[bells ringing] scarlet: oil declining below $44 per barrel. joe: the question is what did you miss? persist.jitters we breakdown moves across asset classes. we look ahead of the fed decision pushing unemployment further lower. donald trump has a five-point lead over hillary clinton in ohio. we dig into the number later this hour. treasury advances. in the end we could not

hold on enclosed negative once again. scarlet: i want to run through leaders and laggards here. you can see the gains were not big by any stretch of the imagination up .5%. .iotech did better it tracks the sector up 2.5%. energy was one centered declining as oil prices decline. .ne name i want to highlight it has fallen or gained 2%. the anecdotal on the iphone seven has an positive. sprint says they received four ands as many new iphones later today, verizon came to say it's orders have basically come

in within the normal range where aboutlects let's talk bond market because that is the center of the action. the story has been that back up in rates lately. down toear yield back 1.7. let's look at the bond index yield. yields are clearly on the rise. this captures all the bonds. you can see the rise in yields, extraordinarily low. at the endup there that arguably caused so much of the volatility we are seeing in markets. i want to show another chart. the five and 30 spread, this is interesting. it is now 10 straight days the 530 spread has widened, and this ofthe longest since august

2012. all of these things about the people aretening, worried about, is it widening ?or the wrong reasons is this an unwanted tightening of fed policy? 10 straight days of widening. giving back some of yesterday's gains, that if the dollar index up by one third of 1%. goldman tax is the -- is staying faithful to the call that held since 2014. currently pricing in a more thread. 15% based on the forecast, 3% rate increase based on the tightening cycle that would last through 2019. currencies have fallen for three straight days. that is the index there. today you can see they drifted

higher but there is still incredible weakness and among individual currencies, we see the commodity centric currencies drop in value. arrows indicate the dollar appreciation. oil today.k look at whipsaw action. we have got inventory data that first appeared to show, people interpreted it as bullish but that reversed right away. we ended up down 2.7%. you mentioned the oil rally we saw a earlier this year, one of those things we saw underpinning emerging-market and an oil has not been impressive as of late. scarlet: you see its pilot -- spiraling lower as a result. a reminder that you can find all of these charts using a function at the bottom of the screen. i am looking at the world -- wells fargo fallout.

a drag onainly berkshire hathaway because berkshire hathaway owns a 10% stake in the bank. these are the top five equity holdings and how they performed so far next year. us, coca-cola, america next and wells fargo is way at the bottom right here. the white line here is the s&p 500. down 13.5% so far this year. fascinating about all of this is it came out of the financial crisis relatively unscathed. did not sell those exotic products and it did not take extreme positions. it pursued a bread-and-butter approach and that is what got it. the decline is now smaller than jpmorgan with market caps and it is interesting if there was one bank people said would have a really good reputation, it is wells fargo. interesting to see how the brand

holds up. that is why it is a great association with warren buffett. i am looking at risk parity. these are a 1% change in the multi-asset strategy index that tries to essentially capture risk parity strategies that long stocks and long bonds. this is everything selling off at once with no place to hide. this index has had its two worst days all year on friday and tuesday. it got a respite monday on the rally and two ugly days in a row. really driving home there is no diversification across asset classes. you will down -- will be down by ridding. scarlet: if you are long on everything and every thing keeps going up, to the downside, that

is where it hurts joe: your it is athe theory is that it low volatility strategy that one thing goes down and other things go up. times worked for a long but lately not so good. to get more insight into the trading, let's turn to oliver. thank you for joining us. oliver: see out there? a quiet day. i think for a lot of people, this was a relief. a big move friday and another rally back and moving back to normalcy. interesting throughout the day. there has been a slow down trend. at the same time, it seems there is a bit of hesitation to go out and put a tiny month -- a ton of money as well. you have got to remember there are big events on the horizon. a slow and quiet two months and now we get into that time where you talk to straight -- to , people are digesting

and gearing up for the events. we have got fed next week and even though the market right now thinks it will not go, it is a big event and has the potential to surprise so you do not want to the caught on the wrong side of the trade. it has been painful for that strategy. to investors and stocks, are they saying everything hinges on the yield curve? classic good question because we have seen this correlation between both asset classes. that is what causes some of that weakness that joe pointed out on the index. there is a lot more focus on yield right now for sure then there has been in the past. if you reasons. one is they have both stocks and bonds in the long-term market. it is technical, which market is more overvalued, which one is pricier at this point?

the saying goes that intelligence is in the bond but -- >>,'s intelligence does it take to buy something that seems like it only ever goes up. >> yes, if you look from a technical standpoint, it is how much longer can both roots rally? thatve this other aspect we talk about at length. a lot of the recent rallies from the first half of the year was related to bonds, and it was a very bond like rally in the stock market. >> i want to bring up a chart here i just showed it a few minutes ago. x had moren vx activity yesterday than any individual stock. what does it do to the market

one volatility itself becomes such a big product for people to trade? that it is no longer a mere derivative of other stuff that it is something people place direction on. >> one of the most tangible repercussions of that is what is happening in the vix curve right now. there are various reasons why the futures curve has basically remained upward sloping throughout the selloff friday and monday and one is you can argue it is such a long position and a lot of the volatility instruments. you buy it and basically what happens is your spot rolls over in the next month and you have theell and that keeps selling pressure on the front end and keeps that curve flowing upward. thing is i think there are a lot of questions, when you talk to asset managers, people advising clients on where to put their money, they're not close

-- not totally convinced that beyond the institutional leverage type hedge funds, that people really understand what these are. you see a huge volume on an astrument like that, hey, good day for you but there are a lot of times where there are volatility products where there is a sharp move that maybe people do not fully understand. that is a separate debate but what we are seeing is there are a lot of bets being made directly on volatility through those. hedge funds have been short through mostly vix projects. looking over the long-term, that has in a big that. asset managers have been on the other side of where they think that will pick up. let's take a look at the positioning here of investors here you look at a chart, the long versus short ratio. to does that compare

previous weeks leading up to the fomc? >> right. this is bullish. it is the most long futures contracts on the s&p. it is a ratio of long versus short contracts. this is the way it has been for several months. it also explains some of the shock on friday. you had a notion that maybe the quantitative easing that we have gotten used to is fading or at worst reversing and you have all the long positions. i think that will be important. joe: thank you very much. the unemployment rate is closing in on the fed level of unemployment. you see the professor of economics next. this is bloomberg. ♪

mark: hillary clinton has just gone through one of the roughest of her presidential campaign. a poll underscores the challenges she faces. this has donald trump leading clinton in ohio. 43% among likely voters in the race. trump pulls well in ohio among men in union households. one of clinton's problem's, the massive trade. the trade agreement hurt jobs and exports. syriansrian aid in being held up by security

issues. he says he is urging the russians to use their influence .ith the syrian government he reached out to u.s. officials. casess aware of dozens of of legionnaires disease in the flint area but failed to share the information with the public. miller pleaded no contest to the misdemeanor of willful neglect of duty. -- legionnaires has believe made but many it was likely the cause. the national football league and get a new efforts to combat concussions according to the washington post. for thatncludes money are protective gear as well as medical research for head injuries. it remains under intense what is suffered by

players per global news 24 hours a day powered by more than 2600 journalists and analysts in over 100 20 countries. this is bloomberg. back to you. miss overhat did you 5%. employment and if so, what does it mean for how the fed frames next move when policymakers meet next week? joining me now is tim. let's start with the dual mandate. stable prices. is it an equal mandate or does inflation matter more to the fed? should bes stated, it equal mandate. we should be thinking about both sides of the equation. joe: i'm curious about the unemployment rate mandate. the unemployment rate, we are at full employment, somewhere around 5%. that thatent are you

is accurate? seen wages go crazy yet, where does the number come from? >> it is an estimate. we do not know what the natural rate of interest is. we have to use these metric models to come up with estimates. it is one estimate of the natural rate here it could you lower? the answer is yes. that is if they question the fed needs to think about. setting the rate at 4% is a big difference. hundreds of thousands of jobs. joe: one thing people talk about is is the fat out of ammunition? people have been saying that for years. i want to bring up a chart our colleague showed me which is

basically that long-term , wectations of rate hikes see the drop in the long-term expectations in the next five years. to three hikes. how much further can they go? we saw a big drop in expectations. does this represent a further limit to how much the fed can -- >> there is a huge topic or it should be a huge topic for the federal reserve, to what extent is it asymmetric here. a better place going forward with interest rates close to 3% at the short end and financial markets are saying that is not likely. it puts a damper on the fed

asns to raise interest rates might be stated in projections. scarlet: there is an academic projection where they rethink interest, where that might be and where it should be. in the meantime, they're looking at the current situation with unemployment below 5% at 4.9% rising, with bond yields , how does the fed factor that into its forecast next week? does it give indication that it will start to pay more attention to it? >> i do not know if you are seeing enough in the rate to be worried that it is at a pace that would be disruptive. if we are thinking about something like the taper tantrum we had a couple of years back. if we see that kind of movement just yet. we might see something more

healthy where some of our expectations, the federal reserve will stay in -- near zero for very long. something better happening in the economy or we think the yield can be at a later date. >> the governor has been one of the main advocates at the fed looking at the conditions. it seems to have emanated out of international action more than the u.s., japan, germany. does this bolster the case that the fed has to be more con isn't of international economics than it has been in the past? >> that argument has been made more evident over the past year. financiald to the markets and the dollar is a linchpin currency. what the fed does matters a lot.

the extent this is an issue that does not go away anytime soon for the fed, that is true. next we will talk about the state of macro economics. something that no longer qualifies as scientific research. this is bloomberg. ♪

and nyu economic professor calling out macro economics in a big way. he wrote the evolution of macro economic smears development in string theory from physics, which suggests they are examples for fields of science that rely

on mathematical theory which fact can end up being subordinated to the fear let death. go preferences of leaders. professor of economics still his economics a failed practice? everyone is focused on numbers and equations that there is no power or relevance to the world anymore? know, i hope that is not the case. criticism is one he is making for quite some time now and it is not something we have not heard in the wake of the financial crisis. not seem they were asking the right questions. scarlet: it is also difficult to figure out what you are measuring and how to measure the new forces like technology, are in unprecedented times, especially when considering monitor policy and prescriptions are so unusual. we have departed from the

unusual path and are in experimental mode. does macroent economics need a complete rethink? toi am not sure we need throw out everything that is done. you will find instead that we can start using the tools we have to ask different questions. once we have not thought about for a while or ones that did not give the attention deserved or they were worried about zero interest rate policy prior to crisis put on the radar. the toolsnow if necessarily need to go away but we need to be more open about challenging basic assumptions and rational expectations and models included in rationality or something similar. and thinking about the role of financial markets more. institutions buttressed by

economics will lose their credibility. you think about the fed in 2016, so trying to figure out if i can get inflation to 2%. of the function of flawed emesis and extraordinary activities that it done since the crisis? >> i am not so sure indicate -- in the case of the fed. much they're taking too faith. signe extent that is the without thinking about the probabilities around them, i could be correct in that sense. i've got to run. sorry about that. great to have you. thank you very much. coming up, this new start once a stake in your home.

this is bloomberg. ♪

mark: get first word news. the u.s. will offer trade benefits to myanmar. indicated that the united states is not prepared to lift sanctions that we have imposed on miramar or quite some time. : u.s. companies have been watching closely for any sign they will get access to the fast-growing southeast nation. it was known as burma before the former military rulers changed the name to myanmar in 1989. donald trump continues to cut

into hillary clinton's lead. a new poll has clinton leading from 48-43%. in august mrs. clinton had a double-digit lead. with third-party candidate, the front runners are virtually tied. clinton tops trump 31-49%. terry johnson has 13%. jill stein has 4%. secretary clinton will be on the campaign trail thursday after sitting out a few days with pneumonia. she will be in greensboro, north carolina, then join president obama at the congressional hispanic caucus institute annual gala dinner in washington. the u.s. and israel signed a new aid deal that will give $38 billion over 10 years to the u.s. -- to the israeli military. the largest the u.s. has had with such any nation. it replaces a long-standing deal. it calls for israel to spend all of the money on us-made military equipment.

global news 24 hours a date 600ered by more than 2 journalists and analysts in over 120 countries. scarlet: let's get a recap of today's market action. after three straight days in which the dow moved up to the double-digit points, we have a bit of --of triple digit points, we have a bit of a calm. the s&p 500, little change, while the nasdaq climbing one third of 1%. energy stocks took it on the chin, falling 1% as a group. no economic data moved the market. joe: it was a quiet day. and for the first time in four days, we did not have a 1% move. finally a bit of a quiet day. a bit of a decline in rates as well. "what'd you miss?" the new tech startup wants to take a stake in your home. digital is giving homeowners

cash for a share of the property. the palo alto-based company is backing investors and former citigroup ceo vikram pendant -- joining us now is point digital finance ceo and cofounder. thanks for coming on the show. why should someone sell a stake in their home? first financial technology platform that allows users to sell equity without taking on additional debt obligations. pc users using us for investment -- second the small business, investment properties, reinvesting into the home. we see customers that want to optimize lower monthly payment. joe: let's talk about the investor. at first blush, having this liquid asset that somebody else controls might not be that appealing. but there is an upside built into it. home, they% of my

get 20% of the upside. caucus through the economics from the investor. -- talk us through the economics from the investor. >> this is access to an uncorrelated inflation hedging asset class. this does not exist. there is a train trillion dollars in u.s. residential equity alone. there is a great way to get exposure to residential real estate owner occupied assets without the tenant, toilets, and taxes that have historically come along with rental properties. joe: i read a recent blog explaining why this is good, and it said that for the homeowner, it allows them to diversify out of their one biggest asset. i can see the appeal of the. you have so much money tied up in one asset, why not diversified? but the homeowner is compelled to either sell the house or by out -- or buy out your investor

after 10 years. does that ultimately undermine the idea that the homeowner is really doesn't find -- is really diversified if the investor is made whole in 10 years in a matter what? eddie: we want to make sure that the customer understands the pros and cons. we encourage them to research. we want them to see if this is the right solution. for our customers dealing with an event such as a medical issue, a divorce, education, this can be a great solution with no debt obligations. talked about how the investor will capture more upside on the homes. about the downsides? say the house loses money. will the homeowner and investor lose money at the same rate?

does the investor have extra protection as well? joeeddie: if we are sharing 20%f the upside, we are sharing 20% of the downside. that is what has radically changed. we truly align with the homeowner. wendy homeowner -- when the homeowner does well, they will do well. joe: is it one-for-one on the downside of the house? both the homeowner loses 10% and the investor loses 10%? if we are using the 20% number, and the home goes up by one dollar, we share $.20 of one, if it goes by down dollar we lose, $.20 of that. joe: got it. if i'm a homeowner and i sell you 10% of my home, do i need to tax obligations on this right away? eddie: no tax obligations.

the is deferred until you sell your home or you pay us back.. because we are sharing in the appreciation, we pay the tax on our portion and it reduces your capital gains. this is not the first time things like this have been tried. the premise of retail markets or risksharing with markets is not a new idea. there have been derivative markets for homeowners to hedge off exposure. it has never taken off. why do you think this will be a different attempt? eddie: you are right this has existed in a foreign bank and commercial real estate space for tickets. decades. for us, building a brand that is tech first, digital, and customer first is going to be the recipe for success.

of pointand cofounder digital. look very much to seeing how it develops. scarlet: coming up, democrats are feeling queasy about hillary clinton's narrowing lead over donald trump. a new poll that is leading towards the republican candidate. this is bloomberg. ♪

scarlet: don't miss bloomberg's new six part series. don't miss donald trump speaking sub in new economic york at 4:30 p.m. london time. eight q and a with a hedge fund manager. don't miss the six part series

"big problems, big thinkers" looking at some of the biggest threats to humanity, whether it is war or the financial crisis. that series debuts tonight at 8:00 p.m. eastern. i and scarlet fu and it's time for the bloomberg business flash. a warning from ford, the automaker says total results will fall because of added investments in electric vehicles and new opportunities. it sees results improving in 2018. ford says it's moving all of its u.s. production to mexico. salesforce ceo says the company is planning to hire a chief diversity officer next week. this comes as many redoubled his fight against state laws that he considered unfair to the lgbtq community. salesforce is among several large company, including dow chemical, apple, and disney, that of lobbied against laws considered hostile to lgbtq people.

spotify is touting a milestone as it goes to a 2017 ipo. it is through twitter that the company has topped 40 million paying customer. that is up from 30 million in march and nearly double the total of apple music. modify has 100 million monthly users overall, but the company money, despite generating more than a $2 billion in revenue last year. that is the bloomberg business flash. joe: "what'd you miss?" new bloombergpolitics poll underscores how the politics race has tightened. donald trump has pulled ahead and one of the pentagon states of ohio. 3%is leaving clinton 48%-40 to a race. 48%-40 3% in a two way race. thanks so much for joining us. like,h ago, everyone is this race is over, hillary is going to win.

tell everybody think it is getting tight again. has something fundamentally changed in the race, or is this noise? >> guess never over until it's over, as the cliche goes. but i found that race was always bound to tighten. leadought hillary clinton's was unnaturally high. we don't have that state in the country right now. there have some very remarkable shifts that the clinton campaign should be troubled about. we have an ohio poll has trump leading by five points. that is a significant margin. in the last 40 minutes, 2 new polls by cnn show trump leading by four points in ohio and a three point in florida. clinton has been leading for the most part in florida. clinton, not win if he wins the romney states. recentclinton's two

stumbles in favor of trump. it's certainly something to watch. you can understand why the clinton folks may not feel particularly safe and secure with the polls. scarlet: there is momentum in a trump's camp. is this more reflection of hillary clinton faltering or trump gaining? hillary clinton stumbled at a 9/11 event and had to us was that she had pneumonia. >> that is the big caveat. these polls were taken over a bad stretch for hillary clinton, where she had 2 errors about handling of the health incident. she will probably be fine. enter basket of -- her basket of ments, goingcom after trump supporters as being racist and xenophobic. reflect worse on a

candidate in the midst of negative attention. i think the key moment we need to watch is the first debate in just a couple weeks. that more than anything will set the tone for the remainder 8 we eks. joe: how frustrated is the clinton camp about what the media is focusing on? we saw hillary clinton tweeting about a story in a newsweek connecting donald trump to international entanglements. there has been a lot of good reporting by the washington post about donald trump's character giving, or lack thereof. --charity giving, or lack thereof. there are all of these bad t hings for trump, but everyone focuses on her charity. how does a cult is this for the clinton camp? --difficult is this for the clinton camp? >> there is a mismatch in the

proportion of coverage about native stories she gets versus trump. with donald trump, there's much more of a steady flow of information. he makes a lot more gaffes. there are a lot more stories about him and his web of connections around the world that extend internationally that voters would be troubled by. as you pointed out, there have been a lot of investigations about this. coverage has been split tween these things. of course that is frustrating for them. scarlet: headlines from hillary clinton's dr.. her doctor saying that she continues to improve and that she is fit to serve, and that her complete physical yields normal results. in addition she says that she is an excellent mental health as well. going back to that poll from ohio, are third-party candidates included? they will be on election day. i wonder what extent they take

away hillary clinton versus donald trump. >> our poll check what people thought with and without the third-party candidates. in both cases it was pretty much similar. trump up by 5 points. right now it's not clear that third-party candidates are taking more from another. what is interesting in that our poll without the third-party candidates, clinton did about 20 points better among young voters than when third-party candidates were included. this is the real weakness of her. she has to mobilize young people and convince them to vote for her rather than gary johnson and jill stein. the main reason they don't like her is because they don't believe she is honest. joe: thank you very much. trump will be in new york tomorrow, making speech at the economic club at 11:30 a.m. eastern. bloomberg will have live coverage of the q&a immediately after. scarlet: coming up, oracle

chairman and founder says his company has a fighting chance to become the first clamp company to reach $10 million in court cloud revenue. -- core cloud revenue. we dig into the cloud wars. this is bloomberg. ♪

scarlet: "what'd you miss?" the fight over the cloud is heating up. oracle announced an acquisition of next week. -- netsweep. oracle is essentially buying market share with netsweep, one of the first cloud services company. revenue reached more than $140 billion in 2019. oracle is completing against the likes of salesforce and

microsoft.is paying a pretty penny for it too. on the revenue basis it ranks among the most expensive software takeovers among the past few years. the transaction has a multiple of 11. that is much higher than the industry. this trend is apparent in a recent purchases by salesforce and sap. all companies valued their deals with revenue multiples near 11. oracle's position to capitalize on the growing cloud market, cloud software as a service and platform as a service, which is the white line, posted revenue growth of more than 60% in constant currency terms. by contrast, software licenses is update increased 4%. and the drag fell 10%. as oracle continues to shift to the cloud, it season overall sales growth decline. which is not a huge surprise. when software companies make this transition, upfront license

fees decline and revenues rise. the founder and chairman tried to minimize in the past through his serial acquisition. oracle releases its earnings after the u.s. closing bell on thursday. joe: let's talk more about oracle with bloomberg's cory johnson, who joins us from san francisco. what you looking forward to in the results? cory: scarlet highlighted the big stuff. a service platform -- the growth of the business is so important. it's such a big company. for all the companies that salesforce spent in marketing, 30-50% of revenues, is marketing dollars can't touch the marketing sales that oracle is able to deploy. as they move their business from licensed software to client software, they have the capacity of market competitors. specifically around big deals. remember the last quarter when

salesforce disappointed. they said a lot of big deals slipped away. the question is if they landed all the way in redwood city in the lap of oracle. scarlet: i talked about how larry ellison honed the strategy of buying other companies. a serial acquirer is how someone described oracle. do they ever get rid of assets, or do they shut down the business it acquires? cory: oracle was not always a serial acquirer. it was a business company until it had bituminous change. --had a tremendous change. they felt they could other software, whether it was crm software, resource planning software -- whatever it was, there would be in oracle part that would be just as good as the competitors. they change their minds when they did a big peoplesoft deal.

use and andn them day -- use m&a. back tol quickly get the company and give them an answer on what they want to acquire. that is why this netsuite acquisition is so interesting. the owner owned 47% of that business. scarlet: speaking of that deal, we spoke with the salesforce ceo about what he thinks about this particular purchase. he is not a fan a surprisingly. >> oracle is making a desperation move to boost cloud revenue. larry owns half of netsuite and said, i want that. now he can boost his cloud revenue and try to make his $10 million. he still not be able to make it. scarlet: he's making it sound like this was a vanity purchase. cory: maybe it is, i don't know his motivations. the netsuite product is highly

regarded. this interesting from a corporate governance standpoint. so many companies, tesla, where he elon musk is buying a company that he owns, run by his cousin, maybe recusing himself by the board -- but you have other board members that have gone back-and-forth. you have a corporate governance world where people like groupon and zynga with 10 to one voting privileges. you have people like larry backing out, recusing himself completely, even though he has a 47% economic interest. then you have the surprising development. t. rowe price is the second-largest holder, but if you strip out allison, the largest holder. saying they will not support the deal. he saw the stock take up significantly in netsuite chairs. this will certainly be one to watch. this deal could get more

expensive. indeed it might not happen at all unless oracle could convince t. rowe price to tend to their shares. from the corporate governance standpoint, i think he has done the right thing in removing himself from this decision. it lives t. rowe price and eight full position. joe: very interesting. bloomberg's cory johnson. thanks very much. scarlet: coming up, what you for to know to gear up tomorrow's trading day. this is bloomberg. ♪

rateet: switzerland's decision isn't scheduled tomorrow. joe: u.k. retail sales again tomorrow.

another look at them post bre xit. so far not so bad. that is all for "what'd you

mark: "with all due respect" to all the other campaign issues out there-- ♪ we are going to get to that as soon as we determine how lori. hillary clinton's vitamin b intake level. ♪ mark: we've got your daily dose of news nutrients for both candidates. hillary clinton late gave the world a full or look at her medical background and current status. her campaign e-mailed details about that recent bout of pneumonia.