>> from bloomberg world headquarters in new york, i am mark crumpton. this is "bottom line" -- the intersection of business and economics with a mean streak perspective -- main street perspective. to our viewers here in the united states, and to those of you joining us from around the world, welcome. we have full coverage of the stocks and the stories making headlines. why lower oil prices are not good news for venezuela. shelby holliday focuses on ebola

crisis and travel concerns. we begin with a market rally after and eight-day losing streak. good afternoon. >> good afternoon. at the midpoint of the trading day, u.s. stocks are rallying as we close out the trading week. u.s. data is showing new home construction rose in september after slumping a month earlier. consumer confidence also surprised wall street, rising this month to the highest level in seven years. saying theyed in, will start purchasing assets in the next nine days. that said, the s&p 500 is still down roughly 6% or says the highway saw september 18. an economist at lpl financials says the markets seem to have a .y the dip mentality most of the traders get ready to hit the weekend. will the gains last on monday,

or are people stepping in because it looks like the market was oversold. >> we have also been watching treasuries -- how our bonds doing? >> essentially, falling for a second day. the 10-year yield up the most in one month. look at what is happening, spiking through the 2% level. yesterday, it was essentially flat. st. louis fede president, not known for being a dog or a hawk, but his quantitative data of easing should stay in place, it could explain the yield movements you are saying. >> thank you. more on the markets, joining me from philadelphia, bill stone. welcome. good to see you again. >> thank you for having me. >> bill, the markets are ending

the week in rally-mode. trace the arc from the beginning of the week until today -- what happened? is today's strength a relief rally or the start of a surge? ? -- surge? >> the hard lessons from the start. what we wrote earlier in the week was the week now we're in the midst of -- i will call it a global growth scare. you combine that with the ebola news and maybe they are related with the worries that if it is bad enough it impacts global growth. this around, and drove bond yields on the 10-year down to 2%. we have gone this bounceback. .ext week is an interesting one i believe that longer term the fundamentals still look good here in the united states. the one side, on optimistic because we will get

more earnings reports next week. i think that will turn out fine. obviously, we have a few around like we just had, that disappoint, but on the whole those will be good. next week we get another batch ineuropean data, the pmi's particular, and they are not likely to show things getting better. hopefully, at least, if they show stabilization that will help us hold in here. bill, you much of the fundamentals, even with europe and asia seeing their economy slowing, and with ebola fears, the u.s. remains strong, but why was that not enough to calm the markets this week? >> i come back to some of the psychology that we have gone so much longer than normal -- on our cancellations, three times longer than normal without even a 5% pullback on the s&p. you have recent holders, you might want to call them weak holders that are more apt to

pull the trigger and sell. that adds to the mix. 2, thes a tough 1, cassette in a probability around what though worst cases are around that, nobody knows. it gets difficult and that feeds into investor psychology. >> what about the comments st. louis fed president bullard made to michael mckee yesterday? the market wase looking for? >> maybe it was enough to snap the streak. in my sense, i always thought the fed was that a defendant -- data-dependent. i am hoping we do not have to do asset purchases because that is not a good sign, of course. that. mixed feelings on if that is going up, maybe that is the sugar high, and i am not too interested in that, but maybe the snapping the psychology that nobody could

help this thing was part of it. bill,l, you mentioned -- you mentioned europe, the ecb, saying it will start within the next days to purchase assets in a new program to support the economy. is this an example of another central bank stepping into quiet fears? >> i think -- they have been making -- talking about it for some time but i am sure it is part of the communication strategy. it felt to me and probably most people that most of the fear rested around europe. most would agree the u.s. -- you could disagree how strong it is, but you would not say we are on the precipice of falling apart. europe, i would not put it that far, but it is not anywhere near robust growth, and that is being nice, today. >> [laughter] you spoke about corporate earnings not too long ago.

the numbers we see right now -- are they enough to give investors confidence at least through the end of the year? >> i think if we get through and come out somewhere, again, as you always expect to do, above the consensus numbers, i think it at least sets the table to get us through to the end of the year. part of it is, of course, people will be thinking about where is the economy going, will europe be weak enough that it will impact multinational earnings? in the big picture, i still think we are seeing continued good earnings growth. what do you value stocks on really in the end is really earnings. fromll stone joining us philadelphia. thank you for your time. >> thank you. >> let's get to the top stories -- president obama has named ron our, or the ebola is

the response coordinator. he is a former chief of staff to biden and served as chief of staff to vice president al gore. in dallas, officials are asking health-care workers to sign legally binding document not to go out in public for the time being. nurse official says a infected with the ebola virus is stable and resting comfortably --the national institution national institutes of health. >> it is impossible to say how she is doing compared to others. this is an individual patient and you treat each individual patient as an individual patient. --t is how we are concerned how we deal with this patient. phan delivered a video

where she is seen in her hospital bed smiling and talking. morgan stanley reported third earnings that almost doubled and beat estimates excluding a tax benefit and adjustment. earnings topped the $.54 average estimate. to $8.7 billion from $8.1 billion one year ago. they have also cut staff. groundction firms broke on more apartment complexes in september, pushing up the pace of home building. housing starts rose 6.3%. most of the gains came from apartment construction, which increased from 18.5% after plunging in august. federal reserve chairman janet yellen says she is "gravely concerned by u.s. income inequality," but did not offer policy prescriptions. speaking at a conference on economic inequality, chairman

yellen said the lower half of u.s. households by wealth held 1% while the wealthiest 5% held 63%. >> the extent of and continuing increase of inequality in the united states lately concerned -- greatly concerned me. the past couple of decades have seen the most sustained rise in inequality since the 19th century after more than 40 years of narrowing inequality following the great depression. >> chair yellen also made no comments on the current state of the economy, or on the future course of interest rates. a category four hurricane is headed toward her muta. the prime -- bermuda. the prime minister is telling people to head for higher ground. the eye of the storm could pass within 29 miles by this afternoon or this evening, close enough to be considered a direct hit. there are still 1500 storms

without power due to a tropical storm just a few days ago. those are the top stories we're following this hour. coming up, the equity markets slides and central-bank policy -- is it there to help? we will look at what needs to be done to appease investors and what the fed is doing. that is next. ♪

two weeks than federal reserve policymakers will hold their next meeting. the fed has said asset purchases will probably conclude at the end of the month, but yesterday st. louis fed president james bullard said his colleagues should consider delaying plans to and the bond buying program. lisa abramowicz and josh wright join me for perspective on the markets and monetary policy concerns. thank you both so much. best -- about the fed's let's talk about the fed best

laid plans. throw a wrench into the plans or give a frenzied market some pause? >> i thought he was trying to give confidence because he said what will the extension of purchases do -- not that much in practical terms. it is more of a psychological boost, that the federal reserve is not stepping back from stimulus and they will keep easy money policies until six this -- sufficient signs of acceleration. >> what are those sufficient signs, josh? >> the fed has been about jobs and inflation. the jobs numbers continue to be strong so far. the interesting number is inflation numbers. market expectations of inflation have declined more than real data, so now we're talking about real economic data versus market expectations. >> at some point, because we are talking about a data dependent

said, you have to go by the numbers on the numbers tell us and elation is still below the target of 2%. but the coreght, numbers -- the more important numbers, they have not moved nearly as much. certain point, the fed is going to remain focused on real economic data on and it will take a larger movement financial markets for the fed to respond. >> from the bond market perspective, people were definitely thrown by the idea that the u.s. economy could be dragged down by the rest of the world, the slowdown in europe in particular. >> these folks have told us for the last couple of days there are still problems, a slowdown, but he'll stone of pnc -- bill stone of pnc said the fundamentals are good, so no one has to go "oh, my god, the sky is falling." >> the stronger the dollar gets, fed getsconcerned the about exports. >> is that a virtuous or a

non-virtuous cycle? >> that would be a non-virtuous cycle. [laughter] concern, can inflation accelerated beyond the 2% target in a meaningful way in the back trap of the target -- backdrop of the target? flex -- >> given mr. bullard's call, if they do not conclude bond buying, how will the markets react? back to the moves you saw in the time after the crisis -- each time we had announcement of qe, bonds and neck with his are moving together because people feel the fed will be behind financial markets. 10-year is back at 2.19%. >> people are going back into high-yield bonds, corporate bonds. i have to wonder, at one point does it start being that bad news is good news? news of more stimulus -- at one

point at -- at what point will it be viewed as a negative for risk assets? >> the interesting thing is we started to see that this week. you had a bad retail sales number, and it looks like an outsized move, but for the first time in a while it looked like you are getting a number -- normal trade. most crucially is the fact that short-term funding markets -- those rates did not rise. that is very different from what we saw during the crisis. >> josh, i guess, both of you, talk about the pros and cons of mr. bullard making his comments when he did. was he speaking to the markets or his colleagues on the fed? >> you know -- >> he is a nonvoting member. >> that is right, and he is an independent thinker. he has great intellect and is very creative. he has been outspoken about ideas that are away from the consensus. >> sure. >> that makes him unpredictable. it is hard to say how much is

talking to the markets or fellow committee members. >> a big piece is how they community, and if he can provide a staff to the markets, even without this non-consensus view, he is doing what he set out to do. >> which is "i am talking to you, but really not talking to you. >> right. the bottom line is we will remain accommodative despite what tea leaves you are reading. >> we have about one minute left , but a question for chair yellen, she was talking about income inequality, she said she was deeply concerned and americans impacted by this are deeply concerned as well. could the fed drive this discussion so policymakers act? tothe fed has the ability raise the profile of these issues and the fed has not always taken that opportunity. that is interesting about janet yellen with this federal reserve.

they have a circumscribed mandate, but they do not have a lot of scope to stand be on that and the times it has, they have gotten into trouble. >> it is interesting the fed is coming out with this because arguably their policies boosted the asset prices for people that are wealthier, own the assets, and have not really benefited lower income people in the u.s. as much. it is interesting that they are bringing out this divergence, the potential risk to the economy. it is arguably one byproduct of their policies. >> lisa brahma said -- lisa abramowicz, josh wright, thank you. we will go back to mia saini. "bottom line" continues in just a moment. ♪

>> after yet another ebola travel scare this morning, the man expected to be appointed ebola czar has his work cut out for him. what will it take to calm fears about ebola? >> a coordinated response and that is what americans need. vincent that amber could have been sick and traveling sick much earlier than originally told. hundreds of frontier passengers for multiple flights are being informed about exposure. this morning we wake up to find out another dallas health care worker was on board a carnival cruise ship in the caribbean. after the news broke the ship was denied clearance to dock in mexico. they are now heading back to texas. the rest of the passengers are

getting a $200 credit and 50% off of a future cruise. these new surprises might not be putting americans at great risk, but they are creating travel anxiety and reloading travel plans for a lot of people. the government have this under control or could we see more travel scares? would not be surprised. i have been asking health officials if other doctors or nurses are traveling and all the cdc has told me is internationally, no. they have not answered questions about domestic travels. since another travel fiasco is not out of the question, i just called the cdc a few minutes ago willk how the new czar help deal with future problems, and all i got was "i have no information for you." >> shelby holiday following the ebola crisis. thank you. we are approaching 26 minutes

past the hour. bloomberg television is on the markets. here again, mia saini. >> it is looking pretty good as we close out this trading week, stocks on their way up. , based off of it severed head -- september 18 hi is still off. the dow is off 5.5% as well, of how give you a sense october is living up to the hype of not being the best month in the calendar year. shares of urban outfitters are trading at a new 52-week low after the retailer said an ongoing sales slump could hurt third quarter profits. they have posted strong gains at anthropology. a profit thated topped analysts and it raised the low-end of its full-year earnings prospects. the company said slow market

recovery have boosted sales of thermostats and air purifiers. we are on the markets again in 30 minutes. stay right here. ♪

>> welcome back to the second half-hour of "bottom line" on bloomberg television. i am mark crumpton. thank you for staying with us. the dow industrial average is seeing its first advance in seven days and european shares ended and eight-day losing streak. trish regan joins me. an interesting week. friday.where we are on >> we have been all over the place, a return to volatility. it is an exciting story to report on during the last hour of trading. we have seen incredible swings.

we will see how much this holds up. >> what happened in the last couple of hours yesterday? on thosee market loans, and i guess for the past couple of days, and what was the traders sentiment is said we do not want to and the day like this? >> there is uncertainty. no one is sure if the federal reserve will be there should we need them. ,ou have the bullard comments qe might be something that might not actually -- or would be continued. you could put the taper on pause. that gave people optimistic thinking the fed will be there, and then started taking what does it mean that the fed needs to be there? what kind of situation are we in? is europe going to be that bad? >> recently, when you wrote the op-ed for "usa today" you talk about fed transparency, and maybe there is too much

transparency. i talked to danny blanchflower. he said we are onto something -- it is like the quiet period before earnings. typically before a big meeting of the central bank in the u k, people go silent for a specific amount of time. >> total radio silence. >> they do not talk to the media . the market begins to value things that what they should be valued, not thinking the fed is going to do this, and there could be something to that -- maybe you do not want this much communication. >> it almost sounds like the market has to do its own homework as opposed to getting a cheat sheet or a crib sheet from the fed. >> it used to be like that. years ago, you did not know whether or not the fed had raised rates, cap m study -- study.-- kept them you had to look at the markets the next day.

coming up, jeff sachs on "street smart." >> we will talk about ebola, and he is the author of "the end of poverty." he has tried to tackle this issue of income and wealth inequality. we might talk to him about what janet yellen had to say. she gave a speech on growing inequality. >> the boston fed summit. ," theregan, "street smart top of the hour. thank you so much. >> see you there. >> stay with it. "bottom line" on bloomberg television continues in just a moment. ♪

>> builders started work on more homes in september -- housing starts climbed 6.3%, surpassing the million-mark for the third time this year. a senior economist at wells fargo joins us from north carolina. mark, welcome back to "bottom line." did to see you again.

-- good to see you again. >> thank you. >> why does it seem like it is two steps forward, one step back? all we haveeally been able to manage and a lot of that has to do with the damage done during the housing bust. a lot of folks are feeling uncertain about job prospects. we recovered all of the jobs lost during the recession, they were not quite the same jobs that were lost. more peoplemillion working today than prior to the recession, but we have 2.6 million fewer people working full-time. nota lot of people are just at the point in their lives that they feel comfortable putting down roots, starting a family, buying a house. it has been tough and credit has been tougher to come by. will get into, we that, but help us understand the

dynamic between home prices, that are slowing, and home price -- home values, which are on the rise. beenll, home prices have moderating, and the reason they have been moderating is that if you go back to the recession we had a nice rebound in home prices largely driven by the influx of investors. purchases have accounted for a much larger proportion of home sales since the recession, and if you look at traditional home buyers there are actually fewer homeowners today than there were when the recession ended. now that prices have come back up, investors are backing away and traditional buyers are not coming back to the market as quickly as investors are pulling away. that is causing prices to ease up a little bit. it is not necessarily a bad thing. we are not necessarily going to see a triple dip in home prices, but the drop in prices, mortgage rates, it should restore affordability and make for a

healthier market. >> you mentioned mortgage rates. a volatility that has taken wall street for a wild great -- wild ride showed up in the interest rate. first-timeugh to get buyers to enter the market and purchased a home? , but what ielp think is really needed is stronger jobs growth. job numbers are looking a little bit better, but the quality of jobs is not that great. 34lot of millenials, 25 to --year-olds graduated in a lousy market. many are working in cities they do not want to live in and they're not likely to become roots -- put down roots there. think we will have a tough time bringing those first-time home buyers back into the picture. one of the things that the lower mortgage rates did do is they are helping to reignite refinancing activity. a lot of folks missed the boat earlier.

they might not have been able to refinance a couple of years ago and they are not missing their opportunity now. we see a pickup in volume. >> i am speaking to mark vitner, a senior economist with wells fargo. home prices in the u.s. are outpacing wage growth. is that why the rental market is seeing so much strength? part of it. big when you look at how fast prices are going up, and how slow income is growing, affordability is not as high as it should be. i mean, you would have thought, given the monumental pullback in prices we saw during the recession, the drop to the record low mortgage rates, that affordability would be off the charts, but it has actually been following the last couple of years. it has been good news for the rental market. it has been good news for the apartment market. there are a lot of folks that think this is the wave of the future, millenials will rent for their entire lives. that is not good. that is not good for them.

that is not good for society. one of the best ways to build wealth in our society is to be a homeowner. >> the index sponsored by wells fargo and the international association of homebuilders fell to a three-month low after reaching its highest level in nine years one month earlier. what does that tell us about homebuilder confidence going forward? >> it is still a relatively high level. to 55, andt 59, fell anything above 50 means most field conditions are good. they have seen a bit of a drop-off in buyer traffic, but in the measures of future buyer traffic, a still remain exceptionally strong. they are up above 60. i think it is 63. that is a relatively strong level. we feel confident about new home sales and new home instruction in 2015. you could almost" on 2014 -- almost close the books on 2014.

mark vitner >> all -- >> mark vitner always a pleasure to talk to you. enjoy your weekend. >> you do the same. ewok. -- thank you. >> it is time for the latin america report -- oil accounts exportsof venezuela's and the price of oil has fallen by 18% from a nine-month high in june. studio --ned now in this drop in oil prices, there is a timing thing going on. it comes when venezuela is seen shrinking foreign reserves. how bad will this hurt? >> it is really bad. industry is essentially dead in this country aside from oil. oil is the abundance of their exports. it is their source of dollars to pay debt, and because there is no industry, it is also their source of imports. they use it to import everything from toilet paper to

toothbrushes, to deodorant. this is a country already struggling. dropollar drop in oil is a of 780 million dollars in government revenue. importance.endous >> can we get a sense of how things are under the nicolas ?aduro presidency >> things are getting much worse and part of it is he does not have the appeal and love of the people that chavez did. he is unable to make some of the crucial changes to the way the economy is structured because they are not very favorable politically decade evaluation or increase in gasoline prices. in venezuela, gasoline is six cents a gallon. imagine if you could just increase those prices or create valuation that would help the situation, but that does not seem like something he will be doing. >> is his government's hands

tied? >> they asked for an external mary meeting of opec, -- meeting of -- extraordinary meeting of opec. opec has to make a decision to see if they can cut production, but venezuela cannot cut production, so what can they do? nicolas maduro made an announcement saying they had a plan and they will announce measures of what they can do under these different circumstances. maybe that means boosting exports of the more expensive types of oil, but we will see. apparently they have a plan. >> apparently, the plan might not be sitting well with investors. how are they reacting? >> this is bad news for investors. reserves are down. they are under $20 billion annually could reserves they only have about $2 billion. they have $3 billion of payments due at the end of the month and over the next two years to have $35 billion in payments.

you have an algorithm, a function, you type in the price of oil and how much that impact reserves, and it is very scary. the price of oil needs to be at $162 a barrel for them to have a balanced budget. this is very scary for investors. thiswould imagine that volatile atmosphere, this volatile time is also dissuading hedge funds because you would figure they would be poking around at this point. >> they would be poking around, they are poking around, and they have been poking around. some hedge funds have been involved in the trade, trading around volatility, but this is not a very convincing story. they are definitely looking, going on trips to see what the situation is. very few world of distressed opportunities and many venezuela would be a good one. if a default, recovery could be very high because they have all if prices --but

because they have all of this oil. but if prices keep going down, it could be a bad story. >> katia porzecanski, thank you so much. that is your latin america report this friday. coming up, a look ahead of the earnings to come. stay with us. ♪

♪ >> first. bloomberg. >> welcome back. this is "bottom line" on

bloomberg television and cheating on your tablet, phone, and bloomberg.com. next week, earnings -- yang yang has a preview. >> apple will be back in the news monday, first with the launch of its apple pay mobile payment system, followed by the kickoff of another big week of earnings releases. the world largest company by market value is expected to report an increase in fiscal fourth-quarter net income and earnings of $1.30 per share according to a bloomberg survey. the iphone maker sold more than 10 million of its new larger models in their debut weekend alone. some of the other companies reporting monday -- ibm, hasbro, and texas instruments. verizon, andald's, coca-cola are among the big names to report earnings tuesday. willtuesday, jamie dimon

speak out on his battle with throat cancer. ceo isive jpmorgan chase scheduled to address the personal topic at the urban land institute fall meeting in new york. the newly victorious national league champion san francisco giants will face-off against the royals in kansas city in game one of the world series. on wednesday, u.s. consumer shows in september should little change according to a bloomberg survey of economists, suggesting federal reserve policymakers might keep interest rates low for longer. also wednesday, the inaugural twitter flight -- the first ever mobile developers conference hosted by the social media giant as well as earnings from the likes of boeing, at&t, and glaxosmithkline. andon.com, general motors microsoft report thursday.

home sales data -- -- new home sales data -- friday. we can expect more ups and downs ford, proctor of and gamble, and united continental holdings out the week of earnings releases. that is a look at the week ahead. but yang yang joining us -- >> yang yang joining us from washington. as we had to break, stocks in the united states are gaining on this friday after a very volatile week. we have been talking about the wild ride -- lots of concerns about what is going on in europe, asia, and of course, the ebola fears playing on the psychology of the market, but as we approach the 3:00 hour here in the united states, stocks are on the rise. the s&p, the tao, and the nasdaq all showing strength. stay with us. another check of the market movers is on the other side of this break. "bottom line" continues in a moment. ♪

>> get the latest headlines at the top of the hour on bloomberg radio and streaming on your tablet and bloomberg.com. that does it for this edition of "bottom line" on bloomberg television. i am mark crumpton reporting from new york. thank you for joining us. "on the markets is next" have a great weekend. i will see you monday.

it is 56 minutes past the hour. bloomberg tv is on the markets. i am mia saini. let's get you caught up on where stocks are trading. as you can see, we have a nice rally across the board. all major indices up in the green. off 6.5% compared to at september-18-high. october is shaping up to be the worst month and over a year for the stock market, but not everything is on its way down. joining me with a look at some etf's thriving in this madness is eric, our etf expert right here at bloomberg. i know you have a couple interesting ones to look at including the ranger equity there -- bear. >> yes, it is up 5%. stocks.out and shorts it is actively managed. they go through accounting statements and look for accounting things they do not like and short the stocks.

hedgelike hiring your fund managers. >> are they chinese companies? [laughter] >> a lot of u.s. companies. ibm, netflix, harley davidson. this is an etf doing well and in bull market,d anything shorting the market has not done well, so it is getting its chance to shine. it is getting and inverse play. >> i guess it depends on when you shorted netflix. yesterday it lost 32%. reits did very well in october and people rushed to rates -- reits. they have been doing great. the one performing the best is the ishares residential realty etf. that looks juicy. >> up 5%.

>> that is right. etf has extrar ,aiting in health care reits which tends to be the best performer. it has extra juice over its peers. >> what about the fixed income angle? >> in fixed-income, the pimco -- sury bond etf >> that is a long name, my friend. >> one of the longest. it is the coupon data stripped out. they are sensitive to interest rates. the duration is 27 years. it is an inverse play on interest rates. when interest rates fall, this spikes up. it is up 30% because rates fell. you would have been deemed crazy if you thought this was a good taken the beginning of the year. here they fall, and something is up 38%. presidentlly with fed

bowler saying we should for quantitative easing on the table. >> that is why the zeros bounced back. they will be the first to go down if they rise. that's interesting stuff. eric balchunas we can talk about this all that afternoon. we will leave it there. eric balchunas, our jeff resident. stay with us. "street smart" is up next. ♪

>> welcome, everyone, to the most important hour of the session. i am trish regan, and this is "street smart." stocks rallying, partly on signs of more stability from central banks. we will walk you through the wild ride with bob doll. plus, the white house named and ebola czar, but will it be enough to change public opinion? i'll be joined by u.n. special advisor and columbia university and -- professor of health policy, jeff sachs. "street smart" starts next. i want to take a look at the top stories we are