chinese tech stocks plunge on a report about chips inserted in products by chinese spies. live from london, that's our top story on friday 5th october. a bloomberg investigation has found that data from us companies has been stolen via chips installed inside circuit boards. also in the programme... tax and spend — or cut back and privatise? two conflicting plans for fixing latin america's largest economy — as brazil gets ready to choose its next president. unilever u—turn. —— european markets have opened and we are tracking wall street. and also... unilever u—turn. the company behind marmite and pot noodle abandons plans to move its corporate headquarters from london to rotterdam in the netherlands. we'll discuss that and the week's other big corporate news with our business editor simonjack. he is trying to navigate a strike on the tube at the moment, so we hope we are going to get him! also in the programme — brits are now buying more new clothes than any other european country, almost double that of italy, germany and the netherlands. fast fashion is harming the planet.

among the content most viable tech companies globally, a few chinese tech giants are making their presence the industry has become a serious rival to silicon valley but there are political hurdles ahead. this is china's tech giants. early on, chinese copies had reputation for being copycats. it's instant messaging app looked a lot like icq, a popular messaging app in the u.s. >> over 90% of them got the original aspiration from the u.s. equivalent. is the equivalent of yahoo! alibaba. people say their model is a hybrid of ebay and amazon. >> comparisons are harder to make. tencent's messaging app has grown to a platform for shopping, flirting, dating, watching videos, playing games and ordering taxis. there is no u.s. equivalent. since the introduction of the internet, the china has controlled the web with sensors and gateways known as the great firewall. this effectively quarantined their ecosystem, blocking access to the likes of facebook, twitter and instagram. that has enabled locals to develop without competition from abroad with a uniquely chinese flavor. users more than double the e

tech, while that may be a good tech for chinese companies, it may not be such a good signal for u.s. . take a look at what is happening with chinese currency. the yuan weakening to its lowest level in months, thanks to tensions between that nation and the u.s. meanwhile, china taking a step, cutting the amount of money that lenders must hold in reserve. for more insight, let's bring in 's strategist. good to have you with us. as soon as the yuan was cut for the fourth time this year, they said, you know what? this depreciation could not be farther from the truth? >> i think they knew it would lead to depreciation of the currency. this is the most powerful tool they have to inject liquidity into the economy and by default, they are weakening the currency. fundamental for economic reasons. but there was no other choice. this chart showing exactly what happened to the rrr rating for major banks, and of course, smaller banks. and the lending rate has been steady though. that we have seen at least 20 times the markets, the stock markets because of these measures, they would get a lift, but

tencent, were loved a year ago but have fallen far from grace there how are you thinking about chinese tech stocks given what i told me about the valuations >> there we have to be more careful. valuations are stretched that's crew across technology, across the world clearly it's a big influence on the chinese market and the u.s. market less important for europe. we see that stretch as vulnerable >> if the authorities allow the currency, the yuan, to fully deprecate and break through that 7 level, because they have no other option, either because they want to retaliate against the u.s. or because they're concerned about a slowdown in the economy, would that cause you to reassess whether or not you want to reinvest in china? >> we need to see action being taken. we need to see the response from the government in terms of reserve requirements and other liquidity action ultimately they have control it's been the wrong thing to do to bet against china the last few years. dent bet against china on a multi-year view. >> it's great to have you with me, thomas we'll continue in a bit. italian plasti

and chinese tech companies. he political risk premium that investor attached to the chinese names on the back of trade uncertainty. if you look at the earnings sensitivity of the chinese tech, because they are sufficient in the internet, in the e-commerce area, which are actually less exposed to trade tariffs. we see the selloff as overdone, and continue to focus on the technology leaders, which are delivering strong momentum. vulnerability comes from regulatory uncertainty in china. that is why we have seen the initial selloff in tencent. do you think that is overdone? if you look at tencent after what it has been through, is it a good entry point? companies, ir tech would trace the regulatory uncertainties. we do see them regulatory [indiscernible] delay in the to approval of online revenue of monetization opportunities and is probably deferred to 2019. but looking at the strong consumer demand for online gaming and looking at the strong penetration of mobile, mobile epayment, we and continue to see long-term g

giants -- a lot of value and make these chinese tech giants even stronger.ompany is looking prevent election meddling with the midterms coming in just ov er a week. story starts at a facebook like a telecommunications summit in london last month. we get to a place where facebook has taken responsibility for the problems of the last few years, what that looks like in an ideal world is something within the process of building up these products. it is not just about growing, ion ways to build in protect s as you grow. jason: facebook is trying to put a better face on how it reacts as a vaguely -- specifically to elections. what are you hearing from their plans? sarah: facebook has brought a bunch of journalists into their war room. they have a bunch of monitors tracking what stories are going viral, all of these factors they need to figure out where the odd activity might be. activity that they might need to take down or escalate. engineers worked together, but the question is whether this will be enough. executive says, peace, i'm going to do something else. o

shery: we are seeing more pressure on chinese tech.i talked to said this could be a huge pressure point coming not only from the u.s., but also from regulation inside of the chinese markets like tencent. earlier thisng week about regulations in online gaming and it is impacting these stocks. joe: let's disentangle further is riskuch more off sellers versus it kicking off specific regulatory action that content warned about in their last earning season when they talked about speed of approval of new gains. shery: we were talking about this this week since we get more confirmation from these companies that online gaming approvals would not come in the rest of the year. in may, --this, back back in march, they stopped approving these games and this had a huge impact on tencent seeing their market cap of operate. because of this, a lot of other companies are taking a hit. because these tech stocks are concentrated in schengen, they are privately funded startups, these companies are feeling more pressure because you see these forced selling

growing western awareness of a more assertive china has put many chinese tech investments on ice. simpson sat down with the president of buyer and baidu, a chinese internet country which is now one of the —— company which is now one of the —— company which is now one of the largest in the world. we want to focus on building great products and inventing new algorithms and then to do what we do the best, innovation. there are always statements here and there and we intend to ignore those statements. do think it will go away if you ignore it? i think it will eventually. companies work with each other to make sure they have great products. i think that this is just a temporary short—term statement or noise. do you understand when people are worried about china and start to think it may be not our friend at owl enemy? china will continue to do well with openness. for people who live in china do business in china, people appreciate the openness and local collaboration. but sometimes, when i travel around the world, i do see some misunderstanding of policy and initiatives. ithink see som

but now chinese tech stocks are down 35% from their peak in january, whereas the u.s. tocks are down only about 4% from their peak last month. the question on a lot of traders minds is will we see convergence? for that, we will look at the bottom of my chart, which shows the correlation between the two. there is a bit of a trend upwards. we could see this convergence up here. we could be at an inflection point. an interesting chart to watch this week. you can find it on the terminal at gtv . guy: analysts are incredibly positive on the stock. vonnie: i was going to a candlestick chart today. will you ask me why? guy: i think i know the answer, which will make you winning very difficult. vonnie: it is jenna gannon hartsburg. birthday. anyway, i did not do a candlestick chart. you are still just fine with your 6040 stocks. you can see that at the tv as well. guy: both fantastic charts. it is jenna's birthday. it would be incredibly, incredibly cruel of me to deny her a win on her birthday. theicularly as i am missing team drinks a little bit later. the birthday g

that has all been put on the brakes ever since the trade war. >> yet chinese tech company names but onlygly familiar. it reached a pinnacle and 2018, overtaking apple globally, but the chinese big tech companies keep expanding and need to convince other nations they mean no harm. ♪ that was just 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 will be all for "bloomberg best" this week's. thanks for watching. i'm rishaad salamat. this is bloomberg. ♪ comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. ♪ brad: i am brad stone in san francisco filling in for emily chang

that has all been put on the brakes ever since the trade war. >> yet chinese tech company names only increasingly familiar. it reached a pinnacle and 2018, overtaking apple globally, but the chinese big tech companies keep expanding and need to convince other nations they mean no harm. ♪ rishaad: that was just 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 will be all for "bloomberg best" this week's. -- for this week. thanks for watching. i'm rishaad salamat. this is bloomberg. ♪ ♪ carol: welcome to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelly. we're joining you from headquarters in new york. carol: this week, the future of retail. e-commerce giants amazon and walmart are after global expansion. next stop on the battleground, india. jason: plus, sears files for bankruptcy. why eddie lampert couldn't keep the retail giant afloat. carol: first, to the politics section.

that has all been put on the brakes ever since the trade war. >> yet chinese tech company names only drew blank stares outside china are becoming increasingly familiar. it reached a pinnacle and 2018, overtaking apple globally, but the chinese big tech companies keep expanding and need to convince other nations they ean no harm. rishaad: that was just 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 will be all for "bloomberg best" this week. thanks for watching. i'm rishaad salamat. this is bloomberg. ♪ >> is a lot of ego food. how did you get to be the head of the entire firm? with synchronized swimming, he became a member of the national team of france. >> i did the european championship and many events. when i interviewed with your firm, i was told that i would never make partnership because i was a woman. >> would you fix your time please? >>

that has all been put on the brakes ever since the trade war. >> yet chinese tech company names only increasingly familiar. it reached a pinnacle and 2018, overtaking apple globally, but the chinese big tech companies keep expanding and need to convince other nations they mean no harm. ♪ rishaad: that was just 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 will be all for "bloomberg best" this week. thanks for watching. i'm rishaad salamat. this is bloomberg. ♪ >> jonathan: from new york city, for our viewers worldwide, i am jonathan power with three minutes dedicated to fixed -- 30 income. this is "bloomberg real yield." ♪ coming up, the fed determines to keep hiking, sending two year treasury yields to 10 year highs. a booming leveraged loan market getting even bigger, overtaking high-yield debt. and italian bonds ending the week on a better note. the eu striking a conciliatory tone. we begin with the big issue -- investors on edge. >> it is not a fantastic

techthink in terms of u.s. , looking more at chinese tech, chinese is complicated because it is embroiledncerns which can be noise, but it is opaque. if you look at the u.s. tech number there is less breadth to the market if you use the nasdaq as your trojan measure. -- chosen measure. they are preparing to park money and save cash returns. you look at the crude benchmark, a group -- delivering a greater yield than what you are seeing over time in most stocks across the nasdaq are definitely less appetite for the growth momentum. we have the earnings out of alphabet and amazon. they effectively downgraded their outlook on what we see .oming up into 2019 it will be value and tech stocks -- in tech stocks ultimately but across the whole space we will see a diminished appetite for those companies, then we start weighing off the risk. shery: how much [indiscernible] our chinese markets? is the great -- growth outlook still there? >> policymakers could turn on the fiscal taps and the pboc to stimulate the economy. risk is down. while the yuan is devaluing, we won't see a market jump too much.

systems based on chinese tech.ou can see more countries making those choices. >> and the one that becomes leader in ai becomes the ruler of the world. that is not entirely wrong. >> it's not entirely wrong. the main advantage you get from having an ai strategy, it does lots of good things, makes your economy grow faster and makes your cities work better. that's the reason the u.s. needs to get crack on this. >>> speaking of that, digital technology is transforming another part of our world. we know about smartphones and tvs, how about smart cities? up next, we'll see how urban cities are staying ahead of challenges from climate to weather change. you're watching "cbs this morning: saturday." you remembered that too. yeah, i'm afraid so. knowing what's important to you... it's okay. this is what we've been planning for. thanks, bye. that's what's important to us. it's why 7 million investors work with edward jones. oh, look... another anti-wrinkle cream in no hurry to make anything happen. neutrogena® rapid wrinkle

technology incubator for such companies in china who musters may recall the back and forth on chinese tech companies e t earlier this year which resulted in no longer being able to do business in the united states after it was learned the company sold products to iran and north korea. and speaking of intellectual property theft a new report out from australia says the chinese military is expanding its collaboration's with foreign universities and times scientists are not coming clean about their military ties to dig deeper we're joined by our teams alex mahela bichon toronto hey alex it looks like many institutions around the world if you look at the study are part of this but some countries in particular seem to be targeted what can you tell us. if you look at the australian policy institute r.c. the australian strategic policy institute they put out the study they were sort of you know ring that bell say take a look at this twenty five hundred is supposedly students so we have different levels of studies and strain their doctorates n.p.r. involved in these different studies that are goin

this is your bloomberg quick take on china's tech giants. chinesee tencent had a reputation for being copycats. q instant messaging app looked a lot like a popular instant messaging app used in the u.s.. there earlyem got in a {and equivalent, seeing, for example, there portal business was an equivalent of yahoo!. ofbo was an equivalent twitter. alibaba, their model is a hybrid of ebay and amazon, so the list goes on. >> comparisons are harder to make. tencent'sging -- has nong app we chat u.s. equivalent. since the introduction of the internet in china, the government has controlled the web with a complex system of sensors and gateways known as the great firewall. this has quarantined china's technology ecosystem. that has allowed local companies competitionithout from abroad. because of china's population, the internet users double the entire u.s. population. the companies grew to be massive. they became so successful, u.s. companies are taking note. >> i think a lot of people are pointing to facebook trying to copy the we chat model, where they a

driving a futuristic vision of the world is going to create a lot of value there and make these chinese techen stronger. jason: and now in the technology section, the ongoing problem for facebook. how it is looking to prevent election meddling with the midterms coming in just over a week. carol: has the social network really learned the lessons it should have? this story starts at a telecommunications summit in london last month. sarah: if we get to a place where facebook has learned from its lessons, has really taken responsibility for the problems of the last few years, what that looks like in an ideal world is something within the process of building up these products. it is not just about growing, but ways to build in protections as you grow. jason: facebook is trying to ut a better face on how it is reacting specifically in elections. the idea of meddling. this concept of a war room has come to the floor. what are you hearing from their plans? sarah: facebook has brought a bunch of journalists into their war room. they have a bunch of monitors tracking what stories are going viral, all

tech stocks but a good one for chinese tech stocks.le think turning more cautious about what could happen in the chinese market. as we have seen, despite the triple are cut, we still saw the biggest fall in a year or so for the ftse 50. take a look at this chart. this -- these are the reserve ratios in china which were already cut for the fourth time this year. is needede liquidity in the financial markets now and get the stock markets did not react. more people turning cautious. jp morgan chase, nomura and jeffries. you can see the difference between the rrr and the lending rate. you are also seeing some more optimistic calls that this could be the bottom. from hsbc.ing that i will speak to the ubs analyst and he says it is ok because you are seeing international investors having more access to the chinese market. joe: talk about the slow down. my favorite story of the day. people arriving at the office of a chinese property developer and someone posted a video on twitter of people that own condos and the remaining ones were sold at a

how difficult is it for any of the chinese tech companies or any of the big tech names to navigate aroundhat in the global expansion plan? yeah, in relation to your report, and you have correctly pointed out, the conclusions of that report were in fatah clique rejected -- emphatically rejected by a range of companies. they said they were completely untrue. there are only two countries in the world where the chinese companies are not allowed to participate in 5g, and that is australia and the united states. in every other part of the world, this is not an issue. it's not an issue in singapore, the united kingdom, france, italy, or other parts of the world. my view would be that it would be a much preferable solution if the two countries, the two presidents, could come to a sensible agreement about these , about about i.t. intellectual property, about cybersecurity, so that the countries can work harmoniously the world and and businesses and consumers can get the benefit of the best technology at the best prices. and so, you know, i never thought that banning things and putting up barriers

quint: i do not think we can necessarily correlate the chinese tech market with the united states techarket. it has to do with the china market being in a bear market and tech being very data-driven. it is going to accentuate the move down. if it does enter a bear market, tech would lead us lower. they would have more data than the overall market. it could potentially lead us lower. what we want to see rather than this rotation out of growth and into value, we want to see another group lead, money come out of tech and find its way into something like financials and industrials, a sector that could lead, that could attract that money. it is tough to draw the correlation that what is happening in china is necessarily going to happen in the u.s. haidi: if you are a longer-term or value investor, would you be adding to that right now? quint: if i was a long-term investor, which i am, the more attractive of those two would be the emerging markets. they have absolutely been ,emolished, and valuation-wise they are fairly attractive. i think tech can become more, you know, valued as they conti

part of why the markets are down right now we have this under-performance that we're seeing in chinese techg weighting in the index aside from that, volatile oil prices and the dollar which hit a high for 2018 yesterday. the stronger dollar, that's never good news for emerging markets, specifically nations that are holding dollar denominated debt that's still a reoccurring concern for investors here >> katherine, we're focusing on the earnings reports, technology, but also geopolitical risks are out there as well. in the middle east for sure, but also we have a big election or round of elections coming up in brazil what is it about this political environment that will be driving trading action >> well, there's one other thing that i would add to the list that you and seema just put out there, that's the g20 buenos aires coming up next month president trump and the premiere are set to meet if there's a break through therein that would quell some of this panic we've seen a large part of it has come from trade tensions and fears with regard to an escalating trade war with the u.s. and china. >

i have put together chinese tech and u.s. tech.s no denying that china is even more battered than the u.s.. what can you tell me about the flow of money in regards to tech and differentiate that for me between u.s. and china. inflowsr a lot of the that lead into u.s. tech and other markets had more growth in comparison with emerging-market tech because interest in emerging-market assets has been more muted in comparison with last year. that, we also have seen outflows from the tech sector because of the corrections on the price front which many market commentators have said it is because of the significance price action earlier this year. we continue to like this sector because of strong earnings expectations, especially after the correction opens up more attractive valuations. nejra: you like tech that blackrock. you also like financials. banks have been underperforming despite good growth, higher rates, and respectable earnings. if that trend of banks under performing going to continue? steepeninge curve could continue given the

chinese tech, there's a 4,000 basis point underperformance relative to u.s. tech.i and trump talking at the g-20 meeting that relieves southeast pressure. the worst the regulatory stuff is behind us it emphasize by cci call from earlier. it's going to be part of the big cap extending 5g it keeps moving. >> cleveland cliff ceo will be on today at 3:00 >> maybe his last visit as ceo >> little damage control >> i agree with weiss on the meaning of 5g and for that reason i like verizon. bought it, own it. >> nice defensive play is in the pharma space >> have a nice weekend "power lunch" starts now >> a wild trade igsession. decent earnings but worrying news about china's economy should investors brace for more volatility ahead and is next week a make-or-break week with a flood of earning >>> tumbling at ford, fear about sales, growth in china stock sitting near nine year loss we have the road ahead report coming up. >>> 20 bold new calls on tech including a new street high price target on apple. analysts who made those calls gives us his best picks and tell us why appl

so i think it's an interesting play i like looking at the chinese tech i think there's more asymmetry on the up side there versus some of the u.s. tech >> so, jim, someone sees you today and says what's with the correction is it over is it going to get worse how do you answer that >> how do you buy netflix when it's the hardest to buy netflix? when do you buy amazon when everyone says amazon is finished because it's down 200 points china is a little hard for me. the president -- it's not about stocks and money i'm waiting for him to say no more chinese listing and the chinese come back and say no more rare metals i think we keep ratcheting it. the f.a.n.g. stocks, we see obituaries daily you mentioned netflix, well, have you seen the slate? i mean, i don't -- for all i know, there's one that i've been watching called the fall it was daimler a couple years ago and it was set in northern ireland. i'm thinking if you're u.s. centric on netflix, you're crazy. it would have been great to buy when it was $25 billion. this is not going away this is a worldwide entertainment company. you have

look, if you really, really, really want to get ugly with tech, worry about chinese tech a lot are goingess in the united states and globally, but that stuff is so out of favor. so you can't generalize on tech. i think it is a company specific approach and hopefully towards the end of the year investors will realize that and they won't treat them as a basket because they have individual qualities, different leadership, different cyclicality. >> it's going to be hard to unwind the wave of passive investing we've had. despite all the good things you're saying about going ogle d facebook, does that make trading harder >> the last ten years have been hard for value investors because we've been in a steadily rising bull market. i've been waiting for some turmoil, some opportunity to get into high-quality companies that are down 20%, 30%, sometimes more than 30%. so getting an opportunity on some super high-quality companies, that's what i do. buy high-quality businesses when there are short-term hiccups and short-term turmoil, when i'm convinced the long-term story is still intact. >> great t

coming up, china surging back after what has been months of selling pain and check out all the chinese techtocks, they were rallying but can you trust this bounce? take a look at the cannabis cam. there's the king, tim seymour getting the buzz for the big pot conference happening right now in new york city as weed stocks seem to be burning out. he will join us live from the ground with the highlights. >>> and later, its not just tech stocks reporting this week and guy here has one under the radar stock. we're live from times square in new york city. chor"ft ney" right after this. you're still here? we're voya! we stay with you to and through retirement. i get that voya is with me through retirement, i'm just surprised it means in my kitchen. so, that means no breakfast? voya. helping you to and through retirement. ♪ ♪ protect sensitive data from millions of kinds of malware, with a cloud that's secure to the core. the ibm cloud. the cloud for smarter business. >>> welcome back to "fast money." china stocks surging back with the shanghai composite having its best day in more than two years a

exposure, by chinese tech.a look at some of your mid-cap movers, we go to annamarie for that. >> let's start with pearson's. the world's largest education company. it reported a smaller than expected decline in u.s. college coursework. latest turnaround sign that things are working for the ceo, saying the company is on track to turn underlying growth. group, all of the homebuilders are down. this is as there could be a to pressure after the warning saying markets for new homes in london and higher-priced locations in southern england is more difficult than previously expected. resenius,ending us -- f the biggest lack of this morning. they manufacture shipping agreement in germany. they cost guidance, and that is what is weighing on the stock. matt, nejra. matt: getting absolutely killed. thanks very much for that. dealmaking is not quite dead on wall street. morgan stanley rallies and goldman sachs jumps the most in six weeks after both said their investment banking is this surged. that is in sharp contrast to

about the real competition from china artie's dan colon gives us the answer and it's not from chinese high tech as claimed by the trumpet ministrations plus the dow jones industrial average hits a new high and there's lots of auto news we'll be joined by our friends to see you all of the stocks melissa are mo and we've met with so many great and interesting entrepreneurism in boston at the forbes under thirty some of these last few days but we didn't have time to bring them all to you we'll show you one of those today about an interesting start up that is literally out of this world all that directly ahead but first we get to some headlines let's go to. the u.s. government has been ordered by the united nations international court of justice to lift sanctions on iran that would have interfered with the importation of humanitarian aid the court ruled today that the u.s. government must lift the sanctions that impact iran's ability to import things like food medicine and even airline hearts the court said that any limiting of things like food and medicine would have a serious impact on the health

tech. attention to more some of the other chinese technology firms recently because of the selloff. >> there's question as to whether china tech is being punished. ate's another chart looking the correlation between china and the u.s., starting to pick up a little bit. the u.s. is only down about 4%. when you look at some of the battered stocks like tencent, now it's down 38%. do you look at that and say it is really looking cheap at the moment, it's a pretty good entry point? grady: we have looked closely at it and tried to value it. the potential to monetize users through social media services, video games and payment services as well as all their global investments, it is a fantastic business. --tainly i think investors that's a type of business we would want to own if we had the right valuation to buy into it. we continue to seek analyst boosting their forecast for earnings. forecast and revenue estimates, if this in line with what you're seeing, or our expectations overblown? question,t's the key profit growth is 20% less this year and the expectation for another 10% profit growth on the

these stocks outperformed chinese techs.fang and the white line would be baidu and alibaba. look at thee a sectors in both countries, which one will outperform? in terms of the three industries i look at, the i.t. segments into the bios sector, andnd the bio sector electric cars and alternative market sizes for these are 50% of the global market, except for electric iss, when the chinese market 50% of the global market. if you look at china, you are looking at equity markets down 30% in terms of the shenzhen index. manufacturing industries are up 60% year on year. people are worried about the lending of the chinese market. i think the government of china has a lot of keys to boost the economic growth. hery: why aren't they doing that now? what we saw back in periods of market decline, we saw authorities intervene aggressively. but in beijing, we are not seeing that much enthusiasm. daniel: this has to do with what the u.s. is doing versus china. 1985. currency appreciated significantly. intoresulted competitiveness of slowin

ati want to take a look bonds of chinese tech giants. alibaba have been plunging. let's look at the bonds. has -- had $7,000 of debt last year. that led tencent to sell 5 billion of bonds earlier this year. check out the returns. negative negative negative. not doing so well. interesting to look at in light of the bonds selloff recently. also including the selloff in chinese assets. the new bond sales are not always the greatest. watching theen equity indexes in relation to the 200 day moving average. we're looking at the dow and s&p 500 and nasdaq along the stocks in the russell 2000. and nasdaq are on pace for their worst week since march. all of these indexes are falling below their 200 day moving average. undersdaq has now been the average for three days. the s&p closed under the average yesterday for the first time since april. what does it mean? the sellers are taking control but not all slices are the same. telling recent one is you the sellers are taking over the equity index and overwhelming the buyers. bloomberg,into the we saw

today's big losers apple down about 2 to 4% with increased concerns around china it is worth noting chinese tech lower. it's not just technology the nasdaq is on pace for the biggest single day decline since early april. it is one of the longest winning streaks dating back to 1985. >> and those big cap tech stocks very much effected by this china chip story still down significantly >> it is a trend we have seen throughout the year. it is what we are seeing today >> thanks very much for that we are coming back in a few minutes time with closing countdown. >>> after the bell jeremy siegel, what he says is behind the market melt down that's later on the closing bell keep it right here keep watching cnbc for how we close. we are first in business worldwide. ♪ introducing e*trade personalized investments professionally managed portfolios customized to help meet your financial goals. you'll know what you're invested in and how it's performing. so you can spend more time floating about on your inflatable swan. [ding] >>> welcome back to the closing bell juli julia is back at headquarters. >> stocks hea

take a look at the move in chinese tech like alibaba and all about 2% to 4% still important to know thatare trading down on the year the big question is whether the rebound can continue, earnings will provide the real evidence as to whether market like china are a source of growth or pain this week. technology will dominate earnings intel among others according this weekend despite technology over a year, goldman sachs puts out a note this morning saying they favor technology and higher margins and speaking of earnings, we are keeping a close eye on travel and caribbean and ex paedia t keep an eye on that sector as well guys, back to you. >> seema mody. when we come back, beth comstock is with us as we enter the biggest week of the earnings season >> and the dow is up 5 points. obvious. sometimes, they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪ >>> could there be more tax cuts on the way the president says republicans are planning s

we talk about the chinese tech names out dpts performing yesterday.tinue to outperform today. it helped stage a come back today. only down about 1% on the week all in all even with the big two-day drop in stocks the u.s. is still vastly outperforming global stocks this year. the s & p 500 up about 3.5% this year compared to the global index. it is down 10% next week markets will be focused on china's number and the treasury report on currency manipulation and earnings season from goldman sachs it could also set the tone for markets as well, guys. >> you know, that chart that you shared there, the s&p, i think it might be at the center of everything going on in the markets this week. it really, a lot of folks are looking at this and saying they let us down into this position i wonder if the conditions are right for the immerging markets to close this gap a little bit it was after the strong performance that we saw in immerging markets gaining ability 60% over those two years it has been quite the opposite those comments are certainly not helping. >> th

yvonne: we were talking about chinese text shares -- tech shares selling off. your concern this trade war is going to be lingering on past 2018 and next year? howard: it does clearly concern -- increase our concern. you have something that is a serious, systemic, comes from at work.the pla because you see trade frictions persisting and you definitely i think for the first time can see supply chains may need to change. so we have been doing work on servers, where are they reduced, where can they take on capacity things there are some that will need to change from this, whether it is political pressure and more substantive and comes from the national security unrest in the u.s. rishaad: supply chains are truly global. it concerns everything -- i wouldn't like to be doing that job anyway. howard: i don't think any of us would. rishaad: but it does go to what a globalized world we live in, how everything is intertwined. you try to break it, where would we be? howard: you need to repeal the laws of economics in some ways or remap them. but it is a narrow slice. i do

snap, twitter, facebook, they're all down 2% apiece in chinese tech names, also among the biggest laggardsch down 4 or 3% each. let's get to sue herera for a cnbc news update. >>> here's what's happening at this hour, everyone. democratic senator dianne feinstein criticizing the fbi report on supreme court nominee brett kavanaugh, saying the investigation was far from complete >> the most notable part of this report is what's not in it as we noted by the white house, the fbi did not interview brett kavanaugh nor did the fbi interview dr. blasey ford. >>> 6.5 million pounds of various beef products have been recalled by an arizona company because they may be contaminated with salmonella. the meat was packaged between july 26th and september 7th. at least 56 people in 16 states have been reported getting sick. >>> and first lady melania trump meeting with the first lady of malawi the two had tea and then walked through the gardens of the country's statehouse and watched a traditional dance performance as well. malawi is the second stop on mrs. trump's africa trip you are up to date that's th

francine: i have a great chart looking at chinese tech stocks. is this link to trade? how much does the existing trade standoff have to do with this? performance has to a trade so i asked you if the -- i thought for a moment if you're asking if the story has to do with the trade story. much to do with importing electronic goods and u.s. goods into china. these things are produced in special economic zones which therefore pay tariffs over the border. the whole nature of apple's supply chain are ours numerous crossing of orders others components a rate -- components over a period of weeks and months. accelerating the cost of that minute -- manufacturing process is a huge threat. tiertends way back to the 1, 2, and three suppliers. you look at semiconductor stocks, they seem to have already been under pressure. that thislot of talk demand for chips has peaked. concern about growth and there is a concern that more and more competencies are being brought in-house by the likes of apple and they can , taiwanmeone semiconductor, to manufacture for them. pressure on the margins

smallerve thought that chinese tech companies would be the test as to whether you are going to see anf the private sector. tom: lord patten, we have time for one more observation. can you give us a state of your conservative party? good lord, do you want a disaster movie? you what is happening and it is basically what bloomberg has been reporting. i think there will probably be a deal between the eu and the u.k. on withdrawal. tom: i don't care about that. is the going to be a deal between prime minister may, mr. johnson and the other eight factions of your conservative party? christopher: i wish it was mined in the sense that it agreed with me because if it was, we would not be leaving the european union which is a piece of a -- which is a piece of egregious self harm. these people are ideologues. they combined in sort of a numbskull nativism with some pretty bizarre roles -- ideas about the roles that britain could play in the world. it puts us more the position of norway than canada. the idea that canada is the solution to the uk's problems or a deal like ukraine, those are both cr

stuart: american tech companies pushed back and said no. the chinesef -- important qualification. they are denied the veracity of the story. >> it is an incredible story. stuart: it is not a software hack. >> hardware hacks are harder and more devastating as well, to given access point into the system. stuart: you got that little chip in the motherboard in the server and you are a defense contractor he using the server somehow or other, they are reading what you are doing. >> a lot of investors in china believe those stocks were hit hard and us tech companies have a vested interest to push back because it says something how well they have done do diligence. stuart: i saw lenovo. >> also company problems as well, financial they missed but supply chains are long and complex. they get a chip unnoticed on motherboards hidden between fiberglass. that is a hard thing to do. think of the jurisdiction you have to go through. one hacking expert said it is like watching a unicorn jump over a rainbow. he had to go through the geography. >> the fact that it might

fresh evidence of chinese tempering in key tech components bound for america. weekomberg business report said chinese spies planted chips in motherboards. supermicro and amazon denied bad chips were planted. is warning brexit without a -- would be a disaster. negotiators should focus on finding a compromise as soon as possible. the deal needs to be agreed to within weeks if the parliaments are to have time to approve it before the split. >> europe must prevent a worst-case scenario. the separation of the united kingdom from the european union without an agreement on accident transition and clarification and the future relations is still possible. situation, arying few days ahead of the crucial eu summit. it would be a disaster if this happened on march 29. >> the new report says banks in hong kong are cutting property marketons as the housing weakens, and that threatens to trigger a downward spiral and prices. lower valuations mean less lending. new measures are aimed at countering the crisis in the city that is the least affordable in the world. hurricane micha