Showing outperformance for second day running. Totally different market. That is the key thing. These results, it has a different feel than basically the entire year until now. Up until that was all tack and all defense. Energy up, industrials up, materials up. Lets dive deeper into todays action. Scarlet im think about the reversal you were just talking about. Choppy Market Action on the week especially around momentum stocks. And this is around the 50 Day Moving Average. Earlier we came close to breaching that short term momentum indicator p take a look at this one and half year chart of the s p 500. Arranged all the uncertainty around the macro factors, stocks stuck in this giant rage and then the more narrow ranges between the 200 Day Moving Average in blue, the longer term buyers and in yellow the shortterm buyers. Last year the s p 500 stuck in between those moving averages, then making it about the 50 day, once below and then the 200 day average once that was sliced and ugly fourth quarter. This year you can see there are periods of time when we have been above the 50 day average but it has been the range between the shortterm and longterm moving average or there might be new investors feeling the pain in this route because this etf has seen inflows for seven straight weeks including more than a billion dollars last week. Like a lot of the stock market it is a story about the reversal in momentum. By the end of august this fund was up more than 12 . Over 20 days that is the biggest gain since 2011. Obviously it goes handinhand with the bearishness in the treasury market we are seeing. Yields up across the board as investors are having second thoughts about how aggressive Central Banks will be. The fed in particular, but also the ecb, heading into this weeks meeting. Mike and the market team, thank you so much. Stay with us, now the chief strategist at Northwestern Mutual and our very own sarah ponczek. Do Economic Fund mentals matter in this current environment where we are looking at a deescalation perhaps when it comes to the u. S. China trade war, and more movement from Central Banks to consider easing strategies here . We have ppi, cpi, retail sales coming up this week, will that move the needle when it comes to u. S. Equities . I do think economics still matter. I would answer the question in a different way. We see no reason economically to actually have a recession. If you look, we are still drawing people back into the labor force. Prior to the escalation of the trade war, companies are investing and productivity was rising. The cycle was moving along. The only reason we see to actually have a recession which is the big question on peoples mind, is that the Monetary Policy authorities mess up, which we do not think they well. And we do not think they already have. Or two, the trade war goes so far it tips us into the abbess. The abyss. I think the economic weakening is pushing us to get the trade deal back on the table. I would answer with yes, Economic Fund mentals matter until we get a tweet or some other narrative that changes the day. At the end of the day, is what happens with trade and what happens with the federal reserve, which we do think they will continue to be easing, just like other Central Banks around the world because there around the globe because there is no other option. Scarlett about the ecb and we heard earlier from mark carney the bank of england governor, warning about Monetary Policy. Listen. Part of the challenge we are not in bute we are getting closer to a global liquidity trap. And that is a question in terms of policy space. But it is also a comment on where we see low black librium Interest Rate going. Equilibrium Interest Rates going. Scarlett are you worried about a global liquidity trap . Im worried about a lot of things. I guess the Central Banks have to because they do not want to find out what the other side of the equation is, is to continue to ease. Right now you have 17 trillion of negative debt. I would not hazard a guess as to what it means if we ended up if we ended up with more than that if we had a recession. I think Central Bank Policy makers are in a bit of a bind. They have to provide liquidity to the markets. There are still the ability to do so. They are creative. We were talking about qe light for the fed today. I do not think central anchors have run out of actions they can do to enhance gross. Is it at the margin . Yes but it could keep us out of recession. The big thing i think could still be happening is that there will be some sort of trade truce in the coming months, because i do think the president values three things. The economy. The markets. And getting reelected. I did not say a great china dell. I do not think that is on the table. Id think he wants some dell. Deal. Do you think investors, because the football has been pulled away a bunch of times it a great deal is in of the works and then gets blown up. Do people feel it is different this time, that there is more likelihood that this does not end with the same. I would probably say no for majority. Sarah we have played this game to, too many times. For someone from the Trump Administration comes out and says a deal is likely in the cards, coming soon, and then they can just not agree on those key issues. Theft andmes to Ip Technology transfer. Those have been the key issues. As brent was saying, it comes down to whether or not the Trump Administration is willing to settle or china is willing to settle. Maybe at this point in time, because we are getting closer and closer to the 2020 election, you are seeing a bit of a sample and the many factoring sector appeared youre also seeing issues over and china. Maybe one does come to the table. But at this point it is not looked like it is going to. And we have seen this too many times before. And never once has one actually conceded. Scarlett i like the way, brent, you outlined what the priorities are as we get close to the end of the year and as we get close to the 2020 election. For you, you had said that you are not necessarily rotating your portfolio. But what does it mean when it comes to positions overseas . In emerging markets for instance in europe . Atsure, i think you look International Markets and they are cheap. We can debate the metrics. What we look at we think those Asset Classes are cheap. They are in need of a catalyst. So for em one of the big release has been the fact that the central bank in the u. S. Is no other tightening. Though Central Banks have been able to play along. The second thing is the trade war will need to simmer down. We think that will lead to a. Em ml performance outperformance. That is an asset class we are not abandoning. Not make sexy and does headlines but diversification is still something you should do in a. Of high uncertainty. I hear people talking about uncertainty and wanting to move to the safety of one asset. To me that smells of certainty, not uncertainty. Who knows what the next five years turn out to be. Really where were are at a fulcrum point where we have things like negative rates that could become more real. We still think the world turns out were normal. But if the end of the day, we want to make to restate aversive hide. You yes i was going to ask further could use pound on how you do diverse occasion going forward. It has been easy so far this year to allocate a bunch of money to stocks, to bonds, they both go up, but they also had a nice inverse correlation. Balancing each other out really great. If we get this. Where rates are rising, and duration does not offer you the hedging value that it was offering for much of the year, how does one sort of off place, that risk . I think is more the question of what types of stocks are outperforming. Not stocks in general but the u. S. Stock market has outperformed. In the scenario you lay out theres a potential for stock markets across the pond to be outperforming. The conditions you mentioned would probably lead to Global Growth are accelerating. Thats why mention sometimes we do not look at diversification as being intraAsset Classes. But when donald trump was elected in 2016i jumped he might make diversification great again because of the deglobalization of the world. So i think those are the little nuances. On the bond side one of the things we have done because noetic specs inflation, which is interesting no one expects inflation which is interesting because underlying measures like the dallas fed mean pc they are not x decelerating their increasing. If you get acceleration in inflation one thing you may want to look at his tips. All things at the margin you can do and things that have not been working are the things that might work. Scarlett fascinating. Great diversification again. Northwestern mutual Wealth Management company. Great to have you with us. Smaller Companies Worth taking note of. Revenue still climbing 53 . It seems therall numbers have disappointed as we are down by 14 . Even this quarter. Fourth quarter overall not as had been expected and the outlet for the Third Quarter as well. Adjusted earnings per share zero cents. First quarter revenue 89 million. Perhaps not moving up to expectations for the private decree business. Stocktt also gain tumbling in afterhours trading for the videogame retailer reporting secondquarter sales aop 12 versus estimates of 9 decline. As for years adjusted eps missing estimates, learning to make at most one dollar 30 whereas analyst were looking for when dollar 37 per game soft off by 13 . That doesnt for the closing bell and for me. For whatd you miss where you look at why bondholders are worried about we work. This is bloomberg. Caroline im Caroline Hyde where live from bloomberg headquarters in new york. There a lot of rotation going in under the headlines. Joe the question is whatd you miss . Caroline apples big bet is rolled out, of rated iphones. Up,lett and china opens slapping a Foreign Investment limit and its stock and bond market. Is beijings move a sign of desperation . Concerns on the we work ipo. We work slipping below face value since the august Leasing Company file to go public in august, spooking bond investors. Is the us now to discuss bloomberg credit reporter. Some people might not realize it but there is already a publicly traded we work intimate out there that we can see every day for the first time in a while were actually starting to see weakness in the bonds. Yes the bond had been doing quite well on this ipo news. But what is that happening lately as investors are getting a little bit nervous. We work is a cash burning company typically not your usual junk bonds issue out there. But right now the bonds are down about 32 five points on this news that this wont happen. It doesnt happen what is the consequence for bondholders. From the ipo and potentially extra cash from this loan agreement, right . Youhe big idea they got if wanted equity cushion if youre a bondholder you do not want to be the one who does not get paid back. You do not would not want to be the only soccer. Equityhat if how to have. Also we work has been sending so much to grow you have to wonder where Interest Payments come in in their priority last. Where they have more debt financing, you know they have that extra cash, they will be able to make those payments. Caroline what is interesting as there now being talked of because this is a company that needs 7 billion of next four years, that they could tap the junk bond market again. Do you think that will be appetite there . Were getting a host of new issues. Her company such as we work . Definitely, this is a case where a company starts to falter like this you wonder about their access. Right now there bond is yielding more than a. 4 so they would be paying a lot to do this. They have been looking at alternatives. They talked about doing a whole business yell where they securitize everything. Caroline and they have been doing really well, a record amount being sold out. How does that work . Typically a lot of Franchise Companies use these where you put all your assets in the box your franchise agreements, intellectual property. We work potentially could do that with some of their revenue from their desks, basically. To have an idea with their cash flow needs are, chris lane had a note out where he pegged it at . 2 billion . We are definitely talking many billions of dollars per i was talking to the s p and they were saying in theyre probably ok. But the estimate that 18455 Million Dollars next year. They have very ambitious growth plans 4. 5 billion next year. To be clear newman had said he wanted to borrow or be in that borrowing space like a netflix and a couple other companies that size. But does their growth match up with what netflixgrowth was. The thing about netflixs investors are buying the story that netflix could be profitable if only it ramped down its borrowing. To find the shows. So we work is saying, we could if we needed to cut the growth and maybe be profitable. Whether you believe that story is up to you. Caroline they should not be mutually exclusive. Im sorry, but you have to have growth if youre going to end anyway way want to be possible. For sure at some point you need to make money to place her investors. You guys are so oldfashioned. All right our thanks to Bloomberg Clara boston for the update there on we work. Undercuts. Apple apple announcing its new tv plus original videos obstruction service in november for 4. 99 months, we will wrap up the new offerings from todays event. That is coming up next. This is bloomberg. Time for what stories are trendy across the bloomberg terminal users universe. Goldmans private Wealth Management which oversees 500 billion dollars says at the economy has gone through vers crises, the company has told clients to stay invested and it is too early to get out of your stocks. Bloomberg. Com has a story on for soccer, hoping to resurgence worldwide with resounding success of the world cup over the summer. The victory led to record turnout for earlyseason matches and new partnerships with espn and brewer abn bev. But the for the sport to take off they need to get serious about salaries, filling datum, antiexposure. And tictoc on twitter is reporting that in an effort to improve its image, saudi arabia is having its corporate sponsors and free trips to instagram influencers. The program is giving saudi arabia some muchneeded blessed he after the outreach over the murder of journalist jamal khashoggi, the war in yemen, and the crackdown on dissidents. The 200 students and influencers have visited be other programs of our. You can follow all the stars on your terminal and bloomberg. Com and at tictoc on twitter. Now lets talk apple because it adjust wrapped up its latest product unveiled. Tactics and pricing, the bundling of tv with the purchase of new apple devices. About allnot to talk it means for investors, caroline angela, what did you make of the price points . A 700 phone is still expensive, but it is less expensive than i was exacting. Yes us too. We were expecting the starting price point to be what you saw 9. 99. Year, 74 if you look at what apple has done historically they have been more inclined to increase prices but this is the first time ive seen them step back and reduce the price. In many respects, apple is almost acknowledging that they made a mistake, maybe last year in terms of increasing the price point on a low end device. That being said, i actually think it is a very good move for them. Lowerave gotten some a cost out of the memory side of things or have increased the memory within the phone and have are passing that to the consumer. The one negative from this lower price point is the fact that they are unlikely pricing in any sort of tariff impact. Should the trade war escalate. I think that is really the rest out there for investors at the point. The risk for investors. Im going to buy a new folk because i shattered my on the sidewalk. Is this the kind of upgrade especially with a camera getting a lot of hype, or the multicamera, it could this drive a new wave of upgrades . Or will it be like all the releases where people buy it when they are like me and they just sort of need to buy new phone . Yes i think the latter. I do not think anyone is necessarily going to run and by any of these devices to be honest. Unless you actually need to upgrade your device buying a new one. One thing apple is trying to do is to work in that trade in program that they announced today as they previously announced as well. That is a push that they are trying to make. The lower price point may help out in china where he really saw some of the issues take place at the end of last year and earlier this calendar year. Lapping easy comparables, sighing looking better for unit basis as you go into the december and march quarter. That said, i dont think consumers will run to the stores and start buying these devices. But that said, i do not think you need to see that for the stock to work. Lets turn to services, how much of allure do you think tv plus is going to be . Either send the price point i understand the price point, 4. 99, but at the end of the date is the concept a offer appeared how competitive will they be for . Netflix or hulu echo i think the price point makes sense because of the content in their library. We expected it to be 9. 99. Theyre linking it to hardware sales. You go by hardware and you get a year of that tv plus offering for free. What that does is it provides some stickiness. A year from now, i guess apple the opportunity to increase that content, spend more over the next 12 months and then those consumers any air can make a decision on whether or not they want to hold onto it. Given that it is a 499 price 4. 99 priceers point, consumers may forget and continue to hold onto that offering paid isaac it works apples favorite in apples favor to offer it at that price and give it out for free and try to build that ecosystem. Caroline today is our ghibli the most important day of apple each year when they unveil their latest phones today is arguably the most important day. What is the most part and risk out there, the trade war, how do we think these are devices are going to go well in china as well as key sales in the United States and other developed nations . Yes, as far as the hardware side of things, were looking for iphone sales to actually decline here of the next 12 months because we do think investors are going to continue to hold on their to their devices until we see a 5g launch in the fall of 2020. That said, we continue to think there are trade war risks. T the end of the day joe we have to wrap it up there. We appreciate you coming on, this is bloomberg. Credit foris taking president trumps decision to fire john bolton. An an advisor to president romney says boltons departure was a result of irans resistance to trumps maximum pressure campaign. The advisor tweeted that the move is proof iran can manage u. S. Policies on iran. Mr. Trump and mr. Bolton disagreed on numerous issues, including the president s willingness to meet with president rouhani. Steven mnuchin says that washingtons policy regarding iran wont change with john boltons departure as National Security advisor. Secretary mnuchin spoke alongside secretary of state mike pompeo at a press briefing today. We have done more sanctions on iran than anybody, and it is working. The president has made clear he is happy to take a meeting with no preconditions, but we are maintaining the maximum pressure campaign. Administration says the world should take action on irans noncompliance with the nuclear deal amid new questions about iranian activities raised by the u. N. Atomic watchdog. The European Commission president elect, who will replace the current pleasant Jeanclaude Juncker in october, says a no deal brexit vote will be more difficult than an orderly brexit. She says the European Union was ready for the u. K. To leave without a withdrawal agreement, which would see tariffs and other impediments imposed on trade. We are not isolated on this globe, but we are in interaction with other players. To havecommon interest an orderly brexit. Mark she added, preparations are done. We updated whatever was necessary, but of course it is also depending on what kind of certainty we will have on november 1. More than 2000 people in the bahamas are in emergency shelters following hurricane dorian. Officials say they are running out of room. Emergency management officials said they will open more shelters as needed. The category five hurricane destroyed or seriously damaged buildings across the bahamas a week ago. The storm killed more than 50 people. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. We want to bring you some breaking news on disney. It continues to shed assets that it acquired through the purchase of 21st century foxs entertainment asset, this time selling fox net, the videogame business. The company basically choosing to focus on some of its more core aspects, including licensing characters. Two people familiar with the matter, walt disney planning to sell off the fox net videogame business. The bond market has already had a september to remember. Investment Companies Issuing 74 billion over on debt last week, a record for any comparable period since 1972. Are investors using this to their advantage . For more, i welcome Bloomberg Opinion columnist covering denmark and neil dutta. , pretty extraordinary generations in the market, particularly on the long end, people selling bonds for the first time in a long time. Is this about detail of about the tail of the recession, concerns receding . Neil i dont know. I think the bond market is still priced for a bad scenario, just may be less bad than a couple of weeks ago. I would argue the last jobs number was a reason to be buying bonds. Maybe part of what is going on is overall in the main, the market is right about inflation, but we will have some inflation, not no inflation. Maybe thats why we have seen breakeven rates,. Real rates have come up a little bit. We saw a little bit of a bid in crude recently, so maybe that is part of it. That was before bolton got fired today, or whatever. It is hard to know exactly. Joe and i were having this debate this morning. We have spoken a lot about the bond buying happening in the u. S. Being a global perspective. Yields were negative everywhere else. Are we seeing a selloff in europe sparking the u. S. . That is certainly possible. It is an interesting thing going on in europe. The appetite for aggressive using seems to be there, but unfortunately draghi is leaving soon. You have seen some relief rally in european banks. I think their appetite for the negative Interest Rate policy is coming to an end and the thought would be it provides relief to the european banking system, which may be why european banks are doing better and that may be why you are seeing life come back into the u. S. Yield curve. When you look at credit, a lot of it has been in investment grade. Ism supposed to believe this a positive sign of confidence in the market. If there is so much confidence, why arent they buying triple bs . There is the risk of downgrades and the risk the economy is ok, but maybe that is not enough for certain companies. You see others, like wework, today in the news. It is not a perfect economy for every company regardless of your business model. There are some floundering. Especially late cycle, investors have to think about which are the winners and users losers. Those companies that issued investment grade, they nailed it. You look at whats happening today, the conversation we were just having, you list 5, 6 reasons. It was one of the more orderly basis point increases in 10 year yields that i can remember. Every half hour, another basis point higher. Into the close, 1. 74 of 10year. The two year yield has cracked the seven Day Moving Average. Those seemed so far away a week ago and now it is back up. Is it a good time to keep borrowing . Do you expect corporates to keep cashing out or do you expect them to worry about recession on the horizon or worries about the u. S. Economy not being as healthy as it was . Borrowing, ims of think about the household sector. Banks have not been passing on the big drops in Interest Rates to consumers. I think the reason backup in rates one of the things you will see is Mortgage Rates will not back up as much even though 10year rates have come up. The mortgage spread that has blown out will probably come in a little bit. That could be helpful, so that may keep the momentum in mortgage applications, that may keep it going. Joe where do you think this leaves the fed . Not long ago, we were talking about 50 basis points, get ahead of the curve. Now you see the steepening of the 210, maybe the three month 10year goes positive again. Does this give them comfort they dont have to use too much ammo up front . Item of the view they should be using their ammunition up front because the more they do now, the less they will have to do later. I was i think wrong now, but i was advocating for 50 basis points last week. At the end of the day, they are going to cut 25 basis points next weekend leave the door open for another 25 a month after, so why not doing all 50 at once . Freaking everyone out. Hopefully they are watching because you make a lot of sense. To me there is more downside to only going 25 now and modestly more upside to going 50. When you think about data dependence, so lets leave the bond market out of it, look at the revision to employment growth recently. On average over the last three months, the revision between the last and first estimate is 35,000. The Unemployment Rate actually has not moved since last september, almost a year where the Unemployment Rate has not gone down. One of the things is the twohanded labor market. The activity is good, wages growing, unemployment low, people feel good about their job situation. About the momentum is slowing. If the momentum slows enough, activity stops improving. I think the fed needs to be cognizant of that. It is one thing to be doing this when inflation is above 2 , but it is not. Wants the effect of this on the market if they take it 50 basis points, hypothetical . Brian i think the point that it could freak people out is fairly valid. If the market is not pricing and 50, i dont see any reason they would go 50 besides shock and could backfire because people would say, what is the fed seeing that we are not seeing . Is what happened in august justified . Are there concerns on the Horizon Growth wise . The point about them about unemployment being stable is interesting. One of my colleagues was writing about the change in unemployment leading up to the election and how that could pose a risk to the president s reelection chances, which could affect trade policy and all sorts of things. That the fed isnt supposed to be concerned about. Only if you are retired. That was neil dutta. A really thoughtful debate. Coming up, Boris Johnson sends the pound swinging as he insists the eu will not ask the u. K. For another delay on brexit. This is bloomberg. Alix Boris Johnson promising to negotiate with the European Union after losing six key votes. Areoss party group of mps searching for their way out of the brexit nightmare with a deal that can win a majority. It has been interesting moves for the pound, sinking over the year but done pretty well on the week. Bank of England Governor Mark carney saying what is happening with sterling makes it look like an em currency. Is atrling volatility emergingmarket levels and is decoupled from other economies for obvious reasons, because it matters tremendously, the brexit outcome. Lets get the inside take of a bloomberg fx reporter. Is it trading like an emergingmarket currency . Carney said what we have been thinking. Sterling can move 1 either direction any given day, something you dont see often in group of 10 currencies. Volatility has taken a breather in the last days since we got confirmation the u. K. Parliament is going to be on a forced vacation. You have seen one month and three month volatility drop to their lowest levels in about a month. His comments may have had more truth a few weeks or months ago, but he is not wrong. It has been incredibly volatile to trade the pound. Is volatility the primary way people make distinctions between developed market currencies and em . Are there other things one would look for in the nature of how they trade that are distinct to em . Katherine i hear people talk about the size of the moves we have seen. You see that, but in volatility. The pound has lost about 20 of its value since we had the brexit vote, so that is also something we have not seen in g10 currencies in a while. That was only three and a half years ago and you would be hardpressed to find another currency in a developed market that has moved that much in that period of time. You wrote an article about how negative yielding debt isnt always providing negative returns for the folks buying it. As someone who failed cfa level two or times, i think i am an expert on kerry trade. Can you explain that for us . Katherine i have not even tried, so you are ahead of me. If you are a bond investor and you want to buy a jgb, which has negative yield, you enter a currency forward contract. The price of those contracts are determined by shortterm Interest Rates. Since u. S. Shortterm Interest Rates are so much higher than japan, you are being paid to part with your precious highyielding dollar. Thats where you are making your pick up on the trade, almost entirely from the currency hedging component. Thats great news if you are a u. S. Investor and you have dollars to lend. Joe so we are looking for weaker sterling, weaker yen . Katherine if we do get the no deal brexit, the bank of england has to ease rates, it would make sense to hedge your pound back to dollars. Catherine breaking it all down. Lets get a check of the business flash headlines. Elotonitness startup p plans to start its ipo roadshow this week. Ofy are seeking a valuation 8 billion. Joe mcdonalds wants to mop wants to automate the task of taking drivethrough orders. A developer of Voice Recognition technology will help speed up the line. The idea is to have a machine instead of a person on the others of the intercom to relay orders to the kitchen staff. It is mcdonalds third tech deal in the past six months. Shares of gamestop falling 22 after hours today after the retailer posted a wider than andcted secondquarter loss a forecast below what analysts were expecting. The company has lost business as gamers purchase titles online. It that is your business flash update. Billionaires like jeff bezos, bill gates, and Warren Buffett could have lost hundreds of billions of dollars in net worth over decades if president candidate elizabeths wealth tax plan had been in effect. Joining us to discuss is laura davidson, who covers Corporate Tax for bloomberg news. The person aren is lot of folks on wall street love to hate. We had this story out that seemed to break it down that a log of the richest people would have their wealth caught by a significant amount. Lauren depending on how long they have been wealthy, so for someone like the gates, he is about a third of where he was. Someone more recently wealthy, mark zuckerberg, it is about half. 2 on assets, about 50 million when you get over 1 billion, over the years it accumulates to a large number. The amount of these billionaires would have seen their fortune grow by is diminished with the tax. Jeff bezos would still be worth 87 billion. You can make the argument that we could do something pretty radical on taxation and even that would not stop anyone from becoming fabulously wealthy in Elizabeth Warrens america. Lauren the economist who did this research and helped Elizabeth Warren talked about, this doesnt make billionaires go extinct, just slows their growth. Alix some billionaires go as far as to say this is a good thing to take our money away from us. Lauren the richest americans have not weighed in yet, people like Warren Buffett and bill gates have said the wealthy should pay more. They have not specified how. , they, Abigail Disney have said specifically about the warren tax, we have a mall responsibility to do this, this is the best way to deal with the and income inequality. Joe bloombergs lauren davidson, thank you very much. Coming up, china removing Foreign Investment hurdles. We have more on the countrys next steps to liberalize investment decisions. This is bloomberg. Head, chinaasia removing one more hurdle for Foreign Investment 20 years after beijing first allowed capital into its markets. The state administration of Foreign Exchange is removing the cap on overseas purchases of its assets. Shery ahn is here with the story. But are scrapping the cap, people are saying it is not that big of a deal because right now Foreign Investment is not up to the cap. Shery ahn they do have the system for institutional investors. Right now they are removing those limits currently at a 300 billion quota. But right now that is not being fully used. Only two thirds of that cap being used, 111 billion. They are doing this for a reason. They need the foreign capital. It is not necessarily for the good of Foreign Investors. It is because they need the money. Listen to this Bloomberg Opinion piece. They were saying china needs to keep control over the balance of payments and avoid a further buildup of debt. China scrapping the quota is less a confident liberalization by a maturing economy and an overt omission admission that the country needs money. China has been edging close to twin deficits in fiscal and currentaccount. Romaine when i saw this, i thought why not do something more massive, a shock and awe opening of the market . When you do this it drips and drabs, who are you attracting . Shery ahn because beijing likes to have control over the markets , of what sort of liberalization they are doing. They have already implemented several steps like full ownership of insurers, full Foreign Ownership of insurers, also up security firms. We are talking about opening up the domestic credit market to foreign agencies as well. This all coming together with measures to boost the economy. We are talking about cutting taxes for small and mediumsized businesses, not to mention the bonds local governments are encouraged to issue to support infrastructure spending. All in all, beijing not carrying out the surprise shock and awe measures, like the yuan evaluation of 2018. We are seeing very small measures including the state council a couple weeks ago calling for all measures needed from the monetary side of things , which could be another rrr cut. Alix i am interested that they want more foreign money coming in. How big a player is Foreign Investment relative to the domestic spend at the moment . Shery ahn not great. We are talking about a 13 trillion bond market for china, 6. 9 trillion equity market. Right now Foreign Investors holding 280 billion of chinese bonds, 225 million of stocks. Not much really. Hadthing is they disqualified for right Institutional Investment framework in place, but they have very high expenses, not to mention regulations make it hard for Foreign Investors to repatriate money. All of this really not working in favor of china, so they are doing all they can to attract foreign capital. This week we have the fourth belt and road summit in hong kong, at a crucial time when we are seeing 15 straight weeks of protests in hong kong. Alix i know you are going to be across the belt and road conference. Dont miss daybreak australia and daybreak asia starting at 6 00 p. M. Eastern. For thetonight conversation with the Asian FinancialHoldings President and Senior Advisor to carrie lam. 9 30 p. M. Eastern. Joe i will be watching more economic data. For august coming out at 8 30 a. M. Eastern. Romaine dont miss the Opec Monthly Oil report tomorrow. Joe Bloomberg Technology is coming up next in the u. S. This is bloomberg. Taylor i am taylor riggs in san francisco. This is Bloomberg Technology. Takes thetim cook stage in cupertino tuesday. His deputies reveal the new iphone 11 models. Details on those devices and more, like the apple watch series five. Plus, apple tv plus finally gets