vonnie: we are about 30 minutes into the u.s. trading session. first of q2. we are all about the u.s. today. let's get to breaking economic data. here's abigail doolittle. march,: for the month of coming in slightly less at 59.3. the survey called for 59.7. this compares to february at 60.8. but anything about 50 signals economic growth. this manufacturing number tells us the economy is pretty strong. stocks are not so strong. declines across the board. all clearly underperforming, down 1%. the dow now higher. we had gains last week for major

averages, but on the quarter it was the first quarterly decline for the dow and s&p since 2015. lots of volatility. we are seeing this in the second quarter of 2018. let's look at two big movers on the day figure dashed a figure. humana popping higher by 7% grade this on reports that walmart, down 2.5%, is in preliminary talks to do a deal with the company. the company is also have a harder ship around providing drugs to seniors. whether it could be an outcry by orrin extension of that deal, if it is an out right by, it can be 40% premium for humana. that would put that at 375. quite an upside. ofoss the board weakness package food companies. let's take a look at tyson, camels, and general mills. a 25% tariffs imposed by china today. down,l research has tyson

saying the pork market for china, the second-biggest exporter of u.s. pork supplies, could really hurt the margins. lots of weakness there. a macro look. if we happened to the bloomberg, a flattening of the yield curve. this is g #btv be 864. a longer chart of the 530 spread. we see back in 2000, around the time of the tech bubble, we had a big flattening. before the great financial crisis in 2008, we saw flattening, a recession. one question could be whether or not we have the yield curve flattening again and whether or not that is a tell head of a recession. it stands out, considering we were talking about how yields were spiking. but of -- lots of volatility. . breaking news.

gary cohn says this is his last week at the white house. obviously, larry kudlow is taking over as chief economic advisor. he will attend the meeting between the president and larry kudlow carried the meeting is scheduled for 2:00 p.m. eastern. president trump meeting with the national economic council. gary cohn will finish his term at the white house. we will attend that meeting today. let's get back to the markets. investors kicking off q2 on the defensive. tech and trade worries lingering. economic growth and inflation concerns after today's data. we are joined now. how much can we judge it by the first day of q2 trading, michael? michael: april and the second quarter are interesting. a few reports have discussed how

april is traditionally a strong stock market month of the year. name and terme a season. a stat from sam stall ball, cfr -- stovan stove all, ll, if you look at the midterm election years, there are the only quarters where you have back-to-back negative returns. it speaks to the uncertainty surrounding politics when you head into a midterm election. thinks case, you have to that uncertainty is higher than normal. conflicting notions of what april has in store, typically for strong month, but midterms second and third quarter can be rough. vonnie: let's take a dive into , 2729 in the library, shows that march and

february sees a lot of outflows, $2.3 trillion of market cap erased. before that, good times. today, the focus is on amazon. i was looking at amazon's market cap come over with $100 billion .ost in the pullback fascinating today and worth keeping an eye on. president trump is still going after amazon. marco rubio also treated about amazon this morning -- tweeted about amazon this morning. president trump picks his battles, and sometimes he has people lining up with him and sometimes he does not. line up morecians than the people. what if his percentage of voters stop shopping at amazon? there are two risks.

we see marco rubio tweeting, if we see more and more of that, i think the concern about amazon will linger. julie: if you look at it, despite the turmoil in tech, it was best-performing group, up 2.2% are we saw defensive groups like telecom services lag. what are you hearing from strategists about what will happen to technology going forward, and whether it will retain leadership? michael: looking at the forecast, it is still there for tech, about 30% growth for the group in the s&p 500. there has not been a lot of orage to earnings estimate analysts opinions on any of these stocks, looking at facebook, amazon. analysts are still overnighted percent on these stocks.

maybe they are late or will change their tune as things go on. nothing has damaged the long-term fundamental look for these companies. --hink amazon's earnings facebook's earnings in may will be important to see if they are losing users. it is hard to judge between earnings. periods.gs the fundamental story is there appeared if you want growth, it is still the place to be. there has not been change in sentiment as far as that goes. rhetoric.re has been talk about the bond market. there was a story out saying the stock market will take more cues from the bond market. we have a jobs report on friday.

is the interplay going to look like? abigail was looking at the flattening yield curve. michael: one of the strategists at bloomberg has a cool market-based economic reduction model. the flattening of the curve -- he looks at the 110 curve, but they all tell a similar story. multiyear lows in these curves. it does increase the risk of recession. that is the most important thing in his model. the last time he read it, it was a 35% chance of recession within two years. that is still below 50% as far as two years out goes an immediate term and closer to the future. not much of a risk. the more it flattens, the more the risk would go up. curves can flatten and invert a long time before the economy turns south.

vonnie: what art strategist doing for earnings? are you -- what a sing in projections? michael: looking at the -- what are we seeing in projections? michael: not much has come down. everyone is excited about the tax cuts. big dividend payments are coming soon. people are bullish about that. there are lots of reasons to be bullish about dividends and buybacks coming. look that have to half the world is closed today, so the volume is not superstrong today. that is another extension of last week, where trading around the holiday and month and an quarter and can be misleading. 100 hasnasdaq conviction. michael regan of bloomberg markets.

you can find his commentary on the bloomberg. let's check in on "first word news." withwhite house summit russians president vladimir putin according to a kremlin policy ap are he says the offer was made in a phone call between the two leaders earlier this month. there has been no confirmation. meanwhile, north korea will be on the agenda when president .rump means with the president they will travel to mar-a-lago. the white house says they will discuss the international campaign to maintain pressure on kim jong-un's regime. china says that previously an tariffs took affect today. beijing targeted about $3 billion worth of american products, including pork, wine, and certain fruits. this was in response to the u.s. tariffs on steel and aluminum. in costa rica, pro-gay marriage

it was rejected that there was campaigns for same-sex marriage. ony pledged to take action costa rica's deficit. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm taylor riggs. this is bloomberg. tit-for-tat,g up china has $3 billion of terrorists on goods. the white house informed china should not target fairly traded goods. more on all of this, next. this is bloomberg. ♪

♪ vonnie: live from new york, i'm vonnie quinn. julie: and i'm julie hyman. this is bloomberg." announced tariffs on -- "bloomberg markets." china announced tariffs. china is urging more trade talks with the u.s. to prevent greater damage to relations. the white house said china should not target fairly traded u.s. goods great joining us more is kevin cirilli, bloomberg's chief washington correspondent. kevin, is the goal of the announced tariffs but a trump administration to get a more even playing field, and we are not quite there yet, are we? kevin: i spoke with several in the in another source

treasury. all of this collectively is what they are saying is there is not a real end game for what president trump is hoping for in regards to trade policy. that has caused confusing amongst some and the republican party. china'sans waking up to $3 billion worth of terrace on exports from the u.s., ranging in a number of areas, wine, pork, aluminum scraps. targetshat directly some conservative states like iowa. ofe have a critical president trump's trade policies. a very interesting dynamic. secretary said "china needs to stop its unfair trade practices which are harming u.s. national security and distorting global markets." they are standing behind the president who tweeted interesting things about nafta

was regards to trade. there is concern from the administration's perspective that china is taking advantage of backdoor deal through nafta. this comes at a time when they are ending the completion of nafta negotiations. a lot of moving parts. the president tweeted about nafta. he says "mexico is making a fortune on nafta. they have very strong border laws. with all of the money they make, hopefully they will stop people from coming to our country and in two hours, at least until congress changes our immigration laws." talk about the mexican election coming up in a anymoments, but is there kind of shift in the nafta negotiations at this point? kevin: a couple of months ago, the administration argued that a tweaking the program in order

for folks who are here undocumented or it legally to send that funds back to native country, they would tweet -- tweak those laws and make it more difficult to send that money back to mexico or other countries. by tying it to nafta is essentially saying that we need ife site -- type of policy you want me on board. i spoke with several sources who tell me that they are wondering what the president's end goal is with china. the chinese response, while significant, did not address something like soybeans. that is what people are perceiving this morning is that would be the next level that both the united states and china would give opening bids. that later today, president trump meeting later with larry kudlow, the new council director at the white

house on what is now reportedly gary cohn:'s last day. vonnie: china requested consultation on tariffs. the u.s. did not meet with china and except the request to talk about appeared why is the u.s. taking this stance, and then complaining that china shouldn't target fairly traded goods? criticismre has been from the chinese. there has not been a point with regards to economic policy and trade policy from the united states. the treasury department would disagree with the chinese interpretation of that. they would are great that treasury secretary steven mnuchin has been working behind the scenes and trying to be the point person break with larry kudlow's arrival at the beinistration, it will interesting to see who the point person becomes. mnuchin hadecretary

that economic vision, but someone like peter navarro, who has been upfront with the president and his trade policies don't necessarily agree on the policy front. the chinese restructuring in their government has them openly criticizing the united states for -- who for all intents and purposes are criticizing and saying we are negotiating and perhaps you don't like what we are negotiating with. julie: there is a possible meeting with a u.s. and another nation that was reported upon this morning, and that is the kremlin has said president trump has invited vladimir putin to the white house for some kind of meeting. that came from the russian side. we have, it from the white house? kevin: no confirmation from it, but a lot of eyebrows being raised on that report from the kremlin. president trump mentioned that he wanted to have a summit

between president trump and vladimir putin at the white house. you have to remember the timeline. you have a march 20 call, where the president congratulated mr. putin for his reelection efforts. the new have a couple of days later, the announcement of severe sanctions from president trump on behalf of russia. that did not come up during the phone call. we will have to wait and see. it would be remarkable should --tter -- that amir putin vladimir putin end up at the white house. julie: kevin cirilli joining us from washington. vonnie: still ahead, the shadow of president trump looms as campaigning for the mexican president begins in earnest. this is bloomberg. ♪

♪ julie: live from new york, i'm julie hyman. vonnie: and i'm vonnie quinn.

this is "bloomberg markets." a july 1 residential election campaigning has started. runner is followed by a former finance in the ruling party. party national action candidate. by a mexican government reporter. it seems like one candidate has a large margin in the polls. he is winning large part what might change that? >> today, the latest poll has shown that he has pulled ahead at the highest level this year. thes 20 points ahead of other contenders according to our poll tracker which tracks

polls together. the contains that i think other candidates who are pulling much further behind will have to create some kind of differentiation much clearer than they have. fightingthey have been between themselves for the coveted second place. none have pulled ahead. one needs to distinguish themselves as a second-place candidate in order for any anti- >> any vote to be pulled into their circle. vonnie: let show viewers the peso. it has been strickland by a likely winner. -- strengthened by a likely winner. what does that mean? four nafta negotiations, it would mean more uncertainty for an uncertain talk that we already see. he has said he is pro-free

trade, but he wants to talk tougher with trump on issues such as immigration and that could possibly derail the talks if it goes too far according to analysts. he does see eye to eye with trump on certain issues such as salaries. he wants salaries to be part of the nafta talks. that is something that trump thinks is important. the current mexican administration had been wary of this. we will see you there is more uncertainty the peso has been rising mostly on positive talks, more so than the elections. thee: tell us briefly about other two candidates. we have the ruling party the other and then

candidate. they have catching up to do. what does their rhetoric sound like, and what is their position? both are fighting for second place. the ruling party candidate has a lot of catching up to do because the ruling party has been under a cloud with scandals. julie: yes. he has try to distinguish himself. vonnie: we will have to leave it at that. there is plenty of time before the election. it still ahead, talking walmart and a potential deal with humana this is bloomberg. ♪

♪ vonnie: that is one of the highlights from tick-tock, streaming live on twitter. live from new york, i'm vonnie quinn. julie: and i'm julie hyman. this is "bloomberg markets." let's check in on "first word news."." taylor has that. taylor: the south korean pop music red velvet has a rare concert in pyongyang. kim's surprise appearance comes a month after a historic summit. for anlso preparing unprecedented meeting with president trump. hasident trump says mexico absolute power to stop a caravan of refugees from entering the country. on twitter today, the president said mexico must stop the refugees at the border. the report is the refugees are making their way to mexico hoping to seek asylum in the u.s. president trump threatened to pull out of after over the flow

of people and drugs. the white house teaming back against david token for claiming he was fired. it says he left the dot willingly amid scandal. he quit over what could be relevant. china's defunct space station has fallen to earth over the acidic ocean. china says the space burned during reentry -- arctic ocean. china says this base station burned during reentry. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm taylor riggs. this is bloomberg. vonnie: taylor, thank you. walmart and health insurance man are exploring a wide range of options including a merger. joining us is health care

reporter for bloomberg news. else a case of everybody is doing it, why shouldn't we? insurers ander retailers are getting together. this makes sense. >> it is sort of, who else is partnering next? what we are hearing is that it seems less likely that walmart would out and out by humana and more likely that they would existingn partnerships. they are at a work on some insurance products, but maybe something to bring in and build on what they have. vonnie: what does that mean? how does that work? whatry: we don't know exactly these companies plan. neither company has said anything publicly about what the partnership might take. we are hearing that it would a jointely have

adventure and expansion of existing partnerships rather than an outbreak deal. vonnie: when -- julie: when you compare this to other coming can't help but compare it to others. here,re was something presumably it would be different because humana target medicare -- the medicare side of the business more. how would it fit into an existing landscape? inhary: humana specializes medicare plans and health care for seniors. it is different from other deals we have seen. you can think about providing insurance to seniors are lots of those folk shop at walmart and pick up prescription drugs at walmart. walmart and he met arty have walmart andbout -- humana already have some deals about drugs.

if you geting that people there, they may pick up other things while they are there. they'd want to just build on that. maybe just get more health in the stores. walmart has a handful of clinics, but they have retail space all over the country. julie: they have this partnership, why he did up -- why heated up talks now? in december had cbs agreed to by aetna. vs in similar -- c december of agreeing to buy aetna. also, a different deal, vertical integration.

bringing different pieces of industry closer together. walmart has been wondering what they wanted to do and walmart. vonnie: what does it mean for walmart getting customer data if this goes through? zachary: they certainly would get a lot of data. the question is -- what was the privacy and how would they use the data? be what theywould get and how they protect it. vonnie: in terms of medical records. we will keep an eye on this. it is an evolving story. the stocks are responding. on thewe have an update possible meeting between president trump and president putin. it is said a number of venues have been discussed for the meeting. earlier the kremlin had said trump had said the white house was one potential meeting spot.

we will keep you posted on all of elements. from new york, this is bloomberg. ♪

♪ vonnie: live from new york, the vonnie. julie: and i'm julie hyman. let's get an update on the markets. we continue see diversions between the now and nasdaq. the dow is down and the nasdaq is taking a larger hit, down 1.8%. he s&p 500 is in the middle. we are seeing the selling in the 10 year yield, raising it to basis points. when you look at what is selling off, it is consumer discretionary policy and financials.

youonsumer discretionary, have some companies we think of aztec, mainly amazon, which is falling over the continuing rhetoric from president trump and now marco rubio. --ebook was downgraded pork was downgraded over tariffs from china. vonnie: julie, that is great. hasking news, a third woman the organization to nullify a nondisclosure agreement she signed as part of her job. it avoided allowing her to sue for discrimination.

let's get the biggest stories in news right now. in china, alibaba has full control of a startup. the company is not staying how much it paid. alibaba had already own 43% of the company. a fast-growing market for a local delivery of food and other products. deutsche bank is preparing to reshuffle the board amid questions of the future of the ceo and chairman. deutsche bank ceo has retain support. deutsche bank chairman has now gone through six years and three ceos.

police across the country have begun enforcing rules requiring big rigs to drive shorter hours. that is your latest bloomberg business flash. after april fools' day the worst month for tesla. elon musk joked that his carmaker has gone bankrupt. he tweeted, despite intense efforts to raise money, including msl of eggs, tesla has gone completely and totally bankrupt. but are the markets laughing? trudell,s is frank bloomberg's auto reporter. tesla is obviously facing challenges right now. the company is set to report numbers this week.

how are expectations looking? it is not a funny thing now. there is widespread expectation that the company will not meet the forecast for ending the first quarter making about 2500 model 3 sedans per week. more importantly is the idea that if they get close to that skepticism about the production surge that they mounted at the end of the quarter being sustainable being -- going forward and skepticism about the company making the next milestone of 5000 model 3 a week by the end of the second quarter. there are ongoing issues regarding manufacturing problems , shortcomings at the assembly plant in california, and a better battery factory in nebraska. a lot of headlines on the fatal accident that occurred last month that tesla has issued a

couple of blog posts about and criticism from regulators in the about the information they are putting out and the fact that they are preempting the results of the investigation. outdid see the ntsb come and say they were unhappy about that. julie: there is a view of elon musk that will own the stock and by the stock the matter what. is there any kind of criticism of what looks like musk's tone deafness with the tweets? are you hearing any criticism from analysts or shareholders? the tesla bulls said his read of the situation was that elon musk must have some level of confidence about the model 3 reduction ramp and

the financial situation if he was going to make a joke like this on twitter. there have been other commentary that has been less charitable to the company. deaf,tainly does, as tone also based again on the blog post of a death involving a model x driver recently. you saw the company walk a fine line of defending its autopilot ,rogram, that at the same time also feeling remorse for the fact that this person died, and it is difficult to do that when you are putting the blame on the driver for not having his hands on the will before the accident. yet, also saying you are sorry for this happening. it is definitely a difficult time for them to strike the right tone. i do not think tweet about bankruptcy are necessarily a good idea. you definitely see that in the

share prices. vonnie: falling again today. we have a model three tracker, and even though some employees were put on model 3 production on friday, they were allowed to do model 3, it looks like they in q1.ng if that is the case, is that tesla saying that they can make the goals? craig: they never gave a specific goal for total model 3. it has been put out the consensus figure is about 10,000 model 3 for the first quarter. figure that is a part of our tracker is a little below consensus. there is definitely concerned about the company's approach to how they are making the model 3, and the automation that the

assembly plant in fremont, california. article that came could talk about the idea that several automakers try to do this and failed and have ofe back to a manual process assembling cars. musk made not elon the right that is really interesting. if he did make the right bet and they figure it out, perhaps they can get production up to where they forecasted and talked about this huge ramp up in production. if they can, it will be costly, and it will mean that have to completely rethink the way they make the car. the company is saying a potential $2 billion capital raise might be necessary. when would be the timing to do that if they are going to have

to? isig: the $2 billion figure a challenge. and maybe this is a reason for the selloff is that you saw that feed into itself, where the company needs to raise cash, and if the shares are dropping, it makes the timing of capital less than ideal. you also have a huge selloff in the bonds, so maybe the debt particularly't be hospitable to the company raising capital that way. it is definitely feeding off of itself. julie: that stock falling a little less than 7%. thank you so much for watching the bonds. vonnie: something a little lighter. president trump in the first lady hosting the white house easter egg role on easter. the blue a session in room, and now you can see the actual roll.

the president and first lady took it seriously in terms of a competition. julie: look at that. vonnie: that is very adorable. this comes on the heels of the sayinghat was put out another former employee of president donald trump's 2016 campaign team suing the organization to nullify the nondisclosure agreement. we will leave you with the easter egg role. ll. this is bloomberg. ♪

♪ a traditional way. alex explains.

spotify is becoming a public company, but don't call it an ipo. the service is sidestepping traditional ipo process in favor of a direct listing. that means the company will not the selling any shares, and it will get -- skip the share process is essential to an ipo. when a company goes public, embarks on a roadshow. they make a pitch to wall street and judge interest from shareholders. the night before the stock starts trading, they use the input to put a final price and number of the shares to sell to investors. the shares open off that dollar amount the next day. spotify is giving all of that, and going straight to the trading. on listing day, private shareholders will simply be able to sell stop to public investors. large companies rarely do direct listings.

the risk is at the stock will tumble immediately or swing wildly in the first month of trading because the company has not gone through the supply and demand. spotify is hoping they will be excited. when they'll privately at $8.5 , and since 2017, shares have changed hands and private transactions valid anywhere from $6 billion to $23 billion. going public will mean more investors will have potential to streaming music company. spotify is promising investors big things come up to 96 million subscribers by year end. that is 36% more than it currently has. to 30% morep 20% this year, potentially reaching 6.5 billion u.s. dollars. investors will be keeping an eye on operating losses. 406ify expects to be

million dollars this year. new shareholders cannot count on having much of a voice. according to people familiar with the matter, the cofounder will hold shares with power after the listing. with the streaming music market predict it to hit $34 billion by 2030, you can bet investors hope they are plugged into the market winner. ♪ fascinating. the founder of the company who is behind the direct listing engaged the person who brought netflix public back in the day. he talked him through how it worked. netflix turned out well in the end. what is interesting about the directive versus an ipo, in an ipo, you have to wait to get outside analyst recommendations are frequently, banks work.

we have had for analysts come out and suggest buying the stock, even though we could see swings. the average price target is premium to a 45% wear shares were traded in private transactions. there seems to be optimism out there. vonnie: it is fascinating. streaming isfrom up 50%. it has awesome to. spotify has more customers than all of its competitors combined, even though we have heard about other services. spotify still has more than any combined. -- netflix net fits and that first mover. let's get a check on broader markets. as we talk about spotify, tech is lagging once again. it is interesting spotify is coming public.

these companies pulling down consumer discretionary stocks. tyson falling on tariffs announced by china on pork in particular. amazon still being discussed by the white house. if you look at major averages, we continue to see underperformance in the nasdaq. it is down by nearly 2%. we have seen that underperformance versus the s&p and dow consistently over the past week or so as the tech selloff continues. we will have more on markets and just a few moments. from new york, this is bloomberg. ♪ . . retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store

near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. vonnie: it's 11:00 in new york and 4:00 in london at 11:00 a.m. in hong kong. from bloomberg world headquarters in new york, i'm vonnie quinn. julie: and julie hyman. this is "bloomberg markets." ♪

vonnie: pure of the top stories we are covering from the bloomberg and around the world. u.s. stocks are lower on the first trading day of the second quarter. this after technology shares of the s&p 500 did the first retreat since 2015. is the worst over, were still to come? china's retaliatory tariffs kick in, beijing repeating its desire for talks as markets await president trump's next move. and why mark zuckerberg is now saying it will take a few years to fix facebook. shares are lower on the news. his 90 minutes into the u.s. trading session and markets are closed in europe, but that's not stopping u.s. traders. abigail doolittle has the latest.