months ago. caroline: as we have the bell there, we made a headway toward the close of trade. overall volumes are thin again. scarlet: a lot of this might be because of the weekend terms and a different catalyst. the g20 meeting but also fed speakers have kept people on the sidelines. --y look for some hit on hints on which way the federal reserve is headed toward in 2019. when it comes down to it, you have a green day for all the major indexes including the nasdaq which is teetering between gains and losses. technology has not given a clean read. maybe salesforce results could do that. joe: they are a little unsatisfying. today, less of the story.

we always need a little action. right now, we still slightly lower volumes. let's piece together some of the activity underneath the surface. let's give volatility from some of our market reporters. abigail: today's trading action was so interesting because earlier today we had the dow and nasdaq down nearly 1%. you all were just talking about that green close. context of an the very bearish third quarter. s&p 500 is the worst since 2011. the question is, what is next? more selling pressure or are we going to see some reversal rally? this chart suggests more selling is likely headed. the long-term chart of the s&p 500 members above the 200 a moving average. when it is high, that told you the market is high. when it is low, the market is suffering.

similar in 2000 coming out of the bear market. out of the bear market, we see close to 80%. during the financial crisis, going well below 20% and investors could not get out of stock fast enough. a great stock out of the bear market is sharply higher. 2011, look at the brief bear market. 2016, if you remember. 20% lower would suggest there is more selling action ahead. the volatility joe is looking for. if joe wanted volatility, all he had to do was look at spirit airlines. that stock is rising 15% today. it's best day on record on a percentage basis after it posted its earnings report. his is looking at and

biliary issues that have made it a stronger candidate followed by investors. i'm as much and i thought, but the end result is, they posted great earnings, they said most of it came from not just ticket sales but from charging fees, that's charging passengers or bags and the like. this is a trend we have seen from a lot of different s&p -- different airlines. s&p 500 is up this month. several analysts are coming out and saying the results from spirit bode well for future speared butnly for also for the airline industry as a whole. also helping matters is jet fuel prices falling. lisa? lisa: why am i not surprised my carry-on fees are feeding into their bottom line. i'm taking a look at inflation

and even the fact that we are seeing some sort of oil prices -- inflationations expectations. take a look at five-year five-year break even. this is a complicated matter. --ing a look at influence inflation expectations over five to 10 years. it has fallen to the lowest level since january and this comes even with the stability in oil prices. what is interesting about this is that 10 year treasury yields have remained stubbornly high relative to underlying inflation expectations. that blue line is 10 year yields . a white light is what we were looking at which is the five to 10 year inflation expectation. it ten-year yields have risen despite the fact that inflation expectations are muted. we are getting real yield again. that is as the fed backs away from -- in the u.s. treasury department sells that. this is an alteration in the

supply, demand balance. a lot of people wonder are there to go many people -- too many people buying into the treasury union. scarlet: thank you so much to the markets team. let's bring back michael. as we await the earnings report, we have mandy saying, head of technology at "bloomberg technology." there was a call from jpmorgan asset management that the dollar is headed for slump in 2019. i want to get your take. hold on to that thought. salesforce earnings are out right now. third-quarter revenue meeting estimates -- beating estimates. in terms of bottom line, third-quarter adjusted eps of $.61 which looks to be a huge beat compared to the consensus estimate of $.50 for the quarter. as for the outlook, joe, fourth-quarter revenue is 3.5 5 --lion to 3.5 6 million

billion. joe: stocks are bouncing around, but definitely lower. salesforce is right at the heart of everything that has been getting hit lately in the market. it's a momentum stocks, it is cloud, it is internet, it is enterprise software. it is already down over 20% from its recent highs and dipping close to the percent now. a pretty volatile post market action. thelet: before we get to salesforce results, let's scrap my question about the fed to you and bring up tech stocks. that's a catalyst for the tech sector. we are not sure where the sector is headed. does this answer questions about technology maintaining the lead in the momentum driven approach to equity? michael: i obviously have not atk at the results -- looked the results, but i would say this has been the most difficult

learning season for technology in this entire cycle. this correction is the first time technology has been at the heart of the correction. in this entire bull market and even going back to most of the last bull market. suspect we have seen the peak leadership by technology, and this is a very important ramification to the s&p 500 as an indexed economic -- indexed dominated by technology. e.m. gave us a good warning sign 67 months ago -- 6-7 months ago. a lot of the decline in em tech was in response to earnings, not just response to trade. i'm beginning to believe u.s. tech is falling.

caroline: we're still seeing salesforce trading flat after hour. -- hours. this is a company that usually blows apart in terms of current quarter earnings-per-share and has a lot of bullish analyst calls on the stock. >> again, if you look at salesforce, this is a company exposed to enterprise software's and that will not change regardless of the macro environments. with cloud spending, a lot of the spending we are seeing, it is very steady and with salesforce having a recurring subscription model, at the end of the day, the china tariff talk and the macro talk is not going to change the growth. it could have a hundred basis point impact here and there but their pipeline is driven by the long-term contracts their enterprises are signing. i do not think it will have much of an impact, but guidance can

sometimes move stock here and there. this is the initial reaction. scarlet: it's notable that even as salesforce has boosted revenue forecast, fourth quarter outlook here missed consensus estimates. michael, i know you do not cover equities. the management of salesforce is known to be conservative when offering guidance. youael: and i do think always have to be careful using guidance. guidance is generally conservative to the quarter, not just in tech but across the board. whichare macro issues people worry about in the trade issue which people worry about. experience management understands there is no downside to being cautious. i never pay that much attention to guidance other than giving you a sense of the general mood of the market. scarlet: the reception to the guidance is what is interesting because in the summer of last

year, the conservative guidance would not have thrown anyone off. michael: i don't think there is making investors more nervous than it has for years. today, people are nervous in a way they have not been since 2011. .carlet: thanks to michael thank you for joining us. and thank you to madendeep. for the closing bell and for me. romaine bostick is stepping in for "what'd you miss?" we will get a preview of what to expect from president trump and his meeting at the g20 summit. this is bloomberg. ♪

caroline: live from bloomberg's european headquarters in london, i'm caroline hyde. romaine: i'm romaine bostick in new york. joe: and i'm joe weisenthal. caroline: markets close in the green. overall it is focused on trade. joe: the question is "what'd you miss?" caroline: setting the table for trade talks. president trump and xi jinping will meet for saturday -- meet for dinner saturday. will tariffs still be just desserts? we will talk to the utah senator about whether he is concerned with the impact of tariffs in china. home values may still be rising. sinceins of the lowest january 2017. rising mortgage rates cut into

affordability. joe: it's time for instant replay. some of the biggest voices on tv today weighing in on the trade tensions. would be goconcern all in on every chinese import, do it at a 25% rate. that is a $25 billion tax increase. 50, that would be noticeable and would hurt the president's economic agenda. >> if there was a trade deal what china, it would definitely be better than what we have. i think the markets would be very excited. if the trade war did not bubble up, i think the trade economy would be in a better place. >> china will spawn most to its own entrepreneurs who have begun to make the case that is not much of an incentive to the creators and inventors of china

is not going to respect and protect intellectual property rights. >> the whole trade issue is now -- has not become mixed up with strategic issues. the u.s. is worrying about chinese military, worrying about the data the chinese have been getting from the u.s., and many other issues. unfortunately, it becomes more complicated. romaine: for more, let's bring in bloomberg's chief economist from washington. tom, we sort of set the table for the upcoming talks at the g20 between trump and xi jinping. we tend to look at this from a u.s. perspective. and you look at the trade war and trade dispute from the chinese perspective, how are they holding up on that side? tom: the latest indication of china's growth is not particularly positive. look at some of the relatively high-frequency gauges like steel prices and the yuan, and the

shanghai market. they are looking lackluster. in terms of the economic backdrop, china brings -- that she brings with him to the g20, it is not particularly positive. caroline: is there any optimism that you think is being digested by china. are a lot of the threats being made by the white house posturing the deal as trump might say? i think even the closest observers of what happened here are going to dc make a call on what the actual what is actually going on in donald trump's mind and thinking about this trade war with china. there are so many contrary indications starting with messages from trump himself. he wants to do a deal but does not think the chinese will be there. more positive indications from larry kudlow, negative

indications from lighthizer publishing the big report saying china is a serious i later in terms of intellectual property. in terms of intellectual property. i'm not sure how anyone looking at events from beijing is going to have clarity going into the summit meeting. joe: we are talking about economic troubles in china, but i'm curious about the u.s.. it always seems there is a debate about whether trade war issues are showing up in u.s. data or not. i think there are conflicting views. when you look at what is going on in the macroeconomy, in the u.s., you see evidence of a trade war impact? tom: that's a great question. inould draw a sharp contrast terms of the macroeconomic backdrop between china and the u.s.. backdrop -- it's that

backdrop rather than the trade war driving the initiative. the debt rather than the trade war is tracking on growth. if you look at china's export numbers, they are looking robust. in the united states, the reverse situation, the fiscal stimulus from donald trump, still driving the growth numbers and scaring -- obscuring any drag from tariffs. caroline: i was interested to read and some of your reports with china being hit with all of these tariffs, do you think this could go to africa? tom: that is an intriguing possibility. certainly there could be -- there will be winners from this fight between china and the united states. we are looking at countries inside these -- southeast asia like malaysia for example, the

philippines, where the have a nascent manufacturing sector that could take off. it becomes much more difficult to do business out of china. africa, you are going to step down the ladder in terms of sophistication of the manufacturing sector, but yes there are signs that that also produces that we are looking more actively to set up in africa partly because of concerns of tariffs and the rest of the world. caroline: a great perspective from tom orlik joining us from washington. coming up, lots of comments from fed officials i had of the meeting on thursday and a speech from jay powell tomorrow. what to expect from the central banks is next. this is bloomberg. ♪ oomberg. ♪

joe: "what'd you miss?" lots of materials for fed watchers this week. james bullard taking his usual dovish tone on the rate hike saying "i don't have any reason to doubt the economy will slow in 2019 and 2020. it would be much tougher for the fed to continue to raise at this pace in the slowing economy relative to where we have been." this comes ahead of jay powell speaking tomorrow in new york. our next guest, the senior economist for bloomberg economics. a big week. it didn't feel satisfying like we got some answer to the universe. do you have anything more to give us in terms of how the fed might see the world? >> sorry about that. he gave us that much intelligence about what will happen. i think what they are trying to

do is be as much flexible as possible so they can react next year to changing economic conditions. growth will be slowing next year from the pace we are seeing this year. we expect to see growth slowdown to 2.4% next year from what we expect to be 3.1% in 2018. romaine: as an economist who has been watching the fed for a long time, how do you break the communication -- rate their communication so far? it seems the message is getting muffled. yelena: that is so true. recently, i've noticed that as well. this is something they are trying to do. they are trying to be as flexible as possible. if you look back and think about a broader picture, back to bernanke's years.

the communication from the fed has been brought since then. i would give them four out of five. caroline: that has been driven by jay powell in many ways. are you expecting more from him than the very carefully worded comments coming from the other earlier? yelena: i think the best thing we can probably get from powell's comments is one of the risks. you identify's what the risks are for the us economy, that would be a great thing. that we seegive us the economy is slowing and that is why we see this many rate hikes of course. -- if you'dus that knowledge is the recent turmoil in the stock market or says something to business assessment with a housing market, that

would be substantial. he said the economy has a remarkable outlook. a lot has changed since then. we would like to hear if he sees the rights. -- rate. joe: he said he thought the fed was a long way away from neutral rates. i think he indicated they have gotten significantly closer to neutral in his view. do you expect powell to revisit that specific comment? sort of calibrated where they are versus some other made of number? yelena: probably not. just for the same reason. it want to be flexible and powell has talked about this. he said he is uncertain where the neutral rate is so maybe three hikes for him is a big way away, but they do not want to give us the precise estimate.

i'm looking at how business investment has fallen. it is a great chart showing. i think that is precisely one of the risks to the economies that i was talking about earlier. business investment slow down significantly in the third quarter. if that trend is going to continue, that would be quite a serious downside risk to the economy. right now, all bigs are in one basket. on economy is growing based what we have seen in the consumer sector. you have to diversify. economic growth is another thing you have to look at. have consumers driving growth, that is a big risk for the economic growth going forward. yelena, always great

to get your insight into the economic questions. the quickest check of the business flash headlines. amazon will now challenge intel. they have unveiled its own server processes called graviton. that will reduce its reliance on intel. amazon says graviton power cloud service is available at a significantly lower cost. google and disney will expand its partnership. google will power advertising for disney properties. we understand among them will be star wars, espn, and pixar. the european union is considering britain can change the mind -- it's mine of leaving the eu. theresa may is taking criticism from members of parliament. the court decision is expected to take several weeks but will

last into the new year. this is bloomberg. ♪

mark: i am mark crumpton with first word news. a british newspaper reports paul manafort secretly met the wikileaks founder in london in 2016. within days or weeks of being brought aboard donald trump's presidential campaign. report is confirmed, that would suggest a direct betweenon -- connection the trump campaign and wikileaks released -- released emails from russian spies. briefing, the national security advisor was asked if he listened to a tape

of the killing of jamal khashoggi. >> know i have not listened to it. i guess i should ask you why you think i should. what do you think i will learn from it? >> [indiscernible] >> can anyone in this room speak arabic? but you want me to listen to it? if they were speaking korean i would not learn any more from it either. ministerkey's foreign says he is listened to what he describes as a disgusting tape that allegedly captures the murder. he told the german daily newspaper i listened to it and he was killed within seven minutes. it was a deliberate murder. he said he could hear the doctor instructing others to listen to music while he cut up the body. turkey says khashoggi was killed last month by a 15 member

assassination squad. they insist orders from the killing came from the highest the government but not the king. puerto rico is making it easy for victims of hurricane maria to clay moneys from insurance companies more than a year after the storm. signed several laws to protect interest policyholders. thousands of maria related claims are unresolved. puerto ricans were hit with higher premiums after the hurricane which devastated the island in september of 2017. is european union considering whether britain can change its mind about leaving the eu. theresa may is facing criticism of her deal from u.k. politicians and from president trump. rated opponents won a second referendum -- brexit opponents won a second referendum -- want a second referendum.

that could last into the u.k. departure day. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. caroline: oak hill has built a $5 billion funds in case of recession. the ceo said that he has been spending more time in europe. been spending much more of our time on the distress side in europe. not in illiquid credit market side. there is not so much distress in the markets. you are starting to see more kratz -- cracks in the market because of european discord. the economic recovery in europe has been slower. not just brexit.

we started the year with global synchronized growth, the tailwind of tech and now global sigrid nice growth does not feel they are in the tax cuts we spend -- synchronized growth does not feel there in the tax cuts we spend. we're spending a lot of our time on shipping which has been a sector -- more people have lost money by the sector but we think there is an interesting because it is closer to maturity and we think it is not opportunity to take the collateral. either that or work it out with the existing owners. spain has been doing recently well. italy is still challenged. it has selective opportunities but that script is being written. >> what about across the

channel? what if theresa may cannot get a brexit neal dunn? -- deal done? be athink that would seemingly to me, a dislocation. it has been pretty remarkable if you look at all the dislocations over the last decade. people have bought in the market rallied back. the market by large still expects there to be a deal. if there was a hard brexit that was devastating, i think the markets would react negatively. >> would create opportunities for year? -- you? >> sure. i joke around because i'm not knowing what i'm urging for every day. we want to make money for investors and so when the markets are performing well, we are excited about the data and

opportunity which we thinks exists and good markets too. when the market is underperforming, we had the opportunity to use the capability we built up over 30 years. we have a large distress fund two years ago that has billions of dollars of dry powder we are waiting on -- sitting on. some have been -- investment. starts with high-yield widen. if the market, whether it is brexit or very troubling meeting between president trump and president cheney, -- president xi. ,f there is market opportunity we and our brethren have a lot of capital and there will be some who will be forced or choose to sell because of fear and that is often when there is good opportunities. >> so you are rooting for

overreaction? >> yes. overreaction is good as long as you don't get swept in yourself. --aine: that was the senior ceo of oak hill devises meeting exclusively with bloomberg. let's turn to commodities. goldman sachs is up with the new call in oil. at $50 oil, it is in the u.s. interest to see oil prices higher because you are digging into the cost structure of the price -- that's the basis of our call. romaine: let's bring in david marino who leads bloomberg oil coverage. $50 per barrel oil makes sense for the u.s. 15 years ago, nice now. >> now we are getting a lot more productive and ended is not -- production and it is not just the consumer. with the production boom, the

shale boom for oil and for gas, there's a bigger economic need for higher prices. caroline: it's interesting that all eyes are set to war the g20. how much is there being built into the market? david: there is some expectation there will be a cut. the question is how much and what is the baseline for the cut. common he will disappear from the market. -- how many barrels will disappear from the market? talk andy meet and until something actually comes out and you see the barrels disappearing, the tank is not showing up, that is when you will know there has been a cut. joe: west texas is gaining 1% today which is quiet by recent standards. levelple feel at this

they are sort of taking the elevator down for now? david: maybe. joe: is there a sense of calm? david: there is volatility in the market today, but it held above $50 per barrel and it thes like that's might be basement for now. there was not a lot of volume today so people are waiting to see what will happen with g20 and opec. romaine: do we have any sense of what this drop in oil prices actually does to gdp levels? do we have any metrics to measure that? david: it looks like if you take into account the savings for gasoline versus reduce income 40 producers, it is about a wash -- reduce income for producers, it is about the watch. caroline: think you very much for joining us. a crime bill has the support of

republicans, democrats, and the president. can he get through the senate? we discuss that and more. this is bloomberg. ♪

joe: "what'd you miss?" a bipartisan criminal justice reform bill has advanced through the u.s. house and is now facing senate. cirilli told kevin there are enough votes to pass. >> we have more than enough votes to pass. this is something of a miracle. in this day and age where there is as much wrong with our country, as much discord as there is in congress and throughout the american people as a whole, it is miraculous we can get such a massive bipartisan supermajority behind

one idea. when idea has the support of the president, aclu, and conservative groups. >> has leader mcconnell assured this will be voted on? >> he has not assured it. recess, he before we said if we could get enough support for it and get into the mid to high 60's, we would have a vote after the election. we are there. ini'm struck by this particular because it has become a nonpartisan issue in many ways. also an economic one. why is this important in order to get into the workforce? >> most people who go to prison will eventually get out. when they get out we want them to not commit more crimes. we want to lower the rates of rescinding. built into the bill is a set of incentives that would convince a lot of inmates to get job training and receive reduction treatment in order to make sure

that when they do get out, they become productive members of society. productive members of the workforce. >> specifically? >> it allows them among other things to earn goodtime credits and time for reduction. the bill also contains a number of sentencing reforms. we have adopted, in some cases, excessive minutes and dutchman the them -- minimum sentencing laws. sometimes they result in weird results. one young man was sent to 55 years in prison to selling 55 dime bag's to someone over 72 hours. that is ridiculous. larry kudlow for example said -- larry kudlow and others, for example, --

what would you love to see at the meeting? >> i would love to see free trade between our countries. it is tradeake sure benefiting people on both sides of the ocean. trade wars have no winners and only losers. i hope and pray for their success. >> are you concerned about additional tariffs on $260 billion worth that the president is threatening? tariffs in general are attacks on the poor and middle class and they are a disincentive for american job creative. 232 tariffs we have on steel and aluminum, we have four more jobs in this country that depend on the manufacturing of things that use steel and aluminum then we do employees who were involved in the manufacture of steel and aluminum themselves area does

not been both are important but to 32 is supposed to be utilized in rail circumstances -- rare circumstances. we need less than 5% of our domestic steel production for national security reasons. there is no reason to invoke to 32. >> i know there is no plan -- 232. >> the president is frustrated with the closing. will you like to see the president to on the issues? anytime you have excessive government intervention whether it is regulation, taxation, or these specific types of taxes, taxes on imports, you will interfere with the supply chain and interfere with the workforce. these are the natural consequences of what happens when we over regulate with a trade war. caroline: that's the utah senator with kevin cirilli there. a quick check of the business flash headlines.

spirit airlines climbed the most on record today. they say charges on premium have and back-checks helped revenue. afteraker shares fell those announcement that steel dynamics will build a new mill. they say it will produce about three main tons per year. prices jumped as much as $.42 after import tariffs into a ramp-up of the mentioned production. their fallen $.15 since the life. in london, an international group of lawmakers upped the ante on mark zuckerberg for refusing to testify at the hearing. he tweeted a picture of the nifty chair with zuckerberg's name. the hearing was about while facebook -- why facebook failed to protect privacy. vice president from the company showed up.

this story intrigued me. this is from richard allen who was sent in zuckerberg's face -- place. zuckerberg cannot travel to europe and did not want to defend the company and the u.k. lawmaker in charge of this particular committee is saying you knew about russian meddling as far back as 2014. romaine: you have to wonder if this strategy they have taken so far at facebook, to send surrogates to speak on behalf of the company, will pay off. joe: those blockers will become iconic whether zuckerberg or the google ones of the other hearings. i think that will be some defining images of the moment. coming up, new york's highest-paid official is not the

mayor buddy debt collector for purgatory lenders. this is bloomberg. ♪

joe: "what'd you miss?" let's get the latest installment in our special series on predatory lenders. they have a quieter way of collecting debt. city official who empties bank accounts nationwide keep the cut for himself. earned one point $7 million last year giving him the most lucrative job in new york city government. he was more the story, is zach. i did not know you could make $1.7 million working for the public sector. >> i did not know either until i wanted to start. get to make $1.7 million on behalf of predatory lenders? >> new york city marshals is this arcane boast that goes back to dutch colonial days. then, they counsel

appointed these guys and said they could get a cut of whatever money they collected. that system has continued to today. they earn commission. if they collect $100, they keep five for themselves. caroline: you would have thought that his reach would be within new york, but because of the law and because of your reporting, it shows he is getting deals thrown at him from all over the country. zach: that's right. he works for these cash advance companies that get new york state court judgments against people -w all of the country. if there's a bank in new york city, he can go to the banks and ask for the money and the banks will hand over money for customers. romaine: isn't that the issue that there is no due process? someone is making you decision

that he had the authority to go in and get the money and the banks have to comply. zach: the borrowers sign this document not really understanding what they are signing way and it allows them, the lender, to go to court, get a judgment, get the marshal, clean the money out of the bank before the borrower knows what is going on. joe: as you pointed out a moment ago, these have been around for long time but it is only in the last couple of years that the monetary rewards have exploded. what did these lenders discover about how they could exploit this law that they had not realized before? zach: the lenders figured out they could use these documents, confessions of judgment, to get the judgments filed in court quickly and use the marshals to help take the money. in the old days, you would have to go to court, file lawsuit, and maybe it would not even be successful. caroline: i do not want to ruin the ending of the story because it is our two of a four piece

investigation. this man, is the repercussions from your insights? our people are star -- are people searching to:? -- starting to call in? he is serving these legal demands by hand in new york city and within his rights to ask for money from company -- from small businesses all over the country. we will see if the city rethink how they want to oversee and regulate the city marshals. romaine: has there not been any ethical issues raised. that seems to be the bigger issue on whether he is operating within the law. the judgments truly exist and his argument and the other arguments of city marshals, it is not our business if there is fraud in creating the judgment, we just enforce the court judgments and we are filing --

enforcing the law and doing so. caroline: your piece is an eye-opener and page turner. thank you. don't miss this, the bank of england publishes its financial and a briefingt by the boe governor. joe: and i will be watching for the speech. jerome powell at the economic club of new york. romaine: and i will be watching tiffany, the reports earnings after the bowl tomorrow. caroline: that is all for "what'd you miss?" romaine: "bloomberg technology" is up next in the u.s. joe: have a great evening, this is bloomberg. ♪

>> i am brad stone in san francisco in four emily chang. this is "bloomberg technology." in the next hour, apple shares that ofpresident trump tariffs are made good including the iphone. plus, where is mark zuckerberg? u.k. lawmakers are angry that the facebook ceo did not turn up to answer questions tweeting out a photog