tv Bloomberg Markets Americas Bloomberg May 6, 2019 10:00am-11:01am EDT
in new it's 10:00 a.m. york, 3:00 p.m. in london, and 30 minutes into the trading day in the united states. from new york, i'm vonnie quinn. guy: i'm guy johnson. welcome to "bloomberg markets." vonnie: the new royal we just heard about. markets, not impacting those today. trade tensions. may not even have more this week following the president's tweets. the selloff for the s&p 500, down 1.15%. had ana overnight, we major selloff, particularly in the tech focused shenzhen. occi upped its bid for anadarko and made the cash portion larger.
now like it might go ahead, and this is sending chevron higher. apple one of the stocks among about 2%, down generally on trade tensions, but overthe eu may probe apple spotify's claims it is tampering with the playing field. guy: the u.k. is out. we have very means live volume. we have a new royal baby. that basically means the brexit story is off of the new cycle -- the news cycle. chinese equity markets dumped overnight. that fed into europe. the cac 40 trading down by 1.6%. the real hit has been in the auto sector, down by nearly 3% today.
i don't think there is a single stock in positive territory. vonnie: president trump tweeting this morning on u.s./china trade, saying "the united states has been losing for many years on trade with china. we lose $500 billion. sorry. we are not going to be doing that anymore." we are joined by bloomberg's senior trade reporter from our d.c. bureau. bring us up to date on these tweets, and he reports that china's representative may not be traveling to the united states this week. reporter: we start the week with a lot of questions hanging over the future of these trade negotiations. the president threatening to impose tariffs of 25% on some 200 billion dollars of chinese imports as soon as this friday if there was no progress in negotiations, clearly expressing some frustrations. also threatening to extend tariffs on the rest of imports
from china, another $300 billion plus of goods. the question is is this something straight out of "the art of the deal," a move to destabilize the chinese as they were sending it negotiating team to washington to try and close the deal? friday was the date we had been told by a lot of people on both sides that was the target date for closing a deal. or is this a move by trump to try and rip up these negotiations and move on? i think there's two tensions here. one is his instinct to close the deal, and the other is the mystic politics. he still needs to -- is domestic politics. he still needs to be seen to be tough on china. seeing a lot of whip sawing this week. guy: is there connection between what is happening with the mueller testimony and what is happening with china?
is this a diversion tactic? i am just wondering how the various circles within the venn diagram overlap. reporter: that is a very good question. the venn diagram here is very complicated. if you look at his tweets sunday, he spent a lot longer tweeting about the mueller report in the investigation then he did in tweeting about china. i think this is a high-stakes negotiation for the trump administration. they've been very good at keeping it isolated from other political problems that the president has. also, some of the other things that are going on with china and the relationship, like huawei and the crack down its 5g ambitions that the u.s. has been leading. is the real question here is this a tactical move, or is this a sign of something bigger? if it is a tactical move, is it something that could backfire? the answer to that is yes, it
could backfire. that is why we are all waiting to hear clarity from the chinese as to exact a what is going to happen with this trade negotiating team, whether they are going to come over here. vonnie: in the meantime, stocks are sliding. our thanks to bloomberg's shaun donnan. for more thoughts on all of this, central bank related, we are joined by the head of investment strategy at bny mellon investment banking. how do markets digest all of this and decide where to go? clearly we are seeing a selloff today, while last week they sort of shrugged off the central bank moves. guest: i think the important thing right now is to not really do that much. we will see a reaction this week , and unfortunately it is probably going to get worse before it gets better. if investors have a knee-jerk reaction to this risk aversion today and until we figure this
out, they are going to end up locking in losses. at the end of all of this, and hopefully we have more clarity by the end of the week, what we need now is an actual deal. what this did was just started the fire, and the fire is going to continue burning. the only thing that is going to put it out is clarity on an actual deal. it looks like president trump is going to put pressure on until that happens. vonnie: it could take weeks. what do you do in the meantime? do you just hold on to what you have? liz: you can hold onto what you have. if your investment time horizon is longer than one year, which almost everybody's is, there's really no reason to react to this in the meantime. hold on to what you have. some of this, depending on how long it takes -- i mean, we've already seen a little bit of retracement in losses. you seen the increased expectations of a fed rate cut later this year. some of this could be a buying
opportunity when we look back on it. guy: does this highlight the fact that volatility is simply too cheap? liz: what do you mean by that. the vix is too low right now? guy: yes. liz: the market had priced in positive outcomes to all of these uncertainties. brexita earnings, trade, , a dovish fed. that actually increased the risks. so yes, that does tie back into volatility in some way. i think volatility was subdued because the market was assuming all of this would come out with a positive outcome. guy: walk me through what you took away from the earnings season. not quite donere yet. i think we are about 75% done in the s&p as of today. originally, we thought we were going to schlep our way through it and it was going to be pretty painful. it ended up not as painful as we
thought. when earnings season began, it was expected to be 3.9% in gross, and now we are just marginally negative. it turned out a lot better than it actually was, but it is still a net bit of number -- a negative number. the market didn't really care that it was a negative number. the expectations for q2 are marginally negative, but still negative. by definition, that would be an earnings recession, and the markets continue to look in the other direction. it was paying a lot more attention to fed and the trade, and the geopolitical risks felt there. i think earnings season was a relatively positive surprise. we expected it to be a positive surprise. we used a lot of the uncertainty in q4 and the rhetoric to under promise and over deliver in q1. vonnie: that is fairly positive, what you are saying. you also set a few moms ago there might be opportunities here. where would you be seeing those? iz: part of the reason why
think we are putting pressure on trade right now is because we are in a pretty powerful position. the economy is healthy. we continue to have better-than-expected earnings season, better-than-expected growth. there haven't been that many crocs in the pavement in the u.s. there are far more -- too many cracks in the pavement in the u.s. there are far more in china. what you will see this week is a classic risk off rally, if you can call it a rally. you will see a lot of risk aversion in the market. you will see those high data sectors -- and you are already seeing it today. the nasdaq is getting hit the hardest because it is heavy dow hitting second hardest. that is pretty classic, and that is something you would expect to see in the market. where you might find opportunities as we move through this, and our bond managers
continue to like emerging-market debt, i wouldn't be putting fresh capital into emerging markets until some of this volatility passes. as we go on, if we get more resolution and clarity on a trade deal, we still like emerging markets later in the year. guy: at what point does the dollar become a problem for u.s. stocks? it continues to climb. it does seem to be everyone's choice at the moment, despite protestations to the contrary. when does it start eating into the middle of the p&l? liz: there's a difference between the dollar continues to climb because it is everyone's preference. i think it is actually everyone's default. if you are a safe haven investor, you are looking at the pound, the euro, the again, or the -- the yen, or the dollar. and nobody really wants the first three. it is the default. where does it start to put pressure on stuff? to some degree, it already has put pressure on stocks, but
almost indirectly. the progress we had made on trade up until this point was eaten into by dollar strength, so we did two steps forward, one step back. pressureut a lot more on emerging markets in the medium-term. we would, though, over the course of the rest of the year, as long as china stimulus is effective and some of the trade rhetoric calms down, we expect more pressure on the dollar later on. vonnie: liz, thank you. always illuminating. liz young is with us, bny mellon investment management victor of market -- management director of market strategy. guy: we have an exclusive chat with jp morgan boss jamie dimon on tuesday evening from the jp morgan level china summit in beijing. , 3:300 p.m. new york time time,10:30 p.m. new york
3:30 a.m. london, 10:30 a.m. hong kong. bloomberg news is reporting that italia is telecom looking to step down. a little blip in the stock, but not much. let's check up on the bloomberg first word news with kailey leinz. kailey: the u.s. is sending an aircraft carrier striker in the middle east as a warning to iran. national security advisor john bolton says he wants to send "an unmistakable message that any attack on u.s. interests be met with unrelenting force." the trump of minister should plans to attack a new sector of iran's economy with sanctions this week. the man once known as donald trump's fixer goes to prison today. be facinghen will
three years related to a number of crimes. his lawyers unsuccessfully tried to get his sentence reduced after he testified on capitol hill. in the u.k., prime minister theresa may hoping to break the deadlock that paralyzes the country's split from the european union. her officials are drafting a new block that would ensure no checks on goods crossing the u.k./eu border. there is a new member of britain's royal family. prince harry and meghan markle have welcomed their first child, a boy. the newborn's seventh in-line to the british throne, the first interracial baby in the monarchy's recent history. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. vonnie: thank you. let's get a check now of the u.s. majors. we are about 45 minutes into the u.s. session.
the dow jones industrial average is down 1%. a bit of a selloff today. 1%, though also down there are plenty of stocks in the s&p higher, not least of which, anadarko, chevron, and occidental. 1.25%,daq is down following stocks in china which were down big time, particularly the shins and index. this is bloom asked the shins index.the shenzhen this is bloomberg. ♪
abigail doolittle. abigail: there is certainly a risk off tone for global equity markets. this, of course, on the trump tariff threats. we see big decline for the majors in the u.s. the nasdaq down more than 2%, and tech getting hit a little harder on the possibility that if china were to retaliate, president trump is proposing it could be against the tech sector. the german dax down 1.6%. the shanghai composite, with all of this starting in china, putting up its first day in a week, down 5.6%, its worst day since 2016. this is not entirely surprising. let's take a look at a technical chart of the shanghai composite we looked at over the past couple of weeks. we have the shanghai composite over the past five years. the momentum indicator, the rsi, going from overbought to oversold. then just meandering around 3000. this year a greater than 30%
rally, and then capped off the level of resistance, going from overbought to oversold. there could be some more selling action for the shanghai composite. there's not a huge haven bid. this is risk off for stocks, not as much for bonds. we also have the yen rally in just slightly, the vix popping higher. if we go back into the bloomberg and take a look at a chart we've looked at several times -- actually, it is not -- there we go. what we are looking at here is, going back to the s&p 500's last record high and september, we have global markets tumbling. this year, the shanghai composite leading. the last time we looked at this chart, it was up about 15% over this time. if china started to tumble, would it take the other indexes lower? that appears to be happening. it will be interesting to see if this risk off trend continues. vonnie: we will continue to
watch that throughout the session and the rest of the week. kraft heinz is looking to restate its earnings from 2016 through part of 2018. exactly did they find, and what took them so long? reporter: essentially, as they were recording costs and rebates, they were doing so on incorrect timing. that presented a distorted picture of the earnings. the restatements don't show a big quantitative difference. for 2016, it was one penny , 2017 five pennies, -- ofr part of 20, 2018, two pennies. itnot a huge difference, but
does raise questions about the company. guy: it makes you wonder why warren buffett still has confidence in this business. vonnie: it does, and he addressed this a little bit in the berkshire shareholders meeting over the weekend. he says that the company still has strong operating margins, and they are -- and that is very true. they are best in class in the packaged food industry, far above their fears. he believes they simply overvalued the transaction to begin with, and that is the core source of kraft heinz's problems. he also thinks they misunderstood the retail environment that kraft heinz is facing. a lot of grocery retailers are in a very vicious price war right now. you have pressure coming from the likes of aldi and legal. whatsort of misunderstood
price and promotional pressures would be there from brands like oscar meyer. guy: thank you. zcak joining us with more on kraft heinz. coming up, we are going to get more on the markets. europe without the u.k. today, so light in volume. lower, off oflly their lows. chip stocks certainly under pressure today. coming up, more on that market story. this is bloomberg. ♪
at this time, there is a complaint from spotify against apple that it is favoring certain streaming services. reporter: it is a fight over the 30% fee that apple takes of anybody that sells their app through the app store. if you sell it on your own over the internet, you just take the nine and nine cents, but if you go through -- the $.99. apple says it is fair because it is helping the market. companies like spotify and many others have deemed it a tax because they feel like apple is abusing their market power. some services like netflix have just opted not to go through the app store, but spotify is actually asking european regulators to look into apple's
practices because it believes apple, which operates the second most popular paid music service after spotify, is deliberately using this to its advantage against direct competitors. guy: if they decide to go hard against this one and really look into it, how bad could it be for apple? what are the potential downsides for apple? lucas: it would be damaging for them, not crippling. $8habet has now been fined billion or $9 billion, and their profit and revenue is still up. given the scale of these companies, a fine from any regulator is damaging, but not crippling. is sort oftify throwing down the gauntlet here, effectively taking on the app store. has anyone else ever done that? could this set a precedent? if spotify is successful, other
companies could do the same. lucas: spotify try to take on apple a couple of years ago in the u.s. they tried to accuse apple of antitrust behavior with the way it was negotiating with record labels. this is the first time i know of -- a reporter for apple may have other instances -- but it is a clash between the two biggest companies in the music business right now. guy: great stuff, lucas. thank you very much indeed. certainly want to watch. apple under a little bit of pressure today. could be related to what we are going to talk about next, china. is here tos' head talk about that. that's next. this is bloomberg. ♪
vonnie: president trump threat threats tot trump's boost tariffs on china sent stocks tumbling. let's bring in thomas fang, ubs china equities head. our retail investors -- are retail investors and other investors in china that scared about what the u.s. might do? we have caught the market on pause for adjustment. to date, the market has been pretty strong on fundamentals. overnight it really triggered this adjustment. vonnie: it is very volatile, though. 7% often can china absorb a
to 10% drop in stocks? is it a major deal? obviously, it would be in the united states. is it in china? thomas: it is a surprise. looking at the market, it is a general selloff. if you look at the foreign investors, it is also a big selloff today as well, so it is a combination of fundamentals a little but ahead of the market itself, and the market really took a hit. guy: thomas, how worried are the chinese authorities about stockmarkets? do they care more about the currency market? how highly does the stock market feature? president last december highlighted capital markets as the primary goal to get it right. indeed, they will pay a lot more attention than last year. that is why we are relatively so that to optimistic
we adjust policy to make sure the market will be accommodating. guy: how much of the recent run-up has been driven by margin traders? the authorities opened up the margin trade. i am wondering how much the recent rally has had to do with it. upmas: the rally has picked since february, a lot of it driven by margin trading from retail. but if you look at it compared of say, the previous high 2015, the overall margin level is not even half of that. indeed the markets are quite aggressive from a margin perspective, but not too high from a historical point of view. vonnie: you are ahead of ubs china equities. people?you tell what do you tell u.s. investors, sovereign wealth funds? how are they supposed to invest
in china? thomas: there are a lot of interest, which is why we are here. was on a conference roadshow to canada and the united states. the overall interest has been very high through pensions, sovereign wealth, fund managers. had moreillion market than $150 billion turnover, but they needed experts to take a closer view on the regulatory particular company results, and to make sure they were on the right side of the trade. vonnie: how do you value a stock when you see how fast it can selloff, how volatile the market can be in china? how do you invest? you can't really invest on the fundamentals. thomas: we do closely look at the fundamentals. and theat earnings
overall, top-down fundamental growth. but you are right, fundamentals are one thing. the sentiment also plays a very important role, especially in emerging markets. we do see rerate in price earning ratio this year. the market will probably take a hit, and people's sentiment would turn relatively conservative. guy: given the fact that there's a lot of margin money in, and the fact that the chinese are willing to support the markets, what happens friday if the president of the united states applies these tariffs? walk me through how it will work, how far the market will fall, how aggressive chinese authorities could be come up eventually stepping in. i'm just wondering how that scenario works out. , from aoverall fundamental perspective, we are cautiously optimistic.
we think overall, the market would turn better from a valuation perspective. this adjustment would definitely potentially present different opportunities. time, if itame turns out to be less accommodating, than the market will be concerned. but with the market reaction to overnight news and those kind of policy risks, they may potentially even out as well. guy: but if there was to be a reaction on friday, probably monday, by the chinese authorities if this turns out, , what shouldgo on
we look at? what could there be on the table? what is in the policy to book? is there a full-blooded -- the policy table? is there in a full-blooded rate cut? what is in the toolbox to deal with this? thomas: on the fiscal side, there's more to be expected. the chinese about government can do more. i don't think the will further margins front, but there are quite a few tools in the toolbox with chinese government. vonnie: longer-term, you have three top ideas that you say are trade dealsther happen or don't happen. what are those top three ideas? thomas: we are still very much focused on the consumer
sectors. consumer spending has continued very strong, so we are very much focused on consumer sector, especially food and beverage, which has posed very strong earnings. others, we have reasonably upgraded the auto sector. we think the sector has turned a corner, and we are inclined to looking to the leader within that sector. i think the third part, just in sectors and tech the overall disruption, and also the winners take all sort of scenarios. those leaders in china would potentially pay off for the stock investors. guy: you talk about the potential opportunity, the dipntial buy the opportunity that could present itself. would you say that most u.s. and european investors are underweight china? is this an opportunity where
they could correct some of that? thomas: either underweight or under allocated. it was announced in february to quadruple the overall wei ghting for china markets in the emerging-market benchmark. we estimate somewhere between $60 billion to $70 billion opportunities. i wouldn't say they are necessarily underweight. we have seen a lot of interest, especially from a fund manager side. but a lot of the real asset allocators are under allocating china because of the benchmark rating, so that will be adjusted along the way, especially this and some of the other indexes. vonnie: thomas, good luck on your roadshow, and your other endeavors. let's check in on the bloomberg first word news with kailey leinz. /china trade talks
appear to be on life support today after president trump warned that friday, $200 billion of tariffs on chinese goods would rise to 25%, and may be imposed on billions more in chinese products. the president is unhappy with the pace of trade talks. the chinese delegation is still coming to the u.s. for negotiations, but no word on when that will happen. militants have reached a truce following the most intense fighting in five years, and which both palestinians and israelis were killed. in india, senior leader prime minister narendra modi's ruling party has said it will need the support of allies to form the government. bloomberg spoke to the party secretary. >> we are very confident in the
party securing an absolute majority. [indiscernible] we are quite confident. kailey: if the party stays in power, they say they will pursue progrowth policy. the horse that finished first -- the owner of the horse that finished first in the kentucky derby, but was disqualified, plans to file an appeal. maximo security was disqualified due to interference. security willimum let run in the preakness stakes. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. guy: thank you very much indeed. coming up, occidental sweetening its anadarko bid. we are going to deal with the details next. this is bloomberg. ♪
♪ vonnie: time now for the bluebird twit pick -- bloomberg quick take. today we are looking at the u.s./china trade war. after weeks of signals that they were getting closer to a deal, president trump rattled global investors, tweeting this weekend that talks were going to slowly, and were going -- were going threatened tod raise tariffs to 25%.
they are reportedly upset on china's backpedaling on certain issues. of this raises the stakes, with china's vice premier due back in washington this week for further talks. as of now, the chinese government says the delegation is still planning to travel. you can read more about the trade war and all of our quick takes on the bloomberg. guy: let's turn our attention back to what is happening with the occidental story. occidental moving closer to ceiling its acquisition of anadarko after it sweetened its offer, increasing the cast portion -- increasing the cash portion to 78% from 50%. our analyst joins us from houston. are we expecting anadarko to give the green light to occi fairly soon? reporter: we've already heard that today is likely when the
board is going to meet. it is expected they are going to move forward with an occi bid. even before it sweetened its bid, you had this gap between what chevron initially agreed to and what occidental was coming back with. now you have a higher cash component, which is obviously positive for anadarko. you get rid of the need for a shareholder vote, which occi has cited as a sticking point in previous conversations. vonnie: what is the talk in houston and around texas, rachel? taking the shareholder out is one thing. . . also the idea that this is a lot for occidental to spend. rachel: we have heard some concern from shareholders that this is a lot to spend that would put the company at risk, but clearly with the higher cash component, occi is saying we know what we are doing, and we
don't need a shareholder vote. for anadarko, that gets rid of the concern that occi shareholders would shut it down, but i don't think we are hearing from investors who think this may be a little too much for them to bite off right now. guy: in terms of the importance, how important is it that we have the laying off of the africa asset, particularly the mozambique asset, to total? it will be fascinating to see the strategy unfold. you kind of wonder what is next. how important is that aspect here? rachel: i think it is really important. a lot of people thought it was going to take a while to line up some sort of asset sale like this, but to already say we know exactly where a $20 billion of these asset sales are going, that says a lot to the overall deal. if they do want to take to $15 billion in asset sales, obviously that is going to be a
positive as far as any investor is concerned, that there is too much that they are biting off when they bought anadarko. vonnie: as soon as anadarko gives its answer, chevron has four days. the stock is higher today. that infer from that chevron is going to walk away, take the $1 billion from occi to get out of the picture? rachel: i think that is definitely a more likely scenario now that you have occidental going 78% cash. chevron has made it clear they are going to stick to the disciplined method. on the other hand, clearly they wanted anadarko at some point. at this point, we've seen so many friend twists and turns that you can't really rule anything out. vonnie: we will keep our eye on the story. bloomberg energy reporter rachel adams heard coming to us from houston. guy: still ahead, why washington is threatening to send warships to the middle east. futures in focus is next.
♪ guy: from london, i'm guy johnson. vonnie: in new york, i'm vonnie quinn. this is "bloomberg markets." guy: let's turn to what is happening in chicago. chino joins us from the cme. we've got two factors today, one of which is the trade story relating to china. the other is the u.s. is sending a carrier group into the gulf. is the story with iran ratcheting up at a fairly alarming pace at this point? how concerned are traders behind you? do you think this one has further to go? we are talking about somebody turning the lights off. hopefully get bob back.
it is certainly a story the markets are wondering about at the moment. the fact that the u.s. is sending a carrier group in ratchets pressure up on iran. the straits of hormuz, that is a big one. vonnie: you have to wonder what the foreign policy is here. i'm sure it will become clearer as the days go by. it is clear that it sort of took people by surprise. obviously, the other side of the coin as well, the oil story and asian buyers being forced to buy more from saudi arabia now. guy: absolutely. the issue, as far as i can tell, is that people are becoming increasingly concerned. the u.s. president squeezing pretty tight. let's talk about what is happening in the chip sector. it is being battered today. vonnie: st microelectronics is our stock of the hour, down more than 5% on the session. emma chandra is here with more.
we were looking at the tech shenzhen down something like 5% overnight. emma: that's right, and this is the worst single day for st microelectronics. over in europe, the sector one of the worst of the group, one of the worst only stoxx 600 today. it is really being driven by the semiconductor stocks, off by some 2.7% today. st microelectronics one of the bigger losers, along with its peers. it is all down to the trade war and the fact that president trump in the u.s. is threatening higher tariffs as soon friday of this week. of course, the sector has a have a correlation with trade issues because they rely on china for so many of their supply chains. for st microelectronics, 60% of their revenue comes from china.
isle, the biggest customer, responsible for 13% of its revenue. guy: also big explosions in the car sector, which is being sucked into it. stateside?pening walk me through whether there is a relationship between european and u.s. stocks. i'm assuming there is. emma: there definitely is. when you look more deeply, chip stocks are all about the trade war. on an individual basis, the apple -- individual basis, apple the worst performer on the s&p on a points basis. the philadelphia semiconductor index is falling around 2% today. chip stocks in the u.s. have been some of the best performers this year, up to around 40% since that december low. amd, texas instruments all looking at 3% to 4% losses today. tech stocks are ultimately
caught in the crossfire with apple and the semiconductor space remaining front and center. these prospects of additional tariffs are a really big risk for fundamentals. derives 19.6% of its revenue from china at the moment. 44% for texas instruments. micron draws 57% from china. emma: absolutely. this heavier reliance on china, whenever you see anything with trade -- we've had a bit of respite over the last few months -- but these have really shaken investors. vonnie: emma chandra, thank you. guy: it is time now for a bloomberg business flash, a look at some of the biggest business stories we are covering. let's start with volkswagen, looking to streamline its business. the german auto giant is
operations in engines for ships. the japan stock bank is considering an ipo for its $100 billion vision fund for companies ranging from uber to we work. apple, they will unveil a number of new features and development tools at its annual software conference next month. run a finemaker has competing, upgrading core iphone apps. fans can't get enough of the game" movie.d it has passed $2 billion in
ticket sales, now the second highest grossing film of all time. that is your bloomberg business flash. vonnie: let's check the u.s. natures now. we are seeing a down day. the s&p 500 is now down almost 1%. autos low. the dow off of its low as well. the nasdaq down 1%. tyson foods up 2.25%. trip advisor up 1.6%. components,he deal chevron, occidental, anadarko all up as well. this is bloomberg. ♪
guy: 30 minutes left in the european trading day. from london, which is enjoying a holiday, i'm guy johnson. vonnie: i'm vonnie quinn. this is the european close on "bloomberg markets." guy: london markets closed today. it is a national holiday. we also have a new royal baby. the chinese markets were down heavily overnight. european markets have furthered , and volume is very light in europe as a result of london being taken out of the picture. you worst performing sectors are those exposed to the china and trade story. chip stocks down, tech stocks down. vonnie: the shenzhen composite index is probably to market in china most full of those tech stocks. it was a 7.4% drop for that