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tv   Bloomberg Markets Americas  Bloomberg  March 28, 2019 10:00am-11:00am EDT

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york, 2:00 p.m. in london, and 30 minutes into the trading session in the united states. from new york, i'm vonnie quinn. guy: from london, i'm guy johnson. this is "bloomberg markets." vonnie: there's some breaking pending home sales data. we are seeing that pending home sales are down 1% month over month, more than what the market was looking for. it was looking for a decline of 0.5%. once again come a home sales down 1% month over month. previously, pending home sales 4.3%.p a little more volatile than the rest of the data. we will have a look at existing home sales and other data for a better indicator on housing. the s&p 500 is back above 2800 today, up about one third of a percent today. higher.lso the 10 year yield at 2.39%.
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u.k. yields are down. the commodities index is down today. we have been trying to make a bit of a bounce since the beginning of the year. it was up a little bit the last few days, but given that commodities are going to be the first hit if new tariffs come online, you can see why the bloomberg commodities index, with aluminum and all of the other commodities in it, is performing this way. we will talk a little more about the kind of stocks a little later on rallying off the back of the lululemon result. guy: you talk about what is happening in the sterling market, the sterling is incredibly hard to price. incredibly hard to understand the political story here in the u.k. as a result, i suspect a lot of people have simply said this is untreatable.
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we are going to lighten up our positions. the positioning is relatively light in the british pound. the cable rate is down today by around 8/10 of 1%. so much confusion surrounding this story. we are going to be keeping an eagle eye on parliament as we progress throughout the session and the next. another story over the last couple of days, the turkish lira continues to remain under pressure. a lot of money remains trapped. for riskuestions is implications, what happens once we get through the municipal elections this weekend. does the story start to ease up a little bit? is it easier to access some of that turkish lira the quiddity? a lot of -- lira liquidity? earlier on report suggesting deutsche bank was looking to raise $10 billion via equity. reportent to that, our
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suggests there have been no board discussion on such a move. nonetheless, deutsche bank trading down by 3.5%. vonnie: the ins and outs of brexit particularly interesting over the last day or two. everybody talking about brexit today. for more onin a -- all of this, let's bring in children investment company's co-chief investment -- chilton investment company's co-chief investment officer. it we look to be and perhaps the final stage of something right now impacting the british markets. is it impacting u.s. markets? guest: i don't think it is impacting u.s. markets dramatically, although we are in the final stages. there is sort of this headline risk, that the uncertainty is at its peak and we are not at resolution yet. uncertainty markets don't like, but i think the u.s. markets are
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delineating between the fact that it is really a eurocentric situation at this point in time, and hopefully we are close, as you say, to the end of this long road. it's been over two years of this cloud of uncertainty, so markets , i think, are hoping to get through this and see what comes in. vonnie: trade is the big uncertainty. com, theoking at the b bloomberg commodities index. there will also be continued china talks. what are you looking at in terms of taking advantage of this uncertainty around china? guest: china does remain a question mark. longerl is taking than some had expected, but the deal is in the works, and he reports are that there are productive talks going on, so that is keeping everybody somewhat optimistic that we are meeting our way towards something.
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again, some resolution and less uncertainty. i do get the sense that we are in the final stages of the big asks, and there could be volatility as a result of how those discussions go in trying to get a bigger ask than maybe was on the table 30 days ago with respect to tough enforcement of ip protections. we will see how that goes. it certainly has the potential to cause some concerns and volatility, but i think the overall picture is still a fairly optimistic one, that we have two willing negotiating parties at the table for discussions. guy: good morning. you bring up the issue of volatility. the vix remains incredibly low at the moment. you see similar things and other asset classes when it comes to implied and realized volatility. we have brexit ongoing. we talked about trade, then the turkish lira, and the bond market turbulence. why is volatility so low, and is it an obvious buy at this point?
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guest: i think volatility is so low in the u.s. markets because of the change we have seen from the fed, which has been quite dramatic over the last four months. where we were in december versus now is just, in my mind, a historic turnaround. we've gone to a policy of patients and a pause -- of patience and a pause. we are going to come to quantitative easing come december. and that big change, is worth look at somewhat in the housing data this morning -- that is reflected somewhat in the housing data this morning. bullish on certain sectors of the economy that are very tied to interest rates because we think this is going to loosen up some of those conditions that were tightening and were becoming concerning. guy: so does volatility rise in
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that environment? you mentioned some of the areas you would be interested in. how do i take advantage of this more normal environment and what you are describing? guest: one area we are bullish on now is housing. we think that there are companies not so much directly tied to housing, but sort of on the periphery of home improvement, which is been a strong trend for five years, but it does have some level of dependence on interest rates and the housing market and consumer mindsets towards equity values. to the extent we are seeing mortgage rates come back down, that is quite bullish for that trend to continue. we like a couple of names in that space. we've been involved in them for a long time. sherwin-williams, in particular, and home depot. these are companies you can feel good about even with the market having moved so much year to date. there are some positive fundamentals underlying the
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companies tied to that trend. vonnie: so what do we do with today's housing data? pending home sales down 1% year-over-year. guest: that is backward looking data, so we have to think about where we will be in six months. with market rates rolling over, there should be at least a thesis that the consumer feels a little more optimistic. affordability was and is a concern in the housing market. the bid for new houses is mostly new homebuyers, first-time buyers. affordability is obviously quite critical in that calculus. those buyers are sensitive to mortgage rates, and the fact that they are going to roll back over should be positive for future demand. vonnie: and we did see new orders at lennar, up 24%, which is a good sign. quarter, andthis what a quarter it has been, 12%. using a lot of portfolio
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managers are behind their benchmarks and are going to have trouble chasing it? guest: it has certainly been a strong move, and some portfolio managers did come into the quarter underweight, a little more guarded, and with reasonable concerns given the tightening we'd seen in the financial conditions in q4. so much has changed now. there may be some playing catch-up. we do still have sources of uncertainty with trade, and my own sense is the market can climb higher, but probably won't be as strong as it has been, and there could be some periods of volatility from trade or brexit or all of these other macro uncertainties that are alive and well. you get your opportunities, and i think there will be those opportunities as we carry on throughout the year. vonnie: jennifer, think you very much. jennifer foster is chilton investment company's co-chief
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investment officer. let's check in on the bluebird first word news with really do young -- the bloomberg first word news. house hasthe white said google indirectly helps china's military with its artificial intelligence work. the tech giant also declined to renew a defense to partner contract last year. what the president said afterward on twitter, that they are "totally committed to the u.s. military." boeing says it is close to submitting software changes to federal aviation officials. the plane maker hosted 200 pilots and industry officials on wednesday to detail plans to regain the trust of authorities and consumers. boeing also defended its air fast -- it's aircraft certification process and safety oversight. it is hoping to overcome a crisis that saw two of its 737 max jets crash in six months.
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video, a ceo apologized for the gulf coast chemical disaster in texas, the worst in 14 years. >> the majority of our employees live in communities that surround our facilities. all of us are profoundly upset the incident happened, and very sorry for its impact on the surrounding communities. reporter: local officials are criticizing itc's lack of transparency since the fire began. one fire commissioner called the executive's cowardly." the u.k. apartment -- the executives "cowardly." -- primeparliament
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minister has promised to step down once she delivers on her promise to oversee britain's departure from the eu. 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. this is bloomberg. guy: thank you very much indeed. coming up, we are going to talk turkey. the lira continues to be under pressure. is this story having on the em? this is bloomberg. ♪
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♪ guy: live from london, i'm guy johnson.
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vonnie: from new york, i'm vonnie quinn. this is "bloomberg markets." bloomberg's chief washington correspondent kevin cirilli is outside the export/import bank. larry kudlow has been talking trade, it seems. kevin: i just spoke with national economic chairman larry kudlow after he gave bank's here at the national conference. he says he has not spoken to robert lighthizer since they had that dinner in beijing as part of trade talks. he suggested that the administration might be willing to remove some tariffs while keeping some in place as an enforcement mechanism for whatever agreement is ultimately decided on. take a listen to what larry kudlow told me. >> we have to see what the track record is, and we are not going to give up our leverage. clarify, thatto
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doesn't necessarily mean all the tariffs will be kept in place. some of the tariffs will be kept there. kevin: beyond that, reporters also asked him about the president's meeting yesterday with the google ceo. he said that google is working with the u.s. government and u.s. military. it was a positive meeting. he was also asked about the section 232 declaration of being a national security threat in terms of the auto industry. he said the administration might take some more time on that. so a few headlines in terms of coming out of larry kudlow as the trade talks in china intensify. back to you. vonnie: kevin, thank you for that. the idea of not all of those china tariffs staying in plate could move the needle. meanwhile, the turkish lira is
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continuing its slide today despite the government's attempts to offset losses before elections this weekend. we are speaking with damian s assaower. people are saying things are correcting themselves, but it is not that at all. we had the bank of indonesia overnight referencing turkey. we had the decision to keep rates on hold until further notice, and turkey is having an impact on the brand. certainly we are seeing contagions, and we are at some extreme levels here. guy: a lot of long money is trapped inside turkey, but as you say, as we start to see the
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volatility rise, that is going to get risk managers very nervous. presumably this is a transition mechanism for some of the contagion. risk managers saying you've got to get out of some of these positions, as a result of which you can't sell lira. emerging markets are a very unique asset class. this,ou see moves like you are really left with one of two choices. you either hedge or you sell. what we saw initially were people trying to hedge their exposure because they didn't want to sell underlying assets, but over the last two any for hours we seen a bit of capitulation. fund managers had to sell local turkish fixed income and equity assets. st up about 12%. talk to us about this. if you can convert
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euro into lira and take advantage, but the levels are so wide in euro right now. i don't think it is an arbitrage opportunity in that sense. if you look at 10 year real rates in turkey, they are -5.3%. you are not going to get that scope to cut rates now and reward fund managers for having confidence in the country. it is going to be a tough climb to get out of this hole. credibility has been undermined. on u.s.-year protection dollar credit default swaps are at 450 basis points. that is on par with iraq and pakistan. it is reminiscent of some of the things we saw in places like nigeria following the oil price collapse in 2014. it is going to be interesting to see how things play out. guy: talk to me about how things are going to play out once we are through municipal elections and once we see the situation
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easing. there could be a second wave of money looking to leave that has been trapped in this process. volatility will probably spike around that as well. is there going to be another monday morning massive blow up in this story? damian: there's no question you assume there is going to be some more pain ahead. but we are correct in assuming perhaps some hedge managers had to sell some quality assets locally, so there may be opportunities to buy. now the country is starving for liquidity. you know, when you get there next week, one kind of bid offer spreads -- what kind of bid offer spreads are going to be you?able for are you going to be basically fighting the pain and trying to get your money out of there because you have such a headache dealing with this mess? it is just going to be tough. guy: president erdogan speaking a little earlier on, indicating
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that lower interest rates will lead to lower inflation. that is not normally how things work. ower,n -- damian sass thank you very much. let's take a look at global markets. here is abigail. lower.: china was let's take a look at one source of volatility right now, the 10 year yield. during the asian session, we had the 10 year yield lower, fueling growth will -- fueling global growth concerns. we are seeing stocks trade a little bit harder. china haslatility, been leading the way in white. upna out of that volatility, 7%, whereas we have emerging markets, u.s., and the dax still lower from all of that volatility. finally, lots of retail movers on the day.
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up a big putting quarter. guy: thank you for those updates on the markets, abigail doolittle. we will talk more about these markets in a factor perspective. this is bloomberg. ♪
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♪ there's growing popularity when it comes to esg funds, basically funds that invest in businesses that do good. but can that approach produce similar goods as a traditional factor fund? our analyst from bloomberg intelligence joins us now. let's talk first of all about esg and the factor approach. how do these two things fit together? reporter: let's start with what esg does. really, it takes alongside
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provisional social -- alongside traditional social factors. if we take bloomberg factor to that and screen -- esg esg fund come up fund, you get higher quality names, lower volatility names. esg is producing this lower volatility, high quality exposure. vonnie: there are so many mandates now to invest in the esg. can it be a factor in itself? reporter: that's a good question. what i think with esg's coming to be not necessarily a factor in itself, but it is a really interesting proxy. everyone looks at traditional financial statement things, but if there's now traversing around is price-to-book effective anymore, i think esg gives you a different way to look at things.
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being able to identify metrics of companies that maybe aren't picked up in traditional financial analysis. guy: the issue i have when i talk to fund managers, they still don't understand the language which you use to kind of define what is what. you talk about financial analytics. that is maybe for another day. thank you very much indeed. tom joining us on esg investing. remember, you can watch factors .ch on ftw this is bloomberg. ♪
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vonnie: live from new york, i'm vonnie quinn. guy: from london, i'm guy johnson. this is "bloomberg markets." vonnie: let's check in on the bloomberg first word news. here's renita young.
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renita: u.s. negotiators are back in beijing for china trade talks. a chinese spokesman said there is still a lot of work to be done. a major sticking point, enforcement of u.s. intellectual property protection. a step back for the trumpet administration on health care policy. a federal judge has -- the trump administration on health care policy. afederal judge has blocked involving work requirements for medicaid.
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somalia hit with a car bomb blast, the fifth in six days. a fire broke out in a high-rise in the bangladeshi capital. five firefighters were forced to shatter the building's glass walls to free toxic glass. it happened in the city's commercial district. bangladeshommon in because city building codes are commonly ignored. 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 renita young. this is bloomberg. guy: thank you very much indeed. the battles over brexit continue. the mayor of london, sadiq khan, discussed ongoing negotiations with bloomberg's anna edwards a little earlier. mayor khan: no matter how you
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voted in the referendum, no matter your views on exit, the process -- on brexit, the process has been a mess. the option that got the largest emotive support from mp's was the one that gives the british public a confirmatory vote where whatever deal is passed by parliament, the british public gets to say whether they accept it or the option of staying in the european union. --t is clear that parliament what is clear is that parliament is in gridlock. toe the british public a say accept the deal that got the stay.support or 50gail: revoking article doesn't seem to be part of your party's policy. is it too late for that? mayor khan: we are rushing towards an agreement because of
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an artificial deadline because the prime minister decided to invoke article 52 years ago today. what we should have done -- article 50 two years ago today. what we should have done was figure out what kind of deal we wanted. we can always redo it if we need to if we decide we want to leave the european union. what is clear is now that we know the terms on which we would leave the eu, the terms on which we would do business with the eu, the british public are wiser. give them a say. give them a choice to accept that deal, the best the prime minister can do, or the option of staying in the eu. guy: that was bloomberg's anna edwards speaking to sadiq khan, the mayor of london. let's stay with the brexit seamen go to westminister. -- with theow brexit seen and go to westminister. is an mp member
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of the erg. are we going to get another vote on the prime ministers deal tomorrow? guest: we are not going to know that until after five talk today. -- afteroing to be five talk today. -- after 5:00 today. there's going to be a debate and a vote. guy: what would it take for you to vote for it? guest: the removal of the backstop, making the 39 billion pounds in installments relating to getting a successful free-trade agreement. it is an appalling deal. the european union have believes the prime minister, who has not negotiated well, into a position where, for me, the withdrawal agreement is unacceptable. that's always a problem when you are placing too many onerous demands on one party.
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the deal you want is ideal for the european union, but unsuitable for the u.k.. vonnie: how do you resolve this? parliament rejected all options and the idea of a no deal brexit, so what is left? guest: the problem we have is 2/3 of constituencies voted to leave the european union at the referendum, but 2/3 of mp's in the house of commons are supporting remain. parliament has never been so out of step with the sentiment of the people. that leaves us in deadlock as to how we will leave the european union. if the prime minister had negotiated harder, it would have been easier to get the withdrawal agreement through, but i don't see that going through. what i think is that we are going to need a new prime minister in a few weeks' time. we are going to have a long
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50,y, i think, to article and then we are going to come up with a new plan. it is difficult to see how we are going to avoid a general election before the end of the summer. vonnie: members of the parliament are elected, too, though, so there seems to be something at odds here. would you be happy to see boris seeext prime minister by -- boris johnson as next prime minister? guest: we are not there yet, but i believe it should be a brexiteer, someone who believes in the project and has an optimistic view about our post-brexit future. there are a number of euro skeptic candidates that i believe will stand with boris. obviously he is a favorite. guy: boris johnson has indicated in a piece in "the telegraph" that he will support theresa may's deal. willany within the erg
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still not support theresa may's deal, do you think? guest: i guess we won't know until we have the vote. i would have thought this probably -- i would have thought there's probably about 20, and mp's, won'tch is 10 support the agreement as it stands because of its threat to the union. guy: what do you make of the idea of splitting the withdrawal agreement and the political declaration, and having just a vote on the withdrawal agreement tomorrow? well, it's maybe one way of getting around the constraints that the speaker has placed on bringing back the withdrawal agreement. however, it won't change the way i vote. i will be voting against the withdrawal agreement. is about ourotocol
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future relation is non-legally binding and covers a very wide scope. i don't see what taking that out , apart from getting around the speaker's demands that it has to be different to be voted on again, what the point of that is. vonnie: theresa may stayed, and therefore it would seem like, for the most part, people are ok with how parliament is made up, so you can't just throw out members of parliament and live what is there -- live with what is there, at least right now. the vote that got the most support was going to the public again and having another referendum. would that be an option? guest: i wouldn't put too much stake in the votes we had yesterday. that was an absolutely one-off, unusual debate. a different voting system. i know that the government cabinet abstained.
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they didn't vote. on top of that, you had a lot of conservative mps who just refused to take part and legitimize the votes yesterday, so that wasn't a vote of the whole house, and i don't think it reflects the true views of the whole house. the fact is that labour were motivated to vote for a customs union, and they whipped that vote. there was no whipping on the government side, and that wasn't a proper debate. vonnie: it seems like you absolutely want to leave, you don't want to leave with the deal on the table, and you don't have an alternative. what is next? how do you manage to square that circle? guest: well, a new leader of the conservative party from the brexit side of the party, i believe, will have a new mandate and new plans. i think the european union don't want us to leave without a deal. the problem with theresa may's
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negotiating position was that the european union never believed we were willing to leave without a deal. youie: yes, but yesterday had a group of votes, so you took the prime minister out of things yesterday. you put that aside, parliament will control -- parliament three control -- parliamentary control, none of which made a difference. what difference would there be if you had a new prime minister? guest: because we will have a general election and a new composition of the house of commons with new mp's, and we will have a manifesto that says we are definitely going to leave. if you actually just look at the ideology, to get out of politics at the moment, and just look at the remainders , and it is allum
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very crowded on the 48% in the remain pond. that leaves the conservatives under a euro skeptic leader, the 52% of the electorate who voted to leave the european union. i think we could do very well in a general election with a euro skeptic leading us. guy: hasn't it created something of a problem in the short-term, theresa may's decision to announce she is going to step down, particularly with the dup? the dup are really struggling with what the relationship is going to look like going forward. moreare nervous that a hard brexit prime minister would make the border a more contentious issue, as a result of which they've already got an issue with trust in the current prime minister. they don't know who the next prime minister is going to be, and therefore it makes it more likely they will continue to sit on the sidelines and may lean towards a long extension. well, i think we need a
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long extension to have a proper leadership contest and get our house in order to prepare for what i believe is an inevitable general election later in the year. the erg have been working unionists for some time. leave theampaigned to european union, and the chairman of the erg, jacob rees-mogg, has indicated that he would be minded to back the prime minister's agreement, but he certainly wouldn't do so in solidarity as long as the dup oppose it. guy: to his point, is theresa than deal a better option potentially risking no brexit at all? guest: well, it's forever remember of parliament to make that judgment call, and they've -- for every member of parliament to make that judgment call, and they've got to look themselves in the mirror and be
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accountable for the way they vote to their electorate. i've weighed up the risks, and quite honestly, i think that if we sign a withdrawal agreement, we really are putting the future of our country in jeopardy. ame people think if we had very strong prime minister that could break out of the withdrawal agreement -- because it is not a withdrawal agreement. it is a treaty in perpetuity between the u.k. and the european union. i could see 10 years after the referendum, we would still be in the backstop and not out of the european union, and certainly going into the next general election, where a large amount of the laws in our country, for the first time ever, are being given to us and controlled by a foreign power over whom we have no influence, and the european court of justice, a foreign court, would supersede our courts. for me, that is not taking back control, and that could be in perpetuity. guy: sir, thank you very much
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indeed for your time. vonnie. well, fromnk you, as the best side of things. , weking u.s. markets now are seeing some individual , helpingday lululemon the s&p 500 to a 4/10 of 1% gain. the nasdaq up 0.5%. sterling weakness very evident. the dollar index is above 97, and yields are back towards the 240 mark. this is bloomberg. ♪
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vonnie: it is time now for our
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bloomberg quick, where we provide context on areas of interest. when times are good in financial markets, bankers get colossal bonuses. bonus often reach several times base salary and take annual compensation well above $1 billion for the battle performances -- for the better performers. years later, they remain a prickly topic for banks and politicians. bonuses on wall street have been climbing, but still shy of their 2008 peak. haves around the globe changed pay structures to reward long-term success, differing compensation and in some cases paying and bonds and stocks. options allow bonuses to be recouped if things go sour. and the european union, banks
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live under a tougher regime after brussels banned bonuses of more than twice fixed salaries. bonuses began their climb in the 1980's when the regulation allowed commercial banks -- when deregulation allowed commercial banks to expand. the banks were deemed too big to fail without harming the financial system, and the hazard of bonuses were exposed. politicians are tapping into outrage among voters about income inequality, but many financial professionals say banker bashing has gone on long enough, and times have changed, the way they operate, and structure pay have, too. read our quick take on the bloomberg. remuneratione of actually flows into this very nicely. swedbank is our stock of the hour. shares dropped more than 3% earlier today.
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subsequent to that, trading has been halted. the swedish bank has ousted its ceo. and much andra has more. what is the ceo going to -- much andra has more -- emma chandra has more. what is the ceo going to do next? emma: she has said she's done nothing wrong, so we can expect to hear more from her with relation to this. it all goes back to the dirty money scandal that is engulfing a number of european banks. at swedbank in particular, it is alleged to have handled some $23 billion of questionable funds in estonia every year between 2010 and 2016, a figure much larger than had first been thought. it comes amid allegations swedbank has misled u.s. regulators with regard to this as well. the stock fell off a cliff this week. if you take a look at the terminal, you can see how
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european banks have been performing today, all down, the worst performer down by 9/10 of 1%. vonnie: the acting ceo is the person who had been cfo for three years, so you wonder how that improves things. what happens now? emma: as you mentioned, they have appointed and acting ceo. the chairman has also promised greater transparency and communication, one of the criticisms leveled at swedbank since these allegations surfaced. we heard from the swedish financial markets minister, saying swedbank hasn't done much right in the past few weeks, and that he's very angry with them. of course, there's investigations by the financial supervisory authorities in sweden and the continuing probe in the u.s.. as i mentioned earlier, swedbank not the only european bank to be caught up in this. danske bank, dear bank -- nydia , and others caught up in
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this as well. vonnie: our thanks to emma chandra. still ahead, president trump steps up criticism of opec. more ahead in futures and focus. this is bloomberg -- futures in focus. this is bloomberg. ♪
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♪ guy: live from london, i'm guy johnson. vonnie: in new york, i'm vonnie quinn. this is "bloomberg markets." time for futures in focus. let's welcome scott in from the cme. did the president's tweet today about oil impacts the price? the price down now about $0.40. guest: it is pretty much a soap opera. you have opec on one side, trump on the other side.
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opec wants to cut production. trump said he wants them to ramp up production. you seen a big drop in oil prices, but now they are bouncing back. they've been really resilient, especially after the build in stocks we saw yesterday. demand is expected to pick up, but it has yet to be seen what is going to happen. right now the option flow is definitely favoring to the upside within the next three months or so. the skew is a little elevated to the option side. that tells me it is expecting a little more higher prices in the near term. vonnie: 10 year yields picks back up again. what is this due to? guest: same thing with the bonds and the rates right now. you have all kinds of different things. headline risk is definitely driving prices for the last two months. you had stephen moore saying he wanted in immediate rate hike. that spiked bonds up right after
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that comment. in the same conversation, he also said he is not too familiar with monetary policy. you are starting to see bonds right now steady. that yield curve is flattening. that is a warning signs for stocks. it is yet to be seen if that will materialize or not. vonnie: all right, thank you for that. the -- ofott gecas at the prosper trading academy at the cme for us. guy: this is the picture for european markets at the moment. the banks are where the weakness lies today, particularly for some of the nordic banks. more broadly the market is higher, up by 1/10 of 1%. dollar-yen always a useful risk guide, giving us an idea of what is going on. we continue to see weakness in some of the chinese markets. we saw another negative session overnight. trade story front and center as we see ambassador lighthizer and
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secretary mnuchin arrive for trade talks. in terms of the stock performance is in europe, banks generally trading lower. we continue to see a very strong -- four accardo . coming up next, "balance of power." the political story continues to develop. the trade narrative absolutely front and center. here in the u.k., it remains about brexit. this is bloomberg. ♪ this isn't just any moving day.
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headquarters in new york, i'm shery ahn. kevin: and i'm kevin cirilli. oh come to "balance of power, where the world of politics meets the world of business. with the trade representatives from the u.s. landing in beijing, you spoke with the head of the economic council larry kudlow. kevin: i asked him, in terms of enforcement mechanisms between the u.s. and china on any potential trade agreement, and he said i'll the president has said keeping in place some of those tariffs are a part of the potential leverage points on enforcement mechanisms, the administration would be open to removing some of them. take a listen to what he told me. mr. kudlow: we have to see what the track record is, and we are not going to give up our leverage. however, just to clarify,

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