>> coming up on "bloomberg best." the stories that take the weekend business around the world. markets keep calm while global carry on. >> we'll have to see the chance to form an alternative majority in the new government. >> germany ponders stimulus as recession looms. be found.h can >> civil unrest and government pressure keeps hong kong on edge. >> we're all breathing sigh of relief that we didn't see violent clashes. first time social networks saying china is a

problem. >> negotiations remains in deadlock with no deals. was thewe saw yesterday there maybe willingness to talk. round of earnings report sends signals about the global economy. >> certainly in europe is that softening.'re seeing >> federal reserve chairman jay getsl speaks and bloomberg the insight. >> we're at a sort of now.ibrium >> we have to be careful not to when we don't have significant problems. stimulateates will our economy somewhat. a i don't see this as beginning of the rate cut cycle. ahead on all "bloomberg best."

hello and welcome, this is "bloomberg best." weekly review of the most important business news, analysis and interviews from themberg television around world. it starts with a day by day look headline. on monday the market respond positively that seem to imply an easying of u.s.-china trade tension. >> the commerce department announcing that the u.s. will for 90he huawei waiver days so companies can continue to do business with huawei. >> they got another 90 days. 90-day reprieve that applied to existing u.s. huawei,s of particularly those who run world networks that depend on huawei equipment. playe suppliers to huawei. updatingws google to

huawei phones with new security patches. move.s a limited need to be careful about overinterpretting this. very much al huawei.n happening in the department of commerce added subsidiaries to huawei. at least temporary reprieve for u.s. customers. extramany could spend an 50 billion euros in an economic crises. financeccording to the minister who has put a number on the possible fiscal stimulus for first time. fears looming recession are pushing berlin now to consider suspending its balanced budget policy. spent ins what germany the last crises. he said we have the fire power to use that money. we have been lowering our debt to below 60%. bank today from the

that a recession is entirely feasible with a contraction in quarter. we hear from people familiar, that the government is looking measures forl stimulus package who will focus economy.mestic government does have the money. that's a lot better than the peers. it does decide spending is the cash can be found. italy, prime minster announced he's going to resign. attacking deputy premier. was sitting next to him. some calling his decision to crises political irresponsible. is >> he's going to resign in couple of hours. his going to hand resignation to the president. then he has to accept the

and tomorrow morning, he will start with the party. he would have to see if there's anhance to perform alternative majority in the new government. chances,sn't see the he will see another election. he wille any stability, name a new prime minster and ask a government. >> the five-star movement in the holdingic party realize talk over possible coalition. what's the possibility they work together? have some common ground. the idea that's being floated is asking a limited program focusing on areas where they are interests do meet. areas like ecology, civil rights. possibility that common ground. it's just a open question whether they can bridge over differences.

ahead of the annual gathering in jackson home. meeting.rom the july should policymakers view the 45 cuts. argue whether to lower rates. that really sent some ripples through the bond market. what did you take away? to ratify what they did. if they want to do it again in september, the conditions they the talking about, uncertainty over trade issues, that sort of thing, still remains. caution about spending. what we don't know is they're see the react if we consumer side of the ledger coming in strong. so hasve been strong and retail spending. if that continues and if dolation ticks up a bit, they want to pause in september and wait and see something more needed. that's still a possibility. of after a better idea jay powell speaks on friday. u.s.ina hits back at the

with tariffs on $75 billion of imports. will take effect in two stages. december 15th.st one echoing tariffs see on chinese goods.d are the tariffs spinning out of control or is this a measured response from china? a measured response from china. areit is a sign how things escalating. as we've seen today, both sides tariffs onslapping each other and the heat is rising. >> we are counting down to those the federalom reserve chair jackson hole. head chair powell about to give speech. michael mckee has a copy of remarks. go beyondir does not his promise to act as appropriate to sustain the

expansion. even though he says that trade forcy is a worry something the u.s. economy. "because the most important monetary policy are felt with uncertain lags of a year or more, committee must attempt to look through what maybe passing developments and tous on things that seem affect the outlook overtime. as appropriate to sustain the expansion." act asomise to appropriate meet wall street's of being devilish enough. >> two major stories. jackson holes and trade. trade.o president trump tweeting he will respond this afternoon to china slapping another $75 million of tariffs on u.s. goods. the stabilitying of financial markets. .> the past 100 years only incumbent president didn't

reelected -- you have consumer confidence down. things are weakening here. he needs to do whatever he can the economy. >> the president tweeting out earlier, my only question is, the bigger enemy, jay xi.ll or chairman the president made a calculation he's going to double down on his bank.s on the central >> i think the market reaction to the various back and forth been really instructive. thesaw stocks fall after headlines that china was going to retaliate and raise tariffs imports. then after that, jay powell's act aspledging to appropriate and hinting at more easing was enough to push stocks up. of course, president trump came traded gave more developments to digest. now stocks are back down.

>> trump said he will respond and he has on twitter. we got a series four tweets. he said many china has been taking advantage of u.s. on much more. our country has been losing of dollars billions a year to china. past administrations allowed china to get so far ahead it's become a great burden to the american taxpayer. as president i can longer allow this to happen. this unfairnce trading relationship. china should not have put new on $75 billion of u.s. product. politically motivated, starting on october 1st the $250 billion of goods and currentlyrom china taxed 25% will be taxed 30%. remaining $300 billion good taxed at10% will be

15%. >> still ahead on "bloomberg best," much more from a busy week of fed speak. and women who make monetary policy talk frankly about the path ahead. next, earnings report also made headlines this week closenvestors paying attention to the forward up. >> very flexible way in which use our cash. we're ready for whatever the world might throw at us.

>> this is "bloomberg best." even earning season winds down. investors plenty for to ponder. players.in with a key company fights to

maintain position in a shrinking smartphone market. the myths. blame this on the trade war. >> he's facing head winds on a of mac cro economic fronts. which we have seen pressure, smartphone sale. revenue.et most of its but it trying to expand into higher margin area which internet services like selling ads, like becames and and sell other devices. we assistant seen sales to take off. most of the revenue areas have slown down a lot. investors haven't seen a lot of promise to produce growth. 44%.right spot did grow >> china biggest search engine analyst revenue estimate. that's facing new challenges.

good set of numbers from bidu. the bright spots? baidu offered investors some reassurance. at least for now. able to grow advertising, face of business in the macroeconomics slow down. incumbents.isting >> the world biggest minor warn china and trade tensions are the key risks to prices.material despite this, they boost final on higherto a record annual earnings. sheeth our strong balance with a flexible way in which to use our cash. we're ready for whatever the

throw at us. we can profit from a downturn. but we can throw off a lot more potentially in an upturn. dividend sustainable? this is sustainable for a period of time? >> we don't have progressive dividend. we change it to a flexible dividend. based on a ratio of 50% underlying earnings. it will go up and down depending on how much is performed. the many tools we have to see through what might in theping in the water future. that's why we're comfortable in that record dividend today. >> new risk mining is australia's biggest goal. reported four-year earnings, up 22% to

$561 million. output. to get therities is best year hole on returns. focus on strength. we look at investing in existing operations, looking at projects. new they believe also keeping them shareholdering funds. 19%.creased dividends by our methodology for investment has stood up well over the last years. we intended to continue the had. that we >> the company came out with giving the green light to $700 million expansion of its still mill. that's in ohio. posted underlying $966 million.

which is higher than the highest estimate out there from analyst. concern aboutwing potential global recession. i'm wondering what are the still telling you about the health of the global economy? mixed story.s a we're seeing some softening in the u.s. still okay.is we sellly to building customers and automobile construction remains strong. we've seen some price softening asia.theast china's economy is still very strong. here in australia, a slight softening in residential activity. from that point of view, just a moderate softening from high levels. the regions we operate in, asia, australia and north america, the markets are okay. >> tj max reporting earnings.

more retail woes ahead. tj max.art well inventory is building up and they're not selling as much merchandise. trouble spot in the quarter with home good change, there.as flat sales they had not great merchandise selection in that chain. tjx becauses is, the way their inventory model works they turn it quickly. when they land on the wrong product, they're able to work quickly.hat kohl's that top line number was grizzly. 2.9% decline in comparable sales. we see early promise from this has.nitiative it where it's accepting returns of storers.rchases in its leader there.n a >> shares of target at record strong earnings

gain more than 3%. >> they got that old feeling back. quarter where they've done compensationally well. higher.k is comps up 3.4%. traffic higher. brain cornell turn around beginning to help. broughtors, they have private labeled brands you can only get across different sections kids, food, apparel and furniture. they redesign store. their delivery strategy really bring down margins but drive more traffic to the store. this turn around really showing the numbers. have a like at quantus. earnings are out. isiness side of the business flat. reported lower.

>> you say that you seen demand for flights to hong kong drop about 10%. does that continue, do you weakness see further in demand in flights to hong kong? >> we're taking that for the next few months. have the flexibility of moving to slightly smaller aircraft. 300 at the moment. sametially same aircraft, product but less seats. we'll do that over the next few months to take 7% of capacity out. ♪

>> welcome back to "bloomberg best." federal reserve was focus attention this week. on monday president donald trump urged the central bank to cut basesst rate by 100 points. it will aid the global economy u.s.ll as the boston fed president was one of two members who voted against a bases point cut in july. he explained his dissent in an interview with bloomberg. >> economic conditions are pretty good. a7% -- 3.7% unemployment is

low rate. if you take out some of the outliers, it's closer to 2%. that's exactly 2%. my own view was that we have to be careful not to ease too much don't have significant problems. the focus is not to do something the exchange rate or something that necessarily takes care of the world economy. supposed to focus on unemployment inflation in the united states. we're in a pretty good spot now. there are cost to easing at ease.you don't need to >> what's the cost? >> one of the ways that monetary policy works, it cause people to earlier thand cars they otherwise would. you choose to make an investment because interest rates you think will be temporarily low. you mightxpenditures

not otherwise make. when we lower interest rates we lower.e cost of that that means in both house holds more likely to be leveraged. they're in much more worse shape. we have to think about the financial stability curve. it's thinking how much we want firms beingand leveraged. >> as you look ahead to the september meeting, you're a voting member. the question of cutting rates again. the question will be on the table. you watching the consumer very closely it's something that not towardsu waiting to see but saying no, i agree. i'm on board. to cut rates again. >> i'm watching a number of things. i'm looking at what the consumer doing. consumer confidence was weaker. that's something i'm paying attention to. sales numbers was quite strong. that would indicate that if that we'll have enough

consumption in the 3rd quarter gdp.hat will bolster i will pay attention to geopolitical concerns. brexit is coming up in october. of things to be worried about. we can't really be determining too far inlicy advance. we'llsters still expect get reasonable growth. but i thinkre low it's reflective of global conditions. want to see evidence that we're going into something that's more of slow down if i'm at 2%, i'm not as worried about that. up on "bloomberg best," more conversations with officials. jackson hole was buzzing as pressure builds to deliver deeper rate cuts. members share their perspective on policy debate.

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rosalind: you're watching "bloomberg best." reservek, the federal bank of kansas city hosted its symposiumnomic policy in phoenix jackson hole. it was challenges for monetary there and bloomberg was to discuss those very challenges with several of the fed regional bank presidents. >> as i look at where the time.y is, it's not yet i'm not ready to begin to provide more accommodation to seeing any without outlook that suggest the economy is getting weaker here. >> you were an advocate of

raising rates to get ahead of inflation. if you're not ready to cut rates where ratesy with are given that inflation is wouldthan anticipated and you be happy to leave them at this level for quite some time? think that's a process of judging how the economy unfolds. rates are now relative to the unemployment and inflation, we're at a equilibrium now. i'd be happy to leave rates absent seeing only weakness oar strength -- or strengthening. >> where would you put neutral now relative to where you are? are you tight? you loose? how do you see it? >> i would judge policy to be at neutral or even accommodative with the last rate cut. about where real interest rates are relative to the rate of inflation, we're

operating close to zero with real rates. i can't believe that is tight any any sense for the economy now. >> how much accommodation does the economy need? >> i like to think about the mid-90's. the 95 example and 98 example. the viewersof weren't around paying attention at that time. at that fed adjust was worried about the asian currency crises. to today.ar lower the policy rate by 75 points. u.s. economy powered through episode.e the committee took those insurance cuts away. baselinehat's a great idea about what we're looking at now with a global trade war, manufacturing and contraction and possible spillovers to the u.s. ensure that economy against that and stay out of

trouble. bases think maybe 75 points where you would see us stopping at this point? >> i'm saying that's what they the 1990's. i don't know where we'll end up. the think that you got field curve that's massively inverted here. you got the funds rate as the highest point on hole, yield curve. there'sto react that been a downdraft in global yields. insurings it you're against? there doesn't seem to be a demand problem in the u.s., it seem to be a constant credit problem. >> this is a global slow down goingere's a trade war on. i don't think resolution likely any time soon. this trade war is triggering world,ctions around the other countries reevaluating their own trade relationships. get out ofeasily control and easily feed back to the u.s.

case but ity base is something that could happen. i think we should protect against. >> how does monetary policy do that? stimulateates will economy somewhat, that would help us power through the waters the trade war. fed iagreement within the think is about much more about how to manage the risks. economy, see the u.s. the u.s. consumer is strong. u.s. consumer stays strong, we're not going to have a downturn. is, manufacturing is weak. decelerating.is if those intensify, that will seep into the rest of the economy. the lastmer will be thing to go. what i'm concerned about is if those negatives intensify, you reports a negative jobs

in the number of x number of months. then you'll see weakness in the consumer. if we wait to see that, we would wait too long. minded that we may need to make a policy adjustment here in the next x number of months and i'm keeping an open mind and i haven't made a decision yet. i will decide before the meeting. >> how big policy adjustment do you think we need? was jay powell in his july 31se saying mid course correction, cycle.reet is in the cut >> i've been open about saying, unless i see meaningful weakness, i view the adjustments tactical. this as end of rate cutting cycle. >> i think it's very important the data.tch we have to be uber data

dependent now and reacting to what's happening in the economy. sentiment.anges in uncertainty causes people to be sort of like, i'm little bit what's goingut forward. are they making decisions on uncertainty. we might have to move things. >> what are business leaders telling you? have gottenthings worse, they might be seeing step down because of the impact what's going on? > every business contact i talk talk, always mention trade policy uncertainty and tariffs is a concern of theirs. of the firms that i talk to still say they're on their plan for investment for the year. they are seeing tight labor markets. to hire and they are attractng wages to workers. larger firms that have more multinational connections are slow downy both the in global growth and the trade

policy. reassessing their plan. i would say that our firms at fourth district, we have exposure to manufacturing more robust and have been able to respond pretty well uncertainty. they are very concerned about it. we have the next potential leg of the expansion of the tariffs to the consumer side. catalysthat could be a or changes in plan. we haven't seen it yet. until get some more information on how firms are reacting to that before advance to it. >> i think right now, we are where we need to be. lyat said, there are clear downside risks to the economy. biggest concern i have now is when you talk to business i talk to says that the cost of capital is inhibiting business investment.

been the drag on the economy now. it's business investment. not the consumer. consumer has been the hero of the american economy. if that's true, the business investment is not being held cost of capital. reducing interest rates will have no effect. what's holding is back is around policy >> is there anything for the fed to do? are you feeling pressure to be savior of the economy because you're the only game in town? >> i think we have top act as appropriate when we see the economy having a shock. now.'t see that i don't think we need to act now. >> do you anticipate from what contacts will tell you that the economy is going to deteriorate? too?hey on hold hold. of them on hol it's perfectly reasonable not to bet.a big bet.absolutely

it's absolutely reasonable thing to do.

rosalind: this is "bloomberg best." global tour of the top business kong.s in hong protesters filled the streets in the 11th consecutive week of demonstrations. >> thousands are protesting heavy rain in hong kong and one of the largest demonstrations since the unrest began in june. largely peaceful. there's a change this tone from the protesters. all breathing sigh of relief that we didn't see violent clash this week. remarkable.are organizers say 1.7 million streets.owed up on the government puts it 128,000. but it was a stunning show of

power here. public opinion hasn't changed condemnation of recent eescalation. we saw the backlash after protesters had violent scuffle. change ofment showing tone. saying if this continues calm, theyreturns to have readiness to start day log once again. >> china has been using fake accounts to undermine the legitimacy of the hong kong protest. that's according to facebook and twitter. we have taken down hundreds of accounts that originated in mainland china. the first time we're talking about china. we talked about russia, we've talkedabout iran, we've about lot of other countries theseave tried to run kind of coordinated disinformation campaign. this is first time social saying chinang out is a problem. this is just the beginning of what potential china has to run these campaigns.

of chinaople bank start releasing new loan prime rate or lpr on the 20th of .fevery mark will it make lending rates bit more market driven? >> that is the hope. plan to replace the current benchmark with this new reference rate which will be on 20th of each month. this lpr will be calculated based on the interest rate for one year alone. offer8 separate banks their best customers. they're disregard the highest and find the mean. the banks are being told by the to use this rate as bases for new loans to house holds and central bankd the said it thinks this can achieve the yield ofering interest rates. it will make it more in

alignment with other central like the fed in control of interest rates across the board. centrall mile in the banks along awaited. look like chinese markets expecting a rather deeper reduction in borrowing earlier today after new one-year prime rate was set at 4.25%. >> this new rate disappointed. doesn't necessarily mean lower rate it's going forward and can it generate demand for new you think? >> i think it's a race to the bottom. globally with the fed leading all the central banks around the moving towards lower and lower rates. i don't think china can skate phenomenon. boris. prime minster johnson made his first public attempt to renegotiate the

deal. johnson said he's looking to replace the so called arab backstop. he sees a legally binding commitment not to carry border.ks at the are we looking at possibly maybe brussel giving in something to boris johnson? boris johnson comes back with this? from the eu perspective the johnson letter the best confirmation why legally backstop is needed. he's saying let's dispense with all this guarantees that are in that provide this insurance policy. instead just trust us if it it, we will fainte find a way to make it work. that will flyng with the eu. johnson will say we tried to blame the eu later, things will fall apart.

chancellor and angela it's up to the u.k. to put forward workables to the backstop. u.k. prime minster believes onerous is on us. >> boris johnson will agree not of october with no deal. what they can do is talk about the future language. theyackstop is there until agree on a future deal. that might be enough to boris johnson. that's a really big ask in a of time.unt >> germany held the world first 30-year bond auction offering a zero coupon and investors appetite there. buying less than half of the amount available. apologizegermany it auction maybe too

large. >> they trying to cover their base. it was a good day for bond traders say this is too much. we're going to buy 30-year bonds with zero coupon at a price that's above what we'll get. to bear.o much it's a real big risk because the further out you go on the curve more duration risk you're taking on. if there is a back up and if switch on fiscal stimulus, you can be looking at large losses. 30-year is too much to bear of euros. >> wall street regulators ramped up a talk. they've unveiled long-waited the volcker rule. less tryingore or to make it clear what trades are and which trades are not banned. banks claim in realtime activity

on trading, it's almost impossible to tell make those decisions about okay, can i do this for our runnt or is this going to afoul of volcker. the point was to go through and muchs it and make it simpler top comprehend. trade. not permitted that said, one of the democratic fdic members of the blasted the effort today. he warned that we're going to go the banking quasi hedge before the crises. >> bloomberg has learned that ramo -- at the world's biggest initial public offering. where do you think they are on the path? run of this.d >> this is the world biggest much anticipated. like you pointed out, aramco has

ed moleis and lizard. sort of manage expectations evaluation.o's interesting parts, lizard did in 2016e the cut back when aramco was planning to list. has lizard butse hassar now it has. a pretty good situation. >> aramco spun out -- announced today $7.6 billion deal. creating the second largest animal help company. it will be created in the first full year. how does that work? >> as you look at this transaction. doubles our pet business. petnces our livestock and business now. grows global market business for

pets and livestock. helps. it's very much strengthening and accelerating the current that we have. it comes back to this, we bring heritage elanco focused on the veterinarian. theal health has been leader in retail. to nowoing to be able meet pet owners where they want to shop with more portfolio, more information and more price points. tradingan sachs is division as planning. hiring spree in years. only coders need to apply. >> they're hiring coders. be the trendo everywhere now. >> this is one of the biggest sprays for -- sprees in years. all the roles they're looking to

fill is engineers. falls within that bucket. this feels more like a structural commitment. entirewhere are the market is headed. gather thisders weekend for the g7 summit. set against the backdrop of uncertainty, the meeting will provide a chance to address major international concerns. different issues that can be brought up. agenda?op of the >> there's many issues that on the sidelines officials worried about. are worried about trade. they worried about the global stage of the economy. perhaps a recession. they also worry about germany. it looks so, makes shaky and unstable. president trump always unpredictable in these situations. led head for another election. the bar is so low for any

agreement. even expecting a communique by end of the session.

rosalind: we're looking here at the bloomberg time line. elevatedkes is on volume. well above the 20-day moving average. comes as investors applaud plans by casino to sell more assets to pay down debt. that response we see illustrated here by the more positive sentiment. -- maybe they'll be become your favorite. here's another function you'll

find useful. you to. it will take our quick pick where you can find more context and fast insight. the making.n computing to make fastest super computers. technology is moving quickly toward reality, it's too soon to there.en it will get this is your bloomberg quick computing.ntum the computer you're using now bits.ses information in quantum computers use quantum bits this is called super position. q-bits can exhibit entanglements. properties let quantum computers consider multiple once.ilities at

a normal computer plugs away one possible answer at a time. figureout these calculations we can solve long calculations. how good it is, how fast it is, thousands of years potentially. lot of hype around quantum computers. researchers continue to make advances.l they promise am machine that can messages andded diagnose and treat disease based a specific patient's body. there's still a ways to go. difficult to make the physical computers the hardware for these things. is in the research material science figuring out to use.he best hardware you don't just talk about the traditional silicone chips we computers.al >> manufactures use tiny laps, seem -- semiconductors.

a canadian company became the sell quantum computers 2011. ibm, google started up in working all built quantum computers. microsoft is investing heavily while china is throwing million into the technology. promisee who knows the of the technology can't help but get excited about it. and if it works out the way it could, this is still something that people think is worth spending lot of money on. rosalind: that was just w. of the many quick takes you can bloomberg. you can find them @bloomberg.com all the latest business news analysis. for watching i'm rosalind

chin, this is bloomberg. from the couldn't be prouders

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emily: i'm emily chang and this is "best of bloomberg technology." we bring you all the top interviews from this week in tech. wilbur ross says the u.s. will ease sanctions on huawei for