, a big part of the story. ringing. the bell off on the nasdaq. the worst month since 2008. we have seen it at its lowest since april and may of this year. the bell ringing. the s&p 500 bouncing off of this low, down 1.6%. we have seen more eroded in terms of market capitalization. global stocks off by $8 trillion in terms of outflows we have seen this month. >> pretty remarkable >> we did back off the lows of the day. have gone the other direction at the end of the day.

the game of the trade it was all about china's tax cuts. concernrade it was about china and the u.s. and there.s >> remember when tariffs didn't hurt? anymore. >> let's dive deeper into the market. >> right now what i'm watching, convergencet trade trade. let's look at where that at. to me,been interesting even since the s&p 500 last all time high, which is demarcated by the vertical line on the chart there in the white, we againstuch tread water stocks from the rest of the world. is that bottom panel. u.s. tech stocks are making all new all-time high. you that theow

j.d.s are getting creamed. don't have an apple or microsoft that's a big wave the damage.tting >> thanks luke. ishareshing iwm the russell 2000. up as much as 1.2% today but did close down wider market later in the saw day. you can see here, it's down this year.so far overall, it's down 13% for the october. i do want to point out, however, is seeing in close. iwm.tors are bullish on last week it topped more than $1 billion. than $4 billion coming into iwm. closely watching it given the tariffs news that we saw earlier today. lisa? much.nk you so i'm looking how everything has been turned on its head today.

up are the ones most beloved. let's look at the banks. see they're all in the green. charge,gan leading the 1.4%. bank of america did end lower on day. the interesting thing is, if you want to pull up the next chart look at bank bonds versus stocks. bonds are barely down if anything they've been of otherming lot investment grade bonds. you can see the stocks have nearly 10%hed down on the year. sort of an interesting divergence. honestly you can look at this and say, maybe the bonds are on to something. they're not taking that many more risks. going to be safe and secure. .> interesting

have hadnd-up as we the close. to get yourant for china.this mean >> i think that's absolutely what we still be concerned about. i will take the news this morning that china was cutting taxes negative. more stimulative act they've done from cutting rates essentially supporting the economy. hunkering down on getting ready for full-blown trade war. --s is not intended to be they don't expect to could tich- capitulate. i would expect trade talk to be month.ssful next capitulation when

we see the fed come down from the rate hike? tolast week, we continued hear full speed ahead. essentially we're still data dependent. messaging listen to from the fed and also follow the economic data. report thisthe jobs week. we have an easing in wage growth very modest, that gives the fed a bit more flexibility to take its foot off the accelerator. >> i have to wonder, too about rates.t on this day, we see ten-year two-year yields slighter higher. it should be unnerving. to wonder, caroline you point to the trade tension, how ish of this is underneath rate-hiking story. i wonder what you're hearing, mike? >> they're all in my head.

one thing i think in the short term is really important to realize it's the month-end occur this week for pension funds. that can sort of give you a head trends are. the we've had this massive underperformance for stocks treasuries. -- buy this. this rebalancing issue. >> i do think this is a higher issue. it is combined with a trade issue. trade is finally getting tangible. >> what about the dollar? how much of this is concerned dollar story we're earnings now. interrelated is so with the fed story. because the closest correlation higher isollar going expectations about fed fund rate. it's all interconnected. trade played a role in boosting the dollar.

market lookingmark for? war isthink the trade going to get worse, doesn't look will capitulate soon. >> the market need to see some and other central bank action that suggest they're starting to take their foot off the accelerator. it's not just the fed we have to worry about. ecb.also the they suggest they will continue to go forward with the plan to tapering at the end of the year. i would expect if the situation were these two major central banks do try to get more devilish. >> the election is coming up in a week from tomorrow. how much is that sort of what people are interested in as far as interaction and people on the terminal? >> kristina makes a great point. the uncertainty is part of the

equation. the market doesn't know what to back now. which party clarity would win, if it was obvious consensus that one party will the other, ie or more they'll be comfortable. 2016,emember going into thenot only most people get most outcome wrong. they are wrong about what most the outcome >> kristina, are you advising hold more cash if they can? >> well, if they have dry powder maybe a good time to deploy it. we're advising to be well diversified. have exposure outside the u.s. and broadly outside the u.s. have adequate exposure alternative. they've had a lower correlation

equities. >> life for gold, real estate and market mutual funds. >> thank you so much. really interesting. hooper and bloomberg markets live editor. does it for the closing bell. up next.ou miss?" is

>> what day it was in u.s. stocks. from highs to lows. ed correction for territory for the dow. to leave.kel prepares brazilian stocks reversed just a after the far right candidate was elected president. ibm.loud is the limit for the software giant delivering dealecond largest tech ever. angela merkel reign is coming to an end. she announce she will not run for the party in december. bonds fell to some extent. perspective.e

interesting that we didn't see the market after foul out of bed on the news of this. well.ws held up i want to get your take what a significant sound this is. after 13 years as chancellor, by's looking at the exit 2021. >> it's very significant in that relinquish herto leadership as of december. at the same time, she very unequivocally affirm she wishes to stay german chancellor until 2021. it was clear even before, she intend to go after 2021. i think this extends to the market reaction. when it comes to this stability of the german government, in a way that was good news. it makes it more stable. effectively she wants to give a

successor at the helm of the to reorient the party if the members decide that this is what they wish before election. she really wants to sit out her term as chancellor and she also made it clear by being very unequivocal she's not looking for eu level office. in a situation where a chancellor really wants by being ar legacy successful chancellor all the way to the end of her fourth term. >> german, can angela merkeling leader throughout her term with her party suffering serious setback in regional elections and giving up her post. can.think she the reason is, the party has no alternative. party is pretty much stuck with her. currentrnative to the

governing coalition will be new elections. new elections the party will be partyrse. best for the government once the party reorient itself with a new leadership. that, they need time. they need those two years. it with merkelet making the current coalition is success. both sides within the edu, the and the new, whoever succeeds her, they depend on each other. on them for support, they they depend on her to make a good showing a as successful leader and to give them time >> what does it mean for the jeromin? whole >> with respect to europe it's ambivalent. there is strong consensus among

anyone who might succeed as the party leader that they want to be a pro european party. of the possible successors hashas been mentioned who self-declared is an old rival mrs. merkel. her right. to he's much more critical than her on euro issues. wrote an opinion piece with senior members of the social democrats. reintroducing himself to the public as a good european. calling for european solidarity. her partyembers of that have been more critical to allow and very pro president macron when it comes his foreign policy agenda. we're going to get a pro government but tightly set limits when it comes to delegation ofrs, fiscal powers to the eu level.

get of thatoing to remainder remained -- of the merkel era. stays within the red leadership. >> thank you jeromin zettelmeyer. thet perspective on movement of germany. sky.akes a push for the now it sits on the ibm -- this is bloomberg.

>> $33 billion bid for the cloud market.g hardest int hit the

the averages today with fresh trade woes weighing. it >> we've been working with ibm for many years. thisy over the course of entire year, we started to do more together. made some big announcements that may at our summit of more work we're doing today. we started speaking more seriously back in april. been something that will continue to evolve, just became a natural next step. terms of why we see so much value for red hat is we do see tremendous opportunity for open source and the enterprise. large market and growing market in front of us. lacked is scale market. we've lacked depth of customer relationships because we're a newer player kind of coming up. we lacked deep industry vertical expertise. we lacked the overall level of

investment. to meet our full potential. together we can dramatically accelerate the red hat business what we do today and together be able to offerings to grow ibmtinue businesses >> what about from your point of view? not just ibm. lot of people said ibm please to make a move. move.s a big this is going to be your biggest tenure as ceo.r ten your been reshaping ibm for this moment. this is to me all about the entire cloud landscape and this is the point to do it. clients,ok at our chapter one of the cloud is over. the 20%.oved the cost saving. is a0% ahead, that $1 trillion market and this is the moment and to go after it, hybrid cloud.

know need what jim and i do together. hybrid, private cloud, many public cloud. they need it based on open standards. they are tired in the lack other cloud. we are the true open source. the portable answer for them. >> that's jim whitehurst of ibm. seniore let's bring in software and i.t. analysis for intelligence. die when a company wants to diversification. it's tough. they have to pay for it. dial?is really move the red hat connection can be stronger with ibm? >> ibm can really use something the this point. they haven't been able to grow time.long period of has a very good

software portfolio. ibm can scale it up. can also help ibm services a legacy enterprise, to differentoads clouds. in both software and services, it can help ibm. >> does this mean ibm can win in andrld where aws, amazon microsoft are taking so much scale and part of the market? they can find a way to slip in because they offer in between mode? think ibm becomes relevant again in technology. it is something now they can offer to their clients and say, if you want a private cloud, we can -- this.y one offering >> no. that's not draw. look atpens is, if you the spending in general, bulk of the tech spending is with legacy companies. they have to move slowly thanks to the cloud. likecannot just move

netflix. they were born in the cloud. it's a different thing. do that, if you're on premise products were created using a red hat technology, it would help you to move some of those things to clouds.t the point i'm trying to make is clouds.t not just ibm's cloud. red hat has products that helped enterprises move applications and workloads to amazon, to and google and anybody else that's out there. >> it's not just about red hat being a cloud -- we shouldn't competitors per se to what the companies would call cloud? >> they're enablers. else that's out there. they're helping companies move cloud.towards the public it's the strategy you can build stuff in-house and also use public cloud. nearly 1,975,000,000

termination fee. is there any risk that the deal doesn't get done? there's a gap in the offer price surprised by the gap as well. anti-trust analysts are looking it. it doesn't look like it. you trying to catch up through the likes of microsoft and amazon. >> you don't think there's any concern they become too dominant? >> we would be very happy for growth oversome here. is sort of a theme we technology. microsoft tech allow itself to competitors. does ibm have to do the same thing here? >> hands down. the single most important thing you have said. softwareopen from

point of view, open and embracing people ecosystem. didof the things microsoft very well, he started off his products on different platforms. office for ipads and started code for ecosystems. in the previous microsoft, they talked. sources not is anti-capitalist. 40% of workloads are on open source. that's a big statement. >> the world has changed. we thank you. we're sticking with tech for the business headlines. she's leaving in company due to changes the structure.

americans kept on spending in september even as income gains off.ed u.s. savings rate is down 6.2%. that's the lowest it's been since 2013. inflation matched federal 2% target. that's your business flash update. not beup, mexico may getting a market friendly for.dent they were hoping why a project is weighing on investors, weighing notably on the mexican pesos too. saw.a big move we >> nothing to do with trade or trump. which is perhaps the big peso sellf you saw off 3.5% in pricing. >> we haven't seen this move of back to when trump was designated president of the u.s. in 2016.

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>> bloomberg first news. the united nations security counsel held a moment of silence the victims of the shooting at a pittsburgh synagogue that people dead. the ambassador said member of the security counsel expressed ther deepest condolences to families and loved ones of those killed. they offer their sympathy to the of theand government united states. of life rabbi jeffrey myers made his first visit back to pittsburgh synagogue today. told reporters while he was pleased to see the tribute to the victims that have been was alsoutside, he

struck by a harsh reality. morningod here this this.t this is beautiful. of concreteod piece here.emorials suspect, robert gregory bowers appeared in court today. president and mrs. trump will to pittsburgh tomorrow. federal prosecutors are asking a for a manecuse bail sending pipe bombs to democrats around the nation. today,urt hearing prosecutors say 56-year-old cesar sayoc is a danger to the community. a hearingll hold friday on whether he can be released on bail. he was arrested last week on charges. bloomberg is learning that

president trump met today with department spokeswoman heather about the position to nations.d nikki nikki haley announcerred she is leaving the job earlier this year. the deceasedson of owner of premier league soccer team leicester city have laid a tribute. fans left hundreds of jerseys at to see where the helicopter went down on saturd saturday. the copter spiraled oof control as it left the stadium following league game. global news 24 hours a day on tictoc on twitter. powered by more than 2700 overalists and analysts in 120 countries. i'm mark crumpton this is bloomberg. >> swing to the right for brazil

bolsonaro was elected. pleased markets. led to huge gains. now a bit of reality check might in.ettling the real is weakness. we welcome now thiago arko advice. the fact going to be perhaps the hopes whether it be a pensions or fiscal reform. depends on the approval of reform.ion it will be a tough one. those two reforms they depend on the will of the skills of theven

economic team. goodpending on a very relationship with the parliament and relying on an interlocking do this middle ground with the parliament. a wholewe haven't seen list of individuals or someone of being track record good interlock between the executive and the legislature. thing thatthe first you'll be watching for to see whether bolsonaro can deliver that are inicies line with what investors would like to see? >> the first thing that we have see is the time frame that his economic team will prepare theeliver the drafts of pension reform and eventually when a tax reform will be prepared by them. second, we have some glimpse of strategy of the presidential palace in getting the necessary votes that they parliament. right now, president bolsonaro has enough votes to approve

measures. for example, the right to bear in brazil. he still doesn't have the votes to approve measures like the pension reform or the tax reform. for that, he would need an extra to 60 to 70 votes. only way to get those votes in a parliament that is diluted is to negotiate. he have to move to one side? building what compromised would he have to make? not hard.il it's have so many parties to deal with. their expectation always is to position in the executive. nextll appoint the minister of whatever area of the government. something that bolsonaro said throughout his campaign, he will not engage on. parliament that the

will support his measures based on the merit of the measures themselves. is something that we haven't seen yet in brazil and well, it's power persuasion would have to be leadership inside the parliament would have to be very agile and guaranteeing their support. >> thiago we're talking about economic reform. key effect aspects that is viewsizes bolsonaro towards social issue and democracy. concernedvoters be about these things. can they be destabilizing even the boxes onall free market liberalization of the economy, the deterioration of sort of civil society potentially under bolsonaro could be a problem? someturally he has made very complicated sometimes appalling remarks as a candidate previously as a congressman.

what the market should look is behave now as a president. very continues making controversial remarks, i don't see this as a literal risk for democracy as brazil has institutions that are more many peoplen believe and understand. create and enough to environment of division million --inside the country. the division inside the parliament can be very prejudice. >> today in europe, we saw a pick-up in the mining stocks for exposure to brazil really picked them up. which industry groups do you are set to benefit the most at the moment or where can you see the greatest downfall been hoped to make into? lot. depends a one of the main points that has

been brought up, not only by bolsonaro but by his future minister of finance. is to present a very comprehensive plan of to unify verynd tax system for brazil to make it easier to invest. naturally if he goes forward proposal, this will be very beneficial to every sector and every foreign investor in the country. at the same time, if you have an heavily onat relies regulation before in messages or forward, then, this represents a problem. if you have an investment air of investment of thelies a lot participation of the parliament to liberate an opponent, this is something that can present a short term concern investor.

>> thiago de aragao partner and director of intelligence arko washington. really appreciate your perspective. turning to mexico investors may marketgetting the friendly president they were hoping for. lopezent-elect andre scrapped a $13 billion project to build a new international nation'sor the capital. the project was backed by some businessmenhiest and the decision contributed to a selloff driving the weakness mexicaneso and sending stocks lower. 3.5%.osing trading here 81 cents on the dollar. here's this massive airport project. it's like a third done. referendumld a against it. to unload to decide. big flashyaigned

projects and corruption. nonetheless investors are not excited. they are pulling the plug on project.g expensive you see the bonds. that moving the peso probably just airportt itself but maybe he's going to do some of the less business friendly stuff. >> we have seen this move back to november 2016 when trump came in. should the market brace itself more for this? going through with the referendum. >> i always wonder if we're so believingt politicians that it's a shocker when they do something that they on.aigned someone who's against the referendum or the airport said we're not going to do the catches people by surprise. >> you would thought we should our china -- [indiscernible] .> there's so many things >> meanwhile, coming up will to update earnings

report tomorrow? we'll discuss tech more.

>> major marketer news today. the dow entered correction today. futures pointing to a lower op open. the pain not ending. we started in the green. that seems to be the desired sell. >> absolutely. an unbelievable reverse. if you look at the s&p 500 up point and ended down seven bases point. reversal sincee 2015. we continue to see the previous getting slammed and those that are not doing well also getting a bit.

at the biggest sellers, it was these big tech names and if you look at those doing well, more value oriented real estate, utility -- long.can watch amazon for it was trillion dollar company in a day. now it's $150 billion. >> it hit the trillion dollar mark. now not so much anymore. an interesting take today because after the ibm red with $33 billion deal, i spoke to one investor who does amazon, microsoft and google. i don't buy the ibm is quickly this huge cloud company that comes into the space. but at the same time, he said an considering the idea. this is just to going present more competition in the cloud space. something toe keep in mind. amazon won't stop. pointing to another

down day. what has to happen to stop the bleeding? >> it's a great question. trade eard the news about esexacerbatedeally exes aer the selling. if facebook post numbers maybe earnings will click. it hasn't so far. the numbers have been very good so far this season. we've seen what happened. down 9.9% from its record. nearly in correction territory. the earnings has been great. you hope that maybe the marks their senses and maybe facebook will help. lot of people keep saying, i don't know what the next is.lyst >> thank you very much. catalyst,f that next the nasdaq took a hit today with losses.ding facebook is set to report its

numbers tomorrow. is facebook going to stave this market or what? >> well, facebook already told us that this is going to be a slow down quarter for them. be spendingg to not and their revenue is going to be as great. there's an opportunity there to surprise little bit and tell that actually it is okay. for facebook, there are the problemsal mental about the future of their business. is the main app, facebook is already so populated around the world. can't grow that much farther from here. the company's future business is dependent on other properties like instagram, whatsapp and all the dramare's about elections we've heard accounts.e news, fake this is a very difficult period for the company. long term the very structural challenges, the facebookwith core

website and platform and undermining democracies around world. but in the short term, does facebook still have a fair degree of flexibility in terms of turning the dial to raise up revenue? >> right. it does. it's so incredibly powerful in itss of the size of business. even tiny tweaks can make a huge difference. noticed lot have more ads on instagram and i using thatll be properly. now it added about a billion users. they will be driving lot more revenue. >> you're writing a book on instagram. going to be a concern? in the last quarter, even they losteporting on, founders from instagram and thee's concern they lost founders as well. how much is that a key concern goeshe innovation that forward? so many of these earnings reports are not about the

but thewe just had forward-looking. >> you're right. about the promise of the future. i think part of the reason why up leaving,rs ended saying broad strokes, all of different reason. it's because their properties critical to more the future of facebook itself and zuckerberg has a idea about get there ando how he wants to use those overallto feed the piece. whatsapp, for example, how going to must be there. it's an messaging app. they have to make compromises reallyw the founders envisioned it in order to move forward and deliver on that potential. whatsapp is a $22 billion acquisition. see how they continue to monetize. we thank you for that break down facebookng ahead to tomorrow. let's keep talking about tech

thing. it's targeting tech giants like facebook and alphabet. joe, this is not surprising veryse the u.k. has been quick to target the big tech company. we haven't seen really target from a financial perspective. they've been quick to label the terrorism in more the yo u.k. this is quite a significant move. >> you sort of wonder whether come.ore thing to -- what are these company will do? see thists may money.nity sort of cap >> they relied so much from the tech community. they wanted pr statements from amazon and facebook to say, we're doubling down on

headquarters. wonder howto realistic it is all these companies wantig to invest with higher taxes and therating itself from world. >> exactly. harder and harder to keep the talent. interesting things coming from the u.k. --ing up speeding ahead

>> shares automakers moving higher today china considers tax cuts. the world's largest out auto is facing first decline in two decades. interesting day. saw coming off the high, europe got a big push and the like. to buy it or see it going back down slide? they tried this before.

>> they have. it was back three years ago and we're talking about tax cuts for the car purchases. they did it in september 2015. great. we got a boost in car sales in china in 2016. faded as well as those tax cuts were phased down. donetime around it's not a deal yet. the top regulator has submitted a plan. taxesea is to cut those to half to 5%. those would apply to cars engines no bigger 1.6 liters. about 70% of last year's sales of passenger cars cars would have a big impact. craigh us bloomberg truedell. we saw the auto stakes railing today. of deal is this news? >> it's huge especially for motors. they have a massive presence in

china. slowing down for them would be a huge blow. everybody to be honest. the market for the size of that will be subject to the purchase tax cut it's about 70% of the market. this would have a broad-base effect on the whole market. smaller.uch its struggles have been more intense. fordaw good rally for today but also a bit of bump as well from goldman sachs. it's hard to separate which of the two are the bigger deals. there. upgrade.n gottenford stock, it's so beeten down >> that's right. been pummeled. few days ago we were talking about whether or not we needed to prepare for that stock going south of $8. it was a few weeks where we were below 10, below 9. really, i think there was sort that happenedlly

after they postedders last week where they came out and said, to stand by our 2018 guidance and i think that really thea sigh of relief for market. are things great for the company? no. of are in the midst years-long restructuring that will take some time to play out. is not falling and they're still executing. for autos.ot falling how much can the sky be falling in terms of u.s. and chinese relationships. we did get that headline that seem to send the market south. all eyes on the g20 meeting. jinping and president trump. we're hearing trade talks may not be on the agenda. big downer for those who hoped something more positive could develop out of this relationship. of the car stocks, though, it's really interesting. purchases andar those taxes reduced. this is something i wanted to

ask craig actually. this car stray in china has been going everywhere. the midst ofin this trade war. the taxesar imports to that were raised to 40%. gone cut 15%. has when you put it together, where does china stand? stand?oes the industry >> it's really hard to separate headlines. while that 15% to 40% was or 15 versus 40, i think initially it started at everythingrd to keep straight here. but the important thing to know that is the apt of importfolio chin -- import from china is small. have any local production there. fords a reason to buy today. there's bige that limitations to how many vehicles

in that markets. >> ethank you for your insight. don't miss day break australia and day break asia.

[captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org ♪ alix steel in new york in for emily chang. big blue he is big deal. i.b.m. looks at the cloud with the $33 billion acquisition of red hot. former army captain commanding victory on the back of a social media storm. we will look at the role technology played. >> gabbert is at the center of