closing bell, u.s. stocks ending with little change. little change in the s&p 500. matt: i'm matt miller. the s&p 500 eking out a slight gain as investors await tomorrow's biggest jobs report. joe: what did you miss? scarlet: central banks are starting to think about ways out of the bond buying maize. what happened to quantitative easing -- when quantitative easing runs out of runway? matt: as global leaders gather at the imf meeting, even christine lagarde couldn't help but chime in on the developing deutsche bank story. she told bloomberg a bad settlement is always better than a good trial. the jobs all eyes on report, we take a closer look at unemployment insurance and

whether or not the benefits help or hurt the labor market. scarlet: this has been the trend before a big jobs report. treasuries declining. the latest data. inwill probably move december. all signs are reporting the economy can withstand a rate increase. >> they are not political and every meeting is live. the other interesting thing is that you mentioned earlier that defensive stocks have been retreating and we saw utilities rip away for a second. they are back down again. losers, health care, telecoms, and utilities are down

as well. the sectors are all down again today. take a look at some of the individual winners and losers on the day today. there were bigger stories under the hood. all foods up on a lot of options act to video and speculation on twitter, i should point out, of possible takeover talks. whole foods up 5%. mylan down as the ceo shredded congress. the senate is angry that she or the company of allegedly had classifying the epipen's as a generic and getting more money from state aid agencies than they should have previously pr -- previously. and salesforce.com. the possible bids for twitter dropped out. if salesforce by an, they would get it for 20% cheaper today. the big story right now is

definitely the ongoing backup and yields. the u.s. 10 year yield ending at 1.74. a pretty meaningful move getting up to the highs in mid-september. still very low by historical standards. of the day, we saw very brief drop on headlines. was no particular inclination to taper that affected bond market around the world. let's look at a chart of german 10 year yields. trading, ae stop drop in yields on the same headlines. quite asnot recover much, but the same story. they were in positive territory for a bit. the story has been a stronger dollar and we saw that continuing today before the jobs

report. it is keeping the streak versus the yen alive and firmer for the eight day. the longest winning streak in two years. as for the pound, that resume the selloff. they try it $1.26 as send the prospect of a hard brexit. now protecting more losses ahead for the british pound. decline areiggest among emerging-market currencies, amid political instability concerns. president being cut if gordon is replaced. where theremodity has been action.

west texas breaking above $50 a barrel. up 1.4% today. and on the flipside, we had the ongoing selloff and the precious metals. gold is down 1%, silver down just over 2%. does a been really getting hammered. it's been over $1300 an ounce. a really sharp selloff in gold. a stronger economy, the backup doing kind of a number. we got off to a great start to the year. a lot of people caught offside by change, perceived change in the macro conditions. >> take a deep dive now on to the bloomberg where you can find these charts. the colleague in tokyo, the spread between the two year yield in the average two-year yield. canada, japan, u.k., germany, france.

all the way back to last december. what does this reflect? u.s. monetary policy is the most hawkish relative to this basket of countries. italy and germany being a proxy for the average member state since december of 2015. it's when the fed began left off. investors were expecting a fairly aggressive fed. they indicated for rate increases for this year. .> that is a great chart one of the big things is the u.s. dollar on a pretty long winning streak. it speaks to one of the main drivers of currency. >> the differential is widening. just thinking about something like you're talking about gold. a price in the underlying

commodity. investors continue to pour into etf. the always see miners moving and i am fascinated by the miners moving a different price level than the commodities. on tuesday, when gold was down big like $50, you saw $350 million of inflows into the gold miners etf. that was a third-biggest day this year. weeks, youuple of haven't seen hardly any outflows , almost all inflows. it's fascinating as the price falls, people still buy it. they said, remember, flows are not correlated to returns. this is more institutional given the size and speed of the trading. joe: here is good news.

i like to show this every few weeks. nonseasonally adjusted jobless claims in the white. moving average is in the orange. i probably shown this 10 times. keepsange line just hitting new lows. it's a really long way to smooth out the noise of claims. we hit 249,000 initial claims. new low on this measure. if you were to just look at the measure, you can't do that, but this one is extraordinarily solid. scarlet: it is remarkably consistent. counting you down to friday's u.s. jobs report. this is bloomberg. ♪

mark: hurricane matthew is picking up steam as it heads towards the southeastern united states. the category four hurricane roared into the bahamas earlier today with sustained wind rising to 140 miles an hour. it is likely to approach florida's east coast sometime tonight. about 2 million people in urged toave been evacuate. it could become the first major hurricane to make landfall since wilma and october of 2005. hillary clinton's campaign is pulling ads that were to air on the stations in the state that carried the weather channel. the spots were part of a multimillion dollar reshuffle togeting voters critical winning the election.

join us sunday night was mark halperin and john heilemann. we will have special coverage both before and after the second presidential debate in st. louis, missouri that starts at 8:30 p.m. new york time on bloomberg television. authorities have arrested 70 people in india and questioning hundreds more in a massive and elaborate scam targeting thousands of americans. mumbai police say the suspects posed as tax authorities and ran fake call centers to contact u.s. nationals demanding they settle back taxes. the scam brought in as much as $150,000 a day. the palestinian president was hospitalized and underwent a heart test today after suffering from exhaustion and chest pain. injury attention to the chaotic leadership situation in the palestinian territories which have no succession plan for the 81-year-old leader. the test showed he is healthy.

hours a day24 powered by more than 2600 journalists and analysts in over 120 countries. matt: the jobs report is a hard one to forecast. in five of the seven past septembers, the u.s. payrolls disappointed on the first to falling short of the bloomberg median estimates. with so much attention on the jobs report and what it means for the fed, how much weight should we be putting now? let me ask what to expect from the fed's reaction? report, wouldtive they possibly raise in november, just six days before the

presidential election? >> it will take a small nuclear device to get them to move in november. economists are having a tough time figuring out september. there is a tale of distribution. even though. joe: 185, 1 50, 160, 1 90. it seems like noise in the same this entity. headlinet's the unemployment rate, wages, pace of job creation, what would really change the narrative? what would we see to kick the market to a different pace?

>> we would get some revisions and new data. there is no evidence to say that inflation's are here. there is very little turnover. the lack of inflation really is the key to the narrative. can have 150 or 250. i don't think it will change the quality of the stands. show me the inflation before i move. a lot of forecasting 450,000 for the month of september. the consensus is 172,000. we have seen the data has been mushy and weak. what was going on? do we know what happened in august?

>> there's been a lot of weakness in the first quarter. the second quarter, we got some confidence. those noisy pieces away, we are expecting a resumption of normal growth. it would be another piece of data that would change the narrative. the key part of the narrative would be improving growth that leads to confidence and inflation. that would any of change the timing. pressure. seen upward it japan, germany, some of it fueled by expectations that the , the ecb might

take a different path in the future. changeeed that narrative for them to continue to rise? reflection of the desperation around the world and that we pretty much reached the limits of monetary policy. sayne wants to give up and we're done with market policy. everyone is pushing down on some kind of easing. think in the states, the uncertainty about what will is actually causing a lot. uncertainty that we are experiencing could lead to about 101.25% of gdp.

the fed inident is the narrative when you have other external factors like the referendum in italy on december 4 along with the election and the policy uncertainty? >> that is what is feeding the caution. the chickens won't move until iny gain some confidence their causing them to say we will posit to we are sure. i wonder what you expect out of washington. if we get a hillary clinton victory, do you expect a passing of the baton from the fed to the government is for a stimulus is concerned from monetary to fiscal? >> i don't think she's got enough coattails to turn the

vote count in the house. as long as paul ryan is in charge, we will have a battle of i want small government versus more expenditures for infrastructure and benefits. they are hoping to get more proximity from that. so the audience will lease not count on that. matt: even if we got some huge infrastructure bill, that there would be a decent multiplier? the obama administration --

changing the narrative. what causes inflation in your view? it is about expectations. in your framework, what is the key driver? >> i have the same as janet yellen. slack absorption. it's not just measured by the unemployment rate. it's also measured by turnover. the lack of turnover. that is not happening fast enough. scarlet: is wall street giving up on deutsche bank? analysts are giving up their bullish views. this is bloomberg. ♪

, this isi'm scarlet fu a chart inspired by julie hyman. faces fallout from fraudulent account openings. the white line tracks the number of cell ratings on wells fargo. i layered on the analysts recommendations which is yet to negotiate down the $14 billion request. 14 of those, it is roughly 38%. eight of those recommendations are cells.

clearly, deutsche bank is more hated. if the group continues on its current strategy. itself.epeat it would be painful in the long term and would put deutsche bank on more solid footing. joe: you can shirk the number of various ratings like that. it, it says something pretty big about the state they are in. i'm looking more at gold because it continues to tumble. the premium, it means people are

paying for puts relative to calls. we can see the decline right there. it has an ugly line. and it have been a lot of put mine relative to call buying. people paying more for downside protection than upside. it's interesting. >> one of the problems for gold has been the strengthening dollar. it has also been against the yen. theeight days in a row, longest streak since june of 2014. this chart goes back to april of

this year because it would have been far too many lines if i had taken it back more than two years. .ou can buy ¥104.02 and the ecb getting ready to curtail the qe. it japan is going way negative. the juxtaposition just drives the currency against the yen. the chart that scarlet showed. scarlet: and look for the

premium to go up even more. matt: it's so easy and straightforward. scarlet: also the move and gap shares is moving higher in late trading. one thing we should mention, it negatively hurt the september. matt: this is a jump on gap since the close. coming up ahead of jobs day, we

take a look at a new study on the impact of unemployment benefits. ♪

margolin forecasters warn that large waves pushed by hurricane matthew could threaten lives and property hours before the category four storm nears the shore. the strengthening stream towards florida with windows 140 miles , hundreds of thousands across the southeast board up their homes and businesses and fled inland to escape the storm. cancel hundreds of flights as matthew pelted the florida coast with high wind and heavy rain. the fort lauderdale airport shutdown earlier today and the air -- orlando airport is expected to do the same by tonight.

the flight tracking service says 1500 flights were canceled today , 1300 more have already been canceled for tomorrow. president obama is enjoying a surge in popularity as the end of his second term draws near. of americans approve of the job he's doing in a new survey, a four point increase from the previous poll and up 11 points from last year. build your prosecutors say a suspect has been charged with attempted murder in what they call a terrorist context. it injured officers in brussels and the suspects have been detained. they will decide if he should be kept in custody by tomorrow. the united nations envoy for syria says aleppo could be destroyed if militant fighters don't leave and syrian and russian governments don't stop the bombing campaign.

they also warn thousands could die by the end of the year. he drew parallels in bosnia and rwanda. global news to one of four hours a day powered by more than 2600 journalists and analysts in over 120 countries. not a lot going on when it comes to the indexes by the end of the session. all of this before the big jobs report that may help determine whether the fed goes ahead with raising interest rate in december because november is probably not going to happen because of the election. matt: if you look at trading the day before a jobs report, over as particular month,

september jobs report has been more likely to miss than other jobs reports over the past seven years, we have seen five misses compared to the estimate. joe: what did you miss? the impact of an up limit insurance on overall employment. our next guest said these benefits did not hurt the labor market during the last recession. university of massachusetts amherst associate professor of economics, thank you for joining us. recall several states really elongation the duration of time with which people could it get unemployment insurance. criticize did saying that this created a disincentive to go out and find work.

>> we wanted to know what is the overall impact of that on jobs. so to study them, here is one problem. it is basically a chicken or the big problem because you don't know if the unemployment , the insurance generosity actually increased unemployment or did it go the other way around? to get it that, here is what we did. we tracked what happens to both

benefit duration as well as employment adjacent counties over time. joe: a clever technique looking at counties on two different sides of the state line and they had different policies in those states relating to the duration of unemployment. >> we tracked employment on both sides of the border. we found there is virtually no toference over the next 12 24 months following the increased generosity. about thealk

theoretical explanation for why that is. it would seem intuitive to say that you can collect unemployment benefits for longer, less inclined to go out and get a job. would around for a high-paying job. why does that affect not show up? >> there are a couple of possible explanations. there is some delay. it is effective in the families that try to expended. and we find very little effect

on employment suggesting that whatever the forces are, the labor supply and additional spending essentially cancels each other out, leaving very little effect. the act of getting checks to people's hand is a boost to the macroeconomy, creates demand. another effect is the idea that if i decide i don't want to pursue an available job opening. >> there is a possible labor supply a fact.

it could be a positive impact on others by not playing these are cochairs. and the effect of spending more money. what we find is altogether, it is a way top, and in theo people case of very sharp increases. >> fascinating stuff. matt: i just wanted to quickly

show bloomberg clients a function ecm i go. it is a market impact monitor. and what i've done here is i've put in gold in the yellow box year. you can put the euro, the euro, the yen, whatever you like. if you click these boxes on the left, i put the four biggest surprises. these are the paths that gold has taken on the meetings. and these two down here are for huge positive surprise on jobs and the price of gold. you can basically put in any kind of asset. i will put in the yen and forecast what it will likely do depending on the surprise in jobs number you get. a very cool function on the bloomberg terminal. past performance is no guarantee of future returns. say: you're supposed to

that really fast so no one understands what you're talking about. go is the special report on bloomberg and has all sorts of headlines, the latest polls, videos. let's pull up this screen right now that shows how the candidates are pulling. the blue line is clinton and the red line is trump. this is according to a real clear poll. there you go. there is the spread as well which we will highlight. obama'sp, president climbing approval rating, will it translate to gains for hillary clinton? this is bloomberg. ♪

scarlet: it is time for the bloomberg business flash, a look at the biggest stories in the news right now. snapchat is preparing filing for an ipo and aiming to sell shares in the first quarter of next year. it is according to people familiar with the matter. a company which recently changed its name could list as early as march. he social media site is known for the disappearing text and pictures could affect the market value of $25 billion according to the wall street journal. the billionng out dollar stakes warren buffett had in the chewing gum business. a candy company seeks to simplify its ownership and reduce business expenses. they had to say a 5% annual dividend to berkshire hathaway. and in august, filing said the had the stake this month.

that is according to people with knowledge of the matter that says there is a valuation gap of less than 10% between qualcomm as they discuss the possible transaction. and that is the bloomberg business flash. a new poll showing president obama's approval rating shows 55%. it is the highest it's been at any time since its first year in the oval office. joining us from washington is bloomberg news white house reporter alex wayne. it seems fairly high, relative to how high it's been. you seen other presidents get decent approval ratings and still that party loses the white house? >> bill clinton was up to 58%

and al gore didn't want to put him on the trail and lost. i approval does not guarantee a win by his favored successor. it hillary clinton is banking on this. she will be deploying obama to a bunch of battleground states including north carolina and ohio. jobless claimsl in the u.s. are at their lowest level in four decades. it is at the highest level in seven years. this theme of the election, everybody is furious and everybody wants radical change. a lot of the data don't really seem to paint a picture of a country that looks like that. is kind of mystifying to the obama administration and the president himself. i believe he wonders to himself why the glowing economic

data is not translating to more support for hillary clinton. is that people don't like hillary clinton very much. part of it is that parts of the country are not enjoying the same kind of success as other parts. that economicof performance might be partstrated in wealthier of the country or urban parts of the country. is a great level of discontent even on economic issues in this country. at the individual term presidency, it's not uncommon for the electorate to simply be in the mood for change. potus will campaign for hillary clinton. what demographic group is he most likely to move the needle? she hasn't been pulling with millennials here it is that the group? or minorities? have we seen evidence of that

helping? >> she is struggling a bit with young people and with minorities. those are the demographics that put barack obama and office. her campaign is really banking on barack obama turning out blacks, hispanics, and young people. the same folks that put him in office twice. if they can put him on the ballot. they often lost in 2010. his party got wiped out in congress and it's a real question if he's going to pose for hillary clinton. kids and minorities don't believe that he likes hillary that much. hillaryinly didn't like

or bill at all when he first got into the white house. that has changed, hasn't it? >> she was secretary of state for four years, five years. relationship was definitely repaired. i'm not sure how much it was repaired between himself and bill clinton. you saw the remarks were he sort of criticized obama care. i doubt the president appreciated that much. bitterness be some there between bill clinton and obama. coming up, imf managing director christine lagarde and what she says is in the case of the deutsche bank settlement that it's better than it good trial. ♪

scarlet: what did you miss? the imf annual meeting opened today and christine lagarde said that the sooner deutsche bank races a set -- reaches a settlement with the united eights, the better. she said a bad settlement is always better than a good trial. tom keene and francine lacqua asked if she was worried about deutsche bank. lagarde: it is a systemic institution and is very strongly interrelated with many other banking institutions around the world. bank,ieve that deutsche like many other banks, has to look at its business model, which i'm sure it does and is in the process of telling us it is here or there. , theterm profitability interest rates around the world.

and what size it wants to have and to strengthen the balance sheets. and to do a bit of introspection and how they want to be, i would mention something outs. really really, it will move more in the direction they aredigital tools, cutting costs. >> there is a business model that we often talk about. do you think institutions have to rush to find a settlement and what happens if they don't?

christine lagarde: a bad settlement is always better than a good trial. we are not in a trial mode. it would deliver some certainty as to if the bank will have to carry it. so the sooner the better. keene: you stood up at the council of foreign relations in washington and was in search of adults. for european banking in general, what this is about is the courage and the will to clear bad loans. imf assisted tyra banks, german banks, banks in general to find the courage to finally write down the balance sheet? >> they be real banking union

within the area. there is a degree of banking union. efforts have been made. there is not a fiscal backdrop it will besupport sizing the system. that is number one. we have say things as we see them. sometimes it is not welcome. if we see a significant amount of balance sheets, we have to say so. privacy in bilateral discussions and we do that publicly aggregating numbers because we never want to single out one particular institution versus the other. in the global financial stability report, we hardly mention any name. but we talk in general --

tom keene: it seems like bloomberg surveillance back and forth. >> she is probably far more diplomatic than we are. do we need to consolidate banks? regulators are looking at that. christine lagarde: the findings are that even if the economic situation improves as we hope it will, if policymakers make the decision and move into action mode, it will be 25% of the banking system that is not going to be prosperous. the work that any business leader has to do looking at his business. tom: this speaks to hsbc looking for low rates out to 2000 21. solvency of many life insurance companies and pension funds is threatened by a prolonged time of low interest

rates. how did negative rates fold in this chronic sense of a lack of returning? >> it calls for re-examination of those two sections as well. true for thelarly life insurance sector. isre a level of return prescribed by law. speaking with tom keene and francine lacqua. tom and fran will be speaking with the a tie-in finance minister. this is bloomberg. ♪

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scarlett: we have the jobs report tomorrow at a: 30 a.m., and a quick dash 8:30 a.m., and a quick report ♪

♪ ♪ ♪ >> we are just three days away from the second mega important presidential debate between hillary clinton and donald trump, but right now the nation's focus is on a massive storm barreling to the florida coast. hurricane matthew is expected to reach category 4 level tonight and has already killed more than 100 people in the caribbean, leaving florida gov. rick scott to issue a direct and dire warning. >> if you are reluctant to evacuate, think of all the people that the storm has artie killed. you