we are covering stories from washington and london. here's what we are watching. u.s. stocks are rising. .here is a surgeon american aim at the federal reserve in front of millions of viewers last night. he accused the central bank of plain politics in a challenge to its legitimacy the could have lasting consequences. one company that we are watching is enjoying a seven-year rally. 2016 may bring that to it in. they are reporting after the bell today. we are halfway through the trading day. let's check in with julie hyman. the peso has been the

proxy for the selection. it was the unexpected proxy. the peso has been gaining ground in the wake of the debate last night and some market for tip of the are judging a hillary clinton one. that is fueling to some degree of relief rally in u.s. stocks. we see some cyclical groups leading the rally today. most notably, discretionary stocks. they are doing particularly well. if you look at the s&p index, it's up. that's one of the best performing groups we are watching. that has to do with consumer confidence. it rose to a nine-month high. if you look at the bloomberg, you can see how it dead. this is ec a left on the bloomberg. this is the actual number. you chart here shows

today's reports are way out here. we saw that. jobs are plentiful right now. this is also at a nine-year high. if you look around the discretionary universe, we've got the online travel sites doing well. they are rallying more than 3%. amazon is rallying today. once again, it's at a record. they are benefiting from some of the consumer confidence. it's up 1.5%. netflix is rising as well.

outlier is the department store. macy's, nordstrom, kohl's, it is doing better than the old line retail. have some breaking news. we have some numbers on the debate. these figures don't appear to count cable or online coverage. the debate ratings from univision show nbc leads broadcasters. we are still off from what the super bowl tends to attract. the super bowl attracted 114 million people. 46 million viewers is pretty incredible for a broadcasting network on a debate here in

we have more from the newsroom. hillary clinton is back on the campaign trail. she heads to north carolina. she met briefly with reporters to discuss the debate. she had this to say about reports that donald trump may not show up at the next debate. . >> i am going to show up. i will be there in st. louis. after that in las vegas. if i am the only person on stage , then i'm the only person on stage. >> donald trump holds a campaign rally in florida. she had a google edge after the debate. more people looked up her names and donald trumps in all 50 states. cap searches led in a majority of states before the debate. authorities say a disgruntled lawyer had to weapons and more than 2500 rounds of live

ammunition when he shot it drivers in a neighborhood in houston yesterday. he wanted nine people. the man was wearing military style apparel with not see emblems. a separate suicide bombing ripped through baghdad. it was the deadliest attack in the eastern neighborhood. 11 people were killed. another suicide bomber blew himself up. he killed six shoppers and wounded 21. no group has claimed responsibility for the attack in global news -- global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. scarlet: thank you, mark. it the debate was heard around the world. about 46 million viewers turned into broadcast networks. we saw contrast between the candidates last night.

intomes, it evolved accusations. this is a sampling. >> she doesn't have the look. she doesn't have the stamina. i said she doesn't have the stamina. i don't believe she does have the stamina to be president of this country. you need tremendous stamina. >> as soon as he travels to 112 countries and negotiates a deese -- peace deal, a release of dissidents, and opening of new opportunities in nations around the world or even spends 11 hours testifying in front of a congressional committee, he can talk to me about stamina. >> it's bad experience. we have made so many bad deals. it's bad. it's bad experience. >> he tried to switch from the

looks to stamina. this is a man who is called women pigs, slobs, and dogs. >> i have much better judgment than she does. i have a much better temperament than she has. asset is mytrongest temperament. i have a winning temperament. i know how to win. afl-cio behind the blue you were totally out of control. there is a person with a temperament that's got a problem. >> ok. saying there were some iranian sailors on a ship in the waters off of iran and they were taunting american sailors who were on a nearby ship. he said if they taunted our sailors, i would blow them out

of the water. that's not judgment. that is not the right temperament to be commander-in-chief. scarlet: let's get more into the debate with bloomberg politics. you were there throughout the debate. temperament is a keyword. judging from what each side said , i think each side's camp came away feeling their candidate came out ahead. steve: i don't not whose advice it was to shout about how you have a good temperament. donald trump hillary clinton have been talking about this for long time. what's most interesting is 46 million viewers, a lot of people watched last night. we are engaged in this every day. a lot of people were tuned into this more than normal.

a lot of people don't read the new york times. they don't read the washington post every day. to hear both candidates lay out , more soe methodically on clinton side and that's why people feel she walked away stronger. a lot of people heard that for the first time last night and i think that's an important thing to remember. now who thet clear next president is going to be after last night? is it getting closer? steve: i don't last night decided anything. this is a very polarized country. people have a lot of preset opinions about these candidates. donald trump has the harder path to victory. he still does. whereds to have a night either clinton had a terrible night or he came out having such a song evening that it changed

the name. i don't think he did you if anything, she had the stronger night. that was good for her. everybody knows that she has been a successful debater in the past. the expectations for her were so much higher. nobody knew what compass going to do. she had a high bar. in a lot of ways she met last night and scarlet: there are questions if he will show up? why is that even up for grabs? >> he visited the spin room last night he was asked about this. he said he was going to be there. there were questions that a been raised about whether or not he felt like he was treated fairly. he said he had a defective mike phone. none of us can hear it on tv.

he has done this before. he did this before the first debate. he likes to work it a little bit. that might be some of what is going on. he is sending a message to the next moderator. i would be surprised if he didn't show up. they are back on the campaign trail already. >> i think what you're are going to hear is what we heard last night, but more directed at their specific basis. last night was a chance to talk to voters who might be undecided. trail of events are about turning at your base. howhear trump talking about she is a typical politician who is ruining everything in your life. hillary will continue to talk about how donald trump doesn't have the experience or knowledge to be president. towardf that is focused

your supporters turn out. if she doesn't get the obama coalition out and of trump doesn't yet more people than romney does, neither can win. scarlet: we have some headlines on the vice chair. he is speaking at -- howard university. theays the best they reserve can do right now is to get unemployment down. we are beginning to see the fruits. wages have started going up. you can tune into his remarks on bloomberg. he is in the q&a portion. up, we will talk to deutsche bank chief economist. this is bloomberg. ♪

harsha: we are going to talk about different kind of debate, whether the fed will hike rates later this year. our next guest says it comes down to inflation data. he joins us now. thank you for joining in. night, is that going to be a factor? >> janet yellen answered that effectively during the press conference after the meeting last week and she said the fed is not influenced one bit. transcripts,t the the fed has not entered this

into their decision. scarlet: there is a perception out there that the fed is politically motivated. donald trump weighed in on that. this is exactly what he said. political by doing keeping the interest rates at this level. obama leaves and goes out to the golf course for the rest of his life, when they raise interest rates, you will see some bad things happen. the fed is not doing their job. the fed is being more political than secretary clinton. scarlet: he did say when the fed interest rates are raised, bad things will happen. bloomberg for coming over. to thef people expected market is not quite there yet. is conflicting evidence

out there. it's not unusual to see disagreements. mr. trump's remarks were not unprecedented for a political campaign. there are grounds for these perceptions given the mixed data we have right now. at the if you look trajectory of inflation, what does that indicate? expectations are pre-will anchored around 2% or it other series of been drifting lower. they are pretty well anchored. consumer price index has been rising. stan fisher noted this as a bit of a hawkish sign. at core pce has been flat 1.6. for the hawks there is something, for the doves there

is something. the fed is not quite behind the curve yet. you mentioned sam fisher. he said we are starting to see the fruits of higher pressure. wages of started going up. the fed has two mandates. the latest consumer confidence data shows an it -- a nine-year high. buying into are not the gloomy forecast. how do we know that we are? are we really starting to see some serious upward movement in wage inflation? there are some indicators, some surveys. you're starting to see some movement. the senses we're getting to full employment. we may not be quite there yet. we are getting close. donald trump made huge

attacks on mexico and china. trade policy has been taking a hit from both sides. populist -- the popularity of that view on the democratic right,d the republican mr. trump and in shifting the republicans view of this substantially. be tough sledding for any kind of trade normalization anytime soon. trade was one of the big reasons why the u.k. can essentially the european union. they are trying to seek sovereignty over their borders. you surprise to the extent that drag down seen brexit the european economy? it's not visible. >> they are still in the eu.

they haven't left yet. we haven't seen, we haven't seen the serious implications. you're starting to hear some noise of the political leadership in the u.k. that we are going to go ahead and buy to bullet and face the consequences. we haven't begun to see that yet. harsha: if i can broaden the discussion, if the federal reserve is holding on to rates, what does this mean for markets like india? they are at 2009 lows today. there is an expectation in the market right now that you're going to see a rate cut by the bank of india. what does that mean to you? what do you have in mind for emerging markets? fed look back at when the

lifted off. they begin to raise rates last december. the impact on india was limited. my sense is the impact on india this time around is going to be limited as well. forink mr. patel has rounds thinking growth may be a little bit. fed going in the opposite direction, standing in the way of a rate cut in india in december if the data moves that way. harsha: are you expecting a rate cut in india? >> i think our senses we will see one. yes. harsha: thank you very much for joining us. up, nike'sming earnings are out after the closing bell. the stock is down 12% year to date. that would mark the first annual loss since 2008.

we are going to dig into their numbers. this is bloomberg. ♪

scarlet: this is bloomberg markets. mikey is facing competition from all sides. and underkechers armour other leisure browns like lululemon. they report earnings after the closing bell. let's look at the sporting goods giant. the first six months of this year were not kind to nike stock. it fell 11% to that's the largest decline in 15 years. wall street has plenty of faith. none have a celebrating. one factor behind the stock is the decline in north american futures orders. last quarter marked the first worst features order.

glove slow to 6%. clearly thea is laggard here. china is the leader. mr. b why nike reiterated its sales forecast. will drive ath high single-digit rate. nike said it is dropping the worst performing a business, golf equipment. it fell 8%. andicipation rates declined the celebrity spokesman sought his star fade. they will seek for details on how to affect the global supply chain. various goods of been stranded at sea disrupting retailers around the world. we will follow these earnings. up, we are joined

from the annual conference on how scandals involving deutsche bank and wells fargo could affect global financial regulation. this is bloomberg. ♪

scarlet: we are live from bloomberg world headquarters in new york. i am scarlet fu. harsha: let's start with the

headlines from bloomberg first word news. mark c.: seeker paul ryan is weighing in on the first presidential debate. a short time ago, he spoke to reporters at a news conference on capitol hill. i saw hillary clinton give a well polished defense of the status quo, which a majority of americans do not like. icm urging front of us a potential for what a unified republican government can get to. people living in cedar watchingwa are anxiously as of river threatens to devastate their city with floodwaters. days layingve spent sandbags. schools and businesses are

closed. another push from the european union. british prime minister theresa must start talks before april. formal talksat cannot start until may. wereria, rebel held areas hit by dozens of airstrikes in the last day. some are calling the attacks the worst yet. russia and syria are blamed. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. back to you. harsha: now we want to take you to washington where the

securities commission is holding their annual conference. they are focusing on the important role that markets play . initiativeessed the to strengthen regulations in the markets. thank you for joining us. we saw the debate last night. from a market standpoint, which candidate would be preferred? >> i'm not going to opine on either candidate. that is a role that i don't get involved in. what i did think was important was we had both candidates talking about the importance of of growth, especially when talking about things like infrastructure develop men. to us, we were glad to see both candidates talking about the need for reinvestment and strong economic growth. scarlet: it comes back to focus on economic markets, by wonder,

looking ahead and jumpstarting and sustaining growth, how can they bypass and instead go to private markets or investors. >> we started off the conference yesterday with jack dorsey and two companies right in the middle of stantec. we are seeing a lot of them coming to the markets. if they are not funded in the public markets, they are funded in the private markets. in thethink will be key next to administration and congress will have to think about is how we continue to have u.s.ust ipo market in the funding job creation, business .ormation that is a hallmark of the u.s. economic system and one that we want to see continued growth and prosper. harsha: the stories of wells

fargo and door should bank -- unfoldingdeutsche bank are beyond us. what you think should happen? regulations, in just the last six years, is more than what was done in the six years prior. the level of capital and the quality of capital for banks has never been higher. the rules, market functions, never greater. no question there is need for greater capital needs and market rules. at the same time, we see that we have subpar growth in the u.s., we see negative growth in other parts of the world and a desire to balance stability with economic growth. this is something we hear regulators talk about, the industry is talking about it. doing a review, looking at the calibration of the rules, are

they impeding investment and business formation? scarlet: of all the remedies that have been introduced during and since the financial crisis, what has worked specifically? what specific measures are worth preserving? >> i think what we're talking about more is taking what has been done, and there are so many different rules, just if you look at the credential space, for one. what do they turn out to be? for some institutions, you are 20%ing at capital at near and various short-term and medium-term liquidity rules. they could have negative consequences. let's see how they are working together and work calibration should be done.

this is something you are hearing discussed in europe, and we think needs to be discussed here in the united states. on what needs to be done, what would be on top of your gender? >> i think policymakers need to sit down and take a hard look at where all of these rules are coming together, may be standing in the way of the abilities allocate capital and credit to the level that we think is necessary to have gdp growth above a 2% level, more to a normal 3% level to ensure we have business formation back at the level we had prior to the crisis. no one wants to go back to the situation of the crisis, other than the fact that we do want to see economic stability and growth running at a historic level, better than where we are at today. scarlet: in talking about the economy and seeking that stability and growth, what you

attribute the low growth environment to now? more cyclical? >> i think part of it is cyclical. part of it is structural. we came out of a very deep recession, no doubt. rules put inand place, no doubt, all of this has manya confluence that in respects may have tampered the ability to allocate sufficient credit and capital at the level we need to grow. you see policymakers and other parts of the globe saying, maybe we need to take a look at where we are calibrated and make sure we are funding the new business development and new technology development coming out, not going back to excess liquidity,

but to stability, ensuring we have sufficient investment and growth. harsha: the fed is evaluating what will happen in industry. from a market standpoint, what is your opinion? >> again, we have seen volatility of an flow -- ebb and flow. i think we're seeing a period of negative interest rates. i think that has to be a warning sign to us that we need to work further to drive aggregate demand. fair, to the chair of the fed and others, they have set their must be more than what we are doing here to drive aggregate demand. that is something that they will have to think long and hard about. harsha: many thanks to you for

joining us. scarlet: we're looking at shares of linked in following almost half of 1%. a pretty dramatic move on this chart. clearly the move is still fairly modest. we do have a report that indicates eu approval of the bel may be -- there may convocations, that was the exact wording. for more on linkedin and the nasdaq companies, we want to head down to abigail to little reporting by from the nasdaq. pointl: we are at this reporting a positive. the strength today is due to a snapback in high names. raised the price target. amazons believe that

will truly be the e-commerce giant. en.for the biggest dry, amg their blood cancer drug failed in an early stage trial. that was disappointing to investors. this is really dragging on pharmaceuticals. another biotech dry, right gileadea en sciences. .t has been downgraded amazingly, the stock is down 20% this year, on pace for its worst year since 1996. a really rough year there explained the ongoing bear market in biotech. it is not all bad in biotech.

a lymphoma drug did beat the primary endpoint in an interim stage study. investors are cheering this news. a little bit of celebration here in biotech outside of those giants. scarlet: thank you so much. we do have some more news on linkedin. i mentioned how it had quickly fallen to session lows and turned negative. it is said that there may be some publications for eu approval of the deal with microsoft. u.s. regulators meantime have agreed to approve the deal but it still requires eu approval. harsha: coming up next, we take you around the world from dublin, to moscow. this is bloomberg. ♪

harsha: you are watching bloomberg. scarlet: this is your global business report. here is what we are watching. osbornek chancellor weighs in on the timeline of the uk exit from the european union. harsha: we tell you which u.s. company will suffer the most. scarlet: six years after he was introduced, the state of obamacare is still uncertain. we begin with the world trade organization. they say that global trade will expand at the greatest pace

since the financial crisis. the wto says that trade will in 2017.7% they also anticipate gdp growth of 2%. harsha: former chancellor uk pursues athe heartbreak from the european union. >> my broad view is we should end up with a softer brexit bent a harder brexit. economic consequences of a harder brexit will be more safir. to bloombergoke from a conference in washington. he also said that theresa may should seek to maintain the closest financial and economic relationship with the european union. the largest discount airline says that brexit will hurt

earnings for up to four years. the ceo of or ryan air blinds -- airlines says they would shift flights away from the uk over the next two years. is replacing microsoft and outlook servers on 6000 computers. they are concerned about security and reliability of american software. scarlet: it is time now for our bloomberg like take where we provide context and background on issues of interest. , as therefore look your act is often called, was signed into law in 2010. its fate is still uncertain. president obama had said 20 million previously uninsured people gained coverage. the underinsured rate has fallen by roughly half. the cost of the plan for individuals is set to rise by

nextly 25% on average year. meanwhile, national spending on health care has slowed. part of the change may be attributed to obamacare. perhaps the most worrying development is the decision by and uniteding aetna health to pull out of exchanges. here is the background. the dilemma in shaping obamacare insurance preserve for the bulk of the population. make it work required a , asination of subsidies well as the so-called individual mandate. this is the unpopular requirement that all americans obtain insurance or pay a fine. here is argument. hillary clinton plans to expand

that while donald trump plans to as congress to repeal it. clinton's plan would probably result in more people covered, but at a cost. donald trump plan would result people people -- less with coverage. head to bloomberg.com for more stories.

scarlet: in today's bloomberg pursuits, building a luxury hotel brand means finding a balance while staying true to the company's brand. alex burton has 14 hotels the

united states and more on the way. he joins us now. >> great to be here. scarlet: you are looking to expand beyond the u.s. borders. why now? >> we are under construction in cabo san lucas, mexico. montage is geared to be a global brand. truly: when you get a luxury hotel expense, what are s?e challenge theuxury is more than rooms. it is more about the experience that you create. tois how the guests are made feel, how to we interact with te guests. lessons in hawaii.

are memorablet are so important. scarlet: they are very specific to the regions you are in as well. much -- eally play all homage. ismakes sure the property unique to its location. beverly hills was spanish revival. hawaii, very much hawaiiana. harsha: i understand you have white a second--

branch a goat -- why a second brand? >> we are opening right in the heart of the gaslight district at the end of this year. we are also opening in the first half of next year in baltimore. newer is competing in the luxury, the luxury lifestyle space. , that customer has aged a bit and is looking for more than just a bar scene, a ruckus library. providing our service culture greats your design and willnt food and beverage provide to market the has not seen that yet. scarlet: talk a little bit about the competition that airbnb provides in terms of a luxury

hotel provider. you need to provide more than just a guess a place to stay. the experience becomes that much more critical and the branding so much more closely associate with the service. compete withs not the amenities and offerings that we provide, the high-end luxury side of the market. createo great lengths to an overall experience. i don't think that can be a college or achieved through the airbnb experience. it is very much different than the true luxury hotel and resort experience. harsha: we look at the landscape of different businesses available across the world. mind thed be in your overall business environment? towe look for markets

provide the overall service that we look to provide. if we choose the right destination and the right markets, where we can get the thet kind of race, you get right investment levels. we want very little differentiation between our best hotels and the broader portfolio. it is a very narrow window. brand, thereage are tertiary markets that cannot support the kind of service and luxury we look to provide. scarlet: we talk all the time about it just bring -- interest rates. when you look at the global environment, particularly the slowdown in china and issues in emerging markets, how much of that is a factor in what you do? i know you're mainly focused in expand tolooking to

mexico, but have you seen a drop off in foreign interest? >> we have not. beverly hills sees the most international traffic and it has held up remarkably strong. in large part because the relationships we have had with guests there, the repeat nature of our business. on the flipside, we are still think for x really -- extremely .nterested in investing scarlet: thank you so much for joining us today. for more, you want to check out perseus, the destination for the finest things in life. just head to the bloomberg. this is bloomberg. ♪

scarlet: it is 1:00 in new york, 6:00 in london, and 1:00 in hong kong. i'm scarlet fu. harsha: i'm harsha subramaniam. welcome to "bloomberg markets."

scarlet: from bloomberg world headquarters in new york, we are covering stories from san francisco to milan, san francisco to riyadh. it was the debate heard round the world. hillary clinton and donald trump went head-to-head. blackstone chief operating officer tony james weighs in on the debate. tax planinks trump's is irresponsible. and an exclusive interview with bob greifeld. what he has to say about the investment climate and appetite for initial public offerings. halfway into the trading day. a across the equity screen. julie hyman has the latest. we are at session highs. julie: we have been talking about contributing factors. one of them appears to be the debate and the perception that hillary clinton won, although

that is not the universal perception. all three major indices at the highs of the session. got a lift from consumer confidence, rising to a nine-year high in the month of august. so stocks took a leg up after those numbers came out. also seeing transportation stocks do well today. take a look at the airlines. getting arica, ual, lift in part from lower oil prices. delta is also setting up a purchase for roomier jets. that depends on whether they can get the pilot union to accept an overhaul of its small plane fleet. so a bit of a change in strategy for delta. also watching cruise line operators. carnival came out with their morers and particular, than the weakness in china. but analysts are taking a second look today. saying, give the

company credit, they are due. they delivered some of the strongest quarters in history and raise their earnings outlook. people taking a second look at carnival and other cruise lines as well. oil helping these trepidation stocks. if you look across the energy complex, we see declines today indicated it is not willing to cut production. there had been some hopes of some sort of an agreement on production by opec nations. crude oil trading sharply lower. gasoline and heating oil also taking a hit. get the energy-related movers today going back to stocks, chesapeake leading the declines. the company directors resigned, so that may have something to do with the declines. harsha: thank you. let's check in on the first word

news. mark crumpton has more from the newsroom. hillary clinton is back on the campaign trail. she has to raleigh, north carolina today. secretary clinton met briefly with reporters to discuss last night's first presidential debate. >> he talked down of america every chance he gets. he calls us names, a third world country. he talks in such dire and dark terms. that is not who america is. we are the best problem solvers in the world. our diversity is a strength. holds anald trump campaign rally this evening in orlando, florida. the mastermind of the george washington bridge scandal says he and his boss bragged to new jersey governor chris christie about traffic jams at the bridge as they took place. david while steam, a former christie appointee of the port he andty, testified that bill baroni spoke with the governor at the world trade

a september 11 memorial service in 2013. the gridlock was meant to punish a local mayor who refused to endorse christie's reelection bid. more california residents have been ordered from their homes as a growing wildfire threatens remote communities in the santa cruz mountains. joselaze south of san destroyed one home and charred more than 1.5 square miles of tribe rush and timber. has been battering taiwan. heavy rain, 100 mile-per-hour wind, and 20-foot waves lashed the island. four people have been killed. 260 injured. the police station ceiling reportedly collapsed and the storm destroyed scaffolding on top of a shopping mall roof. three were injured and a part car was crushed. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg.

scarlet: thank you. the nasdaq entrepreneurial center will be celebrating its one-year anniversary by ringing the nasdaq closing bell today. organization is dedicated to providing education, resources, and access for future entrepreneurs. who better than to go to bloomberg west anchor emily chang, who is standing by with bob greifeld. emily: thanks for being with us. >> my pleasure to be here. emily: it's been a year since you opened this place. have you learn by having an outpost here? >> it's been a remarkable success and shows us how something like this was necessary. we are proud to have had 3000 entrepreneurs come through this facility. we have taught over 100 classes, and there is so much more we can do. great first year and more to come. you haveything

observed about the difference in taste and innovation in san francisco versus your hometown of new york? >> clearly, this is the epicenter of innovation. as i travel around the world, they always want to know what's happening in san francisco, what is happening in the valley. this entrepreneurial center is a way to institutionalize that knowledge. how do we allow other parts of the world to really prosper and grow. companies are choosing to stay private versus going public. what is your pitch that they should cross the line? well, we don't. they have to make their own decisions. the nasdaq private market has been a remarkable success. if you try to stay private longer, you still need to provide liquidity to early-stage investors, employees. we want to provide those services. when they are ready to go public, we want them to list with nasdaq, obviously. but when you are going public, it's an important factor that

you have a mature business model. we want to make sure that we are therefore a company in any stage of their life cycle. how do you come as a business, cope with this, ? >> we do well if we are diversified. we want to be there to provide the right solution for the company at their particular point in time. emily: the ipo window seems to be cracking open. how do you see ipo's through the rest of the year, into next year, versus m&a? rateth the interest environment we have today, m&a activity will continue to be there. example,po market, for is not as bad as people have made out to be. last year we did 146 ipo's. before this year, 64. so clearly down but 64 good quality ipos. when you look at the post public returns of these ipos, they are

outperforming the s&p 500. you could not have said that in 2014 or 15. when we look at our backlog, we now have 116 companies filed to go public. that is higher than we had at this time last year. i think there are good signs. in addition, we had our best ipo week of the year last week. nine companies coming public, eight of them on nasdaq. they priced and traded well, which is good to see. we have an important ipo coming up this friday. certainly exciting. you feel the momentum. won most of the companies, butd what is your pitch to those companies to choose the nasdaq over other exchanges? you come public, you

face an endless series of quarters. we have a unique set of corporate solutions, services, and products to help them as they go through that evolution, and face the quarterly grind of being a public company. that is a clear differentiator to what we do. we are also proud of our market, market structure, how we trade for the investors in those companies. your business is evolving as well, you bought three option exchanges. bats is a tech-forward player. how formidable of a competitor to dig expect them to be? >> our business model is different from those companies. 75% of our revenue is based on non-transactional businesses. player to about 15,000 companies around the world. those are two good transaction focus companies, coming together, there will be synergies they can realize.

but strategically does not change either one of them. we love our transaction business , 25% of our revenue. we expect to do well in it, but it's a different business model. emily: some speculation that cbo we may be open to selling that cash equity platform after the acquisition. would you be open to buying that? >> i don't think we would be in a position to do that relative to our strength in the markets today. we have 74% of the ipo's. thatve an arsenal of tools we deliver to our customers and that is somewhat unmatched right now. emily: do you expect more consolidation? of an transaction part exchange is a transaction processing company, so once you build a plant to process those transactions, the marginal cost of doing the next transaction, contract approaches zero. that provides industrial logic

of why you would want to put two organizations together. plant, two plants, you can consolidate down to one, and you can recognize benefit to your shareholders and customers. that will always be an undercurrent in the exchange world, sometimes front and center, but will always be there. emily: there are shifts happening in financial exchange technology. iex is putting in speed funds with high-frequency trading. how do you see this evolving? >> we are proud of what we introduced to the marketplace, a long life order. what we want to do -- i should say, the biggest thing exchange can do is control the priority of who gets executed first. what we are saying clearly, if you put your order in for a longer printer of time, we will move you to the top of the queue so that you are the next person executed -- getting executed. if you are faster but not willing to commit to time, you will be lower in the priority queue.

positive impact because people can opt in to do that but they don't have to. there is no penalty or delay associated with it, but certainly, a reward if you can provide liquidity to the market for a certain period of time which is longer than others. obviously, the landscape is changing quickly. what is nasdaq's response to this, how do you rise to the change in competition? the listing side, it is remarkable the amount of services we provide to our companies that directly correlates our increased win rate. it is one thing to have a great market open, and we do a innomenal job here and back new york city, but once you are public, it is an endless series of quarters. we are uniquely with our customers through the whole quarterly process of being a public company. on the transaction side, trading of the stock, when you look at

our option technology, opening and closing the market is the best in the industry. our long life order, which we are introducing, is a major positive innovation. compared to artificial speedboats, is a positive development for the investors. i think that will help foster medically. when the unexpected happens, what kind of internal control do you have in place? there has been some concern that the nasdaq lies too heavily on technology. obviously, facebook has gone on to do well, but what are the internal controls you have in place when crashes happen? >> that is something we live with all the time. in addition to providing technology for our own markets, we run 22 markets around the planet. we are also a technology provider to 90 other exchanges around the planet. when we think about what we're doing any given day, how much we are dependent on technology, we have to develop tremendous rigor in terms of how we develop,

release, and support our products. in every step of that process, we are truly world-class. we also recognize with technology you will never be perfect. you have to aspire to be perfect but you have to come up with remediation plans when you have a technology snafu. we are also world-class with that. but it is pervasive and influences everything we do. emily: you are also using block chain technology, something that a lot of people are still trying to understand. how do you see that impacting the evolution of trading technology? block chain technology will completely eviscerate the current post rate mechanisms that exist in our marketplace. i think that will be true across all asset classes. that is the easy prediction and i have no doubt that will happen. the harder prediction is when. with all of this post race activity, it will take a village. but you cannot get away from the inescapable fact that, compared

to how we do it today, technology can be a trusted advisor that then obviates the need for existing infrastructure. emily: you guys have the biggest tech-heavyweight, app is on -- apple, amazon, facebook, caring the most weight in the nasdaq composite right now. lot over thed a years. how do you see changing over the next decade? came to nasdaq 13 years ago, and that than the other exchanges had what would be the larger market cap companies. today, the companies you mentioned are not just the largest tech companies but the largest companies on the planet by market cap. take great pride, as i'm sure you do, being in the valley, knowing that the biggest companies in the world are here. you think prospectively, they are more important now, as you compare yourself to an oil and gas company.

we are proud to have those companies listed on our market representing the future. so with respect to your question, certainly a large part of the index. our market, i think, has done o allow theset t companies to grow over the years. we are proud of that. the way our market works, attracting capital to have the availability of a deep and liquid post-ipo or secondary marketplace, certainly has done its part to help in their success. emily: i know you have your year to the ground with some of these companies. on the otherd exchange, speculation about what's happening to them. disney is talking to financial advisors, sales force potentially, alphabet. what happens to twitter? outside of my areas of expertise. idea tohave no good

your guess would be as good as mine. certainly, in an abstract sense, when you have a lot of large players with tremendous cash on their balance sheet, m&a activity, as i said previously, is here, at a high level. i think it will maintain itself at a high level. emily: bob greifeld, thanks for joining us. scarlet, back to you. scarlet: thank you. that was emily chang speaking with bob greifeld, ceo of the nasdaq. you will want to tune in this she will beuse h interviewing the former chief of google china. is coming uption at 6:30 eastern time. this is bloomberg. ♪

scarlet: this is "bloomberg markets." i'm scarlet fu. harsha: i'm harsha subramaniam. there was a lot at stake for investors and last night's debate between donald trump and hillary clinton. one investors paying close attention is tony james, chief investment officer of blackstone group, clinton supporter, and recent author. we spoke exclusively with him earlier today. >> i think the candidates painted a great contrast between the two of them. if nothing else, they crystallized the issues. hillary came across as cool under fire, struck a nice balance between being tough but not overly aggressive. was well-informed, had her fax and policies, clearly, the adult in the room. donald was interesting for a while but became very repetitious after a while, and for me -- of course, i'm biased

-- but a little bit grating. i did not learn a whole lot from either candidate here and think both were true to form. in that sense, i'm not sure they changed the balance of the election much. are an undecided voter in north carolina, michigan, pennsylvania -- into the debate with high expectation that he would fall flat or she would be cowed, or they would deviate from the remarks, but that didn't happen. voters will be seeing what happens in the next couple of debates. trap one of the things hammered on was his cut taxes. it would revolve -- involve a reduction in the federal corporate tax rate from 35% down to 15%. wondering,'ve been why is in his tax proposal more popular among ceos?

>> i don't think anybody takes him seriously. he kept hammering away at the amount of debt the government has and that he is talking about a tax plan that will bloom the deficit. it is just irresponsible trump talk. i don't think ceos take it seriously. erik: is it mathematically possible? >> it is mathematically possible if you want huge deficits. erik: there is no way to pay for it. >> i don't think so. erik: you have a knowledge you are a clinton supporter. a financier. she is also promising a lot. i won at go through the laundry list but you heard a lot of the last night. proposing to pay for almost all of it by raising taxes on the wealthy and closing corporate loopholes. my question, i suppose, is, is b, goodlistic, and ,b

policy? with the economy right now is there is not enough demand. one of the things holding back demand is income inequality. income more that evenly, whether through taxes or other means like minimum wage, i think we can increase demand, get more economic growth, and it will be good for everyone. that the wealthy can afford to say -- pay somewhat more taxes? yes, i do. but i don't think alone a that will do it. erik: you cannot find enough money. >> no, you can't. erik: or you may find people moving to another country. >> there is just not enough that way. erik: equity futures rose during and after the debate. the mexican peso moved, and interesting indicator. it was taken as a sign that investors judged hillary clinton the winner. if that is the case, if that is

how markets react, why haven't markets been pricing in the growing odds, even if they are still not 50%, of a trump presidency? >> i don't think the market has reacted all that strongly after the debate. hillary held her own, and that eliminate some level of ,ncertainty, and as a result mark do not like uncertainty, so they will strengthen a bit. but that is an interesting conundrum, and investors have talked about that. --hink the answer to that is put the polls aside. they just do not think trump is going to win. they are just discounting that. number two, trying to assess what a trump presidency would mean, it is unknowable. you don't know what his policy would be, advisors, anything. it is hard to handicap that. erik: take a stab at that.

what haircut would you put on the s&p 500 it he would win? i wouldn't know how to do that. i don't think he will win. markets are much more negative about his chances than the polls. schatzkerat was erik speaking to tony james. scarlet: it is time for the bloomberg business flash. rough year for nike, one of the long-standing darlings of wall street. shares are down 13% this year and analysts are losing market share. nike will get a chance to answer their critics when the report quarterly earnings today. a top u.s. justice official is warning banks they should corporate with mortgage bond investigations. the department's official says banks are to blame for delaying resolutions, warning lenders that they will face billions in

penalties. that is your business flash update. jp morgan just launched a new etf that is essentially a systematic hedge fund in an etf wrapup. etf'sak to the head of next. this is bloomberg. ♪

harsha: from bloomberg world headquarters in new york, i'm harsha subramaniam. scarlet: i'm scarlet fu.

let's get the bloomberg first word news with mark crumpton. republican senators challenged fbi director james comey today on whether anything more could have been done to recent acts of a string mist of violence, including the orlando nightclub massacre and the manhattan bombing. rand paul of kentucky said he was alarmed that both men had at one point been on the fbi radar but were not intercepted. director komi pushed back. the bomber in new york, who is still alive, will have a trial, and i hope sentenced to jail for the rest of his life. your facts are wrong about what his father told the fbi. we will gos well, back and scrub our contact with that matter carefully, and maybe the inspector general will as well, which is great. if there is learning, we will learn from it. that director komi said his actions in new york do not point to a larger terror cell.

senate democrats are prepared to block legislation new to keep the government from shutting down at midnight friday. the measure includes money to fight zika and help rebuild flooded areas of louisiana. but democrats say they will not let it go through until there is funding to fix the water crisis in flint, michigan. bail has been set for $2 million for the man accused in friday's shooting deaths of five people in burlington, washington. a criminal-old has record dating back at least two years, including consulting his stepfather, who says his stepson has a mental illness. bombings ripped through busy commercial areas in baghdad. the deadliest attack took place in the eastern new baghdad neighborhood. 11 were killed, 28 wounded. hours later, another suicide bomber blew himself up in an outdoor market, leaving six dead and 21 wounded. no group has claimed responsibility for the attacks. global news 24 hours a day

powered by more than 2600 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. you.et: thank jp morgan says its newest etf aims to democratize hedge fund investing. morgan diversified alternative etf will use a multi-return factor model to pick securities and will use a broad range of strategies. only a few of the other liquid hasetf's in the markets generated as much. joining us now is robert deutsch. this is generally new to the markets. why get into etf's now? but iare relatively new think you will see more investment managers come to market in the coming years. we built up a track record that is not two years. keep in mind, we have been around etf business for years. we are a service provider, we

have had an etf trading desk for a number of years. we launched our first etf two euros ago to bring more products to our financial advisor clients who are really looking for investment get ability like ours in the etf wrapper. why is it attractive for investors, why is it attractive to you? >> more importantly, why is attractive to the financial advisers. this is a wonderful time for us in the market. you have half of etf's, active middlethis area in the that the market is calling smart beta etf's. a wonderful set of choices for investors. for us, we have had financial advisers deployed etf's more portfolios for their clients, and they're asking for our best investment strategies. talk about the etf that is meant to mimic a hedge fund. isn't meant to replace a hedge

fund eventually? >> i don't know if it is meant to replace it, but it is meant to democratize or bring a hedge fund strategy to any investor. you could buy a share of this fund. you don't need to have a million dollars to invest. this is jphf. there is a set of hedge fund strategies built in, we deploy in a rules-based way, and we effectively are object -- our objective is to provide hedge fund-like returns. but in an etf which is accessible to clients, and at a fee under 1%, compared to mo st hedge funds where it is much more. harsha: what is the strategy, where is this money being deployed? to 80% ofure close hedge fund strategies in this one strategy. think of it like a multi strand hedge fund in an etf. it employs global macro

strategy, long start strategy, and is event-driven. we capture most hedge fund strategies in one fund, and the intent is to provide a single digit-like returns with a correlation to the broad equity markets of about .3. scarlet: citigroup has written that the market is oversaturated with etf's, new etf's. he cited a couple of new all in the past year. he says it may be an increasing challenge to scale assets under management. and that that would eventually weigh on margins and multiples. what do you think of that? >> there is a challenge in building scale. we are still in the middle innings of the etf business. of, there has been a lot funds about talk to market, you will continue to see it happen. i think it will grow for the next 10 years. what you're seeing in this proliferation is a lot of funds

that are very narrow, tactical. they do one small thing that may be useful for an institutional investor. we are trying to bring core product to the individual investor to our financial advisors, whether it is through our suite of products or our hedge fund product. these should perform through market cycles. you did see a lot of etf money floating across global markets. what is your own reading of liquidity? >> of global markets? harsha: coming into etf's. iswhat we are seeing broadly some flow of money going out of mutual funds, significant increase in two etf's. our strategy is highly liquid, our suite of liquidity -- equity fund play in the markets. we don't have any concerns about liquidity at this point in the market relative to our fund. scarlet: speaking of liquidity's

and fund flows, if you do a search in the bloomberg and you , limit it tossuer jp morgan, here is a snapshot of nine etf that jp morgan has put up. here is the year to date flow. lots of grain. tell us about some etf's in the pipeline that you have yet to launch but are looking to do so in the next couple of months. >> we have had positive flow, as you just showed. we have a pipeline of products and we will likely double this line of products over the next year. we have filed a small-cap fund to add to this week and have added fixed income funds. scarlet: that is where the opportunity is, fixed income? >> i think there is a big opportunity. there is still an opportunity for equities for managers like thatoviding core portfolio do something different than the traditional index fund. harsha: if i'm looking at investing in any alternative,

why should i know a lot at a traditional hedge fund? but younk you should, have to be a qualified investor with a certain level of assets. you don't need to do that with jphf. for a financial advisor managing money for even affluent clients, they may take 5% or 10% for a hedge fund. this will fit that for them. even if you can access a hedge fund, you are paying 2% fees and 20% of your return out. this is 1% all in. the fees alone, you should at least consider as you make the comparison. scarlet: i know jp morgan, the investment bank, is looking to issue a copper etf. what is the difference between j.p. morgan asset management versus the investment bank etf that you launch? >> that was an idea that we explored at the investment bank

and decided to put to rest a couple years ago, so that is not happening. the investment bank runs, a set of structured notes. amj, you showed on the screen. they have a trading desk. happensetf issuance with the product management we are talking about. harsha: thanks for joining us, robert deutsch. scarlet: earlier this month, goldman sachs chief economist said there was only a one in four chance the federal reserve would increase rates in september and it didn't. is an over 50%re probability of rates rising in december. earlier today, he outlined why there is a greater chance af whimsy will hike before the end of the year. wei am certainly seeing that are moving closer to full employment, upward pressure on wage growth. 2.5% instead of 2%. not dramatic but a pickup. because productivity numbers have been pretty soft, that is

also feeding through into higher unit labor costs, inflation, and pricento core consumer and pce inflation. all of the signals are suggesting that we are now pretty close to full employment and are starting to exert some upward pressure on inflation. i think the fed will respond to that. gradually but they will respond. >> you see the december rate hike camp up. longer-term, that medium green line came down to 2.87% in the last meeting. matchup with a longer-term growth rate of 1.8%? those numbers do not match up to me and implies the fed is that much more hawkish than the markets think. >> i think it matches up. you have to look at real versus reales

growth in the economy. 1.8% anddp growth is real interest rates are 1% or less, which is essentially implied by this chart, i think that matches up. you could even say that the areers in the fed dot plot low relative to the real growth in the economy. is notlationship particularly tied, so i don't want to overstate that point, but i don't think the terminal rate in the dot plot is strikingly high relative to the growth in the economy. >> where are you on december when it comes to the fed? is down 40%. last i heard, you are over 50%. how confident are you? >> 65% confident. there is roughly a one in three

view, that the move slips into 2017. if the economy does that we expect between now and the end show steady namely growth, labor market improvement, and pickup in more than 65%m confident that we will get a rate hike. future isrse, the always unpredictable. scarlet: that was jan hog-ti atzius. you are looking live at hillary clinton rallying in raleigh, north carolina, one day after her debate with donald trump in which a lot of the media experts and parts of the financial markets have indicated she was the victor. you can watch that speech on the live go on bloomberg. we will monitor and bring any headlines. gender diversity does not just sound good, it is good

for your investment, too. we hear from the j.p. morgan chief investment strategist on why it pays off. this is bloomberg. ♪

scarlet: this is "bloomberg markets." it is time for our walk the talk segment where we look at social change and where it is outpacing corporate america's -- adapt. read does gender diversity matter for stock price volatility? morgan stanley says yes. the firm's chief equity strategist told me their research shows stocks with high gender diversity over here have superior risk-adjusted returns. >> there are some companies that started to want to be diverse from the beginning and that has helped. my main focus is helping clients

make money. a lot of people would agree diversity is a positive. what we did -- i have been on the sell side for 18 years. we probably published twice a week for 18 years. this is one of the best reports i've been involved in. i am proud of the work we have done here. we did two things. we defined the gender diversity. we said it is a number of variables. pay parity, empowerment in the c-suite, representation across ranks, diversity programs and policies. we look at these multiple variables, there are quotas for boards in europe, but they don't have any improvement on pay parity. in japan, there is great maternity leave benefits but zero c suites. you have to look at multiple variables to find it. then we rank ordered 1600 global companies in msci world on their gender diversity. it was a very powerful result that takes it from a nice to have two and almost investment

decision to a superior asset class. is there money benchmark to this composite, and how much? the plans and morgan stanley are pretty grandiose around the product around it. let me give you to key result. we rank stocks every night on the number of financial attributes. are they beating estimates, improving cash flow, are they cheap. all the things that you would be familiar with. we rank order the stocks on those metrics on a daily basis globally. let's look at our models. toward liking these stocks, and then we cut them into gender diverse and not diverse, and then observe their behavior. we were surprised with the results. stocks that we would ordinarily like quantitatively, those that were gender diverse that only had better returns over the last years, but they had far less volatility.

bullet to the nonaccounting companies, among those that we would ordinarily like. says to me, i'm going to resource these companies i like, boost those that are gender diverse, and takedowns the ones that aren't. you have talked about an incredible response to this research from customers. are you actively marketing this to customers, and if so, what kind of customers? > >> it is all over the map. those that want to create products, that have huge environmental, social funds, raising assets there. --washington, where i meet we talked about in our research today, the u.s. has very weak leaf policies among major countries in the world. we are among the only ones that

do not have strong maternity leave policies. a lot to do on the influence from the making money with less volatility. i think it is pretty far-reaching. a number of corporate set reached out to us as well. it is quite impactful work. morgan stanleyas chief equity strategist adam parker. we have some breaking news. last night's presidential debate was the most-watched ever with 180 million viewers. more than half watched on broadcast networks, which does not include cable or online coverage. harsha: it is time for the bloomberg business flash. the u.s. justice department is said to be trying to determine you cana criminal fine get from volkswagen over the emissions cheating scandal, according to people familiar with the negotiations who say officials do not want to be so high that it automaker out of business. the government and volkswagen are trying to reach a settlement by january.

alta airlines is studying purchase of roomier airline jets if the company can get the pilots union to accept. the carrier told the union it once the option of adding planes with more room. pilots have a say over which aircraft can be followed by affiliate airlines. the pilots union is against the plan. the world's biggest tequila makers plan to go public. was the company filed an ipo on the mexican stock exchange. people familiar with the matter say the brand may seek to raise as much as $1 billion. that is your business flash update. some breakingve news on cisco. according to a person with knowledge of of the matter, they plan to spend up to $4 billion in mexico over the next couple of years looking to upgrade its factories and increase

production through contract manufacturers. cisco will probably announce the plans on tuesday, according to this person. the spending figure may not be publicly in -- disclosed with the announcement. it also includes spending that has already been planned. this forils on you. right now, cisco shares are holding flat. this is bloomberg. ♪

scarlet: this is "bloomberg markets." i'm scarlet fu. ago, she was working at the economist. every night after she put her children to bed, she was working to launch a baby product is this. brings and $50 million in annual revenue. it is this week's subject of small to big. ini started the company

2004, a year after my oldest daughter was born. i went looking for a blanket that was very, back home in australia and was shocked to find that nobody in america had ever heard of the blankets. that was my moment. 2006, i went to market the goingshioned way, door-to-door to specialty stores saying i have this product. i definitely got a lot more no's in the beginning then yeses, but those that did take it sold through within a week. then i started to attend trade shows. after the first tradeshow we did, we got 86 colors. by far the most challenging thing. i got very lucky in that the

private equity firm that ended up investing in asking to me through a friend that had worked with other equity partners and we hit it off. they invested in my business. i am now with a company called squander pays capital. er was instrumental in teaching me how to be successful has, whereas swander allowed me to scale. i want to get us to a point where we can create a clue trouble lifestyle brand within the children's space. we are in 65 countries. in tokyo,e offices sydni, montreal, and brooklyn, new york. we have just incorporated in china because we have expansion plans. for the first five years, we doubled in size every year. we still have wonderful growth

10 years in. high teens, nearly 20% growth year over year. i don't see it's long down anytime soon. i'm looking at acquiring companies now to continue with the growth. i can do that now because we have such a strong brand. it is never a dull moment at aden & anais. scarlet: pretty incredible story. that was the aden & anais cofounder and ceo. harsha: coming up, tom keene and mike mckee said down together with longtime hedge fund manager on bloomberg television and radio. this is bloomberg. ♪

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,l >> eight 2 p.m. in new york and 7 p.m. in london. vonnie: welcome to bloomberg markets.

we are live at bloomberg world headquarters in new york. plus covering stories out of sacramento, washington and saudi arabia. equities find their footing after the first presidential debate. u.s. stocks extending gains after new data shows a surge in consumer confidence. both donald trump and hillary clinton are giving their own spin on their debate performances. we will speak with a professor who has accurately predicted every presidential race since 1984. see if last night's event changes hezbollah. and energy minister says his country and saudi arabia have made no new proposals. this follows the rejection of the plan to freeze output at current levels. markets