in new york. we are covering stories out of san francisco, rio de janeiro, and china. closed ataverages record highs after pulling back. the best materials and financials are leading the decline. are talking with ason schenker. and the clintons have revealed they have made $10 million. does this put the heat on donald trump to reveal his tack returns -- tax returns?

>> i'm going to start at fixed incomes because that is where we have seen such a dramatic move in reaction to this morning's economic data that came in worse than estimates. retail sales and wholesale inflation. not to mention a later report that came out on consumer sentiment that came out worse than expected. they were as low as one thing for 9%, now it one play 51. 1.51 percent. if you take it over to stocks we are seeing a little bit of up back from this record close since yesterday for the three major averages. the first time they have reached that milestone on the same day going back to 1999. has dropped after manically. if you take a look at what has the on the week of -- in

s&p 500, kind of sideways action. even though we didn't have that record close on thursday. of 1%.f .10 -- point one some of the best-performing stocks that we are watching include nordstrom. reporting earnings that beat estimates and saw strong sales at its rack division. that is after a u.s. justice department report said the government would be receptive to seen -- hearing cigna and anthem arguments over a settlement. waken videos rising in the about gaming devices. switching to quantities we want to take a look at what is going on there. we see crude oil prices on the rise up better than 2% and $44 a barrel. saudi arabia has put out there that there might be negotiations on stabilizing oil prices. we did see a little bit of a dip at 1 p.m. monday recount number

came out and showed a seventh straight week of increase in rates. oil bounced back up from that little bit of a drop. first word on the news and we get more with mark crumpton in the newsroom. mark: hillary clinton is widening her lead in three battleground states. the new poll from the wall finds secretary clinton with a bigger lead in colorado, virginia, and north carolina while maintaining heard vantage in florida. here is a look at the numbers. to trump's 32%. in virginia, clinton leads 46-30 3% and in north carolina she has 48%. mr. trump has 39%. mrs. clinton's campaign said she and her husband made 10.6 million dollars in 2015 and paid a federal tax rate of 34.2%. of theirted 9.8% income to charity.

clinton is trying to undercut the trustworthiness of donald trump. he said he will not release his returns until the irs completes audits to the clintons had forten -- disclosed returns every year since 1977. the u.s. is concerned about reports that chemical weapons have been used in syria. according to opposition groups to people were killed with chlorine gas and an airstrike on a level this week. syria denies the accusation. china may increase pressure on south korea not to employ a defense system. -- beijing may suspend some investments in south korea. nbc will make it up to advertisers who have seen all the big tv ratings fall short of expectations. advertisers were given free commercial time. nbc will not say what audience it promises but the primetime

audience on the broadcast network is down from the 2012 games. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. back to you. shery: let's get back to markets with stocks pulling back as julie just mentioned. the s&p 500 is erasing weekly gains. we are joined by mike regan. we are erasing some gains but still very high levels. are we seeing something of a bubble forming, what are the metrics telling you? obviouslyations are much higher than normal and it is a trend that last year the valuation of the market at 19 -- cap the lid on the stock market as earnings were declining and that this late -- explains the flat market.

it is surprising a lot of people on wall street that now we are seeing expansion valuations. the s&p is trading above the year-end target for the strategists that we surveyed and for this time of year that is an unusual thing. it is usually a pretty optimistic group with very optimistic year-end targets and to see the market above that at these valuations is a bit of a surprise to a lot of people. goldman sachs was calling for basically a second year in a row of flat markets because they did not believe that valuations would expand. a little bit of a surprise. the wildcard that throws a monkey wrench in the valuations is interest rates. treasury yields are down 15%. the fortitude for higher valuations gets stronger the lower those rates go. about,it has been talked

this unloved rally. that was true earlier when we saw stocks rallied also. when you and strategists are looking at it right now, are there any signs that despite this lack of love, so-called, that it will be able to keep going? mike: everyone wants to be a contrary in. when everyone is a contrary in contrarian, everyone sees the greed. early withe years his call. he says a lot of their clients are talking about irrational exuberance and they are concerned, especially the fixed income market but no one wants to act on it because it is irrational. it could go on for a while. how long could valuation expansion last?

interesting story. stocks ofives buying their company in july them a that was the lowest on record. it is not a super long history of data from washington -- tracking insider trades. the number of selling is a must 1400. the ratio is a more than four to one which is very high, highly skewed some -- toward sellers as opposed to buyers. it is something that people look at. it has been an interesting predicted thing at market bottoms. theoes tell you at least insiders, the executives are a little less confident at these valuations levels. julie: interesting. thank you so much. columns.ead mike's this has been an important group this week. short -- shares in nordstrom

rising more than 7% after beating second-quarter estimates. america's largest luxury department store chain got a price -- a boost from its off-price rack chain. we have had a number of the large names reporting earnings and i want to bring in robert that, who has held top jobs at ralph lauren and ceo at robert burke associates. when you look at nordstrom as an example, and you see that rack was powering the sales there, what does that tell you about the state of luxury retail, that it was a lower-priced chain doing well? guest: nordstrom has focused on their growth of the rack business. their anniversary sale is something they started years ago and it is to drive that fashion consumer into the store to get a good deal before the season gets going. they are not necessarily a promotional store. they are very much geared toward

fashion and full price. doingave been good at exclusive product. part with beyonce was doing well. been about how to differentiate their product and the consumer to go to nordstrom and other -- not other retailers. clients bute department stores -- we are hearing that these rants are reducing inventories of these department stores. how do you advise both sides when we have the dynamics of their relationship changing? >> it is a very good question. what has happened is the inventories have gotten in line with sales. because everyone lives through 2008, 2009, difficult times, we started to see things slow down in the last two or three inrters and so this quarter

earnings is people have put their inventories in line with sales. wall street is reacting to that. julie: that is a reflection of consumer behavior we have seen. consumers at this point are not shopping less. that is the conventional wisdom and there has been a sea change for the retailers. does this earnings season, do some of these numbers show they have finally adapted, are they in a good lace now? it is a difficult thing one should go down the discount path as a department store retailer. you are training the customer to wait. they have taken a difficult step in making sure the customers come in and not discounting as much or they are not discounting. you see it on the brand side coach made an announcement that they are pulling back on wholesale and that is the cause the retailers have been

discounting it. they know to have a healthy business they have to go after price. same thing with michael cores -- kors. they are going back so they can have more control of their retail price. shery: what we're seeing is the internet just crushing department stores when it comes to sales over the past two years. if the cambria chart we will see that online sales are spiking while we are seeing department store sales falling. good strategy to go online when you're trying to stay luxury? guest: the customer is incredibly informed and they know how to find the best possible price. everyone is saying their online business and nordstrom being a good example, they have been ahead of the curve on their online business always. they are saying the opportunity to build that online business and also build full price.

the term was used to death but it has become something you have to-- you realize you have have both. macy's is closing 100 stores and their online business is strong, much stronger than their brick-and-mortar. it is a telling sign, how many retail stores does someone need when they have a healthy online business. julie: thank you for joining us. robert burkeof associates. do you think you could work 130 hours a week? burress samira said she can. -- the business week interview with myer is next. this is bloomberg.

julie: this is bloomberg markets. tells --rress a meyer atissa mayer plans to stay yahoo! after the sale to verizon. she has worked long hours to get to where she is. rishaad: you met with marissa mayer. very high-profile. where did you meet her? >> i met her at the yahoo! headquarters a week after the announcement that yahoo! would be selling itself to verizon which is a capstone on this very controversy all four-year tenure that she had a ceo. : did she seem stressed out? max: she seemed more relaxed and more comfortable than i think i had seen her in any interview that i had seen on tv.

pleased with the outcome and also at peace. she has been doing battle with all these different constituencies, mainly activist investors but also former yahoo! employees who had been monday morning quarterbacking everything she has done. the business has performed rather early. it has been a terrible or sheicult for years but looked like someone who had come out on the other and and felt like it was a reasonable outcome. you leave the interview feeling different about her? max: i have always and more synthetic to -- been more sympathetic to yahoo! and her tenure. there have been things that have gone right and there is a strong argument to be made that it was

an uphill climb. and that she did as well as she could have done given all of the adversity that the company faced. what i thought was most interesting coming out of the interview was talking to her about what it had been like to run yahoo! while trying to sell it while also having three kids which she did while she was going through this crazy thing. amazing period in any ceo's life. be one ofis will these formative experiences in her career. reporter: she plans to stay at yahoo!. seemsave said that unrealistic. what do you think is next? max: they have to unwind the asian assets. alibaba which is the best thing that ever happened to yahoo! and in a lot of ways the worst thing because it's want the iconic

internet company. she will at least stick around for six months to a year overseeing the transition to verizon. trying to get things figured out on the alibaba side. at some point she will move on. she said she plans to stay at verizon indefinitely. i do not know what indefinite means but i asked her where do you see yourself in five years and she said something interesting which is she felt like she developed a lot of skills as ceo and she would like to use those. which to me i hear that and i think she wants to run another company. there had been rumors that she was going to do some sort of investing thing. that is still a possibility but take her at her word, five years from now she will probably be the ceo of a company. group: you talked about her incredibly busy period of her three children.

do you have a sense of how she did that? max: she is a very hard worker. she -- i asked her what did you learn at google and she said larry and sergey are amazing thinkers and she talked about that but then she said the thing that people forget about is we worked super hard. she said that for the first five years and she did an all nighter every single week. basically her answer to how she jobs, she called it five running yahoo!, dealing with these investors, having children, it goes on. was just to work like crazy. can hear from the magazine's reporters on the week's most talked about stories saturday and sunday. coming up, we will hear from elise former prime minister and former eu commissioner mario monti on the challenges facing europe after the exit boat.

this is bloomberg. ♪

julie: this is bloomberg markets. let's move across the atlantic for an update on the european economy in the wake of the brexit vote. francine the clock -- francine have rightly

understood that the effect of brexit will be on the real economy. they will take time to materialize and so there probably will be very serious economic real economy consequences for both the u.k. [indiscernible] and the [indiscernible] -- the markets do well to rochus it -- focus on any problems. >> does the italian financial system remain too big to fail and too big to save?

system do have problems. they come out of a number of years in which they have considerably less problems than other banking systems like germany's or spain. different -- this was a big problem. that was the only case in which during my government in 2011, 2013 the state did intervene. there was not really a need to do so. i have the impression that italy's banking system is a problem but i also have the impression that the anglo-saxon world that problem is being slightly exaggerated, maybe also

to inadvertently sick to divert the attention from brexit and other major problems. julie: the commodities closes just ahead. let's take a look at how oil has done this week. it is on track for its best weekly game -- gain in four months angst to saudi arabia and comments that the energy mnister has made about potentially acting to stabilize prices and having informal discussions with other opec members on the sidelines of a conference in algiers next month. this is bloomberg. ♪

shery: this is bloomberg markets. you can't tell how hot it is just by looking at it. it is sweltering and humid out

there. julie: let's check the headlines on first word news. mark crumpton has more from the newsroom. it -- draco rican zika numbersheir bringing the total to 10,690. the newest is just six were released after the u.s. surgeon general visited and said he expects a quarter to be infected by the years and. donald trump is apparently giving up on new jersey. wouldsaying his campaign be competitive there, the campaign has vacated its headquarters in the state and has not paid staffers since early june. filings by the federal election commission shows the campaign last made a rent payment in may for the edison, new jersey property. airstrikes in opposition areas of aleppo province struck a

market, hospital, and a village. 18 were killed and -- including children and to hospital staffers. government troops have sealed off the main route into aleppo effectively trapping nearly 300,000 residents. fatima has fired one of his closest allies. he says he is replacing sergei ivanov because he had been in the job too long. ivanoff is a former defense minister who was once considered a likely successor to putin. dayal news 24 hours a powered by more than basics hundred journalists and analysts in more than 120 countries. i am mark hampton. this is bloomberg. back to you. shery: switching to commodities. snapped a three years of declines. a property boom in china is lifting demand. the rise competitive expectations for further losses

opting analyst to revise their forecast. one analyst not surprised was jason shanker. even though iron ore racked up double-digitis -- losses. he explains what he saw that no one else did. how much did you base your forecast on china and is your outlook change at all given the latest economic data including factory output, investment, or missing estimates? jason: my expectations have not changed. a lot of what my forecast is that on where exceptions you would see out of china monetary policy stimulus that would eventually force the economy in a more positive direction and technicals and december also turned the list for iron ore and all of that fed into our forecast for the year and we have seen prices rising on trend and although things are likely to [indiscernible] the medium term that is what we

are expecting. julie: your sticking with the same playbook. you have been looking backward by going forward you are sticking with your forecast you think we will see similar action. jason: i do not think it will be asked her medic as what we have seen since december. -- dramatic as we have seen since december. that is still a lot lower than the prices that were pretty close to $100 in 2014. that average price is around $94. 2018,are expecting $72 in it is an increase from where we are now and it is a significant increase from what we were saying in the bottom of december but it is still a lot lower than where we were a couple of years ago. one of your forecasts that has not materialized is china cutting rates. important tol be .ee additional stimulus

we will likely see eventual additional stimulus out of the united states. very concerned about the u.s. economy, i am concerned that we a recession by the end of this year or the beginning of next year in the u.s. in that will weaken the dollar and you are likely to see the fed stimulus. 30 will see the stimulus train coming up the station at the same time the greenbacks are likely to weaken and those factors combined with the fact that chinese growth seems to be bottoming out now if we look at manufacturing pmi out of china, that bounce in july was a huge upside surprise, that compiled manufactured to sing manager -- the index. that is a sign we might be near some of the bottom in chinese growth data. julie: i want to turn to oil prices. we have job owning are talking

about talking about -- by saudi arabia, talking about price stabilization. we have heard this before. this is what happened earlier in the summer, we heard all this talk about it. bullet -- oil prices rallied which is the effect they wanted perhaps and it was no agreement. if that was -- will that happen again? jason: this is different. i saw the press release come in monday morning from opec. i go to meetings and i received the note. there was a very formal press release announcing an informal meeting in algeria next month. that is very surprising. if you receive a very -- on very formal letterhead this announcement that there will be an informal meeting on the sidelines, there is probably some meat on the bone here. i think that is why we have seen prices price this week created -- this week.

it is something i caution my clients about. this was some fundamental upside for the price of oil. julie: what does price stabilization action mean in this case, do you think? does it mean a production cut? jason: there is an increased probability of a production cut. i think there is an almost insurmountable challenge to perceive -- achieving that cut. that does not mean there will not be more discussion and will be a lot of discussion, an official discussion and especially after the cooperative tone of the december opec meeting in vienna. it was very different than we have seen a number of meetings. i think that does increase significantly the probability that some kind of action could slideen if prices were to further which is something that happens in the shoulder period, after summer contracts are done trading.

the debbie ti closed for august on july 20. we have been trading september drivinghoulder post season curd, there is a risk it could slide further. someannouncement has ability to bolster those prices and stem some further declines. shery: how much will this meeting boost prices when we are seeing u.s. crude inventories continue to rise, not to mention that it comes on top of seasonal refinery maintenance that could curb demand? jason: i do not think it is so much a matter of how much is the leading going to boost prices but the fact that it has been this very formal announcement of an informal meeting does indicate that the opec members would consider taking action ahead of the november 30 meeting that will be in vienna. that is something that has been done here to stem the pressures downward, to bolster and

buttresses prices that could fall further now that the summer driving season is over. not so much they will boost the price. they are trying to keep it where it is. if it's lights further, that risk of action, that probability does go up. we have seen them bounce off the bottom. crude at 34 barrel. thank you so much, great to talk with you. turning to there 2016 presidential race. the university of michigan's month the survey of consumers shows the number of hassles than expected clinton to beat trump rose dramatically. how crucial is this metric? shery: apple's biggest suppliers of seeing a huge stock drop as demand for smartphones comes in below expectations. what does it mean for apple and the smartphone market as a whole? isia: the time in new york

2:38 p.m. as we check on the major averages. lower heading into the close after that record close for all three averages yesterday. marginallyonly off down the points. of 1%. is off almost .3 the oil price rise notwithstanding, we are seeing materials shares otherwise under pressure and that is dragging down stocks overall. this is bloomberg. ♪

julia: donald trump is speaking

at a rally in cary, pennsylvania. pght wrist introduced him and a letter was signed urging gettingrman to focus on down ballot candidates elected. interesting development in what has been an interesting campaign season. shery: with 20 electoral votes at stake pennsylvania is considered vital to trumps chances of taking the right house -- white house. clinton is getting a 52% of the vote in pennsylvania to 40 printer -- 42% for trump. let's talk more about hillary clinton. her campaign released her 2015 tax returns. husbandshared her earned $10.6 million and paid

$3.6 million in federal income taxes. campaign release the pressuring donald trump to do the same. joining us now is our political reporter. pressure is on donald trump right now. reporter: definitely. hillary clinton put out her tax releases and she has made a very concerted effort to put pressure on donald trump saying that he has not released his own tax returns. she has raised a number of russians about whether or not those returns show that he has not given to charity as much as he says he has or that he is not as wealthy as he says he is or that he does not pay very much in taxes. hillary clinton and her husband paid more than 30% of their income in taxes, a pretty high tax rate and there are questions about whether or not donald trump pays a lower rate than that. too full with clinton coming out with the tax

returns. there is the idea of pressuring donald trump to release his own which seems unlikely because he has not bowed to pressure on anything in particular and there is the crystallizing issue in the minds of voters, will she be successful on that front if not actually getting him to release the returns? she is continuing to push this argument that donald trump is not who he says he is. part of that talking about his tax returns repeatedly saying he does not give as much money to charity and maybe he is not wealthy as everyone thinks he is. this is creating an error of questions about donald trump and sayser he is the person he he is. that is part of her strategy and we will see that for the rest of the campaign. how does this company her appeal to middle-class voters? hillary: that is what

clinton is being hit over. she is not dead broke as she said. she has earned millions through deals and speeches, the speeches that something are republicans -- that are something republicans are hitting her over. that some of these speeches bring in hundreds of thousands of dollars for an hour or so of talking create something that does not resonate with most average voters who earn much less that -- than that over the course of a year. julia: i want to get back to this idea of this open letter to reince priebus. trump them to defund the campaign. is there any chance of that happening, with that gain traction? reporter: we will have to see. he spoke with donald trump so he

is very much on board create as we have seen a number of different polls have showed donald trump like behind hillary clinton. recall the worried that he is going to drag down senate candidates and house candidates. the rnc will have to make a decision if these polls show donald trump lagging, whether or not it makes sense to poor good money after bad. republicans who signed the letter are saying they should pull their support. i do not think that will happen anytime soon. if we get into october and it looks like donald trump is behind we could see some of -- so getting pulled and good getting pulled and relocated to keep their majorities. julie: we will discuss the widespread slowdown of this light -- smartphone market just ahead. this is bloomberg.

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shery: this is bloomberg markets. julie: medication in the workplace is much simpler these days thanks in part to slack. risen and offices has made e-mail passe. the casual nature of it can mean an hr nightmare. break down the end of his software phenomenon. us with a joining preview. how widespread exactly has it become and why has it become so popular? slack usage has exploded. it is used as million people a day. probably more than that.

there was 200,000 a few years ago and all sorts -- in all sorts of offices. it started in tech and media companies and nasa and jpl uses it. you talked to a lot of companies, they are on it. shery: why? rebecca: how do you feel about e-mail? shery: i'm ok with it. rebecca: a lot of do not like e-mail. i do not know if you have been in a conversation in your cap -- you have to go back on a thread and you're stuck in a chain. make itd apps like it more like a conversation. it is more easy to communicate that way. julie: what in the files? there have been some hr issues. is it because it is casual? rebecca: a feels like chatting, it is chatting. gifs in there.

people forget they are at work. you see people putting stuff in that could get them in trouble. a service integrated is this? rebecca: they do a good job of integrating it with other and i software that you might be using at work such as google stocks or dropbox and things like that. julie: is slack the only game on -- in town? rebecca: it does have its competitors. julie: thank you so much. check out her podcast. myry: i am happy with e-mail. that was rebecca greenfield. we have more on that and you can find the latest on rebecca greenfield's piece on the podcast. not to apple. the biggest supplier is changing strategy as decline in smartphone demand squeezes his bottom line. shares had the biggest drop any

year on friday after the company reported its third straight earnings decline. we are joined right cory johnson. is unveiling its next iphone. will this be a saving grace? cory: the new phone will help that what we are seeing is a slowdown in the rows of iphones or smartphones at large. the growth of smartphones happened in the developed world and went to be on that. ll ofd to a continuing ro growth rates but that has slowed down. it has -- is not just about the iphonew product, is getting long in the tooth. we do not see the same kind of growth as we have seen in the past. if you look at the annual growth numbers for smartphones you can see a dramatic collapse of the year-over-year growth numbers getting into single digits.

julie: we have a chart and the growth has been slowing down so dramatically. going from 27.8% down to 3.1%. to ass the component maker certain degree is helpless on this. if you are apple or one of the other smartphone makers, you are the one who is driving that demand. can't do anything. -- assembling the phone is no easy feat. that is the main thing they do but the common nation of the slowdown of smartphone growth and the collapse of the pc industry, those trends have caused the company to see its growth cut along the same lines. growthe expecting the from what they expect of the

smartphone area. sharp was not doing too well with components when sharp was manufacturing. they may have gotten a sweet deal but we can -- we will see if they can't incorporate bat and affect a change in their business models. it remains to be seen. julie: there was a lot of reflected in the stock earnings. cory: i am dismayed at your love of e-mail. how many e-mails are in your inbox? shery: i am good with what i am doing right now. everyone hates e-mail. there e-mail boxes stuffed with e-mails they do not want and silicon valley is focused on slack. shery: i guess i am used to living with inefficiency.

maybe i am too complacent. maybe because i do not know that there is something better out there. cory: you can master difficult things, that is the problem. that is the problem. i am just to adapt. -- too adept. julie: cory johnson talking all things tech. stay tuned for bloomberg west live from san francisco later today. emily chang will bring you the latest tech headlines and you can hear cory johnson on the radio as well every day on bloomberg radio. lots of other stuff. shery: tech being the big driver of lots of stories these days with apple and the iphone. julie: coming up in the next hour. time to get into emerging market debt perhaps. cio ofl hear from the global credit. if you check on the major

averages here and treasuries bear still saying yields pushed back. we are seeing the 10-year fall below 15% on this morning's disappointing economic data. we have seen some selling today also. the nasdaq little changed. the dow is off by 47 points as we head into the last hour of trading on this august friday with volume down 18% from the 20 day average for the s&p 500. this is bloomberg. ♪

shery: it is 3 p.m. in new york and 8 p.m. in london. julie: welcome to bloomberg markets. ♪

we're live from bloomberg world headquarters in new york. covering stories in los angeles, chicago, and japan. u.s. stocks retreat from their record highs. are they coming back to earth or just taking a breather? shery: a deluge of u.s. data out today. retail sales and ppi both seeing their biggest miss. julie: oil posts it's biggest weekly advance in saudi arabia signaled it is good to discuss stabilizing markets when opec meets next month. we get some perspective. hour from the close of trade in the u.s. let's check on markets. we see some red across the screen. it is the