the pimco head of the asia-pacific portfolio management in sydney. can find in-depth analysis on the day's big news. 8:00 inm 6:00 a.m., sydney. you can download the apple are accessed via bloomberg radio. this is bloomberg. ♪ this is bloomberg. ♪ betty: a quick check of the folksss flash headlines, in international looking for acquisitions to gain a foothold in the north american tourism market. the chinese conglomerate told bloomberg they are interested in anything related to the sector from travel agencies and resort brands to recreational content for buyers. the owner of club med has launched a new line of chinese resorts. years, they are checking out of hilton. this largest investor had agreed to sell 15.8 million shares valued at $1.3 billion. blackstone will realize some $14 billion in profit, meaning it has tripled its investment. get a venezuelan vote update from caracas and find out how geopolitical tensions surrounding the oil markets. that is up next. this is bloomberg. ♪ this is bloomberg. ♪ haidi: it is 8:30 in sydney, markets open for

pimco topping out at 3.5% by the end of this year.ty: on the currency front, brandywine management predicting a further 5% drop in the u.s. dollar by the end of the year, so why? why do they think this? they gainot expect buster run to continue, is the message from brandywine, warning investors in the u.s. saying a slowdown in the rise of treasury yields will put a pause to the greenback's strength. not to a chart looking at the dollar versus the u.s. budget balance. we can see the currency tends to weaken when the budget balance has worsened. the dollar index has risen 6% from the february low, and for the u.s. government, a weaker dollar is not necessarily a bad thing when they are trying to revive their manufacturing sector. betty: ok, thank you so much. ruth, our rates reporter. check our library online for some of the charts you just saw, gtv on the bloomberg terminal. giveew sony ceo will details on a three-year plan to pivot away from hardware and into other areas of entertainment and videogame subscription. he took of a in apr

let's bring in pimco's ton tony cranzeni. the 3% on the ten-year is something we talk about a lot.over it we're back below now. what's your action plan? >> there's much to do about 3% it's interesting in comparing it to the last time the u.s. ten-year hit 3% in 2013, the markets expectations about what the fed will ultimately do is different. so investors should be less fearful. in 2013, markets thought the fed would eventually raise the policy rate to 4%. today markets are thinking in the next five years it won't go higher than about 2 3/4% this 3% is different than the last the action plan is to first investors should be looking at core bonds, which is a conglomerate of bonds, you could say, like the s&p 500 of bonds the yield on the barclays aggregate, key cage of this, is about 3.3% today money managers like pimco are able to achieve alpha. if they do, like pimco has, this means the returns for investors probably will be in the 4s, which is not bad for an investor >> tony, thank you very much i hate to cut you off, my gosh we're out of time. it's timfoe r "squawk box. "worldwid

joining us is mike amey, managing director and portfolio manager at pimco.ward picture in europe, but overnight in asia, yesterday in europe, all reacting strongly to what is happening in italy, so let's look at the huge debt that italy has, alex pose—gil as the rest of the world? so the issue with italy, as you say, their total debt is 130% of annual output. the challenge with this is that italian interest rates we re very this is that italian interest rates were very low, which makes paying a large amount of debt relatively straightforward. the challenges, as interest rates go up, it becomes much harder to pay that debt. the last time italy got into serious trouble, the interest rate got up to 7%. so we are now three, roughly speaking, so there are someone in signs, but nothing like as bad as what we saw in 2011—12. that is why the markets, if you look at the broader markets, it has only been the last couple of days. and if you thought paying that off was hard, it would be even more difficult in lire! is anybody taking that seriously? both people see that

still with us from pimco, geraldine sundstrom.inside the bloomberg, a really interesting thing happening. the white line is the 10 year yield, the blue line is the three-month treasury build, almost -- bill, almost at 2%. do you want to be in cash because this is yielding more? h is becoming more attractive if you are a u.s. investor. that is not the case around the globe. i suppose it is a new year and is something that pimco has been talking about, the volatility on the rise. maneuver is room for and a decrease in freedom from the policymakers. we have used a lot of ammunition already. so keeping that powder dry involuntary markets is important -- in volatile markets is important. it is not a question of complete risk aversion, but keeping powder dry for a good entry point into those markets. alix: that brings us into the central bank divergence, which is increasingly divergent. fed minutes coming out from become a more important, especially what they say about asymmetry. i want to show you what is happening with treasury positi

ceo ofanny roman, the pimco says he doesn't see a bear market in bonds. do and how does that affect your e.m. investments? andrew perry, head of sustainable investing at hermes investment management --kamakshya: our year target is -- 325. we expect rates to go up, but we expect the rate to slow relative to the past few weeks, which has been a rapid pace of yield increase. what i would say from emerging markets standpoint is it maps the context of bond yields going up. it matters if they are going up fast in an environment where people are concerned about slower growth. that tends to be the most painful for risk assets more broadly, but also for emerging markets. i would argue that is the market we have been in for the past two weeks where people have been concerned about growth and yields have been going up fast. on the other hand, when bond yields go up gradually along with stronger growth, those types of environments tend to be good for emerging-market assets, good for e.m. currencies, and that is the environment we had in december, january, february, w

joining us now is lupin rahman in pimco europe who joins us from london.hank you for joining us. , i show the lira implied volatility for the next week. highest level since the crisis and the worst week for the lira since the crisis 10 years ago today. we had more measures today allowing exports to repay dollar denominated loans in the local currency. it does not seem to have stopped the route in the currency. what can be done to re-engender confidence in turkish assets? >> the government needs to do quite a few things, being that confident. the start of the process was the central bank hiking, behind the curve previously and a reactive finally. going forward, we need to see more consistent policy from the government. have fiscal dynamics return more on consolidation side and reassure investors they will not confront the economy using the guarantee fund. allow the central bank to do its job, to control inflation. that how concerned are you president erdogan who has embarked on his campaign to be reelected next month, that he will try to influence the centr

i think we would argue at pimco that trade still remains a real policy risk out of washington.ink the president is actually taken literally on his word about his feelings about trade but he can do things unilater unilaterally he doesn't need the congress it polls well. you can see in indiana, he was using this trade rhetoric to sort of fire up the crowd. we think trade is going to be a policy risk in particular with china. >> the headlines on nafta suggest progress, right? this march 17th deadline >> the may 17th deadline is -- speaker ryan came out yesterday saying that was a hard deadline. there's probably a little more flexibility but the point is that time is running short on nafta. there are still really significant issues that need to be worked out, including the rules of content for autos, ip, that investor dispute settlement issues so there's still have integral things that need to be sorted out before a pretty short deadline >> are you surprised, alex, that given some of the major risks how the u.s. and china are still far apart, how the time is ticking for nafta? geop

>> as it relates to pimco, no. relates to the whole change introduced by blockchain, it will revolutionize what they do. if you think a -- if you think of a world we have an absolute -- because of blockchain you'll be able to make sure that you go from executing a trade to everything being computed with the right information in one go. that will happen in the nuts addition -- in the not-too-distant future. >> why do you expect that to happen first? >> i think it will happen slowly over the next year. depending on how much people start to invest. we will be at the leading edge. >> i suspect the are, but are you less a believer in bitcoin them blockchain? >> yes, i'm less a believer in bitcoin. one other thing about this business is sometimes you need to say when you are not quite sure when something is happening. we are staying clear of it. we let other people get excited or not by what is happening. francine: that was manny roman speaking with john micklethwait. a new technology team is set to alter the future of f

vonnie: that was manny roman, the pimco ceo at the milken conference.heck in on first word news. unioney: the european does not like president trump's decision to delay imposing steel and aluminum tariffs. the eu called the uncertainty that for business and said the block should be granted a permanent exemption. the president will use the month-long delay to work out a deal with the eu as with canada and mexico. egypt's second richest man made a long-term bet on north korea a decade ago. he built the country's first telecom operator. now talk of peace on the peninsula has been contemplating the payoff. >> i've been waiting for 10 years. i've been paid in a currency that doesn't get exchanged easily. , i put aa lot of money lot of debt, waiting for the moment there is peace so i can read some of my investment. >> he says he is but half of his $5.7 billion fortune into gold. iran is rejecting claims by israel's prime minister that lied about its nuclear weapons program. netanyahu says material smuggled out of iran proves the country had a secret plan to b

joining us now with inside is libby cantrill with pimco. markets aree the not reacting that much.e were not surprised there would not be anything substantial. >> right. if you take a step back. what we are trying to do with china is fundamental. unlike the aluminum or steel , we are tryingta to reset the trading and a comic relationship with china. trading and- economic relationship with china. the markets are not reacting yet but we will see. shery: in terms of the escalation, you can see that china has started canceling commitments when it comes to bringing and soybeans. if you see the last three weeks, they have canceled those imports from the u.s. >> they are being very strategic about this because who is affected, the soybean imports. it will be red states and farmers who are a bit coalition for president trump. the chinese are being very deliberate about what type of actions they will take against the u.s. with that said, we can see and expect is that things will escalate because it is likely the united states will impose the $50 billion of tariffs they threatened about two

pimco says it will go higher. we talk treasuries next.we have another conversation with the st. louis fed president. clarity, that is all we want. we know what mr. bullard thinks, but a little more on the doubt. ♪ anna: good morning, everybody. 7:21 in europe. this is "bloomberg daybreak: europe." of thenear the start cash equity session this wednesday. let's look at how markets are shaping up. european futures are losing a little ground at the start of the trading day. u.s. futures are almost entirely flat. we have seen some selling in btp's, a spike up in yield in relation to german bunds. is there nervousness around who will be prime minister in italy, around the policies they are putting together? we have seen reporting from the italian press overnight. we will talk more about the u.s. 10 year yield in a moment. you have the lira in your sites, manus. fors: another record low the lira this morning. if we look at how the fx options volatility really ratcheted higher yesterday. one month volatility jumping about 20%. traded, fourwere po

when you look at what the folks at pimco are saying, for example, they are thinking 10 year yields willy stay where they are. look at things like two-year notes and will two-year note yields rise a whole lot more especially with the fed getting more hawkish with higher inflation? do your treasury yield forecast suggest will happen to the curve? will it flatten further? flattening is more likely to happen than anything else. we are not convinced we will see 10-year5% on treasuries, but with the fed continuing to hike the curve will continue to flatten. two-year versus the 10-year, another 30 basis points a flattening over the course of this year and getting to zero year. that is the environment where you can see the tipping point in the economy. when the curve gets flat, that is a worry for many that the economy could be headed for slow down. that is why you don't necessarily have to region that 4%. vonnie: do you remember a time -- differentet do differentcurve things. they are not in consensus anywhere? is not one consensus, there are several all over the place. that is the result of a

but pimco backed greensky is banking on a different trajectory. it just went public on nasdaq.he online lenders sold at $23 a share, driving its market value up. our ipo reporter caught up with ceo.ree greensky quick sweep our commerce at the point for a growing ecosystem -- >> we power commerce at the point of sale for a growing ecosystem of merchants and banks. we now serve almost 2 million consumers. there is a large and growing opportunity to accelerate commerce at the point of sale. >> when i think of what the public market is used to in terms of past lending platform stockses, trading in effectively spooked the market for your industry. how do you differentiate yourself and distance yourself from the two narratives that have not been well received by the street? >> we are about commerce, not credit. ability for instant credit to almost 2 million consumers. >> so, for consumers looking to , electiveprovement surgeries, that is where you are now. where can investors expect you to push next? >> we have tremendous opportunities for growth. we now have a rapidly growing , a gr

pimco's globalth strategist about that. this is bloomberg. >> the hewlett packard enterprise greenroom is brought .ou in partnership kailey: this is "bloomberg daybreak." drugmaker astrazeneca has been raising cash, and may crestor.rights to burberry is speaking in support to buy back to hundred the million dollars of shares -- $200 million of shares. the new creative director unveiled his new collection of september. that is your bloomberg business flash. bonds got the attention of equity investors yesterday as 10 year treasuries moved well above that landmark 3% level. how high will yields go? cohead ofto development, he says it will go higher, but not too much higher. >> yields are going to be somewhere between 3% and maybe 3.5%. targett think that 4% that is out there is realistic. target that is out there is realistic. we think that for a whole range of reasons. we do think that this hiking cycle is already well advanced. six hikes already, another three or for the markets are already technology. david: joining us from

pimco are chasing post retirement income in australia's grain population. >> china's economic advisor in a four-day trip to washington. >> hello, from sidney where it's just past 8:00 a.m. i'm haidi lun. >> and it's just after 6:00 p.m. here in new york. i'm betty liu. we're going to be look how all the action is going to play in the the asia pacific trading day. and haidi, it was a day of advances here in the u.s. we saw another advance at that 3.1% level. let's take a quick look at how the stocks ended trade today. green across the board. some good earnings from some of the consumer stocks like macy's. the dow up about 63 points. the nasdaq gaining some steam to set up asia for a higher open. haidi: yeah, what a difference a day makes. we went from good news to being bad news. to good news being good news. it's amazing how the narrative shifts within hours. take a look at the setup. we had stocks staging a recovery in the overnight session. emerging market asx coming ush pressure. the aussie recovering from that slump on the back that we gained. sidney futures a bit of poverty going

all of this academic and pimco career with models he developed, what did he mean?hael: he is an expert on what the fed does. they have a model, he has a similar model of if you do this, and this happens in the economy. that's what they based their policy decisions off of. not one model, but a lot of different ones. he has done a lot of that. jay powell has not done that. it would be a good, woman to the -- it would be a good complement to the chair. nejra: a lot of these models are coming under question. he said a very complex picture lies behind the 3.9% job. the fed doesn't know -- we talk about full employment, what we are talking about is the maximum number of people who can be employed before you see wages rise and inflations follows. don't we are down to 3.9% and we aren't seeing wage growth area there is something different in the economy today. i was talking to rob kaplan who talked about global technology disruption and the globalization of labor forces as factors that were not present in the past. the fed has to take that into account which is why clarida

pimco are chasing post retirement income in australia's grain population. >> china's economic advisor trip to washington.

he is a global strategic advisor at pimco and will face a senate panel tuesday. beenast 55 people have killed in filing clashes between the israeli army and palestinian kroos testers on the gaza border. monday was the deadliest day in gaza since the 2014 cross-border war. protest came as the u.s. moved its embassy from tel aviv to jerusalem. hamas led opposition to the move, and the palestinian authority said it will launch a war crimes case against israel. has freedupreme court states to legalize gambling on individual sporting events. it struck down a federal law that had large single-game gambling in the country. new jersey instigated legal debate and betting could begin in weeks at casinos and racetracks. the american gaming association says 100 $50 billion a year are placed any legal sports bets. global news 24 hours a day on air and on tic-toc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. the u.s. and china are signaling a desire to avoid a trade war after president trump a

you think about pimco and these other firms.ey have the largest manager of actively managed etf's. they can command a higher fee. what is unique with them is they don't have this big mutual-fund business there competing with. they have some mutual funds -- julie: this is very etf -- >> it is launching actively managed etf's. julie: thanks, appreciate it. vonnie: julie, thank you. still ahead, berkshire hathaway's annual shareholder meeting takes place this weekend. we get earnings some of. we will tell you what to watch. this is bloomberg. ♪ mr. elliot, what's your wifi password? wifi? wifi's ordinary. basic. do i look basic? nope! which is why i have xfinity xfi. it's super fast and you can control every device in the house. hey! let's basement. [ grunting ] and thanks to these xfi pods, the signal reaches down here too. so sophie, i have an xfi password. and it's "daditude". simple. easy. awesome. xfinity. the future of awesome. theie: breaking news -- president making more remarks to reporters before owing to dallas for the n

but pimco backed greensky is banking on a different trajectory. it just went public on nasdaq. it raised $871 million in its ipo. the online lenders sold at $23 a share, driving its market value up. bloomberg's ipo reporter caught up with the greensky ceo. is a digital commerce power source. we power commerce at the point of sale for a growing ecosystem of merchants and banks. we now serve almost 2 million consumers. there is a large and growing opportunity to accelerate commerce at the point of sale. when i think of what the public market is used to in terms of past lending platform companies, lending club and on deck, those stocks effectively spooked the market for your industry. how did you differentiate yourself and distance yourself from the two narratives that have not been well received by the street? david: we are about commerce, not credit. we enable over 12,000 businesses the ability to offer instant credit to almost 2 million consumers. >> so, you got your start mostly in the home loan business. for consumers looking to do home improvement, you are moving into electi

big moves from the pimco team. these are the markets and the treasury is below this level.over nothing. he has the first word news. >> donald trump will delay imposing steel and aluminum tariffs until june 1 as he finalizes the deals. white house says that they have reached an agreement with argentina, australia, and brazil. talks continue to revise the north american free-trade agreement. zone markedrized the border with south korea. speaking at a joint white house press conference, trump expressed optimism and reiterated that he would leave, if not a success stop the treasury secretary says that he is unconcerned with the rising there was debt after a record amount borrowed for the quarter. >> it is a large and robust market and the most liquid market in the world. there is a lot that the market can easily handle. us after ross joins 6:30 u.k. time. >> benjamin netanyahu says that thatountry has proved there is a secret program to build nuclear bonds. this gives president trump ammunition to pull out of the accord. the allegations were called lies that were dealt with by

pimco sees a cap at three and a half percent, but can inflation anxiety push it?urkish currency has lowered for a fourth day, striking another record. we look at the latest trends next. this is bloomberg. ♪ ♪ finance, economics, politics, this is bloomberg surveillance. back to 2011 for u.s. bond markets. 3%. morning, it holds about the sudden move has the attention of investors who look to the fed for guidance. we see the 10 year topping out at 3.5%. we think over the balance of 2018, yields are going to be somewhere between three and maybe three and a half percent. we don't think that 4% target is realistic, and we think that for a range of reasons. already all, it was quite well advanced, six hikes already. well, where is the 10 year end u.s. dollar had -- headed. thank you both for joining us. jeremy, what happens to the 10 year yield? look atnk you need to the data and if you can't justify further increases on the basis of data. if you look at yesterday, and asked whether it justified an explosion of yields. it implied activity was a little further than we as

i believe he used to work at a shop called pimco.given bomb demand or -- bond manager like the janus constrained fund, it is about day but it is mostly a thematic bet on what central bankers are going to do. -- and i dorategy not want you to speak specifically about mr. growth -- but is betting on central-bank theory a more problematic guests in the future? banks: i think central may become more, it may be harder for them to be so predictable. they have been volatility suppressors and they could become contributors. the buy the dip type of mentality, that may have to change. we should expect probably higher fixed income market volatility. tom: i want to come back and talk about this further. this is bloomberg. ♪ ♪ francine: i am francine lacqua in london, tom keene in new york. we are talking about trade and tariffs. yesterday we had a pretty good conversation with the prime minister of canada, justin trudeau, saying he wants to build a canadian economy that will thrive in decades or more from now. if that means losing a short-term e

we know that clarida had a decade at pimco. do you think it is right they assess how the markets will be a forward? going alan: they well. so did janet yellen, so did ben bernanke. i think it will be fine about this, but it remains to be seen -- not to be dictated to by the markets. there was a tendency some years back -- at least i was worried that the fed was letting the markets lead by the nose comes as big. -- lead it by the nose, so to speak. the markets should be catching on to what the fed is doing and what it is thinking. that is what transparency is all about. and i think that will continue. caroline: what about leading the rest of the world? the fed has almost been the only central bank that has been fully able to start to raise rates even slightly, and slowly but surely. the ecb has not been able to. we are seeing european growth slower than has been the case in previous quarters. you have the u.k. having to shy away, mark carney backing away from rate hikes. how does the u.s. assets the rest of the world, and how di

kevin cirilli on your gossip moment. , pimco, will not talk the gossip of cable tv.tion about policy in washington. we are thrilled you are here. what to do about the denver broncos? libby: i am looking forward to a great season. there is nothing going on. seriously, there has been so much going on. the noise in the background, -- tom: noise free. what is going on? libby: there is a lot on trade and geopolitics. we are focused on nafta. speaker ryan gave a deadline. he said today was the day they needed to have a deal signed sealed and delivered to congress. that is not true. his working backwards. we probably have until june to get a vote by december. tom: the mechanisms yunnan capitol hill, can they dovetail -- you know on capitol hill, can they dovetail with the president? nafta, trade is a difficult topic in any environment. going into midterms with a president whose approval ratings are improving but not super popular -- republicans would rather have voted on nafta yesterday. they don't want this languishing in the summer before hitting the campaign trail. that

blackrock with jpmorgan would have -- with deutsche bank would ave it with pimco.ble. it tells you brappings tweeting these individuals plus a host of less well known hedge fund coast treating them as if they were institutions in their own right. guy: i'm an individual. - the hunting license. within your walls. we are a different party. >> one of the interesting things that came out of this report deutsche bank and goldman sachs still has -- with some of its executives. they would say or one argument is that it helps the bank to keep tabs on the personal trading of individuals. so there is no conflict of interest. however, we have had other people say if it is the senior traders, they can lean on the junior guys. give the boss a good price on the trade. we have comments from deutsche bank saying there is no conflict of interest. you can see how such suggestions could arise in that scenario. matt: the way i look at this, in the u.s., i could have a shotgun or a glock but i'm not allowed to have a stinger missile. i don't think you're allowed to in the u.s. this is l

pimco calling it to 80 after it was said on thursday that $100 crude is not out of the equation scottcan crude head higher >> i tell you what, option traders absolutely think so. it's up about 60 cents over the last 90 minutes. and over the past 36 hours we have seen big buying in the 90 strike and 100 strike in the december options so there are certainly some people who think there is quite a pith more upside. >> brian, what's the next key level to watch here in oil >> well, i think when you are looking at it, you know, it's been in a bullish move right here we are probably due for a pullback, below 70 below there i am a buyer supplies are somewhat tight. demand is strong out of india and china. when you look at the capacity and gasoline futures that appears like it could move higher with crude. the geopolitical tensions around it putting fuel into the fire heading into drivering season. 80 seems reasonable. >> for more futures now, head to futures now.cnbc.com coming up, final trades with the halftime team. this is my headquarters. this is where i trade and manage my portfolio. sinc

lisa: pimco predicts 10 year 2.5ds will top out at percent when others say he could go as high as 4%. said at somed point the high yields will be an impediment for growth but right now they are not. james fuller weighed in during an exclusive interview. >> i do think it is crunch time for this. those that are more sanguine on this issue feel it will rise and we have not seen the yield going up in the past day or two. how is that going to proceed over this year and to 2019? i don't think we are in danger now. the yield curve has a nice upward slope. it is not too far off the yearse over the last 30 noti would be concerned we march into an inversion without our eyes wide open. >> the yield curve begins to flatten. maddie, thank you for being here. a lot of talk about the yield curve. we are at the lowest levels on a lot of parts of the yield curve since 2007. how concerned are you? >> we are feeling constructive about where we are right now. if you look at where we are with short rates, two and a half percent. given where investors expect equities to go, if they subtract expected return

arida is a global strage strategic advisors at pimco. senate panel ce a later tuesday. violent clashes between the palestinian nd rotesters. 55 were killed. the protest came as the u.s. embassy from tell lesm. to veers the war crimes case will be israel by the palestinians. has s. federal scourlt teams. ates to bet on matter could begin in a of weeks. are $150 billion a year place is on illegal sports belts. lobal news 24 hours a day on air and ticktock on twitter, 2,700 by more that be journalists and analysts in more countries. this is bloomberg. so much.ess, thank you the announcements that 224 chinese company's a shares will included in its benchmarks from june. me of the names familiar and others not, right? >> yeah, some of the big banks, sharpgse. alley babba and others have been on global indexes. you're the first time seeing a lot of the mainstream included in nies the msci emerging markets index. followed by trillions of dollars in tracking others ension funds and so that has been the cat list of buying amount going into edition of the shares and it will likel

pimco and its parents are hiring in sydney. they are chasing postretirement dollars.rning. good evening to you in new york. you talked about u.s. equities pushing higher and also about emerging markets being under pressure with you rising yields we put -- with rising yields. we put a chart up. msci eme m. in recent history, the relative value, the concept kicked in. that stocks imagine went higher from here because we are now at the feelings. in other words, if emerging markets improve, that bodes well for the u.s. if it does not, that is a bearish sign. betty: it might be indeed. where emerging markets trade needs to be accounted for risk. the risk right now, we heard reinhart.rom carmen these rising yields, rising rates might force central banks in emerging markets to raise rates faster. that could be a risk. that to the first word news with paul allen. st. louis fed president says policymakers have no business flagging strategy weeks or months in advance because they had -- they don't have a situation could change. he said the predicted three or four rate hikes thi

death was the head of pimco.he head of portfolio strategy with michael mckee. you heard at the beginning of there is aid that better chance to get the nafta .eal done can you hit it cap it at this point? michael: there are tough issues. autos.es of origin on they haven't even gotten to some of the tougher things. it isn't clear that they can get a deal but they seem to be making progress. china is a wildcard. we are sending a delegation over there. we don't know what will come out of this but we know that the impact would be bad if both sides can't come to an agreement. lisa: what i'm trying to understand is what is being priced into the market and what has happened? michael: you have a better idea on that than me. it looks like we priced into the markets but the markets seem to believe that there will be deals reached. the consequence of not reaching a deal is so bad for the american economy and global economy that they will come up with something and they look at trump and say that he has history as a dealmaker

he is a global strategic advisor of pimco and is due to face a senate panel later on tuesday.ilbur ross has attacked china saying it is the member of the world trade organization in name only. he says beijing enjoys the benefits of wto membership's it does not abide by the rules. he spoke as a trump administration is making progress of trade time -- in trade talks with china including its treatment with filmmakers cte. -- zte. >> the united states is the most open and the most exploited market in the world. eloquentlyand europe espoused free-trade rhetoric. but in actual practice, are far more protectionist than the united states. saudi arabia told opec its oil production last month was the least since output cuts were introduced more than one year ago. the cartel's biggest member reported output of 9.9 million barrels a day in april. that is the lowest since january 2017. traders are asking if the kingdom or its allies will be forced to raise output. if iranian exports are curtailed by new u.s. sanctions. >> i think what we have seen as a withdraw from the agreement which see

pimco short management portfolio, how do you manage risk?> we have to deal with geopolitical risk and trade policy. we have to deal with the potential for fiscal policy changing. as a result, as investors, we have to prepare for better risk returns and create optionality. and thena for future as opportunities present themselves, be able to create liquidity over the next few years. alix: sounds perfect. jerome: i deal, right? to do that you have to take -- ideal, right? to do that, you have to take advantage of opportunities within the front end of the yield curve. to hear rates are at 2.6%. another option coming forth today is creating good opportunities to preserve capital. at the same time, also reducing volatility to overall uncertainty in the marketplace. that is the ideal place to be. david: how much is the yield you gain and how much is optionality? to things youd cannot anticipate. jerome: by taking advantage of the opportunities in treasuries and across the fixed income spectrum, you are able to create a diversified portfolio that of

. >> well, you know, silicon valley bank, you know, a huge winner, companies like pimco, and the stocksne well, some over last five years are up 25% to 30% in terms of price appreciation while the big huge banks sit on their butts >> touch on goldman sachs a little bit does it have some of the flexible aspects that the silicon valley banks of the world have with what's it doing in the consumer space sm. >> well, obviously, one of the worst managers wall street has seen - >> ever? of all the ceos, especially last, like who came out of the banks, lloyd blankfein is at the top? >> certainly in the top, and i say that because if you compare goldman sach's performance, goes over to the performers of any other of the big six banks, it's the worth. it's the worst because the company made clear decisions that were incorrect. they made the decision that the world is going to come back ksh. >> but since he took over, it's second of the big six, jpmorgan is ahead to the delights of citi and it goes jpmorgan, wells, and goldman -- >> the earnings have not been there, though, right goldman is earnin

investors read all these comments in negotiations let's bring in macro strategist and libby kantrell, pimco'slicy alan, when you hear tariffs, doesn't quite sound as scary now that we've continued to see deal-making and what kudlow himself called a peace treaty with china >> it seems once again the u.s.' bark is a lot less, not as bad as its bite, so far. it's, so far, what we can tell, it's sort of the trade issues in advance. it's not over and done it's nothing that's really very specific in terms of where this is all going it's not surprise to me to see this happen in this way. the sequencing of, put the trade stuff aside and let's get on with north korea for the time being and then get back to the trade situation. >> all sorts of media reports. some painting it as a u.s. win some saying china had the upper hand what do you read what went down? >> in some reasons it's too early to tell and depends on your measure of success. if you're looking just at the trade deficit, if china is sincere about reducing their trade surplus with the united states, and you know, importing more of our u.s. go