e.m. currencies. i thought i would put cable in there as well. are saying the g-10 from cies gaining apart the yen. two as teresa may has weeks to rush and try to salvage some sort of deal. check on the markets in asia, happy monday, it's risk on! >> it is risk on, we of course, closed monday ts for presidents day holiday. we're taking the lead from the on friday and also the china credit data which came verygh on friday which was solid, the best that president trump signalled the talks with trade dispute going well adding to the sentiment. china has been leading the charge today up by 2.8% and you pretty much every market is higher with the exception of india's market. for an eighth session in a row, the longest losing august 2013. investors look ahead to those away from kazmir and the trade optimism. looking at stocks, watching singapore s. in coming through with its fourth quarter net income. it was weaker than what the for.et was looking it says that it's trying to improve and you got

there is no resistance in the e.m. index. overall, you see a down trend, down about 10% over the last 12 months. the fourth quarter was especially bad, but this year, rebounding more than u.s. stocks. 1%, sayingore than are cheeringets the fed's recent decision in january, even if new information didn't come out of the minutes. above 1100, but the long term technicals suggest that could be a brief bounce for e.m.. investors probably want to treat this with care. they're suggesting there is a dovish interpretation around the fed, but some store might be ahead to take this e.m. equity index down. perhaps what emma was talking about in the all world index. caroline: abigail in the markets can, thank you. let's stick on that theme. we go back to quincy and mike regan. quincy, is e.m. the place to be? quincy: it is. it was contrary and some time ago and is now consensus. however, the u.s. dollar has played a huge role in emerging markets. the stronger the u.s. dollar, the instinctive reaction is get out of e.m. china is very impor

and china for the rest of e.m. are less severe. rebound inflows we are seeing is especially intense to asia, so china, equity inflows are strong, indonesia, korea, all these places that would expect to benefit from a relaxation of trade tensions. caroline: aside from trade tensions, there are economic problems of it that persuasion in china. large chinese companies, it seems to be yuan denominated debt. how much is that a key concern when you look at equity flows to that country as well? robin: it is a great point. the turning point in flows, before i get to the china that question, the turning point inflows has been equities. the big pickup inflows to emerging markets has been asia focused and equity focused. so it is very much a risk taking template. to move back to your china overhang,and the debt i think a dovish fed for china has a double benefit. i think we learned that lesson in 2016 when the fed shifted every dovish in response to valuation fears. i hawkish fed means a strong dollar, dollar appreciation. that puts pressure

e.m. bonds were pretty strong, especially in latin america, result, and argentina's sovereign debt specifically. that might be because the federal reserve did not surprise anything -- surprise anybody today. the dollar has come down a little bit today. especially versus some of these other currencies. that is helping emerging-market bonds. scarlet: i will pick it up from there. thank you for great context. still with us is yana and sarah ponczek. sara, you wrote a story about the risks and rewards of following the hurt, specifically crowded hedge fund funds. they looked at which stocks are the most loved by hedge funds and how do they perform. the folio that contains the most loved stocks loved stocks. you need to have more nerve. in downturns, you really see outside losses. you can look at the fourth quarter as well as an example of that, because a lot of people were looking at hedge funds and set apart of that was unwinding. joe: talk to us about areas of the market that you liked specif

you can see e.m.'s skyrocketing for the rest of the year.olatility, i think you have to look at it in absolute context as well as the rebel -- relativity between developed and emerging. a emerging we have seen number of significant headwinds whether it be the trade war, whether it be the rising dollar, lately in 2018 we saw whether it be the government shutdown in the u.s., whether it be broadening of economic uncertainties and political issues. so, we are seeing a pickup in some developed market volatility's, but that was from a very low level. at the start of 2018 you are seeing all-time lows in volatility. i think you'll see a normalization of volatility, probably q4 was a high point, that was an extreme marketing environment for various reasons and whichever way you cut it. i think some normalization of volatility. 2018 was an, early unusually low period of volatility. we should not expect to go back to those levels. we are seeing central banks unwind some extraordinary monetary support for the market. we have not had this level of centr

if it is indeed e.m.owded, we will see investors leave, an avalanche of market could hit the market. that is because of what we have seen in the biggest e.m. etf. record inflows. this is the ticker etf from blackrock and its market cap. so for this year, about $5 billion has been added. --ket cap now at $60 million $60 billion rather. not only is this a record, but you have to keep in mind it is just as easy to sell etf shares as it is to buy so look out. is it indeed to crowded and investors will pull out of this? matt: i feel like, i love that chart. have i seen that chart before? dani: you have seen perhaps versions of it. we have seen e.m. inflows so for this year be at a record so that might be the one you have seen. but in terms of market cap, this is a fresh one for you. matt: i think that could be a winner if you were to use that -- at least from my perspective, if you were to use that in battle of the charts. thank you very much for showing that. very interesting how popular e.m. has been. patric

capital flows might be moving to other e.m.'s. world like last year, where the fed is hiking rates and the dollar is strong, that will always be a challenge to emerging markets. it was a challenge for chinese markets. the world we are in this year is a different one. we are expecting a downside surprise in u.s. growth. we predicted the fed would change its stance to more of a holding pattern. the growth differentials are now reversing with china likely to accelerate. that is supporting their growth. to come back to the original point about the current accounts, china will run a current account deficit, but it is a net international creditor, so it is not likely to find it particularly difficult to fund that deficit. rishaad: jonathan, do stay with us. will be on to discuss more of what is going on out there. let's have a look at what is going on first word news wise and head down to sydney. e.u. chief brexit negotiator says the block is open to a permanent customs union with the u.k. and that the relationship should be as broad an

for me, in terms of e.m. asia, you do have to be selective.l be currencies that could outperform like potentially taiwan because that seems to laugh had a little bit of a bounce back and exports for january, but certainly there might be deeper cracks starting to emerge and imaging at the wrong time against an underlying domestic picture as well which is why i prefer to be long the u.s. dollar. all right, hold that thought. we will pick your brain a little further -- a little further later in the show. minutes dued to the out today. >> plus, india takes the crown from italy when it comes to bad loans. we talk later about the challenges facing indian lenders. this is bloomberg. ♪ >> you are watching bloomberg markets asia. time for the word of the day. ce, which seems to have become the fed's new mantra. >> common sense suggests patiently awaiting reader clarity and a policy that has policymakers well in the past. >> we would be well served if we paused and were patient for some number of months. >> in january's fomc minutes, we see how patience

for the next three months, e.m.e sense but let's be clear, we saw global equities fall, not only e.m.. we get uncertainty around trade tensions, even if we get that and even if we get a risk asset rally, the problem we will then have is that the fed gets repriced and on a relative basis the base market is kept. flows, we willt look at fund flows and foreign investor flows, and both have recovered over the last couple weeks, particularly from foreign investors. they have recovered hugely over the last couple weeks. >> is it a fed story? this big winner out of the fed policy is probably emerging-market. >> yes. the overarching story is a fed story. acis,ularly on a relative what you can see if you look at e.m. equities over the last couple months, you put them together with treasury yields and you get a decent correlation. you how e.m.tells is getting priced. obviously there is the china story but if we get stimulus that might be a catalyst. not only for china but for e.m. more broadly. that cautions the growth concer

and e.m. are still the high confidence trades for us.e: this was a great week for european stocks. one of the best weeks in three months for european stocks. maybe buyer beware. >> if people feel better about him -- e.m., i think europe is a bigger trading partner. scarlet: he is saying it is unlikely we will revisit lows for the u.s. will we revisit the lows for europe? >> europe can catch on to the broader risk sentiment happening in e.m. i think you could prevent that. it does not mean it will outperform. but forus, it is not -- us, it is not a trade we want to be underweight. we do not think it will test the lows. by sympathy, it will lift confidence. we are underweight that part of the world. caroline: we saw stocks fall today. china's data was ugly, the factory orders. >> it was shocking. the shanghai composite had almost a 1% drop. it is not the type of day where china is going to run the show. the optimism toward the trade is growing for the trade situation, at least to kick the can down the road. i think that would help sentimen

funds globally, and if they do come to e.m. globally the have more chance to come into indonesia, because indonesia has one of th ehighest growth numbers in asean. so, i think if money does come back into e.m. space, we clearly do our policies well in indonesia. then i think we will go for a good start of investment -- cuts. david: we have established it is a good entry point at this point in time. you handle fixed income. we are looking at the bond markets, three years at 7.4 the 10 year take you all the way to 7.9. where along the curve do you think i should be right now? >> so, currently what we are doing is we have -- a strategy in which we have maximum cash allocated at this current point. and we have more of a long end. we are at neutral duration but we have -- and the reason of that strategy is because we are going to move into major events in the coming months. so we have u.s.-china deal coming up in march. brexit in march. and international elections in april. anyway we are going to have a huge supply that is going to

india may be defensive and the e.m. category. the upside, investors are leaving e.m.ace. if china does not work in the short-term, india may suffer as well. we saw the rupee tumble on the back of the sanctions between india and pakistan and now morgan stanley says the rupee is a sell. what is your take on it? will this impact to the appetite for indian assets, given all the challenges, including the uncertainty to do with elections coming up? sanjay: yes, it is playing through. we are seeing a significant reduction in the activity of foreigners in indian equities. indian bonds have moved up a lot, possibly in response to what is happening on the border. i would argue these are short-term issues. longer-term investors should focus more on other opportunities. if this leads to normalization of valuation -- i would not hold out to get stocks cheaper in india. get normalization of valuations, i would consider buying indian goods. haslinda: the r.b.i. can cut rates again, yes? sanjay: that is the base case. everyone is pricing into this. weigh on that would the rupee even

you still have money leaving e.m. >> it has been very difficult. i think the start of the year was abroad people getting into risk. e.m. was at the forefront of that. it started to move into high-yield and now duration. it does seem to be a less risk on move in terms of global flows. there is still that expectation that as you get these bad chinese headlines, they have to stimulate more, and we have to start seeing it soon. alix: fair point. barelyhe u.k. economy growing in the fourth quarter. it is up 0.2%. things we would have expected like weaker pound, we did not see those things. >> we did not. we did see the reduction in capital spending for the fourth consecutive quarter, the biggest streak since the financial crisis. it is this uncertainty over brexit is having an impact on the u.k. economy. it is spilling into the data. david: is it spilling into your? -- europe? it is not just a u.k. problem. levered.k. is a trade economy. the slowdown in global trade is affecting it acutely. what i like about the bad u.k. growth we had a revision last we

but to be fair, e.m.'s were feeling the pain that spread through by the end of the year. cominge a sense we're off that because investors priced in trade and the fed and the headaches? jun: absolutely. in our view, we believe e.m. is more interesting. one is the growth rate. even though it's slowing, it's still higher than the u.s., not to mention australia. what is interesting, e.m. asia, for the first time, it is trading on a dividend yield comparable to the likes of the dm markets, such as u.s. markets. caps are20% of market sitting in the cash. we see valuation support for the markets. we expect capital flowing back in. shery: what is your base case scenario for how the china trade war plays out? jun: our base case is we do believe there will be some sort of resolution, as we have been discussing for quite some time. the commentary from both sides seems to be reconciliatory, and we expect china to come up with more concession, as well as the path to open up its market for foreign businesses. we do expe

you look at that basket of valuation metrics, that suggests e.m. ought to have a much better 2019 than 2018. >> phil orlando, chase equity market strategist, thanks you so much. along with bloomberg's luke. that does it for me and the closing bell. lorraine is stepping back for what did you must. amazon's change of heart. why a tech chinetginte is scrapping plans to build a second headquarters in new york city. this is bloomberg. berg. ♪ >> bloomberg's head quarters in new york. >> here's now u.s. stocks closed mix on the day. the tech was the -- >> the question is, what is it? >> ready to compromise. president donald trump is expected to sign a spending bill and will declare a national emergency to get additional funds for a border wall. ow backlash. we speak to a new york city councilmember ahead. this drama retail sales plunged the most in nine years. why some economists were skeptical about the accuracy of he december numbers. let's take a look right now. national political reporter who is on capitol hill with the latest on the shutdown. we und

you are starting to see resurgence in buying into e.m.ssets that can be confused on the policy side. jonathan: rob? >> when we talk about china, we need to be clear. china is a big market with capital controls. they control their own destiny around the finance markets. what we know they have been doing all last year is stimulating, adding stimulus to the economy. so bond yields dropped, credit spreads are tightening onshore. short end chinese interest rates are below u.s. interest rates. this tells me that the policymakers in china are very aggressively trying to support the economy. and spreading that stimulus throughout the economy. that will eventually lead offshore. the ties to financial markets are a little hindered by these capital controls, and it is not as direct as in the old days when you had exports and imports, economic activity. that will leak offshore. that is why they are selling these chinese bonds. these are chinese buyers. jonathan: that is the big fear out there, the belief that the diminishing marginal return for the d

putting some of that cash in duration like fixed income, where you are looking at treasuries or e.m. markets that are very sensitive to treasury moves. johnathan: kathy, what do you think? reporter: i would agree with diana. off the tableey here. it has been fast and furious. you have to be nimble to play this in and out. we would take some risk off the table. we do light duration as well in risk-free. johnathan: we're going to the concept of duration and a minute. i want to bring up the charts we see in high yield, credit more probably and leveraged loans as well. kathy, what pockets of credit are you looking at that have gone too far too quickly? kathy: high-yield, leveraged loans, and re-area really. -- every area of the market and credit. particularly, leveraged loans and high-yield. there could be a quick snap back that even though we are pretty positive on the domestic economy for this year, we're still lay in the business cycle. there is still a lot of headwinds. this concept on that risk, we talked about that credit. what about emerging markets because i've heard some banks a

putting some of that cash in durations like fixed income, whether you are looking at treasuries or e.m. markets that are very sensitive to treasury moves. >> i would agree with diana. we take money off the table here. this has been a fast and furious rally. you have to be really nimble to play this in and out. we would take some risk off the table. i agree, we like duration as well. up then: i want to bring the-shaped charts we see in high-yield, credit, leverage loans as well. what pockets of credit are you looking at right now that you think have gone too far too quickly? high yield, just about every area of the market in credit. particularly leverage loans and high-yield. it's been such a quick snap back. even though we are pretty positive on a domestic economy for this year, we are still late in the business cycle and there is a lot of headwinds. jonathan: diana, on this idea of donning back risk, what about emerging markets? a couple of banks suggesting to people that now is the time to start dialing back of it. diana: in emerging markets it depends on what part you are looking at

not just talking about the u.s., but e.m., asia, and even european investment high-yield grade. i don't see cracks in the assets in the way that you think there should be given the growth act drop. >> the fourth quarter was pretty brutal. jonathan: i agree, but something happened in december, but everything is ok. >> you have charts of their of there of the u.s. high-yield market. the chinese market does not look quite as promising, so to speak. the selloff was more advanced, there has been less of a rally. financial markets, as much as we want them to reflect the real economy, they care about what the fed is likely to do. in the fourth quarter -- i was going to say when they thought -- i'm going to change that to, when the chair said the other day there were going to continue to raise rates, that is when the market came apart. as soon as he reversed course and backtracked, that is when the market started to rally. jonathan: final word, michael. michael: i call it the bond conundrum right now. we have a yield curve that is essentially that close to inversion in the u.s., and eve

across e.m. in terms of equities. we do across asset classes as well.t's not a good environment for equities because of everything we can saying about the global growth outlook. i think for currencies, we have had a positive run. that's due to the softer dollar we've seen which has been the recalibration of fed expectations. the fed is gone as far as a can of the moment. we are more positive on local debt markets because of falling inflation in many countries. this is something that really started last year from the middle of last year in the u.s.. andation started falling that's spread through to emerging markets. that should be very positive for local debt markets. and also for credit as well. credit will be affected by corporate profits which will particularly if chinese ppi drops into deflation as we have been speaking about, that could be quite negative. nejra: has a softer dollar in lower treasury yields gone as far as they can? simon: yes, i personally think the softer dollar is a pause rather than a reversal in trend. in terms of yield, it's sli

e.m. has also benefited from the fed.elloff had this trade issue, but the fed was probably a larger factor from our standpoint. the em world, if the dollar holds in place, for the dollar to stop increasing allows e.m. sentiment to come back and. i think the u.s. and em including less-developed -- alix: stay with us. coming up, the loss of appetite for kraft heinz, a record low on some of its best-known brands. that is next. this is bloomberg. ♪ kraft heinz plunging in the premarket. it is poised to open at a record low after writing down the value of its best-known brands like 15 point $4 billion. joining us on the phone is the bloomberg opinion columnist. give us a sense of what happened. they built the separately big with the help of warren buffett and it seems to be coming down all at once. why so quickly? thee knew the strategy from start was shortsighted. it was about cutting costs and driving earnings first that way. that meant investing internally would fall to the wayside. they were focused on the bottom line not

stefan: a lot of central banks in e.m. be careful in terms of the coming -- taking on an easing tone with exception to china. it was not too long ago that there was a severe shock to emerging-market currencies, and central banks have to raise currency -- rates to defend against the currency weakness. if you step out of the region and think about europe and the bank of japan to some degree, here, the main central banks will be trying to follow the cautiousness that we have from the fed, to see what the data tells us in the next few months. david: the movement in the dollar, has been extreme. look at the yields. you would think the world is ending. if you look at the spreads, look at that. that might be telling us that the market has overshot this. we are overestimating the amount of commendation the central banks can deliver this year. you think the fed will hike, still? stefan: yes. only two times. there is downside risk to that forecast. we talked earlier about the u.s. growing above trend. that is still true, but on the

although there have been a lot of inflows recently into e.m., your e.m. the price action this morning's adjust that could run further. let's avoid the banks. i don't want to get you in trouble. american banks did not participate last year. our reviewou know, for this year is somewhat cautious. we see where ten-year rates are. we see the relative flatness of the yield curve in the u.s.. i am not sure that banks would be our first call if you're trying to add risk to the next report fully appeared -- report. we are trying to find pockets of quality that we think a be more resilient and more difficult market environment. there are some sectors of tech that we like. the corporate's that have less leverage and the balance sheet and more sustainable buyback programs be a we think could outperform in a more difficult environment. francine: what are the subsectors of tech that you like? data miners? guest: we would not necessarily go down to a sub sect level in terms of trying to take names on that basis. what we try and do is focus on themes. balance sheet is on

this chart looking at asian stocks in the e.m. space. marketsn a number from shanghai to hong kong to south korea, new zealand even entering overboard territory. momentum has been picking up, but we are also seeing the relative strength index starting to approach the 200 day moving average. is there a sense that this good news on the trade front gives another leg up to these equities? where do you see best value opportunities? do you see further upside for chinese stocks, even though we have had a big jump? higher china has closed since last september on friday. our kauai think the word overbought is not the same as overvalued. there is value in some of these markets. china, the multiple valuation is really low. there was such depression last year that there is more room for upside, even when you see technical indicators indicating a short, overbought signal that could reverse temporarily. the rally continues from there. earnings have come out in the u.s. somewhat stronger. how will this play out globally? globally, earnings are impacted

what that has done for e.m. and for the asian market has pushed higher.uations and there is some sense we might see the trade talks improve the picture as well. clearly given the mood so far this year, not as much as there was as we sought the outset of 2019. of it is about the consumer sentiment has been a huge source of concern, is that something you are watching? jason: we saw a retail sales in december plunge. that is always something we take care to look at. sometimes it is in the indicator but the wealth effect in u.s. equity markets, no doubt, that was a big factor. as we look forward, we think the consumer is not in a bad position. we don't just see that weakness continuing. season, the earnings sophie kamaruddin just told us about 80% of companies already reported. how is that playing out relative to your earlier assessment that earnings growth could be 4.3% for fiscal year 2019. jason: it has been slightly disappointing. we did envision that to the extent that we were looking at more challenging backdrop for the australian equity market at the b

an e.m. barcoded -- and he embargoed the grain. it was a $50 million trade.so you stepped away from refco, and a 6.5 years later it went bankrupt. tom: i sold it in 1999. it went bankrupt in 2006-something. and it went public. it was probably a month after it went public that it went down. david: did you see it coming at all? tom: no, not at all. you know, valuation, the day before it went down. david: you dealt with the regulators a fair amount me even had difficulty with them with a fair amount of investigations and a lot of lawyers. so, talk about regulation in the business today, what is the proper role for federal regulation? i assume that you think there should be some regulation. contractsit was 150 when i started, today it is 70,000. and there is no limit if you are a big funds manager. so i was always banging up against the limit positions. that changed dramatically. it is not 85% traded by computers with no people attached to them. so it is hard to get mad at a computer. and price discovery, risk transfer, that was the business. a farmer had corn to

we are seeing more broad weakness in e.m. today. let's take a quick look at what is happening in new zealand overnight. kiwive move for the against the u.s. dollar. reserve bank of new zealand was not as dovish as the market anticipated. as a result of which, the currency jumped sharply. vonnie: let's check in on the "first word" news. here's kailey leinz. kailey: white house press secretary sarah huckabee sanders says president trump does not want to see another government shutdown, but he is not willing to back away from his plan to build a border waffled speaking to reporters at the white house today, sanders was asked whether the president will sign the border security deal. sarah: the president isn't fully happy, as he said yesterday, with everything that is in the legislation, but there are positive pieces of it. one way or the other, and one thing you can be sure of, is that at the end of the data president is going to build a wall. he said he would get it done and he will. kailey: bloomberg has learned put offing is until th

the risk rally in e.m. assets against difficult at the moment.uan is probably stock until we see this play out in the spring. francine: we also saw a couple of defaults, two defaults from china. i know they are managed, but when could be start causing a contagion? i don't think there will be a contagion. i think they will work best the government will work to alleviate the domestic angst. there may be a slowdown but it is a slowdown from an economy which is multiple times larger than it was a few years ago, so i am not worried about china and i think it is positive for e.m.. francine: you are not worried about the false either? mike: we don't see a systemic crisis occurring in china. chinese authorities have many policy tools and also, there's a lot of state creditors and local governments who have a state influence. it is something that will slow growth ultimately on a multi-year basis, but i think we are inclined to avoid a debt crisis. francine: thank you both, thanos papasavvas, and mike gallagher. both of you are staying with us. coming up,

it got crowded quickly everyone was looking for e.m.onderfully and now outperformed the u.s if, again, we see improvement in china and in the u.s., it's probably still a good bet and if the dollar continues the weaken, that's also a tactical trade that people have on, just making a bet solely on the dollar declining against those currencies. >> some more headlines coming in president xi is saying he hopes both sides will redouble efforts to meet halfway. in the meantime, we do want to bring in tim seymour, a trader with some china stock picks. tim, you like this market overall? where are we in the valuation of the overall market >> chinese stocks are very cheap in terms of their historical reference to themselves or the overall asset class. so if you look at some of the megacap chinese stocks, ifyou look at ba baa ba, the spending wasn't great or the buying wasn't great but below 1.0, some of the cheapest big megacap high-tech companies in the world. ron is talking about the macro trade here and i couldn't agree more also, just technica

e.m.: absolutely, sovereign bonds, you're staying overweight.you also have interesting calls on australia. this is a great day to talk about it. we had the misconduct report and have seen australian banks rally seen as ause it was soft glow. report that misconduct on australian banks impact your thinking on aussie equities? mark: we think there are a lot of factors on a relative basis that make us like canada more than australia. they are both commodity exposed, we think oil will rebound. that is a reason we prefer canadian equities over australian equities, and the canadian dollar over the australian dollar. if you look at exposure towards china and the slowdown there, we think should there be a mistake, australia is more exposed. nejra: is there any reason australia making headlines today, we got the decision that was no surprise, but avoiding the shift of following the fed has given aussie dollar a boost today. we do prefer the canadian dollar despite what we heard today? because i think the growth outlooks for canada at this point are strong

when you see the diverging views on e.m., in terms of em stocks, you have j.p.gan asset management in the bullish camp, but hsbc cautious on a hawkish fed. hsbc took me back to yesterday's story. lynchf america, merrill surveys are a great insight into where is the herd. they say one of the most crowded is developing nations. they have had a stellar run since the start of the year. nejra: the question is if you want to get out now while you are seeing the consensus in the markets seeing the dovish fed. we talked about going against the grain and markets are getting it wrong, surprising the dovish fed. that is the call you have to make and to some extent on the dollar as well. manus: they say now is your opportunity to sell in the u.s., and backup, it is a big debate whether the fed is pushed into a corner. let's get to the first word news . eu has vowed retaliation if the u.s. follows through with auto tariffs. this dispute follows american tariffs on u.s. steel and aluminum imports. nationalusing the same security justification. exit negotiators are working on

i don't see you invested too much, although i know you had a basket of e.m. currencies.rrent stand at latitude? freddie: we don't invest directly in emerging-market equities. in the past, we have looked at that and currencies. i'm also a big believer in the underlying growth trends in the emerging markets for the next 5, 10, 20 years ahead. i think they are gone economies with a huge future. you have to distinguish between countries a lot. you will suffer a lot of volatility. interesting seeing a lot more sentimental retail and buying and selling that shows volatility. we are happy to have exposure with our stocks. a lot of china exposure. we don't invest directly. not because we are unsure of the future. we are very positive about the future for emerging markets. anna: what part of the emerging-market story are you happy to be invested into? you mentioned earlier about the emerging middle class. is it about emerging middle class and the consumer taste, is that what you're a most excited about? freddie: i still think asia-pacific and china are more interesting a region t

. >> let me thank e.m. and republicans and democrats. you're working together, being with us today. we had three outstanding members of congress. and you can see their willingness to move this through. and i hope this is contagious when they get back to capitol hill. so thank you very much! >> thank you, folks! >> thank all of you! >> nice job! [ applause ] >> so we'll we'll break for a couple minutes here to get everybody else miked up for panel number two. so stay with us. in a few minutes, stay with us. excellent comments. >>> c-span's washington journal live everyday with policy issues that impact you. coming up wednesday morning, virginia republicanman van klein will join us to talk about the tentative border security deal reached by negotiators that would avoid a government shutdown. >> and new jersey congressman malinouski talked about his role on the house foreign affairs administration and over the trump administration's foreign policy agenda. and then los angeles reporter molly o'toule will talk about immigration funding and detention beds. be sure to watch "washington jou

a little switch out on e.m.'s today.ly catching the tailwind after global equities had their best session in three weeks. let's look at currency moves. the market was expecting it could turn dovish, but rates could move higher or lower, and investors piled into the kiwi pushing it up by 1.5%. a little less dovish than was expected. uan higher, and we have had risk on moves that means the yen is out of favor. they yen weaker against the dollar by 0.1%. manus: juliette saly in singapore. nejra: global equities rallied the most in three weeks as president trump says he is open to extending a march 1 deadline to raise tariffs on chinese goods if they are near an agreement. -- heke to the founder discussed the market rally. >> there is a ton of buying power in the u.s. from buy backs, $1 trillion in buybacks. a lot. you have support from buy backs, support from the fed, growth is fine in the u.s. manus: what is your top trade? short dollars versus emerging markets right now. emerging markets got beat up last year. and the lon

happy to be underweight, but we feel a chinese moelis they give the opportunity to draw upside from the e.m in the near-term. nejra: are you looking for opportunities to the upside as well in other sectors or equity markets if we get a positive resolution to the u.s.-china trade talk? the knee-jerk reaction will generally be to purchase economies with direct commodity exposure, and on a fundamental basis, that is not necessarily the best retreated trade. globalnese domination of markets is falling away somewhat. that may be a tactical trade. the chinese consumer is the place to be exposed given the government has a desire to grow the middle class, and that should be the longer-term opportunity. nejra: does that lead you to eurozone companies in the ?onsumer discretionary space i do not know what you are looking at luxury stocks or other industries, maybe i.t. companies in the eurozone that have had exposure to china. paul: the euro zone does not offer much in terms of i.t., the u.s. tends to dominate that space. there are stocks that can give you exposure to that. staples, access to cosmeti

int supports higher prices e.m. and the u.s.allocation the highest in a decade, to your point. coming up, small caps continuing to outperform despite disappointing earnings estimates. this is bloomberg. ♪ ritika: this is "bloomberg daybreak." -- world's second-largest heineken was helped by the fastest growth of its mainstay brand in a decade. investor -- says bitcoin will be digital gold despite its 80% decline. he talked to bloomberg about where he sees cryptocurrencies heading. >> we have found an equilibrium in this 3400-3600 zone. it feels like we are just compromising on the bottom in the next move will go higher. ritika: he expects institutional money to start moving into cryptocurrencies in the next year, setting the stage for a rally. considering starting an online store that sells multiple opportunities see in an online marketplace that compromises between their brand and selling others -- that is your bloomberg business flash. alix: more ways for couples to break up at ikea. it is the place for couples to go to fight.