taylor: coming up on "bloomberg best," the stories that shaped the week in business around the world. hopes of a u.s.-china trade deal are fading. tensions simmer as the two sides show signs of digging in. >> you will be spreading the pain across a whole swathe of consumer goods. >> the chinese have definitely been ramping up their rhetoric. >> those talks are not going to get back to life anytime soon, i think. taylor: parliament shoots down yet another brexit proposal from the u.k. government, and prime minister theresa may is not just down, she is out. >> it will be for my successor to seek a way forward that honors the result of the referendum. taylor: opec and its allies try

to maintain unity on production curves. india's marathon elections end in a sweeping victory for the ruling party. >> there are challenges that the economy faces that have not gone away. taylor: as eu voters head to the polls, leaders in finance speak frankly about challenges facing european banks. >> merger, consolidation, cross-border mergers are not easy, you know? >> you need to first have an integrated european market, otherwise it doesn't work. taylor: plus, the federal reserve releases minutes from its may meeting. top fed officials tell bloomberg what they think about the central bank's pivot to patience. >> i actually think that the policy course that we've done has been exactly on point. >> i am concerned that we are, we may have slightly overdone it with our december rate hike. taylor: it's all straight ahead on "bloomberg best." hello and welcome, i'm taylor

riggs. this is "bloomberg best," your weekly review of the most important business news, analysis, and interviews from bloomberg television around the world. let's start with a day by day look at the top headlines. this week began the same way that the previous week ended, with the u.s. and china growing more and more confrontational on trade, in both words and actions. >> president trump says he is very happy with the trade war and that china won't become the world's top superpower on his watch. these comments signal he is in no rush to get back to the negotiating table. this comes as top u.s. tech companies, including google and qualcomm, have reportedly frozen the supply of hardware to china's huawei. that is having an impact on trading in the asian section. why are they cutting off huawei? >> the commerce department has

effectively put huawei on this blacklist, saying any american companies that want to do business with huawei have to get a special license to do business with subcomponents of huawei, and they should start with the premise that they are not going to get it. >> we hear about the blacklisting, and companies are limiting the products and software they sell to huawei. are they doing that on their own, or have they been given an explicit order from the government to do so? >> they have no choice. for years they have been sort of lobbying for more protection from what they have said is chinese encroachment on their ip, but they really did not want things to go down like this. they want market access. china is increasingly important to these companies. this is not really what they wanted at all. >> china is warning it may step up retaliation against the

united states after president trump blacklisted huawei. this comes as other shoe giants are urging president trump to reconsider his tariffs on shoes made in china. >> certainly in the u.s. retail sector, if mr. trump does go ahead with tariffs in the next batch, around $300 billion worth of chinese imports, you will be spreading the pain across a whole swath of consumer goods -- toys, electronics, laptops, smartphones. that is why is the u.s. and manufacturers in china are warning the next step in the trade war could be the one that has an impact on consumer sentiment. >> the decisions to go ahead with the actions against huawei last week is very much related to the breakdown in talks with china, and it is a real sign that those talks are not going

to get back to life anytime soon, i think. >> we are preparing for theresa may, the british prime minister, to deliver a speech. the anticipation now is that she is going to say it she is going to grant mps a vote on a second referendum. throw of the dice. this certainly seems like a lastthrow of the dice. >> i do not believe this is a route we should take, because i think we should be implementing the result of the first referendum, not asking the british people to vote in a second one. but i recognize the genuine and sincere strength of feeling across the house on this issue. >> is there any way this withdrawal agreement gets through, do you think? >> no, no chance whatsoever. the labour party is not going to vote for it, the dup is not going to vote for it, so this is as dead as the proverbial dodo.

manus: the u.s. is considering curbs on as many as five chinese surveillance companies, potentially cutting them off from american components. these include digital technology and dahua technology. >> as i understand, the top three are really having to do with surveillance, including the uyghurs. >> and this takes us beyond the clash over trade. the idea that they have made surveillance equipment that has helped china suppressed by s means the administration has a potential to take action. and it does mean the potential for a long trade war between the two countries and what some are calling a new cold war, which might be the wrong name, but gives you an idea of where the two countries are going. >> china also digging in its heels as well, saying president xi jinping told the cheering crowd that "we are here at the starting point of the long march

to experience the red army's departure. of now,new long march and we must start over again. " >> the chinese are definitely ramping up their rhetoric while interestingly, donald trump has sort of stopped talking about trade. but this administration is full of surprises. just when you think things are darkest, there could be a breakthrough. i think the markets are counting on that. francine: theresa may's final shot at passing a brexit deal is coming under fire. the prime minister is getting pressure to scrap the vote and resign in today's. >> the reaction that was immediate yesterday after her speech in london did catch officials by surprise, and we heard michael gove, the environment secretary this morning refusing to confirm that the bill would actually go to a vote in parliament. so there is clearly a lot of thinking going on over the next few days. >> pro-brexit cabinet minister and leader of the house andrea leadsome has resigned from the government.

this is increasing pressure on the embattled prime minister, theresa may, to let go of both her e.u. exit deal and her role as the u.k. leader. >> the big picture is that theresa may is leaving, her deal is almost certainly dead, and therefore, i'm afraid, three years after the referendum, we are no further forward in deciding what brexit is going to mean, and brexit will be determined by the next leader of the conservative party. that is why the market is down . that is why the pound is dropping in recent days, because the market is bracing for the prospect of boris johnson or simon rob as prime minister. and the prospect that they might try to lead the u.k. out of the eu without a deal. the latest fed minutes show policy makers will be patient for some time, with inflation far below target. any surprises? kathleen: i don't think so.

i think we got what we expected. here is the key sentence. "members observed that a patient approach to determining future adjustments to the federal funds rate will likely remain appropriate for some time." again, the word, "patient," in an important sentence. also important in these minutes, of course, they said that many, obviously, not a majority many , means more than half, but many of the fed officials see the recent inflation is likely to be transitory, and basically, the patient pause persists. >> as we get ready for the three-day weekend, we are looking at a market that is in decline, equity markets, that is, and declines greater than 1% for all the major indexes. russell 2000, small caps, the worst performer. off by 2%. >> it is a nasty day overall. theink the overnight, rhetoric from chinese commentary in the state media -- it is getting pretty aggressive. on top of that, we had these fed minutes yesterday, and the latest and that we are hearing is that they are still on hold.

so i think, a little bit of disappointment coupled with the ratcheting up of trade tensions is an obvious equation for a risk-off day like today. jonathan: the u.k. prime minister theresa may announcing she will resign as tory party leader in two weeks. theresa may: it is and will always remain a matter of deep regret to me that i have not been able to deliver brexit. it will be for my successor to seek a way forward that honors the result of the referendum. jonathan: what next? >> we now have a timeline as to what is going to happen next. we know theresa may is going to step down on the seventh of next month, then we will kick off the process for the next leader of the conservative party, and ultimately, the next prime minister. that is likely to conclude by the end of july. so we now have at least a timeline with which the markets can now operate. >> a new prime minister does not mean fundamental renegotiation. that is the line that comes out from brussels today. if anything, if we do get a euro-skeptic prime minister,

that would make things more difficult in the eyes of the e.u., and would increase the probability of the no deal brexit. david: president trump has now at least opened the door for a possible resolution of the huawei dispute. >> it is possible that huawei even would be included in some kind of a trade deal. if we made a deal, i can imagine huawei being possibly included in some form or some part of the trade deal. >> does china believe it can win a technology war with the united states? >> we should not have a technology war with china, we should have cooperation collaboration between us. , >> what about a trade war? >> and never believed the term trade war is a good trade is one. about mutual benefit, war is about mutual destruction. how can you posit two opposing very different concepts in one term? >> do you think president trump and president xi jinping will meet in osaka at the g20, and do you think the teams will have

moved things far enough along to come to a tentative deal, or will it take longer than that? >> so far, there is no official discussion about possible meetings between the two presidents, but the possibility is always open. ♪ taylor: still ahead as we review the week on "bloomberg best," conversations with a pair of fed presidents shed more light on whether markets are pricing a rate cuts. and the former governor of hong kong shares his thoughts on the controversy over huawei. and up next, more of the week's top business headlines. the oecd puts out a bearish forecast on global growth and leaves no doubt where they put the blame. >> trade has derailed the global recovery that was going on in taylor: this is bloomberg. 2017. ♪

♪ taylor: this is "bloomberg best," i'm taylor riggs. let's continue our mobile tour -- our global tour of the top business stories. in australia, where the incumbent prime minister held onto his office after an unexpected electoral victory. paul: the australian broadcasting corporation saying scott morrison was able to secure a majority government after that unexpected win on saturday, despite trailing in most polls during the campaign. the liberal national coalition defeated labour in what scott morrison called "a miracle." >> it was a huge surprise on the night, and it has transformed has onlyrison, who been at the helm since august, into a conservative hero, a front-page newspaper come if you see that. it says "messiah from the shire." he did an incredible job during

the campaign in tearing down probably the most progressive policy agenda that the opposition party put up in decades, and clearly, that negative campaign strategy works for him. francine: indian stocks have reached an all-time high as prime minister narendra modi looks to win a single party majority. as results rolled in, the benchmark sensex index touched pass to the 40,000 milestone. this seems to be a pretty convincing win for narendra modi. >> exactly. exit polls that came out earlier this week have predicted a landslide victory for modi with an average of around 300 seats in this 543-seat parliament. modi seems like he is going to pass that optimistic assessment. it looks like his ruling coalition could get around 350 seats, which is actually more than he won in 2014.

the euphoria around his landslide win not last long, with stocks and the currency sliding on thursday after rallying to records. niraj: the euphoria yesterday was largely sentimental, the way the markets moved, but i think come this morning, reality has set in. it is bad news for companies and for stocks. thee are still challenges economy faces that haven't gone away. firstly, india is faced with the prospect of slowing growth. all indicators show the economy is slowing down. the second thing is jobs. all our problems that need fresh thinking the u.s. -- by the administration, and quick execution by whoever is in charge of the finance ministry. rishaad: from india to the indonesian presidential elections, the losing candidate has launched a legal challenge to his loss to president jokowi. -- joko widodo. jakarta, asoss

protesters clashed with police. hundreds have been injured in the worst political violence to hit the country in decades. what about this challenge from jokowi's rival? is there any chance of it succeeding? >> if you look at the official results, he lost by a significant margin. we are not talking about a close run thing. his allegations of electoral fraud and widespread cheating have not been substantiated yet. independent observers have dismissed the claims. i am not a legal expert, but all signs are this challenge is unlikely to succeed. vonnie: opec and its allies meeting over the weekend in saudi arabia to discuss everything from production to iran, while the saudi energy minister urged opec plus to slow "stay the course on output cuts."

>> we are going to take a month and next to month in our own, and hope our other colleagues will do the same. and not jump the gun. >> the meeting in saudi arabia was laying the groundwork to see where people were thinking ahead of this june meeting, where they can decide to extend the production cut or get rid of it. and right now, it is very clear from khalid al-falih that they want to stay the course. it sets up an interesting scenario in june. on the other hand, alexander novak -- while he did not say either way, he said russia would comply if they struck a deal, but he did seem more keen on easing the cuts and producing. >> we are keeping a close eye on oil, because the losses today are pretty notable here. the worst daily performance of the year as matching trade -- as amounting trade tensions between the world's biggest economies sent investors fleeing from all kinds of risky assets. what is curious here, there is not a single catalyst for today's drop. the inventory reports, showing plenty of supply in the u.s.,

came out yesterday. >> i mean, it feels like it has been a slow accumulation of bad news in the markets, which began on friday. we got our first number from the cftc, indicating they were no longer adding to the long hedge positions. then this week, there has not been anything notable, there has not been a huge problem with -- been a huge problem in terms of a down signal in the demand, or something signaling that some thing horrible is about to happen, but it has been a steady drip of bad news. and the trade war rhetoric being up gives the market some concern about the global economic demand going forward. >> the oecd forecasting global growth slowed only 3.2%, well over the past two decades. >> and her husband to intentions, and we really think that trade has derailed the global recovery that was going on in sync in 2017. >> we ran various different trade scenarios through our

model of the global economy to try and get a sense of how big the costs could be and where could they fall. our base case is now that we stick with the 25% with the u.s. tariffs on $250 billion of chinese imports, plus the chinese retaliation that has already been announced. on that scenario, we would see global output, global gdp down by about .3% in 2021, relative to the baseline of no trade war. now, if trump follows through on his threat of tariffs on all trainees imports, that amplifies the impact. in that scenario, we are looking at global output down by .6%, about $600 billion. ♪

♪ taylor: you are watching "bloomberg best," i'm taylor riggs. plenty of fed speak for investors to absorb this week the may fomctes of meeting, to a speech by fed chair jerome powell, giving a mostly upbeat economic outlook. and several top central bank officials spoke directly to bloomberg television. federal reserve bank of st. louis president james bullard sat down in hong kong to discuss the fed's rate path in an exclusive conversation with bloomberg's rishaad salamat. ♪ >> rates are at a place in the u.s. right now. if anything, we are a little bit restrictive, i would say, and i am concerned we may have slightly overdone it with our december rate hike.

but i was pleased that the committee pivoted. the current projections from the committee are for the policy rate to remain flat during 2019. we have got very low inflation numbers, low inflation expectations, that is a bit concerning to me. i think that could be used to justify a rate cut at some point. rishaad: markets factoring in perhaps one, even two? >> here is the thing about that issue, we have had two years of great upside surprise in the u.s. economy. growth turned out to be better than we thought, employment lower than we thought, and yet inflation is really not at our 2% target based on our preferred measure, which is this core pce inflation year-over-year, which is only 1.6% right now.

i think it gives me pause that that is so low, and it gives me more pause that the inflation expectations are below our target. so why aren't those centered at our 2% target? i think we can take this opportunity, maybe, to try and we center our inflation expectation at the 2% target and gain credibility for our target. rishaad: there was a newspaper interview recently, you used the term persistently 1.6%. what is the definition of "persistent?" one month, four months, one year? >> at a minimum, you would like to see what the first and second quarter of this year brings as far as inflation news, and we won't really have all that information until you get to the august-september timeframe. it could be there is just noise in the data. it is always possible. this thing might bounce back and you wouldn't worry about it. but if it doesn't, and it looks like we're going to miss our inflation target again in 2019,

i think that is what looks very concerning. rishaad: miss it to the downside? >> yes. miss it to the downside. really, inflation has been below target since 2012, more or less, consistently. why is that? it seems like we should be able to hit our inflation target over that long of a time period. so i don't want these inflation expectations to get entrenched in the u.s. economy and globally. they both the inflation target is only 1.6%, which has been the average inflation rate over the past several years. taylor: james bullard wasn't the only fed president to go one-on-one with bloomberg this week. coming up, a conversation with raphael bostic of the fed bank of atlanta. she officially asked me how the scales are, i don't think like for me they are tilted more of a cup than the hike, i think we are pretty much in balance. taylor: plus, regulations have european banks in a bind.

prominent executives explain why they are feeling the pain. >> europe has been hesitant to allow the government of deep capital markets like we have in the u.s.. taylor: this is bloomberg. ♪

at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity. ♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond.

taylor: this is "bloomberg best," i'm taylor riggs. let's get to another perspective on monetary policy from another fed insider. federal reserve bank of atlanta president raphael bostic told michael mckee this week that he's not ready to get off the fence when it comes to the fed's next move. >> i am not in the position right now where i think a move in one direction or the other is more likely. there are a lot of risks out there which, if they come to fruition, might have the economy weaken. if that happens, a rate cut might be appropriate. but there are a lot of sources of uncertainty that if they

resolve in particular ways, the economy might get stronger, which could suggest we might want to do a rate hike. right now there is still uncertainty. so it is hard to say what the next move will likely be, but i am certainly not in the case where theou ask scales are, i don't think they are tilted more to the cut than to the hike, i think they are in balance. >> monetary policy works with long end variable lags, as they say. so do you think the december rate hike was justified? could it be a mistake? could the fed be slowing the economy as the year goes on? >> i actually don't think it is a mistake. in my mind, i was very supportive of the cut in december. i thought it was going to be the last one probably, then we would have to see what happened in the economy. when i talk about the arc of my

policy, it really goes to the feedback i was getting from businesses. early 2018 businesses were excited, they were energized, they had just had the tax reform. they saw a lot of possibilities. when i got to the middle of the year, about september, businesses were telling me something very different. they said they are comfortable. we are going to move on, but there is uncertainty in 2019, and you guys might want to hold off for a bit. that became a common theme for what i was hearing. i listen to them, frankly, and i said in 2018, you guys are good. 2019, we think you should take your time and don't be rushing to a number. that's pretty much how we are operating. so i think the policy course we've done has been exactly on point. i think the economic performance would bear that out. we have seen growth continue above the long-term trend, and we haven't seen very much inflation as well to suggest the economy is overheating. so i think we are in a pretty good place. taylor: european banks remain under pressure, with growth languishing, brexit looming, and

the ecb showing no inclination to begin raising rates. several leading executives joined bloomberg television this week to talk about the future of banking in the region. blackrock vice chairman philipp hildebrand spoke exclusively with francine lacqua about the importance of forming a european banking union. >> being a bank in europe is tough at the moment. scale is one of the answers, but it is not the only answer. you have to have the right, the appropriate business model. but i think all countries should recognize that, for their own respective banks, to operate at scale across the entire european market would be a tremendous advantage. it would also allow shifting the focus away from being too exposed in the u.s. and having more of a scaled up, huge market that you could tap into at the european level. >> this has to be cross-border, right? >> absolutely.

>> do you have to do domestic champions first? >> no, i don't think the journey has to go by domestic champions. you have to first have an integrated european market, otherwise it doesn't work. and then you have to have players in the starting position to move into that market. and they will tend to be the biggest domestic players currently. but i don't think we need to think of it as first being a domestic champion in order to be a european champion. it's about being well-positioned and having a market that is open and integrated so you can operate to scale and make the investments that will be necessary. it will be very large. think of retail banking, i.t. -- these will be very large investments, so you need a market of scale to make the profit. >> i think ecb is right when they say that there is a need to continue to restructure the banking sector in europe. there is a need for it after the crisis. it is not yet over in various countries. at the same time, a merger,

consolidation, cross-border merger is not easy. you need a business case. business case is difficult in the current environment, flat interest rate curve, fiscal requirements. business is not so easy. so it is risky, people have to make a clear assessment of the situation before making a decision. this is what we've seen in the recent case of deutsche bank and commerzbank. so it takes time, and you need a business case to do it. >> ok, so if the german government picked up the phone and called you and said, are you interested in commerzbank? the answer presumably would be no. >> the answer would be no. >> is there any banker in europe you could see any advantage with consolidation? >> i say no, but at the same time we are consolidating market shares, which is a different notion. you have the consolidation of entities, banks, but it grows in germany. we have good clients and are happy growing the business and activities in germany.

that's the big difference. market shares and entities. you can grow the market share, you know what to do, you can measure your risk, you can assess it, you can lead the process. acquisition is more difficult, more risky, more challenging in the current environment. >> 10 years on from the crisis, the fundamental issue for european banks, in my mind, is really two pieces. one is they still have balance sheets that are not ready to start lending and to play their role in driving economic growth and lending to small businesses. and two, europe has still been hesitant to allow for the development of deep capital markets like we have in the u.s. so much of the risk ends up on the balance sheets of the banks. what we look for over there is, can we find institutions like proxia, the bank in greece, that doesn't have legacy loans? if you can find a place to start without legacy loans and without legacy technology, the ability

to bring the technology in and develop a digital offering is better than it has ever been for all the reasons we know around the development of technology. so banking can be a good business, but the negative interest rates are a damper on profitability in any financial institution. taylor: now to another exclusive interview focusing on asia. chris patten, the last colonial governor of hong kong, discussed a range of topics in an extended conversation with our correspondent. he began with blunt comments about the territory's proposed extradition law, which would allow people to be sent to mainland china for prosecution. >> what the extradition law does is destroy the firewall between rule of law in hong kong and what the chinese diplomatically

call rule by law in china, and that means that there is no real distinction between the courts, the security services, and what the party wants to happen. so it's not surprising that this has caused as much alarm as it has in hong kong. i think it's the worst thing that's happened as far as the communists in beijing are concerned in hong kong since 1997. and what it raises is a fundamental issue for all of us. people talk about china's role in the 21st century, but the chinese have yet to prove that we can trust them, and if they break their word over hong kong, where are we going to trust them? >> huawei specifically, when it comes to the u.k., do you think they can be trusted enough to be a key player in british 5g? >> i don't know whether huawei can be, but if it comes down to whether or not you can trust china, the answer is no, you can't. so i hope that people are

prepared to separate huawei and huawei's interests from china. whether you can or not, given the rather murky issues of the ownership of huawei, it will be a really important and challenging question, which we will have to discuss over the next weeks and months. i'm not sufficiently knowledgeable to be able to comment on the relationship between the core of 5g technology and the sort of fringes. what i can comment on is a simple fact that china can't be trusted. ♪

taylor: this is "bloomberg best," i'm taylor riggs. let's resume our roundup of the week's top business stories with a focus on company news. earnings season is winding down, but there were still reports

this week with important implications for investors, including results from some heavyweight u.s. retailers. >> retail woes are worsening. home depot, kohl's, and jcpenney's are out with earnings, and all three missed. >> notably, we are seeing a dire quarter for nordstrom. >> yes, and a particular call out there is that their four line department stores really missed with a 5% decrease in sales. they said it was execution issues, and my years of retail reporting have told me it's two consecutive years of having the wrong close. you have to ask yourself about the health of nordstrom going forward. >> target soaring after earnings temporarily blunted concerns over the new chinese tariffs. as it stands, the tariffs haven't really dented them, and they are firing on also lenders, 4.8%.

>> they are doing a good job. you are seeing the haves and have-nots of retail. in the have's column, walmart, target and costco. and the have-nots are a lot of the traditional department stores that we saw posted very disappointing results. jcpenney, kohl's, and some of the home-improvement retailers, lowe's down the most in a decade. that's a turnaround story. each retailer is grappling with it in differing ways. >> deutsche bank is hitting historic lows as it holds its annual shareholder meeting on the backdrop of further revenue weakness. the ceo is targeting investment thanks for "tough cutbacks," banks for "tough cutbacks," most notably in a campaign to restore market confidence following the breakdown of takeover talks with commerzbank. did anything get said in the agm that we weren't anticipating? anything new from christian sewing? >> we do know now that they will have more cost cuts, and many people were predicting this.

the question mark remains. they did leave out the fact that the equities business, which many say are going to get deep cuts, but the question remains what exactly is going on with the timeframe of it. so time will tell whether this is going to be enough to boost share prices. which clearly, shareholders here are not happy with. that was the sense everyone got in the agm in the building behind me. >> ford is planning to eliminate about 7000 salary jobs, about 10% of its global white-collar workforce. the automaker is under pressure to keep pace with massive technological shifts amid signs that global car demand has peaked. this is still far less drastic than what morgan stanley predicted last year. >> yeah, morgan stanley was looking at cuts of 20,000 to 25,000, so yes, this is less than half that. this is still pretty deep. 10% of the global salaried workforce. and they are taking out those at the top in the greatest degree. they are saying the management level is going down by about 20%. they say it will save them $600

million per year, and it also gets them flatter and quicker in their decision-making. perhaps with this new management structure they will be able to update their products more quickly. >> tesla shares have seen a selloff of over 20% following this month's raising of more than $2 billion of capital. many concerns for investors -- what tops their agenda right now? >> the main thing right now is demand for the model 3 and how many cars tesla will deliver in the second quarter. the company has given guidance that they plan to deliver 90,000 to 100,000 cars in q2. that's in north america, europe, and china, and there's not a lot of visibility into how that is going and the quarter is halfway over. >> wall street analysts are dealing elon musk another blow, with morgan stanley slashing its worst-case scenario for tesla share prices to $10. >> first quarter sales were definitely disappointing. so are they going to get some

growth in the u.s.? possibly. but these are expensive cars, and the question a lot of analysts and investors are asking is how much appetite is there in the u.s. for cars that start around $40,000 with decent equipment and go north of $100,000? so if it is not an obvious growth stock at this point, how do you justify the valuation? i think that is why you have seen the shares plummet so much this year, 30%, 40%. >> fcc chairman ajit pai says he will give the $26.5 billion merger between t-mobile and sprint the go-ahead. shares of both telecommunications jumped on the news. >> this transaction was announced almost a year ago, and the company didn't think they would have to try this hard to get it over the finish line, so they are making some serious commitments. they won't raise prices for three years, they are going to do a buildout of 5g with certain things they need to do to meet, or they could have serious fines.

>> the sec says yes, but the doj is leaning towards no on the t-mobile-sprint merger. sources tell bloomberg the antitrust regulator isn't happy with the antitrust remedies proposed. >> they have been opposed to the deal for a number of years and the question from the beginning was whether they would get ahead theas whether the head of doj would overrule the staff to go for the deal. it is very rare for the doj and fcc to diverge like this. the last time we can think of this happened was back in 1977. >> wow. >> wow. >> chow may beat expectations in the first quarter by pushing deeper into online services and smart gadgets. the income for march was $453 billion, more than double the forecast. how will the market take this beat? it was quite a big one. >> it is quite a big one, however we have to keep in mind that they did focus on one-off investment gains, which are about 600 million yuan. so in terms of core profit, if

we look more closely at gross profit and operating profit, we see it is not as glamorous as the net income reported. >> sending a signal to qualcomm. the chipmaker found to have violated antitrust law, shares tumbling on the news. u.s. district judge lucy co says qualcomm is abusing their dominant position in the market to exact excessive licensing fees from phone makers and suppress competition. >> if it sticks, is it possible to quantify what this will mean in terms of the hit the bottom line? >> you know, it is really impossible to quantify. they have to go back and renegotiate licenses, go forward and negotiate new licenses, and it is impossible to say what that will do. one of the things they will have to do that will take away some of their leverage when they negotiate for licenses, they cannot threaten to withhold chip supply in order to get the terms they want. it is unclear how that will

change that bargaining negotiation between qualcomm and its licensees. i should also say they are likely to appeal this, and there is some chance they could win on appeal. so i think a lot of things are still up in the air here as to how this is really going to impact them. >> china's biggest airlines are seeking compensation from boeing for order delays and losses caused by the grounding of the 737 max. how much of a threat is this for boeing? >> this adds yet another layer, exposes another layer of risk for the plane maker. this is one of their biggest customers. we are talking about 53 of 96 planes have been grounded now, and the airlines want compensation for that. when you look at that fleet, it accounts for about 65% of air traffic within china in 2018. so this could stack up to be a pretty big hit for boeing, and these kinds of compensation cases are unlikely to stop with this single airline. you know, there is a lot of leverage that the buyer has over the seller in this case.

>> the billionaire hedge fund manager and one of the original jersey boys, david tepper, is planning to return money to investors and head back to a family office after more than 25 jersey boys, david tepper, is planning to return money to years running apple's analysis center. he follows a raft of other hedge fund managers. why is this? is it the environment or is it personal reasons, he has made his money and can do what he wants? >> the decision to convert his hedge fund and turn it into a family office isn't totally unexpected, but it is still a significant moment. of the $13 billion, a good chunk of it was david tepper's own money, but the fact that now he is thinking of returning outside capital draws, and into a significant air on wall street. like you mentioned, he has been running this hedge fund for 25 years and now he has other preoccupations. why now? for one, he has a football team to run.

last year, he bought the carolina panthers. it is not much fun anymore. hedge funds have to deal with the nagging questions of investors. if you are a rich billionaire and if you have a lot of your own money, why deal with that headache? it kind of makes sense. ♪

taylor: if you you go into the bloomberg terminal, it really highlights with huawei in the middle year the suppliers for the company. it is a global list here, because you have chinese companies, u.s. companies as well -- 310 suppliers feeding into huawei. they have 172 customers. the red color indicates the declines over the past five days. taylor: there are about 30,000 functions on the bloomberg, and we always enjoy showing you our favorites on bloomberg television. maybe they will become your favorites too. here is another function you will find useful, quic, which leads you to our quick takes, where you can get important context and fast insight into timely topics.

here's a quick take from this week. >> in a tweet threat exchanged with jetblue on april 17, writer mackenzie fagan had a few questions about the airlines new boarding procedures. no boarding pass, no i.d. instead, a camera and screen verified her identity against a u.s. customs and border patrol database, then let her on the plane. some passengers might consider the increasing use of facial recognition in everyday life convenient, some might think it is orwellian -- but it is already everywhere. the question is, how far will it go? turns out, even those developing the technology are scared of what the answer might be. this is your bloomberg quick take on facial recognition. in may, san francisco became the first american city to block police and other agencies from using facial recognition software. >> the biggest concerns really are all around celebrities, and -- all around civil whether you

essentially enable a totalitarian state with this technology, which seems to be sort of the direction things are heading. >> so how did we get here? like other ai applications, facial recognition initially developed slowly in the 1960's, with the help of newly available high def cameras, machine learning, and giant databases of photos to increase accuracy and advanced in a hurry. >> facial recognition as a technology that takes things from video cameras and tries to identify people in those images. it does so by taking some key points of the face usually and taking measurements of all the distances between those various points. >> in december 2018, london police made their first arrest based on facial recognition after crosschecking photos of pedestrians in tourist hotspots against a database of known criminals. in new delhi, a trial reportedly identified 3000 missing children in just four days. so if it involves catching criminals and finding missing children, why would anyone be against it? for that, one might look at the

most developed facial recognition network in the world, in china. >> cctv and facial recognition have been used in combination to create this sort of vast surveillance apparatus, and that has been particularly applied against certain ethnic minority groups. even in the democracies, they are using the technology to find suspects or even people who might be involved in legitimate protests so they can be tracked. >> and those are just concerns about the technology when it works as intended. a study from the m.i.t. media lab found that white men in a sample were correctly identified 99% of the time, while error rates of up to 35% were found when it came to darker skinned women. >> microsoft came out last year, it was the first major tech company to say they feel uncomfortable with pulling this technology until there is -- with deploying this technology until they have clear regulation around it.

they were then joined by amazon, which kind of seconded those calls. it seems like some other companies are plowing ahead without such qualms at all. >> to stake out some guidelines, the algorithmic justice center in georgetown university law center unveiled the faith-based pledge, which asks companies not to provide facial ai for autonomous weapons or sell to law enforcement unless explicit laws are debated and passed to allow it. a few companies have signed on, but not microsoft or amazon, possibly loath to lose the opportunity to sell facial recognition to police departments and governments the world over. so what is preventing your image from saying a whole lot more about you than it used to? face it -- not much. taylor: that was just one of the many quick takes you can find on the bloomberg. you can also find them at bloomberg.com, along with all the latest business news and analysis 24 hours a day. that will be all for "bloomberg best" this week.

thanks for watching. i'm taylor riggs. this is bloomberg. ♪

david: you are the leading infectious disease person in the united states, maybe the world. heavy times a day do you wash your hands? >> i would say maybe nine times. david: is there any evidence that vaccinations cause these diseases? >> absolutely not. david: president george w. bush asked you what you could do about hiv and aids in africa. >> he felt that we have a moral responsibility as origination. david: the best way to prevent having an infectious disease is what? >> the normal, low-tech, healthy things are the best. >> would you fix your tie, please? david: ole