15% off and two free pillows. go to leesa.com today! mark: i am mark crumpton with first word news. president trump announced a deal with canada and mexico that would scrap tariffs, ending a trade dispute that began when the president imposed tariffs on imported steel and aluminum. meantime, at an event in ontario , justin trudeau called the u.s. tariffs on steel and aluminum the biggest obstacle to ratifying the new north american free trade agreement. >> obviously these continued and our countermeasures

represented significant barriers to moving forward with the new nafta agreement. now that we have had a lift on the tariffs, we are going to work with united states on timing for ratification. we are optimistic we are going to move forward. mark: prime minister trudeau says the trump administration's national security justification didn't make sense and was hurting workers and consumers in both countries. missouri's legislature has improved a ban on abortions at eight weeks of pregnancy. republican governor mike parson is expected to sign. the proposed bad allows exceptions only in medical emergencies. comessery legislation after alabama's governor, k iv ri legislation comes after alabama's governor signed a bill banning abortion in almost all cases.

other states have passed bills banning abortion after a fetal heartbeat can be detected. assia can start voting again the continent's main human rights body, despite its 2014 annexation of the crimean peninsula from ukraine. votedn ministers overwhelmingly to support a declaration that says all members should be entitled to participate in the council's two main bodies on an equal basis. finland's foreign minister chaired today's meeting. he said russia says it wants to stay as a member of the council of europe. >> that means all obligations, including the payment fees, must be paid. so that is very clearly indicated they want to stay and that means they will fully follow all the obligations. mark: russian foreign minister sergei lavrov reaffirmed

russia's commitments, including paying the fees. he said russia values what he called the positive contribution that the council of europe has made to resolving humanitarian issues as well as improving russia's justice system. bloomberg has learned the white house is considering derek kahn for a seat on the federal reserve board. he is an undersecretary in the transportation department and has been a senior advisor to transportation secretary elaine chao. president trump has named four people for the two open seats on the board. none has made it through the senate. 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 mark crumpton. this is bloomberg.

caroline: from bloomberg world headquarters in new york, this is "bloomberg markets: the close ," and i am scarlet fu. caroline: i am caroline hyde. we have been from gains to losses. as we head into the weekend, people tried to dial back on risk. we really have seen even the most resilient stocks take a hit. beyond meet finally falls. the company has about 40% of its overall shares actually lent out to short-sellers, so there are a lot of people trying to bet against the free flow. this is one of the best-performing ipos so far. scarlet: bitcoin falling in line with other risky assets. for a while it seemed immune to the broader financial markets. we are also looking at the

two-year yield, the 10 year yield. the two-year yield unchanged at 2.2%, even as we see concerns about the trade tensions in different areas, whether it is , resultsice of deer indicating that farmers are delaying purchases because of trade concerns, or china with iron ore prices climbing because there is so much demand from steel mills. scarlet: highest level in five years for iron ore. caroline: let's check some of the key stocks to watch. jp morgan upgrading under armour to overweight with a $29 price target. citing difficult multiyear upside and growth acceleration. nvidia, lowering its price target. saying it's results were better than many feared, even without considering its outlook. the company reported first-quarter earnings yesterday

with unclear long-term prospects , but the stock rising and selling down 2.5%. reiterating its buy rating on pinterest. the forecast reflects strong momentum in the business. theanalysts also seeing stop decline as a reflection of the rally between its ipo and results. pinterest has been well received by investors, the stock rising earlier today, now off by some 13%. scarlet: let's talk about tensions in the middle east. white house officials telling reporters the trump administration is working to de-escalate conflict with iran, affirming president trump's position that he is not angling for war. for more, let's bring in bloomberg news senior white house correspondent margaret tops. when we heard the increased rhetoric from the white house on iran, should we presume it is

mike pompeo and john bolton who are driving that effort? margaret: you ask a question that should be simple and is actually very complicated. the administration led by president trump enthusiastically has sent signals in the last month, especially the last few weeks that have ratcheted up the decision to reposition the carrier complement in the middle east, the decision not to grant renewals on oil waivers, as well as pulling out of the iran plan. the pentagon discussions that were elite within the last week or so about contingency plans for the military. all of that has ratcheted up concerns on the hill among the republican as well as democratic party and brought up pressure for the administration to answer for what they are doing. you have begun to see it trickle onto the campaign trail into the presidential race.

all of that has gotten the president concerned because he ran as a president who said, i am going to get us out of conflicts in the middle east, bring troops home, focus on the u.s. he is sending mixed signals because he wants to apply maximum pressure on iran to force them to renegotiate an iran deal. at the same time, he doesn't want to end up with anything that looks close to a war, anything that involves kinetic movements, u.s. personnel. it is a difficult needle to thread. he is starting to realize just how difficult. caroline: how far do you think his saber rattling, as it seems, can go? before it drags something out into more turbulence or forces his hand to make clear how sound his threats really are? margaret: that's the real question. one question is the question of unintended consequences. could you have a gulf of talk and situation that nobody planned for where the u.s. is

forced to respond? andou put the heat on iran tried to force them to their knees with punishing economic sanctions, which there are some signs the sanctions are having an effect on iran, then you give iran more choices -- come back to the table and agreed to more of trump's terms, or create some violence with proxies in other countries in the region, yemen or portions of saudi, syria. if those are the choices, which choice is iran going to make? all of those are part of the calculus that the president and his team, including bolton and pompeo, have to figure out. they are looping some members of congress in on their thinking, but there is consternation from a republicans, who say, we are concerned iran is being a bad actor, you have to respond. but how much are you going to poke the bear? how much is the u.s. responsible

for ratcheting up tensions? it is difficult to calibrate how tough you can get away with being at still get the goals you are trying to achieve. it is not clear iran will agree to the changes the u.s. wants them to make under any circumstances. caroline: it is a fine line. margaret talev painting the picture of a fine line very well. coming up, the u.s.-china trademark is taking a toll on one of the world's biggest manufacturers of farm equipment. details on deere, next. ♪

caroline: deere is sounding the trade alarm, shares falling after the company cut its guidance. they pointed to concerns about export market access and near-term commodities and a delayed planting season in north america. the bloomberg managing editor of commodities is here. let's talk about trade.

was it just that the writing was so clearly on the wall that the stock fell off today? >> shares are down 19% since may 3, the friday before trump came out with tweets saying they would put more tariffs on chinese goods and everyone realized the trade talks were not going well. deere is not unique in this. for theirower demand products over the years the trade talks will not go well. deere is the biggest flagship for this kind of thing, so it is getting hit as it finally acknowledges after months of being optimistic that may be optimism was misplaced. scarlet: a couple of weeks ago, agco had given a pretty good outlook, raised its guidance. that led people to think deere would do something similar, because it is bigger. it is stunning how quickly things have turned, just on the

ratcheting up of trade concerns, which still could turnaround any day. it is the demand picture that is really of concern. tina: there were three reasons that deere gave the downgrade and the need to curb production. the trade talks, the demand for soybeans, and always the weather. the weather is usually the most important thing that farmers care about. if you are looking at deere, what they are citing his north american demand, the u.s. and canada specifically and large agriculture in particular. these are generally speaking the larger products we are talking about. caroline: it is interesting that trump today was giving a speech in front of realtors about said farmers back his aggressiveness when it comes to china. is there any evidence of that? we did hear about the fund helping farmers. is any of that placating the suppliers? tina: the payments that went out

last year were welcome by the industry, but what we heard from farmers is they want trade, not aid. a farmer is not going to refuse a subsidy payment when they are facing the worst crop prices in years. they are going to take that money. they don't necessarily want to be seen as being supported by the government, but we have not seen a huge drop-off in support for trump. farmers want him to resolve the trade as quickly as possible. scarlet: they want clarity. tina: as does the market. caroline: tina davis, thank you for bringing us your clarity. let's have a look at other market moves. nasdaq has underperformers through the day, but so is the emerging-market. the u.s. has been shrugging off the dove rhetoric from china, the focus on huawei. emerging markets have not. up by 1.6%. we have seen the move from the

yuan as well. scarlet: as we see losses deepen in u.s. equities, the russell 2000 is off by 1.25%, more than the big cap stocks, even though they should be shielded from trade concerns. ♪

caroline: this is "bloomberg markets: the close." always atoining us as this hour is joe weisenthal. there is a big gasoline phrase sentiment and how the market responded, which was positive. now we have turned south. joe: well off the highs of the day. what is striking to me is how dire the rhetoric has become from people who watch the china-u.s. relationship.

between the trade talks, trump's move against huawei, we are hearing a level of pessimism and seriousness that is very bleak. yet markets, although they are down, are not down by that much. 2.5% off of all-time highs? so it feels like the divergence between market sentiment and sentiment about trade ramifications are getting pretty extreme. caroline: the rhetoric coming from china has been dialed up. some saying it would be the most significant misjudgment since the korean war to see -- to think china is bluffing. joe: it is huge stuff. there was a jeffries note out today saying people are underestimating the significance of the huawei move, that it could have micro and macro ramifications from the different companies that work with huawei. everyone saying big stuff is going on. maybe markets don't care, maybe

in the worst case scenario it is not that bad. scarlet: it looks like markets care in the industries that are gaining and falling. what's advancing? telecom, health care utilities, food and beverage. these are the classic stable earnings. on the downside, chip companies, capital goods, energies. and a lot of companies caught in the crosshairs of global trade. caroline: chip stocks don't seem to have caught a break, particularly qualcomm, such a big supplier to huawei. scarlet: this gets my attention, the drop around 3:00 p.m. that prompted indexes to lean into the red. caroline: some questioning a key headline at that point, mike weekend came on at that point, saying risk off is the flavor. options expiring could have answered it. scarlet: about eight minutes to go before the market close. let's take a deeper dive with our markets reporters.

trend weam watching a saw last week, supercharged this week. it is the habit of us gapping lower for the open, then generally making gains. i want to look at how extreme that has been. the white line is the average intraday performance of the s&p 500 from open to close, and the teal is from the close to the open. lower, you can see how extreme it is and how different the dynamic is than the q4 selloff, when it was the u.s. selling during u.s. hours. this tells me what we heard about cash on the sideline being ready to buy the dip, that does exist. they are butting up against headlines that really seem to affect markets in overseas markets. abigail: certainly cash on the sidelines. the worst stock for the nasdaq

100 down 17.3%. this is the graphic dashboard function. these shares on pace for the worst day since 2008. they posted the first loss since going public, $.98 per share. you can see the average volume exploding up, 900%, more so than the 20 day average. the stock is at its low. the strength is getting this wrong. here if we take a look at valuation, basically in line with the group. anyway you slice and dice, a lot of banks downgrading the shares. shares getting hammered, down more than 16%, the worst day since 2008. caroline: we had a ceo saying it was a buying opportunity. analysis, let's bring in the cross asset reporter for bloomberg news. if you are a viewer, stop

messaging us in because you can't do that, as to why we saw the lower at 3:00 p.m. >> probably a mix of a couple of things. you can point to headlines, president trump saying the eu treats the u.s. worse than china. the fact of the matter is none of this is new. you would not expect this to move markets. right now markets seem jittery. it seems every headline we see feed through the market one way or another. at the same time up until this point, we have been talking about the resiliency of the markets, talking about how investors are surprised we haven't seen anything worse. still, largely people believe cooler heads will prevail, a deal will come through. so when you hear words like this, it makes you question it. joe: do you think people think that? it feels so many people are

pessimistic, but in terms of strategists on the street -- sarah: people are pessimistic in the near-term. people are shocked we did not fall more than we did this week and have clawed back so much of the losses. about looking out, every single strategist or investor i speak with, for the most part, maybe with the exception of two, truly believe we will get a deal, either before the g20 -- meeting or in the immediate aftermath. they believe one has to get done. they don't see how it possibly couldn't. i have been amazed at how positive people still remain for the odds of a deal to be completed. scarlet: let's bring in matt perrone, chief investment officer at city national bank. in this environment, i know you say earnings and data always matter, but do they matter as much when people have no clarity and trade headlines can move us

in any given moment? matt: certainly the market is choppy because of all the headlines. we recovered, we are back to the near-term fair value. we expected consolidation, a small correction. that would be normal anyway. then you add this uncertainty that we have with trade and you are set up with choppiness, volatility. the market needs to assess how bad it is going to be and find its footing. we think it eventually well when people get their arms around how damaging this will be. joe: why don't you think the markets are off more? matthew: because data eventually matters, as scarlet was saying. we have strong consumer confidence. the fed has stepped back. we have reasonable valuations, earnings growth accelerating a bit. dividends still in good shape. the the market here,

downside is pretty limited. caroline: it is interesting the earnings we have got coming out won't paid a pretty picture. we had deere, one of the worst performers. we have target next week. retailers seem to be voicing the alarm bells. scarlet: if we think about the 3 billion-dollar list released earlier in the week, more than two dozen pages targeted clothing and retail items. that goes to show how much some retail companies could be targeted. that's the divergence and the issue. today we get university of michigan consumer sentiment out, but that is backwards looking. we have some pretty nice earnings out of these retailers. out of deere, the numbers were strong for the past quarter. the problem is looking ahead because they are taking into account the changes that are going to be happening. scarlet: interesting factoid from dan curtis. he says this is the first friday

decline since march 22 for the broader market, the s&p 500. we talk about how people don't want to be long going into a weekend. they have been for a while. matthew: for years you always got paid to take risks in uncertainty, whether headline risk, d.c. clinical risk, concerns about the fed. every reason there has -- every time there has been reason to be anxious, you got paid for going short. there is no reason why this time is any different? matthew: not really. there is always the wall of worry. we have had to deal with these issues for years now. at the end of the day, what earnings are going to do is what is going to drive stocks. consumer confidence can be fickle. that is why we watch consumer indicators closely. to caroline's point, i think there is a dichotomy in the market and some are going to be impacted. if you want to stay with quality, dividend players, stay

out of the trade impacted sectors and stay on the safe side of the divergence. scarlet: that's what a lot of people are doing today with telecoms, utilities, food and beverage companies. caroline: chip stocks, the lowe, that is why the nasdaq is underperforming. scarlet: all three indexes finishing in the red, volume picking up when it comes to the s&p and the nasdaq. s&p falling pretty much in line with what we had been seeing the last 30 days. kathleen: small caps. joe: tesla down the lowest since december 2016, so that is one stock that will come by. [speaking simultaneously] joe: fred has got a cut. [speaking simultaneously] here is abigail. >> i am thinking about the

muslim is for the daily averages, the dow having his first decline since 2016, the the500 putting up -- one of first as we have seen that this year. we see a beautiful uptrend and that this stock, the s&p 500 is weekng its 15 greek -- 15 moving average. it is tending to get down to its moving average. that happened last year on the first quarter volatility. we have the s&p 500 above the 50 week moving average area that suggests the buyers are hanging in there, but let's see what next week brings. if it is below it could move pretty quickly. you could see a pretty decent move down but holding that, down two weeks in a row, so possibly bearish. let's look at the other asset class. bonds and sovereign bonds, these are sending the clearest alarm

this week even as risk assets were shaking off trade headlines. beyond trade and that place of safety this is the fundamental place. yields the u.s. treasury , and on the bottom, the global inflation to price index and teal is the global activity economic surprise index. both have been subzero for months and it reinforces that global activity, price pressures continue to surprise on the downside. even in the event of these trade tensions clear up, even in the event the fed starts getting back into the game, and if neel kashkari doesn't want a cut, you will not get one. this is what bond bulls have to fall back on, the fact of the world is not that good a place. scarlet: some dire thoughts there. joe: it is the only world we have. scarlet: think you so much. still with us is matt baroda of city national bank.

i want to pick up on the idea luke introduced. people are counting on the fed rate cut at some point. >> pricing in fed rate cuts, more than they have for the rest of this year, prior. what is really interesting is earlier this week when we got the weaker retail sales and weak industrial print, i was asking investors how are we moving higher than if the data matters? a couple made the case we are back in the regime where bad news is good news because this means not only will the fed potentially have to consider cutting rates but also as it relates to trade, if the chinese economy, weaker data, if the u.s. economy are both on shaky footing, that could also in turn put trump and president xi into action as well. they were pretty optimistic. joe:

dividend payers and high-quality companies. talking about rates going lower, how much in your view is that part of the case for them, lower rates and high quality earnings streams and the ability to maintain dividend? >> we are not in the fed rate cut camp. the futures with all due respect have not exactly done that right over the years. i would say we are in the camp rates will remain contained and low. credit,ividend payers, areas of the credit market, you can earn your coupon and that indicates a dividend payer should grow. we like dividend payers and the high cash flows that will grow. lower rates for longer whether there is a cut or not augment that. scarlet: you don't see the fed raising rates either. matthew: no. caroline: i asked for a viewer question area a terminal user is saying -- [indiscernible]

trump tweets. do you agree? sarah: they are asking if i agree? we have seen it in the past, seen trump tweets roil markets. president trump saying he would to 25%.riffs in 10 we did see futures markets opening up at 6:00 p.m. falling lower, and then when u.s. markets opened monday it was no one even cared. the fact of the matter is we have heard this before. a lot of investors i speak with, they don't want to be wrong going into the weekend. we think of last friday and it was actually a day we saw a gain last week. we are getting mixed signals but i have spoken with investors who say it is true. we have seen tweets over the weekend hit markets. [speaking simultaneously]

matthew: i have been glued to my twitter account. upi were a trader, looking for the weekend makes sense. volumes are thin, it will move things around especially market unclosed orders. don't read too much in to that. scarlet: because of tweet risk, what about beyond tweet? you have a lot of geopolitics to be concerned with, tensions between saudi arabia and iran. european elections are next week through the brexit situation has that not -- hasn't been resolved for years. no one coming up in her place. there is a lot to get your head around. we have had to deal with quite a bit of that for some time, watching any event that can be tail risk. is any of them something we want to say this is a reason to sell? we are not looking at numbers,

the u.s. is an insulated economy. we derive most of our growth from internal sources. we are somewhat immune. caroline: you say long overweight the u.s.? is it time to look at emerging markets? matthew: on credit markets you can look there for sure because you are getting good fundamentals, default rates are low. we expect that to continue. in their credit. isn't economies will be interesting if they could correcting for the long-term, we will see opportunities as well. joe: what will make you bearish? matthew: if we see the survey numbers differ and confidence dip and if earnings decline. if something is impractical enough to earnings -- impactful enough to earnings, it could be a misguided tweet, it could be from the fed -- we think the fed

was really getting goes to that potential policy, they walked to interact. incrementally we are more comfortable but certainly there could be another policy error. perrone of city national bank. news.e interesting goldman sachs is near a $2 billion deal for pnb hotels. for were trying to purchase 2 billion euros according to people familiar with the matter. company was bought for 750 million euros. it is not final. it is our reporting. it could fall apart. this is goldman sachs we are talking about. that does it for the closing bell, and what did you miss is coming up next where we will look at the medical risks from the china -- from china to the u.k. this is bloomberg. ♪

♪ caroline: live from bloomberg headquarters, i am caroline hyde. joe: i am joe weisenthal. caroline: here is how we closed lower. we had a down day on friday. joe: what did you miss? caroline: the trade war doesn't look like it is heading for a truce. across the atlantic theresa may's attempt for a cross pretty deal finally broke down. britain faces more political turbulence ahead. a fight, amazon

strikes again, sending waves across the food markets, i confirming is leading investment in the deliver root. it was a week of market rattling trade headlines and there is one measure rising consistently. have political risk climbed since december. here to take us how they calculate it, mark rosenberg of geo bond which attempts to fuse together political science and computer science. it looks like the lion on a chart was right because it showed risk in china rising since the beginning of the year and now it playing out. how do you manners -- manage something like this? political risk is a holistic combination of 22 different indicators.

that is something like trade risk or macroeconomic policy risk. it also includes a range of security risk, government instability, regime instability, other things political scientists know matter ultimately. hundreds of traditional inputs with thousands and thousands, a daily basis which combined into what you see in front of your. that mean you are looking for key things like chinese social media, things that indicate rising tensions? one of the stories has been the surge of nationalist rhetoric in chinese media. >> that is part of it. we keep that sentiment and integrate into more political science driven models that are ultimately based on political science. , but in terms of what we are looking for, ultimately it is

keyword-based. i would note a lot of the sentiment around china u.s. trade was positive and that is why our indicator particularly accurate now but beforehand, even after the december 1 cease-fire between president xi and president trump, we were forecasting china-u.s. trade dispute would accelerate. that is the case. caroline: are you surprised by the market resilience as you 69, at your measures -- looking at the brazil political risk, 71. is the market not factoring this in enough? >> political risk is not a generally leading factor of market interest. it compounds on economic data. that is the data that matters. when that starts look weaker, political data like ours or headlines that are risk off can

make matters worse. given the economic fundamentals continue to be decent, i agree there is some concern in the most recent data, but given overall relatively economic data, this will move the needle in the short-term but in the long-term not so much. one of the things that has been surprising to investors is from the u.s. perspective drama in d.c. hasn't been a market won thetory since trump election. people, whether it is robert mueller or turnover in the white house, this might cause volatility. it never has been an issue. how do people use your data, and how do people sort of make sure just because there appears to be a rise in political risk, it can signal what is useful for markets? >> with u.s. equity markets you are right. a correlationeen

since trump was elected and equity markets are not responding. in emerging markets there is a tighter correlation on the equity side and fixed income and currency. even in developed markets that is the case, what is going on with the british pound, going on in europe. we had seen closer links between market outcomes in fixed income and currencies, less so in equities and less so in u.s. equities which is a pretty large insulated market. caroline: looking at your risk quadrant for the u.s., it is 85. looking at china as well -- how does country compared to country? -- compare to country, when all of them seem pretty elevated? >> all of them are, at least the ones you are looking at. the sub indicators help in that and are broken into policy risk, social, security. a lot of those indicators are

what are more highly coordinated with the assets. comparing among those that provide variation. what is on the terminal is the risk given the range of geopolitical and political risk in those countries, they look like they are going up. the sub indicators are going down or have more diverse pathways. caroline: our thanks to sebastian galli for bringing this measure to our attention. thank you for having you, geo quant, talking about with a signal. now the other things straining the relationship, the trump administration moved to curtail chinese telecom companies. [indiscernible] in newecurity fellow america. is this problematic latest focus on huawei?

how difficult could it make business or the relationship with china? >> the first is an executive order which will give the commerce department broad authority to ban transactions adversary in the supply chains, targeted specifically at huawei but any chinese company, alibaba, could get caught up in it. and for more devastating to huawei, there is a ban on u.s. component sales. for huaweiifeline and will have ripple effects not just between the u.s. and china but in europe where they are reliant on huawei. joe: is this severe enough? they say it is a safe year move that any hopes of it -- a severe move that any hopes of a trade deal will not happen. there are two ways to look at

it. this will push the two sides even further apart and make coming to agreement difficult. the other view is trump is using this as a bargaining chip area putting huawei on an entity list [indiscernible] this is where we held the most leverage with beijing on any issue. there is an argument saying maybe they will come to the table because this is where it hurts the most. we will have to see. are you surprised that the market shrugged it off? what are the repercussions from china's side of the equation? we have seen the selloff in chip suppliers. samm: i think there is under appreciation in the market for how far reaching this can be. it is not just about who is selling to huawei and huawei itself, but is this the beginning of a decoupling entering the u.s. and china from a technology and economic

standpoint? there is an argument that you can't walk back from it. it is not just the trade deal falling apart, but are we looking at a world where technology systems are segmented by vendors? joe: given a major source of trade anxiety or tension between the u.s. and china is china's inclination to develop a robust homegrown technology industry, couldn't there be an argument to be made from the u.s. perspective, the cut off is good ? we are in competition from china. if we lose, it is bad, it cripples -- and this could cripple them taking part in the global technology system so it is worth it? samm: for years there have been market access issues and frankly u.s. policy has not been able to address this on any meaningful level. maybe now is the time to do it.

but the deeper fear is not only will it not fault structural issues, it is going to fuel china's drive to fully reduce alliance -- reliance on foreign technology in ways that could be more devastating to u.s. companies from a competitive standpoint. last year when we almost brought knees under aits similar order, it recalled china's reliance on foreign suppliers. cybersecurity policy and china digital economy fellow at new america, thank you. the crypto crash/. bitcoin losing its funding at the end of the week -- putting at the end of the week. this is bloomberg. ♪ ♪

jonathan: bank of canada governor -- caroline: the bank of canada governor is richer does restricting luggage restrictions. >> new borrowers are highly qualified and lower debts, lower levels of debt and as well on the housing side both toronto and vancouver, speculations come out of the markets so we no longer have the leaps in prices we had before. those two together both improve. caroline: you can see all of that at 1:30 here on bloomberg tv. feeling the impact of the trade war, the farmer manufacturer reported lower guidelines -- they could erode the share of market farmers, keeping them for making big-ticket purchases like

john deere tractors. bitcoin home the rally has come to a halt. it fell 14% before paring losses. it has more than doubled before today. [indiscernible] the reason why it roads and now many are trying to pinpoint the reason why it fell. this isn't your to date but we want to show what happened on a daily basis. when you look at in today movement, the big selloff -- hugeit crashed after a runoff, who knows. i think what it shows is still have broken and not liquid the market is. -- no one really knows the reason. it is still a we are market. caroline: it is -- a weird market. veryine: it is infantile one small thing can have a huge effect. joe: i would like to see the effect that had on options market. caroline: now coming up --

joe: amazon leading an investment in deliver growth.

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mark: i'm mark crumpton with bloomberg's first word news. president trump today announced a deal with canada and mexico to scrap major tariffs. while addressing the national association of really taters -- realtors, the president called on congress to act. hopefullyp: and congress will approve the usmca quickly. and the great farmers and manufacturers will make our economy even more successful than it already is, if that is possible. which it is possible. mark: candidates said in a joint statement that the u.s. would drop tariffs and canada would

drop retaliatory duties. event,event -- at an justin trudeau called the u.s. tariffs on steel and aluminum the biggest obstacles to ratifying the new north american free-trade agreement in both countries. when it comes to sanctions, china is in iran's corner. during a meeting in beijing, china's foreign minister voiced opposition to the sanctions and pledged to support iran's efforts to safeguard its interests. earlier this month, the trump administration revoked waivers on japan and several other buyers of iranian crude. the battle for cuba's economic features being waged on its beaches of resorts. the countries launched a full-scale effort to push its tourism effort higher peer the government has set a goal of drawing 5 million tourists this year. the trump administration is trying to scale back tourism to the island to hurt the cuban economy and force its government to sever ties with president nick limit -- nicolas maduro's

government. corbyn says it brexit talks are over. corbyn says negotiations with prime minister theresa may's conservative party have gone as far as they can. the prime minister had hoped to reach a deal that would ensure passage in parliament. lawmakers have rejected her brexit agreement three times. she puts the blame for collapse of the latest talks squarely on labour. >> we have not been able to overcome the fact that there is not a composition about whether they want to deliver brexit or hold a second referendum which could reverse it. mark: global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. joe: that amazon affect continuing. the company leading a $575 million investment in delivery. buying a slice of the

fast-growing food delivery start up and going head-to-head with smaller incumbents like takeaway.com and more well-known competitors like uber eats. let's get a read on the market with eric newcomer. is so hot and cutthroat right now. lots of players are fighting for it. lots of people losing money in it. on the hope that one day that there will be enough money. ipo: it has been the because ridesharing has slowed down growth. food delivery is where it was softbank,o come from, a major investor in uber. investor indoor -- -- in door dash. joe: tell us about delivery. eric: very european focused business. it had been in conversation with huber at one point about whether uber may acquire them. it seems like uber bought kareem and ridesharing and focused ther

e. that competition seems like it is going to continue. caroline: i can't tell you, it is the dominant force when you look around the u.k. streets. every single bike person seems to have a delivery kangaroo on it. they are a very oiled machinery. there was an interesting piece written by our colleague who was saying that amazon is getting into this and it is really smart from the perspective of food delivery companies. do you think eventually they will team up with delivery? eric: everybody is scared when amazon gets in your space. andn amazon's interest grocery, it makes sense that they are exploring the area and seeing how it plays out. there is always an interesting dynamic where when amazon gets in, and stockard, the startup competitor, positions itself as the tool for everyone else. there are these people who compete with amazon who are worried about giving them too

much power. it is early in the food delivery space. if they start asserting themselves, that would be a dynamic. joe: in the u.s., amazon has tried various things with food. none of them have really clicked. found thenot really thing that really works for them. eric: there is whole foods, but i think that strategy translates into their e-commerce expertise, i agree. it is in a trial phase. on uber eats several times before they stuck with their restaurant focus delivery model. i think it is a scenario where people will continue to experiment. we are seeing virtual kitchens, cloud kitchen. a lot of experimentation in this zone. caroline: credit where credit is due, delivery kangaroo came up with that concept of having these big out-of-town places that you can go and set up a restaurant. and it was clearly, because

restaurants -- you could go and set up or try out a new concept and it seemed that they would be iterating more on virtual restaurants and perhaps trying out new concepts. where is food delivery really going do you think? will we see delivery going public? eric: i think a big challenge is going to be how much there will be consolidation. we are talking about delivery from one place. in san francisco or new york, you will see different competitors. post mates is dominant in l.a. it is whether people can get it across cities or whether it will be small companies. joe: then we have the news that door dash was raising $500 million. how do they fit into the competition? eric: they have had the most growth from the independent third-party data we have seen. they really have come out of nowhere and given trouble for uber eats. i think softbank wants to make sure that they have that stake.

we do not know who exactly is going to fill out this $500 million round. there is a lot of questions we will have about the protections and everything because there have been inside investment in door dash. strong strong data -- a thing when uber has been challenged. if uber is getting hit on the public markets, how is door dash going to increase? i think its last valuation was $7 billion. a significant step up for a company that had been having trouble upping his evaluations. caroline: delivery has a raised 1.5. door dash has a valuation. uber and lyft went badly because they went private for too long. history repeats itself. eric newcomer, great to get your observations. coming up, prime minister theresa may has agreed to set a timetable for her departure as you kpn -- as uk pm.

more on the rocky road to brexit ahead. this is bloomberg. ♪ erg. ♪

caroline: let's get you a check on the latest business flash headlines. a new wave for church's chicken. church's- eight outlets will offer employees half their pay the day after their shift. the chain wants to roll out the practice. the restaurant business is being heard by a labor shortage they are getting crated with recruiting, hiring. starbucks rival sword in their trading debut in new york. it expanded the number of shares being offered and sold them at the marketed range. we asked the ceo if the trade war between the u.s. and china is having an impact. >> when we think about our model from a cost perspective, it does

not seem to have implications. from a consumer respective, probably a positive implication. that is not something we are focused on. we are focused on executing our model and growing the business. caroline: they have agreed to buy u.s. computer maker, the price is 1.4 billion. that represents a premium 17% above yesterday's closing price. strengthen its position in high-end computer systems. that is your business flash update. theing our attention to u.k., theresa may agreeing to set a timetable for her departure. what might a government under a new p.m. look like? wonderful to have you with us. the latest maceration's, we have seen the pound a selloff because the fear here of the business and investors is that we will see a more pro-brexit

heavyweight come in and need the conservative party. will that mean we get some more hard-line brexit eventually happening? heather: i think that is exactly at. i think the fear now is if parliament remains stuck, if it votes a down the week of june 3, the withdrawal agreement bill, they do not have a vehicle to prevent a no deal brexit. doesn't boris johnson win the conservative leadership contest, he would be perfectly outcome tolow that happen. this is why the markets are reacting so strongly. they don't see a way to prevent a no deal brexit from happening. weeks agoall several when i used to pay attention to this story, that people were saying look, it will be a soft brexit. that is the only way out. is it your view that that is probably the most likely outcome, a no deal brexit? heather: what i view -- when i

viewed this when theresa may historically lost the first vote against the withdrawal agreement, i thought ok, this is a time where the parties will come together. they have to find a way through it. what has happened over the last six months is that party is so much greater than country. both the, conservatives and labour party is to remain together. on brexitecision actually divides both labor and the conservative party. this is why i think boris johnson's potential leadership is so attractive. he is the one unique individual that can keep the conservative party together. that is a priority. not the country. caroline: they also have a threat on the brexit side of the equation. the new brexit party. we have these ridiculous strawman of a european election going on that the u.k. has to fight but will not actually have any mep's in the long run because they hope to not be in the eu.

nigel faraj is adding traction. is there an idea that he was drawing that division even deeper? heather: absolutely. not only will the -- will this newly formed brexit party win up on may 22,he vote nigel faraj has been clear he would like to stand as a member of parliament. he sees the brexit on may partyl domestically challenge the conservative party. it feels like we are doing groundhog day, the movie, over and over again. when david cameron said his view about having this referendum on the u.k. membership in the eu, it was to keep the conservative

party together. now it has manifested itself in the brexit party. we keep doing this over and over again. joe: we also had the recent council elections in the u.k. where the liberal democrats from my understanding were basically dead not long ago, they had a good night. his u.k. politics getting to saw about having this referendum on theu.k. membership point where the tories and labor are becoming this internally divided the relevant parties and it is the brexiteers on the one side and the old-school european-style brawls on the other side with more clean distinctions between them? heather: the phenomenon we see across europe is the established parties, the center left and right are hemorrhaging. people are searching desperately for something new, something different. that is why you see the extremes on the left and right mobilizing. in the u.k., because the center is collapsing, you are starting to see a reconfiguration of the center. whether that is the change u.k., so what you will see is what we are seeing in spain, and germany, and elsewhere. . . this political the point where the tories fragment. these two parties cannot really manage a majority anymore. you will have these multiple messy coalitions that will get harder and harder to get things

done. the u.k. has got to get this brexit deal done one way or the other. caroline: wow. a was not long ago we had successful coalition government in the united kingdom, formed by the liberal democrats. far messier will be than that and more parties in the work, talk to us about what will happen to the labour party. could they end up forcing the hand of a second referendum? could we see whether it is a black swan or not, an element that this whole brexit gets unwound? heather: right. you are absolutely right. has deeplyreferendum divided the labour party. it is dividing jeremy corbyn from a majority of his mp's. jeremy corbyn is very agnostic about the eu. he is trying to campaign for an early election. he really wants this issue behind him. but it keeps dividing labour greatly. there is panic in the labour

ranks, the local elections and next week's election will continue to show that there is some hemorrhaging by labour voters in the north and midlands. that is a place where jeremy corbyn wants to win back. there is going to be some panic that they have to get some clarity, the than on brexit party. as long as jeremy corbyn is at the hound, he will not make a decision and the party will continue to splinter because of it. caroline: groundhog day continues. heather conley, painting the picture for us, the worst effects of the g10's performance on the day and week. time for a look at what stories are trending across the bloomberg universe. more thantrump raised $5 million in new york city on thursday evening alone. the president accelerates his fundraising efforts with his 2020 reelection campaign ramping up. the dinner event took place at the penthouse.

has a story on fiat chrysler which is going high-tech. it has redesigned the pickup which features a apple inspired 12 inch touchscreen in the center console. the did -- the big display has helped at the truck line into second place. reportingtwitter is ghost kitchens are gaining popularity. designed to make food to go, these spaces have it no cashiers, tables, or sit in diners. ghost kitchens can cost half of the rent of a full restaurant. all of thosew stories on your terminal on bloomberg.com and at tictoc on twitter. the ceo of l'oreal says he does not expect to see any slowdown in china. he expects chinese sales to grow 30% for his company. he spoke to carolyn kunin from the conference in paris. >> i think we have seen a good thing.

will findntually we an agreement. but as you said, it would have a minimal impact for l'oreal. we usually produce locally in , so we will see. >> so you are seeing marginal impact in the u.s.? jean-paul: the u.s. market today is pretty flat. .hich is a big surprise the economy in the u.s. is very good as we all know. unemployment is good. but consumption is not very dynamic. i don't know if it is related to this, i don't think so yet. but it is true that today we are seeing a flat market in the u.s.. beene u.s. conception has flat, as you mentioned. there was a case last year in the first quarter. have you seen this situation improving over the laws couple of months? jean-paul: not really.

surprisingly again. we thought with a good economy, the u.s. market would be a good market this year. and that is not happening yet. but you never know with the u.s. market. sometimes it is unexpected. i am still confident that eventually things will go right. >> you don't think we will see any improvement in the short-term, especially with this new uncertainty? jean-paul: i don't think so. i don't think so. for l'oreal, we are completely global. asia has become productive for the first time in the history of the company. the number one region. we are doing extra while in asia. we are the number one company in asia but also growing a lot, not only in china, everywhere. india, malaysia, philippines, everywhere. this year, asia is going to become the engine of growth for l'oreal. andnd china officially,

china is on the lower side of this trade war. retaliating in the trade war. on you seeing any extension the luxury cosmetics of l'oreal in china? jean-paul: no. not at all. we don't see any slowdown in our business. consumption is still very dynamic, very positive. consumer sentiment is strong. so far, so good. the chinese market is very dynamic. >> what growth in china this year? jean-paul: very strong. last year we had plus 30%. not talking about the market, but the core business. why not the same? we are pretty bullish. takes also doing what it to build this growth.

we are really investing in terms of media, digital, content, recruitment. the growth fueling that we are enjoying. ceo of l'orealhe speaking to bloomberg in paris. coming up, the second leg of the triple crown is tomorrow as it is said to be run. the race will have a much different look and feel than the derby. we explain why next. this is bloomberg. ♪

derbyhe wildest kentucky in recent memory appears to have wiped out most of its key protagonists. the top four horses that crossed the finish line will not run the second life of -- leg of the triple crown. are who rode in the derby

aboard different horses. our resident horse expert joining us now. all of those courses everyone became familiar, they are all gone. david: they are exhausted. one came down with the cough. the owner of maximum security was disqualified. he is upset and bothered. he took his horse to the jersey shore and said i'm not playing with you guys anymore. another horses often until the summer. it will be -- caroline: another two dollar are aboard different horses. big-time bet. talk to us about the surroundings maximum security and how personally the co-owner is taking it. he is taking it very personally. i get how he is upset. he won the kentucky derby. you saw him up in the stands and he is taking it very personally. they were celebrating. they won the derby. it hurt a lot. he will not let this go. i don't think he will let it go for a while. he has a federal lawsuit going

against the decision. that will not go anywhere. but he is trying. ofhas challenged the owners the four horses he fouled. countrythey were celebrating. they won the derby. house, wore a foil come along range, he said i will bet you $5 million, head to head, you put your horse against my horse and i will be your horse. joe: i don't remember how your derby picketed, but who do you like this weekend and why? david: war of will will gallop. joe: why? david: he was too fresh in the derby. horse can have too much bottled up energy. i think that happened in the derby. he will be more chill on saturday. caroline: what is it going to feel like in terms of -- it is so wet and bogged down. david: sunny, high 70's. i think it will be a great day. caroline: david papadopoulos, we will be watching your calls. that is all from "what'd you miss?" joe: bloomberg technology is up

next in the u.s. caroline: have a great evening. joe: this is bloomberg. ♪

♪ emily: i'm emily chang in san francisco, and this is "bloomberg technology." america's push against why way and 5g escalates tensions between the u.s. and china. and 5gnst huawei escalates tensions between the u.s. and china. chinese state media sign of a lack of interest in talks. markets are still on edge after