that have traditionally been value. utilities and consumer staples trading over 20% premium to the market. caroline: interesting how it has morphed. volumes were elevated again. >> they were. the russell denniston the red. 20% -- correction, the dow volume six apparent -- 6% above the average. joe: real estate finally one of the top sectors of the day. caroline: they have to catch a bit at some point. 500, a nice uptrend.

earlier today, less than five points from the s&p 500 taking on a new high. not quite making a mark at the close. it is worth noting, the brutal shownbeneath the s&p 500 .y that 200 day moving average if the s&p 500 cap climbed higher, we could see more choppy now,ng, but 20% up right on pays for the best year since 2013. >> for me, it is about the bond market. the 10 year and thirty-year year yields rising five basis points, meaning that twos and yield curve is steeping, a five or six level. today we are getting that classic risk on fuel with yields

rising, steepening that curve. the trend has been different if we look at a weekly view. come into my terminal here on tlt, long-duration third this on news the largest bond fund flows, the highest level going back to since april, so tot now has a record amount of shares outstanding, highlighting in the past week or so, huge demand for high-grade bonds. >> it feels like people have been predicting the next recession basically since the last recession ended. the forecasts have picked up lately since the yield curve inverted and manufacturing pmi's are in contraction. today, jeffrey gundlach saying

there is a 75% chance of recession before the next election. bloomberg puts it at 35% in the next year. there is one recession indicated that i wanted to bring up. at least the last few recessions have always been proceeded by a major spike in oil prices. if you look at the chart on a year-over-year basis, basically double at these before or at the beginning of the last three recessions. that is not the case right now. oil is down 20% on a year-over-year basis, so no recession signal, or what is purported to be a recession signal, is perfect, especially when that recession may start, but this one is not signaling a red flag of recession coming on. joe: thank you.

our guests.s is i am curious, your take on these recession warnings out there, and is that anything people should take into account when thinking about overall risk exposure right now? economist, but we subscribe to fantastic research, some cited by your colleague. the most important thing is take a number of indicators to showcase whether a significant portion of those indicators are showing recessionary risks. the majority are still not flagging any recessionary risks. i think you should not completely disregard the manufacturing data that continues to be weak, and ceo confidence, which goes hand-in-hand with the previous

factors mentioned. bute are spots weakening, that, there is no signal would flag recessionary levels. in economic expansion that is the longest on record, it is not the strongest, and gdp growth post june 2009 when this officially started the new economic revival, it is still half the level of what previous records have been, so the length should not dictate the end of the economic growth cycle. vence, your perspective on recessionary warnings. jeffrey gundlach has been talking about the treasury yield .urve and what that means are we still worried about the yield curve? thehe yield curve is where

fed has the mark, now at 2.1% and a 10 year between 1.5% and 1.8%, you will have the likelihood of an inverted yield curve. completely.re it i don't think it has much to do with this. i would look at the first quarter of next year if we don't get a trade deal. by delaying the tariffs to the , i think december exports from china, that was the perfect signal to prove that is correct. if the trade deal or some sort of trade deal doesn't happen by the end of this year and that growth is pulled forward, we could see some stagnation into the first half of next year. >> those are things investors cannot anticipate. what we can anticipate is what

earnings might look like in the second half of this year. ana, you are not optimistic. you say it will disappoint, especially the fourth quarter. >> that's right. when we started the year, everybody knew the first half of on year is going to be weak comps relative to tax induced earnings numbers, but the second half recovery is not coming to fruition, and currently the numbers are showing continued deceleration, a decline of three and a half percent, which would demonstrate negative earnings growth. that being said, when we talk about earnings growth, we are looking at an aggregate s&p 500 number, and there are lots of outliers within those numbers, and that is what investors need to be seeking out, companies

with positive earnings growth in topline growth supported by others that are here to stay, and there are plenty of companies showcasing that trend. the theme this week has , thethe theme of reversals uro,aday reversal with the e it ended up higher on the day. could we get a sustained reversal on the dollar against other currencies, where for a while we see non-us currencies? >> tough call. it is the favored choice largely on what has been going on in the u.s. economy. what could make that turn is if ,e start to see this push again as mario draghi pointed out, lower yields across the board.

i could make a case where you would look at some of the stronger emerging markets and the search for yield in their currencies to basically step out of the dollar and get into some emerging market currencies that are better placed than others. you would have to do some serious research on this. i'm sure there are a couple of places where you can find yields that would be far more attractive than sitting in dollars, if the fed will move into a qe phase. >> thank you. we want to mention that shares of the% in the debut ipo first u.s. firm since 2008 to raise more than $1 billion in price the ipo above its range and sank in its opening trade. that does it for the closing bell.

next, "what'd you miss?" this is bloomberg. ♪

♪ we are live from new york. here is a snapshot of how markets closed, mainly in the not managingp 500 to reprise about hi. joe: the question is "what'd you miss?" unveils a newecb

package of qe. the white house considers a deal to delay or lift tariffs to break the deadlock. investors taking a bullish view on a trade deal with the s&p nearing that record level. ♪ romaine: the european central bank cutting rates 10 points below zero, now -60, and make moreplans to bond purchases. here are the highlights from the news conference. >> the risks around the euro area growth outlook remain to the downside. we still think the probability of recession is small, but in view of the weakening economic outlook and the prominence of downside risks, governments with

fiscal space should act in an effective and timely manner. .e have a mandate we pursue price stability and don't target exchange rates. in the wake of the comments, a big selloff in european yields. .oining us now is our guest he joins us from los angeles. quite a day out of europe. a lot of folks interpreting this open ended in his of the bond repurchases as somewhat of a dovish signal, but the market reaction suggests maybe it won't be as open ended as they would have liked. >> it is more data dependent. it was immediately put to the test. as the announcement came out, the yields fell, the subsequent trade war headlines, a potential

deal with china, reverse those yields. is tied to the outlook for rates in the future when they would hike rates again , and hiking rates is tied to the inflation outlook, so if uncertainty presses in the trade war gets result, the expectation is that outlook will be better, and this is quite rates went up on the back of these trade headlines, because it is a data dependent program. joe: the most dramatic move was the short end of the government european yield curve, striking upward move. what was it about mario draghi statement that caused it to pull away? >> that is a good point. there is a different aspect. i think the bank of japan, there

for part of the excess liquidity surplus to be eligible for a zero deposit rate. said iftion was markets i put my money into short term government bonds in germany at -80 basis points, if i can get 0% on the deposit would be exempted from the negative rate, then i might do that. this is why the short end of the yield curve reacted for that reason, rather than the reversal of yields later on the recession driven by other factors. caroline: what you think of italy doing quite so well? >> that has much more to do with the political risks in italy contained now. there is one clear reason. thee is the anticipation buying of the ecb will press down on those rates. italy aseople look at

a country where there is no esoteric risks. through the whole budget negotiations and markets had to -- have determined yields in italy should be lower. stillal and spain are near 0% on a 10 year, which they were in line with italy in the past, so this is quite italy has done so well. romaine: what we got out of the ecb was not a complete surprise, but when you look at other central-bank decisions, there is concern, particularly for the second-tier banks, you have no choice but to follow the ecb and fed lower for longer. does that have the potential effect of blunting whatever impact mario draghi is trying to have with this perpetual qe? >> that's right. the more central banks follow

this path, there is a global market transmission as well. as much as you say you don't target the exchange rate, but the exchange rate plays a big role in the market and is negated by the actions of other central banks, that is parallel to what we have seen in these situations just went through the 2011, and the crisis. there seems to be an uncoordinated but synchronize easing, and eventually we end up with record low rates, and the effect on the currency market is not the way the central banks would like it. , ithe case of switzerland would typically closely followed the ecb actions. joe: access may. what does this mean for banks -- excuse me. what does this mean for banks?

newthe ecb in this structure of easing with the open-ended qe provide additional easing without causing more pain? >> it could. system is in place. there is scope for affair amount of liquidity to the exempt, so put lower the cost for banks from but the other aspect is with yields being so low in the eurozone, there is a pressure on eurozone, ins the addition it has yet to be seen those negative traits are good policy tool, there is not much bank lending behind it. it is not profitable to be in bank lending at this point. this is why the bank shares in europe had this mixed picture today.

the majority of them are actually siding negative on the day. caroline: always great to get your expertise. some numbers out of broadcom, $5.16, just ahead of expectations. billion,ue at $5.5 basically in line, still holding billion for net your revenue. it is somewhat underperforming and off by a percentage point. romaine: coming up, 2020 democratic candidates will take the stage in hours, campaign proposals and big ideas. so how different is each candidate. that is next. this is bloomberg.

♪

♪ , the democratic 2020 contenders facing off in houston. joe biden, elizabeth warren, bernie sanders, among other candidates. how different are the campaign proposals? quizberg came up with a that is really awesome. we will go through the questions to see if we can identify them. we welcome the author of the story. brian, thank you for joining us. i love your quizzes.

let's get started. i will post the question to our cohosts, and then you can explain. the question is, which candidate wants to cancel up to $50,000 of student debt for borrowers earning less than $100,000? caroline: it has to be someone in the middle. romaine: i will go with elizabeth warren. caroline: cory booker? >> it is elizabeth warren. sanders was to cancel all of it. warren's is more graduated, but it caps out. joe: who is the candidate that ha bipartisan support withinhat

the first month? it is not bernie sanders. caroline: i would say kamala harris. joe: who is it? >> john delaney. romaine: he is still in the race? .oe: one more question who is the candidate that wants to boost national service programs and create new programs? i feel like it is someone who served in the past. romaine: exactly. there you go.

>> this ties into pete buttigieg's themes of service. it is harder to tell the moderates apart. there policies are more mainstream and could fit any of them, but easier to tell what elizabeth warren supports in someone else. caroline: what are you expecting tonight, more nuance in differentiating? >> if they don't differentiate soon, they will run out of time. i think we will see more scrapping, and policy is one way democrats like to fight because it allows them to be nice to each other. ryan, thank you. a quick check of the latest business flash headlines.

edge,t trying to get an it is rolling out an unlimited grocery subscription service in the u.s. for $98 a year, unlimited same-day delivery. it is battling amazon and other fresh food delivery. on onofounder of pellet the verge of a fortune. he is hoping to raise $1.1 billion in the ipo. both will try in to take its asian unit public. it helps to raise $5 billion in ipo by the end of the month. shares would be listed in hong kong. that is your business flash update. romaine: coming up, another

temporary trade truce. ♪ here, it all starts with a simple...

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committeese judiciary took a step today to strengthen its investigation on whether to impeach president trump. to adopt voted 24-17 rules that would apply to impeachment hearings, allowing experts to publicly question witnesses and evidence to be considered behind closed doors. the chairman said it doesn't matter what name is given to the effort. >> some call this process and impeachment inquiry, some and impeachment investigation. there is no legal difference between these terms and i no longer care to argue about

nomenclature. what we are doing is caring on the investigation as whether to recommend articles of impeachment against the president. nancy pelosi maintains democrats will continue to be deliberate in building a well-documented case against the president, including work by other committees. warrenen and elizabeth will share the stage for the first time tonight. the top 10 highest pulling candidates for the parties 2020 presidential nomination will debate in houston. among those joining him will be bernie sanders, kamala harris, and cory booker, and pete buttigieg. the new u.s. ambassador to the united nations says she is coming to the organization "as a voice of america's unwavering commitment to democracy, freedom, human rights, and

whenever possible peaceful resolution of conflicts." >> this is an institution committed to the realization of human rights and human freedom around the world, and i am so very pleased to be in new york working to advance that noble mission. republican longtime activist who previously served as u.s. ambassador to canada. she expressed "external gratitude to the bold leadership of president trump." the eu is helping columbia respond to the mass exodus of venezuelans fling their nation's economic and political crisis. today in bogotá, and new foreign policy chief pledged over $33 million to help columbia identify venezuelan migrants and integrate them into society. she called columbia's response "an example for the region in ," but addedorld

that international aid is needed. 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: thank you. trade headlines injected some optimism into the markets with stocks finishing in the green. those moves coming after ofcials in the trump administration are said to be considering an interim trade deal with china. the presidt has discussed offering unlimited agreement that would roll back some forffs in exchange commitments from china. is the senior fellow at the harvard kennedy school. do you think china would bite to that, rolling back tariffs or

pushing them back into the long hims would be enough for them?m -- for > the devil will be in the details. it would be conducive to de-escalating and taking some of the steam out of this dispute, because on the u.s. side, it is having a deleterious effect on the economy, and nobody needs a reminding we are moving close to an election year, and china as well has enough on its plate, so the two largest economies in the world butting heads and getting into an escalating trade war without any apparent signs of fundamental resolution is not really heading in a good direction. joe: you mentioned the weakness in the u.s. come a but what about china? talk about it,

how much could be attribute it to trade? do they have some of the same urgent needs to get that turned around? >> the difference between china and the u.s. is the stage of economic development. china is still a middle income country that needs to continue to grow at arerapid rate, 5%, 6% for a few decades to catch up with the u.s., so the chinese don't want to upset that apple card. -- apple cart. they can start to export to their own consumers rather than u.s. consumers, but on both sides, if they can find some kind of way of de-escalating there will be quite an incentive to do that. roine: i feel like a few months ago or earlier this year there was an actual proposal on paper floating around within

washington circles, and for reasons not quite clear that was scuttled in the trade war escalated. are we going to go back to that initial proposal, or something completely new? enough hassuspect been worked through in terms of potential commitments or announcements. if the two parties wanted to kick the can down the road a little bit here, it would be pretty easy to come out with some announcements that mean different things on different thes, can be packaged for respective domestic audiences. president trump was playing andball, upping the ante hoping to leverage some fundamental changes out of the chinese system, but we are talking two very different systems, and it is not easy for

china to sign up to some of these things. as these diplomatic communiqués have come they have something to commit to kate to the demise to constituencies, they can probably do that. would be the most fortuitous time for president trump to unveil a trade deal in terms of reelection? how long would it take for the economy to start doing well? does he need to create a deal right here, right now to have a good economy when it comes to the reelection? look at this from the viewpoint of the political cycle , i would be getting moving right now. the economic data has been losing some steam, and particularly what should be of concern to the administration is the fact that growth in manufacturing jobs, which is so

important to the president's reelection narrative in reality, which was quite robust in the first year and a half of the administration has slowed to a trickle in the last six months. given the lags in economic activity, the sooner the better would be the policy i would recommend. joe: i want to turn to europe. we had mario draghi calling for policy,ansionary fiscal saying there are limits to what monetary policy can do. not totally surprising, also in line with what economists are saying. that requires political commitment and elected officials to do something. appetiteink that exists in europe to pursue in expansionary fiscal policy right now? i think you are focusing on the right point. there was a significant hit it

pivote ec -- to bit -- by the ecb today. what we need to guard against downside risks is fiscal action. that is a different message from the ecb. mario draghi said the main burden has fallen to fiscal policy. the problem is not so much the institutionalhe framework to translate that into action. the eurozone has a single monetary policy, but not a single fiscal policy. the conundrum is the countries with the most scope to expand fiscal policy needed to do that the least, germany in particular , so fiscal policy by national governments almost needs to be a gift to countries that can't engage in fiscal policy.

that is a tricky terrain for governments to navigate. draghi has made this case time and time again. is christine lagarde capable of stepping outside of that and going to these governments? does she have the political chops to do what mario draghi was not able to convince these governments to do? see, will have to wait and but i think that will be her homework, so to speak. completinguestion of the architecture of the economic monetary union, the banking union, but also the fiscal union side, getting a physical capacity in places political in nature. a critical play role, may be the scenes more than in front of the cameras, but moving from a technocratic style to someone who is more of a political diplomat is the

significance of christine lagarde coming into the ecb. romaine: always great to get your insights. coming up, shares of smiledirectclub sinking 28% from the ipo price in his trading debut. this is bloomberg. ♪

users areterminal reading about an antitrust investigation into several of the largest global banks conspiring to rig trading. by bank earned leniency

providing information about other things. bloomberg.com has a story on the generic drug industry. less than 1% of drugs are checked for impurities and potency, with 90% of prescribed medication being generic. tictoc is reporting the vaping industry is fighting against the ban on flavored e-cigarettes. now health experts say if flavors should be banned, this curbmove that could lobbyist pressure. you can follow all of these stories on the terminal, bloomberg.com, and tictoc on twitter. curb lobbyist pressure. romaine: shares of aurora cannabis slid 9% after mixed results and warnings there will be more earnings volatility and

growing concern over vaping-related illnesses and deaths. many investment firms have continued to pop up. one firm has been endorsed by the national minority business counsel. i spoke with the ceo and cofounder to discuss how the firm chooses what companies to invest in. we are using standard .usiness principles to evaluate , ite is the cannabis tax artificially inflates what we believe to be corporate prices. we find that in public corporations and believe this pricing is overinflated because people don't know how to invest in cannabis. in order to find proper investments, you need professionals. romaine: you have so many companies out there. it is still a fragmented industry.

you have some consolidation, our altria and kronos group. many are smaller scale. consolidation,t or is this a race to the top for the few companies that can rise above? >> there will be definite multiple winners. you see innovation come from small corporations. the great thing is about cannabis, you have two different fields, the guys doing mergers and acquisitions, like aurora. you will find they have about $3.2 billion in goodwill on their asset balance sheet, and that represents 55% of the corporation. ideally you want to see that under 50%, and that would show a healthy corporation. if it had 60%, you have to ask

whether this is a good deal or not. romaine: are you focused on the growers and cultivators, or is it strictly the branded side of the business, or a company that does it all? >> we are doing a very interesting lt faceted distribution play -- multifaceted play. lot the mom-and-pop shops have what we call internet direct to areumer websites, but there already 5000 now. as more come online commit will be a glut of what do i pick. becomes overly bearing and uninteresting. romaine: the future of the business is not so much appealing to the people who might currently use cannabis, legal or illegal but the people who maybe haven't been exposed

to cannabis, cbd. what is the strategy to reach those people who may be would have never considered smoking marijuana a year or two ago? how do you pitch them on this idea there is something useful to them? states, we ared getting 10,000 senior citizens turning 65 per day. a study based out of canada of a few thousand people who are cannabis users, 70% use it as a replacement for opioid-type drugs. education, working with the medical community and law enforcement and educating consumers to find how this is oxycontin or other things people are taking. romaine: that was my interview

with kevin shin. fells of smiledirectclub from their ipo price today in its debut. joining is now is our deal reporter, who spoke earlier with the cfo of smiledirectclub at the nasdaq. what did he have to say specifically about the offering? the offering was a success, but secondary shareholders, the different story. >> the roadshow went well. they were many times oversubscribed, which is why they were able to price above the range. you need to be confident you will trade up. inis about look for him citigroup and jp morgan as the underwriters of the deal.

i think we have some sound from him. long-termfocused on shareholder value. we are focused on our members. have 5500 team members around the world. our investors are with this for the long run, the next several years and beyond, and that is >> he was saying he did not wish he had done anything differently, but i'm sure shareholders feel differently. that ominous about any ipo coming. what does it say about any ipo? >> it is a good lesson for where to price. even if you feel like you have strong demand, maybe it is better to be conservative than trying to get that money off the

table. we have not seen a drop like this for a significant company on its first day, even uber. joe: this is major. romaine: you can't find a company of this size having this kind of one-day drought. caroline: great interview. thank you. second time is a charm, anheuser-busch inventive trying to -- anheuser-busch inventive trying to take its asian unit public, hoping to raise $5 billion. that is next. this is bloomberg. ♪

♪ time for ab is now invev looking to raise $5 billion for its asian unit, that after scrapping plans two months ago. it is trying to secure funds by

the end of this month to be the world's biggest ipo of the year. shery ahn is here with the story. what a reversal. is that the need driving ab invev? surprised toere see this. at least they lowered their ambitions. afore the initial ipo was $9.8 billion valuation. this time only $5 billion. analysts are saying they don't understand why they are rushing. they offloaded their austrian unit, so we had some annualized even speculating they may have some other m&a deal on the in order to get that moving. also, higher valuations may be helping. not the smiledirectclub ipo

so great, is there a perception that the ipo market is not good. >> the ipo market in asia has been good. hong kong has led the world in ipo's per volume, not necessarily returns, but we have seen the asia-pacific region being very active in the ipo market. peloton and we have we work. offloaded their austrian operations that help because that was a slow-growing part of their asian empire. romaine: we know all the disruptions in hong kong, concerned about beijing's influence on hong kong, has that had any affect on investors so thiss to whether you have

ip over this merger with the london stock exchange? >> that is the skepticism about the hong kong exchange trying to buy lse. this is what the u.s. secretary of business had to say. >> we are keen to see foreign direct investment, collaboration with different international interests, but we have to look carefully at anything that potentially had security implications for the u.k. that is standard. we would always do that. >> there is concern about beijing's influence on the hong kong stock exchange. the hong kong government on 6% of that's kx. -- of the hong kong exchange.

caroline: thank you. that's all for "what'd you miss?" joe: have a great evening. this is bloomberg. ♪ devices are like doorways

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♪ emily: i taylor riggs in san francisco. this is "bloomberg technology." , interim deal considered. the trump administration has yet to make a deal with china. we break down why they are favoring an interim deal, but can they get beijing on board? plus, workers rights.