that what we are likely seeing is a dichotomy in the u.s. economy. that's not the same as other economies where the manufacturing is taking a hit. largely because of the trade war impact and manufacturing. fears ofwith what the trade wars to bed. we are euphoric on the news that we might see the u.s. and china start talking again come october. the s&p 500 drives of high. we are above the 50 day moving average at one point. >> volume starts to pick up as well because even though they were day has come and gone, we did see volume still below the average. today in the s&p 500 volume is above the average. people are back. >> it's pretty impressive across the board. >> let's dive deeper into the action. rally, itday's big

wasn't just haven bonds being sold it was also precious metals. gold is down and so is silver. the worst day for these precious metals going back to 2016. what makes this so interesting is the dollar index is flat. investors just wanted out of the haven assets. that's not entirely surprising. looking at the gold chart that goes back over the last five years, we have seen gold stuck in a huge range between 1200 and 1400 area right now moving -- this year moving above it. we have seen the indicator put in lower highs meaning that we could see some consolidation for gold coming up ahead. if not for treasuries, the big story of the day would be the fact that we now have a record week for high-grade issuance. hitting 74 billion now.

curve, the yield extent to which that the essential best potential recession indicator. let's look at sprecher. this is the 10 year trouble be spread less the two-year people be spread. a gauge of the riskiness and the time component among the companies that are clinging to investment grade rating. what you see here is while that right hereegative, steepening of that recently still nowhere near late 2010 when we were having double-dip recession type worries in the u.s.. this is another reminder that companies are issuing not because they have to but because we can. market seems that the cecile for risk assets broadly all of these debt issuance is help rebel buybacks and propel the market higher. christinaith us is with the -- a chief global

market strategist. today we had some mushy catalyst. the trade talks being confirmed doesn't tell us anything. tomorrow we have the jobs report. we also have jay powell speaking. what expectations are built in right now given the we have seen global central banks from sweden to canada to australia pullback. they sounded less dovish and today's economic data married with the data from earlier this week which showed manufacturing of those in the position where we are not quite sure how jobs will shake out. >> that's absolutely the right point to make area this makes it a little more difficult for the fed it to cut rates. i suspect that what we will hear from jay powell tomorrow is a tepid commentary on the fed's ability to provide monetary

policy accommodation. i expect a 25 basis point rate cut but i expect him to echo what we have heard in advance of jackson hole which is to say that we are not really convinced that we need to give a lot more accommodation. i think we will hear a we duration of that theme but i expect we could see a fairly tepid jobs report as well. i am not convinced it's going to mirror adp. a point thatgo to luke brought up which was the extraordinary we can credit issuance. you have to admire the timing. $74 billion, a record. if this was the bottom temporarily in yields -- >> i remembered three weeks ago that said the same thing, companies are simple creatures when yields are low and they see that they come in and borrow. we knew this week was going to

be big. we knew this month was going to be big. it's typical. it's back to school. it was less typical last month but a bunch of companies came in as well. investment grade has been a low-key big story. it is kind of boring in a way because spreads have not moved that much. yields have come down overall because treasuries have moved lower. it has been a recurring story in the background and companies keep chugging along. investors who bought in during last year selloff have a real nice returns. timing,ng about market we have a new issuance when it comes to bonds. , close to record highs. does -- is it a good time? interestingbeen an year for ipos in general. suggest confidence in the stock

market. seeing companies and their shares to market is good for us as investors. it may not be perfect timing for companies but it is difficult to turn the market. >> it's difficult to the market but an investor from goldman sachs made the point that investors should not invest in companies that are profitable. they should focus on revenue growth because that will mean that they will outperform the broader market for the next two or three years. do you buy that? ask that sounds familiar as someone who was around in the >> we have to be selective. >> let's talk about that.

we were just talking yesterday on the show about the stocks went to all-time highs. there were concerns under the surveys and our strategist pointing out that the valuation of defensive stock much higher these days or the ratio of defensive stock by ua should to growth stocks is really gotten with extreme a sign that stocks near heisman it recession worries are creeping in. it does that suggest that there is an opportunity to rotate back into growth or some sectors who have been on those during this rally? tax it makes a lot of sense to be thinking about growth now. in an environment where you have modest growth, perhaps decelerating growth, you want to focus on the secular growth story. so there is an opportunity there. >> what about alternative asset? how much hasn't just been get

out of haven? >> it is been interesting to contrast gold to have treasuries other bondsd because gold is suddenly now know yield no problem. we saw germany's thirty-year term positive today. that's a small victory for any of us who like positive rates. it will definitely be interesting to watch gold. i have been watching it and i don't do that ever. i've been watching it now because people are turning to it thinking could this be a bond alternative? >> could it be a bond alternative? >> absolutely it is all about correlation. you want to have a diversified portfolio with asset classes that have laurel -- lower correlations reedit the opportunity cost for owning gold are lower when yields are as low as they are. >> do ever feel like it's too easy? with stocks and bonds they work so well in harmony with each

other in terms of treasuries offering versification. -- it's -- rallying like by some of this or some of that. do you ever worry about a correlation breakdown and maybe a sustained selloff? >> we saw that in the global financial crisis. i think it only happens in extreme situations. we have to recognize that is a possibility. be as wellnse to diversified as possible. at that includes a variety of alternative asset classes. christina and brian, thank you very much. we have breaking news. lululemon coming out with results is trading higher in the aftermarket now. this is after lifting its forecast. it was looking to 458. it has raised that the war 63 to 470%. comparable sales including direct to consumer but excluding

the effect -- the foreign currency affect rose 17%. better-than-expected sales and eps also beating the estimates. that doesn't for the closing bell. romaine bostick is coming in for what'd you miss. this is bloomberg. ♪

♪ water from bloomberg

headquarters. here's a snapshot how u.s. stocks managed to rally once again. >> the question is what you miss? stocks surge bonds tumble and trade talks feel optimism. the brexit battle continues with boris johnson saying he would rather be dead in a ditch then asked the eu to delay brexit. we work may be forced to value itself less than half its latest valuing round. u.s. and chinese officials agreeing to restart trade negotiations. is said toelegate visit washington in late october. the s&p 500 reacted by gaining for the fifth time in six

sessions. inching between 1.5% of an all-time high. joining us from los angeles with of latest is the leader bloomberg economic policy coverage. were things so negative in terms of the expectations for talks that merely the fact they are going to have a meeting is seen as a big deal? that this restart is different than any of the dozen other restarts we have seen? funny that the two world's biggest economies, officials can get together and have a discussion is enough to send rockets surging. that's the point that were at right now. china said they are going to need substantial progress on these talks. i think with the expectation is now is that they come out of this meeting was something more than warm smiles and a handshake.

a pathway,ut with something firmer than what they have achieved in the past year and a half. that has been broken promises and a lack of faith in each other. >> what exactly gets put on the table? we were here last month and in july. whatever came out of that meeting didn't satisfy one side or the other or both. >> some promises we have heard in the past that have not been delivered on our -- trumps that he has received promises from china to purchase more agricultural goods and that hasn't happened. licenses tospecial be awarded to companies so they can sell to huawei again. that's the low hanging fruit. they have promised that before and it has not been delivered on. those are the easy items. something harder to achieve would be the delay or cancellation of the upcoming december 15 tariffs. that might be something china would push for.

there are lots of things they a fullgree on that part trade deal that would be seen as a positive. >> thank you. here in new york with more analysis we want to bring in the managing director and chief global political analyst at city. when you look at what has been transpiring with the trade war or what has not been transparent -- transpiring, we have started to get data out of challenger and a fed study that seemed to suggest there is a tangible impact from the trade war. >> negative impact. >> how negative you think it could get? >> it depends on whether we could see a postponement of the tariffs scheduled for october. one of the things i think market participants overestimate is trumps ability to make a deal happen.

there are various parties in dispute. the chinese are irked by all accounts. they want to see significant progress and don't forget with the u.s. elections coming up, it may be the perspective in beijing that waiting to see how long trump is in office affects her negotiating calculus. >> should we not underestimate the desire for trump to get a deal ahead of the elections? would we get something that maybe isn't tangible but is sold as one? >> certainly. we have seen that movie before. markets have some form on this fact that even a cease-fire is perceived as positive news as is just the announcement of a meeting. it doesn't take away the fact that trump has not made a conference of breakthrough. nafta has not been agreed to either and the clock is winding

down for congress to approve anything before elections. >> i wonder about the flip side. someone made an argument to me that maybe trump doesn't want a deal before the election. he ran 2016 on building a wall. playing up fears. is it possible that he runs the 2020 elections on we are in a battle with china? >> yes. i think that that fits in more with what i believe the u.s. objectives are. like a dealcipants because they are watching the s&p. china is named as a strategic competitor in the u.s. national security strategy. i think we should understand these tensions as about much more than buying soybeans or short-term objectives. the u.s. wants to slow down china's rise.

that is what is going on here. >> when you look at the interplay with other world they are also having to deal with the u.s. and trade policy. >> they don't mind the u.s. doing the heavy lifting. >> i wonder how does that factor in to the fact that we are heading into a u.s. election? these other nations know that. how are they going to play against that or two it to extract what they want? if we're talking about trumps fellow g7 leaders, none of them want to be on the receiving end of u.s. tariffs either. don't forget that steel tariffs, auto tariffs the possibility of more u.s. action against europe is something that is very real. i think you'll find the european leaders being quiet on this. i think joe's point is important. campaign to be trump

of continuing to be tough on china as we head into elections also bears fruit and is one of the few arias that is popular in a bipartisan level. >> thank you for that. coming up, soap opera or brexit? boris johnson said he was rather be dead in a ditch then delay britain's exit from the block. his own brother resigns for parliament. this is bloomberg. ♪

>> we want to bring you up-to-date on earnings. but start with lululemon. this is the apparel retailer.

they are reporting earnings for the quarter and boosting their forecast. we're also looking at zoom technologies. the ticker is is em. it shares down 6% after reporting earnings that missed. then a cybersecurity company is down 7%. doc you signed also reporting earnings surging 14%. talk about brexit because the disarray in london continues. the showdown got personal. this time or us johnson's brother quit the government. the house of lords is debating a bill to block a no deal brexit and johnson is arguing for a snap general election. i don't want to go on about brexit anymore. i don't want an election at all. frankly i cannot see any other

way. the only way to get this thing is to make that decision. more let's welcome our guest. he hates banging on about brexit. what else is there? asked nothing else and there won't be anything else besides brexit. even if we left on october 31 just now less likely, i said we because i am based in the u.k. -- >> is this a constitutional crisis or just all caps of weird things that happened in the way the british government works and it's working how it's supposed to even though it's pushing the extreme edges of how parliament typically works? a it is extra hard to define constitutional crisis in a country without a written constitution. that means the british constitution has evolved over 700 years with bits and pieces of rulings and judgments.

you might be referring to a piece about the fact that we don't -- we don't have the military out in the streets suggests that we are not in a constitutional crisis yet in the u.k.. where we certainly are is what i would call a political nervous breakdown. next woman look at what's going on, is there going to be real spillover to the eu if that relationship is severed in the way everyone thinks it's going to be? >> brexit has become a footnote to other eu member states. it always comes lower down on the list of topics to discuss. has been consistent about wanting a resolution that the developments in the last two days, parliament has only been in session for two days, suggests that we are further from a resolution. what is your number one question coming from clients?

is it how much uncertainty will remain? what to do with this breakdown? >> what is so difficult about brexit is that it's impossible to draw a decision tree about the outcomes. it just looks like a bowl of spaghetti. there is an inverse relationship between how much time it takes to explain brexit relative to the wider economic impact. your previous point, what's the potential for brexit affect for the rest of the eu? it's the worst for the u.k.. it is quite bad for ireland. it is less impactful for the eu but the most important byproduct spectacle the brexit lookst leaving the eu extremely unpalatable amount to any other country. >> will the u.k. be in the eu on november 1? >> yes.

how long will it be pushed out? >> the very short explanation is labor will hold out in supporting new elections until it gets what it wants which is for the prime minister to go to the eu and get an extension -- thathich requires will push out cliff edge brexit probably to january. at this one, we are looking to get elections in november. that is not good for boris johnson which is why he wants them earlier. political capital and approval ratings are a diminishing asset for him the sooner the better. aswill go down in history the prime minister suffering forever for political debates -- defeats in the first two days of his position.

>> coming up, how healthy is the job market really? we will talk about that next. this is bloomberg. ♪

>> i'm mark crumpton with first word news. hurricane dorian raked the coast today with strong winds and rain. it knocked out power to more than 200,000 homes and businesses. at least 23 people are confirmed dead in the bahamas but the death toll there is expected to rise erie at the bahamian health minister says the final death count could be staggering. adding toooters are the misery of the bahamians worry at the government has added security forces to maintain order. floodwaters have receded but

many residents are in shelters thinking their homes -- making their homes easy targets for thieves. the eu says the british government has made no proposals for ending the brexit deadlock with a new round of technical talks aimed at ending the impasse set to take place on friday. a spokeswoman said today that for the talks to make progress, we would need to receive concrete proposals that are compatible with the withdrawal agreement. extension at this stage, this hypothetical, if we were to receive a request for extension then it is up to the member countries to 27 eu unanimously agree to any such request and any such request would have to be for a good reason. iran says it will announced saturday what steps it will take to pull further away from the landmark nuclear deal between

tehran and world powers. president rouhani this week reiterated his threat to accelerate nuclear activities if europe doesn't provide a solution for a to sell its oil abroad. the nuclear deal is steadily unraveling since president troop -- president trump withdrew last year. global news 24 hours the day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. >> despite a slowdown in manufacturing and weakness around the globe, the labor market seems to be remaining fairly healthy in the u.s.. jobsnies adding the most in four months in august according to the adp jobs report. economies are still went to keep an eye on tomorrow's report. is a seniorow economist from bank of america.

i want to start with the data we received today. it seems like people are taking a big sigh of relief. after theamazing but reports, nothing in today's data suggested that we are sliding. what was your take away? >> that's a good point. the way i interpret -- interpret today is that we are not at the brink of a recession. clearly, the economy is starting to see some slowing. today's numbers don't change the trend in the data. if you look at the three-day moving average, it's still around 150. midnonmanufacturing in the 50's that tells you the sector is growing at a modest pace. i think markets exhaled today. we are still not out of the woods. >> woman look at other data points in the job market right now, we had a story on the

bloomberg that talked about the reduction in weekly hours, the reduction in temporary hiring and saying if you have those two things trending downward the next shoe to drop is actual headcount. at in thatight and job opening rates are starting to plateau. when company see the weakness in the economy they stop tiring than the cut back on hours then they lay off workers. we have not seen a pickup and claims or a negative number on job growth but we are getting in a fragile state in the labor market that we are getting to that point. >> what does the fed need to do or a ticket -- articulate tomorrow? do you think they will walk the line that guns don't need to go blazing but we are aware? >> i think they will go dovish. they will act to sustain the us -- expansion.

that means they are going to ease further by 25 basis points and they are willing to do more if they continue to see weakness in the data. >> do you worry about central bankers and other policymakers wanting to see too much evidence of a slowdown before they act than it's the slowdown? >> what they are looking at is how the data translates into the outlook. today's number doesn't change the outlook and it's already looking relatively soft compared to what we saw in 2018. as long as that path doesn't change for them, i think they're going to be -- >> what about what we saw the report that showed 10,000 jobs lost that were directly attributable to the trade war? we've already heard the fed address this issue. if you start seeing that in the

data, what do they do and what can they do? >> they have already told us that if the trade war impacts the outlook, they are going to react. what they said is they are not going to react to every twist and turn. they're not going to react to every tweet from president trump. if they do seem meaningful weakness in the data they are going to act. you are starting to see that in the survey measures with the employment index and manufacturing where they are also all edged down over the past few months. point, weg on joe's have heard thus far the vindication of the stimulus coming from the fed is the global pressures we are seeing. we saw evidence again today the andany's numbers were poor the ecb is not going to release qe as soon as expected. the direct impact is

relatively muted given at the u.s. is a big economy. the fed is starting to worry that there's going to be spillover effects through financial channels. if you start to see further weakening abroad, markets are --ng to take that and turn they're going to concern and that's going to lead to the fed to potentially signal more cuts down the road. >> great to get your expertise today thank you. tomorrow, the white house reaction to the jobs report. up, the wework ipo is not going to be quite the celebration once foreseen. target is less below its last private around. this is bloomberg. ♪

>> the wework ipo will not be the celebration they were hoping for. the lower end is going to be less than half the valuation expected from the last funding round. professor of a marketing from nyu. reportnth you wrote a with a colorful title lessening the valuation on his company. now that we are seeing the ofential market assessment what this company is going to be worth, do you think that even at 20 billion or 30 billion that might be more of a reasonable thing to chew on rather than 40 billion or 50 billion we thought

it might be valued at? >> good to be with you. i would argue this is not a market assessment this is me putting my toyota on the market for a million dollars than when i get market feedback that it's not going to fly, i try to present at have a million. atore the initial valuation 45 to 50. this company is not worth 20 to 30. look at comparables. this company invest long than arms the short-term rentals similar to hurts and a direct competitor. at 20 billion, this makes no sense. think thisi don't thing gets out. i think -- i don't think it's anywhere near that. the fact that it has been cut in half doesn't matter. >> we have seen several ipos this year many of them have not done well. they got out the door despite investor concerns about the fundamental unit -- economics of

the business. uber is chief among them. the fact that so many concerns are about the business, the long-term obligations and into them out short-term and how much is the concern about every other red flag that everyone immediately saw when they were looking at this one? >> the answer is yes. where the company individual in his most about the company has become one of the thousand wealthiest people in america is selling $700 million toing to go on a roadshow convince people to buy shares that he can't sell fast enough. you have a company that is trading at -- with a revised relation would be the 14 times revenue versus avenue -- amazon at four. you mentioned uber. that's the cautionary tale. they managed to get out and they have declined substantially and

is teaching the marketplace that if the company doesn't make sense, it is usually not a good stock to own. neither of these companies neither uber or wework in the current structure make any economic sense as stand-alone companies. they just all work. >> to be fair to weworks chief executive, he remains a 22% holder in the business. who else is long is softbank. a talked about them as venture capital company. how much is this a problem for softbank when not only is wework coming in at such lower -- what you think it's is about them? >> that's the correct question and that's the next big story. othernk is amongst

financing vehicles, softbank has been issuing debt and part of toir ability to raise debt make these investments is they ise marked their portfolio the most recent private valuation. some of the collateral they have been borrowing against has been $45 billion market which was the last private valuation. you are about to see their mark of down. to decline.ntinue slack is a great company but they are massively overvalued right now. the next week story is going to be the ripple effect or echo effect in the blast zone and softbank is a few hundred yards away from this blast zone. we're going to see a lot more stories on how this negatively impacts what has been the most disruptive course of venture capital and that is softbank coming in with these outrageous valuations. next i agree to softbank story

is going to be big. thank you for joining us. latest is ack the splash headlines. a delayed ipo. this is a move that could delay one of silicon valley's most anticipated ipos. the company behind nokia says it sold 10 million retro handsets like this one. now it has redone the flip phone also. they unveiled the machine today in berlin. it costs less than $100. love it first like, facebook is

launching is dating service in the u.s.. users can combine elements of their facebook and instagram accounts to create a separate dating profile. that's the business flash update. veryi know you're passionate about this. >> no one wants to use that. it makes sense from a business perspective for facebook to link this. is -- you saw the effect on match.com shares. they were down 4.5% today on this announcement. facebook is a very sticky platform and there are a lot of people who are too lazy to go anywhere else. they don't care if grandma is peeping on them. know whetherve to we have a success rate on how

beautiful these dates and of being read whether they are curated. maybe they will suggest a date. can trade conspiracy theories and racist means. >> going to step up and talk about this more. and was at the consumer staples conference. this canvas company executive says the market space is still >>a development phase react we haven't seen any product on the market that has been able to celebrate -- separate and is still something we're working toward. we don't have standardized market access. away butll a few years

we are doing very well and we are very excited. you will start to see that in the couple of years. it's hard to say you can lead in any single market and until we can roll that out to markets, it's a long way to go. about the users? it's a new product and a lot of markets. are coming users who from illegal into a legal market. you also have -- is it just a novelty that a lot of people are trying and saying they don't want to get high the way they used to when they were 18. are you seeing recurrence among those users that are coming to the product for the first time? >> we're seeing a lot that were concerned about safety or stigma . that's argue with the greatest risk.

there are risks your help if you go to jail. what we're seeing is the expansion of the category and as we learn about different cannabinoids, you don't want to have an intoxicating result to purchase that product. that's one of the reason skincare is interesting. consumers can go into sephora and they're not looking to get looking for a completely different experience. we see a lot of excitement there. not like the connection you want there. let's talk about the share price. we have heard from one of your big rivals that they expect to be profitable with into quarters. where do you sit on the same timeline? we sitre fortunate where from a cash position we have

runway to focus on what is best for the business long-term and not on when can we generate enough cash. we are focused on what will develop the best long-term value as far as brands, products, channels. that's where focus is. >> do you have a sense of when the losses will decrease in move back toward profitability? >> you can look at different categories. overall which markets open up. aggressiveays be when markets open to make sure we can get market share in our product out there. one market may be mature and another market opens in look at the whole of the company, it's hard to project how and when that will happen because there are some a country's opening up in different ways and so many different opportunities. our focus is still growth and i feel like were putting a very fortunate position to focus on growth. >> what's talk about a deal that

has ramifications for you. philip morris said that there are merger talks. would that change if you want to ownership under philip morris? >> is nothing in our agreement that would change their ability to exercise that option. i can't speculate on anything that would happen with the deal. as far as our agreement, there's nothing that would change as a result of that. that was the ceo of kronos group. the future of wto. the u.s. has been challenging china and other nations developing country status at the wto. next ahead. this is bloomberg. ♪

>> the u.s. and china managed to nail down a date to restart negotiations. not all is well on the global trade front. president trump challenging china and other natures -- nations developing country status of the wto. one of those countries is considering giving it up. shery ahn's who are the story. fair -- aware of this wto designation. what does this mean to have it and what would it entail giving it up? >> we're talking right now, south korea. we'll talk about south korea, we talk about technology. you don't think they are a developing nation. now, they are still designated as a developing nation under wto rules. that means they are allowed to have higher tariffs, trade barriers, and they are allowed theive subsidies to

domestic industry. we are talking about wto they are allowed to have a 513% tariff on imported -- imported ine and billions of dollars subsidies for farmers. we have heard from president trump applying pressure to the wto for this to change on july brokenweeted the wto is when the world's richest countries claim to be developing under the beauty of rules and get special treatment. it no more. that was a tweet on july 27. we have pressure not only on south korea but also more targeted toward china. >> a lot of caps and that tweet. what exactly can the president do here? >> they have made the wto's work pretty hard to they are making it difficult to prove judges.

judgesre three of the who remain on the committee. thiswill and their tenure december. this is hampering wto's work. notu.s. could unilaterally consider them a developing nation anymore. for south korea, that might not change things that much. anth korea and the u.s. have fta already the takes precedence to the wto. >> thank you so much. for more on the stories, don't miss daybreak australia and a break asia starting at 6:00 p.m. eastern. jobs day in the u.s., the august report coming up tomorrow at 8:30 a.m. eastern. >> be sure to tune into our special coverage of jupiter remarks on the economic outlook and monetary policy tomorrow at 12:30 p.m. eastern time. that's all for what'd you miss. bloomberg technology is next.

this is bloomberg. ♪

caroline: i am caroline hard -- hide and this is bloomberg technology. its valuation before the ipo by as much as half. more on why and what is at stake in the compnany. peter thiel's data mining company is on the