mark: welcome. i am mark crumpton first word news. china says nancy pelosi's trip to taiwan is a violation of the one china policy and will now conduct missile tests and military drills around taiwan in response. china called the speakers trip shocking and a major escalation on the taiwan issue. pelosi is the highest-ranking american politician to visit taiwan in 25 years. she will be with taiwan's president tonight. in the u.k., -- it stirred plan to personal living costs. she was facing. spac classroom concerned mp's -- backlash from concerned mp's.

became less than 24 hours after truss announced the policy. she's in a race to replace boris johnson as the country's next prime minister. european union is on track to finalize a partnership agreement with thailand by the end of the year, nearly a decade after the pact was put on ice following a coup in the nation. it would be the first bilateral in order for the southeast asian nation. bloomberg learned eu member states want to strengthen the eu's role in the indo pacific region. in kentucky, more rain is pounding flood ravaged mountain communities. at least 37 people are confirmed dead. hundreds of others are unaccounted for. an official says the storm system moving east across the state could dump as much as two inches of rain per hour, impeding the rescue efforts. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.

i am mark crumpton. this is bloomberg. ♪ jon: welcome to "bloomberg markets." kriti: there has been a rise in price action. a negative day or positive day? s&p 500 inching lower. it was the tech outperformance that was crucial. outperforming. the rest of it is a little bit of a mystery. bond yields seeing volatility. up 14 basis points looking at the currency picture. you are seeing strength over asian currencies. jon: on the stock front we digest what corporate america is saying. uber with an encouraging quarter. jetblue dealing with higher costs. we have some dealnews.

cd bank acquiring -- the caterpillar outlook. impact in part by the realities of china. that is weighing on the dow component now. let's stay on the story of china and the tensions with the u.s. markets remaining on edge as the house speaker nancy pelosi visits taiwan, stoking tensions with china. she was greeted by officials in taiwan, much to the dismay of china which as a result announced missile tests and military drills encircling taiwan. let's get details from emily wilkins. thank you very much. tensions are running high. what can you tell us? emily: we knew china would be retaliating in a strong manner if pelosi made this trip. speaker pelosi went anyway with the backing of a lot of members in congress and the white house, both from her own party and republicans have backed this

historic trip. pelosi says the trip does not indicate any sort of wider change in policy towards taiwan but it is a show that the u.s. stands with taiwan and with taiwan's democracy. there were questions earlier in the year when we saw a russia engaging -- invade ukraine, if this is something beijing was watching. we have now seen china say it is going to be doing military drills as well as these missile tests. at this point the department of defense is confident they can keep the speakers safe during her trip. this is just one piece of the overall travel she is doing in asia pacific region. she will continue from taiwan and visit south korea and japan. kriti: we did hear that response from china that they are looking at military drills near taiwan. any response from the american government? emily: we have not heard too

much in response to these drills. the department of defense are confident they can keep a low see safe. pelosi was in contact with the white house about this trip and they had time to prepare. the next thing to watch is anything she says during this trip that will be closely analyzed, very closely watched. tensions right now with the u.s. and china are very high. a lot of people are going to be looking at the next day, looking at the meeting she will be having an seeing what if any meaning they can derive about how top u.s. officials are viewing taiwan at this point. kriti: emily wilkins, thank you as always. there's already a reaction. a giant chinese supplier of batteries decided to push back, announcing a multibillion-dollar north american plant set to supply tesla and ford. that's according to people familiar with the matter. joining us is ed ludlow.

you are moving the market. tesla and ford shares are fading. walk us through the implications for the supply chain. ed: we reported they are considering sites in mexico and the u.s. for quite some time. according to sources they were negotiating incentives and do to make a decision. because of the visit sources tell us they decided to push this back to september or october. they just don't want to stoke geopolitical tensions between the u.s. and china in going ahead and announcing a north american investment at this time. catl is the world's biggest maker of batteries for ev's. it's critical for tesla. i guess that as we see the market reaction. sources make it clear the plan is to invest in north america as much as $5 billion in at least

one if not more sites. they are making a decision here based on the news of the last 24 hours. jon: having to be cautious based on the views and china, -- in china and being mindful on legislatio in washington. walk us through what happens in terms of where things are made, how they are made, etc., in the electric vehicle market. ed: catl has been considering sites across north america. they were also considering canada but definitely united states and two sites in mexico. the reason we are keeping our eyes focused on them is knowing what kind of ripple effects of incentives for electric vehicles in north america. as it stands in the text, the batteries that go into electric vehicles in order to receive consumer-related incentives

would have to have minerals either mined or processed within a country united states has a free-trade agreement with. this has been a kind of awit and w -- wait and see mode. now it is very much the fact that nancy pelosi is in taiwan. the chinese government, we know how they feel about that visit,catl is a giant of the ev industry and made this decision proactively, i'm told. jon: no doubt to watch those political and business lines blurring. ed, thank you for that breaking news update. ed ludlow. as for how the market continues to react and geopolitical issues and earnings let's bring in amy wu silverman. never a dull day. this is the bigger macro story

we did not necessarily see coming because there was so much else on our plate. how has the market been reacting to these latest tensions between the u.s. and china? amy: you are right. never a dull moment. there are these unknown unknowns as well. i will tell you the reaction now has been a bit of a mixed bag. a bit of askew and arising volatility. nothing extreme. one case i will make is that the options markets are notoriously bad at pricing geopolitical risk. we did not see much activity either prior to russia and ukraine. they were deep impacts felt later. it is very early. kriti: there's a level of deja vu here the markets. going back to conversations we had during the trade war pre-pandemic. how do you hedge that kind of geopolitical volatility? amy: there are a couple of things we are talking with

clients about. it is something that's a continuation this entire year. when tail risk is not that expensive, you own it. you on the spread or fixed calls and call spreads. you do a shorter tenure to help you carry trades like that. what is fascinating is that is not with the market has been doing. you have seen a decent amount of trade going through. it seasonably makes sense. we have thrown a wrench into that with more geopolitical risks and more unknown unknowns. jon: as we wrap things up, against the backdrop of a market rally we saw in july how much conviction is there and whether or not we perhaps saw bottom in stocks? you have been watching technology names that have rallied off their lows of the

possibility of people selling calls in the market. amy: yeah. exactly. one thing that happened this earnings season, about 65% of the way through, we are following a different playbook than the last two quarters. i can really only think of ub er as a major one. people are pointing to that saying this means we priced in those risks. those inside moves are starting to be rich again. you are starting to see investors say tech had a big rally. let's sell options on days that they reported thinking we will get to a lower point in volatility. kriti: amy wu silverman, of pleasure as always to have you on the show. thank you for joining us. amy talked about it. uber beating estimates despite inflation worries. we have the details next.

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kriti: this is "bloomberg markets." uber reported revenue that beat estimates despite rising inflation. the shares are sobering to the tune of 23% on the day. let's talk with mark mahaney. he covers that company for us. what gets me about uber is it is trading on these massive ridership numbers. things like shipping and uber eats. write down the growth when it comes to the bottom line. mark: let me start with the

bottom line. one of the reasons the stock is up so much as we have got something called the cash flow and action -- inflection point. although they don't guide to it on a go forward basis, they have left the market with the impression they are now at a sustainable point from positive free cash flow that would build over time. that is what investors have insisted on with uber. they have delivered. that is why the shares are up. the topline results were better than expected. more on the mobility side than the delivery side you were asking about. the delivery side faces tough comps. if one part of the business that is macro exposed, cutting back and discuss rescinding, you can see them cutting back on uber eats and delivery. it is unclear whether that is happening. i asked the management team that

question on the earnings call. they insisted they had not yet seen a trend downward but investors should be concerned that could happen. that would be the weakest part of the business. we will watch that carefully. these results with the company showing premium revenue growth and profitability, it is a rare combination. we like the shares. jon: i'm glad you asked that question on the conference call. you had headlines of your own asking that. can we take away from a company like uber if people are still ordering their same old orders, that it would signal pricing power for them the same way you would think about that if a retailer is able to keep some of it rising firm? michele: maybe that is -- mark: maybe that is what is happening. i think we are all getting squeezed, all consumers. i think the uber customer base is login -- large enough that it does not skew away from average

household income. staples will be cut last and discussion every will be cut first. that $80 bill to bring in a couple of hamburgers and fries from the local boutique hamburger restaurant, that is probably less in the family budget now than it was 12 month ago. i still will be nervous about that segment of the business. i think the company gave appropriate guidance for that segment in the back half of the year. what i like about uber, the stock has materially underperformed your today so what do i know, but it has diversification. mobility, which had its knees cap during the covid crisis and deliver did well, then the recession comes in and impacts the delivery business. mobility is coming back and they are having a surge in new drivers. this is a good sign. the uber unlock occurs today. kriti: mark mahaney, $69 on the

stock. the optimism, you cannot mentored. thank you for joining us. markets are moving. s&p 500 and negative territory. the nasdaq slipping into negative territory. looks like it is coming off the headline that there are repercussions. catl causing plans for a north american plant. it is a battery supplier to tesla. yields up across the curve, and even the dollar not immune from the move. we will have that had. stick with us. this is bloomberg. ♪

jon: this is bloomberg markets. we mentioned earlier shares climbing up the brokerage was acquired today by candida's td's bank. they acquired first arising early this year. td selling some shares in

charles schwab to finance the transaction. let's bring in glen gibson, vice chair and regional head of td securities. i will start with what method you think -- message you think this ends about the ambitions on wall street. glen: thank you for having me. it's a great opportunity for td to support broad-based clients in united states. adding the cowan team, the capabilities they bring to the table gives us a tremendous combined platform to service our clients across north america. it fills in some of the capabilities we were looking to add in our td securities business, a broad research platform and a strong equity execution platform. we are excited to have the cowen team going forward. kriti: let's talk about the timeline here. i'm curious why you took on the cowen deal before first arising

is closed when it looks like the deal was meant to target capital market. deal volume is down. what gives? glen: great question. we build platforms for the long-term capability and service clients long-term. cowen come from a different capability set than the first horizon acquisition. it will not impact our integration at all. we will be integrating the firms as we meet forward -- carryforward. this is to prepare td securities to support clients into the future. you never know when these opportunities come along. it's a tremendous platform. despite the slowdown currently we have had a tremendous growth file both in td securities and cowen in the last couple of years. we expect that to grow into the future. jon: i mentioned as a separate part is selling some shares td holds in charles schwab.

people remember tedium your trade and schwab coming together. td remains a sizable shareholder in schwab, around 12%. one analyst says in some is if you look a trade-off of exposure to well through selling those schwab shares for capital markets exposure. what is your reaction to that? glen: we are focused on building our wholesale capabilities in the u.s. senate must north america to service our clients. we maintain a strong investment in schwab and maintain governance. using some of that capital to be able to continue to build our profile, build the td securities opportunities to support clients with servicing are america's most convenient bank clients on the commercial side, we think it is a tremendous investment opportunity moving forward. kriti: glen gibson, we think he was always on a big day for td securities.

let's get back to the marketeer. there is a lot of movement when you look at what happening. a lot of this we saw this morning when it came to nancy pelosi's trip to taiwan. we had that military move from the chinese military. they were talking about missiles and drills going close to taiwan. on top of that we had that scoop of our own ed ludlow saying the tesla supplier, the battery plant china is known for, they will pause plans to build that out. jon: he really is a reminder of the complications with this trip. for a market -- we talked with amy wu silverman earlier. the known and unknown's. we have known about earnings. we have known how the market is getting used to where the economy is going. we have a sense of what jay powell in the fetter up to. we spent a lot of time on that last week. the story of tensions

between china and the u.s. at one point was a dominant market theme had really taken a backseat. here it is back in full force. kriti: a complete deja view from the trade war on the trump administration that has reared its ugly head. the market has created some sort of resilience to the war in ukraine, saying this is something we can look through when it comes to commodity prices. not able to digest ore price in what's happening on the east of asia. jon: we will likely see how corporations react to this, not just those that are based overseas but take the caterpillar story that we talked about earlier, already navigating some of the challenges with respect to where the chinese economy is. just tied to the covid lockdowns and the ups and downs of getting back to regular business. kriti: it's a market move across the board. take a look at the yields. the 10-year yields, 272.

we will digest that in the hours ahead. stick with us. this is bloomberg. ♪

mark: now keeping you up-to-date with news around the world. i am mark crumpton. alessio republican senator dan sullivan says it's important to support house speaker nancy pelosi's visit to taiwan because, "we don't what the chinese comet's party dictating to senior american leaders where they cannot travel." senator sullivan said he and several colleagues put out a statement supporting speaker pelosi's trip. >> we are where we are on this. you can do a lot of monday morning quarterbacking of how it became such a contentious issue. my view and the view of a number of senators is we should close ranks now and now that chinese comet's party try to drive wedges -- communist party