor party leader's questioning comments made by boris johnson, which seem to confirm the russian involvement in last

month's attack on a former russian intelligence officer and his daughter. in a rect intervi, johnson reportedly said that horton down , the company defense research lab had identified the nerve agent but couldn't pinpoint the source of the poison. >> either he has information he's not sharing, or it was a bit of an exaggeration. i don't know which it is, but i think we need the responsible, cool approach. we need to get to the source of this to prevent it from ever happening again. mark: russia has denied any involvement in the attack. mark zuckerberg is going to capitol hill. the facebook ceo has agreed to testify before a house hearing next wednesday. that's according to the house energy and commerce committee. facebook has been in the middle of a legal storm over the disclosure of user information to political research firm cambridge analytica.

on this, the 50th anniversary of his assassination, the reverend dr. martin luther king jr. is being remembered in observances across the united states. in washington people remember the man who was killed in memphis, where he had gone to support striking sanitation workers. today in atlanta his daughter talked about her father's legacy. >> we decided to start the day --remembering the impossible the possibility of nonviolence. more than ever before, we need his teachings, his principles, his steps of nonviolence. president trump a proclamation saying it is the people of the ited states, not the government, who will achieve dr. ki positive roles. global news, 24 hours a day, powered by 2700 journalists and analysts in over 120 countries.

i'm a mark crumpton, this is bloomberg. thank you. let's get a recap on market action. big swing and stocks, decline in the s&p 500 to a 1% gain. it was only the first two day back to back again -- back-to-back again we have seen since -- back to back gain since march that we have seen. the irony in all of this, of course, is that earlier today there was a sharp selloff and there was concern over the retaliatory tariffs talk about out of china. but that seemed to go away as evidenced in the equity markets by days end with consumer discretionary and staple stocks rising the most. julie: what did you miss? how do you win a trade war? the president said that we lost the trade war years ago. it resonated with our next

guest, alan ruskin. great to have you with us. >> thank you for having me. julie: is this a prelude to some form of renegotiation between china and the united states here? alan: that's exactly right. it's just a negotiation, the start of a negotiation. that's the way the market is taking this, along with you on all of this. looking at where we might be in say a years time. it's intereing, i was lking to traders before i came here and most people felt that in a year, boeing would probably be getting more orders out of china rather than less. war?what is a trade we had this conversation earlier, was the threshold? i'm curious, what's the point when you can say, ok, there's a trade war. i think that you will have tariffs implemented and a real knock on effect terms of exports

and imports. and a little more tit-for-tat. someone bows or you get into a negotiation where both sides try to generate a win-win out of this. sounds like there will be economic destruction in the meantime as you talk about a year-long negotiation. -- alan: not saying it will last a year, probably a lot less than a year. but these negotiations are going on behind the scenes and this is part of it. julie: you said that this is the way that markets are taking it, but the reaction that we saw overnight relative to what we are seeing in the foreign ,xchange markets, for example seems to be far more calibrated. i was showing a chart earlier showing the distinct lack in the change of volatility in the last couple of weeks in particula why are fx traders reacting

fferently here? that's an interesting question. i think they are stuck in well-defined ranges. we're looking at risk on, risk off, playing in the yen is the key crime. he euro dollar is really stuck. if it was moving around it would take everything with it, but it is kind of at the periphery that the trade war is being fought in the currency market. yen crossing in general. julie: what about for the u.s. dollars? we have had various voices saying we're starting to see dollar strength in the second quarter. in what kind of scenario does the u.s. dollar benefit? is it that the country is in the eye of the storm here? they have a different impact, the flight to quality and safety that we would traditionally see. alan: i think that if we go risk

off, you will see a definite tendency for appreciation again. probably losing ground against the yen and tread water against the euro. we just had a interesting question, across the terminal. can china use its currency as a tool in this negotiation? since it is more of a manipulad or nudged or whatever you want to call it currency than the u.s. dollar. chart --on't think the that china wants to go down that road. the u.s. is going to put pressure on them in general to not build up those reserves, that is the ultimate outcome of all of this, and a sense, a lot of u.s. pressure on not just china, but all the asian countries. joe: talk about the cross volatility gap. the running theme is the action in the stock market but when it comes to currency and rates, you

are just not seeing it much. is there a tipping point where you would expect to see it? what is the best explanation for what's going on? the ethics market will take a signal more from the bond than the equity market. if it falls in the in a big way, that will trigger another round of ethics volatility. the issue you're having is that when the equity market sells off, the underlying tone is to short the bond market and there are positions to be squeezed, but so far we haven't squeezed them that hard, and away. the downside is actually been quite limited. further tools of manipulation, tied to that conversation, the ultimate exposure they have in reserve is to the u.s. dollar. how much credence can begin to those who throw out the suggestion that perhaps one tool that china has here is taking

down the portfolio risk in u.s. easutres or shifting out shifting their reserve holdings? how much of a stick is that to hit the united states back with? stick for the united states and it is a stick for china. not one that they will hit themselves with too easily, i don't think. the way to think about it is that china is probably, if anything, over allocated and overexposed to the u.s.. they won't be building up more. you can count them out in terms of buying much in the way of treasuries for the time being. julia: alan, thank you so much. david schawel is the cohead of --alan ruskin is the cohead of fx research. coming up, rising trade tensions between the u.s. and china. this is bloomberg. ♪

julie: timfor flash. a look at the biggest stories in the news right now. smucker is purchasing the rachael ray dog food ran for $1.9 billion. the acquisition is that has nutrition is likely to revive smucker's sales. the premium dog and cat food will exclude tax benefits. smucker's also concerned with exploring the sale of its u.s. baking unit.

a company that skip to the traditional ipo process, analysts are not subject to the .5 day quiet time at least four analysts issued holds on concerns over pricing competition and further growth. limited share supply also raising questions about added volatility and public valuation. spotify, trailing on its second skipping the traditional process, exactly what the questions were that we were asking yesterday in the trading session. all of these issues, the supply and demand, the lack of the closed, a concern. that's it for the bloomberg business flash update. so, overseas ticket sales saving the day for hollywood last year. the motion picture association, one of these stories that we continue to focus on. the u.s. and china have

, but it's not yet a war, according to stephen egeland are, who spoke to vonnie quinn and mark artan earlier today. >> armies are not fighting, but they certainly have different interests and they are trying to achieve them in any way they can. if you look at what the u.s. has done, they have put tariffs on selected goods in china based on some sort of trade criteria or economic criteria. what china has done is put tariffs on u.s. goods, aiming to maximize the political and market pressure. the way that they presented it and the language in the press to affect was meant the market, i think. and make the policies look as damaging as possible to the u.s. . that would put pressure on the u.s. to reverse it. comment, at its

worst, u.s. asset market market like 500 billion, now it's down about 180 billion. you had better be thinking that these tariffs are going to last for 15 years or be extended to a much bader set of categories to justify the selloff that has occurred. >> you say that obviously it is going to affect confidence, but it will also affect asset prices . particularly the more sensitive asset prices for policy. >> i figured will. but if you are a company that sells at 3.5 times the import, your goods are overwhelmingly labor-intensive relative to the u.s. products and you have higher tariffs. it's hard to win a trade war starting with that. unless you are particularly

strategic and the other side is particularly bumbling. they should have the advantage to some degree on the equities side and the economic pain side. the u.s. should have the advantage here. our markets suited for this role of becoming the barometer of successful policy? >> know, they are a very poor choice. markets are not meant to tell you if a policy is good or bad, right or wrong. they are meant to discount future return streams to companies. i think that because these issues are very hard to analyze in terms of market impact and multiple scenarios, none of which we are sure of, the easy thing is to say that if the market tells us it goes down 1%, there for the policy must be a failure and it's a terrible thing. $15 billion is like a tiny amount that the u.s. corporate , almost nould have

impact. i would say that the fact that the adp was strong and that the nonmanufacturing employment numbers were strong is probably far more important, fundamentally, then the chinese announcement. what extent then, stephen, are these political acts driven by state actors? what extent are they driven by a profit motive? >>, to they are driven by profit motive is hard to say. but i think that what we are seeing is that in these types of , china and other countries are very much aware of the impact that their comments are going to have and that their policies are going to have on asset markets and equity markets and they are trying to leverage the impact to put maximum pressure on the administration to back away. they may not have the, you know, the battalions on the economic

and trade side, but they, you know, if they can make this as painful and have markets reject the u.s. policy stance, it will back the u.s. to either off or come to a resolution that is more favorable to china. >> you that fundamentally the u.s. is going to win here in any kind of trade war, but china has leverage? >> again, the question is how susceptible the u.s. is to it. whether a .6% market drop gets reported as an exaggeration or a correct market response. my key point is that they have every incentive to try to maximize the pain, the pain signal that financial markets delivered. julia: that was stephen englund are, of rafiq he capital. next, mark zuckerberg

fielding questions from reporters on a call. we will get the details, next. this is bloomberg. ♪

♪ julia: "what'd you miss?" mark zuckerberg, holding a rare call with reporters over the ongoing pracy effts in the wake of the camera which alytica controvsy. to be winding down, he said he would take a few more questions. the thing that stands out to me in the last few minutes, as you say, is that there hasn't been a meaningful impact on advertising. >> which is what all the wall street analyst have been saying on a semi-date -- semi-daily basis and at the end of the day, they and google are the only games in town. makes totallie:

sense. they are higher this -- higher today. advertisers getting a good reminder of how good the data they have on people is. what else have reporters been asking about? obviously zuckerberg is going to go in front of congress. media people have their own obsessions. >> it was sort of the range of questions. people asking him if he's still the right person to run facebook. he said he didn't think that the board had been talking about replacing him. i think it's a good preview of what you will see in front of congress, where each congress members want to come up and have their own, try to get their own clip of them sort of putting them in the hot seat, so to speak, asking questions like this. julie: facebook came out today saying -- look, up to 87 million

people could be impacted by these concerns. and then cambridge analytica said they never had more than the data of 30 million people. is this a good sign from facebook that they are giving us the worst case scenario? fine, this is as bad as it gets. >> at the exactly what they are doing. it's been a couple of weeks since the 50 million number came out initially and this is quite a lot higher than that. they said they were only able to finalize that in the last couple of days. clue yet ifave any this is impacting the market? >> they need to disclose user numbers. but it doesn't seem like there has been a major impact yet.

julia: is one thing to take a phone call with reporters, it's another thing to sit on capitol hill to face the senators. would we know about any past experience he has had like that? quite the last time he was in a similar situation is when he was trying to raise money as a 21-year-old going to venture capitalists, trying to pitch his idea. he's been the ceo for a long time and it's very intimidating when you go to congress. i'm sure he be that she will be able to handle it emotionally, mentally, whatever, but it's not e kind of situation mark zuckerberg normally finds himself in. have seen ape we significant increase in privacy protection rights. we've got new laws coming in at the back end of may. is there any suggestion that facebook will look to get ahead of this in some way and map what they are having to do now in europe to the united states and elsewhere?

there is a bit of confusion on that. we have had messaging from facebook that they want to extend that protection globally and then they walked it back. at the end of the day, this is their business model. not selling data like individual information, but helping to use the data to have a profitable advertising platform. julie: as long as they know about it. julia: they need to walk -- >> they need to walk a line here. julia: seems as though if the profit machine continues, mea culpa, doesn't seem it will go much further than that. all about the advertising. julia: seems so. i just want to mention a note here on broadcom, crossing the terminal, the company has indeed onmpleted its re-domicilati

--is that how you say that? from delaware to singapore. ins was something that was the works as it tried to acquire qualcomm and they said that even though the acquisition was rejected by the u.s. government, they were going to go ahead and do it and they have now completed the process. julie: all dressed up, no party to go to. joe: coming up, what you need to know for tomorrow. this is bloomberg. ♪

julia: "what'd you miss?" a base wing and the u.s. equity markets. all three major averages ending the day higher. don't miss this, the number three trade balance coming out at 8:30 a.m. eastern. in -- jobless claims are due. julie: and don't miss emily chang talking to sheryl sandberg , tomorrow at 3 p.m. eastern. julie: have a grea mark c.: i'm mark crumpton, and

you are watching "bloomberg technology." . here is a check of "first word news." the president is working with governors for the immediate

deployment of national guard units to the border. the homeland security secretary made the announcement today. the president said yesterday he planned to use the military at the border until a wall is built. mexico has started providing tonsit or humanitarian visas people in a caravan of central american migrants and says the profession -- procession of about 1000 migrants is beginning to disperse. some people, at the request of , criticized mexico for allowing it to proceed. thousands marched through memphis to honor martin luther king jr. on the 50th anniversary of his death, including bernie sanders. dr. king was killed at the lorraine motel on april 4, 1968 at the age of 39. he traveled to memphis to support the sanitation workers strike. jury selection is once again underway t