as we head to the bell, rate the risks for us. , what are one rates you most worried about? >> geopolitics come and go. it's the rate picture that is of the marketplace. scarlet: there is the closing ar, the u.s. stock market closing mixed, the nasdaq, the sector up .8 of 1%. a real alphabet, you name it, week.ly reporting this caroline: the s&p 500 as well onset by the dow trajectory, the upside of the nasdaq, the big pairs, it's interesting how to be looking ahead to the earning season, intel got a bit of an uptick as well. joe: chip stocks having a really strong day, overall, this

bounce a very modest from what has been a brutal beginning of he october. aroline: a deeping dive, what are you watching? engineering stock up 7% today because it agreed to chemicals s energy and energy unit for $3.3 billion this is going to allow the company to focus on businesses in in aerospace and infrastructure. chemicals and oil business had a bit of a drag on earns for some time. urging the d been company to move in another direction. on bloomberg earlier today and this deal is part of the strategy to focus on faster growing higher margin businesses. he is doing that today. hey're getting $2.6 billion in cash out of the deal and they're

going to redeploy into other areas of the business. rewarding them today rising 7%. mike. i'm looking at gold which is a hot topic. whenever you try to figure out gold, it's always a tricky endeavor. obviously a lot of people point aversion with this drop in stocks. it doesn't appear like that was he ebb tighter in this move in gold. it's up for three straight weeks, the longest rally for since january. it appears to be a little risk aversion coupled with some very positions in the futures markets have tab driving this. wide ing to the market bloggers, there may be some more gains in store for gold. that managed ut money is still short goal to the 140,000 contracts and with r points out that currencies slumping in emerging inflationke china and pickingp up that gold could be

an inflationand as hedge which is one of its traditional sources of demand. there, t of theories out but the market slide proves sort of consquealing on the fact here could be some more gains in gold to come. abigail. abigail: a bumpy day for a bearish reversal, the indexes opening higher, opposite lower, the for the dow transports. when the others were up, they .9 of 1% and rly the buyers taking over. are really strong. right up until a few moments the dow transport was slightly higher. bullish term. the dow transports, we see an the 200-day moving average until just recently reaking below that mark that shows us buying activity more so than the s&p 500. what is interesting, though, below that 200-day moving average.

today on that selling pressure higher today, we have a low. that tells you the buyers are willing to step up. we may in fact see a bounce the 200-day moving average, the charts are bearish. appear, more work on the downside. scarlet: thank you so much, abigail and the entire markets team. still with us is john, the c.e.o., and we got to talk about the tech companies, earning season is in full swing and this we really get a read on some bellwethers, whether it's microsoft orr it's amazon. joe was making a point they have making lly volatile and some big swings here. how much of the trajectory companies what the say? >> the earnings are baked in. going forward, the earnings that report are g to going to look fine. it may be some of the chip companies will have some issues, cetera, when you look at the big bellwethers, they look really strong. say and t's what they what the demand picture looks like is the key to this going

at ard because they trade high multiples, they're momentum stocks. they work both ways. people forget that. they have been going up for a substantial period of time, they fast. down just as joe: momentum cracked in the you couple of weeks, if look at the baskets of hedge favorites, really just -- really took it the hardest, the selloff. a bit more ioning balanced after the last few eeks or do you see people pretty heavily exposed to the big winners from the first part of the year? starting to see the market go after the leaders. out.eople are still hanging you'll see them continue to hang on until they start talking picture slowing down. when is the last time a company called about earnings being less than people thought? actually, projections on earnings going down. since en a long time

nalysts have marked down projections on earnings. we saw it in chips, they got killed, a lot of the fan got really hurt. the momentum clearly can go both people certainly when are concerned about interest rates and the demand side of the to tion, it's important understand what you own and be nimble. about what alking you own, the pot stocks is everyone is trying to get their analyze nd how you them, the fundamentals aren't ringing that much money, the legality of the situation, we are seeing them sell off today. you can't compare it to bit coin. it's a different animal. going s a real business on on a global basis in the pot stocks. real thing that will be here not next 100 years. bit coin do you think will? shawn: maybe, maybe not. that is about faith. and is about revenue earnings and substantial revenue

20, 30 years down the road. when you first have a new business, >> you are not quite sure what it's going to be. the winners w who and losers are. you're trying to project that it, these stocks you haven't heard of four or five months, now $10 billion market caps. the real issue. you're still talking about effectively one country, right. et's wait until the world -- scarlet: aurora cannabis is going to be listing in new york tomorrow, a.c. b. it's going to here.d a little bit i want to get your take on currencies, the dollar has found once again, it's resurgent. that means problems for the emerging markets. as the dollar were under some pressure, the emerging markets could recover, this ugly pretty quigley? shawn: slum. it will be interesting, we look continues et, if it to be very volatile and some downward trajectory, the dollar its positioning because really it's been a safe

haven for people to go for the year or so. they we look at europe, have many problems and real ssue, the trade issues and traver wars with china will be here for a while. it's a place to park your assets at this point in time. economy is is if our slowing down, the dollar will not be as strong certainly in the second half of next year. joe: is the midterms on your mind? shawn: absolutely. so?: how does it affect how you think about the markets or between outcomings and market outcomes? shawn: there will be volatility into the midterms. as you have a balanced kind of thought process. if the republicans lose the will, which they probably it's not a big deal. if there is 20% chance that they lose the senate, probably less than that at this point in time, that would be really an dilemma, especially for the tax cuts and everything

that has gone through so far. question for uick you in terms of looking towards assets to work for your new venture. where do you put it into? and the bout the risks volatility with midterms, opportunity. shawn: i think for the first don't have correlated assets, right. when you looked at it a world ly, you had where everything was going up and down at the same time where central banks have changed the liquidity stance. the world is more interesting. there is four times as much d paper in this go around 2007-2008.t cycle in you have to have a new buyer to downgraded.ey're they can't continue on them. they have to actually sell out them. think about the liquidity characters of just that. here is natural places to make real money on both the long and first time in the

years. joe: next year? shawn: it will start. it in real estate a little bit. there is leverage in real estate. coming in new york is down, you'll see that continue as we work our way through this credit.ll see space. will be the last insurance companies have had to purchase assets that have driven spreads down. they're natural buyers in the marketplace. be there.to in effect, they have been pushing credit spreads down to actually are not in line with the risk associated with them at this time. scarlet: so some artificiality there. thank you so much, congratulations on your hedge fund. appreciate it. the closing for bell and for me, romaine bostick "what'd you n for

miss." this is bloomberg. .

caroline: i'm caroline hyde. romaine: romaine bostick. joe: i'm joe weisenhall. "what'd you is miss." caroline: among the biggest losers dropping down the pot sector. glaring the brexit red line, teresa may trying to soften the after a xit the e.u. weekend of protests. and betting on the big names,

lifted the nasdaq ahead of a busy week. for more now on our top story, less than a week after canada historic step forward legalizing marijuana nationwide, pot stocks having the worst record.on the biggest pot e.t.f. fell 11%, the biggest drop on record. christine joins us from toronto. christine, any real catalyst for this? catalyst at all. this may be a classic example of buy the rumor, sell the news or case, buy legalization, sell post-legalization here in canada. of course, the broader market weak as well and so enerally speaking when you see stocks that has run up as much stocks,rhyped as the pot they're bound to fall disproportionate when the market turns. that is what we're seeing today. e.t.f.s posting their worst

on record. stocks falling 11, 12, 15% so pretty significant drop for stocks. this is the fifth session? a row that pot stocks have been lower. at the start of the day before canada legalized and continuing ever since. data or indications yet of sort of what the sales since en so far legalization? >> we have gotten preliminary numbers. to distinguish between winners and losers on the company side of things. e are hearing there are some pretty significant shortages in terms of product country wide. provinces had been reporting that they're either of on or run out entirely certain strains and products. here in ontario where sales so the re online only, ontario, canada, store website, isovernment run website that selling pot is selling significantly fewer products today than a week ago. product shortages out there. that's not entirely unexpected. his is what we saw in states

like colorado and california and nevada when they legalized, retty common because the thing is that no one really has any clear idea of what demand is going to look like in the early days. we saw massive lineups outside of stores. t's hard for the companies to prepare with no historical data on.base their decisions romaine: you managed a shortage of annabis, there is investable cannabis stocks and getting one more tomorrow when nyse, couldd on the it be a phenomenon where if you to play cannabis maybe three companies last month, tomorrow you have four and down people will realize that there are dozens and dozens and takes some of the air out of balloon a little bit? >> that is absolutely a factor. will join the others in listing in new york tomorrow. ow historically, i was looking at this earlier today, generally speaking when a company, a

lists n listed pot stock in the u.s., its volume tends to listing.the days after the share perform better than their peers. case see if that is the with aurora as we get more and more stocks listing in the u.s. presumably that effect will be diluted. they will follow suit relatively have filed their applications, a listing from three the next two or weeks. other companies have hinted that they're interested as well, so long before we have 10 dozen canadian pot stocks listed in the u.s. which means beneficiaries of that early investor interest may effect wear hat off. joe: thank you very much. meanwhile, "what'd you miss" orean exports often seen as a bellwether for global economy, maybe this is a sign that emerging markets and world trade

picking back up. i have a chart here on my year al showing monthly over year change in korean export data, it's the white line. it's really noisy. you don't want to read too much into it. the blue line is the 12-month ticking up, e really noisy. this is one of those bellwethers gauge whethere to global trade is picking up or rolling over. something to keep an eye on to if it continues to gather more momentum. let's continue this conversation with mark, macrostrategist on our markets live team. have you here. could it be ma we've sort of reached the bottom of the cycle this cycle that slammed e.m.s. in international stocks this?ll mark: it's a positive sign. it's a volatile series. wouldn't want to overinterpret -- joe: we would never overinterpret. never, absolutely. it's a positive sign. the trend is showing and it just be dismissed as front running tariffs because this is

the october date, the first 20 october. it's not just about that story getting in ahead of the supply crunch. korea is very important. it's an open economy. it is a positive message for emerging markets. it's important to note that the proceeded the kind of downturn last year. this is a positive sign for markets. i wouldn't read too much into it. there is something in there, but not the whole story. romaine: the bank of korea threw a little bit of water on the trade story basically saying of risks still sort of swirling around specifically because of trade nd specifically because of the fed. mark: two things there, one is banks l of the central mention the risks. we have seen that narrative. back the eep putting risks. the number of mentions of trade recents decreased in the fed minutes from a few months ago. people seeing this message that being nomic impact delayed coming through later. that's a good sign for market.

caroline: what wasn't a good sign, the china rally so much, four percentage points and the rest of the world didn't really care. be caring more that he is standing behind the market? should we be caring about the saying we're going to be that support? mark: massively so. this is a completely missed china.here in the immediate reaction of analysts and commentators is to move.tely dismiss this it's driven by state sponsored actioned. they're the most important fundamentals here. 600 pound gorilla moving the market. why would you too fight them now? is a strange topic not to interpret it as material new the china for market. shift in is a real their economic approach for the moment? mark: it's the national team coming in and buying. of china is saying unwaivering support. it's like going whatever it an important message. you got the cuts in income tax.

providing stimulus and a symbolic message to continue upport and you get the state sponsored buying. it's real buying. tarp and q.e. gave us in u.s. ar bull market equities. government matters even if it's state sponsored. volatile and the problems remain. china will be successful in turning the stock market around. last time we saw this large 2015. was why august subsequently, we did see fresh 28% the next year, but a rally is -- joe: i would take it. romaine: are they also supporting the economy or doing something to make the economy a little bit faster pace expecting?olks are mark: i don't know if it will be faster. 6.2% this year.o it's not a massive slowdown.

drastic.little bit with china, we love trade as a negative story. use marginal growth changes to trade u.s. stocks. hey have been rallying for the last nine years. so the idea that we are going to slowdown skill exceptional pace for growth and the reason for the stock market several trillion dollars in value is bizarre and irrational. oe: you're sounding optimistic, but there are risks out in the world, italy you have lot about.g a how should we think about this in the world of global risk? italy is the biggest systemic risk out there. it's the one thing that people overlooking in terms that can really bring down markets. greece.e compares it to he debt market is 330 million euros. the italian is fifth in the world, it's up there. just too big for the e.c.b. to control it if it

of hand. yields would lead to slow snowballing of debt. the government being adamant they're going to fight the e.u. in this. their treaty must block them, a confrontation is coming. his wouldn't be a problem with positive communication. we're not seeing that. it's a slow moving issue, more volatility. some good news in the rating decision. overall, this is the biggest risk for the markets in the next months. caroline: passionate mark over here, we're glad to have him and new york. you can read his work on the terminal. ooking at europe and talking italy and u.k., blurring the brexit red line. may trying to soften the blow on exiting the e.u. after a protests.f we have more on the phone from london. a reminder, some 700,000 people street demanding a second referendum, but what the markets re worried about today that teresa may will keep her place? >> yeah, absolutely.

weekend, the march was overshadowed by the feverish conservative party that maybe now is the time to overthrow her. we have been here before over last year, there have been several occasions where we teresa may would be ousted. and the tone, the fever pitch high if you like. today talking to lawmakers again, the feeling is that just cling on.l we can't rule out a challenge, ut definitely the feeling is that perhaps it won't be this week. in the house of commons today, he outlined in more detail her negotiating plan. what specifically with teresa may bring back to the e.u. that will, a, be acceptable them, but, b, allow her to maintain her coalition? is of course the question and at the moment she is basically saying that she is

the e.u. to ditch ts proposal, you have heard about the irish border. teresa may is trying to get the their plan for the irish border, the u.k. audience with a has come up proposal that is basically going to enrage at least two factions fragile coalition. today she sort of set out something that is something like halfway house, but basically there is still a fundamental problem which is the e.u. saying we can work with that, but our proposal still has to be in the divorce treaty. are, a little e bit of progress, but the undamental sticking point remains, the e.u. wants to include a clause in the treaty hat teresa may says is unacceptable. that is really where the fight still is. romaine: a lot of folks in the market are waiting for the possibility of a no deal or a very, very messy deal, a bunch of companies are talking about

impact, the tangible impact out there. i wonder when we will see this more into the decisions with regard to the e.c.b. or some of the other economic within the u.k. to actually deal with the fallout if this doesn't materialize? emma: that's interesting. the companies in particular have ort of demanded clarity for a very long time now. the crunch seen is moment, we have to have a deal year-end, or the first uarter, right, we're going to activate our contingency plan. looking at the end of the year came back if people in january and there still was no deal, that would be the moment where they would say enough.s we have to continue, the impact market. caroline: the pound fell today, but there is a feeling of in the markets now, can they keep trading off the

headlines? emma: the pound has been quite resilient with some of the political noise. fell on the prospect of a leadership challenge and of the y you hear some voices that have been pragmatic perhaps threat that now is the time to take profit. november, looking in not necessarily a deal, the end and of course in the summit in mid-december which the moment the market start focusing on. emma ne: we thank you, ross-thomas on the phone from london. next, big tech bellwethers week.et reporting this we'll have a preview of what to watch for. that's next. this is bloomberg.

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mark crumpton. as president trump prepares to stump for senator cruz, he is doubling down on his warnings against the migrant caravan heading toward the u.s. the president says he will begin cutting off for substantially reducing -- off or substantially reducing aid to three nations over the caravan, guatemala, salvador.and el the three countries combined receive more than $500 million in u.s. funding in the fiscal year 2017. national security adviser john

bolton held talks with his top russian officials in moscow today. the meeting came a day after president trump announced his intention to pull out of a landmark nuclear weapon straight it -- weapons treaty. meantime, the european union is calling on washington and moscow to work to preserve the landmark accord. >> we believe that the u.s. and russia need to remain engaged in constructive dialogue to preserve the treaty and to fulle that -- ensure its and verifiable implementation, which is crucial for europe's sense of security. mark: it was signed by presidents reagan and gorbachev. land-basedned all cruise and ballistic missiles with a range between 300 and 3400 miles.

lgbt leaders across the united states are condemning the white house for exploring the measure that could deny federal recognition and civil rights protections to transgender americans. the trump administration reportedly is considering adopting a new definition of gender that would define it as a immutable biological condition determined by a person's sex organs at birth. >> you know, it may be a time of fear for many of us who are transgender, but we are not going back. we are not going to be erased. we are to continue to come out and tell our stories to our friends and families, to our lawmakers. we are going to go to the ballots and we are going to vote. we are going to vote for pro lgbt equality legislators up and down the ballot across the country, because this is not a red or blue issue. this is a human issue. mark: the department of health and human services previously acknowledged that it was working to rewrite a federal rule that bars discrimination in health care based on, quote, "gender

identity." global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. another earnings season is here and it feels like the stock market is at the mercy of what these technology companies report. for more, we bring in our senior analyst for internet and consumer electronics at bloomberg intelligence. when you look at this earnings season, what's the big takeaway from what these companies report? >> there are four key trends for the sector. the market demand appears to be strong. the demand in general for their businesses are still strong. they have a lot of spending. spending is can -- expected to rise.

it's basically mixed expectations for company by company within the space. but these are the four things people are looking at. joe: let's talk some specifics. amazon -- what is the key thing investors will be looking for? >> with amazon, it should be fine, given they had a strong prime day. where the concerns lie is in spending because of rate hikes -- wage hikes, the uncertainty around tariffs, and also holiday spending in general. there might be concerns around the spending near-term, but revenue growth wise, they should behind. joe: alphabet -- caroline: alphabet, we are expecting to show strength continuing. will it be the regulatory agenda or is it more about how much advertising spend there is online? >> as far as how much advertising is being spent online, that's not that big of a concern. what we expect from google is

more data around how the cloud growth is coming along and also expectationsort of of scaling the business look like. those are the things that are uncertain in terms of how it reflects on the expectations going forward. but as far as mobile search is concerned, users are concerned, that should be fine. romaine: a lot of these companies have been able to innovate and throw anything out there on the market at pretty much any price while we are in this improving economy. when you look at consumer spending and corporate spending trends, are there any indications that could slow the growth of some of these companies? >> we are yet to see that on the consumer and in the top line and the things -- end of things. what the spending cycle indicates is there is some structural change in the business, especially the advertising business, which depends on user-generated content. you have to spend more on policing the information and be more liable for it on the platform and things like that.

that structural changes happening. beyond that, if you look at reticular issues with facebook, there are these uncertainties -- at particular issues with facebook, there are these uncertainties. those come to the attention a lot more. as part of the topline numbers -- far as the topline numbers are concerned, we are not seeing that. joe: we are looking at a chart of facebook. it famously bombed after its last earnings and then continued to weaken. almost no recovery at all at any point. on the user growth side, what are the signs you are seeing and that researchers are finding with regards to momentum in t heir most valuable markets? >> last quarter we saw the first sequential decline in europe. that came from a one-month interpretation of gdp are -- gd pr. with the breach that potentially affects 90 billion log-ins -- 90 million log-ins, there might be

some impact. but also, on the spending side of things, it's not just about the securities spending. it's also content, messaging. then launching a new product and marketing. raise near-term spending concerns. joe: we did -- caroline: we did get the news that they have lost another key founder. oculus has moved on. the instagram founders, the what's up founders -- whatsapp founders have left. >> it is hard to retain founders. at some point in time, you're going to have conflict in the direction of the company. the fact that they have been able to retain them for such a long time in itself sort of tells you that they got that independence for a long time, it's on monetization of products and services and maybe

that's where the conflict lies. with earnings, we will end up seeing whether they are ahead of expectations in terms of how they are going to monetize these services or behind. the large thing is monetizing most of the services is still like a 2h19 story. oculus is much longer term, but when it comes to instagram, it's all about the live stories angle. you.ine: jitendra, thank ofing up, a shotgun round tax cuts after the crucial midterm elections. more on president trump's new plan and how his own party reacted to this. this is bloomberg. ♪

caroline: we check on the latest business flash headlines.

lufthansa. bloomberg has learned the german airline has asked for proposals from both boeing and airbus, which wants to sell the carrier more a 350's. goldman sachs is moving its digital bank into the wealth management unit, aimed at attracting more customers. goldman wants to start new offerings over the business brand. it currently offers only personal loans. selling american railcar industries to a hedge fund. the price represents a 51% premium. icahn has quintupled his investment. that's your business snapshot. another tax cut, at least according to president trump, . some middle-class families could

be looking at a windfall. president trump: we are looking at a major tax cut for middle income people who need it. >> what was the timeframe? president trump: maybe around november 1. caroline: this comes as a surprise to many lawmakers. let's welcome our political correspondent. talk to us about whether this could even be done in some way ahead of the midterms. >> the short answer is it probably cannot. it is extremely unlikely that congress is going to come back into session between now and the midterm elections, because house republicans are defending a lot of seats and they want their candidates out on the campaign trail. so, there is no indication that we have picked up that they might bring back the house to session for this. moreover, republican leaders don't really know what the president is talking about here. he has discussed the 10% tax cut for the middle class, but there is no bill out there to do that. there is no plan that has been

devised with republican policymakers on this. it has all the hallmarks of president trump making something up on the fly and using it as a political campaigning tool. the idea of a middle-class tax cut sounds good to people, especially after the 2017 tax law that republicans passed has been a political flop because, by a two to one margin, republicans own internal polling say that voters believe it benefits corporations and the wealthy over the middle class. joe: you are saying that perhaps this is just a pre-election hail mary type of thing? >> that is what it appears to be, joe. if it wasn't, then i would suspect that republican policymakers who work on tax issues and republican party leaders as well as tax lobbyists and outside sources that i have been talking to, who are very well plugged in, would know something about it. they don't seem to know. it's also interesting that the next pot of money that conservative tax wonks want to tackle is not the middle-class income, not income taxes, but

rather capital gains taxes. they want to change retirement benefits and the 401k structure. they want to do potential expensing for start up -- startup businesses. it's not what conservatives want to do if they have another shot at this apple. romaine: trump's comments did raise an interesting point with what is good -- the agenda for the congress for the rest of the year. because i don't see any legislation out there. >> congress is off until after the election, so we are not looking at anything until mid-november. once it gets back, the top item on their agenda is going to be to fund the government and to prevent a shutdown on december 7. this is likely to be a pitched battle. they could -- this could be president trump's last chance to get funding for his wall, especially if the republicans lose the majority. there is no way democrats would put that up for a vote. thetor mitch mcconnell,

republican leader, has indicated he wants to confirm a lot more judges before the year is out. joe: obviously in the national media we tend to look at things, national issues, whether it is kavanaugh or what's going on with saudi arabia or the latest trump tweet, whatever it is. on the ground, in these congressional districts, where democrats are trying to flip seats, how much does the conversation about these -- is the conversation about these big things and how much is it about taxes, health care, topics democrats would really like to run on? >> health care is the biggest issue in the midterm election. it has been so for a long time, regardless of what happens in d.c. with the national conversation or what the beltway chatter is occupied -with. that has stuck at the top of the voter concerns. it is a high and important issue. immigration, for republicans, ranks as a very important issue. president trump has been stoking some of those fires lately by warning of this caravan coming to the southern border.

know, there is not necessarily a correlation between the kinds of things that are being discussed in d.c. and what people in the country are looking at. democrats have a pretty healthy margin in recent polls in the house. they are still in decent shape to win it back. it is looking difficult for democrats in the senate. all indications are republicans have the upper hand when it comes to holding their majority, because the races are being fought on very conservative territory, states that president trump won often by a very big margin in the 2016 election. caroline: sahil, thank you for breaking it all down for us. let's switch gears and talk about blackstone now. a historic investment. saudi arabia has pledged as much as $20 billion. things have gotten a little tougher for blackstone since all eyes are on the fact that

there's concern about this "washington post" report. >> the saudi fund could you needed the money, the $20 billion -- the saudi fund contributed the money, the $20 billion. we have learned more about the terms, the discounts, the revenue sharing element that is most eyebrow raising two other investors. 15% of the fees they pay to blackstone are being offset against the fees. it's a revenue sharing agreement where they are getting concession upon concession. caroline: -- joe: what does this tell you, the concessions made to the saudis, about the desperation or hunger for saudi money among big funds? >> desperation probably wouldn't be the word. it's a huge commitment. it's 10 times bigger than any other commitment to any other blackstone fund. of course they will bend backward to give them some sweet

deal arrangement. you will clip fees for a long time. romaine: building on joe's point, had they hit their targets they set out? >> no, absolutely not. they targeted $40 billion. they are at $5 billion as of june 30 and september 30. no new money came in and q3. -- in in q3. caroline: now we see the issues being played out in the global sphere. why were people not signing up before that? is it a worry when you have such a big player in a blackstone fund such as this? >> it is cobbled together from a bunch of places. this is their first ever infrastructure fund, and there are a bunch of others out there. so many other options.

this is an unknown entity, so people have been a little more hesitant to back the unknown horse. romaine: in the story you wrote, you mentioned another provision related to a review the u.s. government would make. because the saudis would be involved in these deals, there was some concern here that you would have to make a little more room for them. >> another concession the blackstone made to make sure when they got the cash, they can themself from any deal that could draw sify is scrutiny scrutiny.ius that's coreally, infrastructure. joe: we have seen, for example, a lot of tension around tech and softbank and how much they are backed by saudi arabia, how much tech startups are backed by saudi arabia, and the fact that saudi arabia may be toxic for a while due to the killing of this

columnist. couldblackstone or companies that blackstone in best in, could it be similar -- invest in, could it be similar? >> for the companies that invest in other funds, even its fund, as they talk to investors about coming into their private equity fund, whatever fund it is, investors might have concerns about their close link to the saudis. caroline: we thank you for the transparency you brought. you first reported on them landing this deal, now being able to show what sort of sweeteners they have to offer. it's a fascinating read. go online to see the story on the blackstone fund. coming up, chinese stocks tumbling the most since 2016, but bank of america says don't get too excited. this is bloomberg. ♪

romaine: some headlines crossing

the wire here. some vendors saying they want their products back rather than allowing it to be liquidated within this bankruptcy process, including eastern prime textiles. a couple other unsecured creditors basically saying they want the retailer to return the goods it received prior to the bankruptcy filing. they are asking the judge to get their products back before sears moves in a further -- any further ahead. chinese stocks jumping the most since march 2016 after top officials moved to shore up the economy and offer support to the struggling private sector, but bank of america says not so fast,. here with more is bloomberg's shery ahn. is this run-up sustainable? shery: the bank of america merrill lynch, especially their china strategist, who predicted the market trash -- crash, said that this is because of sentiment. we have seen in the past in 2015

the national team coming in and buying up shares about 15 minutes before the close of trading. they would push liquidity and money into these state-owned enterprises. now we are not seeing that. we have talked about this, about how these private enterprises in china are highly leveraged. used pledgedhave shares as collateral for their loans. this is why this analyst inks this is not sustainable, because state funds would not come in and try to buy out these private firms that are so dangerous. caroline: we just had a rather passionate mark cudmore joining us, telling us that the market should be far more excited by the fact that the government are really selling behind the market now. it might not be so much that the national team is buying, but shouldn't it be the rhetoric they are listening to as well? shery: it's been a while since we saw this coordinated effort coming from authorities in beijing. president xi jinping is

committing unwavering support for non-state firms. exchangesve stock coming out and saying they are going to try to reduce the risks of these pledged shares. at the same time, we have the government releasing a plan to cut personal income taxes. remember, the tax structure could be one way that china could shore up its economy, because it is one of the most heavily taxed economies. personal income tax is about 45%. business income tax is around 25% -- business taxes around 25%. i've heard analysts talk about this area of the economy that could work better. what you are looking at is a chart of the shanghai composite, just rising more than 4% in the session after sinking to a four-year low last week. the biggest climbing two years when it comes to a one-day move. joe: it is striking how many huge swings there are. a few days ago, we had that 4% down day. up or down, it is just

characterized by extreme volatility. shery: when it came to the 10-day volatility, it climbed to the highest level since march of 2016. nvestors,talk about i analysts, you need to brace yourself. you need to have the stomach to be able to go to china and buy these stocks, because if you don't have that, you are just -- you just better stay off china. caroline: shery, thank you. for more on those stories, do not miss "daybreak: australia" and "daybreak: asia." joe: i will be watching more economic data. it's mcdonald's earnings. that counts as economic data. romaine: i'm watching earnings. texas instruments, after the bell. caroline: that's all for "what'd you miss?" romaine: "bloomberg technology"

is next. joe: have a great evening. this is bloomberg. ♪

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buyleesa.com today. you need emily: i'm emily chang in san francisco. this is "bloomberg technology." another high departure from facebook. what does this mean for zuckerberg's control of the company? saudi arabia's investment loses more top speakers. and netflix's spending spree continues. the streaming