growth. inflation numbers enough to allow for the cycle to continue. scarlet: there is the closing bell. 500dow rising and the s&p at the best gain this month. eight out of the 11 industry groups are moving higher. no sign of inflation threatening this rally. joe: nothing to derail us. sarah, we saw the green and chips recovering. one area a lot of people were but has been weak is homebuilders. ically see them defining naturally. >> we have seen weakness with homebuilders all year long. there is continued weakness over

higher labor cost and material cost. right now, what is coming into play is people are saying the hurricane is coming into play. usually that is a boom for these stocks. he saw a strength when hurricane atrence hit before -- was four. now it is category 2. caroline: there is always the worry about the hurricane today. matt, what else are you worrying about 20 see the s&p 500 in the , and across the board, money moving into equities despite? matt: in terms of what to worry about, there is plenty to worry about. caroline: but the market does not show it. matt: the market is following earnings. like wetion is tame talked about, the cycle can continue at pace. as the earnings go up, the market will go up.

scarlet: jpmorgan reports on october 12. this will be the quarter you need to pay attention to the anecdotal and what the companies say about input costs especially. what kind of input cost risk are you pricing? matt: to your point around guidance, that's will be very important. we will look and learn a lot about trade and input costs. we are factoring in some impact from the trade battle that is going on next year, but just a few percent. when you run to the numbers, the impact to s&p earnings is not huge. joe: sarah, what else caught your eye in the market? we talk about the homebuilders, and what else was in that that we should be watching? sarah: the semiconductor stock is interesting because we have seen such media weakness falling to the 200 a moving average been the, but amd has

exception. amd is the chip stock in the red. it was probably just overbought. it was approaching 90. we are just seeing that divergence today. joe: you don't want to be the analyst to upgraded their. speaking of -- there. speaking of the turn, when will we see that? when is it time to buy? how do you play it? for strong areas? you look for the beaten-down

countries? matt: it is important for our clients to protect capital so we will go to the strongest markets in em. particularly agent is what we like. a general region we would say china, korea, taiwan. india is even -- caroline: india has been beaten up. matt: we take a very long-term view and this gives us opportunity to average in at attractive valuations for the long-term. caroline: how about the diversification in terms of not just em but what about cross assets? matt: em credit looks very interesting. we have been adding to our em credit areas. in terms of emerging markets, too much diversification is not a good thing either. we doourage you and what for all clients is focused on all clients -- all areas of asia. joe: this year with u.s. outperforming, everyone must wish they are less diversified. matt: they do. we should not look at this as something accidental. when you rank countries in terms of vulnerability, this is one episode in a series of episodes for the region. it should not be unexpected. scarlet: sarah, talk about the

central-bank action from the ecb. did that play into anything at all or is that business as usual? sarah: with the ecb and boe, it is business as usual. the eyes were on turkey. there is a lot of uncertainty about what the central bank there would do and the president is coming out making it seem like we would not get anything but then we get a raise up to 24%. we saw the lira react. that was where the action was today. joe: which was more important, the increase in interest rates from the targets central bank or the fact that the central -- turkish central bank or the fact that the central bank went with her to juan and showed independence? matt: both were important. [laughter] shows we can put an end to this episode. all the worst fears have been taken off of the table. scarlet: what keeps you up at night? matt: inflation.

too much would be an issue. geopolitical worries are one of the -- we track about 20 or 30 indicators globally. one that is hard to quantify is what could happen from a geopolitical stabilization standpoint. inflation and the end of the cycle really. matt, and our thanks to sarah as well. let's move on to one of the companies reporting earnings and one month. jpmorgan. we got a warning from the bank saying third-quarter trading revenue will decline from a year ago. let's bring in michelle davis. is so important because it sets the tone for the rest of i financials -- rest of the financials. michelle: those at the financial conference set the tone and make people think perhaps the other bank will not deliver trading revenue as strong as may be hoped for.

citigroup said at the same conference they will not see revenue as strong. joe: what is the overall condition up until today? 11 day sachs is on an losing streak. what is the overall vibe in capital markets preventing them from thriving? michelle: there is not enough activity. we are coming off of the summer and it is a boring time for trading. everyone is going back to work now. it is something that happened in the third quarter. last year their third quarter was worse in the sense it tumbled 20 2% -- 22%. caroline: i want to go back to jamie dimon. tell us a little bit about whether that factors into and investors viewpoint when you suddenly know donald trump is unpredictable. do they really want to see the ceo be more unpredictable as well? already knewestors

jamie dimon was an unpredictable person in the sense he is outspoken. i'm not sure if that is what changed their investment outlook but he gives them another data point to work off of. scarlet: jamie dimon is the leader of jpmorgan, but lately, he is losing his rains a little. he is delegating more to his lieutenants as well which is a great interest to investors and certainly rivals. tell us about what he is doing there. michelle: succession is a huge topic of interest. in january, he officially delegated more responsibility to his copresident so that was just a sign that this individual who had kept a firm grip on the time -- for a time might be setting up. to lead he says no but to notes. joe: he took it back in about two seconds. talking about how outspoken he

is, he certainly walked back fast. michelle: the question is what was he trying to accomplish? scarlet: it tells you a lot about the relationship between power and money these days in washington and new york. michelle davis, thank you so much. that does it for the closing bell. romaine bostick is stepping in for me next where we count to down to results -- to the big election and look at challenges facing a country. this is bloomberg. ♪

caroline: live from bloomberg world headquarters, i'm caroline hyde. here's a snapshot of how u.s.

stocks closed today. joe: the question is, "what'd you miss?" caroline: policymakers are says the president. turkey bank raises its benchmark interest rate defying the president and one -- defying their presidents view. the damage begins even before landfall. her in florence is reaching the coast and battering the area with severe wind and rain. one of brazil's frontrunning presidential recovering from a second surgery after he was attacked by a man wielding a knife thursday. he will not be able to return to campaigning before the first thend -- first round of campaign.

what is the word from the candidate after the fact he had to return to the hospital for a second surgery? exciting asays there is a lot going on in the election. as you said he underwent a second surgery but it became necessary. -- medical consistent condition is serious. romaine: do we have a sense of how the other candidates are reacting to this and whether this improves their chances to move ahead in the polls? candidates sent their campaign strategists after the event to not make it so hard. the first reaction from both

investors and analysts was that he was going to emerge stronger from the attack and that would make him a victim of a violent scheme. so far, what we have seen in the polls, he really edges stronger, alsohe leftist candidates transcend. it is unclear how much this will impact the final voting and second round of the election. caroline: we have had breaking candidate didil's well in his surgery. four other emerging markets let's bring in our next guest. the dow was one of the underperformers. everything else was higher. >> they announced he went into icu which may be typical after a surgery.

there is a lot more going on in brazil. inflation is a problem, the economy is a problem, and argentina is tied teaming and dragging it along with it. romaine: sentiment has been improving. >> it improved with this particular candidate. the market likes him. also does not like uncertainty and we do not know where this will end. joe: let's talk about the other big em and focus which was turkey. a wild day in turkey because there are three big events. the news that the government was going to mandate all domestic contracts be denominated in lira , sort of laws i form of capital control, then erdogan came out and said don't hike rates. that weakened the lira because people don't like that. then you had the rate hike. you see the wild action on the screen with the ups and downs. what is your key take away from today? >> the interesting thing is we had late announcements by the

finance minister who said they would be monitoring foreign exchange transactions. joe: so i didn't even capture the whole picture? caroline: [indiscernible] >> yes, the president's son-in-law. they didn't react because we do not know what that will mean yet. essentially, it means anything the central banks reaction was well received more than the market needed in terms of an interest rate hike. question is, what comes next? will they keep pace with inflation and raise if necessary? romaine: how d read into this that this is more central bank independence when we know it is his son-in-law? can we read that into this? vincert: i think you can read that into this particular one that they did but the president by saying he wanted to lower the rates and they raised. they stood their ground and raised as they needed to. they have the currency at least

in some sort of calm. it is good for the sovereign and more important for the corporate denominated in dollars in turkey. the nest question, if inflation continues, will they match it again? curious, was at the rate hike, size, increase interest rates or just the fact that today reinforced that there is a central bank independence in turkey? vincert: that's a good question. it is a couple of those. the central bank action was necessary to see. around 350 basis points would have been poorly received by the markets on them not being able to keep up with inflation, but they met the markets expectations. caroline: quickly, does the dollar carry everything higher or turkey? vincert: for now it is turkey. with a little bit of a pause, we will see where we go from here. caroline: thank you for the with us.

a next, hawkish comments from fed governor but could slowing inflation stay in the central bank and? we discuss that next. this is bloomberg. ♪ ♪

joe: "what'd you miss?" we have been talking about the benign inflation data from this morning. check out this chart, i'm looking at inflation via a few different measures. cpi rolling over, the cleveland fed trimmed mean which is a measure which is sliding a little.

basically, however you cut it this morning, no signs of upward pressure. i want to continue that conversation on inflation and the fed with the professor of at the university of oregon and he joins us over the phone. us. thank you for joining let's start with a number this morning and your read. does it change the picture and make the fed feel a less need to hike? tim: i certainly think the tame inflation numbers are staying the fed's hands and keeping it to a gradual pace of rate hikes rather than an accelerated pace. i want to bring it back to the big picture. you had an interesting blog post yesterday about a speech from the fed governor which you characterized -- your characterization made it pretty hawkish that even with no

inflation pressures she is signaling there may be more hikes than the market is expecting to come. tim: the issue here is that although we don't have significant inflation pressure, fede is concern within the that the economy is still poised to overheat. that's really stems from the market hashe job held up well, the economy has held up well, and we see no signs in the data that economic data is slowing down considerably or if at all. they look to the future and say if we do not do something now, raise interest rates, we will have this overheated economy. if it is not overheated now, it will be in six months. it is not essentially overheating in inflation pressures but also possibly in more financial instability. ,omaine: how do you reconcile

when you look at core cpi and some of those numbers reconciling with the core pce, reason for moving rates higher if we have not seen the connect between the two? tim: what seems to be the case is that they have not tighten policy all much -- all that much. bet what is going on in the background is the short run rather than the long run and the share run neutral rate is climbing. as it climbs, they have been stepping up policy rates to match that. because they have been stepping up policy rates to match it, policy has not become tighter. evidence for that is the job market. it looks like it has strengthened recently.

removeently, in order to the combination from the economy, they have to keep tightening and raising interest rates in this environment. caroline: do we expect the dollar to continue to track higher? that spells a lot of pain for emerging markets. tim: surely the concern is how market from a financial perspective, how much the policy is affecting emerging markets and the selloff in those regions , from what we can tell, the fed does not care about em as much as financial marketss think about the fed cares about emerging markets. they are more worried that some of the market issues will blow back into the u.s.. we are not really seeing that on a broad scale yet. joe: one of the phrases we have heard from the ped -- fed is

data dependent. are they really data dependent if the data says one thing but the model says they should be doing something else or are they a blend? tim: i think it is somewhere of a blend of data and model dependence. one thing i noticed in the speeches that she did not try to put a number on the short run neutral interest rates. she used the data to create a picture where the neutral interest rate was rising. that is the way the fed needs to be moving and tends to move as they pull away from the forward guidance from the past. also on jay powell speech a couple of weeks ago -- on jay powell's speech a couple of weeks ago he basically called into question the estimates of the neutral rate or natural rate

of unemployment and said we were not sure about this. that isnals somebody not paying so much attention to the models and more attention to how the data is evolving. moreld like to see officials move away from a focus a specific -- interest rate or time horizon thetoward what data -- what data will look like to cause them to change their policy path. joe: based on what you see between the data and what she represents, is there a chance the markets could get offsides and be surprised at the number of hikes in this year and 2019? tim: i certainly see that is a possibility. some regional presidents have suggested two or three more hikes and we will be over pause. that will only be the case if we see some evidence the economy is

slowing. if we do not see that evidence or if inflation starts to emerge more aggressively, we are not going to see that. this is a chance we see next federal reserve meeting that the estimates for growth and inflation are revised higher. higher dotsuggest and an increase in the path for interest rates going forward. caroline: tim, thank you for your time. florence is reaching coast -- reaching the coast. we will have more on that next. this is bloomberg. ♪

mark: i am mark crumpton with first word news. millions of people in the path of florence are preparing for a monster storm that is anticipated to make landfall friday afternoon. the outer bands of the hurricane have already hit the carolina coast bringing stinging wind and lashing rain. virginia toom georgia, especially in the flood prone areas or on the coast, must decide to stay or go. north carolina's governor said despite changing forecasts, florence will still be dangerous. >> do not relax. do not get complacent. stay on guard.

this is a powerful storm that can kill. today, the threat becomes a reality. get your self to a safe place and stay there if you have not already. mark: florence still carries 105 mile-per-hour winds strong enough to topple trees. it will head west a crossed south carolina saturday and up through the appellations next week. we will have more in just a moment from north carolina. one official said president trump is delusional for rejecting the conclusion that 3000 people died on the island because of hurricane maria. wes is after the president did 3000 people did not die and the revised death count is a move by democrats to make them look bad.

>> this gave permission to other people in his administration to look the other way. he has time today to try to bash to but he has never had time talk to the people of puerto rico to say i mourn with you. mark: the words between mayor crews and president trump -- --z goes back to the president says it was a success. a federal court ruled it was " arbitrary and capricious" for betsy devos to delay and obama ever rule meant to protect students swindled by for-profit colleges. that significant -- this is a significant blow to the trump administration attempt to ease regulation's for an industry. had suedcials

secretary devos over her decision to postpone rules. the new york gubernatorial primary is underway and is a race that is closely watched around the nation. one actress is hoping for a big upset against the incumbent governor. she is a high-profile example of an insurgent left-wing candidate trying to defeat an establishment income but. nixon could still appear on a november ballot thanks to third-party nominations. 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. caroline: mark, thank you. hurricane florence threatens to deliver a 13 foot ocean surge and flooding. david is on the ground in north carolina where he is watching for spillage and the result of

the heavy rain. welcome, david. doubletime for the residents in fayetteville. we are seeing brief rain, definitely cloudy and the wind is not a blowing much. for all of the effects we here at the coastline, we are not -- we're now seeing it 90 miles inland. the thought is, it has to come eventually. joe: how many people are either actuate in versus writing it out? is it easy for people to still get out? what are most people doing? it is definitely still easy to get out. who knows when that will change, probably overnight or tomorrow. toetteville is right next fort bragg so a huge military presence around here wherever i go. there have been quite a few retailers open but you are

starting to see stores close down. as far as people getting out of town, it is busy and hopping around here. people may be feel like this is a safe place to be. there are a lot of military families that do not want to leave if their spouse is on the base still. romaine: so we have not reached the point of mandatory evacuations? david: not for the county i met. -- i am at. romaine: when do you think that would be? david: if you start to see excess water come close to the nearby county, they may force it. is mandating of me an evacuation, but not this county. caroline: thank you. he will be on the ground for us, keepsake. the federal emergency management agency is the primary source of flooding insurance in u.s. -- the u.s.. they are $20 billion in debt. our next guest is from

philadelphia. talk to us about the lack of flood insurance and how much it is a key concern for you. >> this is a concern because of the potential for flooding from storm surge and inland flooding. there are projections the storm do something similar to what harvey did last year which is stall out and drop record-setting amounts of rain. people happens, many suffering flood damage will not have flood insurance. included in most standard homeowners policies. you have to buy a separate policy to have the coverage. romaine: are there no government incentives that would push people to get these policies? carolyn: if you are in a fema special flood hazard area, one hundred year floodplain's, you are required to have flood insurance if you have a loan from a federally backed regulator.

when you look across north and south carolina, in these areas, it is only on average about 20% of people that have this. it is much higher along the coast. pickup rates can exceed 60%. we will see much better flood coverage along the coast, and when the storm goes inland and drops all of the rain, that is when we see a lot of people suffering damage and do not have the financial security insurance can provide. caroline: we will return to you in a moment. many companies affected by hurricane potential is retailers. we look at one in potentially and sears is reporting a loss of $112 million. comparative sales is down. they intend to pursue added measures for cost savings. back to her now and we

talk about the potential for flooding damage and not enough insurance. what does this mean for the government? carolyn: it means there will be a lot of victims without the financial resources to recover. because a lotning of people might incorrectly --ceive this disaster perceived disaster assistance can make them whole. if you look at the numbers from harvey, the grants that fema provides when the declaration has been done, those grants averaged about $4300 per household which is not enough to rebuild a fully damaged home. the flood insurance payments averaged about $115,000. you really need insurance. the fema grants are only to make your home habitable again, and that's my not be well understood for people sadly about to face real flood damage. joe: from a policy perspective,

what could be done in a world in which policy could get changed through this congress that would reduce homeowner's risk and exposure going forward? it seems a we have these stories every year with homeowners being surprised and financially wiped out. carolyn: this happens all the time. is improved risk communication. the way we talk about flood risk creates incorrect perceptions. we talk about being in and out of the fema zone. flood risk is not a yes no proposition. it varies. you can see flooding far outside because mapped area they do not incorporate rainfall flooding. a lot of rain is going to be dropped and overwhelms local drainage which is not effectively communicated. improving risk communication is one. number two, how do you get more people insured?

into your get flood homeowners policy so homeowners do not have to be confused by two policies and can have a conference of coverage? one barrier is price. disaster insurance exceeds what people are willing or want to pay for. caroline: fascinating and well summarized. olyn. you, car lessonup, the number one from lima's collapse. we discussed. this is bloomberg. ♪ -- we discuss. this is bloomberg. ♪

romaine: we still have the headlines moving on sears. they can mount with earnings and

the losses coming in about $112 million. they are taking initial -- additional initiatives to reduce costs and they say options are being explored including partnerships and the sales. stock is rising up about 14%. caroline: we keep an eye on that. latest check for the business flash headlines. the richest person in the world is launching a fund to help the homeless. areall create a nonprofit to help those communities. he has been largely invisible to this world. thanberg will spend more -- uber will spend more than $150 million -- >> we think we can build a host of services that replace all of these cases of the car.

is a $6 trillion industry we are going after. caroline: the collapse of lehman brothers 10 years ago set the quantitive easing in motion. the fed held short-term rates at zero and instituted stress tests for financial institutions. it is doubtful the economy's as occurredh without qe and matthew joins us now. matt, interestingly, they were naysayers about quantitive easing that it was the winning format. matt: it was put into effect at the worst possible moment where the economy was losing gdp faster. that was the fourth quarter of 2008 right after lehman collapsed.

what the fed did was controversial. it said we will buy everything in sight in debt we can to liquefy the financial system which is dried up. credit was gone. what the fed did in every quarter since then was make possible for the financial system to recover. once you had a financial system recovered, it was able for others to recover. romaine: i could understand why it would have been controversial at the time, but five years into it, why are people still not willing to give this credit? matt: that may just be tribal more than anything else. we see a lot of tribal politics. if you were to survey most economists everywhere, i think they would say, at a minimum, it did not hurt.

they would start there and once they look at what happened -- because qe was not just in the u.s. it had been embraced everywhere. caroline: it is still going on in europe. matt: and the proof it must have done something right is that, by the time you got to the end of 2015, you have a synchronized, global recovery. every economy in the world was going up. that is a wonderful situation. it has been a while since the world had seen anything like that. joe: how much do you think the benefits we got from qe was from the liquefying of the financial some confidence that there were some stopping it and that gave confidence to take risk even more than the dollar injection. clearlympetence is a

important measure and it should be said that qe was accompanied by the fed's own stress tests were created by timothy geithner of thatbeen president and went on to the treasury. at the time, the worst of it, you had qe and the fed acting as the agent of the treasury imposing the stress tests. the tests were critical because it said to the banks you had to and you had to pass surviving another lehman debacle. did.of the banks tested that short of confidence -- sured up confidence. the ability for the banks to lend money freely was critical for the economy to take off.

it was two things at the time, the stress tests and qe. caroline: thank you, matthew. it is a great piece. up, trade tensions are simmering and trump does not feel pressure to make a deal with china. what are the risks to both economies? that is next. this is bloomberg. ♪

caroline: it's time now for asia and head and trump pushes back -- asia ahead and trump pushes back. his administration begins trade talks again. should the market be hoping for progress? yesterday it was over in asia. >> yesterday there was optimism that something could happen. key point is that this is

the fifth round of negotiations. until yesterday, the markets took it well. shanghai composite rose. it's interesting to point out this chart on the d tv library will show you turnover was the lowest in almost three years since january 2016 because people are staying away and are not confident this will lead anywhere concrete. joe: the market is getting pounded so much that you would expected -- expect it to bounce. shery: especially because valuations are really cheap, right? people are thinking maybe this will lure investors to come back into the market, but so far, because of the trade uncertainty, that is a key question. to a speaking yesterday former u.s. trade representative and he was telling me as long as china is confused as to what the united states once, this could go for a long time. >> it depends on what they see

as their and estate. do they want to see a reduction in the trade deficit by agreeing china will purchase more soybeans, airplanes, or tractors, or do they want china to fundamentally change the industrial policy of china 2025 and some of the major initiatives that presidency xiled out -- president rolled out? that is a difficult conversation to have. most analysts, when you talk to them about china's vision, they are saying they will not give that up. there is no way they will. romaine: looking at the market reactions on thursday, to see the tech stocks over there rally, you saw the indexes up like 3.5%. is that really trade related or is there more regulatory and underlying issues? shery: we were just talking

about that yesterday when we discussed tech stocks in the u.s. earlier, itling joe has a lot to do with valuations and not just tech stocks, we saw likenies oversold automakers. a huge chinese car company rallied more than 10% yesterday. you have the same thing with galaxy entertainment. a lot of these are -- a lot ofing those are bargain-hunting. joe: i still know how anybody could believe in the fisher markets anymore. shery: i'm a little doubtful because when you see the's china ipos, the way they performed this year, they have underperformed. after they went public they jump and come back down. caroline: fascinating stuff. we watch how the 70% holds in

tomorrow's trade. you., thank for decades, women have been pushing to get their voices heard, and although progress has been heard, their voices are not being heard on earnings calls. here with more is rebecca greenfield. a fascinating piece. coming on and were more female analysts. even if there are, they're not talking much. rebecca: there are still not very many. we had a study that analyzed years50,000 calls over 19 and it found women make up about 11 or 12% of people on the calls but are also proportionately talking less. they only make up a percent of talks. joe: that goes back seven years.

the orange bar is showing they don't even get talk time on the calls equivalent. rebecca: as the share increases, the talk time does not increase much. this is a phenomenon that happens in all kinds of settings. there have been lots of studies showing women do not get their proportionate share of talk time in full board meetings or in the supreme court. joe: we have all been to events like at a panel or a movie screening were some guy will say or actually aion, comment, and squeeze in a follow-up question. do similar things happen on earnings calls where the analysts use it to filibuster? the main problem is not on the analyst side, it is people answering the questions are so heavily male.

they are the ones doing the pontificating. you might get a question from a woman and then all men. caroline: fascinating report. i urge people to read it because bloomberg asked for the data for the study. great findings. rebecca, thank you. do not miss this. announces itsssia rate decision followed by a briefing of the governor. joe: i will be looking at eco-data. retail sales data is out tomorrow. romaine: don't miss this, china releases its numbers for all grist -- four august industrial production at 10 p.m. eastern. that does it for "what'd you miss?" caroline: "bloomberg technology" is next. joe: have a great evening. this is bloomberg. ♪ ♪

emily: i am emily chang. in the next hour, where is larry? google continues to be hammered over conservatives alleged bias. why is he not defending his creation? and starbucks is going greener. it is pushing into renewable energy. you will hear from the ceo. and driving toward an ipo