not much consternation out there today. the retailers outperformed the company. we saw autos, this is more risky. the nasdaq is up 1.2%. >> we are taking a look at mtu etf. that was up about 1%. momentum isutes change with time as well. >> netflix is up 6% today. people are buying back into some of those classic things. i think nvidia had a huge day. 5% on nvidia. stocks these red-hot ardently getting some buyers today. >> risk aversion seems to be put to one side.

let's dive deeper into the action. lisa: i wanted to look on the risk -- look at the risk on sentiment. particularly market currency. look at the emerging markets index. it is rising for a second day. the biggest two-day gain since last year. it is really interesting to me to see this. people were a little skeptical. this is one area that was punished. now it is getting hit by a double whammy. steppingoth the fence away from some of the tightening rhetoric. then we have a u.s. economy that is still solid. which currencies are benefiting the most? this is the brazilian riel. this is verse the dollar. 3.1%. this is extending those gains today. interesting.

abigail: everybody is talking about economic data. this is something that not a lot are watching. it is interesting to look at this long-term range. orders for these trucks including dump trucks, tractor-trailers, 18 wheelers, low 10,000. we see a nice recovery. it is jagged over the next decade. this is right about 10,000. that is where we saw a pretty severe correction for the stock market. about 50,000 back in august. for the month of december, on a preliminary basis, 21,000. we may see orders for these class eight trucks. that may be some kind of signal on the economy overall. >> wti jumps about 4%. adding a six the day onto its most recent winning streak. aboutred that game at

1.5%. it did get very close to hitting $60 a barrel. this is feeling optimism that talk of a global slowdown might be overdone. there has been other data. last week we saw the number of working oil rigs in the u.s. fell for the first time. the shipping data seems to show that opec is following through. american supplies are still growing. rose.g oklahoma be oil market seems to broadly reinvigorated. scarlet? is mark still with us ron. certainly we had the trade talks. we also had m&a to contend with as well.

another day of multibillion-dollar dealmaking there. when you listen to these big pharmaceuticals, $8 billion today. $72 billion on friday, is this a sign of a market late in the cycle? >> not really, we think there is value in the market. with this correction, it is not surprising to see more activity. you're getting really interesting valuations. i would expect that to continue. that will be a support to the market going forward. >> what about non-us? >> is a credit, first. that has been more stable in the u.s. of late. i think that is a sign to look

to that region if you want to play outside the u.s.. it goes that emerging markets are getting real push today. >> it is interesting. when you look at how emerging markets have performed compared to developing markets. this is november and december, emerging markets were out there. it is not just about the dollar but the dollar certainly eases pain. emergingis pain on central market banks. it eases pain on emerging-market companies that are paying back debts and dollars. you do see it, the dollar starts to deteriorate. to the storyd which started to emerge over the last couple of months. >> one of the things we were talking about at the end of 2018 was the degree to which political destruction and white house dysfunction was contributing to a sense of

volatility and rising risk premiums. what is going on with that now? was that a story? >> you did see a shift. in 2018 we had to contend with the fact that corporate tax policy is passed. you have this corporate tax reform which we inflated profit growth, it created this big boom and enthusiasm for risk-taking and the results of a much bigger earnings outlook. then we lost that. that is over, what next? certainly it comes and goes. at certain points you have these air pockets of information. the only thing that matters is policymaking in washington. right now we're in a. of time where we are questioning the economic outlook. the results say that no one is going to put up a lot of risk.

>> that lack of conviction is really playing itself out. >> what about oil? how it is -- how important is it that oil finds a bottom? matt: if oil really stabilizes, that is another positive backdrop or at least an absence of the negative. we are pretty positive on the outlook. we think the market was too negative. just cross risk assets in general. we think that things will stabilize and gradually move higher. >> you are already taking cash on the sideline. how are you making that money work? >> we expected volatility. we did not expect the air pocket. we got the correction and the bottom dropped out in december. it is very interesting. where meeting daily about to deploy cash and see where we

could get a nice return. some values emerging here. someone called it a value restoration project. >> city national bank cif. -- cio. that does it for the closing bell and for me. "what'd youl have miss?" we will be looking at the latest trade talks in china. this is bloomberg. ♪

♪ >> i am caroline hyde. >> i am romaine bostick. >> i am joe weisenthal.

>> we have talks beginning between china and the u.s.. >> the question is what did you miss? >> president she is helping to start u.s. and china negotiations on the right foot. the secondll make it know in dollar deal of the. taking matters into their own are banningbrokers together to form a new u.s. stock exchange. meanwhile, the u.s. and china are kicking up another round of trade talks. by top chinesed officials. >> they've given each other 90 days. we should use that time. these agreements are never done early on. they are always done on the last

light of those negotiations. that a positive signal there are ongoing negotiations. >> i think he would like to deliver a win. for theobably possible chinese to offer enough for him to declare a win. we will probably see some ups and downs between now and the end of the 90 days. >> this is a very short deadline. we can't be optimistic about a whole lot. ultimately there is a lot of the table. that is pushing the two leaders and their teams to find a way forward. >> we are not seeing a collapsing global trade. what we are seeing is company struggling to find ways around these trade taxes with less efficient production. ist less competitiveness falling on american companies. they are the ones that have to pay the trade taxes.

the fiscal and monetary policies trickle through. this is clear messaging around the trade dispute. it is necessary to lift that. welcome the let's oxford university associate. great to have you back. looking at the big picture, do you see any case for optimism? >> there is some reason for optimism. if only because the talks for today have kicked off in a good atmosphere. this is in charge of all economic and financial affairs. that is for president xi jinping. it popped into the negotiations.

i think you have to distinguish trade issues in a strictly defined what of other issues. it will continue to keep china thequite separate and in a state of tension for quite a long time to come. there are some trade issues which i think both sides probably would like to agree about. for different reasons, mind you. we should not be folded into thinking that this is going to be the be-all and end-all of the u.s. china relations. >> can you talk about some of the other aspects of that relationship? the dig of the economic and political side for china? also, how much possibility they would be willing to have to address some of the u.s. concerns? george: sure.

have takense things place in the back channels before the main negotiations start. the fact that the chinese side to make concessions on the automobile tariffs -- they will probably pull back to where they were before they raise them. they will cut tariffs on other products. we have these issues about market openings. there may be other issues, buying american agricultural products. be part ofs should the agreement. the acid test is what, concessions the chinese will make if any. what will the white house or the united states television be prepared to accept when it comes to really touchy issues like

intellectual property rights, litigation and protection when ,t comes to technology transfer or should caps on foreign companies in key sectors as well. also, subsidies to chinese companies. but, state enterprises. this is something the united states and others believe offer unfair competition. that is not that much think china can offer in these areas. there may be optics that look like concessions but we will have to look at the details. -- tradehink the tread war presented that of the united states is going to be too impressed. the white house may have a different agenda. talked aboutdy helping foreign investors and opening up. what does that do to help businesses? what does the business community need to make business expanding in china that

much easier? about thethink biggest pro-china lobby, one of them during the last several years has been u.s. businesses, also european businesses for that matter. some of the biggest complaints have come from the american and theof commerce jibber of commerce in beijing. the chinese have lost the support of both of these organizations. it speaks volumes about the degree of disappointment that exists on the business side with what has been allowed to happen under xi jinping. my own belief is that i think it will take a lot to a net trust back. they will indicate that many companies, and it about a third of them have moved some

productions out of china. -- production facilities out of china. the fine print on the negotiation, whatever happens to be agreed in the end will have to be scrutinized very carefully. there may be the appearance of a deal but nothing will perhaps be resolved under the headline issues. theine: tell us how setbacks really fit into xi jinping's thinking right now. george: there are two main jinping's plus a fate and his thinking. that has been enshrined in the parties constitution. also, made in china, 2025.

they have backed off from a lot of the rhetoric to do with these policies. this is since the summer of last year. not because of form pressure but because of dissent amongst some elements of the communist party hierarchy. also because of dissent from leading intellectuals into universities. it is quite interesting to see how the chinese are doing a little bit of self-criticism. they are changing the appearance in order to appear a little bit more soft. fundamentally, i think president xi jinping seems to be not challenged. he is very firm in his position in china. he is very committed to the goals made in china.

even if the rhetoric accompanying it is a little bit softer than it was. that has a political purpose, of course. >> george magnus on the political purpose and red flags. why china is in jeopardy. 2019 has already assured in a flurry of records. we will have some perspective on all of the m&a action. that is next, this is bloomberg. ♪

all of the recent ups and downs in the market, investors could feel the irish about the market. some say the sense of pessimism is overdone. >> the market in my view is

taking a two buried view on the economy. it is still doing well, there are difficulties we need to watch. overall, i think the sentiment is not as good as it should be. we are in favor of a gross environment. this seems to be over and shadowed. >> what is the environment like in shanghai as you speak all these people in china? panel with starting janet yellen and myself. we talk about the state of monetary policy. the fed raising rates, possibly going into a pause -- the european central banks stopping the purchase program. those are all events that have changed what the global economy was driven by over the last couple of years. markets have to get used to that. that adjustment is a difficult one. i think markets will manage.

our terry policy will continue to be very responsive to economic situation. the economic situation is: of somewhat. it is no reason to be skeptical. we still have a relatively good global economy. we still have relatively good performance on trade. yes, there are trade disputes but at this stage, it is setting the stage for future collaboration between the major economies. rather than already embarking on some confrontation. there are some ongoing discussions and as long as discussions are ongoing, i think we are in a good place. >> by central banks being responsive, do expect the fed to react to the global economy and calling up some rate hike this year or just changing the timing of these increases? economies had already penciled in a pause for the fed in the last quarter of the last year.

that did not happen because some of the impact of the trade dispute had them less frontloaded than expected. he clearly expected the first half of this year for the fed to look at the data and be data dependent. inflation has not really searched and is not a major problem yet, the fed can take its drive. -- stride. i think they will be very cautious and look at the data. that will lead to a pause in the march meeting. it is unclear what the second half of the year will bring. i think the market is a little ahead of itself. there may be rate cuts on the horizon. less see the economy dynamic going forward but we don't see any likelihood of a recession. i would have a? around the fed moving the opposite direction that quickly. we see less rate hikes in the future. not really a change of

direction. it is not widely expected. axel weber there. >> eli lilly has announced it is acquiring one of its biggest takeovers. this is the largest pharma deal ever. for more, taylor ridge joins us more from san francisco. taylor: a big day today. we have a portfolio manager. great to have you. this select pharmaceutical fun over at the deli. what are your key takeaways for the pharmaceutical industry in 2019? >> i think it has been a very volatile start to the corner. investors toot of

come into jp morgan and to try to figure out if there are opportunities that can present interests. what i was looking for was to see opportunities coming out of these investments. that is what people are looking at jp morgan four. another part of jp morgan in 2019 is a banner year in the readout. immunology, oncology, i think a lot of people are trying to understand how the risk reward is set up. i think lastly, there is a lot of potential earnings growth for some of the stocks in the sector. i think people are trying to figure out how these will be set up going forward. >> we have to look at m&a as well. taylor: we are only six days into the year but it was they

for them. karim: there has been a lot of m&a announced. think of m&a as the lifeline of pharmaceutical companies in some ways. if you actually look back, two thirds of pharmaceutical revenues are derived from companies that were m&a. m&a will always be present in the sector. we were discussing the backdrop of a very volatile third and fourth quarter. i think that actually catalyzed some of the pharmaceutical companies to be more progressive. it is hard to predict what companies are going to be acquired or not. it is an area where you want to be involved in the therapeutic areas. that is most interesting for the pharmaceutical companies.

taylor: talk to me about the valuations. to youthe ratios look right now? are the undervalued? -- are they undervalued? karim: the keys held up pretty well in the third and fourth quarter. think there is an opportunity to pick up some of these names that have a very big gap in valuation. inther point to mention is the pharmaceutical sectors, even though there isn't a lot of spread, i think there is a lot of earnings growth between companies. i think that will create a lot of great environments. taylor: you talk about stockpicking. you are a fundamental analyst. when you look at 2019, other sectors overweight or

2019, other sectors overweight or underweight? karim: in biotech, i am going overweight. i think there are companies that have become more interesting. havenk i am trying to that. and the promise of, i am trying to look at more companies that have earnings growth. i don't see a big valuation that would gather that. that is how i am trying to position myself. >> what are some of the key headwinds facing the sector? >> that's a great question and obviously the biggest political risk continues to be drug pricing and that will continue to be in the sector for the time being. it's something i watch very

closely. the key for me is to look at companies that much drugs or therapeutic carriers that add enough value to parents that you don't have to worry about drug prices. >> karim systems suwwan live from the health care conference. >> thank you very much indeed. tune in tomorrow, 10:30 a.m. eastern time, an interview with eli lilly c.e.o. david rick. live from that same kfrpblts >> president trump says he will address the nation tomorrow night about what he says is a risis at the u.s.-mexico border. mr. trump maintenance that more han $5 million for a -- $5 billion for a wall is needed to secure the border. the internal revenue service

will issue refunds to taxpayers even if the u.s. government shutdown extends into the filing season. the acting director of the white house office of management and budget said "tax refpblets will go out." in previous shutdown contingency plans, the i.r.s. would accept tex refunds but refunds would be delayed until the government was funded. hillary clinton joifpbled andrew cuomo today for strengthening abortion rights in new york state law. it didn't give women the same rights gaurnl teed under roe v. wade. >> the struggle for women's quality is not simply something to be read about in the pages of your history books. it continues to be the fight of our life tivement women's abilities to get basic health care, our right to make the most deep low personal decisions is

facing the most significant threats in recent memory. >> efforts to put federal legal protections of abortion rights into new york law were blocked for years by sate senate republicans who lost control of the chamber in november's election. with democrats now in control of the senate and assembly as well as the governor -- government's autopsy in new york state, codifying roe v. wade in state law is expected to occur. israeli prime minister benjamin knelt yahoo is demanded he be allow told confront his accuse numbers several corruption cases against him. in a narksed television address yesterday, he invited his accuseers to a public dsket. netanyahu, combho will stand for re-election in april says se -- he is center of charges.

mar talks with british prime minister theresa may this week. but the deal for brect in it november cannot be renegotiated to gain support in the british parliament. he said the deal on the table is the best and only deal football. prime minister may was continuing to work in her words from fufertsfurlts assurances to address m.p.'s concerns over her brexit deep. the prime minister stressed the n.h.s. would benefit from becks it. >> over the next five years, the budget will increase by 20.5 billion pounds in real terms compared to today. this is possible because of our strong public finances and ecause we leave the e.u. he -- we will no longer be sending

vast annual sums to brussels. a ay had to call awl off parliament vote last month since she was expected certain defeat. the vote that be reset for next week. i'm mark croverp carom thofpblet is bloomberg. >> and a big week for the fed. set to release its latest minutes this wednesday and then fed chair powell will take participate the next day. tim, i want to go back to what happened last week with powell because i get the sense, everyone sesms to get the sense that he's now telling the markets what they want to hear but fund mentally the message hasn't actually changed. >> i think that's right. i think markets reacted. because imheard positive news when they were yearning for that

this academies powell came out and said we have a ways to go. so what they heard was what a they wanted to hear but i think the message hasn't changed. one of the things i wanted to history is that there's been a t of talk on a the balance sheet. i think markets overreacted a built. i don't think that's going to be a tool they touch unless there's a serious change in the economy and i think that's something being missed today. >> what was it fund mentally that was different? i had we havely -- roughly the same view. i thought what he said in the atlanta last week was very similar what -- to what he said in december. he talked look the reflect they had exhibited in 2016. what you see the was different? >> i think he different dnt didn't address those issues in december.

that's why president williams came out and played cleanup. so the markets felt heard and some said this is a sign the fed is more dove and i shall that is not the case. i think they've become more dada dependent. they really don't know where the stopping point is so even though some of the comments lab sthrab it's more dovish, still you could see a couple of rate increase this is year. >> but the fact he acknowledged financial conditions means they're not job to what's going on. they're not just looking at the jobs report or inflation. they're aware of this world in which money is being lost and credit spreads widening and things like that >> absolutely. that's what got lost. they've always looked at financial markets but they've been trying to say we're foot reacting to them. they should have said we're not reacting to that but we're

listening. >> we're sensitive. how sensitive is the fed going to be to the number out today? >> there's a difference between hard and soft data. the soft data, you go out and ask, what do you think is going to happen with the economy? that's very sensitive to changes in political policy and trade policy. you take that with a grain of salt. you have to hang your hat on the hard data like the jobs report, which was the strongest of the cycle. that was stellar. so i think they'll lean on that more than the soft data. >> we had a lot of data points we're expecting this week, next week and over the next couple of weeks after that that we may not actually department gfment -- get. how does that factor in to what the sfed going to do? >> we're dwelting a bit of second vathes on the fourth floor because everything has

stopped. the census bureau is not going to be showing up and event when the shutdown ends, it's going to take time for these agencies to do survey data. i think we'll see a lot to have splex speculation about what the trade markets are going to be. but right now we still have im employment data. and, that of course, is the big one. market pricing, not any hikes to this poifpblgt. whattle change it or what will either cause the fed to move closer to the market or the market mash to say? missouri? >> 2018 was about the labor market. 2019 is going to be about inflation. if we start to see inflation pick up. we saw strong growth this wreeverplet year. yuflede expect inflation to pick up the middle to end of next year. six months ago we weren't

talking about market volatility. we are now. we could see inflation pickup later in the year. the labor market is likely to stay above trend for some time. there's been a lot of talk about rate cuts in 2020. >> in 2020, in what, june or something? >> to me, they're not cutting by a quarter percentage point. they're cutting because we're in a crisis and they're cutting by full percentage point if anything, there's a prolonged pause. >> great analysis from you 6. tim, always great to get your perspective. coming up, bankers and brokers. they're putting their money where their mouth is fed up with exchange fees. that story next. this is bloomberg.

>> a group of big banks and brokers are joining forces to form a new stock market. the nine founders, iran includesing bank of america, citadel, morgan stanley are hoping they can take on the established exchanges such as n.y.c., nasdaq. and we're joined by a banking reporter. why do we need another stock exchange? >> because there's not a whole lot of competition with the current one. it looked like it was a pretty since the three major exchanges fell quite a bit. it is something that may drive

down priletses, good for all the players overall, except the big three. >> so you have 13 stock exchanges in the u.s. talk to me about the 13th one because that's a fairly new one and how is it perform something >> it's ok. the thing is, since 2012, what i 2.5% of hey only have, equity? it's not a huge player relative to these three that have 3/5 of the u.s. market. >> so if they're not able to capture market share in any meaningful way over the last three years -- >> it's quite niche. >> what's the difference between that and what these nine banks are trying to set up? >> you have morgan stanley, the number one stock trading firm globally. u.b.s. and then you have citadel and

virtue, which are high frequency trading firms and etrade, retail. you have a nice mix of players. we're missing gold man and j.p. morgan but we they do have a lot of weight behind in firm. >> they could win out whether or not they get that much trading coming through from other players are not balls they're disrupting the situation. but i'm interesting in the i.p.o. strategy you were outlining or thinking about. >> right, two times in the last 12 months, citadel stuck tout me was investing in this venture and also the spotify last year alongside morgan stan limit it was a completely new way to go public and something early in able to glean using existing information from investors. it would be interesting to see these two terms come together and find new ways for companies

to list on their new exchange. >> is there a timeline on this? >> it will take a while. they still have to apply with s.e.c., which could take another 12 months. >> thank you. bloomberg eats bank reporter with us. ever, p, optimistic as that's next on asia ahead.

>> amazon has the power of microsoft already to become the world's largest public company. check out a chart of it. microsoft didn't reign supreme for all that long. pple in the top spot and continues to see some market eroths valuation.

>> still that white line is apple. there was a huge gap in october between apple and everyone else and now an is fourth. but it's almost hard too see the difference between the others so there could be a lot of jostling back and forth. >> but that chart does say a lot about how the world is changing and what investors are betting on is going to be the future, right? >> i'm also amazed that microsoft, after all this time is still one of the biggest. >> it's a juggernaut. >> and also made the right bet when it comes to cloud. >> yes, good seg. >> investing in digital trust, a software firm pioneered in customer alaska identity access mfingt in a deal. tom, are you going to tell us how much you paid? >> no, we don't normally sclose how much we pay for

private companies you would but we're very disciplined byears and really excited about janrain's technology. >> how can the technology help your customers? >> example, look at companies that have had data breaches where their customers' data has been revealed, say a hoyt campaign, a commerce or media company. those companies were storing that data generally themselves often in the clear and then they goat a breach and lose it. including janrain's technology, we'll be taking that ta and secure asking it in a strong watch. many countries around the worlds are establishing produce about data privelsy, what can be done with it and we can support nose

rules and respect them so that an individual's data is only used the way they want it to be used. we can also stop account fraud because if we're keeping track of how useers access we can sites from when -- where they're going it on their devices, we can excite that with our bot exaketsibilities too know when it's really you accessing your bank account. >> how is this going to hipp the bottom-like lionel at akamai once you get in integrated. quite a bit.help our web securing business is our fastest growing bilts. a quarter of our revenue at over $700 million a year of run rate this capability is vital for most of the world's major enterprises so it should help keep a very strong growth rate

for our security business. >> tom, once of the big stories that people are excited about is enterprise tech spending, cloud, security, continue to be really strong, that there's there big secular upgrade cycle happening across the industry. from your perspective, have you seen any slowdown in demand in this area? >> i think there's huge demand for security and that's because the level of the attacks, the sophistication of the attacks continues to decrease so you need the word's best technology to defend yourself and what's na what akamai is providing. >> so you've not seen any shrevedown? >> absolutely. in the area of cybersecurity and that's why security is growing so quickly at akamai because we can offer really the unique solutions to stop attacks against major enterprises.

>> thank you, tom lacten, c.e.o. of akamai. thank you for joining us. now to asia hafmente tesla takes an international road trip to china, breaking ground on its first car facty out -- outside of the u.s. there was a lot of pomp and circumstance around in and a plot of investors are encouraged. what benefit does tessly -- tesla get out of it? >> a huge deal in the middle of nowhere. and really long awaited launch of in factory. $5 billion factory but what will be the nainl benefit? chinal is the biggest auto market in the world and we are seeing a u.s.-china trade conflict which means all of these u.s.-made tesla cars have faced potentially higher tariffs and so forth so that would be a

clear benefit if they could produce from win -- within the country. >> how many does tesla view tesla as -- chin as one of its keel opportunities? how big of a prize is china from elon's perspective to grow? >> fts huge because it's the potential and the fact that china is now veering towards less air pollution and more clean energy. that's part of their government strategy and that is something that gets a lot of support from beijing and now you want to be a in an industry in commoinl which is supported by the government. it could be tricky that you have a lot of local competition. beijing electric vehicle and y.b. make up the bulk of things made in china. >> it still has a hefty price

tag selling in china. we were worried about the top end of the chinese market. >> definitely. especially as you see more crackdown on luxury and seeing beijing trying to reign in all of these luxury pumps. however, this also plays into too clean energy narrative in china as well so naked actually help tesla. already -- very interesting to know -- moment in factually -- factorry is fully oned by tesla, not a joint. a way of china's one-way opening up to the all the market and other markets as well. >> one thing i'm sure you'll be covering on your show later is the appearance of charmos goal in a jeasms courtroom. >> for the first time in two months in handcuffs.

he'll have a rome tiled around his waist as well, customary in japanese courts. he's expected to speak for 10 minutes, give his version of the accounts that transperiod. allegations of compensation and other algraduation -- allegations with nissan. we havor correspondent steven engle on the site. >> it will be fascinating to see how he appearles and what he says. ed we thank sheri and don't miss daybreak eastern, 6:00 p.m. eastern. tomorrow, the numbers for the juho zone. >> and november data for u.s. trade is out at 8 conditional 30 a.m. eastern. >> and the world bank updates its global economic prospects report. >> "bloomberg technology" is up next in the u.s. >> have a great evening. this is bloomberg.

moment? moment? ♪ eurozone be be

emily: i'm eminem los angeles and this is "bloomberg technology." in the next hour, tesla finally begins building its $5 billion factory in china, which will shield it against import tariffs but will it protect it from the ongoing trade war? why the start-up overhauled is business model in europe and changed its hiring strategy as a potential i.p.o. nears