scarlet: from bloomberg in new stories are covering from jacksonville florida. jumped by 156 thousand. stocks are declining on the report. what does this mean for what the fed does next? the imf world bank meeting is taking place. will hear from consolidation among asset managers. with just 31 days to go until the election, they will go head-to-head in their second debate on sunday night and julie hyman joins us with the latest read from the jobs report is something more negative as the day goes on.

julie: they are considering raisin the stake in this company to 25%. information.more i just wanted to bring you that headline initially as we get it read as the day goes on, things have gotten more negative. initially, the read by economists was it was not as bad as it looked on the surface because labor participation had ticked up. seasonally, we see september higher. that is not helping stocks. stocks have continued to fall to their lows. you can see this on the one-week chart. today, stocks were dropping off. 9/10 for&p is off

weak. we are also watching the bond market. we have seen a muted reaction on the shorter end of the curve. yields had briefly gone lower. the fed is on track to raising rates once more this year. now we are going to get more details on that deutsche bank story. written already had that some of the major shareholders and deutsche bank had been speaking with the bank about backstopping its liquidity issues. people are hearing from familiar with the plan who declined to be identified. they are boosting their stake in deutsche bank to 25%. 10% stakefamily has a

in the biggest lender in germany. the people who gave us the information did not want to be identified. there are a number of big holders of deutsche bank. this had been one of the possible plans. we are to talk specifically about deutsche bank and the possibility of an asset sale. scarlet: let's get you a check of headlines. mark: hurricane matthew has been pounding florida four hours with high winds and driving rain. now it has moved within a mile of the coast. it was downgraded overnight.

it has maximum winds of 120 miles per hour. the hurricane is located south of daytona beach and is following the shoreline. 2 million people were ordered to evacuate. president obama got an update from the heads of fema and homeland security. >> i want to emphasize to everybody that this is still a dangerous hurricane. surgetential for storm and loss of life continues to exist. people continue to need to follow the instructions of their local officials over the course of the next 24 or 48 hours. mark: the death toll in haiti is approaching 300. it is expected to rise. john kerry says russia and syria

should face a war crimes investigation for their attacks on syrian civilians. forces struck another hospital overnight, killing 20 and wounding 100. they own the world more than explanation about why they keep hitting hospitals and women and children. hillary clinton enters the final an edge and staff. her paid staff outnumbers donald trump's five to one. more than 4000 people are working to elect her. that is compared to 904 trump. president of columbia has won the nobel peace prize. after honored just days voters rejected a peace agreement with rebels. the president is trying to salvage the peace talks. the ward left 200,000 people

dead it. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. alix: thanks very much. the u.s. economy produced another month of like lester growth. unemployed -- it did not meet the estimates we were looking for. a lot of economists are saying it was pretty good. what will the fed do with this new information? bill gross weighed in earlier today. flat. work week was there tonothing much keep the fed from raising interest rates. point, they have to.

it tends to be a little weak kneed at the moment. they have stressed data dependence. here we are. matt: karen is the head of macro at merrill lynch. she served as a director of the markets group for the new york fed. thanks for making the time today. when i first heard, i thought not as good as had been anticipated by our survey. when you look under the hood, it's pretty good. karen: it's not at all lackluster. i think the fed is going to be happy with this number. they have a nice report. they think the market got it wrong. they focus too much on the number. number that captures people who are less attached to the work force hasn't budged. underlying all that, when you pull people off the sideline him

back into the labor market, they are initially going to be unemployed. when you look at education levels, it is showing people with a college degree or advanced degree, there rates are going down. they are finding jobs. people are high school diploma or less, they are going up. scarlet: this is validation of the view that we are ready to go in december? karen: this is a validation that they pause in september. the instincts that janet yellen expressed in september, there is more room to run. open.esult, the window is if they want to go to more times, that seems reasonable. why might the fed look

at this more positively? if it's not beating the headline numbers, it's a disappointment. karen: they have not looked into the numbers like i have. they are not looking where the jobs are coming from. i think the wage number looks fine. higher than we have seen in the recent past. that's not bad. it's not much higher than where we have been. the absence of wage pressure is another sign that there higher e have seen in the recent past. is creation. it withoutrbing creating inflation. matt: is this a goldilocks number for the markets and the fed? it gives them an excuse or pressure to race ahead of the election in november? karen: it takes off any pressure. they don't have to be stressed

about inflation being a problem. it gives them a runway for september. scarlet: august numbers got revised. tohas now been revised 160,000. had this soft patch in july what can we say about that? we have gotten stronger and stronger in terms of gdp outlook. it's starting to build. we are going to grow more next year than this year. growth is picking up.

the consumer remains solid. i think a lot of that has to do with risk aversion. i think now, people have settled down there feeling more confident about the data we are giving. outlookth that positive for next year, could the fed be a little bit behind the curve if they only hike once in december? ins puts them at three hikes 2017. karen: i don't think they're going to be much behind the curve. think they are waiting for inflation to pick up. they are also waiting for expectations to pick up. they are not going to be aggressive. they won't feel like they are behind the curve and that's an important thing. scarlet: thank you so much.

matt: we just wanted to reiterate the breaking news that we have on deutsche bank. the royal family is thinking about raising its stake to 25%. currently, they have three major shareholders in blackrock and the qatari royal family. they have a 10% stake. you can see on scarlet's bloomberg, you can see a list of the holders in. the royal family breaks of holdings into a different group. i have a 10% stake now. raising said to be their stake to 25%. you have a balance in deutsche bank shares today. you can see the big jump.

more after the break. this is bloomberg. ♪

are: deutsche bank shares getting a pop from the breaking news earlier that the qatari royal family may increase its stake in the bank to as much as 25%. that is according to people with knowledge of the matter. for somes searching way to bolster liquidity in case he settles with justice department officials for a

settlement on mortgage deals. you had been writing the story. this is significant, a 25% stake would be huge. ruth: it would be huge. we know they are considering this and if they do raise the stakes, it would be a great capital infusion for deutsche bank. the sharesbe getting at a much lower price is probably a great bargain if they still believe that fundamentally youbank is intact and if remember, they have come into banks earlier. they had invested in credit suisse.

they had invested in barclays. they put money into banks. this is not something that haven't done before. they own 10% in deutsche bank area -- bank. scarlet: this is something a lot of people have speculated on. will this be sufficient? we don't have a settlement figure yet. if it is in the tens of lay-ins of dollars, would he still need to raise money? ruth: we don't know when the investment is going to come in. it's possible they wait until the clients are known. to do anything. they don't want to go to investors and raise more money. they don't want to do any of that until they know the extent of their fine. that those are two things

he said he was not going to do. he told investors repeatedly -- i watched him personally say that he is not knowing to sell shares to raise capital. he said he is not going to sell his asset management unit. gowould rather do that then down in flames. does this provide the perfect solution? ruth: in a way, yes. they would come in with a few billion dollars that would strengthen the capital position. money, they don't raise if they do an ipo of their asset management unit, they still can say that they own it. they can get money to help with their capital position. that is where they hit two birds with one stone. it is on a list.

scarlet: perhaps selling the , whichanagement business is a profitable part of the business, may not be the solution. there is no quick fix. if there is no shift in strategy, these current issues will repeat themselves down the road. they suggest deutsche bank get rid of the investment bank. is that discussion taking part? are lookingw they at an array of options. we don't know if they are saying to get rid of the investment bank. when we talk to people across the street, they say deutch is still showing up. deutch bank was one of the lead managers of the sale.

they arelike for now saying it's a businesses usual. they are winning business. it could change over the next weeks and months. we don't have enough to tell us. it seems like a lot of this is in the hands of the department of justice in some ways. they have asked for $14 billion to settle these issues. less.banks have paid far where do you expect to see the settlement? ruth: there have been numbers doing the rounds. that is a lot less than the $14 billion number. -- surpriseme prize when the numbers came out. it seems like they don't expect to pay that much. nobody knows what the numbers are going to be.

scarlet: it thank you so much for joining us. longthe british pound's wildly last night. it dropped 6%. there was a little bit of a recovery. what about the algorithms? we will explore. this is bloomberg. ♪

scarlet: that -- pound to the plunge today. it comes on the heels of three other inexplicable currency tumbles in a little over a year. it is believed that trading is becoming less stable. we have been following this story. the bank of england is looking into this.

it's going to investigate the cause behind it. everyone is so quick to write this up as a fat finger error. thaterybody is asking question. platform operators, traders are asking that. the feedback we are getting so far is it was at a time when it was low liquidity. there was not a lot of volume going through. we talked about the ceo. started -- from what i can see, i can't rule out that finger. i can't rule out that it was something algorithmically related. we were seeing -- matt: to some extent it doesn't matter. these kinds of incredible fluctuations the currency market

has been happening more and more. they are dangerous to economies. why don't we have systems in place that can stop them from happening. >> that's a good question. it's something the bank of england will probably be raising. what'se going to ask being done to monitor the currency. they do have committees to have those discussions. one of the things we're hearing about is the market is fragmented and there are lots of different trading platforms. how are they all tied together? what kind of system is holding that together. a lot is being looked at. there are a lot of answers that need to be figured out. matt: we talk about the fact that there is a triumph of liquidity around the daypart.

least tos probably the color we are getting. not the london trading hours. this is not where you might see more liquidity in the currency. it came at a vulnerable time when there has been a lot of chatter and speculation about sterling. matt: thank you so much. scarlet: it's been a brutal week for the pound regardless. ubs: coming up, the head of explains why the sector needs to redefine itself. this is bloomberg. ♪

scarlet: live from bloomberg world headquarters in new york, i'm scarlet fu. matt: i'm matt miller. this is "bloomberg markets." let's start with the first word news desk with mark crumpton.

south florida escaped the worst of hurricane matthew and now the storm is pushing north. hurricane was downgraded to a category three storm and state top of florida's atlantic coast. still, matthew has sustained winds of 120 miles per hour. now 100 miles of coastline from florida through south carolina are at risk of a deadly storm surge. hundreds of thousands of homes in florida and businesses are without power. in geneva, switzerland, the international red cross announced an emergency appeal for $6.9 million needed for money, medical aid, sanitation, and assistance to 30,000 people in southwestern haiti hit hard by hurricane matthew. unicef says it needs $5 million to meet the immediate needs of children in the region.

on sunday night, donald trump and hillary clinton meet for a town hall style debate at washington university in st. louis, missouri, the second debate presenting challenges for both candidates. secretary clinton has been largely absent from the campaign trail preparing for the event. mr. trump held his own town hall event in new hampshire on thursday but denies it was practice. .oin us sunday night we'll have special coverage before and after the second presidential debate. coverage begins at eight 30 p.m. -- 8:30 p.m. new york time. a piece of a wing found off the coast of the arusha confirmed to be part of the mh 370 flight. 230aircraft vanished with nine people on board during a flight from kuala lumpur to beijing in march 2014.

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. debate number two between hillary clinton and donald trump comes this sunday night and the stakes are high for donald trump, whose poll numbers have slipped since last debate. he told a town hall last night in new hampshire -- let's take a listen. >> they said this was practice. this has nothing to do with sunday. we are here because we just wanted to be here. hillary, frankly, is talking about debate prep. she is resting. i want to be with the american people. i want to be with the people from new hampshire, and she wants to rest. joining us now with more is steven yaccino. that was kind of a prep for the second debate.

some pretty optimal conditions for him. >> he says it was not prep, but it was clearly a town hall, a couple days before the one and only town hall debate or this presidential election, and it had some elements that trump will see on sunday, a moderator, questions from the audience, although the audience did not ask them. it was an invite only crowd. they were all softball questions. even then, he strayed from his message. he was attacking journalists, hitting hillary clinton about resting, making fun of her for preparing for the debate. seems like that has been his message, attacking journalists. >> it is not data message that his campaign wants him to focus on. talking about the serious health issues. the campaign would much

rather him talk about the economy, immigration, which is the issue that got into this point. trump hit some of that the last night, but if we were looking for a sign of whether we would see a more disciplined, more on trump atpracticed sunday's debate, last night was not any indication of that. now, debates are about expectations. the republicans are wringing their hands a little bit because mike pence had such a strong showing at his debate this week that the expectation after that was that donald trump has to do just as well if not better to raise the bar. since then, trump has indicated he is not preparing that much, preparing a little, but not that much. the performance last night may have lower those expectations a little more. maybe if he comes out and has a stronger presence, stronger performance than the first debate, it may be enough for him to claim victory. scarlet: of course, the format

and a town hall debate they were simple over hillary clinton. by her own admission, she does not perform quite as well. >> donald trump has not done as many town halls as some of his republican rivals did in the primary. his go to format is the big rallies. as we saw last night at this town hall in new hampshire, he was still in rally mode. he was making jokes come interacting with people, but he is still on the stage. the town hall debates are much more interactive, much more personal, surrounded by the crowd. in past years, you have seen a lot of candidates talking directly to the person who asked the question, telling stories, being more biographical. an intimatef affair, and we have yet to see that from donald trump in any real way. scarlet: there was a story here the debate mayg,

create negative headlines for wall street because this format could bring up a lot of wells fargo questions, cause a lot of attacks on wall street. >> there could be a real market effects. matt: you are showing me this yesterday. you can follow the real clear politics results. it seems like donald trump has been in a bit of every fall since last update. i am sure bloomberg politics will be covering this. >> and republicans are worried about that. there has been talk recently that in donald trump does not have the performance that some are expecting, we may see some reaction from some down ballot candidates in the senate and congress who may start to distance themselves. matt: even more of them, you mean. >> yes. scarlet: sunday night we will have special coverage before and after the debate. new york time.30

matt: in washington, the imf meeting is in wrapping up. nancy lock while caught up with the ubs ceo sergio ermotti. he weighed in on deutsche bank and whether or not the european banking system is broken. >> financial markets are now of theable in respect soundness of the banking system. of course, we still need to go through all of these challenges we are facing on the macro front and also geopolitical front. negative rates, how much do they hurt you? ,> they hurt us in our respect generating revenues on our deposits. very long inventory of deposits, our clients are risk-averse. so they go into cash. that is punitive not only in terms of margins, but also capital consumption.

is a real challenge, a double whammy we are facing now. francine: deutsche bank is one of the biggest concerns. how many times are you asked why you are different from deutsche bank? >> i was waiting for that question. deutsche bank is in a unique situation, but it is still a situation that is much better than people probably assume. strong.em is very the same kind of discussions and matters five or six years ago would have created much more turmoil. the reason i am confident is i see how the system reacts, and i get comfort out of that. francine: how do you think the doj is handling the negotiations on both sides? >> i do not know. in those kinds of matters, every situation is different.

it is difficult to judge from the outside. i prefer not to comment. we have this huge fall in the pound, we talked about algorithms, fat fingers, possible lack of liquidity. have we learned anything about markets in the last 24 hours? difficult to make a comment without knowing the cause, but if there is an indication there is a clear lack of liquidity, of course, all of this happened during tokyo hours, so maybe that was not the int liquid time of the day terms of pound-dollar. it is true there is less liquidity in the market and people are concerned about the developments of the u.k. exiting and the consequences. i think you start to see maybe a readjustment of the pound exchange rate to the new

paradigm. francine: how closely did you rie party to conferences. are you convinced we are looking at a hard brexit? still not convinced. when you look at those kinds of is to say whatue needs to be saved, vis-a-vis from a negotiating standpoint, and also from a domestic political point of view. the financialne system, industry is not important for the u.k.. it is a big contributor in terms of the well-being of the u.k. of course, it may not be the same as we have it today, but i still believe london will continue to play a very important role in the future. francine: do you still see it as the financial capital in europe? >> most likely yes, but less so

globally. the reality is, the assumption is always that flows will always go somewhere else in europe. the likelihood is that may be true, but some may also go back through the u.s. or asia. going back to deutsche an ipo forare doing the asset management bank. is that something you would do? >> we do not comment on potential m&a situations. have an ipo,ey there is nothing to look at. francine: you could always change their mind. invest inlike to asset management by buying something? >> i will not comment on particular matters, but it is true, we are going to a redefinition of our asset management strategy, we are

doing well in terms of achieving our targets. the industry is becoming very competitive and it is likely to see more consolidation, so we look at first of all, making our business more efficient and effective. we cannot rule out anything, but that is one option. our base option is to grow organically. lacquahat was francine speaking to the ubs ceo sergio ermotti. coming up, surveillance speaks to philipp hildebrand, italian finance ministers, and the european vice presidential commissioner from the imf annual meeting in washington, d.c. it is a special on television, radio, and online at bloomberg.com. this is bloomberg. ♪

scarlet: you are watching bloomberg, i'm scarlet fu. matt: i'm matt miller. this is your global business report. the goldilocks report that some are describing the september jobs data. bill gross weighs in on the fed's next move. scarlet: brexit is turning ugly in the financial market and the british pound is the latest casualty. a sharp move triggering concerns about the effects of computerized trading. china central bank reports unexpected declines in foreign exchange reserves sending the yuan to its lowest level since january against the dollar.

in today's quick take, we review its volatile history. start in the u.s.. in american employers added fewer jobs than expected last month, payrolls grew by 156,000 in september following a revision of a 160,000 increase. that was bigger than previously estimated. the unappointed rate rose .1%. bill gross says the report clears the way for the federal reserve to raise interest rates. upthe week was flat, wages to 2%, so nothing much of to keep the fed from raising interest rates. whether it is november or december i'm not sure. at some point, they have to. the central banks tend to be a ak-kneed at the moment. also said the global economy needs a weaker dollar, not a stronger one. matt: more problems for volkswagen north america.

they are recalling one million vehicles for fuel pump cap and suction top problems. among those being recalled are otherdi q7 and subsidiaries. france's total has agreed to sell it specialties chemical unit to the carlyle group. they will pay $3.2 billion for the business. the company sells chemicals and equipment such as spray booths. the sale is part of their plan to divest $10 million worth of assets over two years. traders are blaming computer-generated sell orders in part for the flash crash of the british pound last night in early asian trading, or in friday -- or friday in asia. the pound fell 6% before rebounding. that was the biggest drop since

the u.k. voted to leave the european union. traders speculate the initial startedmay have been with human error with algorithms adding to the trading pressure. scarlet: time for a bloomberg quick take where we provide context on issues of interest. china has long walled off its currency, keeping on world markets despite his recent stature as an economic giant. to fuel growth, it is not promoting international use of the yuan. this is one of the biggest changes since the creation of the euro. at the start of october, the yuan joined a basket of four other currencies in the imf special drawing right. it is an overdraft account that holds for globals thanks. this was a milestone that analysts estimate could trigger a $1 trillion which into chinese assets. dina's economic slowdown has put downward pressure on the yuan, prompting beijing to step up intervention, resulting in a

surprise massive devaluation in august. china kept its economy close to nonsocialist countries for 30 years before setting a fixed currency exchange rate in 1994, aipac that has endured for a decade. after they joined to the dummy to, selected foreign institutional investors were permitted to buy yuan denominated equities in limited amounts. 2010, the economy became the world's second-biggest and the use of the yuan took off. beijing plans to make the yuan full of convertible by 2020. their inclusion in the currency back is expected to accelerate the pace of reform. a more widely used currency would raise her influence in setting prices of commodities from oil to iron ore and would give individuals and companies on the mainland more options with their savings. makes the march to convertibility, china becomes vulnerable to swings in the currency as well as money flows that could aggravate its slow down. you can read more about the yuan

on the bloomberg. that is your global business report. bloomberg.com for more stories.

scarlet: there is an art fair every day this month for collectors with the stamina to peru's from seoul to santiago to what is our eyes. the number love art fairs has doubled over the last decade. ,ith the art market contracting will art fairs flounder this year? that is the subject of our bloomberg pursuit segment today. so is there art fair fatigue get? >> that is what a lot of

collectors have told me. the number of global affairs extended from about 100 to over 270 around the world. this month alone, there are 52 art fairs. budapest, to moscow, action in london right now, is , on top ofexhibition that there are options, selling another $200 million worth of art. matt: they are selling that, not just up for auction. the last couple of times we talked to you, it is about the art market in decline. $100,000 on and painting now only worth $20,000. that is the general theme. yet the number of art fairs is exploding. >> it's very interesting what will happen in the coming year. we are starting to see a little

bit of a consolidation. art market, in many ways, is very inefficient. spend 52 weeks to prepare for one event. what do you do for the other 51 weeks? a lot of fairs are trying to figure out a more effective model. they have resources, people that know these collectors around the world, and they are trying to figure out how to use their resources. ofrlet: are you seeing a lot art fair organizers combining or cutting out their fair in favor of working with another one? >> the biggest fair in the world is art basel. editions, one in switzerland, one in miami, which is totally crazy, and then one in hong kong. they bought a local fair and added that to the portfolio. now they're doing something very interesting. they are partnering with certain

cities around the world for a certain fee, they produce evidence for these cities. ted eventst art-rela based on our network of collectors, museums, etc. so they are tapping their resources. opening inalso different parts of the world, partnering with an indian fair, where they bought a 60% stake in a local fair. matt: this is great news for lovers of art, artists themselves. there are more places to see art, sell art, get paid for what you love to do. is there anything bad about this? to take in.ot for some collectors, some people i spoke with said we have to cut back. we cannot go to 15 fairs a year.

and for the galleries it is a huge expense. they can post $100,000 for the space alone, airfare, you have to fly your staff, you have to wine and dine collectors. and because the market is contracting, everyone is rethinking, how much money and time do i have to spend? some of the smaller galleries did in year ago we eight, maybe we would just do five this year. scarlet: which price point is most important for the art fairs? >> i would say 500 and below. scarlet: thank you so much. this is bloomberg. ♪

york,t: it is 1:00 in new 6:00 in london, and 1:00 in hong kong. i'm scarlet fu. matt: i'm matt miller. welcome to "bloomberg markets."

from bloomberg world headquarters in new york city, we are covering stories from nashville to london and oslo this hour. starting out with payrolls in the u.s., the big economic story for us today, up one hundred 56,000 in september, unemployment rising to 5%. why many are calling this actually the goldilocks report. a flash crash for the pound. analyst speculated initial decline may have been sparked by a human error, but is it more about fears of a hard brexit that are weighing on the currency? updatesre bringing you on hurricane, downgraded to a category three storm. still, if it hits land, it would be the strongest storm to do so in america since 2005. millions in florida police as

the storm gets within miles of the coast. julie hyman is here with the latest on equities amid so much action. becausef course, macro of the jobs report, and also a lot of stock specific news. we are seeing this selloff deep in a little bit for the major averages in the wake of the jobs report. was not thisead negative but stocks have taken a leg lower. take a look at the intraday chart. you see it happening shortly before noon. it may have been contributed to by comets from richard fisher which were perceived as dovish where he said the fed was perhaps more concerned about foreign risks to the u.s. economy and global growth. nonetheless, we saw that leg downward at the time. in terms of individual movers, there has been a lot of latebreaking news. autsche bank, after taking big leg up, shares are still up, but have pared their advance.

bloomberg news reporting that the atari royal family is considering boosting their stake in the company to as much as 25%. reuters reporting that such a boost would be unlikely. that may have accounted for some of the declines off the highs and the confusion over what could happen next. tesla is another stock that we have been watching this week, selling off, down 3.5%. company's of the long-standing supporters have been reducing their ratings on the company, not as supportive at this time. reduced itss recommendation on the stock earlier in the week. a lot of the criticism has to do acquisition of solar city. we are also watching booze allen hamilton. a former contractor of the company has been arrested, accused of leaking secrets. he was a contractor at the national security agency.

wasoutlook on the agency downgraded to negative citing reputational risk. down by 3.5%. finally, specialty coating makers are trading lower today. ppg coming out with lower-than-expected earnings. some of the other paint makers also lower. ppg, the magnitude of that is much steeper. scarlet: thank you, julie hyman. let's get a check on the first word news with mark crumpton. in geneva, switzerland, the international red cross has announced an emergency appeal for $6.9 million. the money is needed for medical aid, shelter, water, and sanitation assistance to 50,000 people in southwestern haiti hit hard by her king matthew following a meeting with the heads of fema and homeland security, president obama

discussed efforts to get help to haiti. we know that hundreds of people have lost their lives and there has been severe property damage. they will need help rebuilding. americans to go andhe american red cross other philanthropic agencies to make sure that we are doing what we can do to help people in need. mark: unicef says it needs the money to meet the immediate needs of children in the region. meanwhile, the death toll is approaching 300 and is expected to rise. florida gov. rick scott is brushed aside questions about his decision to keep the state's voter registration deadline on tuesday in place. hillary clinton's campaign has asked governor scott to extend the deadline because of hurricane matthew. scott refused, saying the deadline that everyone has a lot

of time to register. the republican governor is a strong supporter of donald trump. u.s. secretary of state john kerry says russia and syria should face a were crimes investigation for their attacks on civilians. he says syrian forces struck another hospital last night, killing 20 and wanting 100. he said russia and syria over the world more than a donation of why they keep hitting hospitals and killing women and children. olombia and for c farc rebels say they are committed to talks that would see a cease-fire by the end of the month. they want to try to save a peace accord that was seated in a referendum last sunday. 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. matt: thank you.

this morning's flash crash in .terling the pound oh 6.1% in two minutes in early asian trading, setting of concern that britain is heading for a so-called hard brexit. so what caused it, a fat finger, automated trading systems, concern about theresa may's comments, or those from rental lawns in retaliation? our next guest says that auto hedging may have been the real issue at play. not that it matters that much, but was this just human error that spiraled out of control due to computer trading? >> we have seen volatility in markets forever. rashes are nothing new but they happen a lot quicker today. especially looking at the pound

for my where everyone is unsure of what to expect, what news is real, what is not, and then the fact that it happened in overnight hours for the u.s. and european traders, probably added to the situation. scarlet: to your point that these happened more frequently, there was a crash in the rand and the kiwi in august. what happens when there is a crash in one of the majors like the pound? up andakes people stand question what we can do to keep the markets safer. of major currencies around the world has an impact on commerce and everybody involved in the marketplaces, from corporations to investors, to banks and market makers. that always raises the question, do the markets move too fast, is there anything we can do to prevent the sudden spikes in volatility that tend to go relatively unexplained? we have been hearing there are concerns about liquidity in

these markets, especially in early asian trading. as scarlet has pointed out, the fx market is mostly one of the deepest and most liquid in the world. are there liquidity problems, and if so, what is causing them? are don't think there liquidity problems but it is harder to disagree with the idea that the profile of the fx market has changed over the last 10 years. whereas, a decade ago, we had primarily banks driving the markets. today, the ecosystem is more diverse. a number of non-bank liquidity providers in the marketplace that impacts trading and pricing. ability forhe investors to do the trade that they need, and the way that they do that has changed. maybe before they would go to a bank, be able to do a large trade at once. now it is more likely that even if they go to a large bank, they will do part of it with that bank and then go into the open

market to work with other counterparties to ensure they do the rest. maybe it is a little harder for the investor, but i suspect the speed in normal times, the quality of the pricing, the cost of doing the trading has improved. scarlet: what kind of fixes might there be at a market structure level, would it make sense to impose circuit breakers? breakers are the answer to these questions over the last couple of years, but in a market like fx which is very global, over-the-counter, where trading is not concentrated in any one that you, or any number of venues, for that matter, it would be hard to put standards in place to make sure that each of those individual marketplaces ask exactly the same. if you had one market were the circuit breaker, or even ate a percent of the markets with a circuit breaker, and the others without, it could make things worse. some people think that is what happened in the equities market a few years back.

yes, we had circuit breakers, but the rules were different from exchange to exchange, and made things worse. matt: isn't this also what happens in markets? have been, that these happening forever, not just in the last 10 years cable, which has been trading since the 1800s -- i am sure it happened when they laid the first transatlantic piece of equipment in 1858. >> for sure. if we think about the crash in the 1980's -- admittedly, i was not old enough to remember -- but that was a crash that happened largely because of portfolio insurance. there was a little bit of a market shock and people started to automatically get themselves out. it required phone calls between new york and chicago, activity on the floor. it transpired over a day or two. now it happens almost instantaneously and only takes a few minutes.

volatility is nothing new, neither are market crashes. it is just that they happen a lot faster today. thankfully, we also recover a lot faster than we used to. it is not good business for anyone to catch a falling knife here. do we presume, in addition to people losing money potentially on the flash crash, that there is somebody who profited handsomely? >> for sure. we saw prices go down to about 114 or so. if you are lucky enough to buy the way backld on up, there is some opportunity there. we should not look at that as a negative. as market makers get more sophisticated in fx, as they handle these occasional market blips, the market should just work itself out and get more efficient. if there is opportunity, it will bring more participants. if there are more m

participants, it will smooth is not over time, but there will always be crashes. scarlet: ultimately, doesn't matter the cause of the crash? >> it's interesting to understand what happens, not necessary, but just as important to understand history to help where we go in the future. it is good to know the mechanics. it could be that we don't find the cause. if we do, maybe there was not much we could have done to fix it. but still good to know in case there is something -- whether it is the market participants or global regulators want to look at and understand better, then they will be able to do that. matt: knowing is half the battle. things for joining us. scarlet: coming up, the ftc unveils argosy rules for broadband providers. why verizon and comcast are fighting back. this is bloomberg. ♪

matt: you are watchingmatt: "bloomberg markets." i'm matt miller. scarlet: i'm scarlet fu. recently unveiled new privacy rules. it would require providers to before in agreement sharing web browsing data and private information with advertisers and other third parties. the proposals are up for a vote at the end of the month. to talk about what this means is kyl daily. why is theuestion is fcc getting involved in consumer privacy? >> when the fcc last year did its big landmark net neutrality wass, the approach it took reclassifying broadband as common carriers. that meant a lot of things, but one of the things was that the

ftc, the privacy cop for most of the market cannot readily common carriers, so if we want a cop on the beat, either the ftc would have to not be subject to that exemption, which would require an act of congress, or the fcc had to step up and make rules of its own. fcc'sthe chairman of the proposed a measure that was quite controversial. what was in it? >> the original plan circulated earlier this year was rooted a lot more in the fcc approach to theycy, which historically have been responsible for the privacy practices of common justers which used to be phone companies, as far as the fcc was concerned. now that is a different ball game from the ftc approach, rooted much more in who can

collect information, who can use it. the ftc is more agnostic about that kind of stuff and focuses on the actual information that can be collected. any obstacleshere to this particular pattern being approved and implemented, what stands in the way? >> approved, probably not. there has been a lot of drama at the fcc this past year. generally, especially this close to a vote, they don't put something on the agenda and start circulating fact sheets and talk to reporters unless they are pretty confident they have the votes. there has been a lot of pushback from republicans both in congress and that the fcc on this item. i suspect that the republican minority might not support the item ultimately, but they probably will have the votes to pass it. as far as standing up, we just have to wait and see. it is pretty likely that there

will be a lawsuit, challenge seeking judicial review of these rules. do the courts think that this is overreach in the way that some of these broadband providers are saying it is? we just have to wait and see. scarlet: kyle daly, thank you. the fcc will be voting on october 27 on those rules. just $10 away is from a merger. we will have the latest. this is bloomberg. ♪

scarlet: this is "bloomberg markets." i'm scarlet fu. matt: i'm matt miller. news reported

yesterday that qualcomm remained hot to acquire nxp andconductors after intel texas instruments decided against a bid. talks continue now as the two are just $10 a share price a part in negotiations. sutherland is with carol massar and cory johnson on radio. welcome to everyone on bloomberg tv. we are here with brooke sutherland, m&a columnist ed bloomberg gadfly. call, and nxp, just $10 apart. are they going to come together, what is the expectation, should they come together? >> there is an easy way to meet in the middle. $10 a share is not nothing but not a huge divide between the companies. when you look at $115 a share, it there is a reason why that should be mathematically

attractive to both sides. i'm optimistic that they can figure something out. you never know until the end but it seems like this is not a huge cap to bridge. the way i would put it, they are pessimistic until the very end. historically, big technology deals don't work, but maybe semiconductors are different? has beenk everyone doing a semiconductor deal. qualcomm has been vocal about getting a deal done. they have incentive to see this through and try to diversify themselves away from smartphones him and which has not been growing. i think most big deals in general do not work, but qualcomm has incentive to see it through. a piggyback on that. if you look at qualcomm shares, and you point out in your column, they have been at higher. you don't normally see that in terms of the acquirer. >> i think people are so excited to see qualcomm do something.

its cash balance has been rising and it's been on the sidelines while competitors have done a lot of m&a. investors were sort of waiting to see what they may do with the swelling cash reserves. now that they know and can assess what is happening, there is also taking uncertainty out of the market. the fact that they are doing something to diversify away from smartphones, which has been a problem for them, is appealing. carol: will this deal be accretive right away? >> it will be massively accretive. 120.e talking about 110 to it will be accretive to their earnings. with their cash as well, much of that is located overseas. so they really cannot put that to work toward american targets. because nxp has a netherlands homebase, they can use that money to help pay for this deal, whereas they couldn't thought with other deals. $10 a share is not nothing

when there are 340 million shares. $340 billion more than they do not want to pay. but whennot nothing, you look at the midpoint of the range, it works out to an ebit. valuation lower than the median paid across the industry over the past couple of years. when you look at two of their paid forhat avago broadcom, they paid much higher. it is not nothing, but qualcomm would be getting a good price on this. cory: more than 21 times cash flow. last seat in musical chairs is not necessarily that you are winning, it could be that you are just paying too much. >> i have raised questions about whether this is the right move for qualcomm. nxp has been up front that they are having issues in the auto market, that they expect the man to fall. we are seeing come -- some

concerns about whether we have seen the peak in auto sales. ships are a little different for cars, but there are questions about this. but there does seem to be a way where you can find a way to make people happy. everyone what nxp gives qualcomm in terms of the marketplace. >> they are the largest producer of chips for cars. that is an attractive market right now as cars become more high tech, whereas qualcomm has been focused on the smart phone market. competition is heating up, we are not selling as many smartphones as we once did because everyone has them. it is really looking for a way to diversify and find more growth. as the connection between cars and phones get closer, it makes sense strategically. carol: anybody else coming in for nxp? >> what my colleagues have reported is that qualcomm is the only bidder at this point. it is looking at other targets,

so that is something to keep in mind. other't know what those targets are, but maybe it does find something cheaper than nxp or find another way to diversify that may still work. carol: some great insight, thank you, brooke sutherland. scarlet and matt, back to you on tv. matt: thank you very much. you can catch more radio interviews on sirius xm. i listen to bloomberg radio all the time. also check it out on bloomberg.com. thelet: coming up next, u.s. economy added 156,000 jobs last month but missed the forecast for a second month in a row. we will get insight from labor secretary tom perez. this is bloomberg. ♪

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these medicare advantage plans can combine your hospital and doctor coverage with prescription drug coverage, and extra benefits all in one complete plan for a low monthly premium, or in some areas no plan premium at all. other benefits can include: $0 co-pays for an annual physical and most immunizations, routine vision and hearing coverage, and you'll pay the plan's lowest prescription price, whether it's your co-pay or the pharmacy price. or pay zero dollars for a 90-day supply of tier 1 and tier 2 drugs, with home delivery. don't wait, call unitedhealthcare or go online to enroll in aarp medicarecomplete. matt: live from bloomberg world headquarters in new york, i'm matt miller. scarlet: i'm scarlet fu. this is "bloomberg markets."

let's get more on the first word news with mark crumpton. hurricane matthew continues to brush part of florida's northeast coast with high wind and storm surge flooding. the now category three storm has left at least 780 thousand people without power and hundreds dead across the caribbean, many in haiti. for more, let's bring in brian sullivan who is in boston. it looks, at least for now, that perhaps a lot of folks along the u.s. east coast 10 -- the bullet. >> it looks that way. chancew on, the biggest of damage from this will be flooding. the flooding may be devastating especially in south carolina and parts of north carolina. , that as a direct hit they will not provide that. a 20% chance -- i was talking to jeff masters and weather underground. a 20% chance it may wobble into

florida going forward, but right now it looks like the biggest damage will be flooding from the heavy rains and storm surge going up the coast. mark: i just mentioned haiti. the poor people of that country, the poorest country in this hemisphere, once again getting battered by a natural disaster. yes, it has been a true humanitarian catastrophe down there. there is a lot of open ground in the mountains. there are very high mountains, some of the highest east of the mississippi river, for instance. water gets up there and adjust , and they in torrents don't have a chance. it wipes out the infrastructure, the bridges, everything else. it will take days for them to get a good assessment on how bad a damages, but it looks pretty tragic right now. mark: because of the storm track, we should point out, it looks like it will keep the

damage levels below sandy or katrina, but in any event, are we still talking run billions in damages? >> one of the estimates i saw earlier today was between $20 billion and $25 billion which would put it close to the top 10 if not in the top 10 most expensive hurricanes in u.s. history. mark: the storm track, are we getting word from forecasters that it could come ashore florida or georgia today or tomorrow? >> there is still a chance. if it doesn't happen there, it may come ashore in south carolina near charleston. before we let you go, we mentioned earlier, nearly 800,000 people without power. is this a situation, as in prior hurricanes, that we could see residents and businesses without power not only for days but perhaps weeks? >> it could be that damaging. that is another thing that will

take a few days to assess. the other problem here is that the storm is not done with florida or georgia, not done with south carolina. we could easily crack a million in the next way for hours. if that is the case, crews will be stretched mighty then. it will be a while before they can get the power back on. mark: states of emergencies in effect in those locations. brian sullivan, thank you so much. 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. thank you. the u.s. economy added 156,000 jobs last month and the unemployment rate rose slightly to 5%. there was also a slight acceleration in wage growth. after breaking the numbers this morning, erik schatzker asked the labor secretary tom perez about the data as well as

american workers who might not be benefiting from all of this job creation. >> you look at where we are this year, we have average over 170,000 jobs created a month. as you get closer to full employment -- and we are nowhere near yet, we can do better. you often see a trade-off between the numbers of jobs created and weight growth. that is what we are seeing in this recovery. we have rage growth annualized of 2.8% this year, which is very solid. this is what you see in a business cycle as you continue to move up the mountain. there is a healthy debate over what constitutes full employment and what does it mean to you? are noti know is we there yet. at the end of the 1990's, we had on a blended rates at 4% and we had real rage growth -- wage growth. we are at 5% now, which is a lot better than what the president inherited, but we can do better. when you raise the minimum wage,

when you pass immigration reform, those are the ways to create tighter job markets and the lower on appointment. approach: employment, there are limits to the numbers of jobs the economy can create. are we there yet? >> we are not anywhere near full employment. we have room for improvement. >> just to come back to this point, you have to have an idea of where full and limit is, if you are saying we are not there yet. >> what economists say, and there is a range of opinions, in order to keep that on a plummet rate moving toward full employment, you need to have anywhere between 70000 and 100,000 jobs created a month. when you are above that figure it in any given month, you are moving toward that figure.

when you are below you are treading water at best. we have been consistently above that figure, averaging about 175,000 jobs this year, over 200,000 last year. we continue on an unmistakable path in the right direction. i would love to pick up the pace. i have set a number of times this morning, we know what to do to pick up the pace. infrastructure was dwight eisenhower's issue. newt gingrichas and clinton and others working in a bipartisan fashion. hopefully, when we get past this election cycle, maybe there will be a common sense caucus in the republican party that will come together and say, actually these would be good for america. since we are talking about the upcoming election and the campaign, there are people in this economy whom you know feel left behind. we are talking about some nativeborn americans who cannot find jobs. people who did not finish high school, for whom the unemployed

and rate is 8.5%. people who can only get work in low-paying industries touches retail and hospitality. i am sure you would rather see them have a job then not have a job but they need to be paid more. this report did not show too many encouraging signs on that front. there are more people unemployed don't have a high school diploma than before. look at the census data on median household income, we saw the largest growth last year of any year since the 1960's. where we saw the largest growth was in the lowest -- folks at the lowest end of the income spectrum. when you look at the census data, you see that the prosperity was broadly shared. 3 million people were lifted out of poverty last year. that is the largest one-year reduction in the poverty rate since the late 1960's. having said that, we can always do more. i still meet people who are struggling to make ends meet. there is nobody spiking the

football here or at the white house. we know what to do moving forward and we will continue to be relentless to pursue this innda of jobs, good jobs infrastructure and elsewhere. we speak, hurricane matthew is hammering the east coast of florida and will move up into the georgia coast and carolinas in all likelihood. are you worried about the impact that hurricane will have on the october jobs report, which we will see on november 4, just four days before the election? foremost, the president is concerned about the health and well-being of the people living in the affected areas. preparation is what it is all about. the federal government has been working lockstep with state and local authorities to make sure people are safe and sound. that is always our first worry. we will deal with the aftermath later and, as we have done before, will be working closely with affected communities on the recovery efforts, whatever those

may be. that was tom perez with erik schatzker. scarlet: spot gold is on pace for its biggest weekly loss in years but some are not giving up on the precious metal just yet. that is the subject of julie hyman's chart of the day. this is bloomberg. ♪

scarlet: this is "bloomberg markets." i'm scarlet fu. matt: i'm matt miller. julie hyman has her chart of the day. do with gold to prices and how the gold bowls are hanging in even as prices fall. you have the price in blue and

the recent tumble, but at the same time, etf assets and gold backed funds are still rising, up for the fifth straight week. this illustrates we are still seeing investment in gold related products, even as the prices decline. goldman sachs saying strong physical demand will limit the downside. goldman would be a buyer if it goes substantially below 1250. saying todayrald that it could rally after testing 1200. there is still some optimism built in, but what have we seen with prices? year, beginning of the pretty fantastic, up 28% through july. but that is when it peaked and started to see declines. if you look at it from july 8, that is one it saw its peak for the year. you see a pullback here. an 8% slide in the price of gold.

a lot of it has to do with the outlook for rates. as we have seen perhaps another rate increase get closer and closer, as reported in a 10-year treasury yield, which has been working its way higher, now approaching 1.75%, still low but higher than in july, the gold price has been sliding. recently, in the past couple of weeks, we have seen that sharp divergence with the 10-year treasury yield climbing, reflecting the view that the fed will raise rates by the end of the year as gold prices continue to slump. that relationship today is not as much an effect because treasury yields are kind of flat, gold prices are kind of flat. over the past couple of weeks, we have seen that in effect. matt: thank you. i may steal that chart and use it later on. health: moving on to

care, the fate of the affordable care act is still uncertain as we get closer to electing a new president. hillary clinton wants to expand obamacare while donald trump ask congress to repeal it. joining us now is dr. jeffrey vanderbilt the school of medicine. you are in town for the barclays health care summit. we will get to that and a moment, but i once do it your take on the affordable care act. as it stands now, will it survive? but i mustit will, tell you, the real impact of the affordable care act, those of us in academic medicine, is shifting the focus to outcomes. for a long time, the u.s. hockey system was based on fee for service, so it was a volume-based system. now what we are moving toward is a system that reimburses us for the quality of our outcomes. that is a good thing. what we are seeing is all health care systems, not just the academic systems, have gotten

religion, so to speak. now a certain part of our payments relies on that outcome and we are moving in that direction. direction, for sure, but we have seen insurance companies drop out of certain exchanges because they cannot make a profit. it seems very complicated for some people to use as well. wouldn't a single-payer health move you just as much toward outcomes and maybe be a simpler way to ensure all americans? >> what i try to move you remine of is the health-care system is complicated and the big academic medical centers that are the anchor for health care in this country are very complicated. if you change things too quickly, you can sink the ship. we have really done is drawn analogy to a symphony orchestra. if you think about a big health care system like that symphony, in times gone by, it was like a different musical instruments were playing alone. what we are trying to do is

bring those components together. medical practices, hospitals, so they played together. if you change things in the middle of her her soul, things do not come out so well. we don't want to see the music change three times during the rehearsal. we like what we have now and we want to adapt to that. we feel we are moving in the right direction. scarlet: this was one step to get us there. what should be the next step? >> i think there is an and or now in standardization. i don't mean that we all have exactly the same thing. if you are picking out furniture for your house, you would like to pick out different kinds of porcelain for your bathroom, but the little ball that makes the toilet work, that can probably the same.- be there are a lot of things that we can standardize across the board and it would make it vastly less expensive and probably improve our quality quite a bit. matt: talk about what you

presented at the barclays conference this morning. >> one of the things that we talked about is how we are starting to practice health care across regions. now we are responsible for quality and we are getting paid for quality. if i'm in nashville and i have a patient coming to me from jackson, i am partly responsible for how the patient does, because how they do with their health system at vanderbilt will be impacted by how they are managed before and after they go back. now you can see how it is so important that we are interconnected across geographies and that we are able to pass information back-and-forth, share protocols, and standardize how we care for patients. if you are running an olympic the hand of what he's her going to be to the right or left hand and you did not know which it was each time? that is kind of hell health care works today, and we need to make those handouts consistent each

time. that is what will be good for patients. scarlet: what kind of investment implications would that have? your audience was analysts and investors. >> great question. i think the investors will start to look at how real that integration is. are the senior teams at those hospitals, in those clinical practices really working together, are they setting up goals that they achieved together, or are they just saying they will get there? >> if i were an investor, i would look for evidence of those systems really working together, and other is tangible evidence of that. fascinating stop and optimistic to hear that we are headed in the right direction. dr. balser, thank you for joining us. coming up, we go to washington, d.c. for the annual meetings of the imf. in norway central bank governors gives us his take on the global

economy. this is bloomberg. ♪

scarlet: global finance leaders and central bankers are convening in washington for the annual meetings of the imf and world bank. and joel was involved spoke to voiced in olson, the norwegian central bank governor for his take on the economy. to madamelisten lagarde and the president of the and i definitely share their general view on the prospects for the world economy. which is not a very bad, but as they stated, growth is still weak and fragile. that is the term they used. that, in the present

situation, if we get measures around the world in the direction of protectionism, which will we can trade, that is not what we need in the present situation. right now, the upcoming u.s. election is seen as an event risk for markets and economies around the world. do you have your eye focused on that, is that something important to you, the outcome of that? , with thely speaking close relations between the norwegian population and the that i can assure you there is broad interest in norway in the upcoming presidential elections. t anye you concerned abou volatility in the markets that may arise related to the election? >> my short answer is no. there is no point to be .essimistic on any outcome

it is far too early in my mind to evaluate the results on financial markets and volatility in the markets based on any specific outcome. >> speaking of volatility and politics, of course, last night, it a pretty extraordinary incident with the british pound lunging over 6% in a matter of minutes before recovering a lot of that although not entirely. what do you make of these extraordinary moves, and as a central banker, the seeming increase of flash crashes and sharp moves in what seemed to be liquid markets. >> the movement in the pound reflects what we have seen for some time. volatility in financial markets and currency reactions that we

have seen for some time is, in my mind, a result of the underlying forces, again, getting back to the term growth is weak and fragile. naturally, anye, event causes reaction in international markets. but then the pound came back quite a bit. ini go back to the brexit june, justefore r summer holidays in norway, we were quite anxious about the persistent increase of volatility that would occur in the aftermath of that exit from the u.k. down, asarketsca calmed they often do, after reacting first to an event. that was the norwegian

bank governor voiced in olson. matt: joining us now is joe weisenthal. mainstruck you as his concern, what is the front of his mind, brexit? >> i don't think so specifically. that a lot ofally what we are seeing, whether it is the volatility we are seeing or thepound anti-establishment sentiment, a lot of it has to do with the fact that the economy is still not that good. that is still the underlying theme for everything. the fact that we are coming on nearly 10 years since the start of the financial crisis, we are still searching for answers to get growth backup. scarlet: for commodity exporting nations like new -- norway, they are tied to the swings in oil prices. you have a chart on the correlation between the norwegian krone and oil prices. certainly positive but less positive than in 2015. view that the

norwegian krone has some safety, that when everyone is panicking, they have a seemingly stable political system. not any monetary union, not facing a huge event. just in general, the fact that the oil story has eased a little bit. it has been stable in the mid 40's to mid 50's for quite some time now. you may expect currencies that deal in oil to be reflected -- to see a reflection other than just the oil price. matt: we will see you again in an hour and a half. scarlet: coming up in the next hour, we speak to philipp , as well as the european vice president from the . this is bloomberg. ♪

tom: the teeter buildings are next to each other, and you have gone back-and-forth between the buildings to panels on economics , investments. what have you learned? talk about inflation, conductivity, but behind closed doors, a lot of people focused on deutsche bank, and there are so many questions about the past. tom: i would agree with deutsche bank