Border protection Officials Say that they encountered about 52,000 migrants at the border last month, down about 65 in may of one of 44,000. President trump had threatened to impose tariffs unless the country helped to stem migration. Bloomberg has learned the u. S. Is moving ahead with talks on restricting capital flows into china. There is particular focus on limiting chinese stocks and u. S. Government pension funds. The u. S. Supreme Court Appears to be divided over whether federal law protects gay employees over being fired because of their sexual orientation. Todays hourlong session suggested that gay rights advocates had the chance to win the votes of conservative Justice Neil Gorsuch along with the four liberal members. Separately, the court is considering whether the main job bias law, known as title 7, outlines lgbt discrimination. Global news, 24 hours a day on air and tiktoc on twitter powered by more than 2,700 journalists and analysts in over 120 countries. I am Mark Crumpton. This is bloomberg. Live from bloomberg World Headquarters in new york, i am shery ahn. Live in toronto, im amanda lange. We are joined by both our bloombergand bnm audiences. Hear the stories we are following. Blacklist backlash. The u. S. Is taking aim at chinese tech firms and markets are taking notice. Faceoff in canada. Just weeks until the federal election, main Party Leaders took the stage, and front runners traded blows, but was there a true knockout. And spotlight on fed chair jay powell. He is set to speak in colorado and just an hours time. We will tell you what to expect. Shery lets get a quick check of the major averages, so trading in the afternoon session, we are off of the session lows, but the s p 500 still falling for a second consecutive session. We have semiconductors taking the biggest heat following the most in about six weeks as we get more concerning trade headlines unsettling the market. We have a rally on safe havens, not to mention, safe haven currencies like the japanese yen and swiss franc gaining ground. When itlar story comes to the british pound. We are at the lowest level and more than a month as we continue to get more brexit turmoil, and had of thecourse i eu summit next week, and as we see the u. K. Accusing merkel of making a deal almost impossible. We are seeing the pound of trading at the 122 level. Amanda closer to home, we have another data point on the u. S. Economy that could be cause for concern. We have Producer Price indexes showing the lowest the client, the prices drop on a monthly basis by the biggest amount in four years. Up toveryear, prices percent, and that is the smallest again, and it should leave the Federal Reserve with room to ease. As we said, stocks sinking as investors and digest of the latest shock. In the trade war, bloomberg has america is moving today, our earlier bloomberg correspondent sat down with the pimco representative. 2020, youst half of ,ee gdp dip to 1 or something and if the rhetoric on the trade war gets worse, you may even be an recession simply because the consumer will lose faith in what is happening. Shery joining us now, the ceo discussndustrials to the trade war to the impact on your business. Thank you for coming in. Thanks for having me. Shery we know the Agricultural Sector is your biggest unit, and we have seen this ongoing trade tensions between the u. S. And china, and the u. S. Making up over 20 of your revenue. Are you concerned that farmers in the u. S. May end up losing market share in the long term if these tensions continue . We are concerned. As you correctly say, we are the second largest agricultural see the farmers hit with the trade tensions, and they are cautiously waiting. The demand could be better if we had a resolution to these trade rhetorics right now and trade disputes, and apart from the chinese situation, i think that it is very important to get done and we hope we get a short term revolution done there to then find a resolution to the chinese side, and if this stays longer, the u. S. Farmers will lose a farm share for sure. A lot of your equipment used in and infrastructure build up globally will be a longterm trend that will be beneficial to you, but we do have an interesting low rate environment, financing may be easy for some of your clients, but what is that outlook on how that affects your business globally . Hubertus i think that is a positive and the tax reform that is a positive. We hope despite all of the trade 4,torics that by quarter farmers take advantage of the tax benefits they have and come back to the buying table. Prices, wecommodity had a little rally on corn that benefited the farmer, but right now, it is the trade rhetoric that is creating uncertainty, plus the harvest is not yet in. Farmers are sitting on the sidelines not waiting for harvest, and in a low interestrate environment, it will stimulate some purchases we hope. Shery given the environment right now, you have announced your fiveyear plan, and you are targeting 5 compound annual sales growth until 2024. Our team at Bloomberg Intelligence thinks that this is overly aggressive. What are your thoughts . Ambitious, but it is based on investment into innovation. We are going to invest 13 billion in r d and invest in the digital revolution that is going on in farming and new holland is the leaders when it comes to automated farming. We think that we will be able to gain share from our competitors. That is the reason why 5 growth in ag might sound like a lot, but considering the Ag Industries are around are in the trust, i think markets will help in the next five years plus investing in innovation to gain share. Shery what are you expecting in terms of ag Equipment Sales . Are we flat are we going down . Ertus i dont want to the 2020, and right now we are in a blackout period, but we are in a flattish market environment as we speak, but there is hope that we get the trade issues behind us. Everybody is hung up on china right now. I think there is other possibilities and the u. S. M. C. A. , it is very important to get done, and we have just now ratified the japanese situation. They are coming back to the buying table, and then there is a delegation of china and washington so lets hope that something comes out of a. We are cautiously optimistic. Where do you put your forecast for the year ahead . Hubertus i do not talk about a recession because we are optimistic that we find a resolution to the trade rhetoric. Obviously, and we heard it from the other colleague, if the straight rhetoric and trade war continues, there will be a risk. We are preparing for the worst and hoping for the best, but i think the worst in our case in ys move. Sidewa anare atr at alltime low in ag right now. Shery great to have your thoughts, thank you. This is bloomberg. Phony trudeau, you are a and a fraud, and you do not deserve to govern this country. Currency become for policies trying to get people to vote against things. Nightsscenes from last canadian leaders debate, and they got testy at times. Took fire from all sides. The race is still looking like it is the Prime Ministers to lose. Solomon, you have been doing this a long time. We all watch these things waiting for that moment, and senator, you are no jack kennedy. Was there such a moment last night . Evan if you are looking for a winner last night, it was like trying to find a 20 bill that you dropped at amash pit at a concert, amanda. It could find it, but was a mess. Stage,ere six people on five moderators, 120 minutes. They had to make their case. The format was designed for a couple of zingers and they all had prepackaged zingers. There was no deep engagement. What happened . You have to measure this on their own terms. Andrew scheer had the big clip at the beginning. He thoughts, people are not going to watch for two hours, i will come out looking like angry guy. For american viewers, he wants to be the next Prime Minister. He has the dimples, but he ditched the dimples and he went for the full anger. It is a risky strategy because it can be very polarizing to look only angry and only oppose and not propose. The Prime Minister is the incumbent and he also had a risky strategy. He said, i will try to stay above the fray, but he risked fading away. He was neutral, and andrew shira got some partisan momentum. Who is, there was singh our third party, and he looked at it and said, no room for policy here, i will go for likability. He thought, and politics they do not care how much you know, they want to know how much you care. He probably did the best in the debates, and that hurts mr. Trudeau, because who does it help . The conservative, Andrew Scheer. Shery what topic sparked some fireworks last night . N Andrew Scheer wants to make this about trust. That is what he is trying to make the election, do not trust mr. Trudell. Trudeau is trying to make this about who has the best plan specifically about Climate Change and energy. You know i did not get enough . The economy. All of this money they are promising and very little time spent on how they are going to find the money. There must be a money tree in canada and maybe one of them has money. Shery i do not think that only happens in canada. Heaven solomon, thank you for joining us. Evan solomon, think joining us. Powellup, fed chair jay will be speaking in denver. We will get a preview, next. This is bloomberg. Shery this is Bloomberg Markets. I am amanda lange and toronto. Shery i am sherry ahn in new york. Amanda we are waiting for federal chair jay powell, so micah, lets start with what we expect from powell today. Mike a little bit hard to know. They powell had to it is a little bit hard to know. Bit hard toittle know. Does he want more time to make a decision and does he need more time because the markets have decided that he is going to cut rates. If he does not say that today, if he does pushback, he could have a Market Reaction a negative Market Reaction that he does not want, so it is a tough job going into this. You have three point 5 unemployment with wages growing even a little bit more slowly. On the other hand, you have the lousy imn manufacturing numbers. So does the fed think they need more stimulus . Saythey have to do is something that will convince the market for the feds onthejob even if they have not made a decision yet. Shery in the meantime, we continue to see diverging views coming out of the fomc. Where do we expect powell to stand in all of this . Michael everybody is about where they were. The people who have spoken out in recent days have basically reaffirmed positions that they have taken over the last two fed meetings. Charlie evans is somewhat devilish. Very debit is somewhat dovish. Jimmy bullard is very dovish. Neel kashkari also on the dovish side saying he thinks the economy needs additional stimulus, so no one has really changed their position which leaves powell with the majority going into this meeting if he wants to make a cut. Shery mike mckee, thank you for joining us from denver. The latest from the nab conference. For more on what we can expect, lets welcome our guest. Dave, great to have you with us. We continue to see very diverse views within the fomc, so how important will the messaging be . Dave the messaging is pretty important because last year at in boston, that is when he talked about how good the economy was going and really increased expectation to rate hikes, and that led to the volatility that we had in Fourth Quarter last year. I think he has a big challenge. As mike pointed out, the fed is stuck in the environment where they have really low unemployment, the consumer seems shape, jobsd are getting created at 150,000 clip, and all things that would not indicate that we are going into a recession. On the other hand, inflation has been difficult to generate and we have the trade environment that seems to be preoccupying markets and the fed. And perhaps, rightly so. The wildcard of trade and trade fictions, we are setting to see it show up. So speculating about the impact is hard. You expect a hear more about the fed of how they stand ready or how they are thinking about sudden materialization . That powellse is has recently noted the economy remains in good shape, but the trade war is one of the major risks they are worried about. I would expect them to highlight that as well today. We are seeing that from the companies that we are investing in, increasing uncertainty about the outlook, and more uncertainty about the demand outlook, and that has the potential to really pull back activity and creates risk for the economy into 2020. Shery but you mentioned that involvedtional factors in a recession here and the u. S. Are missing at the moment, and what happens with how big of a risk it would be for the fed to continue to add by cutting . I think that is a really big challenge and that is what you are seeing from some of the dissenting opinions. As they look at the economy today, they really do not see the need to have easier monetary policy, and it is hard to do more just as an insurance or something that might happen. Recordtill have the level of negative yielding debts in the world, and there were commentators saying that the u. S. Could get there. What is your expectation for even getting down around 1 , let alone negative for the u. S. . David i think the conditions that has been a lot of talking with most of our clients asking the same questions with negative yields in the u. S. The conditions where we see negative yields in other economies, particularly japan and parts of europe, those economies have different demographics than the United States. Much older populations. Productivity growth is a little stronger in the United States and again, the economy is in healthy shape. See thet really prospect for negative yields in the United States anytime soon. Negative yielding debts around the world has capped a laid on u. S. Rate and will continue to press her pressure at lower, and if we do continue to see weakness in the economy, rates can go lower from here. Shery how long without one point 5 level hold for the twopointyield . David while we remain in the environment of a live question myks on future growth, sense is that treasuries will trade around this range. As we look at the economy and where things are today, yields in u. S. Should be higher than where they are. We have a negative term premium, so yield should be higher than they are today, but i think this continued uncertainty is really impacting and straight mark around the world. In terms of when we talk sign offlation and no it, we would like a little more inflation, and what do you think the magic is that could created at this stage without going too far. We no longer talk about side,ooting on the dovish but should we be . David we should be worried about inflation. Part of the problem for Central Banks and others trying to measure inflation is a lot of Different Things happening in the economy, particularly structural elements around technology which is made the substitution for labor using technology for labor a lot easier particularly on robotics, and you have measurement issues around prices, particularly with goods and services subsidized through internet commerce and other markets. As the it is challenging fed looks at inflation iftistics to measure it, and we get a resolution in trade and we see an uptick in global growth, inflation could be a problem. Shery dave leduc, thank you so much. It is time now for the Bloomberg Business flash. Aedit suisse weighing return to Wealth Management after a four year absence. The plant to add 15 million of assets under management in miami. Verizon wants to issue more debt to find environmentally friendly projects. Follow similar deals. That is it for Bloomberg Markets and this is bloomberg. Mark im Mark Crumpton with first word news. Kosovhouse republicans slammed adam schiffs impeachment inquiry is being biased. Congressman jim jordan of ohio told reporters we wish he would have been able to testify, but we fully understand why the Administration Made the decision they did. Rep. Jordan based on the unfair and partisan process mr. Schiff has been running, you think of what the democrats are trained to do, impeach the president of the United States 13 months prior to an election based on an anonymous whistleblower with no fustanella to has a bias against the president. The guy running the process can chairmanship, did not even tell us that he met with the whistleblower prior to the whistleblower filing the complaint. Mark the house intelligence, foreign affairs, and Oversight Committee say they will subpoena the messenger for his testimony and communication