i'm su keenan. this is bloomberg. china's foreign ministry has summoned the -- the ministry threatening further action if needed. our chief north asia correspondent stephen engle is following developments. in beijing reacting strongly and not backing down. stephen: no, and this will not defuse the tension that has been building up on the trade front between china and the u.s. this is likely to escalate that on the diplomatic front with the foreign ministry summoning the u.s. ambassador to beijing to the foreign ministry yesterday. i talked to a number of u.s. ambassadors to china. when they are summoned they usually go to the foreign ministry, they take their lashings, and they take their marching orders from the chinese back to the state department. she probably had an awkward afternoon. saturday,follows on china summoning the canadian ambassador to china as well for perhaps another verbal lashing. and china is taking it further saying they would take further action if necessary. arrested meng was december 1 in vanco

here is su keenan. su: we begin with theresa may facing a vote to bring down her government should the house of commons reject her deal asked week. labor says it is inevitable the party will propose a no-confidence motion should she lose the debate. that would put the u.k. on a course for an early general election with the e.u. saying the only options are the deal on the table or canceling brexit altogether. russia and saudi arabia have yet to officially confirm new oil curbs after agreeing to extend their deal to manage the market into next year. president putin announced the opec plus extension after meeting with the saudi crown prince at the g20. the president said he is the alliance will reach an agreement when they meet later in vienna. marriott says the four-year long data breach that exposed information of up to 500 million guests will not affect its own branded chains. the company said hackers stole details linked to hotels operated by starwood before it was acquired by marriott in 2016. , saint

i am su keenan. this is bloomberg. tensions between beijing and washington are escalating and show little signs of dying down despite calls to separate the rest of the huawei cfo from trade talks. beijing summoned the u.s. speak about this. david engel joins us in hong kong, also ros krasny in new york to cover every facet of this story. this comes at an awkward time as washington and beijing are grappling for the right response given trying to get trade talks on track. officials will hear talking about how these issues should be separated, the trade dispute and this alleged terminal case with huawei and the arrest in canada and extradition process. what we are seeing is a diplomatic row that is escalating because of the arrest in vancouver of the cfo of huawei. what we are hearing is the chinese foreign ministry has tomoned a u.s. ambassador china, and that comes a day after the canadian ambassador to china was summoned to the foreign ministry. i know how these things work. they have to go and get a

su keenan joins us. as said we could get a bounce in january but the nowhere in terms of direction. doesn't build confidence. let's go into the bloomberg because the s&p said no surprise to end december as the worst month in nearly a decade. a 13% decline in volume from last week because of the holiday ended up being a wild week. marketook at the snapshot. the dollar was down for a second day on friday. crude managed to be above 45. what we saw was the tech index lower, the energy-based stocks still drags on the market. let's go into one of the big themes of 2018, the faang stocks. look at the dramatic loss of these posted. very interesting going into 2019 analysts say it could turn around. as we look at the big performers for the year, interesting themes emerge. disney is a stock to watch, even though it is ending flat, slightly lower and comes off the deal with verizon, multiyear deal, that could actually be a positive. twilio is one to watch. big issue because they deal with infrastructure. stocksthe m

su keenan now joining us with more. su: we start with china with plans to rein in lending by regional banks. the banking and insurance realtor commissions says those lenders, including world cooperatives, must have proper licenses orioles wind down their businesses. smaller, regional lenders have become major rivals a shadow banking in china as they seek ways to enhance profitability. south korea says north korean leader kim jong-il and wants more -- kim jong-un once more summits. south korea's president's office personal letter of well wishes over the weekend. meetaid he is willing to more often in 2019 to achieve peace talks and a more nuclear free korean peninsula. the u.s. will welcome the new year with the government still in partial shutdown. little indication of any imminent agreement to resolve the standoff. some 400,000 federal employees are working without pay. furloughed. president trump has stepped up his attack on democrats, blaming them for the death of two children at the border with mexico as he stresses

su keenan tried to make sense of all of that with jeff kling offer. -- jeff.he bond markets. >> the good news for investors is credit spreads and fixed income complex is fairly priced. our general view had been the markets were overly complacent with the risks on the immediate horizon, now with the recent pullback, the entry point is better. su: let's talk about that. what happened in the end of 2018? i think an analogy is the broad market was sipping champagne on the top deck of the titanic. they had been failing to pick up their heads and notice the iceberg. challenges is the with china, whether the trade relationship or the broader geopolitical risks, ongoing challenges with brexit, fiscal deficits in italy and france, these are things that have been here for some time but the markets were too caught up in the data out of the u.s., which was always a one-time phenomenon. it was fiscal stimulus through the tax plan of 2018. they continued softness and easing. that are one-time stimuli were not necessarily playing into long-term growth and investors realized

su keenan joining us with more. this seems to be the key theme that has been playing out for the last few sessions. >> bond investors want to know what is going on with the economy, what it means for interest rates and stock investors are all about the straight headlines. let's go into the bloomberg because we have seen an interesting shift. a lot of investors selling the rallies, and that's what you see with the fourth quarter volatility, it is all about selling as opposed to buying when the market drops. 2018, butearlier in that appears to have been specific to those volatile times, not these. you see the bonds relatively unchanged, the dollar advanced on the latest economic data, showing a lower than expected jobless rate. retail banks and the index were really where we saw the weakness. one of the retailers projecting a week holiday season for sales. that seemed to not many of the retailers down. oxford industries involved in menswear, and notice the financial groups it in a big way. adobe software came in above

su keenan joining us with more of what to expect.rategies downplaying the potential of a deal last week. some really looking forward to see what futures will do in half an hour. on we saw the market rebound expectations this would happen. this could be the second half of the reaction. let's go into the first chart. it was the biggest weekly advance since 2011. it was on a positive trade outlook that the can would be kicked down the road. it has been. what we saw was tech rally. we saw oil futures down, energy was lower. it will be interesting because the full reaction will not really be seen until the opening bell. let's go into the sox most likely to move, most impacted by the trade truce. alcoa mentioned in its latest earnings it would see a terrific negative impact because of the tariffs. it started a rally friday. there will be more follow-through. we heard about emerging markets set to react or this is the etf that is popularly traded, down friday. kimberly-clark has exposure internationally. apple could be impacted by this. tha

haidi: su keenan, thank you so much. we'll talk with a global c.i.a. with wells fargo which oversees $483 billion in assets. kirk is now joining us from los angeles. great to have you with us. so are stocks telling us something that the data has yet to reflect here? kirk: well, i don't think that this selloff is fundamentally driven. i think it's mostly political. meaning the stock market is reacting to the events in washington, the trade wars, the concern about brexit. so i don't really think that at the end of the day, you know, this is something to get too concerned about it. obviously anytime it sells off you worry. this isn't the end of the world by any means. shery: health care stocks held up. now we have this ruling on obamacare. is this a threat for the sector? kirk: well, i've been a bull on the health care sector all year. the ruling, if it were to stand, would be a blow to health care. i personally don't think the ruling will stand. the other thing that came out of left field was the johnson & johnson worries about the asbestos litigation wh

su keenan more on this. we saw that really volatile session. toward the end, a late day rally. what were the drivers in today's action? >> a lot of people do not know if it was trade, if it was tariffs. there was a volatility. nasdaq and tech investors saw a 3% swing that ended in a positive. most are happy to take that. take a look at the dow. intraday, down close to 700 points. those final in hours, particularly in the last hour. if you find our library of charts, you are seeing these .wings intraday in the s&p 500 this was the 57th swing of greater than 1% so far this year, and if we go into the snapshot, again, we talked about but thes were in focus, banking index took the brunt of this. the s&p 500 banking index down almost 4%, cut losses in half. the kbw index fell into a bear market. there were some losses here, and some who say it is going to get uglier from here. >> what is interesting is when we had this broader trend of the downside towards the early session and we saw most stocks falling, it was interesting to see some of the faang stocks outperform, and they led th

shery: thank you. .ut get a check of the markets we begin with su keenan now, joining us. seen trade tensions easing between the u.s. and china and at the same time you get these headlines from huawei, and the cfo detained in canada because the u.s. wanted her after allegations she violated sanctions on iran. u.s. futures not looking good. traders and the wall street investors and main street investors get an important timeout to reassess a lot of the news and sentiment driving the market. while there may be concerns lingering about yield, yields, there could be concerns about trade and this, it all is related to the underlying growth story. let's go to the snapshot of the way we left things on tuesday. you look at the stoxx story, financials were lower, chip stocks, not only a tech playbook momentum play. -- play, but momentum play. did weconcerned not only end on the lows in terms of the stock market but if you look at the breadth of the market, it is better than the bounceback, it has matched the fact the majority of the stocks are still below the 200 daily moving avera

su keenan has more. we were talking about supply concerns, but also you were telling us it's because of liquidation pressures. >> that is what many veterans will tell you when we see this kind of sharp drop. it could mean that major funds are getting margin calls and are forced to sell into it. oiled to work on the exchange and we would say days like this you go home in an ambulance or a limousine. it's a very rough day. in the stock market, the energy index, those energy type stocks to commodities, biggest exciting group. let's going into the stocks themselves. i said oil stocks got cracked and we're not kidding you look at the size of these declines. this reflect also some of the reasons the commodity was down, the fact this questions about the opec plus cut, that is now nowerns concerns about supply, demand, shale production, and look at this -- oil spiraling below 47, now 46 as we get into extended trading, and as we also look at the bigger picture, you can see how dramatic the decline has been. agai

su keenan joining us now.hat happens if the markets have priced in much more dovishness that the fed really cannot satisfy? this is exactly what happened today. >> exactly. you had a bet out that it would be more dovish than it was. they actually trimmed the amount threeure rate hikes from to two, but the market was expecting one. you have the s&p 500 dropped an immediate 1.5%, and the russell 2000 down the most, you get some of the reaction that was taking place. stocks fell, and commodities, you took a big dip in crude, which was actually moving higher. let's look at some of the big movers. what we have is a sharp drop. fedex, what happened after the bell yesterday, remember how they trimmed the profit outlook saying what they had going on was a trade concern, and that fueled a lot of the concern about trade going forward. byebook actually dropping the most since july on intensifying concerns about privacy coming out of washington. i don't know if we have the bloomberg that we can bring up. we actually have

. >> su keenan with a look at overnight trading action pretty much all to the down side. let's get some perspective on the markets now and i guess the sentiment we're seeing bill rose the president and c.e.o. and also author of "bankers of the world" joining us now from new york for this entire hour of "daybreak asia." bill, really great to have you and for this prolonged conversation as well. in terms of the reaction in the markets is there a sense this is a bit of a seismic shift in psychology? trade is still unresolved. it could well be a cold war we're looking at between washington and beijing if this doesn't get resolved. have you concerns wheefer the fed does next and economic growth getting revised down all over the place. is this a fundamental shift for after, you know, years of easy money and strong growth? bill: well, first of all, it is good to be on with you. when i was here with you a couple months ago i said that we were at that point at the top of the goldilocks economy and had nowhere to go but down. i just came back from beijing the day before yesterday i