Sort of waiting for it. We got it today. Very interesting, and a lot of this comes from some of the overnight data we got overseas, like you mentioned from china, and then the u. K. And from germany, and of course now here in the u. S. Markets deteriorate in the last hour or so. David we come back to the same question again and again. Is this a projection of future growth, or or of a position where people need to put their money somewhere and drive down yields as a practical matter . Taylor lets get a quick data check. It is all about bonds today. We talked about futures here after what was a really good day yesterday, deteriorating this morning. Off about 1 or so. Ns is back in positive territory. German tenyear now at a 64 basis points. You wonder what the ecb does next. When we look across asset for the safe haven plays, for me it is all dollaryen. We have again continuing to strengthen. Handle is something that catches my eye. Gina we are joined by martin adams and vince cignarella. We will put up our twostens spread. When we came on air, it was negative. What should we be taking away from this . Vincent when you look at the practical sense, when the fed overnight money, and a 10 year yield is below that, it is just a matter of time before the twoyear yield in the 10 year yield would invert in this situation. I think the bond market is probably telling us more with what happened with the president blinking on trade. By moving the tariffs, what hes basically told importers is ship it all in now in the Fourth Quarter because this might revert, so i think we might see growth being brought into the Fourth Quarter from 2020, and i think the bond market is seeing perhaps Slower Growth into next year. At now while it is hot. Get it now why let his hot. Taylor equities near record optimism,wing some while the bond markets were showing us a very different story. Who is right as you take a look at both Asset Classes . Gina if you take equities in a broad spectrum, equities are nowhere near their alltime highs. If you think about what happened over the last year in stock markets globally, the german dax off its 2018 peak, the Chinese Exchange off of its 2018 peak, you had this sort of sideways global market, with the u. S. Continuing to make new highs. Markets haveer struggled quite a bit, and that tells you that market have started to price for global weakness. I think the question coming into the news overnight is how much of this was priced. Youve got the german dax already down 15 from its peak, the German Exchange the Chinese Exchange down 20 from its peak. How much further weakness do we have to price Going Forward . My perspective is global stocks have been struggling since early 2018. Its just the u. S. Has been breaking higher. Its a safe haven. Theres still ample liquidity. The money needs to go somewhere, and its gone into u. S. Stocks as a defensive play in Global Equity markets. Taylor some of the surprise came overnight from china. You mentioned the dax. The German Economy was weaker than expected as well. If you come into my terminal, it is all about the chinese economy. Basically, the three indicators we look at, retail sales, fixed asset investment, and value for that industry is all coming in lowerthanexpected. Vince, i wonder how much of the uncertainty is coming from the fact that china really is starting to get hit. Vincent china is getting hit, but a new of caution where everyone thinks this might affect the trade situation. Setarly july, president xi over a conclave of the most in anent chinese officials town that is essentially the hamptons of china, as it was explained to me. No uncertain under terms would be bullied by the United States, that they would go the distance, and they would not roll over on ag products. In fact, he never agreed to buy ag products. Products if buy ag they dropped the ban on huawei. I think now President Trump is going at it with a much weaker hand. David maybe he wont be bullied, but might he stimulate . Weve seen week numbers in china and germany overnight. It raises the question in both cases of more stimulus. Gina i think china actually has been stimulating all year. You look at different stimulus theures in parts of government that has resulted in stabilizing pmis. Europe is a different story. Europe has this sort of institutional resistance to stimulating be a fiscal policy and is reliant on the ecb to simulate via Monetary Policy. The european pmis continue to make new lows. So this is this divergence that may affect that may reflect more stimulative policy on the part of the Chinese Government. We saw a valuation in the ivanka moving in response in the yuan that is probably helped the outlook for chinese growth inherently. Once you have devaluation of the currency, that should help the value of your exports. You should see chinese growth stabilizing the near term, especially if we continue to back off of the future tariffs. David weve mentioned trade once or twice. Yesterday, President Trump decided not to go forward with some of the tariffs that were going to go into effect in september and put them off until december, basically saying he wanted to save christmas for u. S. Consumers. This is part of what he said. What weve done is weve delayed it so it wont be relevant for the Christmas Shopping. Grinch, not so much. Vincent i think this was a bit of capitulation. He knew this from the beginning. We knew the second round of tariffs would affect consumers, while be first was targeted more towards business. This was, i believe, the message sent to lighthizer and mnuchin and shanghai. We are not and mnuchin in shanghai. We are not going to capitulate. Trump, and some type of anger or some other thought process, thinks to put tariffs on china. ,hen the situation comes home realizing how this is going to affect the economy and the Fourth Quarter, realizing china is not going to bend, he kind of had no choice. Where does this put Jerome Powell . If the economy gets hotter in the Fourth Quarter because hes brought business forward, that means powell probably has to hold his stake, and that means more contention between the white house and the fed. Mr. Powell i think is in the hot seat once again, unfortunately. Taylor our equity markets accurately pricing in risk . Weve seen significant pullback with tweets here and there. Are we fairly valued . Gina i think we are pretty close to fairly valued. Our broad model suggests 2900 is fair value for the index, and we are at 2925. If you look at where the valuation excesses actually lie in the s p 500, it is all of these defensive sectors. These are trading at extreme premiums relative to cyclical sectors, so much so that it would imply we are already pricing in recession. It is a bit of a bizarre environment because stocks have already rallied on increasing on improvingt earnings outlook. Be anxt leg higher has to improving earnings outlook because weve already certainly priced in, yes, things are slow, but the fed isnt coming to save us. Youve got to balance that right now. Certainly, investors are very defensive. They are not optimistic we are going to have great growth. This is just the latest of a spate of things dampening off is dampening optimism. Taylor bloombergs gina david bloombergs Gina Martin Adams and vince cignarella, thank you for being with us today. You can find all of the charts we just used and more at gtv on your terminal. Coming up here, more on the yield curve inversion and what it signals about a u. S. Recession with sebastian page, t. Rowe price head of global multiasset. This is bloomberg. David wework has filed with the sec to go public, issuing their ipo. We have sonali basak here to talk about it. Sonali it is finally coming out. I would urge anyone who has a terminal to look at the top live blog. What we are not going to have today is the valuation we are looking for at 47 billion earlier this year, but people are expecting it to be a little lighter. Taylor talk to me about that valuation. Saying, i was speaking with an analyst monday night who said it feels like it is a tech company, but this is a real estate company. What is it . Asali the idea of its a tech company is what they will be leaning on to sell. But people are looking at the acquisition cost, which looks ok , but the underlying cost and the growth rates are what people will be looking at right now. David is anyone talking about a possible liquidity mismatch . They make longterm commitments on leases, but people can get out of their leases pretty quickly. Sonali you see it evolving a little bit more with longerterm customers, and that is what they are going to have to prove people, that they are not a mismatch, especially in a downturn. Taylor we have talked about the type environment in which these companies the type of environment in which these companies are ipo think are ing. Are they concerned about the work it in which they are pricing . Sonali youre looking at pricing today, and i think there is an element of people wanting to get out the door while the market is still hot, but it is already getting quite chappie. David now they do the roadshow and talk to people . When do you think we will get a valuation . Sonali next couple of weeks , by the end of the month. They will go public by september. Hopefully i will be breaking it. Taylor who are the big players involved . Sonali that is what we will be looking at now. Jp morgan should be flush left on this today. David you had that story about the relationship with jamie dimon personally. Sonali exactly. He has about 40 million of Adam Neumanns leases, plus some of the mortgages. David the size of the mortgages on two houses in manhattan. You actually have both sides of this. Adam neumann, one of the things i havent been able to see yet, who is selling. Ken adam neumann cell . How much is can adam neumann sell . What is softbank selling . Taylor we will wait on that ipo on the valuation. Sonali basak, thank you for coming to share that with us. The 30 year yield plunged to a record low. Joining us now is sebastien page, t. Rowe price head of global multiasset. On the phone, ira jersey, bloomberg interestrate strategist. Did anything change fundamentally this morning, or was this just a psychological barrier . Ira i think it is a psychological barrier. Market has been trading on sentiment at the Global Economy is going to continue to slow down, and right now we are pricing for a recession sometime in 2020 or 2021. It is unlikely that we are going to get a recession in the near term based on the fundamentals in the u. S. , but the market is pricing for a lot of bad news Going Forward. David what is the chance that it is not the same signal it has been in the past because the rest of the world is in negative yields, and that is forcing money into u. S. Treasuries . Is certainlythat part of it, but that would be true in twoyear notes as well. When you look at twoyear notes in germany, they are at 80 basis points compared to positive 160 in the u. S. So this braid is even wider between in german yields in u. S. Yields. So i dont think it is only the negative yield environment. It is also the idea of the Federal Reserve is behind the curve a little bit. In a the market fear that slowing growth environment, the fed only has somebody bullets. Only has so many bullets. The worry is that the fed will continue to cut, but want to stop quantitative easing. Thats going to keep the long and depressed a little more than it would be and other times the fed might ease. Taylor i want to bring in sebastien page, whos been so patient with us. Thank you. The fed might be behind the curve. Does this inversion show you the fed is behind the curve . Pun intended, i should say. [laughter] sebastien it has been a good indicator of recessions, but you have to take into account the fact that the lead time before that signal in the recession that signal and the recession is all over the place historically. I think your earlier question, is this time different, is the key question right now. This can be one of the most Dangerous Things you can say in investment management. But we have major forces colliding. There are reasons to worry. Fed policy uncertainty, Political Uncertainty couple slowing growth, slowing earnings. It is absolutely right to take into account that global Central Banks have reentered a cycle of somewhat aggressive easing, and the policy right now is accommodative even in the u. S. People, as youe said, maybe the fed is behind the curve. We talked to scott miner yesterday. This is what he said. They are going to cut rates, and they know it, so why not just get as much bang for the buck, do something very fast, rip the bandaid off, and move on . That would send a clear signal to the market that the fed is not going to allow a recession to occur. David he was suggesting that they not wait until september for their meeting, that they actually cut again before that meeting. What do you thing about that . Ira i think this Federal Reserve wont do that. Would they do that, could they do that . The answer is yes. Now, is it possible the fed goes 50 . That the Federal Reserve cuts more aggressively than the market is currently pricing . I think that is as distinct that is a distinct possibility. Because they only have so many bullets left in their easing gun, i think it is more likely they will continue to cut 25 at each meeting, but i do think the fear factor means the market is going to continue to price for three more cuts this year. That leaves them just above 1 on the fed funds rate, and at that point they would definitely have to significantly reevaluate. We might even get more inversion of the curve at that point because then you are probably only two or three cups away from quantitative easing if they need to ease more. Taylor you said the word cycle, which mixed me think the rate cut we saw was not an insurance cut. Is this the beginning of a rate cut cycle . Sebastien quite possibly. I agree that the fed could do more should they want to. What we worry about right now is if you use excel spreadsheets, there is something called the circular reference, where your results points to another result, which points to that same result. At this moment, it seems the fed is sticking is taking its cues from the market, and the market is taking cues from the fed. Theres this circular reference in the Monetary Policy environment that is deviating from the dual mandate of stable employment and low inflation. David ira jersey, thank you so much for joining us today. Sebastien page, please stay with us. President trump surprised the markets yet again yesterday when he abruptly reversed an earlier decision imposing more tariffs on chinese goods, at least until december, and at least for some goods. Capital gaveheyman us his assessment of what was and was not covered. The new 300 billion of tariffs that was supposed to be implement it in september that is now, some of these tariffs are going to be delayed until december, this is a on hundred pages of this is 122 things delayed. The original 300 billion looks billion. 175 now from welcome Bloomberg Shawn donnan. Does that look right, that 175 tariffswill not have until december . Billion or so 100 getting hit september 1, and somewhere around 160 billion hit december 15. A lot of this is in what products are being hit. People were saying that President Trump appears to have saved christmas. The delay and a lot of these goods that are being delayed for new tariffs are things like smart phones, toys, laptops, the kinds of things you might give your nearest and dearest for christmas. That said, the september list is still pretty long, pretty significant. We need to remember that 12 days ago, when President Trump first tweeted out that 300 billion threat, we were expecting talks to go on for a while. Andere in a relative peace, things have really escalated pretty strongly since then. That 110 billion were so is 100 10 billion 110 billion or so that is going to get hit september 1 is an escalation. David he said yesterday that this is really to give some relief from christmas. Does this water down the good news . Christmas comes and goes december 25. By december 15, almost all imports from china will be subject to new tariffs that have been imposed by the president has part of this trade war. That is not good news for anyone. David thank you so much for joining us today. That is bloombergs shawn donnan reporting from washington. Markets were up on the care of delay yesterday, but Morgan Stanley strategists say we should continue to price in escalation of the trade war. Positive interpretations of todays news dont ring true to us. We do not think it meaningfully changes the uncertainty facing corporate decisionmakers regarding investments. Still with us is sebastien page of t. Rowe price. What do you make of it . What is the Market Pricing in . Sebastien it is all about the uncertainty, i agree. The market is pricing in on the equity side a relatively rosy scenario. The key point here is what is the incentive of both parties to come to a deal. China probably sees this as a longterm negotiation, a test of pain tolerance, a test of endurance. President trump, perhaps with a fair amount of political support, sees this as a game of chicken where we need to apply maximum pressure. We seen positive development on the crip it on the Christmas Shopping list, but if we say what is the incentive for a deal, there is one catalyst, and we are seeing some of it today. That would be a significant slowdown, a significant downturn. The bad news is good news type of environment. Taylor in my terminal at gtv , it was all about the china data we got overnight. Industrial production, retail sales, fixed ass