the korean peninsula since the mid-1950's. to suspendthe step several the largest exercises as a good-faith measure coming out of the singapore summit. to suspend this time any more exercises. mark: in june, president trump suspended the game saying he believed north korean leader g -- kim jong-un wants to get it done on denuclearization. the president added i do trust him. at a united nations security council session, the humanitarian situation in syria, britain gave a strong denial claims thatsian british special services were involved in plans to help syrian rebels launch a chemical attack in northern italy province. >> the myths are just defensive ity gave a briefing in which

has said," by members of its own administration, that the united kingdom and white helmets were preparing chemical weapons attacks against the city -- against the people. i did not use the word, gore my press briefing. i said that even by the egregious standards of russian propaganda, this is an extraordinary allocation. mark: ambassador pierce added the claim is a smokescreen for a possible impending attack by the syrian regime once again by its own people. investigation ordered by puerto rico's government estimates that nearly a result ofdied as her camera reappear the finding was issued today by the school for public health at george washington university. contrasts sharply with the official death toll 64. the storm hit puerto rico last

september. global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪ lisa: i'm in for scarlet fu. joe: i'm joe weisenthal. caroline: modest gains for the u.s. claiming onto the record high as does the nasdaq. joe: the question is what did you miss? caroline: the ball is in canada's court. canada is looking into the terms of the trade deal. >> a silver lining in trade tensions.

maybe a good thing for the economy. we talked to the pimco cio in the next hour. and president trump accusing google playing dirty. saying the company mixed search results to get preference to the stories about him. did you miss? a canadian minister of foreign affairs is in washington making to keep canada and the rebound and remained north american trade agreement. after they closed a rudimentary take on the host for the united states to the north. >> we are as canada consider joining in the agreement already reached with mexico. basic asset we have to let remains to be seen is how close the canadian attitude is. >> let's welcome school policy studies professor from ontario,

mr. wolf, thank you for joining us here at have you got much optimism about canada being led in on the part -- let in on the party? >> certainly in washington right now, talking to the other teams to find a what happened yesterday. it is not clear really what happened. as far aso agreement a full trade agreement. toico the united states not lay some obstacles in the way of renegotiating nafta over the last several months. joe: will you look at the framework they got, does it look of saying for the difficulty that we can talk about later on, something that canada will be hanging onto? textst of it was in the

yesterday. puzzlegest piece of the of was rules of origins for automobiles and canada posits position has been closer to the u.s. position and mexico. will want to look closely at the fine print to see how the new -- new rules would work. nothing in the auto rules would be difficult and most of the are basically what had been negotiated in the last year. more problematic for canada is what was not in the pieces of paper we saw yesterday. >> one thing i'm struck by is the u.s. and mexico negotiated alone first without canada. i wonder if that sets a tone that could be problematic as the agreements get negotiated? >> negotiating alone was a little problematic but not what they negotiated first of these started last august and they were trilateral most of the way.

thing. common they go off to the room by themselves. it is mostly what happened in the last month. the only thing that is surprising is the way they announced that they have an agreement, him thinking they rename it and maybe they could have separate agreements with mexico and canada. a lot of politicians in congress and u.s. business leaders said no, you shouldn't do that as a matter of economics eight cannot do that as a matter of law. joe: is a plausible they have -- the chum came to an agreement that they had some reason to believe it was something that canada would

agree with? >> ethic the mexicans were certainly keeping the canadians informed. if they had been heading toward anything that would be a disaster for canada, they would have told the canadians and taken it into account. there is nothing deeply problematic. is that -- will there be a perceive cost if they that canada ultimately goes along for trump wanted? cost -- there may be a cost but we're not there yet. some asks in the negotiations.

the u.s. position was strengthened by american rules. we have to see this week what that entails. canada had some real concerns about the u.s. position and we will have to see how that comes out. if the american stick to some of their strongest hardline positions they have adopted in the last year, it is not clear that canada could agree to be part of this agreement. because of that, we do not know .ow much flexibility a resolution at least preliminarily, what is the worst case scenario at this point for canada and its economy? scenario is-case probably that we walk away from nafta.

walking away from nafta -- nafta itself would not be disastrous. what would be as if president can't get punished canada with tariffs on automobiles. be unpleasant for canada. it is probably not likely. it would be quite unpleasant for the united it's as well. -- united states as well. quite some seems as though a lot of the optimism is baked in and euphoria is dying away. the canadian dollar still strengthening. optimism that a deal would get done. are you generally more optimistic than pessimistic that canada will have a good deal for the country done when it comes to nafta? >> i am more optimistic than pessimistic. my wife says i'm always too optimistic here nothing there are grounds for saying that in this circumstance. when the negotiations broke off last june, i'm many difficult issues, negotiators said we need a week. i'm sure it is still the case.

many fact sheets issued yesterday could have been issued in june. where the three sides have to , whether theunds united states simply doesn't .are >> coming up, italy's government wants to be on -- the european union could stand on its way. this is bloomberg. ♪

12%hares jumped as much as today. a wall street journal report of the operator, please ahead and kfc restaurants, rejected a buyout offer for groups led by health capital. a 20% premium over the close yesterday. after italmost a year missed analyst estimates. a solid second quarter. better than expected. the swiss money manager will start paying back investors in bond funds early next month. they stunned investors over allegedly -- due diligence. 40% of the money am a hedge fund will be paid out depending on market conditions. not as much as you want to hear.

that story to me has legs. the idea of, what happens when you get mass withdrawals and you have to free to fund. this is an even a good time when theations and markets effects -- not only the money in his maiden funds, $2 billion so far being pulled as a money manager. >> pretty remark. >> fascinating times. government is a large investment spending partner. let's bring in fred. talk about the loggerheads

we have here at the moment. we understand italy has been flushed with debt. one of the most debt laden countries in the eu. they do not want to be exceeding .% of gdp in the eu rules overall, are they likely to do so? >> the five-star movement coming together after -- after the election in march, it is really a three-way coalition. one of them is the finance minister. we have a very entertaining, as an outsider, between the populist leaders, who will up withu rules and come the spending plan. hours later, you have the technocratic finance minister who says, no, no, no.

promise and italy promise they will do in the past few years. know wherey do not it will end. part ofaly will not be the european union, will it be considered part of the european markets? >> let's remember the italian economy is the tool economy. is really well integrated in the german supply chain. some of the best mechanical engineering companies, in europe, pharmaceuticals are booming. there are parts of the country well. booming and doing but there are parts where poor andons are justice is low. that is probably more comparable

to poorer countries in europe than to germany. joe: we have seen the yields on a tynan government bonds since the election. during the acute crisis several years ago, that spread between italian and german debt was something, has the feedback loop -- feedback -- put pressure on politicians to rein in what they say or what they say they will do that might because anxiety to the markets? >> it is a little different this time and that is because populist leaders are saying if the spreads are high, the ecb is not doing its bonds. now, weback then and have ecb in quantitative easing

and launching whatever it takes for the transaction for limited quantity if needed. the backstop is the ecb. the ecb should step in for bond yields. that is the dynamic. the bond yields are going up and measures are taken. wonder when the leaders would go ahead with that. lisa: thank you for your perspective. the top of the hour. punished by investors even at the outpaced p are chairs at one point today fallen the most in a year. around 5.2%.

>> yes. they were down about 8.4%. have to look at sales, they have a chart of that. i want our viewers to look at this. he will see what part of the problem is. i wantthe next quarter of the forecast, this is the company basically on the brink back in 2013. they have quite a turnaround. times are still going to be good but we will not grow quite at the rate we used to. >> you see the forecast not living up to expectations. >> and that is part of it. the ceo gets a lot of credit hear the stock has done well. up about 20% prior year to date. think about this. it is a company, the last

national electronics chain we have here. he would have thought by now it would have gone the way of a block luster. good jobs done a transitioning into services and other things. not just reselling. >> stocks philip almost 20% on the full-year. retail,ther side of the the company is making the case to investors that it is worth it. ♪

>> 2:00 a.m. profitability for the next two years. for more, let's bring in broome -- bloombert west is reporter. our investors think it is worth

it because the stock came off today. are a big holiday campaign will work this holiday season. more portly, they are renovating the store. >> also in the earnings, it is clear there is a shift from foreign buyers with more of a focus on domestic buyers in the u.s. what does this tell you about the wealthiest in the u.s. there was no hype for tiffany. people just didn't go. their flagship store it will create some buzz.

so much traffic goes by there. >> what are they doing to make it more friendly. >> one problem is there are too many people in that store. massive lines that you cannot check out and no one likes that experience. they are expanding the retail space significantly. there are offices in that building in the flat -- in the -- store.tory >> it seems to be that the chinese are not in europe. sales are up 28%.

it pretty high price point. sydney's betting they will do that. a high jewelry collection, is it goes to a 700 thousand dollars >> what if >> what if this -- sell expensive paperclips. every objects objects

thing. home decor is not a big part of the business but if you make a tin can -- yes, what other retailers must be benefiting from the fact that more americans would be spending this money on the objects? >> things are starting to work could listen up, thank you. i look at that. we are basically flat. go intoannunciate as we the close. it opened above that level for the first time and this morning.

we have the nasdaq still trading about a thousand, up .1 percent. meanwhile, the dow jones currently flat up 2.5 points. we will help break it all down. this is bloomberg. ♪

[applause] caroline: "what'd you miss?"

stocks struggling to hold on to their gains. the s&p 500 clinging there to another record high. ?he nasdaq caroline: i'm caroline hyde. joe: and i'm joe weisenthal. welcome to the closing bell coverage through weekday from 4 p.m. to 5 p.m. eastern. caroline: we begin with market minutes. let's check in with the majors toause the nasdaq managed push slightly higher than s&p 500. aboutw jones is trading 26,000 which is another record. lisa: let's begin some of the specific movers. we've been talking about best buy all day. forecasted earnings for the third quarter where the guidance missed the lowest animist -- analyst estimates.

amd, really interesting. it is down incredibly. day, and nearly $1 million of volume. alphabets, the parent company of google, down nearly 1%. this company in the crosshairs of president trump for its search rankings. joe: let's take a look at the u.s. bond market. not a ton of action, but retire again. we see the 10 year yield back up 2.6788 into year as up to -- is up to 2.67. caroline: yield went into the dollar overall which is why the selloff has been limited coming off of the lows. that is feeding into the canadian dollar. the looney rose the strongest and more than two months.

betting candidate will eventually reach the steel with its two southern neighbors. that is u.s. and mexico. let's bring you what is happening with the mexican peso. we sold off in terms of the strength that we saw yesterday. the optimism on a bilateral deal and we have the dollar 1.7% versus the mexican dollar on a day of dollar weakness. the mexican peso is something to watch out for. let's look at the emerging market space. check out what happened. this is happening on onshore yuan versus the greenback. this is the most gain in 14 months. i'm also looking at the lira which had a down day versus the dollar. the dollar is pushing 2.4% higher against the lira signaling that people will not get the reforms they need. theresa may says it is not the end of the world because we got

a huge deal out of the eu. joe: oil and gold finally. not a ton of action. oil is flipping a little bit i had of inventory, but not that big of a deal. gold is down, but still hanging in there at $1200 an ounce. those are today's market minutes. caroline: "what'd you miss?" investors waiting for the details of president trump's decision to take a trade deal with mexico leaving out canada. iversen said in a bloomberg interview that moderate take -- trade tension is leading to slowing of growth and that is ok. our next guest, mark, do we agree with this bet we see a stand and the wheels pushed by dan being a good thing overall or overheating? >> what we think is an economy growing at 2% real growth which is now growing it close to 3%

due to the tax cuts from the fiscal stimulus. we've got to record profit growth, but if you look forward a year, a lot of the stimulus will fade. we have seen interest rates up, tenure rate back up about 80 days -- 80 basis points over the last year. we have also stream -- seen a stronger dollar. these concerns will dampen investor sentiment a little bit. naturally, the economy will slow. we are growing at 2.9% this year and will probably grow at 2.2% next year. that will ultimately cause the fed to slow down the pace of tightening. lisa: perhaps the trade tension has slowed down the pace of moving around in the bond market. it has been a really boring quarter or u.s. bonds. the most boring with the tightest trading range since 1965. up for as this set us breakout and, if so, where do yield go next, higher or lower? mark: i think we will probably

stay within the range. the reason why we have been in this range is because inflation is picking up and doing so very gradually allowing the fed to normalize rates to a more neutral level. they are basically tightening very gradually. it's like a goldilocks situation where the fed can normalize rates, you can have inflation move moderately higher, yet you don't get interest rates to move meaningfully higher because the economy is not breaking out. it is growing well, that inflation is under control. joe: you hear a lot of people potentialat even the concerns about inflation, even if they are not breaking out now, and given the narrow spread, that it does not make sense to go for a particularly long duration. you're getting paid about the same at the short and long end. it feels like this is such conventional wisdom. where do you stand on this issue

and doesn't make sense to reach further on the spectrum? mark: overall, we think it makes sense to shorten your interest rate exposure a little bit simply because the fed has raised short rate, and as they did, it made maturity bonds more attractive relative to the curve. all things equal, we think high-quality bonds make increasing sense here. rates have backed up almost 1% over the past 12 months. we also think the earnings momentum and growth momentum in economy is close to peaking. that means the equity markets will likely face a little more headwinds going forward. to is not a bad time consider moving out of u.s. equities into high-quality bonds. caroline: mark, you're talking about a flattening yield curve. we heard mnuchin saying he did not care about the flattening yield curve and the suggestions. does it suggest a recession to, or is that out? mark: i think a recession is

unlikely, maybe 10% over the next year. we do think over the next three to five years, it is likely we will have a recession. more than likely, 70% chance. the flat yield curve simply reflects the fact that the fed is able to normalize short-term rates and global capital. the strong dollar, that is coming into support the long end of the curve. we think the yield curve is too flat. we think it will steepen moderately. the big issue we have is that we are running 4% deficit and we are going to be going to 5% budget deficit. that is incremental treasuries that need to go into the marketplace. we think there needs to be a term premium. we don't necessarily think the flat yield curve is a signal recession is imminent. we do think the economy is going to slow from this trend of 3% real to about 2% trend next year. lisa: mark, i'm trying to square

this idea of de-risking and moving assets into bonds and the front end of the curve. this idea that we are in a goldilocks scenario with nothing that will shake the status quo for the foreseeable future, can you explain how those two things fit together? if it is goldilocks, why not belong risk? -- the long risk? mark: you want to take risk when no one wants to take it. it's usually coming out of recession. lisa: but that has failed though. mark: the point is that the economic expansion in the u.s. is very long. we think the fed will have to continue to tighten. you're seeing higher cost pressures feed into some of the companies which is important. that means the fed might need to raise rates. wages are gradually picking up. essentially, the economy is going to slow and we are probably at the profits. the equity market is going to be forward-looking. the best world for equities is

behind us. going forward, bonds will look like a pretty good proxy. they offer almost an equity return, not quite, but you get 4% to 5% high-quality on bonds right now with a third of the volatility. that makes sense to us. joe: we are talking corporate credit, high-quality, picking up extra yield beyond treasuries. mark: we like investment-grade and not agency mortgages. mortgages are still constructive on sectors focused on housing. housing we think is midcycle were some parts of the economy are later cycle. andeally like pipelines, because of the tax cuts, consumer discretionary will continue to do well over the next year. lisa: mark kiesel keep investment officer of global

credit. stay great there. caroline: we have breaking news on hewlett-packard. they are naming a new cfo coming from sprint. he is going to be the new cfo. they're also coming out with a fiscal third-quarter earnings and net revenue is just above analyst expectations. we see that rise up about four percentage points. it seems to be a strong number in terms of the third-quarter earnings share. we are seeing in shade -- trade higher after hours. this is bloomberg. ♪

mark: i am mark crumpton with first word news.

president trump issued a warning to tech companies ring an oval office meeting with the president of fifa. mr. trump said "literally thousands and thousands of complaints have been received." , theytter and facebook have been treading on troubled territory and have to be careful. it's not fair to large portions of the population. mark: an apparent tweets today, the president claimed google search results were rigged against him. puerto rico's governor has raised the island's death toll from hurricane maria to nearly 3000. that is a sharp jump from what had been the official toll of 64. the move by the governor comes following reports earlier today by the milken institute school at university -- washington university. the storm to the island last september. the owner of a texas company that makes untraceable 3-d

printed guns says he has begun selling the brew plants -- the blueprints through his website despite a federal court order from barring him from doing so. cody wilson said he has received nearly 400 orders. a federal judge ruled selling the plans online could impact national security. mourners from as far away as las vegas and miami have travel to detroit to pay their final respects to aretha franklin. they play the sound of her gospel recordings. she died on the 16th at the age of 76 of pancreatic cancer. her funeral will be held on friday. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. lisa: "what'd you miss?" emerging markets on the rocks.

perhaps u.s. high-yield is overvalued. still with us is mark kiesel pimco chief investment officer. bonds withhigh-yield escalating valuations and emerging markets continues to selloff. we have a chart that shows how you are earning the least extra bondsm to own u.s. i your over emerging-market corporate's that have a higher rating. since 2005. does this bonds mean it is time to sell u.s. junk and go into emerging markets? mark: we certainly would agree with reducing u.s. high-yield here. as we talked earlier, we are in the later cycle of the u.s. expansion. we will probably have a recession in the next three to five years. we think high-yield, ridiculously the risk that is part of high-yield, the triple c segments, has run its course. we would be reducing that. we like some of the highest quality high-yield areas, the

double these particularly in the housing related sectors. in terms of where to rotate -- , particularly in the housing related sectors. in terms of where to rotate, higher u.s. interest rates calls capital to move out of emerging markets into the u.s. the point is, a lot of the seller strength, who knows when the dollar will peak, but a lot of that has happened already and going forward, emerging markets may make sense. caroline: [indiscernible] mark: i'm sorry? caroline: where's that select value in emerging markets? overall, we look at have a positive energy. if you look at the supply and demand for energy, globally, even though china is slowing, energy demand is holding up quite well. particularly for oil. if you look at u.s., china, and

other growth, that is going up. we favor some of these emerging markets benefiting from high and stable oil properties. there are companies in mexico, brazil, and other markets. we like emerging-market companies focused on the consumer. when you see higher interest rates in the united states, the consumer is doing really well. in china, the consumer is only 53% of growth and that is likely to rise going forward. the tray concern with china is going to offset that by lowering rates and stimulating their economy. owning emerging markets makes sense with these valuations. joe: i know we are talking about e.m., but in this segment and the last, you mentioned positivity to housing. i'm curious about that because the data is not great. if you look at home builders, not to doing great, slow

increases in the case schiller, -- k shiller. i would love to hear your read on u.s. housing market and why pick up -- why to pick up more risk. inninge are in the sixth of the housing recovery and probably two or three years away from peeking. the reason why this is constructive is the strength of the underlying structure. overall affordability is attractive. the number one reason is low inventories. if you look at these markets, inventories are low, the consumer is healthy, housing is affordable. you really need the inventory to pick up in order to have a problem in housing. that has not happened yet. lisa: which sector do you see as the most challenged? i'm thinking of say telecommunications with high yields and how some of that has come under pressure. is there an area you are seeing? mark: we like the consumer

overall, but we think some of the retail sector has been disrupted by amazon. if you look also, airlines and autos, those are probably later cycle. a lot of that demand has been filled. the big thing we see from a bottom-up perspective, and at pimco we have 60 analysts looking at this, the higher cost at profitability for the sectors so companies are paying more to hire people and there is a lot of inflation, particularly in transportation. the higher costs are going to feed through which will be a headwind for many sectors. more so in 2019 the now. the higher costs are coming in the pipeline. joe: mark, on the question of emerging markets, you said maybe the dollar story is played out. does that mean referring to the local currency then -- deferring to the local currency than? mark: we like some of the hard currency. the other points i want to make

is we will start to see overtime the story has been about the divergence globally. where the fed has raised rates in the dollar strengthened, u.s. rates have strengthened. the story going forward will be the fed having to slow the pace of tightening and you will likely see other central banks raise rates like the ecb and the bank of japan. will preventhat's will prevent further dollar strength going forward. particularly the same rate we have seen over the last few months. caroline: we thank you mark kiesel, pimco cio. this is bloomberg. ♪

caroline: we take you live to the senate floor for you have just seen the confirmation of richard to be vice chair of the federal reserve for four years. momentarily, there will be another vote to see if he is expected to confirmed as a member of the fed on february the first, 2022. this man was a prominent economist and global strategic advisor to pimco. he is unlikely to shake things up. the dollar is not reacting. there we have it. richard confirmed by the senate as the vice chair of the federal reserve for four years. "what'd you miss?" apart from that, italian assets remain under pressure. the tenure bond yield is reaching highs nonsense back in may. his italy somewhere you want to be invested? garrett -- david wade an earlier. earlier.d in

>> the political situation has never been stable. it has 66 governments since post-world war ii. this is the place that tends to be politically unstable, but i would add is also a place that still functions despite the political instability. if you look at what the impact has been on share prices, this inability to come up with a unified government, you have seen an extremely severe downward impact on, especially, the banking sector. one stock we own is probably down in dollar terms close to 30% off of its highs in february and january. despite this, despite the low share price, the business continues to do well. you see low losses trickling down, and at reasonable levels. , theirck of bad loans

capital position is quite good, it is this macroeconomic uncertainty and not the fundamentals, which in this particular case, is hurting the share price. .e see this as an opportunity as long-term value investors. analyze and try to take advantage of what the market gives us in volatility. we believe the market has given us a buying opportunity. we are going to take advantage of this. you have to look through the cycle. you can't be looking day to day, week to week. we look quarter to quarter, year-to-year, three-year to three-year in making these judgment. >> let's take a look at three years. do the business fundamentals come together with the politics and geopolitics in the sense? if the entire in government has to make substantial cuts and go

through what greece did, cannot infect your business fundamentals -- affect your business fundamentals? david: you really have to analyze and look at these things. you are right. in the case of italy, they have a healthy portion, a large portion. not economically healthy, of debt. that to gdp is somewhere near 130%. there are a few things counterbalancing this. one is the public sector also owns a lot of assets, and, unlike greece, they could probably go through asset sales to walk on -- work on that that. number two, and more importantly, italy is wealthy. to gdpvate sector debt is extremely low in italy. you don't see this consumer leverage and business leverage. it is a very wealthy country when you look at private sectors

at the gdp. they do have to control spending, duty reforms, but they need to start growing their economy. the north grows in the south does not and they have to come up with ideas to energize the economy. lisa: that was david speaking earlier on bloomberg. come up -- coming up, google yourself. we have all done it, and president trump did not like the result this morning. what the attacks from the oval office could mean for the search engine. that is next. this is bloomberg. ♪ ♪

mark: i'm mark crumpton with first word news. the canadian prime minister says he has been encouraged by what he calls the progress made by canada's partners particularly on automobiles. the white house once canada to endorse what president trump has described as the north american free trade agreement's replacement by the end of the week. trudeau said he looks forward to signing a trade deal as long as it is good for canada and for middle-class canadians. keepny may take steps to the economic crisis in turkey from destabilizing the region. according to the wall street journal, the german government is considering providing emergency aid to turkey that could range from coordinated

european bailouts to project specific loans. turkey already has dismissed any talk of a bailout. france's high-profile environment minister announced his resignation live on national radio today thing the government has not done enough on green issues. nicholas's departure is a blow to the president emmanuel macron, who has tried to put france as a champion in defending the environment. he has campaigned for environmental issues for decades. lindsey graham has no closer friend in the united states senate than john mccain. ,tanding next to his empty seat he remember the john mccain the public did not know. the man who liked to give his friends playful greetings. >> he would consult with a linzie, i wish you are in my naval academy class. i said that is very nice, john.

you know why lindsay? i said no, john. i wouldad been my class have been stuck in the mud. the more he humiliated you, the more he liked you. senatorrvices for the are scheduled for this weekend and he will be buried at the naval academy in annapolis. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton, this is bloomberg. lisa: let's get a recap of today's market action. a crawl toward a new record. that is a sad crawl, but a crawl nonetheless. we have records that the s&p 500 and nasdaq. dow jones is still below this year's high that it made in february. a selloff in the bond market as well in this sleepy august. caroline: some of the tech

names, and "what'd you miss?" with teching issue companies today. the president took to twitter to attack google saying republican conservative and fair media is shut out -- is straight out you legal. google and others also pressing voices of concern and hiding information and use that it is good -- and news that is good. this is a very situations -- very serious situation and will be addressed. alphabet,good googles parent coy is down 1% on this. any truth in the matter? googles parent company, alphabets, said there is in no way -- alphabet, said there is no way in which we see or influence what is seen on the

search engine. david: this is really has one that it has no objective basis. it was a highly amateurish research project which has been debunked all day. many people are trying to repeat that experiment and have found quite the opposite result and that conservative news was being favored. on the most bear facts, there is no basis. what we have seen before is that the president and others on the right are willing to be critical of the media in hopes they can push it in their direction. sometimes it works. intimidation works. joe: so they are playing the ff --a sickly -- re playing the referee basically. we have outsourced an incredible amount of power to private companies to have a real say of who gets to say what in the public seen. david: as you know, this is one

of my big concerns. this applies to facebook and google, and other companies. but, particularly those two. the public sphere is now dominated by those companies. particularly, facebook, but town square is what i like to call it. it's wrong a commercial company could control where speech is happening in be able to make judgments about what is excepted and not. google, to a lesser degree, is involved. that is a problem and needs to be remedied somehow. the problem is no one has a good way to remedy it, least of all the president. nothing he is doing is leading to a new wants policy discussion that might help us solve the problem. lisa: i think this was something brought up today threatened many discussions people have had about this, google has a black box when it comes to how they rank different stories. david: so does facebook. lisa: so does facebook. is it important for that black -- bd be the mystified

mystified to understand -- be d emystified to understand what it is and. itid: once it is demystified will be played even more. that they explain how their company works, it will be exploited by evil people. what i believe is that maybe we need intermediary transit -- transparency where there is a global agency or something that does not exist that gets insight into how the systems work. that's might be the way to do it. maybe there needs to be some citizens court. that has been proposed by mark zuckerberg himself. caroline: at the moment there is no citizen court, but lawmakers will be going in front or to capitol hill to talk about russia. will the public hearings help or

muddy the waters further? david: i think it's good these people's feet are being held to the fire. it will be beneficial. i'm afraid, given past experience, sheryl sandberg will not be candid. she has not been candid about this and repeated public appearances. jack dorsey tries harder to be honest and constructive, but it is hard given the concerns of congress. people get a ton of questions about this issue we are discussing now which is right-wing bias. they will have to come back with a reply on that. a lot of questions from congress are not intelligent. they don't have a deep grasp on how the systems work, but i think having discussions in congress is beneficial. better than nothing. joe: the issue of "shadow banning" on twitter seems to be a myth. i've not seeing compelling evidence that that is a real thing. we have seen a lot of people called to twitter to remove info

wars and other particularly inflammatory actors from their platform. what would you advise jack to do when he gets these calls to remove certain people for going over some line? david: twitter way more than facebook has operated on a principle approach, but they don't ban people except in the most egregious circumstances. twitters out rhythm is, it could be less algorithmic which is meaning it is a little more transparent. the real problem is facebook and google. these are black boxes. i would not be surprised if, in response to the criticism from the president today, google does tweaking. nobody would know. lisa: hold on a second. what you go back to said there should be an intermediary act to check out the black boxes. ,hat makes you think regulators

as you said do not ask the most intelligent questions, or another group could be more -- could be better at it? david: i believe we can find a way. we are living in a new world where global companies have unprecedented power that is not -- that has not been taken stock of at the national or global level. we have to have that dialogue. i don't know the answer, and i paid close attention to the topic and have not seen a good answer coming from anywhere. a lot of serious people are thinking about mechanisms that might be greeted. maybe we should go back there and pull the plug on the facebook servers. david: some people say maybe that will be necessary. i hope not. caroline: should we see a selloff enterprises? david: yes. why do you think facebook dropped $120 billion in one day. their growth and profitability were slowing in large part because of the measures they were taking to reduce

politically distorted information. it will affect the stock prices of these companies. lisa: facebook climbed up pretty close back to its high so it did not exactly -- david: that's why i'm not taking it that seriously. lisa: david kirkpatrick, thank you so much. very provocative. joe: and we got to the whole conversation and no one said anything about blockchain. that's very impressive. [laughter] lisa: dream big joe. nasa is seemingly coming to a close and jimmy carter discusses the future of america's relationship with her neighbors. this is bloomberg. ♪ ♪

lisa: "what'd you miss?" as president trump seems willing to end nafta and replace it with a new trading arrangement, a former president is worried about the consequences for the u.s. and neighbors. jimmy carter spoke to us earlier today. i personally helped nafta get started and was proud of what nafta has done. i hope when they do replace it with something, it will be fair to both countries relating to canada. nafta was and i hope the new arrangements, whatever they might be, will be very successful. >> you use the word fare. in yourresents fairness own views when it comes to trade issues? your talked about the lumber industry and -- in canada and

the issues. there are a lot of issues on industries associated, but what do you think a fair deal looks like? >> the minor adjustments like september and november, -- like lumber can be handled by the organization of groups. we want to make sure it comes are good for both countries. they also have specialist who work on them. the overall arrangement between countries has worked out by the world organization. i don't think there is any doubt ,n organization like nafta was which has been in operation for a long time, which was beneficial to the united states, i think it was beneficial to canada and mexico. i hope the future will be the same. >> are you optimistic at the end of the day that some kind of new trilateral deal can be reached

between canada, mexico and the united states? >> that is my hope. i knew trudeau's son -- i knew justin and he and i were good friends. i pray that his relationship between all of the people of canada and the united states will continue on. we've never had a better friend supporting our awfully changing policies more avidly than canada has. we need the same thing in the future. >> you mentioned the relationship you had with p are trudeau and you lead the delegation at his girl -- pier trudeau and you let the delegation at his funeral.

>> my high school teacher used to tell me we must accommodate changing times but take the principles that never change. that is one of the things that has to be done both in politics and trade relationships. we have to accommodate the other allowances or sometimes yield on a particular point. fairness and equality, those principles, never change. >> at the end of the day, how do you think the trading relationship, the friendship in canada and the u.s. will play out in years ahead depending on what happens with something like nafta? , thethink, overwhelmingly people of the united states and

canada have an international friendship and cooperation with each other. although we might have setbacks on occasion, i think that that friendship comes through. i have no doubt in future years the difficulties we see right this moment between prime minister trudeau and president trump will be dissipated. i feel sure about that. if both sides cling to those principles are described, accommodating changing times, but keep the principles that do not change, i think they will prevail. >> i want to talk about the passing of john mccain. you have spoken about that in the last few days. in remembering him, you talked about his commitment to the truth. can you elaborate on that? wherethe naval academy john mccain and i attended, the preeminent duty we had was to

tell the truth. if we made the slightest statement that was not factual, it was an automatic ejection from the naval academy altogether. if we said we did not step on the grass and an upperclassman saw a step on the grass, we were gone. telling the truth was one of the most preeminent things that prevailed in my early life with my father and also particularly was nailed down in my consciousness when i was at the naval academy when i ran for public office. that was the main promise i made to the american people. a lot of falsehoods have been told about the vietnam war and that. i would say too little groups who would support me, for president, i will make a misleading statement to you, don't will point me.

-- don't bull point me. the bike local movement is spreading the on upscale restaurants -- caroline: the by local movement is spreading beyond the upscale restaurants. that is next. this is bloomberg. ♪

joe: "what'd you miss?" using locally sourced ingredients is the purview of trendy restaurants, but banks of increased shipping cost, everyone is buying food grown nearby. piers morgan for our -- from our consumer reporter. leslie, i really like this story. we are seeing consequences in the increase from trucking costs to how and where restaurants are

getting their food from. >> definitely. it is now lesser to restaurants. they're seeing higher cost us everything from apples to zucchini. in turn, they are sourcing more stuff locally. that has been on trend for a while, but another reason is making them do it as well. caroline: how much is that driving up costs just from the smallest sense? is growing local that much harder? leslie: it is a little tougher logistically to find someone who can source you grains in chicago in the winter. especially for some of the larger chains. they just can't get the supplies they need to really go local. more and more, they are looking to do that as shipping and logistics cross -- costs go up. lisa: let's delineate what we're talking about. is going local, going to the

small farm in an upstate area, or is it going but we have farms in california and new york and we will move more towards those and adjust our menus according to what they have? is that what we are talking about here? leslie: i think it is both. they are trying to get more stuff from close by -- as close by as they can. if it is a nearby small farm, maybe they are going there, but at the same time, if it is an east coast chain, getting something shipped from the midwest is getting a cheaper than having it shipped from california. joe: i noted -- i know this is not directly part of this story, but restaurants are getting hit by all kinds of costs, labor costs, higher minimum wage in some places. from your reporting, do restaurants and they can pass these costs on or do they have tripep doing things on the

-- on the supply side due to lack of pricing power? leslie: largely, they already are passing these along. they have kind of run into a wall and do not have much choice. maybe they're not passing the entire cost increase through, but they definitely are passing the price increase along. your sandwich, soup, it is all getting a little more expensive. lisa: going forward, what is the recourse here? do we end up with these local farms, new infrastructure, or does this add pressure to the trucking industry to get things together? leslie: long-term, it's hard to say what will happen. short term, we will have to pay truck drivers more and more money until it entices enough people to get out there and do the long-haul drive. all the way from california to new york. long-term, i think we're going to see a lot more local sourcing, a lot more farms in

urban areas, even indoor grown stuff. that will all happen at some point i think. caroline: leslie, great story there. coming from the u.k., the real source of pressure was the minimum wage coming up and they're looking toward technology to cut out the servers. it's interesting here they are finding new products. lisa: i have to wonder people are also trying to cater to this local trend. it sounds good and they can check prices up. i don't know. joe: it's a win, win, win. lisa: that's what i'm thinking. it's hard to be so skeptical but it is interesting. an indoor grown area is fascinating. have you seen those articles? joe: yeah. are they really happening though? caroline: they are amazing. yes. i don't know how many there are, but they are real. they are growing all this greenery. joe: remarkable.

coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪ g. ♪

caroline: "what'd you miss?" it was another set of record highs, but only at the s&p 500. the nasdaq is also trading at an all-time high.

i will be looking at more economic data. am. gdp numbers out at 8:30 and numbers or pending home sales, they come out at 10 a.m. eastern. we will continue -- will we continue to see more weakness? that is all for "what'd you miss?" caroline: "bloomberg technology" is up next. joe: have a great evening. this is bloomberg. ♪

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emily: i am emily chang in san francisco. this is "bloomberg technology." another conflict bluing -- brewing. google response to criticism that there search results they were the left. and state-sponsored misinformation campaigns ahead of the u.s.and state-sponsored misinformation campaigns ahead of the u.s. midterms tipping off