The u. K. Government says the country is not ready for a no deal brexit. Internal documents talk of chaos on trade and financial services. Shery later in Bloomberg Technology global link, one u. S. Social media giant is finding success in china. Our exclusive with linked ins ceo ahead. Lets get you a check of the markets closed in the u. S. Stocks are broadly in positive ground with the s p 500 finishing above the 3000 level for the first time in six weeks. We had health care and tech stocks leading the gains. Interesting to see the nasdaq composite closing at the highest level since july with which was the first time we saw it gaining ground in four sessions, after we saw that massive rotation away from Growth Stocks into value. That trend of slowed it down a little bit in todays session. U. S. Futures not doing much. We are looking ahead to that ecb policy decision on thursday. Lets take a look at how markets in asia are setting up. Sofie ecb is very much on the radar. Futures and asia looking mixed with south korea closed for the weekend. Marginally extending gains at the top of its close. Banks led the rally amid the shift we are seeing into value. Checking on the euro, holding levels around 110 ahead of the ecb decision which may see a showdown between the devon hawks. Malaysia also due to decide on policy. Rate cut bets are building, likely to see a hold from the bank. On the docket, Consumer Prices from india, retail sales from singapore. I want to highlight that hong kongs guess developers is to report earnings after cutting prices for a batch of apartments here in the city. Paul all right, thanks, sophie. Lets check in with check in on the first word news. Jessica thanks, paul. China has announced a range of u. S. Goods that will be exempt from 25 extra tariffs imposed last year. That is as beijing seeks to ease the impact of the trade war without lifting duties on major items such as soybeans and pork. Pharmaceuticals and lubricant oils are among the exclusions. They are effective for 12 months from next tuesday and they cover 16 categories of goods worth more than 1. 6 billion. The u. K. Governments warning of sweeping chaos from a no deal brexit with disruption to trade and financial services, and the possibility of public disorder. The document is part of a worstCase Scenario called operation Yellow Hammer. Parliament voted to force boris to make it public. The government is facing legal action. The Scottish Appeals Court is ruling the suspension of parliament is unlawful. Houseurces in the white saying john bolton left after arguments with President Trump over easing sanctions on iran. We are told the president mold the meeting with iranian leaders, but was warned against the idea by bolton. Treasury secretary Steven Mnuchin agreed with the plan, prompting the president to ask for boltons resignation. The idea of independence for catalonia is back in the news, with hundreds of thousands of people staging a mass rally in barcelona. The demonstration came weeks before verdicts in legal cases against 12 leaders. September 11 commemorates the fall of barcelona in the spanish war of succession in 1714. The succession us leaders fate face a range of charges including rebellion. Global news, 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Im jessica summers. This is bloomberg. Shery u. S. Stocks rallied with the nasdaq rising to its highest level since july and the s p 500 closing above 3000 for the first time in six weeks. To discuss this, we have investments senior your Portfolio Manager shayna sizzle. Great to have you with us. How supportive will the equity markets be given we are headed to the ecbs decision on thursday, not to mention the fed next week . Shayna i thicket will continue to be supportive. Our rates here we have seen the 10year note, increasing 20 basis points over this week. Rates rising is generally a risk on, risk off trade. We are seeing cyclical stocks starting to work. Higher beta name start to work. That is generally supportive for equities. Shery we have seen this return to value. This chart on the bloomberg showing the ratio with Growth Stocks. That has been the momentum trade investors have been focused on. Yet that trade seems to wane a little bit in todays session. How do you see this shift into value for the future . Shana i dont know if we are necessarily saying a broad shift in leadership that will be sustained longterm. What i think we might be saying is a technical correction. Velocity,tes to inflows into certain areas of the market slowing down. We have seen mass inflows into defensive lowball etfs all year long. That turn, notaw necessarily that money is not necessarily going there, it is just not going as quickly as it was. We are seeing money go into the more cyclical names which are broadly what is in the value indices now. That is what is driving this change in leadership. Im not sure if there is a fundamental reason that you will see the value outperform. Anotherwant to bring up chart on the bloomberg terminal that shows 60 of stocks are on the new york Stock Exchange, now above the 50 day moving average. Equities are so hot right now but to what extent is the fed a propping this up rather than boring things like Earnings Growth . The next quarter is looking a bit bleak. Shana a couple things worth noting. We are not necessarily saying economic is here in the u. S. We have seen weakness in the manufacturing indices. Largely as a result of the tariffs and the trade issues. However, we have seen continue to strength out of the consumer. The job markets continue to be fairly strong as well. I now the 130,000 august payrolls was considered stop considered soft. If you look at rada private Market Information which includes small business, that has been strong. You have seen an increase in Wage Inflation become an greater workforce labor Market Participation as well. Overall, the Economic Indicators in the u. S. Have a band fairly good. Have been fairly good. Estimates have been coming down more than they should have which is why we saw such good earnings versus consensus in the second quarter. The Economic Outlook is reasonably good. Why do we keep talking about the fed potentially easing . Does this play to the argument that they should be holding onto their ammunition for a real crisis . Shana i agree with you completely. The fed keeps saying the reason why they are using right now is because of Global Economic weakness which you see through the negative Interest Rates overseas. However, i actually agree. There is no economic reason in the data in the u. S. That suggests the fed needs to continue to ease. And for the reason you said, im concerned because if we do have some real economic weakness, we are losing opportunities in ways in which to deal with that. Shery away from all of that macroeconomic trend, would there be any sectors you like that is away from that and more future longterm growth oriented like those Disruptive Companies out there that are getting a lot of investor attention . Shana absolutely. We have a theme this year called be innovative. We are using that as an opportunity to take advantage of new offerings in what is called the new economies. That is what you are talking about, disruptive things. That is things like xt, the ishares technology etf, or comp komp, the spider can show new economies. And that is companies that are those Disruptive Technologies which are the technologies of tomorrow. Drones, cybersecurity, all of those things. That is something we are actively looking at. That doesnt always mean technology stocks. That can mean defensive stocks, pharmaceutical and health care oriented names. And you look at portfolios, you might think i dont see a ton of growth here. That is because growth is broadly seen as technology. That is not necessarily a place where we have a lot of exposure. We do believe in those disruptive opportunities. Shery thank you so much for joining us. Shana sissel, cls senior Portfolio Manager. Linked in game plan for china. Jeff weiner explains how the Company Operates and why he is not too worried about the trade war. Closerp next, as we inch to a no deal brexit, and internal u. K. Government reports chaos and outlines the worst Case Scenario. This is bloomberg. This is bloomberg. Paul internal u. K. Government paper outlines the worst Case Scenario for a no deal brexit. Food and fuel shortages, disruption to the supply chain, protests in the street, and chaos of the border. Bloomberg opinion columnist john author has read the fivepage document and joins us now. Five pages seems sure to cover a whole to cover all those risks what is your reaction . John my reaction is that it is not exactly the most substantial of documents he will ever see. It is very scary. You can see why they did not want to publish it. That being said, whoever the Public Relations genius was, i dont know if you can see this, but someone redacted a paragraph. That is not a great idea if you are coming freedom if you are coming free of something and then redact it. It is very concerning to the British Public that there is something that is not appropriate for them to know. This has been very poorly handled by the government and on its face is very alarming. I think the particular passage that surprised me the most was that they are worried that there will be a lot of eu fishing boats in british fishing waters at the point of no deal. And they are worried about british andeen foreign trawlers, may blockading ports in violence. Quite a startling image when you start to think that they are concerned about that come october the 31st. Shery just a second, we have a breaking news out of the u. S. The Trump Administration now can curb asylum bids according to this upper room court. The Supreme Court also saying this lets asylum a rule take effect while lawsuits are proceeding. We have seen more moves by the Trump Administration to curb Asylum Seekers coming into the united states. And now the Supreme Court saying the administration can in fact curb those asylum bids into the u. S. We will get you more details as we get them. Returning to the brexit question with john, really not great news everywhere around the world. How do we know so far as this Yellow Hammer document can undermine Prime MinisterBoris Johnsons claims that it will be ok if you go ahead with a no deal brexit . John it makes him look very bad indeed that level. I think the critical point now is whether the public buys the notion that obviously we are in a chaotic situation. Whether that is the fault of the current government or whether in some way or other, it is the fault of the eu, and proponents to brexit within the u. K. I can easily imagine Public Opinion breaking by the way, because it is not as thou opposition to brexit has handled its communication well over the last three years either. But certainly, the risks of a no deal must be reducing evermore at this point. Because it does look like a seriously bad idea. Shery does that mean that we will get that brexit delay and the bill will kick in . Prime minister johnson keeps saying he probably can get a deal until the next European Council summit. John as far as i can see, there is no chance at all of a deal between now and october 31. It seems ridiculous to suggest there is any way that can happen when you think of the sheer amount of detail, sheer amount of time that went into the original deal that was not thought to be good enough. Thealso have to thrown in sheer problems with constitutionality that the Prime Minister is having. One of the more startling things is the new story today about brexit is not the highest court in scotland has ruled that a Boris Johnson lied to the queen, provoked parliament under false pretenses and parliament should be back in session. Arguably, as big a constitutional crisis as written has had in many decades. And yet it is not even the main story surrounding brexit today. I think the Prime Ministers room for maneuver when it comes to trying to wriggle out of what parliament is trying to do at this point looks very limited indeed. That does not mean in the final analysis he cant persuade people that we need to get brexit over with, let the other people and so on, that we just want to have over it. It doesnt mean that he doesnt have the last laugh. Shery he can still persuade the public. John yes, but the idea that he is going to get out of the eu by october 31 is very unlikely now. Shery john authers, thank you so much for that, are Bloomberg Opinion columnist with the latest on brexit. The London Stock Exchange weighing up on unsolicited 37 billion bid from Hong Kong Exchange and clearing, it challenges current plans to buy a data provider. Matthew boxes here. Is a lot of skepticism that this deal will happen. Mostly because people are concerned about chinese ownership of lse if this actually happens. Matthew that is fair to say. That said, there is no antitrust riskier. These companies dont overlap. That is not an issue. There is not a law in the u. K. That says Hong Kong Exchange cant do this. I think the Political Risk is there. It is no secret when anyone wants to buy someone elses exchange, politicians tend to flip out. These are considered national groundrules. Ground jewels. Whether it will be the key factor, im not so sure. I think it will come downi thino whether the managers of the London Stock Exchange think it is in the best interest of their shareholders and whether shareholders will be on board and that is an open question. Paul there is a couple of hurdles right there, the regulatory and the board thinks. There are many moving parts. How about the refitted of deal . How does that fit into this . Matthew thats what it is all about. Hong kong exchanges went into stop the London Exchange from doing this deal which would be a transformative transaction. The London Stock Exchange wants to move forward. They said today, we are committed to a refitted of deal. It is a great deal for the London Stock Exchange. Its a great deal for the ceo of the London Stock Exchange. Its also just as important to Hong Kong Exchanges to prevent them from buying this. This is classic m a. If you want to keep them from getting stronger, by them. Or keep them from doing something transformative. Paul is that how this fits in with the broader consolidation of exchanges . Matthew it is interesting you say that. You have to look at this and the broader consolidation of exchanges. The exchanges have come together for the last 10 to 15 years. There is not a lot else you can do out there. Now is the time for the Hong Kong Exchange two pounds. It was one of the last group sitting out there to be had. If lse does this transaction, they are out of reach. If Hong Kong Exchanges is not able to consummate the deal, there are not a lot of other things for them to do. We are in the last innings of the consolidation wave that has gone on for 10 years now. Paul matthew monks, thank you for joining us. A reminder, bloomberg lp, the parent of a Bloomberg News and Refinitiv RefinitivBloomberg Intelligence competes with and Thomson Reuters to provide Financial News data and information. Bid forhave more on the the lse with columbia universitys fabio salva dellien the next hour on daybreak asia. He thinks a deal is not likely. This is bloomberg. Shery im shery ahn in new york alongside paul allen in sydney and Bloomberg Technologys taylor riggs in san francisco. Lets look at the top global tech stories. Car sales inric china fell for a second straight months. One of the most durable pillars in the global auto market is crumbling. Deliveries Avenue Energy vehicles declined to 16 from a year earlier to 85,000 units. That follows a 5 fall in july. Fell after hours after adjusted First Quarter revenue mist at the lowest estimate. Income was 9. 2 billion, up year on year, below analyst expectations. Oracle said the ceo is making taking a leave of absence for healthrelated reasons. Ridehailing rivals uber and lyft gained in the session on news that the governor of california is open to talks about potential exemption from legislation that would force them t