alix: i am alix steel. u.s. stocks closing higher today and heading for an advance, the longest streak of weekly gains and smith. joe: "what'd you miss?". scarlet: it looks like consumers are more optimistic than expected, we will break down the data. joe: and winter is coming, why economists are looking carefully at el niño and what weather could mean for the markets. alix: who has the worst currency in the world, syria, ukraine, venezuela? do not miss the roundup of basketcase currencies just in time for the weekend. we begin with markets, we talk about highs in the s&p 500 closing at in eight week high. for the year, believe it or not, the s&p 500 has cut losses to

1.3%. scarlet: treasury is falling and oil is gaining. joe: twitter shares, late last , steve came out and said on twitter, 4%, and everyone thought it was a hoax. they thought it was an account that didn't tweak much -- twee much. anyway, bloomberg news confirmed later in the day that it was real and twitter shares surged. so among other things, you have to ascertain whether certain accounts are real or fake. scarlet: the validity of twitter. alix: i was looking at dow jones transportation average, because even though we had a modest uptick, this did not do anything in turn -- for the dow. airlines are really underperforming right now, so

some leaders are not performing when it comes to the market. scarlet: and it is not look like the high we have seen in other indexes. alix: and we had a lot of volume in the dow, especially heading into the close. you know, there is a lot of reinvigorating. joe: always something to complain about, it is still oppressive this week that streak. alix: take a look at the shanghai composite, what is driving it i should say? this is actually margin credit that is outstanding and the reason is significant, if you fallen the high, it has significantly. this is why you have seen the rally in the shanghai composite, closing above the 50 day average. there is a headwind as traders unwind margins, this is over in a has run its course. joe: that sound like good news.

dive, theor my deep market is getting ahead of the european central bank, traders are looking at possible rate cuts, which is already negative. they have made it clear that they are not ready to discuss stimulus quite yet, so you are looking at 0.2%. 0.2%, atare negative least a 50% chance of a 10 basis point cut. they should be meeting next thursday. joe: so they are not done. scarlet: correct. joe: "the fly against deflation, i would did dive into my desk will look at the know about average earnings, this is an attempt to strip out

demographics and look at the theoretical life of one employee as they get wages. it is hotter than the official measures, but there doesn't seem seem to beng -- does cooling, there could be rollover, this is just a few months. we are still waiting for this wage inflation two, and there is no clear sign it will come, we will get the index later in the month and perhaps that will be a boost. we do not see a definitive number. alix: nothing that says to the fed they should be comfortable in raising rates. and talking about inflation, we will look at the chief industrial economist from bloomberg. forll know that this gained the first time in four months. but we want to dig deeper. joe: one thing is highlighted

was the lack of inflation expectations by consumers, is this a huge deal? tell us what the survey said. runf we look at 5-10 year for inflation expectation, we have declined and this basically matches belows we have -- lows we have seen in the cycle. there has only been one instance where they have been lowered. he look at the 5-10 year series and that is more of a sense of longer-term inflation expectation, the years ahead to be sensitive to what they are paying at the gas pumps. this does not encourage policymakers, because they are worried about the lack of inflation in the economy and they are explaining it now as due to the strong dollar, due to gasoline prices, they do not want to see an entrenched mindset of extremely low inflation take hold. alix: i was wondering about

that, this survey, is it just tracking oil crisis? -- prices? >> it does, but it is less sensitive to gas prices and consumers do not expect that these prices to be sustained for the long run. scarlet: is it right that if people do not expect inflation to rise, they will put off the purchase of big items? a survey says that they are actually willing to bend on big products. >> this is the entrenched mindset, but we did see an improvement in expectations to buy large goods and that it be an encouraging sign, because those are discretionary items that could be pushed off, you could go along without the efficient refrigerator for some time, if you need to. but when household are confident, they are willing to spend on big ticket items, which include autos, which we have seen them at the highest level

since 2005. joe: you held a conference call after the release and you are looking at the state of the consumer that is not in the numbers. what is something we could have missed. >> one thing you miss was a professor from the university of michigan, who runs the survey, he suggested that we may have already touched the peak and overall consumer sentiment that this test for this economic cycle. we were at 98 earlier this year and he's the just that we may not be revisiting that level in this economic cycle. alix: is there a primary factor for that? >> just looking at the different ages -- stages, as we get later on, we will see more pressure and i could eat into the overall assessment. joe: one thing we have not seen really, any indication that volatility has harmed consumer

confidence. >> not in the long run, but if you look at the sentiment indicators, sentiment, even the headline results, like new york of higher -- empire, they all got a bit of a hit in late august and early september. now we are starting to see, signs of recovery, so it looks like that impulse, the negative impulse that hit the economy is indeed, transitory. it is starting to cap. -- pass. that does not mean the coast is clear. we will see in early november for the job report. but we will start to see as we get closer to the year, not enough maybe to give for the september lift off, but probably the beginning of next year. scarlet: everyone always is,

watch with consumer does, not what they say. especially what was mentioned professor.d by the >> i always watch what they are doing more than what they are saying, but if you see a flop - is amp in confidence, that precursor of caution. was there, and q3 it will probably be there, so we mean to watch. watch what they are doing, not what they are saying, but finally what they are saying is bringing back in line with what they're doing. alix: and the low gas benefit, i was interested to see if they look at these moving up over the longer term, because i am looking at the oil and it is sub 2016,til april 2000 --

vacuuming gas prices are here to stay. bewell, preferences could shifting to more fuel-efficient vehicles. they are doing a different cell, they know that gas prices go up, but nonetheless they are making the decision to invest otherwise. joe: i want to look at the terminal, hr we talked about earlier, the cpi report, headline inflation basically was zero, but all measures for the cleveland fed, not only our firm, but rising lately. you see the white line. you look closely at those numbers and are the signals? >> those are interesting signals worth monitoring, but it is still a three horse race for inflation. you have rental prices, which continued to hit new highs, rent inflation is red hot.

if you look at goods prices, they are in deflation, it is not just energy prices, it is across the board due to the strong dollar. the key moving part, the third horse, than on rental service prices, that shows ever so slightly an upturn. so the fed needs to hit their mark on inflation, but they need to look at broad-based inflation pressures, not just one horse driving the story. scarlet: ok, thank you for the deeper read into consumer confidence. alix: lost and bearish, that is how they have described consumer sentiment right now, but we will look at some of boards -- reports that will leave you more optimistic. ♪

♪ alix: i am alex will, "what'd you miss?", we will get to the headline there -- headlines. >> joe biden could be feeling the pressure for the vice presidential it, but president obama said earlier this morning that it was entirely up to the vice is in. -- vice president. aideshington, a longtime to hillary clinton filled with jens from a panel today, she testified behind closed doors probing the deadly 2012 attack that killed ambassador chris in benghazi. clinton will testify on thursday. and republican presidential candidate donald trump is lashing out against how

campaigns are financed. an interview, he took aim at super pac. >> these are the biggest, disgusting joke you have ever seen. when they say the candidate does not stick to the pac, i guarantee you, these candidates, everyone of them is to the pack -- speaking to the pac. these campaign laws are a disaster. mine is simple, i pay my own money. >> still, almost 74,000 people have made donations to the trunk -- trump campaign. alix: credit suisse is debunking arguments out there. the thing was, they felt lost and bearish in the markets are now, but we had three charts to show you that things are not that bad. one thing was the global

reserves we have seen in quantitative tightening, so banks are not investing. barry couple recent to debunk this. reserves are only down $100 billion, when you adjust for fx, that was a bearish argument for when they are adding to reserves. a bullish argument, i should say. and they look at global liquidity and that is an interesting chart. they say that the liquidity is supported and consistent with a 30% re-rating of global equities, there is money in the system. that was a great counter. joe: another thing it touched on was the concern among everyone that there is too much debt in the world and they talk about household debt and basically the extent to which household are under leveraged. this is relative to the, this is

back down at levels long what it was before the 2000. so the idea is that the household has a lot of room to leverage, there is positive impulse out there. not a major source of vulnerability right now. scarlet: and consumer spending is driving that growth, as opposed to government investment. for earnings revision, they have been coming down sharply, this pushes back on that. now they are at a four-year low, but they say that his darkly you need a drop of 5% in earnings for the bear market and that is unlikely to happen unless you have a couple of things going. or% -- companies over invest are off by 100 basis point, i'm not sure if those will happen anytime soon. joe: one thing i realized about the report, it frames this moment. many are confused about which way the world economy is going.

there are a lot of debate happening, the debate about china, there is the inflation debate in the u.s. army you could make the argument that -- u.s., the argument where we are this moment there is so many questioning. scarlet: there is a lot skepticism. the market is not matching up. things toiting for take off and it does not get there. alix: one part where they did express caution, a bigger take away, was that they do see risk for a chinese hard landing, that was a key risk for foreign investors and they see that as a high probability. they say that the record is looking at deflation, health prices, and in effect, so this combination makes them a wildcard. but the effects to be holding up

. joe: there is a major concern out there. alix: a great no. -- note. scarlet: much more coming up, he died into some of the worst performers this week and inflation. next. ♪

♪ --rlet: "what'd you miss?" president obama says that russia will have realized that they cannot tom their way to a peaceful's --peaceful resolution in syria. so with all of this political turmoil, how do you measure a country's economy, evaluating their economy.

joe: steve hankey is a professor , thank you fors joining us. utrecht these troubled -- you track these troubled currencies, why do you do this? >> it is an important topic because i am training didn't -- students to learn how to do these things. another aspect for the general public is to actually have an accurate read on what is going on in a place like syria or venezuela you, because the official data is not reported, even invent as well you. --then as well you. they have the highest inflation 500t now, running between 600 percent and the central bank is not reporting anything. joe: what is happening with syrian currency? currency just

continues to gradually weaken, not to magically, but gradually -- dramatically, but gradually. it is fairly stable between 70-80% so what i look at is through the fog of war, if you look at a currency on the black market, the free market or free exchange, you track the exchange rate, you can translate the changes in the exchange rate on the black market into an annual implied inflation rate am i do everyday. for isyria what i look we are getting a lot of propaganda from the u.s. and russia on what is happening on the battlefield, who knows? i know what the black market exchange rate is doing and it has not changed much since

russia entered the picture. i will be watching that carefully and if the exchange inflationlizes and comes down, i will have an idea e and the redeem -- regim if they are gaining, and - -co- confidence. alix: what do you do with that information? the related to what is happening internally with politics, how does it go from there? syria, that is the extent of it. in been as well you --invent as well you --then as well you, the inflation is much higher than banks are forecasting. ala is in a lot more

trouble than people actually think. it does provide many trading opportunities, because you have a very accurate estimate of the inflation rate. at higher rates of inflation, once it is over 25%, the technique i use for purchasing power parity's is very accurate. from a trading perspective if you are in a high inflation country, in countries where the has been big depreciation's and currency, you can get a handle on the bond market. , but at there is that the same time, what about pushback or response from authorities, what policymakers do they have to bring down hyperinflation if it is not acknowledged? >> they do not acknowledge it, because they do not like the

reality facing them on the ground. syria is a unique situation, because you have a civil war. the thing is, to look at the black market will tell you a lot about who is not only winning on the battlefield, but who is topping the foreign exchange at the foreign bank. if the pound strengthens, we would have a fairly good idea that the central bank is able to supply foreign exchange reserves to meet the demand by those who pounds get their syrian to the central bank and get something in exchange. it is a good thermometer on what is in reality going on. alix: fascinating. we have to leave it there.

speaking of currency, we have breaking news, brazil's currency is tumbling, this is after the finance mr. -- minister is preparing to resign. scarlet: we can really see them move lower, you are looking at dollar strengthening, because that is a quote for the currency. .1%, so thee .1% -- 3 headline here is that there is speculation that the finance minister will resign because it has been reported that he is frustrated, that the government has not taken steps to address fiscal issues, especially with the credit rating being downgraded. he will hand in his resignation on friday. joe: you see the reaction to the news. scarlet: we will be right back.

♪

scarlet: what you miss? >> we begin with the united states and russia and a possible for peace that could coexist in the skies above syria. raidsations conduct across the region paid russia began airstrikes in syria last month. they are in support of the assad regime. some are supported by the u.s. as well as its allies. the u.s. is calling it a clear violation of un's sanctions. u.s. ambassadors meant -- a

medium range ballistic missile was inherently capable of delivering a nuclear weapon. report. is preparing a to the un security council to that monitor sanctions against tehran. virus that has plagued west africa is still not a thing of the past. world health organization reports two new cases have been reported in the week of new guinea. that ends a two weaker run with no reported new infections. hillary clinton is urging congress to fix a quirk in the law that would increase medicare deductibles, as well as premiums. the democratic presidential hopeful is deeply concerned by news there will be no social security cost-of-living increase next year. as a result of some medicare bills are set to increase unless congress acts to prevent it.

there is more detail on bloomberg.com. back on over to you. scarlet bank we had -- scarlet: we had stocks close on an eight week high. the s&p 500 has reduced its losses to 1.3%. the dollar strengthened, oil rose and treasuries fell. the dollar is strengthening even further when you look at the brazilian rialto -- brazilian -- brazilian real. >> they are unconfirmed at this point, this would be a huge deal. was impeachedeff that would be a good thing. the entire cabinet and government has been in this

scandal of bribes and kickbacks. this would be a significant shift. he has tried hard to get the economy on track, and it is hard to get anything through their congress. >> clearly traders don't like to -- don't like this piece of news. we are still dealing with earnings right now. ge, according to today's results, getting what is wants in terms of industrial profits. it finally looks like it's getting valued as an industrial company. this is one of the reasons -- from a conglomerate to an industrial giant. industrials in orange touch a higher multiple then ge did for most of the last couple of years. except recently, because this sell ge and announced to 200 billion dollars of ge assets. that was the turning point where people were convinced to ge was making the change, making the

move to get rid of capital assets and turn itself into an industrial company. they are being rewarded by investors. and i have been talking to analysts. they were more cautious on ge because they didn't feel like they could rate it yet as an industrial company. the fact it did jump up its peers is quite significant for the rating community. the way peoples are valuing them at estimating their earnings. >> let's talk about a currency getting slammed. the zante a quach a -- the kwacha. you can get a good feel for how it has been beaten down. copper prices is the yellow line. of exports of 70% income for zambia. here you see copper rebound but

the kwacha has not. what is everyone going to do? prey on sunday, literally praying for the health of the economy. given thet work, health of central banks you might as well try something new. divet to take a quick deep into my terminal. we got the jolts reported it is a look at job openings. this is a look at the rate of quits in the food accommodation industry. as you see it is up in recent years. these are obviously not typically high-end jobs, but people at the lower end feeling more confident. you don't quit your job if you are worried about being able to find another one. scarlet: didn't we find that restaurant sales are up? >> that is one area that is doing pretty good.

scarlet: fast food workers are demanding higher wages. let's move on into the weather. our first weather block may be the first of many if scientists are right about el niño. i know aas predicting one of the strongest on record. with sea surface temperatures rising we could see more rains, floods, and temperature changes. jacob mizell of the spoken investment group joins us now. ocean temperatures have been getting warmer over the decades. tell us what our first math shows us and how el niño figures into it. jacob: this merely shows temperatures across the central pacific ocean, with a focus on the red across the equator. see service temperatures are surface- see temperatures are two degrees above average. just south of alaska we also

have some slightly warmer ocean temperatures. kind ofgoing on is a debate between those two key features in the pacific ocean. dominatinge el niño the equator and the warmer weather off the pacific west coast. oft is sometimes a signal colder air inflow into the east coast later into the winter, where the el niño will bring a more will mild winter to the east coast. cooler weather in the south, colder weather strapped up in canada. it will be a battle between those two the main features. you are looking at the temperature anomalies average. average around the globe, what is going on with sea surface temperatures? you havence 1950, where sea surface temperatures normally are. these maps will show where the deviations are on average. is what el niño is, it is

when the central pacific ocean really warms up more significantly than average. scarlet: actually it was el niño 3.4, the possibility is increasing. jacob: it is actually peaking. as you move into the october november month, those are the months the sea surface temperature anomalies peak. then you have a typical lag effect. in january you start to feel the core of those across the state speed we have the first indication on our short-term weather models. to start seeing more moisture in southern california and a lot warmer mather -- warmer weather moving into the midwest. scarlet: 25 in massachusetts, a cold snap for sure. you have to take a look back at the 60's and the 80's. this is a map of what we could see if and el niño hits. jacob: this is a map of the teat

of the last major el niño's, from 1997. the two last major el niño's from 1997 and 1882. -- and 1982. the west coast and primarily the southwest is going to be much cooler than average. >> will it also be more wet on the west coast? jacob: the climate prediction center is forecasting significant easing on the drought across western california because primarily of the el niño. skiing in february in utah or colorado. at what point do we find out if it is playing as normal? jacob: we are seeing these anomalies peaking. they are cresting in the next few weeks. as that happened we are seeing where in the pacific ocean they

are going to dominate most. there is a standard el niño. cooler water next to south america. we have a lot more for the end of the winter. >> you are looking at how speculators are trading the national gas market. what do they expect? jacob: money market managers are -- thatition right now is because of this el niño. they expect the prices are going to remain low throughout the winter. no heating demand across the east coast and key population centers. prices are going to stay low. what we are advising is there is a potential that el niño is

expected to collapse into the spring. colder weather could move in to the tail end of the winter and booze that heating. >> thank you, that was great. >> we will get you back on for the following year. scarlet: what cities in the u.s. really matter most.

time for thes bloomberg business flash, a look at the biggest business stories in the news right now. goldman sachs is firing 20 analysts for allegedly cheating on internal training tests.

bloomberg news has learned the analysts have been dismissed or in the process of leaving the bank. chinese e-commerce company alibaba is offering to buy the rest of a popular streaming site. it has been referred to as the youtube of china. scoping and one investors lowered about twitters recent struggles. steve ballmer has built up a 4% stake in the company. the l.a. clippers is high on twitter's new moment product and is praising jack dorsey for making the company leaner and more focused. and that is your bloomberg business flash. >> let's talk about housing. the housing sector is cited as the bright spot of the u.s. economy. as demand continues to outpace supply, will structural issues bring it down again? california, welcome. when housing peaks in 2006, the last bubble, it was clear there

was a massive imbalance in the market. is there an imbalance now? is a supply and demand imbalance with the lack of home construction we have seen from 2009 through 2015. demand has still been there. growth, we hadon household formation growth. there has been virtually no construction. we have been constantly saying we believe there is a housing shortage, especially in the first time homebuyer market. slideillow was out with a and was talking about cities where they see a high potential of new household demand. the number one city identified was riverside, california. why is there so much potential very? -- potential their?

>> you have a growing population base. riverside county, specifically san bernardino county. there is continued population growth. it is a way of life. people enjoy having the house, ae yard, living on the cold sack, being able to kick the ball around on the streets. there are more people moving into those communities. it is more readily available. >> what might actually be structural? maybe they are going to move in with their kids, instead of our retirement home. they are not going to want to move into their own house. housing has to have a bigger snap back. >> you have not only the baby boomers but also the millennials.

one segment of the population is considering what to do with their household portion, do they sell or rent for their golden age and keep some cash for themselves? there is a lot of people in that age group considering those types of things. is then coming up millennials. you have 80 million millennials next18 335 that over the five through seven years are going to be moving into household. are you worried about the amount of student debt millennials are carrying? to say they been able for a down payment given the high cost? >> it is a challenge for millennials to earn a mortgage. we are seeing a trend from my home ownership nation come of

the american dream of owning a home is no longer the american dream of today's population. a lot more people tend to move into rentals. today isge millennial making $45,000 per year. it would take them on average 4.5 years to save up for a down payment. save 12.5 years to save up for a down payment, are you going to put that money into a house? now -- scarlet: a lot more to come. we continue our discussion of the u.s. housing markets next.

scarlet: he looks at single-family homes in california. we were talking about how there is a lot of pent-up demand, especially places in california where there is an overrepresentation of renters. what happened to the idea that americans would become like germany, a nation of renters instead of homeowners. jack: about 68% of the population owned a home versus renting. on a national average we are closer to 65%. each percentage change represents one million households. in the western u.s. it is lower, 59% and trending lower towards an equilibrium of 50-50. warren buffett has made some comments about investing in single-family homes, saying it

is very attractive at the class. is this a new idea? at what the -- what other point in history did institutional investors consider single-family homes as an investment class? jeff: it is not a new idea. 15 million single-family attached homes in hands of investors who rent them out. recently been until they have become more institutionalized. the credit crisis, the home values that allowed institutions to come in and aggregate large portfolios has made headline press. have publicly traded reads that are buying and owning single-family as a traditional asset class. it is always -- it has always been there. joe: is there anything

more attractive? jeff: we love the western u.s. for various reasons. primarily -- primarily the stability of the rental income with upward price depreciation in those marketplaces. you can win two ways. your downside is protected by the stability. scarlet: out is looking at the large buyers. they have amassed about $68 billion since 2011. what would categorize a bubble in this space? jeff: the bubble depends on what your time is as an investor. historically the future value is greater than the present value. i think that is going to rain .rue as long as the leverage stays in tact, i don't think there is real wrist -- real risk from

investors getting hurt. despitemily showing us overall economic factors going pretty remains consistent. investors should be protected if they have the ability to withstand those. scarlet: there's so much data available to investors. i wonder if there is too much can misleadt data people, optus skate instead of clarify. >> we often have challenges, where do you start, what is interesting, what is not? institutional investors are reporting quarterly on the metrics, are reporting publicly on what expectations should be on cost and things of that nature, i

think that is a great sign for this investment class. joe: there was some political backlash, the idea of long -- the idea of wall street being a landlord. there any risk factors along with regulatory dimension that one has to consider? jeff: nobody wants to see their name on bloomberg as not taking care of their tenants and properties or things of that nature. fact you do have institutional owners in place, that headline risk is so high not only on their agenda but individual investors like us. thes raising the bar of quality of these assets and bringing it to the forefront. this, we areiss

going to tell you what you need to queue up a monday trading day.

scarlet: morgan stanley reports earnings early morning on monday. next weekly 4% of the s&p 500 will be reporting. it will be busy. alix: sunday night you are going to be watching the third quarter china gdp numbers. they start to come in at 6.8%. this is going to be crucial for the markets. do you actually believe the official data? joe: our neighbors to the north are having an election. it has been the longest general

election season in canadian history. it is a tight three-way race. nobody knows who is going to win but there is a lot at stake. >> have a we live in a pick and choose world. choose, choose, choose. but at bedtime? ...why settle for this? enter sleep number. don't miss the columbus day sale. sleepiq technology tells you how well you slept and what adjustments you can make. you like the bed soft. he's more hardcore. so your sleep goes from good to great to wow! only at a sleep number store. right now save $600 on the #1 rated bed, plus 24-month financing. hurry, ends sunday! know better sleep with sleep number. john: with all due respect to

the chicago cubs, welcome to new york. just make sure you leave your filthy stinking deep dish pizza -town.n chinat it is not really pizza, it's like a cheese high. spending power and debbie downer. are,alk of the town hillary clinton is having the best campaign performance and today she is dominating the news.