Is fundamentally committed to the realization of human rights and human freedom around the world, and im so very pleased to be in new york working to advance that noble mission. A longtimes republican activist who previously served as u. S. Ambassador to canada. She expressed again extraordinary gratitude for the bold leadership of president trump. The president has no plans to meet with his iranian counterpart while in new york for the yuan General Assembly later this month. Treasury secretary Steven Mnuchin said today that the departure of john bolton as National Security advisor will not dramatically change the administrations position on iran. President trump says he would meet with president rouhani with no conditions to discuss Irans Nuclear program. Global news 24 hours a day, onair, and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Shery live from bloomberg World Headquarters in new york, im shery ahn. Amanda live in toronto, im amanda lang. We are joined by our bloomberg and Bnn Bloomberg audiences. A thaw in the trade war. Trump Administration Officials have discussed offering a limited agreement to china that would delay and roll back some u. S. Tariffs. The European Central bank dives deep into its cool box cutting his deposit Interest Rate further into negative territory. Chipmaker broadcom set to report results after the bell. Investors will be paying close attention to huaweis impact on its bottom line. Lets get a quick check on the major averages here across north america. We have some enthusiasm, more positive talk on trade that we will dig into in a moment, potential for a change in direction on chinese tariffs. We got a read on inflation also may be factoring in. For the dow, we are seeing financials leading the broader s p 500. Every subgroup but energy higher. Tech showing leadership as well. In toronto, we are surpassing a intraday record high. We are tracking for a record close as well. Here is one that is not a record , not the kind you want to set. Smile direct posting an initial Public Offering today, and has the distinction of pricing after 23 to be the first billiondollar ipo that priced above that range to break above that level since 2008. Not a great record for this one. Shery we will see how that affects other potential ipos this year. Is also coming online. We will discuss that later in the show. Lets talk about those trade tensions easing between china and the u. S. , being felt across the world, with Global Market seeing a risk on sentiment. Now onlyhai composite about half a percentage point away from its july week. We have seen volatility on the shanghai composite relative to the s p 500 falling to its february low, a level we have not seen since a few months back, and also a lot down from its may peak, which is what happened when trade negotiations broke down after the spring negotiations. Whererse, the focus is will we go on these trade tensions between the u. S. And china . Will we have a limited trade deal . That is a big question, amanda. Amanda a question the markets have been asking. Every twist seems to create a result. With us is Michael Mckee to talk through what this might all may mean, the question of a limited agreement in china that could delay or rollback tariffs. Latest . You make of the we had a bit of a contradiction from the administration, but doesnt sound like something that may be in the offing . Mike it might be. You had a poll earlier this week that said six out of 10 americans think there will be a recession in the next year. President trumps approval rating, particularly on the economy, has fallen significantly. He seems to be in political trouble, according to the polls in states that he narrowly won in 2016, including pennsylvania and michigan. The idea of dolly the temperature down a little bit is something that would seem to make sense. But remember, this white house has been riven by ongoing inputes by the china hawks the white house, and the pragmatists. You might put Steve Mnuchin in the pragmatist camp, Peter Navarro in the hawk camp. You really dont know which side is winning, which side is putting forth what. The bloomberg story based on says theces president is considering this, not something that has been agreed to. The other report says one person told them it was not happening. You take your choice in this case. Shery what would a limited trade deal even mean . There were negotiations in the spring and we kept hearing we were near a trade deal and it just didnt happen. Mike what appears to be in this deal, the administration would back off some of the sanctions that it has put on. It is not clear whether they would take off sanctions in place or back of sanctions they have threatened to put into place. In exchange, the chinese would buy more stuff from the u. S. , particularly agricultural goods. Donald trump always focused on the bilateral trade deficit. At the same time, they would enforce laws against intellectual property. China passed a in july that cracks down on intellectual property theft. Not clear how far that goes, whether it has teeth or not. Formulation might be enough that the president could declare at least a partial victory. Just in terms of showing a victory, there is a growing speculation that there is a game for the president ahead of the election, he shows a great win by pulling back tariffs. Do you believe there is that rind of issue at play, o does he have a longer game in play in terms of chinese texts of privacy . Mike probably both at the same time. This is a bipartisan issue, do believe china has cheated a lot, and needs to be brought to heel. The agreement disagreement is about the way the president is doing it, not that it needs to be done. This president is looking at the polls and see some issues. He promised a lot of great trade deals and he has not really gone much so far. One can see where there might be an imperative to address this up and make it look like a deal, if it would rebound to his advantage going into the 2020 election. Shery thank you so much for the latest on chineseu. S. Trade tensions. Also, the ecb cutting interest 50s 10 more basis point to basis points, announcing plans to start open in the bond purchases. Originally weakened on a new before reversing. To take us through the fixed income reaction is denise simon, emerging markets debt manager at lazard. Also with us is brian chappatta. Thank you so much for joining us. Let me start with you, brian. Give us a taste of what happened in the treasury markets. We went from yields up yield down to yields up. Was a wild morning. The ecb kick things off, everybody thought draghi was bringing out the bazooka, yields fell, but then people digested it, saw there were issuer limits, limits to what the ecb could do, at least now, and yields backed off. Lowsn bonds went from the to the highs, 14 basis point move. That carried the treasury market in addition to all of the questions about whether there would be a u. S. China trump deal. This, denise, a piece of obviously a knock on effect in the emerging markets, growing concern of downgrades or some of those countries, as u. S. Dollar strength continues to wait. The ecb taking out more of its arsenal, keeping the dollar standing strong. What effect will it have on e. M. . Term, in the near financial conditions are the most important, and they have been easing. With the ecb this morning, the met cutting, china providing stimulus, this has been very supportive for e. M. Assets and the search for yield. If you look at emerging market theormance, since all of trade wars flared out last year, its been extreme a positive. I think this will continue as long as we see this accommodative policy from the developed market Central Banks. Shery the ecb rate decision, we just mentioned, the euro was whipsawed and what does this mean for the u. S. Dollar and how this would affect emerging markets . We are hearing from fitch that yens are pacing downgrading risk because of the stronger dollar. Denise the dollar has been kind of sideways for the last few months. I think the next move will depend on what the fed does. Easing, ied also wouldnt expect to see a lot of dollar strength. As long as all the Central Banks are using in a more synchronized cycle. If we did see dollar strength, that would be a risk, but i dont see the conditions that for that right now. Brian, there is growing talk about the limits of Central Banks ability to make any difference. Certainly in a time of crisis and growing pressure on the fiscal side of things. From the bond market point of view, do you see any signs of fatigue, there is not much more the banks can do that will have an effect . Brian i think that is absolutely correct. Look at what happened in europe. Not want todid start qe, and that raises a lot of alarm bells. Ok, there are a lot of folks who oppose further easing, just going back to the triedandtrue playbook of throw a lot of money at the bond market and force credit to be cheap to run the world, and that will get things going. I think that is a very valid concern. The fed will have to address the next week, too, because there will be people within the fomc Voting Committee that will say we dont think we should lower rates right now. Shery in this environment, denise, where are you seeing opportunities, especially in emergingmarket corporate . Denise in this environment, the search for low yield, u. S. Dollar denominated emergingmarket corporate is an overlooked asset class. They have very interesting characteristics that i think are underappreciated, when you look at their Balance Sheets compared to the u. S. Peers, they are less leveraged. The reason emergingmarket corporate borrow generally or refinancing shortterm debt, and for making investment, versus when you look at u. S. Highyield borrowers that are looking to leverage up, using that debt to buy shares, or to do the lbos. It is a more quality reason to borrow. Third, if you look at the yield 6 , or getting, 5 to close to Investment Grade credit, fiveyear duration, you dont have as much volatility. I think its an extremely attractive asset class right now in this environment. Amanda i imagine like me, you are happy you dont have to make investments decisions in this environment. I know you have been watching the negative yield situation closely. What part of the bond market are you focused on, for signs of alarm or fraying . Brian the negative yielding aspect of the market is interesting because its been going down, yields have backed up quite a bit over the past several days, and no one is quite sure why, which is the most interesting part. There are a lot of various components that have gone into yields rising in a developed market world, treasuries, for example. Part of it is that maybe there were session recession fears are overblown. We had a strong cpi number this morning. Core cpi was 2. 4 yearoveryear, the highest of the cycle. Maybe there is some inflation building up at least on the u. S. Side, which could get interesting for the feds decisions. People think the fed will be cutting 25 basis points at every meeting in some ways, and i think therell be a lot of back. You have a really low Unemployment Rate and now you are seeing inflation meet their mandate. Then . T do you do i think fed the will have to grapple with that. Amanda thank you for both of your thoughts on this, denise simon, and brian chappatta. Coming up next, broad, set to report earnings after the bell today. The question is how the company is moving to software and helping it escaped the broader chip market malaise. This is bloomberg. Shery this is bloomberg markets. Im shery ahn in new york. Amanda im amanda lang in toronto. Broadcom will report its thirdquarter numbers after the bell, analysts are expected the chipmaker to maintain a somewhat cautious tone, thanks to Global Markets and end the market demand uncertainty. Joins us now from san francisco. We are talking about china, chinese tariffs, and the overlays in canada, still the huawei question out there. Broadcom is tied to both. Do we expect to hear anything about either of those issues and how it will affect them . Absolutely, the ceo tends to be forthright in addressing these issues. You will remember broadcom has already lowered his annual forecast by 2 billion based on these issues. Investors are saying, he is taking everything out, we should be safe from here, expect earnings to come in about where estimates are. Anything that is a step down from an already reduced set of expectations would be particularly bad. Shery why are their shares going up . Up almost 20 this year, to mention other chip companies. Ian very good question. Broadcom is not doing that well compared to other chipmakers. We had a historically bad first half, the big promise chipmakers me to investors last year was that by this time in 2019, things would appear to be getting better. They are not. If anything, they are getting worse. Obviously, a swirl of uncertainty surrounding the trade issue. Nobody seems to know. Are way ahead of where they should be. Are way ahead of where they should be. Amanda of course, we have the ceo pushing into his are way ahf where they should be. Amanda of course, we have the ceo pushing into his acquisitions in software. Is that enough . Ian there are concerns whether he would be able to replicate his winning formula in software and appears to be going ok so far. Obviously, just when out and bought a big chunk of symantec. Some are concerned about how that will do, but fundamentally, this is still a chip company. The companys fortunes are still dependent on where demand for semiconductors is. Software is building over time. Shery we have the new iphone apple 11 this week, broad, broadcom a key supplier for them and samsung. What sort of benefits will the cpu models . Ian that is a lot of uncertainty cynicism about how these new releases will help. On the one hand, you have a new iphone, getting kind of lackluster reception, not really advancing things much, so that may not help broadcom. Then you have samsungs new offerings, which people generally liked, but we are still not there in terms of that a phoneorks like the galaxy note would need to take advantage of the new technology. Probably next year will be an uptick year. A lot of baseline expectations now. Shery ian king, thank you for joining us from san francisco. Whirlwind pelotons from kickstart on raising to an ipo over 1 billion. How the exercise company did it. This is bloomberg. Amanda this is bloomberg markets. Im amanda lang in toronto. Shery im shery ahn in new york. Call it a kickstarter success story. Peloton started making his luxury stationery bike after raising more than 300,000 from crowdsourcing. The company is now poised to raise 1. 1 billion in an ipo. Lets welcome todd metcalf from london. Directtoday how smiled is falling 18 from its ipo price on its debut. What do we know about peloton . How well are they go along with their ipo process . That is a big question, interesting time to ipo. Some companies have gone quick out of the block, but today you have a lot of hope and direct,ion around smile and that has disappointed, despite pricing above the range. Peloton is talking with investors, getting a sense of where the market is. The question for investors, this is an operational, expensive product. Is there a way they can move from lossmaking into a massmarket product, that will deliver profits in the future . The sense so far is, there is quite a lot of excitement around the ipo. You can see from the visuals, pretty as durational, glamorous brand aspirational, glamorous brand. If it goes as expected, it will make its cofounder john foley a very rich man. Amanda obviously, this was kind of his vision, a lot of romance to this, tom, and yet were in this atmosphere where the appetite for moneylosing seems to be dwindling for investors. Is there any conversations inside peloton about reducing the cash burn . Tom absolutely. That is top of investors mind right away. Spending 2000 for a bike, 4000 for a treadmill, where is that demand coming from . Peloton is trying to reassure investors that the fitness space is one of the hottest markets out there, and they are making the case, our offering is something that people will happily pay for, and they will point to their 1. 4 million subscribers already and say we think we can grow this many times. Shery i find the origin story fascinating. They started with a crowdfunding campaign. Tell us about that. Tom back in 2013, the company was set up but they needed more funding to get the bikes they were prototyping into manufacturers. So they went out to prospective said,s on kickstarter and you can buy 50 for a tshirt, and for those early birds who are going to pay 1500, they got one of the first bikes. They managed to raise that money, and since then, have raised money from venture capital, and now the Public Markets. It is pretty extraordinary that five years ago, they were raising 300 from ordinary joes, and now raising about hoping to raise about 1 billion from the Public Markets now. Amanda fascinating story, tom. Ray to have your thoughts on it. Bloomberg users can interact with all the charts you see on the network on gtv. Recent charts are featured there, you can see the analysis that backs them up. From toronto and new york, this is bloomberg. Devices are like doorways that could allow hackers into your home. And like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. 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