trillion dollars in october. slowdown, broad services and manufacturing weakness igniting fears of a drop in global growth. focusok shifts its to video and stories. will that be enough to stabilize faang stocks? halloween, after all. facebook. staple it for tech? off theey ripped band-aid like last quarter. i guess it is ok for now. david: the street loves it for now. well, onebrands as dollar -- $1.04 a share. revenue stronger, $1.4 billion.

sales of 2%. a nice beat for that company. david: traffic is growing. they need to have that happen. alix: it looks like they did beat estimates. brutalmarkets, a october. it woke you up no matter what you were trading. s&p futures up 17 points. it feels like a rally into the end of the month them up at the headlines are the mall choice. yesterday, the s&p swan 1% five times during the day. the dxy at the highest level since june 2017. 10 year yield is up two basis points. the action has been in the equity market. crude looking at its worst month since 2016. crude up .4%.

david: time now for the morning brief. 7:30, gm earnings. 8:30, the treasury issuing new bonds. 5:00 this evening, brazil releases its rate decision. alix: time now for the bloomberg first take. a trillion dollars wiped out across the world. this is how bad that month was. this is shorter-term, the one-year chart. you can see that a trillion dollar slide. show me yours. everybody wants to know what the fed will do about this. same chart back five years and look at the decline 31%, then15 and 2016, 2016 and the fed raised rates

five times. we have had a total of eight raises. do they stay down? healthy corrections are not bad. crash? a correction or it does not have any hallmark of a crash. flows, retailnd investors are putting money into u.s. markets. alix: do you like that? seen $11.5 billion come into etf's in the last week alone. that money is coming in. it is quite sticky and some of the etf's, even those that attract the s&p 500. the fast money is moving in and out. the dumb money is sticking around.

the retail investors are staying put. necessarily not stop spending and send us into recession. david: china pmi's are down again. all the numbers are down. the white line is manufacturing. is export line orders. china is really slowing down. >> the politburo took notice, saying they need to take timely steps to counter the slow down. the risks are revealing themselves. they see what is going on with trade. they have a slow down going on anyway. they are trying to prop up the and notand deleveraging going too far in debt to do that, so there is pressure on china from trade wars and this global slowdown. seven level that everyone is watching.

that is the biggest risk for the markets. what do investors do? >> we saw the shanghai composite rise into the end of the month. the third most in close into chinese stocks. people are starting to see there might the assigned of value. it has fallen a long way. now might not the of bad time. when you look at those new export orders in the pmi data come at are in contraction territory. time? a great it remains to be seen. david: facebook out with earnings at the foul yesterday. mark zuckerberg said next year would be another investment year. 2019 to be another year of significant investment.

david: what he is talking about is he believes in video, alternative reality, virtual reality, and it will suppress margins as a practical matter. >> facebook tv has not gotten any traction yet. they hope to keep pushing forward. they also have to invest in security. idea of faking news, one of the biggest threats his what happens in the new congress , particular if it tilts democratic, in terms of regulation? alix: at the end of the day, that could happen. i want to look at facebook overnight. p was during the call , but then the stock was able to rally.

pummeled, they got facebook had already been pummeled, but facebook in a bear market for october. if you have retail in that market, how does it find a bottom? and how does it go higher? >> you look at the tech space, we have seen tech companies beat expectations, but reaction in the market, they have fallen on average. i will be watching xlc. that started in june. we saw its biggest outflows to date yesterday. we will watch to see if we see money come back in, or people are more skeptical. alix: it's going to be a fun close. check out all the charts we use on gtv on your terminal.

just go to gtv . more on this terrible month that was for global equities. this is bloomberg. ♪

>> this is "bloomberg daybreak." dimon says the decision to skip the recent summit accomplished nothing. he said it was largely symbolic following the alleged murder of jamal khashoggi. follow the bank will

u.s. government's lead going forward. has been in saudi arabia for more than 70 years. ura said the company could face another reckoning. operations on the continent lost more than $100 million in the third quarter. japan's take us brokerage posted frome net loss as revenue retail and wholesale businesses declined from a year earlier. samsung posted profits that topped estimates. demand for chips helped net income rise $11 billion through september. the company signal caution in semiconductors with a 27% reduction in capital expenditure. samsung expects a weaker chip market in the fourth quarter and earnings will decline.

that is your bloomberg business flash. it was a crazy october for equity markets. the biggest drop since 2012. joining us now from des moines, iowa, great to see you. u.s. lost the outperformance title? how do you play that on november 1? >> what we have seen in the last been has not necessarily justified by economic fundamentals. come as we goat into 2019, a lot of it is not priced in yet, especially from the earnings side. if there is a bounce back as we get some buybacks and the

positioning turns around, 2019 will be a tough year. beid: the selloff might not justified, but was the buildup justified? we had record after record after record in the stock market. was it overreacting on the upside? >> you raise an interesting point. over the last 10 years, we have not had speak factor growth, but we have had easy monetary conditions, driving the strong returns. although we have growth slowing, the bigger factor is financial conditions are starting to tighten. we have quantitative tightening from the fed, the ecb, and the boj in the future, so you are taking away huge support for the market. i think that did worry markets this month with the fed sounding ratesawkish, concern that

are going up. david: if the spectacular results were the result of the , it isnetary policy clear that will toughen around the world. we will we have to rerate equities across the board given the monetary situation? extent. to some in europe, a lot of those concerns are not yet being considered. there are some things we can't ignore. that is the post mario draghi .ra with a few more hawkish and try to normalize policy and decrease that balance sheet earlier than targets are expecting? that would be one area i would be concerned about. the boj are still in such loose monetary policy come at they are not in position to move to active tightening, so there is some value in japan for the time

being. alix: this shows the individual sectors and performance over the last month. think utilities and consumer staples would not be the stocks you would buy, but that is what happened. how do you play that going forward when utilities ?utperform the s&p how do you square those positioning's? >> that has been an interesting development. that tells you people are clearly worried about the growth environment, what the fed does to growth, and that is why you are seeing that movement and utilities. i have concerns across a number of the cyclical sectors. i am increasingly concerned about the tech side. let's talk about china.

i'm going to put up a chart that shows pmi's, export orders, things like that. that numbers from china. how bad is it? how much is the trade war as opposed to something inherent in the chinese economy? david: it is not just the trade war for china. slowing ofe active the economy taking place at the beginning of this year. when we speak to our china economists, they are worried about the trade war, social struggles in china, and how that will play out. i think markets have almost priced in a lot of the problems from the trade for. -- trade war. markets have perhaps fallen as far as they can go. justification for investors to consider china an

attractive place to move back to. it is a risky time given the developments from the u.s. administration towards china on the trade side. alix: what other areas of the value,also provides that even though value has been hard to perform? think emerging markets outside asia are looking better than they were a couple of months ago. we saw good stuff coming out from brazil. i think there is a move towards em, maybe staying away from asia, then considering the opportunity when we see a positive catalyst pushing that forward. david: you will be staying with us. coming up, facebook climbing in the premarket after mark zuckerberg outlined an investment year for the company. we will talk about that next. this is bloomberg. ♪

david: facebook reported third-quarter results after the bell yesterday. shares are rising in the premarket. mark zuckerberg singh 2019 will be a year of investment. >> we are also heavily investing vr, portals for video presence, oculus, with no wires attached. with all this ahead, i expect 2019 to be another year of significant investment. david: welcome now paul sweeney.

investment is a euphemism for don't expect margins to be too high. up for this last quarter when they said revenue growth is slowing because people are using different products on the facebook platform and they tend to be lower revenue products. the monetization of messenger and whatsapp will take longer, so you have growth moderating the outlook. they are investing in new products, privacy and data integrity measures, more and more headcount, more and more technology. you have moderating revenue growth, rising expense growth, and that has brought the stock down. david: internationally they said we will be going into

territory's way the ad revenue is not so high. they arehese stories, not making much money because they have freely short commercials. figure out trying to how to monetize the new advertising opportunities in stories. they are lower revenue per unit type of product. as they expand in these international markets, these are much lower revenue markets, at least at this point. that contributes to a story that is a growth story, but at a lower rate. alix: what do you make of the reaction overnight? you come inside the bloomberg, you can see the move down, then it recovered quickly. >> the stock was all over the place, up 5%, down 5%. there are a lot of moving parts.

are giving ae collective sigh of relief that the story was not worse coming into this quarter. they even suggested the expense growth in the second quarter soht the lower than that, the stock is reacting to that. it will still have to find its footing in an environment where there will be slower profit growth and anticipated. what that lens itself to do we do with tact. see the same thing in the u.s. when you look at the nasdaq 100 underperforming the s&p for another month? >> with tact, it is a difficult one. we have a few days where it feels like things have fallen apart, then it bounces back. we have the tailwind from buybacks coming through as well,

and positioning should push tech ford. threeoncerned about factors. one is global growth slowdown that will hit the luxury side of those tech goods they go out. we're seeing increasing regulation in europe. one of the chinese software it will affect u.s. technology firms if this is spread out across the industry against china. u.s. chipmakers will suffer. tose are things we need start considering, and it makes me more negative for tech coming into 2019. david: i wonder whether we are heading in a direction where we have a cold war when it comes to tech and trade with china and what thatasia and could mean for tech growth and equities. >> absolutely.

one of the things we felt at the beginning of the trade for in q1 was what does this mean for the tech side. that is where the u.s. feels most threatened by china. export controls on chipmakers in the u.s., that tells me the u.s. administration is willing to allow some pain. a sector that is a clear driver once you take that away, it is difficult for the u.s. equity market to perform well next year. alix: what will take the leadership reins? it was supposed to be financials, but based on october it is utilities. >> i think financials will continue to struggle. we have the flattening yield curve, tightening liquidity conditions, and falling growth. where the financials fit into

this, it will be a struggle for the next year. ngthink we can start movi gradually into the defensive side. alix: thank you. great to see you. coming up, should the economy be preparing for the next downturn? what will that downturn look like? we'll speak to our guests on the long term capital for 2019. what economies will grow and won't? this is bloomberg. ♪

alix: this is bloomberg daybreak. i'm alix steel. earnings come out and about 20 seconds but relief that october is now over. green across the screen other than italian banks.

in other asset classes, the dollar moving firmly higher today. euro-dollar flat. 1.13 is how we print. softer growth is the stored in europe. 2/10 spread, 26 basis points. outd: general motors coming come across the wire, earnings-per-share, $1.87. that compares to $1.25 estimates. they have margins across the board globally at it on 8%, 10.2% in north america. as far as guidance, not changing their range but say they are hitting the high end and could even be above the high-end. did very well in north america despite some headwinds, including from commodities, input costs them a but they did well on the margin, 10.2%. china, they warned us would be down but they have record equity

. strong report from general motors, up almost 7% right now in the premarket. alix: amazingly, it is burning ford.bringing up alix: a couple other earnings to , second-quarter operating revenue coming in strong. earnings crushing it in the second quarter, trumping estimates, boosted their forecast for full-year even.. not quite trading in the premarket. i don't know if these numbers are comparable or not, but earnings came in $.38, the estimate was for zero. a killer beat, in that is a comparable situation. these big oil companies, it will be interesting how they see

operations going, production rates. we will get that as the call goes on. commodity day is tomorrow. let's get an update on what is getting headlines outside the business world. taylor riggs has more. janet yellen is concerned about the white house undermining the central bank. she wants president trump to steer clear of commenting on monetary policy. expects to more interest rate hikes in the coming months but believes the fed is trying to take its foot off the accelerator. the president has repeatedly said he is not happy with rising rates. to end thents talks war in yemen to begin in november. event secretary mattis says the conflict should move toward a political resolution. he says the mounting number of civilian deaths in yemen as a result of the more must stop immediately. improved accuracy of bonds is

still a warmer, so we have to move toward a peace effort. you cannot say we are going to do it sometime in the future. we need to be doing this in the next 30 days. we have admire this problem for long enough. taylor: secretary mattis believes the focus should be on the militarizing the yemeni border and allow the international monitoring of weapons provided to iran. china saw its biggest drop in manufacturing pmi in months, falling .6%. the weaker than expect and purchasingom the manager survey suggest the economy took a sharper turn for the worse. there was also a decline in nonmanufacturing pmi. the slowdown is partly due to a weeklong national holiday but does highlight the risk of an accelerated slowdown in business. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries.

i am taylor riggs. this is bloomberg. david: china is one of the things being taken into account in a new report from jpmorgan. jpmorgan asset management is coming out with their 23rd annual 2019 long-term capital market assumptions report, focused on helping investors and advisors understand the economy. for example, they are projecting 2.5% global growth. they say the u.s. economy has increased stability but may not grow as fast as the past. for more we welcome in david kelly and john bilton. asset management oversees about $1.8 trillion in assets. congratulations. people, 9000nd, 35 hours, six months. not much work. >> we take it very seriously.

we spend so much time thinking about the short term in markets but for our institutional clients, mutual fund clients, they have long investment horizons. we want to look at what does this mean for the next 10, 15 years. oftry to provide assumptions what these numbers will be like so we can plug them into the models. that. 2.5%, i understand increased cyclical risk, what does that mean for me as an investor? >> where that you are long-term or short-term, you need to understand what are the structural drivers of earnings growth, long-term dividends, buybacks? what are the head or tail, valuations, margins that may be coming through because of the current state of the economy. u.s. equities, we think we see 5.25%, potential growth on average. if we reach equilibrium starting from terror to the wishon's,

that number is 7.6. u.s. equities actually look good but we have to do with the fact that the cycle presents challenges for us as investors. year ise story this u.s. with great growth, outperforming the rest of the world. is that the store you see in 2019? >> not really. the point is for the long run -- that is why you do these long-term assumptions. what we see in the short run is a lot of fiscal stimulus in the u.s. has pushed up growth, a tax cut has pushed up margins. but if you look at the papers that we have put into this, one of them is on growing government debt. that could eventually put a squeeze even on corporate tax rates. we also have labor supply constraints which will slow growth in developed countries. that is why in the long run we think emerging market will outperform stock market returns and economic growth. david: what about public debt?

say you don't expect a big economy to take that on. what is the risk in that? >> we have talked about the notion of managing outside the main. recognize and when say you don'g economy to take that on. mean reversion matters and when new equilibrium is being formed. if we are operating in record -- relatively sluggish growth, the incentive to grow is lessened. they are central bank balance sheets, larger debt to gdp structurally lower interest rates. that flows through into the different asset forecast that we make. >> it is like when you reach a certain time of your life and a doctor gives you medication and says you have to take this for the rest of your life. have central banks keeping rates lower than they have been in the past, and even lower than their own targets. in order to help governments

finance this big debt load and stimulate growth, we may see low interest rates for a long time. looking atu are stocks versus bonds, where he will get the better return? >> if we look at what is happening in the united states, bonds are back. if we look in europe, returns are still exceptionally low. economy that is normalizing its interest rates, the u.s., and one yet to get off the ground, europe. as a result, if you are looking at this in the u.s. you have a classic late cycle environment playing out. dustuprs can test out -- the old playbook's for that. >> the reason our team is managing beyond the mean -- to be honest, the mean is pretty mediocre and many will not be

satisfied from what they can get from a plain-vanilla portfolio, so you have to exploit where we are in the cycle, the way that economies are changing, the way that private and public equity markets are changing. david: what does this tell you about volatility and risk and a liquidity? >> in terms of the volatility of the economies, all around the world, economies are getting more stable. recessions, milder, and weaker recoveries. we have also seen an evolution in equity markets. we put a lot of work into alternative markets. stocks are acting more like bonds these days. they are not taking as much entrepreneurial risk. because of that, they are not giving us the best returns, so we look at private equity also. >> this is something that we pick up on. as the cycle turns, whether you are a short or long-term investor, you have to plan through it. that means not just thinking about market risk what are you

being appropriately compensated for other moments of risk, like liquidity. perhaps we are just beginning to challenge ourselves to be paid for other elements of risk, and that is where we can pick up improved returns. alix: what does that do in the next downturn? if you have investors in a liquid asset, even if they will be compensated, in a world with tightening conditions, and correlations are actually higher across the board come across asset, what does that mean? >> it means there is a requirement not to avoid risk but to know the type of risk you are taking. if you are taking an ill liquid asset risk in a portfolio that requires daily liquidity, there is a question to ask. and a have deep pockets long-term timeframe, taking illiquidity risk and being compensated for that to be a good strategy. late in the cycle is really

important we think not just about the mean returns, the average expected returns, but the distribution of those, understand what is appropriate for the portfolio structure you have, cash flow requirements you have. david: we started talking about china and pmi numbers. extent does the fate of china read across your longer-term analysis? >> it does feed into it. china is a bigger and bigger part of the economy. we see china slowing. we rely on long-term numbers coming down, just because it is getting bigger, richer, but also more mature. there are short-term issues with china. we are not going to try to project a blowup in china or specific market events but we recognize it will grow more slowly. other countries like india will grow more quickly. >> china is important from an asset market perspective as well.

only about 2% of international holders. your average international bond manager has probably more dollar exposure to belgium than china because of how much of that market is held by international investors. china is a huge untapped potential market for asset investment. we think this will grow over the next 15 years to meet the size of its economy. david: we have a question from a viewer, tying back china to the u.s. $7.50 of, if it takes new debt for every one dollar of gdp growth, aren't we in a slow 2% growth for years? they are borrowing more than their gdp is growing. is that sustainable in the long term? china is trying to make a transition, and we need to, too. it is not government debt that drives innovation. it is rewarding enterprise. david kelly, john bilton

of jpmorgan asset management, thank you. to recap some earnings. general motors had a big beat, $1.87 compared to $1.25. they are up over 10% right now in the premarket. there is one example of earnings beating and they like it so far. alix:they are up over 10% rightw in the premarket. sprint indicating as well, up 6.9%. its guidance was boosted by about 2%. it also sees the full-year adjusted ebit. on the high end. strong report from sprint. also looking at hess, although that will be the call that will be interesting. continuing the gain of .8%. crushed earnings. production came in better than expected in the u.s. overall, if you back out libya,

production was a little light. it's all a question of how much are you going to get out of what you are spending. efficient it is, capital investment. coming up, all for nothing. more on his comments about skipping the saudi arabia investment forum. this is bloomberg. ♪

taylor: this is "bloomberg daybreak: americas." hour, up in the next divya suryadevara, general

motors ceo. we turn to wall street beat, were recovered three things wall street is buzzing about. ubs goes shopping. the bank looking to bulk up is asset management business. asset was nothing. he was the first or drop out of the saudi investment conference but he said that move really got nothing done. and an exclusive interview with david rubenstein, he says lending to fast growth companies may be the least risky thing to do. alix: joining us now is lisa abramowicz. we want to kick it off with ubs. this is the latest and asset managers trying to consolidate. we won retail clients and specialized asset managers. what is notable is $800

million worth of assets is not enough to compete. when you look at some of the other asset managers, it's a scale game. ubs recognizes this, especially as an increasing percentage of their portfolio becomes passive. if you are not getting very much fees on each dollar coming in your door come you better have a lot of dollars coming in. david: those asset managers are doing so terribly well compared to the market. eric balchunas has articulated this well. at the end of the day, we are heading toward a couple of massive asset managers that oversee a vast majority of assets. we are seeing an increasing number of investment firms go lending, coming up with these other strategies that pay fees. when it comes to passive management, it's a scale game. only the big ones will win. alix: we literally heard that from jpmorgan asset. direct lending, they like.

then there is the antitrust thing. we have to go to jamie dimon. an event yesterday, asking him about pulling out of the saudi arabia conference and said it made no difference at all. thing to interesting me about this was his candor. the reality is we are following the government to lead, and the government is doing this. we are not going to cut of anything. we are not going to cut of anything. it was interesting from the candor perspective. alix: i agree. if you pull back, great, people might care, but who will step in? french companies? total? chinese companies? all you are doing is losing out unless there is a global backlash. and the leaders may not

have gone but their underlings were there trying to make deals as well. although there was an interesting tidbit that some people were hiding their and the leaders may not nametags under their ties. david: i had not heard that. michael milken, who spoke to david rubenstein in one of his special interviews. one of the things he talks about is when it is risky to lend and when it is not. some of these high-growth companies like tesla, this is what he said. >> what i discovered is quite often in the future credit is rated low, even if it is the future. the real risk often lies in companies that we think of as establishment, have paid dividends for a long time. from his experience, going back to the japanese companies that he led to, sometimes those are the safest ones. asa: michael is

polarizing figure, known as the junk-bond king, went to prison for some of his dealings, but for all intents and purposes, he is right on here. the biggest risk lies in assets perceived as safe. when people feel confident that they will buy something and will not lose money, that is the scary part. today that is why some are , that the bonds rated bbb is why people are raising so many concerns about these bonds and other assets. david: we always remember the ones that work, we don't always room for the ones that don't. you have to be very selective. lisa: true, but right now it does not appear as it investors are expecting all ccc companies to pay out. is there any knowledge and of risk? people buying as many as they can and depending on that for their retirement? maybe. too bad for them. that is the issue. lisa: the other issue is

leveraged loans. in a capital structure, they will get paid out before bonds. going to theme and not anywhere else, so there is an inherent risk. lisa: there are a lot of companies that are junk rated that are only issuing leveraged loans going to them and not anywhere else, so there is an inherent risk. lisa: and not bonds subordinate to those leveraged loans, so there is no buffer. if they default, first lien, great, but there is no second lane. david: thinks very much. it is great energy. you can watch that entire interview with michael milken on the david rubenstein show at 9:00 eastern time tonight. many thanks to lisa abramowicz for being with us today. coming can watch that entire interview with michael milken on the david rubenstein up, wall se wave. bloombergou have the terminal, watch us online, check out our charts and graphics and interact with us. go to tv on your terminal.

this is bloomberg. ♪

david: as the midterms are coming up, this time it is wall street in the midterms. a fascinating piece on the bloomberg. for one of the first times ever, the democrats are getting more money from wall street, the banking industry and securities. more money going to democrats than republicans. you may ask why? they want to avoid what they think could be the worst effects of a blue wave. maxine waters would take over the relevant committees and they are concerned about what may happen. they are giving money to democrats who they see as more moderate because they want them to be listening to them, try to

tell done what may happen. alix: that is interesting. what are they most worried about? requirements, they could trim those back. investigations with maxine waters, she says she will go after wells fargo, deutsche bank , because of those connections with president trump, also equifax, the lost data. they are worried about if the democrats get the majority, they have the power to investigate. alix: t minus six days. we will be joined by the general motors cfo coming up. stay tuned. this is bloomberg. ♪ ♪

alix: nightmare on wall street.

global equity markets lose $8 trillion in october with u.s. on performance slipping, cyclical sectors all into correction. china caught in a broad services and manufacturing weakness marika leading fears of a global growth -- getting lowered. earnings to the rescue. facebook outlines the new vision. gmc hitting the high profit for the year. we will speak to the cfo. david: welcome to "bloomberg daybreak: americas." i'm david westin. we are getting a lot of earnings in. we are waiting for kellogg's and glaxosmithkline. gm shut out the lights. adjustedxosmithkline 2018 adjusting earnings growth at 8% to 10%. looking for their longer-term guidance, some concerns about the dividend being at risk. we are winning for more information on that. the longer-term view of growth wem 2016 to 2020 is what

will pay attention to. for now, a percent to 10% holding up the stock in the premarket. david: and they did beat estimates. up about 1% in the premarket trading. alix: will earnings be enough to prop up the equity market? it will be a lot of reshuffling and readjusting into the close today because it is the end of a turbulent month, pension funds getting in there to buy. s&p futures up around the highs of the session. g.m. helping the equity market. you have slowing growth and higher inflation. 1.1%,nflation rising to neutral in the fx market. the dollar moving higher. dxy at its highest level since 2017. yields movinghe u.s., higher by about two basis points. crude up by about .2%.

-- .3%. at 8:30, the u.s. treasury will be telling us how many bonds it will be issued next quarter. then brazil will be issuing its rate decision tonight. tonight, president trump will be campaigning in florida, six days away from the midterm elections. right now, let's get an update on what is making headlines outside the business world. indonesian investigators think they are close to finding the main fuselage and data recorders from the line air jet that crashed monday. it was the first crash involving the new boeing super max. inspectors found no issues with other planes in the fleet. the ntsb plans to question airline staff tomorrow. for more federal reserve chair janet yellen is concerned about the white house undermining the central bank. she wants president trump

tuesday are clear of commenting on monetary policy. washington,ks in she said she expects to more interest rate hikes in the coming months but believes the fed is taking its foot off the accelerator. the president has repeatedly said he is not happy with rising rates. received herth ii lowest rise in public funding since the u.k. treasury changed its financing arrangement with the royal family six years ago. she will get about $105 million for the next financial year to fund her duties as monarch. from theot just .2% prior 12 months. the annual inflation rate was 2.4% in september. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am taylor riggs. this is bloomberg. alix: thank you. let's be clear, that is for allowance for being queen. she also owns a lot of property

that she makes money from. alix: i'm guessing she does not pay for food or electricity or internet or tv or cable. rough stuff. vision of the future. shares rising in the premarket. the company had mixed results yesterday. mark zuckerberg says it will be another year of investment. >> we are also heavily investing vr, technology that will be bringing people together , experience that delivers rift like quality with no wires attached. i expect .19 to be another year of significant investment. alix: joining us from san francisco is mark lehmann. if you look at the wild ride that was facebook overnight, what did you make of it, what was the biggest take away for you? the noise going

into the quarter, we saw the report, people are believing in mark zuckerberg, the investments they are making. they see a nice rise in revenue. those expenses will bloat in 2019 are investors. 2020 will be a year of great gains on the bottom line. april are getting facebook the benefit of the doubt ask month after we started this whole investigation into what happened with the 2016 election, and what they are going to do about it. alix: is this going to be enough to stem the tide when it comes to faang stocks? amazon at its lowest levels in 2008, netflix, lowest since 2012. does give it some stability? >> fournette it does. over october you saw amazon and netflix really taken on the chin, alphabet less so. you also saw facebook which had a tougher time reporting in the june quarter.

as of now, it seems facebook will, about 10% off the bottom where he treated yesterday and i think people are giving it the benefit of the doubt. experience, some of their other products have not denigrated, have not gone down. people are getting facebook the benefit of the doubt that the investment expenses they will have will lead to better days ahead. david: we are in the last day of trading for the month and it's been a pretty rocky month. as you look at it right now, what lessons do you glean from what happened this month, what does it to you about particular sectors that you think are stronger than others? >> i think it was t.s. eliot who said april is the cruelest month but traders would say october. this has always been a tough month for the market, either going into elections or a time of reflection for the market. looking at where we were in the fall, multiple that were stretched, they looked at rates rising, tensions elevating with

straight talks going into the -u.s. ties, and people got a little scared. of almost backdrop perfection, they have taken some chips off the table. tech, which has led the market for so long, is not going away. our investments are there. but i think there is a temperance that we needed, frankly. we are seeing that. pauset think this is a that is permanent, i think this is to recalibrate what we are paying for these companies. right now, the companies are not perfect. that is what happens. butrosie going into 19, this temperance is not the worst thing for the markets long-term. alix: you have to recalibrate the multiple you are willing to pay when you have light cycle stages, pete profit. what was interesting was where we felt it. tech and growth were hit but utilities outperformed.

you also had some of the consumer names like retail, autos did better than expected, homebuilders. is this shift going to be shorter term or longer-term? >> for now, i think the rotation you described is real. the economy overall is not going down, we are not seeing recession looming. what we see domestically, we are seeing growth slowed a little bit, we see the tech stocks which were way above evaluation metrics coming in of it. if we see a cloudier picture for 2019, expenditures, the consumer tapped out, the effects of higher rates temper of the consumer, i would be worried the would i don't see that. thesetation into some of stocks is healthy because some of them were undervalued. rotationeing the benefit from those domestic companies. that will not slow down into 2019. 18 will be an investment year,

recalibration of multiples. i don't think the economy has stopped. david: always enjoy having you, mark. thank you. kellogg's earnings coming out, right on the money. earnings-per-share at $1.06. net sales just a bit more, 3.7 as a pose to 3.4. people were hoping they would get a lift from reduced overhead cost him a year-over-year favorable comparison. in the premarket, they are trading down over 3%. coming up, general motors shares soar after reporting a strong third-quarter earnings. we speak to divya suryadevara, the general motors cfo. this is bloomberg. ♪

david: general motors came out with earnings today and they are being rewarded by the marketplace. the stock is up about 7% because they have a beat on expectations, big beat on earnings-per-share. art were also attractive. from their headquarters in detroit, we welcome divya suryadevara, the cfo. you have a beat across the board. what are the highlights for you as the new cfo, what do you take away from these reports? >> it was an outstanding quarter. we had strength across all of our core operating segments. north america was extremely strong, 10.2% margins, driven primarily by the strength of our new full-size pickup that we recently launched, which are doing exceptionally well. we have a strong pricing environment as well. when you look at china, strong

third-quarter equity income of 500 million. financial, that continues to perform exceptionally well as well in the with a record earnings before tax of 500 million. what you are seeing is our execution in a challenging environment, and those in the numbers on the board today. david: talking about north america, what about pricing power? are you seeing an ability to pass through higher costs? you have some higher cost from commodities, i understand it. >> as it relates to pricing, we are certainly helped by the launch we have coming up, we launched the cross over last year, now we are getting into the early stages of our full-size pickup lunch starting with our light duties. we can capitalize on that overall. commodities is certainly a headwind. we have had to offset about 400 million this quarter. it is a billion-dollar headwind this year. we have managed to find other

offsets with our light-duty launch, as well as pricing discipline, other areas of the business which have managed to offset that. david: going to the full body trucks. they just won out this last month? deliveredcorrect, we 45,000 this quarter. your marginuch of performance -- 10.2 percent in north america -- how much is because of product mix, selling bigger vehicles? >> we don't typically get into a product line profitability, david, but the strength was across every segment. we are seeing a lot in trucks, crossovers have performed well, and we are disciplined on the passenger car front as well. david: you mentioned china, a big player. you make a fair amount of money there, $500 million this last quarter, a record. you commented on this recently,

saying you will take something of a hit. you see further deterioration in the purchases of gm vehicles in china? >> it is clear the volatile environment, one that we are watching closely, but what has worked this quarter, when we continue to execute on our things that we can control. we have been intensely focused on cost. you see that coming through this quarter. luxury has been performing well, as you may well know. within that, cadillac is up over 20% year-over-year. the macro backdrop is something we are watching. what we are controlling are the factors that we can control to help mitigate the overall macro factor up. david: there was a report the government was considering a tax break for chinese consumers of cars, particularly the smaller vehicles. how would that affect general motors? you are big with the buick in china but also you have some joint ventures with smaller vehicles.

>> we have seen the press reports. it is speculative at this point. if those measures or other measures are implemented, it would help the overall industry, for sure. but again, it is speculative at this point. we are focused on controlling our execution in that environment. avid: monday and that we talk fair amount about is autonomous and you have a lot of investments in softbank, honda. where are you in that? >> no news here. we continue to remain on track. , as youbeen focused know, on our rate of development in a dense, urban environment. we continue to be focused on that, remain on track to target commercialization in 2019. david: you have a fair amount of investment. do you expect to take more investors into cruz? >> we will be selective and

opportunistic going forward. partners, wereat are capitalize well into commercialization. if an appropriate partner comes along, which we feel we could benefit from mutually, that is something we would consider. that is not in our plans currently. david: give us a sense of the macro factors. not in your control but you have to respond nonetheless. when you see interest rates climbing, how sensitive is your business to each 10% rise in interest rates? i think interest rates is one element but you have to look at it in the context of the overall macro backdrop. is themean by that unemployment, the wage growth environment, consumer confidence , the state of the consumer balance sheet overall. what we're seeing is a continued instructive macro backdrop. .nterest rate is one element

from an overall consumer affordability are perspective, it continues to be constructive. david: we heard from autonation who said they got really hit on new vehicles because of interest rates. you are not seeing that from your perspective? overall, like i said, in the context of the overall backdrop, affordability remains constructive. we are not seeing that. david: how do you see the overall north american market demand? anticipating, where do you have to cut deeply if you go down that projection? overall from a north american perspective we have seen several great years here. as i mentioned, all the factors from an economic perspective .2 a continued constructive environment. but you're still talking about

numbers in the 16th and 17th which are still strong. as we move forward, we have been absolutely focused on cost, maintaining a low breakeven. if the cycle worked to turn, we are prepared to do with that. david: what about wage costs? jobs numbers coming out on friday, we will look at how much wages came up. is that starting to cut into your margin? >> overall, i don't want to comment on specific cost elements that you can see in our margins we are managing to offset whatever headwinds, whether that is wages or materials or other elements, and continue to get results. what you are seeing in q3 with our 10.2% margins in north america is a demonstration of that. david: you said you may go toward the upper and or even over that range. what may drive you there? we have stated our eps range of 5.82 6.20 before.

with the strong results we have had along with a favorable tax expectation here, we are going to be at the top end of our expectation. upside.l for extra we really expect, looking at q4 and the rest of the year, for all of our corporate excitements , to continue to perform well. north america will benefit from our new full-size pickups. there is clearly volatility in the other non-core elements like fx, certain other non-core items and the tax rate will be higher in the fourth quarter as well, but putting that together, all the core operating segments continue to deliver well. that is where we see potential upside. we are mindful of some of the volatility we are seeing right now. david: thank you and congratulations on your new position. divya suryadevara, the gm chief financial officer.

meantime, we did get the adp report out, saying companies added 227,000 jobs in october. that beat estimates. s&p futures around the highs of the session. so much bad news big ten and after a terrible october. will the job market providing upside surprise? this is the first indicated for that scenario. reaches a dealy which could lead to a sale. this is bloomberg. ♪

david: time now for the bottom line where we look at three cup

is worth watching. clorox came in with their earnings and they are down. down over 5% now. they beat earnings-per-share but they have some cost, margin pressures, fx pressures, and they will not be buying as many of their shares. alix: i wonder how much passed through they have. gold corp., interesting commentary after their earnings. this is what he had to say about the crisis for gold miners. caution to a certain degree has to be thrown to the wind. right now as an industry we are facing an existential crisis because reserves are declining rapidly. if we are not replacing the assets, we will stop existing. comments from the ceo of a gold company. i covered gold over 10 years ago or nothing could go wrong, so a really big pronouncement. david: no question. our third story, bungy. we are joined by brooke sutherland for that. >> they have reached a

settlement with activist getting a who are now number of board seats, also getting the company to agree to form a committee to do a strategic review. that will encompass operational improvements but also will include possible looking at consolidation opportunities. david: didn't glencore want to buy it at some point? in 2017,talks stalled not clear what happened, but the ceo said he really wants to expand and agriculture markets. he primarily wants to buy companies with existing infrastructure. bangui would seem to be a good option for them. this company also help talks with archer daniels midland earlier this year. those conversations tell apart in part because the conversations --talks about antitrust. alix: only about five of them have that scale. >> the main agricultural processors. it will be interesting to see if

that company takes another step at conversations with bungy now that you have activist investors prompting the review. alix: they missed on their sales but provides the full year guidance. >> i also wonder if that sped along the agreement. the ceo had made big promises about second-half performance at bungy him and delivering with that guidance cut. you wonder if that made him take these demands more seriously. alix: brooke sutherland, thank you. coming up, an exclusive interview with marc lasry, avenue capital management cofounder and ceo. this is bloomberg. ♪

alix: this is "bloomberg daybreak: americas." i'm alix steel. of thekets at the highs day after we got that killer adp report, private companies adding

227,000 jobs in the month of september -- october. it is halloween, right. that is helping the market. european stocks outperforming the u.s. market for the first time since 2016. even in telling bankshares, despite the fact that its outlook was lowered by the s&p, also trying to eke out again. still a stronger dollar story although the cable rate is below other fx swaps. , downr yield in the u.s. a little bit. 2/10 spread, 27 basis points. we were at 35 a couple weeks ago. potentially a soccer deal with italian bonds. all of that percolating in the markets. david: don't hold your breath. who is to erik schatzker here for an exclusive interview with marc lasry, avenue capital management cofounder and ceo. >> and a renowned credit

advisor. great to see you this morning. only one place to begin, and that is with this. what do you make of all of this market volatility, the beginning ?f a bear market just another pause on the way to hire highs like we have seen so may times in the past five years? >> i think it will be difficult. the simple reason is everyone is waiting for the midterms. ist you'll find, our belief if democrats get control, i think you will have a lot more volatility. the reason you'll have more volatility is you will have more headlines. you will see more of these problems that you are seeing in d.c. with the president and congress. erik: or between the house and administration? >> democrats need to get control of the house. if they don't, you will find the markets going up.

the markets are sort of focused on the fact that if democrats get control, you'll have a lot of issues. those issues are not good for the economy. erik: you believe what we have seen over the past couple of weeks is a reflection of political risk being priced into i think political risk is being priced in. economics lot of issues. the other issue is how much is the economy going to grow? equities need an economy to grow around 2%, 3%, or 3% to 4%. bonds need flat to up 1. all we need is an economy doing what it is doing. whether the economy is up one or 2.5, that's great for us. for equity markets, you still need to have this study growth. i think people are getting nervous about whether that growth is there a him and then you're getting nervous on the political side. erik: let's talk more about the

political side. when you say if democrats take control of the house, when you say there will be more volatility than what we have seen, what does that look like from november 6 until year-end? >> if you look at what has happened over the past two years, whenever there have been issues within the administration , a republican-controlled congress has made those issues go away. the biggest one would be investigations of the president. if you have a democratic-controlled congress, the house, you now start having those investigations. i think the market does not want to deal with that. erik: why, because it is bad for business >> what the market wants, you want certainty. more uncertainty there is, the more headline risk there is, the more issues you'll end up having. erik: to what degree do you care

about this as a credit investor? are you looking at the market today, when you are predicting between now and the end of the year and saying that is a sell signal or by signal -- buy signal? buy signal. is a if it is more uncertain, we like that. erik: why not sit back and wait until after the midterms? >> that would be great, if you could tell me where the bottom is, i would love that. i would love to know the bottom. what we are very good at is understanding value. buying something at $.60, buy something at 50, i don't know if we will ever time the bottom, but we will be good at buying at low prices. erik: let me ask you about spreads. we could look at the equity market and decide whether we

have seen a bottom in risk .ssets you are in the credit world. there are a few ways to measure it. let's start with high-yield spreads. 3.80 today. does that feel like a bottom to you? i look at that, i don't see how you are getting paid for that risk. if you look at investment grade, investment grade bonds today, 50% of those bonds today are trading at levels that are bbb. when you look at that, from 10 years ago, that ends up being multiples of what it was. any slowdown, you will have quickly andretty for us, what we will see, we think we will be able to buy investment grade bonds quickly e today trading at par. once there is a problem with rates going up, will be able to buy those bonds at around $.60.

erik: $.60 on the dollar. >> there will be issues. i love issues. give me more issues. erik: when does that happen, by ?ow much do rates up to rise are we talking about a repricing of the middle or long end of the curve? >> rates will go up about 100 basis points. fund. as they do that, the cost for companies, because everything is a floating rate, starts to move up. right now, what people focus on is how much the economy is growing by. erik: 3.5%. are 100 basis points higher in the economy is growing that meanst's say 2,

the economy has contracted by a third. all everyone will talk about is the slowdown, as opposed to the fact that you are still growing at 2%. once that changes, that psychological change happens, what you'll see is the markets will start to focus on when are we hitting that? erik: you don't believe that psychological changes happening now? the reason i say that is because the markets are discounting mechanism. 100 basis points may only be 12 months away. it is starting but you need more issues, you need more problems. we will start to see that. erik: a 100 basis point increase overnight, lending target, is that enough to trigger the distress cycle? >> i don't know if it is enough,

it is the beginning of the cycle. using a baseball analogy, right now, we are in the second inning on the distress side. it is very early. you want to get to the middle innings. we will get there, the question is how long it takes. erik: i want to get back to your point about buying investment grade bonds. $.60 on the dollar. >>erik: i want to get back to yr point that is somewhere out in e future. reason i don't think you are getting paid for that risk today, if you are an investment grade holder, 80% of the bonds being issued our covenant light. you have less covenants, you have a lower coupon there you are not getting paid enough. comever there is a problem in the past, you can look at the covenant and that would end up holding the price up. now the only thing that will be there, you have one covenant, when the money is due.

that is why bonds will drop. everyone will go, i have no covenants. all i can do is ask for my money back. erik: you make a great case for shorting liquid credit. are you? >> we are short some, yes. high-yield index. erik: what are you buying them? >> right now quite a bit in the power sector. erik: utilities? issuesr companies having because their debt has to be restructured. retailers that are having some issues right now where we think the value of the real estate is worth a certain amount. ?rik: any names people want to know if you are talking sears. i presume not. jcpenney, neiman marcus

would even names that people know. and where bonds are trading, we have been buying some, selling, going in and out. depending on where the pricing goes. that is where we have been taking advantage. a number of other using craddick opportunities. we have been pretty busy. we have not had a problem investing capital. what do you think of the investment grade issues of selling off in the past few days? gm and ibm? >> i think they are fine. the issue those companies will have, especially ge -- ibm on not as worried about. i think ge has a lot of issues. that is something we are starting to look at. that is probably a year away for us. erik: so the bonds are not clearing it at the right price. >> still not cheap enough. erik: the outlook for the economy, how much recession risk

do you see, to what degree do you factor that into the bond decision you make? do you need a wider margin of safety, cushion, then even five weeks ago when everyone thought everything was fine? >> the economy is fine. 3, 2, 1,e are going at for us, what we do, still money good. , as you haves issues, as the economy slows down a little bit, people are going to get nervous, but we will be able to buy that debt. i will give you an example of something we are doing. saw. about $40 billion of equity value. we are factoring some of that paper. people are coming to us and saying i don't want to take the risk that i will not get paid in 90 days. on tesla. aroundre buying that

$.95, $.96 on the dollar, and we are getting paid 100 cents on the dollar in three months. so when you look at that, you are getting massively overpaid. people are nervous. from an economic standpoint, i would say nothing to be nervous about. still have $40 billion in equity value, but people are nervous. irrespective of whether you on musk over the long run or not? >> my kids are buying tesla. i know what is going on there, i look at the equity value, but from a business standpoint, we are making 10% on a piece of paper that we should not be. erik: what will it take for the market to start punishing the companies with that balance sheets, over levered, that for some reason have been skating along, even in a post qe era? >> you need rates to move up,

number one. everyone knows they are but the question is how much and how quickly. and you need a slowdown. you aref a sudden talking about the economy growing at 2%, then people start getting nervous. if you are growing at two, you are word on growing about one. recession?are we in so if you are worried about a recessionary environment, it is hard to raise money. if you are not worried about a recessionary environment, you can still raise money because you can say we will have growth. --k: always great to send spend time with you here. marc lasry, the ceo of avenue capital. volatility ande he says, it is great. he likes his chops way things about buying investment-grade bond for six cents on the dollar one for most people that would be apocalyptic. erik: lots of good stuff coming

out of that. during that interview, i wanted to point out what happened with the treasury refunding announcement. basically, the treasury will in 2, 3,billion more and five-year notes. one billion over two months versus one billion every month. the 7, 10, and 30 having year, they will hold that level. so they are issuing more, more long-term debt this quarter, but on an individual basis, a little bit less. david: the fourth consecutive quarter they are raising. they are borrowing more money, it's clear. alix: the yield near the highs of the session on that. david: we want to turn to health care and its role in the midterm elections coming up. voters go to the polls across the united states in a little less than one week to vote in the midterm elections. control of the house very much

up in the air. according to a poll, most americans are concerned about the future of health care. we welcome from cleveland, dr. toby cosgrove, the former cleveland clinic ceo. thank you for being here. let's get to the core of the matter. what difference will it make if the democrats or the republicans control the house? see ahink we will slowdown is the democrats controlled the house in the number of things that affect the aca. particularly, they will look at the navigators that have been brought in, they will look at the various other aspects that have been used to slow down the expansion of the aca, and the exchanges. david: one thing you have been concerned about is the extent to which health care consumes our federal economy, over 17%, almost 18%. one happy helping the problem to

slow down what is being done to the aca, does it make it better or worse? >> since 2010 we have seen health care inflation be less than general inflation, but that seems to have turned around this year for the first time since 2010. we are seeing health care inflation slightly ahead of standard inflation for the country. it is project it will continue. we will see the total amount of spending on health care will go up about 5.3%, which will bring across ourtrillion economy. actually, if you look at medicaid, that is currently 10% of the federal budget. it is a big number and it continues to get bigger as the federal medicaid increases. congress,rt from the what about what the administration is doing? one thing that you focused on is the cost of drugs. there is a new proposal out of

tiesaying we are going to the reimbursement for part b of medicare to international prices which are lower. is that a good thing? >> definitely a good thing. we pay about 180% of what european companies are paying for their drugs and it is nonnegotiable right now for medicare part b. some of ourto tag prices to those paid by other countries, we can reduce our prices substantially. this will give us an international market, meaning to have a semblance of an international market for competition. interestedare also in increased efficiencies, which you think there will be more of if there is consolidation. has the administration been more open to mergers within health care than his predecessors? much have not seen difference, frankly, in terms of

being open or not to mergers. one of the things that we are in danger of, however, is the rural hospitals. particularly in states where they have not extended medicaid. those hospitals are really in financial trouble. we have seen a lot of closures, some 90 closures of rural hospitals across the country. this will have substantial effect on some people's access to health care. about two thirds of those are a third ofabout those, i should say, are outside of the 20-mile radius of a major hospital. one thing we are seeing is better transportation and we are seeing a lot more outpatient capabilities, so that should help to offset the loss of those hospitals. fair: there has been a amount of consolidation in urban areas already with hospitals. has that resulted in reduced costs, are greater efficiencies being passed on? >> what we are seeing is an

attempt to control the cost. frankly, if you look at the cleveland clinic and of which is emblematic of what is happening ofoss the country, about 63% our payment is medicare, medicaid, and no pay. it's impossible for us to raise rates there, regardless of whether we consolidate or not. insurance companies, it's difficult to raise our rates to them because we are lucky if we get a 1% or even 2% increase in year-to-year what they are paying for us. what we need to focus on is the efficiency. from twoiency can come things, the consolidation, and the increased use of technology to help us reduce the huge number of employees in the health care industry, which are now 60% of our cost. david: also the issue of middlemen when it comes to pharmaceuticals, the pharmaceutical benefit managers.

a lot of people think that middleman is adding a lot of cost to what the consumers are paying. is that right, should we be going after the pbm? >> i think they are in trouble. you see them consolidating with insurance companies and the pressure will be on them in the future. almost all the major pbm's are now associated with one of the major insurance companies. i think that spells difficulty for the pbm's unless they are associated with an insurance carrier. david: coming back to the midterms, six days away, what is the one thing you would like to have come out of the next congress that would really move the ball forward? is it more likely a democratic control house would give that to us or republican? >> clearly, what everyone wants to see is pre-existing conditions. those need to be included in insurance. .hat is important about 75% of people across the

country want this. i don't think we are going to see a generalized repeal of the aca. that has now been in place 10, 12 years. the markets in place, the more people look at it as a benefit they want to maintain. that is similar to what we have seen historically, whether it is social security coming in, medicare, medicaid. longer a benefit is in place, the harder it is to take it away. i doubt that will be going away in our immediate future. i think questions have to be around drug pricing. regardless of whether it is a republican or democratic-controlled house, we onl see real pressure companies to reduce prices. that will be one of the things that we see out of the next congress. always good to have you, dr. toby cosgrove, the former cleveland clinic ceo. the stake inook at

health care companies, we want to bring in dr. ana gupte. looking at the individual sectors, you can see pharmaceuticals and biotech. will that continue to be the ?lay into midterms continu >> i don't know how much drug pricing is a partisan issue. the current republican administration is taking the lead on the expectation from a street perspective is that we will have a purple way for the most part. at least more than 50% is being priced in, the house will flip. we will have some governor races going democrat and then a senate that remain republican. and no change in the contribution of the white house until 2020. personally, i don't know that the drug stocks are responding so much to the election as to this proposal on the table right

now with medicare part b. then the broader selloff. the markets are not necessarily trading on fundamentals at this point. i don't think it is an election trade for pharma. alix: if you are looking at a purple congress, what happens with the medicare and medicaid providers? >> the purple wave is good from the point that we have divided government. as dr. cosgrove said the expectation would be from a legislative standpoint we would not repeal break listing conditions, we still have the supreme court as another avenue to do that. at least one angle is removed. ,here is an expectation also some bullishness around the medicaid is stocks. governor races, especially that goes democrat, there is a broader medicaid expansion story that goes in here. going to that question

specifically, medicaid expansion, what is the likelihood across various states? >> about a dozen states where there are governors races. there is more bullishness in the markets that that would transpire and that we have more expansion. the uncertainty on whether governor races do, in fact, turn blue. secondly, the republican legislatures may not allow that much expansion. have treated him before this broader growth selloff, and anticipation of the blue wave. finally on drug costs, alex a czar says there is more coming. >> there is a belief that the rebates could be eliminated. the safe harbor provision is sitting in the office of management and budget at this point. personally, i'm not really on board with the notion that pbm's don't add value. i think a lot of the rebates, which are at the heart of the debate, go to employers in the commercial market, and then they

go back to seniors and medicare. pbm's are in the mid-single-digit margins. i'm not sure the employers are on board. beyond what the government wants, what is feasible, you may whopushback from employers don't really appreciate the impact to their bottom line on benefits. david: thank you so much for being here. is what i'm watching. how we close today. it will be hard to judge price action into the close because we had a lot of balancing at the end of the month. a crazy month for u.s. equities. s&p futures around the highs of the session, near 1%. strong adp number. employment cost index your on your is now at the highest level since 2008. the phillips curve may actually be alive and well. european stocks outperforming the u.s. stocks for the first time since 2016. also in the market. how much of that is pension fund

rebalancing into november? also watching the dollar, stronger against most currencies with the exception of sterling. .1%.done by higher inflation, weaker growth. that is a stagflation conversation coming into the foreground. in the market for the 10-year, yields moving three basis points. more issuance coming on the back end so winning on that a touch from the treasury refunding announcement. crude up five point 4%, the worst month since 2016. that does it for "bloomberg daybreak: americas." this is bloomberg. ♪

jonathan: the countdown to the open starts now.

coming up, stock markets rallying to end in ugly october. s&p for its biggest monthly loss since 2010. hopesberg driving home for a better 2019 and china's economy risking a global slowdown. market to end a messy month going into the final day of trading in october. equities in the bond market on the back burn. treasuries on a u.s. 10 year. investors are seeing worldwide preparing to close the book on ugly october. >> i think these markets are dealing with crosscurrents. >> more headwinds such as increased inflation. >> earnings growth and revenue growth are -- >>