rosalind: coming up on "bloomberg best," the stories that shaped the week. markets keep calm while global turbulence carries on. italy dissents into a crisis. descends into a crisis. germany ponders stimulus as a session looms. >> the cash can certainly be found. rosalind: civil unrest and government pressure keeps hong kong on edge. >> we are all breathing a sigh of relief that we did not see any violent clashes. >> this is the first time

negotiators are coming out and saying china is a problem. >> resident negotiators with no deal odds rising. >> the timing is a hint there may be a willingness to talk. rosalind: another round of earnings reports sends signals about the global economy. >> xiaomi is facing headwinds on a number of macroeconomic fronts. >> certainly in europe, there is no question we are seeing , weakening. rosalind: federal reserve chairman jay powell speaks at jackson hole. and bloomberg gets exclusive insight. >> we are at a sort of equilibrium right now, and i would be happy to leave rates here. >> we have to be careful not to ease too much when we do not have significant problems. >> lower rates will stimulate our economy somewhat. >> i don't see this as the end of a rate-cutting cycle. >> i think right now we are where we need to be. rosalind: it is all straight ahead on "bloomberg best."

hello and welcome. i am rosalind chin. this is "bloomberg best." your weekly review of the most important business news and analysis around the world. let's start with a day by day look at the top headlines. on monday, markets responded positively to news that seems to imply an easing of u.s.-china trade tensions. vonnie: the commerce department announcing the u.s. will review the huawei waiver for 90 days, so companies can continue to do business. >> they have 90 days for a limited part of their business. this extends a 90 day reprieve that applied to existing u.s. customers of huawei, particularly those who run rural networks that depend on huawei equipment.

some suppliers to huawei's handset business. we are looking at google and its android software. this allows google to keep updating huawei phones with new security patches. this is a limited move. we need to be careful about over interpreting this. there is still very much a crackdown happening on huawei. in fact, the department of commerce added 46 new huawei subsidiaries to its blacklist today, but at least a temporary retrieve for some u.s. customers and limited suppliers. matt: germany could spend 50 billion euros in an economic crisis. that is according to the finance minister olaf schultz, who has put a number and on a possible fiscal stimulus for the first time. fears of a recession pushing berlin to consider suspending its balanced budget policy. >> that is what germany spent in the last crisis. we now have the firepower to use that money. because we have been lowering our debt to below 60%. >> we heard from the bundesbank

today that a recession is entirely feasible with a contraction in the third quarter a possibility. we also hear from people familiar that the government is looking at potential measures for a stimulus package. so we are focused, and the government does have the money. it is running a surplus. its debt burden is down to 6% gdp and declining. that is a lot better than its peers. so if it does decide to spending is needed, the cash can be found. afternoon, this prime minister giuseppe conte announced he is going to resign. sharply attacking matteo salvini, who was sitting next to him. salvini, of the league, of course, calling the decision to spark a political crisis irresponsible, motivated by personal ambition. is goingminister conte

to resign to president mattarella in a couple of hours. he is going to hand his resignation to the president. tomorrow, likely tomorrow morning he will start with the party. what is next? we will have to see if there is a chance to form an alternative majority in the new government. if he does not see those chances, it will go to the next election. if he sees any possibility, he will name a new prime minister, ask him to form a government and talk in the parliament. manus: the five-star movement and the democratic party are holding talks over a possible coalition. what are the possibilities they work together? >> they do have some common ground. the idea being floated is a limited program focusing on areas where interests do meet. ecology, civil rights. there is the possibility for common ground. it is an open question whether

they can bridge over there many differences. >> fed unity appears to be fraying ahead of the annual gathering of central bankers in jackson hole. policymakers viewed the 25 basis point cut and insurance move, but argued if it would lower rates and how much. that sent ripples through the bond market. what did you take away? michael: it appears to ratify what they did. if they want to do it again in september, the conditions they were talking about, uncertainty over trade issues, that sort of thing still remains. business caution about spending. we don't know how they are going to react if we see the consumer side of the ledger come in strong. jobs have been strong and so has retail spending. if that continues and if inflation ticks up a bit, do they want to pause and wait and in and wait and see if something september more is needed? that is still a possibility. we will get a better idea friday

after jay powell speaks on friday. alix: china hits back at the u.s. with tariffs on $75 billion in imports. that will take place in two stages. one is september 1 and one is december 15, echoing the tariffs that were going to be put on chinese imported goods. into the u.s. are the retaliatory tariffs spinning out of control, or is this a measured response from china? >> well, i think it is a measured response. but it is a sign of how things are escalating, continuing the theme of the summer. as we have seen today, both sides just keep slapping tariffs on each other. and the heat is rising. vonnie: we are counting down to those headlines from the federal reserve chair at jackson hole. fed chair powell about to give his speech behind closed the doors. michael mckee has a copy of his remarks. let's get to our economic and foreign-policy correspondent. michael: the fed chair does not

go beyond his oft-repeated promise to "act as appropriate" to sustain the expansion, even though he says trade policy is a worrisome thing for the u.s. economy right now. from his remarks, "the most important effects are felt with uncertain lags of a year or more, the committee must look through what may be passing developments and focus on things that seem to affect the outlook over time or pose a risk of material risk of doing so. we will act as appropriate to sustain the expansion." does the promise to act as appropriate me walet wall street's test of being dovish enough? vonnie: two major stories hitting the economy and markets. jackson hole and trade. first two trade, president trump saying he will respond to china slapping another $75 billion in tariffs on u.s. goods. this is threatening the stability of financial markets in the u.s. >> the only incumbent presidents

not getting reelected presided over recession. that was carver, hoover, and i forget the third. i think trump knows he has to rectify the situation. things are weakening. he needs to do whatever he can to stimulate the economy. kevin: the president tweeting out, "my only question is who is our bigger enemy, jay powell or president xi?" he has made a calculation he is going to double down on attacks on attacks in central banks. >> i think the reaction back and variouseaction to the back and forth this morning has been instructive. you saw stocks fall after headlines china was going to retaliate and raise tariffs on u.s. imports. and after that, jay powell's speech pledging to act as appropriate and hinting at more easing was enough to push stocks up. and so then of course president trump came out and gave us more trade developments to digest.

now stocks are back down. emily: trump said he is going to respond and he has. on twitter, we have a series of four tweeze. he said "for many years, china and many other countries have been taking advantage of the u.s. on trade, intellectual property theft, and much more. our country has been losing hundreds of billions of dollars a year to china with no end in sight." "sadly, past administrations have allowed china to get so far ahead of trade, it has become a burden to the american taxpayer. as president i can no longer , allow this to happen. in the spirit of achieving fair trade we must balance this , unfair trade relationship. china should not have put new products, u.s. (politically motivated!). in parentheses. "

in parentheses. "starting october 1, the $250 billion of goods currently being taxed at 25% will be taxed at 30%. additionally, the remaining $300 billion of goods being taxed at 10% will now be taxed at 15%." rosalind: still ahead, as we review the week, much more from a busy week of fed speak. the men and women who make monetary policy talk frankly about the path ahead. also earnings reports made , headlines, with investors paying attention to the forward outlook. >> there was a flexible way we were able to use our cash. we were ready for whatever the world might throw at us. rosalind: this is bloomberg. ♪

rosalind: this is "bloomberg best." i am rosalind chin. even as earnings season winds down, there is plenty to ponder. let's begin with a round up of the key players in china's tech sector. starting with xiaomi.

>> the profit missed estimates as the company fights to maintain its position in a shrinking smartphone market. what caused the miss? can we blame this on the trade war, too? >> they are facing headwinds in a number of macroeconomic fronts. they are seeing pressure on their overall smartphone sales. they do get most of their revenue from the lower margin sales. they are trying to expand into businesses like selling ads. online content like games and music, and also sells other connected devices. but we have not seen sales take off enough to offset sales in other areas. investors have not seen a lot of promise in new areas to induce growth. the connected device unit did grow with the sale of tv's. >> the biggest searched engine in china, baidu beat rivals

estimates there putting out. where were the bright spots? >> basically numbers offered investors some reassurance, at least for now. it is able to grow its business in the face of a broader macro economic slowdown, but also send off essentially a challenge from up-and-coming rivals. also, existing incumbents like tencent. >> the world's biggest miner warned growth in china and trade tensions are the key risks to raw material prices.

despite this, the hp bulletin boosted their pay off to a record earning. >> with our strong balance sheet, the way we are able to use our cash, we are ready for whatever the world might throw at us. we can profit from a downturn but we can also throw off a lot more cash potentially in an upturn. >> is the dividend sustainable? andrew: we don't have a progressive dividend. quite early in my tenure, we changed it to a flexible dividend. it is based on a pare ratio of 50% on underlying earnings. it will go up and down, depending on how markets perform. it is one of the tools we have to sail through what might be choppier waters in the future in the way you have described. that is why we are comfortable paying this dividend today. >> australia's biggest gold producer closed with its best profit in years. they reported full-year earnings

up 22%, to $561 million. a record output from its mine. >> our priority is to get the best shareholder returns. we focus on where we can add strength in m&a. looking at new projects. also, keeping in mind returning shareholder funds to the shareholder. we increased our dividends by 19%. we are well placed now. our methodology has stood up well over the last five years. we just intended to continue the focus we have had. >> we are talking steel, the company came out with earnings, giving the green light to a $700 million expansion of its northstar steel mill. that is in ohio. that will boost capacity 40%. the company posted underlying profits, 966 million australian

dollars. which, actually, as we mentioned earlier, is higher than the highest estimate. >> there is growing concern about a potential global recession. what are the markets telling you? >> it is a mixed story. and the u.s., the economy is still ok. automobile construction remains strong. we have seen some price softening in the southeast asian market in recent times, but the chinese economy is strong. a lot being consumed internally. here in australia, a slight softening in residential activity. but from our point of view just , a moderate softening from high historical levels. generally the regions we operate in, asia, australia, and north america, the markets are ok. >> harold stores kohl's and t.j. maxx both reporting earnings.

estimates,alysts' sending shares slipping, signaling there may be more retail woes ahead. this quarter, inventories are building up and they are not selling as much merchandise. >> the real trouble spot was their home goods chain. basically, they had not great merchandise selection in that chain. the good news is, because of the way that inventory model works, they turn it quickly. when they land on the wrong product, they are usually able to work through it pretty quickly. kohl's, that topline number was pretty grisly, and a decline in sales. we do see some early promise from this new initiative. accepting returns of amazon purchases. it shows the importance for stores thinking creatively to of how to address foot traffic. kohl's are something of a leader.

vonnie: shares at target a record. posted strong earnings in a gain of more than 3% in comp earnings. >> they have that old target feeling back. third quarter they have done exceptionally well. comps up 3.4%. traffic higher. the ceo continuing to help. they have brought brands into the target stores, across that you can only get there, across different sections including kids, food, apparel, furniture. redesigned the store. consumers are really liking that. second, the delivery strategy, fulfillment strategy is really working to bring down margins and drive more traffic the store. the turnaround showing up in a big way. >> let's have a look at qantas. earnings were out and the company says the leisure travel market has actually weakened. demand from corporate customers on the business side is also flat. pessimistic comments as the

airline reported lower full-year profit, which by the way, also missed estimates. >> you say you have seen demands for flights to hong kong drop by about 10%. does that continue, do you think? do you expect to see further weakness? how long will that continue? >> we expect this will continue over the next couple of months. we have the flexibility of moving to slightly smaller aircraft. essentially the same aircraft, same product with less seats. we are going to do that over the next few months to take 7% capacity out. anticipations this will continue for the next few months. ♪

rosalind: welcome back to "bloomberg best." i am rosalind chin. the federal reserve was a focus of constant attention this week in the lead up to chairman jerome powell's remarks at the annual symposium. on monday, president donald trump urge the central bank to cut interest rates by at least 100 basis points, saying such a cut would aid the global economy as well as the u.s. the boston fed president eric rosengren was one of two members who voted against the cut in july. he explained his dissent in an exclusive interview with kathleen hays. mr. rosengren: it was tied to the fact that economic conditions are still pretty

good. 3.7% unemployment is still a very good rate. inflation is a little bit low. the core measure is 1.6%. if you take out some of the outliers using the dallas trim mean, then it is closer to 2%. in fact, it is exactly 2%. my own view was we have to be careful not to ease too much when we do not have significant problems. and so the focus is not to do something that affects the exchange rate or something that necessarily takes care of the world economy. we are supposed to focus on unemployment and inflation in the united states, and so i think we are in a good spot right now. there are costs to easing when we do not need to ease. kathleen: what is the cost? mr. rosengren: there are several costs. you cause people to buy houses and cars earlier than they otherwise would. you make a temporal substitution.

you make an investment now because interest rates are temporarily low. and so you make expenditures you might not otherwise have made. when we lower interest rates, we make the cost of debt lower. that means that households and firms are more likely to be leveraged. if we do that before we have problems, then we are in significantly worse shape. we have to think about the financial stability characteristics. how much do we want households and firms to be leveraged whenever we have a significant downturn? kathleen: as you look ahead to the september meeting, you are a voting member, the question of cutting rates again, it will be on the table. are you watching the consumer very closely, then, as something that would tilt you not toward waiting to see but saying, no, i agree i am on board? ,it is time to cut rates and cut them again. mr. rosengren: i am watching a number of things. consumer confidence is a little weaker. that is something i am paying attention to. the retail sales number was

quite strong. that would indicate that if that continues, we will have enough consumption it is going to bolster gdp. i'm going to pay attention to geopolitical concerns. brexit coming up in october. there are clearly problems in hong kong that could spill over in a broader sense into international markets. so there are plenty of things to be worried about. i think we cannot be determining monetary policy too far in advance. forecasters still expect we will get reasonable growth over the second half of the year. yes, bond rates are low but it think it is reflective of the global conditions, and global conditions are weak. i'm not saying there are not circumstances in which i would be willing to ease. i just want to see evidence we are going into something that is more of a slowdown. if i'm growing at 2%, i'm not as worried about that. rosalind: coming up on "bloomberg best," more conversations with top fed officials. jackson hole was buzzing as pressure builds on the fomc to deliver further rate cuts. and members share perspectives on the policy debate. >> if we were ever data

dependent before, we have to be uber data-dependent now. ♪ is bloomberg. ♪

rosalind: you are watching "bloomberg best." i am rosalind chin. this week, the federal reserve bank of kansas city hosted its annual economic policy symposium in phoenix, jackson hole, wyoming. it was challenges for monetary policy and bloomberg was there to discuss those very challenges with several of the fed presidents, beginning with esther george, the head of the kansas city fed. ms. george: as i look at where the economy is, it is not yet time. i'm not ready to provide more accommodation to the economy without seeing an outlook that

suggests the economy is getting weaker here. michael: you are an advocate of raising rates to get ahead of inflation. if you were not ready to cut rates, are you happy with where rates are, given that inflation is lower than anticipated? would you be happy to leave them at this level for quite some time? ms. george: i think that is going to be a process of how the economy unfolds. i think where rates are right now, relative to the unemployment rate and inflation , suggest we are at a sort of equilibrium right now, and i would be happy to leave rates here, absent seeing some weakness or strengthening that would cause me to think rates should be somewhere else. michael: where would you put the neutral rate right now relative to where you are? are you tight? are you loose? accommodative? how do you see it? ms. george: i would judge a policy to be a neutral or even accommodative with this last rate cut. if you think about where real

interest rates are, relative to the rate of inflation and where the fed funds rate is, we are operating close to zero. i can't believe that that is tight in any sense for the economy right now. >> how much accommodation does the economy need? >> i like to think about the mid-1990's example, the 1995 example and the 1998 example. i know some of your viewers weren't paying attention to financial markets at that time, but if you look at that, the fed was worried about the asian currency crisis, very similar to today, lowered the policy rate by about 75 basis points. the u.s. economy actually powered through that whole episode, and then the committee took those insurance cuts away later. i think that's a great baseline idea about what we are looking at now with the global trade war, global manufacturing and contraction, and possible

spillovers to the u.s. you want to insure the economy gets that and stay out of trouble. michael: so you think 75 basis points, where you would see us stopping at this point? mr. bullard: i'm saying that's what they did in 1990's. i don't know where we will end up, but i do think that you have the yield curve that is massively inverted here, and you have the funds rate as the very highest point on the whole yield curve. that does not make a lot of sense, so we have to react to the fact there has been a downdraft in global yields. michael: what is it you are insuring against in the u.s.? there doesn't seem to be a demand problem in the u.s. there doesn't seem to be a cost of credit problem. bullard: there's a global slowdown. this is the cost of credit problem, and i don't think there's a trade resolution

likely anytime soon. the trade war is triggering other actions around the world, other countries thinking about reevaluation of their own trade relationships. this could easily get out of control and feed back to the u.s. that is not my base case but is something that could happen and we should protect against that. michael: how does monetary policy do that? mr. bullard: well, lower rates will stimulate the economy somewhat, compared to what they would be otherwise, and that would help us power through the churning waters of the trade war. >> the disagreement within the fed i think is much more about how to manage the risk, and the way i see the u.s. economy is yeah, the u.s. consumer is , strong. and as long as the u.s. consumer stays strong, we will not have a downturn, or a severe downturn. we are going to have solid growth. the issue is manufacturing is weak, global growth is decelerating, and if those intensify, that is going to seep into the rest of the economy. the consumer will be the last thing to go, and what i'm concerned about is if those

negatives intensify, you could have a negative jobs report in the next x number of months, and then you are going to see weakness in the consumer. if we wait to see that, i think we have waited too long. so i am very open-minded and constructive that we may need to make a policy adjustment in the next x couple of months, but i'm keeping an open mind, and i haven't made a decision yet. i will make a decision before the september meeting. michael: how big a policy adjustment in the long run do you think we need? jay powell, his july 31 press conference, said midcourse correction, and yet wall street is pricing in right now the beginning of a rate cut cycle. mr. bullard: i've been very open -- have been very open about saying, unless i see meaningful further weakness, i view the adjustments needed as tactical. they should be limited, restrained, modest. i don't see this as the beginning of a rate cutting

cycle. >> i think it is very important that we watch the data. if we were ever data dependent before, we have to be uber data dependent now, reacting to what is happening in the economy, not just as changes in sentiment, because uncertainty causes people to be concerned about what's going forward, but are they actually making decisions based on that uncertainty? in that case, then we might have to move. michael: what are business leaders telling you? do they say things have gotten worse, that they might be seeing a step down because of the impact of what's going on? ms. mester: every business contact i talk to always mentions trade policy uncertainty, and the tariffs as being something that there's a concern of theirs. the majority of the firms i talked to still say they are on their plan for investment for the year, they are still certainly seen tight labor markets, trying to increase wages to attract workers. -- to retain and attract workers.

the larger firms that have more multinational connections are affected by both the slowdown in global growth and the trade policy uncertainty, and they are reassessing their plans. it is sort of a mixed picture but i would say that our firms at least in the fourth district -- we have exposure to manufacturing and free-trade -- that has been more robust and able to respond pretty well to this uncertainty. they are very concerned about it and we have the next potential leg of the expansion of the tariffs on the consumer side. i think that could be a catalyst for changes and plans. but we haven't seen it yet and i would like to wait until we get information on how firms are react to that before responding in advance to it. mr. harker: i think right

now we are where we need to be. that said, there are clearly downside risks to the economy. i think we would have to act as appropriate if those come to fruition, or even look like they are coming to fruition. the biggest concern i have right now is that when you talk to business leaders, nobody i talked to says the cost of capital is inhibiting business investment. that has been the drag on the economy right now, is this investment, not the consumer. the consumer has been the hero of the american economy. if that is true, and business investment is not being held back by the cost of capital, that's reducing interest rates well have no effect. what's holding it back is the uncertainty around policy, especially trade policy. michael: so is there anything for the fed to do at this moment? are you feeling pressure to be the savior of the economy, because you are the only game in town? mr. harker: i think we have to act as appropriate when we see the economy having a shock. i don't see that right now, so i don't think need to act. michael: do you anticipate, from what your business contacts are telling you, that the economy is going to deteriorate, or are they on hold, too? mr. harker: a lot of them are on hold. it is perfectly reasonable if you are sitting on a board to , a corporate board, to not make

a big bet on the uncertainty resolves. it is absolutely a reasonable thing to do. ♪

rosalind: this is "bloomberg best." i am rosalind chin. let's resume the global tour of the week's top business stories in hong kong, where protesters filled the streets in the 11th consecutive week of demonstrations. >> thousands of protesters defied heavy rain in hong kong in one of the largest demonstrations since the unrest began in june. the rally was largely peaceful. it seems there's been a change of tone from the protesters. >> i think we are all breathing a sigh of relief that we didn't see any violent clashes, but the numbers are quite remarkable. organizers say 1.7 million people showed up. the government puts it at 128,000, but it was a stunning

show of people power and perhaps a signal that public opinion hasn't changed despite china's condemnation of this recent escalation, despite the fact that we saw this backlash after protesters had a violent scuffle with police. if this continues, if everything returns to calm, they can start have a readiness now to start dialogue once again. anne: china has been using fake social media accounts to undermine the legitimacy of the hong kong protest, according to facebook and twitter. they have already taken down hundreds of accounts that originated in mainland china. >> this is the first time we are talking about china. we are talking about china. we talked about russia, iran, a lot of other countries that have tried to run these coordinated disinformation campaigns, but this is the first time the social networks are coming out and saying china is the problem, . this is just really the

beginning of what potential china has to run these kinds of campaigns. shery: the people's bank of china will start releasing a new low prime rate, or lpr, on the 20th of every month, marking the start of long-awaited reforms. what does this mean, and will this new rate make lending rates a bit more market-driven? is that the hope? that is the hope, so the pboc plans to replace the current benchmark one-year lending rate with this new reference rate, which will be announced on the 20th of each month. this lpr will be calculated based on the interest rate for a one-year loan that 18 separate banks offer their customers. they will then disregard the highest and lowest and find the mean of 16 submissions. the banks are being told by the pboc to use this rate as the basis for new lows, and the ans for household and businesses, and the central bank

says it thinks this can achieve the effect of lowering the real interest rate for loans. it will make it more in line with other central banks like the fed in controlling interest rates across the board, the final mile in the long-awaited reform monetary policy. >> doesn't look like chinese markets were expecting a deeper reduction in borrowing costs earlier today. the board remained flat after the session, after the new one -year prime rate was down .25%. >> this new rate has markets disappointed, doesn't necessarily mean lower rates going forward, and can it generate demand for new credit? do you think? >> i think it's a race to the bottom. as you know, globally, with the fed leading, all the central banks around the world are moving towards lower rates, and i don't think china can escape that phenomenon. francine: u.k. prime minister boris johnson makes his first public attempt to renegotiate the brexit deal.

in a letter to european council johnsont donald tusk, says he is looking to replace the so-called irish backstop. instead, he sees a legally binding commitment not to carry out checks at the border, as long as the bloc promises the same. are we looking at perhaps maybe brussels giving him something to boris johnson, or if boris johnson comes back with it would it be enough to push your parliament? >> i think from the e.u. perspective, this is the best confirmation they could ask for of why an illegally mandated backstop is needed, effectively he is saying let's dispense with all the guarantees that are in the treaty and provide insurance policy and instead just trust us that eventually if it comes to it, we will find a way to make it work, and i just do not think that will fly with the e.u. the johnson administration is saying, we tried, and are positioning to blame the e.u.

later if things fall apart. chancellorrman angela merkel has sent boris johnson's challenge to solve the border backstop within 30 days. she says it is up to the u.k. to put forward workable alternatives, and the prime minister agreed, the onus is on us. >> what we saw as the tiniest hint is the willingness to talk , and perhaps if boris johnson would agree not to leave with the no deal they could find a way forward. what they can do, perhaps, is talk about the future language because the backstop is there until or unless they agree on a future deal. perhaps if they can find some of that language, that might be enough to placate boris johnson, but then he has to get it through parliament. that is a really big ask in a short amount of time. >> germany held the world's first 30-year bond auction, offering a zero coupon, and , well, investors showing little appetite, buying less than half the amount available.

germany apologized, saying the auction may have been "too large," which might be the understatement of the day. >> well, they are trying to cover their bases. it was good for bond traders to stand up, and say we will buy 30-year bonds with zero coupon at a price above what we are going to get three decades from now, it was too much to bear and it is a real big risk, because the further out you go on the curve, the more duration risk you are taking on. if germany decides to flip the switch on fiscal stimulus, you can be looking at really large losses. so the 30-year might have been too much to bear for bond traders of europe. >> wall street regulators appointed by president trump have wrapped up a top goal, . they have unveiled a long-awaited overhaul of the volker rule that uses restriction on banks, making speculative investments. >> this is not a gutting of volcker. this is more or less trying to make it clear what trades are

banned and which trades are not banned. banks claim in real time the way they conduct activity, it is almost impossible to make those split-second decisions about can ok, can i do this for a client? or is this going to run afoul of volcker? the point of this was to go through and cleanse it and make it simpler to understand, this is an allowed trade, this is not permitted trade. that said, one of the democratic board members of the fdic's blasted the effort today. he basically warned that we were going to go back to the banking quasi hedge fund days we saw before the crisis. >> bloomberg has learned saudi aramco is taking advice on the oil giant for the biggest ipo, aramco slamming a listing as early as next year. where do you think they are on the path? this is the second run. >> this is the world's biggest ipo, very much anticipated

eagerly anticipated, and aramco ,, as you pointed out has listed , them to advise it on this ipo. they will be playing key roles in the advising process, including helping enlist underwriters, listing venues, as well as to sort of managing expectations around aramco's valuation. and i do want to point out one of the most interesting parts of this, is that lazard did not make the cut in 2016 when aramco initially was planning to list. it did not choose lazard as one of their advisors to be part of the process but now it has. so lazard in a pretty good situation. david: the animal health company that spun out of eli lilly last year announced today a $7.6 ayer's animaly b health unit, creating the world's second-largest animal

health company. they say it is going to be created in the first full year. how does that work? jeff: it doubles our pet business, balances our livestock and pet business more globally, grows our emerging-market for pets and livestock. that helps. it is very much strengthening and accelerating the current strategy we have, and i think it all comes back to this -- we bring a long heritage, we have been the leader in online retail. today it's about 40% in u.s. pet purchases. we will be able to meet pet owners where they want to shop, with more portfolio, more information, and more price point. romaine: goldman sachs' trading division is planning its biggest hiring spree in years, but only coders need apply. they are not hiring commodities traders, they are hiring coders, which seems to be the trend everywhere. >> this is one of the biggest hiring sprees from goldman in years, and what are they doing? they are hiring engineers. they had to go up and down the chain to win approval, it is significant in terms of what

they had to put out to hire this kind of talent, yet all the roles they are looking to fill are engineers, and that is critical because in some ways it tells you it is more like a structural commitment than a cyclical commitment. that is where the entire market is headed. >> world leaders gather in france for the g7 summit, set against a backdrop of growing uncertainty, the meeting would provide a chance to address major international concerns. lots of different issues that could potentially be brought up at the g7. what is at the top of the agenda? maria: there are many issues that officials are worried about. they worry about trade and the global state of the economy. they worry about a recession. they also worry about germany and the politics, because it is so shaky and unstable everywhere. perhaps a no deal brexit, president trump always unpredictable, many think italy could be headed for another election.

i have to say the bar is so low for any agreement that we are not even expecting a communique by the end of the session. ♪

>> we are looking at the gd function on the bloomberg terminal, where there are on some elevated volumes, well above the 20-day moving average. it comes as investors plan to sell more assets to pay down debt. that response has been illustrated here by the more positive move sentiment. rosalind: there are about 30,000 functions on the bloomberg, and we always enjoy showing you are our favorites on bloomberg

television. they will become your favorites. here's another function you will find useful, quic go. it will take you to our quick takes, where you can find important context in fast insight into timely topics. here's a quick take from this week. >> decades in the making, quantum computing is the technology that could make today's fastest supercomputer look like an abacus. teams around the world are racing to build machines using different approaches. while the technology is moving quickly toward reality, it is too soon to tell when it will get there. this is your bloomberg quick take on quantum computing. the computer you are using now processes information in bits that can represent two possible states -- one or zero. quantum computers use quantum bits for qubits, which can represent one or zero or both at the same time. this is called superposition.

qubits can also exhibit what's called entanglement, estate in which a change to one changes the state of another. these properties like quantum computers consider multiple possibilities at once, while a normal computer plugs away at one possible answer at a time. >> if we figure out how to do these kinds of calculations we can solve absolutely complex and unfathomably long calculations with a quantum computer that would take a traditional computer, no matter how good or how fast it is, thousands of years potentially. >> there's a lot of hype around quantum computers and researchers continue to make incremental advances. evangelists promise machines that can break the most impenetrable coded messages, more accurately predict weather patterns, and instantly diagnose and treat disease based on a specific patient's body, but there is still a ways to go. gerrit: it is very difficult to actually make the physical computers, the hardware for these things. a lot of the research is sort of in material science, figuring out what is the best hardware, and there are a few different options. when you talk about a quantum computer, you are not just talking about the traditional silicon chips we see.

>> manufactures either use tiny loops of super connecting wires, superconductors, combinations of both, or even stranger approaches, like twisting subatomic particles into a braid. and many qubits can only exist in temperatures colder than deep space. a canadian company called d wave solutions became the first to sell quantum computers in 2011, although their usefulness is limited to certain kinds of math problems. ibm, google, intel, and others all built working computers. gerrit: anyone who sort of knows the promise of the technology can't help but get excited about it, even if it is many years away, and even if it never works out the way theoretically it could, this is still something people think is worth spending money on. rosalind: that was one of the many quick takes you can find on the bloomberg. you can also find them at

bloomberg.com, along with all the latest business news and analysis 24 hours a day. that is all for "bloomberg best" this week. thanks for watching. i'm rosalind chin. this is bloomberg. ♪

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jason: welcome to "bloomberg businessweek." i am jason kelly. taylor: i am taylor riggs. jason: we preview the g7 meeting in france and look att the past drama failed editions. taylor: china's crackdown on cathay pacific sends a chilling message. jason: we will dig into the