policymakers may wait to raise interest rate. and the next fight is the looming congressional shutdown. john boehner demands funding be stripped for planned parenthood. betty: and we will tell you why the suv model x is a key part of this strategy. pimm: good afternoon, i'm pimm fox. that he: let's take a look at how markets are trading on this midday. the fed coming out surprising some. the markets byin deciding to stay on rates.

down by 7/10 of 1%. we are bouncing around our lows of the session. i want to show you how rod base the selling is right now. all of them are in the red him. down almost 2%. pimm: people buying utilities as a defensive move. you are looking for a yielding instrument. betty: speaking of oil prices and energy stocks, the reason why is oil prices are lower. the fed and noting their inflation target is not going to be met. part of it having to do with how low oil prices are three at volume, trading on futures, just skyrocketing after the fed.

pimm: let's see how treasuries are performing. take a look here come buying at the 10 year end 30 year. ,et's take a look at currencies see how dollars are faring. the euro gaining against a dollar. and the pound sterling holding on to those gains. let's get straight to some of the top stories on the bloomberg terminal. all abortions after 20 weeks -- house has advance legislation that would end government funding for planned parenthood.

betty: in measure what the economy may look like, the conference board index is up 1/10 of 1%. pimm: and u.s. and russia military officials will begin talks over russia's buildup in syria. russia has stepped up its military support for bush are al-assad. most military talks in the united states and russia were canceled after russia annexed crimea from ukraine. and women may not be a asked to compete that maybe asked not to compete for several front-line jobs. to prohibit women from serving certain infantry position.

it also puts the marine corps at odds with other three military services who are expected to open all contact jobs to women. pimm: and protesters took to the streets after a military to in the nation. three people have died and 60 others were wounded. the transitional government has been passed with organizing election scheduled for last month. interim president was detained and released today. betty: the general election will be the sixth for the eu nation. see burress -- alexis tsipras call for a vote for his agreement of eu creditors -- his agreement with eu creditors. a pimm: and 11 house republicans

are calling for action against climate change. they signed on to a resolution thursday to figure out humans have a role in global warming. it stops short of calling for specific solutions. those are your top stories at noon. betty: pope francis lands in cuba tomorrow. a key role in thawing out relations between the u.s. and cuba before he arrives here in the united states. pimm: keeping your returns steady or even making money during extreme periods of volatility, we will talk about alternatives liquid investments. back to the federal reserve's decision to keep interest rates unchanged. many read this is a failure to move as a sign --

betty: q market speculation when the fed is going to hike rates. many traders will think it is in december. is oliver renick. what was the reaction at that time? oliver: i think it was hands up, here we are again. are on theere trading floor. they thought the rate was going to have a twee five basis point hike. there was majority that was surprised. if you look at fed funds futures going into this there would not be a rate hike. i don't think that was a sentiment going into this. removing that uncertainty.

markets don't like uncertainty. it would have been nice over the run. ending the day down with 3/10 of -- there is some extra volatility around that. they like this kind of environment. it is back to back of the same all. pimm: based on your reporting, are you all struck by -- are you at all struck by how the federal reserve and the rest of the economy does its own merry thing over here and not interested in guys on the 14th floor thing?

over: -- oliver: the point about the discrepancy between certain , we have seentors different singles in the bond market. what was interesting about yesterday's move was stocks were up two and three quarters percent in the past five days. goings the biggest rally into a meeting in the past three years. pimm: you continue your thoughts. this is the s&p 500 going back to the beginning of the year. oliver: i don't think they wanted a viciousness. they wanted yellen to say that even if they don't move now, here is what our plan is. betty: what did the traders say

to you about positioning through the end of the year? oliver: at this point i think it will come back to looking at some of the fundamentals of companies. we have seen some of those projections come down. berkeley removed the eps estimate to be flat. the fedple are saying is still out there, it has that uncertainty. i don't think there will be a whole lot of big positions. i think we are going to see big moves. what we seeore of the past week going into the end of the year. pimm: you have to find out where you are going to be in december. oliver: they don't see it in december. pimm: thanks so much. bloomberg's oliver resnick. ready bank we want to turn to

the corporate borrowing side. the companies have more time to ctinue borrowing at ultralow interest rates. below --ning us is a is not be locked med -- joining nabila achmed. nabila: it has driven a huge day lucian to the block -- into the bond market. people are away from m&a. there are borrowing because they don't want to bring money from overseas ox -- overseas operations. that: wasn't going to be devastating for corporations if the rate was going to rise to five basis points? nabila: even after 25 basis

point rise, there was no reason for companies to not's -- to stop going to the markets. sector ande investment grade had a cushion, some bigger than others. a big cushion compared with energy. want to get your thoughts on banks. with this rate increase, not good for financial institutions. how do they increase interest rates for the loans? nabila: he keeps saying the fed isn't going to be so windowed. it is about time we reward favors. pimm: taking a look at $7.9 trillion.

betty: that raises a question of whether companies are overleveraged now. merger tasteer big on borrowing. companies are being fed these low rates. are they low -- are they leveraged? nabila: energy companies are really struggling to refinance. ,ome of that debt they raised that is a problem. m&a isn't going away. don't have another way of growing earnings, other than buying up. pimm: the idea being that if you are looking for any kind of tax-advantaged investment, people will look for municipal bonds. has compressed a lot.

is there enough supply in the marketplace? >> investors don't have a lot of places to put their money. they are happy for more supply. earlierseen spreads this month. people were talking a little bit at it. the yield is down 10 basis points. betty: thank you so much for joining us. pimm: thank you so much. ahead, a potential government shutdown on the horizon, and how does planned parenthood factor into all that?

pimm: let's take a look at the top political stories crossing bloomberg at this hour. forld trump is taking heat not challenging a supporter that fired off an anti-muslim question and claiming president obama wasn't an american. we know our current president is a muslim. you know he is not even american. camps wherening they want to kill us. when can we get rid of them? trump: a lot of people are saying that and saying that bad things are happening out there. we will be looking into that and plenty of other things.

betty: one the washington post asked trump about his non-reaction, he said the bigger issue is obama is waging war against christians in this country. he is clearly operating from a different playbook than some other republican presidential hopefuls. here is how john mccain responded to a similar type of question back in 2008. >> i can't trust obama. i have read about him and he's an arab. >> no ma'am. family man citizen that i just happen to have disagreements with on fundamental issues, and that is what this campaign is about. he is not. pimm: the current leading democrat contenders sent out a trump not done" false statements about potus

disturbing and just plain wrong. betty: let's bring in phil mattingly to get his take on this and the looming budget tight. i think a lot of people were not many, although given that trump was a leader in the birther movement. is that going to hurt him? phil: it is a great question if this will hurt him. will probably hurt him more. concerns gets to is the you have heard from a lot of establishment republicans. they have noticed donald trump appears to be tapping into a strain of the farc right -- of the far right that concerns them, a strain that is after african-americans, against hispanics, against jewish members of society. what this does more than -- you knowe is

this better than anybody. very little has taken down trumps numbers. take a couple of weeks to see how this sinks in and if this is specifically a reason for a drop. pimm: let's talk about the concern over the federal government's budget. we have a budget impasse. closer to a government shutdown. give us the background. even talkingma was about this issue in a speech at the business roundtable this week. phil: the white house concerned what this is leading up to. the back story is this, 10 videos and undercover videos have been released by a group.

the language and descriptions he used has been described as grotesque, not only by conservatives against abortion that by democrats who are supportive of planned parenthood. conservatives, particularly the far right of the party, has said flat out there will be no funding of the government if it includes the funding for planned parenthood. $500 millionceives . it has to do with the other reproductive services provided. they are willing to vote down the government measure if it includes planned parenthood funding. there is no path forward for republican leaders. changes wee major are heading for another shutdown. even republican leaders would acknowledge that. inre are a couple of things play. bills.re a couple of

the house is considering putting of a separate measure to fund planned parenthood. that is not assuaging the most hard-core conservatives on this. vote for a clean continuing resolution, a clean funding bill. john boehner will have to rely on democrats to try to pass something through. everybody seems to assume that is the end game. that potentially puts john boehner's speakership at risk. we are going to go up to the deadline. betty: tune into all due respect today. stay with us on bloomberg market day.

that he banged this is the bloomberg market day. stocks are selling off in the wake of the fed's decision to hold rates steady. senior markets correspondent julie hyman taking a look at what is happening in the markets right now. area --ouncing along bouncing along. julie: the nasdaq down. a pretty broad-based selloff. in addition to the fed holding rates steady and uncertainty looming over the markets, we saying hisdimon firms trading revenue will be the same as competitors. we have had bank of america and citigroup say they could see trading -- those other stocks are down. i want to figure out how has

these trading revenues done? is for the global investment banks, not just for those in the united states. year over year, with the exception of two quarters ago, pretty consistent declines in trading revenues. that would bey pushing down those bank stocks today. pimm: pope francis will be visiting cuba tomorrow as he then makes his way to the united states. it could play a critical role in helping the two countries come together. political hope. enough heerestingly has sounded off on a lot of issues, not just u.s. cuba relations but also climate

change and income inequality. people say he is a much more compassionate hope, even his stance on gay marriage. arrives base andrews. he will be welcomed at the white house. later on in the week, friday will be his first full day in new york and that he will be spending time in philadelphia. betty: appeared with the president wanted to greet him at the airport. this is how important it is. we will be back with much more on the markets.

♪ betty: welcome back to the bloomberg market day. let's get a look at the stories making headlines. jamie dimon says the u.s. banking system is much safer now than it was.

the ceo spoke before barclays. he says the capital is more diversified than it used to be although he is concerned about what happens when the economy gets worse. >> what i worry about is when you have a really bad environment. banks will be much more restricted. although aittle bit, lot of that will be made with non-banks. betty: we will all be worried if things get worse. he says his other concern involves treasuries. ground & gamble breaks on one of the largest economic development projects in west virginia history. the $500 million manufacturing hub is expected to create hundreds of full-time jobs, and the second to be built on u.s. soil since 1971. about 100 construction jobs will

be available when construction starts next month. bloomberg news reported meeting with small oil producers about takeovers and joint ventures. many drillers have been forced to shut down rigs or partner with a company with deep pockets. the obama administration is easy more economic sanctions on cuba. news organizations and telecommunications and establish a presence in cuba, so can mailing and religious organizations. the next stop for the irs, belize. a federal judge says the irs can serve a so-called john doe summits over correspondent accounts in the lease. americans may be using those two dodge tax payment. we have seen more market

volatility since mid-august than at any other point since the financial crisis. the s&p's 10% drop in late august was swift and painful. alternatives, you avoided much of the bloodshed that we saw. we spoke about this a few weeks ago. look at the liquid alternative fund versus performance. they are not without risk. someone who knows a lot about this segment of the market is larry of goldman sachs. head of a group that sells liquid alternative funds. larry: good to see you, daddy. betty: describe exactly what these liquid alts are.

larry: these are relatively new. some of them have been around for some time but really since 2008 we have seen the bigger growth of the asset class. i think that is largely due to post-financial crisis we saw investors looking for liquidity and transparency, and frankly that is what these provide. betty: what are they, a small part of people's portfolio because they are alternatives? larry: generally is what we see is people use these as a piece of their portfolio. they should certainly have the majority of their assets in stocks and bonds, but adding alternatives to your portfolio can dampen the volatility of the portfolio. when you showed the chart of the s&p what happened over august. betty: there is two charts. mmx and the gs post --

gs: next. a drop earlier next month. explain this to us. larry: we saw a huge selloff in the equity market and basically, the two weeks in the middle of august. but we saw when we looked at how the liquid alternatives perform, this was really the first true test it we saw for liquid alternatives, that by and large they did with they were supposed to do. they outperformed the equity and another interesting statistic which i do not think we have a chart for, relative to a 60/40 portfolio, what a lot of investors have come alternatives outperformed that portfolio. they really added another source of return for investor portfolios. asty: but they only do well we're seeing with these charts. fund so young-short can see the big decline.

it did not drop as much and outperformed after that. is it only good than in a bear market? larry: absolutely not. think about liquid alternatives is they are another source of return for the portfolio. you have stocks, you have bonds. what investors need now is another way to make money. what liquid alternatives do is use stocks and bonds, trade in them in nontraditional ways. they may use some leverage, but they can use nontraditional investment techniques like hedge funds do, and use them in a way to generate what is really a different source of returns. it is adding an additional return driver into your portfolio. time,e have seen over they can dampen the volatility of a portfolio. if you are long-term goal is to generate 6%, 8% of your overall portfolio, if you get there and

it is very volatile you get to the same end. if you can smooth that path to the ultimate goal, you will behave better. you will not sell in the middle august. betty: you will have some protection. larry: and because your portfolio is not quite as volatile hopefully you behave more smartly. betty: did the fed help things along the way? volatility is likely to continue. are more of aalts topic of conversation at with concerns about interest rates, the thought of adding another return driver is important. betty: what kind of flows are you seeing coming in? larry: this has been one of the most rapidly growing asset classes within the acid management world. -- asset management world. 300 billion, depending on what stats you use but it has been growing at roughly 20% a year

over the last several years. it is definitely an asset class that continues to grow. i think the path towards growth continues because as investors get more familiar with the asset class, i think right now a lot of investors are just not that familiar with liquid alternatives. hedge funds have been around for decades and institutions and wealthy individuals have been investing in alternatives for decades. what is know about liquid alternatives is that now, these types of trading strategies can be offered to the retail investor, to everybody. betty: because it is a mutual fund, essentially. larry: any mom and pop can buy it, you can put it in your ira. betty: what does that tell you about the psyche of the investor? it is still a small part of the asset management market. larry: i think investors are nervous, and rightfully so.

with that said, i think investors are open to new ideas to make money. i think as they sit there and look at their portfolio they realize there has been volatility in the stock market and you have seen a huge run overall in the stock market. they are certainly concerned about their fixed income portfolio, or should be, given where rates are and could go. they need to think of other ways to make money and they are open to these conversations. educating investors and advisors about liquid alternatives is an important part of what we do every day. betty: it is about 10 to 15% of a portfolio? larry: generally, in that ref range. betty: thank you so much. larry of goldman sachs on liquid alt. coming up on the bloomberg market day, what was behind china's decision to devalue its currency?

you will hear part of my interview with a top chinese official. the new operating system could dramatically alter the online advertising business and could have major implications for companies like facebook and google. ♪

♪ betty: welcome back to the bloomberg market day. i am betty liu. let's get to julie hyman for big stories in the market day where almost all sectors are in the red. julie: we see a pretty steep selloff in the wake of the fed meeting. this is the worst day after fed when itsince last july was more sort of the global economy that was calling a selloff, versus directly tied to

the fed. that seems to be somewhat the case today. that is the implication of the fed not decided yet to raise rates, that the global economy is not strong enough for it to do so. we are seeing that concern drive down u.s. stocks. you see again what that he was referring to. -- betty was referring to. you have one subset of financials that have been doing well, the reits. see the oilyou majors, the large cap oil stocks that are down today. taking relatively large hits on a percentage basis as they fall along with the underlying price of oil. one of the many victims we are seeing across asset classes of this global economic concern. if you look at oil prices and the decline we are seeing, you

have more than a three and a half percent drop in those oil prices after steady trading wernight, a big drop as began regular trading today. i also want to look at the dollar, the dollar is faring better throughout the day. so thereen recovering does not seem to be as much concern reflected, or perhaps the idea as janet yellen expressed, the domestic economy is on pretty solid footing. i want to take a look at treasuries because we have been seeing those yields go down, especially a plunge in the two year yields yesterday that a stabilizing. the 10 year continues to go down and 1.5% is where we stand now, reflecting the outlook that we are not going to see the fed raise rates perhaps this year, according to some investors. betty: julie, think of so much.

-- thank you so much. european markets traded, here is ryan chilcote in london. ryan: i want to talk about the bond market. look at u.k. yields down 10 basis points. german, down nearly 12 basis points. is reallylls you this a global bond rally we have going on today. x 200.s the stoc the equity market down close to 2%. this is yesterday. this is where janet yellen after the close, spoke. this is where we got the fed decision so basically in europe we had equities opening down, they continued down, and somebody decided at the end of the day it was maybe a little

bit overdone. let me show you what that carnage looked like here in europe. daxraphically speaking, the down three and a half percent. only greece was up. greece up nearly 1%. look at those greek banks. hard to say they are on fire because most of these are penny stocks. alpha bank up 14.3%. why, because they are going to have an election in grace on sunday and all of the parties are promising to implement the austerity deal they agreed to back in august. not exactly what we are used to seeing in greece but that is what is going on ahead of that election. betty: put head over to asia -- let's head over to asia. much of the global turmoil started after the chinese currency was devalued last month. in the midst of that, i traveled to beijing for an interview with

one of the senior policy advisers to get the story. he talked about the thinking behind the u.n. devaluation. demandet supply and determine the value of imp. i am be generally speaking is quite steady. continue to dose reform in china in various sectors, including the financial sector. when people look back 10 years or 15 years from now, they will see that the market reform is really good, not only for china but for the rest of the world. betty: he is talking about the rmb. mark crumpton joins me with more on china. he made a very good point, that these are needed reforms and are

having a more literate it currency -- liberated currency. it just happens to be bad timing. mark: the signing was such that when we mentioned this happened, a lot of people thought little market overreacted because the move on the currency in relative terms, it really was not that much. betty: no, it was not, it was what, 2% or so, and it was a gradual move. these are going to be measured and gradual steps and the rmb will remain stable. he did talk also about the overall economy mark -- economy, mark, and said, we are growing at 7%, we continue to reform the economy. he believes china is continuing to grow and that it will be a contributor to the global economy, and not a disastrous component. you get any sense from

him during your talk about the timing of the currency devaluation, why they did it when they did it? betty: a lot of people thought it was related to the special drawing rates and whether it was blowback from the imf deciding to delay that decision. he completely dismissed any link to that. he said it absolutely had nothing to do with it. there i am, by the way, walking around beijing, kissing babies. it is fashion week/hillary clinton impression in beijing. what is really interesting, i was there 20 years ago. i did a semester abroad at beijing university. the amount of bicycles 20 years ago, overwhelming. i saw practically none when i went back. people were on electric scooters, driving cars, no more bicycles. mark: what can we infer from

that? of thethe modernization chinese market and the growing, i cannot say middle-class. but it have middle-class is not bigger than the poor in china, but it is a growing urban class of people who have more disposable money. travel furthero and they can buy electronics and buy more machinery. i felt that was fascinating. the other part of it, though, was that when we were there, the military parade had just finished and the skies were clear for that. each day that we were there, the skies grew hazy year and hazy here. hazier so by the end of the trip we did get a look at this pollution problem. mark: what do the chinese people think of the west? betty: i cannot answer that in

20 seconds. there is obviously, there's quite a bit of animosity towards the united states, but there is also a lot of reverence. one of the most popular figures in chinese business is warren buffett. people love warren buffett, all these chinese business folks want to emulate the billionaire. there it is a lot of reference for parts of the u.s. mark: you are going to have a special. when is it? betty: i need to get to the plug. mark: you are welcome. wall" "china, behind the on monday. mark: moore geopolitics in the next hour. greece has elections coming up. a will be back -- they will be back in the headlines. see you in a few minutes.

up, tesla says it --.an suv for you women ♪

♪ betty: welcome back to the bloomberg market day. i am betty liu. this is not your mother's minivan. test now believes they have found -- tesla believes they have found the suv that women will love. now.miller joins me dangerous for me to talk about female drivers, for me and for you. i know that you are more of a sporty, convertible type now. betty: i have an suv. matt: don't you have a drop top

as well? betty: yes. matt: they have a survey in a group of women and they said, what is most important to you? this group said safety and a third row of seats. the model s does have a third row. you can comfortably sit seven people as long as some of them are in your -- some of them are children. betty: in your trunk. matt: i think volvo used to have a third row they did the same thing and it is cool, but the model s is much bigger. open,he falcon wings are you can literally walk into it and it is like a little cabin because the floor is so low in the ceiling is high enough that if you are a smaller person than me, you just walk in. the key really is the safety of the vehicle. betty: exactly. as we know, the model s had the

highest safety rating by consumer reports and i thought it was really interesting, the gender gap. matt: i was shocked, and i cover these for a living. betty: let's bring up that chart that shows in 2012 -- matt: only 13%. betty: 13% of buyers were women. in 2014, 18%. look at that huge disparity. matt: the reason this is so amazing is that more than half of car buying decisions in america are made by women, like 56%. that is only because probably the husbands are not telling you it is more. car, which isof kind of experimental, almost revolutionary as far as a completely new way, powertrain to run a vehicle, i guess women

were not willing to take the chance. it did not become clear until later how incredibly safe the model s was. betty: i remember one time elon musk took us through the model s. because it does not have an engine, there is a big gap between the two front seats. i said, this is perfect for women because i always trying to find a place to put my purse. that is exactly where i will put my purse. matt: you can have a bigger purse in the model s. betty: and also put some kids in there to. matt: we should drive around in one together. betty: we do. much more on the bloomberg market day, including more on the fed's non-decision. ♪

♪ betty: it is 10:00 in san francisco and 1:00 a.m. in hong kong. >> this is the bloomberg market day. stocks take a tumble after the

fed left the interest rate in place but how much should folks place on the decision? a key stopping port for migrants, we will speak to the ambassador of greece. mark: apple is taking aim at competitors like google. how some could change the world forever. betty: good afternoon. i am betty liu. matt: i am mark crumpton. we just talked about the fed, it is like the lebron james thing, the decision. betty: and then it came. matt: and then it went, and the market started selling off yesterday and the market still