>> welcome to bloomberg markets. i'm scarlet fu. investors are waiting for the talks between u.s. and chinese officials. you have the s&p 500 low or by about .2%. modestly lower here. yields also coming down just a hair, reflecting gains in the price. the dollar giving back some of its gains. oil prices rising. wti climbing to as high as $61 a barrel. now closing at the week with gains around 4%. in the equity market, sentiment has improved in the past month. an industry survey finds investors are still more bearish than bullish. they are now less bearish than they were back in early april,

which is helping keep stock indexes in a tight range following the recovery from losses sparked by liberation day. sentiment will be put to the test this weekend when the long-awaited chinese-u.s. trade negotiations begin. president trump sang an 80% tariff on china seems right after previous reporting suggested the u.s. what aim to get the number below 60% before the start of talks. peter navarro, white house trade advisor and china hawk came on bloomberg today. >> the boss says let's see what happens. it's in everyone's interest around the world to level the playing field with the united states in a way that allows us to restructure the international trade environment which is fundamentally skewed against united states. economic security is national security. that is one of the guiding principles of the trump administration. we are trying to give fairness

a chance and work with us. scarlet: joining us now is chief economist tom orlik. give us a sense of what was count as a win here. it is not president trump meeting with president xi jinping. it is their surrogates. what would look like a win for both u.s. and china? tom: it's in the interest of both sides to lower tariffs from where they currently are. right now we have tariffs on bilateral u.s.-china trade more than 100%. if you put 100% tariffs into a model of the relationship, it tells you it's basically at an embargo. you turn off all u.s.-china trade. no matter what you think about security or balance or the desirability of tariff revenue, turning off all trade between these economies is not a good idea. it's in the interest of both sides to bring tariffs down.

if we get there this weekend and if so, how far? president trump put out the 80% number. that's the line in the sand. if we are below that, the markets will consider that to be a win. if we don't get that far, well, i suspect that will be a disappointment. scarlet: 80% has been floated as the marker here. what does china want out of this? they have not floated specific numbers but from your understanding of what they are looking for, what is their goal? tom: i would break this down across a few different areas, scarlet. the first thing china would like is a reduction in the tariffs. exports to the u.s. probably around 2% of china's gdp. saying goodbye to that at the moment when they have so many challenges at home with their

slow motion collapse, that would suddenly be painful. secondly, the u.s. has sweeping controls on sales of semiconductors to china and at slowing china's advances as an ai power and technology power. china would love to see some controls being removed. last but not least i think china politically has a strong desire to be treated with respect. to be treated with respect and be treated in some respects as a peer great power of the u.s. that has not was happened. insults have been flying. an important component of what china wants as a talks get off in switzerland is the restoration of what you might call diplomatic normality in that beijing-washington relationship. scarlet: this will be the first of any kind of talks.

there has not been a big back channeling we know of so far. they will set the terms for what they might discuss in future negotiations. do we note if there have been future negotiations scheduled? matt: as far as i'm aware, there have not. trade deals are complicated. you have multiple interests across different parts of the government, different parts of the economy on both sides. you have got the dynamic of principles. scott bessent and jamieson greer from the u.s., and the vice premier from china. the people calling the shots back home. president trump and president xi. that makes things complicated. we are not going to get a comprehensive deal from these talks in switzerland over the weekend. the best we can hope for is an

agreement to agree in the future and a temporary lowering of tariffs from their current extremely high levels while the talks toward a larger agreement get underway. scarlet: people say this meeting is a small victory. tom orlik in washington, you will be monitoring the headlines and truth social post coming out this weekend. in canada, the un-implement rate climbed to almost 7% marking the --unemployment rate climbed to almost 7%. joining us from toronto is derek declue it. there are tariffs imposed on canada as well. what does this report tell us about the trade war as canada is feeling it? derek: that the tariffs are starting to have an effect. we saw the job losses were

pretty broad in areas like manufacturing and wholesale trade, the stuff that is most sensitive to the shipment of goods across the u.s.-canada border. some of this we knew about. stellantis, the big automaker had temporarily shut down plants in ontario right after the auto tariffs, around the time they came from the trump administration. we have seen a gathering of problems in the canadian private sector. the jobs report really does sort of emphasize the point that trade -- the trade war and level of tariffs is a problem. real people are losing their jobs because of it. scarlet: absolutely. the politics in canada have been fairly fluid. we got the labour party winning. mark carney as the prime minister. to what extent did that have

impact on the job market in april? derek: the job market temporarily looked better because the elections agency that runs the vote had to hire thousands of temporary workers to run advanced polls, look after voting lists, and handle things on the day of the election which was at the end of the month. without that little temporary boost created by the economics of the election we might have seen job losses. we are where private sector employment has fallen in the last two months at a rate we have not seen a recent years outside of the covid period. scarlet: thank you for putting that into context. it is interesting the election did temporarily provide a bump in jobs. what is this mean in terms of the outlook for where rates are headed? the bank of canada met in mid april. the next meeting is early june. if job losses are happening now

and the outlook is not great, where does that lead the central bank? derek: we have seen today as a result of that poor jobs report a bump in traders' expectations of a rate cut in june. the expectation of the market and of economists is the bank of canada will be on pause. they are waiting to see how things play out, to see the inflation picture. tariffs are somewhat inflationary in the short-term. if this is not entirely changed the game it has increased the odds they will be debating cut or pause when they start to deliberate in early june. that would widen further the gap between the policy interest rate of the bank of canada and the fed which is quite wide by historic standards. scarlet: derek, thank you so much for giving his context into

the employment picture in canada and the damage from the trade war on that country. coming up, expedia cutting its bookings forecast for 2025. we will dig into concerns about u.s. travel and demand for overseas. this is bloomberg. ♪ sara benzino... brandon coley... jablonski auto body llc... -whoo! -yeah! whoo! what'd she call harper? oh, you mean jablonski auto body llc? we actually sold the twins' naming rights. you know, like stadiums do? kids are so expensive these days. -here he comes! -...oasis breeze tan & spa... -whoo-hoo! -yes! if you need a tan, i'm your man. good doing business with you. or...we can look at some investment options -for you... -works for us. the right money moves aren't as absurd as you think.

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company reported better-than-expected gross bookings last quarter. that was a surprise after uber presented disappointing results. they boosted the stock buyback program to $750 million. take a look at united airlines, giving up early gains after it learned air traffic controllers really lost communications while radar displays briefing went dark early this morning at newark liberty airport. this is the second outage in two weeks. renewing concerns about the airlines' operational reliability. united has had to cancel dozens of flights this week. we are taking a look at shares of expedia. they are down about 7.5% after the online booking company cut its outlook for bookings and revenue. expedia is the stock of the hour. we welcome back natalie long with more. expedia is expecting growth but

at a slower rate. natalie: they expected a bit higher -- for the full year the expected 3% to 5%. now they are cutting to 2% to 4%. mostly due to the domestic and inbound travel to the u.s. that has been weaker. scarlet: it's a double whammy. domestic travel, demand weakening but also inbound travel from other countries, notably a market that is really hitting. natalie: the canadian market. they saw nearly a 30% slump and canadian travelers to the u.s. which contributed to the overall slump. scarlet: we say the first quarter results don't really matter because they are backwards looking. in the case of expedia, those numbers were also disappointing. that kind of makes it an outlier compared with its rival booking. why is that? natalie: expedia makes two thirds of its revenue in the u.s.

booking, they make the majority of their business in europe or elsewhere. that is the same for airbnb. we saw the scummy's beat in the first quarter but also forecasting weaker. scarlet: there's a part of expedia we don't often talk about, it's beta be business -- b to b business unit. while revenue did beat estimates , analysts are growing concerned about it and they see a couple of red flags. natalie: taking a step back, the business helps firms like american express or walmart make their travel sites. for analysts, if travelers are holding up elsewhere outside the u.s., those businesses should be more shielded from the macro headwinds. even though it is growing in beat estimates it slowed to the lowest since the pandemic. that was a point of concern. scarlet: this is a part of the

business that should be more resistant to macroeconomic headwinds. for expedia it really depends on what the company is able to control. macro headwinds, trade war concerns, worsening consumer sentiment, it cannot do much about it. that means watching your expenses. what is expedia doing when it comes to cost controls? natalie: they have laid off certain people and teams in the past year. they have been trying to drive some efficiencies using artificial intelligence across its teams like customer service. that is how it is boosting profits to be results. scarlet: natalie lung with the latest on expedia. coming up, bill ackman says harvard's endowment is heading for a painful reckoning as the university comes under political pressure. matt swain joins us next with more. this is bloomberg. ♪

scarlet: this is "bloomberg markets." time for a look at alternative investments. private equity firms are taking the longest in a decade to give investors their money back, bad news for elite universities that cannot afford to be patient now that they are under pressure from the white house. at the milken conference, bill ackman said the endowment at harvard is heading towards a

painful financial reckoning. he said, "the reality is it's a financial crisis right now. give my not know it but it is." it's probably a $40 billion endowment. he says the sale will only come at a meaningful discount to the valuation. joining us more is matt swain at houlihan loki. the idea that harvard is in talks to sell about $1 billion of its stakes, ackman says the endowment will need to take a massive discount. do you agree? matt: bill is a talented investor but what you see on the surface is not necessarily what is going on. harvard is telling about one billion dollars of the private equity portfolio. they have 40% of their overall book which is $53 billion in pe assets. it's not a strict county and of a measure as people may think -- it is not as draconian of a

measure as people may think. they are selling them for roughly two to three times the multiple the money they actually made on these assets. they are selling them at a 90% to 95% of net asset value. i see where bill is coming from. the average private equity fund is trading at $.77 on the dollar. that is down 3% over the last 90 days, for what the administration termed as liberation day. if you look at the top quality equity funds and top-quality large buyout funds, they are trading post at $.90 on the dollar. i don't have enough purview into harvard's book to fully know but i would be surprised if that was the valuation. scarlet: walk us through how sales on the secondary market unfold. how quickly can it be done? what is it look like? who's in the driver seat, the seller or the buyer? matt: this is a buyers market. i want to make no mistake saying that.

when we are running these processes or anyone is running these processes, unless it is a fire sale, these are institutional processes. it will be run over an extended period to maximize price, value, and time for cash to come in for the underlying investor that is selling their portfolio. it is not like they're going on a fire sale. if you look at harvard, they hired an advisor. they are transacting with a notable secondary firm. and would transact if they weren't. scarlet: they are not a force to seller. matt: they might be a stressed seller with the uncertainty in the market but by no means are they a distressed seller. scarlet: yale is selling some stakes as well. the schools are looking to raise cash and have short term liquidity now that trump is directing the government to withdraw funding from them. is this an effective way generally for the endowments to raise liquidity?

matt: yes. the secondary market has evolved in the last five years. it has nearly doubled. this year i think we actually might see a record again of maybe $180 billion. it's a very institutional market. yale's is more notable because they are selling $6 billion of private equity. they only have a $40 billion endowment. they are 40% exposed to private equity so they are not selling everything and not getting out of the private equity business like some people would have you believe. what people are not accounting for otherwise is attached to that is probably another $1 billion in what we call unfunded. the remaining commitments yale we need to come up with an cash, they are getting rid of those liabilities on top of what they have invested in the ground as well. scarlet: you mentioned 40%

exposure to private equity. put that into context. how overweight is that? matt: many of their peers have around an 11% of 30% allocation to private equity. scarlet: a huge difference. matt: nearly four times. they will be overexposed compared to their peers set. the number of sophisticated institutions and what we are seeing across the board, family offices, there are roughly 7000 of them. 30% will increase to private equity allocation this year. you have a number of retirement systems. texas been a civil retirement system said we will move from 13% to 20%. you have a number of institutions that actually increasing the private equity allocation. it doesn't like a harvard and you will be decreasing -- and yale will be decreasing. scarlet: investments looked different than they did 10 to 20 years ago when universe endowments begin following the yale model and begin

diversifying into illiquid assets. they can go in there with their eyes wide open. matt: there's a change going on in private equity as a whole. we are focused on the secondary market. institutional investors are getting closer to the assets that they want exposure to and able to pick which ones are in their portfolio to optimize their portfolio construction. if you look at the secondary and direct market, both are growing now is the private equity fund market has actually gone down the past couple of years. scarlet: matt swain, fantastic to get your take. global covid of equity capital solutions at houlihan loki. i'm scarlet fu. that is it for this hour. the s&p 500 down .2%, along with the nasdaq. this is bloomberg. ♪

>> from the world of politics of the world of business, this is "balance of power." live from washington, d.c. the trump -- the president is

leaving it up to scott b. i'm kailey leinz, live in washington as president trump says an 80% tariff rate on china seems right on the eve of trade talks beginning in switzerland between scott bessent, trade representative jamieson greer, and china beginning. we will have more on what we can expect with tyler kendall, live at the white house, with a line -- with insight and analysis from a former member of the international trade administration. enviable have more ahead of the trump trip to the middle east next week. jeanne sheehan zaino and rick davis will be here to discuss budget reconciliation work ongoing in congress about how much -- how high taxes could go or how much they could be cut. we begin always with a check on the markets, amy morris is always keeping track from washington. amy: