the fact that the pmi's were so weak. certainly added to the concern. if you look at the leadership amongst stocks, to still be they issue. top 25% of at the stocks in the s&p by foreign exposure they underperformed about 6% versus the 25% with the lowest overseas exposure, so this is still a trade war environment. scarlet: primarily a trade war environment, weighing on equities today. of course also some positioning before a three-day weekend, with some people probably not here tomorrow. but declines over 1% on all the major indices, the russell 2000 small caps down almost 2%. energy getting clobbered. basically a crash in oil prices today, down over 5%, west texas, all the benchmarks.

that is a asset class finally catching up to what other prices were saying. caroline: and the question is what was the catalyst today? yesterday we got the inventories. caroline: let's go deeper into market action with our reporters. abigail, what are you watching? abigail: back on that head and shoulders pattern on the s&p 500 which has progressed. more interesting is what it actually represents. this year we had the big rally, and some investors, the early smart money or those able -- willing to take a risk were buying early. adding trend continued, to the position, but the flattening out tells you not everyone was believing in it, so some people who bought low at the beginning of the year off of the lows last year are starting to sell. the people who bought less well, on the uptrend, but the people who bought well at the beginning of the year don't want to disrupt the profit picture so

they are selling slowly. here we have the third shoulder, we are likelyow, to see a breakdown below 2700, even 2600. the equivalent has already happened on the russell 2000. something to keep an eye, could be a bearish tell on what is ahead. sarah: i want to stick with technicals as well and move to the russell 2000. as scarlet mentioned, the russell 2000 down about 2% today, more than the major averages, the nasdaq, s&p, dow. throughell 2000 slipped the 50-day, 100-day, and 200-day moving averages, begging the question, where is the support, especially when small caps are supposed to provide a safe haven against trade? according to bloomberg intelligence, the safe havens we saw, in the beginning of 2018, may have actually been more due

to benefits from the tax cut, not from trade. so what we might be in for is more of a high risk beta trade like at the end of last year, and small caps could be in for more pain. romaine: the talk today on the conference call with best buy, shares falling about 5% today despite showing comparable same-store sales beating expectations, and reiterating its forecast for the year. but analysts on the call wanted to know how the company will deal with the latest tariffs. the company has had a remarkable turnaround, but the ceo is leaving in about three weeks, handing over the reins. this is as we have seen a lot more competition and more of a decline in the mobile space really weighing on earnings and the trajectory for margins.throw in trade and tariff issues and investors seem concerned. the company did not say specifically what they will do, but they said they will work with the trump to try to

minimize the impact of trade tariffs and hinted that they might pass on some costs to the consumers, and indicated they will be more heavily on some of their services like the tech support business that in theory should be more immune to trade issues. caroline: consumer takes a hit again. romaine and the markets team, thank you. our guest is still with us, and mike regan. want to get to your perspective, in what we saw with energy markets, the significant selloff. why the catch up today? >> if you look on a relative basis, energy stocks have been struggling very while. the s&p 500 energy sector relative to the s&p has fallen to new multiyear lows a week or so ago. so with the market down, that felt that much worse. throw on weak economic data on top, ok, the global economy

probably won't support energy prices. the political risk with iran, may be taking out on the market a little bit. put that together, and here is a sector that is in a multiyear lies have, and most ral been selling opportunities and continue to be. joe: volume on equities was lower than it has been lately, but not massive. and it felt as ugly as it got today, and of course a rebound in the final hour of the day, at no point did it feel the panic, capitulation selling that would mark a bottom. mike: that is fair. there's a school of thought that to complete a correction you need one really ugly day. and the fact it is not here is probably having people wonder if it is coming. i still think, when you talk about any of this, technicals and everything else, it is a watch every tweet, watch every

headline kind of market, and i feel something could turn it around quickly. so i think people are still clinging to hope that there will be some thaw intentions. obviously an insanely hard thing to protect when and if that will come. scarlet: going back to the idea that the trade war is the driver here. ned, how do you view the declines we have seen? of a correction in the s&p 500 for u.s. equities? ned: on an average year you have 3.4 corrections of at least 5% in the s&p. we haven't even had that to that extent this year. so this is normal, and in terms of small caps, as we talked about, they tend to be volatile, but there is a misnomer about their overseas exposure. the s&p 600 actually gets about

44% of profits from overseas, and the s&p 500 about 50%. a decade ago, that gap was much ther, so it really isn't domestic safe haven it once was. you aren't going to get that benefit. throw on a beta effect and the fact we are very long in this economic expansion and small caps are in a phase when they tend to trail. a lot of things among small caps are kind of working against them, which then means the direction isn't going to look as good because so many more large caps, it will make the average stock look that much worse. joe: as mike regan was pointing out, this is a kind of market where people are watching tweets, watching headlines to see if that could give a change in direction. is part of the market still holding out hope for some sort of miracle deal at the g-20, or has that view been pretty thoroughly flushed out?

mike: the way i would think about it, if we are getting a bigger correction, more than 10%, there needs to be more than just a trade war fear needs to be more than just a trade war. think about the fourth quarter. it started off with some trade war fears and the multinationals led to the downside. but it quickly spread. we had the fed, global economic concerns, government shutdown concerns, all these things added to it. so if we get that cathartic selloff, even just for a couple days, maybe we need something else to come along. maybe more earnings downside risk. if you look at q4 earnings numbers, those numbers look kind of high, and certainly you are seeing weakness in the u.s. economically, which could be a driver, but i think you have to look past the trade war and a couple tweets here and there to say we can get the final washout before we can move higher and break the head and shoulders pattern that could be forming. caroline: the one that abigail

was talking about. ed clissold, great to get your perspective, our very own mike regan as well. breaking news, earnings still coming out. hewlett-packard enterprise, not only beating in terms of overall second-quarter numbers, but the oksrd quarter lookahead lo strong, 44 cents versus $.41 estimated. adjusted full-year earnings per raising full year 2019 earnings per share outlook. this is after they just made a big purchase, $1.4 billion to buy supercomputer maker cray, so hpe firing on all cylinders. scarlet: the stock is up about 2% right now. that does it for the closing bell and for me, and romaine bostick and the "what'd you miss" team will be looking at tesla. this is bloomberg.

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♪ ♪ caroline: live from bloomberg world headquarters in new york, i am caroline hyde. romaine: i am romaine bostick. joe: i am joe weisenthal. caroline: here is a snapshot of the selloff in the u.s., the nasdaq off over 1.5%. stocks slumped globally as the world's two largest economies harden trade war stances. and billy nor david tepper -- billionaire david tepper ending his long career in investing to spend more time with his nfl team. defending the megadeal

before a key shareholder vote. we begin with the market in another ugly day for stocks. itss&p 500 on track for third-down week in a row. an equity strategist joins us from newton, massachusetts. thanks for joining us. what stood out? .att: number one of course, the poor numbers on the pmi side, not just in the u.s. but in germany and other parts of the world. but you also had, we had oil breaking down, below $60, kind of a round number. the market isn't always highly coordinated to oil, but it has been more recently. that didn't help. and the trade negotiations, we have seen a big change. people are realizing not only have trade negotiations, tensions risen, but they have

completely broken down, and it will be quite a while before this can get back on track. so i think people have to price in coming to the conclusion, i have to price things differently than i was thinking three weeks ago. romaine: so what exactly are the pricing in? slower economic growth? are they pricing in margin compression? what is being repriced here? thing we have to consider of course, we got new news. when we get a change in the facts, we have to change our minds. but when did this take place? it took place after a 25% rally, an all-timerket at high and people talked about a further melt-up, so sentiment was really strong. when you get new news in that, more than a 5% pullback should be considered normal. and the thing i do see, the fundamentals, the hold

uncertainty the trade negotiations, the break down of those negotiations brings out, what will happen in the second half in terms of earnings? a lot of people are looking for a big pickup in earnings in the fourth quarter, anywhere from 8% to 10%. with this uncertainty on the trade side, that makes it less likely and people talk about p/e ratios worse than they thought. caroline: is it time to look for opportunities here, time to start buying whether this is a dip, for putting your money to work? do you want to stay invested? matt: i don't think it is a time to buy the dip yet, but you don't want to be getting out of stocks, either. we were already looking for a 3% to 5% pullback in the market based on it just being overbought three weeks ago. but now that we have had a real change in the investment landscape, i think we will see something more. in today's marketplace where it is so mechanized, we always seem to overshoot in either

direction, so we could get even more than a 10% pullback. i don't think we will see the big 20% correction we saw in the fourth quarter, but what you need to do right now is set up in advance which stocks are your favorites and at which levels you would like to buy them, so if the market is down 10% you are not the one panicking, but the one who is prepared who can take advantage of a bigger dip that i think is coming. joe: easier said than done, of course. what if you knew that the trade war would go on for a long time, that there might be no resolution, might go beyond 2020, a real deepening of the tension between u.s. and china. how does that affect market strategy going forward? [laughter] matt: well, again, we are in a an unbelievable economic run, not just the stock market but growth of the economy. the problem is that this 10-year

expansion has really been a mediocre one, still the worst since world war ii even though it is about to become the longest. evaluations ast stretched as they are, if the uncertainty surrounding the trade war continues, i think you have further problems. it is not just worrying about higher prices to consumers, passed on to consumers, but also the uncertainty of business owners both large and small putting off capital investments, and it slows things down. it doesn't mean we will have a recession, but with the stock market as extended as it was three weeks ago, it could cause the market to pull back further than people expect. romaine: always appreciate your advice. matt maley, strategist at miller tabak. david tepper is trading his career as a hedge fund manager to focus on professional sports. this is bloomberg. ♪

romaine: billionaire david tepper has enjoyed two passions for most of his life, trading and football. paid $2.3fund manager billion for the carolina panthers and is ending his career in hedge funds to focus more on professional sports. o, he made kind of a big splash when he made this purchase of the carolina panthers? >> it was the biggest number for a u.s. sports team, $2.3 billion last year. romaine: but maybe at the expense of what is going on with his hedge funds? >> we should take a step back. david tepper is a legend in hedge funds, has been running this for 25 years, from working-class to the top of wall street. he has an $11 billion fortune,

may be time to think of what to do next, and maybe it makes sense to manage his own money. we can look at the reasons. onal footballti league team. [laughter] two, you don't want to be tied down by nagging investors month after month, a raft of other senior investment names like tepper who recently in the last few years have said we will return outside capital and just manage our own money. it's a big issue for these guys. them.it makes sense for joe: a lot of hedge funders did very well in the precrisis period, some of them did very well during the crisis period, and many of them couldn't find their footing when the crisis was over or could never find their rhythm. he did really well in all of the periods, which seems like a striking and unusual fact. >> this goes over 30 years.

he started his career at goldman sachs, the jon corzine era, made a ton of money and then set out on his own because he didn't make partner at goldman to start a hedge fund. during the crisis there was a bet on bank stocks that paid off in heaps for him. except for last year when he lost money, he has an annualized track record of 25% returns, which is pretty great but also gives you an idea of why he would want to return outside money because it is hard to keep up with that pace and show the same level of outperformance relative to others anymore. caroline: so now he can take his $11 billion and put it in a family office where he has more freedom. i'm interested in the carolina panthers purchase given that he's from pittsburgh. why the sudden affiliation with a different team? just glory that the hedge fund

managers are after? >> probably that that was the team on the block, my guess. [laughter] we don't know why he's doing this, but if he thinks it is getting away from nagging investors and focusing on football, he is in for a shock. he has to worry about cam newton's shoulder, somebody else's knee, somebody else's back, and from what i understand the carolina panthers are no new in the patriots. [laughter] joe: thank you very much. speaking of the ultra-wealthy, they have nearly $8 trillion hidden around the world. a french economist who advises elizabeth warren knows where to find it. joining us now, the writer of that bloomberg businessweek cover story. a know he's been writing for long time about hidden wealth and how the wealthy dodge taxes. elizabeth warren looked to him coming up with her wealth tax. he knows how to find it. where is it all? created,e's done, he's

found all these new sources of data. we have a pretty good sense of how much income people are making at the top, because they have to report their taxes each year, but wealth is really hard to find, really hard to estimate. rich much money they have. in fact, a lot of rich people don't know how much money they have. caroline:problem to have. [laughter] ben: so what he's done is created these new technologies for converting tax data into wealth data, and also finding macroeconomic data and estate tax data, putting it all together. picketty,ge is thomas the french inequality researcher, and he's really following in this. caroline: also coming up with policy prescriptions. advising elizabeth warren,

talking to bernie sanders, has backed aoc's 70% tax rate. what is his answer to the growing inequality? ben: his answer is really aggressive taxation. he consulted with sanders on a 77% estate tax, consulted with elizabeth warren on the wealth of, which is 2% on fortunes $50 million and 3% for billionaires, but year after year that could really have an impact on wealth inequality. he's also open to other ideas, much higher tax rates, because the goal is not necessarily to bring in revenue, but to stop extreme inequality and stop trends. romaine: but what is he trying to stop? is the idea that the rich are not paying their fair share of taxes by hiding certain assets, or is the idea that the tax system itself somehow maybe isn't enough? ben: it is both. first of all, he things we should be better tracking what wealth the rich have and should

be asking and demanding more information from banks and other financial institutions of what their holdings are so they can't get out of their tax burden. the other point, we need to just real concern is wealthy people can kind of tilt the world in their favor. the more wealth they have, the more they can buy competitors, lobbyists, pay themselves big wages as ceo's. so it is not necessarily about revenue, but controlling inequality. joe: how much can the u.s. or the u.s. president to unilaterally versus, to actually address the problem, some cooperation with other countries around the world given how much is about getting wealth from outside of their borders. ben: that is a good question. the u.s. has a different system, because when you are a u.s. citizen you have to pay taxes on your worldwide wealth.

a big problem with people leaving with their money and going elsewhere. taxabeth warren, her proposal says that if you want to move your money offshore, you really need to renounce your citizenship, and if you do you have to pay an exit tax, and it will be hard to come back here and run your business is here. the u.s. has some advantage in that, but yeah. caroline: fascinating read. these folks have a lot of freedom, and a lot of power to hire really smart tax advisors, so his point is we need to be aggressive cracking down on that. caroline: thank you for talking us through that. get his story in the latest bloomberg businessweek. coming up, major marijuana merger. guests join to talk about the possibility of their major

deal. this is bloomberg. ♪

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in need. live healthier, live happier, by resting deeper. get 15% off and two free pillows. go to leesa.com today! mark: i am mark crumpton with bloomberg first word news. as you saw here on bloomberg television, president trump unveiled his latest package to help farmers survive his trade war with china, including $14.5 billion in direct payments to producers. house, het the white said farmers can expect their first payment in july or august. >> we can make sure that our farmers get the relief they need, and very quickly. we will be taking in hundreds of billions of dollars in tariffs, in charges to china, and our farmers will be greatly helped. mark: american farmers are

struggling to remain afloat as the tariff dispute with china leaves soybeans from last year's harvest channing up. -- piling up. in missouri, first responders are going door-to-door looking for victims after tornadoes ripped through the state. twisters have spread across the great plains and midwest the last several days, along with violent thunderstorms that have led to widespread flooding. at least seven people have died. the atlantic hurricane season is off to yet another early start, but weather officials say it should be a near-normal year. the national oceanic and atmospheric administration predicted nine named storms, saying 4-8 will be hurricanes and 2-4 could two mas last year, florence and michael, who tog -- which together

killed 38 people and because $49 billion in damages. in a 18 count indictment the justice department wikileaks founder julian assange with receiving and publishing classified information. the new charges go beyond the initial indictment made public last month that accused him of conspiring with former army intelligence analyst chelsea manning in a conspiracy to crack a defense department compete or password. the indictment says assange's actions risked serious harm to the united states. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. caroline: we have some breaking news from the united kingdom. the u.k. prime minister theresa may will announce tomorrow her timetable to quit. for the, her plans are

u.k. conservative leadership race to start on june 10. she's meeting with the so-called 1922 committee, whose chairman is graham brady, a very powerful subcommittee in the conservative party. we will likely understand her exact view on when she will quit as prime minister after that meeting. as we understand it, june 10 is when the conservative leadership race will start. romaine: turning back to north america, a major potential marijuana merger between canadian canopy growth and american acreage holding, coming out ahead of a june 19 shareholder vote promising the merger will create the globe's preeminen preeminent cam cannabis company. murphyinton, and kevin join us. kevin, i start with you. one of the main criticisms against the deal for some shareholders who are opposed to

it is that once legalization sort of arrives en masse in the u.s., your company would be worth a lot more than maybe what it is worth today? kevin: i think my company will be worth a lot more in conjunction with canopy. my goal is to protect shareholder value, not only maximizing upside, but also protecting downside. this deal with canopy in many respects de-risks our business, and also fortifies our business immediately with the ability to access canopy's brands, their cannabis know how, their technology. they have spent hundreds of millions of dollars of capital building an infrastructure we can utilize right away, before we ultimately come together, so we have the opportunity to build this company, ultimately come together and be the global

dominant player in cannabis. joe: for people who haven't been following the deal, it is highly unusual because it could close over, how many years does it have to close, eight years? kevin: 7.5. joe: all contingent on marijuana being essentially de facto legalized or permissible at the federal level. what is a realistic timetable for that before the legal threshold written in the contract is met? kevin: it is a first time, really one of its kind. tothat is where we need educate the public as to what we are looking to accomplish, and i believe it will happen much sooner than people anticipate. of reason for that, 65% americans are looking for legalized cannabis, of which 56% are republicans. change seen a sea socially in the united states.

today 33 states have a medical program, of which 10 states have an adult use program. the amount of jobs we are creating, it is the fastest industry growth in the united states. and we believe it is going to happen much sooner, and i believe it is going to actually be a 2020 election-year debate. and i believe it is not whether you are democratic or republican, but who gets credit for legalizing cannabis. caroline: interesting. bruce, what is more interesting with the whole set up of the a filing you said you might get rid of that condition entirely, that it is bound to u.s. legalization, but that depends on the stock exchanges? bruce: the way that we set it up , the goal was to enter the u.s. the keyt in a way where actors -- we set two conditions. one if it is federally

permissible, but we also have the right to act if we want it, so if it became socially more normal or a bit more easy, we don't have to wait. that was important to us, because it gives us certainty this will happen, we just don't know the terms under which it will occur. romaine: i want to expand this away from just the merger. we had the farm bill last year , but thered farmers was the open question as how you deal with cbd, federal regulations. one week from tomorrow, the fda will finally take us up at the committee level. what are you expecting from this? will be get to a point even in 2019 where we get clarity? bruce: we have been pushing opposition, which is that if they continue to not regulate, the principal problem with cbd, does it come from the sources you expect? the fda has a safety obligation and should be stepping into at least regulate the process and

positioning. that creates a platform where you can use the ingredient to create outcomes that become registered medical products. they need to take that first step, otherwise we are stuck in that nowhere land. joe: speaking of cbd, we got news that square, the payment processor, will start for the first time facilitating online cbd sales. how slow or what progress are you seeing about cannabis just within the banking and financial system? because obviously that is a huge impediment to business. why -- it and that is is, and that is why safe banking, we believe safe banking will make it to the floor of the house this year, and we believe it will pass this year, and ultimately we believe it passes through the senate next year. safe banking, essentially a bill that will make it permissible for banks and insurance companies essentially bank the is nice.

-- the business. we need to take cash out of the system. we need to bank it correctly, and it is as much of tracking the capital in the space but also making it safer. people believe that these dispensaries have all sorts of for, that poses a risk folks working in those dispensaries. so it makes sense for this business to be banked. it makes sense from our vantage aint for ultimately it to be legal drug. caroline: bruce, going back to the merger. june 19 is when the shareholder vote is for acreage. as we know, one key investor, long-term since 2015, has said they are backing it. but there are some activist investors who are worried, the key issue that eventually acreage could be more valuable. so what is it that shareholders aren't getting?

we hear it is a de-risking situation for acreage, but what if you aren't about de-risking as an investor, but are about maximizing opportunity? they are getting cash upfront into their pocket, and over the next 18 to 24 months, we are lending them everything we have learned, everything we know. acreage, happen with they have all the tools and advantages to be the number one. i think it is the certainty of success, what will drive people to see that the combined entity will be globally dominant. you are getting exposure through this transaction, in 20 to 25 countries by then on the canopy side. this cranks up with medical claim files based on work, in germany, in canada, everything comes in as soon as it is permissible to the benefit of everyone in acreage. if you look at it, a chance of a big win and it all working goes through the roof compared to everyone staying on their own.

joe: thank you to acreage holdings ceo kevin murphy and canopy growth co-ceo bruce linton. now, tesla troubles. questionser raising of whether tesla can reach its delivery target, but still remains optimistic long-term. >> i am a believer into haslett. i believe they will in fact turn the corner and capture what will be a juicy growth curve around electrification of vehicles, which are 1% to 2% today and will eventually be 100%. but 2019 will be difficult. the demand question is quite critical. joe: meanwhile ceo elon musk seeking to calm the company and perhaps the stock with an internal email saying the company has a "good chance" of exceeding the record deliveries in the last three months of 2018. teslag us now, dana hull, reporter at bloomberg news. when this email leaked, it was on some chinese message board, a

photo of any male and was scratching their heads saying, is this real? but what was in the email, and how much does it differ with the increasingly pessimistic perspective that wall street is taking on the company? dana: the email is real the email is. it took news organizations like berg time to verify, but it is real, going off to all employees. it is optimistic, going, team, we can make it, we stand a chance of exceeding the targets. that is in opposition to the analyst warnings, dan ives, wedbush, more recently and famously adam jonas. this is as much of an attempt to stop the bleeding. the email definitely had an impact in stopping beside of the stock, and a message to employees that things aren't as dire as analysts might have you see. romaine: so let's talk about the

stock. this seems it was directed to a certain degree at the stock, and this is a country with convertible debt tied to the fortunes of the stock and compensation packages tied to the fortune of the stock. how much do we know about how much the company pays attention to this? dana: it is huge. tesla has 500 626 million dollars of debt payments coming -- 526 million dollars of debt payments coming due in november. we will not get those numbers until early july. the stock is a big indication of sentiment, and trading at its lowest level in over two years. when it is closing lower day after day after day, you have to do something to turn it around. it is important to know, stock is a huge part of employee compensation, with all the employees in fremont an nevada and elsewhere wondering what is happening, so it was intended to employees as much as the market. caroline: seemingly it worked,

because haslett bounced a little bit today. tesla bounced a little bit today. dana hull, thank you. coming up, indian stocks reverse gains and the rupee weakens. changed minds after the modi victory rally? this is bloomberg. ♪ bloomberg tv will be live in new delhi and mumbai to break down the numbers of the indian election.

romaine: prime minister modi declares victory in india as p, surged tohe bjo

a commanding lead, and the markets joined in the celebration. but they faded once they realized the domestic reality aat modi will face even with majority. we are joined by a senior counselor at the albright stonebridge group. modi has been in for five years, get a chance to do a lot and has another five-year term. what will his first order of business be? >> i think his first order of business will be to drive the economic growth and development ad promised right from day one when he came in in 2014. for thisbeen his plank campaign as well, very interested in seeing development of theg the lower levels indian population as much as

possible. but he's also very conscious that a lot needs to be done in terms of sustaining the economic growth that india has been able to maintain in the last few asrs, and to continue that the fastest-growing large economy in the world. so i think you will see a slew of economic reforms, and also a lot a focus on making it easier to do business in indiana. mr. modi has been personally tracking the ease of doing business index put out by the world bank, and india has already made improvements. i think he's going to try to push that further up in the ranking. when you see the scope of his victory, considered a landslide, how much can that be attributed to various reforms, the economy and so forth, versus the nationalist notes he played throughout the campaign? theath: i think the fact of

matter is that if you look at th e way the victory has been spread out throughout the country, including in states where mr. modi's party and the bjp are not in power, you would have to concede a lot of this has come from some of the reforms and development activity reaching the masses. there has been a lot of debate about that, but the truth of the matter is that you don't get this kind of mandate unless people are actually seeing the benefits of some of this, some of the programs he's launched. lot is think, while a also being attributed to his intent in terms of his vision for india, his pride in the country, getting people to believe in themselves, so on, i think partly there's also a contribution of the track record

that contributed to the landslide. caroline: of course, your role is helping businesses outside of india set up shop and make sure they make the best of opportunities. the world's fastest-growing economy at the moment. what one thing would you like to see happen that would make international businesses have an easier time accessing the consumer there, and perhaps bringing more wealth, more growth, more revenue? pramath: i think the one thing that we need to see in india is the development of infrastructure. if you talk to people who want to invest in india, or are interested, they clearly see the opportunity. it is an economy growing 7% a year, adding upwards of $200 billion to the gdp every year, so the opportunity is clearly there. i think that what often happens, once people are in india, they get frustrated because of problems with infrastructure. so i do think india needs to

continue to invest a lot in its infrastructure, whether that is power, roads, ports, aviation, and so on. romaine: thank you very much. ha, seniorng counselor at the albright stonebridge group. you can catch our special coverage of the indian election tomorrow at 12:00 p.m. hong kong time, 5:00 a.m. london time, 12:00 a.m. here in new york. this is bloomberg. ♪

caroline: artificial intelligence. let's talk about the future of it. i spoke about ibm's manager of watson and ai for -- about the ethics of more controversial uses of the technology. here is what she said. of truste four pillars grounded in the ethics piece. is it fair? is it explainable? is it robust?

visit accountable -- is it accountable? that means a lot about tracing. recently we were helping the european union on the recent guidelines around ai ethics they released. we are part of that, as well as a number of different programs around the world, to help agencies, customers and tech companies think about how do we use this technology in the best way we possibly can. caroline: does it need government regulation? important that we welcome government understanding it. that is absolutely critical, and that is part of where our work has been. how do we help governments better understand the technology ? and then that can lead to things like a national ai strategy. we have been part of advising the u.s. on that. as i said on the european union example with ethics, we have been part of that. those are ways that governments

can participate, and i think it all comes back to the point of how you get trust around the data and trust around what is happening with it. that's critical, and once that happens, then we will see even more expansion then we have seen so far, which gets us back to the $15.7 trillion opportunity. caroline: what aren't people understanding? what isn't the government understanding? the fear factor that somehow robots will take over, computers will become more intelligent than humans in some way take us out of existence? times whether it is government or anybody -- a lot of times whether it is government or anybody, the uninformed don't understand how it can help humans, which is what it really comes back to. it is about augmenting humans in what they do, and helping them be able to surface and understand more insights, have knowledge of a lot more things. caroline: that was my conversation with beth smith,

ibm watson data and ai general manager. amazon may soon be able to figure out how you feel just by hearing your voice, developing a voice activated wearable device that can understand your emotional state. it looks likent, quite a basic picture. [laughter] but it is a woman asking alexa, saying i'm hungry and the amazon ai seeing she is not feeling well and suggesting chicken soup. [laughter] .oe: there is a lot there romaine: there is? i am good at accessing my emotions. like i am good at contempt. [laughter] caroline: poor amazon alexa. joe: could probably do some good targeting. anaine: like you need emotional pickup and it orders flowers for you? caroline: puts on the right music. [laughter] joe: i think is a good idea. caroline: maybe restrain some of

the contempt in your voice. [laughter] caroline: that is all for "what'd you miss." romaine: bloomberg technology is next with an exclusive interview with facebook's vice president of global management. joe: have a great evening. this is bloomberg. ♪

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♪ ♪ emily: i am emily chang in san francisco, and this is "bloomberg technology." trade show down, the simmering dispute between the world's two largest economies taking a toll on markets and the global supply chain. has a "tech cold war" already begun? tesla continues to get pummeled by bears, one of them calling it a code red. can the company whether the storm?