not just the trade war but a lot trying to decouple supply chains around the world and restrictions on technology exports, those tech at risk.t it, there we have closing bell. s&p 500 up 0.9%. at riskier indices, look russell, 2/3 of a percent gain. kind of a sneaky day. that the majorng upices, even with the nasdaq so, 45last 15 minutes or

minutes, it was a steady descent. volume pretty low and i would expect that would be the case tomorrow before the fed decision on wednesday. let's dive deeper into the action with our market reporters. abigail: i'm watching the s&p 500. let's check out a range chart. the first one back in january of 2018 after president trump slap tariffs on solar panels and washing machines. trade is a concern. as the fed was tightening and the economy was doing ok, the new concerns about trade, a huge whipsaw down. not so long ago, there was a pattern in their that tells you investors that bought will down at the bottom were looking to take profits. they are letting it ride a istle bit it is suggested it

move -- it is morphing into an ultimate bayer pattern. name of thes the game but it looks like the near term to medium-term could just be bullish for stocks. emma: i was taking a look at the great british pound, dropping furry fourth consecutive day and hitting a six month low. over at unicredit saying the cliff edge risk related to a no -- i'm sure we would all like to know when that would be but it won't happen until the conservative party has a new leader. mp's in the conservative party in the u.k. vote again tomorrow. boris johnson, the arch brexiteer, expect to win despite skipping a tv debate last night. if we look at the volatility

markets, traders are expecting some more brinkmanship around the date of the next brings it deadline. and it isis rising trading at around the highs we saw with the last brexit deadline, march 31. caroline: great analysis. we thank you. let's go back to carla and jason wa, and how -- to luke ka jason. luke: we are looking at pretty much a rate fall and then nothing else. two weeks ago, before we got resolution on mexico, if you looked at high-yield volatility and demand for hedges, stock volatility demand for hedges, the only thing that really wasn't acting up at the time was stocks. jason yields continuing to go

down. now, the only place where there is really demand in options for more downside related risk is still in treasury. that seems to be more and more .he story joe: i want to talk more about this event decision. there seems to be an emerging consensus that one way or disappoint.ell will so the market is setting itself up for disappointment. is there a way for powell to not commit to rate cuts but perhaps give a message that will not royal -- not roil investors too much? >> i guess that they will cut and ease additionally as needed is reassuring. now there is this reflectivity

where a strong stop it is holding up pretty well in the face of dovish message takes some of the pressure off of them to do more. or two orrtainly one three eases through the next six to 12 months will help real estate. they were hiking nine times in the last cycle, you certainly saw that show up in the real estate market. affordability suffered, existing home sales suffered, now rates are down again. your seen rates at least start to stabilize. that is one of the sectors that will benefit from lower rates. scarlet: concern over the trade war and how companies are perhaps pulling back on the

activity. where you see evidence that it is hurting the economy? >> it shows up through uncertain corporate sector. we look at the small business optimism index, the quarterly confidence index that was released last week, the morgan stanley plan, indices, all those are giving you a sense from cfos and ceos of their propensity -- propensity to hire more people. what you saw after the trump pickup onn 2016 was a the back of what was affected to be deregulation, tax cuts. as those things have morphed into uncertainty, not just using weapon,as an economic but a political weapon, you will see the hit to, the hit hiring. number, very volatile,

the regional survey today, but you start to see that in those capex plans. tech is a really good player in that. there has been a big departure since the financial crisis in terms of what i would call capital like businesses as opposed to capital-intensive says. tech has been the beneficiary of that capex boom that we saw 2015-2016 many earnings recession that was caused by the rollover and commodity prices. that will start to show up, those effects of uncertainty. caroline: i'm going to turn our attention to another sector. energy up 0.9% today. what is going on with oil? were overweight

commodities through the first half of the year. lightened up and our benchmark strategies have very little commodities exposure now. it is a tug-of-war with what is going on the supply side, with u.s. production ramping up, taking share from opec. opec has had to respond with these supply cuts. on the demand side. we've seen that with the evidence of slowing data around the world. the percentage of countries in terms of pmi that is less than 50, that is as low as it was as we saw in 2015 now. the two-headed monster of increasing production in north america and potentially rolling over demand. joe: the fed isn't the only central bank we have on the calendar.

i think the boj and boe both coming up. how does the world look from their perspective? of course we have the big forum going on for the ecb. boj.day's big from the perspective of other central banks, what are their objectives? i think generally worse. the perception is that the fed and other economies are innocent bystanders in the trade war. easiernse, i think the the fed is, it helps them more with easing policy potentially. with the bank of japan in particular, i think it is particularly ominous that the one place that really put its thumb on the scale of the bond market in terms of cutting volatility by setting the price

in the yield, it is you another kind of outlet for something that has been so contained for so long. luke and jason, thank you both so much. that does it for the closing bell. romaine bostick stepping in next for "what'd you miss?" where the team will look at what -- look at how the situation in hong kong could be a challenge for xi jinping. this is bloomberg. ♪

caroline: here's how the u.s. stock closed in the green today. the nasdaq outperformed. joe: the question is, "what'd you miss?" caroline: the hong kong chief executive has stalled extradition legislation but they want a total bill withdrawal. ecb officials and portugal. -- officials head to portugal. the fed looks for other options amidst volatility and political pressure. an expensive esa paper. -- expensive piece of paper. an mba degree will cost you, but how much? hundreds of thousands of protesters flood the streets of hong kong and demonstrations.

executive carrie lam suspended the legislation calling for exhibition -- extradition from china. pro-democracy activists weighed in on lam's future. kong being the puppet of beijing, that is the reason we demonstrated five years ago. it is time for us to freely elect the leader of our city. caroline: we want to author -- we want to welcome the author of "red flag." george magnis, he is over the phone with us. you talk about how the leadership is different than the predecessors. how is the angst going to be affecting the confidence of the

authority? will it? that is the question at the moment. the chinese government wasn't kind of orchestrating this extradition bill. this was really carrie lam's project. i think she thought it would endear her to beijing. there is kind of a taiwanese connection. it had the effect of pulling taiwan into the kind of influence of beijing and greater china. this was her project. it looks like it failed. obviously, the chinese government was pathetic to what you want -- was sympathetic to what she wanted to do. i think the chinese government

were kind of acquiescing in that she had to back down. jinping, probably the biggest climbdown he has had to do since he came to power. he will not be happy about having had to do this. i think with the g20 looming , they had no choice. her,ne: who will replace if she has to step down? george: the chinese government came out and gave support today but i think that is just to keep her in situ for the time being. office --r term of the term of office of the legislative branch in hong kong goes to next year. i would think that sometime,

after a little bit of a hiatus, she would be replaced by someone else. joe: talk to us about some of the other side asked that xi jinping has had lately. he sort of went through a bunch on twitter this morning. talk about how in your view that difficulties, this just being the latest. george: i would say the hong kong issue definitely looks like a climbdown from what would have been a previous decision. that lots of other people have been following look even more like sensitivity. the biggest one i think is the trade war. xi jinping and his advisors were definitely wrongfooted by the assistance -- the insistence

with which the trump administration pursued and prosecuted the trade war last year and since may 10 of this year. this has basically set the government back a little bit. there has also been quite a lot of pushback inside china. it is difficult to know exactly where is coming from but we know that former government officials and some academics have been quite vocal about china heading down the wrong path, that the approach to the united states was wrong. you will notice, and lots of people have noticed, that china 2025, china's signature kind of industrial policy very new era, and that is at the center of

disputes with the united states about subsidies, technology transfer, no one really talks about china 2025 anymore, not by name. the rhetoric has been dialed down substantially. similarly for the belt and road. inthe belt and road forum april, a different approach to scale and significance by president xi jinping. caroline: we are still seeing the pictures we've gathered over the weekend of the protests. i am interested in what happens with the two systems currently in place and the overall view of where taiwan and hong kong go in their relationship to mainland china. is it still the focus and these two xi to bring into the mainland, and what would that mean for hong kong as a headquarters of so many

multinational companies? withe: reuniting taiwan the mainland is clearly a strategic medium to long-term objective. systemscountry, two kind of mantra really has been shipped away increment -- , anded away incrementally for aore cumulatively number of years now. extradition was the last straw really because it kind of made them realize that the encroachment, the legal system whatng kong, has reached the action has called for. are, iccessful protests suspect the feeling in beijing is that they want to accelerate

the whitewashing of the one , to the two systems andnt that it still exists, therefore they would want to speed up the process by which hong kong becomes more integrated into the mainland. magness that was george of oxford university. coming up, some business school students are financing $100,000 for their degree. this is bloomberg. ♪

of ambition.e be one of the fastest ways for aspiring

executives to climb the corporate ladder but it is also pricey. nearly half the students at some of the top schools borrowing at least $100,000 to finance their degree. to discuss, we are joined by bloomberg businessweek's caleb solomon, who was running the bloomberg best b-schools mba rankings. when we talk about the student debt crisis, much of it focuses on undergrads or degrees that don't turn out value. we don't focus as much on the b-school side of things but it is significant. we found, at some of the most prestigious schools in the world, students are graduating with $100,000 of debt or more. that includes duke, cornell, chicago university. you ratchet down just slightly,

it is almost one third or more at another whole series of prominent schools like m.i.t.'s sloan school, wharton, and kellogg. romaine: we know that the schools are expensive, but what is the return on investment? you have to spend money to make money, right? caleb: you do. our reporter on this story was able to interview a good number of students that graduated from the schools with that six-figure debt. roy -- as roi. i will be out of the workforce for a certain amount of time, how much more when i make when i graduate? at these schools, the average starting salary can be $130,000 a year or more, not counting other things.

they thought that it was worthwhile. caroline: would it be more sensible to go abroad? europe boasts some pretty good business schools and it is kind of shorter and cheaper to do it there? caleb: exactly. that is what we found, too. , weything we talked about looked at schools outside of the u.s.. india, spain. when you look at those schools, the debt levels are much lower, and that is probably because it is a very different program. two-year full-time program. in europe, they kind of call it a year but it is typically 14 or 16 months and you are out of the workforce for much less time. caroline: maybe it pays to go

abroad. it is a great piece. many should go read it in businessweek. we are looking at the telecom billionaire patrick draghi. he has agreed to buy the auction a 61% premium., collector.id art are risingeyond meat again and short-sellers are feeling the squeeze. $534-sellers are down million mark to market losses since the ipo last month. 11% atwere up more than one point today. a big week for central banks. jay powell is expected to speak tomorrow and discuss rate cuts.

the -- this is bloomberg. ♪

with i'm mark crumpton bloomberg's first word news. a white house official said israeli representatives have not been invited to the trump ministration's israeli-palestinian peace conference in bahrain next week. they said the meeting will focus on the economic vision for the palestinians and not political issues. the palestinians accused the u.s. of bias toward israel. the european union said they would wait and -- wait for scientific reports on iran's compliance with a nuclear deal before announcing his response.

the eu said it would not speculate on what would happen if tehran veers away from the terms. it would break the stockpile element in the next 10 days. >> the interest we have is to keep the nuclear deal in place because in this exercise, we never made a mystery out of it. during the last year, it has become increasingly difficult for all to keep the nuclear deal completely implemented. this has been our constant focus as europeans, as the european union. mark: russia's u.n. ambassador is accusing the united states of destabilizing the middle east by escalating what he calls aggressive accusatory rhetoric and artificially fueling anti-iranian sediment -- anti-iranian sentiment. he condemned attacks against

tankers during a meeting today and called for an international investigation to identify the organizers and hold them accountable. the trump ministration has blamed iran for those attacks. world food program director david beasley said today that "seriousy uncovered, diversion of food parco -- of food." uponid the houthis agreed more monitoring but has faced roadblocks ever since. >> the humanitarian situation in yemen is dire. despite the suffering of 20 million yemenis who don't have enough to eat, we continue to face severe resistance just doing our job to keep people

alive. mark: the u.n. humanitarian chief said that 80% of the yemen population need assistance and protection, including 10 million who rely on food aid to survive. toronto police say two people have been shot during today's parade for the nba champion raptors. their injuries are considered serious. custodye two people in and have recovered firearms. 24 hours a day on air and at tictoc on twitter,powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ bonanza it is a banking across the globe. central bankers at the ecb, japan, and england all set to make decisions this week.

in the u.s., fed chair jay into -- isaiting weighing in with projections. >> as always, we will act as appropriate to sustain the expansion with a strong labor market and inflation near are symmetric 2% objective. >> if we saw a downside risk to the outlook, then that would be a factor that will call for a more accommodative policy. >> i'm a little worried about the low inflation rate. even though it is temporary, that could be a reason for more accommodation. >> we are seen mixed signals around what is happening in china and europe. we just need to keep being data dependent. >> it is too soon to make a judgment as to whether we might

or might not make an action. i would rather be patient and let events unfold a little more. joe: i want to welcome the bloomberg opinions senior editor for markets and a senior reporter. extraordinary rally we have seen over the past several weeks, long government risk-free bonds fall into the lowest levels around the world. is there a feeling that it has gone a little too far, too fast? >> i was going back and looking at how many rate cuts were priced in this year. it was maybe a half a rate cut. two,ou are pricing in maybe three, maybe even four. that's a lot for this year. see any sort of propensity for powell to push

back on the market? john: there certainly is propensity for him to push back. if you look at the fed funds 1, 2, 3, 4ket, any cuts this year is deemed possible by the market, an opinions. wide set of i think the chances try to narrow the options and pushback are pretty high.

as brian says, to give you one illustration of how overdone the rally is, this is the example that a guest from deutsche's gave after the show on friday, the ostia -- the austrian century bond has gained. lending money to austria for a century. romaine: what could happen over the next century? john: the last 100 years were not so great for austria. anything can happen in 100 years and that doesn't seem to be putting people off. caroline: going long century bonds. peace also makes clear is the fact that inflation expectations have shifted dramatically. what have you heard in terms of how they walk that line? brian: i think that is the real big question. the idea was that fed was focusing on inflation and in the may meeting they were going to make some comments to that effect, saying that inflation was a big risk, maybe we will have to cut. powell pushed back on that. he mentioned transitory factors.

that was not music to bond traders's ears. it will be interesting to see if he says that again. joe: how problematic is it for the fed that stocks are basically at all-time highs? john: it makes life that much more complicated for them. i always love the jeremy grantham analogy that equity markets are the brontosaurus. if you bite it at its tail, it will take a long time to get 'srough to the equity market head. nervously after the latest amount of data has suggested there's a slowdown, i'm beginning to think that even if you forgot there was any tension over china, you would begin to think that the data is

suggesting that things are slowing down and that would stockore suggest that the market here in the states is also overdone. ofaine: do you have any sort dinosaur metaphors as to what will happen if we don't get any sort of a dovish signal on wednesday? we are wound up in these traits for three, four rate cuts. brian: it sort of feels like there's an expectation that the minutes will state something in terms of downside risk. it doesn't feel like that is what the market has priced in. it raises this issue with equities. romaine: is there anything that can say on wednesday that will satisfy the market? brian: i think morgan stanley said the minutes would specifically highlight, if downside risks happen, we could

accommodate. he sort of said, we will take action if we see downside risks. the question has become, have fed officials seen that downside risk already or will they say, we still have to see more before they determine that the labor market is weakening or inflation is undershooting? caroline: we've got to think about thursday, too. we all know the fed is the main bank in town but we have the boe, boj. is there anything these central banks can do? john: not really. the bank of england, there is truly nothing they can do until the brexit situation is resolved and that is not going to be soon. similarly, in the bank of japan, i'm not sure what they can do to allay any concerns about the deflation that is taking hold. even in the case of japan, you

see a lapsing of inflation expectations where no one expected that much inflation in the first place. even after years of of a nymex that hasn't taken shape. the fed is plainly the most important show in town. for this week, i would suspect it is close to the only one. caroline: only game in town. thank you. up next, we are going to be talking boeing's focus at this year's paris air show. efforts to regain customers. we hear from the ceo next. this is bloomberg. ♪

caroline: time for a look at what stories are trending. ubs still feeling the aftershocks of the ceo using the phrase "chinese pig." the ubs economists -- bloomberg.com has a story on more than 700 companies being targeted in a campaign advocating for clear transparency when it comes to environmental impact. companies including amazon, exxon, and volvo have failed to report carbon emissions for years. it is reported that facebook is releasing a new app allowing users to opt in to sharing information and get paid for it. users will register through ads. they will combine it with the data they already have developed

a more complete market portfolio. you can follow all these stories on your terminal, at bloomberg.com, and at tictoc on twitter. romaine: bowling ceo dennis muilenburg says he expects the grounded 737 max jets to return to the sky by the end of the year, possibly with a new name. they talked about plans to repair the jets, get them recertified, and when the max will fly again. dennis: first of all, safety is our paramount focus. that is the tone for the entire show. we are making solid progress of bringing the max backup. simulation flights this week. we hope to schedule the certification flight shortly and then get the airplane back in the air. all of this is being done through the lens of safely --

safety. >> 2019, 2020? dennis: it is something we expect to happen by the end of this year. we expect it to happen this year. >> are the regulators going a little deeper into the systems than anticipated? dennis: it is a thorough examination and we expect that and encourage it. we are working with regulators around the world, the faa, chinese authorities, canada. we are working with bodies around the world and it is important we do this in a thorough and disciplined way. >> you keep emphasizing the thorough. are the regulators going deeper in then you would have expected? dennis: i think we are going deeper than normal and that is good. we are looking at every

dimension of the software updates but not only the airplane itself, also the toining materials, the end end design. >> are the regulators on the same page? dennis: they are aligned. i am seeing growth convergence from regulators. we are encouraged by the collaboration between the regulators. >> do you think the aircraft will fly first in the u.s. and then in europe or do you think that will happen at the same time? dennis: i think there's an opportunity to do it together. whatevering to support the regulators want to do. >> euro cents is they are getting closer to -- your sense is they are getting closer together. is there a gap? dennis: there is work to do but the trend is that they are aligning. >> where are the chinese

regulators on this? dennis: they are part of the discussion as well. across the world, i see convergence across that entire group. our focus remains steadily on safety. caroline: bloombergs guy johnson with boeing ceo dennis muilenburg. let's get a check on the headlines. a rare downgrade for disney stock. shares fell a record level after the stock was cut the equivalent of a hold rating. dead afteres aren't all. u.s. plans to add as many as 50 branches in new and existing markets, part of a push to build out its retail presence. last year, bank of america and j.p. morgan open hundreds of branches. thinking of bringing the defunct gas guzzling hummer brand back to life, only this time it would

be electric. bloomberg has learned that the hummer name has been mentioned. spiking gasoline prices killed hummer sales a decade ago. romaine: joe, you've got to be in the market for this. what do you drive, ford f2 50? hummerthink of the old as the ultimate 2000's car. romaine: it got 10 miles to the gallon, which is crazy. caroline, you drove in this morning on what, the company issued rolls-royce? caroline: phenomenally eco-friendly, the rolls-royce. i asked for bentley. romaine: is that still made in britain? caroline: i'm not sure anything is made in britain. they still have an iconic

british history. but i think we can do better than 10 miles to the gallon. joe: i'm all in on the electric hummer. coming up, going private. one tech titan taking sotheby's private. this is bloomberg. ♪

romaine: telecom titan patrick drahi is buying auction house sotheby's for $2.7 billion, taking a private for after two decades as a public company. tina --e, kathia cousin kazatina. >> they were trading on friday at $35. joe: what is the appeal?

what is it about this asset that he sees the opportunity on? of two main is one and art isthe world, class for asset millionaires and billionaires in the world. along with paintings and sculptures that it sells, it is itself a massive brand, a global brand. it is where billion errors go to play and shop in different industries, including telecom billionaires like esther drahi -- like mr. drahi, who is a collector as well. it has this appeal. asoline: it has an appeal sort of a glory asset to be holding if you are a collector

like he is. give us a sense of why the price has been down lately even though they have been hitting record after record for amounts they have been selling thanks for like balloon dog. katya: it is a good question. auction business is quite brutal. they have a very hard time making high margins, especially when the value goes up. a work of art, the less the auction house makes. they have been expanding the art auction model beyond the auctions themselves. expenses are high. the margins have been growing smaller because the high end of the market has recovered recently. it is the same story decade after decade. i talk often with my sources who say, we have been at these auction houses in the 1980's and

1990's and or making as much money as now, or a little bit more. they take doesn't grow as much as what they spend. also how much art costs these days. it is a hard business. caroline: we will see how it performs better out of the glare. we thank you. do not miss this. panelvernor speaks at a in central portugal. joe: i will be watching economic data numbers for u.s. housing starts out at 8:30 a.m. eastern. romaine: adobe reports second-quarter earnings after the bell. " is "bloomberg technology up next. romaine: this is bloomberg. ♪

♪ emily: i'm emily chang in san francisco and this is "bloomberg technology." huawei says u.s. sanctions could billion as by $30 they prepare for a drop in international smartphone shipments. company, bobr swan, says he doesn'