available right now. go to buyleesa.com today. you need mark: i am mark crumpton. first word news. bill cosby has left the courtroom in handcuffs to begin serving time for sexual assault. defense lawyers try to keep the 81-year-old out of prison while he appeals the conviction, saying he is rail and legally blind. the judge refused their plea, keeping them on house arrest. ofby was convicted in april molesting andrea constand in 2004. the u.n. secretary-general is stemming leaders from around the world that they are suffering

from a bad case of trust deficit disorder. he painted a bleak picture in his speech to the general assembly today. he pointed to rising polarization and populism in nations, affecting trust in international institutions. dangerous.e it as those who close their borders to regular migration, and those who ignore human rights in combating terrorism -- he added, "democratic principles are under siege." the turkish president also addressed to the general assembly, criticizing what he called the "twisted development of trade wars." wants the world to experience a new economic rupture. it is very easy to create chaos,

but it is difficult to today,lish order, and countries are consistently trying to create chaos." to say that to need trade wars have harmed humanity in every age. the head of the wto said there will be no winners in a trade war. speaking in berlin today, the wto director general says the entire international community has a responsibility to reduce tensions and avert a full trade war. he said, "the warning lights are flashing." global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2,700 journalists and analysts in more -- over 120 countries. i am mark crumpton. this is bloomberg.

scarlet: from world headquarters in new york, this is "bloomberg markets: the close." i am scarlet fu. caroline: and i am caroline hyde. the s&p 500 is down, however utilities on the down were -- is up. the utilities on the downside, and there are rates going higher. check out the 10-year yield. scarlet: and, of course, this is as the fed begins its two-day meeting. aretocks are higher, 10 lower. the dollar drifting lower, providing support to commodities. our bloomberg commodities index at a seven-we caught, and we

also have gold and silver lifting commodities overall -- at a seven-week high, and we also have gold and silver lifting commodities overall. we saw a knee-jerk reaction and selling in bonds, but that has eased off just a bit now. let's turn to what is happening in new york. president trump is trying out a good cop-bad cop routine on iran. he said that the prime minister was an absolutely -- that the iranian president was a good man. he sharply criticized the iranian leaders and called on the rest of the leaders to isolate the country. president trump: they do not respect their neighbors or borders or the sovereign rights of nations. leaders plunder resources to enrich themselves and to spread mayhem across the middle east and far

beyond. scarlet: for more, we want to welcome the director of the future i ran into initiative at the atlantic council, barbara slavin, and she joins us by phone. --director of the futurean iran initiative at the atlantic council. barbara: he spoke just about an hour ago and said iran does not do photo op diplomacy, which was kind of a act handed slap at trump for his meeting with -- kind of a backhanded slap at trump for his meeting with kim jong-un. deal that15 nuclear it negotiated with the united states and other countries, of course, truck pulled out of it trump, so unless --

pulled out of it in may. macron in france says he hopes to continue discussions with the u.s., still hope that the u.s. will come back to the fold. how much can iran cope with this and the effect it is already having on the economy? they understand that president trump is in some political difficulty at home, that we are about to have elections that could flip at least one house of the congress, and they have seen this before. it is extremely painful for them, but they have also learned over 40 years had to cope with a variety of different types of sanctions. we should point out that just one,night, the p4 plus including france and germany, approved support of the nuclear deal and said they had come up

with a certain payment vehicle, a special mechanism, that would allow trade to continue with iran to circumvent the sanctions that are coming back in place. now, i think a lot of this is just bravado. we have seen most major multinationals leave iran. their currency has taken a tremendous beating, but if they continue to sell about one million barrels of oil a day -- and remember, the price of oil is going up, and why is it going up? because of the sanctions. they can still manage to survive. it will be tough. it will be tough. scarlet: i like what you said hast how i ran -- how iran noticed that trump is facing trouble at home and that they could wait out his presidency. is there anything behind the scenes to try to show up -- sure things up?

-- to shore things up? barbara: i just wrote something atlanticnline at the council website. it will not change u.s. policy on iran, but there is a lot that iran can do. it can stop using slogans like "death to america" and "death to rallies.t no one believes that, but it just makes people angry. syria, for yemen and example, and it could have a better human rights record and let go of some of the americans and dual nationals and other political prisoners that they are holding. they could do a lot to improve their image and get some bipartisan support in the u.s. congress, but -- in the u.s. congress that it has not had. from the atlantic

council joining us by phone, barbara slavin, thank you for joining us. tomorrow, an exclusive interview with the french president at the one planet summit in new york. instagram.coming up, what do is them to unfriend the media giant. that is ahead. this is bloomberg. ♪

it is time now for a look at some of the big movers on the back of analysts' recommendations. the price target is raised on say itp, where they remains undervalued and that it has an upside of 50% by 2020. next up, raymond james, slashing its rate on semiconductors,

including intel. it has now underperformed. there is a negative shift in sentiment for the company. and lastly, looking at square, getting a boost, and analysts there raising the price target to a street high of $125 with a a case formaking square. later.s join us scarlet: we do not want to miss that. sources are telling bloomberg do well offounding instagram are parting ways with facebook. here is our "bloomberg intelligence" analyst. so many questions about instagram here, and a lot of it is predicated on your analysis that instagram is with more than 100 billion dollars on its, and facebook has only started to monetize some of that now. what are some of the examples of

what facebook is doing or that mark zuckerberg is pushing the founders to do that is making them uncomfortable? we are seeing is the growth is shifting towards more facebook platform engagement dropping. the user growth has been slowing, and the platform is maturing on its own. so, not instagram has to pick up is fallingthat short, so basically pushing advertising and trying to monetize life stories a lot more than it is right now is sort of the hope here so that they can meet inspect nations in the second half, but this exit basically creates like an execution risk in terms of that monitor his asian -- monetization timeline. jitendra, it is

interesting that we saw snap do relatively well, and they have suffered. is focused on taking a leaf out of their own book. is there a worry that facebook is going to lose that secret sauce when they have lost the two of founders? so for instagram, there are two questions. are the users going to leave, and are the advertisers going to leave? and there is content, cleaning up the platform, trying to improve privacy issues, and things like that. they might be more cautious with instagram. is theat we are seeing near term because of this risk, will they be able to monetize in the time we expected them to? caroline: fascinating, as always. waral, fantastic

reporting. a quick check of the business flash headlines. uber drivers. a federal appeals court in had a ruling on pay and benefits, and it was unexpected -- not unexpected. in a surprise choice for ceo with a ubs banking chief named in a move that reshapes the leadership of two of the region's leaders. leader left at a time when they are shifting in favor of wealth management at santander. i thought this was interesting. he is going back to santander. the question is, is he going to be doing more deals at santander? scarlet: that is what he is

known for, but at ups, he was known for streamlining the firm and cutting jobs and really shrinking it down. this is bloomberg. ♪

caroline: this is the countdown to the close. i am caroline hyde. scarlet: i am scarlet fu. the beginning of deliberations over interest rates. >> i cannot wait. nothing facetious. it is a decision meeting, and, of course, everyone expects a hike, and the reason i am excited is i feel the tension is growing between those who say more is needed and the fact that inflation is still pretty benign. it is not up as strong, and that

seems like it is going to be an interesting issue for chairman powell in the press conference. caroline: and i think i do what seems to be quite a calm situation. utilities on the downside, those exposed. scarlet: absolutely, take a look at the bloomberg, utilities the worst performers, and there is that rate sensitive sector, very prominent in the losing called him, and, of course, on the upside, a rise in oil prices -- in the losing column, and, of oilse, upside, a rise in prices. you added up, and you get a pretty mixed day with the dow and s&p. this is all within a pretty narrow trading range. we are just moments from the close, so let's get some deeper dive into the action and we'll get started with lisa. what are you watching? lisa: i am watching rebranded, which is the new trend in products.

it is no longer dunkin doughnuts. kin, and the idea is that they can appeal to people who want more than doughnuts or coffee and breakfast sandwiches, and it is a trend across the sector. weight watchers yesterday rebranded to ww. i guess they want to move away from weight and go more towards healthy lifestyles, but ww is pretty hard to say. also, i hop temporarily rebranding themselves -- ihop temporarily rebranding themselves to ihob for burgers. either way, it seems to be a boom. weight watchers is up-to-date, and the parent company of ihop up, not too shabby. at square, upg

11.5 percent. near session highs. their best day since february. and there are two of you causes behind their strength today. they are watching a role, we do , anda very bullish analyst he has changed his target per share, a street high. plus, he is saying these shares should be included since that sector warrants it. and this is pretty amazing. facebook. we see amazon, netflix, and year,et higher on the particularly amazon and netflix, but take a look at square, up on amazing, andtty that same group would be up more than 38%, which is what it is doing right now. not so shabby, romaine. romaine: semi conductors

struggling to hit the biggest note we had out this morning came from raymond james, basically cutting ratings on five of the big chipmakers, including intel. a lot of the concern here really has to do with some of the trends that we have seen in terms of orders and supply. we have seen some of the stocks really underperformed today, including applied materials. now, raymond james joins a list of analysts who have raised these red flags to get we have heard this from goldman, morgan stanley, and quite a few others, at theant to take a look philadelphia semiconductor index, because when you look at what it has done, basically since the end of august, only about six of the 30 members in that index are even higher so far this month. you can see the performance there. it definitely has not done that well, and, again, a lot of this has to do with the end of some sort of cycle here, where there are supply concerns, whether

they are going to start to take over, and we are going to see a bit more of a downturn in the stocks. caroline? caroline: romain, great round. from chips to doughnuts. romaine, great round. and a slight in treasuries could have an impact on banks and on utilities. for more on rates, our reporter, sarah. they are down 1.3%. sarah: yes, the art. utilities are the worst performing sectors, and we are seeing it play out. september 6 was the day they bottomed. ever since, they have been climbing up, and that happens to be the same exact date that the utilities sector peaked, so you can see that direct inverse correlation there with utilities coming down and the yields going up. utilities, the

relationship with rates is very clear, because there are yield plays and things are predictable to get what about with the banks, which also are rate sensitive but do not quite mechanically work the same way? banks, it isith more difficult. if you look at the really big a bankingy have division. they are not only reliant on lending, and yet, people always say, well, banks like to borrow short, lend long, but that is not the only thing going into their profit. we have seen a bit of a different take with financials. yes, financials are now up on the year, 1.5%, but at the beginning of the year, a lot of people were calling for banks to really be the out performers in a rising environment. this should be the timing, but it has not happened yet, and it is just not a one-way trade. >> in terms of what people are looking for for tomorrow, how have people been positioned? you mentioned it is not a one-way trade.

people happened putting their money into banks, have people been pulling out, what is their sentiment here? >> the sentiment has been good. we have had people putting a lot of money into banks, and then there is the broad financial etf that took in a lot in december, and last week, regional banking, that etf took in the most since december, so if you combine them together, they took in about $1.5 billion last week, so people are positioning as if banks should outperform, as if they should get a lift, should get a boost, but what is interesting is the fact that today financials are lower. yesterday, they were lower, and friday, they were lower, so this is heading up to the fed meeting. we are not seeing it. right, sara, you're staying with us, because we want to bring in a global head of development. -- all right, sarah, you're staying with us. joe was talking about tension. do you see room for a hike from the federal reserve?

well, i think at this point, people are anticipating the rates will rise several times over the course of the next six to nine months, and that is what the market anticipates. it is usually one of inflation, and when we see higher inflation, that could cause that to go on longer, but right now, areink that potentially we talking about how many hikes and over what amount of time, but this one seems to be pretty much done. portfolio,nd the people are looking to position themselves, whether three rate hikes in 2019 or slightly fewer, and are we likely to see utilities continuing to sell off? of the sensitive issues like utilities are going to have a tough time in this environment until we have clarity as to how far rates will go. clearly, there are substitutes. they are looking to build yield pro for leo's -- yield portfolios, but also securities

and other things that are less interest rate sensitive. i went to bring in the chief equity strategist and what he told us about positioning earlier -- i want to bring in the chief equity strategists and what he told us about positioning earlier. take a listen. >> a 2018, only three months or 2021, you0 might want to be more positioned in terms of growth, and the way to think about that is technology as a key part of the portfolio, and that is consistent with the fact that your best growth in terms of earnings growth is companies in the opportunity in scarlet: we go back to this idea that this market continues to move higher as earnings are there. joe: that is all it comes down to. 20 seconds until the close. the nasdaq is slightly up.

do equities care about the fed tomorrow? it seems like equities go up when the fed cuts or hiking. the fed is clearly going to have an implication on what stocks do over the long-term because that is how we value them. earnings are the start of the market and the highest correlation between stocks is what is driving the earnings. in 2019, we see earnings going up between 10 and 12%. overseas is eight to 10%. the earnings will continue and it will not just affect technology stocks, but it will affect the overall market. scarlet: speaking of stocks, not too much bullishness if you look at the sector performance today. eight out of the 11 groups are in the red. orlities is the leading lag

-- lagger. is fallingthe s&p today while the nasdaq is closing up 2/10 of 1%. caroline: we are clearly seeing not too much of an effect on the outside of the indexes as a whole, but underneath the services, there are significant moves going on. in terms of different sectors moving, even if the stock market is close to all-time highs, we see real weakness. >> i want to go back to the communication service -- sector. all of the new additions were today, but if you got a look at centurylink and verizon, they are lower today. the old sector is not doing too hot today.

the instagram founder is leaving the company and people are still figuring out what is going on. facebook has not been able to find its footing since the missed subscriber number in july. scarlet: going back to the sectors, energy is doing well. it is commodities as a group doing well. the bloomberg commodity index has been gaining for a sixth straight day. the weaker dollar is getting the lift from the commodity prices. caroline: let's bring in david again. and -- where do you see oil where that's plays into the hive network individuals or banks looking at in terms of turnarounds? the energy companies are the beneficiaries of this, and they have been extraordinarily strong performers. what clients are doing are looking at the opportunity to see more income on a current sois from some of these mlps

we see a lot of client interest in building portfolios that have greater exposure to that income. joe: let's go back to rates and the fed meeting. is there an upside risk to rates here? people are expecting a succession of hikes throughout the rest of this year and next year. could there be a situation where the fed moves faster than the market thinks? david: they are anticipating quite a few moves over this year and next year. there is something more interesting at play than what they will do. themselves --es one is the rates themselves, and another is the shrinking of the balance sheet. if you look at the purchases of the allen's sheets, that is not changing whereas -- balance sheets, and that is not changing.

it is a market risk underappreciated by most analysts at this point. scarlet: another market risk people talk about but does not show up his trade policies. the terrace in the war, and the trade rhetoric -- the terrorists ifs and war -- the tarr the war, and the trade rhetoric. u.s. equities remain firm. talk to us about your positioning when it comes to overseas market when it comes to the trade fears. david: we are underweight in some of the markets we do not have a stronger viewer on. to answer your question directly, the u.s. market has outperformed and it is not looking at the trade impact as strongly as it might if the china-u.s. trade war goes on to 2019. there are many companies that will see significant reduction in prices and the inability to raise prices. we are neutral on the u.s. market.

the emerging markets have been deeply punished and are good value right now. caroline: i want to dig in on what sectors will most get hit today. where do you see the most pain? david: in two places. , because manufacturing the inputs for the goods are overseas. all, material impact in the agricultural sector in the united states because substitution effects will come into play and other countries of the the beneficiary fact that the agricultural products are higher. that will drive earnings in the u.s.. scarlet: david, thank you. as we were just talking about, bmw is in the crosshairs. 5%y are closing more than down in germany after cutting its profit outlook for 2018. it is the latest to succumb to

trade fears. joining us now from detroit with more details on how automakers are navigating these roads, is bloomberg's autos editor. expect this should be expected but bmw has this record of meeting its operating margin target for almost a decade. even through the 2009 recession. august thataled in trade -- if trade relations did not get better and the u.s. started dropping these terror tarrifs threats that they would have to cut their outlook and they did. they thought they could pull a rabbit out of a hat, but no such luck. there are concerns about nafta and they don't have anyone to

stick up for them. both parties are fighting and they are in the crosshair. joe: explain to us why the european companies and makers are the ones feeling the most pain. jamie: it is a bizarre phenomenon of history. the u.s. automakers, to the ,xtent they are active in china they are building vehicles in china and have chinese joint ventures. for the german automakers, the luxury automakers in particular, they come to the u.s. to build their suvs which are now popular in china so they want to ship them to china. and they do in tens of thousands. ,mw is made in south carolina and they like to ship them to china. but now, with the retaliatory tariffs against trump, it has

been much less profitable or not profitable at all. they are trying to figure out and take acut smaller topline or a smaller bottom line. caroline: it feels bmw is not just blaming costs on the rise but they also say the trade concerns are hitting demand. are you buying that? jamie: i'm a little skeptical on that. are headwinds that bmw and the automakers are facing that are slowing growth overall. consumers don't tend to stop buying in anticipation of trade of higher tariffs. they buy more before the prices go up. i'm a little skeptical, to the extent prices have already risen. consumers are sensitive to that. herne wants to pay a next $5,000 for a bmw if they think they can wait and the trade tensions will come down and they can get them at the price they

were expecting. scarlet: in the meantime, you see a lot of pain for the automakers. they are in the second day of decline. jamie butters, thank you for joining us. for the closing bell and for me. romaine bostick is stepping in the four "what'd you miss?" we will try to read the fed tea leaves. bloomberg will become during the announcement with special coverage starting at 2 p.m. eastern time. this is bloomberg. ♪

caroline: live from bloomberg's world headquarters, i am caroline hyde. u.s. stocksf how closed today. a third loss on the s&p 500. underneath it all, utilities are feeling the pain. joe: "what'd you miss?" caroline: you can't keep cannabis down. not stocks are up after a three-day losing streak. we speak to one of the market's biggest players. u.s. treasury yields are pushing higher ahead of the fed decision tomorrow. an exit from argentina's central bank. a resignation three months into his post. we have to talk pot stocks. a three-day losing streak and tilray is leaving the pack again. all eyes are on canada whose recreational market opens in october.

our next guest wants to stand out with branding. we welcome michael from toronto. with wonderful to have you us. it is not just about canada, it is about a global hope we see mobile markets -- more markets open up. how quickly could we see this? michael: we things moving -- see things moving rapidly. up,ee medical markets open and as people become more comfortable with the idea of cannabis being legal, we see the shift toward recreational. we are now on five continents, all medical except canada moving recreational, but we see the transition with the regulation. is a hugeow there opportunity, but who will stand out and have a product that can capture market share and have margin? au recently launched

recreational brand of cannabis called spinach. i'm curious why, and what is your thinking approaching branding in this market? michael: the first thing is that there are heavy restrictions on what you are able to do and market. you have seen lots of the branding. we have another brand code just cove which is targeted to an explorer cro wd. you have to look at who your consumer is and we are selling a product about recreation, having a good time with friends, and we brought -- we thought spinach was a humorous way to do that. some people would still have fear, and this is a happy, green plant like spinach. romaine: one thing someone brought up to me yesterday,

particularly for folks expanding in the u.s., is an issue of protecting your intellectual property. when you come into the market like the u.s., it does not have federal framework to dealing with medical or recreational marijuana. yourre you protecting intellectual property? michael: you can file in the u.s. and get full ip trade production. when we built kronos group, we came from the u.s. into canada and saw in opportunity to be in a federal, legal environment. with the scalable part of a company, is the ip, and that ip can move everywhere. we have the ability to registered the trademark and patent. we not conducting business he legally but you can get that ip protection. nike's fiscal first

quarter is coming in well ahead of expectations. we are seeing a significant uptick in growth, much more than the 10% anticipated. review is staying in line with expectations -- revenue is a staying in line with expectations. michael, we are looking at the company that is educating the markets like nike, how do you educate the market and analysts? you have naysayers, particularly the short-sellers out there. some have looked at your company and said they are worried about this. how do you focus on what fundamentals should be looked at? michael: there are a lot of different factors. it is not a five-minute conversation. bringing people into the facility, understanding

the differentiation, and there is a thought, can't you just grow this in the field? to show the differentiation on psychological effects, flavor, there are a lot of differentiators. we recently announced a partnership and that is about being able to go through avenues. we have been doing what we have been working on for quite some time, sequencing the dna and map andthe cannabis genome being able to produce rare can canabanoids.s -- there are a lot of initiatives that are important to bring to light. joe: tell us more about that. how much can you get the cost of

them down through the synthetic creation of them and when will up?ramp that we don't have exact numbers. we have not given guidance on where we think that price per kilo will get. that was enough confidence in order for the equity release, they would be producing for less than 1000 per kilo. floor that as the kind of show that we can get below that pricing. the amount of automation attracted the amount of data in the library. print so mucho more base pairs of dna and do

strain tests that we see this accelerating faster than other companies will be able to develop the same. joe: have any major consumer companies reached out to you in terms of an investment? cannabis is interesting. you look at these major consumer companies, and when you are looking for growth, the most obvious answer right now is cannabis. when you look across for those companies, that is not just beverages. food,is infused vaporizers, topical, so it is a huge opportunity. i think there are a lot of companies viewing this as something they want to be more offense of about rather than defensive. joe: is that a yes or no? michael: we don't speculate or

discuss anything before it's done. joe: i had to try. michael: i was a lawyer, sorry. [laughter] michael, thank you. nike is reporting fiscal first-quarter earnings and the shares are falling. it seems to be a weakness in -- thatat is costing has overall product costs. romaine: china numbers look weak. they are coming in below estimates for china and for the asia-pacific region as a whole. that might be why we see this. caroline: the gross margins are just slightly less than expected. all eyes are on jerome powell. we look at the feds decisions tomorrow.

that's next. this is bloomberg. ♪ his is bloomberg. ♪

caroline: the fed's gathering in washington today ahead of tomorrow's rate decision. the central bank is expected to raise interest rates. more, let's bring in merrill lynch's head of u.s. strategy. it is more about the dot plots and 2019 or is it more about tomorrow? >> the decision to raise rates is expected tomorrow. see a number of participantses --

coalesce. there are two rate hikes this year and three next year. -- they willill keep it that one rate hike for 2020. shift upwardshe. implying the fed continues to keep rates relatively elevated into the future. joe: the latest inflation data point we got was be nine. why all of these hikes -- be nign. why all of these hikes? mark: we will get core pce and we think it will be soft. that will be quite close to the 2% inflation objective. when the fed looks at the broad economic data, they see and unemployment rate below what they think is sustainable, and they see inflation which is at target. they have achieve their goals as

far as monetary policy is concerned. there is no reason why rates should not be higher and close to neutral. ed: i don't get that -- joe: i don't get the theory there. inflation is at the target and employment is there, why more hikes? if they are already at their target, having not to done their job -- have they not done their job? mark: they are worried about a further acceleration in inflation. the broader theme is that they are slowly but steadily increasing. the fed does not want to be too far behind the curve so they want to make sure their rate hikes are keeping pace with the broader economy. they want to keep inflation relatively stable. right now, their forecasts are pricing at an inflation overshoot. they want to keep it at that moderate level. they don't want to get -- let prices to get too far out of

hand. need to take it into restricted territory in the future. romaine: how does this fit with the narrative that powell and the new fed regime that we have was going to be more focused on what was going on in the now rather than trying to get ahead of the curve? it seems like the message they are sending and what they are does with this rate hike not mesh together. mark: i think they are saying we are at target. the economy is in a good place, and we think rates should not be accommodative but closer to neutral. one of the things that we in the street expect is that the fed will strike language and hint they are closer to neutral. knowing where neutral is is difficult, but it is somewhere in the 2.5% to 3% range.

rates should at least be at that level over time given they basically hit their dual objectives. therefore rates there for rates and yields. mark: we have a 315 and q forecast -- nq forecast. we think the rates will slowly move higher and gradually and the feds will raise short-term interest rates. the curve will flatten over time , and we think the ultimate and rate will be somewhere between three and a quarter and 3.5%. caroline: we will see what happens tomorrow. mark cabana, thank you. pressure, the head of argentina's it central bank is quitting after three months --

argentina's central bank is quitting after three months. this is bloomberg. ♪ ♪

mark: i am mark crumpton with first word news. mitch mcconnell says he believes he has enough boats -- votes to stop brett kavanaugh's nomination. two women have accused him of sexual misconduct. he has denied the allegations. quotes york times someone saying "it is not a place whether judge kavanaugh is qualified. it is whether or not a woman being a victim some point in their life is to be believed." an awkward moment for president trump as he addressed the u.n. general assembly as he boasted

about the extraordinary progress his administration has made. he received a this reaction from the delegates. less than two years, my administration has accomplished more than almost any administration in the history of our country. america is so true. [laughter] i didn't expect that reaction, but that is ok. mark: the president added the united states is a stronger, safer, and richer country than when he took office. iran's president says sanctions country equates to terrorism. an said the sanctions are " economic war disrupting trade ond will harm people bey iran."

--blasted what he called judges told bill cosby he is not entitled to bail. attorneys for cosby had been asked to grant bail as he appeals his conviction. cosby was sentenced to three to 10 years to prison. a close ally of angela merkel was ousted as head of her parliamentary group. it was a surprise defeat the delta blow to the longtime german leader's authority. group --n who led the 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: nike's first-quarter growth marching is missing estimates slightly. shares are moving lower from the report. for more, let's get to bloomberg intelligences analyst -- intelligence's analyst. what is changing? >> i don't think anything fundamentally changed. we still have to wait. maybe sales were higher than expected and the gross margin on the merchandise could be lower. didn't see anything

in the report that suggests change that they are getting squeezed? >> no. all regions are higher than we expected and higher from the fourth quarter. the results look positive. romaine: can we talk about their website and this idea that we saw in the past couple of quarters where they sell directly to the consumer rather than going through some of the traditional retail sites, and how that is helping push margins wider. chen: nike, like any other they want to own the platforms. that is better margins. joe: you mentioned the region. is it solid everywhere? chen: yes.

north america is up 6%. the other regionally focused on his china which is up 20% or more. you expect we will learn about any brand or sales impact from the controversy over colin kaepernick on the call? chen: i think we will have color. at the end of the day, the effect from that will be small. nike sells 60% outside of the u.s. and colin kaepernick is a big name in the u.s.. for the chinese consumer, maybe it is not a recognizable name. i think the impact will be nelly -- 90 -- negligible. caroline: will they be unaffected by the u.s. and china relations? chen: if tariffs go on finished goods, i think they will get affected. the issue is that we do not know

how much of their goods are made in china or sold in the u.s.. about 20% of the factories are located in china. more onwe will learn potential exposure on the call. caroline: great. we will have to check in with you once the call is done. thank you for digging through the numbers for us. a shakeup at argentina's central bank. the central bank president resigned citing personal reasons. let's bring in patrick c -- galepsy.c -- is he the fall guy? >> it is terrible timing because you have the president here in new york for the usga and the economy minister here as well, so the leadership is here.

meanwhile, you have the buddha saris chief taking the blame -- aresauthorities -- buenos chief taking the blame. caputo did not speak to the press and is not like speaking publicly. weekmf director said last to the financial times that she wanted to see improved communication from the central bank. there are already signs outside of the personal reasons that things were not going well. joe: is communication the main thing argentina needs to change or are there different approaches at the central bank -- that the central bank should take? what he was doing was not working well. patrick: there is talk about potential currency peg. that is not something typically , but it hasthe imf been getting speed because the peso is a worst-performing currency.

wantolicy the imf does not is for the argentina central-bank to be selling reserves. that has been an expensive mistake this year. billion, anderal they did not gain much. the imf is steering argentina away from selling reserves to defend the peso. we will have to see if they impose some currency limitations, but that is something argentina has cautioned against. romaine: once you get beyond the government, the top line government, how popular of these programs? the electorate is still facing a vote next year that he has to contend with and dealing with these programs. patrick: absolutely. he is seeing his lowest approval ratings of the presidency. this is extremely unpopular in argentina. the imf's associate to down

there with poverty, unemployment from the 2001 default, so this is going bad. having to renegotiate three months later is extra bad. he is taking unfriendly steps and it will challenge is to have to reelection. caroline: we spoke to him yesterday over in new york. what did you learn from him? what do you think he is trying to tell the rest of the world here?here is negotiating patrick: there was a 12 your havinge regime in place opaque numbers from left to right. line thating a president obama fail that. better andgetting mockery is taking a page out of obama's playbook.

he says things are looking bad, but they are getting better. romaine: does the data show the crisis is receding here? patrick: no. [laughter] is pretty badata because you have 40% inflation. the government is seeing a two-year recession. there is more consistency in the policies that could be working better. there is more communication from the government so there is a lot of international backing for argentina which might be its best currency. caroline: best currency over the peso is the international backing. wow. thank you. to put the is hoping f in faang. we have that next. this is bloomberg. ♪

caroline: could faang stocks be getting a new member? we have an analyst no one that and we have been speaking with a cfo of square discussing some of the future trends affecting this. >> a couple of big trends could be here in the canadian market. one of the ships is a cash flow society. the second big trend is opening up financial services to serve the under faang. analyst with aa hundred 20 father -- hundred 20 --dollar price tag on this $125 price tag on this.

what are the things that will help them get big? the most important thing to understand about square is that their success with the larger seller has been the turning point for gross payment going gross. in the early days, it is for cabdrivers and small retailers. slowly but surely, they made their way out to the larger seller. i mean sellers with $125,000 volume or they have tens of millions. as they move upmarket, they generate more volume trickling to revenue. they have hit an inflection point in terms of their traction with larger sellers. that has been the seminal point. joe: this seems like the key thing. when i think of faang stocks, i think of companies whose economy of scale gets better when they

get bigger. they have these networks that allow them to grow faster when they are large than when they are small. are you saying square is hitting the point where it hit this threshold? dan: exactly. example fromou an the work we have done. efficacyhe marketing that you are getting per unit of marketing reflecting positively. it has been trending downwards up until now. now, they hit the inflection point where it is trending positively. the other thing i want to stress is something sarah said as well. they are going at it from multiple directions. they are the only company that has a full ecosystem. they are going after the sellers at the point of sale and then going after users.

they have more downloads and venmo.w -- than romaine: do we get to a point where we see square expand? when you think about the faang stocks, these are not companies staying in their niche. i think of square as a niche company. this has been a criticism of dorsey. where do we see them spread their wings into other areas? dan: they are there. they now have an app for payroll. if they can penetrate the pen the row -- payroll market, that is a big market. i think we are there because it are but people do not as visual. i think it is just not visible and it will become visible overtime. romaine: i is it too early -- is it too early to add them to

the faang area? it is not too late, but definitely not too early. we should have done this a long time ago. they are disrupting. caroline: but they have paypal and shop i -- shopify. dan: that is true, but they are the only payment company of having a full ecosystem of attracting sellers and buyers. the market is so big there is room for growth for everyone. when we talk about square specifically, you see some of their competitors becoming a me too and doing the same thing. that is the best sign they are doing something right. caroline: dan, thank you. sources are telling facebook

that instagram cofounders are leaving facebook on growing tensions on mark zuckerberg. we just spoke to someone on the exits. >> it is a sign for them and they need to pay attention. our industry has changed. already seen this. every seo needs to ask himself, what is the most important thing to you and your company? what is your highest value? our highest value is trust. nothing is more important than the trust we have with our customers, employees, partners, top executives. when you see top executives walking out and customers questioning your privacy practices or how you are misusing their data, you need to listen and wake up. you need to say what is going on. it is very serious. i will not call out one company

and say this company has to change, what i am saying is that for every co in the industry, we see what the employees are saying and we have to operate at a higher level. we just created a new office of ethical and humane use reporting directly to me. that is because when employees or partners or stakeholders have concerns, they should come directly to me and have a that conversation. we are in the fourth investor revolution, and everyone wants to know is your product being used ethically and humanely. every company has to operate at a higher standard. every enterprise company like us and every consumer company like facebook and others. every co has to look at this. it is very serious. that is why the government is involved. i called for regulation in january. >> you said facebook should be regulated like big tobacco.

that was before cambridge analytica. how should they be regulated now? dan: facebook is the new cigarettes. it is addictive, not good for you. consumers need to be aware of what can happen. that is why the government is involved and needs to be more involved in the regulation of facebook and other social media companies. in the example of companies that have questions about other products being used ethically or humanely, they need to create structures where they can evaluate the ethical and humane use of their technology. technology is never good or bad. it is how you use the technology that matters. you have to be crystal clear with your employees, customers, and with everybody on what your values are. seeou do not, you will customers leave you, or

employees review, and we have examples throughout our whole industry this year. you know that and you have been reporting on them. you will see more of this until ceos change. they need to pay attention. cot is true for me and every in our industry. caroline: very passionate their speaking with emily chang. you can catch that interview on bloomberg technology. the rupee continues to sink. india's plans on their currency is ahead. this is bloomberg. ♪

joe: it is time for asia ahead with shery ahn. india is set to be looking to cutting imports on goods. what is going on? what is up with the rupee? >> it is in a freefall right now. they have hit record lows around 70 per u.s. dollar.

we are seeing them try to them bolster the rupee. they are trying to cut imports of goods including a comics and capital goods. includinga wide -- capital goods. -- i thought was this was a healthy emerging market. shery: the india stock market was the best-performing of the year. now, you can see the correlation between oil and india stocks being the most negative in more than a year. ,ou can see when brent rises crude prices rise, people are thinking sell indian stocks. caroline: the indian rupee is the worst currency. how much could cutting imports help? trying to look

at the dollar spending going into this and trying everything possible. they have already tried to defend their currency. they are sitting on $400 billion of reserves, but that has not helped. we are seeing a double when he because when it comes to the indian equity market, we see a liquidity crunch taking place. bring that up. the shadow bank in india, it is this big industrial shadow bank and missed a payment on a commercial payment? talking about infrastructure and financial services, and they missed five payments. this spurred skepticism over what is going on in the financial sector. we have the liquidity crunch get to the worst level in two years. you are seeing average yield at the highest level since 2015. in ais all coming together storm for the indian market. not to mention elections and

politics are playing into this because we saw the indian equity markets gaining ground as the prime minister came in with reform measures. more political uncertainty with some people taking to the streets. this is also playing into it. the fact that the fed is tightening and emerging markets are stepping off the not help. --oline: shery: i will come back tomorrow with something more optimistic. caroline: please tune in to see daybreak australia and daybreak: asia with shery ahn. tomorrow, the global business forum in new york. some of the greatest world leaders talk through the biggest problems. and i will be watching the fed. their decision is tomorrow followed by a press conference

with german jerome powell -- chairman jerome powell. caroline: that is it for "what'd you miss?" this is bloomberg. ♪

emily: i am emily chang in san francisco. this is "bloomberg technology." the dream force conference. we hear from an outspoken ceo on his new co-ceo, and the responsibility tech leaders have to shape the world. plus, filtering out. instagram founders are leaving facebook. this is raising concerns about the future of the platform and its competition with snapchat.