president is expected to name his panic on monday night. theresa may is facing a revolt over her plan to tie the u.k. closely to you trade rules. the clash could destroy the chance to destroy the deadlock in brexit negotiation. davis was among seven cabinet ministers to meet with foreign secretary boris johnson's office today to discuss how to handle mays proposal. said todaykesman that while russia is concerned with the second case of poisoning in the ua -- u.k., -- no evidence has been presented to support any accusation connecting russia to either case. iran has summoned envoys from france germany and belgium over

the case of an iranian diplomat who was arrested in germany. that is according to the associated press. suspecting aed for plot to bomb an embassy. the deputy foreign minister said the allegations are a plot aimed at damaging eu relations. than 2700 more journalists and analysts and more than 120 countries. this is bloomberg. live from bloomberg world headquarters i'm scarlet fu. i'm joe weisenthal. we are 30 minutes from the close of trading. the nasdaq is leading the way up over almost 1%.

the fed affirms its pace of rate hikes. when you miss? $34 billion worth of goods for chinese tariffs go into affect. agriculture flows, president trump's trade spats are set to reshape commodity training for years to come. the latest fad acknowledging trade risk, the focus shifts to u.s. labor market. looming trade wars. on $34 billion of chinese goods are set to go in effect at midnight eastern time tonight. beijing is set to fire back immediately. is reporter sarah mcgregor. chinese policymakers digging in

for a lengthy fight. they keep stressing in their remarks that they are not the aggressor. why do you think that is? >> the whole impetus of these tariffs was the trump administration. they looked into china's practices on intellectual property and they found that it violated the rules. this is what started this whole tariff war. i think china wants to, it has been painting itself as a globalist ever since donald trump was elected. they are trying to champion themselves as a world leader at this time and contrast themselves with the trump administration. tois important for them showcase themselves as responding to the tariffs and also within the wto rules, retaliating has a bigger scope for rationale than actually imposing tariffs in the first place. >> do we know of any

on either to going have this off or to make these tariffs short-lived? trump is on his way to montana right now. he is going for a political speech there. he may say something at the rally that would surprise us or he will be speaking to a crowd of farmers which will be being met a lot of china's retaliation is on u.s. farming goods. we don't really have any indication that he will back down on this. the only reason people think this might be a possibility that he would retreat is sometimes we have seen that on his trader pledges. at this point we are being told as of midnight tonight they are going ahead with these tariffs. viewersuestion for our -- are our markets ready?

we know that chinese stocks are already in a bear market. signs of an economic slowdown. here in the u.s., markets are shrugging it off. what are you hearing is in terms of economic impact? >> even a year ago it would seem remarkable that the stoxx would that tariffs were set to take place. i think the u.s. markets have kind of shrugged off the first round of tariffs. be, china haswill said it will retaliate dollar for dollar. trump said if you do that we will retaliate back. he has directed the u.s. chair to look at more tariffs on imports.

if things start escalating, we will see the markets react. i think they have not digest that level of trade yet. we will have to see what the markets -- markets open at. be -- as willwill be sleeping when this happens. when we wake up we will have a firmer grip on what china has done. you mean you're not going to stay up all night for the announcement? >> i'm going to be awake. ofof the next round threatened potential tariffs you mentioned that $200 billion number, do we have a timeline for that? from what we know so far, it's not so much a formal process. auto probe had a timeline.

billion is more informal. it seems almost like a threat. it doesn't look like there are deadlines attached to it which in one sense might bring some relief and another some fear. how quickly could these tariffs could put into place and what with the process before that? that is part of the mystery around this. >> china has time on its side. there are no midterm elections to concern yourself with. because chinese president is president for as long as he wants to be. what i find fascinating is that in the u.s., there is increasingly bipartisan support for the u.s. to some -- stand up to china.

schumer for example supporting the idea that the u.s. stands up to china. is there a similar level of support in other places that china trades with in europe for instance? do we know anything about that? >> just on your first point, it is important to point out that we were getting press releases from politicians daily about these chinese tariffs saying what a bad idea it is. it has been very quiet lately. we have heard that there is some sense that leaders are letting this play out. the democrats have been more supportive than some republicans on hitting china with some tariffs. europe, thered in will be implications there as well. a tradeescalates into war quickly, the rest of the world will be swept up in it. you have talked about it on your show as well, there is a real

focus on these auto tariffs and what will mean for europe. there is a preoccupation there with direct hits from potential auto tariffs that the u.s. might put in place that is really dominating the conversation. there is a lot of moving parts and we will hear from world leaders about this in the coming days. >> thank you, sarah. joe is always on twitter. tweeted he has accepted the resignation of scott pruitt as administrator of the epa. that was just sent out moments ago. he says that the agency scott has done an outstanding job. i will always be thankful to him for this. endless drip drip drip of scandal. stories that would have sunk other people at other times, but

he held out for a long time. it got to be too much. he followed up the president will onndrew wheeler monday assumed duties as acting leader of the epa. progressade tremendous in the future of the epa is bright. pruitt has resigned of that as the head of the epa. will continue to follow the story and get you analysis on it shortly. this is bloomberg. ♪ we want to go over again the

breaking news that came and moments ago. he hassident said

accepted the resignation of scott pruitt as administrator of the eve ea. -- epa. scott pruitt built his career challenging epa rules. is hard to remember any similar situation in which someone in public life based such a steady drip of stories that would in normal times the scandalous starting with the whole thing of living with a lobbyist and the renting of the room than stories about attempts to get his wife a job. ands pretty extraordinary each one of these stories, there was a when is pretty going to be out. at last count there were more than a dozen open investigations of scott pruitt.

if he had a lot of defenders either. he was called us will be as you can get. another said he is a slump, drain it. trump was on his side saying he was doing a good job and prewitt is not lemos for his many controversies but went back to the idea that he was doing what president trump him to do in that role. was,r whatever reason it it really took a lot for the president to turn on him. >> let's bring in our chief content officer. what do you think finally did it?

the president kept defending him and kept saying he was doing a good job. >> the water basically went over the lip of the picture. a liability. even donald trump could stop it. donald trump has shown an intolerance of this kind of behavior in the past and it was too much for him. some people have left this administration and the cabinet post very fast. there is big a very fast turnover in donald trump's orbit. was there anything about prewitt the trump felt a loyalty to? >> the anti-regulatory forces that advise trump. that scott pruitt was doing a fantastic job .

trumpesonated with donald . he thought he was doing a terrific job. that countered all of this narrative about his unethical behavior. he has accomplished a lot of deregulatory things in his short tenure as epa administrator. it is going to be difficult to find someone else to continue his legacy. >> didn't they find someone else already? is it that hard to find a conservative who is going to rip up existing epa regulations? it doesn't seem like they would that be -- be that hard to replace him. >> what will be interesting is the confirmation hearings where the dismantling of inventive environmental safeguards will get another hearing in congress. that could prove to be

embarrassing. it was so thought interesting that there were so many republicans calling for his dismissal as well. one saying he was a swampy as you could get. another saying scott pruitt is a small, drain it. felt that iteople was long overdue. is't forget the president very loyal to people who are loyal to him. he was a very loyal supporter of the president. he was doing the job president expected him to do and wanted him to do. it took a while but donald trump finally did the right thing and lots of people's eyes. >> have you ever seen a socket like prewitt -- tsonga like prewitt. it seemed like it was something every day.

cnn reports the about him cleansing his calendar of embarrassing meetings. muchst got to be a bit too for even the trump administration to bear. especially when they have the agenda set in place and they can continue unabated. >> probing about his round-the-clock security protection. these are really specific things. >> this is a bad day for investigative journalism. scott pruitt just kept giving on theily basis and i think trump administration would not mind seeing that narrative galway. what surprises you about the timing here? scotthave been calls for pruitt to step down as head of the epa put the president had

resisted up until this point stressing repeatedly that scott pruitt while not blameless for the controversies was also doing a great job? >> two things that jumped out. media within conservative that has evolved within the past 24 hours. point, scott pruitt had the dissent of [indiscernible] republican donors had backed scott pruitt for some time and it appears over the last 24 hours that that also appeared to deteriorate. calculation is interesting particularly at a time when the president and his administration is gearing up for a contention supreme court nomination. to haveident will need some acting director confirmed at the epa so the politics of

this before the midterm election something that many have speculated was going to be something the president was going to hold off on. ultimately the barrage of controversy surrounding director prewitt is something that the president has decided is not worth it. >> tell us a little bit more scandalous side about prewitt's approach to running the epa. supposedly methodically dismantled regulations. what was his specific approach? what did he accomplish? from his standpoint he would argue that those deregulatory policies were in line with the president's policy initiatives and that deregulation is something that as a whole the administration would argue are a positive. the second point especially within the last week or so were you see president trump really

taking on opec, that has been met with concern among many in the energy sector about what the long-term bible strategy is run the administration's endpoint. or how they plan to take on opec especially in the midst of a brewing trade war and escalating trade tensions worldwide. it would appear that director prewitt had been facing intense pressure to get to the president to communicate to him about a different type of policy with regards. president is not listening to that it would appear that now the energy sector is going to have to recalibrate regroup and rethink about the process is going to be moving or were. >> scott pruitt did a lot to dismantle previous regulations in place. did he actually do anything in when of adding to measures

it comes to protecting the environment? >> certainly nothing as visible as the dismantling that he took on. there were areas that he did defend wildlife preserves but that didn't get much publicity at all. in terms of how he ran the department, i must say that given the number of people who work for him, who have come out since then, and describe some of the behaviors that ultimately led to his downfall, it could not have been a very pleasant lace for people to work. that does speak to what kind of a manager he was within the epa. know that the president has fired people that still keeps in touch with some of them. corey lewandowski comes to mind. do you think that scott pruitt is one of those who he might continue to keep on speed dial and liaise with?

even though he is no longer in place as the head of the epa? >> that is a great point. corey lewandowski was really advocating against scott pruitt. was one of the dominant forces inside the beltway who criticized scott pruitt and working behind the scenes to dismantle him. thesecond point is president has kept in touch with a large swath of folks who have out of then and political orbit of the administration. we will have to wait and see but one could make the case that he is someone who is very well connected in the energy world, very connected to republican connected to the deregulatory space. in someoneo bring

from our d.c. bureau. accomplish atally the epa? he launched and set in motion a number of changes to obama era regulations governing climate change and air and water pollution. many of those are still in progress. frankly very early stages, but he has put them in motion. era initiative for ratcheting down carbon emissions from power plants across the country. there is a proposed repeal in the agency is putting the final touches on a proposal to replace it with a much more modest alternative. we have also seen him roll back limits on methane pollution from to wells and change the way

epa regulates and oversees water pollution. >> i want to bring in here that the new acting epa chief will be andrew wheeler. he was the deputy to scott pruitt. pruitt, injure wheeler is a former coal lobbyist. >> someone representing the coal industry. is it possible that prewitt found out about his recognition -- resignation via tweet? >> it is very possible. was never an inner circle guy. you didn't see him conversing with the president very often. i don't know the donald trump will continue a relationship but given scott pruitt's relationship -- interest in random rating himself i wouldn't be surprised if he figures out a way to do pretty well in private industry.

>> what is the unfinished business for the administration at the epa? >> there is so much that they have only started doing in terms of the deregulatory initiatives. .hey have to finish they are working on the rollback on methane regulations and water pollution rule. there are still frankly some conservatives who are pushing the epa to take on the endangerment ending to redo the epa's landmark conclusion that carbon dioxide emissions were a danger to public health and welfare. what will be interesting to see is whether injure wheeler is willing to do that. he is seen as an institutionalist. his entire career has been tethered to the epa in a way that scott pruitt never did. where scott pruitt was an antagonist, wheeler has been wedded to this institution.

it will be interesting to see heavy is willing to make these changes that conservatives want. guest.k you to our ♪ what's a gig of data?

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>> on scarlet fu. >> and i'm joe weisenthal. >> u.s. stocks are closing higher on the day with the nasdaq leading the day up by more than 1% on the session. just a quick note if you are tuning in on twitter, welcome to the closing bell coverage from 4:00 to 5:00 p.m. u.s. stocks are closing higher with the nasdaq up about better than 1%. it was pretty much a solid day for u.s. equities. it comes as the u.s. gets ready --impose on imposed good impose tariffs on imported goods. >if you look at the industry groups, you have 10 and 11 sectors rising with technology, consumer staples, and health care leading the way. a mix of defensive and growth

here in the sector. energies with only decliners. i don't know if we should read too much into this homage oh given the holiday and volume. the dow was off 16% and the nasdaq was off a present in the 20 day average. >> let's take a look at the government bond market starting with the u.s. to -- two and tenure. short-term rates are meaningfully higher up to 2.5% 10 year yield was flat on the day. that means more flattening of the curve. if we take a longer-term look at the 210 spread, you can see the ongoing compression download 28 basis points. the lowest level since 2007. if breaking below 30 basis points. anxiety about a potential curve is only going to continue. scarlet: in the currency

markets, keep an eye on sterling here. it erased his earlier gain in --s to as high as 13275 132.75. may haserkel -- theresa a meeting on how cabinets will operate and angela merkel's government is not ok with what has been posed. the u.k. economy is supporting the case for higheer interest rates. the euro is gaining versus the dollar, pound, yen. bloomberg reported policymakers are not comfortable with a rate hike until next december. they say tightening in september and october is a possibility. joe: let's take a look at the commodities starting with oil, gold and copper. oil is falling down 1.55%.

trump tweeted about 20 opec to produce more. he is trying to jump on the price of oil. there was a modest concession on pricing out of aramco today. it was down 1.55%. gold is up marginally and copper future is down nearly 3%. china concerns trading anxiety way there. we have a long-term chart on soybeans. they have been getting crushed. look at soybeans. they are falling off a cliff. we talked to peter borscht and he is always looking at the chart. a sign of disinflation there. perhaps do to some of the oncoming tariffs. soybeans a really taking it on lately. scarlet: "what'd you miss?"? too much care talk -- carrot

talk. equity market cap is erased in the last two weeks. perhaps this is markets overreacting. that is the take of our next atst, the head of research mobile advisors, you are saying markets are overreacting because the charts exceed implemented charts have fairly large margin if we look at what is already been done. having said that, and people can see that for themselves, why ine there been rethinks which people seem to be taking the more literally than they have been. >> i think that the white house has gone from being a tailwind because we had tax cuts and deregulation which was sort of the story of last year. more towards trying to fix global imbalances which involves significant political risk so

uncertainty has rattled markets. what is the tailwind now? we don't have another tax cut in the cards. there is no obvious global growth. what is the bull case for stocks? tom: the global economy is fine. one thing we have to keep in mind is there is still a huge amount of global savings flow by oecd measures i think 20% of gdp is saving slow and that is getting recycled into the economy. unless we have a leverage issue, there's a lot of fuel to continue to grow the economy and help the equity markets. i do think the bright spot to change can be the u.s.. if you look at the last two sector by. equities sector have been the place to be as these trade tensions have

elevated. we should probably not be so concerned with the yield and look at the risk reward of u.s. being better. if we are getting concessions it is good for stocks. joe: what do you mean go through equity sector by sector? tom: if you look at industrials, u.s. industrials over global industrials, what you are better off doing is taking about this regionally. scarlet: given the u.s. economic backdrop, is the timing for this trade conflict or four white house to ratchet up these trade issues and try to reshape global trade flows good or bad? tariffs and protectionist down,es may close things but is that a good thing to do when the economy is doing so well? i don't know if there is ever a good time to bring up tariffs and trade issues. scarlet: but this is something

the president campaigned on and he was determined to do it one way or another. tom: it's going to be a difficult time because of brexit as well on the horizon. i think there are global imbalances that need to be addressed, so i think there is never great time to do it. i think it would be great if we got some rebalancing, but we'll know. joe: let's talk more about the tech isbecause tack-- still the big question. if you have been long tech or overweight tech you done phenomenally. if you have not, you have underperformed. orthere so upside in tech outperformance i should say? tom: in general, text share this -- techs share this. it's 20% of the market cap today. scarlet: where should it be? tom: well, it is absorbing more

of global gdp which means it is the way it should be growing and we are going to see this extension into financial services and health care naturally. but the other tailwind is there is a labor shortage in the developed market. you can't meet production without substituting labor shortage which is more technology capital. we think tech will be close to 40%. joe: what is it at now? tom: it's at about 20 scioscia double. -- so it should double. the two biggies will be financial and health care are close to 40. i think tech and health care's combined weight -- financials and health care's combined weight should drink to 40. maybe 10% comes out of that and with labor. scarlet: you say semiconductors

should be what investors are looking at because people are getting rid of sectors or companies that were more vulnerable to the trade discussion because they rely too much on chinese imports. talk a little bit about how much exposure investors should add to tech names specifically. i like to start a little broader. any group that has been sold hard on trade tensions as a group that people should consider buying on weakness. tech,k, when i think of we did not really get saying because we are not recommending them. they have done great but we are recommending all other tech. at the end of the day, it is a raw material sector. the structure looks a lot healthier than it has in the past. we've seen a many groups are starting to rerate.

i think that is one of the groups. scarlet: -- joe: tom, you have been a big cryptocurrency bowl -- bull. the selling in bitcoin has been rallied. every time it looks like it is about to rally, it is been slapped down. why hasn't your thesis play out yet? so iwe are only midyear think a few things really hurt cryptocurrencies this year. one is the group did have a parabolic move last year so we are consolidating a lot of the gains. triple.is still almost regulatoryis, backdrop has been unimportant last year, and because crypto has gotten large enough, it has

become central and there are still regulatory uncertainties. it has limited the ability for new money to come in when there is time where there is still a lot of supply. i think the third factor is, in the past, look at 2017, there was no volatility everywhere. so, incrementally, financial markets were saying, we are buying cryptocurrencies could that is supposed to get volatility. there is volatility everywhere now, so the or not getting crossover into crypto. scarlet: what is the correlation between cryptocurrencies like the coin not just on the sectors but also as a classes -- also asset classes? tom: when we track rolling correlations and we publish this so it is available every week, the correlations for coin to the s&p or bond market, or gold, are actually quite low, but we are seeing changes in the

relationship. gonechange is bitcoin has from being negatively correlated to bonds to positively correlated to bonds. it is still uncorrelated to equities but it has picked up its correlation to gold. one of the things that is probably a headwind this year is what is happening with the dollar. i think a stronger dollar is not supported. scarlet: so we are seeing links with bond, gold, and strong dollar. globalom fundstrat advisors, thank you. scott pruitt has resigned from his post and we go live to washington dc to examine what his exit means for that agency. from new york, this is bloomberg. ♪

>> let's get to first word news this afternoon. reporting, scott pruitt has resigned from his post. questions about his condo rental and travel raise questions about continued effectiveness. president trump tweeted he had accepted the resignation and the deputy administrator will take over the agency. the mexican president-elect open the door and said president trump is welcome to attend his inauguration. at a news conference in mexico city, his u.s. counterpart and canadian prime minister justin trudeau and others heads of state will be invited. he takes office december 1. scaramucci is not as confident about the united states's position in the looming trade war as his old boss.

hean interview, he said hopes president trump will soften rhetoric. >> a trade war initiating even a trade battle if you will, i think will be very bad for the american worker, american consumer, and bad for the republican party going into the midterm election. >> he also said he feels the president is close to agreeing with the noon after court and wants them to leverage u.s. relationships with north american and european allies to help focus on china. the u.s. ambassador to russia says president trump is ready to discuss election meddling when he meets with his russian counterpart later this month. he says the president is going into the bilateral summit with " eyes wide open" and promises they will hold the kremlin accountable. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.

this is bloomberg. scarlet: scott pruitt has resigned. let's bring in gender louis who covers -- jen gillooly. we know about the different scandals and the legacy of scott pruitt in that regard, but talk about what he accomplished at the epa and whether his successor will continue or change that path. jen: administrator pruitt set in motion a lot of policy changes that president trump campaigned on. he started ripping up the clean power plan, the obama era rule. he began rewriting a water pollution role and rescinding limits on methane emission from oil wells. much of that work is in its oil

stages -- early stages. he was facing a lot of litigation. it is going to be up to andrew wheeler to finish the task and move a lot of these policies to their final endpoint. joe: is there any reason to think the work can't essentially continue unabated with a new person in charge? jen: i think we can expect much of the same, frankly, from andrew real or -- andrew wheeler. my reporting indicates he is in the same vein as scott pruitt in terms of policy priorities. they're very similar in their outlook on some of these regulations and on the epa's authority. what is different from andrew is that he has been around the block and run the epa for years. he has worked as a career staffer under bill clinton and the first president bush before entering the senate and working there and entering private practice as a lobbyist.

he has always been tethered to the epa. that makes him an institutionalist and somewhat respecting of the agency. . they're conservatives that tell me he is concerned he will not go quite as far as scott pruitt in terms of wanting to aggressively limit the agency's power. that is the biggest concern. they still think on many of the broad policy objectives he will be a similar -- take a similar approach. scarlet: as ken prewitt exits, -- excuse me, scott pruitt exits, he was the subject of at least 13 federal investigations. do we know what happens to those probes? do they continue regardless? jen: my understanding is that many of the probes will continue. a special there is counsel investigation into allegations that aids the questions prewitt's -- pruitt's decisions will be

looked at. we will see the results over many months even if it seems like it is a moot issue. scarlet: jen, thank you so much for giving us more context. joe: coming up, reshaping cultural commodity trade. we take a look at how escalating trade blows are upending the global flow of soy, cotton, and others. this is bloomberg. ♪

joe: president trump may be reshaping what global commodity trading will look like in years to come. the trade fight he is picking has already roiled food markets and will escalate further that

he slaps tariffs on $34 billion worth of chinese goods as planned tomorrow. joining us with the details, bloomberg's agricultural reporter from detroit, megan, they give her joining us. where are we seeing the impact of the trade war most clearly from your perspective? area where we are seeing an impact is the soybean market. for soybeans, that is a heavily exported crop. in the u.s.. china is the major market for those. import that to feed livestock herd, and right now, if you look at the soybean markets -- prices, they have come down 17% and it is happening on the backdrop of growing whether in the u.s.. joe: we are witnessing a pretty incredible story right now where ship called the peak pegasus is traveling to china, filled with soybeans, scarlet has a map of

the ship's travels trying to beat the deadline. shipment outto the in the see if they do not the the deadline? can they turn around and go somewhere else or do we get this big boat of soy means with no -- soybeans with no and mark? megan: we saw something like this earlier. china has imposed a tariff against ac grain and there were shipments that were crossing the pacific destined for china and some of them ended up going to other nations and being rerouted elsewhere. becca potentially happen here. it is unclear what will happen to this ship. scarlet: what is interesting with soybeans is, if china stops buying u.s. soybeans, they would have to find a replacement supplier. brazil would fill that spot because it is already the top exporter of soybeans. of course, brazil is in the southern hemisphere so it is not

an exact replacement. it is an imperfect replacement. talk about what happens down the road if they maximize their exports to china. because then, it needs to find a way to make up for the soybeans that it would then move on to china and start importing soybeans of its own. megan: when you look at the global soybean export, brazil and the u.s. really dominate global shipments of this crop. it is a very seasonal pattern. this time of year, brazil is the dominant shipper, and from about october through january is when the u.s. dominates shipments. china is the largest importer of soybeans. they employed -- important like something like 100 million tons. right now they are getting a lot of that from brazil and the could continue for a while. the interesting thing is how this will play out when the u.s. harvest arrives and supplies a

really strong. as you mentioned, brazil might take advantage of exporting to china for as long as he can, and could import potential he soybean mills from argentina which is typically a pretty large exporter of the soybeans. joe: what is the lobby doing to make its case or is it making its case to the administration that the situation is hurting its members? seen presscertainly releases coming out from places like the american soybean association who are really talking about how important exports are two farmers. i think they're saying some thing like one third of the u.s. living crop is typically destined for china. mentioned, the prices have come down a bit and farmers are going to be harvesting their months.a fewm

that is when these prices will be vital. a lot of those crops after harvest are loaded into rails and vessels to be sold abroad. joe: quickly, megan -- megan, does aly, chinese market with cotton exports as well, where can i can't go to next if it is not china absorbing it? megan: megan: that remains to be seen -- megan: that remains to be seen. when these prices get low enough, typically country see another opportunity and might step in to buy some of these. that could be the case for soybeans even if the u.s. is selling less to china, it might pick up extra demand from other countries. scarlet: megan, thank you so much for joining us from detroit on the agricultural trade flows. coming up next, a pricey round-trip ticket froor tech ipos. from new york, this is bloomberg. ♪

>> let's get to the first word news this afternoon. insight for children under the age of five who were separated from their parents after crossing the mexican border. the health and human services secretary said they will comply with court orders to reunite the youngest to cheney's with their parents. is analyzing the dnas of some adults and children to verify family relationships. there are roughly 3000 kids separated and fewer than 100 are lower than five. robert mueller told the court that paul manafort must prepare from his -- for his criminal case by jail.

bars bylaced behind allegedly tampering with witnesses in his money-laundering case. tour's overturned and 40 passengers were rescued off of the island and nine others remain unaccounted for. rescues -- rescuers are searching the waters. musksentatives for elon are in talks with rescuing a boys soccer team indicate. they could help by trying to find the precise location by using technology. they could potentially help with pumping water or providing heavy-duty battery packs known as tesla power walls. it is unclear whether officials will accept the offer. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.

scarlet: let's get a recap of the market actions. the nasdaq's leader the day on the indexes. the dow is adding 182 points. this comes on the eve of the imposition of u.s. tariffs on chinese imported goods. it looks like everyone is looking past that. we also have the jobs report tomorrow as well that could change things quite a bit. "what'd you miss?" in $22 billion round-trip ipo market cap is joining us now to take us through the big swings in the space. this is the ceo of triton research. --t time you joined us, [over talk] >> it was very interesting that we thought we might be in a moment of crazy abnormality. the few you spike -- the who you spike made ituya

look normal. everything is up 60% on average versus the long-term 30% you would see on the data. it could be less crazier than we thought. joe: the key thing that made the spike or one of the interesting things about the spike is your firm rates ipo's by various measures and it was all of them. it was not just the good ones. it was the good and the trash that was getting bought aggressively. >> if you look at the chart is fascinating. they stay in rank so the good ones did better than the less good ones by the scores that we put on them. they went up together and came down together and they are still at the level and should get about double the return for these guys this year. joe: when you see investors suddenly piling into what you consider a bad one, the trashy

or ones, does this tell you something about the market overall? when you look at historically and when the junked as well, does that say these are signs we are getting near some zuber and's -- exuberance? rett: when you look at these companies when they went public, the first day of trading is called the institutional discount. how much did they knock it down for these hedge funds that normally buy it to get it at a discounted price. was a little lower than suggested but they are went up together and all came down together again in respective. it is interesting the kept the rank order, but we did see different types of buyers coming into these things. that says a company like doma with a twin public can actually go. sometime the window closes as opposed to it trades off. sometimes it is just no more. scarlet: when you think the role is of etf's that track these ideas?

i'm thinking of the renaissance diggers. two-- tickers. allowt extent does this people to buy them higher and move in relation as opposed to deciding good and bad. rett: the shift is more toward tech an ipo's. in the first quarter, we saw these chinese companies actually open down. no one was into them. it was not the time. upn the huya market shows and we see interest in technology altogether whether it was a low score and company or a high-scoring company. scarlet: what is this mean for private companies that are considering going public? rett: harder. the market is very open. 18 new issues this year versus 22 and the entirety of all of last year.

also, lower quality companies to your point that of come out. it is a good time to go. if you're thinking about going public as a technology company, there's a strong market. scarlet: i quickly can we get it done? rett: how many elements are available for the documented to have direct the elements? joe: other lower quality companies, i said trashy and junky, what characterizes the back companies? rett: the score has 15 components and we look at things you would look at like the volatility of the midst of it -- management team. things we look at is does the company stand a chance at saving money? some of the chinese ones that greatut of favor were examples of companies that were challenged as far as their financials. we do models and the fundamental analysis on these things. when you say a company that has a negative gross margin, not a very good sign. joe: who has a negative gross

marginjoe: -- joe: who has a negative gross margin? rett: there are a few. if you are selling something at a loss, and you have to pay all of your expenses another way, it is very challenging. it is not mean that they won't turn it around. in the short-term, the financials were brutal and that killed them in the score. scarlet: when you are on last time, your great line and called it the uber market, and you said the momentum could continue for another year until uber decides to go public. because that is what people are waiting for. how does the price action of the last couple of weeks james that -- change that? rett: on the one hand you have repricing across the board of all of these things to levels that may not be sustainable or make sense. but, there's more capital coming into it. another thing is these chinese companies have something weird happening read last week, a company went public and it was not a success. it was more like billy billy in the first quarter.

those of the steppingstones between here and uber, airbnb. scarlet: the higher-quality trading months? rett: while the steppingstones to the big dogs who also have investors who only know the retail. what happens in between is we saw new capital on the one side of the backlog. all positive, but a lot of chinese companies now seem to be under pressure because of what is happening under trade in other aspects. joe: i know there are non-tech ipos. biotech has had a busy year, you track those and today show any interesting patterns? rett: here's why we don't. our analysis is focused on the fundamentals. we are good at figuring out if technology companies are ever making money. we've no idea if the curves cancel. we're not that good yet. we're working on it. scarlet: are somebody decides to take a big amble on it? rett: right. scarlet: we look for to that,

david. .hey key so much for joining us we are on the eve of jobs friday. estimatesking of the at of tomorrow's big numbers. joe: a reminder to us of scott to our podcast on itunes. there you will find the best content you can enjoy each friday and enjoyed over the weekend to listen to the best interviews of the week. scarlet: perfect for when you're driving, right? joe: perfect. this is bloomberg. ♪

scarlet: "what'd you miss?" the labor department is releasing to market data tomorrow. it's forecasting about -- it's

forecasting thousands of jobs added to the economy. joining us for more is michael mckee from washington. i gave you the estimate, 195,000 after 222000 and the month of may. in this holiday shortened week, we had a deeply -- adp employment change and do any of those give us a sense of what the june jobs and intricacies of the report might look like? >> not really. they are all indicators that suggest the labor market is relatively healthy. given that the range of numbers and possibilities for an accurate number is about 100,000 wide, they will not give you the exact figure. we'll have a reason to think of growth has slowed. on the chart you showed, the important numbers were the two on about -- two on the bottom. with unemployment as low as it is, companies will have to pay up forevermore scare workers -- scarce workers. we see wages rise in that

suggests inflation to gina fed's mind about how fast and moves, or if it does not slow the fed down because they want to try to produce more wage gains. scarlet: mike brought us a chart that shows as the unemployed rate falls, the wage growth is approaching the 3% early hasn't moved up the way we you might think. joe: this is the key thing mike close to 3.7% as we moved it a little bit rounding down. at what point do economists start to say we really have no idea where unemployment is going. some fed officials are saying the curve is extraordinary flatter in does not work anymore. they are looking for other indicators to see how this might be feeding into inflation. in the past you would see rising prices so workers would go out and look for bigger raises, and if they got more money in their pockets because the company has

to pay more to hire them, they spend it and that leads to inflation. none of that dynamic is happening. thehave the fed saying natural rate of unemployment is up 4.5% and predicting it will fall close to 3% in the cycle. is, if you charge, and i do not have one with me [indiscernible] one dynamical hold as well. joe: labor force participation rate, one thing striking is economists expect just under 200,000 jobs tomorrow. i remember two years ago, people were saying even if the economy keeps growing, we cannot add 200,000 jobs each month because there is not the available supply of labor but we keep adding, 200,000 jobs. do people start to rethink about the participation rate as it

structural -- as cyclical versus structural? michael: they been trying to parse that out for some time. retire,aby boomers you're are going to have a lower labor force. it accelerated after the great recession. the question is now, are we stabilizing or going back up again? and, what are the sub issues of this? if you're bringing people back into the labor force, what are they qualified to do? is there an army of coders out there or structural engineers? probably not. you're looking at creating jobs at lower paying industries that may not be as valuable to the economy. but they can still come back to work if you can find the bodies. joe: this gets to a key point which is as the labor market is getting tighter, we have seen employers reach out to pools of labor and talent that have traditionally been marginalized

whether it is people in prison, whether it is minority groups for the unemployment rate being quite elevated related to race. is there a case from the fed's perspective to bring about structural benefits to the economy by persistently letting the labor market have a lot of ome ofressure to heal s the structural damage to the economy for people have been locked up. you can do that in the fed has been trying to do that. get as many people working as they can without touching inflation. the problem is, it is less about structural change than a cyclical change. these people have been unemployed and for a long time. going back to a lack of skills that keeps them on the sidelines, they may be among the first lego when the economy turns down. the real long-term solution is

education that takes a long time to take effect and retraining people who have longer-term skills keeping them in the labor force. scarlet: i can believe we have not brought up the fact that president trump tweeted about this. this adds an extra variable for traders to deal with. michael: it is unfortunate for other people stuck working because of the jobs report on this holiday week when they could be at the beach earlier. they're going to have to watch out for that. with anybody else, you would say he kind of did what he was not supposed to do and they would tell them not to do it again, but nobody knows with donald trump. you have to be on the lookout for it, but hopefully they said that is not the best way to do things. the government does not like insider information going out early. muchet: thank you so michael mckee. we will be glued to twitter and remember, bloomberg users can interact with the charts we were just showing you using to tv

including this one on wage growth and how it is lighting behind the decline in unemployment. from new york, this is bloomberg. ♪

joe: japan is reallocating in the u.s.. japanese investors are selling lower treasuries and buying riskier assets like stocks and corporate bonds. let's bringing catherine, thank you so much for joining us. we think of japanese investors as he told his of treasuries. but, that is changing. >> definitely. for the past years, japanese rotating oute been of u.s. treasuries in favor of u.s. stocks, agency debt,

basically everything except for u.s. treasury. joe: we look at treasuries as being relatively high-yielding to japanese government bonds. know, the cost to hedge the currency risk eats up a lot of this. walk us through the calculus in. katherine: this is definitely a story about skyhigh currency hedging cost. treasuriesn unhinged is about 2.83%. four young-based investors protecting themselves against the currencies, that yield whittle down to about .2%. definitely -- .3%, definitely not as attractive. joe: the turn away from u.s. treasuries is not actually a turn away from the u.s.. katherine: not at all. they're piling into other assets at a record pace. they are holding corporate, u.s.

stocks agencies, exceeded one chilean this year for the first time ever. they are clearly loving the u.s.. return this looking for or is it something of a change to the nature of what the approach is? what is the nature for this change? katherine: it definitely speaks to a change in deputies investing -- in japanese investing. prefer u.s. assets when they look abroad. they have been pushed further up the spectrum as hedging costs have become prohibitive. joe: this is a story we see all around the world where people perceiving not a lot of return anywhere on perfectly safe assets so people feel the need to push out the risk curve. katherine: it definitely speaks to that. these japanese investors are having to raise the risk profile

just as concerns start to emerge in some of these other markets, specifically the u.s. stock markets. joe: when we talk about japanese investors or any investors, there are my melissa investors, institutional investors, big fund insurance companies, what type investors -- of investors are we talking about? katherine: this data i am looking at encompasses a wide slot of investors. everything from the bank of japan to japanese insurers and pension funds. yeah. abroad -- a broad, joe: a broad range. investors,lk about is there any suggestion that the rotation will abate? katherine: that depends on your view of u.s. yield. a number of things going to

currency hedging costs among them. the yield is the underlying asset. at this point in time, u.s. treasury yields haven't risen high enough, even though they have been rising all year, they've not risen high enough to overcome the hedging costs. if you think u.s. yields are going higher, perhaps they will get to a point. joe: that would be the key thing. all right, katherine, think you very much. scarlet: it is time for the bloomberg business flash. goldman sachs says forget about a trade war, now's the time to buy commodities. they said the economic impact on sanctions is small. the firm is forecasting a 10% return on commodities over the next year. resigned aa ceo has bounce shareholder pressure. after they signed a european steel joint venture.

earlier this year, elliott management wanted to oust -- oust hiesinger because of falling stock prices. losts of the group have 30% since he became ceo. boeing has agreed to a $4.75 million venture with an industrial partner. this will help them better compete against airbus while expanding doing -- expanding abroad. embraer, it will remain a separate company. learned the median pay for energy workers over the last year is $123,000 according to data that is not required by the u.s.. the salary is driven by a pool of well compensated professionals such as geologists and petroleum engineers. along with the cost of attracting and retaining young talent.

that is your business flash update. coming up, what you need to know to europe for your trading day. tomorrow is job day after all. this is bloomberg. ♪

scarlet: just to recap, scott

pruitt has resigned as administrator of the epa after all of those damaging revelations. joe: the and list scandal of -- endl-- the end list ess scandals. also because of the transformative work that is occurring. he says the unrelenting attacks on me personally, my family, are unprecedented and havd a sizable toll. there are about 12 open investigation into him. does it for "what'd you miss?" bloomberg technology is up next joe: have a great evening. this is bloomberg. ♪

selina: i'm selina wang, in for emily chang, and this is "bloomberg technology." china temporarily bans sales --m u.s. chipmaker macron micron. as we approach midterm elections in the u.s., the fake news fight rages on. what can platforms due to control misinformation -- do to control misinformation? why