the s&p losing 1/10 of 1%. talks are coming from president trump saying take a step back, don't go so far. scarlet: that would be dovish. joe: there has made no indication that anyone in the fed is listening to the president at all. -- evidenceevident of the opposite, but that seems just as plausible. michael, is this something that will move prices? short-term orno medium-term effect. the fed will tune them out. caroline: it's interesting we see the call from the iea saying to opec give up breathing space. we did see energy as the

outperform or. scarlet: clearly the big gamer -- gainer. real estate investment trusts as well. it is very interesting that these bond proxies are doing well at a time where bonds are selling off. what do you make of that? >> i guess people have sold weirdwhich is a little but people do weird things. we are negative on commercial real estate. less negative about utilities. as interest rates continue to push higher, commercial real estate is in the spotlight. scarlet: let's look at these movers with the last-minute selloff. it let's start with romaine. >> one of the areas we saw little bit of strength today was restaurants. if you look at the s&p 1500 up.aurant index, it is --was up as much as 2% at 1%

one point. and starburst -- ,tart box -- starbucks mcdonald's, rising and giving a boost to this sector. the seams of to be a lot of bullish sector. it's just a better custom of the -- customer deliver -- customer experience overall. >> tech stocks have taken a beating. in the russell 2000, the tech sector is down 11% -- more than 11%. it is really leading the drop in the russell since august. there are theories about why small caps have an underperforming, but one of the most interesting is that not a lot of companies in the russell 2000 are profitable. more than 25% of the companies are unprofitable.

bank of america says that is more than you see leading into a recession. tech is the poster child of this which is why it has been the worst-performing group. only half of the tech stocks in the russell 2000 are profitable. abigail: not just on the day but over the last four days. take a look at this four-day chart of the s&p 500. four down days in a row. losing about 1.5% over this time period. it has been such a bullish tim eper -- time period. it has done a bit of technical damage. i was watching to see the close. this is a year to date chart of the s&p 500 in relation to 50 day moving average in yellow and another in blue. as the bulls took charge with the s&p 500, they gained more tha -- they gained above. maybe the bulls are trying to hang on. scarlet: abigail, great stuff.

and our entire markets team, thank you. president trump en route to iowa and speaking now at the white house. let's listen in. coming.of your >> [indiscernible] >> gina is certainly a person i would consider. she is under consideration. we have many names. nikki has been great and will be looking -- working alongside of us and helping us. plus, he will help us with 2020. nikki is a great friend of mine and we have become friends. i've heard a lot of names. i have heard ivanka and how good would ivanka be.

this is nothing to do with nepotism, but the people that know, no ivanka would be dynamite -- know ivanka would be dynamite. i would then be accused of nepotism. yes? >> [indiscernible] >> i think ivanka would be incredible but i could not pick because i would be accused of nepotism. even though i'm not sure there is any more competent in the world, but that is ok. we're looking at numerous people . >> there's a lot of speculation about the timing on the day you celebrating the kavanaugh -- >> this in ministration does a lot. another administration would -- after the cabin our victory, it is a victory for the people, not -- a lot of people

celebrate. we go back to business the next day. nikki and i talked about this a year ago. she wanted to be here for about two years. we finished our big week last week. we had a tremendous success at the u.n.. we'll 30 days out but nikki will be involved with us for a long time. she will help me make a final pick. i want to make somebody really good. i think she has bought -- brought a new level of prestige to that position. terms of people wanting it, is easier now than it was. nikki has brought great confidence and prestige to that position. how has your house -- i do you keep your base energized now

that you have the kavanaugh victory? >> i would say just by winning. we have to keep winning. we are doing a lot of winning. usmca whichwith the is our deal with mexico and canada. it is fantastic. china wants to big a deal so badly, we will see where it goes, but i do not think they are ready yet. >> [indiscernible] >> probably. a lot of those were paid protesters. they are all unhappy because they have not been paid yet. protesters.id that was professional, orchestrated. when you look at the halls of congress and you see screaming like that. it is like chimes, one goes, the next goes, these are paid protesters. i do not know that their energy is great.

the energy on the republican side, i do not think it has ever been greater. maybe 2016 where the energy was very good. my man, say hello to your father. >> i will. have two supreme court justices through and your term, how many more do you think you might get? >> a lot of theories on that. it could be three. under one theory, it could be for. some people could say two could happen. it could be anywhere from one or two to four additional. we will see. i hope everyone remains healthy. i'm very happy the way it is right now. we put a great man, and i think a great justice, on the court. it is a guessing game, you don't know. what is an honor is that there have been many presidents the never had a choice. here i am not even two years and

we have two that are confirmed and on the court. [over talk] >> i believe kanye west is coming to the white house. he is a terrific guy. he loves what we're doing for african jobs, and so many different things. best rate,els at the meaning the lowest rate. kanye is a smart guy and he sees that. also coming with him, he said do you mind if i bring big jim brown. what would he be making a lot of money today. i call him unstoppable jim brown. he has been a friend of mine, really with us. he gets it. african-american -- and by the way hispanic and asian -- have never done better in this country, and he likes it.

>> [indiscernible] >> know, they are just trying to get me a message, but the messages do not work. i think they treated him with great respect. they had meetings beside just the news conference, and i think they treated him with great respect. he had a great meeting with north korea. china was not so much -- i guess he was giving them a message, and they were giving him a message to come back to me. >> do you have any updates on the saudis? >> no, it is a sad situation. >> [indiscernible] >> it was given to me. i want to look at who drew it because i cannot give you reports -- i could give you reports that are fabulous, but i will be looking at it, absolutely.

hope is the greatest. i love it. i'm so proud of her. i'm very happy. i'm very happy for you, right? was that announced officially now? i'm very happy for fox because they have a winner. hope is a winner and she has been from the beginning. she was literally right from first day. fox has themselves somebody really great. >> [indiscernible] i want more industry and energy. i don't like $74. if i have to do more, whether it is through else in all -- ethanol or another name, that is what i will do. i want low prices.

it is an amazing substance. the indy cars running hundred percent on -- 100% on ethanol. what really means is that we are helping our farmers, and helping our refiners. they are both very important groups. the farmers have been so terrific and produce great products. i think it will be great. and, it has no impact. that was a misnomer. there is no negative impact. there are those that say you do this in the air is cleaner. they say you go 12 months instead of eight and the air is cleaner. >> [indiscernible] >> who did? >> [indiscernible]

did that factor in at all? >> i know nothing about it. i know nikki. this is one of the most honest human beings you'll ever see. i've not heard about this. like nikki haley to be the next u.s. senator for south carolina? >> that depends on if she will run again. i can tell you you have two really good ones that right now so i do not see her doing that, no. lindsay is a terrific guy and i'm sure he is really happy. he really stepped up over the last two or three weeks. i thought it was fantastic. he is a popular guy. tim is a popular guy. those are the two people -- and nikki does not have that in mind at all. he is somebody the never ask me that question. really stepped it up.

100%. i do not know or. she supported -- know her. she respected it. she helped me in the election once i want a primary. we have really been friends and compatriots. we've done a great job together. the united nations is at a new level of respect. we worked together, we had a tremendous week last week. nikki wants to work with us and also, i guess she said a few times to a few of us she wants to work on the 2020 election with us. >> [indiscernible] >> i think they were. i'm not going to say who i mean.

he is a very fine man. i know many fellow americans that are evil. are you saying we should not say a fellow american is evil? .'ve known fellow americans doingt like what they are because we have inflation and a lot of good things other. i will say this, we are normalizing money and that is good. i don't think we have to go as fast. i want to pay off debt. the numbers we are producing our record-setting.

it down want to slow even a little bit, especially when you do not have the problem of inflation and you do not see that inflation coming back. i don't think it is necessary to go as bad. i have not spoken to him about that. i would like to stay uninvolved. how are you? >> [indiscernible] >> he is very talented, but no i have not. what would you do if i said that? do -- what would they do? >> i think cnn would support of anke -- ivanka. we had a very good talk yesterday and is going before congress. we will see how it works out. know, meantime, as you

there was no collusion. devin nunes is very smart people. id there is no collusion and there is no collusion, which is what i care about. recommend we dress -- we address [indiscernible] >> we will start getting together. caroline: there we have it. that was the president of the united states talking about many things. talking about how he does not like oil at $74 per barrel and he does not like the fed doing what they're doing. in terms of rights, he thought the rates were going to far. notably also saying you like to stay uninvolved when it comes to

the fed. quite interesting statements. joe: he wants to stay uninvolved other than publicly voicing his opinion on the policy frequently week after week. he also said we are normalizing money. scarlet: i think you meant normalizing interest rates as we have been discussing for years. that heheadline here is does not think we have a problem of inflation. michael, you disagree? michael: he is the president and not the economic chairman of the federal reserve. caroline: i'm interested that the markets have not reacted. the dollar was lower, but you think the market has come lower? michael: he is not actually the person a tedious interest rates. powell is the person. in 36k you can look ahead

months and imagine a u.s. economy which had overheated at that point, has inflation, the tire interest rates, and economic growth is decelerating. that is not the world we are in today. it a bitd like to go quicker and a bit slower. it is good tv but -- but not the kind of thing the markets will pay attention to. >> thank you. >> that doesn't it for the closing bell and for me. mess -- what did you miss?" ♪

caroline: live from the world headquarters in new york. i am caroline hyde. u.s. stock market managed to stay in the green. s&p 500 and the dow jones in the red. joe: "what'd you miss?" caroline: closing marks up with the bond rallying. the yield retreats for multiyear's high -- multiyear highs. president trump said the u.s. does not have to move as fast on rates. the imf is citing trade tensions as a cuts it forecast -- as it cut its forecast for the first time in years. and what canadian arm is looking into the possibility of selling canadian-based rocks -- products. >> yields have paired some of

the gains today, that we are still back above the levels we saw earlier this year. we will bring in brian chappatta, a bloomberg opinion and a senior economics advisor. let's start with brian. we saw this pullback in yields, but when you look at the volatility in some of the measures in the market, it seems to imply this rise in yields will continue. brian: i would debate you on that. an interesting day because you saw yields rise across the developed markets and treasuries saw a relief rally. the treasury market mood far and fast. some people were scrambling to revise the forecast, maybe saying the yield curve will not fight it anymore. there was a bit of taking stock and saying, maybe these levels

are sustainable. you broke through a lot of technical barriers, but we are finding our footing. joe: what is your take away? >> think about interest rates sensitive of the economy. numbers do not seem to rebound soon. we not only have a supply issue but also demand has weakened. brian, we have this wealth supply coming onto the market, perhaps of the fact yields came down, it goes well with how they go up. where are strategists seeing the yield go forward in the yield curve? brian: a lot of the move has

happened already. the curve is interesting because it could steepen either enable -- either in a bull or bear fashion. people are revising exactly what they are thinking will happen. romaine: when you think about the morgan stanley's and look at real yield and velocity that we saw over the past couple of weeks, is there some concern there? this is not quite what we had. backup?is driving this it is not inflation. is it an improvement in economic

outlook or is it a premium increase? i think it's worth watching where we will go in terms of inflation and fixation, and if that triggers inflation expectation, the neil smith higher. caroline: trump said we don't have a problem with inflation. >> that is where i was going. he sounds like an economist. i think he is right. currently, we do not have an inflation problem. not until the end of the year because we think inflation will continue to decelerate in terms of core inflation going into the end of the year. there is a lot of specifics. gasoline prices were high at this time of last year. based on the base affects, it should continue to decelerate. there are other idiosyncratic issues such as apparel prices. for example, apparel

prices plunged by the biggest amount since 1949 in the latest report. we will continue to watch that. that might be the effect of a strong dollar. joe: i'm glad you said he was right on inflation but our last guest disagreed with me. r.o.e. quick, brian. -- realn pushed off quick brian, recession pushed off? -- once want saw yields saw yields move higher but the fed will continue to keep going despite what ttump said. . we have an extra american economy and we will be rising rates more. i think the steepening is overdone at this point. ,aroline: brian and yelena thank you both. is cuttingthe imf its global forecast for the first time in two years. the biggest risks in the world

economy, next. this is bloomberg. ♪ s bloomberg. ♪

mark: i am mark crumpton with first word news. hurricane michael has intensified into a category 2 over the warm gulf of mexico waters. forecasters fear it could strike florida wednesday as a stronger hurricane. mandatory evacuations have been issued and the florida panhandle, at least 120,000 people, have been asked to clear out. >> we will see destructive winds , likely over 100 miles per hour. will produce significant impact, especially in the florida big bend region. upwards of 12 foot storm surge is expected. the could be low line flooding

in coastal areas. mark: the florida governor calls michael a monstrous storm and added the time to prepare is now. prepare, they say the disappearance of a saudi journalist in turkey's largest city is of serious concern and is urging the two countries to cooperate in the investigation. said it would be truly shocking if reports of the death of the saudi journalist were confirmed. >> we call for cooperation between turkey and saudi arabia to conduct a prompt, impartial, and in dependent -- independent investigation into his disappearance and make the findings public. mark: turkey says as part of the investigation, they will search turkey, the saudi consulate istanbul. president trump and european leaders have called upon them to

explain what has happened to the journalist was criticized the saudi government. leaders of northern island's democratic unionist party traveled to talk with michelle barnier. this took place as the deadline for decision-making approaches. reporters were told a border in the island see are not options on the table. >> there is a border on the island of ireland. regimes,rrencies, two but there needs to be a political will to be with it. mark: eu and british officials have been meeting before a summit in brussels. eu leaders say there needs to be major progress at the meeting for there to be a deal before britain leaves the block. 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: the imf says the world economy is by telling. for the first time in two years, the group cut their forecast. we have the deutsche bank chief economist. are these numbers striking? >> let's take a deep breath. is a straight wall really that bad for the u.s.? they have pretty significant numbers. if you look at the bloomberg screen, -- >> we just happen to have that up right now. think that we are watching

the trade war, it is very important, but if you look at the top line, the first white line shows you the real gdp is three, then three, then three. it is only going to drop gradually. this is not a slowing u.s. outlook and dramatic in that sense. this may have an impact on the rest of the world, but the u.s. is still solid. withcould it be that rising stock market and low unemployment, things look at the good and people are too sanguine about the effect of a trade war on the economy and they will get blindsided by it? on expectations, we are much more worried about overheating and inflation about recession.-- a all joking aside, the fed has a target of two and we are below two for the last decade. and theyd exactly two

expect us to stay there for the next 18 months. never ever in the history of any economy at we hit the inflation target and moved sideways for the following 18 months. it never happens. the risks of overshooting are significant. i think that is what they are telling us at the moment is that we cannot under appreciate the risk. romaine: the imf pointed out the potential for political risk or the geopolitical risk with swelled to her multiple -- to a level to stunt global growth. >> i have a lot of sympathy for that, but as a portfolio manager, what do i do with that? difficult to predict what will happen in italy, u.s. elections, and across the board. it is tough to take that into account when you are trying to structure your portfolio. there are a lot of different things happening in politics but we end up with a bloomberg

screen shot today. do we think we are little bit above or below? we look at that. maybe the biggest fear is not so much a slowdown in the recession, maybe the consensus is trading in your word about overheating and inflation. caroline: why is the imf given then?numbers are they trying to make us take -- stepback -- stead back? >> i think they do look at it and believe that some of these things can play out. is that you can look at how it differs from the contentious. there is a little too much pessimism in the imf. joe: ideologically driven economists, i find that hard to believe. i want to go back to inflation. did you ever find these goldilocks scenarios where

inflation hits the target and sits there, but we have had people predicting inflation for a long time in this country. we have had people talk about employment for a long time. that has not materialized, in the fed has continued to wreck down a testament. what explains that? ofyou were to go postmortem these errors, what would you identify? >> when the crisis happened in 2008, a lot of people left the labor force. we thought they were unemployable and cannot come back. around 4ak, there were million or 5 million. the question was, how many of these will come back and hold wages down? what is the slack in the labor market? the issue was that there was just more people that came back which is great news for the economy, but inflation was held back because there were more workers that came back and they made sure wages did not go up too much.

both on the orange line in the on ifline, this depends you believe orange line is demand inflation and the white line is cost inflation. in that sense, it has been a slow and weak recovery. so one piece to the puzzle is productivity. can we have a sustainable 43% withoutwo plus an uptick in economy? >> the corporate tax-cut is incentivizing companies to invest in more capital and create a bigger stock and more opportunity. we're not seen that yet. -- we have not seen that yet. you have an outlook that is relatively strong. will be the main reason why the

gross -- growth outlook is the consensus over the next coming quarters. caroline: thank you. inflation.'s order to turkey, in fight inflation, are going into grocery stores and checking the price of things like onions, yogurt, and toothpaste to make sure it is properly priced. romaine: that is one way to fight inflation. micromanaging the economy. [laughter] joe: do you approve of that is a good measure? >> that is unconventional. caroline: a lot is unconventional about the market. joe: that is extremely well put. was a striking image of police checking price tags on goods.

caroline: joe always brings us the best things. earnings season is back with financials kicking things off on friday. we are finally pass the days of peak earnings growth. that is next. this is bloomberg. ♪

caroline: excitement may be burning out for cannabis buyers in canada. -- want a is said to be marijuana is said to be legalized but only a few retailers will be able to open the door. they are bracing to fall short of demand. their market is still riding the high, looking into the possibility of selling cannabis products of their own. for more is our canadian cannabis reporter.

are they considering selling their own? >> right now, they say they have engaged in preliminary fact-finding and of no plans to sell either cbd infused products or marijuana at this time. when the company says they are not looking at something at this time, they leave the door open for future possibilities. they are interested and they are leaving the door open for future. the cbd product is the extraction from cannabis that does not get you high but is a wellness product. it helps you relax, sleep, and so on. even coke said they are looking at cbd. they are also leaving the door open for medical marijuana sales in canada as well. joe: tell us about the market structure that is planned for the canadian marijuana market. can anyone open a retail outlet or will they be tightly

controlled and limited in the number there can be? kristine: that will very province by province. every province has its own model. here in ontario, it is the most populous product in the company. we don't have any retail stores open when relies -- legalize asian takes effect -- legalize egalization takes effect. alberto will have several private stores and nova scotia will have several government run stores. british columbia will only have one store open in the entire province so it varies depending tohow quickly they were able get her act together and the regulations they put in place. caroline: christine oram, thank you. joe: earnings season kicking off friday with some of the biggest bank reporting's. here with what to expect is the cofounder of data and research.

>> the big story will be revenue growth. we peaked in earnings growth for the year for the first half with roughly 25 percent bottom half comps. it seems like the take of learning cycle has passed and we are worried about continuing revenue growth into next year. romaine: when we talk about revenue growth, should we be with revenue growth? nick: revenue solves margin problems. if we have problems with the labor cost or inflation. those can be resolved by having better revenues. my revenue growth also speaks to the sustainability of the cycle and how much longer we have. that is a question we heard from clients, whether we are in the 11th inning -- clients, we are in the 11th inning. . caroline: the imf said downgrade your expectations.

someone from deutsche bank saying that is a little pessimistic. how much is it being factored into expectations and 2019? nick: 2019 revenue growth is 5.3%. that is the number people have locked in versus 9% in the first half of this year. it seems like they have adequately calibrated their expectations downward. that will go into about 10% earnings. it feels analyst are beings conservative. romaine: this will be a tough comparison when we start the earnings season. when you look at the revenue numbers and you look at what people are projecting for the next fourth-quarter, into 2019, it is a stair step down. ofn you look at the health the market and economy of these companies, how do you reconcile that? nick: the trouble is we have tax cuts this year and a very tough comps in the quarter -- in a

quarter of next year. it has the benefit of guiding people down to a more manageable number, that as long as the economy stays strong, we can eventually beat. the first quarter comp in 2019 will be tough. joe: we talked a lot about headlines earning growth and revenue growth, let's do a breakdown. when you look within the indexes, who do you expect to be impressive? nick: energy is the first one. 100% growth year-over-year on commodity price improvements. we will see how they do it that. financials are the other weir group. they're looking at -- weird group. they're looking at only 3% revenue growth so it is all margin expansion. they have not had a great run this year. i'm worried about friday's earnings.

the bottom line is there are big discounts. i'm not a big believer but we will have to wait and see. caroline: maybe syntactic can come to the rescue -- their rescue. we have had a volatile trading for technology. where's the expectation for that? nick: since facebook and google are communication services, tech is 17% earnings growth. it has come down below as it the earnings which is pretty achievable. romaine: what about the health care sector? we have seen a lot of attention given to them. nick: health care is a great place. out intoem rotating less regulation risk. used toeem to recall

track cannabis prices and maybe still do. what you seeing? nick: it has continued to come down. we will see canada probably do the same thing. it'll crunched on quickly as supply meets demand. caroline: it's always good to get your perspective, and. -- nick. the trust appealed imposed by the european union. google filed the appeal at the second highest tribunal. hsbc has agreed to pay $765 million to claims related to mortgage bonds. authorities say the bank chose to put defective mortgages and the bonds and caused significant losses to investors. a restaurant here in manhattan has brought a movement to an

urban setting -- a far movement to an urban setting. bass infish for striped a restaurant. fisher,e not much of a the restaurant can help you catch them. that is your business flash. romaine: do i get a discount for doing this? why my fishing for my own food? joe: because we live in the city and we need something that resembles the hunt. this is the closest to it. caroline: it is like you used to choose your own mobster and i have the catcher on fish. how big of these fish in the pond? joe: it is a tight labor market. customers have to do some of the work. [laughter] caroline: fascinating. i'm intrigued. coming up, is your fender bender for luxury cars. we look at china and we bring

you more data ahead. this is bloomberg. ♪

caroline: that's a rather misty evening in new york a we're looking toward asia. europe's luxury car prices are bearing the pressure of a slump in chinese auto demand. now, investors in india are now paying the price. here with more is shery ahn. why are investors in india getting ahead for the lack of demand in india -- asia? shery: it's interesting. rover is owned by a motor

company in india. when they sold them, when they bought jaguar, they did not know brexit what happened so there are pressures from all sides. now we hear 46% of the sales in china declined last month. we're talking about economic slowdown in china that to mention financial volatility and the weakening yuan playing a part. romaine: how bad is this? i saw earnings from louis vuitton and they talked down some of the asia lull and they say it is not as bad. shery: i think it's a thing with auto sales in china that is different from every other luxury product is that they have this uncertainty coming from import tariffs being changed back in july. the chinese authorities said we will cut import tariffs to 15% from 25%. global automakers were really

happy. then, the trade tit-for-tat intensified and they said we are actually going to hike the cars built in the u.s. to 40%. you're seeing cars at bmw take a big hit. caroline: their german but they make a lot of cars in the u.s.. shery: so you see them take a hit. that they would be passing the costs to consumers. they did not. they took a profitability hit. joe: it's kind of weird that this trade war and all of the companies that seem to get stuck in the middle of its end up being european. [laughter] [over talk] shery: there are many other problems going on. happened and they have a lot of problems on their own.

with all these problems within china and the u.s., they could get hit as well. if you take a look at the consumer side of things, it is not just about the economy slowing. you don't want to be buying foreign-made cars when the economy slows. when the financial market takes a hit, these are people investing in stock markets and they do not want to buy luxury cars. the car industry in china is huge so you have domestic makers also coming into play like china's biggest suv maker competing with all of these rivals as well. caroline: we will see how the local car companies do. shery ahn, thank you. you don't want to miss the rest of her reporting in "bloomberg daybreak: australia" and "bloomberg daybreak: au sia" u.k. dates come out tomorrow. joe: i will be looking at more economic data for september out at 8:30 a.m..

romaine: and don't miss john williams making remarks in bali. caroline: that is all for "what'd you miss?" romaine: "bloomberg technology" is up next. joe: have a great evening, this is bloomberg. ♪

emily: i'm emily chang san francisco. this is "bloomberg technology." fresh evidence and the china hiking scoop. hardware discovered on the servers at a major u.s. telecom company. . google's play to take on apple's on and -- apple and amazon. a smart speaker with the screen. is it enough to send us. alexa packing? the bulls are back in