francine: catalonia clash. hundreds of people were injured by police at the polls. the euro falls and the yields push higher. the trump doctrine. the u.s. president is said to give a speech highlighting the benefits of deregulation. rumors swirled that he will pick the next fed chair. newnd manager says the european rules coming into play from methoifid ii will result in less efficient markets. new european rules coming into playn

out of las vegas as a shooting incident on the strip left at least two people dead. this is "bloomberg surveillance ." updated onkeep you las vegas throughout the morning. i'm francine lacqua in london. let's quickly check on your data. there's quite a lot going on today. monday means we need to digest a lot of news from the u.s. overnight. just getting some breaking news out of bmi for the eurozone. euro area september manufacturing pmi, rising to 58.1. that is shy of the estimates, but just a touch. preliminary was 58.2. 58.1 is what we are getting. the dollar rising, treasury yields up, investors trying to contemplate tax cuts as well as the chances of a new and potentially less dovish fed chief.

spreadse, we look at the between german and spanish yields. first, let's get to the bloomberg first word news. here's nejra cehic. nejra: we start with that developing story. at least two people reported dead and 24 others injured after a shooting on the las vegas strip. police say one suspected shooter is down and they do not believe there are anymore. authorities have shut down part of the las vegas strip and interstate 15 after reports of gunfire. some flights have been halted at mccarran international. u.s. president donald trump has used twitter to tell his secretary of state that he is wasting his time in seeking negotiations with north korea. the remarks came a day after rex tillerson acknowledged that he is communicating directly with the rogue nation. the move highlights differences within the administration about how best to get kim jong-un to

halt his nuclear weapons program. theresa mayinister heads into her conservative party's annual gathering fielding questions over why she hasn't fired boris johnson. johnson has challenged her strategy on leading the european union twice in the last few weeks. may could a weakened only laugh and dodge the question on whether the minister was on sack of all. britain is likely to forge its first post-brexit trade deals with the u.s., australia, and new zealand. speaking at an event on the sidelines of the conservative party conference, liam fox also said britain is working to adopt trade agreements that it is party to as a member of the you, and wants to have been in place before the u.k. leaves. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries.

i'm nejra cehic. this is bloomberg. francine: thank you so much. catalan separatist leaders signaled they may move towards a unilateral declaration of independence. hundreds of activists were injured on sunday as they sought to stop spanish police from shutting down a referendum. mariano rajoy, the prime minister, has refused to acknowledge the referendum. >> there has been no referendum in catalonia. today, all spaniards have seen that our rule of law is still strong and in force. let's cross now to barcelona, where maria has the latest. the market is responding quite a lot to the vote. remember, we were having a conversation last week, are they -- theyo complacent might have been. this is a big constitutional

crisis. you could argue that it was a double whammy for rajoy. the vote happened, then you get this, which is really bad for the spanish government. they always wanted to keep this contained. now it is a front-page story all over the world. for ramallah, it is a difficult moment. is he going to step down over this? we are hearing he thinks there is no reason to resign. he feels strongly that the constitution has to be upheld. the government backtracking, saying they feel sorry about those images, but saying the catalan police did not really cooperated. they were told to seal off schools, and they didn't. a lot of violence happened in the early hours. francine: what happened next? you are mentioning that this could have huge implications for mariano rajoy.

if catalan leaders declare independence, how should investors view what happens next? >> francine, that is the question. we are going to get a lot of breaking news on that. they are about to meet and there is going to be a presser around mid day. the question is, the regional president thinks it could trigger an independent catalonia. i really don't want to anticipate what could happen, but if there's any hint that he could announce it, you would expect the justice system to step in, and he could be probably dismissed from office if the court deems this is another violation of the constitution. francine: thank you so much. maria on the ground in barcelona. joining us this morning, christian, head of economic research at barclays, and the chairman international at hbs investment partners.

think it took me at the time four years to get you back on the program. first of all, how should investors look at catalonia? on friday.nored today it seems that spreads between german and italian yields are going crazy. >> you have to get used to a bit of volatility. on friday. your colleague in barcelona had some comments. that will take a bit of time. at some point, the catalonian's will decide if they want to vote again. until that happens, that could take several months, it is not going to be dramatically bad. i wouldn't say that is a calamity. francine: we look at the ecb and the fact that they are standing firm. what does it mean for spanish gdp overall? >> catalonia is 1/5 of the

spanish economy, so it is important. so far, i would be of a similar view that europe looks strong right now. we have a global recovery in full swing. in europe, after elections in had italy andou spain cleaning up the bank balance sheet. now we have a situation where europe looks quite good with regard to growth. farourse we have to see how this expands, but this will be something more seriously fundamental. francine: far this you were saying that when you look at the spanish bonds, they are falling a touch. let me bring you over to my chart. you see the spanish bonds compared to the catalonian

bonds. we will push it out on social media. any value? any value in european bonds at the moment? >> sure. this is a remnant of the recession, 2008. you could argue that the central bank in europe could have reacted faster. you have in equity in europe. you see that in the german election, the catalonian failed independence vote. tightening, any tapering will have to be minor. if spreads blow out a little bit, widen a bit, -- francine: this is what we are looking at between the spanish and italian 10-year yields. how should we view the german election, that wolfgang schaeuble resigned to make place for someone else hardly because of this new coalition be informed, and what do you make

of the italian elections? >> until maybe the development of the last few days, we have to reassess how far this can go. until now, we thought the italian elections were the biggest remaining risk in europe. ms. merkel is clearly weakened. it will affect a little bit the sense of these markets and how much germany will be willing to share risk possibly in further integration of the union. on the spanish ministry, i doubt we will see a strong change in policy, because the likely new minister from the free democrats will probably not be that different from shyla when it comes to policy. francine: what would it take for you to buy italian yields, italian bonds? >> italian bonds have rallied quite a bit. i would like a little bit of a spread.

i'm not worried about the italian election. francine: why not? >> italy has created about one million jobs. gdp has risen 1.5%, as opposed to expectations below 1%. we don't know how the coalition is going to be formed. i think that things chug along in italy. there are definitely long-term concerns. yields also move out a bit, i would buy italian bonds as well. francine: do you think that mario draghi wakes up and looks at these yields and tries to process what the catalonian vote in the upcoming elections mean for his policy? >> it is not just the catalonian vote. other people in the ecb have hinted they will be pulling back. you must remember, and i go back

to this, catalonia, german elections, all this is a consequence of tight monetary policy. they took their time to do it. now they've got to take their time to pull back. francine: stay with us. stay with "surveillance." plenty coming up. the u.k. prime minister is heading into the tory party conference fielding questions on why she hasn't fired boris johnson. president trump tells his secretary of state that he's wasting his time seeking negotiations with north korea. we will talk about that situation. this is bloomberg. ♪

francine: this is "bloomberg surveillance."

let's get straight to the bloomberg business flash. here's nejra cehic. nejra: we start with a developing story, at least two people reported dead after a shooting at a music festival on the las vegas strip. police say one suspected shooter is down and they do not believe there are anymore. authorities shut down part of the las vegas strip and interstate 15 after reports of gunfire. some flights have been halted at mccarran international due to the incident. monaco airlines has been placed under administration and off lights canceled following the suspension of its certificate. administrators were appointed to the carrier and travel group. the administrators will work with the aviation authority and the government regarding the repatriation of the 110,000 customers currently overseas. global construction materials maker crh is nearing an

agreement to acquire suwannee american cement. according to people familiar with the matter, the companies could announce a deal this week. at deal may value suwannee $150 million. a representative declined to comment. cryan mayank's john face pressure from investors if a turnaround fails to show results in the next six months. that is according to "the sunday times." a senior portfolio manager at union investment told the newspaper, we haven't seen any sign of growth in the investment bank. we need to see this. hedge fund manager chris says new european rules on research will result in less trading, list price discovery, and less efficient markets. he wrote that mifid ii should cause the cost of capital to rise because it will give different levels of information to people in the market.

the revised markets and financial instrument to directives start january 3. francine: thank you so much. as theresa may's conservative party holds its annual conference, the prime minister has been fielding questions over boris. speaking to the bbc, may said her government backs the approach to brexit that she set out. >> what i have is a cabinet united in the mission of this government, andrew, and that is what you will see this week. united in a mission to build a country that works for everyone, and agreed on the approach we take. francine: still with us, christian from barclays and nikhil srinivasan. christian, let me go to you on brexit. it seems messy. it is part of negotiations. is it more messy than needed?

-- christian: it is unprecedented. they have no reason to really be up front with approaching the u.k. the speech in florence was very important. she touched upon all the issues. she couldn't deliver the details yet that some would have wanted. the reception on the continent was positive. that is a good sign. -- i think it is really people will watch whether her concept has a strong backing by her own party. she must come out of this week as someone who is sure to be the leader for the coming years, and then i think brexit could take a more constructive path than it

has maybe over the last few months. francine: when you revise upwards or downwards, do you look at brexit talks? christian: we look more at brexit talks in the sense that we look at uncertainty and what could happen to investment. we have a u.k. economy that has been much more resilient than people would have thought. is investment is slowing. the boe will be important. they may be hiking. i think if we have an outlook for brexit that signals some kind of uncertainty, that will help the u.k. economy over the medium term. francine: are you a political analyst yet? do you need to be a political analyst to figure out where you put money in the u.k. or the u.s.? nikhil: i think on brexit, christian has all the points right.

it is a complex issue, negotiating brexit. forget that britain had about a 15-year of cycle. just from the cyclical point of view, having a slower u.k. is expected. that doesn't mean it is going to collapse. they just expect slower growth. francine: what happens to pound? does it make investments more attractive? nikhil: pound will be in the 1.20 to 1.30 range. i think it stays around here. i think you've got a sterling which is essentially trying to find a base around 1.30. francine: christian, what is your take on -- this is one of my favorite charts. this is u.k. consumer credit. it is something i imagine mark carney is looking at closely. does this chart worry you? christian: it is a chart that is

important. it is behind some of the recent significant changes in the attitude of the bank of england. they do, theyhat highlighted a balance sheet of said they had and said been leveraging. this is why they argued for a rate hike. they believe they are in a situation where households are robust enough that they could withstand some increase in interest rate. i think it is a very important chart and one to follow. , we will seeikes one hike for now. onncine: what is your take euro-pound? nikhil: range bound. like a lot currencies, euro-dollar range bound, euro-sterling range bound.

you've got a period of uncertainty. spain, catalonia, etc. between both things, i think you've got a range bound currency. francine: interesting. i want to talk more about the global outlook. barclays has said u.s. growth remains decent. europe and japan have shown further upside. the ecb is likely to taper further next year. christian, this is your report. what is the most surprising thing in it? it,stian: if you look at how well global growth is synchronized. there's a lot of questions from investorsinvestors who say, sh'e be more cautious? global economy that continues to expand. we get very good data out of europe.

japan has relatively low growth. we see some emerging markets like russia, brazil, coming out of deep recessions. china continues to hold up quite well. this is something we haven't had for 5, 6 years. if you look at equity earnings, they correlate very well with global growth. that is the big story. that is why we continue to be quite constructive. francine: are you positive about world growth? nikhil: this is the first time since 2007 that all economies are showing positive growth. i am very comfortable with growth. francine: how do you feel inflation? i don't know if it is the phillips curve being broken or something more sinister. christian: the second part of the surprise is that inflation stays so muted.

unemployment rates are falling in all the key economies. it does take time. people are coming back into the labor market. fallloyment doesn't because participation rate goes up. i think there is something bigger in the background. that is why phillips curves no longer work. that is something i think central banks have to grapple with. all their models and all the usual actions are based on the phillips curve. francine: i don't know if you worry about inflation. if you look at the most distorted market, it is probably the bond market. gets repriced, it could lead to further correction. nikhil: let's talk about this inflation and fed policy. fed policy is about normalization. i don't think they care as much about inflation as normalizing

the interest rate. should they care more about inflation? nikhil: if you look at -- all are pointing to more inflation. we haven't seen it in the u.s. we haven't seen it anywhere in the world right now. -- typicalt indicators are up. the feds behavior is about normalizing based on financial stability. fed will continue to gradually increase rates. i think we will get some inflation in germany. it has been going very strong. probably get some everywhere. we are not going to get as much as people want. yields are 2.36 today. where is this going? all yields are high in the next 12 months. francine: thank you so much,

christian. thank you for your time. nikhil srinivasan stays with us. we had great comments from christian as well. we will talk about regulation and china. up next, the hedge fund manager warning of a terrifying mix for markets. we will discuss that next. in the meantime, this is what markets are doing. dollar rising, treasury yields rising. investors contemplating the prospects of u.s. tax hikes, as well as a potentially new and less dovish federal reserve chief. this is bloomberg. ♪

"bloomberg surveillance." francine: you are watching"bloomberg surveillance." i am francine lacqua. let's get to nejra cehic. nejra: we start with a developing story. at least two people have been

reported dead after a shooting at a music festival along the las vegas strip. one shooter is down and they don't believe they are anymore. authorities have closed down part of the strip. halted atts have been america's eight biggest airports due to the incident. u.s. president donald trump has used twitter to tell us sectors they that he is wasting his time in negotiations with north korea. rex tillerson a balanced that he is communicating directly with the rogue nation. a state department spokeswoman said there is no contradiction in the position. you can't prime minister theresa may is fielding questions over why she has not fired boris johnson.

johnson has challenged her strategy on leaving the european union twice at critical moments. yesterday, may could only laugh and dots the question on whether "on second." -- on second." ramco we are getting breaking news out of u.k. this is u.k. manufacturing data 59.9.at pmi has gone to sure if it is having much impact on pound. you can see dollar impact there. of course everything that has been happening in between, including that foreign speech by the prime minister. i think we are getting is the -- in aech by philip hammond

couple of hours. we are just getting some breaking news out of las vegas, where we had that terrible shooting. we are waiting for the chair of the las vegas police department is it due to speak. as soon as he starts talking -- there he is. marilou danley, she is an asian female, approximate four foot 11. she weighed 111 pounds. we have not located her at this time. we are interested in talking to her for follow-up. two vehicles we are interested in locating people we need your assistance. --have a hyundai to sign tucson with nevada plates. pacifica with

nevada plates. registeredhe plates to the suspects that we have located at the mandalay bay. there are a couple of things that need to occur. one is the red cross is responding to the headquarters here at the police department at 400 south martin is a king to receive any phone calls from family members who are trying to family who attended the concert and are unable to contact them. that number will be established shortly and get it out to you. anybody that may have cell phone video or any type of video associated with this event that would be a benefit to the investigation, please respond to the las vegas much bolton police department headquarters at 400 south martin luther king. if you have it, you evaluated

and you think it would be a benefit, please bring it down. if you areers, unable to call, or you do not want to wait for a call and you want to respond in person, we have set up a family retreat area for you to respond so we can help you locate your loved ones. you will be contacted by a police officer here at the headquarters and they will direct you to where you need to go. is a special me agent in charge with the fbi. he is assisting with the investigation which is ongoing. we have the fire chief from clark county fire. they are assisting with all of the victims. as far as number of victims, i cannot give you an accurate number. we have in excess of 100 plus injured. and in excess of 20 plus that have died. we will get those numbers to you

accurately as soon as we can. please bear with us. this is an ongoing investigation but we are comfortable that the primary aggressor has expired or passed away. there has been multiple phone accusations or conjecture coming through social media that there is multiple shooters. falseas been proven to be . additionally, there has been accusations or believes that there are some explosives going off. that is also false. the only exposes contained was from our swat team breaching the room. we are pretty confident that there is no longer a threat other than we are attending to locate the person of interest. no, not at this point. we believe it is a local individual. hisnot at liberty to give

place of residence because it is an ongoing investigation. we don't know what his belief system is at this time. you.orry, i cannot hear no, we have no idea. as you can imagine, it just happened, so please bear with us. >> can you believe he acted alone? >> we do not know. it is an ongoing investigation. we believe he is the sole aggressor. we are attempting to locate the person of interest. we have -- i have two police officers that are at the hospital. one in critical condition. the other one, minor injuries. there are other police officers the were off duty attending the concert that have expired.

we don't have those i -- we have those -- we don't have those individuals who have expired. francine: the shooting that happened a couple of hours ago. there is one suspect that is down after that attack it would understand that officers swarmed the las vegas strip after a gunman fired on concertgoers. the police chief saying there were hundreds injured and at least 20 people dead. he said a lot of reports on social media were wrong that at this moment they think there was only one shooter. they said be very careful when it comes to social media because of the speculation. he is saying it is too early to speculate as to the motive. he did say that the perpetrator was a local person. conference. news our thoughts are with the victims and we will get back to

it. in the meantime, regulation. less trading, less price discovery according to the london-based hedge fund manager. in the letter to investors, in his -- he said the new rules were part of a terror -- a terrifying mix of asset prices. still with us, nikhil srinivasan . when you look at the risks out there, we had him quite bearish by the view on the world economy . what d.c. you see as the biggest risk for markets? nikhil: the biggest risk is complacency. people are complacent about the north korea situation, the middle east. they are complacent in the u.s. about increased regulation. if you look everywhere, the biggest ricks -- the biggest

risks are people are like let's continue forward. francine: is it that is impossible to price in trump's next move? nikhil: it is hard to value the level of risk that i am talking about. given there is a lot of liquidity out there. want tothat people continue to do what they are doing and make money. you cannot argue with that right. the biggest risk is complacency because it is not priced in. francine: what will it take to be priced in? is it a snowball effect? nikhil: not terribly. itple have come off of relative to the market. people have to get used to the that the ownership of these stocks remain robust.

we haven't seen a real selloff. know when then't canary in the coal mine its mark is. nikhil: china is fine. francine: not even the debt and reserves? nikhil: nothing. the currency is showing resilience. the congress is going to go find. you are going to slow down growth built in because of reforms. you had this anticorruption move which is going to taper off. i am not worried about china at all. francine: are you worried about emerging markets? it has been telegraphed for about three years. are you worried about some kind of connection -- some kind of correction in emerging markets?

nikhil: all of these emerging-market have run up quite a bit. i'm less worried about directions from the oil market. russia has more upside as well. you have to take a step back and say are we still looking through the lens of just looking at the world through the lens of 2007-2008. francine: what about again? yen. you look at gdp is going higher and joblessness is going down. one in 10 people voted for the far right in germany. they did the same in france. nikhil: economic inequity in europe. that is going to continue. francine: will it get worse? nikhil: i think it is going get worse.

i think is going to get worse in terms of voting patterns that shows people are continually growing disgruntled. in spain now, you see it. you are going to see that. you are going to see protest goat -- protest votes gathering. you are going to see governments having to run deficits. even the german government which is in surplus will incrementally have to increase spending. factone has to accept the that there are a fair people in the preparation that is not gaining. francine: they kill, thank you so much -- they kill, think he so much. the latest reaction that this man could be nominated to succeed janet yellen. this is bloomberg.

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francine: we understand that more than 20 people are dead and more than 100 people have been injured: the shooting in las vegas. -- been injured in the shooting in las vegas. one of the police officers were in critical condition. we were hearing from the sheriff . he was saying that the shooter is located on the 32nd floor of the mandalay bay hotel on the city's strip. he hasn't by vols because it is an ongoing investigation by the said the man was known locally. it appears to be an automatic gunfire that was heard and route

91 which is the country music festival. we are awaiting confirmation. officers this warm this las vegas strip in the early hours of this morning after local man fired on concertgoers. we will have more on that. let's get a check on your markets. mark: u.s. equity futures are pointing higher just on the back of what you were saying. this is the spanish stock market going back a year pierced stocks are falling today. stuck in a wider trend of gains. toward abe moving unilateral declaration of independence as early as this week after hundreds of activists saw to stop spanish police shutting down an illegal referendum. gains byorming at 2.3% the general gauge.

nay stake is a local issue. this is euro on a monthly basis. it is down by .5% after cattle and the leaders -- after cattle and leaders may declare independence. europe ended its longest run since january 2013. this is the spread, the difference in yield. the spread is widening by five basis points. let's put it in perspective. 1.2% is where we are. 6%. spread was at we had a two-day rally before today and we know the event is over. the spread earlier did rise as much as eight basis points.

sterling was the best performing major currency of september, rising by 6.3%. it had its best month in more than two years on the expectation that the boe will raise rates. as bulk of sterling strength the strategists cease sterling falling to 128, francine p on the flipside, contemplating tax of a lesshe potential dovish federal reserve chief. francine. francine: mark, thank you so much. we were just talking with nikhil srinivasan and we have a question from a viewer. this is a question -- we were talking about complacency in the market. would you say that the complacency originates on a majority of the disgruntled are

not amongst its players. it something we should become worried about for markets? .ikhil: the question is fair i don't think you have to worry about it is a constant something might happen, but the consequence from a policy point is it will have to remain relatively loose it on the monetary side, will have to remain loose as well. tightening cannot happen. if you want the disgruntled to be feeling better off. i don't think any economy in europe can tighten today. or the u.s. no, i think fiscal policy has to remain expansionary. francine: this is why you have talked about normalizing, not tightening. --sident trump and miniature

and steve mnuchin has -- have met with kevin walsh. it will be steady as she goes which is normalizing. the gilles: my point about not -- nikhil: my point among normalizing is to ensure financial stability. have receiveds high last seen 10 years ago and i think the fed must be concerned. normalization is far from close. francine: it still matters if you have someone at the head who is a dove or hawk. so far, inflation has been the cornerstone of how you measure stability. they don'try time

get inflation, they use another measure. these are comments from people who do not see inflation. francine: would you change the mandates? in if you do change the mandates, what would you be looking at? capital allocation. that is what has been happening. other thing like capital investment has been ignored. you cannot really change the mandate. my point is we were late to normalize and now they have to reach a level of normalization which the market will decide whether it is too high or too low. francine: what will be a game changer for you in the u.s.? is it tax cuts? nikhil: would be a game changer, gdp in the u.s. drops below 1%. it doesn't seem likely.

francine: why would we do that? nikhil: people are not ready for that. people are not ready closer to zero to one. that would surprise people that would show, my god, something is wrong. francine: do you think that is likely? nikhil: i don't see it in the numbers. that is my biggest risk, gdp falling below expectation. francine: but we need to happen for gdp to fall below expectations? nikhil: retail spending falls, oil prices. again, if oil prices go up significant leap -- oil is in a good spot. i don't think we are going to $80. francine: you get them for section plans against the trump administration, does it feel to through -- does it filter through inflation?

nikhil: i prefer tax cuts to infrastructure spending. francine: because of lacking time? nikhil: slippage, all kinds of things. studies have shown that at the structure doesn't rule as much for gdp. i prefer tax cuts. is priced into the market? nikhil: i think it is going to be linked to tax cuts which i think is reasonable. in may become demised to two parties -- in may be compromised to two parties. francine: when you look at the conversation and you talked about emerging markets, is it right to think that your outperformed the u.s.? the gilles: for sure. sure -- nikhil:

for sure. i would rather buy u.s. equities. francine: u.s. is more exposed globally. nikhil: u.s. equities are more i would rather buy u.s.global. i think you are going to have a looser policy directive from the ecb. continued looser policy from europe. well.y has been doing francine: it is europe. should we continue doing that every couple of years? nikhil: commentators in this country and the u.s. have been talking about the end of the experiment for a long time. they have been wrong. they are going to continue to be wrong about the end of the experiment. the question then is, can europe outperform? europe is sometimes its own worst enemy.

as long as things continue to chug along in the french-german relationship produce positive news for europe come i think europe continues to find. -- continues to do fine. francine: nikhil, thank you so much for joining us. , from h&p asasan partners. -- the gunman fired into a music festival. the gunman is dead according to police. officers swarmed the las vegas strip. we listened to the chief of police updating the media on what happened. do not listen to social media reports that it was more than

one. we cannot divulge the name of the beliefs. it is an ongoing investigation. seemed to appear to show an automatic gunfire, that is at least what was heard at about 91 which is this country music festival. pictures showing chaos and people fleeing in terror. we'll keep you up dated -- we'll keep you updated. trades, aboutking some of the traits of his economy along with the k. -- along with the u.k.. this is bloomberg. ♪

francine: the trump doctrine. the president is said to give a speech highlighting regulation.

as reports swirl that he will kit -- that he will pick kevin walsh as the next fed chair. the euro falls on spanish 10-year yields. las vegas police confirmed that than 21 people have died in more than 100 injured after shooting at an outdoor music festival. this is "bloomberg surveillance." i am francine lacqua in london and there's tom keene in new york. there's a lot of news out there and sad, the shooting in las vegas. look at fed and every thing to do with brexit. tom: the news this morning absolutely extraordinary. we could spend the entire day on political news. we must get right now to our first word news. >> there has been a deadly attack on the las vegas strip. at least 20 people were killed and more than 100 wounded and what is believed to be automatic

gunfire. ♪ [no audio] the las vegas share says off-duty police were among those killed. las vegas mccarran airport closed but flights have resumed. at least 20 people have been killed and more than 100 injured

in a shooting at an outdoor music festival on the las vegas strip. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. in a shooting at an outdoor music festival on the las vegas tom: we've got a map appear of las vegas. want to make clear that this is a developing story really happening in the news flow happening in the last 80 minutes or so as america wakes up. francine, the shootings at mandalay bay the south end of the acclaimed las vegas strip. everybody has their emotional resonance for certain part of the strip. the facility is modern. it has been up for the last 20 years or so with a set of 40 story towers. francine: we were listening about 20 minutes ago to a press conference by she the sheriff -- by the sheriff. they were saying they are looking for a fema companion of the shooter. -- a female companion of the shooter. it is an ongoing investigation.

arguing about the motives. one thing significant is he said don't trust social media when it comes to these things visit there were reports there were multiple shootings -- multiple shooters and explosions. tom: i would agree with that right now. only thing we can say it was a , thery musical festival music associated with nashville, tennessee. let us move on to the terrific news flow we have and the reaction within the, the music associated market. this begin with a get a check, check, currencies and commodities with the euro weaker, but a risk on feel. the second screen please. 9.60.x, there is the dow. 500.on the s&p

the yields were high earlier. .hat is a higher two-year yield in gold, i don't want to use the word, plunge. it is on the edge of plunging. francine: the dollar rising with the treasury yields as you were saying, contemplating is what today.rs are doing they are looking at the prospect of a tax cut. i am looking at euro retreating in the wake of this vote in today. they are looking at thecataloni. we are seeing a spread between german and italian bonds. german and spanish bonds also go higher. tom: very good. we want to talk about the news for today and begin with what was occurring on thursday and friday. it has been an extraordinary move. an earlier dialogue of thursday and friday on the so they show -- on the sunday show. here's the secretary of the treasury. >> we believe we can get back to

sustained 3% gdp or higher which had -- which adds millions and millions of jobs. that is our focus, so the president wants to get tax reform. we are working with the house and senate and we hope to get something on his desk to sign in december. tom: i cannot convey how odd this news flow was. changed with the debates over puerto rico, nfl football and presidential golf. host this morning, rick lacaille. jim, let me go to you. if we can remove herself from las vegas and we will have more reports on that. .hat an external weekend the lead was the president and secretary of state, in particular with the secretary of state in china and the president

saying his work is not worth it. seen so manyhave norms busted. so many traditional approaches, it is not even -- the president typically would be on the same page as the secretary of state, not seeking to undermine the secretary state. your guesses as good as mine in terms of what is going on, what the president, the commander-in-chief has in mind. i can't speak to that. francine: when you look at every thing that is happening in the u.s. in infrastructure in tax cuts that are investors look at or priced in. do you get a sense that congress would support the president when it comes to tax cuts more than if a structure? jim: there is nothing this republican congress wants more than tax cuts.

pastf the talk in the eight or 10 years about the evils of debt and deficit, that is been thrown out the window. the president and some of his outrageousness has been tolerated all with a single goal of the congress to have a package of tax cuts passed. that trumped everything else, no pun intended. francine: we are happy to have our host, richard mckay. richard: what is real, is earnings growth. there has been this sort of appetite for nostalgia, back to the reagan days, deregulation and like taxation.

it is kept america -- american equities doing well even though they are expensive. tom: i look at this jim and i want to look at the weekend in dictionary sequence of events. do you have any perception that this is a president they can delegate authority on puerto to save theme defense department to go in and do electric grid work on that -- puerto rico? the defense department to go in and do electric grid work on that? jim: no and yes. is so much for example in the tax-cut package that has been left for congress to fill in the blanks to a certain beent that task is delegated to the tax cutting committees.

the president gets ahead of that and sometimes it derails it and sometimes steps on his own stories. and you saw that in puerto rico. -- are he is delegating not delegating, the my new ship of policymaking, they clearly remain at the center of where and how the stories are moving. tom: just because we have you for short time, with your work in paris, jim hertling, and your work in london, i am fascinated debateught the catalonia can spread across europe. discussions.her what are your thoughts? jim: tom, it is a great question and i find it fascinating. you know there have been these independent movements for greater autonomy throughout

europe, whether they are in brussels, scotland. the interesting thing that could happen in catalonia which is happened nor else is an actual just they are talking about a national declaration of independence. that really changes the dynamic and that is what i am most curious to see. francine: rig, are we discounting political risk? i don't know if it comes from the trump administration. complacent -- are markets to complacent? [no audio] richard: i don't think markets have really ignoring those issues. they are priced in generously? no. rates.w real interest there's a lot of cash looking for yields.

good.ery jim hertling, thank you so much. we will continue with mr. lacaille. coming up, a very important conversation with roberto a rebate -- with roberto jaguaribe . from london and new york, this is bloomberg. ♪

tom: again, in the united states , a shooting with multiple deaths. over 20 killed that appears to be in las vegas. this is the mandalay bay resort. america waking up to a carnage. here's a map of las vegas, the

set upith mandalay bay at the south end of street. this is something in america that everyone knows. we have all been to las vegas and this is quite something. the video, horrific. a shooting as a country music festival is occurring near mandalay bay. francine. francine: something that we need to keep a close eye on. our prayers go to the family and victims. let's go to another top story and this is catalonia. violent scenes in catalonia where please crackdown on a controversial independence vote at hundreds of activists were which more than 85% of voters asking for independence. police acted proportionally in defense of the law. with us is rick lacaille. we are seeing a little bit of

movement, for example the sustain, the spanish yields compared to catalonia. i wonder whether you're more worried about mariano rajoy's future and the ambulance -- and the imbalance. rick: the banking sector getting better shape but i think spain versus italy had always made spain better. austerity may have caused some of the conditions that have led to this outbreak. will the government stand and create a budget? they are out of the woods but not in the sense of being a great spot. they need to continue the work. francine: we are looking -- euro moved a little bit on the back of it. i don't know what it means for mario draghi. thank you for the great chart which is the spread between

italians bond yields and spanish bond yields. richard: growing better than expected but the prospect of the election next year i think hangs over and the question of whether you are going to have a more difficult political situation and a huge debt. it is kept investors focused on those issues. they are enjoying a cyclical upturn. this is really pricing business as usual. tom: where is populism in europe? all investors have to have a meter on the populism tone of your. europe. we just tone of where do we stand? rick: the best guide is late spring, early summer we had an improving outlook with better election results in the center

in both netherlands and in france. germany was a little bit of an anomaly with afd. i'm not sure that tie is destined that tide is coming in strongly with pocket -- that tide is coming in strongly with populism. catalan is still a separate issue. a lot of his him and the fiscal position they have been in. look at them piece by piece and generalize and say there is a big problem. tom: i look, rick at the markets and it is such a news flow we really want to discuss the dynamics. equities are approaching equity -- equities are pushing record highs. do you agree, the sentiment is --negative there's no way there is nowhere to go but one way, up?

those panelists that are focusing on individual companies , we think they're overestimating growth. they are not seeing a lot of these challenges that a viewpoint would give us. francine: rick, what is the one thing that is being mispriced when you look at geopolitics? when you look at monetary policy, is there something that people are getting wrong? rick: i think north korea is one you cannot calculate. the second is china. strong economic results seem to be coming out of china. they seem to be able to delay the day that this credit challenge will be faced. in the meantime, it is sick when i asked recovery between the s.jor bloc we've got very low volatility and it is like a coiled spring.

people have it really discover the possibility of the trump tax reform actually working. francine: rick, thank you very much. some very important comments. we will be back with rick for more bloomberg stories. be sure to pick up the latest edition of bloomberg businessweek on newsstands and we take a look at the future, steve bannon just look at the future of steve bannon. this is bloomberg. ♪

francine: -- emma: this is bloomberg surveillance. in the u.k., wanted airlines -- monarch airlines has shut down. monarch went into administration after failing to resolve its financial troubles. that is the bloomberg business flash. francine: thank you so much, m a -- emma. state street global advisors is bullish on the stock saying valuation measures showing attractive markets amongst developing developed countries -- amongst developed countries. rick, augusta concern with japan because weike japan are about this financial experiment? rick: we are seeing that .ranslate into actual changes

when an active team goes to japan to talk to companies are invested in, there was a different dialogue and it seems the feeding into a different dialogue. they are helped by cyclical recovery which is seen over six quarters which is the longest since abenomics kicked off. we have been skeptical about abenomics but if you look at the results in the last year, it does seem to be getting better. francine: inflation is not -- inflation is nowhere near the target. rick: that is a challenge. the labor market does seem tight. it is something in common with germany in some the other countries. the very tradition of lower inflation. it hasn't really interrupted the investment case from an equity

perspective. tom: i can buy japan or i can buy and etf p which of the industry groups -- etf. which of the industry groups and give them a much higher valuation? banks? conglomerates? banksi wouldn't say it is . there's a consensus on u.s. and european banks to a certain extent. isn't our cars in japan. he had to the technology names, the industrials -- you have to look back to the technology names, the industrials. francine: is it independent of yen swings? rick: it is entirely independent of yen swings. it has benefited but we could see a little more strength in the yen. .t is not an extensive currency the evidences for certain range of yen, companies are able to

produce better earnings, year-over-year and we are expecting wage growth in japan to be in the high single digits. francine: rick, thank you so much. he stays with us. coming up, we speak with roberto jaguaribe. this is on the back of a couple --u.k. meter reporting that media reporting that the brazilian government would be interested in free trade negotiating with the u.k. we'll discuss that next. this is bloomberg. ♪

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which is why comcast business delivers consistent network performance and speed across all your locations. fast connections everywhere. that's how you outmaneuver. tom: i am tom keene in new york. america, again, wakes up to a shooting in las vegas with many,

many dead. with our first word news, here is emma. emma: there has been a mass killing on the famous las vegas strip. at least 20 people have been killed and more than 100 wounded when what is believed to be automatic gunfire interrupted at an outdoor music festival. -- directed at an outdoor music festival. police stormed the mandalay they resort and casino. the las vegas sheriff described what happened. a number of flights headed to nearby mccarran international airport were diverted because of the shooting. a few flights resumed this morning. we will try to bring you the soundbite later and more on this developing story as it breaks. this is bloomberg. francine: thank you. do, michels or temer's stemming the bleeding

from the nation's public accounts. the domestic unrest comes as latin america's biggest economy looks to boost growth through international trade. it is grilli discussing investment agreement with the united states and a possible free trade agreement with the u.k. .oining us is roberto jaguaribe still with us, rick lacaille. both both for coming on the program. ambassador, talk about how long it takes to have a free-trade agreement with the u.k. >> it all depends on the process of brexit is going. it can only be done after brexit. where on the process of negotiating with the european union, which we hope can be concluded shortly. it has been on the table for 17 years. we would be very interested in pursuing something with the u.k. it all depends on the brexit situation, obviously. francine: are you confident the

political situation in brazil is stable enough to make sure that trade agreements that are signed and will be seconded? >> what you to look into brazil, brazil has obtained a high level maturity.tional i think the political situation is still volatile. we will have elections next year. we don't know who was going to end up winning the elections. but we do know a certain number of progress is that have been attained over the past 30 years are not going to be brushed aside. the latest one has generated a number of concerns internally and some resistant. actually, the results the president temer has carried out over the past year and have have been tremendously impactful in generating a more balanced environment for investors and for economic growth. your update, ambassador karlov the state of the commodity business and commodities in all of south america. can you call a bottom on the

commodity a bear market? >> starting with doyle, now -- starting with oil, and now brazil. we have changed some of our rules allowing for all interested parties to become operators in the very promising areas of exploration in brazil. mining is big, especially in agricultural brazil has become a powerhouse. agriculturalgest surplus in the world. despite the fact there are some difficulties and challenges ahead for everybody, we know that the influx of demand for more calories is going to increase significantly, especially from asia. brazil is very well-placed to be able to supply that demand. tom: i know you have an institutional responsibility to toe the line, but all of us have been thunderstruck i the images 200,00000, even

resilience lining up in protest at this point and that point and another point in protest within the nation. give us an update on how the elite are speaking to the people of brazil and can they give them more hope of a future of prosperity? >> we have undergone a very difficult period in brazil, as you well know. first of all, we had the largest recession in recorded history in brazil. which, fortunate, is on its way out. over the past 2, 2 .5 years, brazil has undergone a very major recession, which is also associated with political volatility issue. this has generated enormous concerns. of course, not as many people line the streets now as they were four years ago at the time i was ambassador in london. more than one million people took to the streets. the situation is still complex,

volatile. there's a lot of the satisfaction politically speaking. i think on some traditional terms and very modern terms as well, people do not feel terribly represented. i do not think this is a brazilian issue alone. i think this is true in many parts of the world. but it is something that requires some changes. i think we have to face some political changes in brazil, especially in the political system, in order to give more satisfaction to the brazilian electors. francine: rick, are you invested in brazil? >> absolutely. maybe there is a sector die mentioned, which -- now there is a reaction to that. what sort of sectors do you think are interesting? >> resilience, in spite of this very difficult patch, we still retain an enormous attraction for investors. over this period, we're the six

largest. this year we expect to be the fifth. i think the most demanding issue in brazil like now -- right now is infrastructure. changesmade significant in concessions law, creating more favorable environment from investors, including foreign investors. brazil arers in treated exactly as domestic investors. i think this is the place we are making the most effort to attract new investors. francine: you're one of the biggest investors in the u.k. what would it take for you to invest in infrastructure in brazil? do you need reassurances from the government or just a good yield? >> we're not direct investors globally, but we do invest a lot in brazil for the equity market. in this sense, it is portfolio investing. we are looking for more stable political environment together with other emerging market countries. the stability we've seen recently in brazil is a special case is foreign-exchange reserves, a fiscal challenge, in

other respects, a great deal of stability. you think about climate change and how that will impact the economies in emerging markets. i don't know whether you have a viewpoint on how brazil might manage climate change, but i'm interested in that, as a driver of return for investors? >> one of the reasons i am in london is because of green. brazil is a very sustainable country, and sustainability is in the forefront of our agriculture. been capability in agriculture. sustainability is key. this is one of the issues we want to increase investments. increaseaid for a 20% in food consumption, brazil needs to have a 40% increase in its production. tom: ambassador, we are all victims of our geography. i'm going to rip of the script and ask you a time will question. much of the focus

east-west, and everyone knows that is wrong, and should think north-south much more. what do we need to do in the americas or, frankly, with africa and europe to make for more north-south diffusion of would just ask and travel and airline travel in such? what do we need to do to jumpstart further a north-south dialogue? >> you know, brazil is a relatively large economy, always amongst the seventh, eight largest in the world. but we are small trade. the 25th in the world. in spite of that, we have a very balanced trade. we've seen latin america, europe, the united states, asia has now become the biggest partner. but africa also is very significant for brazil and always has been. i think you are right. within latin america, many things have to move more quickly. we just had a meeting of all agencies of the same nature as apex in order to enhance

internal cooperation in this respect. and we have several meetings with our counterparts in the united states as well. select america because we also supportive of brazilian companies that want to go abroad in the united states is still number one for brazilian companies. when they want to move abroad, the united states is the first country they want to move to. but i think we need to have more action internally. with europe, the southern part of south america has always had a very strong connection with you. europe is the largest investor in brazil. over $350 billion deposit. result is the highest investor outside the united states and europe, even larger than china. tom: these are -- really,aille, these are really important facts. this idea that most americans don't understand the european-brazil next this year. if that is the case, you say you love japan right now. what will it take for you to go long brazil?

-- youknow, japan mentioned japan. japan is another big traditional partner of brazil because of the traditional immigration from japan to brazil. brazil has the largest concentration of japanese outside of japan. japan has been a friend since the 1890's. a big investor traditionally in brazil. our case at least, i must say that we have a very broad range of external representation. the new player on the field is asia, especially china. they have enhanced are medically their participation in latin america and especially in brazil. -- issue, picture off the relationship to an equity market and commodities. the second, which is still important, corporate governments. raising return on equity and latin american countries has been very important for investors. opera governments is bottom-up.

-- corporate governments is bottom-up. those have held back investors and raised the risk premium. i agree with you entirely. i think this is one of the issues that the present government is trying to tackle. we are changing a number of issues, which had held brazil back. labor legislation in brazil. if you pay someone 100 a year salary, then your expenses are going to be close to 190 because of the labor expenses associated with that. regulations for investing in oil. they have changed. we are giving a lot more independence to all of the regulatory agencies. all of this defines an environment that is been more attractive for investors, both brazilian and foreign. tom: this has been terrific. ambassador, thank you. former jaguaribe

brazilian ambassador to the united kingdom and president of their trade and investment agency for brazil. we continue with rick lacaille as state street global advisors. a morning briefing for you on television. when you're in your car and radio, coast-to-coast, bob and karen. bloomberg daybreak. look for that. this is bloomberg. ♪

tom: in america, a shooting. the university medical center of southern nevada, well over 100 people wounded in a horrific shooting in las vegas. this occurred at a country music festival, the acclaimed jason aldean playing, opening up his part of a nighttime segment when the shooting began. there are 20 dead.

we have seen this too many times, francine, across america. of the the south end strip at mandalay bay. francine: the police chief was saying, because all with media especially social media because he was saying there appear to be an automatic gunfire. that was what was heard. it was at a country music festival. we saw pictures from the scene shown people fleeing in terror. the police chief asking for help with someone traveling with the shooter. he said the shooter was local. at the moment they don't want to reveal his identity or the possible motives behind it because it is an ongoing investigation. arece have said at least 20 dead, more than 100 injured. the gunman has been shot dead. .et's change gears theresa may's conservative party halted annual conference. due to prime minister has been building questions on why she has not fired boris johnson.

he has challenged her strategy of leaving the european union twice in the last couple of weeks. philip hammond will address building a stronger economy later this morning. let's get back to rick lacaille, global chief investment officer. when you look at brexit, i don't know whether you something look at monetary policy and the fact they may reverse the cut last august or follow negotiations blow-by-blow. blow-by-blow is unavoidable. the bank of england can't counter every disadvantage the could accrue from that brexit, but it does seem like culture wars are being fought out as well as it can economic negotiation. that is the challenge for investors, understanding how they can take out the culture wars from the troop economic long-run position that we're going to get to. francine: what is the one thing people misunderstand about brexit? to need a way to get a clearer picture on how much the eu is

ready to give in? spoke words in english, is that a good omen of things to come? >> what can i say? no, seriously, i think the things people may misunderstand is how the mix of pulling out of customs union and forging trade deals, for example, with brazil, might makes. so can britain be a conduit to the rest of europe for the rest of the world? no, of course it can. it makes it a little more complex. i think the ideals, of the global trade deals with carry outt of europe, the european negotiation of the same time. i think it times are short. transition is very welcome. back, rick,o circle to the idea populism. i guess prime minister may is still in with populism, so is mr. corbyn of the labour party. how does that affect global gdp? how does that affect united kingdom gdp?

there's got to billing between this politics into your world, isn't there? >> i think there is a link. stopping immigration is bad, particularly for a country like u.k. that has relied on an influx of talented people from many parts of the world. stopping global trade is bad. that feeds through to the top down story and how much freedom individual companies of god. the more populism you have got opposes foreign takeovers, it getsion, the worse for owners of businesses. the question is, how bad is it get before the effects are felt by those supporters of populism in this backlash that we're going to far, this is affecting employment trends and wages? francine: that could take five years, if not more. it is like a slow to affect. >> it is not just a theoretical point, it is a practical point. many of these attempts at nationalism or nativism or the

opposite of free trade have been tried. usually, they result in disaster. it could take a long time. francine: reg, thank you, rick lacaille chief investment officer, global advisors. if you have any questions for rick or any of our other guests, .ou can type on tv you think you up-to-date with all of the breaking news. if you click underneath of your screen, you can ask questions directly to rick lacaille next. this is bloomberg. ♪

francine: this is bloomberg surveillance. let's get to the business flash. a deal between dish shows pay-tv operators shall offer sports. the agreement means 2.4 million new york subscribers will continue to get espn with other disney-owned channels. the deal was struck last night. at jpmorgan, a change to the rollover possible ceo jamie dimon. daniel pinto is handing over businesses.f africa

you will remain in london and oversee jpmorgan's brexit planning. you also on global technology. that is the bloomberg business flash. tom: thank you. we're watching events in las vegas. we will have an update at about 7:00 -- seven minutes. let's turn to the united kingdom to the idea it is the fourth quarter of 2017. rick lacaille a state street global, his world will be different. the first quarter of 2018 and most certainly by march or april of next year. it is about how research gets paid. it, on on the buy end of the receipt of that research. how are you going to pay for it gekko what is the methodology that state street mobile advisors sees? >> we have not gone public honor methodology. tom: now is a good time. >> i thought you might say that. transparency, a

deal for investors. ofbe a little motivation weighing the financial sector. substantially, it is a good thing. it is all about transparency. we will have unexpected effects. i think it will take if you use exactly what those look like. it could be small company coverage. it could lead to a much more out for those managers willing to invest in their own research to deliver better results for customers. it is a big shakeup. the shakeup is not about issues of principle. for many managers, it is the operations, the policies and procedures yet to put in place. it presents a big job of work. at the same time, a lot of other changes in the industry happening. tom: you and i have seen the development of buy side it has research. i think of wellington, a boston. what will make it work this time? what will be the cap kilis that will make the investment -- what will make the investment to their own interior research? x we do a lot of our own

interior research. i think the best combination is often your own researchers, specialists, long-term tenured long-term tenured final analysts such as we have come interacting with others. there is a natural not monopoly, but in efficiency to be

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delivers consistent network performance and speed across all your locations. hello, mr. deets. every branch running like headquarters. that's how you outmaneuver. an: again, america awakes to horrific shooting. 20 dead come over 100 wounded. in critical condition.

this on the strip in las vegas. good morning, everyone, it is most difficult news from las vegas this morning. we will give you a full report in a moment. as we continue to the markets. this morning, well, the first morning of the fourth quarter, yields are higher. gold plunges. stocks at near record highs. we will get a briefing on a resilient american economy. and amid of violence and riot, and extreme very weekend in barcelona, in catalonia, they demand of independence. look to october 6 at the 83rd anniversary of their first battle with franco and madrid. good morning, this is "bloomberg surveillance." i'm tom keene. in london, francine lacqua. francine, on las vegas, there are no other words than to say once again, "in america." francine: it is once again in a lot of parts of the world, tom. what i would caution, we do not

know any motives. we heard from the chief of police saying we need to be careful and speculate on social media. we understand there was one shooter and the gunman was shot dead. tom: she and her team have been following this all morning, emma chandra. shootingre has been a on the famous las vegas strip. at least 20 killed and more than 100 wounded. a gunman opened fire from the 32nd floor of the mandalay bay resort and casino. hundreds fled the scene. automatic gunfire erupted. riflesarmed with assault stormed the mandalay bay. the las vegas sheriff describes what happened. >> there was a shooter on the 32nd floor of the mandalay bay. officers responded to that location and engaged the suspect at that location. he is dead currently. he has been identified. he is a local resident. i will not release his name at this time. but we are interested in a

companion that is traveling with him. -- a number of flights were diverted because of the shooting. a few flights resumed this morning. we will bring you more on this developing story as it breaks. tom: thank you. greatly appreciate that this morning. let me run over to a data check. the euro weaker, dollar add a littleures to the record i seen on friday. september was such a successful month of record highs for the stock market. the next screen if you could. you can see the effects 9.56, an extraordinary number. way under a 10 level. i guess all in all, gold down nine dollars, down $10 earlier. francine: this is what i'm looking at.

front and center. treasury yields also rising. investors contemplating biggest tax cut but also the next federal reserve chief focusing a lot on euro, treating in the wake of the contentions boat and the spanish region -- vote in the catalonia region. tom: thank you. time to go to kevin cirilli on the events of the weekend and driving into this week. once again, a shooting, this time in las vegas. kevin, you gave us a great scalise'son mr. return. another shooting, really no different than this one. what you expect to be the response of the white house this morning as they await to 20 dead him over 100 wounded in las vegas? kevin: i just reached out to the white house and no word back from the money horrific tragedy unfolding -- and no word back from them on the horrific tragedy unfolding. wounded more than 100

at a jason aldean concert, performing at a country music festival. this will dominate all of the headlines here of the united states. it comes as president trump is expected to make remarks later today. he is expected to take questions from reporters at an event at the white house later today. of course, comes on the eve of when president trump is scheduled to go to puerto rico. no question is tragedy, another shooting here in the united states. tom: it comes front and center -- to sift through the weekend debris, kevin cirilli, i found the treatment of the secretary of state to be absolutely remarkable. i went back and looked at the tensions between george washington and thomas jefferson as well. am i right, the distinctive issue with secretary tillerson is the president went after him while the secretary was in china? kevin: yes or the president pretty much saying on twitter to

the secretary of state rex tillerson not even bother negotiating with north korea dictator kim jong-il and. first and foremost, some are speculating this is a good cop/bad cop to have a political strategy where the president doesn't want to broadcast the united states strategy with north korea while still giving the opportunity for his top administration officials like secretary tillerson to negotiate. at the second point i would make is their speculation this is the president losing confidence in the secretary of state and trying to lay the groundwork for replacement. tom: i'm going to go wide on a monday. the president of united states is structured on the art of the deal. do you see any evidence the art of the deal truck negotiation tactic has any chance of a successful outcome across the many different items, including puerto rico, including north korea and others?

kevin: north korea, there said the sanctions are designed to slow down the pace of the provocations of the north koreans in terms of their missile capabilities and missile launches. in terms of puerto rico, when the president goes there tomorrow, he is facing intense scrutiny and criticism, not just from democrats, but some republicans, in order to further -- more results on the ground. the governor of puerto rico has stood by president trump. about taxes and infrastructure. what do we know will happen next? kevin: now it heads to the committees where the tax writing committees here in congress will begin to get to work. there will be some developments will stop today, we were supposed to hear more from president trump. there was a lot of speculation he would be centering on regulatory affairs, the regulatory affairs, and taxes. i can't stress enough, this strategy -- tragedy in las vegas

is going to be front and center in the united states. francine: what we know about the star wars? short list of become fed president. we understand there are links between him and his father-in-law, that has been a huge donald trump supporter. kevin: mr. warsh's father-in-law has had connections to mr. trump. this is a wide list of folks. there were a lot of folks on there. on the surface, but i would also note it is a bit preliminary still. there is a broader list that has been just kevin warsh. tom: i think it is him as religious you and i are fighting the same cold right now. almostink it is

religious that you and i are fighting the same cold right now. everyone else should have it as well. you're a trooper for showing up, kevin cirilli, thank you so much on various for singles from washington. he is leaning so far back from he is leaning so far back from me to get away. harm bandholzparse with the debt now. i think there's a lot of confusion about why raise rates now.

>> the economy does not need the policy anymore. we must not forget the fed has been, we take a couple of steps back when around the related issue to these are most unprecedented quality is very easing -- monetary easing. much has changed. the unemployment rate is close to 4%. more than eight years of economic growth. and yet if you look at the fed balance sheet and the interest rates go a look like nothing has happened. i think the fed is right in gradually, very gradually, normalizing the policy stats. hearine: this is what we more and more. if you want to normalize coming look at financial stability and not inflation. is that the correct way of looking at things? >> i think financial stability is important. that is transmission between monetary policy and the real economy. despite of these couple of or few interest rates hikes we've seen from the fed, financial

conditions are all most easier than ever. important. we cannot completely dismiss inflation. janet yellen has giving us an interesting speech several days ago where she was going through the issues that we have with inflation. one of the big questions is, is inflation still giving us the correct signal? ultimately, we were looking at the fed wants to set monetary is right a way that for the stance of the economy. this slack inrve economy directly. but look at inflation of an indicator as how tight the labor market and all of that stuff. maybe the link is somewhat broken and we have to reevaluate what the correct inflation rate is. looking back, this core pc fed has determined to be it's favored inflation gorge, it is much lower than the core cpi that greenspan and mr. bernanke

have been looking at. actually increased its inflation target over the last several years when there are signs the trend inflation rate has come down. francine: but are they right in doing so, harm bandholz? if you are the fed, first of all, how do you see the next fed person coming in? willoughby steady as they go or will it be someone more dovish? are they right in looking at inflation through the corner of one ayako >> i think the fed will remain gradual. will we have this issue that it is that only the fed chair that is potentially being replaced, but plenty of vacancies on the fed board. it is a big reshuffling. thannk the -- it is bigger one person, even though the chair shaping the view of the committee. as athink that kevin warsh bigger than 50% chance of becoming the next chairman. he has been on the shortlist for fromtime, basically right

the onset. i think he checks a lot of boxes. historically, he has been a bit more hawkish and that is why we reactions inket that way. but i think -- he is not the type of fed president, if you should become it, that tries to choke off the recovery by being too hawkish. francine: thank you, harm bandholz. stays with this for the hour. coming up, live in barcelona in the aftermath of yesterday's controversial referendum. what we're looking at is kind will catalonia's may be signaling their independence. what does it mean for the spanish prime minister? we will look at that next. this is bloomberg. ♪

francine: this is "bloomberg surveillance." tom, we have to go to barcelona and catalonia. spanish yields have risen. bylund scenes and catalonia or police crackdown on a controversial independent vote. -- violent scenes in catalonia where police crackdown on controversial dependent vote. 85% of the voters back independence. spain's interior mr. said please acted proportionately -- minister said police acted proportionally. it is been quite a week and. you done a great job in covering this. what does it mean for the prime minister's future? for rajoy, what a pr disaster for this government and for rajoy personally, what a double whammy. the vote went ahead. the yes won. a you wanted to make this domestic issue, now he is made

is a global issue. we've all seen the pictures and symmetry medical footage. a lot has happened. he rajoy questioning, is going to resign out go the answer is no. he is facing a serious domestic crisis? yes. he is going to meet with rivals in opposition leaders today. he wants to test the waters. this is a minority government. rajoy facing a lot of tension here in both madrid and barcelona. maria, whatgally, happens of let's say catalonia were to actually declare independence in the next 48 hours? what happens after that? they have been incredibly vague. last night the regional president said, i won't inform the parliament to enact this law. this law for context has been suspended. legally, it cannot take place. i want to because shows, but if we get to a state where the regional president is about to announce unilateral independence, you would think

justice would kick in and that means either he gets dismissed from government or spain would have to suspend the economy of the region -- autonomy of the region. a very tense scenario. tom: give us the historical context here back to 1934, maybe back to 1940. i would really go back to the 1930's. is there a linkage or is this separate, discrete, and modern? >> i think we have to be really careful when we try to make references with the civil war. itt we're seeing now is really started in 2012, the economic crisis. you remember the story. spain was about to be intervene. the economy was really bad. it began to hurt and catalonia and the government demanded better financing. rajoy said, this is not going to happen. what we have seen is the movement is gaining a lot of pace.

there's been no dialogue on either side. that is eventually what led to this, a lot of tension and very little political action. yesterday, i do want to say, however, the spanish government today kind of backtrack on the violence and they did say, however, if catalan police had acted in the way they said they a lot of violence could've been prevented. a lot of it was completely unnecessarily and unjustified. tom: maria, thank you so much, from spain this morning. unicredit is af citizen of europe and knows these tensions as well. i think one of the great misunderstanding settling for americans, but all of us, is catalonia is an economic juggernaut of spain. there is no an american equivalent. i have not seen that yet. you would have to sum up three or four states to get the weight of the importance of catalonia to spain. >> that is why if you want the strong bargaining, that is why do so important for spain. tom: it is a must unthinkable to

--e spain without: lumia without catalonia. when i look at this, it is the spain that is been different in the financial -- in this financial

tom: multiple shooting and america again. 20 dead, 100 wounded, 14 in critical condition by one report. abc television is in las vegas.

let's go now. horrific scene last night. horrific.ely the feeling that has taken over las vegas now it is a sense of panic. if you visited vegas before, you know there is usually a sense of fun, people are here to party, to have a good time. but as soon as this happened, that panic kicked in. we saw people running to their hotel rooms. many hotels along the strip not letting guests leave, only led desk letting guests with key cards in or who could actually prove they were staying at those hotels, letting those people in because they were saying it was just unsafe for people to be outside. even at the hotel where we are staying, we could not leave. the valet not giving us the keys to the cars, saying it was not safe, that we needed to stay in place. this scene also, still a very active seen. go ahead. tom: "the wall street journal

for nearly looking for a woman associated with the dead shooter. is she considered a danger and threat to the police and the people of las vegas? usedu know, they have not that exact terminology. they have not said she is a threat or a danger, but they have said she is a female companion, possibly a roommate of the shooter, calling her a person of interest, someone they say they want to speak to. when it comes to if she is a danger or not, that is still in question. they have not said that explicitly, but saying they do want to speak to her. tom: danya, this happened at a country music concert. jason aldean, was on stage at the time, he is safe. do we have another reports of the various acts at this concert, that they are all safe this morning? know, we have not heard anything other than they

are safe. we have not heard about any injuries to any of the actual acts or if they were even targeting the shooting. that is another thing in the situation. police have not released a motive. we know the fbi is investigating, helping to dig deeper into the shooter's background. also looking at surveillance video from hotels trying to stepsack that shooter's to see what happened in the moments before the shooting and if there was an accomplice to help him with this. tom: thank you so much. we will continue here. terrific news flow this morning in spain and in las vegas as well. more reports for you.

tom: good morning. there is no other news this morning come all caps decide by las vegas. 20 dead, 100 wounded, one report of 14 in critical condition.

we were just there moments ago on the strip. right now the global summary, first word news on las vegas. a so authorities say called lone wolf gunman was responsible for the deadly attack on the las vegas strip. at least 20 people killed and more than 100 wounded when what sounded like automatic gunfire erupted during outdoor music festival. police armed with assault white so weapons stormed the mandalay bay casino. >> there was a shooter on the 32nd floor of the mandalay bay. officers responded to that location and engaged the suspect at that location. he is dead currently. he has been identified. he is a local resident. i will not release his name at this time. we're interested in a companion that is traveling with him.

emma: witnesses say gunfire was heard intermittently for more than five minutes. a number of flights headed to mccarran international airport were diverted because of the shooting. a few of them have resumed this morning. i will bring you more on this developing story as it breaks. tom: thank you. greatly appreciate it. we will continue to follow that story. as kevin cirilli said, much out of washington, no doubt this morning. in the world of finance and economics, what we know for certain is we enjoy october. the beginning of the fourth quarter. a good time to check up on the economics. we've been doing that with harm bandholz of unicredit. anon the world, i guess, of interrater richard. bob profusek joins us. what do you see forward? in open question to start our conversation, what is the view ford for m&a? "we got to get it done by the in

of the" is that out there? >> there is a sense of things better get done pretty soon. one of the things about life -- the last year or so, all of this ambiguity about tax policy here and the u.s. is only about two thirds of all global m&a. that really had a dampening effect. there were others. of course, general, political circumstances that affects people's outlook in general. but the uncertainty about tax and whether we would have so-called border adjustment tax, whether interest would become nondeductible -- all of those kinds of things, they really put the brakes on things. through the third quarter, while the number of deals are pretty much the same, the value is down significantly. tom: i see in re tell, the challenges of nordstrom is out in the media today of constructing the transaction. i don't know if you're involved in nordstrom's. i don't want to get you in trouble. in general, is there money of to our eyeballs waiting to be put to work?

>> there is still lots of money. tom: a briefing from unicredit. send the invoice. what's the tenure and what is it going to do? tom: that was $10,000 right there. thecine, jump in conversation. raising go we're jumping ahead. -- francine: we're jumping ahead. what would it take for companies to do good m&a? when you see good m&a, expecting growth to increase significantly, and that, you want market share to be able to negotiate better? >> people do m&a, they think it is all good m&a. of course they do or they would not do it. fuel for so to speak of has been low interest rates and low growth. skin due toporate

synergize. even a private equity firms are starting to do that. they're doing the add-ons and tech ins because if you pay a 10 multiple for something, say $50 million of cost, your created, at least as a matter financial theory, $500 million times 50. synergies are there. as long as money is cheap and growth is slow, well, we're going to have m&a. there is all sorts of external circumstances. uncertaintythink about tax policy in general and some of the uncertainty about this administration in general has had a dampening effect. in general, things are good. the pipeline -- even of the value of deals has been down, the number has roughly been consistent in the pipeline has been very good. not quite as good as 2015, but good. , we look at tax cuts, does it help with consumer

spending? what does it actually help with? does it help with household debt? is it directly linked to inflation and gdp? >> we don't know enough details, afraid the framework out there mostly helps to further increase inequality in the u.s. the numbers that are out, we have two independent estimates. overall, household and not tax cuts. cut goes to the corporate side. if you look at the history, how much of the separate economic growth, the multipliers are relatively small for corporate tax cuts, particularly in an economy that is very close to full employment. so the direct growth effect is relatively small. further increases inequality because most of the corporate tax cuts are ultimately paid by the high-income individuals who

own these companies. tom: we're going to break in with breaking news and for the tragedy in las vegas. this is all happening in real-time with a briefing from las vegas. we're going to continue our discussion here, but this will be much of what we are going to the this morning. francine, we have seen it so many times and we move from a crushing 20 to 50. let's listen in to las vegas. >> located numerous firearms in the room he occupied. like i stated earlier, it will be a long and tedious investigation. we are bringing in all of the resources of the fbi to assist us in this investigation, and particular to the victim witness advocates and the csi folks to help us process the scene and ensure we're getting all of the evidence that we can possibly obtain. furthermore, i want to provide you the phone number i said i would in the first briefing host of that number for family and friends to get an update on

535-5654.s is 1-866- 535-5654.time, 1-866- obviously, this is a tragic incident and when we have never experienced in this valley. what we are anointed try to do is the best we can to get our first responders back on their feet and responding and conducting a proper investigation and ensure we have the safety of this community at heart. my condolences go out to the loved ones that lost their lives and their families. we will do the best we can to make it as easy as possible for you to get information as we know it. i think it is important for you to see via the i wake county fire -- it is important for you to see the folks behind me. it shows we have the full

support of all of the government entities to solve the situation as soon as possible. >> any motive? >> not yet. >> [inaudible] >> i don't know yet. there are some officers from other jurisdictions that were attending the concert. so i don't have inaccurate number yet. >> new provide an update on your officers injured? >> one was critical but he is stable and one of my officers was off-duty attending the concert and lost his life. graffiti giving more details about the firearms found in the room? more, i don't have any details. all we know is they were rifles and that is all i know at this one. we're executing the search warrant on the room as we speak. >> [indiscernible] we'reare holding up and going to do the best weekend. i don't want to say that is what we are paid to do because nobody is a to do what we are experiencing right now. but in my preview of the police

department, they're doing a fantastic job and we're going to have to look out for the well-being moving forward. >> you said there were numerous firearms found [indiscernible] hotel.he room of the we have officers at his residence. we will be executing a search warrant there shortly. the city recover from this moving forward? tothat is a hard question answer at this point. it is too early in the process. please, give us time so we can do a good job. thank you. i would provide you an update on a regular basis at approximately a two hour window at a time. as you can imagine, we don't get a lot of information all at once . please, bear with us when i provide you information. several people on social media are asking where they can donate blood, if they can. provided,ne number i we will get that information out. at right now, i'm not comfortable providing that

information because we are overwhelmed and the medical services at all of the hospitals right now. united blood services has responded. once they get all of their personnel on the ground and more place, we will be able to provide that info. place, we will be able to provide that info. >> [indiscernible] >> looking for their loved ones. >> [indiscernible] >> yes, ma'am. there are two locations where they been responding. one is at the south central area command, which is in close proximity of the mandalay bay. and also here. preferably, we would like them to come to police headquarters on martin luther king so they are not inundated with people responding in that area. >> [indiscernible] >> thank you very much. have a good night. the share for las vegas. he is 29 years of service. no doubt he has never seen a night as he saw last evening and into this morning as well. there is been a change. we were reporting 20 dead and 100 wounded. that is sadly not true. we have more than 50 dead in the

las vegas shooting and 200 injured. i'm not going to quo the criticalte injured because we're very uncertain as we heard from sheriff lombardo. we will have continuing coverage of this and the response nationally and internationally as well. this is bloomberg. ♪

tom: in america, another shooting. this in las vegas last night. jason aldean was playing a country music concert. from the 32nd floor, gunfire rang out. there are now 50 dead and over 200 injured. sheriff lombardo of las vegas bullies just reporting to all -- police just reporting to all. paddock.ct is stephen

he is dead. there were numerous guns in his room. a person of interest there searching for right now, a woman . we are uncertain whether she is a threat. francine, this is extraordinary and always different and unique. it of the same time across america, heartbreakingly constant. francine: we were just listening to the sheriff saying the shooter was on a 32nd floor of the mandela -- mandalay bay hotel that he of being killed. the police were sharing the image of the governments compare -- of the gunman's companion. 50 are dead and more than 200 injured, including the gunman. tom: let's get the map up. to our global audience who has not been to las vegas, it is dry, dry, dry and the city is north of the city. the strip is always culturally

outside of the city. a lot of the millions of tourists who visit do not know that. there it is. north to south, the las vegas strip with the mandalay bay and much of the new construction to the south. very, very close to that acclaimed las vegas sign, fabulous, iconic image, literally one third of a mile maybe from mandalay bay with the airport nearby. are right now.e we will have many more reports on this through the morning. francine: we certainly will. let's look to another story this morning. theresa may's government, conservative party holds the end will conference. u.k. prime minister has been fielding questions on why she hasn't fired boris johnson. before secretary has shows her strategy of leaving the european twice -- challenged her strategy of leaving the european union twice in the past month. addressing delegates on building a strong economy. phone joins us now on the from manchester where the tory

party conference is taking place. what is the mood like? it seems, first of all, the tories, including the prime minister, is trying to engage more with the youngsters, the on people that labor is so good at getting. >> i am in manchester now. last week i was in brighton with the labour party where they were full of young people singing. -- singing germany corbyn's name. nobody is singing theresa may's name at all. so the conservatives have decided the reason why they had the electoral humiliation they had in june was because young people don't feel they have a stake in the economy, so the conservative response to that, which the chancellor will do today, is explain the importance of free market economics. remains to be seen if this is actually going to do what they hope it will do.

francine: what do we know about what kind of, i guess the society the prime minister wants post-brexit? not very muchn, is the answer. so she has talked about a country that works for everyone, that is the slogan at this year's conference and last year's conference. there are some giveaways to help young people buy houses, extra government loans, a little bit sort ofing on railways in the north of england. but to be honest, the tories are slightly caught here. they don't really understand what happened to them in june. they have got a lot of theories about what went wrong. but fundamentally, they thought they were just going to trash the labour party. they thought they were going to destroy jeremy corbyn's labour party.

now they're looking at what is going on in labor. they're looking at these kids, joiny, sort of flocking to the party and they just don't know what to do about it. yes, one possible option is to explain free-market economics. what the smarter criticism is that actually, if you're under 40 in britain, it is extremely difficult to buy a house unless you have independent wealth. one answer might just be too vastly increase the housing supply. at the tories are not really ready to take that kind of dramatic step. instead, it does feel slightly they are flailing around. francine: do you have any idea of who the most popular figure amongst the conservative party is when it comes to british youth? is it bore strong said? -- is it boris johnson? >> he is the most well known, most recognizable figure.

there are various polls about who might succeed theresa may when she goes. the public lie here is theresa may is going to leave the party until the next election. nobody really believes that. people keep doing polls and surveys of tory activists and saying, who would you like? sometimes johnson is down. today he is right back up there at the top. but actually, the thing to remember is, the favorite never wins the tory leadership contest. they could easily go for someone else. a scottish tory leader yesterday gave a good browsing speech. lots of people quite like her. she is young. somewhere vote in where really, the conservative party was considered dead 10 years ago. she is taking her claim as the person who is loyal and helpful to may, while plotting an independent course. francine: rob, thank you so much

, u.k. government reporter out there with the prime minister and conservative party conference. we will get plenty of updates from rob drop today and for the week. we will be back with bob profusek of unicredit with harm bandholz. if you have questions for either, you can log onto tv . check ande data ask tom and i to put questions directly to our guests. this is bloomberg. ♪

are alls is where we stuck it is where we have been going back 40, 50, 1 hundred years. the great move in the stock market, up, up and away. a gorgeous chart of optimism on america. is what your this whole practices based on. you know what, there is this, that, and the other thing, but we always move forward, don't we? >> we do. you get lost sometimes in the daily event. especially on a day like today,

that seems sort of irrelevant, to be honest with you. the trusted thing is usually in the positive direction. tom: is the synergy going on, is a constructive for america or israel world financial engineering defended? >> it depends. some of synergies are euphemism for job losses. contra was, now you have one. at a lot of synergies are making companies better. they're making them more efficient. there combining best practices and doing all sorts of things. working on a deal and a very, what was in the 21st century, might be monday and industry and -- in the chemical space. they actually are spinning and enormous amount of time doing a better rather than doing what he does or he does. tom: interesting. francine: harm, when you look at the strength of the economy, are counseledmed it is companies that are healthy that are adding to, i guess, the general pretty encouraging gdp

news? >> absolutely. let me also, in the light of the news we have received, say that i think it -- the focus on growth is important, but i think we have to rethink the whole -- it has to be more inclusive growth. it reduces several tensions and it is also more efficient for the economy. because if you leave some people outcome you see protests and that is not good for those people or society and ultimately it is not good for growth or financial markets. francine: thank you so much, harm and bob profusek. tom, the big story today is that horrific tragedy in las vegas where we understand that 50 people are dead according to the latest report from police. more than 200 are injured.

the latest is police have located two vehicles there were looking for in the government the gunman'sand companion. tom: the most interesting things over which is crushingly difficult is the video of the actual shooting in a repetitive shots in the language used by ap as the german was firing "clip after clip after clip" which states something about guns in america -- as the gentleman was firing "clip after clip after clip" which states something about guns in america. it will be debated. maybe we will go out 25 days of the debate. and you wonder, what will happen? we will stay with this story through the morning. this is bloomberg. ♪

jonathan: a gunman opened fire at a concert in las vegas,

leaving at least 50 people dead and 200 injured. the suspect has been killed by olice. the president is taking on criticism of his response to a devastated puerto rico. and the prime minister faces a constitutional crisis in spain. cat aland separatists signal they may move toward a line lateral declaration of independence. from new york city, for our viewers worldwide, good morning and welcome to "bloomberg daybreak." i'm jonathan farrow alongside david westin. alix steele is off for today. to begin, let's kick off the trading week and get you up to speed on the market action. four-day winning streak on the s&p 500 coming into monday at an all-time high with futures positive, up .2%. treasuries stable. 2.34 your yield. euro dollar coming off the back of its first monthly drop since february, and weakness, 1.1745.