u.s. corporations from chip makers to google have frozen the supply of critical software and components to huawei technologies complying with the trump and ministration crackdown that threatens to choke off china's largest technology company chip makers include intel qualcomm zylon x. and broadcom and they're. you know this is one of their largest customers as well way and now they're you know there will be results and consequences to the u.s. and u.s. corporations and shareholders at least maybe not employees in a lot of folks have been warning that china would come up with a world leading technology and a huge corporate behave with to back it and the scuttlebutt was no you know we are all the value added jobs here in america you know they manufacture but we design in california you know that's the apple phone but now huawei you know has emerged as a. tech leader that is now defining this new era of 5 g. and you know 5 g. just like every previous 2 g. 3 g. 4 g. or every other protocol that's dominated global commerce ok this is the battlefield for the next generation and they have the pol

u.s. corporations and shareholders at least maybe not employees though you know a lot of the folks have been warning that china has come up with a world beating technology and the huge corporate him with to back it and the scuttlebutt was no you know we are all the value added jobs here in america you know they manufacture but we design in california you know that's the apple phone but now huawei you know has emerged as a. tech leader that is now defining this new era of 5 g. and you know 5 g. just like every previous 2 g. 3 g. 4 g. or every other protocol that's dominated global commerce ok this is the battlefield for the next generation and they have the pole position so i think 1st of all all the people who said that was not going to happen michelle happened we covered that about 10 years ago when we said that this would happen because the fact is it is the process of manufacturing whereby innovation happens this is why the long term plan of germany has always been to as well keep those jobs keep those you know precision technology high value added jobs in germany because they know as soo

u.s. corporations so that by the end they still could supply something similar also could happen with your wise so not all is lost to put it this way and there are certainly and clearly could be some exceptions in support of there from new york with the latest thank you hans that's going to you now iceland has passed a new law that requires government agencies and ministries to pay women the same as men by the end of the year it will be extended to private businesses so does this mean the end of the glass ceiling in iceland so women there say no. reykjavik the capital of iceland the north atlantic island has a long tradition of equal rights and equal pay for equal work has been the law for about a year now youngster to your works in the transport ministry she was one of the 1st to receive a raise thanks to the new law ruth spends much of her time sitting in front of a computer at the ministry she works in i.t. and usually takes a sober view of things we have constantly trying to create order out of possible chaos so that people can find the information they need when they need it bringing

u.s. corporations but the companies have not necessarily invested more they used to those tax cuts to buy back stock good to increase their dividend a lot of the money has not been invested men also is the regulation i do not believe that those are the key factors that we see this healthy job market and as referred to earlier this trend already started about ten years ago thank you young quarter there on wall street for us. cybersecurity officials from around the world are meeting in prague and they announced a series of proposals to guide the global build out of five g. networks they include a policy of respecting national sovereignty in setting security requirements the conference took place amid a washington led push to ban chinese tech supplier while away from the building of these networks and to convince allies to do the same. the prague agreement might not mention huawei but the us representative at the two day conference on five g. made clear who the allies should or should not trust we hope that like minded governments will avoid committing to any one system or vendor until they'

u.s. corporate debt market will suffer massive losses if the biggest economy falls into recession. .- of big >> the financial system of the u.s. is safe. that doesn't mean we won't have a recession. massive losses, but that will be the problem of those people who invest in the bond market. >> mike pompeo has launched a rebuke against the u.k. approach to national security. he is demanding allies take a tougher approach. this comes at a sensitive time. to deliverggling brexit and under almost daily pressure to resign. bitcoin has climbed back above $6,000. inrose above $19,000 december, 2017, before sinking. it has clawed back to the highest level in six months. we spoke to the chief executive about bitcoin. struggle forng to a while. we are going to be much higher. anyel better than i have at point in my career. 24 hours a day. powered by more than 2700 journalists and analysts. >> she rallies the call on that. bitcoin. another, south africa. they started counting the votes from yesterday's election. opinion polls point to an outright victory for the african national congress. a nar

u.s. corporations freeze out huawei from their supply chain. good morning. matt: less than a half-hour away from the start of european trading. take a look at the treasury yield here. the three-day chart as usual. down inet very far thursday's session to 2.35, just one basis point away from the low for the year. we are coming back now to 2.4%. investors are less freaked out than they were on thursday. check out the futures in europe. we were looking at a mixed picture for futures. we now see all european equity index futures contracts priced lower. ask futures are down 0.2%, as our cac futures. ftse futures are litter -- our little changed. -- ftse futures are little changed. anna: we have india on the ascendancy. the rupee rising. the indian rupee higher. it is the modi affect. things could change. , we arey right now a vote that would be positive for indian assets. also australia on the ascendancy. uptralia's aussie dollar 0.8%. trade.talking about we are talking about huawei. we are talking about president trump and i ran. ratcheting up the pressure. plus

u.s. corporate market.aid 835 basis point concession in order to bring its $450 million of 10 year notes to market. that is where we begin the segment, cracks in credit. pimco ringing the alarm. >> we have probably the risk is credit market we have ever had. it is true when you look at both the size of it, the duration of it, and the quality aspects of it there is a big vulnerability there. jonathan: krishna, your view on that call? >> if he is talking about potential liquidity issues in or where the credit markets can under for warm, i can see why he would say that. having said that, i think there's a bit of inconsistency between their views on the credit market and their views on the economy. they are not expecting recession for three 05 years. if that's the case, the credit market may be risky. after spending some time with him, the view is that three to five years of mild recession, but perhaps the view that we are approaching the net to thousands. this is where things start to build. is there any push

this is corporate debt to u.s. gdp at record highs.ook at how it has climbed from the depths of the recession. the total amount is twice what it was going into it. that is one reason why the fed is concerned. there is a lot of riskier debt piling up. obligations. he talked about their four-point check listings. there looking at borrowing by businesses and households. also, funding risk. thatare looking at things look like they're at the point where they need to be watched closely. he says toward the end of the speech this debt growth has moderated somewhat since 2018. this might be a pause, a sharp increase in debt. it could increase bone abilities of a. the federal reserve is watching increase appreciably. the federal reserve is watching this. if you keep rates low for a long time, keep liquidity in the system. firms will reach for yield. that will create some sort of financial stability risk. they will take some of those , who theyential tools are lending to. that is what this leads to. one other thing i would like to add, why are th

u.s. corporate level and that is where u.s. corporations are vulnerable. manus: how vulnerable? a huge portion of our market, our ftse 100 et cetera is globally exposed. the ftse 100 in terms of trade war risk, how do you look at that? in terms of the trade autos get hit, a lot of the supply chain into those big industries is still based in the u.k. and that would have some friction. some of the other parts of the global trade war i do not think were affected, whether it is the pharmaceutical companies or the big oil companies. they are not affected by this. already, under owned and looking attractive as far as i can see. n has brought up some of the sectorseil. what sectors are you liking? more at we look continental europe right now than the u.k.. we think there is so much uncertainty in the u.k. with brexit. we like some of the industrial companies in europe, particularly the ones exposed to renewables. we like consumer staples. we have increased some of our exposure to companies we have seen at the end of last year, particularly hit. we have actually increased our exposure t

u.s. corporate market.ndustrial company flex that holds a triple b minus rating held a 835 basis point concession in order to bring its $450 million of 10-year notes to market. that is where we begin the segment, cracks in credit. pimco ringing the alarm. >> we have probably the riskiest credit market we have ever had. it is true when you look at both the size of it, the duration of it, and the quality aspects of it. there is a big vulnerability there. guests are still with us. krishna, your view on that call? krishna: if he is talking about potential liquidity issues in the market or where the credit markets will underperform, i can see why he would say that. having said that, i think there's a bit of inconsistency between their views on the credit market and their views on the economy. they are not expecting recession for three to five years. if that's the case, the credit market may be risky. but the likelihood the risk will manifest it self in prices probably doesn't happen. jonathan: after spending som

u.s. corporate dramatically. year to date, u.s. bbb's lack for the most part.ibm deal, bmy, our analysts at 20 basis points, so we didn't take part in that. you have flows into u.s. ig. you have flows into u.s. high-yield. flat in loans for a dog's age. as long as that continues, fundamentals don't matter, until they do, and then technicals takeover. that is why you need to think about the cost of that liquidity. that will increase when vol picks up. it is best to take down your active risks and maintain your liquidity bucket. you'll have an opportunity to buy these names cheaper. jonathan: i want to spend more time on this, then we will turn to high-yield. diana, your view on that. how do you frame those flows that have gone into u.s. credit through much of this year? diana: we saw a huge allocation into cash for the end of last year as investors started to get concerned about the trajectory of the global economy. and actually for most of last year, was concerned about where the 10-year treasury was going. so investors have had cash. with the fed turning more

u.s. multinational corporations.opefully, from what we're seeing, what i see when i meet with a number of these people is the people in, the legislators, people in the administration, even academics are starting to wake up to see that corporate america is lobbying for the chinese. and that the chinese hire many lobbyists in d.c. to do their bidding. time to call a spade a spade and push back like we're pushing back. i'm thankful we are pushing back. our kids will be thankful we reset this relationship and disallow hollowing out of u.s. industry. charles: what do you say that china doesn't have elections. president xi xinping is set is for life and that they can wait this out, playing unusual quote, unquote long game? what do you say to people that say we cannot beat china? >> when hu jintao was here for state dinner of president bush 43, president bush 43 got him alone for the first time ever in his administration's history and they had a talk on what their most worried about. president bush was most choreographed ab

u.s. corporate debt yields lower.s a result the total return for the barclays, aggregate bond index has been about 6% over the past 12 month, a fraction better than theurn of the s&p 500 index over that time including dividends. the bonds have delivered that return with farolessility in stocks which suffered a quick 20% loss in the end of 2018. what's more it's the part of the stock market that acts most like bond, and dividend--focused utilities which held up the indeckes and there were longer stretches of time as finance jerry says should. the s&p has returned more than 12% annually compared to about 2% a year for bonds. agains way, bonds have done their job in diversified portfolio with stock market weakness and holding t mostir value when stocks are doing well and the question from here is whdher the barket can continue its impressive performance and they'reci p in a federal reserve rate cut or two in coming months and it wouldequire the requirement to lose more steam in a way that stock investor might n like. thi

u.s. corporate dramatically. year to date, u.s. bbb's lack for the most part. -- lag for the most part.ibm deal, bmy, our analysts liked it at 20 basis points, so we didn't take part in that. you have flows into u.s. ig. you have flows into u.s. high-yield. you have been flat in loans for a dog's age, and as long as that slow continues, fundamentals don't matter until they do, and , then technicals takeover. that is why you need to think about liquidity and the cost of that liquidity. the cost will increase when vol picks up. it is best to take down your active risks and maintain your liquidity bucket. you'll have an opportunity to buy these names cheaper. jonathan: i want to spend more time on this, then we will turn to high-yield. diana, your view on that. how do you frame those flows that have gone into u.s. credit through much of this year? diana: we saw a huge allocation into cash towards the end of last year as investors started to get concerned about the trajectory of the global economy. and actually, for most of last year, was concerned about where the 10-year treasury was going

u.s. corporations you might see higher consumer prices here in the united states but i guess what really worries traders here is that also when the chinese economy should get affected in a negative way by those terrorists that goods lead to weaker growth in china that would be bad news for countries like germany or other european nations who exports to china so you could have all those effects and that would be negative and then specially also if china actually does retaliate and then we become full blown a trade for so that's kind of the very it's not so much those twenty five percent on the two hundred billion dollars it's all what could full of that really makes traders and investors nervous you say what can follow i mean there's a lot more than just these trade tariffs there's the iran nuclear deal that's falling apart there's north korea i mean these are three very volatile very active geo political flashpoints it's almost impossible to give the global economy a positive prognosis at the moment isn't it. well i mean besides the trade negotiations i'm not so certain if the dealings with nort

u.s. corporate debt, so there are outlying risks that could tip us into recession and change the dynamics for 2020. rishaad: some of the language calling him against her, gangster tactics. this is actually helping him almost. perhaps the chinese government wants to deal with donald trump, you could argue. >> what is clear is that it is incredibly politically alluring to vilify china. that has a very broad base. halloweenlk about the out of the middle class, people impacted across certain geographical pockets of america, even in terms of the different type of class that would say not necessarily have exposure to china and have into the country, but would certainly side with the president on this. david: very nice to see you. trump is looking at 2020. china is looking to reverse offense to go back to the start of the opium wars 200 years ago. does china's political system give it an advantage or disadvantage in dealing with the u.s. long-term? the long view. we go back to henry kissinger statement that it was too soon to tell about the french revolution. china can afford to adopt the long v

thing back on the tracks. >> does it start to impact consumer sentiment in the u.s., which has held up until now, and corporate the market psyche is fragile. the market itself on core fundamentals is fine. u.s. unemployment is 3.5%. who would have thought this was possible a decade ago? there is plenty of liquidity in the market. the issue is market psyche. there is more downside than upside. more people think the market is heading down and we are potentially heading to a recession than we are the reverse. that's not a good thing. that's why you are seeing, when these macro stories hit the news, whether it is prime minister may in the u.k. announcing her resignation, shocking election results in australia, around the world you are seeing things triggering micro-reactions, and it is more negative news than positive news driving it. the 10 year,month, how concerned are you when you look at that? >> it is the leading indicator of recessions over the last 15 years. the former fed chair janet yellen said it could mean that or it could just mean it is time for the fed to act to cut rates. that surprised me, frankly.

u.s. corporations like u.s. steel. ery major corporation in the united states. against this backdrop, you can see why tensions are running high. it is about much more than trade balances and soybean markets. it enplaxplains why the trump administration is taking a hard stance in building the 5g networks. history is riddled with great powers. china's model of wealth without liberty is not something we ant to define life in the 21st century. it means we need to be clear about the actions of the chinese government. here's one way to gauge the stakes. senator chuck schumer and donald trump don't agree on much. the minority democratic leader offered words of encouragement to the president tweeting, don't back down. strength is the only way to win with china. that's your reality check. >> that was very notable. to hear chuck schumer agreeing with what donald trump is trying to do. >> quote tom petty, don't back down. >> is that what he said? >> always take a good tom pretty quote. >>> it is a night of high fashion and spectac

u.s. corporations, should think twice about increasing their investments in china. seems like the trump administration, i don't think trump himself, maybe thinking this through subtly, but others in the administration what the u.s. to start decoupling its china. with this would be devastating for a lot of people in the tech community on both sides. there is a real desire among some sectors in washington to far less reliant on china. emily: what happens next? we know the u.s. has told china you have to rev it up within four weeks, or things will get worse. sarah: we have heard these ultimatums before. what we expect is there will be some low-level talks are you there have been video conferences. there is no scheduled meeting between these high-level officials yet. not to say that won't happen, but it was not immediately scheduled. provided that things progress, we expect some high-level meetings. trump will be at the g20 meeting in japan at the end of june. that has always been a target that he might even meet with president xi jinping at the time. we are keeping our

u.s. corporations. donald trump is contemplating whether he puts on even more retaliatory measures. if sentiment is getting even worse, then risk positions will be sold and the u.s. dollar will benefit from that. from that perspective, the macro picture, we believe has an equal rating at the moment and if you look at the other pillars that are important to look at, it is also technical and positioning. from a position perspective, from what we saw before the u.s. china trade tensions flaring up like this, we already saw a reduction in dollar long positions. we are at the very extreme level at the moment which would be an important reason for this to turn. from a technical perspective, and this is true for all of fx, there is no indication we are in a crisis right now. we have not broken any important levels. you look at euro-dollar, we are still trading in the range. 111 -- 1.1135. resistances,break the 2018 to 2019 downturn in euro-dollar is not challenged. we argued you do not have to abandon the long dollar position. you do not have to abandon your strong dollar view for the time

u.s. officials say china has reneged in some of its commitments. to beijing team says one law strike a deal. the fed is increasingly worried about corporate debt. nding standards are slipping. startedet's get you with a quick check of the markets close on the monday session in the u.s. we are seeing u.s. futures starting to trade. pressure down 7/10 of 1%. not surprising given that we have seen after the market closed, ambassador lighthizer came out and confirmed tariffs will rise on chinese goods on friday. secretary mnuchin also saying we have seen a big change in direction on the trade talks. a lot of pressure on futures at the moment. during the trading session, during the regular session, the s&p 500 managed to recover some of the earlier losses. the s&p 500 have fallen as much as 1.6%. it closed down .5%. the pressure was mostly from the tech companies with exposure to china, not to mention machinery firms taking a hit. the dow was down one quarter percent, while the nasdaq was down a quarter percent. let's see how we are saving up in asia. asian markets back after the golden week break. sophie: we also have returning from the long weekend

u.s. corporation was fined 4300000000 euros the commission also made amazon pay a quarter of a 1000000000 euros in back taxes. now she's investigation with the amazon is using its dollars a pound against small online merchants we get very serious suspicion that something is wrong then we have access to knock on doors 6 30 in the morning teams come in we can take a copy of your server your laptop your phone to find your digital evidence and then we will try to find a smoking gun because of course we have to find the evidence because this is an investigation it's not gone that far yet 1st of all she sent out questionnaires to merchants who sell their goods through amazon at the same time she's also looked. at the ever increasing services and goods that amazon itself authors. yes that is concerning because when you are in so many different markets but you have the same customer then one very basic thing is of course how to make sure that data doesn't travel from one part of the business to the next part of the business how are you going to make sure that you don't just gets the amazon offere

u.s. corporate debt. and softbank profit jumps an extra $4 billion on the uber investment.company is set to price the ipo today. morning, everyone. good afternoon if you are watching from asia. tom, we look at markets and brexit. of course, we look at euro politics and with the eu will do with iran. there is a lot going on. the pitfalls and you are down 3%, then down a little more. yen strength, a global proxy for the tensions that are up there right now. we will put yen and cold in my data check. but history to the bloomberg first word news. >> for the second time in a week, north korea has conducted a weapons test. the north fired at least one unidentified projectile today. borderlaunched from the near south korea. is believed to have been a short range ballistic missile. the negotiations are overshadowed by president trump's threat to raise tariffs. president put the blame on china. president trump: you see the tariffs we are doing? they broke the deal. so they are flying in the vice premier. good man. but they broke the deal. meet theent trump will vice premier only if

u.s. corporate market will take a beating if the country falls into recession.exclusively to bloomberg. >> i think the financial system of the united states is safe. that does not mean we will not have a recession, and in a recession there will be massive losses in the bond markets because of lack of liquidity. that will be the problem of people who invest in the bond markets. anna: steve eisman speaking about the bond market. luke hickmore, investment director, aberdeen asset management is still with us. he was talking about what would recession, that to reflect on the resilience and corporate bonds, as a result of trade tensions, it does seem as if the focus is on equity markets and equity market selling. the nature of credit markets, with we saw some robust issuance coming through earlier on this week. expected. is to be are trump and china will get a deal done are high. yields are low. where else do you go, if you stable yield in your portfolio? credit is a key part of that market. the demand is so high. three times over is not unusual at all, and that can c

u.s. corporate ward. ompany director there's a big role you play as the director and you are fiduciary for the shareholder. that's her role and you are supposed to be focused on corporate governance in a fiduciary role. completely inappropriate to have an employee rap on the board. they can have one on the management team. half a chief officer that brings employee issues to the table at the management level but that is not a role for a board of directors of a public company. kristina: you would argue former ceo of coca-cola, you have walmart and you have i don't know the name of the person on this. you have these major executives they can't relate with the issues of workers. >> that's not their job. their job is not to run the company for their job is fiduciary responsibility to shareholders. >> that is a misnomer. i was a portfolio management -- manager and it's a misnomer that it works in germany. germany the 30 largest companies have that but the middle companies actually don't require that and they hav

u.s. corporations expected to have a sense of moral and ethical responsibility, not just fiduciary responsibilityrray of stakeholders. the idea that somebody has worked for a corporation, the idea that somebody would retire with dignity. there was moral and ethical responsibility that was expected. starting about 40 years ago, the whole idea of trickle-down economics, we bought into this economic theory that if all the corporation owes is that one fiduciary responsibility for that one group, that would trickle-down and help all boats rise. it hasn't, it has created a situation where 1% of all americans own more wealth -- how we treat our earth, how we treat our children, that's when economics would could be better for everybody. that's where money comes from, one people can actualize their dreams. >> shannon: how do you run against this president should you become the nominee where he's able to cite the lowest unemployment numbers nearly 50 years, the best unemployment numbers for minority groups, certainly african-americans and hispanics, the highest hourly wages that we've ever had in this coun

u.s. corporates import weakness from overseas through their topline. romaine: i want to bring in bloomberg across asset reporter sarah ponczek. you heard what alicia said in regard to earnings. things were looking up, but is there a real risk here that the earnings expectations will be revised downward if by friday or by? monday we don't have some deal? sarah: there is a real risk. if you think about right now, executives filtering through to guidance and analysts putting in forecasts. right now, they have tariff levels at 10%. if you see those rise to 25%, or more goods being taxed, that has to be filtered through to guidance and the new forecasts. ubs estimated we could see eps estimates contract 5%. looking at growth expected this %, so looking at flat growth for the year. there is a big risk with earnings, and acutely where the risk is when we talk about trade. caroline: alician, you mentioned the fed. an interesting take from one of our opinion writers, saying this of chicken between china and the u.s., but a game of chicken between trump and the

u.s. corporate profits and some economists think could even force the hands of central banks around the world karl weinberger said it's a lose-lose proposition. our assessment is that u.s. consumers, voters, have more to lose than the chinese who can and do source everything from food to technology elsewhere ubs estimating full blown tariffs threatened by the president could shave 45 basis points off global growth and a bad hit to u.s. earnings how bad a hit? here's their estimate. if tariffs rise from 10% to 25%, they see a 2% hit point to s&p earnings but if there's a 25% slap of tariffs on all chinese goods imported to the u.s., that's another 7 percentage point by ubs economist with a full blown trade war or not can have a decisive impact on the fed and other central banks next move. jeffreys writes, if there is a breakthrough in the trade negotiations, a fed rate hike as soon as 2019 back on the table but the trade war between china and u.s. could force central banks into easing that is contingent upon how domestic economies fare in heightened global trade uncertainties here's what we kn

u.s. corporate profits which we get maybe 50% of our profits from outside the u.s. and, really, we have a fragile global economy right now and this is the sort of thing that i just don't think anybody wants. >> global growth, talk to any big ceo and they'll say global growth, that is their game plan. kelsey, give us lawmaker reaction, specifically republicans. >> i think it's very notable that republicans want to come out most forcefully against this. the finance committee chairman chuck grassley who is not at all someone who breaks with the president on things very often is really upset about this. he says that trade policy and the border are completely separate issues. we're also hearing from a republican from iowa who says that this is a bad idea. if you're losing republicans on this issue, it does not spell good things for usmca. it also does not spell good things for when president trump wants to ask for more border money and the spending bills coming up. they already have a huge fight on their hands for spending and this is not making it easier. >> all right.

u.s. corporations have coped really well with a strong dollar. market can go up despite weakening's. the market fell last year with strong earnings. this is clearly a valuation driven change in the stock market. that will continue. earnings are perfectly respectable, given the weaker manufacturing environment. alan, we'ret, going to keep you with us. there's still more. alan higgins our guest host for the hour. let's get to the top stock stories with annmarie hordern. annmarie: i'm looking at all the industries that are going to be very sensitive and exposed to china and sensitive in terms of trade war escalating. this is a luxury stock. volkswagen a minor. all of these are exposed to china u.s. trade war. president trump, just with two tweets, shaking up the markets. these are all to the downside. there's only a handful of stocks trading higher. last i checked, it was nine or so. matt: not many, of course, of the stoxx 600, even with only 400 trading, we still have such a low number. very interesting. china headlines are coming across from the p

u.s. corporate earnings. we have been talking a lot about china, tariffs, not today.t was about the bottom line eps. meanwhile, boeing, late in the day, saying it's completed the software fix for the 737 max along with simulator testing. i should note here, the faa says it has not received this information yet, but we'll be watching for that. finally, cisco really leading the dow all day long. they had a double beat last night. people focusing on that report because the company really discounted what was going on in china. that stock soaring today. liz back to you. elizabeth: thank you very much. coming up, tensions continuing to escalate between the u.s. and iran. president trump however now saying he does not want war with iran. that's according to the new york times. what are the next steps? but first the majority of new yorkers now saying don't do it. don't run new york city mayor de blasio. the city has a lot of problems. we're also going to show you who said this. who said this? quote, while the mayor of our nation's largest city is busy running around iowa and

u.s. corporate nationals.le further at the mid and small caps purely u.s. based. lauren: let's pull up your pick, erin. you provided this show some of the stocks you like and i'm curious why you like some of them. >> j2 global, a midcap stock, provides software to small and medium u.s. businesses. very protected and based off the u.s. economic growth. more of a contrarian play, utx and finally with first energy, it's a utility company. it's actually holding up the back when the market goes down, it's a safety stock but this company has a lot of appreciation. it's in transition. there's a >> it is up today. what sectors do you like? >> being a bear, people are, i love the banking sector right now. i think we're going into the biggest period of consolidation we've seen in maybe decades. i think the valuations, i think the bank stocks have not participated like a lot of the other stocks. lauren: comerica. >> comerica being one of them. a big regional play with the ability to acquire at reasonable prices and grow

u.s. corporate bonds. does oil high and was that inflation story -- tie in with that inflation story? tim: it has been a big problem. certainly the last few months and for me personally at least. partially motivated by that. the inflation outlook -- the consensus is we are headed for disinflation and everything is terrible. you have commodity price movements in oil that look absolutely fine and where inflation protected securities would offer decent risk reward in this environment. manus: would you lighten up on em risk?s? -- personally, i have my own exposure on that. such a good start to the year and you have the introduction of trade uncertainty, which when you speak about em equities on an index basis, you're really talking about chinese and east asian equities. they dominate the index. from that perspective with trade uncertainty back to the fore, and with sentiment having deteriorated back to levels we thought last june -- saw last june when the follow-on tariffs were introduced by the u.s. -- demographics favorite -- but for the near-term, east asian equities look a little bit

that is a big leverage pickup in the weaker corporate sector in the u.s. at would you be looking at in terms of corporate earnings? chetan: the corporate earnings estimate that the u.s. consensus forecast is billing and is optimistic. a possibility of a recession in earnings continuing not only in the first two or three quarters but for the full year. you will see a problem and which will be different from what the consensus is building in. i am sure you have that data on bloomberg. the u.s. corporate sector is showing consensus. it is a sharp acceleration. we do not think that will happen. tom: you are painting a pretty bleak picture. presumably, the banks come to the rescue. will they put a floor under this? chetan: in terms of trade tensions, there are two key economies that are at risk, the u.s. and china. both countries have the tools to defend the problem they will face on account of trade tensions. typically, policymakers will react with a lack. -- lag. and then policy actions will lag. an effect with the it will not be able to prevent the downfall t

u.s. corporate debt, beware credit markets. the ratio of debt to gdp now at record highs.nto a report when they said the banking system still looks resilient. they are not saying things are follow -- falling apart. however, they noted in the report that the businesses right now who have the biggest debt loads are the ones taking on the riskiest loans. banks provide lenders protection against the borrower defaults, but those protections have started to erode. standards for new leverage loans have deteriorated further over the past six months. here is something very specific that shows clearly how they are concerned. the historically high level of business debt and the recent concentration of debt growth among the riskiest firms could pose a risk to those firms and potentially their creditors, and could i add if they got bad enough, to the entire economy. they have been warning since last year of weaker standards being issued for the leverage loans. clearly they have raised a red flag. and let's remember that jay powell, his specialty when he came on the fed board of governo