shirley evan thinks fed policy could be loosened if inflation expectations run too low. sovereignly yields are at their lowest levels in years. investors grapple with the short-lived u.s. curve inversion. and president trump's concerns might be over. attorney general william barr clears him of obstruction of justice. the focus now turns to the southern district of new york. alix steel, here with carol massar. carol: now we have to figure out the legal and political inclination of that news over mr. miller's report. -- mr. mueller's report. alix: president trump tweeting over the weekend "no collusion. no obstruction. complete and total exoneration. keep america great!" that becomes what, next? carol: now it turns to see what

kind of pushback there is. there are other investigations, certainly here in new york, so we will see where those go and what else might come out of it. bex: in the markets, as in futures a little bit softer. you did get some good news out of europe helping to turn over all things around. you had business confidence in germany coming in better than estimated. that gave a lift to the euro. you still have more selling in the bond market, yields up by about two basis points. a big sigh of relief after the global rally we saw come to a head on friday. carol: time now for the morning brief. israel -- enter on monday, israel's benjamin netanyahu meeting with president trump at the white house. on thursday, the fed's rigid

claritin -- richard claritin speaking. u.s. treasury secretary steve lighthizer robert are in beijing for the newest round of trade talks. the question now is where do we after the mueller investigation. we have two screens we want to put up here. one is what william barr said and what robert mueller said. the special counsel did not find -- marty, where does this lead president trump? quote iseller specifically about obstruction of justice. and mueller barr make it clear they did not find wasificant evidence there

conspiracy within the trump administration to collude with the russians to interfere with the government. --there are going to be there is going to be controversy over barr stepping in and making the determination that the president did not commit a crime of obstruction of justice. we at bloomberg, there is a political and legal story. i wonder about what the market investment story is. >> i think the market itself had long since decided that there was not going to be any appetite in the senate to convict the president of the united states. so the whole idea is is donald trump going to survive his term, and i think this makes it clear that he certainly will. carol: marty is going to stick around to dig deeper into this. gina, when you saw this news over the weekend, what did you think? gina: i totally agree. i think the markets generally

anticipated no real meat coming out of the investigation because the market has been so strong this year. we've hade here -- major valuation reshaping. it removes a degree of's uncertainty, if there was that, but in general the market is trading on a lot of other things. alix: one of the things the market has been trading on is news out of the federal reserve. we did hear from the federal reserve bank of chicago president overnight speaking with one of our colleagues on bloomberg tv. he had some thoughts when it comes to inflation. toi think inflation is close 2%. that's good. but i'm worried it still takes accommodation to keep inflation at that level. i actually marched down my path for policy rate increases, so i basically got policy on hold until the fall of 2020. carol: gina, what you thing about that in terms of what it is taking to keep inflation at

these levels? bond market is saying the next move for the fed is going to be a cut, so he seems hawkish. i think the equity market and bond market are still sending two relatively different signals. it generally suggests that we are going to have an uptick in inflation sometime within the next 12 to 18 months. maybe that is because you get yield curve expansion. the bond market clearly doesn't feel that way. the bond market is saying there is no inflation. there is actual -- there's absolutely going to be a cut. if we are going to have some as they square off.

marty: it does cut both ways. i think the whole notion of interest rates is intertwined with 2020. in fall 2020, we have an election. the fed, and my view, would be very reluctant to raise rates in advance of an election cycle. if they do cut, i think ultimately that is probably going to be beneficial to donald trump. alix: this all leads into our third topic, which is what happened to the yield curve on friday. the three month tenure spread, the headline on friday, it went negative for the first time since 2007. obviously now we are above that level. from a market basis, what does this actually mean? gina: the yield curve inversion is, immediately, markets trying to price for an inevitable recession. the question becomes really, for investors, is this time different? these are very dangerous to

financial lexicons. i think going forward, we look for what does the signal and the yield curve meet on a more persistent basis. how does the fed react to this? is it persistent over time? does the economic data back this up? there's a huge question mark for stocks right now. where do we 12 months from now? worse?ngs better or the market is right now anticipating things will get better in 12 months. we are going to have to see that balance over the course of the next few months. carol: that gets us back to elections again. we are going to be counting down, and it is the economy. need to think we appoint bob mueller to figure out where interest rates are going. [laughter] marty: because no one really knows. carol: that is a good point. we are in this funny place with the economy, and investors are trying to figure this out.

marty: the fed doesn't even know. they basically said so. gina: let's not forget this is the unwind of monetary policy towards qe. there is an incredible amount of policy movements impacting the curve globally. investors are a little bit skeptical as to what that really means. alix: at least there is some wiggle room, unlike the bank of japan. gina martin adams, thank you very much. marty schenker is going to be staying with us. you can find more at g tv on your terminal taylor: -- on your terminal. coming up, trump claims vindication. robert mueller finds no collusion with russia during the 2016 campaign, but the political fight over the report is far from over. more on that, next. this is bloomberg. ♪

♪ --viviana: the u.s. international trade commission said to release key findings expected to happen on tuesday. appleng in favor of could hint at a qualcomm victory. boeing plans to meet this week with regulators, pilots, and technical leaders to explain plans for getting the 737 max 8 back into service. the aircraft was grounded following two deadly crashes in less than five months. the plan maker -- the plane maker plans to hold an informational session. aragon warns -- president eric on -- president

erdogann -- president warns about speculating on the lira. that is your bluebird business flash. -- yourank you bloomberg business flash. alix: thank you. carol: this is something we've seen from turkey before, certainly in terms of going out there with economic warfare against countries, individuals and entities. alix: which makes it really hard to be an investor in particular countries, idiosyncratically. i don't believe in the lira, but how can i short it now? president donald trump claiming victory after the special counsel found no evidence of collusion with russia, and attorney general william barr saying there is not enough evidence to charge the president with obstruction of justice. with the political fight over robert mueller's findings far

from over, democrats are demanding the release of his complete report. joining us now is applied to mike -- -- applies to applied technomic's political advisor, and still what this is bloomberg's marty schenker. >> because barr made this

determination there is no obstruction, they are now demanding the full report and the information that allow the special prosecutor to make that determination. we know in the southern district, the investigations are going to continue. this is far from over. i do think we have to be clear this was a very good weekend for the president. if you look at the markets, this was a very good we can the markets. they are not going to respond to this because there was nothing there. carol: remind us what is going on here in new york. guest: the investigations into campaign-finance violations. we do know the president has been implicated in two payoffs to two different women, so that will continue. we also know there's investigations into the trump organization that is going to continue. paul manafort, should he be pardoned, those investigations will continue. bob mueller was very careful to farm out some of these cases to other districts, so those will continue. the president has a right to be happy and relieved, but this thing is far from over. what mueller did with obstruction of justice, he said there is no evidence either way. marty: there is commentary this morning about william barr's basically stepping in. he didn't have to do that. he could have just left bob

mueller's findings by themselves, but he went in with rosenstein and said there is not enough evidence that the president committed a crime. he believes he has the power to do that, so he did. alix: why do you think mueller did that --carol: why do you think mueller did that? guest: it was very comey-esque, the same thing he did in regards to hillary clinton. we don't have enough to charge her, but i am going to go out and say shame you did that. in a way bob mueller did that without coming out publicly. i think what democrats are saying, number one, bill barr came out and said he wasn't going to support obstruction because he -- obstruction before he was even confirmed, and this was done in 48 hours. very quick for him to do that. alix: which the democrats will jump at. is that correct that they should do that? marty: there are many questions that remain unanswered. we don't even know how long the

mueller report was. was it 30 pages or 3000 pages? that speaks to bill barr's determination. what did he base it on? was he able to go through the entirety of the report? it is not just democrats who want to see this report. it's republicans, too. carol: wasn't a lot of the testimony grand jury testimony? are you allowed to release that? guest: they are not, but democrats or republicans could at,o court and request that and there is precedent for that being released. people do want to know the basis. these rules were set out to give the public confidence in these investigations and findings. anything that diminishes that confidence is going to be pursued. alix: where is the risk for the market? marty: i think the risk for the market, that may be counterintuitive, is that the democrats and republicans just do battle on a political basis

and basically get nothing else done until 2020. there are other major issues confronting the economy and global politics that may take a backseat to this back-and-forth between the white house and the democrats. alix: to that point, if you have a triumphant president trump, what does that mean for things like negotiations with china, how he views the economy? any measures he wants to take from that respect? does he get more aggressive? guest: this does unshackle him a bit. he doesn't have to worry as much that there is going to be a finding that he had somehow done this horrible thing of colluding with russia. for thejust add, markets, in terms of the political goings-on in the u.s., the big question now moves to 2020. take the white house, that could shake the markets. a lot of the things you are hearing are things that our clients are concerned about.

carol: what about the security of our 2020 elections? have we really dealt with the idea that other nations can get involved in shape and sway the election outcome? marty: i think the unspoken truth is that mueller did determine definitively that the russians interfered in the election, and there has virtually been nothing done to prevent it from happening again. legislatively, cybersecurity wise, states are left on their own to figure it out, and nothing has been done. alix: meanwhile, one market reaction is -- [laughter] alix: how do you factor in that kind of risk when you're looking at the market? you certainly can't be hedging something like that. guest: it is interesting because i think the market is saying there is nothing much to see here. i think if there was a different outcome, we could have seen the markets shaken. i couldn't agree more on the issue of our 2020 election security.

it is a huge challenge, and it has almost been unaddressed that bob mueller did find that russia was involved in meddling in 2016. without the president's involvement, but none the less, it can happen again because we've done nothing. you talk about political risk, that is a huge risk. alix: sarah huckabee sanders saying trump is ok with the public release of the mueller report. i'm sure he is. [laughter] zaino and marty schenker, thank you both very much. coming up, markets taking a week off in the red. some volatility, where is it? this is bloomberg. ♪

alix: the s&p fell the most

since january on friday. markets moving past president trump's told you so moment from sunday. for more on the reaction to the mueller report and what is next for equities, direction investment's head of capital markets and institutional strategy, and the fixed income senior vice president for assets under management. in terms of the impact, what might we look for to see where there could be one? >> i think in terms of what happened on friday and the global slowdown, a lot of it was bad numbers out of europe. you had a six year low on germany and france pmi. u.s. manufacturing down at the lowest levels for the past two years. out,nk with the fed coming it is almost as if they confuse the markets again. do they know something we don't, or will a dovish fed that could be digitally lead to another rate cut or at least a rate hike market?lead to a lower

carol: do you feel that there is confusion in this market cycle? >> without a doubt. the fed has changed so much from just three months ago. they've gotten much more dovish than people thought, but it did leave people scratching their is going on.g what there's got to be something bad going on that we don't know about. it is such an about-face. we always talk about with the fed, be careful what you wish for. it is difficult for them to thread that needle and get the message just right. now they say it is fine to have 1.3. -- 1.3 trillion dollars of excess liquidity at banks. why? it really gets people worried. i think we overreacted friday to the thin market. people leaving for spring break. this kind ofou see

meltdowns. the headline a little while ago, sarah huckabee sanders saying trump is ok if the mueller report is released. is there overhang in the market? >> i think there probably is because i don't know that everyone is buying it, per se. trump came out very favorably in his tweets. this is over, i one, back off now -- i won, back off now. but there is definitely wanting to read the entire report, but the general overhang on the markets on that topic is sort of over the bigger issues on the global economy and china tariffs. i think they will take precedence over the mueller investigation. carol: when it comes to some of those big macro issues, do you feel china at some point will be resolved? >> i would expect so, and i think it looks like the market is going that way. etf provider, we are

seeing more flows into emerging markets in china. i would expect to see more entree tariffs and sort of conclusion on ip theft -- on trade tariffs and some sort of conclusion on ip theft. job rates are very good. china could be the next thing that keeps us away from that inverted yield curve foreshadowing. carol: two steps forward, one step back constantly. alix: the other thing is the lack of volatility and how you play that. it is the vix versus the treasury index versus fx volatility index. all of these moving higher after friday. do you prep for more volatility? way in fixedest income to deal with it? >> i do think volatility will continue. there are these crosscurrents, and with the treasury curve inverting, the 10 year treasury doesn't look attractive. inflation is around 2%, and the

yield is down below. the corporateut turf looks a lot better. we don't see any spike in defaults, so without that, the credit markets look ready good, so we would flip from one to another. the breakeven inflation rate is only 1.9, and yet inflation has been over 2%. even if inflation comes down some, you've got some cushion. alix: good point. sylvia and bryce will be sticking with us. coming up, breaking down the 310 yield curve inverting, then reverse. this is bloomberg. ♪

w?w?uhió'ñó ♪ alix: this is "bloomberg daybreak." a little bit of softness in the equity market. you had positive numbers out of germany that helped a little

bit, but the risk off sentiment continued and drag stocks lower. the dax up almost 3/10 of 1%. in the bond market you are seeing a little bit of a relief. selling finally takes hold. yields up a little bit, but nonetheless we have australia at 10 year record lows. still have the 10 year seeing its worst day -- actually, the 210 seeing its worst spread since 2007. the other big part is what is happening with the cable rate, down by 2/10 of 1%. time --xit drama, this it is like inside drama. it is kind of fun. apparently some of her cabinet numbers are saying if you are going to resign, i will help us get the brexit situation through. a little tit for tat could actually happen. carol: we are going to talk about more of that in just a

second. let's get more on the world upside is this. viviana hurtado is here with first word news. viviana: a number of the russian parliament wants to restart talks on limiting nuclear weapons with washington. this after the mueller report found no evidence of collusion between moscow and the trump campaign. the president calling the 22 month inquiry into russian interference "an illegal takedown that failed." at least one prominent republican economist is calling on the u.s. senate to block the apartment of the president's latest pick for the federal reserve. the harvard professor says stephen moore is not qualified to be a fed governor. the former heritage foundation official also served as economic advisor to the trump campaign in 2016. theresa may's cabinet is reportedly pushing her to 90 dates she will step down. bloomberg learning some believe this will actually help the prime minister win support for her brexit deal. her trade secretary says he

would leave the european union without a deal if that is necessary to avoid canceling brexit. tonight the house of commons votes on next steps, including the attempt of parliament to seize control. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. the: "the guardian" saying petition to revoke article 50 is now over one million signatures. carol: it would be interesting if you did devote all over again. when we ultimately see something different? i don't know. alix: that is a good question. we are also waiting for the house of commons vote tonight on the next step for brexit, and a temper parliament to take over the proceedings for a day. carol: theresa may meeting with her cabinet, so we will see if anything comes out of that. know, ad curve, as we

big story friday, inverting the gap between three months and 10 year treasury yields negative for the first time since 2007, stoking recession fears. michael mckee has more on that. michael: do you remember "mad guessing -- "mad magazine?" what, we worry? that was the slogan of the magazine. that's what i want to say about the yield curve today. there are lots of yield curves, and one that most people on wall street follow is the white line. san francisco fed and others have said the three months 10 year is the one you really want to watch, the best predictor of a recession. and look what happened. it did go negative on friday just briefly, but take a look at this morning. this yellow line has gone back positive again. that is important. france or campbell harvey of duke university studied these and said a yield curve inversion

has to last for a quarter in order for it to predict a recession, not half of a trading session. let's take a look at whether the yield curve actually does predict recession. yes, at least if correlation and causation are the same thing because yield curves have inverted before the last seven recessions, but it doesn't mean a recession is imminent. when the inverted before the last two recessions, about nine months before the 2001 recession and almost two years before the recession in 2008. so don't change your portfolio based on the idea we had a short inversion of the three-month-10 year because it doesn't mean we are going to have a recession right away. it probably means the economy is slowing, and we already knew that. finally, you have to keep in mind that with the policies of my econ professors, this time it really is different. the treasury is selling a lot of

-- pushing up rates on the shortened. in previous recessions and previous times when the yield curve inverted, look at what the term premium was doing. it was way elevated. but right now we have no term premium. it is actually negative. that suggests it is much, much easier to get that 10 year rate below zero and have an inversion. it doesn't necessarily mean we are going to have a recession ahead. the markets are different this time, so what does it all mean? it means we could see market behavior based on fear of the yield curve lead us into recession, but it may be that the only thing we have to fear is fear itself. i might point out that pat harker of the philadelphia fed speaking in london, he said one rate increase this year is still justified. alix: thank you so much. bloomberg's michael mckee. brief yield curve inversion leads market participants asking

whether recession is really on the horizon. the answer depends on who you ask. >> the yield curve is flat right now. long-term interest rates have come down over a very long period of time, so it is not surprising. >> because of that negative term premium, the yield curve may actually be inverted, but that may be a relatively normal condition. >> there are a lot of reasons why yield curve inversion may not be a reception on growth at all. >> inversions are typically followed by a slow down. >> we see numerous occasions when the yield curve has inverted, some of which have preceded recessions, others which haven't. for me, in isolation it is not all that informative. >> it is very vapid news -- very bad news. this provides a production of recession, and it is a prediction that's been remarkably accurate. >> it is a signal a recession might happen. it is not a signal on win. with sylvia jablonski and

bryce doty. what do you do in your portfolio when you still have the 10 year at 2.49%? >> i think it is important that recessions happen so rarely and so short-term that you can't really make a statement about inversions ever. the mistake i think people make is that they think and inverted curve causes something, but you need to think what is causing the inversion. that is how you can think about what to invest in. the fed funds rate is higher than inflation. a higher thane tenure rate. this at mean we are headed for a recession? is there a certain amount of panic because there's an uptick in volatility?

certainly that is the case. we are not looking at a recession scenario where you are going to see a spike in defaults. , it is not amarket sky is falling type of situation. it makes sense to be a contrarian here and add a little to frisk, but in the stock market i would be the opposite. i would pull some risk off and move from may be stocks to credits in the bond market. . i think it doesn't really pay to extend. what are you getting? hardly anything. so you might as well ride it out for the next six to 12 months. carol: i am just thinking about maybe it is different this time around, but because we saw the inversion, we will have to see how long this lasts ultimately, but maybe it is different this time around. >> i think it is different. we have global slowdown, but positive momentum for some of those things to be resolved.

i would somewhat disagree and that i would probably allocate to equities. they don't necessarily go back in and buy, so looking at a portfolio and perhaps picking more quality, defensive names, late cycle performers, we are have low gdp growth, but it is a positive number and earnings are expected to be high single digits. you are not getting high sickle digits in fixed income right now, so i would probably pick my equity opportunities. in terms of the equity play versus the fixed income play right now? >> i do like the defense of equity tilt. -- i thinkigher there is going to be another step of capitulation here where that would be a great entry point. i'm not necessarily thinking

stocks are going to fall off a cliff or anything like that. i agree to the point that earnings are pretty decent, and that is why i like credit on the bond side. obviously as bond manager i am a little biased. [laughter] alix: but there is a broader into location i want to focus on. a bloomberg opinion piece yesterday said, "the more people misread the yield curve inversion as a signal of looming recession, the more stocks are likely to fall and volatility to rise, and the greater the risk of market liquidity." >> i agree with that. i think when you received was , investors just tend to behaviorally sell equities and you drive the liquidity and fear and miss out on potential rallies and breaks parts. alix: so when you see financial materials and energy getting hit

hardest on friday, what do you buy? >> i like emerging markets, artificial intelligence, some of the names that have been beaten down like biotech, for example. time is aotech at the bear trade, but after biogen news it might be a good time to get back in because they still have these fda approvals and games that are investing -- that are advancing. i thing i wouldn't go into high beta right now i think it is probably a little overvalued. think it is a i little different than technology. i would say i i could be the next tech run ash say ai could be the next tech run -- i would say ai could be the next tech run. you have 70 issues with the , butcy stuff and inventory

ai touches everything. you have factories, manufacturing and japan for the aging population, health care. ai touches everything. driverless car's. i think there's a massive amount of potential growth in that space. alix: we have auction supply coming online this week. what are we going to learn from that? >> it is going to be driven by stock volatility. if there is a relief from the mueller investigation and any breakthrough on trade, and it looks like stocks are going to stabilize, the auctions will go poorly. yields will be higher. there won't be that quality demand we saw friday. it is a lot of volume. so i'm a little nervous about that. carol: just quickly, what is

your focal point for the week >> the auctions -- for the week? >> the auctions are big. it is a ton of money coming in from the marketplace, so it is going to be interesting. >> china talks in april. we seen 150% to 200% turnover in our china funds. alix: that's a lot of movement. carol: thank you so much, sylvia direxiou, and bryce doty of sit fixed. we will have more coming up in today's wall street beach. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." coming up in the next hour, janice henderson's cohead of global bonds. ♪ viviana: i'm viviana hurtado with your bloomberg business flash. we begin with a bloomberg scoop. uber isillion deal reportedly set to announce. this would make it one of the most valuable tech startups in the middle east. canceled high-end dramas and comedies by youtube, according to reports, a step back from the

company's design on a pay service that features hollywood quality shows, due to the high cost to compete with netflix and amazon. brazil state prosecutors want to free $770 million worth of funds of the damages to dams increased. the world's biggest iron ore showed tons of output. alix: deutsche bank's rating at risk if it's commerzbank merger isn't completed. jp morgan prepares for a no deal brexit, pushing about 300 employees to leave london in the event of a no deal brexit. not going to say

this right -- a $3.4 billion buy an fund agreeing to u.k. based satellite operator. carol: joining us now is my partner in crime on bloomberg radio and "bloomberg businessweek" jason kelly. there's a plethora of stories. let's start with the wall street journal saying a possible merger between which a bank in commerzbank. jason: that's right. this is a complicated deal. it is the worst kept secret. the german government playing behind the scenes and the chancellor being like, whatever they do is find. we are not involved at all, which clearly they are. ist is becoming clearer credit rating potentially at risk, and also the investment bank. that is something very close to home on wall street. like, whatrzbank is

are you going to do with it, guys? we are a retail bank and you are an investment bank. i wonder what that will end up being if they drill down to talks. jason: it certainly seems to be coming to the fore. part of it is because the u.s. arm of the investment bank has languished a bit. they had a lot of departures, and it has not been the focus. but they all got their bonuses or something. carol: how can they get bonuses when there's so many troubles? alix: jp morgan activates a brexit contingency plan. jason: this is really interesting because with all the back-and-forth, and i feel like everyday we are talking about theresa may, if she can even speak at this point because she's hoarse from all the talking. this is something that banks have had to plan for.

what if this goes through? what if it goes through fast? jp morgan actually making bankers and staff sign contracts to say, look, if there's no deal, you've got to go. you've got to say you were going to go to another european country because we got to make sure our business keeps running. carol: i wonder if everybody is now starting to think we've got solid dates, kind of solid, would it comes to brexit. jason: and yet we still don't know what the brexit is going to look like. carol: here's a story that is right up your alley. private funds buying for $3.4 billion. jason: what is interesting here, there was an approach from echostar last year, and here comes this consortia of pension funds that say we will pay a little more because they got the money. the coalition is interesting.

you've got the canadian pension fund and ontario teachers, two very active investors and canada. pe funds and pension funds. alix: i also wonder the longer-term implications to a lower yield with a structural shift. what that does for private equity to raise even more money to -- ratchet? ratchet up the prices even more. jason: that is one of the big issues we've talked about.

the amount of dry powder out there for private equity, they are competing for it a lot. prices continue to go up, so it is harder to make money on the other side. carol: jason kelly, i will see later on. jason and i, of course, are on "business week" on bloomberg ready you. coming up, -- bloomberg radio. coming up, apple ceo tim cook said to announce the biggest change since the iphone 7. this is bloomberg. ♪

♪ apple having a big day, a vigil transformation. we are hugged me about a trip -- a potential transformation to streaming video, new

subscriptions. the bulk of the revenue is driven by hardware, but they are 1.4ing to really tap their billion users of active users. they are coming up against a lot of competition. we know there's ton of streaming services, so we will see what happens. alix: service revenue is up 19% in the past quarter, so it is actually growing. what are they going to do with pricing? originally if you were an apple user, it was going to be free. now that is not the case. will they let the service beyond other applications like a roku? they typically don't ever do that, but will they change their model? if not, are they going to be able to have pricing power? carol: from what i am reading, they are looking at amazon and their pricing model. i think it is going to be tough. ist is fascinating, tim cook going to take the stage at the tim jobs -- the steve jobs

theater, so visually they are showing why this is so important to the company. we will see if they can really pivot. alix: typically what apple has done is they wait for the first movers to do stuff and then see what went wrong and what went right. this is not dissimilar, but i wonder if there is a first mover advantage when it comes to streaming, like netflix, for example. that: they certainly did with the smartphone and have come out well. there are so many choices for users at this point, it is a pretty crowded field. alix: coming up, the yield curve inversion and what it means for the economy. this is bloomberg. ♪

♪ new york fed president charlie evans thinks fed policy

should be on hold until fall 2020, and could even be loosened if inflation expectations run roo -- run too low. sovereign yields are at their lowest levels in years as investors grapple with a short-lived u.s. yield curve inversion. presidentller clears trump of collusion, and william clears him of can obstruction of justice, but the story is not over. carol: we are making sense of the mueller report. the president claiming vindication, but in the meantime you've got congress and congressional democrats saying they are going to move forward with some other questions. the: president trump in white house yesterday waited until william barr came out with his take on the mueller report, and said, "total exoneration. keep america great!"

now the question goes to the democrats. in the market, it is kind of boring. [laughter] alix: friday was super exciting, and then we see a little softness in the equity market and bond market, a mixed dollar story as investors try to adjust to what that inverted curve means. yields are up by about three basis points. there were some slow down out of germany, but we came off of that. carol: let's get to your morning brief, focusing on the week ahead. it is a busy one. monday, israel's benjamin netanyahu meeting with president trump at the white house. french president emmanuel macron meeting with china's xi jinping on wednesday. on thursday',s the fed richard

claritin -- on thursday, the fed's richard claritin speaking. steven mnuchin and robert lighthizer are in beijing for the next round of trade talks. we will see if we have any more movement forward. alix: global bonds slipping today after a monster rally last week that saw the inversion of the three month-10 year curve. bloomberg's taylor riggs is here with a breakdown of all we've seen. taylor: in the bond markets, i would start with what you mentioned friday with the german ten-year yield thing into negative territory for the first time since 2016, and continuing to stay in the get of territory rallyafter a risk off into global bond yields. continued overnight and into the weekend in australia and new zealand, and over in japan. australia and new zealand bonds lower from anywhere to five to eight basis points.

japan continues in fully negative territory by about two basis points. -8 basis points on that 10 year. we want to highlight again that three month-10 year yield. that yield curve is what we can see dipping back into negative territory for the first time since 2007. we are getting a little bit of a lift today as the 10 year rises to about a 2.46, but every time it inverts there's a little bit of lag, and typically you do see a recession. it is probably more natural that yield curves are flatter because of structural changes with lower long-term expectations on growth and inflation. still, it is causing a little bit of attention this morning. alix: thank you so much. --did hear from bloomberg excuse me, new york fed chair charlie evans. here is what he had to say.

>> the yield curve is flat right now. long-term interest rates have come down over a very long period of time, so it is not surprising that yield curves tend to be flatter. anderson'sis janus cohead of global bonds. give us your expectation given where we were friday and where we are now. guest: i'm hesitant to comment too much because it is only a few days since it inverted. i believe this time it is different. the fed is looking to unwind arguably the greatest monetary policy experiment ever. they pushed interest rates up higher to 2.5%. nationally you had a lot of issuance and the longer end. there's a lot of challenges with respect to growth and inflation, not only for the u.s., but also globally. that's because yield curves to be flat around the world, and in this case to invert for a short time. carol: that is a good point

because the sitting to various coverage of the inversion of the yield curve, everyone is saying maybe we are getting a little bit of overreaction here. what should investors be focusing on instead? guest: i think the biggest their --marks around the biggest question marks around their our global growth. have political leadership challenges in germany, france, italy, the u.k., greece. like last week we saw the pmi's out of the region come out absolutely terrible, the markets in a spiral, the yields really crashing down, this is a situation we think the ecb needs to reintroduce stimulus at some point in time. then you look at the u.s., and the situation is not as bad. the fed has backed off future rate hikes, the inflation target

hasn't been met. the status quon where they can reengineer and make sure growth can continue for the coming years. in a bloomberg opinion piece, it said, "the more people misread the yield curve inversion as a signal of looming recession, the more likely stocks are to fall and volatility to rise, and the greater risk of pockets with illiquidity. seeingwonder, people headlines, are they getting more nervous? are they going to pull back when it comes to market participation? guest: we are anticipating that will happen. i've got to take exception. the reality is you are starting to see s&p revenue growth decelerate, as well as earnings growth decelerate. that is because of global economic activity, as well as trade slowdown.

so when it says it is flattening out in the united states and that is telling you the global growth environment is not everything you had been anticipating. we are moving up the quality spectrum and going a little longer on the curve to be more defensive. alix: that really also reflected in the overall global bond market. if you come inside the bloomberg, i will show you a chart of the negative yielding yielding debt. how do you make money off of this? guest: there's a reason why yields are going negative, because people are concerned about global growth. there's consistent stable income in the fixed income space, we are targeting opportunities we think have the best value. countries like australia and new

zealand that are posed to cut interest rates at some point, but also have yields. -- we eventually think the yield curve is going to steepen because of the fed looking to cut interest rates at some point in time, and also the fed pulling back the reins, but still focusing on maintaining growth and stopping equities to some extent, but ultimately -- and backstopping equities to some extent. when you look at the shape of the ocher being so flat come a week -- the l curve being so mitigate that interest rate component and still focus on income. we need to have a little bit of perspective to wait and see how this one rides -- oneing said that rides out.

having said that, is this time to adjust your portfolio? guest: we've been inviting investors to take a very active approach when it comes to fixed income. fixed income needs to play in innovative portion of people's portfolios and work harder. you can still get income, but you need to focus on high-quality assets in sectors poised for growth. you can focus on attractive countries like australia, new zealand, parts of the u.s.. we are looking forward to the next couple of months, when we can prove to ourselves that income can still be had despite the lower yield environment. alix: nick --carol: nick, thank you so much. joining us now is chad morganlander, washington crossing advisor's senior portfolio manager. how do you approach the markets right now? cautious are much more , much more balance. a little different than nick's viewpoint.

we would extend our duration and high-quality assets. we would go seven to 10 years on our duration and reduce the equity exposure on the emerging side. ours is probably the only group that thinks the dollar will continue to slowly strengthen over the next 18 to 24 months. it happens because the other trading partners are having much more of an economic slowdown and difficult time within their growth environments, as well as their monetary policy. ecb is going to be much more dovish than everyone is in his abating. it is all about china. don't believe the state's economic numbers. look at australia, look at germany. part of the reason you had such a massive selloff is because the germans were so poor is -- is

growth was so poor. have expectation along with the dovish behavior. alix: doesn't that prolong the cycle? is it too early to take on defense? guest: this monetary stimulus has not given the impulse into the global economy. also, just one other thing, you're turning around and seeing they are trying to get your arms around and shattered them over the next five to 10 years. what is good for china is to slow down that machine. that is not good for the developed markets, nor for yield curves. carol: in locations around the globe. thank you very much.

chad morganlander of washington crossing advisors is going to stick around. up next, trump claims vindication. robert mueller finding no collusion with russia during the 2016 campaign, but the political fight from that report is far from over. that is coming up next. this is bloomberg. ♪

alix: president trump claiming victory after the special counsel found no evidence of collusion with russia, and attorney general william barr saying there is not enough evidence to charge the present with obstruction of justice. joining us with more is kevin cirilli. i'm guessing you were pretty busy over the weekend. kevin: the president saying there is "complete and total vindication" on the point of no

collusion, no evidence of collusion found by special counsel robert mueller. fromess is returning recess, and democrats are suggesting that more investigatory work needs to be done. house judiciary committee chairman jerrold nadler of new york saying he is going to bring the attorney general to testify to find out firsthand why there was no connection made on obstruction of justice. democrats, including 2020 presidential candidates, are calling for the full and total relief of the mueller report. as wellhis, republicans as senior administration officials are breathing a collective sigh of relief, also suggesting this is an endpoint and time to turn the page. from here, prime minister benjamin netanyahu will be had to the white house, and he president will head wednesday to campaign in michigan the same day kiersten gillibrand of new york formally announces her presidential run in front of another that -- of none other

than trump tower in new york. morganlander is still with us. democrats are going to have a on. time moving how do you interpret the political fight over mueller, and how do you look at that as a marketer spent? -- market participant? guest: we are anticipating this will continue for the next several years i'm going into the election and postelection, but overall we don't think this is going to have any impulse on the u.s. economy or drag on the bus economy. mean forat does it other initiatives president trump wants to get through? guest: it is dead in the water right now until postelection. we are not into the dating anymore fiscal stimulus, and particular on infrastructure spending. are anticipating the deficit

will continue to stabilize at 5% , but will not be as its to because you would need to have an increase of the deficit to get a little more impulse in the u.s. economy. 2.2growth expectations are that little above trend evans thanks. five -- 1.25% is pretty. lousy growth. alix: what does that mean for volatility -- is pretty lousy growth. alix: what does that mean for volatility? do you play higher vol? how do you hedge it? guest: we think volatility will increase as you see additional watermarks of global celebration. we would be -- global deceleration. we will be much more careful to be in high beta equities. we would also be reducing our

small-cap exposure because of it being much more volatile on the equity side. alix: if you like the dollar, how do you then like, say, value international versus small-caps? guest: we would be well below our benchmark allocation when it comes to developed markets, as well as emerging markets. we would also then move up to more large-cap growth, as well as value. on the growth value side, we would be much more large-cap value in anticipating that multiple expansion we've had is going to be short-lived at this point. ? we have seen growth margin expansion, right? carol: we good sign -- have seen growth margin

expansion, right? that is a good sign. believe, will be a positive for margins, as well as maybe for inflation expectations. carol: chad is going to stick around, chad morganlander. coming up, uber's arrival in the acquireast, looking to a ridesharing utility. this is bloomberg. ♪

♪ alix: time for three companies worth watching this morning. a super interesting trading day. there was a huge stock decline for the equity, and then you had to have a pause in trading, and then it said it was potentially a fat finger. carol: i love that.

i love looking at these luxury stocks because you wonder what is going on, i'm but it tells you about the broader economy. alix: trading volume was almost six times the moving day average. carol: not a fat finger involved in this, but a pretty fat deal. billion to buy1 their arrival in dubai called kareem networks. this is kind of a departure from what uber has done. lyft is much more domestically focused. uber has been offloading their global presence and properties, so this is interesting. they are making a much more significant commitment to the middle east, where they've got some investors involved. that might explain a little bit of their move. alix: in some ways, it makes sense. they have such a hard time in

you have someone already operating. carol: i just think it is fascinating, especially as they move closer towards their ipo. real.m&a monday is still reporter: it is. a makerisher is buying of viral vector technologies in len and -- in gene and cel therapies to prevent sums a diseases -- prevent some diseases and disorders. bio actually has revenue, so about sevent for times their expected revenue this year. in thee to other deals

space, this is actually fairly reasonable. carol: there's been a fair amount of news in biotechs. guest: we are optimistic on health care, as well as biotech. we anticipate there will be continuation of m&a deals due in part to cheap financing that could issue some debt, as well as equity. we would be overweight on the equity side, as well as the credit side with health care. , how what kind of activity much more consolidation could we see in a space like this? reporter: you've seen a lot of m&a in this space, so this plays into that trend. if you think about it, celgene has a couple of drugs in the pipeline. a big deal with bristol-myers trying to buy celgene. if that deal goes through, you've got a couple activists trying to stir things up. alix: that plays into the longer

--carol: that plays into the longer health care trend. reporter: exactly. it is sort of a growth area, especially at a time when you have these alzheimer's drugs not being what people thought they would be. this is an area of slowing sales for some of the treatments out there, but there still a lot of promise, and the clinical data does support the fact that these drugs actually do work. alix: you mentioned the cheap money out there. when we see yields this low, do you expect companies to relet r evenen more -- to releve more with this? guest: no. what you had over the past several years is companies take back on leverage. i think we are getting to the end of that game. we do see that there will continue to be mergers and acquisitions to get a little more of an organic growth rate.

carol: is that also a sign we are late in the market cycle? guest: we are definitely late in the cycle. carol: we've been saying that for several years. [laughter] guest: investors are still positive on a 175% growth rate as their trend -- 1.75% growth rate as their trend. , brooke and a lot chad. thank you very much. coming up, after a 22 month investigation, robert mueller's report is out. we will talk the next steps and unanswered questions. this is bloomberg. ♪

alix: this is "bloomberg daybreak." i am alix steel. palm and the equity market after the action we saw friday. european stocks trading heavy.

dax one of the non-bad performers over in europe. coming in much stronger than estimated, that helped along the margins in europe. in other asset classes, i'll pause in the bond rally and weakness in the dollar could the dollar heavy. dollar index hitting session lows. .able rate up by .3 a vote scheduled in the house of commons to say how much parliament will take over the brexit negotiations. now are at 13 in the sentiment which leads you to believe how much you could take that inversion seriously when we're seeing a come back. carol: a very different feel in the market. let's see what is making headlines outside the world of business. viviana: sarah sanders says president trump would likely

support the public release of the robert mueller report. sanders telling fcc the president is more than happy for any of this stuff to come out. she called it a complete and total exoneration. alix and carol will have more on the investigation in a moment. --jinping is in france economic ties are at the top of the agenda. france hopes to secure an order from airbus jets from beijing. willes say emmanuel macron want better access to chinese markets. theresa may's cabinet pushing her to name the date she will step down. thisberg -- some believe will help the deal. tonight the house of commons votes on the steps, including an attempt for parliament to seize control of the proceedings.

global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. feel: brexit beginning to more and more like a shakespearean play. alix: sacrificial lamb. lead and we will vote for it. the cable rate hitting the highs of the session. carol: president trump political fortunes changing instantly following mueller's findings of no collusion. concerns are not over. joining us from miami is former u.s. attorney guy lewis who served as the director of the executive office for united states attorneys in washington. he worked with robert mueller, james comey, and ron rosenstein. delighted to have you with us. give us insight for mr. mueller and how he left it to determine the outcome when it came to obstruction. guy: what a weekend. in, atort that came

least as far as we know is a summary from the attorney general to members of congress. while maybe it is not a home run with the bases loaded, certainly , i believe after looking at it and trying to parse the words, it is a home run with two people on. it is as good as it can get in terms of the president and in terms of robert mueller's review of the evidence. then the attorney general and ron rosenstein review of the evidence over the weekend. carol: why did mr. mueller leavitt for mr. barr to determine the call when it came to obstruction? why did he leave that door open? guy: that is a great question. the attorney general indicates in his letter, and he quotes bob mueller, and he says it is a very difficult question of law

and facts. as a prosecutor who did this for a long time, politics and prosecution do not mix. they do not mix. they should not mix. you have to sit there and try to parse what does this mean, what authority does he have, what are the guidelines and terms of the evidence and then trying to weigh the evidence to see what the president's intent was. when you look at it, at least from the attorney general standpoint, when you look at it, it was not just the attorney general, it was ron rosenstein who had been criticized by the otherent, along with professionals in the department. they have come to the conclusion that on balance, there is insufficient evidence to go forward with any kind of obstruction prosecution. alix: you worked with robert mueller in the past.

can you walk us through what you interpret the process being. can you give us any inside information for knowing us for so long? guy: bob is unbelievably thorough. there is no question about that. go back a few years. bob was the chief of the criminal division when i was trying general noriega in south florida. he would be involved in the process daily. sometimes hourly. i went back. in terms of how long -- and this is just guesswork -- but i'm trying to put together pieces of a puzzle. the pen starr report was 400 pages long. i would be willing to get this report is at least that long. especially when you start considering the attachments. look at what they did. they interviewed over 500 witnesses, over 2800 subpoenas were issued.

they did hundreds of search warrants during the course of it. 40 fbi agents involved. ,302'shas to be a dozen the reports the fbar actions -- the fbi agents generate, i bet the report takes up a room. carol: how much do you think will be publicly released in how much can be publicly released? guy: another great question. here's what i think is happening. first of all, i think general bar, a man of incredible integrity who i worked with over the years. i take him at his word when he says in his letter that i want to get this out as soon as possible. i think he has marshaled all of the troops. they are trying to segregate out information that is grand jury

material, and are also trying to follow the departments rules where if someone is implicated but you are not charged, it is not fair to smear them in public. that was the problem with james comey, when he comes out and starts talking about all the evidence that is not public. all of these conclusions that are not appropriate to disseminate in public. not fair for someone who has been investigated and not charge to be smeared in the press. it is not fair. is goingeneral barr through that and trying to follow the letter of the law. i do think we will get something in short order. if i had to guess, maybe this week even, in terms of a redacted report that will be released to the republic -- to the public. guy lewis, former u.s. attorney for the southern district of florida. the focus on the mueller

investigation now joins to the southern district of new york. joining us is jessica roth, former southern district of new york prosecutor. walk us through what is on tap in the southern district of new york to move the story forward. are at least two investigations going on in the southern district of new york. the first involves michael cohen and the payments made women who alleged affairs with the president and michael cohen arranged for money to be paid. in the southern district of new york consider those to be violations of campaign finance laws. the southern district of new york has set in open court that president trump directed michael cohen to make these payments. if they pursue that further, that could be legal jeopardy for the president, would get into the question whether a sitting president would be indicted or this of something deferred until the president was out of office, and whether other people involved in the trump organization were part of a

scheme to orchestrate those payments. that is investigation number one. just the first one we know about. the second is into the inaugural committee and what moneys were coming into that, including whether or not any donations were being made by foreign entities, which is unlawful. also, he was being spent. that is an additional room of investigation. the southern district sent a wide-ranging subpoena to the inaugural committee. among the crimes that were cited included wire fraud, money laundering. that appears to be a wide-ranging investigation. carol: robert mueller's investigation started out looking into russian meddling in the election and then it branched out. themight we expect investigations in new york, for the same thing to happen? jessica: a good question. investigations have a tendency to open up, especially when you

have people like michael cohen who is trying to cooperate with prosecutors, who have a wealth of information about the trump organization, mr. trump, and members of his family. he can leave them in different directions. the documents obtained in michael cohen's office, those different investigations, as well as when the get the documents back from the inaugural committee. seeking to interview members of the trump organization about a range of topics. organization were involved in insurance fraud and tax fraud. all of these are directions the investigation could go in. alix: if the mueller investigation took 22 months. how long could this thing take? jessica: this could take years. 22 months for complex investigation of the type mr. mueller was invest hitting is not long. these could take years to develop. we are looking at several years further out. carol: is there consideration

that with the 2020 elections, they will do it six months before hand or have to wait until the 2020 election? jessica: prosecutors are not going to be sensitive to that -- they are going to be sensitive. there is a department of justice memo that directs prosecutors to be sensitive to things that could impact an election. the memo speaks about election related crimes under investigation. that has sometimes been interpreted more broadly to suggest you should not take any also be clearly doing their job independent of political consideration. there is tension there. they're trying to do their job without thinking of the political ramifications. when we get close to an election, they need to be sensitive to not doing something that would unfairly impact the election. carol: a fascinating story. jessica, thank you very much.

jessica roth, former prosecutor of the southern district of new york. coming up, apples pivot. the company expected to announce a move that will hit it against netflix and amazon. this is bloomberg. ♪

viviana: this is bloomberg daybreak. coming up later, lynn good, duke energy ceo. this is "bloomberg daybreak." boeing plans to meet with regulator, pilots, and technical leaders to explain plans for getting the 737 max 8 back into service.

the aircraft was grounded following deadly crashes in less than five months. the plane maker plans to hold an informational session on wednesday. a call fornk ditched investors to short the nations benchmark bonds after a rally said yields below zero for the first time since 2016. germany's largest lender recommended investors bid on rising bund yields. now it says it will reevaluate its outlook after week german manufacturing data boosted global debt market. -- traders in hong kong to work on its equities desk. stafferscoming after were pushed out in the wake of an internal investigation. the january probe examined whether traders properly exposed the banks financial interest while facilitating stock trades. that is your bloomberg business flash. carol: it is time for follow the lead, a deep dive into stories making headlines and moving markets with key insight from

industry veterans and insiders. today our focus is on streaming. apple is said to be announcing a shift in strategy as the couple announces -- seems to be ramping joining us is bloomberg news media reporter. services. let's start there. services being what? music, it is limited, the focus has been on hardware. , as myday could mean colleagues and others have been reporting, is potentially a shift toward subscriptions of news, original content, magazines, maybe even gaming. expensive. that is reporter: just looking at original content, it is probably

ankle-deep. alix: apple certainly has deep pockets. reporter: more than anybody else. more cash than hollywood put together. you see reports of $1 billion put toward it. you see report and you know oprah is doing stuff, they have the creme de la creme. alix: apple do not want to do netflix and amazon. does that pamper them or help them? >> if you see someone like disney, it has marble, it has star wars, so they bought fox for quantity and scale. what apple does not have is scale. the question analysts are asking is to they buy a video company or someone that already has content? i do not know.

that is going to be the big question and something i'm interested in. alix: great to have you here on set. good to see you. wolffre on apple, michael joins us from los angeles. great to see you. what is going to be the distinction between apple talking about being a service company and apple being a service company? michael: a big difference in terms of today. apple is able to offer its products exclusively. when you look at apple's previous forays into streaming, they were able to offer a service just as good as other services. apple music has the same 30 million songs that spotify does. when you're getting into video streaming, we are in a different world. instead of thinking about apple competing against netflix, we should think about apple competing against amazon. amazon has become the biggest seller of other people's services.

50% and infor over some cases even more of the sales of other services, where it is -- whether it is hulu or cbs now or hbo. in that fight, amazon has been smart in creating a user base. we are buying things on amazon. we are watching content. apple is doing the same thing. they have 1.4 billion in terms of user base. is this a move for apple to capitalize on that 1.4 billion? michael: it certainly is an opportunity. $40 billion in revenue, growing 33%. apple services have a much higher margin for apple. at the same time, this enables apple to take a share of other people's services. nobody is expecting that apple is going to launch their own

netflix killer. what there is an expectation for is in both video and news, for apple taking a bigger share of the revenue of the companies as it sells those services. alix: what is your best estimate for what kind of pricing power apple could have? michael: the pricing can be brought. is the need to look at extent to which apple is going to create a product and pricing that is simple. apple music has been a simple project. $10, all of the music you want. if you look at itunes, it is one dollar per song. we need to look for apple to do something simple. that is what everyone is expecting. alix: what would be a big surprise to the upside or downside based on what apple says today? michael: a big surprise would be of apple is trying to launch a netflix competitor. they said they are spending $1 billion a year on programming.

that is far less than the $10 billion a year netflix is spending. what is exciting to see is they are already producing programming for partners such as steven spielberg, who will relaunch amazing stories, or jj abrams, or new series with octavia spencer. many of those people expected to be there today. they will produce great programming. it is likely they will be selling other people's services. hard to imagine that apple is going to be a netflix killer or a cable killer. carol: do you think it is interesting there is a story about youtube backing out of plans to produce high end trauma. youtube is getting out but then you have apple coming in. ishael: what everybody finding is the huge expense of doing these new programs, especially if you do not have a library. if you look at the services, the leading services out there, you have hbo and showtime have

launched on top of netflix and hulu and prime. the next wave are likely to be the nbc service, which they are saying will be advertising, or the warner service. all of those companies coming with huge libraries. apple does not and youtube does not. alix: david solomon of goldman sachs will be at the event. what can we expect between the companies? a huge: we're seeing explosion of consumer digital financial services. it will not be surprising apple is launching not only a car but a set of services in partnership with goldman sachs. carol: is the news today going to move the stocks? michael: it is not clear. a lot of the market is already expecting this and as is typical with apple launches come --rybody already has

launches come everybody already has a sense of what it will mean for the company. alix: michael wolf, thank you for joining us. the aftermath. intercontinental terminals fire, the closure of the houston ship channel. this is bloomberg. ♪

alix: here is what i am watching. oil soaked water. since the aftermath of the intercontinental terminal fire in houston last week, the fire is out with the oil is now soaking into the water, closing the houston ship channel. that is where it doesn't major companies rely on the waterway to receive crude oil and the raw materials plus to send out roddick's -- to send out products. some vessels be allowed to enter a tributary. there is some relief. the overall route remains closed. carol: i have family down there in my look at these pictures,

this is not a source of drinking water, luckily, but in terms of shipping traffic, getting in and out, you're talking about problems. ,lix: you still have the plumes which is a refining byproduct. europe that issue as well as oil soaked water. is that going to materially impact the shipping? carol: and you do have people coming in down with illnesses have to be worried about the consequences. alix: that wraps it up for bloomberg daybreak. coming up with jonathan ferro, bob michaels, his take on the inverted yield curve. this is bloomberg. ♪

jonathan: from new york city for our viewers worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪

jonathan: coming up, the bond rally going global. negative yielding assets topping trend a lien dollars. u.s. trade officials heading to beijing. including a victory lap at home. mueller finding no collusion with russia during the 2016 campaign. 30 minutes away from the opening bell. futures negative. down to .1% on the s&p 500. the euro firm or after a decent german bit of confidence. treasury yields rebounding by a single point. a single basis point to 2.45% on the u.s. 10 year. we begin with global bond markets underlying concerns. >> seeing a big risk off scenario. >> slowing growth. >> worried about economic conditions going forward. >>