about never undergoing a trade war we are experiencing now. people and not being sure where the shoes will drop. will the sector gets hit? it's will go to the dominant portion of the market and it is hard to see the market perform without the strong performance by tech. caroline: it was the driving force of the market and the s&p 500 was. up led by netflix on the outside nasdaq is outperforming as well and the dow jones is up. dayelt like a risk on the even in the face of what has been significant headwind coming to the chinese u.s. relationship. joe: you see the moves there and it was solid all day. even after we got the headlines around 8:00 this morning that the retaliation figures were coming in. it hit futures for 10 seconds.

scarlet: as matt pointed out, you did not have an extreme reaction in china. the benign reaction carried to the u.s.. caroline: did china support the market? scarlet: that is a good question. matt, come back in here. do you see any signs china support to the market? matt: we heard chatter about that but nothing firm. we have seen that in the past when the chinese have come in at key levels and the shanghai index was testing its 2016 lows and a break below that would have been a key. there has been speculation that has taken place. we saw that in the currency currencyhen the u.s. crust came in. there is speculation. they are sensitive to these things. it is not just the fundamentalness they watch.

scarlet: we have numbers on china's treasury holdings. they sold to a six-month low. they are specifically $7.7 billion to 1.1 sterling -- 1.1 trillion in july. this is one of the big concerned with the trade tension on whether china might selloff holdings. in: on that recent theme china intervening with the market, there is a report on bloomberg with deutsche bank saying if the national team comes in, now would be the time. it makes you wonder if they have not come in. michael regan, one of the big stories of the year that has gotten to a fever pitch is divergence between the u.n. and everyone around the world. you wrote an interesting note on jpm, is there some vibe that maybe the convergence

will happen? mike: that is what jpmorgan wrote about. it is something on people's minds. how bad can the em selloff get? a lot of people expect it can bottom at some point. jpmorgan's take was basically that sentiment got so far extreme to the advantage of the u.s. and negative on everyone else that the convergence would happen from the bottom up meaning the weaker parts of the world would catch up to the u.s. rather than the other way around. it will be interesting to see if that is true. caroline: matt, you were talking about complacency in the market. where do you see the convergence or divergence we might see between the u.s. and the rest of the world? we may have to meet somewhere in between with emerging markets and the u.s. coming down -- emerging markets going up and u.s. going down. on both sides with this trade

issue, how much is going for them? president trump has a lot more political pull for him then china. there are people on both sides of the aisle who agree china has been cheating for a long time. at least something needs to be done. he does not have that political will when it comes to some of the nafta countries. he can be more firm on that side. president she could do the same thing because you do -- xi is thing do the same because he does not have to worry about reelection. will last a lot longer than a lot of people think it well. when you have that, it creates and company start pulling back on some of the capital spending programs and things like that. that's worry -- while more it about complacency. scarlet: the 10 year yield has -- 3%.d 10%

in the past, it has gotten past 3% but cannot stay there. is there a sense things are different this time? sure, but the100% short end has been selling off as well. you have three months, one month is above 2%. eventually we will have to flatten the curve or see the tenure continue to go higher or both -- 10 year continue to go higher or both. it wouldn't be surprising if this was the last cross above three for a while giving the trend in inflation and the market coming around with the fed stock -- dot plot. matt, what is your take on where long rates are going? about -- are talking we certainly see inflation data pullback, but we also have a

simple positioning. we have the commitment of traders data showing record levels of short positions. when everyone is on one side of the boat, the market cannot go that much higher -- i'm sorry, lower in the much on terms of price. if we get above 3% and stay here for a little while, we can. i think they will pull back. matt, thank you for time and mike as well. lray surpassed canopy to be the biggest marijuana stock on the market. they hit the $4 billion market valuation. here to take us through it all is craig. end.y when does it it seems to be winning the view

that they could get into the u.s. quickly. craig: that was a fairly inconsequential plus release. all it said was that the da is giving them approval to import to california for a medical study and there goes the stock. joe: it was up like 27% today. the news is merely that they are able to do a study in california. craig: there is not a lot of information here. there is not sales or profits or fundamental measures we would use to judge the stoxx. there is this perception about what is happening in the u.s.. this is the dea giving a little sign that they are ok and there goes the stock. scarlet: marijuana is the new blockchain. everyone who says anything about it will get a pop in their stock price. joe: if there were actual , they aren earnings creating 300 times revenues or

2000 times earnings, but the nice thing is you cannot say that because they do not exist. craig: the price of sales on tilray has gone through the roof. these stocks are extremely valuable and it will just continue. it does not take much to move shares. caroline: we are getting analysts coming out and saying this adds another domino to the future legalization in the u.s.. did you feel a hint of that? craig: 100%. the federal situation is tricky to handicap. if you watch congress, it is gridlocked. difficult for me to see the path to federal legalization in the u.s. whether it be medical or recreational but people are slowly getting comfortable. the dea is still considered this a schedule one, the worst of the worst of drugs. scarlet: it is one thing to be a marijuana company and talking to other companies, it is another to be a big consumer staple like

coca-cola and talk about canada streets as well. looking tooca-cola speak with cannabis about cannabis strength. did that have an impact and are analysts sharpening their pencils to quantify this in the numbers? craig: i don't think it is so much sharpening pencils whereas the perception game. is arguably the most famous brand in the entire world so they say we are looking at cbd and that is another piece of evidence big business is getting comfortable and that israel. this is -- that is real. it is here to stay. there is corporate foam of your -- fomo here. these beverages have missed out and they say it is not happening this time and investors say i do not want to miss out of the gains. scarlet: convergence of corporate fomo and investment

fomo. thank you so much. that does it for the closing bell and for me. romaine bostick steps in and we look at the bank of america survey why money managers -- and why money managers are optimistic about u.s. stocks. this is bloomberg. ♪ ♪

caroline: i'm caroline hyde. romaine: i'm romaine bostick. joe: and i'm joe weisenthal. caroline: the markets were up and who cares about a chinese tension and retaliatory measures because the s&p 500 closes up 5/10 of a percent.

joe: "what'd you miss?" caroline: legal roadblock with of taking hiseet company private might be at the heart of a criminal investigation. china announcing retaliatory tariffs on u.s. goods. stocks shrug off the trade tension. there is a nuking king of cannabis, tilray is taking growth. the u.s. government gave them the green light to import medical marijuana into the country. tesla could be facing a legal roadblock. they are under investigation by the justice department following elon musk's tweet taking the company private. tesla conference it was contacted by the doj but has not received a subpoena. joining us from washington dc is thomas gordon. we would love to get your perspective here. you advised the firm on

compliance. tesla, withadvising their compliance and gone astray? thomas: not at all. what they have here is an informal request from the doj for documents. the department often asks people for documents as prelude to an investigation or to perhaps take a quick look and decide what they want to do. when what have i seen -- from what i have seen, they did what they need to. romaine: how common is it for the doj to overlap with the sec investigations early? thomas: very typically the department of justice will take a look at something paralleling the sec. sometimes they will let them go forward and develop the case first and take a look later. sometimes they will start at roughly the same time. first andsec started

reportedly gathered documents and interviewed people. my understanding is that the doj did not make their request until about one month ago. they followed a little bit behind but not much. joe: theoretically, what would be the bar for something that would cause the doj to ramp up the investigation or bring charges down the road? what would be the kind of thing they would have to discover looking into the company? thomas: what we're talking about here with the department of justice is a criminal violation of the federal securities laws. any section of the federal security laws can become a criminal charge by adding the component of willfulness which is fairly high. what the doj would be looking for is the harsh types of

intentional conduct on the part of one of the executives, mr. musk probably, that gave them and indication there was intentional wrongful conduct. you have to remember the department has a high standard of proof so they will want fairly solid evidence. caroline: how much is twitter and social media changing the game for the sec and doj and assessing willfulness? thomas: twitter in the last few years has become a game changer for disclosure. the sec allowed companies like tesla to use it to do disclosures. that has played into this. at the same time, the sec has brought a number of cases where people have abused these mediums and put out fake information to run up the price on a stock and trade and make a profit.

areas created a whole new of securities laws violations. , thank you gorman very much. america first is captivating investors like never before and at the expense of other world markets according to bank of america's latest survey. here with details is luke. arenow u.s. markets outperforming wildly versus everyone else this year. what looks like is that investors, rather than getting cheap markets elsewhere, are leaning into their america holdings. luke: most certainly. the biggest thing the survey highlighted was going all in and the overweight share of investors and u.s. stocks rose to its highest since january of 2015.

european equities fell to its lowest in 18 months. it is clear investors are not bargain-hunting. they think global growth will slow. they like u.s. growth stocks and they like u.s. as the growth region of the world. caroline: in terms of where else they like, what caught my attention is that they are looking at europe potentially. if there you seeing divergence continues or we converge in -- see convergence going, where will they the investors like? luke: investors reduced their bond underweight and some are still overweight. there is one question asked in the survey and that is how this .ivergence will end month, we expect divergence to continue. got month, even as people more bullish to the u.s., it increased their overweight. that is no longer the dominant

position. people think divergence growth will end with u.s. growth or that it will be met with acceleration from other parts of the world. is that so the argument divergence has gotten so stretched it has to rebound like a rubber band or have fundamental arguments on how the rest of the world will catch up with the u.s.? luke: that has to do with investors profit outlooks. the share who deemed the u.s. most profitable is at the 17 year high record for the survey at 69%. people think global profits will deteriorate. what i find interesting is that even the u.s. bowles -- bull expect profits to grow by double digits. remember back to the caterpillar hi mark? we were worried about the slowdown and how it would hit.

slow profitg with growth because we are worried about the rest of the world. romaine: so at least it is profit growth -- joe: so at least it is profit growth. luke: exactly. the expectation is for global profits to deteriorate so it is the only place to be is one way to read the survey. romaine: luke, thank you. we have breaking news with jpmorgan. they are raising their dividend to $.80 per share. the current one stands at $.50 -- $.56 per share. they are boosting it to $.80 which is pretty big. caroline: we will see how those shares react after hours. we are taking a deeper look into crude oil and intelligence is up next. this is bloomberg. ♪ . ♪

caroline: let's get the outlook for oil. they have been trading higher today and up in terms of brent contract. that is on the back of saudi arabia. our next guest is taking a look at the energy sector through satellite imagery and machine learning. anton joins us now -- and one joins us now. how did your company china light on the supply situation in oil right now? >> we want to be transparent to the oil sector by using satellite imagery and social ever study monitor in the world.

joe: what can you see from the sky? antoine: we can see production, the level of crude oil through satellite imagery. we can track bunkers and see whether refineries are on or off -- we will be able to track to be able to have a real-time view on consumption. romaine: it's a taking that data and looking at it today, what does that tell you about the direction of oil prices? antoine: there was a disconnect between fundamentals and prices, so the price was too low compared to the level of inventory. recently, the price went up and is now in line.

loweredl inventory has since two years ago. moneyne: he just raise and i want to understand who is buying your data. where are you offering it at the moment? you have insight people need. antoine: we have a large base in new york city so that is big for commodity hedge funds or asset when -- with regard to oil prices. this is basically anyone exposed to the rhetoric of the commodities. joe: tell us about supply. one of the big stories from the is that thanks to the plunging oil prices, it was a source of investment. even if we do not have a big demand boom, the supply is limited and will take a while.

then there are significant bottlenecks in texas on getting the oil out. when you look at the world through your lens, do you see that undersupply and supply bottlenecks out there? antoine: yes. and collapse in which has removed a lot of the -- in the market. then, we have mature provinces and we see a decline that was much higher than what people were expecting. , but, growth in the u.s. outside mature provinces, the supply landscape is bleak. caroline: since you were bringing online the ability to track demand, everyone seems to be worried about that when it

comes to trade tensions. from your perspective, should we be worried? everybody talks about , but we have seen the largest increase last year and we are cap deleting supply global area and we crossed 100 million months ago. the demand is a miss for now. caroline: antoine giving us his perspective there. coming up, a new cannabis king. tilray snatches the crown as the biggest canopy stock. we will discuss. this is bloomberg. ♪

mark: i am mark crumpton with first word news. trump says he feels "terribly for brett kavanaugh." whose supreme court nomination is threatened by an allegation of sexual assault. mr. trump told a joint press conference that he totally supports judge kavanaugh. >> he is an incredible individual with great intellect and a great judge. he has impeccable history in every way. i feel so badly for him that he is going through this. i feel so badly for him. this is not a man that deserves this. ups should have been brought

long ago. mark: kavanaugh and his accuser have both been asked to testify monday before the senate judiciary committee, but it is not clear if she will appear. -- win back investigators u.n. backed investigators have issued a scathing report. the chairman of the commission called the atrocities committed against rohingya "crimes of the highest order under international law." >> the killing of civilians including babies cannot be argued to be a counterterrorism measure. tore can be no imperative rape women and girls or burn people alive. mark: the full report provided new details about the investors -- investigators concerns about how the united nations reacted

during the violence. one criticized the panel's findings thing they lacked fairness. asylum-seekers will be moved out of a severely overcrowded camp on the greek island -- on a greek island and sent to the mainland. authorities criticized conditions at the camp housing 9000 people in a facility built to accommodate 3000. threatened toials shut down the facilities unless the government improved conditions. north korean leader, kim jong-un, says his june summit with president trump has stabilized the regional security region. kimmitt made the comment in pyongyang with south korean president moon jae-in. kim thanked moon for brokering the summit with president trump in singapore. the leaders of the two koreas

had their first in-depth talk today and scheduled to continue wednesday and moon is expected to return to seoul on tuesday. 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. i am mark crumpton. this is bloomberg. romaine: the global consumer goods market is getting disruption from legal cannabis. every industry from alcohol to food is trying to get in on the action. here to take us through which areas are primed for the opportunities, he is a senior analyst for bloomberg intelligence. what exactly should these companies, and i talk about the alcohol companies, beverage companies, tobacco companies, what should they be afraid of here? >> they need to be afraid but for opportunity at the disruption, particularly in canada. canada will legalize

the use of cannabis and that means consumers have lots of other choices in terms of what to do with their discretionary income. they don't have to get a beer to enjoy themselves on friday. the beer companies have taken notice in particular because it is that market, people of democrats it's -- them up graphics -- demographics who tend to be beer triggers and are the biggest canopy users. rather than look at this as a threat, companies look at this as an opportunity and put $4 billion in betting this will be an opportunity for years. joe: when it comes to big beer brands or tobacco brands or snack brands, there are well-known companies in lines and names that people have been consuming for years. and the cannabis space, will inone have brand value customer allegiance or anything

like that. ken: out of the gate, probably not. some of the big companies like canopy have already signed up snoop dogg and they are trying to get big endorsers that the younger generations understand, can identify with, kmnow, but brand identification will be a big key factor going forward that is why these alliances coming around between big packaged goods companies and the big growers and sellers of cannabis is a win, win operation. the cannabis guys need the brands and the brain guys know how to manage brands but need access to a supply chain. it is a partnership and potentially win when. how quickly will we see this winning on the bottom line with some companies getting into bed with a canopy player -- cannabis player? ken: it depends on how they go to market.

look at some of the rumors of the past few days by coca-cola and pepsi co. joining this with beverage companies getting in the space. if coke and pepsi were to do it, it would be on the non-thc side of cbd which has therapeutic benefits backed by some scientific claims. to work hardve to develop and market these products. how they do that will affect profitability. there's a lot of open ended questions with how these companies get in because it certainly will have that influence if it is profitable out of the gate were not. romaine: there seems to be this assumption once marijuana or cannabis is legalized in some widespread fashion that consumers will adopt it. is there any data that backs up the idea that consumers on a broad level really want this? ken: we know they wanted on the

medical side. if i look at the u.s., a lot of the growth will be on the recreational side. over 30 states have authorized legal access to medical. a lot of growth will come from the recreational or adult use side. in canada, the growth will come on the recreational side. medical is there also. the u.s., a lot of the growth will come from the medical and i think there will be a slow adoption outside of the u.s. for whatever reason. consumers just -- regulators just have not embraced the full recreational saly at. -- sale yet. not tried a cannabis infused beverage so i cannot comment first brand -- firsthand. i can see benefits but the cherry is out -- jury is out. joe: what about tobacco

companies? thateveryone thought tobacco would jump in given their big economies of scale and distribution. that could be the case, but a lot of the big companies, given the big m&a you see over the years and concentration of the companies, they have high profit margins and returns. as a consequence, high dividend payout ratios. into a business requiring a lot of capital expenditures with uncertain profitability given the competitive landscape that is fragmented, i think they will move slowly. likely in a partnership arrangement, likely looking at cannabis oils and vapor side as opposed to the sticks, but we will see. caroline: i'm interested to see. i'm already being offered cannabis infused facials. thank you. brexit's endgame, we break down the latest move toward an eu

departure in six months. this is bloomberg. ♪

caroline: as the u.k. continues to work to negotiate brexit, it is also looking beyond and renewing its trade relationships. liam fox remains confident it will get done. >> i think we have seen the movements in recent weeks towards an agreement. there are a number of reasons driving it, political reasons driving it. you have potential instability in some of the german political areas. we have european companies caught in the crossfire of the

u.s., china dispute. to puts a strong desire , but that isissue not guaranteed we will get one. i think the mood music has certainly improved. >> we have had dire warnings from major corporations about what would happen to them in an event of no deal, has that overdone those warnings? >> i look back to the referendum and we were told if we voted to leave the eu, just the act of voting would cause such a shock that we would lose 500,000 jobs and investors would diverge us -- desert us. we have continued to grow and added 600,000 jobs to our economy. last year we had more direct investment plans than any time in our history. i understand the nervousness, what we need to be rational about this. the armageddon predictions have not materialized.

the opposite has happened. i'm confident the u.k. will take advantage of the freedoms. the key thing to point out to investors and those trading is that, as we move forward, the fundamentals of our economy are strong. the investment base is strong in the u.k. and the government is trying to get a deal with the european union to maximize our access to the european market, 43% of our exports, but does not tie our hands for opportunities out there in the rest of the global economy growing quickly. >> one question you must encounter is whether theresa may will survive. what is your answer to that? to even think of changing a prime minister at this point is such -- in such a historic negotiation is to disregard national interest.

i think we are likely to get an agreement which will strengthen. not only as a colleague and prime minister, but as a friend i want to succeed. even more than that, i want the country to succeed so the negotiation has to be successful. there has to be a little less me and a little more us. >> you are negotiating this new agreement at a time when many moving parts are afoot. other trade deals are up for grabs, the revised of populism across the world, how does that change the negotiations and what you are trying to achieve? >> you need to go back to why we are leaving and what the visions of the future are. people worried at the time of the referendum. we have looked to see what the opportunities are beyond europe,

and my message to many of my colleagues is that there is a world beyond europe and there will be a time beyond brexit. if you look at the imf predictions, 90% of global growth will be outside of continental europe. that means we need to be concentrating our efforts. it is not to say europe is unimportant but there is another new emerging part of the global economy we need to be part of in the u.k. we are well placed to take advantage of the developments when a lot of those east asian companies will be looking for some of the service capabilities. we see trade deals have a stabilizing effect historically and cement relationships between nations. what is your responsibility in europe when we see an ugly anti-immigrant sentiment afoot to make part of the deal here a values-based trade arrangement? >> in the european union, the

fact that we have had free movement of people, that is something of a constraint on our economy. this big advantage in being able to take a wider level playing field view of global talent. that is an opportunity that comes to us as a result of brexit. in migration, we have to understand there can be an extraordinarily powerful and empowering tool for an economy migration, but we also have to recognize the political realities around that. and, that the levels of migration making integration possible will differ in an economy growing rapidly or one in recession. we have to be willing to flex and be pragmatic about migration policy. aroline: that was liam fox, key meeting tomorrow between the u.k. and eu determining brexit. joe: here's something you might have missed, nicolas maduro

dined at take steakhouse of the instagram famous chef known as salt bae. there is video of that. it was pretty extraordinary. we see it there. he is being served food and here , himself., salt bae, he is getting really into it. romaine: who would turn down an invitation like that? joe: on the other hand, if you are leading a contrary of people who are destitute or there is widespread poverty or destitution, that might not be the best look. one might think it is not the best move. nonetheless, he said later in the day that he will go back to the restaurant so he is doubling down and not apologizing for it. he said it was a great restaurant and he will one day

return to the restaurant. one interesting point i have been looking at on the bloomberg terminal is our legendary cafe c on leche index or we go out regularly to caracas and measure inflation by looking at the surging cost of milk. it is up about half 1,000,000% in the last couple of years. this is what happened with the currency at the same time as the president is dining. romaine: you wonder if there will be any real backlash towards him as of this. joe: even marco rubio got in on the action urging people to get upset because this guy has a chain in miami. maybe they will see a little bit of a dent. joe: we will see. caroline: fascinating stuff. how president trump's trade war

with china could spark an even wider conflict between the world biggest economies. we will have five asia flashpoints to watch next. this is bloomberg. ♪ this is bloomberg. ♪

caroline: there's one trade deal done and another trade war up. we're just getting started. that is how president trump summed up his policies. just how concerned should we be? >> we are looking at quite treacherous waters here which good considerably destabilize global economic confidence and threaten a future recession. >> the impact of this trade war is on the economy because they say the trade impacts are -- that is not true. >> these conflicts are raising

downsize risks to the economy. certainly we see this is worrisome. this will have negative effects on the economy. >> it is not just about trading goods, it is about trading have itgy, and you will become balkanized in this friction having a negative impact or reducing growth or inflation -- increasing inflation globally. caroline: as trumps trade war heats up, we have five asia flashpoints to watch. here is shery ahn with our asia look ahead. stories are a great read. what stuck out to you? shery: let's talk about the talks happening now. the first south korean leader going into north korea in 11 years, moon jae-in. more is at stake because it is

not only a meet and greet, it is about having something concrete, and it would be the first time they would be talking about the nuclear reservation -- de nuclearization. joe: let's talk about that south china sea. that is one of those things coming back and forth in the headlines. what is the latest? shery: it's also about the east china sea. when it comes to asia, it is about these territorial issues. the south china sea would be a strip of sea between taiwan and the philippines. we saw the latest altercation a u.s.chinese vessel got underwater drone before in, butt trump came this has always been at the center of tensions between all of these asian companies. then you have the east china sea which would be japan's androlled territories

president trump and the u.s. is always bowing to protect those territories. romaine: in taiwan still remains a flashpoint. shery: taiwan is always a flashpoint but has become more controversial after trump because he questioned china policy. have don't forget we also the shooting general region -- region which is another flashpoint. caroline: all of these flashpoints but the market shakes it off. talk to us about yesterday ending higher on the chinese market. do you think it was buying something from china? shery: i think that helped. you saw the shanghai composite get a boost in the last few minutes, but it was surprising

because we started low. as soon as news broke of the tariff announcement, u.s. futures dipped. it was not 25% though. after the markets closed, you got the reaction from china, and i was surprised. you were talking about $60 billion taxed but also not on the 25% level they warned back in august. joe: so maybe people are reading into this, and when we look at the overall rally, people are reading into this and it could be worse. there are even signs that even in the chinese response that they are trying to keep this temperature down low. shery: it is interesting because the response from the finance ministry coming from china, they are saying we are retaliating and not sitting idle, but to they say beijing is ready to negotiate trade tensions with the u.s.. it is interesting but also worth

pointing that they are targeting u.s. lng. that is big. this is somewhere that would hurt the chinese as well because they are trying to veer away from burning coal and into lng, but we are getting mixed signals. we will see how it continues. shery ahn all over it for us. don't miss those stories. meanwhile, the bank of japan announcing a policy decision followed by a briefing. joe: i will be watching economic data. u.s. housing numbers coming out for august at 8:30 a.m. tomorrow. caroline: that is all for "what'd you miss?" romaine: "bloomberg technology" is next. joe: average evening. this is bloomberg. ♪ -- have a great evening. this is bloomberg. ♪

emily: i am emily chang in san francisco. this is "bloomberg technology." tesla and turmoil. the company is said to be the focus of a criminal investigation into elon musk's public statements about private funding alongside another investigation by the sec. plus, a 20 year trade war. prediction over the conflict between china and the u.s. after more terrorists are levied.