stop offering unit sales. level could highest be hit since 2009. we talked to ellen zentner at morgan stanley. trump says, show me that video. potential draft of a trade deal after a good phone call with president xi jinping. david: jobs day. i'm david westin. it was also iran. alix: yes. the equity rally, oil not participating. potential eight countries that will get waivers. we do not know what that means. david: we do not know how much they will be able to get from iran. they don't send the money directly. it goes through escrow. alix: we are talking to jeff currie later on. he says the market is pricing

zero exports from iran. that is why the market reacted like it did. market,arket, equity risk on anyway you slice it. s&p futures on the high of the session of 21 points. insane week. the last five days have been challenging if you are a long investor in equity. 4/10 of 1% despite a italian manufacturing shrinking the most in four years. the story of a weaker dollar, part of a potential trade relationship between china and the u.s. 10 year yield up by three basis points. david: first take. we have achieved u.s. economist of bloomberg, we also have lisa. alix: awww. let's talk about the

china development. there was a report that president trump asked for a plan on trade with china. something is coming? >> today i spoke to president xi, great guy, great man from china. he is the boss. we spoke and he said, we have to make a fair trade deal. they all want to do it. lots of great things are going to happen over the next short period of time. david: president xi is the boss. >> there is skepticism that president trump is trying to be more sanguine about china because of the midterms. the more he talks about a deal, the more the markets rise. he wants a rally. he tweets a lot about the stock market. people are skeptical. underlying that is intransigent points that president trump has

reiterated about the issue with china -- it has to do with intellectual property theft, cybersecurity, fundamental structures to china's economy. it is hard to see this resolved with a pen. lisa.i agree with if i was an advisor to president trump and i wanted to improve the economic message into the midterms, the most powerful way for the president to job the equity market is to create the impression we are close to a trade deal with china. equity market. this will be an important theme for the remaining years of his term, especially if he loses one of the chambers of congress.

assuage i wanted to concerns of north dakota farmers in the contest there, this would be another step. steel and aluminum on one side, the have and have-nots of trade. david: indiana. they have people going both ways. lisa: i wonder whether china will play. carl: they want a deal. isa: they are aware this election ploy. do they want to put pressure on president trump? karl: watch the other hand. you and near seven. let's go to jobs. wage growth.

wage growth. will we see the highest wage growth, fastest since 2009? over 3%? carl: we will. that is a statistical fluke. we talk about hurricane impacts. we hurricane impact driving wage pressures in the report but if we look to october last year, we had a week average, weak earnings. this is a base effect, 3.1% in near-term, that will not be sustained. we are not seeing inflation pressures in the economy that will sustain. wage pressure is picking up, phillips curve not dead. this is exaggeration. david: statistical anomalies -- these are good numbers. lisa: here is the dilemma for the federal reserve. that is the reason markets are watching closely. will the federal reserve continue with the rate hiking

path that many people think is too fast next year? if we get sustained, a feeling of sustained wage growth, albeit even recovery, that will give the fed confidence to raise rates perhaps more than some would like. potentially that could be viewed as a negative by markets even though it is positive for the economy. carl: the slope is positive. today will overstate the degree to which things are picking up. david: we will take that into account. apple, after the bell, it disappointed. they were shy on units sold but look at the average price and overall sales. terrific. it was off and training, trading, apple came down. said we out, tim cook will not have the unit sales report anymore.

there are a bunch of reasons people are concerned. you have a feeling they disappointed and that they are trying to hide something because they will not report unit sales of iphones. they say -- we are trying to put more emphasis on service side, that is the growth business because we are getting a slowdown in the super cycle of smartphones. this is a big question. up viewingg to end apple as a services and utilities company that is not going to be the growth engine it has been? or are they going to continue to look for a new product that can drive the growth side of the story forward? alix: the trend, what happened to apple after hours and you can see the decline when they said they were not going to reveal numbers. this will always be a hardware company. give uske they want to,

credit for this fast-growing business at the end of the day. carl: consumers are in a solid spot. spending will be a solid performer of the economy in the fourth quarter this year and holiday shopping season will be half a percentage point stronger than last year, which was strong turnout. david: contrary and to float, what are consumers going to spend on? iphones? services? there is another way to look at this. as a manager, what you measure is what the company will manage. let's not pay as much attention to iphones, let's report on earnings from services because that is the growth engine. lisa: astute observation but if that is the case, they made -- they may need to lay out more carefully how they will grow services.

they are starting to break out more information about services. david: and health monitoring on wearables. your watch will tell you how your heart is doing. lisa: then they will be a software company. at that point it will be interesting and we will see what the growth perspective is. alix: and what kind of multiple you pay. guys, thank you. i want to bring up alibaba. stock moving lower in premarket. it cut revenue forecast on macroeconomics conditions. that writing down the stock. it is up 2%. it went down then up. david: earnings-per-share be by a bit. they are worried about china growth. they are taking estimates down. -- beat by a bit. alix: 4.6% to the original

revenue review. i am curious. they rebounded. potential. david: earnings-per-share beat by large for the last quarter. this is just speculation. maybe they are paying attention to president trump. alix: maybe. david: maybe. alix: true. david: speculation. alix: was september just a fluke? more on the jobs report. we talked to ellen zentner. this is bloomberg. ♪

♪

is bloomberg daybreak. elon musk says he would not accept an investment from saudi arabia now. he criticized the government over the death of jamal khashoggi. interests have prompted him to tweak that he has secured funding to take tesla private, then he said he used twitter " with not as much of a filter." reversing the premarket again. morgan stanley estimates targeted, 13.5%. guidanceed the 2018 after beating estimates in the third-quarter. q3, revenue at $2 billion. shares in iag have taken off after announcing stepping up growth plans through 2023.

the upgraded forecast shows confidence in the market, shaken by rising fuel prices and overcapacity. that is your bloomberg business flash. alix: the question on jobs day -- will we see wage growth over 3%? 200,000 job additions in 3.1%, thestimates, biggest gain since april of 2009. the number comes in. oh my gosh. what do you think? ellen: consensus at 3.1%, , that wouldpected not be a surprise. the headlines will be around the fastest wage growth since 2009. that will get people warm and fuzzy. alix: [laughter]

ellen: you might get rise in yields because of that. will the fed hike faster? we are looking for 3.1%, it is a jump. this is mathematical anomaly. fundamental organic wage pressures happening and broadening to more industries because we have a tighter labor market. that is a healthy development. it is not something that gives the fed feeling like they have to move faster. it is healthy. david: a good thing or a bad thing? it does mean there is real wage growth. ellen: we finally moved into positive territory. that is great. the key is productivity. productivity in u.s. is rising, ontrack close to 2% this year.

when you think about, well would be acceptable level of nominal wage growth given productivity and inflation? certainly around 3.5% would be a healthy wage growth level that would not suggest inflationary spillover because of activity is rising. think of productivity as the governor of nominal wage growth. you can pay your workers more and labor costs will not cut into your share of profits in a bigger way. that is the bottom line. this is healthy, normal, not inflationary. alix: is the power moving back to the worker? could potentially go on a big labor strike. is there more bargaining power? ellen: in certain industries. transportation, trucking, warehouse, that is where wage pressures have been. that has been the case for a few years.

there is a shocking headline. trucking is a terrible job. it is one of the worst jobs to have in the u.s. when manufacturing starts to those after downturn, laborers in the trucking industry tend to move across lines to manufacturing. you have had a shortage of trucking workers for years, then layered on top of that, regulation on the industry and fuel standards on the industry that have now raised cost for employers more. it is a tight labor market for the trucking industry, where the employees do have bargaining power. david: on the back half of the earnings season, how does this work? on the one hand you pay your workers more, not a good thing, squeezing margins. on the other hand, you increase demand. how does it work overall? ellen: if you are confident in your investment prospects in the economy -- and we can talk about

trade -- if you are confident about leaping that five-year hurdle, you want to invest more and grow your capital base. productivity drives profit. if you feel you are getting pressured by workers, you will have to raise wages, let's say you are amazon's competitor and you need to keep up, and they increase the minimum wage, you have got to grow the bottom line. alix: interesting with eci, up 2.8%, digging deeper there were more gains into the benefits than the wages. are we not measuring the power of wage growth? and pullwill go back from janet yellen. they looked at the data closely. the better measure than hourly average earnings because it picks up wage growth,

and you add other compensation and total compensation is what drives household decision-making. she felt that was still the best indicator of overall health of the worker in the u.s. david: you mentioned trade as something cutting against capital investment. china. the report yesterday that president trump is considering a deal. formuch overhang is that capital investments in the u.s.? massivee just gave a tax cut to the corporate sector. if you look at equipment investment -- energy sector out of it, other sectors out, just equipment investment, we would be more readily impacted by tariffs and tax cuts -- it has been sluggish. the third-quarter was barely positive. that would seem incongruent with

having passed tax policy. david: it was also expensive capital investment. you would think it was hyperdrive. ellen: businesses need a sure and steady strong outlook for the five-year investment horizon. there is too much uncertainty around trade. businesses are holding back. the sentiment surveys have been near record highs. small and medium businesses are out there investing but large companies are affected, dominate the dollar investment in the u.s. alix: are we in for a surprise? massive upside surprise with and the economy runs higher? let's say they come out of g20 skipping across the rose garden. alix: i would pay money to see

that. ellen: they come to a deal. that is not what anyone expects -- probably rhetoric around -- we have agreed to negotiate at some point or we will work on it -- but let's say we wake up tomorrow and both of them have agreed this is as far as it goes. president trump will not roll back the tariffs in place but we will not take it any further. we have cut a deal and this is what it will be. companies then hit the reset button. we are under the new tariff regime but we know it will not go further. you can now adjust how much capital investment you were going to do and make those plans and move forward. that would be a positive development for investment and for the economy. that is what has been so difficult about trade. it is binary outcome. either really bad or ok. david: hard to price.

staying with us. turning to apple, earnings for the fourth quarter after the bell. it beats expectations on sales and earnings but fell short on the number of iphones sold. tim cook is bullish. the cfo said it would stop reporting the unit sales numbers. >> we are going into the holidays with strongest product lineup ever and we could not be more bullish about the future. >> the december quarter, we are no longer providing unit sales data for iphones, ipads and macs. david: shannon cross has a rating on apple and a price target of $260. welcome. to theestors react badly disappointment on the number of sales for last quarter or that they will never get the numbers again? shannon: combination.

clearly it was like from the standpoint of units, revenue was fine. the strength of the model remains. with regard to disclosure, investors typically don't like to lose numbers disclosed. apple is the only one in the industry who gave those numbers. they will still be working with market share guides. industry numbers will not be in flux. they are trying to emphasize the power of recurring revenue stream off installed base. we encouraged them to provide more metrics. they probably will over time. that will go a long way allowing investors to see the base growing double digits year-over-year for the last several and that will drive services revenue. david: also what they do with it. they will report revenue off services.

is this tim cook saying we will deemphasize the number of units selling every quarter and focus the company more on expanding services? shannon: it is the direction they have been going for a while. frankly, companies with more recurring revenue get higher multiples. they are explaining the value of their ecosystem. they will give us now the gross profit off services. one of the things that benefited apple as they saw margin compression in the phone because every year you get more and more things in the phone, more functionality and the price goes up, but not enough to cover it, they are mixing more and more high-margin services business. that is supporting the margin. they want to highlight. david: what about china? it cuts both ways. ont is the effect of china apple? shannon: china is an important market for them.

they managed to weather it well in the past. there are times it has slowed down and impacted the numbers. they manage the relationships on both sides better than any other company at this point. they are exposed. if we have a trade war, they will be hit. they manufacture in numerous places but iphones come from china. china is a big market and remains so. greater china revenue was up 16% this quarter. the app store was double digits. china is still strong. david: thank you. shannon cross. alix: apple also has net cash of $122 million. the buybacks will play a part. stocks sees corporate purchased next year. corporate will be by far the biggest source of equity demand, given 20% plus growth, in a favorable backdrop for m&a.

ellen. break it down. what will it be? february, we did a survey of equity analysts. what companies will do with tax benefits? the biggest was m&a followed by dividend increases. this goes back to the investment backdrop. m&a will be up by a record amount this year. companies are doing what they said. we broadcast back in repatriation, that has gone to buybacks. alix: thank you. jeff currie, next. this is bloomberg. ♪

♪ alix: this is "bloomberg daybreak," i'm alix steel. welcome to jobs friday. u.s. equity futures higher open. triple digits over 300 points in

the futures. european stocks seeing rally, the best since 2016 led by the technology sector. surprising considering that apple is down in premarket. roller coaster ride for the nasdaq. risk on equity market. risk on currency. the dollar weaker against all g10 currencies. euro-dollar up. manufacturing in italy was the worst in four years. sell on the back. copper having a nice rally along with soybeans. that is a china trade story. if we get agreement, that could be well for commodities. copper inventory hitting tight. crude, biggest weekly loss since february. nearing the bear market. not so good.

not participating in risk on. david: good for gas prices. alix: you drive a lot in november. david: update on headlines. good morning. emma: president trump says u.s. soldiers on the border with mexico may fire on migrants who commit acts of violence. the president said people who cross into the country illegally ramevse detained, as he his base ahead of the midterms. >> anyone throwing rocks, police and soldiers, we will consider that a firearm. there is not much difference, when you get hit in the face with a rock, which as you know, very violent a few days ago. emma: the closest group of migrants is still hundreds of

miles from the u.s. border. the president wants to reach a deal on trade with xi jinping at the upcoming g20 summit. tohas asked key officials draft potential terms. multiple agencies are said to be involved in the plan. the united states has agreed to let eight countries keep buying iranian oil after re-imposing sanctions on tehran next week. for is an exchange continued import cuts. south korea is among the countries to get a waiver. global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm emma chandra, this is bloomberg. alix: thank you. midnight on sunday, the dividing line in the world of oil. u.s. sanctions on iranian oil kick in.

this is the one we change in wti, the worst since february. sachsurrie leads goldman research for commodities. $80 a barrel. what did we learn this week about oil and expectations for iran? jeff: oil and commodities of the best-performing asset class despite the pullback. up 4% year to date, energy up 11%. three questions about iran. what was priced in? what does the announcement mean? what does this mean for prices? priced in -- people were talking about iran going to zero by october. 800,000it is closer to barrels per day. our expectations were somewhere between 1.2, 1.4.

you look at the selloff. most of that was demand. it was running in lockstep with equity. yesterday was the first day we priced in iran. the back end of the curve came down. it was not the front end getting hit hard like when the equity came off. iran drove you up but demand drove you down but yesterday was different. expectations, probably closer to 50% reduction every 180 days, much more aggressive than what barack obama had at 20% reductions. why are we bullish? we are beginning to see the iranian cuts begin to impact inventories. inventories tighten. positioning in market is light. the third reason is overall demand picture looks good. we will talk about copper and

the rest of em, that is likely to turn. alix: on the curve. i will illustrate. is where the, curve was one week ago. the orange line is now. 73, now at $70, that re-rating across the curve. what part of that was u.s. oil production in august? russia nearing record. opec pumping the most since 2016. what part of the market is believing this? jeff: it is not so much issues about those increases. u.s. was a long time ago. we expected big increases from saudi and russia. people are less concerned about capacity constraints. that is why. it only came off $1.50. down,ont and came

indication of growth concerns and demand worries. that is likely to be repriced in coming weeks. when we think about inventories, we have increases, what do we know in the high-frequency data? inventories are drawing. those increases relative to iranian cuts were not enough to offset demand growth and as result, we are drawing inventories for the first time in three months. ago, wti, a few weeks prices on the tear, what did you make of that? was that correct? do we need to factor that demand and for the next few weeks? jeff: when i look at the market one week ago, $78 a barrel. that did not surprise me. our forecast this summer was for $82. i thought we would be in steep backward motion, which is

typical. in,fact that the front got is not consistent with inventories or where we are in cycle, which is why we have a forecast of $80. we will see spot prices rise relative to back end. david: geopolitics fighting with global growth. them, which is most likely to disrupt numbers? the numbers are different. off: i would say, in terms thinking about actual loss, i would not put it in either one. you had outright slowdown from places like brazil, latin america. high oil prices, strong u.s. dollar weakening demand. was that going to back up into the u.s. and create weakness in product prices and much larger problems? the trade war, for all that you look at the concrete numbers,

not that big. when we think about iran, are we talking 800,000 barrels per day level of exports? these are not that large. david: china is slowing down. jeff: they are stimulating. david: can they stimulate enough to make it up when it comes to commodities, oil? jeff: the key point is spending on infrastructure. that is copper today. when we look at the stimulus they are likely to do, they tried monetary policy earlier and it did not work. alix: let's go to china. if we get agreement or a truce, what is the upside for those exposed, soybeans, copper, aluminum. jeff: nickel is massive, trading below $12,000. copper you are up 2.5%. short.

go all copper, they can the way to $7,000. there is upside risk. markets are short. commodities now -- this is by them now, -- positioning is light. metals is outright short. when we look at energy sector, you have a lot of the lanes out of the market. david: how long can china keep that up? you can only build so many apartment buildings that no one is living in. you are leveraging. at some point, it will catch up with them. 5, 10 years? jeff: it is a type of investment that is different from before. it is economy oriented, light rail as opposed to bridges and roads. it has a different flavor. that eases concerns. further out -- will they pursue

deleveraging broadly? that is a bigger question. will they relax anti-pollution deleveraging goals now to further economic growth? when you think about anti-pollution -- there is no evidence that what they are doing is negative, just giving corporations bigger opportunity to choose what they want to do, they still have to hit targets. alix: buying commodities now. why would you want to buy oil? copper, i get. jeff: i want to own oil because i would argue the selling on the front end pushed it fundamentally. inventories are still below five-year average, demand is relatively good. iranian barrels off the market, the market is short. alix: if you have a constructive you going forward, how do you own gold? you are constructive on that for the next six months. jeff: one is wealth creation in

emerging markets. that is on the back burner. china will reenter the market and buying gold with a better economic backdrop. return to fear. concessionary probabilities rising in the u.s. and other developed markets -- also supporting gold. i believe gold is the best-performing of commodities over the last several weeks. if you get a turn in em, that is what drives the outlook for gold. it is wealth creation, creating the demand for physical gold. alix: how can you own oil and gold? similar case for both? outlook think about the for the non-energy space. it is much more em oriented. the outlook for oil is dm. we see a re-convergence of global growth. where were we one year ago?

story,synchronous growth pushing oil and copper and the complex higher, even gold. not a strong of a convergence there but -- in fact we saw it in equity the last couple days -- a convergence between em and dm. out, brent and copper are up today, dme and reconvergence, the same thing as energy. alix: you need a weaker dollar for that story? jeff: it would help. alix: [laughter] david: perfect. thanks so much. coming up, the new monster. $2.3 million car that might have you forgetting the for robbery. -- the lamborghini. this is bloomberg. ♪

♪ this is "bloomberg daybreak," i'm emma chandra. coming up. emma: this is "bloomberg daybreak," and i have the bloomberg business flash. stocks shrugging off concerns around the iphones. semiconductors had prepared. more dependent on the u.s. reaching a trade deal with china. long-term growth from the automotive industry. italian manufacturing shrank the most in almost four years in

october continued weakness. new orders fell. optimism is winning over concerns about political stability. the populace government says it makes the expansionary fiscal plan more necessary, as critics worry about the debt. nigel higgins will take over next spring, the first nonfamily member to lead the rothschild firm. that is your bloomberg business flash. alix: we turn now to pursue its. all things luxury. -- pursuits. selling off a vast collection of fashion, including 20,000 dresses.

the latest hyper car, the speed tale retail price, $2.3 million. hundreds of participants will be running a virtual marathon. david: i love this. i learned something every time. i think about millennials. this is expensive stuff. thousands of dollars. has shot uplothing in the past few years. the average item has doubled in price. fashion brands are be releasing stuff. -- re-releasing stuff. this one guy has 20,000 dresses, he will sell them. david: he got started by meeting betsy johnson in jail? up and she was in the cell. >> he may have been dancing in

the cage. alix: [laughter] >> there were quaaludes involved. alix: it was a club. [laughter] david: he got arrested. alix: it is not a vintage sweatshirt. david: $3500 evening down. poor bill is left out. >> there is pretty much everybody else. a ton of stuff. -- you can have any desire in the world and she said -- if i pick one over the other i get in trouble. if it is vintage, i am off the hook. >> she said she doesn't like to this off the brands. alix: supercool. brand-new. $2.3 million car. it is beautiful.

tale, they will make 106 of them, they will sell them in 2020. it looks like a teardrop. you will not see this on the road. this is part of the ultimate series. it weighs 3000 pounds, over 1000 horsepower, more than 250 miles per hour. david: zero to 186 in 12 seconds. alix: this is going to be the dumb question. do you actually -- does this in your garage? what do you do with it? david: they will figure out a special track. alix: a fun toy. david: who can afford this? that is a couple inches off the ground. alix: the inside is so cool. it looks like a spaceship. david: the driver's forward and

the passengers are aft. passengers to either side. the driver isa 1, in the middle of the car. david: virtual marathon. this sounds crazy. now it makes sense. there are too many people applying for the new york city marathon. so they have a lottery. you can run in the virtual marathon. app tracks you? >> yes. it tracks where you run. this is people running their own marathon, wherever they are, in over 25 countries. within four days of the marathon, if you measure it on this and you are part of the program, you can qualify for the next years new york city marathon. david: does it pick the fastest?

>> people who have signed up. david: no matter how slow you are you get to run the marathon? >> it is not one of those qualifying marathons. there is a lottery. days.it is four >> you have to do it in one go. alix: i was going to try it but darn it i was so close. >> the new york city marathon is one of the greatest. i cannot imagine doing it on your own alone somewhere. david: hacking? alix: good point. david: there was a famous story about the around the world single-handed sailing, where one guy hacked and misreported his location. alix: he was in it. if you hack your own thing and make it look like you are

awesome, you have to run the marathon. david: you are in the marathon. chris, thank you. great stories. coming up, we knew the control of the house may be leaning toward the democrats. is the senate closer than we thought? we came up with a contrarian view. alix: if you have a bloomberg terminal check out tv , click on charts and graphics and interact with us directly. send us questions. this is bloomberg. ♪

♪ david: i am watching the senate races today. the house, everything will probably go to the democrats. the senate, people are writing off for the democrats. our crack economics team put the expertise into play. it may be closer than we think.

overlay the political thing with individual states, how they are doing economically. well, people will vote for the incumbent. it is down to f braces -- four races. in fact, it will probably go republican. but it is far less likely than what the political pollsters think. that is what they say. alix: meaning that the state economy is not as good? david: if it is going well, whoever is in office will stay and they applied that state to state. they basically say it will come down to these. indiana, arizona. alix: indiana caught in the crosshairs.

the good and bad of trade. it depends if soybean farmers are worse off, and how good the alumina makers are. david: the trade is mentioned in political advertisements more than four times as much as other states. it is a big issue in indiana. alix: understands trade? if you are a farmer, you do. david: they possibly understand a deal with china. alix: good point. half an hour away from the jobs numbers. this is bloomberg. ♪

i am a family man. i am a techie dad. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience.

my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. >> apple turnover? the company holiday forecast

disappoints. all bold. investors not so much. u.s. wage growth could hit the highest level since 2009. news onnews still good the jobs report? and drafting terms for a trade deal after a long and good phone call with president xi. david: it is jobs day. big earnings numbers. exxon crushing it. earnings per share came in $1.46. not comparable to 122 but back over 3% in premarket. , $12.6 billion. the estimate was $8 billion. a huge number for them. the upstream earnings more than

double what the street expected. >> they could use that cash. isthe fact there was so much interesting because the complaint is they were not buying back stock. iny are just using capex growth. maybe you do both and that makes the street happy. returning to the shareholders? they have been patient. their production came in underestimated. a solid quarter. that is going to add to the feel of today's risk on asset class. pointshave futures at 25 you hit a crazy week for the markets. , part of that is the selling of the dollar story. holdrisk on seal takes

your it bonds, that is the story . up by three basis points. crude not participating, up by 3/10 of 1%. waivers granted to intentionally eight countries. alix: -- david: apple announced earnings, but investors were disappointed because it fell short of the number of iphones sold. tim cook is bullish. the company cfo said he would not record those numbers of units sold any longer. into the headed holidays with our strongest product lineup ever, and we could not be more bullish about apple's future. >> we will no longer be providing sales data for ipad and mac. holds joining us, he apple and alibaba shares in his fund. good to have you.

the report was about the fact they are not going to give those unit sales numbers out any longer. over reported? >> what they are trying to do, they are trying to go away from this obsession in regards to just focusing on iphone unit volume. , on the subsequent quarters those numbers have been flat. they have not been growing at the same rate we have been seeing. they are trying to get away from that. i am assuming they are going to report iphone revenue which would be average selling prices times iphone units to give us an idea of how they are doing in that segment. i think they wanted to get away from this preoccupation with the ever increasing iphone unit sales. selling 10% more iphone units in the quarter. that is what they are trying to communicate. alix: they missed on the unit

sold. david: they did ask for an well on average sales price. this is a profound way of competing on pricing power. what does that do internationally? can they have that high a price point compared to overseas? >> you are right. average selling price most recent quarter, iphone unit sales were up. a huge jump. you bring up an interesting conundrum. they came out with the anniversary our phone. iphone asked are going to be anywhere from 1000 to $1400. how does this matchup with growth plans? of these less prosperous countries in terms of people's incomes the how are they going

to afford these higher priced phones? how do they strategize that going forward in terms of domestic market becoming more mature? you bring up a good point. we will have to see how that plays out. alix: how do you wind up valuing apple? services or hardware? gross margin was 38%. getting close to 40% gross margin. the margins are higher on the service side of their business. they did 10 billion in revenue and services. that is their goal. they have this massive user base. a have different hardware pieces you can use. it watch, a phone. the goal is to keep increasing that user base, and reliance on that ecosystem. we are going to have to start looking at apple as more of a service company opposed to what is the latest new iphone they

are going to bring out and what will it sell david:? we are not when it talks much s, but theunit services. is that repositioning saying that is what we should be focusing on? >> exactly. the key is to create excitement around their stocks. if they can break out all the things they are doing, apple pay , all these different things built into that, if they can show how those different segments are growing a lot of analysts are going to get excited about services becoming . bitter -- bigger percentage more disclosure. it is a pivot away from this obsession into the services and that is what you are saying that announcement. >> that is dan morgan. will we finally see jobs

growth? grow.are excited to joining us now, the chief economist -- head of u.s. rate strategy. your number? >> 200,000. david: that is daring. this number.about it is about revisions to last month. we are expecting 35,000 upward revision. is this sustainable question >> definitely sustainable. we have than a couple different things looking at wage growth. one of the things we just did, analysis.ord count we went back to the early 2000's. when you see words that indicate wages are a concern and rising

that corresponds to a certain increase in wages. right now that is where we are currently on wage growth. it is normal to have a quarter where you have a wage growth surge. it is not uncommon to see a surge in a quarter of the 7-12%. spendings a jolt to and the economy. it also gives a jolt to interest rates. they meet next week. i will put a chart up your that shows the wage growth numbers. what does that say to the fed? >> stay the course. if you listen to comments from people, they have been focused more on wages and the focus on the short-term. to me a strong wage number says the fed should stay on track. how does the market perceive a

strong wage number? that is where we are stuck between a rock and a hard place. a strong wage number could signal the fed hiking once a quarter for the next year. the next thing, the market might take that as a risky asset and react poorly to a scenario where you have strong earnings growth that leads to potential for risky assets. where is the complacency in the bond market? >> i think the bond market is stuck between a hawkish fed and the equity markets and risk of sentiment on the other side. that is where we are seeing it play out. in some respects the bond market wants to trade in line with up in wages., pick that should mean higher yields.

what you are seeing is every time we see that the market starts to price in more fed rate financial institutions start to tighten and we see a selloff. study on the course for the fed. what does this say about the u.s. economy? you have things like housing softening. there are some places in the economy where there are some concerns. >> i want to bring it back to the wage question. are wages going up? are wages simply going up because there is scarcity? that these into the answer to your question. one of the reasons we are seeing housing starts at low levels compared to demand, and prices going up to where it is feeling pricey in certain markets is there is a shortage of labor. .onstruction costs are going up

materials costs are going up. these types of bottlenecks caused the business cycle in the first place. constance hunter, let's get an update now on the business world. image chandra is here. a cash crunching after pouring money into donald trumps 2018 campaign. the nra had a sharp decline in working capital last year prompting it to borrow against life insurance policies and take out a loan from its philanthropic arm. michael bloomberg is a donor to including every town for gun safety. and allegations of intimate -- anti-semitic hate crimes, they are acting on a dos your

information given to the london police chief. it detailed 45 cases of discriminatory posting by party members. north and south korea have agreed to inform the international olympic committee of intent to cohost the 2032 summer olympics. it is part of reconciliation efforts to send a combined team to the world hamburg in january.s they bowed to participate actively in international sports events and organize more friendly competition between them. news on air and on tictoc on twitter powered by 2700 journalists and analysts in 120 countries. alix: before we had to break, exxon mobil ahead killer earnings. for the first time in 10 quarters, output beat expectations. they were able to ramp up

production. they are investing in other startups. no conversation on buybacks. >> will they gain ground on chevron? that has been their nemesis. to becution is going front and center for them. watch that stock into the open. we are going to get a read on hiring from someone on the front lines. this is bloomberg.

david: jobs numbers raise questions about what is going on

with the economy overall. on the front lines, ceos making day-to-day decisions. welcome now one of those frontline ceos. welcome back. good to have you here. give us insight toward the jobs numbers. >> we have looked at a couple of things. we are seeing robust hiring. a are competing to attract talent. they are finding some constraints. the workplace becomes a tool in attracting and retaining talent. they are spending more on office furniture. >> our trip through our west coast clients, we are in these new workplaces creating, upgrading their facilities. in those high-tech parts of the country they are competing for talent. part of that is the culture of the workplace.

the importance of height adjustability and creating a more hospital bull -- hospitable environment, that is office skills come together. we can fulfill those needs. >> you raise a good point. part of the story is wages. are you seeing that more in the point of view? >> we are. when you look at millennials coming to the workplace and the criteria they are using to determine where they take a job, wages are one and benefits are too. but the physical environment we are seeing company trying to compete to attract talent. alix: interesting. constance, you have a question? i-mercial.this, res

are you seeing shortages? raising wages? >> we have 3800 associates around the world. we do a lot of manufacturing. european manufacturing plants. we are in a business that ramps up in the fourth quarter. what we are seeing in their north american locations is some temporaryinding workers. it used to be easier. 1 not tremendous wage pressure but finding talent and bringing people in for seasonal jobs. that is where we have seen pressure. >> we have gone through this earnings season. maybe it will be growing as fast. for your business are you seeing any of that? people concerned it is going to rein in growth?

continue to see a robust pipeline of activities. we are seeing our ability to gain share in these pipelines. we feel good about that. the challenges are inflation, tariffs on the horizon, some of the things that i think are causing concern. talk to us about tariffs. >> it would be great. david: how does it affect your business? >> we are u.s. manufacturers. we have for manufacturing plants in north america. we use a lot of imported materials we assemble here in the u.s.. those costs rise. it actually incentivizes us to not do as much. we are hopeful there is some resolution. it has been and a norm us distraction. teams of people trying

to find alternate supply chains. there is more productive things we could be doing. you get the since there is money being held back and hiring or spending because of tariffs? >> i don't think so. it put some pressure on prices. we have two pricing increases depending on where the tariffs go. we will have to assess what we do next year. we are so well position because our crossover between how people live and how people work is the epicenter of what people are trying to do in our bases. group spaces, we are well positioned to respond to those changing work trends. we are optimistic into the end of this here and next year. looking into things -- 2019 what is your biggest risk? >> on the endpoint price

pressures. on the material in commodities side we have seen transportation, inflation. we have seen medals. use a lot of aluminum and steel. potentially on imported components. it is a positive environment. the trendsent where in the workplace are supportive of their margins expanding because we move outside of the individual models. those are our marching to pre-discussed. what sectors have pricing power and which ones don't? how do you view that? >> that gets into detailed aspects of microeconomics. it is interesting to hear you say you were able to raise prices yet you are still seeing demand increase. that speaks to the general health of the u.s. economy and the robustness of demand. >> we're a on the coast.

we are seeing energy clients again aftervesting been quite for a few years. we are seeing lots of opportunity around that part of the united states. david: the lawyers have the money to invest. alix: you called it. the day after the election. go long lawyers. david: thank you for being here. staying with us. the dow is falling out of the jobs report. they had of fx strategy will be joining us next. this is bloomberg.

alix: the dollar showing weakness into the jobs report down 96. you do have the yen and pound slipping lower against the

dollar. joining us to take us through foley.bers, james good to see you. how will the dollar respond to positive news? >> the number we are looking at is the earnings number. when you look at the payroll number, it can be impacted once again by whether. if we're looking at a number little bit stronger or weaker, it is semantics. there is a tight labor market in the u.s.. the headline number we get today, what we don't know is how much is that feeding into wage inflation? wage inflation has been soft compared with other economic cycles. we are anticipating we will get more ways of inflation. risk thea very strong fed will be hiking interest rates.

probably another few times. dollar,tside for the limited on a strong earnings number. particularly today. there has been so much emphasis on the stories about trade. that is going to be the great influence today. do we stay wage bound? do you think we are tapped here? there is a will they, won't say. that can carry on into the g20 meeting later on in the month. that is the one were trump has integrated there could be a deal on trade. trading one headlines. there is a lot of skepticism. be trumps headline, the deal was to boost the stock

market ahead of the midterms. we need to see something more concrete. we could see a softer dollar, a move it back into risky assets. trade is really where the direction is going to come from. david: we are focused on the nine states because of trade. europe has a lot going on that affects the-year-old. outit or italy, as you look , which is going to be driving that more? at 30-60 days it is going to be related to trade. and the impact on a trade deal and global flows to risky assets.

is an interesting question. as we look ahead into 2019 we have the slowburn. issues in italy, but now we have the likelihood. many investors, this view that may be popular, getting a stronger foothold, that my mean there's going to be less emphasis on fiscal reform. on the budgetary issues. there are some negatives in european politics. that can be a negative. growthse we have the data. some of that has not been too good. that has implications what the

ecb does. is the trade you are looking at today? that dollar. i think there is more room for disappointment for a softer dollar today. alix: all right, you are sticking with us. talk about the optimism in the stock market. good news out of china and u.s.. you have the dow jones futures up. off the highs of 300 earlier. of the performers overall, technology, that sector, up. in the premarket, in other asset classes, that is the dollar. a broader weaker dollar.

, yields up by three basis points. copper in crude brought along that as well. >> 250,000 jobs added to the in october beating expectations. unemployment rate unchanged at 3.7%. that is still the lowest since december 1969. average hourly earnings rose to $.27. $.83, 3.1%, beating expectations. hourly the highest earnings increase since april 2009 when it increased by 3.4%. 7.4% this month

from 7.5% last month. in thehave an increase labor participation rate to 62.9%. that showed little change over the past year. , when hurricane florence, september jobs number was revised down from 134,000 to 132,000. august revised up. the bottom line, 16,000 jobs revised down in september. august revisions up 16,000. if you dig into the numbers a little bit there was significant gain in the particular sectors last month. 36,000 additional jobs in health care. 30,000 jobs transportation and warehousing. line, final jobs

report number before the midterm elections, 250,000 jobs added to the economy in october. unemployment remained unchanged. david: terrific job. still with us here in new york, constance -- and shane foley. we will turn first to you. your reaction? a big beat of expectations. >> what i would do is take the smooth number, 180000 and say that is where we have been adding jobs over the past year and a half. a slightly slower rate. the thing to look at is the wage number. digging into which sectors caused an increase in wages. david: looking at the breakdown for manufacturing was up. it looks like there is a big

gain. >> i am sure there was a pullback in september as well. i am out looking at the details yet but i don't know what the revision was. it is looking at those two months together figuring out what is going on. we like to compare against the six-month average compared to that. were you sure? >> the market is moving the same way i thought i would. people are going to look past the september report. you got a wage number year-over-year for about 3%. is a psychological level. that is what is going to support over the near-term. alix: we are on the curve is this? >> from the value of the curve. if this is any sort of positive

news, you can see a selloff led by the valley. david: all right. jane foley, a view into fx. how are these numbers affecting the dollar? perspective of how you dig into these numbers, the fed is not able to push ahead with the interest rate hikes. i don't think many people would argue from the numbers we have just seen. theo have a view that dollar will continue over the the 4-5 months or so but market still needs to know what will happen with that trade pact. that is where the tension is going to be. this is a dollar positive story but another implications of the fed are in the price. alix: fair point. there was a trade gap reported

here. trade gap was a seven-month high but exports and imports increased. 29% monthports, down on month. definitely an impact on the trade front. those numbers are actually good. .igher exports and imports can we hire -- handle higher rates? >> absolutely. the repricing is gradual. the market can easily handle higher yields. you are seeing a law the trends on the employment front. it is going to support a strong consumer. that is the key. a good portion is the consumer. .ou will see a strong consumer we should be able to support higher yields on the back of that. numbershat do these

tell us about the pace of the economy? this is not a slowdown. there are more people making money. 4%, threeown from the and a half percent rate. we are talking about a return gdp but stillial being above potential gdp. ,ne thing i want to point out we had the diffusion index, the percent of adding jobs. to 65.7. from 61% up back to the six-month average. that is a positive sign. i think the underlying string theory is good and it is what we are seeing before we jumped up to this jobs growth rate. alix: you keep talking about trade is going to the epicenter here.

continue the narrative of we are in a non-secret and eyes here because we're not seeing the same growth held up in europe? >> i think that is right. if you go back to the beginning of this year, several central banks will be hiking interest rates. maybe central banks or the bank of japan could be hiking this year. we know that is not going to happen so we do have a lack of synchronization. reasonslains one of the . that should continue. it will be politics in next as well. all right. thank you very much for being with us. constance hunter will be staying with us. chandra,rned to emma with first word news.

u.s.s. soldiers on the border may fire on anyone who commits acts of violence. >> anybody throwing stones, rocks like they did to mexico, where they badly hurt police and soldiers, we will consider that a firearm. there is not much difference. you get hit in the face with a , it was violent a few days ago. there he violent. david: the closest group of migrants is still hundreds of miles from the border. hair when is still the highest drug threat in the united states. 72,000 deaths in 2017 from opioid related overdoses. federal officials are concerned methamphetamine is rising in areas not known to be hotspots

for those drugs. drug enforcement administration comes back with its threat assessment today. level news, powered by 2700 journalists and analysts. this is bloomberg. out, oilvron earnings and gas production at a record. they started the buyback in the third-quarter. it is going to be pivotable -- pivotal. if you are delivering on production and buybacks that makes investors happy. david: exxon will? alix: we will see. they had a killer quarter. quite shareholders may want that money back. let's talk about the jobs numbers which broke nine minutes ago.

a big beat on the total number of jobs created. a slight revision downward last month. .2 percent in hourly earnings adds up to 3.1% increase year-over-year. futures are up on the news. we will see what the fed has to do with it. >> the trade balance came in, negative. worse than estimated and were sequentially. the numbers were interesting. imports and exports rose. down 29%, the lowest since february. , butre getting a breeze when you get import data exports rising, that is a better signal. the gap is wider because you are importing too much. >> to be fair, the administration so far is right. the economy is growing. mean to bes that

importing too much? we are demanding goods. there is no such thing. alix: global growth is also good. if you are importing and there is not a lot of room. >> that improves our buying power and increases the cost of commodities. we have a strong dollar. you're not exporting for the global economy. particulars about how much we are exporting. >> the midterms and infrastructure spending, putting infrastructure spending in focus. this is bloomberg.

>> this is bloomberg daybreak. here in the hewlett-packard the white house canceled economic advisers chairman, this is bloomberg. now to your bloomberg business flash. excellent reported earnings per share for the third quarter that be the highest analyst estimates. the company surpassed expectations for the first time in 10 quarters. there he would expect -- expects increased volume over time as it rims up activity begins new projects. consumers have not felt the force of the trade war yet according to calls but that could change if things are not resolved. i spoke with michelle guest in new york. >> a lot of it is uncertain now. time, if there are

significant tariffs and it has many products, ultimately that will impact prices. for us now it is a small part. conversationar our on bloomberg television. president trump wants to reach a deal on trade pre-people familiar with the matter said the president asked officials to draft potential terms after a positive call thursday. multiple agencies have said to be involved. that is your bloomberg business flash. the push for a deal with china was prompted by donald trumps chinese president xi jinping. fromspoke to president xi china. he is the boss. he is the head of china. we have to make a fair trade deal. they all want to do it.

great things are going to happen over the short time. good to have you here. your first reaction to the china news? your company is a domestic company. that help your business or hurt your business? indirectly, it can bring some cost to the raw materials. rebar and steel. we get more consistency. >> the president has said repeatedly, we just got jobs numbers out, jobs have been growing. construction jobs, 30,000 last month. toward the top of the range.

what would be -- what would be the prospect? how would these numbers change? >> they are going to continue to increase. we have difficulty finding workers. there is going to be additional inflation.bably more hopefully the participation rate will increase. there still are a lot of able-bodied americans sitting at home for various reasons. i hope that will alleviate the shortage is we do have. >> a great point about a higher reservation wage. see the shortages are you willing to pay workers more? more.have to pay workers

we have to put more internal resources into hiring and sourcing people. , we had 300one truck driver positions and 500 total jobs to maintain our current level of business. it is very difficult. are you seeing productivity improve or stay the same? >> that is an interesting question. we are driving productivity through innovation in technology, through truck trafficking -- tracking, optimization of our truck fleet riseliver more cheaper and our yards delivered per man hour. that is the ultimate measure of efficiency. >> that is great to hear. are you able to pass on those costs? >> we do have to pass on the

cost. we have rising raw material costs. our fuel prices are up 30%. we have automatic mechanisms to pass on fuel directly. the other is, it is a competitive market. we choose to compete on the higher end market. projects like laguardia airport moral trade center, where there is less competition because there is not as many concrete companies that can perform that type of work. we do have to pass along those inflationary measures underlying our cost of production. you are describing a pretty robust business. you are up to the limits of capacity. do you really need the federal government to come in and layer over that? there is a lot of infrastructure

, like that already. >> 29 states since 2013 have increased gas taxes to fund the understand. two years ago, democrats and republican platforms included and infrastructure build. priorities have changed. im hopeful in 2019 we will see a meaningful bill. you have to drive. congestion, poor roads, poor airports the bridges in trouble, society of american engineers rated our infrastructure as a d+. needing a stimulus, what is more meaningful to us is a robust gdp on the tune of 3%. tax reform has added consumer optimism, consumer sentiment is

the best it has been an 18 years. it would be a tailwind to us. we have a robust economy as we stands now. we want and infrastructure package from the federal government? is that good or bad? it is a long-term consideration. it may be inflationary in the near term, it would ultimately .e beneficial for the economy there are many areas where infrastructure lags and the rating from the american society of engineers has been in place for a long time. we could certainly use an upgrade of infrastructure investment. david: one of the higher interest rates? we are already borrowing a lot of money. what does that do to your business? money foras borrowing it, i hope there is more of a

user fee funding mechanism. .hat is the big difference proof is in how do you pay for it? chamber of commerce and the administration is coming out in support of a gas tax increase phased in over five years where users have to pay. >> all right. constance hunter, both of you. thank you. down. up, apple more on what i am watching, next. .u can go to g tv look at the charts. clearly love the pain praise chart. this is bloomberg.

alix: what i am watching his

apple. that stock still being whacked in premarket. if the loss holds you are looking for the second time in six quarters they have not advanced after earnings. they are overdeliver kind of company. we are getting downgrades. it really took a dent to the market. raises the specter of downturns, bank of america says negative estimate revisions. the rhetoric is getting brutal. >> d want to sell more high funds or make more money? we can make more money and not sell as many iphones, but i guess they don't like that. significant buying opportunity because of that. on the short term, unpleasantness. >> it is a big battleship. as they are turning it around toward services.

>> to they have something to hide? is it they just want to highlight part of their business that is going to grow more than others? or that they are peak growth for products? analysts like data. if you take data away they don't like it. you have a daughter. >> no, no. don't wait a beast. that does it for bloomberg daybreak. big lineup, this is bloomberg.

>> from new york city, i'm jonathan ferro. the countdown to the open starts now.

coming up, the jobs report coming in hot. , happy trade talks between the united states and china ahead of the g20 fueling a fourth day of gains on the s&p 500 even as apple stock is rolling open in the premarket. the latest guidance is appointing some investors. 30 minutes away from the opening bell. futures up 6/10 of 1%. the dollar week this will starting to reverse a little bit. treasury very much softer. year.on a u.s. 10 we begin with a payroll report. the economy adding 250,000 jobs in october. hunter weighing in on the results. >> if