the united states. they say you never hear this side. the comes after criticism of the zero-tolerance policy which the president reversed. customs enforcement issued a notice that it may seek 15,000 beds and the pentagon says it is drawing up plans to house 20,000 unaccompanied children on military bases. themy corbyn says government under his leadership would recognize a palestinian state very early on and push hard for political solution to the syrian civil war.

tour. a regarding the conflict corbyn said the trump administration said the decision to recognize jerusalem and move the u.s. embassy was a catastrophic mistake. a lack of appreciation or understanding of what had happened. halley peace process can come about. there has to be a recognition of the rights of palestinian people to their own state, which we as the labour party said we would recognizing government. mark: asked about allegations of anti-semitism, he said there is no room for anti-semitism in our society. he continued it has to be a

peace process and a right to live in peas and the right of israel to live in peace. threatens tariff retaliation against united states. .ashington impose new tariffs the economy minister said autos could be targeted days after saying the government would probably impose duties on roadbuilding equipment. russia estimates damage from the tariffs will be around $538 million. than $23 million in 2017. global news 24 hours a day on air and that tictoc on twitter powered by 2700 journalists and analysts in 120 countries. this is bloomberg.

wags live, i'm julia chesley. joe: we are 30 mess really close of trading. s&p 500 heading for its biggest gain in weeks. a more than expected boost output. joe: what'd you miss? julie: a new target in the saber rattling over tray. president trump threatened tariffs on cars imported from europe. the president border policy causing confusion. he is telling -- pulling lawmakers efforts to -- he is saying lawmakers efforts to fix the issue is a waste of time. and president erdogan pinning hopes on this election sunday. a quick look at the

performance of the market. it is snapping several days of a losing streak. you mention this earlier, we are seeing the dow higher. the nasdaq slipping into negative territory. energy is the big performer. opec underwhelming in terms of a boost in supply of output. versus what the market was seen. energy stock certainly benefiting from that. , some ofs interesting these stocks we have seen including the ipo's cooling off a little bit in the last couple of days. i do not know if it is going to last but definitely between energy and the tech stocks very day.a reversal type of >> absolutely. seeing consolidation after the games makes sense. particularly as we head into the

end of the quarter. >> you have a rebalance that throws uncertainty into the equation. when it comes to take you did have a bit of a fundamental catalyst to the downside. red hat coming out with earnings yesterday. the stock has been plunging and taking along its rivals after the forecast was not up to snuff . this is a company that is up 40% over the past year. like many stocks the expectations were running hot. julia: great point. president trump issuing more tariff threats over twitter, taking aim at the european union which targeted a list of american brands from politically important districts. the president took to twitter saying based on the tariffs and trade barriers placed on the united states by the european union if these tariffs are not broken down and removed we be

placing a 20% tariff on all of their cars coming into the united states. hilton here. automakers react on the new sending the trading day in the red. david, we know the eu is suggesting this could harm the number of exports they provide to the united states in terms of cars and car parts but can you explain what the respective tariffs are? what are we talking about here? >> when you look at the different trade deals particularly for cars, the european union is taxing cars at 10%. is saying hetrump wants to get rid of, the imbalance with china. it is two and a half from chinese cars made here.

you see as unfair and one of the culprits of creating the trade imbalance have with some different trading partners. he is coming up with a threat for 20%. he is saying there tariffs and barriers have to go down or go away. his brashke always, opening bargaining chip. he wants them to move closer to where we are with the tariffs. >> i know this is all theoretical. nothing has gone into effect. do we have any case studies of what happens in these situations? if the european cars are going to be more expensive does it directly benefit u.s. carmakers? becaused question really most cars coming in our luxury vehicles. cadillac and lincoln, they have struggled for some time.

not really because of any tariff on trade imbalance. they have not been competitive in terms of the products they have. they have been behind the market. they do not have enough of them and the brands have been tarnished. does it benefit? it would in a sense that they would have a better shot making up ground on the likes of mercedes, audi and bmw. on to a lot of competitive vehicles and it is a cost differential. look at what general motors did. adding a 25% tariff on to their roles and their growth has taken off. it could help in that sense. , for is something like 10% a lot of luxury buyers if they have $70,000 for a luxury car monday probably have $77,000.

they may wait a little while to get another. gm andat definitely mean ford are going to pick that up? tough to say. joe: one of these stocks that sold off, it comes a day after they were already week. it warned about weakening sales due to the trade war. basic to be getting hit. people were skeptical. how much is it really due to trade. what is going on with them? what has -- why has that stock been weak for a wild? why do they have problems that go beyond the tit-for-tat tariff actions? >> they don't make as many vehicles here in the u.s.. huge. south carolina is they export a lot of vehicles from their area bmw was putting

up a plant in mexico. if there isn't easier deal, bmw has a solution mercedes would not. you have that issue. there is also for them, some issues in commercial truck business that is probably weighing down on them a bit. they are not positioned as well for the north american market if this does love the tariffs. they would take a bigger hit than either of their german competitors. it feels based on everything you have said the eu has the better part to bargain. the president is trying to tackle this asymmetry. what is the net effect? >> if they go zero tariffs it is business as usual. luxury cars americans do love continuing to come in. the u.s. carmakers don't make

in europe toing bring in this market. it is not going to help american jobs very much but luxury buyers would be happy. julia: thank you. julie: thanks so much. coming up with the fed tightening, who is going to buy bonds? we get insights. this is bloomberg. ♪

julie: the ecb will wind down bond buying program. discusses where

this leaves investors. >> they are a view years apart. the ecb is where the that was a couple of years ago guiding towards the end of the bond buying. the ecb continues to guide. it is on track for the end of this year, with a trillion dollars of negative yielding debt it is unclear what the -- where the bonds will come from. if that is not even in negative liquidity mode yet. there is focus i think, too much focus around hi melanie more hikes will the fed do this year? and the flatness of the yield curve. the most important thing happening in the bond market is the reduction of the fed balance sheet. that is the big kahuna. the supply demand that is creating along with other large , there was aers

story just this week they reduced. china and japan are becoming less regulated. it will provide a support for that part of the market. everything will continue to struggle and move higher. it is hard to imagine a scenario in which the 10 year goes back. quantitative tightening . you can go through the balance sheet, add in the european central bank, and get to the back half of this year. things get interesting. what are the implications from that chart. when the ecb stops buying in the fed balance sheet rolls off more aggressively? >> trying to figure out the direction of rates based on that

supply and demand picture is not right. in economic terms you get to an equilibrium. some that comes out of reaching that equilibrium rather than supply and demand getting you there. on expectations with respect to the economy. not buying bonds anymore. if the european economy continues to slow down the implications are very different. the same applies for the fed as well. the u.s. economy accelerating into the second half. as long as it does that rates continue to rise as a result. if that is not the case things are going to revert. likes of the ecb was not in the game to economic conditions the german curve negative for six years? >> ecb is in the game.

that is like saying if the sun isn't there. influencenks have an from a policy standpoint on where rates are. .cb is in play ecb wants to support the economy. i don't think you can take it out and arrived at a natural rate of interest rates. >> you are more worried about what is happening. >> yes. here is the reason why. you cannot discount with the ecb has done. it has created an artificial asset class. that ison i said because as the fed was guiding us around what did is going to do the markets were dismissing intended nearing to price things based on sentiment the fed is going to back off. that is what is happening in europe.

that is death only the since you get that investors have generally discounted. once that sentiment is out or starts to move out you are going to see significant movement. , the rate ofs inflation and a long-term inflation. >> away from rates in europe and towards high-yield, if you think it is hard to justify, hypothetically speaking, what is happening with german rates. it is kind of in a bit of trouble. for the ecb, it is hard to justify where high-yield europe has been. >> i think about it totally

differently. doubt coming out of the commodity cycle where you have and norma stimulus come centralo the market, banks are starting to remove policy. >> that was earlier today. you can catch the show in new york. carmack shares are at record high. abigail joins us with the details. we get this on this day of tariff talks. >> some of this should get a short squeeze.

if we hop into the bloomberg we can see perhaps they are moving into the right direction. we see is that in the first see this big dip. moreadam jonas, he has a underweight rating. the stock is up so much for no real reason. maybe this is the reason. changed hist stance. he will not change in town. he's a critical analyst in terms of these car stocks. with the tariffs, would this hurt or help? thereed-car inventory out , cars coming in from the eu, most of that would go to the carmakers.

>> a new porsche. julie: or a used one. interesting. thank you. coming up, we may not know the winner of the trade war but the u.s. is beating china in the equity market. we will have the charts you cannot this, next.

julia: the question over who would win a trade were between the united states and china has broken down into the short-term, median term and long-term. people are voting with their feet. u.s. is winning. what i am showing you is a relative ratio between the s&p

500 and the shanghai composite. shanghai shares are the cheapest ever relative to the united states. the reaction to the latest tariff threat was a $406 billion wipeout. the largest single day loss of value in more than two years. what about for the small cap? the stronger dollar, the idea that they are more insulated. the valuation divergence also at a record. this is 2000 versus the csi small-cap index. that is sinking deeper into a bear market. ,inally the momentum stocks what i'm showing you hear is the nasdaq relative strength index. you don't even need me to tell

you anything further there. the nasdaq setting a new high this week moving further into overbought levels since june. belowve strength dropping 30. julie: the nasdaq has been hugging that level for a while. i am taking a look at copper. dr. copper. it is a reflection of perceptions of economic growth. with all of the trade noise, i was curious how it would be. if you're making the torture analogy. you have copper futures here in yellow. you have the net positions in copper futures in blue. the highest since january last week. we just got the data. you see a little bit of decline. pretty substantial as we have had a pullback in the prices.

somethinglooking at we don't talk about that much. greece. the greek crisis is officially over. i that i mean they got a deal to extend to reduce the burden of the debt. this crisis.ost of the blue line is the greek stock market. white line is the greek unemployment rate. 2014.down from they said if they ever got a deal on the debt he would wear a tie. look at him today. there is a photo. he put on a tie. he committed to his word which is a signal to bondholders greece will be good on its debt. very symbolic.

bloomberg users can interact with the charts using g tv . you can browse recent charts and check on the markets. we are seeing a mixed picture heading to the close.

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>> stocks in the week. gain in nine sessions. energy stocks lead. slips. nasdaq i'm julia chatterley. >> if you're tuning in live on twitter, we want to welcome you to our closing bell coverage every weekday from 4 to 5 p.m. eastern. >> we begin with our market minutes. really, a switch of recent trading action. the dow rising, the nasdaq falling. of course we've seen the opposite quite frequently in recent days. industrials and energy stocks as well, even as we saw from the large tech have been performing so strongly. shares, veryterial strong. financials to the downside. we're going to dig more into the moment.rade in just a but on a stock basis, if you look at the 10 best performers most are energy

stocks. a couple examples, marathon oil and petroleum getting a big lift from oil prices rising. nearly 8%. by and annadarko at its highest 2015.since red hot having its session going 2006.o the revenue forecast, according analyst, threw a wrench in everyone's good time. as for blackberry, also bad news in software there. of course, the company has itself to a software company. it had its worst day in a year, weaker growthted in software revenues. the company said that was because of a change in accounting standards. software revenue in its most important growth metric was 18% year earlier.

>> now let's take a look at the government bond market, starting with the u.s. not a whole lot of action there to your yields. majorly. 10-year yields, unchanged, ending the week at 2.90. big winner today, i mentioned it in the last segment, greiss e finally getting that bond deal to reduce its debt burden over time. down to 4.15%, still pretty based on the developed markets, eurozone standards, but down. well see if it ever converges with some of the other countries. >> let's take a look at what's on in currency land. you can see, 116.59. the euro, session gains after we threatening tont impose his tariffs on imported e.u. from the relatively unchanged. we did see the yen stronger earlier on in the session.

the dollar canada, lower as well. earlier on in the session, we it weakening, canadian cpi data as well.es we had the dollar rising to the sincet level we've seen june 2017. we've come off significantly since that level or at least of 1%.ow, down some 3 sl/10 the bitcoin -- we managed to get up.bitcoin charts as you can see, look at that. 61.98, the level there, approaching the year low, as japan -- japanese regulators of the companies revenues. and all sorts of speculation on it could be here and on the possibility that we could see 14,000 at some point as well. know. never >> exactly! moving on... >> and on commodities, the big today, oil.

look at that! 5.6%.ining there's a deal for opec. so, you know, they're gonna production. so you might say, why has production expansion caused such big rally? well, people already thought an expansion might come but there's how come they can expend. they're still gaining a little bit. there's a limit. not going to be too much. and the fact that opec can come agreement at all, even if it's an expansion, suggests that together.is hanging that it's not in disarray. so you see those gains. gold basically doing nothing on the day. and those are today's market minutes. more on today's market action, let's bring in ramsey, guest, doug joining us from minneapolis. great to see you, doug! i always interests me when see something in someone's note that no one else is saying or not many other people are saying.

you say there is a major liquidity squeeze going on right i have not heard much elsewhere. talk me through this. where you're seeing evidence of and what that means. >> well, you know, it's not so liquidity.g a lot of people talk about this redemption. it's more a notion of economic liquidity. basically monetary stimulation in relation to the economic growth. hadhe first quarter, we nominal mt growing. in at 4.7..p. coming that was the first quarter where m2 growthyear, slipped below year over year nominal g.d.p. growth, since late 2010. that's a big change. the idea is for years and years, wasrate of monetary growth far in excess of what was needed by the real economy. changed.has now so we think just the liquidity available for financial assets,

principally stocks, has lessened here over just the last quarter. mean, that's the big turn here just in the last three, four months. >> so that tightening everyone talking about between rates and the runoff, starting to show up in the data. thing that's interesting about your portfolio, you're into tech but not so much the fangs. so why not the fangs, and where do you see opportunities still in tech? >> our quantitative work is largely done at the industry basis, so none of the groups in which those fangs ourently reside rate on attractive list. it's not like i have anything against those companies collectively.r i mean, the valuations certainly are high. groups justdustry don't qualify on our attractive list. what we have, for quite some we bought this group at about a 6% position in our long the middle of in 2016. it's semiconductor capital equipment. appreciation,n

it's up to 11% of the portfolio currently. position.our largest tech is more than 30% of our portfolio. i mean, certainly the valuations they were a year or a couple years ago. we also like the data processors outsource servicing stocks. so there are a couple groups. i mean, semiconductors have been in the headlines. the radarying under with tech, with none of the fangs. >> you always make an interesting point about how the purchase of these tech stocks are being funded by the market of theling the likes consumer staim staples. ties to the reducing liquidity in the market too. >> it does. beenn, remember, tech has a leadership mode now since rate of ascente has really been about the same or the rate of our performance similar.very but the market, i mean, certainly in the second half of 2017, thehroughout

market was very broad. it wasn't tech outperformance at of everything else. whereas now you are really seeing this flight from safety. getting into ae pretty dangerous phase. i'm not saying just for tech but overall.arket i think the point you made linking that to lid bid ti is dead -- liquidity is dead-on. even today, it's sort of been of what we've seen year to date, rough day for small caps. until the veryy, end of the day. we've seen a lot of days where you've seen just, among the headline indices, some pretty odd behavior, which is really just saying that because of that diminution in liquidity relative to economic growth, there's less available for the stock market, less available to float all those boats. you certainly see it with foreign stock market action. the efa down. em down. it has gotten narrower, despite the numberss, and

being strong. super officially that would say very broad market. >> doug, are you concerned about trade? >> i am, but you know, at the it's interesting. when you raise up these tariffs glimpse, iget a mean, trading partners and even those maybe with more protectionist inclinations country, ie, maybe the farmers right now. withwhat's going on soybean prices. i mean, that may give them pause. there's certainly a chance, whether it's intentional or not, short-termhe suggestion, whether it happens or not, to raise tariffs could up bringing them down across the board, which would be -- i'm long-term.t

that doesn't -- bullish long-term. that doesn't repeal the business cycle. but, you know, there's a reasonable chance, when you see whites of the eyes, of what this could potentially do, i the auto -- to the auto market, a 20% tariff suggested today. parties to the negotiating table. i mean, it could happen. moreust trying to put a positive spin on what could be presidentdire, if the goes through with what's been proposed, i believe. >> yes. work.ld let's see. thanks, doug. with you.at to chat coming up, opec strikes a deal, to boost oil production overcoming opposition from iran. next.alysis, this is bloomberg. ♪

♪[music] >> here's the first word news. president trump is highlighting the plight of americans whose loved ones were killed by people entered the country illegally. the president today hit back against the political firestorm that's hammered the white house over the forced separation of children from their migrant parent. the president blasted the media coverage of the heartbreaking froms of children pulled their parents at the southern border. mr. trump said you hear the you never hear this side. offering torline is reunite families separated by president's zero tolerance policy for free. the airline says it will try to with authorities on what it calls its mission.

several airlines have distanced from the president's controversial policy. earlier this week, american and united continental asked the u.s. not to fly separated children on their aircraft, while fron tear and spirit -- frontier and spirit airlines said they would not knowingly transport children away from their families. says thed nations secretary general is expected to meet with secretary of state pompeo this weekend. topics on their agenda include north korea and the middle east process. the meeting comes as gutierrez is asking the u.s. to rethink plans to withdraw from the u.n. human rights council which biasedton says is against israel. meantime, a general assembly is meeting monday about financing agency for palestinian tougees after u.s. decision withhold aid. the u.s. supreme court has privacyd digital rights. justices ruled that law

enforcement officials need a mobile phonet tower records that show someone's location over an period. the ruling could have a far-reaching impact. locationrs seek phone data from telecom companies in cases athousands of year. this is bloomberg. miss?t did you opec is pumping optimism into the market today. the cartel has reached a compromise on crude, agreeing to one million by barrels a day. here's more insight from the global head of commodities. you with us on a friday afternoon. one million barrels a day terms,tes to, in real around 600,000 really.

400,000 gapat mean, particularly if we throw in potential issues with the united states and with blockages from, i don't know, nigeria, venezuela and iran? >> let's step back. 900,000 inst about production. venezuela being about two-thirds of that. what they're saying today about doing on paper another million barrels is basically that into account. but they really can't take all that into account, because the capacity is in four countries, saudi arabia, the emirates, kuwait, and russia. when they talk about 600,000 in, that's kind of helping fill the void but not entirely. that's why you've seen the react the way they did today. we talked about production, exports and sanctions. arereally, what people looking at is the level of

inventories around the world. today is notdoing really going to mop up that much more into the market, put much market.o the so, you know, that's not surprising to us that we see the reaction. going to bere still sort of below the five-year average. of five-year lows inventories by the end of this year. >> i'm just curious, those four mentioned, are they pumping at capacity? if they did raise to capacity, like?ould that look >> so saudi arabia's capacity, they say it's two million barrels a day. we probably think it's more like 1.5. kuwait and the emirates, probably about another 400,000 anotherand russia, 300,000 over a two- or three-month horizon. >> so in theory, they could certainly have raised quite a bit more? >> they could have but you're talking two million barrels a day. in an environment where growth is 1.6 million barrels a day 1.3 next year, you start getting a very sensitive

issue here. comingget production online, so that's a relief to the market. cap going to fill the void, prices. but inventories are very low and is declining. >> how much at this point is all up to the i.p.o., in terms of saudi arabia making sure that there is a firm price? certainly part of it. of things, a lot including in opec, in saudi are looking at. these prices help obviously but on the other hand, you don't to rise so much that gets -- you don't want bottleto be so high that bolt early.lenecks get relieved it's a balance. of course, ideally you'd love $100 for an i.p.o., but unless

that happens tomorrow, you've got lots of risk leading up to that. >> do you see any using of that bottleneck? >> eventually. probably not until the end of next year. you're talking about substantial bottlenecks. i mean, you would need to now.ve the bottleneck you'd need somewhere in the order of about 5,000 liquid to go down there, all at the same time, to relieve that bottleneck. happen.g to there's about a 10- to 15,000 estimated shortfall of labor. gonna say, we know all about the trucking shortfall. that adds to it. had this same time, we request from the trump administration to make this to get someder price relief. but how much wiggle room is there in the united states, you can't fix the supply problem? leverage on that end? the oil producers in the u.s., production? because we're at a record in the

u.s. as well. >> yes. a's probably going to decline little bit next year, despite relatively high prices. use venezuela. their production between now and the next opec meeting, early going to is probably be down 50,000 barrels a day per month. talking another 300,000 coming off the market between now and december that somebody has to fill that void. can the u.s. fill that void permian?he some but not all. you're going to have to wait year for that to really make a difference. it's a bit of a complicated global.at's very >> i thought you were ordering oil reserves to be released there. [laughter] >> thank you. is really interesting stuff. great perspective. head of commodities. coming up, the president's border policy breeds confusion the houseers while pushes back a vote on dueling

immigration proposals. thel get an update on immigration debate from capitol hill. from new york, this is bloomberg. g.

♪[music] >> "what'd you miss?" the six-month anniversary for the republican tax cuts. remind voters who put more money in their pockets, ahead of midterms. much more divisive issue has been dominating the headlines, immigration. beenresident has not helping. now a push for a solution is back firing for some g.o.p. moderates. to sort it all out is national political reporter, on hill.l so there now seems to be a number of different bills on congress, on both sides of the aisle, that are up for consideration.

just waitent says until after the midterm so we'll have more republicans to support it all. how has that been received on capitol hill? >> not well by the republicans, are trying to get consensus between the hard line wing and the housest wing of conference. and they wanted to get consensus passbill that can at least the house. the version they're working with, it has trump's so-called four pillars, funding for the wall -- they are not getting anywhere in terms of getting the votes together for that bill, in part because this is a conference that has been decade for more than a on immigration, constantly tripping up on efforts to get a solution. keeps undercutting them by pointing out, accurately bill is note, that this going nowhere in the senate, so why bother? this.e not happy about >> i was just going to ask about that. what is the point of passing

unlikely that a, seems to pass the senate, and b, will voting forailed for amnesty by fox news? >> right. about because moderate house republicans, who in among the most endangered their swing districts back at home, divided to team up with last month on a so-called discharge position around paul ryan, pro-daca bills. thisstopped that earlier month, after leadership and the their conference convinced them to negotiate with them on a republican only bill. firing on all sorts of ways. now what they have is the right, as you pointed out, attacking supporting amnesty, in their words. and you have the left attacking them for teaming up with hard a very conservative solution that now looks likely to go nowhere. nothing atup with this point. >> what's the calculus here from

the u.s. administration? you've clearly got those republicans that are very nervous, heading into the this as a veryee divisive issue. they want to have some kind of solution, because it puts their election potential at risk here. the president is saying, looks it, we'llworry about wait until after midterms and actually have more senate seats a i believe to do something -- be able to do something about this. are they just assuming they're going to gain more as a result of doing nothing on immigration? >> i don't think they think that in the house. i think the republicans want to be able to pass a bill out of the house so the moderates can to home and say -- go home and say, we tried and here's our solution. else it does, it gives legal status to people who were brought here illegally as children. would protect them at home, because the issue of daca is nationally. it's kind of a flash point for many of them. they're's happening is ending up without a solution. alienating thep

right and left and getting attacked by their democratic opponents. in southen to them florida. and a man who is challenging in the central valley, one of the key proponents of this charge backing, who ended up away with it. they're kind of caught in, you flanks between these two in a nowhere position. i should note the house republican leaders are not yet.ially giving up they say they're going to return to this, gonna try to pass this, but with the president at every step,em it's very hard to get these fence sitters on board, because of being attacked by the right for amnesty, and if they don't believe the president is going to be there to protect them politically, it's a tough sell for them. >> yes. it's a mess. thank you for that. now, up next, a crucial election in turkey this weekend could decide the political future of the president. what it means for the nation and volatile region. from new york, this is

bloomberg. ♪ bloomberg. ♪

>> first word news. federal officials are trying to find a place for all the who have beenlies detained. immigration and customs enforcement issued a notice that up to 15,000 beds. and the pentagon says it's to house up tos 20,000 unaccompanied children on military bases. russia is the latest country to threaten tariff retaliation against the united states. this after the u.s. imposed new steel and aluminum, both important russian exports. minister said autos from the u.s. could be targeted, just days after saying the would probably impose duties on road building

equipment. russia estimates economic damage u.s.'s tariffs will be $538 million. the u.s. is russia's sixth largest trading partner, turning over $23 billion in 2017. south korea president moon is in moscow, hoping to boost economic ties between the countries. moon met with president vlad vladimirhe kremlin -- putin at the kremlin. promised moscow would try to settle problems concerning north korea. pence will head to brazil next week and is scheduled to meet with president tenner on tuesday. one of the key topics will be u.s.'s commercial use of a rocket launch site, whose makesity to the equator it inexpensive to launch rockets. bloomberg has learned both sides made concessions, and

progress is being made on the deal. the brazilian defense ministry estimates the base could generate revenues of up to $1 billion. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. is bloomberg. >> let's get a recap of today's action here. the dow breaking an eight-session losing streak, around for a half percent gain. the s&p 500 up just about fifth of a percent. and the nasdaq, the unusual outlier. we saw increasing weakness. amazon lower on the day. microsoft taking a hit in video. some of these high flyers that we have been watching. the games on the s&p, coming from the oil sector, raw materialher stocks. >> "what'd you miss?" presidential election takes place soon.

--ogan is hoping the economy is hoping that the economy being will win him votes. let's bring in michael, the founder. michael began his career in turkey and he joins us from london. us.t to have you with just explain how critical this president, the particularly since he's pushed for the country to transfer from a primary parliamentary system to a presidential. enormous for erdogan. he's been fighting for this for years and years. the presidency in 2014. but it was an unempowerred presidency, after many, many attempt, allcoup these sorts of things. he forced through constitutional changes last year. lose thz vote, he loses everything, because all the underwill be consolidated whoever wins this election.

there's no plan b for erdogan. there always has been. but this time around, everything is at stake. the real chances that he would not win? >> well, i think it's very credible. can go to a second round. if this were a level playing field and there was a strong opposition candidate -- in this case, there seems o to be -- it very possible he could lose, because there's always voter fatigue, the economy is particularly well. but it's not a level playing field, as we know, because of the state of emergency and the control of the media. and still, it looks pretty razor thin. made a tactical gamble and i would say a mistake -- it may mistake, butbe a the threshold move to 50%. and he almost never gets 50%. he always gets in the 40's. so because of that 50% scenario, there is a where he could lose this. but we'll know soon enough. >> aside from the lack of level that youield described, is there any risk of

voter fraud as well there? be -- if heg to does indeed win, is it going to as a credible result by the international community? >> well, it's less important international community thinks and much more important what the turkish population thinks, because in the end, if there is a win and there's no astability and protests, it's win. and there is a huge voice in turkey against erdogan. it may not be a level playing field, but there's a super has a opposition that voice and is not afraid of expressing that voice. becomes anw, if that issue, and that's one of the things that erdogan would have weigh -- if that was the only way he could win this election, you never know. maybe it's one of the things considered.e but there's risk associated with that, because you can't take it there would bet no public backlash against something like that. >> it's interesting. chart the path that

turkey has taken over the last and years in particular, the political instability, the coup we saw a couple of years on the mediakdown and on opposition in particular, solve some oftion that uncertainty and the volatility either way? either w he wins and we see him hee a five-year term, or if doesn't win, we move forward on to something else and we sort of some of the uncertainty we've seen in recent times. >> i think you've hit it. way i see it. the a lot of people think there's going to be problems almost no matter what happens. of the --now, one erdogan has been so passionate about taking control this way. been driven by this goal, really since the protests the corruption allegations, all the way back in 2013. a constanten electoral battle. we've had so many elections and much volatility, because he has been extremely short-term in

2013.inking, really since if he wins this and there's no backlash, he will take a five-year-- he has a view at least. there won't be a serious election for another five years matters and that should, in theory, change his thinking. strong casee's a for him to take a view that will to rebalancenomy and for turkish bonds perhaps to be amongst the best performing to year end. you don't hear that often. but i think there's a very credible scenario. if i were his advisor, even if i were a fan of his and an advisor his, that's exactly what i would advise, after he wins the until now, i up wouldn't, because he needs that short-term victory. ablet's say he wins, he's to consolidate the power he'd like to. he can finally start to take a horizon on domestic political matters. what, from a policy standpoint, does that actually look like? what will that allow him to do?

>> absolutely. is thet important thing lifting of the state of emergency. he should have lifted this long ago, because the merits associated with it moved beyond the post-coup environment and more about securing this victory. and if he doesn't lift the state of emergency, it will be extremely telling. and those bears that think erdogan is brand damage permanently will prove vindicated. but if he lifts the state of aergency, that will send strong message that things are changing, because even if he judiciary,lot of the at least there will be a judicial process and you take some randomness out of the equation. but most importantly, the stimulus has to come to an end and the central bank has to be left alone to its own devices. the practical reality is that if a five-year view, and if he doesn't rebalance the economy, there will be a crisis that destroys him politically within that five-year period. so it will be against his to try and continue to

stimulate all the way through. take thisdes not to approach that i'm mentioning and continues to micromanage the economy and try and defy global market expectations, i think there will be a crisis and i think there will end up being policy response. and what i mean by that is something that is an effort to turk's vulnerability, which is the corporate forcible way, in a that the market doesn't like. that is something that would be the road. it doesn't need to happen immediately. but if he doesn't rebalance, i it's almost inevitability. >> that's the crux of this now, michael, for investors. out, you know, markets don't like a future president that goes he's gonna the central bank and he's reiterated that again in the last 24 hours. what is the probability that he goes back to being what he was thehe beginning and he left central bank alone, allowed his

economics team to deal with the equation part of the and the economy, and not be so hands-on and repressing them way that he'se been so recently? iswell, i mean, he already in control. and what has happened when push central banke, the has hiked significantly. but the brand damage associated saying i willly have more control over the central bank after the election done.ready but i think -- keep in mind that narrative, what it speaks of more than anything is the lack of quality advice that he's getting. he's surrounded, of course, by are extremely loyal and saying yes all the time. so my idea of what makes sense think, might not be comeucommunicated to him, becaue people are afraid to push him to make difficult decisions. fact that the central bank acted, i think, with his full acquiescence, even a preelection environment,

currencye realized the weakness was a political liability. if turkey is going to rebalance, it needs much less consumption lot more exports. the only way you can force that consumption and improve confidence. you can't force exports to increase. so it still might not work. but that's the only credible way for turkey to get out of this, stop that stimulus that artificially distorts over and over and over. unsustainability of turkey has been very clear for a long time. now we're at a stage, though, where erdogan's interests, i think, could finally align with investors. question oft a whether he takes that policy choice. >> all right. michael, thank you so much. that election is sunday. hopefully we can check back in with you soon, once we know the whether there might be a second round. really valuable perspective the situation in turkey.

coming up, he ended a successful intog career to speed investing and tech. rosberg, to you 16 -- 2016 formula one champion, next. >> and subscribe to our weekly podcast on i tunes. find our best content. whatever your favorite watchiews were, as you us, listen to some of them over again, over the weekend. this is bloomberg. ♪

>> "what'd you miss?" germany's nico rosberg stunned the race world when he retired the 2016 formula 1 championship. since then, he's been investing in tech start-ups like lyft, and

formula e. we sat down with him to talk about his investing strategy. >> i think they're going to have huge impact on our world, massive. especially once you get more sources feeding the electricity into those cars. it's going to take a while, but it's going to be a huge, positive change and therefore, i've been very much fascinated about that. yeah. and really exploring it and then becoming an investor and shareholder in different businesses that i really believed in. and so far, it's been a great ride. formula e, for example, has had hugee, huge expansion, hike growing there. it's a great time. with all the manufacturers now, yeah, and soon, from a german perspective, going to be mercedes, porsche, fighting each other on these racing tracks. going to be able to have them in our cars, which

we buy in a couple of years afterwards. it's a spectacular time. >> yeah. amazing and exciting that you're involved in it. you're also an investor in lyft. you think that lyft can overtake uber? saying that uber is doing the heavy lifting and thoses able to ride tailwinds. what are your thought? >> i think lyft has a little bit more potential at the moment, to grow. there's a lot of positivity is havingt and uber difficulties in different ways. i see more growth potential. watch. be fascinating to anyway, in general, in the ride sharing space, there is still so go. way to it's just tiny, tiny, if you look at the whole mobility u.s., just in the ride sharing is still very small. potentially massive. very exciting time in mobility in general, yeah. to happenat's going in the next couple of years, unbelievable. >> you're in on the ground level high-growth area.

returning to that idea of impact investing,mission some have been putting it as part of an asset allocation strategy where people do invest in something they feel strongly about. for you, what's more important, mission, the profit, or both really? >> it's really the combination both. it's bettering our world in different ways and at the same time, having the possibility to make a business case out of it profit. turn a yeah. and that's so cool that our world is going to that direction moment. there's so many opportunities that are jumping out. more and more. yeah? real hypeere's a that's coming out. even teenagers are starting to be aware of sustainability about healthy living, healthy food. yeah? it's just everybody. it's a momentum. this is going to be a great time in that space. >> and you mentioned that you racing for 12 years. and i was reading about your career. and some ups and downs, and then

more and more ups. talk to us about perseverance, how you really persevered through those years to ultimately become the world how will you apply that going forward to your life as a businessman? a quick intro in formula 1, since i'm here in the is not that sport big. we have liberty media, who took sport.e sport in my team, we had two racing 1,400 employees working to build just two racing cars. that's it. $400 million budget per team. really a massive global sport with a lot of interest and everything. is extremely high. and therefore, for me to have success in that sport at the highest level required an incredible focus. and i'm seeing that more and often, in the business space. the most successful people, they just live with such an and dedications to the one cause that they're working on. yeah? that's very, very

important. >> that was abigail there with the formula 1 -- or former formula 1 champion, nico rosberg. >> once a champion, always a champion. breaking news from the wall which isurnal, reporting that the securities and exchange commission is looking into whether companies improperly rounding up their quarterly earnings per share. apparently the investigation the absence of the that would, because imply that there is rounding up to five in these various quarterly earnings. for example, if a company has 55.4ngs per share of cents, and then they round it to 55 cents, there's an combination this. again, according to the journal, they're not naming names in terms of what companies are investigation. >> i guess if earnings are really being honest, there could predictable distribution, all the way through nine. if you have a missing one, then that could be -- that's a forensic technique, to look for

of numeralsbution and numbers as a sign of manipulation. sounds like an interesting investigation. >> we'll bring you more, if and when we have it. from new york, this is bloomberg. ♪

>> "what'd you miss?" brands are trying to tread the line between comfort and slumminess. more is reporter kim. kim, i mean, is this sort of the wave of athlete leisure? we've seen that wave. wear, asave commuter it's being dubbed. >> workplaces have been becoming a very longfor time. so go all the way back to, like, the 90's with business casual,

the dockers, khakis, and just a button down shirt and maybe a blazer. now, with athletic wear becoming so prevalent all over on streets, coming out from the gym, it's just natural that it will kind of into the workplace. >> jim, i have a pair of khakis you sawone would -- if me wear them, you would say, he's just wearing normal pants. really comfortable, kind of stretchy. is it possible that i've inadvertently bought into this and not know it? >> it is possible. but at least they look like khakis. what this newf commuter wear is for. it needs to manage temperature, stretchy, comfortable, while you're going to work, but also look like it's a regular blazer pants, once pair of you get there. >> completely sidetracked there, slumpiness. i've never actually heard that term before. creases.

this commuter wear, it drives me completely insane. can see this. it also plays to the guys that to increase the leisure wearete here, if you can take something that's generally worn in the it's a sale gym, opportunity surely. >> it's an everyday wear kind of days a week. if you're selling athletic wear, you can only sell it to people gym or on weekends. but if you have the workweek, whole new set of sales. >> presumably what has allowed sort ofhis are technological advances in fabrics. that's one of the things that fueled the whole boom, that you have these synthetics and you can make them look like khaki, which is how joe was taken in. better. they do feel they manage heat better, things like that. >> imagine all the incredible like nikeat companies

and under armour are making for torks wickl athletes away all -- to wick away all that sweat. if you can infuse some of that in a practical way in regular clothing, then, you know, when you sweat at work, it won't feel as bad. it will wick away the moisture. just -- it can't just be athletic wear at work, because it's made for a different purpose. made for taking on tons of moisture over a short period of time. this needs to last all day and be comfortable and appropriate. >> from a business perspective, companies moving towards clothes that look like workwear or the companies t doctors of the more, whatever, moving towards more comfortable thing? >> it's the leisure wear. this market and they want a piece of it. >> do we have any information on how well it's selling? buying it? >> one of the apparel brands we talked to is an athletic wear

brand. but their top seller is their commuter pant. >> hmm. >> so apparently something is working. ha!a >> hey, joe? he's already there. i'm not...one trend >> thank you very much. oh. about -- it's a reference to yesterday. >> coming up, what you need to know for the week ahead. this is bloomberg. ♪ bloomberg. ♪

>> "what'd you miss?" stocks finishing the week lower, although they got a little pop comes to least when it the dow, getting some relief and the s&p 500. the nasdaq, though, in the red. this.miss on sunday, as we talked about, its presidential election. >> and i'll be watching the banks. second part of the stress test, thursday. on thursday, the e-summit taking place. talk.bt, brexit >> indeed. show. all for this bloomberg technology is next. >> have a great weekend! this is bloomberg. ♪ two, down, back up!

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bloomberg technology. some white house officials try to refill -- restart talks with china before the first wave of tariffs kicks in. tech leaders are starting to speak out about a trade war. at deep dot into new emily sources. -- energy sources. theover the ball out after departure of brian krzanich and intel ceo.