square off tonight. david: shares of germany's biggest lender's long -- slumped to a biggest low. opec's credibility, to question -- come under question? i'm jonathan ferro along david westin and alix steel. the markets are front and center, deutsche bank and other record low. david: a new record low for the stock. that $14 coming off of million asked from the department of justice, it's tough for deutsche right now. we have seenix: areas with the divergence of the two. all of this lays the groundwork for the big event tonight, the debate, we will be sleeping because it's 9:00 p.m. i will melt tomorrow if i do. seeing a lot of notes coming out

about the potential market impact. togan stanley says you want buy a dollar papal calls that. david: i don't think people are taking donald trump seriously, and it's really getting narrow. jonathan: do you just go to cash in setback and we do see what happens? if you could pick a winner at this point, what happens after? there's no consensus. david: it also have to do with congress, whether it is split or unified. alix: we will follow this through the next three hours. and the one event oil traders have circled on their calendars, wednesday's informal opec meeting in algiers. francisco blanch and vice president of ihs dan juergen. starting off with the markets, is decidedly risk off in the debate tonight. you may look at equities and europe.

the banks of men actually hammered and the flashpoint is on the dax down by 1.5% in frankfurt. the biggest loser is deutsche bank. another record low for the biggest bank in germany. some speculation on what that means to the bank going forward. are we repricing a cash for this market? the delegate with a 100 handle, -- the dollar yen with a 100 handle. this is how we shake up ahead of the opec will they won't they. saudi arabia said to offer the potential to cut production to january levels in the market, a bullish tone for commodities wci -- wt and 4649 and ti trading low. come in on a basis point 1.6% on the u.s. 10 year. alix: safety is the trade for today.

let's check in with a bloomberg team for in-depth coverage. , dordrechtnuzzi falling to a record low, carolyn conan and megan murphy. the latest bloomberg politics poll. in equities and in debt, deutsche bank is the story. jonathan: i want to cross over to elisa martinuzzi disorders therewith happen. the story overh the weekend and the report that the state wouldn't step in. where are we with that story now? elisa: there's lots of moving parts. don't jamaica's been on the record to say they never asked the government for any diplomatic help with the doj. you had the government say they are not going to engage in any speculative about deutsche bank.

georgia bank is popping up in ,erlin as we reported last week so very much at the top of the agenda. this year, weier have the ceo deutsche bank come out and say that some clients have stepped back from doing business with the bank. for both client activity and the restructuring, how difficult is this moment for them and how can they do anything until they know the scale of the find that comes from the justice department? elisa: that's the difficult part. any have laid out astonishing plan that's been complicated by the markets. investors would expect to become even deeper, but where you cut and how will depend on how much you have to pay legal fees. there's not enough visibility on

that front yet. were asame time, clients little concerned about the distraction. guess with third-quarter earnings, we get a better sense for how that's playing out in the day-to-day in their businesses. jonathan: elisa martinuzzi, thank you. deutsche bank down by 6% in frederick. another record low. alix: on-base for the biggest loss since the financial crisis put that into perspective. inc to getting the meeting algiers and speculators wait, hoping the group does reach some kind of agreement. bloomberg spoke with the algerian energy minister on the future of opec. the question of opec credibility is a very old one. every time we say that opec is losing credibility, that it's worth nothing anymore, but is only a discussion forum. it's like the phoenix. opec is always rising from the ashes. i hope this time also it will

give a more serene and responsible image. opec is not dead yet. joining us is carolyn conan, and we heard saudi arabia would be willing to cut down rushing to the january level. is that at all realistic ? carolyn: they think the chances of this are better than in april. inn did not attend to this algeria. we've seen other ministers arriving this morning. the iraqi minister also saying he's optimistic that a deal algeria theched in uae foreign minister speaking two minutes ago saying the maximum that can be reached in algeria is some kind of freeze, but not production cuts. alix: but we did see in april is

with a like we were on the verge of some kind of deal. you have crown prince calling the energy minister and said take it off the table and shut it down. and he did. it was a last-minute decision. i were looking at something like that, interference from the saudi conference? tamiami -- can you hear me? it looks like we may have lost contact with caroline conan. is it different with iran potentially just meeting to come to the table? david: it's fascinating to see the politics as they play out. tonight'sser to home, the first of three presidential debates that take place in long island. the stakes could not be higher. the latest national bloomberg ind shows the two candidates

a dead heat with hillary clinton and donald trump having the support of 46% of the voters. megan murphy joins us now for more. pollsse is that these show a substantial narrowing in this race. on the national level, but in certain key demographics. the data in the polling that really stands out. one of them is that among younger voters and women voters, hillary clinton once much bigger margins seem to have eroded since june. among younger voters, we've seen them drift somewhat towards gary johnson, the third-party candidate. but among women, which has to be her core block, we've seen that gap tighten. that's built a problem for her unless she can turn her messaging around. it's going to be women in a large part the decide this election in several key swing states. in particular, women who make their mind up late and women who are on the fence between donald trump and hillary clinton. with thennect them event tonight. it's speculated there will be

record viewership for this. it usually 60 million, it's set to be well above that. how important is that for both of these candidates in trying to turn around those persuadable's or the undecided? megan: were looking at an audience that people expect will be as high as 100 million, super bowl type numbers. what people are looking for from donald trump how hard he hits her personally and how hard he hits his key issue, which is terrorism, national security, what he's going to do to keep the nation safe trade for hillary clinton, she has to come out there and the expectation fairly or unfairly are going to be higher on her. the bar is lower for him. he comes across as presidential, people will sit up and take notice. for her, she has to have a strong performance tonight. she's got to really get her message across on what her voters and the persuadable are really looking at. and that's the economy. how is she going to jumpstart , andand stimulate growth

how is she going to bring back a resurgence of optimism that we need to see to get her voters to turn out? david: in the new social media world, we would be won or lost on the debate age or will a follow-up in the twitterverse and on youtube and facebook, will that be just as important? trump, he always was the winner on social media. it's been a huge indicator of his candidacy of particular. we will be watching closely with the social media verdict is tonight. david: megan murphy is our washington bureau chief. bloomberg television will have complete coverage leading up to the debates beginning at 8:30 a.m. eastern -- 8:30 p.m. then after the break, we will have full analysis. we got him a chandra who is here with first word news. emma: a number of western powers have slammed russia over the bombing of the syrian city of aleppo. friends in the uk are among

those calling the nominal more crime. when human rights group says more than 200 civilians have been killed in the last week. russia has denied responsibility. for seriouse center russian backed government spread the pentagon is repairing a test of its ground-based system to shoot down missiles into the u.s. that will provide the new president with evidence of whether the system can stop nuclear weapons that north korea is threatening to launch. it had several failures in the pentagon says the next test will take advantages of some major improvements. and he inspired the american golf boom it with his hardcharging style and thrilling tournament victories. arnold palmer, who down it in golf in the late 1950's through the 1960's has died. he won several major titles through the course of his career. after he retired, he remained one of the highest-paid athletes, making millions from endorsements. arnold palmer was 87 years old. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries.

i'm emma chandra, this is delivered. jonathan: -- this is bloomberg. jonathan: deutsche bank and its impact on the markets. its lumps for a record intraday low amid renewed capital concerns. should investors be concerned about possible contagion? we debate the next. from new york city, this is bloomberg. ♪

alix: this is "bloomberg ," i am alix steel. it's a risk off day across the markets. let's take a look at individual movers. pfizer on the downside off by 1%. the company will not be slipping into two units. it was thing of splitting into innovative health and essential health units. that's not happening. pfizer looking at other ways now to help the company. talking about deutsche bank,

that will be a theme we are heading throughout the next three hours, right around a record low really weighing on the individual shares of european banks. the stocks are off by 2%. deutsche bank is now down 21% just in the last two weeks. theme ine an m&a europe as well. chemtura is being linksysy links to -- $33.15ut $2.1 billion or a share. popping a percent in three markets. both of these rallying in the regular open, that's a positive for the merger. investors like that kind of organic growth. jonathan: shares of germany's largest lender, deutsche bank

hitting another record low. legal bills may force the bank to raise capital. in a report of the weekend that chancellor angela merkel has ruled out state assistance. the government spokesman coming out of the last couple of hours thing that will not participate in any speculation whatsoever. around assistance and deutsche bank. ,oining us now is ian harnett cofounder and chief investment strategist. great to have you with us on the program. another morning with deutsche bank in the spotlight. what has to happen for a show like this not to talk about deutsche bank anymore? ian: the german government have to bail them out. what we've seen consistently from european governments as they say no, no, no and then the clues in the name. deutsche bank. if it goes bust, that's not a great story for the german government. they have elections coming up. jonathan: we have to take it that far? is there a market solution? ian: the five-year cds has gone up a lot, but the view in the market was when you're cbs were

still constrained and what's going through now is this is a short-term issue. it's not just a long-term story. alix: we haven't seen the cds spreads or the debt or equity yet. the debt will be hit nearly as hard as we saw back in february. is there a distinction to be made? every time mario draghi says more qe, more bond purchase programs driving as interest rates lower, the eurozone banks get absolutely trashed. is not're seeing i think just this worry about the legal position, but actually the impact of those negative interest rates coming through on the eurozone making system. that's undermining the position of europe. jonathan: how much is this convenience to blame the ecb? they effectively build up whole eurozone banking system by backstopping eurozone debt. now they are complaining about low interest rates, the problem i look at deutsche bank is not so much the retail banking all. it's the investment bank. this the balance sheet that they haven't cleaned up.

ian: in the credit crunch, deutsche bank dodged that silver bullet. i think our concern at the time, we were very negative on the outlooks for the banks as a whole was how do they do that? we are seeing some of that come home to roost. they get back to the haven't managed to clear up the balance sheet is symptomatically that. -- symptomatically of that. david: given the role of european banks in financing real growth in europe, which is the safer growth? this is whyn: you're not going to see deutsche bank being paired out. 30% of electronic payments, 9% of cash payments, they're going to have to come in. the risk is the eurozone growth is going to decelerate and i will take these markets down. we think these european markets have a 10% downside risk at least. alix: when you take a look at the profitability that leads to bank loans, at some point, does that force germany's hand? if you're not making money, you are not going to lend money and

that doesn't create a problem. ian: it creates a problem for the ecb. they are trying to increase the financial stability of the eurozone, and by their measures, by putting these negative rates, normal rates further down, they are destroying that financial stability. jonathan: there's a big call to make to say the state needs to come in and clean up this bank asap. where is the flash takes it to that point? in aarket is added credibly low valuation already. the bank says we don't need to raise capital. if we take a statement for what they're worth publicly, they don't think they are in the composition right now. where's the market flashpoint? ian: that's what regulators come in and say you do need to start raising capital, we will see the market pressure that, pressure that, pressure that. and with the markets want to see is some government action here. they want to see the backstop for the banks and a recognition that you've actually got to make policye macro credential

and micro financial policy is sitting alongside the financial policy and the fiscal policy to boost the economy, not bring it down. ian harnett of absolute strategy research. sticking with us. alix: the debate, dalton continuing to move higher in the polls, where markets reeling really to reflect his improving on? -- improving odds? debate fromonight's hofstra university. this is bloomberg. ♪

david: this is "bloomberg ," i'm david westin. until now, the market's reaction to the residential race has been muted. that may be changing. morgan stanley joins a long list of banks voicing their concerns in a note out this morning reading improved odds of at trump win raise risks to our policy in commensalism pieces.

if clinton's lead remains slim or worsens, markets may start reflecting trumps potential early policy path which is tax reform and trade protectionism. in is still with us. wire markets not -- ian harnett is still with us. why are markets not reacting to this? recentlyal investors viewed this as a tail risk events. 5% probability. we have that in japan a few weeks ago. in london last week, we saw people saying this looks much more like brexit. 60% 40%, now we are seeing 46, 46. there's a real chance this could happen. what does it mean? david: as people adjust their expeditions, do you expect increased volatility? and what do you do as an investor in advance of the election? ian: it increases volatility. do get continuity versus change?

that is where we see the trump impact. on the trades that people will be thinking about things like defense, construction. a really, the key question is what happens to the dollar? looking overseas to get that oversees earning. jonathan: ira member of the conversations we had on brexit, and i went to see the family, and it's going to happen. they mention the fact that trump supporters are in the south and midwest. how much is that story playing out again? ian: it's about the fact that policy has failed to deliver for society as a whole. that's what low interest-rate and low interest has done. it's produced great profits for corporate, but it hasn't helped society. we are seeing this anti-establishment vote regaining hold. that's why it's continuity versus change story that coming through at this point. david: what -- alix: what that

means for the yield curve, morgan stanley says into the debate, you have to be flat. it's going to pressure the yield and you have potentially risk off moves, you want to get out of treasuries busy don't know what trump actually means. ian: what we saw going into the brexit vote was people did flatten their positions. to the degree you have people taking big bets either way, they will close those down. is ank going out, if it trump win, then clearly the risk of increased fiscal spending, talks of a $.4 trillion impact of that fiscal program, that's going to take those yields higher. potentially. at the same time, what we're seeing from equity investors is they are finding a lot of reasons why they want to play that break the playbook, which is the currency goes down and you get that lift to some of those fiscal winners. david: the courtesy goes down, but not against the mexican peso. trumpn is doing against against what the patient was doing. what does it do with relations with mexico.

ian: the isolationist nature of thingump agenda is the that the referendum about globalization. it was also true of brexit. what we see happening is very much creating these three groups. u.s., eurozone, and the asia extra fan group. x japan group. david: we'll have complete coverage of the debate, and the next debate will announce. jonathan: up next, it's the debate with dan yergin. from new york city, this is bloomberg. ♪

alix: this is "bloomberg ," i'm alix steel. here's what you need to know at this hour. hillary clinton and donald trump will confront each other face-to-face for the first time

in tonight's presidential debate. laying out for voters they're vastly different visions for the nation's future. polle news -- the latest shows that you to get 46% of likely voters in a head-to-head contest. amid the possibility mounting legal charges. and pfizer says it has not -- decided not to its -- pursue a strategy. look at the markets, that's the backdrop for this risk off day that we're seeing. jonathan: if you are deutsche bank, and are looking for some love, you're not getting it this week. torture bank stock hammered and you see the spillover effect to the rest of the banking center in europe. the dax down by 1.5%, the biggest loser is the biggest lender in germany, it is deutsche bank. european banks are the leading

losing industry group, and the spillover from equity to fx while capturing the risk off move is a stronger deputies yen -- japanese yen. will be a it bullishness right here in the commodity markets with brent trading at 4646, wti up about 9/10 of a percent. with the rumor mill in full swing ahead of the opec unofficial meeting, the will they won't be -- will day, want the output freeze. back arabia putting it cut january levels. will they get the material? in the bond market, 10 year yield coming about two basis points. we trade on the 10 year in the u.s. at 1.59%. alix: the latest speculation ahead of informal talks in opec talks in algiers this week. john was just talking about it, to entice other members to stabilize the market. the all jerian energy minister

spoke with bloomberg television head of those talks. >> saudi is a very important member of the organization, and sony is ready to do the maxim for the success of this event. eventuality,r any it's ready for a freeze, it's ready to lower production. it's available to make it a success. alix: joining us from washington is dan yergin, and so many rumors and so much chatter, but a potential saudi cut be enough to get around to the table? are quite right. opec is producing a lot of rumors and speculation right now. thei think in terms of saudi's, it is seasonal with their production would go down anyways right now. the sticking point continues to arabiaeen iran and saudi of other both willing to compromise and the differences are very deep. iran has the additional problem of presidential elections coming

up and can't seem to beginning away anything. alix: i love that you implied it cut is really a hold of their lower production anyways. the financial stress of the saudi's is really picking up. we heard over the weekend they will inject over $5 million into banks to help them survive. look at the saudi interbank offer right now, the highest since 2009. do these financial stressors really move the saudi's hands right now? are all the oil producers feeling stressed. look at venezuela, which destroyed its own economy and had little prices -- low oil prices. saudi arabia has over $500 billion of foreign reserves, they are not in the same data of position as other countries. the other thing to keep in mind is that saudi arabia was one of the countries that set up this whole international energy forum, which they headquartered. that's with the meeting is in algiers. they are also worked to have it taken over by an opec meeting given the commitment they made to the ief, which brings

consumers and producers together. alix: they are starting the rumors themselves. the third prong of this when it comes to saudi policy is a in the nexto coming two years in the saudis having a debt market potential this year or next. those two potential moving events for saudi arabia have to do with them trying to job own prices higher today? an: they are looking at number of different things, including the recognition that if prices go up, we will see more u.s. production come back into the market. i think that what you are pointing to is they are preoccupied with their domestic reform programs. that's number one. the ipo is part of it. what happens to prices now as opposed to doing something in november when they meet or next year, it's early in terms of the ipo. but that's really where so much of the central focus is, because that's with her future is, this reform program. alix: that's with the crown prince is going to care about.

in april, they were near some kind of freeze deal with opec and he got a call from the crown prince to shut it down and like 12 hours. what is the risk of something like this happening this time? , and the quite high tension with eroticism gillette saudi arabia does not want to cut production to give more barrels to iran. iran is saying we want 4 million barrels a day or more. they are vague in terms, they keep changing in terms of what they want. the depth of animosity is so great, think it makes it very difficult for them to come together and compromise. if there wasn't this animosity, it would certainly be more likely that something could happen. right now, i think one outcome that we could see here is serious discussions and consultations, they will pick it up in november when opec meets. -- parte the rhetoric of the rhetoric we have heard is the market is tightening anyways

and it's not when of a less difference. the rhetoric now is big oil is looking at projects that were profitable at 100, but now can actually work at $50 or $60 a barrel. is the fundamental backdrop different than what we saw a weeks ago -- eight weeks ago? it's a recognition of the industry worldwide is recalibrated to a lower price level. if you look at u.s. shale oil, used to be 60 dollars to $80, now it's $40 to $60. i went to the houston of norway for their big offshore all-conference and the coo of an oil company there said they can now have a break even low as five dollars on one new project, so this whole rebalancing that's going on to adjust to a lower price environment. alix: that raises the question, do we actually need an opec cut to balance this market and to see stock draws actually happen? do we need a $1 million -- one

million barrel a day cut? libya comell have back in the market in nigeria come back, that's what makes it so difficult. i think it cut is really unlikely. a freeze is something they can talk about, but the balance has changed. people used to talk opec non-opec, now you also think about the big three. saudi arabia, russia, and the united states and how each of them react. the dynamics are quite different than they were even a couple of years ago. in looking at oil up my 1% today into this meeting. what is the downside risk potential of brent at 46 if we don't get anything come wednesday? it's been so volatile up and down, i think it's that range of a couple of dollars. i don't think that the market is terribly convinced that something is action going to happen. it is much jockeying going on right now. that's why you're getting this kind of volatility around this. i think having gone this far raised expectations, unless there's a blowup altogether,

they would come out with some kind of statement or process to continue the discussion, which would not necessarily be bullish , but would not lead to a my god, they didn't do anything. expectations are just not that high. alix: the goldilocks opec scenario. dan, thank you for your perspective, dan yergin, ihs markets vice-chairman. jonathan: breaking news, cboe has a cash and stock transaction valued at about $32.50 per share. the close on friday was $31.80. 2% move because bloomberg reported just last week that cboe was in talks to acquire the global markets despite months after the exchange operator went public and that long-awaited ipo. with the big move in the back end of last week on a report, david. that was edging up closer to that price. david: not a big surprise, but

they're going forward with her. -- we want to talk about sovereign banks, we don't always get to hear from the sovereigns themselves who are doing the borrowing. what does this mean in a low rate environment for them? how concerned are they about rates turning higher? , theined by conor o'kelly entity responsible for managing ireland's sovereign debt before the -- debt portfolio. looking to the program. -- welcome to the program. what does it look like from your seat as you going to this low rate environment borrowing money? conor: if you look from ireland's perspective, for example, three years ago, ireland couldn't borrow money for 100 days. earlier this year, broad money for 100 years.

about 2.30%. but the implications of rates and the advantages and benefits of bonds have moved from investors to sovereign borrowers. that's a fact. in our case, if you go back to 2013, our annual interest bill has reduced by between 30% and 40% over that time. we had imf borrowings, which are about 10% of national debt, which we refinance at about half the yield at about four times the maturity. the benefits are very significant. david: and the corporate world, we see more and more issuance as corporations increasingly load up on this and expensive debt. is the same thing true for sovereigns? as a changer capital structure? -- does it change or capital structure? conor: you want to issue a lot of bonds and for as long as possible. once you've done that, you had

to find equilibrium with your investors. you are in the permanent issuing business, you can be opportunistic about it. you are here to say you have to find a way of disturbing those bonds. we heard conversations in the uk with talks to investors who say please, please, issue some more superlong's work, because we want to buy them. are you having this conversation right now, our investors say we like the century bonds, want to see some 50's and 30's as well. are you seeing those things? conor: him have to be careful, you can see where rates are, it doesn't mean necessarily there at the size of sovereign issuers need to do it at great when you to do it on sustainable basis. ultimately, you are trying to match investor demand with your natural for disposition to go long or extend the maturity and improve the profile of the country's debt. so we are trying to do. we have ans case,

average of 12 years, the longest in europe. but the stage, we are a bit more sanguine about where we go on the carpet where we issue. it's more a question of what is the right trade for the taxpayer at that particular time and where is the best value, not necessarily having some predisposition or bias towards going longer. david: we covered brexit an awful lot. the markets pricing in the likely consequences of brexit at this point? conor: for ireland, it's a big issue. with a yogi berra that sent the future ain't what it used to be? everyone is on caution. biggestthe uk's our trading partner, 17% of our trading is in the uk, 3% of france's trade is with the uk and ireland is the uk's fifth largest trading partner. as biggest china. it's a very important relationship, a very big relationship and with profound applications for us. i think probably, in the short-term, you are seeing lower sterling, it will hurt the tourism industry and food and

and in certain sectors. ireland is a very adaptable, flexible economy. we have been trading with austin, berlin, birmingham for a long time. a very open economy. personally, i think that the advantages of ireland as a multinational destination, which has been part of our policy for 30, 40 years, and access to european markets and the demographics, well-educated workforce, they are likely to be amplified. benefit asd ireland you see large banks you may have to leave london? maybe they turn up in dublin? conor: i wouldn't be opportunistic. it's not about the short-term, the next year or two years. it's about the next 5, 10 years. it's a profound event, and for it has profound applications. i think strategically, if britain were to continue to

isolate itself, ireland's natural advantage as a potential center for european industries, not just financial, could be very significant. david: conor o'kelly, ceo of ireland's national treasury management agency. alix: coming up, the first presidential debate stakes -- takes center stage tonight. what can donald trump and hillary to win the undecideds? pimco's executive vice president libby cantrill joins us next. this is bloomberg. ♪

alix: this is "bloomberg ," i'm alix steel. coming up, bob doll gives his outlook for equities in the fourth quarter.

david: this is "bloomberg ," i'm david westin. tonight, donald trump will face hillary clinton on stage for the first presidential debate of the season. as the nominee's head into the highly anticipated debate, a national bloomberg poll out today shows trump and clinton in a tie with each candidate having the support of 46% of the voters. when third party can it's are included, trump actually leads clinton 43-41. let's bring in libby cantrill, thank you. indicateserg poll this and other polls point in the same direction. this is becoming a very narrow race. libby: it is. as poll should not be taken gospel, but when you look at the average of polls, they are also directionally similar, in that this race is definitely tightening. you're were talking about before it's also tightening in very critical swing states that

hillary clinton has to hold should you want to get elected to the president. david: what's this mean in terms of the market? libby: it looks like the market is pricing in a status quo election. a democrat victory or some sort of split republican congress. as the election nears and the polling continues to tighten, does volatility pick up? direct rotation change and how does that affect rest assets of the u.s. dollar? tonight will be important. if you look at previous election cycles, there hasn't been so much distance between the convention in the first debate, whereas we have had a long time of a vacuum. this will be very important for the market perspective. david: you mentioned a split congress. how important is the down ticket? if donald trump were to pull ahead, and he brought along the senate with him, that would be potentially a big policy difference. libby: for sure.

one of the things we talk about it pimco is so much of what he's been talking about on the presidential campaign trail still has to be effectuated by congress. things like tax reform of government spending. --the competition of composition of congress is going to matter. should donald trump when the white house, likely, that corresponds with the republican house and republican senate. he will have presumably a cooperative congress. should hillary clinton ascended to the white house, the big question is whether publicans can hold the senate or the that flips over to democrats. says thesen stanley two potential from bentham's could happen is additional stimulus, you have tax cuts and a lot of stimulus, or fortress america, meaning the protectionist rhetoric is so extreme and damages trade to the extent that any tax cuts will be totally negated. libby: that's a great point, and a big question for markets. so many of his fiscal policies would be stimulative free,

growth, would be supportive of markets. but then there are things on trade and immigration, and those areas actually, he would not need necessarily congress to effectuate. he would withdraw the united states from nafta, without congressional approval. same thing with immigration. she could do a lot of things on immigration policy without congress. from a market perspective, what does the market look at more positively? how do they do those things? -- view those things? are they concerned about things like trade and immigration? david: i see that kubiak has a , 43 percent,4% clinton over trump. we had a big vote and bridget in june. -- from brexit in june. libby: you think about that as a paradigm within pimco, how does the market responded to an unexpected outcome, and as of now, i would say that trump

victory is unexpected. with riskw was brexit assets selling off an hard duration did well, but that was short-lived. response to alar trumpet victory, would that have more longevity? or would we see a recovery like we did after brexit? libby cantrill, great to have you, pimco set of public policy. tune in tonight for special coverage of the first presidential debate. bloomberg politics will be on the ground at half for university with special covers before and after the event. we are also teaming up with twitter as the exclusive streaming partner for the debates. june in on debates. twitter.com, or follow be politics. jonathan: central banks are getting out of u.s. treasuries. we show you how fast and why in off the charts. from new york city, this is bloomberg. ♪

alix: this is "bloomberg ," i'm alix steel. as we head into the presidential debate tonight, i want to take a look at the treasury market. something is happening there in terms of foreign buyers. his overall foreign sales of u.s. debt. you look in the red channel here, we've seen three quarters of countries selling debt like china, like japan, like saudi arabia. that is the most sustainable back on record just in this quarter. we've seen $78 billion sold over the last six months. we've seen $100 billion sold. i want to bring this up on the eve of the debate because if you get a trump presidency and a lot of stimulus and the u.s. issuing a lot more debt, will there be the foreign buyers to come into the market and help support that kind of spending? we are digging a little deeper into who is doing the selling and why. i want to drill down on japan. this top panel are japanese cash holdings and the bottom panel is

boj securities holdings. japan has been swapping treasuries for cash and you have longer negative rates pushing up demand for dollars and creating this dynamic where more cash, less securities as they need that kind of liquidity. you also see things like saudi arabia wind up selling debt as well, their fx reserves continue to come down as the oil price comes down. a low different countries selling for different reasons, but the net result is continued selling. who is ashley doing the buying in the markets? -- who is actually doing the buying in the market? indirect and direct bidders, the blue line or indirect bidders. you can think of them as foreign buyers. they are at about 15% of the overall auction. where is direct bidders, which can look at as money managers are coming in at around 6%. you have direct bidders with a steep falling and really haven't recovered from the 2014, but just in the last month, you've

seen them started to come in and buy when you had foreign buyers drop off a cliff. you do have some money manager stepping in and buying the debt with a foreign central banks or not. but nonetheless, it's a really interesting trend, when you have the fed trying to raise rates and you have now the potential of a trump presidency and more debt being issued. jonathan: topic of conversation for later. thank you. coming up next, we debate the outcomes from opec's meeting in our years. our investors to negative on crude? francisco blanch joins us from new york. this is bloomberg. ♪

david: war of words.

round one tonight, trump and clinton square off in the first debate in front of what's expected to be a record tv audience. jonathan: deutsche bank shares slumped to a record low in this for nude about mounting legal charges. opec oil pack -- credibility comes under question. is there any chance for a deal? we have your preview. david: welcome to your second hour of "bloomberg ." i'm david westin with alix steel and jonathan ferro. i don't think there's been this much excitement for presidential debate since kennedy and in. -- and nixon. jonathan: it's going to get more and more important for the markets and what does one candidate mean for the market versus the other. alix: a potential stimulus from the trunk could mean a stronger dollar, but commerzbank said not the case. you could actually see increased dollar risk if he took the helm of the presidency. david: it could be for for some

america, which could really affect the economy. alix: that was morgan stanley saying fortress america or additional stimulus. we are examining this throughout the hour. we also debate this is the outcome of fallout from the big informal opec meeting in algiers on wednesday with bank of america's head of commodities research, francisco blanch as well as talk equities and look ahead to the fourth quarter's with bob doll. taking a look at the markets, it hasn't really changed the risk off sentiment throughout the morning. jonathan: if you are bullish and gearing up for the section on markets, its risk off, go to bed. acrossra market is lower the board. the ftse down by about 76 points, the dax up by 1.6%. the story is european banks down across the board. the biggest losing industry group on the stoxx 600 and deutsche bank. another record low, it's that story all over again with renewed capital concerns and speculation as to what role potentially the state would play

if things really did get that bad. in the fx market, you see this kind of risk off tone as well. manifested in a stronger japanese yen and dollar-yen trading with $100, in the commodity market, if you are sick of this fed speak, get ready for the jawbone out of the opec committee. the whole of the opec organization is out in force, talking about will they, won't they, outlook cuts, freezes, etc.. 46.t crude it trading that we trade just under 1.6%. alix: the risk off continues. let's check in with a bloomberg team for in-depth coverage of all the top stories. us on thekee joins fed speak it, coming up guy johnson in london and deutsche bank shares falling to a record low. megan murphy previews the first presidential debate in the latest bloomberg politics poll. in equity markets, deutsche bank

is front and center. jonathan: i want to bring in guy johnson from london. you and i have kick this around this morning, but european banks are in the spotlight. the narrative it seems as a whole load of different things. what seems to have been this monday morning was a focus magazine article indicating that may be the german government wasn't interested in backstopping deutsche bank. i don't think that anyone believes there would be some sort of government guarantee, but the fact that it become currency in berlin maybe had started to spark a little bit of concern. you so it rip a lacrosse the entire financial sector here in europe, it went into unicredit and just about every institution . at one point, the entire banking sector in europe was in the negative territory area. , offche bank down heavily its earlier lows. it comes back to this $14 billion fine we may see emanating from the united states. if that was to come through in anything like that kind of site,

that would be a capital concern for deutsche bank. the bank is out this morning, a spokesman reiterating that at this point in time, raising money is simply not on the agenda. at some point, the loss will crystallize, at some point, the company is going to have to turn around and take another look at it. john crime try to figure out to do with strategy, but it's deutsche bank leading the way lower. the state is stuck between a rock a hard place. they can hardly come out and say they have state assistance ready to go for deutsche bank. that's going to scare people. the can hardly lean on the justice department, see the case study for that. it was the french government, you saw the size of the finally came out the other side. as you say, it's a rock and a hard place. what can he do between now and when he actually find out the final lumber? -- the final number. ? rangee needs to work on a of his options. i suspect that probably is what

he's doing at this point in time it. i suspect that the base case is not that we end up with that 14 number, and we end up with something a little bit less. i think he can probably continue what he's doing right now, which is reviewing strategy, trying to figure out what to do with this institution, maybe changing the business model and a significant way, even further than maybe has been already suggesting. from the german government point of view as well, they've been parading the italian saying you can't have state aid to rescue your banking sector, it would be a pretty tough ask if the germans then turn around and suggest well deutsche bank is different. jonathan: yes it would, but maybe it is. guy johnson -- guy johnson, thank you. john krein had to come out early this year and talk about how clients were distracted. a couple of weeks ago, he had to come out with a memo for employees also word about them being distracted and saying the asset management arm of the business is going to stay. thatyou have a workforce is distracted, a client base that is clearly worried about them as well, you wonder what on

earth this bank and do in the coming year. alix: nasa management unit not be sold in need to raise capital? from one drama to another, we are looking at all the fed speak that's going to happen this week. let's bring in michael mckee for the big week. what can they tell us about monetary policy? punxsutawney janet came out of her whole and we have a more weeks of will they won't they. we have 14 fed speakers this week. don't get your hopes up on monetary policy. they're almost all talking banking. they knew guy johnson was worried about it. including janet yellen, who has three speeches and appearance before the house financial services committee. it's a series of hearings like humbert hawkins, been on monetary policy, on banking. dodd frank says the fed is supposed to have a new vice president for supervision,

there's never been anybody appointed. the financial services committee is going to haul janet yellen up there to ask what the fed has been doing to make the bank safer and whether or not what they been doing is hurting the economy. alix: presidential debate coming up this evening, john pointed out that whoever is the next president will in fact decide who will then lead the fed if janet yellen does not take a have economists started to talk about this? donald trump is suggested he would like to get rid of janet yellen. he probably can't, even if he does, indications are he would not reappoint her. that would be something the markets cap start worrying about in fairly short order. almost everyone on the fed has been appointed by president obama, the entire board of governors. the could be a lot of changes coming up. mckee, thank you. david, and everything markets have to consider when looking at

the fed and interest rate decisions. towardse take one step figuring out who decides whether janet yellen keeps her job. the latest national bloomberg poll shows that you get it in a dead heat ahead of the debate tonight. askedat's what they are to choose only between hillary clinton and donald trump. when third-party gannets are included, trump leads. let's talk about gary johnson, who comes out at 8% in this poll. is this going to be a ross perot moment? collects we have to remind ourselves of the groundswell that bernie sanders. where those voters going to go? are they going to trend towards her or are they going to stay at home and not vote or go for gary ?ohnson her margin among the jet boaters

is really eroded over the past three months. we don't know exactly how they're going to go in the election or whether they are going to stay at home. david: people are saying this could be a record number of viewers. we're going to put a chart showing how many viewers and watch these debates going to 1960. it feeds back in 1980 at about 80 million viewers. it's been around 60 since then. how big could this be? how useful could it be to bring the persuadable's over to their side? say wesome analysts could be approaching 100 million viewers, super bowl style numbers for a debate that pits donald trump against hillary clinton. there is no question, this is the campaign for the ages and it's expected to be a debate for the ages. it draws and people who never tuned into a debate before. we are going to have to see what he brings to the table, whether he comes across as presidential or what he comes across as the apprentice. david: donald trump is to come across as presidential. what is hillary clinton's goal?

megan: to have a dominant performance and come across a self-effacing to make a the purely he shouldn't even be on that stage with her, let alone be in a candidacy for presidency. i think that's what she's going to keep going for tonight, he doesn't have the qualifications to be your president. tested, i know these situations, i can put myself forward not only on the economy but on issues like national security. but the message she wants to take a prototype. a more positive message that she is the one that deserves their vote. david: megan murphy is our washington bureau chief trade and a reminder, bloomberg television will have complete coverage leading up to the debates beginning at 8:30 p.m. eastern, and after the debate, full analysis with john heilemann mark halperin. now it's time to get an update on news making headlines outside the business world. for that, in the chandra is here with first word news. a: a number of western powers of slammed russia over the bombing of the syrian city of aleppo. france and the uk are among

those calling the bombing a war crime. when human rights group says more than 200 civilians have been killed in the last week. russia has denied responsibility. aleppo is the center of opposition to serious russian backed government. in washington state, authorities say the 20-year-old man suspected of killing five people at a shopping mall hasn't had a number of run-ins with the law in recent years. he was arrested outside his apartment complex, and the immigrant from turkey and is a legal u.s. resident. he inspired the american golf boom it with his hardcharging style and thrilling term of victories. arnold palmer, who dominated golf in the late 1950's through the 1960's has died. he won several major titles during his career. after he retired, he remained one of the highest-paid athletes, making millions of dollars from endorsements. palmer was 67d years old. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries.

i am a chandra, this is bloomberg. jonathan: the final trading week of the quarter. last week central-bank rally, moving asset management city for photo management bob doll joins us next. from new york, this is bloomberg. ♪

alix: this is "bloomberg ," i'm alix steel. s&p off nine points from the lows of the session. pfizer off by 1%, not pursuing splitting into two units. was thing about going into an innovative health versus essential health unit, the ceo said the gap between the current market value has now closed. it's been revamped with how they

are dealing with expenses. the 2016 guidance stays the same. they don't: m&a monday for nothing. theseand cboe, rumors first leg to go about moving higher in premarket. rounding out with smith & wesson, at one point down by 5%. now it's off by 3.5%. its partner, general dynamics, lost a bid for army sidearms. it had submitted a bid to replace the current beretta m nine, it didn't go through. smith & wesson says they're going to focus more on consumer guns instead. this is a look at some of the negative guys in the market as the restaurant continues. -- risk on continues. jonathan: deutsche bank shares hitting a record low in frankfurt amid renewed concerns

that mounting legal bills may force the bank to raise capital and a report over the weekend that chancellor merkel has ruled out state assistance. joining us from princeton, new jersey is bob doll, senior portfolio manager and cheap -- chief equity strategist. how we try and understand how this is going to evolve from your perspective. either the regulatory environments remains a super tough valuations remain under pressure in europe for deutsche bank as well, with this develops into something bigger. where do you think we are going? bob: neither of them are positive as you point out in your two questions. i think this will continue to great on us for some time. deutsche bank widow has some issues. i would argue that european banks in general are undercapitalized. certainly versus the u.s. banks. that's why u.s. bank stocks have fared somewhat better here in the last couple of years. jonathan: as an investor, the last thing you want to hear is

that the cash call is going to raise capital and you've been pushed to one side once again in your stock is worth less than it was the previous day. the question i asked earlier is what needs to happen at the top of this bank for us to wake up and stop talking about deutsche bank? bob: you know when these things spiral in the wrong direction, they tend to go farther than they otherwise might because the negative attention as they are, which causes people to avoid the bank from a doing business standpoint. in the wrong direction. think that will continue. the statements that germany, the government is going to do nothing i think we'll get amended at some point in time. they will provide some sort of backstop. it's a big institution for germany, its key for the german economy. and for europe in general. there are more chapters in this book to come, in my view. is a profitability issue

and also now becoming a solvency issue. if you take a look at the terminal, looking at deutsche bank equity versus cocoa bond, the white line if you take a look is that coco bond, it's been performing better than equities just in the begin of september, but now both are rolling over. calling deutsche bank one of the biggest systemic risks in europe. how far does this wind up bleeding into not only other banks, but also the economy? no question that first volume in the right relationship to say this has moved to something more serious. as a result, i think that the attention will be on the german situation. but more broadly, europe. for economicsitive growth because when people get concerned, they pull back their horns. in the another episode long list of things we have had since the bursting of the credit bubble. a deleveraging environment, credit concerning slow nominal grates onll that

things like banks with not enough capital, which does not bode well for financials globally. david: this could go european growth in a larger sense. grates on things like bankswhat does thats about their relative value of european equities, as opposed to the u.s.? bob: if i had a dollar for every time someone told me how cheap european stocks were versus the u.s., i would have a long stack of dollar bills. they are cheaper, but you get what you pay for. not to continue on this point, you have the eurozone that has worst capitalized banks than that of the u.s. they still have a problem to broaden the conversation with one month salary policy for currency and a different physical halsey for every country. that has happened several times. we will have more chapters of that. then you have a population economiclythe most

healthy growing parts coming of decline in population. how do you grow your population -- your economy, when the population is shrugging? -- shrinking? i would continued overweight the u.s. andthan: greece 1, 2, three, movies no one enjoys. bob doll, thank you. alix: i liked greece two. we debate how tribes push in the polls could be behind the rising yields that shaking global markets. and saudi arabia opens the door for an opec agreement, but will it make a difference? francisco blanch will be joining us next. this is bloomberg. ♪

alix: this is "bloomberg ,"

i'm alix steel. the first debate is tonight, and will there be material effects on the market? this is the clinton trumps bread versus the 10 year yield. -- trump spread versus the 10 year yield. as you have seen trump again in the polls, you have seen the 10 year yield grind higher. it's not a one-for-one correlation, but if you look into big spikes in march, you do see in increase in the 10 year yield. our markets telling us something? bob dole -- bob doll is still with us. can we look at the shakeout was on the bond market and link it to the presidential candidacy in the u.s.? the answer is yes. if you look at the policies articulated by the two candidates, it's clear the donald trump wants to put in some pretty huge tax cuts and do some spending. the bond market shutters are only see some of that. not that hillary doesn't have

some of those issues. but to a lesser degree. and if there is some correlation there. and stocks have responded in somewhat similar ways. we've seen the risk of parity shakeout starting to happen as well in the last few weeks. you've seen stocks and bonds fill up together and it increases the leverage. you have to shakeout in sell even more. is there a link between that kind of selling and trump getting in the polls? i think so. whether you like your hillary clinton or not, the market says i know what i'm getting. the range of outcomes are defined. muchdonald trump, it's a wider potential range of outcomes, which means more uncertainty, which generally raises the risk premium and lowers prices and risk parity sorts of things really get concerned. i think that's what's going on inside the market as these to go back and forth in the polls. flipside, you can make the argument that you would see a huge stimulus under trump, the likes of which we haven't seen.

why haven't the markets started to reprice that potential stimulus? bob: i think the markets to say that's what he said, but might he say something different next week? that's been the pattern over time. the markets are also saying how much fiscal room to either of these candidates have in a situation where the deficit has already begun to pick up? debt levels and entitlement programs kick in and out of been talked about any reform. the amount of room for wiggling on fiscal policy is not very big. you are an investor heading into the debate tonight, and the -- what is the best way to hedge this? the we way overview importance of who sits in the white house. having said that, i think we watch the polls. i'm of the view that the uncertainty issue is the big one. if i believe the donald trump wins, it is going to do better,

i want to be more careful about the risk in my portfolio. and if hillary clinton wins the market isnk an increase its risk premium and we continue to muddle through. alix: a lot of calm from bob doll. good to see. a reminder, bloomberg television will have complete coverage leading up to that debate beginning at 8:30 p.m. eastern. after the debate, we have full analysis with john heilemann. jonathan: nothing dramatic in the crude market. oil having it's because dropping more than two months. up next, make america's head of derivatives research. ♪

alix: this is "bloomberg ." it is a risk off day, so let's look at some of the contributors to that free market. this is the u.s. top egg

supplier suspending dividends because you had a huge drop in prices. wholesale prices down 58% year on year. demand got hit because of that bird flu. also taking a look at goldman sachs. it is said to be planning a 25% cut in its asian investment bank staff and that has come on a lack of merger and ipo activity in that region. a great read through comes to about 75 investment jobs. --tter began to doj session began its? session as the price target is 25% lower of its closing price on friday. oppenheimer says no buildup from the olympics and a slow start to the nfl streaming, which was supposed to be huge for twitter, often higher not buying it. and you: it is risk off can see it on the screen down

4/10 of 1% on the s&p 500. in europe, that is where the price point is g. every single industry group in the red today. the ftse down by 1.4%. deutsche bank trading at another record low. concern about capital rates and concern about the states position and any potential assistance as the story continues to develop. the yen is stronger. that is how this risk off story is playing off. it is reflected in the bond market. the story and the commodity markets is very commodity specific with brent and wti up over a percentage point. brent at 46. is the opec freeze debate that will gather steam ahead of algiers this week. alix: now to the morning meeting. we just talking about saudi arabia offering to cut

production to 10.2 million barrels per day. what is more important to saudi's? take a look at this chart on the terminal and it says it all. this is market share opec versus non-opec. non-opec coming in at 58% while opec is 35%. the saudi's and opec one to fight to the death, but has that changed? joining us now is francisco blanch, head of commodity research at bank of america merrill lynch. these market shares has spoken more for saudi arabia. francisco: i think the mood is changing. we have had two years of a brutal price war. it has cost saudi arabia a court eventually in dollars if you look at their foreign exchange reserve position. i think the mood is changing a little bit. i do not think there will be an

eminent production freeze, but i do think that we could start to see consensus towards investment freeze so we do not see a lot more growth on a forward basis. if opec decides to aggressively invest to gain market share, it will come at the cost of press. production outside of opec is a lot more expensive than within opec. theink it is in cartel's best interest to stabilize production and let demand growth and take us to a higher price. we have recently released a piece arguing that the price war is over. ithink it is behind us and don't think there's necessarily going to be an aggressive move to cut production either. demandre onwards, as increases, we will see big barrels coming in. alix: you pointed out to really important points. one is that the price war is over.

a few years ago was a totally different situation. the next is a freeze on future investments. if you take a look at opec spare capacity, there is barely any left. this is the oil they can bring on quickly for three months and keep it up for a little while. if you do not invest now, there is no investment freeze. what does the spare capacity chart look like in the next year? francisco: exactly. as demand continues to increase over the course of the next year or five years, you will have a situation where incremental barrels will have to be brought to market and we are going to require a price signal to do that. that means looking at different scenarios and the saudi's are going to take up a larger number of dollars at a higher price given to this quantity rather than trying to increase quantity and ending up with a lower price. i'm not arguing for prices to the $100 a barrel or anything like that, but according to our

estimates, the price of demand in the median term is very low. the difference between demand growth and a $50 environment than a $65 environment is not that great. i think if the saudis do the math, they will conclude that it is better to have a somewhat higher price by allowing those external barrels outside of opec to be incentivized to come to market. that is our view. alix: if you guys concluded that and the saudi's look like they're willing to cut to 10.2 million barrels a day, do you think other members of opec -- and i'm really talking about iran -- will do the same amount that you are? francisco: iran is a different question. they lost a lot of revenues over the last few years. the sanctions were imposed when

oil prices were 100 plus a barrel. it was a bit of a different environment with a lot of revenue lost over the last years. there are grievances around that point. they will have to figure out a way to make up for that a little bit. for iran to grow production from here and double exports as we to increase production from here on, they're going to have to make big investments. money will behe available for iran to make those investments. i think it's going to be a point of contention. even iran would be better off with production at 3.5-4 million barrels a day and $70 a barrel then with production at 5-6,000,000 barrels a day. see a saudi cut, it is really a whole because they won't pare down production anyway. at 3.6 million barrels a day, that would in

essence be a cut for them because they're producing more than that now. they're never going to agree to some kind of cut right now. francisco: no, i do not think there will be an agreement for a cut. we are going to start working towards an investment freeze and potentially if reduction freeze -- a production freeze down the line. non-opec supply has taken such a big hit. in places like china, we have seen production down 10% year on year. countries like mexico and venezuela are suffering as well. when you have bolivia and nigeria growing over the next year's months potential, that is offset by the other declining sales. we are giving to a point where the market is going from a big surplus to a balance to a deficit. that is where you probably want to keep it. you want to keep it at a slight deficit that puts upward

pressures on prices. alix: a lot of other banks are not as optimistic. they still see a one million barrel per day surplus and that cut absolutely has to come from opec. there is no other way from that oil to be drained from the market and that oversupply will just keep rolling down the road. what do you see that is different with your $61 forecast for next year? francisco: what we think is different is that we are not optimistic on the supply side. if nigeria comes back and full force, we have all this cosmic zakhstan ka demand and then we could be back in the mid to low 40's. we are talking a lot of ifs here. there are a lot of countries experiencing a slight drain. balance eachisks

other out more or less on the supply side. as long as opec doesn't continue the price war, so to speak, remember that we had the saudi's with a million barrels per day and then the iranians a million barrels per day and that's a lot of oil into three years. as long as opec's ambitions are tamed a little bit, that is going to lead tire prices. we still see demand grown pretty healthily next year. nox: short-term though, freeze or no cut -- what's the downside? francisco: the market may sell off a little bit if the talk is negative, but overall i do not see much of a change here. we had a bit of a washout on friday on the back of that comment from saudi. they were expecting no change.

i think it's possible opec is getting together an ethic of this point, even how long the price were has gone on for and how much of a drain it has had on oil and gas, and given that demand is so healthy, it is an saudi's interest as well as the opec members interest to start coming together and do something. there's something boiling in the background. i think it is but probably the right thing to say the price war is behind us. i do not see another price war coming up in the next six months. alix: francisco, great perspective. the head of global commodity research at bank of america will merrill lynch. you had them both saying no problem the markets going to be fine. important,he most coming from the fed. uk jeremy corbyn survives another leadership contest. what does it mean for the parties and the ultimate outcome

of brexit? joining us next in new york, this is bloomberg, ♪. ♪

david: this is "bloomberg ." i'm david westin in the hewlett-packard enterprise greenroom. barra up tomorrow, tom ck joins us for a full hour. jonathan: from new york city, this is bloomberg. the uk, jeremy corbyn has held off control of the opposition labor party. the news could have applications for the country's prospects and brexit planning. his ally has been setting up his vision for the party in the

annual conference and liverpool. >> it is a country that has radically transformed, more equal, more democratic, based upon a prosperous economy that is economically and environmentally sustainable, but where that prospect is shared by all, that is our vision to regrow and transform britain. nothis party, you kno longer have to whisper its name. it's called socialism. jonathan: it's also called the 1970's as well. we are joined by bloomberg at the conference and liverpool with carolyn fairburn. it is called socialism if you didn't know. >> and has slightly different meanings on different sides of the atlantic. it got a standing ovation and this room and liverpool. let's speak to carolyn fairburn

to find out what business has been made from the opposition and the uk. jonathan saying you do not have to whisper socialism, but how do you feel that what we heard today? arolyn: i think we heard at tone that was contradictory. he was talking about productivity and manufacturing, which is good for business and also investment in infrastructure, which is very welcome. at the same time, it was quite one in how itt highlighted the famous misbehaviors in business like philip green and mike ashley. it did not give as much credit as i would've liked for the unexpected. i think there are quite a lot of signs of intervention, which we will be wary of.

anna: anything in the detail that would give members of the cbi or make them nervous about investing in britain any further for example? carolyn: i think some of the implications around a significantly rising living wage. they have been getting very much rapidly.t rising it is something that businesses would feel lead to lost jobs and growth. intervention around tax evasion, business is very much on the page of one in to get good citizens in terms of facts. a lot is going on in our tax area. he talked about tax avoidance as well as tax evasion. anna: is that similar in town from the rest of the political fair or markedly different? carolyn: we need to look at the

fine print. there is real support in the business community of doing the right thing. it is not just a complete lecture but understanding what the right thing is. we need to understand what he meant and what kind of new regulation he means. anna: we hear the uk government and this post brexit world talking about industrial and the opposition is trying to reclaim that as their road. we do not know what either party means by it. carolyn: the really good thing for business is that both parties are talking about that strategy and it's really welcome. it's a long-term plan that says we're going to try to see this and get behind the infrastructure and get the investment needed. .hat is needed we need to understand these different definitions and it will be very important to have a very clear definition of what is contained in both parties.

anna: where are you involved in the conversation around brexit at the moment? the prime minister and the chancellor all talking a lot about brexit. what is the business community advising on the timing for brexit and the priorities? carolyn: we are seeing good engagement with government. other businesses have been a part of it. what we are now hoping to see is a really strong roadmap for that going forward. it's a bit fragmented in pieces given the tumultuous summer, but now it's time for gear change. inare having a conversation government about how something quite structured is put in place. there's a really clear understanding of the pros and cons and to be sure we are absolutely ready to pull the trigger. anna: did some businesses talk

to you about being nervous about before they trigger article 50 or establish a new relationship with europe? our business is putting those investment decisions on hold? carolyn: we are hearing examples of that. the consumer demand is looking quite strong, but we are hearing anecdotes of investment decisions being put on hold. we need to wait until the gdp quarter meeting in november to be absolutely sure about it. i think the quicker we can get certainty the better. there needs to be realism around how far it will have complete fx on the ground. havingne the reasons why a strong strategy and taking control the things we can do is the focus. anna: you said business t does not mind waiting a little while. waiting a little while serves a better purpose to get to a better place. carolyn: business wants to know that we are ready. we know the different possible

scenarios and understand our negotiating position. they will want to know that. if that had to be understood later, i think they would prefer that than something that is triggered early when we are not ready. anna: carolyn, thanks for joining us with your thoughts from the conference in liverpool. jonathan: great work. in the markets, dow futures down by almost a ton. deutsche bank at a record low. some big conversations coming up. david: coming up, we show you the relationship between the u.s. gdp growth and tax collection. that is in battle the charts next. this is bloomberg. ♪

david: this is "bloomberg ." time for battle of the charts. oliver, you are going first today. r: there's a bit of an

event going on in terms of the debate. i want to show the signal that the stock market is sending about trump versus clinton. sum this up som shortly and is no signal. you can debate whether or not each candidate will have certain policies and the uncertainty. trump'sook throughout rise and fall here, that really has not been any discernible signal from markets. the blue line is the clinton trump spread. it is looking at the real clear politics paupoll. when the numbers down, trump is doing well in the polls. there's really no discernible correlation. it goes green and strongly red. if that is the case where there is some kind of correlation, you would expect one way or the other. but you are seeing is no sign.

trump got another search here and markets were flat. markets were vacillating as the polls become even again. bit of will be the first determination in terms of a clear market reaction. david: equity markets don't care at least yet. alix: i want to show great indicator of growth in the u.s. and that will be very critical when it comes to the debate this evening. this blue line here is tax employment. the more money you make, the more people employed, the more inney you withhold texas. it is coming up under 5%. we are obviously off the highs of 2013, 2014 and well off where we work back in 2001. this white line is u.s. gdp. it is clearly not an one-for-one correlation. you do see when those texas state start to come down that gdp also winds up coming down. see the rise that

gdp also rises as well. my question is -- if we are not actually spending on taxes, maybe the labor market is not as good. wages are particular high. that wind up meaning for gdp, which is trending lower? david: i am voting with alix steel. jonathan: i'm going to split the work so the control room will do some work. alix steel gets the vote from the control room. coming up in the next hour, we will bring you the first u.s. presence of the bait coming up -- presidential debate coming up from hosford university. firsthe countdown to the one of three coming up before the vote. and then a contrarian call on inflation. and them market, future soft and equities down across europe. deutsche bank leading the losses

and trading at a record low. switch up the board, risk off captured in the fx market. 146 anden trading at treasuries rallying with yields down by two basis points. crude ahead of the algiers meeting at $45 and $.10. from new york city, this is bloomberg. ♪

♪ jonathan: we are 30 minutes away

from the opening bell in new york city. this is "bloomberg ." i'm jonathan ferro alongside alix steel and david westin. in fed is taking a backseat the race to be the next president of this country starting to build momentum. alix: it is really risk off across the board anyway you look at it. the dax and particular off by 2%. the ftse up by over 1%. deutsche bank is the story. equity record lows. commercial bonds getting hit. anyway you slice it, it's a very bad day for european thanks. riskhan: a proxy for aversion. alix: just a couple days after that boj decision and you can still not gain any traction with the downside of the yen. jonathan: looking at the bond market, you can see the spillover from the fixed income with treasuries rallying. coming in at two basis points across the curve. alix: you see some momentum and

brent and wti, but that's not a risk on move. attalked about the speech the official opec meeting that could take place on wednesday. saudi says it will cut if iran came to the table. jonathan: the most efficient jumped to move the market to some extent. alix: 80 u.s., it is still the theme from europe, which is the risk off trades. s&p futures off by nine points. at one point we were off by 14 points. cannot really survive that risk off field we are having and the uncertainty we are heading into the presidential today this evening. we have to take a look at pfizer. the company will not be splitting into two companies. nonetheless, the difference from the company saying it is not now. withwill be bought by ceo a 71% premium to the ipo price.

the total deal is $32.50 a share. it was a earlier in the premarket and could not hold on to those gains. also taking a look at carnival. we are looking for earnings to trickle in at any moment now. the concern is any discount affect in the caribbean cruise line. overall there is a lot of supply as well for the cruisers. it could be a rough quarter for the company. for more on what is happening in the markets, abigail doolittle is shown in this in the nasdaq and mark barton joining us in london. you are looking at eggs of all things. cal-maine foods. the shares do have of cal-maine foods, the number one producer of eggs here in the u.s.. shares are tumbling as the company put off an awful first quarter. they missed sales by a percent. behind this is a huge drop in egg prices. nearly 60% over the last year. also tumbling is smith & wesson after the gun maker says it was

not accepted into an army program. surprise, butf a the program was never in the company's guidance anyway. finally, shares are soaring in the premarket. the biotech company said the melanoma drug met the primary endpoint in a study and a plan to submit for approval for this drug in 2017. alix: thanks so much, abigail doolittle joining us from the nasdaq. mark barton, you're taking a look at turkey and the aftermath of the country being cut to jump by moody's on friday. mark: i would say source upset since the attempted coup in july. it is the biggest move upward since july, but the biggest question is there going to be more selling in the bond market? many of these require at least two investment-grade ratings. you do the math. we have a big move in the turkish 10 year yield today. it is the most since 2009.

the german specialty company agrees to buy its u.s. competitor for $2.1 billion in cash. it is expanding its lubricant additives and the flame retardant businesses. businesserman confidence surging to the highest level in more than two years in september. it is a sign that corporate concerns are using over the economic outlook and the consequences of brexit. really quickly let's get to deutsche bank. .he record low of 10.6 euros capital concerns persisting. since the highs of 2007, this is a company that has lost 89% of its value. the government says it is not stepping in and merkel's chief spokesperson says he is not speculating on speculation. that is confusing. the facts are simple. it has lost 90% of its value since 2007. jonathan: stuck between a rock

and a hard place. there is a cloud of uncertainty around that company and a cloud of uncertainty over who will be the next president of the united states. the story in the bond market is as follows. auction, treasury protected security could be sought demand really start to pick up and that's the white line on the far side of the screen. picking up to its strongest demand. you look at that auction and you want to say is that a reflection of investment and that it's time to present inflation once again or is it a hedge to who will be the next president and what could happen with fiscal policy and potentially inflation as well? david: that is a great question and that is what we are going to address right now as we look at a life struck -- live shot of hofstra university. bringing into to answer the

question is dan fuss. he manages a $15 million bond fund that has beat 89% of its peers. congratulations. areaw the tips bonds that protected against inflation. what is the cause of that? is that because inflation is around the corner or does it tie into the presidential race? dan: it is hard to determine, but i would say it's mostly hedging and hedging against the rise in inflation further out. there is a fear factor in the market that is very sizable and it's in the market overseas. it is perhaps in my sense much more overseas, particularly in asia, then in the u.s.. it is hard to put a number on it , but since march we have been very aware of the asian caution with the u.s. election. it's the nicest way i can put it. going back to jonathan's

chart for a moment, it was not just the absolute number about the interest in the tips. buyersin direct liars -- , which might act as a surrogate for overseas buyers. those purple bars are the indirect buyers. dan: i think that is the point. the indirect is overseas. now it seems most of the upset or our sense of the upset is not the normal overnight buying of t.s. deb that is really coming from a different sector of the markets over there and not inclined to go toward treasuries or tips because of the yields right now. this would be more -- i think you've got your finger on it. i perhaps do. i think it is people hedging as to what on god's earth is going

to come out of this u.s. election. that is the concern. david: we will have all till the going forward the next 40 days or so, but what about the underlying concern about inflation? we had a fed president saying we should be concerned about this. had alan greenspan on this program saying inflation is coming sooner or later. do you see indications of that? dan: yes, but to be frank about it, i've been much too early on that. you see the pressures building on essentially the cost of people overall. labor, howeverf you want to measure it, has been rising. new york city is not a good place to measure that sort of thing because of the swings both ways. across the country, the employment as the skill requirement has gone up, there is a shortage developing.

boston is an extreme example of that of the skills in the modern world. that starts to drive prices. if you take out essentially the gas, of fuel and oil and and you look at it and say, oh hmm, things are starting to move up. and that is true in japan as well. david: that is exactly what alan greenspan warned about because he sees that going up 4% a year now. your core inflation is north of two now. dan: as reported, yes. david: yet we do not see inflation expectations picking up. why is that? dan: darned if i know. [laughter] it is the sampling technique again here. it is the expectations that you are asking people. who are you asking? where are they?

i just don't know. i put low credibility in surveys like that. i would rather look at the hard numbers. david: looking at the hard numbers and as somebody who invests in a lot of bonds, what does that tell you about your investment? does that affect your duration? dan: oh yeah, big time. you have to be careful when looking at swings in the market. you are better off looking at average maturity. duration is wonderful when your liability mentioned. -- matching. the problem you have is that interest rates are low. there is increasingly strong reason to believe they will had higher at some point. my personal guess is that the fed will not do anything until the election is over. i think it is reasonable to see a rise in interest rates. how far, how long? i don't know. the rest of the world might not

have the same view, but north america -- and that goes from mexico through canada -- you have to really expect some sort --prize in interest rates rise in interest rates nearly independent of the fed. once they give way a little bit, it's going to be moving up. david: dan fuss, you're going to be staying with us. for an update on news outside the business role, we go to emma with the first word news. toa: donald trump is looking apply his new campaign discipline at tonight's first debate. trump and hillary clinton will face off at hofstra university. he is risen in the polls after learning to stay out of his own way. a new bloomberg survey shows the two are in a dead heat. trump leads when third-party candidates are included. on can watch the debate here bloomberg tv beginning at 8:30

p.m. eastern. our coverage will include 30 minutes of pre-and post debate shows led by the bloomberg politics team. twitter will live stream the bloomberg broadcaste, . democrats and republicans vowing to veto president obama's bill sue saudiamilies to arabia and government. he inspired the american golf with his hardcharging style and thrilling tournament victories. arnold palmer, who dominated golf through the mid-60's, has died. he won several major titles in his career. after he retired, he remains one of the highest-paid athletes, earning millions through endorsements. arnold palmer was 87 years old. for hours a day powered by journalists and analysts and more than 120 countries, i'm emma chandra. you have oilup, ye

climbing up at $45 a barrel ahead of this informal meeting. the deal is all hinging on iran. we will dig deep into those numbers. it is today's main event -- trump versus clinton. be sure to tune in for a special coverage of the debate beginning at 8:30 p.m. eastern. this is bloomberg. ♪

alix: oil is the future and focus with crude of 2% all because saudi arabia came to the market and said we would be willing to cut production to 10.2 million barrels a day. this is the chart the matters most for oil. this is iranian market share to asia and europe. the orange bars are to europe and the yellow bars are to asia.

if you look at iranian connection between now and 2010, it is relatively the same. from that perspective, iran could cut or freeze production. if you take a look at the market share situation, it's a very different story. market share to asia has not recover that much is 2011-2012. it is around 2012 levels, but nonetheless no big jump. the real weakness in market share for iran actually comes from europe. the market share at 1.5%. back in its heyday, that market share was up by 4%, which means they have a lot more room to produce and export if they want share.h this market barclays was kind enough to share this information with us. because demand is higher now back and was in 2010, iran would actually have to have production rise to 300,000 barrels a day from the levels just to reach about 2.5% market share in terms of exports.

no way are they agreeing to some kind of freeze. joining us from the cme is scott bauer. if what i laid out happens and iran says no dice, we are not freezing, what happens to oil on wednesday? scott: i think we go so $43. last night for the november concert, it hit $44.50. it was the low it hit last week. it bounced so it held, so if we see this move coming out and there is no freeze here and saudi arabia and iran cannot make a deal, which i don't think it's going to happen quite frankly, there's going to be a very real possibility we have reached that $44.50. that has been the recent range. probablyg is going to hit $40 well before it has any chance that $50. if the saudi's and opec have proved nothing, it is that they are awesome at jawboning

prices higher. it is possible we could get a nonevent on wednesday and the market still expect something to happen down the road. what is the upside potential? scott: i think it is really limited. we saw what the market reacted to last week and we saw oil rally at first before it sold off. i really think $48 is the max upside that we see here, even if there is any sort of deal. i think the market has already factored in. we have seen with the upset possibility is. i really think that the danger zone is more to the downside here. alix: another nonbeliever in the market, yet oil rallies 2%. scott, great to see you. scott bauer of trading advantage. corporate leverage reaching record levels. dan fuss tells us what he is willing to take on more credit risk. this is bloomberg. ♪

jonathan: from new york city, this is "bloomberg ." leverage and corporate is reaching record lows. joining us is dan fuss. corporate credit, it is like the time when people are talking about steep yield curves in the sovereign space. there talking about a reach for yield that has gone too far. what is the story for credit? dan: credit is pretty fully priced. that's unless you assumed the economy stays strong, but if you assume that the economy stays strong and employment continues to grow faster than the pace of activity, then you worry about inflation. you are darned if you do and are darned if you don't. the credit spreads have actually sort of maintained at a lower range, but the base rate of

interest is very long. you do not get compensated fully looking at history for the credit risk. the only way the credit spreads are justified going forward is that the earnings of those particular companies continue to come through. and interest rates stay low so they can refinance. this is the single being the lowest. settinged the perfect if life stays perfect. jonathan: and you think it will? dan: i hope it does. i would say the odds are against it. the odds of history are certainly against it. you have the normal ups and downs. we are priced to perfection -- i think it's the turn right now. you have to take that in mind

and adjust accordingly. alix: where would you mind up going on the credit scale? the triple c market has pretty much been closed to borrowers. it is the single bees and double bees with most demand. is that where you want the search for yield to go? dan: neither one. to the degree that you have the flexibility, i would back off. i would say all right, i will stick with what i've got assuming they can read through the down cycle. if you assume they can't, you better get there as fast as you can. you have a flow of funds coming foreignust domestic but and it has come into the u.s. high-yield market. for that matter, it has been in the european high-yield market and there is a pricing disparity there. that as a whole another story.

you need a little bit of caution. if you are running high-yield money, let's say it's a mutual fund. we are very focused on what are supposed to have a high-yield here. income is very important to us. if you are running investment grade money, that is still true. with investment yield money you will say, all right, i'm going to step back and hold some research. i will move out and have an average maturity of six and a fraction. if you do six and a fraction, you're clearly holding your yield. i'm fully aware of the other name for barbell is dumbbell. [laughter] i feel a little bit dumb myself anytimeof held reserves there is money in an money out scenario.

i've held reserves because the risk level is higher. , but dofeel that way not be misled by duration. you have got to look at where is the cash? can i raise the cash near-term? liquidity in the high-yield market is sometimes a thing. david: if credit risk becomes an issue do debts become more attractive? dan: depends on the collateral. statement, it is. there are some a specific exceptions. what you have to watch with collateralized is you have to watch the liquidity. you can have a wonderful set of collateral, but it might not be marketable. there are classes of collateralized debt that are

highly marketable and are nearly circumstance and they are priced accordingly. jonathan: great to have you with us. next up on this program is the cash open for equities. future soft and equities down across europe. in thee bank spotlight trading at a record low. risk aversion dominating across assets. switch of the board quickly and the story captured in the fx market with a stronger japanese yen as we trade with a 100 handle. we come into basis points and trade at 1.6% on the u.s. tenure. next up, the market open in new york. this is bloomberg. ♪

jon: this is bloomberg . moments away from the opening bell kicking off another trading week. equities down across europe with the ftse down by 1.26%.

angst leading the losses. the fraction -- the flashpoint down 1.8 5% with deutsche bank trading at a record low. as you hear the opening bell in new york city, this is how the story evolves in the other asset classes. 40 --llar yen down to 100 147. treasuries giving up early gains in the session. risk.6% ahead of an event this week in the commodity market wti trading at 4533. alix: risk up across the board. equities following european of 1%., all by 6/10 goldman, apple, pfizer, all lower. bath as much as 25 points from the dow. pay attention to those names. could not escape the pull of european banks. pfizer up by 1%. the company will not be splitting into.

bernstein says pfizer mccutcheon trait on finding more merger targets. cvs up by 1% getting a boost from its remake of my diver. -- macgyver. strong demo numbers helping cbs. carnival did a flip now up i more than 1%. it boosted its full-year guidance but its fourth-quarter estimate midpoint was below estimates but nonetheless that revenue outlook lift was enough to get the stock moving in the markets. a look at the pivotal key, the focus in the equity and debt market, deutsche bank. shares are the blue line deutsche bank equity shares down to a record low and this white line is deutsche bank plus contingent convertible bonds. the yield spiking higher over 7% in february. now about 7.2%. many times we have seen the equity come under stress but the

debt has actually held steady. now you see the stress not only in the debt market but also the equity market. that is a solvency and profitability issue. jpmorgan saying deutsche bank can handle a fine but everyone billion dollars you add on that that is about before basis points extra eroding its capital base. germany -- merkel coming out and saying we're not going to be bailing out deutsche bank. can they afford not to? jon: i think it is difficult to draw a distinction between whether deutsche bank is a proxy for risk aversion or capital -- or catalyst for it. i want to join jonathan tice. let's talk about deutsche bank because it is the kind of risk off day you would expect deutsche bank to be hammered anyway. new concerns about what is happening with this bank. jonathan: we are revisiting its inability to grow capital. restructuring heavily. rates are destroying the fixed

income business. already a relatively low capitalized bank. if you have got $14 billion as a starting point by the doj, maybe you get something that happened to the u.s. and it comes down to six, seven or eight. expected 3 billion at the start of this year. it may be -- it would not be surprising. capital is going the wrong way. it is difficult to see where this stops. no trading below three times tangible. week we aree last repricing the potential for -- the longer deutsche bank holds off the harder it gets. the headline today from the spokesperson is that deutsche bank's capital increase is not on the agenda, determined to meet challenges on its own. how does it do that? jonathan: if you look

we were meeting for an ipo and has not happened. that does not really change the game for me but that is one thing they can do. it has to be more cost because they can't sit this out and hope the fixed will return. asset management, you have credit now saying pioneers on the block. we need to realize some capital. maybe need to rethink their asset management strategy. i do think even with the dilution, the fact is germany saying we're not going to bail this bank out is not a surprise to anybody. germany is the country that said no to italy. you can't do this you can't do that. that is not the reason the stock is down today, just a realization of how difficult problems are becoming. jon: i guess the first rule of fight club is you do not talk about fight club. i see stories from so many different angles.

on howtice department big the fine will be and the ecb as to what they do with the deposit rate. opposition tohe ecb monetary policy, this buildup over the last couple of years, do you think that will get more intense as the months progressed? cityhan: monetary part of -- monetary policy is one part of it. i'm happy about where we are. the regulatory pressures as well , we did not used look at leverage ratio and europe. as you look at the shop on leverage ratio, larry 3% for the minimum. knitting about derivatives will come under certain he. of course there will be complaints about policy. even more pressure -- the u.k. drop one of the cushions, one of the buffers required post the brexit vote. you may see more pressure from backpedaling and more dilution

on some of these capital pressures but it is getting increasingly difficult as it is -- three banks to watch in europe to understand how they avoid pulling shareholders through something dilutive. jon: jonathan tice, great to have you on the program. the stock down by 64 percentage points. not a pretty picture. david: you are really on with the movies today. from greece to fight club. we are not even donald the program. you are good. another company in the headlines. yahoo! state a breach was not only a surprise to its users. it was a surprise to verizon, the company that agreed to purchase it for nearly $5 billion. verizon learned of the hack last tuesday, days before the public was notified. joining us is mark lehmann. this was a surprise to me that they would be surprised given the long process they went through to bid for this.

could this derail the merger? mark: i don't think it will. you look at material adverse change. the likelihood that it rises to that level is low. i think they will go through with the merger. there may be some negotiation about price or how it happened but i don't think that is going to derail the deal. david: it would not have been a fun phone call to mr. mcadams, ceo of verizon. what kind of price adjustment could there be i think that speculation right now. i think there were two or three bidders that were not too far away from where they were. some sort of find, some sort of probable compensation. i think the odds of it being a big change at think are unlikely. this has been shopped for a decade. i think there's a lot of people who are behind them, maybe not right on top of verizon's bid. eclipsedas clearly

what was behind it. two or three people behind it who would wait in the wings and i think verizon is going to make some yahoo! people feel badly but i do not think it derails the deal. david: we also heard about twitter in the news about possible purchase by salesforce or google. is there any advance on that story? mark: i don't thank a lot of change over the weekend in the news -- the news was obviously broadcast loudly on friday. a lot of speculation. salesforce mated loud and clear that he wanted to buy linkedin and that did not happen. he made an impassioned plea to the board and set i'm a better fit. i think that told you mark benioff wants to be an acquirer. i do think this is one of those instances where there is smoke there is fire. the salesforce has joined force coming up shortly. , the ir people

are quiet and san francisco over the weekend. i think there's something to be said for what the rumors are. alix: the third story has to do with apple, big boost to the dow over the last week. we have us -- scandinavia's largest bank buying it because it is boring. is apple a boring value stock? mark: i'm not sure it's boring. when you see what they did with iphone seven. alix: they say nonstate -- they say non-expensive and stable earnings. mark: portfolio managers this past week were talking about the dividend growth funds they own. you put in the category the cisco's and oracles and ibm and microsoft, apple is in that world and pays a couple percent dividend. well-publicized trying to decide what the do with the cash. a huge cash hoard. what we saw in the last couple of months with launch of 7, the problems samsung has had.

stock.ot an expensive people have it decelerating and people have been surprised you look at what microsoft performance was this year. some of those boring companies have done really well. alix: great to see you. mark lehmann, president at jmp securities. breaking news regarding the opec chatter. supposedly iran is out there tweeting that a proposed a cut -- in that it proposed it has market share about 12.7% of total opec market share. that would be about 4.1 bit -- 4.1 million barrels per day. from sed a, the weekly iranian magazine. if they are looking for 12 to 13% market share from opec they are nowhere near that now so they'll imply that any type of freeze or cut would be off the table. david: at the same time that is a ceiling. they are agreeing not to keep

going forever. alix: utc oil fill up by about 2% in the markets. how to play this low rate environment. we speak with a u.s. bank ceo on finding success and wealth management. draghisident mario testifies at the european parliament in brussels. we will bring that to you live. ♪

david: this is bloomberg . coming up later today on bloomberg television reid hoffman, linked in chairman and cofounder.

jon: from new york city, i'm .onathan ferro risk aversion dominated pretty much every asset class with the exception of commodities in the equity market this is how we trade. 6/10 of 1% on the s&p 500 and the nasdaq, down by about 40 points. let's catch up with abigail doolittle. abigail: after two weeks of gains for the nasdaq we have the index sharply lower and one of the drags, acacia communications. shares of the munication lower.nt maker are they announced a 450 million secondary offering. this comes months after the company's may ipo. some investors may not like the timing of that. plus there is a huge shortage of 36%. , thisg lower on the open after the taiwanese circulator was downgraded from a neutral to

a buy. they goes against the grain. most of the analysts are bullish on the stock and on average most analysts see more than 15% upside potential for the shares of high max h --imax. jon: thank you very much. one story we have been following is deutsche bank's ongoing troubles. shares dropped to a record low out of concerns of mounting bills including the justice department's proposed $14 billion fine for its mortgage bond business. how much do banking policies and regulators help or rather not help at all? we are joined by russell goldsmith. great to have you with us on the program. where do they need to get a helping hand? do they need to look elsewhere and say please do something to monitor -- to regular the monetary policy? russell: i think what today's news points out is the european banks have real challenges and

mistakes that made leading up to the financial crisis or even in recent days, they have challenges. i think it points out how much stronger u.s. banks have become since the passage of dodd-frank. since we got through the financial crisis. rbc, really looks safe and strong. i think it comes back to values. rbc, we never did subprime mortgages, toxic securities. you don't have this tail risk you are seeing with deutsche bank. jon: you are have to hedge in the wealth management business, stable income. everybody wants to play that game right now. do you think there is a first mover advantage to that extent? we're talking about deutsche bank potentially selling that side of the business. russell: wealth management is significant at city national. in the u.s. we have bolted rbc plus wealth management -- in

canada they have a tremendous wealth management business. i think while it has the benefits you are talking about in terms of stable economics for the company, where we started at city national where i think rbc is focused, which is where you have to be focused. financialout the full lifecycle. we have seen our clients who are mostly entrepreneurs, we want those folks to preserve their capital. we don't want to see them take their hard-earned savings and lose it. that's why we build our wealth management services. rbc's in the u.s. is a $300 billion. you get the benefit of stable earnings but you have to start with the client. as a distinction between city national and rbc. alix: goldman sachs, morgan stanley, front and center in their wealth management business but not goldman wants to go

retail opening an online retail account to basically compete for the same amount of money and the same type of products you guys would. have you end up competing for the same type of mind because you are running away from low rates? russell: at city national and rbc we are a private bank. it's not a heavily retail -- we are not offering services online to any meaningful degree. it's more personal focused around the client. i've only said you cannot just hand somebody a fixed, here is the model. understand who they are, what the risk appetite is, what their needs are. in city national and rbc's world , that is more personal than an online service. jon: imagine rbc is almost like a safe haven in this environment . if we get the flash point do you think there is systemic risk that could lead over from the eurozone banking system? do you see the banking world is a safer place or is that a false

sense of security to some extent? russell: if you look at the capital levels of american banks and canadian banks especially -- rbc has been an strong shape all along. canada has been a safe place for banks especially rbc, the leading bank in canada. u.s. banks are more heavily capitalized than ever before. it's easy for people to lose sight of that. has forced the banks to have a lot of capital. city national has a lot of capital and more capital since our merger with rbc. jon: i would ask you to make a call but i will ask what you want to see for the next president of this country. russell: i think that is the right question. . studied the economy a lot the fact is the issues are complex and huge. localization, the impact of technology, how it's changing jobs, raising the value of education.

climate change and the opportunities. these are huge issues. what i would like to hear our complex nuanced answers they recognize that rather than just pat solutions. jon: russell goldsmith. under 12ming up, just hours until hillary clinton and donald trump take the stage in the first debate and the pressure is on with a new poll showing that are really in a dead heat. ♪

david: hillary clinton and donald trouble face-off tonight in their highly anticipated first debate at hospira

university in new york. this is after the latest national bloomberg poll shows the candidates are in a dead heat. that is when voters are asked to choose between donald trump and hillary clinton. when third-party candidates are included, trump leads clinton 43 to 41. bloomberg politics kevin cirilli joins us. set the stage for us. what is the atmosphere? are these campaigns feeling increased pressure as polls come in showing a narrow gap? kevin: the stage is set in little under 12 hours from now. donald trump and hillary clinton will go head-to-head. i'm here in the media filing center where the journalists should be watching the debate. the latest bloomberg national poll showing this is a deadlocked race. the stakes have never been higher for hillary clinton and donald trump. both of them don't so much have to appeal to the bases of the party. what they need to do is win over independent voters who are

trying to make up their mind between a lesser of two evils argument. david: take us into the psychology of the campaigns. tell us what the spin is today going into it. what is the hillary clinton campaign trying to spin? what is the donald trump campaign trying to spend? the surrogates i'm speaking with have told me essentially they are trying to lower expectations. they are saying that hillary clinton is not as much of a charismatic debater. on the flipside of that come up all caps people, the sources i'm speaking with inside the campaign car telling me this is -- so much an experienced the bottom line is both campaigns realize the opportunity that they have two reach such a widespread massive audience and is having anticipated debate.

david: donald trump has had 11 debates. both of them have been around this block a couple of times. kevin: if your donald trump what you want to avoid is a what's aleppo morning joe moment. a viral moment that defines the rest of your campaign. if your hurry clinton, what you want to avoid is having any type of moment that would have voters question her trustworthiness and she needs to present herself as a candidate of the future and not of the past. both candidates with challenges to overcome. a 90 minute debate, no commercials. fascinating to see how this plays out or it will follow it on the terminal all night long. david: over 100 million americans they think they watch this. haveberg television will complete coverage leading up to the debate beginning at 8:30 p.m. eastern. after the debate, we'll have full announcements. alix: it only it wasn't :00 p.m., we can watch it. home sales data from august.

top of the hour ecb president mario draghi testifying at european parliament in brussels. we are tracking all the developments with deutsche bank stock. jon: the dax down hard and we open up that way in u.s. equities as well. after a week of games we kick things off with a day of losses potentially. 26 minutes into the session, equities down across the board in the united states. for myself, jonathan ferro, alex steele, in weston as we count you down to the first presidential debate. ♪

>> 10:00 a.m. in new york, 10:00 p.m. in hong kong. i'm vonnie quinn. mark: welcome to bloomberg markets.

vonnie: we will take you from new york to brussels and cover stories out of turkey. algeria and the u.k. in the next hour. about 30 minutes into the trading day in the u.s. julie hyman has the latest on some breaking news. julie: new home sales is the data we are getting for the month of august. an annual pace of 600-9000, month over month the klein of 7.6%. not as steep as the estimate. in recent days and weeks we have gotten more negative headlines on housing, existing home sales missing estimates. housing starts missing estimates as well. this number, although it does show a drop, is not as bad as has been forecast. annualized, 600-9000