give the market everything it wants, you could see a little bit of a risk resuming in the markets. downet: the s&p closing for the first time in six days. [closing bell] andlet: the dow, nasdaq, the s&p all closing in the red. was ane: yes, and trump laggard today, once again saying trade, forget about it. i can still slap on tariffs on china if i want. romaine: yes, and that was largely due to jb, some very low expectations, but this was much better than feared. scarlet: and that is a great point, particular when you look at earnings. for the most part, people were expending earnings to come down. it is always fairly low at the beginning of the earnings season, and then as it goes on, people have these.

that the banksle were the focus point. they seem to miss in terms of overall trade. in terms of miss overall trade. the laststeven, over couple of days, it has been middling, hovering your record highs. when you look over the next few months, do you think we still have sort of enough of a catalyst year to kind of keep this momentum going, pushing equities higher, and how do you think that fits in with, i guess, regards to the earning picture -- earnings picture that we have? is no: i think that worry. a good deal of this has been momentum. overall, we are not bearish. we think we have a record high level of eps in the united states this year, and, probably, we can go on to another one in 2020. the problem is it cannot be

everything that everyone wants, which is a rapid gain in eps with ever rising asset prices, getting it altogether. inflation low, profits high, markets high. broadly speaking again, i do not think we have come to a point where we are just wildly irrational on equities prices. we have got probably too much in the i.t. sector, lagging in the health care sector, but this is not an environment, again, where i think that we have to do everything right to get markets to go up a little bit further, but we have made so much progress in this year. we are just going to be a little more risk-averse that we would be, say, when we were in january, where we put more money to work and markets. scarlet: all right, steven, thank you for joining us and enduring a very unhelpful ear p iece.'

"what'd you miss?" that is coming up next. this is bloomberg. ♪

♪ anchor: live from bloomberg's world headquarters in new york, i am caroline hyde. and i am romaine. after fiveains straight days, the s&p 500 closing up. romaine: but the question is, what'd you miss? caroline: the sting of falling rates paid we will discuss in a

few moments. a busy day on capitol hill, , with crypto. two-year low, a no rhetoric.t shares of wells fargo falling despite forecasts, with the income of the second quarter missing estimates. for more, let's welcome our wells fargo senior executive, vice president, and cfo, john shrewsberry. great to have you with us. talk about net interest income, down in the second quarter. how does it look for the rest of the year? >> sure, so we have forecast the full year down from last year as a result of the overall level of rates, the prospect of cuts at the front end, but also lower long-term rates. we do a lot of investing at the

long end of the curve, and lower yields mean a lower opportunity. having said that, it has been a very good run, as rates have run up to this point, and i think as a sector, we have outperformed expectations on the relationship between deposit costs and risk-free rates, so this little of giveback, bit while it is certainly painful at the margin, it is on top of everything. second quarter, we posted the highest profit ever of $6.2 billion, and while interest income was a little bit lower, we had higher revenue across most of our noninterest income sources because of customer activity, mortgages must bigger in this environment, various fees stronger, so there is something to be said for a softer landing if, in fact, the fed does go and reduce rates and to the extent that it makes credit better and keeps consumers and businesses in the transacting, borrowing,

investing, et cetera all of those are good for banks, and they are good for wells fargo. anchor: offsetting that interest income is growing the loan base, it was down slightly quarter after quarter. within the loan segment, where do you see future growth? about mortgages and shifting to other loans? where do you see growth? john: sure. not nervous about mortgages feed we had $53 billion of mortgage loans in the quarter, 20 of them the type of loans that end up on our books and 33 the type that get sold into agency securities. of what is on our books, the credit quality is very, very high. we have actually continued to sell down some precrisis mortgage loans that actually have been performing well, but the time has come to move them off of our books. but it quality very high. the issue with mortgages is, of course, that the lower rates go because they are pre-payable,

lower yields, good for our customers. good for our customers, but it contributes to that interest income calculus that we talked about. credit cards are up, reflecting a strong consumer. auto loans are up for us. we had slowed down our auto business a couple of years ago and restructured it, and we are up 17% in originations, and the net balance has begun to grow. loans, a variety of categories, they do not all work together. it is a little bit softer in this quarter, but still representing what is going on with a 2.5% gdp growth environment and what businesses are doing in capex terms to invest or to acquire, and commercial real estate is the category where we are the market leader. we have actually grown a little bit the last couple of quarters, but we have been a little bit more cautious there for a period of time. it tends to be hot space, mostly with nonbanks competing, and we are cautious. e: on the consumer side,

there was a bright spot in terms of consumer accounts, consumer checking. i am wondering about how you're marketing your products out there to the consumer in light of the scandal, in light of a lot of the concerns about some past consumer accounts, how they were held, what type of eggs you are seeing and getting new customers through the door -- what type of things you are seeing in getting new customers through the door. john: it is actually customer consumer sentiment. that is as high as it has been in three years in terms of the strength of sentiment. on new primary checking account acquisition, primary accounts are the ones that customers use as their banks, so they have direct deposit or bill pay or their debit card activity. we have been growing at about 1.3% net. we sold some branches last year, so the growth number reflects organic growth, and it is not a bad number it could always be

higher. but we were starting with a very big base of about 30 million customers in that category, so to be growing at, you know, between 1% and 2% per annum, income -- income pounding, and the way the market is a whole value proposition, where there is still a very big physical presence in banking. our digital capabilities are as strong as anyone's. we have got any product a customer could need, so if they want it, it is one stop shopping, and it is very competitively priced. as you know, most servers -- services are free to customers if they are regular customers. your name is in the ring, but there is an interim ceo. with him, the changes, and, indeed, will be see your name as ceo sometime? john: you know, the board has been pretty clear that they are

looking for a ceo from the critics who to calm have been critical of people who have been in the company for a long time, so i think that is what is going to happen. he is doing a great job as interim ceo. he was asked this morning on our investor call to respond to that and responded completely what he has been asked to do, but he is doing, and the board has lots of confidence in him. the operating committee, we are running the firm. u have good cadence. we have. members in that group and leadership. it is going very well -- we have new members in that group and leadership. in the interim, everyone is focused on what is most important for wells fargo. the operations are running smoothly, and he is doing a fine job. will keepank you. we our eyes out. that was the wells fargo cfo, john shrewsberry. fullrnings this week in swing.

goldman sachs has revenues standing out, second highest in four years, well jp morgan is lowering its outlook, now to .5 billion. i want to bring in a reporter. it is one thing that we did not get to speak to the cfo of wells fargo about that i am curious on . sales and trading. i am wondering how much of this is structural. we have heard the fed talking about lowering the rates of unemployment, anchoring long-term rates down on the low end, so with lower volatility, how much of the declines are structural and not cyclical? >> two elements to this. this, we pointth out that the overall is increasing, so you have to grow by increasing your market share and not staying steady. at the same time, look at some of the key factors that have impacted trading this quarter,

the macro uncertainty, and looking forward, the rest of the year, has any of that changed? uncertainty about fed moves, brexit. when you look through the rest of the year, does not look like any of those are going away. in fact, just this afternoon, the president said he might impose tariffs on china, and it went up, so that backdrop will stay with us at least for the foreseeable future, and that will have an impact at the trading desk. : i remember listening to jamie dimon and touting the net interest margins and how great they were, but they seemed to be more dismissive. jamie dimon, i believe, he was on a conference call with journalists and said it was the wind out there blowing, "we do not have any control over that. do not pay attention to that. pay attention to whatever we are doing." >> the other interesting thing i

think about the net income margin, right, we have to keep in mind the deposits, but it is not like they can also cut the deposit rate as much as they used to, because now, with all of the online banking, digital-only banks, you have them competing. andomorrow they went out said, 1.5%, 2.5%, we have to cut back on that significantly, people will get over that inertia and shift their savings somewhere else, so that create something for them. so that is the challenge that they are dealing with. the economy remains strong, so even if the margin is shrinking, as long as it is broadening, it is not bad news for the bank. in some respects, goldman sachs has been doing well by stealing some market share from deutsche's. -- deutsche. what about other big players? looking at,we are

bank of america and morgan stanley, bank of america, i do not think he will see much difference there. theere trying to see about investment banking. they have been in a rebuilding, rebound phase, so it will be interesting. it might be different from the rest of the banks. beenn stanley, they have known as a top equity trading shop on wall street. usually.o morgan stanley is also benefiting from some of the same dynamics, like getting market share from some competitors who have been retreating from that space, or like some of the other folks, reporting a downturn. that is a key one for me. romaine: more for morgan stanley thursday morning. and now, to our bloomberg reporter. coming up, blue apron, adding beyond meat to its meal kits. that is coming up next. this is bloomberg.

♪

♪ want to bring you some breaking news, stocks, two breaking stories. the railroad missing on second-quarter earnings, missing on second quarter revenue, and, more importantly, their full-year revenue, they are looking at a decline of about 1% to 2%. they had previously protected growth for the full year. you see shares down about 5.5% to get on the flipside, united airlines actually rising a bit after hours, the company saying there second-quarter operating revenue and a lot of other key metrics also rising, slightly above what analysts were expecting, also giving a full-year forecast on capacity a little bit light of 3% to 4%.

going redue apron is hot, the meal kit maker saying be beyond meat option will offered. they will have the blue apron menus added in august for joining us is an editor over at bloomberg news. what is so fascinating is that blue apron, arguably much more so than beyond meat, really needed this, i mean, massively unprofitable. what are they hoping beyond meat can add? you remember, two years ago, blue apron was the beyond meat. they were down about 90% before this announcement, having a hard time maintaining subscribers, the kind of people who like meal kits learned to cook, and then they do not need them anymore, so the idea of this company, the unicorn, fell flat, so this is really smart. they are teaming up with beyond meat, the next hot trend, hoping

it makes customers stay. i do not understand how it offset some things, particularly when it comes to environmental efficiency when it comes to blue apron. being 81%about it lower, a small tick up higher. it will affect some of the main headwinds? >> one of the questions about blue apron is all of the packaging. i do not know if you have gotten it, but everything comes shrink wrap. -- wrapped. you could argue that beyond meat is a lot greener. if you care about the environment and do not want to be eating meat, it uses a lot less water and land than cows do. considered is still to be a little bit of a fad or fadish, and people move onto the next hot thing.

where does that leave either of these companies? >> that is a good question. i think this is a riskier move for blue apron. they are certainly throwing everything at the wall, and they need to be, because what they are doing right now is not making investors happy. for beyond meat, i do not see a lot of risk. it will not hurt them to be in a meal kits. maybe they will get more customers out of it. most of the blue apron subscribers are millennials, and that is who knows about fake meat, so you are not going to a new part of america who maybe doesn't know about these products, so no riskier, but maybe not a lot of reward either -- so no risk here, but maybe not a lot of reward either. googled let's talk about the british luxury -- anchor: let's talk about the british luxury firm of burberry, sales growing at double what analysts had expected, with sales and mainland china rising.

reporterur retail joining us been we just saw that share price spike. the best we have seen in how long? since 2000 two, the best day since 2002. also, trading at its highest in more than a year. withig headline was same-store sales, coming in at 4% higher. that is double what analysts had been expecting for that quarter. there was the design to really take it for the first time, around 50% of the products he had designed in the store. all about the monogram, and one thing analysts are saying is that the chinese buyers are really loving this monogram style, and it helps them compete. signature move? the new designer coming in, focusing on the monogram? >> exactly he brought in this

monogram, with the original founder with burberry, a pattern.l it is known. when he was over at vinci, he really -- when he was over at overchy, he really won people like the kardashians, from clothing to scarves to bags, that is what the chinese consumer has like. particular, it is important in attracting millennials, but there is also significant growth in the number of chinese shopping on mainland china but also the tourist spending. romaine: do we have any sense of if this trend is going to translate into europe or into the u.s. here? i mean, i understand why the chinese are clamoring for it.

emma: particularly within that millennial group. you have to have a fair amount of money to be able to buy burberry, but 40% upward sales now come from china, which also means there is risk. when you look at a potential trade war, implications, and a slowdown -- romaine: i think john was excited. emma, thank you. and let's get a check in the latest business flash headlines. u.s. retail sales in the u.s. did better than expected in june. that indicates consumer spending was already healthy before an anticipated interest rate cut this month. the value of overall sales rose 4/10 of 1% if you factor out cars and gasoline, sales up 7/10 of 1%. a disappointing quarter for

dominoes, the pizza chain with sales missing estimates. still, earnings were better than expected. their shares are lower in trading. and tesla is cutting the prices of cars shipped to china. the electric car maker is trying to boost sales in its second largest market. prices of the tesla model s and x were cut about 4%. and that is your business flash update. romaine? today,: another story the tight labor market, and when you think about it, we have talked about labor's lack or if 's lack or if labor it exists, and a lot of companies have had trouble finding workers -- we have talked about labor slack. they do not have that same pool. a lot of people they may not even have considered for the job

10 years ago, they are taking a much harder look at them and actually putting money into trading them and bringing them on. anchor: this is a social enterprise. it was taking the u.s. by storm. u.k. massive in the they have tried to hire homeless and then maybe ex-conx. -- ex-cons. amazing,his is an positive story out of an issue when it comes to hiring. anchor: now all we need is jay powell to sort of focus on this analysis as we analyze the tight labor market and what it means. anchor: a whole new pool of people. anchor: one of the benefits of a tight labor market. coming up, silicon valley. executives on capitol hill, addressing everything from cryptocurrencies to concerns. we will take you through the

highlights next. this is bloomberg. ♪

i'm mark crumpton with first word news. senate majority leader mitch mcconnell is standing behind president trump in the firestorm that has arrested since the president's tweets about four democratic female congresswomen. the leader said today that words matter but that the political rhetoric has got overheated. >> the president is not a racist. i think that the tone of all of this is not good for the country. but it is coming from all different ideological points of view. that's the point. to single out any segment of this i think is a mistake. on the house side,

democrats were not buying the characterization. >> the comments made about sitting members of congress cannot be tolerated. because you cannot have the ship sink, this historic american castigate, you cannot members of congress who go to a border state like texas and see conditionsnhumane and chastise them. the house toin condemn his tweets was halted after speaker nancy pelosi called mr. trump's comments racist on the house floor. republican doug collins said it violated house rules and demanded that the speaker's words be stricken from the record. the european union parliament has confirmed a new president of the eu executive commission. the european parliament voted

with 22 abstentions today, to approve the nomination to be the first woman to serve as european commission president. confirmation required an absolute majority of 374 votes. following the vote, bloomberg asked about the eu trade relationship. with the united states. >> we have issues but we should never forget that allies and friends are on the same side of the table. therefore, we are going to negotiate about the different topics that have to be sold. in the very end, we know that it is that are to be in a healthy way trading with each other. mark: in a twitter message only a few hours before the vote, the eu council president donald tusk said that the underlying and was the right person for the job. questioning facebook's

plan to create its own digital money. at a hearing today lawmakers blasted the social media site for repeatedly violating consumer privacy and polarizing america. brown compared facebook to a toddler playing with matches who burns the house down. day onnews 24 hours per air and on tictoc on twitter powered by 2700 journalists and analysts in 120 countries. i am mark crumpton, this is bloomberg. >> u.s. technology companies are headed for their biggest antitrust showdown with congress in two decades. you have executives from google, facebook, apple, amazon, abouttly facing lawmakers widespread competition. joining us with more now is jennifer reed, for antitrust litigation. what is your key takeaway?

that having all four of them in differentith so many issues they are facing, how do you combine that into one hearing? >> it's essentially a problem. still ongoing, it started late, has happens. characterized these companies, google, facebook, amazon, apple, has innovators that are great for consumers and businesses and it brings only legitimate and competitive benefits to the marketplace. marketplaces in which they exist . i think we saw the difficulty of having an antitrust hearing the four different countries. when you get into the questioning, they have very little time. it's about specific conduct. they have all had difficulty so far trend to get into the nitty-gritty of the difficulties of these countries that have criticized the subject. >> i was listening to it, i caught the first hour. they were all over the map, with

the questions, and clearly didn't seem to understand some of the businesses and business models they were asking about. i heard questions about myspace and others but -- other sites that don't even exist anymore. what is the likelihood that we get some sort of legitimate legislation to rein in these companies? >> let me say that some questions were better than others, but let me tell you, the apple icloud pops up all the time i thought -- all right, i'm not sure where this is going. i think this is the beginning of thinking about whether we need legislation. this is the first or second hearing in a long series to determine if there is a problem, what is the problem and do we need legislation to solve it? i think there could be. the devil will be in the details when you actually get to the point where some entity is trying to pass a bill. we'll see what happens.

>> looking back to microsoft in the 1990's, do you think it is -- the more extreme calls coming in for a complete breakup of these companies is in any way likely? or do you think they will be somewhere in the middle when it comes to regulation? >> i think it's highly unlikely even with senator warren huge -- moran. she said it opened the door to competition and innovation but we didn't break up microsoft. imposed behavioral remedies, substantiating the idea you might be able to rein in these companies with behavioral remedies. mosto is under the pressure, facebook with the elections and fake news scandals ? or google with their willingness to want to work with china and that political pressure? peter thiel calling them treasonous, for example.

>> is funny, each week it seems like a different organization is under fire. the focus is there but in the hearing so far it's been a lot about amazon. on the facebook side there has been a lot of heat, but also in the data protection with antitrust. >> it's great to hear your expertise, jennifer. onlythose were not the stories from capitol hill today. executiveok responsible for libra faced questions and he tried to assure them that facebook can be trusted with user money. >> trust is primordial, we have made mistakes in the past and are working and are continuing to work hard to get that are. we have invested in a number of programs, notably on privacy, election integrity, and another -- number of other issues. >> joining us now, the manager of grayscale, who has $200

billion of assets under management. let's talk about the flow you are seeing in the assets of digital currency, but did libra help to focus the mines and the attention of those when we saw the likes of bitcoin being fueled i this discussion? >> it is an important moment for digital currency ecosystems. when you see companies like square, reallyl, starting to devote their energy to digital currency endeavors, it causes everyone from policymakers to the investment community to focus on asset efforts. i felt like one year ago crypto was in its own little world, had a lot of cheerleaders . now you have the president, one of the most powerful in the world talking about it, which are not sure is a good thing. congress is debating it. do you sort of welcome this attention?

what's important to remember is that it's early in the lifecycle of this asset class and what we are really starting to see is the development of the infrastructure. yesterday secretary mnuchin's commentary, for example, looking at digital assets and anti-money laundering issues in place, ky see, money service business practices, that's the kind of stuff with the infrastructure around assets where they can really stand to benefit. >> i wonder how many of the projects -- problems we are seeing right now have solely to do with the fact that facebook is in its name. if libra were coming from someone else, what it it that much scrutiny? does it hurt or help? >> i'm not even sure i'm ensuring the best person to comment on it, but i do think that the facebook approach of working closely with regulators atan approach frankly that our business in grayscale, we have been doing this for about six years and being the worlds largest asset manager we have to constantly being gauging with

policymakers, regulators, ensuring that we have the right level of disclosure. that's what talking to investors does. >> speaking of, you have seen a near tripling in your assets, quite phenomenal, up 2.7 billion from 900 26 million. where is the money coming from? >> a lot of folks in your seats ask where the money comes from when it comes to digital currency and it grayscale they haven't coming to us for quite some time. this past quarter about 84% of our inflows were from institutions. that's hedge funds, pensions, endowments, investors looking for digital asset exposure through a trusted counterparty and a framework that works for them legally and operationally. >> with those institutions you are talking about institutions that like more stability and we have seen a lot more volatility in the crypto. for the last couple of months, for example. how do you manage the volatility and reassure your clients that their investments are at least

somewhat safe. for 2018 we had the strongest asset raising stretch we ever had. $360 million against the market the did nothing but decline. when you see pullbacks in prices like that or even recently with in the market, investors are viewing that as an opportunity to get more exposure at more attractive levels so we are seeing investors moving not just into bitcoin, but around all the products we offer. >> talk to me about those. we try to differentiate on the program between blockchain technologies and bitcoin. has there been an interest beyond bitcoin to the other, broader currencies that are may be less popular? >> in the past quarter we saw more inflows that were not bitcoin products. about one quarter of them were towards ethereum and ethereum classic rod x. one of the big catalysts for that was that throughout q2 of

this year we secured a public rotation for our it here he am products. it gives digital asset exposure. >> is this still purely speculative, seeing them as a trance to trade or make money? when will we start to see the ethereum, particularly with its smart contracts, coming into play and getting the attention of people? >> our parent company has invested in 140 digital currency related businesses in 30 countries around the world, so these are countries were -- companies working on identity management solutions and different ways to implement things like smart contracts, etc.. it's very early days and we will eventually find some of those killer apps, but in the meantime the investment community is just one take away. it's really looking at assets storedtcoin as a digital value or goal.

we have seen that resonating with investors. >> michael, thanks so much for being here. up, not alloming views on u.s. treasury's are like. ,ranklin templeton fixed income it's cio shares her contrarian views. we have, this is bloomberg. ♪

>> time for a look at the stories trending across the bloomberg universe. some users are reading about deutsche bank as they discuss how to transfer their own $16 billion linked to hedge funds and they announced that they were exiting the business. pulling out about $1 billion per day in terms of funds and going elsewhere, a firm with details on the pressure for completing a deal.

bloomberg.com has a story about a way nestle can create chocolate without creating shared as sugar, using leftover products from processing, turning the white pulp that covers the cocoa bean into a powder that naturally contains is one smallually step for man but of giant leap for mankind. today marks the 50th anniversary of apollo 11 in the history of its landing on the moon get the saturn five rocket carried astronauts neil armstrong, buzz aldrin, and michael collins, the milestonehed of human history. you can follow these stories on your terminal on bloomberg.com. taylor? >> well, the franklin templeton fixed income cio has an upbeat view of the economy that persuaded her to go against the grain in the treasury markets

and on bloomberg earlier she shared her contrarian call in an exclusive interview. >> what we have set on treasuries is that 275 by the end of the year is feasible and if we continue to see the type of data we have seen today, on the back of the data you could easily get to three. if i look at where the u.s. economy was the last time we crossed three, you know, we are not doing that much right now, are we? time, thisame bearish call is pretty lonely on wall street right now. particularly because the fed has been dovish. given that line in the sand, when do decided you are going in a different direction? for us i think that ultimately as soon as the market tries to purely predict the fed as opposed to looking at the underlying data, it's a risky place to be. now it is up your moral hazard. you are saying the fed is going to deliver to the market.

and i don't they it will, despite the data. i think the fed has pre-much backed itself into at least a 25 basis point cut. marketa that because the is anticipating additional rate cuts the fed has to deliver? you know, three weeks ago the market was anticipating 100 basis points this year. data comes and these things change, the market changes with the data. >> are you investing based on what you think the fed should do or what you think the fed will do? >> that is a very good point. what the fed should do, as you know at this stage, i feel, is nothing and i don't think the fed will do that. however, being squeezed into overvalued assets to me doesn't seem to be a good way to go forward. so, what will we do? we will remain cautious because ultimately just because the asset is rising because of valuation, there's a limit to

how far you want to buy into it. the further you buy into that overvaluation, the riskier the position gets. >> would you go so far as to say that when the fed has 25 basis points at the end of the month that it will be a mistake they have to revert? or will they just adjust? >> at some paid -- stage if it's an insurance cut, they could easily reversed. no one is calling for race hike next year but if you get the type of underlying data we are getting, i see no reason to believe that the fed will not start hiking or reversing these so-called insurance cuts as we go into the next year. which is not something anyone is talking about, but i think we should be. >> your argument is based on economic health in the united states. particularly in the labor market and the last report that play on that scene. nevertheless, consumption, manufacturing, investment, they are all to an extent at risk

from this trade war. how are you factoring that in? >> i have to say that we have been looking at the trade war, i will call it trades skirmishes. there has been no war. --s an on comfortable truth, uncomfortable truth that we have an talking about trade since the administration came in. there have been distinct trades skirmishes without a war. trade tensions are here to stay and it doesn't matter who is running the show. that the trade tensions will have a material real impact. they will have impact on specific industries, specific parts of the economy, but not at a macro level. >> that was an exclusive interview with the franklin templeton cio. the big -- british pound, not so

great. 9/10 of 1% versus the dollar, the worst performer of the month and on the year. it seems as though it is bracing for boris johnson or the prime minister, saying that we don't deal with this until the 31st. >> we went five for a few months without this and you are bringing it back. caroline, with your knowledge over there, when will we get a u.k. prime minister? when will we find out for sure? >> next week. by the end of july. >> i feel like it has been pegged to the euro for the last three years. i can't remember his name, but the guy from over at the royal london asset management, he said it's basically been three months until they sorted out. all right, coming up, india is killing off the one industry they can bring tycoons and the line.

we will discuss that ahead. this is bloomberg. ♪

to asia ahead.ow hedge funds are the big business in india and it has taken seven years to reach the asset mark. now some heavy taxes are threatening to kill off an entire industry. shery ahn is here with the entire story. the general idea here is that the taxes on capital gains or investment gains are being raised to a high level relative to other countries and it has the potential to weaken the hedge fund industry? >> yeah, we are talking about the annual budget that came out and the prime minister releasing new tax brackets that the good for hedge funds. we are talking about an industry that isn't too big. for the last seven years they went up to about six early in dollars but if you take a look at how much they have poured the the equity markets,

relative size of the hedge fund industry is tiny and these changes could have a huge impact. >> one of the bigger issues, arguably, is the differentiation between offshore and onshore. i asset managers and hedge funds in the senate, they have put their capital elsewhere. wrecks that's the issue, offshore investors can always go back to the country and invest in other overseas economies but the onshore investors have nowhere else to go and we are talking about these big piles of money and when you are raising alternative investment fund taxes to 43% on annual earnings over 50 million rupees, $730,000, andy mccurdy says that will go somewhere else. and we are talking about tax brackets also for stamping out short-sellers. if you purchase and cash out equities within the year, taxes

will also go up to 21% from 18%, though some of the other changes could affect income from derivatives trading that is really not great news. >> another piece of news that sort of came out of asia couple tohours ago was the link china for u.s. treasuries that fell again. >> yes, the third month of decline, the lowest in two years, falling by $2.8 billion. 1.1 one trillion dollars. why do we always care about this number? is a sensitive topic, right? could it be weaponizing the trade war? most analysts don't think so. >> thank you for your perspective on all of that. shery ahn on "daybreak." qualcomm shares are up, they are getting u.s. support in a bid for the ftc antitrust ruling. remember back earlier we heard that they had lost their bid to

pause that? >> quickly here morgan stanley said that the market a large brought -- block of broker shares here that are declining, they are now rising in after markets. this is bloomberg. ♪ i don't know why i didn't get screened a long time ago.

i kept putting it off... what was i thinking? ok, mr. jones... we're all done. i told you it was easy. with life line screening, getting screened for unknown health conditions is so quick, painless and affordable, you'll wonder why you hadn't done it before. so if you're over age 50, call now and schedule an appointment near you. for just $149- a savings of over 50%- you'll receive a package of five screenings that go beyond your doctor's annual check-up. ultrasound technology looks inside your arteries for plaque that builds up as you age and increases your risk of stroke and heart disease. after all, 4 out of 5 people who have a stroke, their first symptom is a stroke. so call today and start with a free health assessment

to understand your best plan of action. so why didn't we do this earlier? life line screening. the power of prevention. call now to learn more. ♪ emily: i am emily chang in san francisco. and this is "bloomberg technology." text --p in the next next tax hour, -- the next half hour, being grown on capitol hill. plus, president trump has an eye on google. he would like the u.s. attorney general to look into peter thiel's allegation that google's