nejra: good morning from monday -- london. manus: this is bloomberg daybreak: europe. these are today's top stories. anna: asian equities trade deeply in the red. u.s. futures indicate a lower open. >> is the correction we have been waiting for for a long time. i really disagree with what the fed is doing. panic --this region to

reason to panic? perhaps short-term pain is unavoidable. ♪ a very warm welcome to the show. 10 year government bonds, do you find a haven the want to buy? money flowing into 10-year futures. we have a big bond auction today. as a be futures down. mr. trump thinks it is good. precedent or diluted? global stocks under pressure. semiconductors really taking a hit. the worst day in japan since march. we are trying to grapple with

yields at 3.2%. is that enough to unseat equity gains? anna: the selloff has gone global. the havens are clear. bond markets, yen. do you blame corporate profits and the realization that the trade tariffs are having an impact? do you blame the chinese crackdown on luxury goods? do you blame the fed? president trump blaming the fed. he said it is going wild. the problem is the fed. he says that chinese tariffs are not perfect. let's go straight to a market update. let's get to juliette saly. she has all the details of what is selling off. many markets losing more than 3% this morning. >> they certainly are. you mentioned that u.s. stocks had their worst sessions in february. the biggest drop that we have seen since june 24, pretty much

all the major markets that we track in asia have actually gotten a black box when you look at them on the bloomberg. that means they are moving farther away from that 90 days. the nikkei off by more than 15%. i want to show you the tire. this is where you are seeing a lot of heavy selling. we saw that big drop in the philadelphia semiconductor index. panic in the more taiwan stocks. let's have a look at some of the individual players. we know it is the tech space being hammered. we have seen the i.t. sector off by about 5%. conductor off by over 6%. down the most in around seven years. it has been in the red for 10 sessions in a row.

that's the longest losing streak for that stock, which makes up such a huge portion of the index in terms of market cap. sincengest losing streak 2004. luxury goods are being hit hard as well. thank you very much. juliette saly in our singapore studios. it is spreading to asia. down over 3%. in the u.s. with the s&p tumbling 3.29% yesterday. fresh concern about the impact of a trade war. the nasdaq had its worst seven day -- day in seven years. a team we have rallied together. our asian economics correspondent is in bali.

you, futures are rock. his mnuchin right? that this is a correction and we should not get roiled about it. >> i think that is right at the moment. it depends on how much for the rig goes. a big theme of the past few years has been u.s. equity outperformance. they were overdue a correction. there has been no major pullback. they were due for one with yield surging so much recently. but does not mean an end to the bear market. i don't think long-term investors will be alarmed by this. it's move was sharp. it depends on how the trading goes from here. we haven't seen much panic in asia. have suffered quite a lot given what happened in the u.s.. there has been sharp will back. commodity markets are relatively stable.

that means that this won't last more than a couple of days. no one wants to catch the falling knife just yet. toa: the selloff is starting be in focus at the imf meeting. i know that christine lagarde has been commenting. steve mnuchin has been commenting. give us the latest. >> that's right. coming into these meetings, one of the risks that organizations was sky high valuations in the market. the selloff has been a reminder to finance ministers gathering here of the fragility's in the world economy. responses have been contained. we had the u.s. treasury secretary tell bloomberg news earlier that it is a correction but no real supplies -- surprise. theindonesian official made

point that he welcomed the selloff in the u.s.. meanything, that will there will be less withdrawal on capital that goes to the u.s. and more of that capital will come to the emerging-market world. the views are fairly split. in the days ahead of the talks going, thealks get market selloff in the broader trade tensions are going to dominate all over the discussions. we are on a knife's edge when it comes to that. to mark. it back your question of the day, i think it is a sharp and president. what is it? how far will this correction go? it's not a surprising question. everyone wants to know if this is a turning point. the one in february was 12%. willoughby further this time?

willoughby smaller? at a majorr major -- turning point? we will have more downside in the short term. maybe a few percents. manus: thank you very much. let's get a bloomberg first word update. juliette saly has that for us. juliette: u.s. president donald trump stepped up his attack on the federal reserve hours after the worst wall street selloff since february. pennsylvania, he told reporters that the central bank is wrong to raise interest rates. fed isink that the making a mistake. it's too tight. i think the fed has gone crazy. it is a lot of safety. he gives you a lot of margins.

i think the fed has gone crazy. juliette: donald trump has said he opposes blocking arms sales to saudi arabia over the disappearance of a journalist. his comments come as a bipartisan group of u.s. senators is forcing his administration to investigate the disappearance of a journalist. that triggers a human rights probe that could result in sanctions. negotiators are edging towards a compromise even as officials on both sides worn that optical still stand in the way of a deal. the chief brexit negotiator has said a deal is within groups. officials in brussels and london said some progress was being made. the main sticking point is how to keep the irish border open after britain leaves the block. office hasrg london won the 2018 prize for best new

building. havingdescribed as smashed the ceiling of office design as it scooped the top u.k. architecture honor. global news 24 hours a day on air and on twitter. powered by more than 2700 journalists and analysts. this is bloomberg. manus: thank you very much. it is a heck of a building. let's give you some light coming through on italy. will the bond vigilantes feast on this? the head of the budget committee , italy says he expects the eu to reject the budget plan. in terms of down

the budget plan and whether they will be accepted. that's the first set of press issues that we have. i know there's more coming through. a more conciliatory line from the president. that thest saying government should avoid conflict with the eu. italy must deal with the eu/. he's commenting in a meeting with government leaders. one of the newspapers there, of course. we will talk more about italy as we go through the program. the biggest u.s. stock route from february is spreading through asia. futures point to another lower open later today. let's bring into the conversation our guest, the global cio at wells fargo asset management. are you to see this morning.

there are many ways to talk about the scope of what we are seeing in the u.s.. a chart that shows the s&p 500 posting its longest losing streak of the trump presidency. this is clearly something that roils him. does it have you worried? >> you have to be concerned but i don't think the correction is unexpected. a lot of this has to do with the structure of the market today. if you think about it, you had the rise of the passive investors. passive investors by nature are we cans. when selling occurs, it must sell in the proportion that is in an and dax or an etf. it exacerbates on the downside. what you saw later in the day yesterday was a lot of the passive selling at the end of the day. it's important not to overreact to the selloff. manus: very good morning to you. we have created another relationship, bond yields to the equity market.

maintains 3.2% is small potatoes. it's not enough to unseat an equity market. my guest said that was hogwash. that's all fine and dandy for the united states of america. the rest of the world can't survive a ratcheting from the fed. goldman says 5% would unseat the market. do you agree or disagree? what is your phrase of the day? >> what you have to watch is the u.s. consumer. and the credit market. rates, does this low the u.s. economy down? as strong as the equity markets have been, the fixed income markets have been even stronger. i think it will be interesting to watch. the other effect will be the dollar. what we have to be careful of here is that the dollar will slow down. the very strong dollar was

obviously significantly impacting the rest of the world, especially emerging markets. down,if the dollar slows it will be fascinating. this selloff is spreading into asia. we are seeing something that started in the united states yesterday intensified there. we had already seen selling and the rest of the world. is it not time for the u.s. to sell a little bit more than the rest of the world? i'm fascinated to know how those linkages come through this time. >> it's a very good development in terms of the rest of the world. in have such a disparity interest rates with the 10 year treasury at 3.2 and german bunds at 50 basis points. belowof government bonds zero. this is a very good development. , it is healthy for the u.s. and world economy. manus: there has been a none -- and unseating of tech.

semiconductors, down in the past couple of days. the nasdaq is having a horrid time. the worst selloff since 2011. is this the beginning of a bigger reappraisal of tech? what you are seeing is a rotation to more of the defensive names. tech has had a tremendous run. was up 50% but now it is below 10. a tremendous selloff in tech. a lot of that is to be expected. in a correction, you will have a rotation to the more dividend yielding stocks in the safe havens. it has been a tremendous run. obviously a lot of the earnings in the u.s. are continually driven by tech. i would say that the corrections to be expected. i'm not surprised. a conferencet

yesterday and i find this amazing timing. seemed, the view was 2019. we didn't put 2018 is an option. everybody laughed. is that your view? >> i was expecting the correction in 2019. it's a little bit early. i think a lot of this is the effect of the tax cuts expiring. i've talked about this for a while. a lot of this impact has been frontloaded. the tax cuts were very stimulatory in the short run. you had a lot of repatriation of profits for the big tech names. i think that drove a lot of the market. i think you have a confluence of a lot of factors going on. reappraising our risk and portfolios. kirk stays with us.

global cio at wells fargo asset management. show, moren the interviews from the imf and world bank annual meeting. this is bloomberg. ♪

anna: good morning everybody. 6:20 here in london. these are the losses we are , recap of what we saw in the united states and how this is translating into asia. we were talking about how much of this is passive trading. i'm just fascinated. you would expect the contagion into asia. asia has already lost so much ground while the u.s. was still

doing very well. really fascinating conversations about connectivity in these markets. manus: you talked about the inter-linkages in the market. rocked by italy, higher rates, oil. is it really trade wars that are beginning to be reappraised? can the world live with the federal reserve? that takes us to our question of the day. the global right continues roiling markets. fall?r will the s&p will we have a correction? will we see what we saw in february? join me on tv . get your point in. anna and myself will bring that to you. let's get your business flash. juliette saly is standing by. has won avia

tentative ruling slashing the lion's share of a $289 million verdict in the first trial over roundup weedkiller causing cancer. the judge is considering a new trial on whether the company is school peepers illness. a judge indicated that she is inclined to set aside $250 million in punitive damages against monsanto, which via acquired this year. says it is the victim of a fraudulent effort to raise national security concerns about its pursuit of ca technologies. it says the u.s. defense department has concerned a memo circulating among lawmakers on capitol hill is probably fake. it is unclear whether the document is designed to derail the deal or move share prices. rand paul is calling for a national security review of the broadcom bid.

microsoft ceo says his company supports national privacy legislation, adding the voice of the world's largest software maker to the course of tech giants preferring federal action to state-by-state giants. -- action. they characterized privacy as a human right. us aim to all of become people knowing that we will be held to a different standard. that's what i think about as microsoft. everything from our operational security posture to our ethics, how are we going to even go and ask for regulation? to create a framework for us to make progress, especially in democracy. juliette: that's your bloomberg business flash. thank you very juliette

saly in singapore. trump sets up pressure on the fed. he has criticized the central bank, saying they have gone crazy. is making ahe fed mistake. they are too tight. the fed has gone crazy. you could say, that's a lot of safety. it is a lot of safety. it gives you a lot of margins. i think the fed has gone crazy. manus: the fed will also have their eye on cpi data later today. willvey by bloomberg predict that inflation has eased. that is good for powell. our guest is from the global -- is the global cio from wells fargo risk management. my guest in the last hour said the fed is hell-bent on raising .ates and it will be a mistake mr. trump has said they could

have gone crazy. are the fed on the way to a policy mistake? >> no. i think that the fed is doing its job. it may slow the fed down, meaning if the dollar comes down to earth and the u.s. economy slows down and is more muted, it will slow the fed down. i think the fed has done its job. they have done the market a favor. they have slowed this tremendous equity market down. to get back to my earlier point, the thing the fed is going to watch rate carefully are the credit markets. the key to me is when you raise rates like this, what is the impact on the consumer? what is the impact on lending? what is the impact on mortgage rates? that is something that the fed will watch closely. that will slow the fed down a bit. that's probably a very good thing. anna: you have been buying --

under waiting high yields. i want to get your thoughts on where we are in the yield curve. for a long time we talked about the incessant flattening. time, we talked about sweetening. what happens from here? >> i have expected that it will flatten. what is different in this market is the central banks. normally the 10 year treasury would be higher and you would have a steeper yield curve. because of central bank buying and the differential in rates between the u.s. and the rest of the world, there's always a bid for the 10 year treasury. when you see markets become buyinge like this, lucy in the 10 year treasury as a safe haven which will flatten the curve. manus: thank you very much. the global cio at wells fargo management. will they show up and by the action this evening?

next, european equities indicated for a lower opening. we will have a few perspectives. this is bloomberg. ♪

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been waiting for for a long time. really disagree with what the fed is doing. >> the fact that the yield curve steepened is actually a bullish trend, not a bearish trend. the fact that we are heading into a good time for equity returns, both of those probably have some element of may be dip mentalitythe of this latest selloff. >> if the u.s. falls another three or 4%, that short-term momentum will be mirrored around the world.

1930's adage, when new york sneezes the world catches a cold, lapin initially. china is already looking like it is in the fridge. why should it fall even further from here when it is already discounted? >> there is no new news here. that chart proves that there is no news today. that means you are going to get this back. i don't know if it takes a day or a week. i would absolutely be buying this. anna: no new news, he says. just talking to each other. we are asking a question on the blog in connection to the selloff. it's very simple. maybe a little hard to answer. how far will the s&p 500 fall?

and to the page on the bloomberg terminal were you can read the latest from the team and join the conversation. mliv is the conversation. we are seeing big markets open. we have the latest. >> we are seeing markets carry off some of those losses we saw in the u.s.. we are seeing steep losses that extent -- exceed 4%. we see some losses in china and japan exceeding 4%. this after some companies yesterday said that they are going to see some affects from the trade war on to their bottom line. we are seeing taiwan as one of the worst losers today. down more than 6%. tech shares bear the brunt of these losses. we are seeing australia able not to drop as much. thent to take you into terminal to show you exactly what's going on in china.

i have the shanghai composite in blue. it has given up those recent gains, now plumbing as. the lowest in four years. in the gauge of sentiment, i have charted the margin debt in the white. it has been falling with share prices. this is a sentiment indicator. it is more risky to buy stocks on margin. investors are doing that less, they are less confident they will see gains. i mentioned tech before. this is the reason that hong kong is off so much. tencent falling for the fifth straight day. share prices now getting very low. one of the interesting things about the shares falling is the spread with the analysts target. this is a $90 spread now. manus: thank you very much. the latest analytics on the markets. juliette saly has the very latest.

the u.s. treasury secretary says that yesterday's rout on wall street was just a correction, not a reflection of a wider systemic issue. comments come his as fresh concern about the trade war with china has sparked a broad stockmarket selloff. are concerned that the trade war means american companies may not be able to deliver the runaway growth in the third-quarter earnings season that has bolstered equities this year. chief has said the world economy is strong but the benefits of growth are not being shared properly. she told the annual meeting that while china is leading the yuan fluctuate, currency and trade wars are detrimental to all. that's a new echo by world bank president who says nations need

to brace for a worsening trade dispute. >> we are trying to build resilience in these economies to whatever direction the trade disputes tend to go. all the countries that are in the influence of the supply we have tohina, think hard about what they need to do now to prepare for worsening trade tensions. we are very concerned. we are working with everything the one of our countries to prepare them in case it gets worse. in the west, hurricane michael has slammed into the florida panhandle. unleashing a trail of destruction across 200 miles. the extreme weather pealed off submerged entire neighborhoods. it's one of the most powerful storms ever to hit the continental united states. global news 24 hours a day on air and on twitter.

powered by more than 2700 journalists. this is bloomberg. manus: thank you very much. shouldake a look at what be setting up the trading agenda for you today. attention toyour the socialist government that is expected to present the new budget plan immigrant -- in madrid. budgets are rocking europe. we get the accounts of the ecb's last policy meeting. isryone wants to know what happening in markets and italy. debuts its 19ines hour-long service to newark. the world's longest nonstop commercial flight. rather them than me. manus: absolutely. a lot of peanuts and white wine.

italy's yield spread over german bund's is the front page of pretty much every newspaper in italy. the premier declared on wednesday that he is absolutely want gap bye spread beyond 400 basis points. his challenge could unwittingly where is -- raise borrowing costs. our guest is still with us. from him, ienge rag to the- a red bears. i think they will challenge it. what do you reckon? >> i think not. i think that the italy situation will stabilize. italy is very important to the european economy. the third biggest economy in europe. you have to be concerned when they have a debt ratio to gdp of 130%.

it's in everyone's interest that the italian bond situation will stabilize. we will watch it. me is, do 10 year italian bond yields go through 4%? probably not. anna: do you think we see a debt downgrade? will that be something that moves them further on the italy story? >> i think it is already factored in. it's hard to tell what the rating agencies are going to do. it is already factored in. i think that this will keep the european central bank accommodative and will slow down their thoughts of unwinding the balance sheets. it's interesting the knockoff affects that you don't think about in terms of the federal reserve and the central banks. the team has done a great job at analyzing the capital ratios of some of the italian banks.

talk about the spread and where it would need to blowout in order to impinge the buffers of capital on italian banks. overly extent are we pessimistic on the italian banks? the mliv team wrote a piece recently that there is a big systemic risk. these are the buffers. how do you look at the banks in italy and europe? >> you have to pay attention to the italian banks. there's a lot of forces that can come into play, especially the central bank which can buy the debt and help prop up the market. as long as you have german bund yields anchored a 50 basis points, and you have central banks of the world other than the u.s. fed continuing to be accommodative, there will be a bid for the italian banks. i think it will stabilize. anna: do you worry about the

underlying italian economy? we have some great reporting on the italian economy talking about the exposure of banks to the construction sector. they are also dealing with construction exposure. reale worried about the economy in italy or the rest of the eurozone? >> i think you have to worry about it. in my mind, the european economy has slowed down versus the u.s.. that's one of the reasons the u.s. dollar was so strong. don't forget that the weaker the europeanp economies including italy in terms of exports. i think a lot of forces come into play here. i look at this as a continuation of the same. i don't see italy becoming greece. there are a lot of reasons for that. certainly the european union cannot afford that. i think that you will see a lot of forces come into play. the volatility is to be expected. i'm pretty optimistic it will work out. ares: to what extent

clients prepared to take more europe? we saw the funds flow out of europe progressively over this first eight months of the year. is the sentiment from the clients side in the asset management of wells fargo? do you want to put more money into europe? it depends on your time horizon. if you are saying, do you think this is something you should buy for the next week or two? probably not. theer-term, europe and emerging markets are a goodbye. good buy. manus: thank you very much. ascending day and markets. an interview from

bali. manus: if you are traveling to work, you know what to do. digital radio is the dense the nation. bloomberg radio is life. i'm doing a little bit of radio later on. this is bloomberg. ♪

anna: 6:45 here in london. 1:45 in the afternoon in hong kong. was have a look at how these markets are performing. negative down by 3%. don't be put off by the green as that is a little offputting. i will leave the panel on the right-hand side for you. this is a volume story. this is average volume a time.

a vat go on the bloomberg. we are seeing incredibly high volumes compared to the average. that is why it looks so green. it is not mean we are going higher on these markets. that prompts us to ask the question. manus: it does. china is down over 5%. of theals are one bleeders, down 96% in terms of volume. here's the question. you wents on whether home long. how far will the s&p fall? new highs.to make are we on for the same kind of retracement? a number of people say this is our catharsis. even the president suggested that. get in there. join the conversation. we are all set to go. juliette saly is always set to go with your business flash.

juliette: thank you. said he is planning the company's investments at 60-60 five dollars per oil -- barrel. reflected on the major price swings seen this year. i use the phrase, well off the fairway. it is very volatile. the next 30 days has the potential for it to be up and down sharply. the fundamentals remain the same. demand stays about the same. juliette: the chairwoman of saudi arabia stock exchange has said the country's opening up its market to foreigners is a grants 280 licenses to qualified overseas investors. she made the comments at the bloomberg invest summit in london where she discussed the economic and social reforms in saudi arabia. way to go.a long

in social and economic reform. we are executing a vision that is extremely ambitious. everybody in saudi arabia today has an opportunity to shine. we are committed to opening up our markets. juliette: that's your bloomberg business flash. anna: thank you very much. juliette saly in singapore. the biggest stock selloff since february rolled from the united states through asia today. certainly a topic of conversation at the imf annual meetings. finance minister and central bankers have been gathering. our reporter is there for us. it has been hot. the discussion has really

featured through here at the imf. also with concerns about the world trade given the u.s.-china trade war. let's get some perspective. good to have you with us. tell us the news, the comment from trump calling the fed crazy. he says it has gone wild. your thoughts? >> the fed is far from crazy. it's doing its job. to make sure that they fulfill the mandate of employment and price stability in the united states. i think they are doing that in a very reasonable manner. the interest rate policy that and the following movement they are doing with the balance sheets are perfectly consistent with a reasonable central bank.

i do not subscribe to that comment. >> is there any reason at all to think that the fed moving too fast? saying, thekets are fed should be more mindful of the implications. fed has thehat the responsibility to complete its mandate. thatis case, to make sure the u.s. economy remains at full employment, that inflation doesn't get out of hand. it is consistent with the 2% target that they have. i think they are doing that very well. i don't think they are moving too fast. i think they are not. whether they should be taking into account the impact of the policies on the rest of extentld, they do to the that the rest of the world is sufficiently important.

if there are spillovers from the fed policy on the rest of the world, this may spell back negatively into the united states. these interactions are factored in when the fed makes monetary policy decisions. caseis not just the nowadays. it has been the case for quite some time. i would say during ben bernanke. >> can there be better policy coronation? france is way ahead in its normalization process compared to the rest of the world. that is causing the pain. >> the united states is in a different cyclical position. it is growing quite strongly after recovering from a very deep financial crisis. the united states has reached full employment. i think that the fed is doing what it has to do. policy, theeconomic best thing is not to change the fed policy. the best thing is to make sure

that the policy is coming from the united states and other countries and are consistent with preserving the open trade environment the world has enjoyed since world war ii and that has so well serve the world. that is the policy were i think a lot more coordination and reasonableness is necessary nowadays. >> your thoughts on the weakness in the you want? ? steven mnuchin saying that there could be some kind of competitive devaluation of the currency. do you see that? >> i do not. i think that the chinese currency has weekend -- weakened. i don't think that is by the design of the chinese authorities. naturally, china's currency has ricocheted a little bit. any deliberate

strategy on the part of the chinese authorities to weaken the currency, especially if you look at it from the point of view of several years. i don't think that's the case. >> is the reason to be concerned about china's slowdown? are they taking the right moves to stimulate the economy? >> china has to navigate a difficult balance between making sure that the economy grows at a and at the same time making sure that the things that they want to do in terms of dealing with some of the financial imbalances in china are done. that thesion is chinese authorities have adjusted their economic policy, both of fiscal and monetary, to provide economy with some support now that the economy is facing the headwinds coming from

the trade conflict with the united states. thanks to these domestic policies, china is being able to counter most if not all of the negative impact of the trade conflict with the united states. growth isat china's going to be still 6.5% this year , a little bit lower next year. is very healthy in terms of what you may expect from such a large economy. >>'s china at the center of the emerging markets selloff, how has it been for banks in these markets over the last several months it -- months? >> we have continued to do very good business in asia. one thing which i want to markets sooner or later differentiate across

countries depending on the momentum. it may be that at first market sentiment makes markets move in an undifferentiated made a -- matter. over time, countries that have stronger fundamentals that are able to do better. if you look for external asia andlities, emerging markets are in a better position than other emerging-market areas. that should not lead to complacency because that is high in emerging markets in asia. corporate debt in some countries like china, india, but also emerging markets in asia get high household debt. those are things that need to be monitored. overall, fundamentals are healthy. inflection point.

becca be recession. do you see that happening? toi think it is very hard predict where the world will be in two years time. i think we should take advantage of the present situation. it is so good. lower inowth, although terms of the recent forecast, global growth is going to be lower. it will be lower than it was before hand. the growth rate is pretty good. we need to make sure is that we avoid a recession. for that, the first thing is to avoid damaging global trade. manus. manus: great conversation there.

a little bit later today, more guests coming from the destination. we have the first deputy managing director joining us later on. the world bank ceo. ♪

manus: good morning from dubai. i'm live from bloomberg's european headquarters in the city of london. these are today's top stories. manus: global slump. asian equities trade deeply in the red after the worst market selloff since february in the u.s.. europe and u.s. futures indicate a lower open. prompts donald to call the central bank crazy. we havethe correction been waiting for for a long time. really disagree with what the fed is doing. manus: is this a reason to panic? mnuchin from steve

suggest short-term pain is unavoidable. ♪ anna: good morning everybody. what a morning it has been. in the asian equity session, we have seen many markets down more than 3%. nasdaq yesterday more -- down the more for poor percent. which he futures down 1.6%. lewdlyures suggesting weaker at the start of the trading day here in europe. it's clear to see the havens at this time. those old traditional havens. realization that trade

tensions are going to hit corporate profits? is it something to do with the tech sector? is a program selling? the market took a tick lower. is it a shift in monetary policy? president trump is clear in what he thinks is causing this. he thinks it is down to the fed. point over the past two five hours, we have spoken to a variety of guests. you've mentioned the haven. the want to buy some treasury? do you want to buy u.s. treasury as a potential haven for you? there's a big auction today. 30 your paper is coming to the market. have they cheapened up sufficiently? my guest said it is hogwash to say that these equity markets can survive at 3.2%. that's the view from goldman sachs. is, boom futures are rising. we are seeing a haven flow there.

there are more lines coming through about a bottle -- battle royale between the italians. red flag by up a saying this spread won't break 400 basis points? let's get to our reporters around the world. juliette saly has the latest on the asian markets in singapore. we are actually seeing asian stocks having there were session since after the brexit vote. csi 300. on the we had that huge following monday. this is even worse today. the japanese market closing lower by almost 4%. australia not hit as hard. it doesn't have as many tech stocks. down by a most 3%. you are seeing taiwan, one of the worst hurt. it is so heavily made up from tech stocks that were hit hard. the taiex down the most in 10 years.

the worst day for asian stocks since after brexit. lows on they 2017 msci asia-pacific index. let's have a look at some of the pacific -- specific players. a lot of tech stocks being hit hard. tsmc off by about 7%. tencent makes up such a huge percentage in hong kong, it is having its worst day in about seven years. it is in the red for a 10th session in a row. longest losing streak since it listed in 2004. china is cracking down on undeclared luxury goods. you see product in hong kong off by around 11%. not a very good day for asian equity markets. anna: not a great day. thank you. japan,tailing listed in

their numbers seem to be better than what is estimated. headline, focusing on the full-year outlook. they see ¥270 billion, against the deficit -- that number has come in ahead of estimates. manus: let's get to everybody around the world. we've had the worst stock route since february. let's roll the agenda along. began in the u.s. with the s&p tumbling more than 3.4 percent yesterday. first concerns about the impact of a trade war. let's get straight to the team now. they are standing by. we have garfield reynolds joining us from sydney. in baliour bloomberg where she spoke to the u.s. treasury secretary mnuchin.

we have all of these markets to put in context. up the mliv team. question of the day. we had a rout in america. beuld we he, and carry on -- calm and carry on? >> the thinking is that there had been some level of concern shouldn't beities as high win the rest of the world was being beaten down. i think asia has been hit very cruelly. yesterday's slide in the u.s. came right at the end of the u.s. day. i got in this morning and i was thet it, s&p flatline at the top. a real wiley coyote. in andquity traders came went, good lord. sold everything at the open. they decided to wait and see what china would do.

chinese stocks have seemed to find the floor lately. they went. taiwan and all the rest of us. there's an air of panic in asian equities. currencies and rates, not so much. that's an interesting way of looking at the factors. aldean in a risk factor. to, what is down america going to make of it? u.s. markets only broke down at the end yesterday. i think we are waiting and watching to see what happens once u.s. traders come into their floors this thursday. anna: really interesting to see the spread around the world. it did global -- go global. the rest of the world was losing ground already. big topics has been a of conversation amongst finance

ministers and central bank governors in bali at the imf world bank meeting. what is the thinking? i know you caught up with steven mnuchin. i sat down this morning with the treasury secretary here in bali. we talked about the stock market route. he says there is nothing that has triggered it. there has been no news, nothing fresh for investors to act on. he said after 35 years of heerience in the markets, does not see any reason for surprise. markets go up and down. this is possibly just a correction that was expected or maybe even necessary. see that against previous comments from the administration where they have as ad rising u.s. stocks reflection of the economic agenda that president trump is projecting onto the u.s.. now that they are falling, this is seen as, we should just get used to this.

so far he doesn't seem too concerned. we talk a little bit about treasury bond yields. there are no big worries there either. manus: thank you very much. and our team in sydney reporter in bali with the latest on steven mnuchin. let's get your first word news. juliette saly a standing by. juliette: donald trump has said he opposes blocking arms sales to saudi arabia over the disappearance of a journalist. his comments come as a bipartisan group of u.s. senators is forcing his administration to investigate the disappearance. that triggers a human rights probe that could result in sanctions against saudi officials and entities. brexit negotiators are edging towards a compromise on the thorniest issue in talks. on both sides warned that obstacles will stand in the way of a deal. chief negotiator has said

a deal is within reach. officials in brussels and london say progress was being made. is hown sticking point to keep the irish border open after britain leaves the block. inricane michael has landed the florida panhandle, unleashing a trail of destruction. the extreme weather pealed off roofs and submerged entire neighborhoods. it's one of the most powerful storms ever to hit the continental united states. global news 24 hours a day on air and on twitter. powered by more than 2700 journalists in more than 120 companies -- countries. this is bloomberg. manus: let's give you a quick check. we are down 42 points. lines. these

expects the eu to reject the budget plan. these are fresh reports. says disputes with the eu unsettle markets. our guest in the last hour doesn't believe it will break it or that the spread will blow up. btp's coming up under pressure. much is itn is, how lee a systemic global risk issue? wea: the stock market route, need to overlay that. the biggest u.s. stock route since february looks to spread to europe after asian benchmarks slumped. the plunge began in the united states. yesterdaymbling 3.29% as fresh concern about the impact of the trade war with china roiled stocks.

the nasdaq had its worst day in seven years. european and u.s. futures continue to point lower. let's bring in other places -- voices to the conversation. thank you very much for joining us today. i want to start with a chart which is really interesting. how global should this selloff be? this is focusing on asia. asian shares following -- falling most since the brexit vote. asia has already been weak. why should asia catch this cold when the u.s. sneezes? of the indices were tech in china. this is a tech problem on its face. the economy has been weaker relative to what people wanted. now you are getting the major parts of the stock market involved in this. emerging markets are dealing --

any tech oriented emerging market is where the heart and soul of this will be dealt with. it's affecting market values. manus: good morning to you. what you make of the proposition -- goldman sachs says 3.2 percent is not enough to unseat an equity rally. 4%.need maybe even my guest at 6:00 said that that is hogwash. that is inside america, made in america. that the global markets can't deal with a rampant fed. what you make of that? >> it is made in america and china. alibaba and tencent. these have been called the seven deadly sisters. that is china and the united states. here's the great thing for where we are sitting in london. it's not made in europe. tech is a tiny part of your.

that is what people of missing -- are missing. in united states, it is the stock market. that is why mnuchin is not feeling any worry. his economy is doing great today. anna: when you make of president trump's criticism of the fed? do we take comments from president trump in the same way we would've taken comments from any other president? does he mean this as intervention or is this part of a tv show? >> if you were president, you would want rates to be really low. in the tumult shows up market, they want rates to go to the floor. the only problem is the economy can't deal with that. there's too many pressures. if the fed does not raise rates, we will deal with a larger asset bubble than we have had. tech has benefited from glow rates -- low rates. that game is over.

we are coordinating that as we speak to make people decide what they need to do the next time. manus: if anna was president of the united states, we would all have a great time on the show. don't know what her number one policy would be. let's talk about the relationship between rates and banking stocks. it's not working, basically. have a look at this. what is going wrong here? the traditional relationship is not working out. history of banks, they will have a big run in a year and they will go nowhere for up to 24 months. you have to get everybody excited just in time to frustrate them a bit. the rates going higher are beneficial to earnings.

you'll see that materially one year from him. -- from now. not forget, bank of america broke five dollars in 2011. look where the stock price is now. who wanted to sit through what has been a terrible, unenjoyable era? you wake up and you have made a ton of money. the economy doing better only helps certain businesses and hurts other assets in general. give her a. our guest is staying with us. we will get further into his thoughts on the tech sector in just a moment. bloomberg users can interact with the charts shown during the program. you can do g tv function on the bloomberg. save them for your own research. as the stock routes berlin, from paris to pretty much every market you can

look at, trade tensions are beginning to bite. we bring you our exclusive conversation with the microsoft ceo about how the trade war is impacting the tech giant. this is bloomberg. ♪

manus: it's a global selloff, it started in america. it has ripped its way across the globe. nasdaq with its worst run in six years. you are looking at the hang seng cascading down by nearly 4%. the neck i market in the red, worst day for japan since march of this year. says and. president the asian route. the president of the united states of america think that is good. the correction we have been waiting for.

stocks 50 of 1.7%. tech is getting hit. the volumes are surging higher in asia. we have a pretty system mliv question of the day. anna: it is very topical and easy to ask, more difficult to answer. s&p 500 fall?he let us know what your thoughts are. had to the mliv page we can read the latest from the team and join in the conversation. as the trade conflict between the united states and china deepened, the microsoft ceo has weighed in on how the tariff war will affect his business. i think about people and institutions, i think about this globally. those are the things we always think about.

company, werican are a multinational company that is also an american company. we are fundamentally dependent on and proud of the american and the trust and american institutions and values that the world has. clearly, that has served us well. even today, they service very well. -- served us very well. our form of democracy with all the debate that we have, our ability to be able to set an example for what is a place where a lot of people of diverse backgrounds can come together, have a debate and make progress. i think it is what makes america unique. us being born in that culture is what gives us our credibility. we can't take any of this for granted as a nation or a company. we have to earn it every day.

trust is this formula that is about having values that are consistently applied every day. that is what engenders trust. >> are the trade tensions affecting your business? >> i think we are going through this space where everybody has recognized -- let's call it the phase of globalization, it has not created equitable growth in all parts of the world. our in any country through all parts of the society. every country is really looking at, what are their relations around trade that help them thrive? every country will put their country's interest first. look at what makes more sense. it that our responsibility as a multiple natural country, what are we contributing to each country? how are we making small businesses more productive? if we do that, we are good. if we don't, we have a challenge.

long-term stability for us come from our ability to create more surplus and opportunity. the microsoft ceo speaking exclusively to bloomberg. i said it was made in america. this is the tech selloff. for the seventh day out of nine. the earnings expected from tech are 19%. they will be below the market for the first time since 2014. could tech route -- put the tech route in perspective. connect those dots for me. >> the expectations are too high. it doesn't come down to what's going on in the business. it's all about price. mania,ter child for this that's why your question of the day is going to be much worse than this. amazon is the poster child for this.

they have been the momentum trade of a century in this era. go to fundamentals, there's hardly any to produce that kind of market cap. anna: our guest in the last hour was saying that all investors have overly high concentrations in those mega names. are investors more exposed to texan they realize? >> the indexes are. the greatest investor of all time said he was going to put his window in vanguard's s&p 500 fund. we will see how people like a passive index as tech gets clobbered in this mania ending. different than any other media. in 1720, isaac newton was more interested in stop jobbing than he was in science. he got killed. he could understand the movement of heavenly bodies but not the

madness of men. the greatest capitalist being interested in computer science. we will deal with the madness of man. manus: understand my own madness every day. the problem is the economy is doing too well. we have the largest population group coming to borrowing ages. those two things colliding cause inflationary pressure. inflation innse cities like san francisco and san jose where the wealth effect as boom. the rest of the economy has not benefited. anna: thank you so much. good to get your thoughts today. let's check the markets for you. spectacular day of losses coming through the asian markets. this is what we expect from the start of the trading day. features suggest will be weaker. manus: the italian government bonds are falling, yields are rising.

money is going into yen and havens of choice. join the mliv team with your question of the day. how bad can it really get on the good old s&p 500? ♪

anna: good morning. welcome to "bloomberg markets: the european open." we are live from london. i am anna edwards alongside matt miller. matt: the biggest stock selloff since february kicked off in the u.s. yesterday and rolled like a 10th through asia, leaving 4%, 5%, 6% distraction in its wake. we will soon see the bloodbath as markets open in 30 minutes time. time.utes'