it is 3 p.m. in new york, 12:00 p.m. in san francisco oliver: and 8 p.m. in london. oliver:welcome to bloomberg markets. live from bloomberg world headquarters in new york, we will be covering stories in washington, russia, and mexico city. the close of trading, stocks are gaining along with bonds, yields falling for the fifth time in five days, but is a bubble brewing? president is taking a cautious tone, think demand in the u.s. is slowing down. highlights from his exclusive interview coming later this hour. the reviews are in -- global financial markets in the polls point to a win by hillary clinton and last night's debate, but can one date clinch the election? than one hour from the close of trading, julie hyman is here with the latest on the markets. julie: one debate may not clinch

the election but it has had an effect on the markets today. clinton's performance causing a additionlly today in to we have a consumer confidence reading for august that was the strongest in nine years with survey respondents saying they see jobs as plentiful at the moment. aroundhave been hovering highs of the sessions for most of the day. what specifically we are watching, the fang stocks to the floor as of late. large-cap technology counting for a lot of the recent gains we see. we were talking about the sector spider report and amazon trading a record. netflix higher, helped by price target increase. alpha that is also gaining ground, so tech is the single biggest contributor. one exception is linkedin, on a report that there may be

regulatory opposition in the eu. that's coming from a market research firm. clearly where those headlines hit. so that's a bit of outlier in technology today. creating a bit of a in other types of cyclical groups, energy shares because we see a decline in oil. oil has had a whipsaw in the past week or so as we get competing headlines ahead of the opec meeting and meeting in algiers. it looks like there was not going to be talks on a production target and that is sending oil lower. many other oil and natural gas twoiders, chest week with of its four departing. getting back to the election,

what we talk about as a proxy for the election is the mexican peso has been going up and we see the process of a term that you term presidency going down. it concluded, it looks like now is around the high of the session. about a 2% move today. if you look at the bloomberg to look at the bigger currency universe, this looks at the ranked return of currencies today. .he pace is here at number four the dollar seeing broad weakness, only the canadian dollar and taiwanese dollar falling versus the u.s. dollar today. that is one of the ripple effects we have seen from the debates last night. let's check in now on

the bloomberg first word news headlines. our crumpton is in our newsroom. back onllary clinton is the campaign trail in raleigh, north carolina. before leaving new york, secretary clinton met briefly with reporters to discuss last 's first presidential debate. ms. clinton: he talks down america every chance he gets. he calls us names and calls us a third world country and talks in such dire and stark terms. that is not who america is. are the best problem solvers in the world. our diversity is a strength. donald trump will hold a campaign rally tonight in orlando, florida. senate democrats have blocked a bill that would keep the government from shutting down at midnight. 60 votes were needed for the legislation to advance. the measure includes money to fight the zika virus and rebuild flooded areas of louisiana. let goocrats would not

through because funding to fix the water crisis in flint, michigan was not included. the self-professed mastermind of the george washington bridge scandal say that he bragged to chris christie about traffic jams as they took lace. he testified that they spoke with governor christie at the world trade center during a 9/11 memorial service. the gridlock was meant to punish a local mayor who refused to endorse the governor's reelection bridge -- reelection bid. christie insisted he had no knowledge about the closures before or during the alleged payback plus. a person close to shimon peres tells the associated press that his condition has deteriorated. he was hospitalized two weeks ago after suffering a stroke that lead to bleeding in his brain. and on asedated respirator during most of his hospitalization.

global news twice four hours a day powered by more than 2600 overalists and analysts in 120 countries. the bondet's turn to markets with the 10 year yield down for the fifth time in six days. the aberdeen asset management ceo told bloomberg he is concerned about bonds. >> bond prices are at an all-time high. the bank of england buying even more is just going to push the price of even more. we are getting into a dangerous situation in the bond market. oliver: joining us now is lisa abramowicz for this is interesting because there are more big names talking about bond market valuation. it's interesting when you think about stocks versus bonds. valuations are not the best predictor.

you can keep getting more expensive but i wonder when you look at the bond market, are the in theructural impasses bond market put a lid on how expensive bonds can get? are we getting to the point where you can't go any further? lisa: historically, what is a bond? you're giving a loan to a borrower with the belief they are going to get it back with a certain amount of interest. more and more bonds and lower benchmark interest the price has gone up so high and yields and gone so low that some investors are essentially paying companies and governments for the privilege of lending to them. at some point, you would think people would say this seems unsustainable unless we are facing some kind of deflationary spiral. why would you be paying the

german government or french government to have the privilege of lending to them, not to lending toor apple these companies. you have these central bankers untraditionalore territory buying corporate bonds. the bank of england started buying corporate bonds they and their plan is to buy up to 7% of the market. much of these dwindling yields are a question of simple supply? that's part of the equation y won't some of them cancel it this week? lisa: you raise a good question. bond vigilantes, why are they having a role again now? canceledhese companies sales because they did not get the rates they were looking for. there are an increasing number of companies in the u.s. and europe selling bonds because they are basically getting free money.

is notof the sudden it free anymore, they won't borrow. you have deutsche bank and people are speculating their financial condition is deteriorating because of the $14 billion settlement with the u.s. government. causing some jitters and frankly, why would a company sell bonds into that market when they could wait a week and they can let it die down and borrow for free again. heard martinst aberdeen talking about how there's going to be more demand now. i want to jump into the eternal real quick to bring up this chart which shows the investment-grade bond index and yields getting low here. lisa: the idea that investment-grade corporate bond yields are below 2% from more than 5% in 2010 is really telling in my opinion because companies are borrowing for

cheaper and cheaper and it's not just rish companies. are u.s. companies that have a material presence in the united kingdom. a benefitust giving to companies that are british. ?hat is it doing at this point other than distorting the market, there's no evidence it is fostering growth. there's a cry from big investment managers saying these distortions, to what and are you going? if it isn't working now, isn't that the definition of insanity? i think that is the concern. oliver: maybe there's even more insanity in the markets because they keep getting more insane. that is lisa abramowicz. coming up, our exclusive conversation with the blackstone president and coo, tony james. we will get his take on a debate

and how global markets are being affected. this is bloomberg. ♪

this vonnie: oliver: is bloomberg markets. i'm vonnie quinn. i'm already. time for the bloomberg business flash. tyson foods is recalling more than 132 thousand pounds of chicken nuggets. they may be contaminated with hard plastic according to the u.s. agriculture department food safety and inspection service. no confirmed reports of any adverse reaction. $4 billion to spend

in mexico over the next couple of years according to a person with knowledge of the matter. they would upgrade factories and increase production through contract manufacturers. it is a boost to the mexican president as he seeks to show his economic reforms are attracting more investment. home prices in 20 of the biggest u.s. cities are rising at a steady pace according to the case schiller index from july. prices were up 5% one year earlier. portland and seattle the biggest gains while new york and washington and the smallest. that is your bloomberg business flash update. lot at stake for investors in last night pasta date. one investor was paying close attention, tony james. the president and coo of blackstone. erik schatzker spoke with him exclusively and asked about trump's tax plan.

tony: it is mathematically possible if you want to have huge deficits. but there's no way to pay for it. erik: you have a knowledge you are a clinton supporter and a financier who can do the math. she is also promising quite a lot. you heard a fair amount of it and a proposing to pay for almost all of it by raising taxes on the wealthy and closing corporate loopholes. my question is is that realistic , and is it good policy? tony: i think the problem we have what the american economy right now is there's not enough demand. we can get into that later but one thing holding back demand is income inequality. if we spread that a little more evenly whether through taxes or other means like aim minimum-wage, we can increase demand and get more economic growth and it will be good for everyone.

do i think the wealthy can afford to pay more taxes? yes, i do. but i don't in cologne that is going to do it. or you might find people moving to another country? tony: there's not enough that way. equity futures rose in the debate and it was all taken as a sign that investors judged hillary clinton the letter. react, whyow markets haven't markets in pricing in the growing, even if they are not 50% of a trump presidency? tony: i don't think the markets react all let strongly. i think hillary held her own and some level ofe

uncertainty. as a result, markets don't like uncertainty, so they will strengthen a little bit. but it is an interesting conundrum and a lot of investors are talking about it. i think the answer to that is that the polls aside -- they just don't 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 policies are, his advisers, anything, so it's hard to handicap that. erik: take a stab at it. what haircut would you put on the s&p 500? tony: i would not know how to do that. what most markets think regardless of the bowl. markets are much more negative about trump's chances in the bowls. what we are getting at is

this idea of pricing and political risk. there's not much priced into the stock market today. we have seen stocks selloff 'snce hillary clinton popularity peaked in the polls, but not by much. tony: the markets are pretty good. they're great right now. we are net sellers because prices are high by any sort of historical context. assets.uity, almost any that's one of the things driving markets. these are factors, but the overwhelming factor is that soerest rates are so low and much capital sloshing around the world, it has to go somewhere. where is it going to go? let me bring up a chart that explains this point. this shows fresh -- french and the -- sovereign cds and

call it the european benchmark the beginning of 2010. and have comek way down from where they were in the sovereign debt crisis days. does this make sense given everything we have seen, the rising tide of populism and anti-immigrant sentiment, central-bank policy running out of room? tony: europe has a lot of problems, but in the short-term, we are going to defend the eurozone no matter what and they've got the printing presses to do it. it makes sense that equities are up because discount rates are so low. cds is a measure of risk as well as base rate. thespanish economy is fastest-growing economy in western europe right now. the risk of things imploding and defaulting has gone down for france and spain. there's more in it than that,

but it makes sense. blackstone president and coo, tony james, speaking with erik schatzker earlier today. ceo, elon musk, is laying out his plans to colonize mars. he is in guadalajara, mexico to unveil a full interplanetary transport system. redging travel to the planet and mass gets. he is looking to do this for the price of a median u.s. home. he says. follow travel to mars would cost $10 billion a person. what would make it doable is full of reusability when i comes to building a city on mars. methane is the best fuel to get to mars. you can watch the event on

bloomberg live go. ♪

oliver: vonnie: vonnie: this is bloomberg markets. i'm oliver and it. vonnie quinn. time now for options inside with julie hyman. today is kevin chesley from recon capital partners, chief investment officer there. we have been watching this relief rally in stocks with docs rising after the date and rising after the surprisingly strong consumer confidence rate this morning. is there anything options wise reflecting the overall move we are seeing? kevin: you're sorting to see a risk on the market with a lot of the names that have driven it since the february lows. you go into the tech space which is driving this market. people are starting to get back

in with amazon at an all-time high and it's good for the market to see that because those are names growing revenue on the top line and bottom-line and earnings season is coming up. people will start to look through that and this consumer confidence numbers really good because some of the data previously did lead to a rate hike in december. ansaw nonmanufacturing at all-time high. it's really good for the market right now and that is what you are seeing. julie: going forward, it's as like you would like to get a little more defensive, which is contrary to what we see in today's session. kevin: investor should position themselves defensively. no matter who comes into the administration, they are facing one of the weakest economies we have on record and they have to push through policies because monetary policies are not

effective right now. we saw that as a bone of contention and that is not going to go away. the data isn't there, whether it is globally or domestically, you get some consumer numbers that continue tod they buy home depot or lowe's but when you look at supervalu, williams-sonoma, nike tonight, let's see what they say. you have a bifurcated market. julie: you are looking at a utility, southern company. why is that? kevin: it's one of the best run utility companies. this is a company that has put $2 billion back to. they are actually focused on growing and trading at 18 times pe. options are a great place to take a conservative role and buy a stock cheaper.

that's what you want to do. you want to sell the november 15 put commas of the stock goes down, it will put you. and about a 50 day trade you get one percent. that is great in this kind of market and you would own it lower here. julie: how concerned are you about interest rate risk? kevin: that's why you want to get into this focusing on alternative energy, solar and wind with longer contracts that are not subject to the normal power generation boom. oliver: thank you. still ahead, more on the presidential debate. ♪

♪ >> let's get your check of the headlines.

mark crumpton has more. the presidential debate was the most-watched in u.s. history. that is according to tv rating service company nielsen. the preliminary numbers were 80.9 million viewers across 12 channels. the total audience is expected to be higher because nielsen did not count pds, c-span, internet viewers and audiences at restaurants, bars, parties and offices. for comparison, the carter, reagan debate in 1981 scored 81 million viewers. hillary clinton apparently had the google page after the debate. google trends says more people looked at her name the donald states after the event. however, google says trump searches led in the majority -- the majority of states before the debate. we'll could have prevented recent acts of extremist

violence, including the orlando nightclub massacre and a bombing in new york city. rand paul of kentucky said he was alarmed that the alleged perpetrators of both incidents had at one point been on the fbi radar but not intercepted. director comey pushed back. beb bomber in new york will -- the facts were wrong about what his father told the fbi. but there as well we will go back and scrub our contact with that matter very carefully and maybe the inspector general as well, which would be great as well. if there is learning, we will learn from it. mark: director kobe says the actor -- the actions -- director said the actions do no t point to a larger carousel. the british prime minister needs to start brexit talks before april. it might be too long to wait

past the first quarter of next year. from talks to exit the eu cannot start until britain triggers article 50 of the lisbon treaty. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. you have the u.s. stock market closing in just under 30 minutes. right now the major indexes are higher with seven out of 11 groups gaining. on the downside you have utilities, real estate investment trusts as well as energy stocks declining. let's check in with abigail doolittle who is live at the nasdaq. >> a little bit of a wobbly start to the nasdaq this morning. we're listening -- we are we're listening -- we are looking at a nice rally after yesterday's nearly 1% decline.

technology, it is really all about technology. the top point boost for the nasdaq going into this time include microsoft, amazon, facebook and out of that. as for audi is on -- as for amazon and microsoft, there getting a nice boost from j.p. morgan. is $1000 a share. he says amazon is likely to dominate the e-commerce space. as for the big percentage winners, where looking at some of the online travel agents including expedia and trip advisor. both offer -- and analyst told theteam earlier we do have skip form here new york city in positive comments of travel demand are coming out of that conference including expedia ceo saying consumers are buying total travel packages instead of just plane tickets.

on the year it is interesting to note with both expedia trip advisor -- excuse me, trip advisor more than 20% down. the 2015 declined are a contrast to the nasdaq overall gains come up over 6%. his are any reason to think the nasdaq will not be able to hold on? >> that is an impossible question to answer, especially considering this year's volatility. heavy nasdaq up 6% on the year. back in february the nasdaq was down more than 50%. huge volatility. a piece of that is biotech. in white we have a biotech, and blue we have nasdaq. the biotech industry is still down more than 10%. his worst year since 2008.

a big divergence. health care winning about 50% and the nasdaq. he will be interesting to see how the diverges resolves. and analyst told our team earlier while we're not looking at the gloom and doom that we had been earlier, you know biotech is still in a bear market down more than 25%, that it is still not time to celebrate. biotech investors are cautiously treading water. we will have to see how that holds up and see whether or not it can hold onto these games. >> -- these gains. >> emerging-market assets rose for the first time in three days and investor anxiety after election seemed to ease after italy clinton's debate performance. clinton's debate performance. little bit over the

last few days, we can see the rally specifically today on the last day. i want to bring in our next guest, the head of global emerging markets equity strategists. he joins us from austin. boston. from from your perspective, does u.s. political risk play a role in assessing emerging markets? it plays aion at all role. i think the way you look at the events of today after the debate last night was a lice laborde jory -- a nice laboratory experiment. not here to debate the politics because it is not my skill set of clearly the senator clinton won the debate last night. you got a response to that. there was great concern that mr.

trump would do well. you had a classic reaction market, particularly with respect to the mexican peso. people started to reduce the chance of the margin of a republican victory. >> we were talking about the mexican peso earlier. how much is this about currency speculators looking to profit off of short-term gains and how much of it is about what might actually happened to the country's economy depending on whether or not trump it's into office? -- gets into office? >> if there is concern out there in the markets about what could on a republican victory in the election, the mexican peso is probably one of the best ways to play that. concern under a aboutican presidency control over mexico, the so-called wall, renegotiating nafta.

there is no doubt the mexican peso has a lot of fundamental concerns right now but the fear about the election results -- or we should just say election uncertainty has added to that. today, it big rally shows you how concerned the markets have been about the election in november. >> you see that clearly in how the mexican peso reacted overnight following the debate and how donald trump was performing. it was like seeing it lifetime. afterou have an instance the debate, the mexican peso could strengthen by a huge amount. the peso has become this barometer for donald electoral possibilities. his is it still a barometer for emerging markets? >> no. the way in which it really plays is because interest rates are relatively low in mexico and because it is a very liquid currency, if investors want to move into high

currencies -- for example the r the me -- lira, a fairly wide account deficit. politics as well. it tends not to do as well as you would have thought in a world where people are putting andn terms of fixed income race by by the high income rates markets. therefore it is become a little bit of a barometer overall but i think we can probably overplay that. >> i'm curious, the other country that you associate with trump is russia because he is perceived as being conciliatory towards putin. is anyone talking up playing the ruble from the opposite

perspective? >> no. but is much more of a throwaway line from mr. trump. will not something that have a fundamental impact on the russian economy. russia is really improving. we like the equity market. we see the economy beginning to bounce off the bottom. oil goes tothat if $60 next year, then russert will be one of the best places to be. in that event, the ruble will do well. ruble and peso aside, people perceive that if trump were to win it would represents a major changes, all kinds of unknowns from the deviation from the status quo. yet all the focus is on the peso. the world of everything you're looking at them is there anywhere else investors should be paying attention to?

or are they underprepared for the event of trump wedding? >> -- trump winning. >> the mexican peso is the specifics of it right now. i looked at my screen before the debate and e.m. was down in asia by about .4%. by the middle of the night it was up .7%. -- i'm noteral sense saying it is right, but a good performance by senator clinton in the debate has allowed people to take on more risk. i guess that has to mean that in the event of a republican victory you would get to selling pressure in the ge -- in the e.m. generally. not to anyone country, as investors turned more cautious. the sheer uncertainty about how some of these trade policies could play out, because they will be quite damaging for the global economy overall. whether or not that will happen

seems rather unlikely. head of global emerging markets strategies, thank you much. >> coming up less my debate drew record ratings. a demand letter has correctly corrected every presidential election outcome since -- ♪

♪ this is "bloomberg markets." it is time for the bloomberg business flash. the race is on to get more people hoped on amazon and head of the holidays and music seems to be the latest lore. according to a person familiar with plants, amazon is working

on a five dollars per month music streaming service. they plan to use the service to boost sales of echo, it's gadget that lets people use voice commands to make purchases online. -- ifairlines is studying the company can get the union to accept. according to a memo, it told the union and what the option of adding larger planes which would be flown by affiliates. under the contract, delta pilots -- the pilots union is against the plan. the wto says global trade will expand of thesesince the financial crisis. officials say weakness in key thinking a -- if toll. trade will expand 1.7% in 2016. it also predicts real gdp growth of 2.2%, marking the weakest performance since 2009. businessour bloomberg flash of it. -- he has protectively --

trumpnow he sees donald pulling out a very narrow win based on his metrics. he was asked whether this is one of the harder elections to call. >> here is what makes this election so tough. my prediction system is based on studying every american presidential election going back to 1860. guided by the theory that elections are essentially judgments on the performance of the party holding the white house. today, the democrats. have 13 true false questions and it's six of them go against the party in power, the democrats, they are predicted losers. right now they are down exactly six. that is what historical force. but for the first time in over 30 years i have hedged my prediction because we have another historical force

colliding with it and that is the absolutely president-shattering nature of the trump candidacy. trump could have overcome some of that -- his pension not to be telling his truth, his birther thest controversy, is meaning of women, his lack of knowledge, his refusal to release his taxes. instead of resolving any of those issues he inflamed every one of them in the debate, thus strengthening the historical likelihood that he will go heldst patterns that have since 1860 and snatch defeat from the jaws of victory. he certainly did nothing to move history along in his direction. contending historical forces explain something that has puzzled all the pundits why the election to this point has been so close. new kind of candidate

or is he actually espousing -- or will he eventually espouse much of the old style republican policies that we have heard throughout the washington years? really proposing anything that is that much different, ideologically? >> great question. he is not a new kind of candidate because of his ideology. his ideology is pretty standard republican policy, provided you can hear out what his policies. hisfy anyone to tell me policies on immigration, but it is other things that a really critical. we have never in modern history seen a candidate with no public service but enriching himself through the expense of others through many accuracies, the trump foundation in institute. you never seen a candidate who to make things up as he goes along in his campaign has wellianshed an or standard of truth. it was ok for trump to say

lesser role as a democrat and against them, it was not a lie because trump was speaking out of ignorance. you can make up anything you want when you do not know anything. it was just bizarre. and a have the key blueprint, but within the key there remains a lot of subjectivity. when you talk about charisma, major policy change, those words has some subjectivity based into them. in an election like this when you see someone who is so extreme, how concerned are you that this might be your first call? call, -- missed >> that is a great question. that is why for the first time in 30 years i put in the qualifier on my prediction. i am more concerned with getting the historical patterns right and the contending forces that be correct. by the way, when you buy my book , you will see there is a lot less subjectivity that you might

assume just looking at the questions and cells, as they are all carefully defined. plus, i have answered them since 1860. by the way, i was hit with this critique or 20 years by the professional forecasters. theye early 20th century came to realize the human world does require some judgment and the latest, hottest thing in forecasting was the combination of cut and dry and judgmental indicators. i twice keynoted the international forecasting summit after being in the cold for 20 years. love to follow forecasters here at bloomberg. let the a few to forecast what will decide election. will it be a particular swing state? >> i do not think so. except for the very disputed well outside000, lastrror margin -- for the 130 years or so the popular vote and the electoral college vote

have fallen in line. usually there is a tide in the last two elections, one way or another. i do not want to dump too much of the pundits, but they spend way too much time on the swing states when in fact it is the type that matters. coming up, the cost of insuring deutsche bank's debt got into a record. we have a charge a heavy pressure is mounting. this is bloomberg. ♪

♪ >> this is "bloomberg markets." away from the closing bell and i am looking ahead to nike will be reporting. it is looking towards his first stock price decline in eight years and one reason why is weakness in north america futures orders. this is a critical metric for

nike because attract the amount of shoes and apparel that retail orders months in advance. last quarter you can see 6% growth, that was a deceleration for north america. it is the lowest score in the region for 2010. the preceding quarter, nike recorded 10% growth. china and japan are the drivers futures orders. when it comes to the actual numbers, i was looking it up and north america makes up 45% of nike's revenue. 6% slowdownismiss a from the preceding quarter. >> i want to talk about policy divergence, that was one of the themes going into this year and people have forgotten about it. but it is back in a big way. this is the spread between u.s. and u.k. two-year yields. there are the widest since 1992. the short-term government bonds are sensitive to the policy of the respective banks.

what that really says is the gap between when a future pace of rate hike is enormous between the countries. lots of economic uncertainty in the u.k. in the wake of the brexit vote whereas there is a high degree of confidence the u.s. will have more rate hikes in the near to medium future. you can see the divergence between the two paths show up in this chart of the two-year yield spread. a look atking deutsche bank. this is been a major story. if you look at the stock market you can cease -- you can see pressure on deutsche ease. if you look at credit default swaps on deutsche bank's junior debt, you can see that it has been soaring. by some pricing estimates, a 536 basis points today, an all-time record since pricing began in 2007. a bit of a divergence on

deutsche bank between stock market and credit market. interesting to see whether the relief rally currently happening in equities followthrough into credit. it is so deutsche bank-specific but it has bled over into the european banking sector. >> you saw this in the morning. deutsche bank shares tumbled in germany. as soon as it tumbled again you you saw diving. so overall anxiety emanating. >> that does it for "bloomberg markets." take a look at the major averages with less than four minutes ago. you are looking at gains all around. the dow up 130. this is bloomberg. ♪

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>> we are moments away from the closing bell. u.s. stocks, shrugging off and the mexican peso meeting the emerging market. [closing bell] scarlett: did dowd joe -- the dow gains, extending its quarterly advance. joe: the question is, "what'd you miss?" >> we break down all the market moves by asset class. >> nike may be losing its cool, retailers are picking more in demand styles. nike earnings, just minutes away. >> we speak to a former executive at the italian treasury about what's next. we begin with r