we are worried about chinese growth. the big thing would be if u.s. growth slowed. i think that is a real possibility. we are worried about overseas growth, but i think the real concern is u.s. slowing growth. caroline: that has really accelerated our losses. we will be discussing the big tech mover. that really highlighted that weakness. dow jones just went into red territory. it was the best performer but it is closing at its lowest of the session. the nasdaq did hit a low earlier on. it came down in the final couple minutes here. we did not revisit those lows. banksd to be that the big

set the tone for earnings season. increasingly it feels like technology and big tech will be the ones determining this. caroline: when you have the biggest technology companies in the world being owned by the stoxx. as we mentioned earlier, the average volumes have been lower today. they are up about 12%. and s&p 500 are up about 5%. heady heights that we were seeing last week. retail: i mentioned sales earlier but didn't really have the impact on the market we were expecting. there are a lot of questions about how the federal reserve precedes and whether it acknowledges the violent selloff that we had over the last two weeks. caroline: and we will wait to see if u.s. treasury's rally today.

the steellook at stocks. they have sold off badly today. there was a note downgrading the entire sector. a lot of it had to do with supply concerns. a large supply of sheet metal was coming into the market. we have thed side, rising interest rates. 3%.ort sold off by steel dynamics by 4%. u.s. steel down as well. there is concern that even with -- of the help that the these were the ones proposed in march by the trump administration. the industry has not recovered. they still lag the market. they got a big boost from these steel tariffs, but that did not translate into stock market

gains. investors don't seem to think that the benefits will last. are concerns that the general dynamics of the market will outweigh any benefits. >> something that stands out to me right now is the bearish selloff into the close. the s&p 500 had been slightly higher. one tell is the emerging markets. the is a 12-day chart of emerging markets index. perhaps a bit of help for the bearish action we have had. we're really pressuring the emerging markets. if we connect them to the s&p 500, we see the emerging market index over the last decade or so in this massive consolidation pattern. we see uncertainty around rates. the s&p 500 in yellow is

climbing higher. this year, not so much. last week, breaking back down into the range, suggesting the s&p 500 book may just follow. there is some bearish action here. overall, there might be more bearish work to be done. isone stock i am watching bb&t. dell is trying to buy out this tracking stock to return to the public market. there has been pushed back from shareholders. carl icahn came out and said that he opposes the transaction that dell is trying to do. you are seeing a bit of a pop today as you see public opposition crystallized. this is a complicated transaction but the premise of

the pushback is that bb&t is meant to track vmware. big difference from where dell is tracking and vmware and bb&t trades. when you are calculating the value of the stock and cash deal, the value of the stock component is too high, much higher than the market valeues the core of dell. carl icahn is proposing a potential partial buyout of bb&t holders, to still provide an opportunity for those who want to fight the transaction to do so. romaine: thank you -- scarlet: thank you, brooke, and your entire team. cameron i want to bring the topic of saudi arabia and oil into the conversation. we're trying to figure out what happened to the saudi columnist.

how much of that and saudi arabia's intended use of oil as a weapon takes up a lot of your thinking? >> clearly, if we return to a 1970's paradigm where the saudi's take production off-line, and you get an oil price spike, even though the off has weened itself foreign oil, it would likely lead to a spike in domestic oil prices and that would hit the consumer hard. i was surprised and amused that we didn't see much -- and bemused that we didn't see much reaction in the crude market today. like theocks are second worst sector in the s&p 500. whether that is a sign that the markets are skeptical that this will escalate, or that the

saudi's would take money out of their own pocket by deploying this policy lever, i'm not sure. given that we've seen oil selloff, i would have thought -- normally it was good for at least a spike. caroline: you are looking at saudi arabia adding to geopolitical risk. is china the only country in play right now? >> i think it could. the thing with geopolitical risk is it could always escalate into something big. the odds are that this won't. crude oil and gasoline is already at a four-year high. it is hitting household budgets and business budgets. we are starting to see companies talk about margin pressure, interest prices, higher wage r

ates. we're seeing pressure on the consumer sector who have stopped buying houses, stopped buying automobiles, the retail sales numbers were relatively weak. i think there is a strong message coming from the stock market. when you look at the consumer discretionary sector. what is the message? the only thing performing is defensive, anti-economic stocks. i think the market, including a 10% drop in industrial commodity prices, all of that, is indicative of a slowdown in the united states. a lot of damage of the stock market doesn't happen when the yields are rising. it happens when they peak.

that might be what we are just starting to see. scarlet: you say that there may be a slowdown in the u.s. we have evidence of a slowdown in china as well. how much of a factor will this be for equities in the u.s.? all along we have known that equities are slowing down. if there is further evidence that china is slowing, could that hit the week market here -- the already weak market here? >> i think it could. if it is we cannot, -- week enough, it could set up a contagion market. there are a lot of companies dependent on global sales. if the impact on the tax cut on bottom-line earnings will fade, a lot of those wall street estimates are based on significant sales growth. if we get the sign that the u.s.

and china are fading, the next two to drop our wall street revising down there estimates. they won't revise them down from year, but from a 3.1 510 10-year. hereh abroad and growth will be important over the next six months. scarlet: thank you very much. thank you to cameron crise, bloomberg's macro strategist. that does it for the closing bell and for me. miss?" is "what did you this is bloomberg markets: the close. ♪ ♪

caroline: this was a down day. >> the question is, what'd ya miss? a report from saudi arabia will reportedly say what killed the journalist. the end of the retail era? more stories are closing down forever after filing for bankruptcy protection. and u.k. prime minister theresa may's negotiations are intensifying ahead of the summit. the saudis are looking for a scapegoat. saudi arabia is preparing a report that says his death was

the result of an interrogation gone wrong that was done without clearance. the u.s. this mean for and saudi arabia, and the world and saudi arabia? >> here, president has built his middle east, foreign-policy strategy around a close alliance with saudi arabia. he made his first foreign trip as president of saudi arabia and touted weapons sales there. he has counted on it to be a bulwark to put pressure on iran. if some of the reports we have heard turn out to be true, it puts the u.s. in a tough position. pressuredent has faced to cut off arms sales or other measures against the kingdom. they areknow what

trying to accomplish over there? >> the secretary of state will arrive tomorrow. he has been dispatched to "get the facts" about what happened. he may make a stop in turkey on the way back. the u.s. is feeling the pressure. they want a straight story out. you want to remember that the crown prince initially said that he left the consulate alive, after his disappearance was reported. even if the cnn report is true, it is a dramatic turnaround in the saudi story. >> do we have any sense of why this case seems to resonate more with the u.s. government than other allegations of human rights issues? >> that is a debate we have had in the newsroom. some of the dteail -- details about this, that, not only was he killed, but dismembered at

the consulate. people usually think of consulates as safe laces. not a place where you would end up dead. he was a resident. he was in the greater d.c. area. he worked as a journalist at the washington post. that helps in the u.s. engle. there has been a look -- u.s. angle. there has been a lot about saudi-u.s. relations. caroline: thank you. could this clash spill over into oil markets? let's talk to tom petri, a chairman in colorado. he led teams that advised saudi arabia on its natural gas initiative. what is significant to me coming out of saudi arabia about their

omnipresence and overall power in the oil market, and what that might mean going forward. >> it is a particularly fragile time, even before this happened, for the supply-demand picture. because of the policy that the u.s. had taken with iran and because global growth had tightened things up faster than you expected. against that backdrop is this whole discussion of punishment and second-order consequence. then we have the whole second and third order geostrategic issues. arguably an existential threat, a series of saudis, made by iran to arabia and israel, two key

allies of the u.s. in that part of the world. we have to keep in mind that there is a lot of oil in the world. there is plenty. opec has said this. is not in the right place at the right time for the markets. there is some upside mark on this. it will be self-correcting much sooner than any protections of $100-plus oil would suggest. yourll me about relationship with the saudi and u.s. government at this stage and what leverage the saudis would have to retaliate when they are dependent on the u.s. for things like military aid. >> it cuts both ways. it is clear that the president's comments are such that he doesn't want to lose this ally, as a customer, and a strategic ally. before any of this happened, we a look in hisen

then of -- an increase in relationships in that part of the world with respect to that part of the world. and it here with abu dhabi, united arab emirates, and kuwait, are all important factors, such as the saudi relationship. caroline: what is important there is that president trump has pushed away any of the issues impacting the fence and negotiation -- defense and negotiation. they had an agreement last june that comes to mind. it doesn't look like that will be on the brink. because of the worry of what it would mean for russia. en do you think the u.s. could impose sanctions or exert pressure without forcing oil prices up? >> it is hard to say.

at this point, it turns on what comes out from the secretary of state's visit. gavely, if the report you just before i came on, about the expected statement of the saudis , it certainly represents a step toward acknowledging something happened.ing how they deal with that would have an impact on the range of reactions. on whatthis will turn congress might impose on the president. that would be legislation that might or might not pass, that might or might not be acceptable and would be the toad -- would be vetoed. caroline: is it -- that they

didn't move on it? >> they moved initially. we are in a zone right now where the reaction in the oil markets has been modest so far. it's waiting to hear more. it certainly clicked off initially as people came to realize that this could cut either way. the other part i want to emphasize is the self-correcting aspect. oryou go from here to $80 $90 oil, the impact on global demand has to be factored in. caroline: we have breaking news on the tech side of the equation. they have been having a meeting in l.a. with their executive teams. providinglso

preliminary growth targets. overall they are seeing 20% total revenue growth for the total year. good move to reiterate. >> there are a lot of folks who were wondering when the company would start to ratchet down expectations. you can take that as a good sign. caroline: we are also looking toward netflix's earnings season tomorrow and what it means. >> when you look at like salesforce and other companies, they are the drivers of this market. caroline: from new york, this is bloomberg. ♪

>> it has been a long slow decline for the sears brand. the company filing for

bankruptcy after struggling to regain sales. quite the iconic american brand. more with us is the american opinion columnist. joe, i want to start with you. sears was a huge deal in my childhood. you recently went to a sears store. what did you see? >> nothing good. from the outside, it looks like a castle. they built these amazing stories. you walked inside and there were wires coming out of the ceiling, the carpets are stained, the merchandise looks cheap. it was just plain sad. caroline: sarah, your perspective of the -- joe nocera . sarah, what is your perspective?

>> i think this is less about amazon and more about self-inflicted wounds. lampert'sder eddie stewardship, the company has suffered. saw in newhat joe york, i have seen in maryland and virginia. these stores are underinvested in and are not compelling destinations to shop. amazon, there were things that brought sears to this point. >> sears was the amazon before amazon existed when you think about the mail-order business. how did we get to this today? >> i think that their success has sowed the seeds of its destruction. they were so dominant and the executives were so sure that they could feedback any competition -- beat back any petition, that the hubris was

overwhelming. the market began to change. all of these little malls that all had little stores and the specialty shops. then kmart and panties started -- jcpenney started to take customers away. they were so used to being king of the hill. to me, that's where the problem started. when eddie lampert came in in the last 15 years, he was the icing on the cake. , but ithered the fall think it was going that way anyway. one to winsarah, any from this? >> i think the big names in retail sales, those who sell electronics, that was the largest share of sears business. caroline: thank you so much. i wish we had more time. brexit is off the rails and days

before a scheduled summit. theresa may says it is achievable. this is bloomberg. ♪

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mark: i am a mark crumpton with first word news. hasam of investigators entered the saudi consulate for what turkish officials say is a joint inspection of the building where jamal khashoggi disappeared nearly two weeks ago. that say to sources the saudis are preparing a report to acknowledge that the death of the journalist was the result of an interrogation that went wrong, one that was going to lead to his abduction from turkey. turkey fears a team dismantled and killed the contributor for the washington post who is lasting in an stumble nearly two weeks ago. at the direction of president trump, mike pompeo is in route to the area to speak with king

salman about the disappearance of the journalist. the president says he spoke by phone with the king, who denies any knowledge of what happened to him. and jeff sessions today announced the creation of a new task force targeting three of the world's mosys aureus drug cartels -- world's most notorious drug cartels. he told a group of federal prosecutors in washington that five of the groups will be designated as top transnational organized crime threats. >> they challenge the very law of the united states, the sovereignty of the united states, and they asserted their own law, their own sovereignty, and they impose their own penalties and punishments. and they have their own ways of taxing innocent people in our country. mark: the justice department's initiative follows president trump's executive order, shortly after he was sworn in, to disrupt and dismantle criminal

organizations called cco's. prime minister theresa may today gave parliament an update on talks dayst -- two days ahead of a summit. one key issue remains, the border between ireland and northern ireland, once brexit happens on march 29. >> we agree our future economic thenership should provide solution to the unique circumstances in northern ireland, in the long-term. as well, we are both committed to ensuring that this future relationship is in place by the end of the implementation period, we accepted there is a chance that there may be a gap. mark: prime minister may insists achievable,l is however angela merkel are globally -- merkel, are doubly the strongest voice in the european union, says germany wants a hard brexit, but not at any price.

global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. mark: i'm mark crumpton. this is bloomberg. road to brexit hitting a speed bump. setu.k. and european union the hit a milestone as talks have stalled. theresa may addressed the breakdown. we want to welcome our editor who has been writing about how ireland could potentially scuffle the deal between the eu and u.k. ever getting through, do you think it is, or is this a pause or indeed a derailment in terms of talks? >> i guess there are two ways to look at it. some might argue that this is at the 11thable hour, as negotiations are entering their in game. and -- their endgame. it will all work out and when is the final sort of 11th hour, it

is no longer going to be this week at the eu summit, it might even be in december and they will have to vote on a deal. but there is another way to look at it. conflicting red -- the metaphors here -- there is not even a hard way to figure out how may can get a deal through that does not cross one of them, including those of her own party and her allies in the government: the small northern irish party. so that is why we have this torturous negotiations over an irish backstop, an insurance policy to prevent a hard border between northern ireland and ireland. and it is very possible that we could end up with no deal, with great britain leaving the eu without a withdrawal agreement,

which is why they are negotiating now. so are we heading toward no deal? nobody can really say. is ireland is where -- it the stumbling ball clear it -- w block. romaine: when you get past the ireland issue, is there anything else that could possibly lead to some sort of agreement for them to sort of work this through? reporter: there are two remaining issues. one is northern ireland. the other issue, which is not part of the withdrawal agreement, it is a separate political declaration, an outline of what their future trading relationship will be. and that is controversial, tecause hardline brexiters wan a clean break, they do not want in with the european union's custom union, because they want a trade deal with the u.s. and maybe join the new tpp. so they -- that is also

contentious. and the eu says, you know, you cannot sort of cherry pick from our single market, you cannot have a free movement of goods and not services. so these are very heavy issues. if there is an order to them, they need to get through the irish issue before they get to the -- either to talk about the future trade deal, which is not part of the withdrawal agreement. it is all very confusing. caroline: it is conflicting and exhausting. so when you are in london having to negotiate the headlines, and inform the readers and institution investors, how difficult is the process and how much do you think this is pontificating and posturing, just the place in the audience? reporter: one thing is clear, right now it is all about the politics. teh eu and -- the eu and u.k. know what the possibilities are for moving forward. may its now, for theresa

is about getting her parliament on board to whatever deal she can get from the eu, and that is no easy prospect. within her owny party and coalition who are happy to walk away with no deal. mind,e thing to keep in the view from europe is very different here. the europeans are, they would like to do a deal, but they are accepting of the idea that it will not be a deal. and they are not obsessed with brexit the way that we are here in the u k. they have other things to worry about, like migration, or russia and eastern europe. so they are going along and they have their red lines, they have their prophecies -- they are very rules-based. itthey are not looking at with the same sense of urgency as the british government. caroline: meanwhile, the pound did not trade much off of the headlines.

thank you for your opinion. and coming up, researching market manipulation. we see what impact it has on the assets like a big point and even the vix. this is bloomberg. -- bitcoin and even the vix. this is bloomberg. ♪

caroline: crypto, bitcoin's climb captivated wall street and was the impetus of many investors to start taking crypto asset seriously. but to researchers at the university of texas who have published a paper alleging that happened of bitcoin's rise last year was due to malevolent of buying -- manipulative buying. please welcome professor john griffin, one of the duo, joining us from austin.

talk to us about how you came to the conclusion that stable coins in particular were helping to drop the move in bitcoin and why that is a bad thing? john: thank you for having me. there was obviously a large rise in bitcoin last year, and it corresponded with a lot of tether issuance. there was discussion online, maybe people might call them conspiracy theories, about the relationship between tether and bitcoin. caroline: tether is a stable coin. john: yes, it is. and so the nice thing about all of this is, i do research on forensic finance, and along with my co-author we already researched manipulation. and so this would -- so this provided a nice context, because there is a lot of data available on the blockchain. so it is tons of data out there, which is a researcher's paradise, but it also takes creative methods to use the data

and group the data, so that is kind of our field experiment. romaine: what exactly was the conflict you found? john: well, i guess what we found is two main things. one, that win tether is issued, that the tether is then sent out within three days, typically into the wild. and it is usually sent in a particular pattern, like after there is a large price decreas.d it is sent out a large groups and the price rallies afterwards. we found the nature of that price and pattern could not happen by chance. when we ran all kinds of simulations, we found it never happens by chance, which is consistent with what you would expect in terms of a large player moving the market. that if you buy a large amount of bitcoin in a coordinated fashion, you will move the price. that is the first thing.

the second main pattern we found was that around a month in, that the bitcoin price drops. but not around all month-in's, just a long large ones where there is a tether issuance. so basically if you have incomplete backing, you need to sell assets near the end of the month to raise dollars. so if you look at the patterns in terms of when the bitcoin prices fall, they typically fall right before, right before the month ends, when the reserves -- when some of you might want to sell to raise dollars to put into their account. so basically, basically they are trying -- it is consistent with incomplete backing of tether at certain times good caroline: this is important, because today without tether slide below u.s. -- today tether slid below one

u.s. dollar. so how much will it be a problem if we see tether slide? if we see its strength questioned? is that a pro or con for the overall crypto market? john: it is a huge problem. i think that -- if you look at most of the major exchanges, they are holding back amounts of tether. finance holds an extreme amount of tether. and what will happen basically is, people will realize that tether, if people come to realize that tether is not fully backed, then basically you will see a classical bank run, where people want to get money out of their accounts. and as they try to get money out of their accounts, the exchanges will freeze their accounts -- i believe we are already seeing that happen -- and as they freeze accounts, them basically that father calls more question on why they are freezing

accounts, why will they let people get money out of their accounts. if they let everybody withdrawal, then basically they will be left holding nothing but tether. so all of the exchanges will have an incentive to freeze the trading. caroline: great perspective on a day where we see disruption in the price for tether. thank you. romaine: a little bit of breaking news. the software company twilio basically in an all stock deal to buy an female saw for company used by companies like airbnb, uber, and a bunch of others. the deal will be an all stock transaction for $2 billion. no more details quite yet, but we are looking at the share of grid risee -- send higher. caroline: this has been quite a selloff for them recently, so buying them on the cheap. romaine: absolutely. it off by 1.8%.

we will return to the crypto conversation. we got another reaction to fidelity's move into the crypto space. >> we have been saying one of the things that will get people involved is custody solutions. they are coming out with a worldwide custody solution aimed at institutions, so that is a box that gets checked. if you are thinking about making a pension investment in crypto, you can take custody off of your list. >> to those who do not immediately understand what custody is and why it is critical, what is custody in the rest of the wall street world? >> what is unique about crypto is that they are bare instruments. if i take your bitcoin, it is gone. so people are giving keys. >> as opposed to the electronic record? >> yes, if your money is a stolen of jpmorgan, they know how much was there and they

still owe you that money. so they are story crypto keys that give you access to your bitcoin. >> if fidelity solves the custody problem, that means what for the would-be clients? >> so listen, fidelity is a start that allows the would-be clients to store their crypto keys, they would feel comfortable that if they make a bet, that crypto is going up -- i win. if it goes down, i will lose. but i will not make a bet and then have some because he had to say, by the way, we lost your crypto. so having a custody provided with insurance allows me to make the bet i want to make, if i am an institution. >> if it is what fidelity wants it to be, what i am getting at is what does that mean, what does it mean for the family office, the hedge fund, the endowment? >> it makes it easier.

and they'ret out -- coming up with a custody solution. >> goldman sachs has talked about getting into it. >> bit go has a solution. so what is good for the space is that you are getting multiple people involved in this, all with credible names. and it is going to get that much closer from the consultants to say, this is a safe asset class. we have already have yale, harvard, stanford, north carolina make investments into crypto venture funds, funds that will be based in crypto, that is a big deal. so slowly but surely you are looking at institutions getting more comfortable with the asset class. >> you have a vested interest here. more intutions do crypto, some of it will flow to your firm. but you have been in a dialogue with investors, some of him are taking -- of whom are taking baby steps, some are on the

sidelines. if they can get a reliable trading partner infidelity, does that mean they will start? michael: 100%. it one i have been overnight. >> when would it start? michael: they announced the business today and will probably be up and running in january. then you have to run water through the pipes. so my guess is, you will start seeing institutional flows into pearly crypto assets late first quarter -- purely crypto assets late first quarter. >> this is not deal with the scams, the fraud or with the compliance issue writ large, although it may solve some of those questions. michael: we are making progress on regulatory. the fcc said that bitcoin -- these are not really securities. they are utility tokens. >> they got grandfathered. michael: but that is a big deal. it allows people to start where

there is certainty. so i think that over time you'll get more regulatory certainty. it is not their 100%. but most of firms, ours included, is operating under the rules we would use if they were currencies or equity securities. right? know your customer, anti-money laundering. same process we used when i was at goldman sachs. caroline: that was michael nova grants from galaxy digital. now a check on the business flash headlines. and the highs ranking female air of henry ford has been named to achieve customer expense officer. she is the great, great, great granddaughter of the automaker. sinkinging to reverse profits and a falling stock price. a new study looking at what time it change could mean -- at what climate change could mean for barley .

a report says that by the end of the century, drought and heat could hurt the crops and of to cause a 20% drop in supply in the u.s. and if you're not a fan of the pillsbury doughboy, you are not alone. areennials say that buyers leaning toward vegetables and meats that do not use preservatives. that has prompted companies like smuckers to sell brand like those very. hershey made a similar move, selling off a potato chip brand and buying a snack that is gluten free. and that is your business flash update. it,e is not an avocado and i am not interested -- in it, i am not interested. romaine: you have to wonder why these companies have taken so long to get on the bandwagon. general mills -- you know, if gwyneth paltrow can figure out the one is trend, why can't these companies? caroline: now they need to get into this, if not gluten-free but i am worried about beer

being a problem. but that does not fit with the millennial focus. romaine: that could cause a riot. caroline: what makes me laugh is cider is advertised as gluten-free. romaine: that is good. i think it has always been gluten-free. [laughter] caroline: if you are waiting on a new videogame, we have more on the gaming freeze in china, ahead. this is bloomberg. ♪

caroline: breaking news, the president speaking at the moment surrounded jamal khashoggi, the journalist who is understood to have been killed while in turkey by saudi arabia. he says that mike pompeo may go to turkey. he also says that mike pompeo has been cast with finding out -- been tasked with finding out what happened and the u.s. has not made a decision on whether to send steve mnuchin to the

saudi conference. this as a speculation swells as to what happened to could show the journalist for the washington post, as so far saudi arabia has refuted those claims. now to asia ahead. no new games, beijing expected to extend their hold on approvals to new video games. 15 tencent, among other -- hitting tencent, as well as china's remaining gaming market. in terms of the share price selloff, we have seen big moves. >> it is a huge market. it is a $30 billion chinese gaming market, so when you have the news they one of the approving any more gaming titles, that is going to be big. with tencent, we saw the huge selloff with $10 billion of market cap being lost and we know that 40% of the revenue comes from these games, so they are taking a big hit. alibaba tumbled. we know that alibaba, they

established their video games division, they purchased another videogame company that also took a tumble. and a huge market that could be affected, if in fact of the approvals do not come. romaine: we saw a lot of u.s. shares of the videogame makers fall today, and they basically have to go through a company like tencent to get those games distributed. >> alibaba traded here, we saw them take a tumble because of the news. and they have to go through companies, like you said, like tencent in china because a lot of the businesses that you have with chinese companies, in order to sell within china, they have to come through joint ventures. that is one problem the administration has talked about before. in this sense, we know that so far there have only been about 1931 approvals this year. last year, 9000 titles approved. romaine: wow. caroline: very specific numbers for us. 7:00t miss a shery ahn at

p.m. eastern. romaine: bloomberg technology is next. caroline: have a great evening. this is bloomberg. ♪

emily: i'm emily chang. this is "bloomberg technology." live from the wired summit in san francisco, we will bring you some of the top minds in technology. stay tuned for interviews with kitty hawk sebastian, and the intel vice president who is working on the future of a.i. first, to our top story. the fallout over the disappearance of a