balance sheets were so large relative to global gdp, relative to financial assets. now that the quantitative easing has turned into quantitative tightening, you should expect that the removal of that should have the opposite effect. there is a big debate i think in economist circles about what is more important for some hoping balance sheets. is it the flow or is it the stock? i do not think it has to be either/or. they can both be important. the flow is going the other way with the fed in the maximum point of runoff into the fourth quarter, and the ecb talking about ending the asset purchase programming. scarlet: the afternoon come back has run its course. the dow closing down, that it had lost as much as 548 points, no losing just 127. volume has been heavier than average. volume in the dow, caroline and joe, up 52% from the 20 day average. joe: important to recognize we were much lower early in the day. early on, we were down over 2%, with dell off 500 points.

the nasdaq briefly went green around the 3:00 hour. quite the come back. caroline: interesting to get your take. chris heisey from bank of america, the wealth side of the business, was saying, is it so important to see how the tech players are in the next few days? huge.hose will be we will get texas instruments after the bell. semiconductor focused. that will set the tone as one of the week areas. caroline: let's talk about how the number is coming out at texas instruments, starting to come through. we are going to keep a close eye on how business continues to perform. scarlet: fourth-quarter revenue outlook, let's get that first. that is what has been driving a lot of stocks. the outlook misses the average analyst estimate, $3.6 billion. analysts were looking for $4 billion. missing the mark. conservative guidance for the quarter that just ended.

$1.53.s were looking for texas instruments expects 113 to $1.34. joe: we see the stock falling 4%. a bellwether. semiconductors have been weak. that is the initial market reaction to these numbers. caroline: let's dive deeper into the market action with lisa. what have we been watching? lisa: since we have been focusing so much on this, it is important to note that some parts of the u.s. yield curve have been steepening sick -- steepening considerably compared to where they were earlier in the year. and you look at the gap between 10 year treasuries and yields on seven-year treasuries, you can see it has widened to the most since the end of march. this contradicts the narrative that it is playing out of slowing global growth. you have not seen the same

action in the 210 curve, the one a lot of banks look at, to determine whether or not they are going to make a lot of money on loans. it is an interesting conundrum when you start to see it steepening, given the fact that so many people look at this indicator as a bellwether, to see whether we are heading into recession. right now, it is not saying that. back to going semiconductors, i want to look at cadence, a software company. they design a lot of the software these companies use to make their chips. it was the best performing stocks in the s&p 500 today, best performer in the nasdaq 100. it gave an interesting read about the chip sector, which has been beaten down. it was a bullish forecast. keep in mind taken's is at -- cadence is at the front end of the tech sector, baked into r&d budgets. they are less affected by inventory, pricing, and trade issues that are affecting the end results you are seeing in

texas instruments. the outlook was so bullish it gave a lot of analysts a bit of pause. to look at the chip sector a thele bit differently -- worst people have been saying about this sector may not necessarily materialize, or they may moderate a little bit as we get into 2019. definitely something to keep an eye on tonight, as well as amd tomorrow. abigail: stocks at lows that joe was mentioning, and a bullish reversal. let's put it into the context of the futures. one traders watched on the 11th, 2710 -- the question of whether that would hold. they had reached that level. but on the close, well above it. some traders may be encouraged by the action. the fact that the last low has held on a closing basis -- we put it into the context of the

longer chart. we see the uptrend leading into volatility in rising rates has snapped. we now have the futures in this range marked by those yellow lines, suggesting there could be a bounce back of -- around the 20th hundred level. charts do look bearish. if the lows break, it will be concerned. the futures are 2500. scarlet: keeping an ion the markets team. we want to recap texas instruments' latest results in terms of outlook, fourth-quarter revenue missing the analyst estimate. the third quarter came in higher than expected, but that has been a theme this earnings season. the third quarter comes in fine. the fourth-quarter guidance is a little light. joe: it speaks to this peak earnings growth theme, which is that we will have higher earnings in the future, but the pace is going to decelerate.

whatever we have seen so far does not matter that much. the stock is selling off after hours. the stock is down 16% from its highs earlier this year. it is down closer to 6%. clearly, some troubles in this space the market already anticipated. caroline: it is important what they say in the call and what the ceo and chair say in the statement. it's templeton saying revenue increased. however, demand slowed across most markets. scarlet: not something most investors want to hear. liancourt remains with us from boston. as you hear the earnings reports, during earnings season, a lot of companies cannot buy back their shares. you are missing a key source of demand from the market. once they are able to come back in, how much stability will that provide? the earnings environment overall is so positive, no matter the ambiguity about the outlook.

jason: buybacks are bullish and the tax changes have helped the numbers in the first half of the year. they were striking and extraordinary. getting through the blackout period is going to help bring demand back into the market. thatnk the real issue is since the second quarter of 2009, stock prices have appreciated at something like 17% annualized. is not really that surprising to have a bit of a pullback and restore value in the market. i think companies being able to step in individually and buy stocks after they have been beaten down across the board is going to help put some base into what we have seen in the volatility the last couple of weeks. joe: jason, i want to ask you about the area of the market i find most interesting, the rate-sensitive aspects of the markets. we got a little bit of bounce in the homebuilders, but very minor in comparison to the selloff they have seen over the last several months.

what does it tell you about this market that the sectors most exposed potentially to fed policy have been repriced so dramatically this year, particularly in the last month? think that makes sense. the most interest-rate-sensitive parts of the economy, the housing data has been extraordinarily bad through the course of 2018. we tracked the housing surprise index, which measures the high-frequency data, whether it is permits, starts, or existing home sales. all of those numbers through the last six months have been really surprising on the downside in a big way. it is not terribly surprising that homebuilders would see the effect of that. auto sales, if you look at light vehicle sales in the u.s., they have rolled over in the last few months. both of those things -- housing and autos are big parts of the u.s. economy. they are big parts of gdp. the fact that they are rolling ,ver shows that for housing

because afford ability has gotten so challenging and mortgage rates have been increasing, it is not surprising to see those things show impacts and higher rates. caroline: another sector that has been beaten of his energy. oil having its worst day since july. what are you keeping? jason: very closely, slightly bullish on commodities in general. i think that has been the right view this year. total return is up 8% year to date, versus an s&p of about three. that is the right call, driven by the view that we do not necessarily expect energy and oil to imminently rise in price. we think we are going to be trading around a very volatile range of high 60's to low 70's, at least for wti. we think the risk of a big upside pop in oil prices is a lot greater than the risk of prices rolling over. those two things would be driven

by the fact that spare capacity is extremely low, and also driven by the fact that you get one outage -- even though we have had inventory built over the last couple of weeks, they are still really low in absolute terms, relative to where they have been over the past five years. scarlet: you have the possibility of saudi arabia weaponizing oil as well. ourt at putnam investments in boston, thank you so much. that does it for the closing bell and for me. from "what did you miss" new york. this is bloomberg. ♪

caroline: live from bloomberg world headquarters, i am caroline hyde. shares coming off their lows. we close in the red. joe: the question is, what did you miss? caroline: crowning a new emerging-market champion. wild swings amid u.s. stocks. oil in the geopolitical crosshairs. as saudi arabia pledged to produce as much as it can. and hot off the boil, a disappointing debut for aurora. shares of the cannabis company fell 11%. it is tracking down further. 2018 has been a punishing year for emerging markets, and relative to the rest of the world, e.m. stocks have been

generally bearish the last seven years. but cheap valuations could get investors back into the space. john, seniorn editor for markets. john: good to be here. joe: in the past, the case for investing in emerging markets was kind of an optimistic story. the role of the new economy and all of that stuff. now it is like, it is looking cheap area john: you could dress it up and make it sound a little better than that. it is about value rather than growth, if you want to make it sound technical. we could say there is umpteen amounts of academic, practical research that shows the single most important factor in how well you do in an investment is how little you pay for it in the beginning. on that basis, emerging markets are cheap. buy things when they are cheap. the stock market might be the only market in the planet where people feel happier about buying something when its price has just gone up. that is basically due to the kind of continuous misperception

that allows smart people to make money, therefore if you want to be smart, by emerging markets. it makes sense. they do look spectacularly cheap compared to the u.s. isbe that is because america spectacularly expensive. i happen to think that it is. either way, if you want greater value, it is in emerging markets. you do not need to talk about briics, decoupling, the great emergence of the developing world. caroline: goldman sachs? john: i do not know that jim o'neill is too happy with the briic hypothesis at this point. joe: it worked for like a decade. john: i know some of the prehistory of this. -- it stands for brazil, russia, india, and china, four countries with very little in common with each other, which goldman sachs

decided would make a really sensible investment strategy. in the aftermath of 9/11, there was a g7 meeting and jim o'neill made a deal that of -- a geopolitical point that the world needs better brics. he said it was time for emerging economies to get together and throw their weight around and try to exert more influence on the g7. about a year and a half later, having coined the term brics, somebody in the global goldman sachs marketing department -- not that i am being cynical -- they decided what a great idea this was and started picking up on the bric concept as an investment idea. and they made a mint out of that for about five years. it popped into thousand seven. romaine: is the growth story still there in e.m.? the biggest story has not been emerging markets. it has been u.s. tech. greatand it has been a market. what people used to point out when they were making the case for e.m. was the reason of point

-- reasonable point that you are starting from such a low basis. if you look at china, they have indeed delivered since goldman sachs was peddling the bric hypothesis. growth should still be out there somewhere in the emerging markets. the question is whether this is now going to be the kind of sustainable growth that will show itself in equity prices. joe: the problem is, you can be cheap for a long time. stocks can get cheap and then get much cheaper and much cheaper after that. john: people on the other side point that out. joe: it is great to say that compared to the u.s., e.m. looks cheap, but how should one actually think about the risks and massive overshoots? john: of course you should think about the risk of massive overshoots. the long-term in investing -- i used to write a column called "along via." -- "the long view."

it is your friend. it does not guarantee that you are going to win, but in the long-term, these things tend to even out. it means you need to worry less about the specifics of timing. i mean basically, if you wanted to buy the u.s. at these multiples because you are making a bet that your fellow competitors in the heard will be even stupider than you, and you will have a greater fool to sell to before too much longer, that is a perfectly sensible thing to do, if you have really worked out the parameters of what you are trying to do. if you think the u.s. at its current valuation is going to outperform much of the rest of the world over 10 years, that is ,ery hard -- very, very hard very hard not to crack. very hard to justify the notion that from here we are going to get back growth. caroline: has china and its leadership said enough to make that appetizing yet?

john: the big secular growth story in china, which has not gone away, and in many ways is as exciting as anything that has been in the world economy since the u.s. in the late 19th century -- this continental-scale country awakening to what capitalism can do for it, growing out -- that has not gone away. you do have to get past the short-term first, and there is every reason to fear a major crisis at some point, because -- caroline: the debt. john: i just grew the parallel ,ith late 19th century america which is a very positive parallel. they had an investment amec roughly once a decade, and china may be storing up problems for itself by deliberately averting using state power, in the wave it -- the way americans did not do in the 19th century. in the short-term, plainly, that is a reason for very great concern.

you are 25 years old and already interested in the stock market, i am slightly worried for you, but you could put it into china and don't worry about it, and that probably will be all right. caroline: what about your music taste? have a read of his columns and click the link. we are very, pleased to have joined bloomberg. itsng up, aurora makes debut amid a can of this route. cannabis companies are trying to reach a new type -- amid a cannabis rout. ♪

romaine: canadian marijuana company aurora cannabis was listed today and promptly dropped 12% in the middle of a bit of a rout with cannabis stocks in the u.s.

we're joined by sean stifle, portfolio manager at navy capital. is the selloff we have seen the start of a real reevaluation of these companies? sean: this is a buy the rumor, sell the news. into the huge run legalization and this is a healthy retracement. joe: what is your take on the early days of legalization in canada? has there been enough data to give you a sense of early leaders, what brands consumers are flocking to? sean: i was in toronto last week. the first day in canada, there were 30 million sales. contrast that to the first day in las vegas. not different. you are talking about an entire country. event.f hype into the ontario is 40% of the population in canada. there is not a single retail store. letdown, and these

companies need to figure out what they are going to do next. caroline: a healthy correction that seems to coincide with the timing of aurora listing. canada coming over to the u.s. 10 a healthy correction will turn into more buying, and fundamentals will drive a pickup in stocks? the reason to list in the u.s. is liquidity and the stamp of approval. aurora clearly has the liquidity, but you have to convince investors it is something to buy. this is the cost of capital arbitrage. the lowest cost to capital is listing here. that will allow companies to back fill the valuations. romaine: when will we get to a stage where we see more branding and marketing of specific names, so this is not a broader commodity? sean: we are there. i focus my time on brands. brands are the next wave. be thery of 2019 will emergence of cannabis brands the four of us could name. joe: while you were in canada,

what were the brands people were buying? sean: they have all these niche he names, sole, energy, spinach. joe: that is from kronos. sean: you see an ad agency and they come up with interesting things. whether or not they sell is another story. romaine: they went to an ad agency for spinach? caroline: popeye, it made him healthy, right? how many of the brands that are listing will still be around in five or 10 years? sean: there is only one cure play brand in canada, charlotte's web. brand, an excellent company. you will see a listing of slang, another brand house. we are more excited to see these are place coming to market. how much of a threat is it for existing public companies in the short-term that there is more supply coming to market? there is so much money money to

chase this space. there is in elasticity and the stock shoots up. it balances out as more people chase the cash. sean: supply coming to market is not a bad thing. if all you are doing is using cbd and edible or vape 10, it would be great if the price went to zero. activity, we are talking about big companies like constellation. are we going to see more consolidation amongst the cannabis companies, rather than waiting on this white knight? sean: unequivocally. the producers in canada, only 20 survive. time to band together with your friends and build a sustainable business. caroline: we will keep up with you and see how the market continues to evolve. ofk stifel -- sean stifel navy capital.

moving into the market involves attracting female customers, who only make up 31% of the u.s. market. the story interested me, by our colleague, craig. 31% are women, but they are trying to market to them. romaine: it is a big market, obviously. maybe it just speaks to the idea that the way people like me and joe consumed is going to be different from the way you consume and you have to market to that. the brands include names like poison and green crack. to those appeal to you? caroline: delightful. i like a turn of phrase. this used to be wu-tang fan meets a lot of misogyny. joe: they are trained to change the image. romaine: agreed. caroline: a glass of chardonnay. moving 5% on saudi arabia's pledge to fill any supply is from iran. ♪

>> i am mark crumpton with bloomberg's first world news. -- says the has united states has the dumbest immigration laws anywhere in the world. he rated his assault on democrats as they once responsible for the nations immigration problems, citing what he calls a catch and release system. a migrant caravan is attempting to make its way to the u.s.. coming up.what is a lot of people coming up. we can't let that happen. we need a wall. , weut up some of the wall do this as fast as it comes.

mark: the president has threatened to call aid to some central american nations of they don't do more to prevent the caravan from reaching the u.s.. the migrants continue heading this way and the u.n. refugee agency says that is making the trip need help. the caravan's numbers continue to grow as they walk and hitch rides through hot and humid weather and the united nations estimates a currently comprises over 7000 people, many of whom intend to continue the march north. concern for us is the developing humanitarian situation among this group, with having food, water, health and other needs. there is also kidnapping and security risks in areas the caravan may venture into. stabilizing the situation is urgent. mark: the migrant caravan is still over 1000 miles from the year -- from the nearest u.s.

crossing. isn't buyingdent the saudi version of the death of journalist come all good khashoggi. nalist jamal khashoggi. he says it was part of a planned plot and he wants the crown prince to stand to account. in earlier call into an independent in the -- independent investigation. the secretary-general can investigate if parties request it or if there is a legislative mandate from a u.n. body. says she hasconnor the beginning stages of dementia and probably alzheimer's disease. she says she was diagnosed some time ago and as her condition has progressed, she is no longer able to participate in public life.

the 88-year-old was nominated to the court by president reagan. she took her seat in 1981. she retired in 2006. tonight's game one of the world series, the red sox host the dodgers. it is like a to be cold at fenway park. temperature is expected to be 50 degrees and will cool off from there. it is the first time these teams have faced each other in the series since 1916. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. >> as been three weeks since jamal khashoggi was seen alive in istanbul. what heident revealed called the naked truth about his death. saudi arabia kicked off their investment conference. more trauma and a story that

already has many twists and turns. the killing of the saudi journalist jamal khashoggi. the president delivered a highly anticipated speech. he said there would be a bombshell revelation that did not come through, but what he did portray was a story different from the saudi version. thisurkish version insists was a savage killing that was well-planned. they are calling for a thorough investigation. here on the ground, the future investment initiative is underway. the investment summit, despite a still ceos pulling out, has strong representation from asia and the middle east. , webillion worth of deals understand a deal has been postponed. ultimately resilient, but saudi stocks closing lower for the day. bloomberg news, riyadh. also out of riyadh, all real

falling as much as 5% to its lowest level since august, after the kingdom pledged to meet any supply shortages that arise from sanctions. lipmore, the president of out association joins us from houston. thank you very much for joining us. tell us about the geopolitics that we see at play here and why it is depressing the price of oil. andy: you are seeing a number of things happen. have announced they will fill any supply gap and the saudi oil minister says they could increase oil production by 2 million euros a day. than offset the impact of sanctions. those supplies declined 1.5 million barrels per day. we have the u.s. and saudi's who are allies against iran at the sometime that the saudi's are buying arms and the u.s. is buying oil from the saudi's. i don't expect that the

khashoggi incident will impact oil supplies. joe: you think that the saudi's would use their oil our as a weapon? andy: i don't think they will do that. i think they need to sell their oil to satisfy their budget, but what is probably disheartening to the opec and non-opec reducers is the fall in oil prices. not too long ago, brent was was $75higher and wti and now with the opec and non-opec producers increasing production, the market sentiment has changed. it feels a we are oversupplied. pickup --wafer demand do they wait for demand to pick up? or do they power ahead? andy: i think they will wait to see what happens. the oil market has focused on

iranian sanctions and deceptions of venezuela. iraqi production has produced to near record. the same time, nigerian oil production is back to 2 million barrels a day and libyan production has ticked up to 1.2 million barrels. and non-opec producers are going to be looking ahead. they have a meeting in december and they will look at the oil market balance and perhaps trim some production to maintain higher prices. joe: we are talking about supply and we have been for a long time but on the way up and in this slump. what about demand, because obviously concern seems to be rising about economic frailties the world. how's that impact? has beenand growth

good for the past couple years and is expected to continue in 2018. demand is expected to increase 1.4 million barrels per day. next year, 1.2 million. earlier in october, when the iff revised downward, that started oiling a pall over the market and getting people thinking, what if that growth is in there? at the same time, we talk about shale oil increases. >> we are seeing stockpiles in the u.s., the latest api data is said to show one of the greatest builds since february 2017. you look at the permian basin and the idea is stretched to capacity, at what point does this reconcile? andy: we are seeing increased inventories in the u.s. due to refinery maintenance, which is a seasonal basis. we have seen refinery utilization dropped from 90% in

early september to below 89% today. that caused demand about one million barrels per day. i do expect that inventories here will continue to increase over the next couple weeks, further pressuring elegiac prices. as we get into the new year, those refinery runs here and in europe will pick up again and we'll see mitigation of the crude oil inventory. president ofociate without. glad to get your take. coming up, ameritrade ceo says he likes volatility in the markets. he joins us and with more. this is bloomberg. ♪

joe: -- caroline: let's talk td ameritrade.

the financial services company focusing on fourth-quarter earnings yesterday. we welcome td ameritrade ceo tim hockey. before we delve into numbers, let's look a built solely lee, because that is the story of the day. the swings we've seen in the market, how good is it? trading anda investing business, so whether it is a cell, it is a trade. days like this, we will probably do one million trades and if you can trust that with a couple years ago, we would do about half a million, so double. joe: is very sweet spot where you want to see volatility? obviously, that causes churn, but you don't want people to lose money. tim: of course not. joe: eventually, people get dispirited and walk away. what is the volatility sweet spot for you where people are still doing well, they like to be engaged but there is enough action that they want to make moves? tim: it is not a number as much

as a duration of volatility. seen it hitting sick of their lows in the long-term range, you see a spike like in february, an enormous amount of activity, you see the specs of the past few days, those are all very good for active traders, because they see opportunity. our clients tend to be opportunistic. they sell the opportunity today with the announcement in earnings that they are actively trading. if it continues for a number of days, great. you mentioned the headlines in the article i talked about, it feels like it is a top. if you have a decline and a more sustained a bear market, some people, not the active traders, but some will say, i will move to cash and we will wait it out. broader markethe data, it seems to see just a lot of retail investors were not moving around amid these selloffs. when you look at your business and the cash in your account,

are you seeing more activity now than what we did earlier this year? tim: certainly if you look at the longer-term trend of cash relative to the bull market, i was looking at data today, if you go back 10 years, the percentage of cash clients would have overall used to be 21%. then we had the tenure bull market, now it is 11. you get a reversal, to my point earlier, he see cash going back into the accounts. that is good for us. interest rates, we make some revenue for us. joe: one of the interesting things about the market lately is we have seen enthusiasm about individual stocks in pockets of the market that pickup. cannabis was one, what have people got excited about in trading individual stocks anyway you haven't seen in a long time? do you see that as being a

sustainable theme for us, people getting bored of being told index and by the same amount every month? tim: i don't know if it is boredom as much as people like to trade what they know. i don't know that means for cannabis stocks, but crypto in the fourth quarter was driving. cannabis in the last quarter was about 6% of trades, crypto was about 1%. the bloom has come off that rose. next quarter, a new story. by etf's, by sectors, i don't know if that is boredom. i will be interesting to see what happens when you don't have the perennial market runoffs, whether active gets more attractive to people, as opposed to passive, when not all boats are floating on the tide. caroline: you talked about how

the environment help she said on cash to put to work. what about your clients being able to put their own cash to work in other areas? are they just -- could they ever take it out of ameritrade and put it in a bank? tim: absolutely. the way to think of it is roughly speaking to factors. the interest rates, as they start to rise, they get maximum yield for their money. the vast majority of our clients are looking to use cash. that is their dry powder they're going to deploy. quickly, want to talk we have seen this race to the bottom, and i'm wondering how that has affected how you adjust to an environment where you have a certain group of investors expecting to hit rock-bottom? tim: i say look at the longer-term trends. and ourameritrade

closest competitors were born out of a massive disruption in pricing in 1975. placing one trade up 100 ibm shares with have cost you $100. the price point would drop to $1050. -- would drop to $50. , in our particular case, our revenues from trading are 3%. trade levels of gone up 3% in that time. we see that as continued pressure, the retail client wins. more price cap petition is great , which is driving consolidation in the industry. scale wins. caroline: thank you very much

for joining us. scale wins. tim hawkey, ameritrade ceo. we go to breaking news, mike pompeo has been speaking in the u.s. about how the u.s. has identified some responsible for the killing of the jamal khashoggi. the journalist related to the washington post. the u.s. is reviewing key sanctions overall saying they're looking at revoking some of these is. rebuking -- revoking be says is not the last step they will take , but at the moment they will revoke these us and it will be the last step. >> i want to turn back to earnings. a follow-on texas instruments. they have missed their forecast, but they will head into what they are calling a softer market. they are saying they will slow chip production and that their strategic inventory will rise. these are comments by the cfo on a conference call. texas instruments still down

5.5%. caroline: we'll keep you posted. early voting is underway in some states. there are only two weeks left until full boat. democrats are staking their hopes on certain groups of voters who are not known for showing up to elections. with thermick joins us story. talk to us, it is about hispanics, ethnic minorities, democrats are keen to engage this time around. they going to be able to do it? >> here are two numbers to set the table. ofr out of 10 and six out 10. in midterm elections, four out of 10 eligible voters vote and presidential voters, six out of 10 eligible voters vote. democrats are trying to move that from four out of 10 to someplace between six out of 10. they will probably never get to the level of presidential turnout, they are trying to get as much as possible among voterscs and occasional

tend to be more democratic. you are seeing a lot of surrogates out there, former president barack obama, former vice president joe biden and many others are trying to turn out the democratic base. and reaching out to young voters. joe: you mentioned young voters. demographic that democrats are perpetually hoping will show up at the polls and always seem to disappoint them on election day. the sides having these celebrity surrogates come out and campaign, are they doing anything different on the ground than in past elections in hopes of inducing turnout? >> with youth voters, it is always about charlie brown and the football. billionaire tom steyer is trying to change that. he is spending billions of dollars -- millions of dollars to convince younger voters to turn out, working on college campuses. a lot of online social media work where those voters hangouts.

we will see how effective his investment has been, at that has been a niche where he has been trying to specialize in terms of getting the turnout whipped up. >> you mentioned obama and back 2008, he got credit for mobilizing these voters we are talking about today. i wonder why the mechanism that he used in the election of 2008 is not effective or in play today as we speak. presidential elections are always a bit different from midterms. he had what was referred to as the obama coalition. he mobilized african-american voters, hispanics, youth. he did well among women voters. he was able to put together this powerful coalition. that is harder to do a midterm election, because all of these races are individual. senate races in misery or indiana or house races in the suburban chicago and washington dc. it is harder to put together that overall message that will

work nationwide. turnout, inthe comparison to 2014, our last midterm, the turnout was 36.7. everybody agrees that we will at least be in the 40's. i doubt we have 50%, but there has been so much interest and attention this midterm election, which midterms don't usually get. i am sure turnout will at least be somewhere in the 40's. caroline: still a sobering number if you can't hit 50%. john mccormick, we thank you for washington. coming up, china responding to the slump in its stock market with a drip of stimulus. next in asia ahead. this is bloomberg. ♪

caroline: now to asia ahead. china stocks could be looking down the barrel of another day after major markets in the u.s.

would a trickle of stimulus address those concerns? i'm afraid the support given by the local government, by xi jinping has not been enough to settle from yesterday. >> there was a coordinated effort. let's give it to them. they did have a two day rally, the biggest jump in three years. that faded away as wall street felt yesterday. let me go through with some of the things that beijing authorities are doing. on the fiscal side, they are trying to tackle consumption, they have consumers out there, cutting taxes, planning to raise personal tax deductions, get tax deductions. also personal tax threshold being raised. to get exporters hit by the trade war with more rebates, trying to increase investment infrastructure, spending, monetary policy wise, they have been discussing they already that they are

trying to devise new support for corporate bonds as well. despite all of this, the u.s. market falling, bringing down china as well. joe: i look at these measures and i think, specifically with tax cuts and credits, some of this might be about stimulate in the economy right now, but it also serves the long-term goals of having a society in which the consumers have more spending power and more ability to say for social insurance and things except. china when we talk about in this trade war, we focus on having exports, that is not true. the fact is that it depends on domestic consumption. they are a heavily taxed economy. personal income taxes of about 45%. when it comes to businesses, about 25%. if you stimulate this kind of economy, there is a long way to go. different tools can be used. to miss: you don't want

her analysis coming up next on "bloomberg daybreak: australia" and "bloomberg daybreak: asia." third-quarter results tomorrow. joe: also watching microsoft earnings. >> report earnings after the bell.

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francisco. this is "bloomberg technology." coming up, tesla has its foot on the gas when it comes to earnings. reporting a work -- a week earlier than expected. is the company even close to breaking even? plus, uber loses another.