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tv   Bloomberg Markets Americas  Bloomberg  August 13, 2019 10:00am-11:00am EDT

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it's 10:00 a.m. in new 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: from london, i'm guy johnson. this is "bloomberg markets." vonnie: the u.s. is going to delay 10% tariffs on certain chinese imports until december 15. that saw a big turnaround in the market just a half-hour into the open. we have a massive rally now for the s&p 500 and all of the major indices, led by retailers such as best buy and so on because toys, apparel, laptops are all included in that delay. on chinese10% tariff imports on certain goods is now not going into effect at least until the middle of december, which has those securities rallying. spread has come very close to inversion in the last few minutes. it was at two basis points just a few minutes ago.
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argentina continues to be a story. the currency we getting another 7%. i want to show you the reaction in the yuan after those headlines. we were floating along nicely, and then suddenly this massive drop for the yuan. a strengthening of about five or six big figures on those headlines. talks are going to be over the phone in two weeks. we also learned that as well. guy: big move in dollar-yen as well, 1%. that's the risk off trade being reversed. german 10 year moving as well. we were -61.50. we are now at -59. the trade news, the massive catalyst completely changing this trading session. vonnie: back to that news now, china saying it will hold its next round of trade talks with the united states in two weeks. conversations will take place over the phone. the u.s. is also delaying tariffs on certain items until december.
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joining us from our washington, d.c. bureau is shawn donnan. here in our new york studio, we have damian sassower our of bloomberg intelligence -- we have damian sassower of bloomberg intelligence. we will delay those extra tariffs on certain items until december, but talks continue. shawn: we had the announcements of the next step on these tariffs. tariffs will go into place on september 1 on a number of items, but they have said they will delay until december 15 the tariffs going in on toys, laptops, smartphones, and some apparel. that seems like a tacit admission that they were a little bit worried about hitting people's christmas shopping. if you remember, a lot of this list was consumer focused
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products, and that was something that risked being problematic as the president politically consumers started to see possible price increases ahead of christmas. interestingly, the president line beforeharder this in a tweet, insisting once again that china was paying the cost of all of these tariffs. that is something that has been disputed by economists and many businesses. also insisting that recent -- in theon in the yuan proved that his china policy was working. so why the change? was the president briefed on this this morning? who's been making the decisions on the fact we are going to be seeing these tariffs rolled back? i'm curious how the decision-making process works here.
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who is ultimately pulling the trigger on a decision to delay? shawn: so are we. we are trying to figure it out right now as well. if you remember back when the president, some 10 days ago, announced to these tariffs were going to go into place, me and others were reporting there was a heated debate in the white house about these tariffs. a lot of people said peter navarro, the hawkish trade advisor, was really the only person lining up with the president and believing these tariffs were good policy. we've seen the markets tumble since. we seen a lot of volatility around. the president has downplayed some of those market swings, but it is clear they have caused the administration to soften a bit. we saw damian sassower, massive reaction in the offshore yuan, which would indicate the market thinks this is a very good sign that indeed there may be a de-escalation now.
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damian: i wonder how much this has to do with hong kong. goes, there's going to be some pain in the financial markets, so buying some time with the trumpet been assertion isn't a bad thing. there may be some sort of word out of there on how they will handle this. for instance, if they debate proposing a curfew in hong kong, intervention may be imminent. have see intervention, we forces celebrating the anniversary of the prc, forces and shenzhen lined up, if we have any overt reaction, i think all bets are off. the white house insists the hong kong issue and the trade issue are separate. damian: they can insist all they
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want to but this is a strategic decision. that airport closing down, that's 5% of china gdp. ramifications, the ancillary impact to global markets can't be denied. look at huawei. look at some of the other things that have been tallied about between the trump administration and china over the last year. theie: do we know if heads of companies have been speaking to the administration i law -- administration at all? we know lobbying has been going on. is it possible something got through to the president of the united states? shawn: that's entirely possible. companies have been working very hard to try to get their products off this list. i was visiting a company yesterday in pennsylvania that has been lobbying hard, hired some washington lawyers to do that work. it's not just the big companies
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doing this. we had hearings over the summer where we saw hundreds of companies lineup and plead for their products to be excluded from these tariffs. ofre clearly is a lot pressure coming from the business community for the trump administration not to escalate here. but i think we also need to be a little bit sober about this. havethe lead negotiators spoken again this morning. that is good news. the chinese side are saying there will be talks again by phone in two weeks. that does not mean that we are any closer to a big final deal to resolve this. this is again a de-escalation, maybe a pause on escalation may be a better way of putting it. this is not a big step towards some grand bargain. guy: can i come back to the issue of huawei? what shawn is saying sounds really sensible.
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there's one other factor we haven't dealt with, huawei. do we know if the u.s. administration is going to extend the decision on huawei? that decision has yet to be made, and my understanding. damian: the verdict is still out on how the u.s. government is going to handle huawei, but this is just a pause in the broader negotiations between china and the u.s., and it extends further than anything we can imagine. geostrategic positioning in the south china sea. what is going on with hong kong, this is a country that emerged from the 1997 financial crisis. it has received an awful lot of capital infusions and influence from the mainland. it's one of the largest economies globally. it is a major financial hub. now in this kind of cratering as we speak. if you look at the hong kong dollar sovereign curve, it was
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50 basis points steep a year ago, now 30 basis points inverted. the impacts swap rates, $4.9 trillion hang seng market. theimplications of that, chinese companies listed in hong kong are basically at risk here. vonnie: all right. i'd like to thank bloomberg's damian sassower here in new york and shawn donnan in washington, d.c. now to hong kong for the latest from their. protesters forcing major disruptions at the hong kong airport for the second straight day. we are joined by yvonne man, "bloomberg markets: asia" anchor. is the situation escalating or de-escalating? ofnne: in the last couple hours, things have taken an unexpected turn. this crowd getting more riled up in the last couple of hours after protesters alleged that
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they found a man who was apparently a mainland public security officer who was apparently pretending to be a protester. he fainted on the ground. they dragged him over to the departure hall, where we are standing at the moment, and this crowd is now surrounding this man. and some reporters we have seen were trying to protect him. at this point they are just being squeezed by throws of people who are still not willing to let him go. they are trying to tend to him. we had firefighters trying to diffuse the situation, but they also retreated. they weren't sure how to get through here. i think things are getting a lot more intense here, and potentially getting out of hand. guy: getting out of hand. yvonne, let's talk about what the protesters want. when you talk to them, are they
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worried about provoking beijing? are they worried about the fact that beijing could send the pla in or other forces from across the border in shenzhen? is that what they want? are they trying to provoke beijing? i just wonder what the motive is for these protesters as they seem to be getting angrier and angrier. yvonne: it doesn't seem like this is about the extradition bill anymore. this is about the police force, the use of force we have seen in these violent crashes. they are trying to get the international community awakened , as well as the government, who continues to not have any major assertions. we heard from carrie lam this morning, and she did not provide anything new or any concrete plans to try to ease people's fears. she continues to back the hong kong police. we are seeing signs that beijing has stepped up preparations to mobilize forces to try to stop this unrest.
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ofte run media posted videos police a sibling south of the border in shenzhen. at this point, some people say the price is still too high at a time they are still dealing with this trade war with president trump. economically, the costs are just too huge at the moment. that being said, the forces are gathering by the day. it seems like they are just trying to create this disruption here to get attention. vonnie: it does seem like it wouldn't take very much for this to escalate even further, to get out of hand, as you say, and perhaps for the mainland security forces to come in. if there is a situation with this man who allegedly now is getting help from ambulance and airport staff, but he was also alleged to be a mainland public security officer, is this the type of thing that could tip it over the edge? or are we dealing with calm, levelheaded protesters? yvonne: i think where we are
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right now, it is getting a little bit intense, i have to say. say. we are staying away from these crowds right now because they are just getting bigger here. the fact that allegedly, this is a mainland public security officer is certainly getting the attention. tipping point to actually deploy some support for hong kong police because hong kong police are nowhere to be found here. we have not seen any kind of police presence. so far there is firefighters and ambulances. we are not sure what is really going to happen next. guy: a bigger question, a lot of people use hong kong. it is a massive airport. i'm curious what happens if the general public want to get in and out of hong kong. are people going over to shenzhen airport and using that?
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are other regional airports picking up the slack here? there are thousands of people every day trying to get in and out of hong kong. what are they doing? is one ofs, hong kong the biggest transfer hubs in the world. wet we've seen at this hour, seen a couple hundred cancellations. cancelingific still hundreds of flights today. we've been hearing there are still flights heading out. the check-in counters were closed earlier this afternoon, around 4:30 p.m. local time, but we were still seeing some flights go out and some flights come in. those who are transiting who were not in the departure hall area were still able to fly out. i think there are still operations going on here, but we have also heard from our coworkers that they were almost diverted to shenzhen at one point. someone had to fly to macau this morning as well.
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diversionsseen some as well. guy: yvonne, as ever, great work. thank you very much for joining us. bloomberg'yvonne man joining us froms -- bloomberg's yvonne man joining us from hong kong airport. of the first word news with kailey leinz. higher inflation could limit the chance of additional fed rate cuts. wall street regulators set to take a major step on overhauling banks' abilities to trade on their own funds. it would loosen restrictions on banks investing their own money in private equity and hedge funds. one of asia's most trade reliant economies is anticipating the impact of the u.s.-china trade war.
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singapore has cut its forecast for economic growth this year to almost zero. it sees gdp shrinking at an annual rate of 3.3%. in russia, radiation levels briefly reached 16 times normal after a failed missile test resulted in an explosion last week. moscow says the test involved a small nuclear power source. five atomic scientists were killed in the blast. 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: want to check stocks now. they are moving substantially higher on the tariff delay announced just a little while ago from the administration. best buy currently the best performer in the s&p 500, up 7%. hasbro leading toymakers. mattel, as well, higher. apple up 4.5% off the back of this news. this is bloomberg.
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♪ , i'me: live from new york vonnie quinn. guy: from london, i'm guy johnson. this is "bloomberg markets." for more on the markets, let's get to emma chandra. emma: the s&p 500 up by 1.7% today, firmly in positive territory. thatof course on the news those u.s.-china talks are back on and will continue next month. tariffsthe news, the will be delayed that had go -- that had been expected to go into effect in september,
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delayed until december. we have seen the likes of apple, mattel, and hasbro jump on that news. 1%,stoxx 600 up 7/10 of after previously spending the session and the red. the hong kong still in the red. the turmoil in hong kong and through asia still protesting. that is -- still persisting. that is why we saw them in the red today. a bit of a turnaround story for bonds as well. take a look at the 30 year treasury, spiking now. we had been expecting the yield to hit a record low today. then we got that better than expected out of the u.s., and we are seeing things backup. in terms of movers, let's look at some of those perhaps not impacted, moving ahead of that tariff news. trading at ancial february 2019 hi as it plans to sell its canada mortgage unit.
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1%.nce auto parts down it was down a lot more earlier in the session after it missed with its earnings. henkel, european consumer products company, also falling today. they said their shampoo business had been impacted by slowdown in china. one last chart for you, showing we are back in positive territory now, but earlier in the session, nestle came the first company to see its 10 year bond fall into negative territory. vonnie: thank you. let's check on some sector leaders now because of the trade news, was talking about -- trade news emma was talking about. 10% tariffs will not go on things like laptop computers, toys, and some apparel. that is helping the s&p 500 index. also, the consumer discretionary
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index, which holds names like amazon.com, nike, target, ford, dollar general, ebay. all of these companies will benefit vastly from this delay in tariffs. communication services also one of the better performers. it is up to percent. %. holds names -- it is up 2 it holds names like disney, google. 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." big market reaction this afternoon. we will get a phone call taking place, a delay to the tariffs, which is pretty significant, and we've already walked through some of the stock market reaction. but i just wonder whether the
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market should be getting ahead of itself here. i thinkident's tweet really nails how the president is on a hair trigger on some of these issues. he talks about the fact that the chinese talked about buying big from great american farmers, and then didn't, and maybe this time is different. that is a huge challenge to the chinese, isn't it? soybeans are trading higher. nevertheless, the president is laying out the parameters here pretty clearly. vonnie: and if you look at corn as well, it had been down big, it also spiked on this. it is still down 2.1%, but nevertheless, it is clear that market for dissidents believe this might be some kind of de-escalation or softening, even as the president continues to complain about china. we do at least have the promise of a phone call, so we know that chinese vice premier liu he
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spoke with robert lighthizer and , and thenchin today we get the promise of a delay until december. this affects goods from toys to apparel to products made in china that are sold in best buy. tohink it is very important understand that as much as the administration protested that we weren't seeing the effects of things like inflation and consumer prices, maybe we were beginning to. guy: we didn't want to cancel christmas. maybe that's part of this. it takes a long time to put this stuff on a boat and ship it across, so maybe that's a factor as well. the president firmly believes there's no impact yet. we are going to talk about that and talk about yields next. 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." let's get a first word news
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update with kailey leinz. kailey: a sign of compromise and the trade war between the u.s. and china. the trump administration will hold off imposing tariffs on certain chinese goods until december. the two sides spoke on a conference call since the isn't -- on a conference call for the first time since the recent escalation intentions. hong kong protesters have done it again. they forced the airport to halt ,heck-in for departures protesting in the airport for the fifth straight day. hong kong chief executive carrie lam warned that the city risk sliding into an abyss. weekly protests in moscow have become the biggest public challenge to russian leader vladimir putin since 2012. a police crackdown has led to thousands of detentions. protesters face five years or more in prison. his popularity plummeted to 64% in 2019.
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more than one in 10 voters could cast ballots on paperless voting machines in the 2020 election, leaving their valid -- leaving their ballots more vulnerable to hacking. many states haven't done enough to make sure it doesn't happen again. 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. the news that the u.s. will delay tariffs on some chinese imports is stocks higher. the s&p now up to percent. joining us to discuss the latest is sherry paul, ubs senior portfolio manager. you are in the wealth management side of things, so clearly clients are going to be watching these hairtrigger moves. the market was way down in hong kong, and suddenly we get this surge on the idea tariffs might
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be delayed. how do you deal with that? sherry: that's a really good question. you are right, the clients are concerned. they look at this policy volatility with a lot of concern. my immediate advice to them is to resist the urge to allow political and policy volatility and chaos to create portfolio chaos. there are some very basic print suppose you can use to immunize yourself and your own investing behavior, as well as your portfolio. number one, focusing on data, number two, being politically aware, but investing in that data, and number three, realizing that to gain some acceptance, this is now the environment we are in. use it to your advantage. vonnie: that said, you can't ignore the fact that the two- ten spread saw two basis points today. does that because you to
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think maybe we will invert, and i need to rethink my theory on whether we are headed to a slow down or it recession? sherry: i think it was janet yellen who said that correlation doesn't necessarily translate into causation. we are notis that entering a recession this year. we believe the markets have taken into account this 10% tariff september 1 position that has now been suspended, which is why we are obviously seeing markets rally today. i think it continues to affirm my point that if we get too focused on what might happen versus the data that can tell us what will likely happen, we lose sight of what can be really directional opportunity instead of trying to be perfect in our timing in terms of our asset classes. what that simply means is we should be taking advantage of market pullback when the data tells us we are not in recession. we should be stepping into sectors that have been
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disproportionately penalized by the possibility of a poor policy outcome, which is why we are seeing consumer discretionary and tech rally today, and we should advantage ourselves to turn volatility into our friend as we seek to find value in this market. there's plenty of it, particularly when you look at the 10 year yield. eight out of 11 sectors right now in the s&p are yielding higher than a 10 year treasury. that is meaningful from an income standpoint. guy: is that sustainable, sherry? sherry: i'm sorry? guy: is that sustainable? yields are super low. sherry: yes, but for how long? whenever we reflect on the concern around recession, i tell clients to remain concerned. the question is what you do before, during, and after.
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for now, yes, sustainable. we have easing around the world, accommodative policy in the united states. i think right now, what investors need to be doing is remain committed to their portfolio allocations come about look for rebalancing opportunities, particularly in sectors that have been oversold, and present good values and terrific dividend income. frankly, the decision-making is around the fed and governments. i personally love dividends because they reside on corporate balance sheets. corporations that make around when and how to deploy their cash flow is often decoupled from the political environment, and can be more stable. guy: but if companies think there is a recession coming, they are going to be hoarding cash. if companies worry life is going to get tougher, they are not going to be so keen to pay out
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those dividends. it is a really fine balance right now. are we going into a recession? you say no, but if corporations start to worry about it, that outlook is going to flip on a dime. sherry: it may turn, but you make a very good point, and that is how corporations typically deploy cash flow during recessions. i've been managing money for clients since 1998, during two of the worst recessions in u.s. history over that 18 year period. if we look back, that isn't u.s. companies did. most did not cut their dividend. the majority of companies did not necessarily cut their dividend. to your point, they may not be raising dividend, but i think there's really a good case to be made for stability of income, not to mention the fact that
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that creates a rate environment for companies to deploy their capital through share buybacks or through acquisition. all of those things long-term are supportive of markets for longer-term investors. it makes is a little more challenging for short-term thinking, but if you embrace long-term thinking, i think that we are coming into periods of real opportunity. vonnie: i know you favor u.s. and em over europe right now. where any emerging markets, and where do you find the undervalued in the u.s.? sherry: with regard to our allocation, we prefer emerging-market over euro zone are merely because the euro zone is struggling, and we believe that out of anywhere in the globe, that would be the market most challenged entering into a recession first. by default, we are investing in emerging markets, but we are overweight in the united states for a lot of reasons. when we look at the stability of two, eight outer
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of the 11 sectors are currently yielding dividend rates higher than a 10 year treasury, and in terms of where value is right now, risk profiles for individual clients are highly personalized. my specialty is custom portfolio management. for clients that are most concerned about any of the things guy is speaking about in terms of recession, we want to thread the needle between sectors that are traditionally defensive, like utilities, consumer staples, and even real estate, and continue to have growth in a portfolio at a good value, which tech continues to present. consumer discretionary a little overvalued, but kind of came back to us anyway that we could find good bargains within the sector. we continue to overweight growth stories, particularly if we believe we are headed towards recession, and again, i would reiterate that we don't see the data supporting that for the current year. sherry, what we are seeing
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at the moment is a big spread between bond proxies and value stocks. does that carry on? bond yields have come down really sharply. bond proxies have followed, therefore. do you see that being a sustainable position? it just keeps getting bigger and bigger. sherry: not necessarily. i think anyone who tried to time the 30 year bonds in the last few days is having a different viewpoint on that today. so i think longer-term, it's ecbr that the fed and the and anna terry policy around the world is inclined to be accommodate -- and monetary policy around the world is inclined to be accommodative. i would caution investors, at the same time, that that doesn't mean you want to step into a value trap in terms of taking on more portfolio volatility and
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owning value stocks just to yield chase versus the safety and lack of correlation that, for example, a treasury bond would present as being valuable in your portfolio. vonnie: we have to leave it there, but thank you for being here to chat. sherry paul, ubs senior portfolio manager, thank you. guy: let's get back to the markets. some of the leaders spiked pretty sharply on the back of the trade news we got around an hour ago. apple was up circa 6%, now up by 4.75%, still a decent pop. this is bloomberg. ♪
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♪ guy: from london, i'm guy johnson. vonnie: from new york, i'm vonnie quinn. this is "bloomberg markets." stocks surging now on the u.s. delay in tariffs on china. let's bring in bloomberg's dave wilson. the s&p 500 was up 2% at one point. the dow up 1.7%. the one actually reached seven, strengthening -- the yuan actually reached seven, strengthening. is this just temporary? dave: you look at the reaction and see the likes of apple and the retailers and apparel manufacturers right at the forefront of the gains, and basically, my first thought after looking at that reaction was the trump administration saved a holiday shopping season. you delay the tariffs to december 15, they are not going
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to get imposed on the goods being imported now and over the next couple of months to stock the shelves in november and december when people are going out, buying their holiday gifts. so the retailers don't have to face the prospect that when people show up in the stores, the price tags are going to be higher because of tariffs. definitely a plus for a whole lot of companies here. well intodoesn't play the election season, either. what does it look like in some of these stocks?it today.e squeeze david: with that deadline out there, people were concerned about how a whole lot of companies would fair that would be affected by the tariffs. the standout within that group would be best by, sibley because -- the standout within that simplyould be best buy, because it is a pretty big chunk is the buy's business
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biggest u.s. consumer electronics chain. you look beyond best buy and see a whole a lot of companies would be affected by these tariffs, but now at the very least, can plan for another quarter or so without having them hanging over their heads. vonnie: what's interesting is we did get that list of the tariffs that are going into effect september 1, and looking at a lot of agricultural products, a lot of life things, carcasses. that will impact commodity companies. david: absolutely. we will start to see over the next few days the pluses and companies. david:minuses out of this decis. they may very well have something to say about how these tariffs might affect their business. the thing about retailers, macy was results are due tomorrow -- macy's results are due tomorrow,
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mightt's next week, so we get an idea how this affects them for the third quarter and beyond. guy: let's come back to the issue of shorts. do you think traders and investors will use this as an opportunity, given the fact that the president appears to be on a hairtrigger? he's completely changed direction. the agricultural issue seems to be a big one for him.
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be so they can have a sense of what it means for them not to have the tariffs staring them in the face right now. vonnie: thank you. it is interesting to look at the list because it includes lots of types of apparel, so we will see the continued reaction on these stocks. guy. guy:guy: let's turn to another corporate story we have been watching. cbs and viacom have reportedly agreed to an exchange ratio of 0.59625%. those decimal points are all important. it is an all stock merger. let's talk a little bit about this deal. the question i'm asking is, why is this so hard? they've been negotiating around the clock, and they've basically come up with an exchange ratio that kind of reflects where stock market values are now.
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reporter: it was very tough to get down to this, so don't underestimate how many hours of bankers and lawyers, heads and directors have gone into this decision. they've been negotiating around the clock since the weekend, but really they've been negotiating for about two years. these companies were separated into thousand six. sherry redstone, who's now in control of national amusements, which controls both of these companies, realized both companies needed scale to be able to compete with the netflixes of the world. they needed to get together so they could do m&a to bulk up a little more. that idea seems simple, but coming to terms on how you execute that has been a really long, hard-fought process. areie: it seems investors happier today with what it looks like has been struck in terms of an exchange ratio, so a little bit less of a share of cbs for
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each of viacom's at this point. let's talk about the boards. where there any disagreements on how many seats should go to each party? nabila: what's amazing is they have actually come to an agreement. i'm sure there were disagreements in the lead up. sherry redstone will be the chairman. cbs gets six board members, viacom'sts four, plus ceo, who will be the ceo of the new company, will be on the board. guy: thanks for stopping by. nice to see you on the side of the atlantic. vonnie: let's bring you live pictures now from hong kong airport. police are there as protests enter a 10th week. it caused travel disruption. this is another day at the airport where flights have been canceled, check ins have been canceled. it is nighttime in hong kong,
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and you can see these life pictures don't make it look like anything is de-escalating. there's a large presence there at hong kong airport. we will be live at the airport at the top of the hour. this is bloomberg. ♪
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♪ guy: from london, i'm guy johnson. vonnie: from new york, i'm vonnie quinn. this is "bloomberg markets." guy: time now for futures in focus. isning us from the cme scott. we've got news we will get a trade deal. we get a tweet from trump as well talking about the ever cultural sector. i'm really curious -- the agricultural sector. and really curious, did you really believe these talks are back on, or do you believe this is a head fake? scott: i hate to tell you, but i
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think it is a head fake. the agricultural sector has been whipped to and fro more than any other sector. i'm suffering a bit of deal delirium. i don't get as excited on news like we've had today, and i don't get as upset on bad news, because as you watch the agricultural sector over the last year or two years, we used to really get excited and sad, but over time, those moves have been more and more muted. i'm kind of feeling that now. i can't say that the water is really warm, everybody pile back in, because we've delayed these tariffs and loosen things up a little bit because at the end of the day, i'm now playing this game. until there's a deal, there's no deal. that's how i moving forward. guy: what we've seen thus far is we have recession signals all over the place. the cpi data, small business
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survey today, both look pretty good. but the curve indicates a recession is coming. when you talk to people down there, do they believe a recession is coming? no, and i don't believe a recession is. after quantitative easing, we have screwed up the pricing mechanism all over the place, and no one can find true value anymore. before that, we've been able to manage our crises on the 1955 handbook on how to fix your economy, but now we have a very difficult time moving forward with that. i think that going forward, we have an inverted yield curve because everyone else has got negative rates. that doesn't mean we are going into a recession. my question is why shouldn't the yield curve b inverted seeing what is going on around the world? guy: it is a fair question, and when i'm seeing a lot of at the
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moment. we are at -60 on the german ten-year. that's going to have some effects on the u.s. ten-year, and we've seen some pretty big moves off of that. we will have to leave it there. scott shellady joining us from the cme. vonnie: time now for our stock of the hour. we are looking at the world's largest chemical company. trading in the green now by 1.4 percent. i might have an idea of why, but here with the real details is emma chandra. emma: we are looking at the .eversal for b sas -- for basf earlier we saw the stock decline, with reports that it was looking to sell its pigment business, a deal that could fetch more than $1 billion in part of an effort by the ceo to overhaul the chemical giant. you can really see that
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underperformance, and it has been down to the uncertainty or a picture -- the uncertain trade picture. they said that profit was likely to drop more than 30% this year due to the impacts of the trade war. basf has huge international exposure. we should be able to show you how the revenues are exposed. they get about 20% from the asia-pacific. we will be looking to see how this latest tariff news will impact it in the future. vonnie: emma chandra, thank you for that stock of the hour. let's take a quick look at hong kong now. the airport is at a standstill for the second day of antigovernment protests. we will go there at the top of the hour. this is bloomberg. ♪
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♪ guy: 30 minutes left in the
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european trading day. from london, i'm guy johnson. vonnie: from new york, i'm vonnie quinn. this is the european close on "bloomberg markets." guy: the narrative has changed to trade today for financial markets. we were down earlier on. we are off the highs, but still a significant turnaround. same story for german yields. we were -61.50. we did get down to around -58. the big move, the bass of move, is what's been happening in the yen. currency,n, risk off the yo-yo currency, really surging. let's call it 1.3%. the trade narrative, that switch , that delay of the tariffs, the phone calls that are happening have changed the narrative today on both sides of the atlantic. vonnie: we

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