condition for the disease to spread. it claimed a growing number of are ill-equipped to respond to the cases. florida because of the storm. people now have until october 18 to the register. scott refused to extend the october 11 deadline. the judge initially granted a one-day extension. donald trump suggested the washington politicians in both parties work together to keep themselves out of legal trouble. , they recommend charges against hillary clinton -- he suggested both democrats and pelicans and times when one with it. hillary clinton's may be looking to turn three traditional red states blue. georgia and utah could be in place.

democrat have been particularly intrigued by polling suggesting a close race in utah. it is one of the most conservative states in the country. political leaders there have pulled her endorsements from donald trump in recent days. i am mark crumpton. this is bloomberg. ♪ are 30 minutes from the close of trading in the u.s. live, i'm matt miller. u.s. stocks extending their gains and then racing them after the federal reserve september minutes. it was a close call for federal

officials last month saying a rate hike was needed relatively soon. the internal division still remaining over the timing. brexit pains continue to drive swings in the town as the british prime minister can see the need for a parliamentary vote of a plans to lead the eu do for a soft or a hard brexit? three major u.s. bank gear up for earnings later this week. we expect nearly as many fireworks as we have seen in the last few quarters? we will take a look at where the major averages stand. we had gains across the board and those gains were extended after the minutes from the last federal reserve open market committee were released at 2:00 and now we see those gains being paired. nasdaq down 2/10 -- .2%. the dow jones and the s&p little

change with gains of 1%. nasdaq where the biggest losses are to see what is going on with courtney. courtney: thanks, matt. the nasdaq really bouncing between gains and losses all day now, slightly lower. this comes after yesterday, a biggest decline in over a month since -- since september 9. we have to talk a lot erickson, the biggest percentage decline or on the nasdaq today and if you look at the stock, it is down 20%, on pace for its biggest one-day decline in nine years. this comes after a third quarter revenue really surprised and blind-sided investors. with quarterly revenue at the worst in 10 years. planning on more cost-cutting in jobs thato the 3000 it announced it was eliminating in sweden last week. the company is in a bit of turmoil after the ceo was ousted

last july and it is tracking down its peers. at cisco, they are down about 2% as well and cisco on the nasdaq -- today. a bright spot, i am looking at apple up for its seventh straight day, on pace for its best winning streak since february 2016. it has added $28 billion in market cap over the last seven risingd of course it is on bad news from its rival, samsung, which had to end production of the galaxy note 7 smartphone and today, coming out and saying that they are cutting $2.3 billion from profit for the third quarter. back to the site right here right now at the nasdaq, i will send it up to you matt. matt: courtney collins at the nasdaq market site. statistics, job openings falling to a loan

august. the labor market, a steady rise in the number of people voluntarily quitting their jobs and declining layoffs. it is the rate that fed chair janet yellen looks at. to parse the data for us, the chief economist at the jobsite. thank you for joining us from washington. reallyport is like the nerdy version of the jobs report that everyone knows about. only the true connoisseurs really look at it. what stuck out to you most today? >> the biggest thing that struck was that we continue to see a relatively low number of unemployed relatives to job numbers out there. right now, there is about 1.4 unemployed people. that is down steadily over the past few years. the recession, that was 6.5.

in terms of people actively looking for work today, there are a lot of postings out there. >> there are 6.5 people looking for every noble job. it is a pretty extraordinary improvement. did fall.enings are there signs of a labor market to you of momentum fitting a little bit? >> the fall we saw was month over month and still keeps us in the higher job openings range. that has been about a year and a half. we are still clearly at the the recovery looks strong for those actively the labor market. one question this raised is we saw the opening of particularly some high wage industries. finance information, which includes tech as well as

moviemaking and publishing as well as professional services. that combined with something we saw in the jobs report last friday, which is that job growth has been slower in some of the something-- it is worth watching. it is too soon to know exactly what it is, as the beginning of a new trend. if there is any softening, it was like it will be among the higher wage industries. matt: we have seen labor force participation bottoming out. i have got a chart of it on my screen. we basically turned around a drop and have hung around the levels we saw at the beginning of 2014. is that going to continue the trend of labor force participation bottoming out here? >> yes, the hope is as wages continue to rise, we might even start pulling more people back into the labor force in the directly into jobs or into actively looking.

the number i like to look at most is working age adults 25-54 who are working. that was at 78% time for the highest point since the recession. think the big question is how many folks are out of the labor back today, could be coast in if the economy is strengthened. it is a question about whether the market fundamentally changed, or is there actually more slack and this is a both economists and policymakers are assessing over right now. are: we know policymakers at least finally looking at and inusing on the difference the health of labor markets among minorities and those more or less educated, gender divisions in the labor market. where do you see biggest

problems that need to be focused on as far as that is concerned? >> in the last -- last month of jobs report from the past week, we saw a big increase in unemployment and a drop in labor force participation with those who are the least educated. although warning sign those folks had the worst and therefore had the worst recovery to have since then. that is definitely worth watching. the good news is what we saw in the income data last month, rose is that the income particularly for lower income households. as one finding that inequality might be narrowing a bit even though the news of unemployment theworse for those with least education. the other group, of course, that we are particularly focused on,

is labor force but a patient rate, which has been declining not just in the recession but in terms of economic anxiety a lot of bigger questions facing the economy structurally. >> we talked about the quick break being a popular thing for janet yellen to look at. people quit their jobs when they feel confident they could get another one. --re is also quick break quit rate by industry breakdown. what are you seeing there? isthe quick break right now just about as high as it is been at any time since recession after prerecession levels. i like to look at this as the share that are voluntary. quit versus layoffs. it is hard to compare this by industry given there are some industries that have a lot more than others.

the quit and the higher rate will always be higher with hospitality were people do not as industries like manufacturing and finance, where there are much longer-term jobs. higher quit rate, especially relative to the layoff late is a sign of worker confidence and continued economic recovery. joe: great stuff. thank you very much, chief economist. matt: coming up, thanks earnings jpmorgann earnest with and wells fargo leading the charge. next, we will hear from ceo thomas on what to expect from wells fargo after the account scandal and why he thinks we are in for a good quarter for the u.s. banking sector. this is bloomberg. ♪

joe: next week, we will hear from the bank of merrill lynch and morgan stanley. 's's scandal,argo shrinking revenue and increased litigation costs. was asked how ceo closely investors will be paying attention to what the wells fargo ceo john stumpf has to say. that you willre hear very much and i do not know if it will be very different from what he is saying. important obviously to investors. my sense is when there is a strong message that he has, it will be set up to be delivered very specifically. my guess is he will just reiterate what he has been saying. broadly,ore

potentially, it turns around. banks begin on friday, you know, this could be the quarter we see some improvement. yields are a little bit higher in the last few days. what do you anticipate more generally? >> we expect a solid quarter for the banking industry. a discount for the overall market, a lot of talk this will be the sixth consecutive quarter for earnings-per-share for negative, and yet banks, if you look at the 200 banks we follow, they have never had a down six.er over those quietly, it is a steady performance and we expect that now. riskink a lot of the macro talk, meaning those brexit conversations earlier in the year, the first quarter was very volatile. we have seen a couple of recent decisions from regulators that have been a little gentler on the industry. the governor gave a speech about two weeks ago i think that was very positive between 250

billion dollars. there will be a lot of talk about that and i think there will be a lot of talk about potential changes for interest rates. i think it will be steady a positively interpretative order. >> happening in the imf throw bank last week, infused into that a lot of talk about deutsche bank in the european bank. you have the ceo that company in washington trying to figure out a settlement, and those talks reportedly ongoing. i wonder how you see that playing out in the american banking system? system in different europe than what i described in american banks. i raised capital -- capital to a higher degree much sooner. the other difference is no negative interest rates. for deutsche bank, we think the issues they are dealing with is a slow economy in europe. increased rate latorre headmans. this whole discussion about what this fine may be brings into question about capital adequacy.

those are important matters. i think the big discussion is what have negative interest rates done to big banks in europe? when the banks look out beyond 2020, we think it will be hard to make money in that market if you have negative interest rates. even negative interest banks, there will not be as much commentary around macro issues, why do you think that is the case this quarter? it is not like you resolve much. is still an issue, do not get me a rock. i do not mean to dismiss it by any means. the big we have got global -- in the country. those are maybe the big eight banks. when you get beyond that to the regional banking market, that is not as big an issue and there is a thriving -- maybe that is too aggressive a word, but there is a positive momentum story with regional banks where we think there will be 8% earnings-per-share growth. it is still a difficult environment.

i think it is a question of which banks you're talking about with regards to macro issues. >> let's talk about the small and medium-sized banks. you look at the prospects for m&a going forward, would you see more, do you think? >> we had 25% fewer banks today than in 2009. that is how quickly the industry is consolidating. roughly 3% to 4% of the industry every year is consolidating. it is happening below the biggest banks and more in the midsized bank area. we will think it will be a continued healthy environment. von a: it always happens. some banks merge. isn't it a good thing that banks are consolidating? >> i think it is good for shareholders in the industry to have the banks become more profitable through consolidation. i think what is different is while i was earlier speaking

from a relative performance spaces, i think the banking industry will be ok, and good, but it is still a hard and challenging environment. we have a flatter yield curve than previously. benignquality has been but at some point it will probably become a little more expensive. . lot of regulatory issues vonnie: very much down again. comparison will be good relative to last you because lester was a recorder for the more investment banking inclined banks. we think there is a chance for a modest surprise but from a historic perspective, it is not an easy environment for the banks. doesn't --as the kb kbw president and ceo. matt: time for a look at some of the biggest is the stories in the news right now. secure cooperation, output moves from is -- istanbul to vienna.

turkeyhieved its goal in after scoring backing from russia's to largest oil producers. opec's challenge is trying to cut production or highlighted after the latest data revealed a half million barrel difference of opinion over how much menu -- members should pump caps on output. it will be decided next month. energy transfer declined a u.s. request to voluntarily suspend work on north carolina -- north dakota pipeline. moving ahead of construction for work on the controversial project. the pipeline will did -- damage sites considered culturally significant and poses environmental risks as well. several protesters were arrested this week. humana shares fell the most in three months earlier today, following a sharp decline in government ratings for players to help ensure author -- offers and medicare. four-star plans or better, dropped to about 37% in july

down from 78% a year earlier. the justice department filed to block a merger between humana and aetna. fallout today from samsung's galaxy note 7 crisis. said of fiat chrysler deals have stalled akoni -- according to people familiar with the matter. discussions have not been dropped completely but people familiar say it is unlikely it will be signed by the end of the year. phantom's priority at the moment is said to be managing the issue and not pursuing other large deals. that is your bloomberg business flash update. stocks, theup, u.s. biggest test since the brexit vote in june. we will show you why a pivotal level could show danger. this is bloomberg. ♪\

matt: on speculation opec agreements in crude output will not succeed in producing supply. let's take a look at what the history is. g tv 3898, you can see a blue line which is opec's production quota. the white line is excluding the rock. over the last three or 40 years, you can see production started the opec quota. an all-time record level.

32.5 to 33. history is telling you they have not in the past. so obviously, history does not -- >> that is a cool chart and it reminds me of a reverse chart here at one of the policy charts and the charts about the fed not begin to hit its goals on inflation. matt: he does look similar indeed. joe: similar themes. i looking at the s&p falling below a pivotal level. recently fell below its moving average for the first time since the brexit vote which you see right there. line and youe cannot make too much of a deal of the s&p falling below its 100 day moving average on a one-day basis. the idea thatto momentum in the stock market really does seem to have fizzled out a bit. at new highs in early september and ever since then, the dominant theme has been to

back up in interest-rate, a lot of talk about the fed, it seems very likely that the fed will hike at this point. we have seen the markets stall out a bit. you want to keep an i on the 100 day moving average. a lot of people will be paying attention to it and if it falls below, that might be a sign of a deeper loss to come. we fall sharply below that right after brexit, it didn't continue to anything so you do not want to read too much. >> it is an trusting we fall below the moving average now but right when we start into the earnings season. we have disappointments yesterday, and a little later on in the program, ipo share -- i showing the chart s&p price index because it does not look good. what's i look so to the chart. matt: thank you. the market closes up next and here are the major averages with

westman conformist to go to close. you can still see gains in the dow in the s&p 500. the nasdaq down lightly but really not a lot of movement. the gains we saw earlier called after the fed minutes were released. this is bloomberg. ♪

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>> moments away from the closing bell. "what'd you miss?" the fed losses after signaled policymakers will gradually -- probably lift interest rates gradually. i'm joe weisenthal. matt: and i matt miller. welcome to viewers tuning in live on twitter. you can watch our closing bell coverage every weekday from 4:00 p.m. to 5:00 p.m. eastern. new technologies, new innovation. let's kick off with market minutes. markets seem to be holding onto gains at the end of the day here. i got they would turn down and drop after minutes were released, but they are coming back a little bit. joe: it has been a pretty tight range the entire day. a rally, age-old right after that release of said minutes.

a huge move. we have more gainers than losers. on the upside, utilities and telecom really leading the charge. kind of aresting, barbell of defensive groups. looking at individual movers, we then talking about humana. its plans at a medicare that were rated less than or stars are now the majority of what it offers. four stars or higher, only 37% compared to 78 percent last year. black & decker is going to buy numeral -- newell brands'tool unit. who knew they had a tool unit? in the bondh action market. a kind of moved around a little bit. the two-year yield was higher on

the day earlier, but it fell. again, these are not very significant moves, kind of reflecting the fact that the minutes did not really change much for the fed picture. this is the spread you want to keep an eye on. it has been trending down for a long time, really bottoming this summer. we will talk more about banks in a little bit, but this is a steepening curve. matt: i've been looking at currencies very closely since the so-called flash crash last week in the pound. is a great way to look at currencies. you can see in the fourth column, the bottom row, cable is trading at one dollar 22 -- $1.2213. even though today is a decent move for pound-dollar --

joe: i just cannot get over that chart. no one can. matt: it is unbelievable and makes me want to go to paris. the thai baht has been weakening on news of the king whose condition is unstable. joe: a look at commodity markets today, energy, nymex crude, brent crude down a little bit. matt talked about it at the beginning of the show, or the last hour, a little bit of concern about opec pledges. cotton having a big day. the usda report on supply and demand, lots of demand out of china. cotton this afternoon really surging up. matt: those are today's market minutes. you can find all the following charts using the function at the

following screen. joe is going to kick it off. joe: i have another chart from this markets and jolts report turnover survey. it is a look at how long it takes to fill available job openings, and i think this chart puts it in a nice big picture. it takes just over a month right now to fill those job openings. it is down from earlier in the year when we had 1.1 month, when it was a bit longer, a sign of a tighter labor market, but this is till much better than it was back in the recession when job openings were filled in much less than a month. it does show that maybe the labor market is losing a little bit of steam, but still some of the best levels since the financial crisis. i have a look at earnings. s&p trailing 12-month earnings in blue your versus the s&p price index in white. let me put a vertical line here. of can see a peek at the end

2014 beginning in 2015. we've had six consecutive quarters of a drop in s&p earnings and another one is forecast now. you have not seen a string of declines like that in s&p --nings without recession the red-shaded areas are recession. it is interesting to see that the s&p continues to rise in price as s&p earnings continue to fall. i want to continue this chat and ask why or what he thinks about that -- chris baran, the head of strategical analysis at strategis.s -- what do you think happened? chris: it is not a question of what happened but what happens from here. it is a sign i think earnings will be getting a little bit better. earnings are a nominal construction, a pickup in inflation, and we are starting

to already see that in break and that may be reflective of a little better nominal climate. are going to see cyclicals do better with a steeper curve. i think industrial banks may be on the leading edge of that. >> so the earnings recession is over? chris: when i look around the that things signs may be getting better. copper acting a little better. macau gaming stocks, hong kong property stocks. indicator.ite i bring up macau gaming all the time and people laugh at me. only intellectually honest if we talk about it as they improve because we talk about it is the market is going down all the time. have a chart right here if we could go into the bloomberg that speaks to what a great bellwether macau gaming

is. the white line is the year-over-year change. now 7.4% year-over-year. the emerging is markets index relative to the world index. it tracks it pretty nicely, so it does seem to be leading or coinciding or whatever. it is an interesting economic bellwether, and it also speaks to global growth. em has turned particularly relative to growth. the dax down 35% from where it was tinted years ago. the nikkei down 35% from where it was did of years ago. those were good where markets. i think those bear markets are over. i would that you look to other parts of the world. europe and japan as well. matt: i was looking to china today after the usda report came out, and they lowered their forecast for the amount of

cotton that is available. i have a chart, which is the price of cotton in china. this is one of the indicators our commodities reporter pointed me to. this is a two-year chart, and you can see the price of cotton in china has spiked up to the highest it has been since september 2014 as they are just buying all the cotton in the world because they are making so much textiles because they are selling so much clothing. this is just another indicator you can look at from emerging markets to see that maybe things are really picking up. chris: there are maybe four or five things around the world that do not it this thesis. if anything, maybe some signs inflation are creeping back and perhaps early evidence global demand is getting better as well. >> another chart i have been looking at today as we go into earnings season, during the relative performance of the lf versus thecks, x spy.

we have big banks reporting friday and early next week. do you see continuation of the strength they have seen? not get to say these words often, but we are going to say them -- trend change. i think the relative improvements of financials and the banks in particular is getting better. joe: this is a very small trend. if this is a trend change, it has only been going on a few weeks. banks the improvement of predate the backup in yields. sniffedquity markets this out first. rewind two weeks ago. you have deutsche bank going on. wells fargo that was going on, and they could not push these banks stocks lower. when things did not go down when they should, maybe the story is changing. i think the bank story is changing. joe: it turned the cliche on

about the bond market being smart money and dock market being the double money, that leaves it on its head. chris: i'm not sure we're going to get the purest leadership signal from what bonds tell us day-to-day. i look more at changes in equities here. i think that is the lead. are a technical strategist, but maybe you have seen some of this coming up in your charts. how are investors prepared for this election? are they even? taking themtainty out of investments, or are they not even trying to price it? chris: nearly 60% of clients we surveyed last week identify themselves as neutral. we have seen risk come off. when we look at the calendar in election years, it is roughly the third week of october where you start to turn the calendar from a headwind to a tailwind. matt: we have your chart of

here. chris: we are getting close. really, we accelerate in mid-november, so do not be surprised if there is more volatility, but we are very close to the seasonal trend turning, which leaves us reluctant to be too negative. matt: is this pricing or volatility? chris: this is price. this is every election year since 1930. it is difficult to stand in the pocket year. joe: thank you very much for coming on. matt: it has been a busy day, but the question is -- "what'd you miss?" pound.for the battered the currency rallied after prime minister teresa may agreed lawmakers should the allowed a stay. plus, fomc minutes offer further color on the alt lines developing within the federal reserve. to arom a divided fed

divided grand old party. the battle between donald trump and the washington establishment republicans has left some on the sider are side -- on the r wondering if the party is on the cusp of a cataclysmic fracture. this is bloomberg. ♪

mark crumpton. let's get to first word news. toricane nicole is headed bermuda as a category two storm with maximum sustained winds near 100 miles per hour. the national hurricane center said some strengthening is possible and nicole could read near major hurricane strength by tomorrow morning. authorities are urging people in eastern carolina to leave low-lying areas where rivers have caused major flooding.

the tar river continues to rise. forecasters expect it to crest above 25 feet by early friday. the storm killed 85 people in the united states with half of those fatalities occurring in north carolina. matthew inflicted less damage than predicted, but it was still costly. the storm impaired or damaged more than one million structures, forced businesses to close, and temporarily put thousands out of work. according to goldman sachs, matthew probably caused 10 million -- $10 billion in damage. is bringingwarship hundreds of marines and sailors along with power generators, water purifiers, and bulldozers to help relief efforts in hurricane-ravaged haiti. army personnel started delivering supplies yesterday.

the iwo jima was carrying more than 1100 sailors and 600 marines. 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. joe: "what'd you miss?" afterund rallied today prime minister teresa may agreed lawmakers should be allowed a say on taking britain out of the union. joining us is the global .trategist at societe generale thank you very much for joining us. i want to start with a question -- what would a brexit that is not a hard brexit look like? there was a little bit of optimism today, but what does that even mean. is it some sort of in between stage? brexit where is a

there is at least the ability to maintain access to the single marketing goods in europe in some reasonable form. the hard brexit is one where control on immigration is at the top of the list and anything that has to be sacrificed to fit in with that from the access to the single markets, passporting to the banking sector -- all of greatersacrificed to a degree rather than a lesser degree. a soft brexit is anything that says we need to either buy our way back into the single market, find our way to have a relationship like the ones in european economic areas like norway has or perhaps like switzerland has, in return for some deal that the british would controlhave a deal on of immigration but with some caveats here or there. that would be a soft brexit. as of the last week, that would be a dream relative to what is most convenient to us. matt: a dream that seems

unlikely, doesn't it? from the rhetoric we hear on either side, does a hard brexit or harder brexit seem more likely? >> yes, we would need to have a thege in attitude from british government on its priorities and its whole political tactic, which is what the lawmakers in the house of parliament are clamoring for the government to give one, but it looks to me they have been offered a fireside chat to air their grievances. all those eastern european countries, for whom freedom of movement of labor around europe is one of the big things that made them join this party -- this body in the first place. matt: if they allow a soft leave is next.ta spain may go. wouldn't everyone want a soft

exit? switzerland currently has a soft exit but would like to control the flow of foreign workers coming into its country. internallyreferendum the said they wanted to tighten up their rules. problemsa lot of coming through, and if i am a country like slovenia, estonia, lithuania, hungary, poland, bigger countries, why would they risk creating a precedent that comes back to haunt them many times over in the years ahead? that is what i really cannot understand. joe: i want to show a headline in "the telegraph" newspaper last week. the writer said those betting against the pound our idiot teenagers without the foggiest idea of what brexit means. you criticize that in one of

your morning notes. i'm wondering if the collapse in serling is creating further angst at people in your line of work who do this for a living and start to think that you are really the enemy as opposed to just assessing where the currency should be? >> we then called death we have scribblers.teenage you could call me a teenage when thes and 1989 term came about, but you cannot now. necessary for is the shock we are setting ourselves. it will help domestic importers compete. what would be worrying would be thatrom an adjustment

helps, you get a disorderly fall, which is what it looked like half a through the last crash, where the equity market goes down at the same time as bond yields go up, at the same time currency weakens in a way that does not help anyone. we're quite close to that at the moment. would not feel guilty. people voted for this, and this is what happens if you got a big trade deficit, big current-account deficit slowing the economy, and you decide to really mess up your relationship, your trade relationship with your biggest trading partners. far doorst of all, how you think it can go, and which pairs are the most important -- , how far did you think it can go and which pairs are the most important? >> in terms of the distance we think we can go, currently, we are probably priced for growth ,nder 1% gdp growth next year

but not recession, for rates to get cut a little bit but not to go negative. i guess to an a half rate hikes between now and next year in the united states. to get below 120 on a sustained basis, either have to have the fed raise rates four times, which you can discuss, but it does not seem likely, or i have to have an economic environment that is recession in the u.k. be maybe negative rates, may much more dramatic action and loss of confidence. that is possible, but i think we are more likely to take cable down to 115 again at some point, but in a years time, i would not be surprised if we are not are from here. as long as the government does not make any more mistakes. in terms of the overall level, but are, the biggest part of the u.k. trade-weighted basket is the euro. that's the one that matters most. that the one that could move the most. those are the people who we rely on to invest in the u.k. to finance our deficit, and they

are the people we buy things off and sell most of our things too. euro sterling is more important. if we lose control of euro which is trading -- the euro is worth 90 british currently.nts if that went to parity, that would be a much bigger deal. not impossible. they have a huge chronic out surplus. we have a huge current-account deficit. -- they have a huge current-account surplus. matt: you are going to stay with us because you have been watching currencies closely tied to oil. that has an on the move. we've been talking bonds as well with yields on the 10-year treasury at the highest level in months. we will continue this discussion. this is bloomberg. ♪

are back with a global .trategist at societe generale we've been talking brexit, but of course, there's another big vote coming up, and that is the u.s. election a less than four weeks. naturally, people analogize the two for obvious reasons, but one thing people say is that nobody soft brexit coming, and it was a shocker on election day, but i recall there were several polls showing a very good chance of winning. our people sort of misremembering? >> opinion polls were never conclusive one side or the other. what was conclusive if i remember right was the booking

agency. the betting industry was pretty convinced that we were going to stay in, so that is where money was lost. to be fair, the opinion polls were closer than your election. let's put it that way. matt: while we are comparing the two, i want to look at treasuries and guilds. if you are long, they have fallen off a cliff compared to treasuries. >> the bank of england is going to be really reluctant to cut rates below zero. i think most central banks are unconvinced about the merits of negative rates. we are at 25 basis points. really goodre is a chance we get 10, 5, but not more than that. had looked to me as if they just gone too far. matt: i wish we had another 20 or 30 minutes with you, but unfortunately, that's all we've got.

always a pleasure. we will come back and talk about the fed minutes. this is bloomberg. ♪

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sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. crumpton.mark let's get to first word news. an airstrike on the biggest market on the rebel held line of aleppo reportedly has left 15 people dead. on tuesday, at least 41 people including five children were killed in a series of airstrikes across parts of the city controlled by rebels. series of on a russian warplanes has a devastated aleppo, which international aid organizations say is in the midst of a crisis.rian a u.s. naval destroyer was .argeted today the uss mason reportedly

returned fire. it the second such incident since sunday. pentagon officials say iran-backed rebels were behind the attack. they are reportedly considering retaliatory measures. the philippine president has ordered his defense chief to cancel preparations for next year's planned joint military exercises with the united states. he says he is trying to chart a foreign policy that is not dependent on washington. meanwhile, an eight-day combat exercise between u.s. and philippine forces ended a day early. the philippine president says the maneuvers only benefit the u.s. military. ecuador has granted a request from julian assange for more preparation time. the wikileaks founder was originally scheduled for questioning october 17 regarding a rape accusation in sweden. ecuador prosperous secure the general's office says that interview is now scheduled for november 14.

assange has been holed up at the ecuadorian embassy of london since 2012. back to you. matt: thanks very much. i want to get quickly a recap of today's markets. we saw very little change on the indexes. you can see the dow up 15 points. the s&p up .1% and the nasdaq down .1%. there were some luxe relations today, so it was not this boring throughout the trading day and we didn't get interesting earnings in from the largest railroad in the eastern u.s. they reported third-quarter profit that beat analyst estimates. revenue also beat analyst estimates, although we saw some drops in revenue. intermodal revenue down 6%. volume down 6%. better than the street was

looking for but still not necessarily a positive sign for the economy. joe: you can see the stock of their 2.5% after hours. "what'd you miss?" minutes from the september meeting show fed officials expect to raise rates soon. the decision at the meeting was a close call. what is your big take away from the minutes? ultimately, not a big market reaction to them. >> there is a little bit of a knee's in the 10-year yield, so maybe they were -- i do not think dovish, but slightly less hawkish than what folks were anticipating. nonetheless, there's a broad cohesion on the committee of individuals comfortable with the fed moving before year-end. i will say the fed is on a glide path into the december meeting and it would take a significant

market or economic disruption to that -- off matt: would an election result push them off that path? a i don't think so, but severe market reaction might potentially lead them to consider it. joe: one of the best arguments for not hiking at an accelerated pace is the fact that inflation by most measures still seems to be muted. you brought in a chart looking at the number of fomc members who see inflation risk tilted to the downside. what are we looking at on this chart? >> four meetings a year, the fed releases updated economic projections, the famous dot plot , gdp growth, unemployment projections. in the minutes we get what i

think is even more important information, which is if those risks are tilted to the upside for downside. in september, there were a few fed officials worried about downside this. show: this is a blue line here, so there is a declining number of fed officials, the lowest since mid-2015, who are worried about undershooting on inflation. >> right, and at the beginning of the year, you had a record number, 10 or 11 of the 17 were worried about downside inflation, so this chart shows they are following the market on this. basically a put option on the u.s. inflation, so it's inflation averages below 2% over the next five years, then this will pay out. markets have become more sanguine on inflation as well. members these fomc right to ease back on their concerns about declining inflation?

we see the economy settling in at 5% unemployment rate, they will have increasing maybe not that we are at full employment just yet, but we will be there relatively soon, and therefore, the inflation data will take care of themselves in such an environment. i will argue i think the fed is probably more focused on the labor market than inflation at this point, although inflation certainly factors into their consideration as well. the point being that inflation a laggard economic indicator, where is the in jobyment rate creation is more concurrent. it looked as though we were about to hit the unemployed -- the inflation target, if unemployment or job creation were rolling over, that would lead them to pause nonetheless. look at another chart you brought us, the number of u.s. employee is on nonfarm payrolls, the number of fomc members who see a risk to

unemployment forecast tilted to the upside. same thing as the inflation chart we just showed, but for the labor market. when the blue line goes up, that means less that officials are worried about upside risk to unemployment, so they are not worried the unemployment rate is going to go up. matt: you have to twist and contort your mind so much. >> the reason i inverted this one is if you look at year-over-year growth in nonfarm payrolls, you can see they kind of track each other. the point is that payroll growth, job growth has slowed, but that officials are still relatively sanguine about the risk to the unemployment rate, even though the labor market kind of seems like it is slowing. >> which is in contrast to the staff forecast. we read the minutes here, the staff forecast talked about downside risk to gdp and upside risk to the unemployment rate.

>> the official wavelength is the staff looking at this decline but fed officials are ignoring it. is -- is this a function necessarily of a slowing economy, or could this be about an economy of full employment? >> the debate at the meeting, clearly there was much discussion about full employment, are we there yet or not? it aimed to be evenly split that paceparticipants said the of hiring is slowing. we are seeing some wage pressures, and that means we have reached full employment, where is basically an equal number, some participants also said to look at in voluntary part-time employment. the lack of wage pressures in the economy and the rebound in the participation rate as evidence there is still more slack to be absorbed. the jury is clearly still out on the committee.

joe: this third chart you brought looks like it is a similar idea as the last one where you have this gap emerging between the pace of gdp growth in the number of fed officials who are actually concerned about gdp growth. that's right. we know gdp growth has slowed quite a bit, running at the slowest pace since 2011. the number of fed officials worried about downside risk that actually fell in september. fed officials are making a bet. we get two more jobs report center things along of things

will decelerate and that will make the december debate a lot more interesting. matt: we get october and that can be the same as what we got for september. >> you just look at the year-over-year. that's why i like to smooth it out. you can see the direction of the .rend this is a key thing to watch. data we are getting already that seasonal hiring is going to pick up. >> we should get a pickup in that and retail numbers. there is a real interesting contrast. the statement and minutes talked about still solid consumer spending. theave not seen that in third quarter. q2 was very robust. retail sales, consumer spending. we are growing at about half

that pace in the third quarter, and consumer spending is the primary driver, so it's hard to make the case that gdp is so -- i win consumer spending think there is a broad agreement that december is appropriate for the next rate hike. there is not broad agreement for next year as they continue to debate if we are at full deployment and not. if we'll get the answer. there's going to be significant disagreement on the path in 2017. >> do you think if we did not would still plot we be talking about the december rate hike?

>> for any number of reasons, the fed wants to stay on a tightening path no matter how slow, and for that reason, i think december has to happen. matt: awesome conversation, guys . thank you very much for the latest information and research bloomberg intelligence. coming up, hillary clinton extends her lead in the polls. equities bracing themselves? not necessarily how you would expect. i will show you in light deep dive next. this is bloomberg. ♪

joe: i'm joe weisenthal. i'm looking at how markets are preparing for november's election. let's look at the chart put together. it shows the premium people are paying for downside protection versus upside protection over the next two months. it hit its highest level earlier this week. although it does not look like there's a ton of anxiety in the market right now, markets still .airly high, fairly muted there is a lot of hedging going on in terms of what happens over the next several weeks. matt: it's interesting because i have been asking people if investors are hedging against the possibility of one election the other. over the past few days, there has been some craziness, right? hence the friday bombshell dropped and now the spat or feud between paul ryan or donald trump continues to get more and

more caustic. it is becoming a problem for markets as well. joe: yes, it is. let's continue talking about that, shall we? am i right? as the situation, is the environment getting more caustic in washington, d.c.? can you feel it? >> i certainly think it is. the last few days, the donald trump we have seen goes above and beyond the donald trump we saw before and it's not like he was a toned down, laid-back figure before, but he has been really elevating things. we saw that at the debate and we have seen that at rallies since then. he is not pulling any punches. and hillary clinton has to respond to that. i think we are seeing an escalated tone if you will.

joe: people are talking about the republican party right now in pretty apocalyptic terms. it is not the first time i have heard that. in 2008, the republican party was dead. after the 2011 debt ceiling fiasco, the party was dead. after mitt romney's loss, the party was dead. after the government shutdown in 2013, the party was dead. meanwhile, they have gained all these seats and governorships and controlling congress. if this -- is this just more of the same? everyone is writing the party obituary, and meanwhile, the party continues to do its thing and thrive? >> their base turns out in the democratic base does not really. in presidential elections, if republicans lose next month, it will be their third consecutive loss in a presidential election and they will have lost the popular vote in five out of the

last six elections, and that will be a real moment of reckoning because it's not clear after 2008, after 2012, that they have learned their lesson in terms of wanting to piece together a demographic coalition that is sustainable and winnable. that is the debate in the party, and it is only going to escalate. up his tacticss that people thought were not real, that would just a sideshow . this has proven to be a real force in the party and republican leaders do not really know how to reckon with it. the question is after there is an election and tom manages to the partyout, which ifl fall in behind him, but he does lose, how are they going to put the party back together? you: two joe's point, do

not feel safe as a political reporter saying "this time is different for the republican party?" >> am not quite going to go there because i think there is a chance that they will change course. i'm saying the battle, the intense split within the party is only getting worse, and republicans i talked to both for and against trump for this piece we have on bloomberg politics today, worry it will only get worse. i think the concern within the party is that things are not about to get better any time soon, that there's going to be a serious bit of turmoil before the party can correct course in whichever direction it tries. much.hank you very great piece on the tensions inside the gop. matt: coming up, lessons on the greek crisis from the former finance minister of the country himself. we will hear about the country's

economic outlook now. this is bloomberg. ♪

matt: "what'd you miss?" have all the talk may centered around brexit, but it was not that long ago that we were focused on exclusively on if greece could weather its and if we would see a grexit. bloomberg sat down with the former greek finance minister. his newest book describes resiliency of the greek people as well as with the country is today.

>> the biggest haircut in ,istory, nine finance ministers and what i try to do in the book is to tell the story of exactly how decisions were taken. should there have been debt restructuring early on? were likenalities because that plays a role. but also to take a step back and then see why we are there. why portugal and ireland and cyprus, who came into the bailout, came out earlier. >> what is the difference? >> there's a number of differences. first of all, we were starting from a much worse point. we had a huge competitiveness around 15%. credibility deficit because the previous government lied about statistics, but also, when we designed the program, there were

mistakes in the fact that debt restructuring took too long to happen, but a lot of issues were internal. unlike other countries, there was no political consensus around what needs to be done. there was a lot of infighting. werenitial governments alone in trying to do a difficult job, and all this has played a role. the recession has been much deeper than it should have been. we lost more than a quarter of gdp, greater than the great depression of the u.s. more than 35% unemployment and .0% for the youth we're still there. we are crawling. we are not out. >> are you going to get out? the economy is still contracting. what is left? >> it depends how you look at it, but, of course, in many ways, greece is like a broken country. joh: coming up, what you need to

know to gear up for tomorrow's trading day next. this is bloomberg. ♪

mere 5:00 on a wednesday afternoon. equity markets were pretty boring. what i thought was interesting was i was reading the market story and noticed gold was at a four-month low and then i saw 10-year yields on run a four-month high, so it made a chart where i inverted the

10-year yield to show you they are moving basically the same direction. joe: that's a great chart. you see that early july was basically the turning point for people reaching for all things safety now going to riskier stuff. ,att: yields continue to rise and a lot of people think gold will continue to fall. do not miss this -- delta earnings are out tomorrow before the bell. we will learn more about the health of the u.s. economy through one of the biggest airlines in the u.s. earnings season really kicking off in earnest this week and we have the banks at the end of the week. joe: and tomorrow i will be looking at weekly initial jobless claims, which have been very low, very steady. we talked earlier in the show about some signs that perhaps the labor market is cooling a little bit but we have not seen that yet.

matt: we've got equity earnings. weekly the labor market, oil inventories from the department of energy out at 11:00 a.m. tomorrow. do not miss that.

take ourre going to country back from these people. we have to stop the inflow of illegals coming into our country. this is the most important election our country has ever had. is time for the american people to take back their future. make sure you get out and vote november 28. ♪