good afternoon. happy lunchtime clima. i am alix steel. scarlet: here is what we are watching this hour. hints of a rate increase. pimco says falling commodity prices are largely behind us. is the worst really over? we will ask the executive vice president who is making that call. scarlet: getting ready to show audiences his best steve jobs. already getting some oscar buzz. alix: for more on today's activity, we want to head to the markets desk where julie hyman has the latest.

julie: today is a subdued at session. it has been a good week. could be the best week for the s&p 500 and the year -- in a year. the nasdaq has been the strongest performer throughout the session. let's look at the leaderboard. at the imap, you see the sectors that are leading and lagging. sort of subdued here. a mixed picture. energy the biggest laggard along with financials and information technology. i want to look at the recent rebound in the s&p 500. the s&p overall up 7% in this latest upswing we had since september 28. energy shares the best-performing group during that time. they have been up 15%, materials close behind with a 13.5% gain.

commodities rebounding. the pullback today is a pullback on recent outperformance for that group. alix: energy is still the biggest laggard. who is keeping the market afloat? .ulie: industrials and airlines couple airlines came out with numbers for how the third quarter and fourth quarter are looking for the company. both american airlines and united airlines coming out with positive commentary. we are seeing southwest also participating in a rally today. united talking about higher margins. sayingn airlines september comments traffic was up by 7.2%. this is a group that has been doing quite well. look at the industrials , for the week, up 6.5%. we have seen this overall rebound from the lows with the

s&p 500 retracing 50% of its drop, the correction drop. it is up about 7-8% from those levels. onx: we want to get a check first word news this afternoon. outgoing house speaker john boehner is urging paul ryan to succeed him. the washington post says the two have discussed the issue. onlyboehner told that the one who can unite the party. shortly after kevin mccarthy stunned capitol hill by dropping out of the race, ryan said he was not interested in the job. mccarthy says ryan would be an amazing leader. >> we have a good conference working together, trying to work together. paul is looking at it, but it's his decision.

he has to decide. mark: of the republicans are pressuring congressman ryan to run for speaker. beforemoil comes weeks critical deadlines to raise the debt limit and fund the government. a spokesman for ryan saying he is not running. days after the tragedy at a tiny organ college, yet another deadly shooting on a college campus in the unite states. one person is dead and three others wounded after a shooting earlier today at northern arizona university. the incident started after a confrontation between two groups of students. an 18 year old college student was taken into custody. >> two separate groups got into a confrontation. the confrontation turned physical. one of our students produced a handgun and shot four of our other students. one of our students is deceased. that others are

being treated at flagstaff medical center. eastern kentucky university canceled classes for the arrest of the we got great thread on social media. president obama is heading to oregon to meet with survivors and relatives of those killed. not everyone is happy with the visit. gun rights supporters plan to protest. the pentagon will scale back training of syrian rebels and will focus on existing units battling islamic state. the change reflects the failure of creating a u.s. force from scratch. that is a look at our first word news pretty can always find the latest at bloomberg.com. -- first word news. you can always find the latest on bloomberg.com. scarlet: the first interest rate

increase may be imminent. thats lockhart suggested in a speech in new york today. he said the economy remains on a satisfactory track. ica liftoff decision later this year at the october or december meeting. alix: let's talk to someone in his camp on the issue. eric nielsen is the global chief economist at union credit bank. always a pleasure to talk to you. you get pretty feisty about the issue. do you think october has any chance right now? we think december. it should have been september. we push it back to december. who knows? that is the best guess. view,n economics point of it doesn't matter if it is october or december. on economic data, they are behind the curve now. scarlet: i wonder how you would

great the communications so far. they had that dovish statement after the september 17 meeting followed by hawkish talk -- the jobs report seems to vindicate the dovish statement and we have hawkish talk starting up yet again. erik: it's almost like europe. it seems clear and then we have the noise and all of a sudden they took it off the table. it has been quite messy lately. it reminds me of the old days of the ecb. scarlet: i'm not sure about that. ben bernanke was on bloomberg television yesterday. >> the reason the growth is so slow is not because the recession is still resisting this persisting, the productivity gains are slow.

according to a bloomberg survey earlier this month, economists see a 15% chance of a recession next year. the odds were 10% for the last 13 straight months. what would be the justification for a contraction in the economy? erik: we think it is unlikely. if you do this model, it is quite low. recovery asf this runabout the average, maybe a bit beyond the average. given all the changes the world, it is difficult to see this recovery being a lot longer than it is. it is surprising that people are starting to think about a slowdown again. that's why i said what i said. it feels like they are behind the curve. it would have been nice to have a cushion to come into a partial

slowdown. alix: if you look at the german , i havecoming out tracked german consumer confidence. it is rolling over there. that matches up with the retail sales we have seen, the import data that was pretty weak. is germany the canary in the coal mine for europe? erik: i don't think so. these are quite difficult to interpret -- we have corporate scandals with bullets wagon -- volkswagen. all these things when it comes to russia. the recovery in europe is a lot younger than america. it is nice and fully funded by construction. -- consumption. it is not credit led. the increase in consumption is

funded by the increase in income. sluggish and speed, unfortunately. to see europe roll over now would be quite a surprise to me. dorlet: what does the ecb next? mario draghi's ready to use the instruments available. another board member indicated it is too premature to talk about another round of the week. qe.round of tw erik: i think the ecb is hoping that that will move. that will take pressure off the euro. and easing on the financial conditions in europe. that will be wonderful for the ecb. qe 2.nk they will do a ecb is thatfor the their own inflation forecast that takes you back to 2% within

that period is unrealistic. ,he moment you acknowledge that the slowdown in emerging markets , if you cannot see in your own forecast that you hit your target, what are you going to do about it? the answer is qe 2. alix: love having your opinion. scarlet: coming up in the next 20 minutes, a collapse in commodities prices is over. we will weigh the evidence. alix: who will step up to the plate on gop leadership? we will have the inside scoop on some of those possibilities. crusade yearsmond in the making. ♪

alix: welcome back to the bloomberg market day. scarlet: time now for our business flash. alix: the probability that the world's biggest economy will enter a recession in the next 12 months has jumped to 50%. the highest level since october of 2013. -- jumped to 15%. the walmart cfo will retire at the end of january. he has been in the position for five years. johnson & johnson conducting criminal trials -- bolaical trials for an evi

vexing. the first volunteers have received initial dose. more than 11,000 people have died from the virus since 2013. you can always get more business news at bloomberg.com. juliet: we will revisit hyman who has an update on individual company names. julie: container board. people are buying it. an upgrade for the group coming from wells fargo. upgraded mostly on valuation calls. the analysts saying underlying fundamentals remain intact. stocks are a good defensive play if we see challenges in the developing markets reached the u.s. international paper exiting a joint venture in china. , up by piece of news 11%.

i want to look at lumber liquidators. the stock up sharply today, 24%. caps off the best week for the stock in 7.5 years. the company reached a settlement with the department of justice theiregations related to products containing materials they were not supposed to. it has been a terrible year for lumber liquidators. there were has this materials -- hazardous materials. the whole chart would be filled with those comments. the ceo resigned in may. that settlement with the doj spurring this bit of a rally we have seen. look at it in context, even if it is up 24% today, looks less impressive.

i left the volume chart on the bottom of the price chart. you can see the spike in volume we saw when these reports were surfacing. the company responding, a lot of back-and-forth. has been an interesting year for lumber liquidators. we will see of this settlement or ifhe issue behind it there are other shoes to drop. i was looking up international paper short interest, right around the highest level since 2009. market. shorts in the that was kind of cool. julie: something else that can exacerbate the move. alix: a minor rally is pretty major. commodity companies jumped for a ninth day, the largest -- longest streak in 15 years. oil headed for its biggest weekly gain since august. scarlet: pimco sang the worst of

the collapse in commodities prices is probably over. what went into that call? greg shares executive vice president at pimco. what prompted you to make this call? was there a move in demand? did supply show signs of shrinking? : you are seeing a significant drop in capital expenditures come across a variety of commodities. that is an important part of the adjustment being made. capital has been invested that a lower rate -- at a lower rate. guarded optimism call. you cannot rally 20% today. we do think that is important. alix: the theme among all

analysts, we will see lower prices for longer when it comes to oil. is your coal that there is a floor or that we move higher going forward? greg: 10% higher than the after thisve today most recent rally. disagree,art where i if you look at the market itself, it is handling the high inventory levels well. we have not seen signs of distress and the physical market like we saw in 2008. some of the forecasts, you have to have physical distress. we are largely able to get past that. the physical markets are operating efficiently unlike 2008 when we had significant disorder. scarlet: which commodities are more distressed than others? part the most important

will be emerging-market growth. the sentiment there isn't -- is incredibly bad. if we see acceleration in demand, that will improve metal consumption. the supply cuts have's julie: julie: stopped -- supply cuts have stopped the bleeding. alix: what are the chances that supply will not continue to be shut in? we see brent and wti over 50. does that mean more producers on? isncore isn't shutting -- shutting production. >> you will be in this world where if you rally too much, there is a lot of money looking for investment opportunity.

if you have an opportunity that is good, you will see the capital coming into the space. it is guarded optimism. we don't think there will be a of $60 wti.lly scarlet: earnings season is underway. what you plan to glean from oil companies and mining companies? >> he will be important to see where their forward guidances. how they are planning to spend relative to their free cash flow. have becomel costs very expensive. if they are curtailing capital willditures, if they continue with that discipline going forward, that helps ensure rebalance.ontinue to alix: free cash flow is the dirty work. good stuff.

you mentioned glencore. is chairman of bloomberg lp a senior independent nonexecutive director at glencore. alix: still ahead, steve jobs back on the big screen. hollywood's latest version of the apple founder premieres this weekend. how his legacy is portrayed. scarlet: this trailer is great. ♪

>> musicians play their instruments. i play the orchestra. worse than usual this morning. i did not think that was possible. it was a system error. fix it. this cannot be fixed in seconds. you have three weeks. scarlet: welcome back to the

bloomberg market day. was the trailer for the new steve jobs movie. his legacy continues to grow. that movie will be out today. -- it is notne always flattering. scarlet: his widow try to prevent this movie from getting made. that did not get too far. aaron sorkin wrote the facebook movie. slack from that. he wrote this movie as well. you have to wonder how accurate that is. scarlet: he had to dive into corporate america. what's interesting is the

release date of this movie. early october. movies nominated for an oscar like best picture are usually released in the october-december period. scarlet: when you have someone like michael fassbender, it is the key. scarlet: lose weight and put on a black turtleneck and jeans. he doesn't have to put on a lot of makeup. who will take john boehner's place? we will discuss, coming up. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20.

it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. alex: welcome back.

scarlet: mark crumpton has all the details. mark: president obama says vladimir putin's leadership is eroding and that his military actions in syria prove it. in an interview with 60 minutes, the president suggested that russia's decision to launch airstrikes is a desperate move, prompted by the weakness of the shah are all a sod, who is trying to stay in power during a bloody civil war, now in its sixth year. studentna, one college is dead and three others wounded in an early-morning shooting at northern arizona university. police say the violence again when two groups of students got a confrontation on campus. a freshman is in custody. to a awake this morning

tragedy on our campus. we are, of course, shocked and deeply saddened by the circumstances that bring us together this morning. authorities say the shooting took place in a parking lot outside the dorm. south carolina is bracing for more flooding. jeh johnson has traveled to to check onay recovery efforts. a storm is expected this weekend, bringing additional rain to some areas and threatening rain and others. the weather service warns of possible scans tied to the -- scams tied to the floods in south carolina. donations toking flood victims. scam artists often impersonate charities to try to get money or private information after a tragedy occurs.

that is a new sign bice president be inching toward a white house run -- vice president joe biden may be inching toward a white house run. meeting with the dnc. the dnc has held similar meetings with other potential candidates. you can always find the latest news at bloomberg.gov. alix: house republicans are scrambling to find a new leader. kevin mccarthy shocked house members yesterday by quitting the speakers race. pluset: bloomberg politics phil mattingly is in d.c. -- bloomberg politics reporter phil mattingly is in d.c. with more.

phil: first and foremost, we have three major deadlines coming up. october 29, highway and runs out.tion funding november 5, the debt ceiling is reached. december 11, the government runs out of money. most should we be concerned about? >> absolutely the debt ceiling. if we do not raise the debt ceiling, treasury will default on its debt. globaluld have major limitations. we have had shutdowns before. if they have not affected gdp or the stock market. they are uncomfortable. i would rank it third and importance. it is critical that investors start getting some clarity on how we are going to proceed on the debt limit. is the choice of probably 215 of the 247

members of the republican caucus. a few minutes ago he said he is still not running. but he is going to consider it over the weekend. might still be in play. if he runs, what changes? >> the headlines will be the bleeding is over, but nothing really changes because you still have to vote to raise the debt ceiling. there are not 218 republicans who will vote for it, which means you have to go to nancy pelosi. about theem is not personalities of paul ryan or kevin mccarthy. it is about policy and the process of how the house is going to move forward, and the new speaker will not be able to solve that problem. long as you don't have somebody in the race for speaker of the house, that gives rayner and mcconnell some --

boehner and mcconnell some flexibility. left seed question -- lift sequestration and get some tax reform. the field of dreams vote. build it and they will come. im not sure it is going to be successful. best casehat is the scenario. what is the worst case scenario based on the dynamics you are seeing right now? >> if we don't have a leader, or even of paul ryan says he's going to be the leader, and we approach the november 5 deadline. we tried a big deal. it failed. we tried a small deal. that fails. an ugly process where investors are uncertain about the outcome of the debt ceiling. investors believe

there is a foot in the market that the debt ceiling will go up. as soon as you lose that foot, gold will start going higher, equities will start going lower, and the 2011 nightmare will come back. i assign a 10% probability of that invent. it is one investors should be focused on. seem toery two years we get here. if paul ryan is not the speaker, who should we be watching? >> trey gowdy, john kline as a caretaker, and the dark course would be mike conway of texas who has been making calls and we think is a serious candidate. phil: no shortage of headlines. you will be busy the next couple of weeks. alix: great conversation with dan clifton of strategic us --

with dan clifton. dazzled by diamonds. we will tell you the link the diamond industry is going to to stop synthetic fraud. alix: and glencore took a steep nosedive. ♪

scarlet: welcome back. i'm scarlet fu. alix: and i'm alix steel. a beer maker is trying to rally shareholders and hold

back a takeover offer. they have some pretty sweet deals. beer on tap. it's pretty amazing what they have. thatberg news reports credit suisse may sell stock to raise up to 8 billion dollars. the bank is under pressure by swiss regulators to raise capital to protected from another finance -- protect it from another financial crisis. scarlet: insurance companies are taking a hit from the wildfires in northern california. losses are estimated at 1.23 billion dollars. state farm is the largest insurer in california, followed by farmers and allstate. alix: you can always get more business news at bloomberg.com. scarlet: let's take a look at the european markets close.

days of gains for european stock markets, the best run since july. investors bet the feds won't budge on interest rates this year after the release of september's minutes. been thempanies have driving force. have a look at the two big gainers on the footsie today. this hasn't happened since y2k. has surged, wiping out the majority of last quarter's slump, which was the biggest in four years. the worst may be over for commodities as producers shell projects. the shelf projects. -- shelve products.

the data out today from the u.k., construction output fell since fastest pace 2012. britain posted a larger than expected trade deficit in august, indicating a faltering economy could persuade the bank of england to keep interest rates lower for longer. we are hearing that at all of the central banks, lower for longer. shares still below offer price. 42 pounds 15. that tells you investors are not concerned. standard chartered shares are up today. cut almostanning to a quarter of senior staff to help reverse a two-year profit slide. that's according to a person with details of the matter. saving the best to last.

glencore. wow. another 7% rally. hasglencore resurrection been absolutely astonishing. last monday, shares fell to a record low. double your money in nine days? you by glencore shares nine days ago. the company has convinced investors it is financially assured and solvent and today it said it is going to cut zinc production by one third. what happened to zinc? record high. mark barton is so passionate. stocks andat u.s. focus on the nasdaq. >> i don't think i can match mark in excitement in terms of glencore resurrection, but i am going to start with facebook. .5%, no specific news on that front, but there is

a great story on bloomberg.com. emojisll about the im they have been introducing. this will change the way people interact with their newsfeed. there is a great story about the background of all the people at ojis.ook to make the em the emojis. talk about go pro. this is a company on track to do a billion six in revenue. billion in revenue. they are a little bit concerned about the average selling price. finally, autodesk, a great piece on bloomberg intelligence saying the company is going to continue

to use its cash flow to buy back shares. thoughe up about 6% even the company is coming off a year of perpetual licenses. they say the cash flow is going to keep the stock within a bed because of the buyback program. because of buyback programs. alix: there if you investors understand where to put their money, including david rubenstein, co-ceo of the carlyle group. he offered a forecast for the economy. >> we tend a have recessions every seven years more or less in the united states since world war ii, so it some point in the next year or two or three, we can expect a recession. you do expect some slowdown after the pretty good growth we have had. i don't think we are likely to grow at more than 2% or so in

the united states this year. he europe will probably be 1%. china is slowing to about 6%. i don't think we are on the precipice of a recession, i just think there will be modest growth for a while. is different about china. i don't think we have ever had an economy this large that is centrally controlled. as we watch over the last few months, their willingness to ,ntervene in the equity markets dislike give you concern or increase the risk premium as you go to china, because you're not sure with the central government might do? >> the central government there is really controlled by the president. typically, the premier controls the economy. in this case, it is an economy that moves quickly when it wants to because of central control. sometimes you wish in our country we could move more quickly when we want to get things done.

you trust the government. >> i think the chinese realize that propping up the equity market doesn't work. there has never been a case in the past -- >> you think they made a mistake by intervening. >> i think they feel that way. i don't think they will be doing that again. >> to continue the tour around the world. growth is still lesley and what it was. talk about india. there is a lot of talk that india may be coming on. >> in 2001, the phrase bric was invented. it meant brazil, russia, india, china. prime minister modi has done a spectacular job of convincing business people around the world that india is a place to invest, and more and more business

people around the world are going to india, investing there, and we are increasing our investments there as well. >> looking to russia, many investors have said they simply don't want to be in places where they don't understand or trust the rule of law. what is your take? >> we were in russia twice and we pulled out twice. we did not think there was an opportunity for investors to get a good deal or the best deal. the best deals went to oligarchs. and we have nout intention to go back. we have made some big investments in brazil. we think the bottoms have probably been hit. you never know exactly where the bottom is, but we filled -- feel bullish on the long-term products of brazil. >> is there a product you are excited about? states is the united still the best place to invest.

i think buyouts are a consistent way to make money and i am attracted to the buyouts we are doing in the united states. >> that was david westin speaking to the carlyle group. it was interesting -- the ceo of the carlyle group. it was interesting to hear him do a round the world tour. with all the political turmoil and questions over leadership, the president of brazil might get impeached. i want to go back to what he said about the u.s. and how we tend to have a recession every seven years. there was a great article today a 15%aid economist see chance now of a recession in 2015. that was up from the 10% prediction in the past three months. a critic talking about how he does see a slowdown and wishes the fed would have hiked earlier because it would

give them more ammunition going forward. the question of what can the fed do? we heard a president yesterday, who is extremely dovish, say negative interest rates may be something we can use in the future. we have heard a lot of chatter from morgan stanley, saying their clients are looking at the potential of qe4. on the one hand, we are looking at hikes and the other hand, do we need more stimulus? haslet: and monetary policy run its course already. alix: exactly. coming up, shine bright like a -- synthetic stone? it doesn't have the same ring to it. we are going to tell you why the world's a guess diamond producer is selling fake gems. -- biggest diamond producer is selling fake gems.

alix: welcome back to the bloomberg market day. the world's of biggest diamond companies is making near flawless gems they selling.n on why? alix: it's actually an attempt to weed out fake stones being sold as the real thing. thomas, how does this wind up working? thomas: there have been numerous accounts of fraud in the industry. is thers -- de beers industry custodian and biggest producer. they want to protect consumer confidence. they figure the best way to is to buildonds machines to do it. so they build to their own synthetic diamonds and try to stay further ahead than the competition to make sure they are building the best synthetic

diamonds. if their machines can catch the diamonds, they feel confident they can catch the ones others are making. how much of the market is synthetic diamonds being peddled as the real saying and how much of it is i know it's synthetic that's real thing, and how much of it is i know it's synthetic, but i want to buy it because it's cheaper. thomas: it's a small industry. the ones being sold as synthetic diamonds are a very small, niche market. the legitimate ones being undisclosed and trying to be passed off as natural diamonds are even smaller. we don't know how small it is, but it's tiny. consumer confidence is

everything to the diamond industry. things likeeen from blood diamond, they have to work to cut off consumer confidence issues. what is the difference between the man-made diamonds and the natural ones? a very good question. it not much. chemically, physically, they are very much the same. you could give to stones to an expert in the diamond industry for 30-40 years, and he may not be able to tell the difference. on somethingium formed in the crust millions of years ago. perhaps not so keen to buy something mind and blood or made in a lab. in blood or made in a

lab. they go to india, where about 90% of the world's diamonds pass at some stage, tel aviv, new york, and put them in these big training centers. they go through big training centers where they are cut and polished and put into juda jewelry. scarlet: thank you so much. you can read thomas's story on bloomberg.com. next coming up in the hour, we are going to talk to a ceo who says don't worry about health care's limping quarter. ♪

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scarlet: from bloomberg headquarters in new york, good friday afternoon. i am scarlet fu. i am alix steel. here is what we're watching this hour. the health-care industry has been feeling sick. buy or stay away? we will get some insight. scarlet: and we will talk to a ceo who has never lost faith in glencore, the beleaguered mining company. alix: world leaders are meeting in peru. we will find out more. to the: let's head first markets desk were julie hyman has the latest. tgif. although it looks like traders are feeling tgif by