is it assignment stimulus measures are starting to work? the bulls are back. glencore shares rise again. as christine lagarde warns that low commodity prices could persist for long periods. and twitter chatter. shares spike on speculation that cofounder jack dorsey will be named permanent ceo.

you are welcome to "the pulse" live from london. i am manus cranny. breaking news on the eurozone. the whole of the manufacturing for the eurozone comes in at 52. so that is a pulmonary reading. tha -- a preliminary reading. a little bit of a drop for spain. germany disappointed before he came to air. don't be fooled. analysts say it will make it to 1.20 by early next year. that is the state of play on the eurozone. manufacturing. let's talk about one other country -- it is china. more evidence this morning that china's stimulus measures may be working. the word is stability. figures show that manufacturing stabilized in the last month. $5 trillion wiped off the

chinese stock markets. mark? mark: china closed for a week. the chinese stock market, still chinese data continuing to set the tone. is the chinese economy stabilizing? yes, the additional gauges below the 50 level but it was above estimates, an improvement on the previous month. which is leading some to say that those rate cuts in november, the extra infrastructure spending has at least stabilize the economy. that's lifting equities in the region. i had its worst quarter of four years. i thought it would look at the impact on commodities. what about commodities countries, those countries that produce commodities like australia, new zealand, canada? this is the aussie dollar rising for a second day. the aussie is one of the big trading partners of china.

this is a courtesy at 9% against the dollar last quarter. because of the yuan devaluation and because of the prospects of higher u.s. interest rates. i wanted to show you the price of copper, because copper has been affected by the slow john and china. it is rising today and jumped yesterday after an anglo-american and glencore says it plans to reduce production in chile, the latest and cutbacks following a slowdown in demand in china, which is the biggest user of copper. the bloomberg commodity index, which measures 22 commodities, 15%, theials sank by biggest slide in seven years. i want to show you the nikkei 22 5, yes, china data boosted the nikkei. gt showed showing -- slowin

sentiments. it may prompt the bank of japan to boost quantitative easing. a majority of economists resurveyed said that will happen at the end of october, which is a year from the last time the boj governor surprised as an added a whole load of q.e. the nikeei rising today. it's all about china. manus: no such thing as coincidences as you well know. the markets.n the imf chief christine lagarde is warning that the global outlook will only moderately accelerate next year. speaking in washington last night, she also said that china's policymakers are facing what she called a very delicate balancing act. those were her words. they push through economic reform. christine lagarde: china is in the midst of a welcome

transpiration, one that has been called for, expected by many. welcome transformation. it launched structural reforms to lift incomes and living standards of the chinese population. these reforms will, by design, lead to a new normal of slower, safer, more sustainable growth. china's policymakers are facing a very delicate balancing act. they need to implement these difficult reforms, which they have embarked upon with the political determination to stay the course. same time,he preserving demand and financial stability. investors were worried about the speed at which china's economy was slowing. these concerns, the investors' concerns, put pressures on commodity markets and triggered sizable currency depreciation in of commodity exporters,

particularly in latin america. of course, as it invests less, china is going to purchase less commodities. this will in our view contribute to what could very well be a prolonged period of commodity prices that will be lower. case, you have not gotten the point, china is central to the whole world. let's bring in a global economic st at commerce bank. it is quite substantial. it is china, commodities, the imf. that is are critical worry. when we talk about china, stability in the pmi this morning, two months to the contraction. when will we be sated? the rock has stopped? >> i think that is a long time away yet.

what we are not sure of is what is the speed limit? the east to be 10. -- it used to be 10. it looks likely that we will go for a couple of years of growth slightly below that. it could take a couple of years before we really noticed how much damage was caused by the property bubble. festive spirits in the u.s. and the european markets, it can take an awful long time. from past experience in the u.s. and the european markets, it can take a long time. it certainly is one more instruments. i don't think it will be the panacea because i think that the problems home rather than a board. -- abroad. if we have a slightly weaker of the options but i think fiscal policy is much more useful at the moment. manus: the great debate is about japan.

from the lastr on big dose of quantitative easing. here we are, facing down the barrel of another recession and ja-- in japan. abenomic. do we need more q.e. you envisage more q.e. and will that reinvigorate the slide in the yen? peter: do i expect it? yes. precisely because the japanese have nothing left in their locker. what we've seen over 50 years, japanese q.e. has not been effective. it may weaken the yen. big deal. japanese problems are at home rather than abroad. if you look at gdp growth per head, it's actually running at the same level as the united states. japan is much more deep-seated

than the numbers imply. manus: our editor wrote a great piece, talking about rate cuts and 600 rate cuts, the most recent being india this week since the financial crisis began. to fiscal policy which will not save us forget is a growth rate above 3.5% which is where we are looking, according to christine lagarde. worse than 2014. where will that play out in markets? peter: all countries have some scope with the possible exception of greece. manus: you are not trying to hang yourself on austerity? peter: we are in an environment similar to the 1930's. fiscal policy was one of the great stimulus that helps the global economy recover. today we are in a different environment. reducing deficits and debt is all that counts. and monetary policy will do the heavy lifting. they are wrong. we need to have more fiscal

stimulus in all countries in the world. not huge amount, but i think we have to be sensible and say, look, we do not have to reduce our debt to gdp ratios. if you have growing growth and low interest rates, it is possible. manus: how to to look at the prism of glencore monday, tuesday, wednesday? i'm fascinated to know. i look at it from one stock global event, global contagion. it reminded me a great deal of frenetic market activity that we had back in 200 8. did a channel lehman-esque thoughts for you? peter: fortunately not because glencore is not a systemically important. it is a important factor. we have to get used to global commodity prices. companies and countries which have are suffering. and glencore is a victim of that. manus: great to have your

insight. everybody has their attitude for fiscal policy. question of whether they have the appetite. thank you very much. glencore, let's check in on the stock. the stock has rallied. we are up 6.5% on the day. this is about an unwinding of that frenzy in the stock price. it is day three of the stock gain that wiped out monday's record loss. thes jesse, the man on glencore story. here we go. volatility takes on a whole new meaning. we've recouped, ok. so it looks like the market is beginning to reevaluate everything that we were told from an investor -- there's no equity value left in the stock. what is your thinking as you are waking up this morning and you look at the stock again? jesse: the stepanek, what we had from the 29th percent

decline. we heard from the company. we have had a string of notes from analysts have gone into details about the debt position. before that, there was not a huge amount known about glencore's debt position. blew oute cds which on monday. manus: debt insurance blew out like a balloon. jesse: we saw the bounce and the share price. the copper price is up. glencore they're exposed to copper. to have that price going and the right direction will be very important. ivan is a bit happier than he was on monday. hich reminds me of course, there is that simon kennedy-esque, saying you take price and divide by 180 get the chinese growth. if you look back at bernstein's copper price they are talking

about $10,000. talk to me about trying to, the whole debt discussion was yesterday. the point was this -- we know they have $30 billion of debt. but the markets seem fundamentally disappointed with the $10 billion proposed reduction, but we're beginning to see other things come into play as -- in terms of commenting that initial proposal. jesse: that's true. they sold $2.5 billion in shares. a couple weeks ago. the other key component -- asset sales. let's see them deliver some of these asset sales. the agricultural business, they are looking at selling a stake there. that could take time. the one that they can get away quickly is the precious metals streaming deal. there are a number of players in north america that love these deals. manus: explain to me what a precious metal streaming deal is. a grand technical term but there is an easy example.

e: glencore will forward sell their gold and silver production from the copper mines. gold and silver produces a byproduct. they did not care for. precious metals, glencore. they will sell that production. it comes on the other side of the production. they will sell it to special companies who specialize in world two streams and they will take it on. they could reap $1.5 billion most people think. manus: a stock for the brave. thank you for the update. we have john meyer coming down later. we just don't understand. nor do we appreciate the trading glasenbergat ivan has built. on "the pulse" this thursday, the head of japan's automobile manufacturers association has attacked volkswagen. honda says the

company's actions have damaged the sector and he finds it hard to understand what happened. as many as fitting 11 million vehicles with software to cheat emissions tests. vw scandal has crossed european carmakers $50 billion. to be goingappears from strength to strength. it's upcoming ipo is 10 times over subscribed. at $11 the company billion. for rory is yesterday -- in new aims to list york and the second half of this month. twitter share price spiked on reports that jack dorsey has agreed to stay on as ceo. his says he'll make possession permanent after stepping in on an interim basis three months ago.

dorsey will continue to head the global payments company. coming up on "the pulse," america's response to russia after airstrike hit syria. the two countries agree on a strategy to deal with the conflict and the threat from terrorism. ♪

welcome back.

this is "the pulse" live on bloomberg tv, radio and streaming on bloomberg.com, your tablet info. military talks are being held between russia and the u.s. following vladimir putin's decision to launch airstrikes in syria. russia's foreign minister says that the country wants to avoid conflict, but not everyone in the state is convinced. >> the first instruction to us was to make sure that the military of united states, the coalition led by the united states on the one hand and the military of the russian federation who are now engaged in operations in syria, at the request of the syrian government, get in touch and establish channels of communications to avoid any unintended incidents. and we agreed that the military should get into contact with the m very soon. manus: of thisthe wreckage

administration's middle east policy has now stepped vladimir putin. as in ukraine, as elsewhere, he perceives the administration's inaction and caution as weakness and he is taking full advantage. putin's ambitions are obvious, my friends. he wants to prop up assad, play kingmaker, undermine u.s. policy and operations and ultimately expand russian power in the middle east to a degree as i 1973.ned unseen since manus: bloomberg's ryan chilcote is here. of course, president putin's decision to strike. what was fascinating was watching the decision being made and then execution of it. it was all done in rocket time. this is not typically what you expect from western action in regards to getting on with bomb campaigns. ryan: critics of pressure would say that is what you can do when

you have an autocratic government where one man gets to call the shots and does not have to consult with other parties. it does not get much faster. had this very quick, stealthy buildup of russian forces in syria. then we had this lightning fast approval from the upper house of the russian parliament, giving the russian president permission formally to bomb, conduct bombing operations in syria. you had russian forces giving nato and the united states one hours notice. in one hour, we are going to start bombing. the holes brought -- the whole prospect of russia engaging in military strikes in syria, destabilize the general assembly meeting of the united nations. tomorrow, the russian president is going to sit down with angela merkel, francois hollande and the ukrainian president. those talks are supposed to be about ukraine. but you know all the journalists are going to want to hear about syria.

what is putin planning on doing? you know that is what angela merkel andh ollande will want to do. do you know the last time the russian military conducted an airstrike outside of the former soviet union? this is the first time at a quarter century. they have not done it since the collapse of the soviet union. this is history. you have to go back to 1999, the end of the kosovo war when paratroopers to an airfield to secure the airfield. it caught nato and the rest of the world by surprise. what are these russians doing? the russians were upset they had not been given their own zone for patrolling within kosovo. insignificantt geopolitical incident. this is a bigger deal. the russian military is 10 times stronger. and vladimir putin isn't borussia elton -- isn't borussia elton. yeltsin.

manus: in my the bringing in with a cold and sitting down with obama. but this is a man who was to flexes political and military muscle. very briefly, other concerns about the potential targets that russia hit yesterday? ryan: yes, they're ours. those concerns were there before russia acted and they have been confirmed in many ways. russia says it was going after islamic state with his military campaign yesterday. france, the united states safe no, you are going after all of the opponents of assad in syria except for islamic state. "the wall street journal reporting in fact, they hit cia funded militants in syria. manus: i know you will stay on top of the story. ryan chilcote the latest from syria. in the u.s. twitter shares a after reports the company is set to appoint cofounder jack dorsey back as the permanent ceo. can he help resuscitate

confidence in the social media network? caroline hyde has been taking a look. caroline: is jack back? is jack the man who, of course, helped found the company, sent the first ever tweet who was ousted in 2008 and seven years later, will he about to get his steve jobs moment? a man he admires. who left applen and returned as chief executive to lead it to great things. re/code is saying he will return as permanent chief executive. interim ceo since june, top of the internal candidate list, we understand. the pressure has been building. three months more than three months he has been interim chief executive. they need to make a decision. will it be him, someone else? we saw a record lows in the his stock. executives were leaving. they need to study the ship. re/code does put some caveats in

the headline. look, their other key executives they need to seal the status of first. the head of revenue. will he become coo? adam bain? and the cfo? costolo stood down in july. will he leave the board? they have three x ceo's. -- three ex ceo's? will jack dorsey remain the chief executive of square, a mobile payments company meant to the ipo'ing? can he be chief executive of both? as soon as today we could see jack dorsey put to the home of twitter and the share price likes it. investors like it. the share price rose 5%. work.have a look at the still to be done. because it is a tough task

whoever takes the helm. they are releasing new products. trying to woo in, build up user engagement. e-commerce remember that buy button, that could be unveiled to millions of businesses. big commerce. they are selling tickets to sports games. new product, as his political donation. we could see tweets being more than 140 characters. you would not have to tweak your tweet. we could see a longer version made. will it engages more? the key issue is engagement. 316 million users. not a lot compared to facebook. 1.4 billion. they pale in comparison. we will have to see how they will build this business. manus: jack dorsey back in the top seat. ok, what could be a bigger

trauma for european equity investors than the greek banking crisis? in a word, glencore. we will tell you why after this very short break. ♪

u.k. manufacturing data crossing the terminal. following to 51.5 in the month of september. the estimate was for 51 point three. manufacturing still growing at a sluggish pace. employment falling for the first time in two years indicating concern about executives, the outlook. in its monthly report, margaret economic say it's factory index at 51.5. a reading, of course, above 50 indicates growth. new orders slipped to match the weakest pace this year, falling commodity prices are lowering companies cost. domestic demand remains robust.

a strong pound and cooling chinese growth are threatening its exports. market says it's index is broadly consistent with mildation or evena a downturn. we had a survey from the british chambers of commerce under scoring the challenges. all its gauges of manufacturing remain stagnant or fell in the third quarter. that is interesting about the manufacturing industry. manus: thank you very much for breaking all of that down for us. let's get you up to speed with our top headlines on bloomberg. china's manufacturing sector shows signs of government stimulus is working. the official pmi for september climbed slightly to 29.8. -- to 49.8. five central bank interest rate cuts since november. the new round of infrastructure spending appear to be grading -- gain traction.

confidence is falling in japan. the latest survey from the central bank shows that the index for large manufacturers fell to 12 from 15 in june. concern is growing that the economy may have contracted in the quarter. the nation back into recession. twitter share price, well, it's spiked on reports that jack dorsey is -- will stay on as ceo. says he website re/code will make his position permanent after stepping in on an interim basis three months ago. dorsey will continue to head square. now there is a cracking story on the terminal this morning and on our website which i have tweeted out. which do you think was a bigger trauma for european stock investors? the pummeling of the greek banks. that was so summertime.

or is thit the drop in glencore? based on the fire loss, it is the latter by far. let's talk about glencore's year with mining analyst and partner john meyer. welcome. here we are. monday it had all the tremors of everybody talking about his start -- about systemic risk. glencore dropping like a stone. we managed to recoup those losses. last week, glencore had zero equity value. case,at's really not the inyour opinion. dog elliott is a very good analyst. he's right. glencore does not have a lot of equity value if commodity prices stay at current levels. but commodity prices are recovering. we do not think commodities will stay down for a long, an extended period. talking about are

that but when was the last time the imf or write about anything -- were right about anything? manus: countercyclical. they advise the british government had the wrong strategy. they were wrong there. manus: look, you said we are missing a couple of things in the glencore story. or is we are misinterpreting miss of valuing readily marketable securities. you had also said that we are not cognizant, we do not have full understanding of what ivan glasenberg's masters of the universe trading business is. john: it is a bit of a black box. we had the pleasure of analyzing mg metals on the market many years ago. the way it works is they have billion of readily marketable securities. most of that is metal and warehouses, finance and hedged. it earns a grade return for glencore. and nobody should worry about

that. -- the knives have been out for glencore. there hedge funds out there that have got it in for glasenberg. old're looking to settle scores. they think that there is weakness there. manus: do you think that is part of what is behind a 30% drop in the stock? john: sure, it is. i've heard stories about major hedge funds who'd really like to see this go down. and i just do not think, i think there is more of a vendetta here than fundamental analysis. a weaklencore's and position. and there is $12 billion of debt that will need to be refinanced before 2017. but when they refinance, maybe it will cost them more, maybe it won't. but i don't think it changes glencore. manus: what is the capitulation moment? the debt holders met yesterday. billion. $20 billion is a promise and they have a credit line. what is it that changes a debt reduction story to an outright

panic in the commodity sector? what is the trigger? john: there have been some people -- and i think the stories are incorrect -- saying that there is debt that is backed by assets within glencore and glencore might be forced to sell assets in order to satisfy that debt. and another story that perhaps glencore were shopping around for more debt. i honestly think the stories are not sure. i think they are put out there to try and collapse the company because there are people -- there were large short positions in glencore on monday. and it had a serious impact on the stock. that is why we are all talking about. but glencore is a much stronger business fundamentally than i think people are understanding. manus: if we talk about what's happened in markets, a lot of people are saying that glencore is a very personification of a company which has tentacles in tiny countries, huge countries.

it ships mountains of thermal coal. 150 mines in australia. present asiologically well as financially present. the conversation you're having with people, tell me about those. john: well, the interesting comment was that when glencore suffered a hit because the chinese bear rated the copper market. now glencore knows what it feels like itsure, they connect with everybody. they are the dhl of the commodities business. they make huge amounts of money on shipments of coal, not so much iron ore, copper, zinc int o the agricultural stuff as well. they blend those commodities. then copper concentrates, for example. send us to china. maybe they make $10 million going in as a guest. very, very big money.

they provide a good service for their clients. that is why they have so many clients and they keep coming back year after year after year. really significant and value adding business. manus: it is interesting that you said that this is like a vendetta against ivan glasenberg to pillage his company. let's talk about -- take the story on in terms of commodities and the market, because the view is from christine lagarde that global growth is going to be less than it was last year. the chinese, which are seeing are stability, but they bringing money back home because of their fiscal issues. is this the next big challenge for 2016? the repatriation of capital to commodity countries. it is an important point. we know these saudi arabia

investment authority have been withdrawing money from blackrock and other major investment funds. those guys have gbig holdings in glencore. us they have got to sell stocks to meet those redemptions. we don't know which ones they are selling, but it is a good idea that glencore is a deep liquid stock very that will be one of the ones on the cell list. interesting to note that glencore's relative performance is where anglo-american is. it is not performing any worse than anglo. a stock i would not want to buy, either. although i would be a buyer of glencore. manus: with a target near-term? you are a buyer. john: near-term, we're going back to 120, 140. manus: anglo, rio, anything else in the grouping? hit by low oilis prices. rio's more boring, but more solid. you can buy rio tinto for

leverage on the upside. another point i would like to make is the panamanians who just opened a second canal are worried about global trade. deputy prime minister last week. he is concerned that global trade levels might be falling. and that is not so good because they have just spent all this money on developing a new trade route through to the u.s. west coast. it is a concern, but i think things are picking up. manus: we find the bull. buy your glencore stock at 120. don't think my pension funds manage that. thank you, john mack. we should point out that the chairman of bloomberg lp is also a senior independent nonexecutive director at glencore. ok. hong kong and china. they are closed today at the start of golden week.

millionshinese travel, of tourists are slated to celebrate a holiday. however, things are changing as shery ahn reports. shery: hong kong is losing its luster. the local currency pegged to the u.s. dollar and is reducing its charm. retail performance in the city will be weak as china's consumers switch to other holiday destinations, especially japan and south korea. a weaker yen makes japan more affordable and visitor numbers doubled in august to a record year in year. korea remains a key destination for young people in cosmetics and fashion. chinese tourists are expected to jump this holiday season. live bookings during golden week are up 30% on year. they seem unaffected by the market rout, because traffic -- travel plans were made months in advance.

for retailers in hong kong, the focus on local shoppers are expected to fare better than their peers. a jeweler gets more than 60% of revenue from hong kong residents. there could still be some action for gold related sectors. fully focused. how go pro is training athletes to capture the greatest moments on camera. stay with us. scary. ♪

manus: it is "the pulse" in london. welcome back. top headlines. dutch investigation into the downing of flight mh 17 has been given fresh evidence. they hope it will shed light on what happened. the airline crash in the rebel controlled region and ukraine. that is in july last year, killing all people on board. apple has launched his music streaming service in china, along with e-books and movies. it is promising a library of content here to its most theortant market outside

united states. apple music will be offered as a free trial before users are month, about 10 yuan a less than the $1.60 in the u.s. the monthly charge is between $10 and $14. google and microsoft have feuded a deal to end their over smartphones in video gaming. they are wrangling over tech innovations or five years. google's mobility unit was demanding royalties on the xbox gaming system, while microsoft saw to block motorola phones. gopro cameras have given athletes and extreme sports enthusiasts a new way to show their skills off to the world. that in turn has helped gopro 4 billion company. the firm holds training camps to teach athletes how to make the world pay attention. been for a look.

>> something pretty special about getting on the river. becoming part of this river. flowing with the water and to get in there and adapt like water does. it is not about just sitting in my kayak and focusing on getting that line right. lens,so clearing the figuring out if my camera angle is right, making sure how to get the right shot myself. we're not mainstream athletes. if you are football player, you know what you need to do to be at the top. being a professional extreme athlete, is more of a creative performance activity. and that's kind of what we are doing right now. getting trained to be better at

producing our own content. all right, sweet. so, does everyone here know how to change the modes on their cameras? can i see their hands of everyone does not understand how to change modes? all right. it's really difficult when someone does something really amazing and it is shot in not the right mode. we want to make sure if they are going to go out and do some of the craziest stuff in the world, we want to make sure they are making that looks the best. so, we have a camera buffet in the back. all this gear is for you guys to borrow. so, we start with a couple of training courses in the morning. then we go out for the day and do activities.

what you got? a big narwhal? cool. whoo! the game of social media and being enough weight is not something to be taken lightly. you can be the world's best at whatever sport you are doing, but if you are not performing -- promoting yourself, then it is hard to make a living. today we're going to do a little bit of the how-to. ways not to lose your gopro when going kayaking. so, i'm going to run a couple of different things here.

you are running a dangerous line. when you turn your hobby into a full-time job, because the more you commit yourself to sponsors you stuff, you find that kayak a little bit less than perhaps you might want to. we are in new zealand to test out the new speaker. >> they use a gopro. tons of people watch that footage. those people by gopros. some kid that has never tried that sport before, buys a gopro and makes a video. that is a cycle we want. >> can you give me a hand sliding it on their? >> can be overwhelming sometimes having to do with the camera, but my own risk, but you know, in the end, it makes it that much more exciting. >> 3, 2, 1. what may be separate us from some other people in

extreme sports is there is a certain element of showmanship. but we like to share. someonesomething -- doing something i can tell they love, that is what we try to do. capture the moment and encourage them to get outside and have fun. you have to work sometimes. but there's balance. >> it's really scary but i'm glad i did it. manus: you see that is so me on a set of a morning. more of that later. up next, what if we got for you? asl, it's the same restaurants. a little bit of a makeover but we get to speak to the owner and salinity chef. -- to the celebrity chef. ♪

hovering desserts and magic cocktail shakers. it is one of britain's wackiest restaurants. and this week, the fat duck reopened after a refurbishment. richard vines spoke exclusively with the owner. >> the last 20 years, all work to get me to here.

last,is, for me, now at we're just starting now. thing that makes us different from every other creature on the planet, we can imagine. we imagine things that are impossible. then than thet, the imagination -- they think that when we taste taste inre's smell and flavor. they are more closely connected. there is a language here which is so exciting. we do not even have to train ourselves. chef, yoully, as a

take a protein and a carbohydrate and swap them around. but that's what fatduck is about. it is about storytelling. the menu is replaced by a map. ank itinerary -- -- think ternary -- itinerary. i am telling the story of a holiday that runs the course of the day from morning to night. these are the most-- by far the best to run. ne favorite food -- 3.7 million. it makes no sense. but then we can imagine, can't we? jon ferro inrive my regaling of dinner at the fatduck.

an experience bid if you can get me a table, i'll buy you a pint. glencore is traveling higher, up 6%. jon ferro is here with tom keene. ♪

gaugean: china's factory stabilizes. glencore shares rise again to wipe out monday's record losses. low commodity prices could persist. isounder jack dorsey speculated to be named permanent ceo of twitter. ♪ welcome to "the pulse." i'm jonathan ferro alongside manus cranny and tom keene in

new york. what are you excited about, tom? tom: we are looking forward to the jobs report. it pretty good report yesterday. we will see wonderful claims today and maybe we go on to a ho-hum jobs report tomorrow. note because you are the scholar on this, the three-month yield in a negative the united states. you've got to pay the u.s. government to take your money. jonathan: we look back to the quarter that was for china. what a corner for china -- quarter for china. a slew of negative data. do we have a little bit of evidence that china's stimulus measures may be working? let's get straight out to mark barton. pmi, 49.8, 49.7 is

where it came from. the survey was for 49.7. i have charted the official china factory gauge. anything below 50 shows a contraction. we are above the three-year low. away from the way highs of 56 in 2009. now, thethat, for economy has stabilized and equity investors like it. stocks are rallying across the world. jonathan: i'm looking across europe at the data coming out. mixed is probably the word. can you wrap it up for us? mark: the factory prices component. the manufacturing gauge fell

from 52.3. what stood out for me was factory gate prices falling in september for the first time in six months because input costs are dropping at the fastest pace since january. that is a warning for the central bank. that is going to put pressure on the european central bank to boost qe and that is going to add to those economists, more than two thirds of whom believe there will be an increase in qe this year. that is the big take away for me. jonathan: mark barton, thank you very much. the majority of economists think it is coming in december. the route from europe, the rap europe, thewrap in wrap globally. christine lagarde pointed the finger at china. >> china is in the midst of a fundamental and world

transformation, one that has been called for, expected by many. it has launched deep structural reforms to lift incomes and living standards of the chinese population. these reforms will, by design, lead to a new normal of slower, safer, more sustainable growth. china's policymakers are facing a very delicate balancing act. they need to implement these difficult reforms, which they have embarked upon with political determination to stay the course, while at the same preserving demand and financial stability. investors were worried about the speed at which china's economy was slowing. these concerns put further pressure on accommodating markets and triggered sizable

currency depreciation, particularly in latin america. , china issts less going to purchase less of those commodities. this will, in our view, contribute to what could very well be a prolonged period of commodity prices that will be lower. jonathan: let's bring in the investor, shall we, kevin durant. kevin, great to have you with us. tom keene, you are going to love this. we have someone in the house that is not talking about deflation. the world christine lagarde is describing is a world of disinflation. kevin: christine has got it wrong. she is making the assumption that a lot of investors are making. she thinks commodity prices are the full story on inflation.

if you have a look at the tightness and the increasing tightness of the labor market, we are seeing tighter labor markets, stronger growth within those economies, that leads to increased wage pressures and that is where inflation is going to come from. tom: let me ask you about the theoretical physics of mark carney and janet yellen. are we delusional to believe that central banks can get out front of events and can get out front of the shift from deflation to inflation? kevin: i think you are right. they don't want to get out in front of it. these nations have high debt to gdp ratios. in order to rebalance the economy, we keep talking about how economies rebalance, the rebalancing that is taking place is a shift from savers to borrowers. that includes governments.

governments are high on the list of borrowers. they have three choices. you have a hard default, iceland and greece. you default on your creditors in one of two ways. you devalue your currency. or you create inflation. that is a domestic default on your creditors. that is the game we are playing here. that is why we are doing qe, the stimulus measures. it is only going to continue until we see inflation flow out into the real economy and turn into real-world inflation numbers. jonathan: but, kevin, it is not happening. when you look at global spare capacity, why would we get the inflation you are talking about anytime soon? kevin: thanks. -- bank. s. the central bank is your engine room. you are revving the engine faster than it has ever been

before -- revved before. we have said to the banks, lend money or we will call you nasty names. if you do lend money, we will close you down. tom: ok, but what i find important here is what do we do with our money assuming a higher rate regime? do we go to cash or short duration or can we actually manage and grabbed a yield while we see these seismic shifts? tom.: that is the problem, we are already in cash. if you have a look at the past year or so, the changes in valuation, the equity markets and the asset price markets are in something of a small-scale liquidity trap. investors like myself and my , we are all scared of each other, essentially. the money that is being pumped into the economy has come into

the asset price markets and has not been released into the real world because of the problems in the banking sector and the elevated cash levels in our industry. jonathan: what i hear from you if you are early to chapter 10, the end of the story. 10 in 2010, chapter i miss the ethical market -- epic bull market. maybe i don't want to turn to chapter 10 yet. kevin: if you were holding nominal assets, get yourself a body bag. you have to get yourself real assets. i think equities will give you a mid to small single-digit rate of return over the next 10 years. is nominal five,

you will have a 10% loss year after year. jonathan: kevin durant is going to stay with us. here is what else is on a radar. manus: we get straight to the middle east. russian warplanes have carried daystrikes in syria, two after president putin called for a coordinated international response to islamic state. a swift decision that appeared to catch western leaders off guard. japan's automobile manufacturers association has attacked volkswagen for damaging trust in the industry. he is also the chairman of honda. he said one company's actions have damaged the rest and he finds it hard to understand what happened. to fitting atd

least 11 million vehicles with software designed to cheap admission -- emission tests. appears to be racing ahead with plans for a stock market listing. the upcoming ipo is 10 times oversubscribed, valuing the supercar maker at more than $11 billion. ferrari has yet to give a projected share price. it aims to list in new york at the second half of this month. twitter's share price has spiked on reports that jack dorsey will stay on as ceo. he may make his decision permanent after stepping in on an interim basis three months ago. jon, back to you. jonathan: coming up, we talk glencore's turbulent week.

more after the break. ♪

jonathan: good morning and welcome back to "the pulse." glencore getting another pop this morning, trading higher by 6.71%. the third day of gains for the stock and wiping out monday's record loss. for more, let's bring in jesse rice berg.

where do you want to start on the week it was for glencore? jesse: we started off with monday madness. people were playing guessing games, what is really happening to the stock? we still don't really have a clear picture. market concern about their debt position. we finally heard from the company on tuesday, they broke their silence, they said they had no sovereignty issues. i think that i laid some fears -- allayed some fears. jesse, that is right where i wanted to go. you nailed it. when you look at the balance sheet adjustment, does the cel-sci side give any indication of the markdown we will see -- sell side give any indication

of the markdown we will see? jesse: we have seen glencore take a huge markdown. billions, it and is a carl sagan question, what is it? jesse: look, i don't know. i'm not sure many people do. to give a hard number on those sorts of things is quite difficult at the moment. jonathan: what tom said about the sell side is really interesting. no one can answer the question. theing kevin durant from the conversation. why are people struggling to value glencore? kevin: i think a significant part of the business is essentially a black box. it is the trading division and no one outside of the organization has any real insight into all of the trades taking place in there.

tom: kevin, are there other glencores out there? that is the raging debate in new york. i mean in asia, as well. is your radar? -- is your radar up? kevin: let's put the trading business aside for the moment. if you believe industrial commodity prices will remain low , there are a number of these organizations that don't make a profit at these price levels. from an equity perspective, if you are heavily geared and you are not making any profits, it does not take too long before your equity value turns to losses and the value is eradicated. glencore recognized that early and they are doing something about it. of course, there are bound to be increased incidence of losses. jessean: i want to bring

back into this and i want to take this big picture. does the glencore move embody everything that is wrong with the world? a slowdown in china, a commodity route, and companies have loaded up with too much debt? jesse: to a degree. it is a china-driven story. you had christine lagarde overnight saying that slowing demand for commodities and china will lead to a prolonged period of commodity price weakness. one can read china right now. that also contributed to a lot of the core investor sentiment around the stock in the past month. tom: let me digress. what is the price of gold doing? i thought we were unable market for six weeks. market for six weeks. what is your reporting on the zeitgeist of gold? [laughter] jesse: i don't cover it terribly

closely. tom: if you don't, you can make it up, so go ahead. [laughter] jesse: fair enough. gold is an area where glencore is trying to reduce their debt. they are saying gold and silver in south america to streaming company. that is a key part of their asset disposal process. we think it is going to be the next cap off the rack, so to speak. kevin durant, thank you so much. tom keene is going to stay with us. moving on, coming up, is jack back? jack dorsey may be appointed as the permanent boss at twitter. ♪

jonathan: good morning and welcome back to "the pulse." hours and 20 minutes into the trading day in europe. the dax is coming off a session high, off 0.25%. switch up the board very quickly. we will rattle through the fx market quickly.

a weaker euro this morning. the euro is advancing for two straight dollars -- quarters against the dollar. where is that parity call? oil is higher by 1.8%. the lowest quarterly average price last quarter since 2009 on crude. over in the u.s., let's talk stocks. twitter shares spiked after the news that the company announced appoint jack dorsey as the permanent ceo. caroline: seven years after he was ousted from the company he helped found as chief executive, is this his steve jobs moment? ashe coming back permanently chief executive? this is why we saw shares pop higher. he has been interim ceo for more than three months and the stock

has been under pressure. we saw a record low in august. the pressure has been on twitter's board to sign, seal, and deliver who will be the ceo. there are still some t's to cross and i's to dot. the revenue chief, in particular, could he become clo? -- coo? will dick costolo leave the board? dorsey, will he remain the chief executive of square, the mobile payment company he also helped found? could he really be ceo of two major tech companies? challenges that already faced the company. they are unveiling new products overall. we have seen e-commerce being kicked off by twitter. political donations. all of this is being ramped out. over 140ports of

characters. we might see longer tweets. they are trying to build up the user base. million -- 316 million users compared to facebook's 1.4 billion users. jonathan: caroline, thank you. tom keene, i'm reminiscing about our time in new york together. no one else really knows how to use it. is that the fundamental problem still? tom: i have seen a lot of good research showing that twitter has a lot of impact, but it is subtle and different than facebook. we had a good interview with , who waszer yesterday very optimistic about how twitter can fit in with digital media. the number one thing i would focus on is the idea that facebook is always tweaking and always changing, where twitter

is essentially the same thing it .as 3-4 years ago will mr. dorsey change that dynamic? jonathan: tom keene disagrees with me. i'm gutted. [laughter] jonathan: i think i know where this one is going. kevin, social media stocks, how do you view them? kevin: i think jack dorsey may be great operationally for twitter, but it does not deal with the valuation. even if we put it on a super great margins for an advertising -- twitter is great. i use it as a newsfeed. otherwise, it does not justify its valuation. jonathan: i would love to see you get more out of my twitter feed than what i had for dinner. said emergingrde economies are likely to see a fifth year of declining growth.

we take a look at who is getting hit hardest. ♪ the only way to get better is to challenge yourself,

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jonathan: welcome back to "the pulse." live from bloomberg's european headquarters in the city of london. i'm jonathan ferro with manus cranny. manus: the manufacturing sector shows signs that government stimulus is working. numbers climbed slightly. five central bank interest rate cuts since last september, a new rise of infrastructure, seems that the economy is gathering steam.

confidence is falling in japan. the latest survey from the central bank shows the index for large manufacturers fell to 12 in september from 15 in june. the economy may have contracted in the quarter that has just ended, which would tip the nation back into recession. twitter's share price has spiked. jack dorsey may stay on as ceo. he may make his position permanent after stepping in on an interim basis some three months ago. he will continue to head the mobile payments company, square. jonathan: thank you very much. if you are struggling to keep up with the market moves this week, you are not alone. hopefully, mark barton can keep us in tune. mark: china is closed for a week. china is taking center stage for a week, it doesn't matter.

there may be a stabilizing , despitering industry still being below 50. forget about the third quarter. wasst 900 billion euros wiped away from the value of european equity. yes, it was the worst quarter in four years, but stocks are rising today. glencore is up by 6.5%. what a week glencore has had, wiping away all of monday's 29% record loss. up 17% on tuesday, up 14% on wednesday, up 2% today. just 9% of investors say sell. the price target is double today's share price. are you brave enough to buy glencore shares? that is the big question out there. this is sterling against the dollar.

sterling had followed for nine consecutive days before today. that is the bright side of today's manufacturing pmi data. month.was below last the markets is the manufacturing gauge is broadly consistent with stagnation or even a mild downturn. employment is also falling for the first time in two years. is not good when you are thinking about the whole composition of the u.k. economy. have a look at the bond markets. u.k. yields are rising. the manufacturing gauge in the me., in the eurozone, excuse , fell to 52. what stood out to me was factory gauge prices. there are pressures at the

factory gate. that means deflationary pressures are there. that means there is pressure on the ecb to do more on qe. there you go. jonathan: when will it come? december? mark barton, thank you, very much. emerging-market stocks dropped the most in four years. christine lagarde, the head of the imf, gave this morning -- warning in washington. >> emerging markets are likely to see a fifth consecutive year of declining rates of growth. india remains a bright spot. china is slowing down as it rebalance is away from export-led growth. companies -- countries such as russia or brazil are facing serious economic difficulties. growth in latin america countries, in general, continues to slow sharply. tom keene is in new

york, still with us. , you actually had a good quarter. you called it dead on. how does it go from here? >> i think it is going to be difficult as we move, it will continue to be difficult. in fed may hike rates december. may slowse growth down. commodities are at a very low level. this puts pressure on countries like brazil. faceing markets will turbulent times in the weeks ahead. i don't think a record change of sentiment will happen. , good morning. bernd: good morning, tom. tom: do you assume that, within these emerging markets, that the government and the private industry balance sheets will

adjust after a reset of commodity prices? bernd: i think the private sector companies, especially in countries in latin america like brazil, who took on a lot of debt over the last couple of years, will face serious inllenges due to the drop the currencies, due to the drop in commodity prices. it will take some time to adjust , for these companies, for the private sector. , you willly next year see some improvement. at the moment, it is going to be difficult. tom: we look at contagion between emerging markets in the developed world. what about emerging market to emerging market? if i take the challenges of a brazil and i look at a non-commodity emerging market like the philippines, will they get knock on effects? bernd: you can see contagion

from brazil, especially in terms of risk sentiment from markets, when you had the big selloff in brazil, some other high-yielding currencies, like south africa, were driven down by the selloff across the board. volatilityies facing and rate hike uncertainty, globally-speaking, we see a lot of contagion and fear in markets . this is also due to the a current -- the current account deficits. also, the capital inflows. jonathan: at the center of this fear, corporate balance sheets loaded up with dollar-denominated debts.

as the dollar get stronger, we are wondering what is going to happen. how does this play out in the nightmare scenario that a lot of people think it will? bernd: we are carefully watching the balance sheets of corporations in brazil. it is impossible to get the full picture. i would expect some problems in corporations in brazil, especially after the 35% drop off on the brazilian real. , but itface problems has to be seen over the next couple of weeks when we see some announcement. g, thank yournd ber very much for joining us. everyone had a bad queue3. -- q3. aftermathughts in the of the airstrikes. can america and russia agree on syria? that is the fundamental

question. ♪

jonathan: welcome back to "the pulse." live from the city of london. urgent military talks are being held between russia and the u.s. russia's foreign minister says his country wants to avoid conflict, but not everyone in the states is convinced. >> the first instruction to us

was to make sure that the military of the united states, the coalition led by the united states, the military of the russian federation will now engage in syria, at the request of the syrian government, get in touch and establish channels of communication to avoid any unintended consequence. military that the should get into contact with each other very soon. >> into the wreckage, into the wreckage of this administration's military policy has now stepped vladimir putin. perceives in action as caution. play kingmaker in any transition, undermine u.s. policy, and expand russian power

in the middle east to a degree, as i mentioned, unseen since 1973. jonathan: ryan chilcote is still here. tom keene is still in new york with us. ryan, who are they actually striking? that is not that straightforward at all. ryan: it is an interesting one. the russians began by saying they are going after islamic state. u.s. said they are going to get everybody but islamic state who are opposed to bashar al-assad. the russian spokesman said that this operation is all about supporting the advancing syrian army.bashar al-assad's he did not say they are not hitting islamic state. he put the emphasis on supporting a sod. -- assad. that is the big issue the u.s.

has with this. carter called it pouring gasoline on the fire. what is the back-and-forth between the obama administration and moscow? is there any dialogue? ryan: it is a strange dialogue, tom. the way the u.s. learned about these airstrikes was the russians sent a three-star general to the american embassy in baghdad. he walks up to the u.s. embassy and says, guess what, russia is going to start bombing in one hour, please get out of syrian airspace. an argument ensued. the secretary of defense not pleased, said that is unprofessional and not the kind of behavior we expect from the russian military. it is fair to say relations aren't great. jonathan: ryan, this is the here and now. i want to turn the page and ask how this develops. in an ideal world, they organize

something coordinated. how do they get back together and somehow make this coordinated? ryan: it is a tough one. the russians are only giving the americans an hour's notice. the americans don't even bother to tell the russians, for what it's worth. they have their own separate zones of control. the only way this changes if the u.s. gives ground and starts cooperating more with the russians. that is what putin wants. he wants to go on the offensive diplomatically-speaking. he wants to be treated like a military power. he wants to deflect from ukraine. he is going to talk with merkel and hollande tomorrow about ukraine. and starts tots cooperate more, we could see a bit more coordinated approach in syria, but i doubt it. jonathan: if you thought

geopolitics could not get any more complicated, you were wrong. ryan chilcote, thank you for joining us. u.s. data, something we will be watching for the rest of the day. we will be speaking about the vw emissions scandal. for more, let's go to frankfurt. can we really expect the vw saga to be in the data that is released later? >> only specifically to volkswagen, it is expected that sales rose 13%. there is a bit of a calendar effect from the labor day weekend moving fully into september. suv sales remain popular. is probably going to continue its upward trend. volkswagen is the big question. how hard it is the diesel testing cheating scandal going to hit them? depending on what measure you

are using, either as a group, it will potentially rise, but it is more likely to fall and the volkswagen brand will fall specifically because more models were hit by the scandal. jonathan: tom, you and i have spoken about the political pressure. french pressure intensified. run us through what is happening. ministry saidmy it was opening an investigation into whether volkswagen's deception of french consumers would open it up to fines and penalties. the environment ministry said it was looking at whether to try to call back subsidies which were provided in the cash for clunkers program for those specific vehicles. it is part of a growing set of

investigations throughout europe. there are investigations throughout germany. officials in spain and sweden have also said they are looking at the subsidy question because they were giving cash for clunkers for supposedly cleaner vehicles and, in this particular case, the vehicles may not have been so clean. jonathan: thank you. the vw saga, something to continue to keep an eye on. manus has the top headlines. manus: the dutch investigation 17 continues.h over toas been handed find out what happened. the airline crashed in the rebel-controlled donetsk region of ukraine. apple has launched its music streaming service in china. content geared

toward its most important market outside the united states. apple music will be launched free of charge for the first three months. month will beper charged after that. google and microsoft have reached an undisclosed deal to end their long-running feud over smartphones and video game systems. they have been wrangling over tech innovations for five years. google was demanding royalties on xbox gaming systems. microsoft sought to block motorola phones from using certain features. back to you. jonathan: manus cranny, thank you very much. coming up, wall street wakes up. tom keene tells us what you need to know for the rest of the trading day before the city of london signs often hands over the baton. ♪

jonathan: good morning and welcome back to "the pulse." live on bloomberg television and streaming on everything. let's get a check on the markets. the stoxx 600 up over 1%. marching hard for a second straight day, the ftse 100 is up

by 1.5%. 1.1150.lar, what a quarter. the data is not pretty. negative all over. there is a very real possibility that qe could be increased. wti at $46 per barrel. market moves for a look at what is watching -- what we're watching the rest of the day. let's go over to mark barton for a recap of data. is the china news news. the markets are closed for a week, but look at the pmi data. the theory is, just look at the stock market, just look at the flight to risk. we are having this thinking that the chinese manufacturing has stabilized.

49.8 was versus the previous month's 49.7. this chart shows that very clearly. this is the official factory from 2012g back through 2015. i've drawn a yellow line at 50. the economy is still contracted. , a five interest rate cuts push into infrastructure spending, there is a view that the industry has stabilized to the we are still below 50. the eurozone figure is as interesting, i think. this is manufacturing data in the eurozone. , it is the lowest since april. the part that stands out most is factory gate prices that fell in september for the first time in six months. that is because in put prices, led by oil, are dropping at the fastest pace since january. is that going to lead to more deflationary pressures?

on, you are saying december qed, i will leave you guessing. jonathan: tom keene joins us now from new york. we hand over the baton to wall street as wall street wakes up. s&p futures up by 16. monday is like it never happened. tom: it has been a couple days in a row. some of the themes boiling right now are great. yakham fellss -- will join us. we will talk to him about the savings glut in the world. we will have an important conversation on oil with skip york avoids mckenzie. -- of woods mckenzie. when i would go back to was what mark barton just highlighted. what kind of change are we seeing? is it unit change or price change among the different global goods systems?

a number of people have pointed out that what is different this time is price deflation. we have goods coming down. exported trade coming down. it is coming down within the eu ofyou -- mili price deflation. that is where you hear christine lagarde talking about the new mediocre. jonathan: as stanley fischer said, maybe it really is all about inflation from here. tom: i noticed the spanish data earlier that really gives pause. you wonder if that is one of those tea leavs that mr. draghi is going to have to focus on. jonathan: a crucial conversation globally. tom keene coming up with "surveillance" after the break. that is it for "the pulse." good morning. ♪

announcer: this is bloomberg "surveillance." tom: commodity markets find a bid. what is the price of oil? what is the unclear value of hydrocarbons? houston and riyadh care.

october, an early jobs report. 0,000 jobs per20 month. russian airstrikes in syria caused damage and distressed. this is bloomberg "surveillance. live from a gorgeous new york. it is the first day of october. i'm with is. good morning. us from ferro joins london. what have you learned about glencore? lot.han: not a i've heard enough about glencore. it embodies the problem we see globally, commodity rout, weaker china and companies loaded up on that debt. commoditiesus is on , your gallon of gas in america. our top