battle with china. the u.s. denies report that they would block chinese companies from listing. credit suisse's board backing the ceo after the investigation into a spying scandal. a close as investors prepare for event risk into the end of the year, from fed to impeachment to earnings. welcome to "bloomberg daybreak" on this monday, september 30. what a wild third quarter it was. here's how it looks to be settling up in the markets. s&p futures modestly moving higher. a little bit of selling on the margin, but nothing to write home about. euro-dollar a little weaker. you got better employment data out of germany.

crude rolling over yet again. the outlook stable, but nonetheless, crude may be reflecting some demand fears. you the days market moving news from around the world. joining us from hong kong is caringly -- is caringly -- is karen leigh. the city is cleaning up from the get another weekend of violent seventh --ead of the ahead of the 70th anniversary of communist rule in china. : chinese president xi jinping spoke just a little bit ago. he said relations between hong kong and the mainland would improve, and this comes even as pro-democracy protesters plan to offer a number of rallies tomorrow that coincide with the celebrations beijing will be rolling out for the anniversary celebrations.

they will be attended by tens of thousands of people, so it is really going to be a juxtaposition between what is happening in the chinese capital and what is happening here in hong kong. alix: thank you very much. unbelievable video from over the weekend. now we want to head to europe. credit suisse's board is backing the ceo at a crucial meeting today that determines who takes the blame for a spying scandal. maria tadeo has the latest. maria: the question here is what is happening at credit suisse, and what was management thinking when they put a former employee under surveillance videoed the former employee -- under surveillance. the former employee decided to leave for ubs. he says he felt physically threatened.

there was a very public altercation on the street, and claims his phone was almost stashed away. the board will have to make sure they come up with a clear explanation as to who is to blame for this. some of the heat has moved away because some of the big shareholders at credit suisse claimed that there is no point getting rid of the ceo, who has done a good job turning around the bank. this is not a good look, but the reality is this is a very cutthroat industry as long as nothing here was illegal. alix: thank you very much. then we had to wall street. friday is jobs day, and poor that is a very busy -- and before that is a very busy week for fed speakers. michael mckee has more. michael: one of those fed officials, john williams, already speaking out this morning. it is quarter end, and it is volatile, so we are keeping an eye on the repo market.

i made a chart that said everything is ok, but look at how we've opened in the repo market. the fed will come in later this morning and probably take that away. it is probably not too much to worry about, but definitely keep and i'll net. john williams saying it looks like we need more reserves in the system, which means the feds -- which means the fed goes back in the system buying bonds. we hear from jay powell, the other members of the leadership, and a whole bunch of board members as the week goes on. a very busy week for them to be commenting on. it is the week when we get the jobs report friday, but before that, a lot of manufacturing numbers. china did report it's ism's, still contracting, but a little bit lower. this week you've got ism for the u.s. tomorrow. by the end of the week, we get trade and jobs, as you can see. on awful lot going on. keep an eye on auto sales

as well. speaking of trade, one more thing to keep an eye on, the president may be allowed to impose $1 billion worth of tariffs on europe this week in the long-running airbus and boeing dispute. airplane parts, but also things like wine and leather, luxury goods, something to watch as the week goes on. alix: thank you, bloomberg's michael mckee. saudi arabia's crown prince mohammed bin salman warns that war with iran would bring down the global economy. he says he prefers nonmilitary action. peacefultical and solution is much better than the military one. >> do you think that president trump should sit down with president rouhani and craft a new deal? >> absolutely. this is what president trump is asking for. this is what we all ask for. denied ordering

the murder of journalist jamal khashoggi. crude down by over 1%. coming up on this program, more on your morning trade and analysis on the markets in today's first take. this is bloomberg. ♪

alix: time now for the bloomberg first take. teamng me for my in-house of wall street veterans and experts, romaine bostick and vence and bostick and vence and cignarella -- and vincent cignarella, plus paul richards, medley global advisors president. the main story over the weekend was conflicting signals about

whether or not china is going to be restricted in terms of what u.s. investors can invest in financial flows. what does the street care about this? vincent: it is really a big deal. the news was out on friday. it was essentially confirmed. now the white house is walking it back. i think they probably forgot it was china's anniversary celebration, and they don't want to throw a monkey wrench into things. but if they do enact this, it is pretty much a sledgehammer, basically cutting off china from raising money in the u.s., which is a big deal. sources, where would they go for that? alix: do you buy it? paul: i'm going to take the other side of that. i think it made for great press, but the only way you get to that point is if everything breaks down between the u.s. and china. -- i'm more concerned

at that point at where tariffs and trade will be. to my, it was a buy the dip opportunity. romaine: i partially agree with you, but i also kind of agree with vincent. it was a big deal that it was being considered. you had a high level people within the trump administration discussing this is a real possibility. i don't think everything is going to fall apart, but the fact that they are willing to walk it out to that edge i think has to be a little bit concerning, that if there isn't some detente between the countries, that this is the -- vincent: i agree. it is the last straw. . it was a shot across the bow from the white house to get to say it attention is a possibility. i don't think the administration wants to go down that road. alix: isn't this something they'd already talked about last

year irrespective of trade? it seems like this is something that is on the table irrespective of trade issues. paul: i think everything is on the line with china because of the hardliners advising the president. he tends to go in these three to four week atul's, and then pulls back. he wants a deal. if he doesn't get a deal, he may not get reelected next year. this is about the economy, particularly what he will face the next 90 did months with the impeachment process. anything is on the table -- the next nine to 10 months with the impeachment process. anything is on the table, but unlikely to happen. alix: i have two fx guys here. i want to highlight what is happening with dollar-yuan. this is dollar volatility, and it shows where the market will be looking at where the volatility is. what is the right trade? we are picking it up a little

bit, but nowhere near where we should be. vincent: this is a really tough call with vol in china. whatever the markets do with the offshore yuan, the domestic economy suffers greatly if it weakens or strengthens to drastically. china and the pboc are going to keep the currency within range. it could depreciate. it wouldn't shock me if it did, if the trade tensions escalated a little bit, but i think the vol will come down a little bit because it is going to be tamped down by the pboc. they can't let it shoot in one direction or the other. paul: i think when they let the yuan go through seven, that was their way of using one of their tactics, and we know the president. is incredibly sensitive on currencies i think the next big battle asked the president is incredibly sensitive on currencies. i think the next big battle --

the president is incredibly sensitive on currencies. i think the next big battle is europe. china used a psychological point with the trump administration. i don't think we will see tremendous depreciation from him. however, if things were to break down, we would have a big problem. are at a point now where if things break down, things are going to get super a bleak -- super ugly on every point. the market will be the ultimate recipient of that problem. at the end of the day, let's give this another 10 days. let's give china a week off. let's see what we get in a couple of weeks, and we will now. romaine: there was a lot of talk that this was the markets taking control, or that china had lost control. i think what we have seen in the weeks since then is that china was a lot more in control than what we thought. when you talk about what the trump administration could do in

terms of trying to push back on the currency front, i don't know if the u.s. has as much leverage as the chinese do, as well as the europeans. it as and of using smaller point in a broader issue, there's a lot of event risk in the next quarter, whether it is china trade, fedeasing tariffs, two meetings. there's a lot of risk in there . romaine: i don't think we've had a lot of risk there. it will be different at some point, but when you think about the last nine months and just how resilient the market has had this fact that we over the summer, the market always seems to find a way to align. vincent: there is treasury issuance which is supposed to amp up in a big way. we have to see what that does to the repo market. alix: you are bringing in repo market? i love this.

vincent: just briefly. then i will go back to currencies. [laughter] vincent: i think europe is a layup win going into the election for the president. i think he's holding onto that is a last, best shot. it plays incredibly well to his base in the midwest because this is about autos and auto tariffs . that is going to come to the market when all the other straws have been pulled and it is inevitably going to happen. paul: i think this is a 2020 battle. it will be a nice little fight. the good news is vander lay-in leyen is in play. i'm fundamentally long european financials.

not saying i love it. [laughter] paul: i'm ok with europe. i was just in the u.k., and i cannot believe what a mess that is. what did you do with the last three years, and you are still no further? i think europe wants to get ahead. i don't necessarily agree with with the ecb just did. i think you have to be really careful with europe in general at the end of a european cycle. everyone is looking at china, and china is looking at the u.s.. this is about trade. romaine: the data has held up in europe. i don't think europe is the case people make it out to be. the german economy is weaker, but there are still signs it is not going to be that really severe recession i think some people were predicting a couple of month ago. -- rest of europe, public the rest of europe, this is a political issue. you're not just looking at europe in a vacuum.

tle in one of " johnson battles allegations and an opposition plot," here's representative adam schiff talking about how they are moving closer to talking with the whistleblower. rep. schiff: that whistleblower will be allowed to come in, and come in without a minder from the justice department or the white house to tell the whistleblower what they can and --not say >> we will get the and cannot say. we will get the testimony of that was a blower. alix: who cares about impeachment? it could disrupt nafta. it could distract the white house. it could make president trump more volatile. why? vincent: is it a nixon impeachment or a clinton impeachment? clinton just went by the boards.

you also have the issue where we go into the senate with it. congress may say yes, impeach. the senate says no. then it just plays out in the election cycle, which is 2020. between now and november 2020. romaine: the only meaningful things coming out of washington were potential trade resolution, usmca, maybe infrastructure, maybe health care. three of those four things were never going to happen, whether trump was under impeachment or not. the usmca is somewhat of a threat, but the markets hadn't pressed that in as a huge positive. because we had so much paralysis in washington over the last two years, this isn't going to derail it. we've already had a test run they reacts to how with the mueller investigation. alix: joe biden does not look very good in all of this.

there was a report in one of the getting ant investment of chinese money into an investment vehicle in the u.s. as this percolates, to me that is a risk. if elizabeth warren becomes a nominee, you get health care back in the spotlight in a big way. that one.re on i think what you are looking at is exactly right. think the market is not price the possibility of a war in presidency. the market is not going to like it. it is not going to be a trump market. think it could well assist warren, but it is early days. you have 13 months until the election. i'd say biden is not done. . think he's got to take this i think you will have six months

of real instability going into that election next year. vincent: one of the things even -- one of the things, even top democratic fundraisers are pushing back against elizabeth warren because they know what it will do to financial markets. there's pushback within the party to say, just give us biden for four years and then we will rethink this for years from now. alix: thanks so much. really appreciate it. paul richards of medley global advisors will be sticking with me. check out all the charts we are going to use over the next two .on gtv this is bloomberg. ♪

viviana: your watching "bloomberg daybreak." ab invev got it right on its second try at a nation listing

-- ab inbev got it right on its second try at. an asian listing. . . in july, the deal was put on high because of lack -- in july, the deal was put on hold because of a lack of demand. the chairman of the credit suisse board will decide the ofes of excavated -- executives in the surveillance scandal. 6%., since july, up that marks the fourth straight quarterly increase. gold has rallied while central banks cut interest rates. concerns about the trade dispute also has investors moving into gold. that is your bloomberg business flash. alix: thanks so much. another big name has fallen in the retail apocalypse.

orrever 21 has filed f bankruptcy protection. the la-based chain has 800 stores around the world. most of itsclose stores in europe and asia. paul richards of medley global advisors is here with me. i doubt you are shopping at forever 21 because you are not in a dear old girl -- you are not an 18-year-old girl. you never know, right? how do you look at the debt market right now? vincent: you've been encouraged --paul: you've been encouraged to leverage. when you look at credit markets, you just go to argentina, it amazes me six weeks on from that event, as we talk to clients, argentina was really damaging, particularly in the hedge fund market. this tells me the search for yield has really hurt people, and i think credit markets are responding in kind as well. you've got to be super careful

out there. credit markets are looking for anything in yield in general right now and saying, hold on, i need to reassess this. there are risks out there that perhaps the market might have forgotten about. alix: do you think that is changing? 's undereeing aaa formform bb's, for example. paul: look at the ways that ipos have been question. i think people are questioning valuations in general. as we go into q4, if you haven't made your money already, g4 represents particular risk. i think the market has gone into a de-risk mode here. there are two minut -- theree are too many uncertainties that need to be worked out. my view on equities is that will

be the last one to go. equities hang in there, but don't necessarily break recent eyes. the equity market had an amazing q3. .he market had thrown a lot of people got out of risk at the height of those issues and never got back in. they are trying to work out, do they join the party right now? so this is pretty tough. alix: paul richards of medley global advisors will be sticking with me. coming up, more about the risk in the fourth quarter. you've got impeachment battle in washington, earnings, as well as the fed. we will break down your playbook. this is bloomberg. ♪ from the couldn't be prouders

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save up to $400 a year on your wireless bill. plus get $250 back when you buy a new samsung note. click, call or visit a store today. alix: this is "bloomberg daybreak." we are just 8, 9 hours away from the start of the fourth quarter in the u.s.. s&p futures up by about

0.3%. u.k. equities trying to eke out again. up 0.5n stocks for banks percent. turmoil around credit suisse. it looks like tidjane thiame is safer now. jumping toate percent. many say they have no idea why because the headlines get consistently more confusing. off by zero point 8%. you have mohammad bin salman saying they are not looking for a military war with iran, taking a little bit of geopolitical risk off the table. in the u.s., the other highlight is on the impeachment drama, intensifying over the weekend. nancy pelosi warning president trump not to make anything worse. rep. pelosi: honor your oath of office to the constitution of the united states. speak the truth, and let us work together to have this be a

unifying experience, not of dividing one for our country. don't make this any worse than it already is. alix: the president took to twitter, writing, "these radical lefts are lying and cheating like never before in our country's history in order to destabilize the u.s. in its upcoming 2020 election. they and the fake news media are dangerous and bad." still with me is paul richards of medley global advisors. that wasn't one of many, many tweets. when would you be nervous? i would be nervous if we were to see a smoking gun, or something else come out. the market is only 0.5% since this came out this week. pelosie is despite nancy being dragged into this process by the left, i think it's the -- it's thee needed

last thing she needed. we have a lot of stuff in the fourth quarter, whether it is brexit, earners for the next round. would you care about in the next months? paul: i'm not saying we are going to see a major problem in earnings or in terms of economic data, but q3 was pretty tough. there was a lot of turmoil. a consumer feeling particularly good with all of the news headlines. we may see more benign data, and then the markets will say, what do i do? that's exactly why the fed has cut twice in the last three months. . think you watch and wait

alix: based on that, when you -- when you have ceos revising down for the first time in years, how do you view that? have we priced in rough earnings? paul: i think it limits the upside, but the downside, those companies that have poor guidance and results are going to take a hit. overall, i think the market can hold up because still waiting on the big one, which is trade. i think the market will hang in there come up with the upside will be limited until we see exactly where we're going. the reason we are getting poor guidance from my view is trade. alix: citi had a really interesting report out. many of their clients expect the loser of 2019 to become the winners of 2020. so we might not go anywhere in terms of the absolute level.

but do you really think that? that utilities won't be the outperform or, that reality won't be, and say i can't do consumer discretionary? paul: at the end of the day, we came into this year in the market had taken a real hit in q4, and now we've got the nasdaq and that's it the close to 20% up here today. you're on your, the market is pretty much flat. i think you are really going into the minutia. the fact that you look at a year basis and we are pretty much flat, the market is at a precipice here, trying to decide whether to go up or down. alix: it all hinges on that october 10. paul: that is not getting into the sector argument because whether you are long or short year on year, that could all fall apart if china takes an early flight home next week, so i'm not buying that.

i'm looking at the broader market. how do you look at the need for fiscal stimulus? mario draghi spoke over the weekend and said he has spoken about it since 2014, but now the need is more urgent. "monetary policy will continue to do its job's but the negative side effects are more and more visible." are you expecting stimulus from different countries? paul: i think central banks have reset across the board. every bank has gone into a dovish mode. the ecb arguably. they are pre-much done. -- they are pre-much done. you've got germany deciding whether they could. now wherea situation every central bank has reset. they don't have a lot left in their tank, quite frankly. what's interesting is the u.s.

went fiscal, but at least has a little bit of play in terms of interest rates. alix: so how do you view japan? you have this tax increase on goods tomorrow, but there's a ton of offsets all over the place that you could argue is actually stimulative. i think they are talking a very brave argument here. they haven't got the currency to play with because trump is looking at the currency. at the end of the day, they are all looking in. i think they will go the fiscal route, as will europe. but i think we will know that if the u.s.-china trade talks break down. step because next the market is going to be in disarray. alix: do you like areas that have room for fiscal? paul: that doesn't play into my thesis because i am either long i felt thoughhere

a lonely on that view, particularly in august. if we get a fundamental breakdown in u.s.-china talks, like may revisited, this either happens or it doesn't. we either see the progress mifid happens, i think the market is going up. if it doesn't, i think the market is going down. as an investor, you've got to decide. i don't think fiscal would be safe today. alix: there you go. paul richards of medley global divisors, thank you so much. if is here with first word news. viviana: president donald trump calling for the democrat heading the impeachment investigation adam schiff to be investigated for treason. he's also demanding to make the autonomous whistleblower behind probe. congress says we will hear from the whistleblower soon. it is matter of security to clearances for this person's lawyers.

a weekend of protests in hong kong bracing for more. using responded by teargas and water cannons. the city preparing for bigger protests tomorrow, when china works the -- when china marks the 70th anniversary of communist rule. facing allegations of sexual impropriety and plots to oust him. a sexual claims he had relationship with a businesswoman and authorized a taxpayer-funded sponsorship for her company. ♪ -- for her company. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. alix: for more on u.k. and brexit, anna edwards joins us in manchester for the tory conference.

thank you so much for joining us. what is the conversation out of the tory conference as it relates to boris johnson over the weekend, as it relates to brexit? beingboth things are discussed here. good to see you. the government was rather focused on braggs it and the agenda -- on brexit and the agenda. we've heard the phrase "get brexit done." they've also talked a lot about investment and infrastructure. to relaxeven prepared the fiscal level rules to allow an infrastructure revolution around broadband and the like. of course, the media is also running around, trying to get new information. week,at's lasted the last

these allegations that have been denied by the prime minister around where he groped a journalist 20 years ago or so. lifeoversy in his private is not new, but when either of those go further, that is the interesting one for investors. alix: there's also been increasing talk, whether it is from the boe or the chancellor of the exchequer talking about, if there is a hard brexit, what is the failsafe we see? can you walk us through what we know about that? anna: no deal brexit, and some sense it seems less likely now than some months ago. certainly at the end of october because the benn act has been passed, which is supposed to make the promised or ask for a deal if he has not. we spoke to one of the authors today.

certainly that is part of the conversation. , theyget a no deal exit should be think about policy stimulus. even if we get a deal, there might be some need for the u.k. economy, and it is buffered by a slowdown globally, and particular in the manufacturing sector. alix: anna, think you so much. appreciate that insight from the tory conference in manchester. another story i am watching this morning, you can call it the greta affect. rallied 7 million protesters around the world to turn for climate change. now she's getting credit for voters redrawing the political greenspe in austria the unexpectedly tripled their support in yesterday's election. that sets them up as a possible coalition partner.

it also shows how the environment is moving to the top of the political agenda in europe. not enough for the greens. coming up, it is the latest twist and turn in the credit suisse spying scandal. the unbelievable story at the board meeting to determine who was at fault. more on today's in wall street .e, check out tv just corrected tv on your terminal. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." coming up in the next hour, ariel investment

cio of global equities and author. now to your bloomberg business flash. the trump administration downplaying a revelation about limits on u.s. investment in chinese companies and financial markets. last week, bloomberg reported the white house discussed delisting chinese companies from u.s. exchanges. the u.s. treasury department saying they are no current plans to stop companies from listing in the u.s. more problems for boeing the company's upgrade as the air force waxes a surveillance crane is being delayed or on almost year-long closure of two classified laboratories developing software for the project. boeing worked to address the efficiency and regain certification for a lab.

spacex will use starship to take humans to mars. musk says the goal is to make space travel like air travel. i'm viviana hurtado. that is your bloomberg business flash. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. thanks so much -- one had 20 countries. alix: thanks so much. that such a cool shot. the credit suisse board meets today to determine who gets the blame for backing the coo. investments like wework and uber prove troublesome. december sees major ceo turn. more ceos leave their seats. joining us is bloomberg's sonali basak. let's start with credit suisse. what's happening? sonali: this really escalated

last week after the private wealth star banker left for ubs. they were worried he was going to take some clients, among other state secrets. prosecutors got involved. god knows what else could happen in terms of legal where my fixations. they are looking at the role of all of the senior executives. is really in these hot seat, but the big shareholder is back. alix: what i read over the weekend is there's a debate as to how much of it was personal. -- how does that story play into all of this? sonali: it doesn't look good. been kind of an open secret for a while that the two of them weren't getting along for some time, really for many months. when he left, there's a whiz of

this being personal at all, it's not going to look good if he also had involvement in this. is what they did actually illegal? someoneke, i could ask my husband and that wouldn't be illegal. prosecutors did get involved --sonali: prosecutors did get involved. ceothe board to back the based on their own investigation is one thing, but if there is any kind of, you know, if the prosecutor had said something, we don't know what ubs will decide to do also. he starts in october. there could be more at play here if he continues there. our second story has to do

with wework and softbank. softbank had a $5 billion buyback. sonali: the stock for softbank is already back to where it was in february. they injected some susan -- some juice into the sector here. came inre than some markets last year. you have wework an issue here, uber an issue, sprint has been pressured amid deal talks. you have alibaba, which is been threatened by trade tensions, so you have a lot of issues within the softbank portfolio company that could be weighing on the stock. alix: good thing they have to raise another $1 trillion or whatever. sonali: jeffries alone had to take a more than $100 million write-down on a less than 1% stake in wework. could be very

significant. our third story -- alix: our third story is the revolving door of banking. it was all over the place. ceos are falling from the sky. ceos have been under pressure for some time. a lot of data has some -- has shown us this is happening. this was not just an activist or taking over and asking all the ceos. it actually private shareholders are putting pressure on ceos as well. alix: i wonder if this is a turning governments, or was this really bad circumstances. sonali: some are external pressures, but when the markets was all going up, and this made in the new york times article over the weekend,

everything is good i'm rosie taylor: now thought -- is getting choppy. now they are not giving people enough time to turn around the company. not to mention you have 200 ceos coming out and saying it is not about the shareholders. how do you balance that when shareholders are not being patient with the companies? alix: that is a good point. this is not like wework or juul. good stuff. thank you very much. in today's off the beaten street, don't expect to hear from german bankers practically when i run the office. the workday ends, the workday really ends. the share of bank employees who can be reached by phone or email after hours has fallen to 24% since 31% in 2013. weekend availability fell to 15%.

employees tend to work more efficiently, and in return they get more time off. i'm on email all the time. just asked my kids. coming up, we will talk the bull run in treasuries. and if you are jumping in your car, tune into bloomberg radio across the u.s. on sirius xm channel 119 and the bloomberg business app. this is bloomberg. ♪

alix: time now for traders take. we are looking at the bull run ending in treasuries. vincent cignarella joins us now. vincent cignarella joins us now. he's the voice of global macro squawk. really, and of the bull run? -- the end of the bull run? the problemincent: with treasuries and the problem we are seeing with rates as i

think the fed is way behind the curve in fixing the fed funds rate and having inverted the curve. we will see the treasury coming up in the fourth quarter with large issuance. the problem, i am just going to say it very briefly, repo, is funding that issuance. if that becomes a problem, which it likely will be, you have a withtion of less buyers the treasury being on the sell side. this volume of treasuries is going to hit the street, likely backup the 10 year. could see it back to that 2.3% level, give or take. we saw the run from november. if you look at the chart, you can see this great run from 2018. it bottomed out at about 1.45%. i think it is simply going to be a supply and demand issue. alix: the counter to that as we will have higher yields in the u.s. and everyone will want to

sell euro bonds and come into the u.s.. vincent: i think they will come back at a certain point. we are going to need to see the trade run for a little bit. the other issue is china trade. tradene thinks that the doesn't go well, you have to come into u.s. yields. they won't tell treasuries. they said back in june, they won't just buy them. alix: fair. especially when there are risks in the companies. thank you for setting us up for the week on that. coming up on this program, liz young, bny mellon investment management director of market strategy will join us on this last day of the third quarter. this is bloomberg. ♪

♪ welcome to "bloomberg daybreak" on this monday,

september 30. here's everything you need to know. president trump has called on the housef intelligence committee adam schiff to be investigated for treason. rep. schiff: the whistleblower will be allowed to come in without a minder from the justice department were from the white house to tell the whistleblower what they can or cannot say. we will get the unfiltered testimony. alix: prime minister boris johnson isn't just fighting to get a brexit deal. he's also battling for his credibility. johnson faces allegations of sexual impropriety and threats to oust him. it is still possible the u.k. could end up with a national unity government. it is very much dependent on whether the labour party leadership are prepared to back it and accept the reality, which is it cannot be led by the leader of the opposition. it's not a criticism of him.

he has a highly partisan agenda, which is in my view incompatible with leading a government of no opinion. alix: in israel, prime minister benjamin netanyahu will make a last-ditch effort to form a government. elections this month produced a stalemate. talks to form a unity government ended without a deal. mars.usk eyes on he outlined plans for a next generation rocket that spacex hopes to use to eventually take humans to the red planet. musk says the goal is to make space travel like air travel. that's just cool. in the markets, we are wrapping up the third quarter, entering the fourth quarter. s&p futures trying to eke out again. watch those small caps, continuing to underperforming the market. it closed at its lowest level on friday in about three weeks. a broadly stronger dollar with the exception of the cable rate. in the u.s., a little selling in the margin.

the whole curve moving a bit steeper. crude off by 1%. it looks like mohammad bin salman wants to take military action off the table, so some premium coming off the oil market. the impeachment battle continues to intensify, while market participants weigh how much they should really care. >> i would say that the market is not going to care very much. >> right now it is just a headline risk. >> political uncertainty is the focus. >> there needs to be such clear, incontrovertible proof of egregious wrongdoing that reasonable people on both sides remove them from office for this to be a risk in the short run. >> you will get impeachment from the house, but you may or may not get conviction. to me it is overhang. there was a question mark. the white house is going to have to fight a very serious impeachment inquiry. that takes a lot of time and pressure, and takes it off of things like the war with china.

the impact on the markets can be tremendous. alix: joining us from washington is the event geo policy founder here in new york, and liz young, bny mellon director of market strategy. would you agree, not a big deal? deal?ig deal -- or big liz: at this point, agree that it is kind of a overhang, and we have to wait and see. the markets don't let political uncertainty. alix: terry, where do you sit on this? the overhang category myself. what i've been telling investors was there was going to be lots of reasons why washington was going to be market negative this things thatg from already existed before the events of the last couple of weeks. continued uncertainty in the u.s.-trade war because i don't think there is a deal on the

horizon. , the likelihood of a partial government shutdown, all kinds of things like that which were already there. increased political and policy uncertainty. this is a little bit of an overhang on this. it hasn't really changed much in the last couple of weeks. what you've got his allegations, ,nd until that is all you have it's impossible for me to conclude that this is a major event. alix: in the market, we are still seeing what it means for the likes of impeachment. president trump likely to be impeached in the first term, this is the yes shares, 54%. how do you measure overhang? we can all agree on that. how do you deal with that in the market? liz: the thing we want to look at right now, this is not a new risk to the market.

the market has been upset about all these other things going on. i think it continues to weigh things like brexit, trade policy , much heavier than this. the market has gotten used to getting scared and then stepping everything back. if this becomes a real issue, i think the way we measure this going forward in 2020 adds to the political rhetoric that we are already ready for. alix: what about the volatility? i pull up my volatility chart is going to which be most sensitive to the continued overhang develop and's that come up? think think ethics -- i fx vol will certainly be supportive of that. i don't know that impeachment

threat are going to affect treasury demand that much. continue to be or attractive than other places yield wise. alix: let's move from impeachment threats to the second or third derivatives of this. we are not necessarily going to -- toafta if jp morgan have nafta. at jp morgan, there's a lot of concern that it will not get done. terry: i think that fear is overblown. it is a real fear. a business point. i think it is a trail risk. dynamic -- you have a dynamic where democrats have to engage more than they have been. they need to make it look like and they need to actually do some things to encourage the citizens, voters, and the markets to understand that they are not solely focused on impeachment, that they are that they areed

actually focused on a variety of other things. so i think the impeachment thing makes nafta a little bit more likely. i'm still calling for ratification before christmas. they will certainly be around between now and christmas because starting in november, they will be wrangling back and forth on government funding, something i think goes on for quite a while, but they will be able to move that forward, and i think move it forward before the election year craziness kicks in fully. alix: election year craziness, that's a good way of putting it. the other derivative effect is how it looks for joe biden, and the more increasing likelihood that elizabeth warren could actually get the nomination. what is your work around that? terry: i have been bearish on vice president biden's candidacy since last august for a variety of reasons i won't bore your audience with. is,my view of it basically and this goes for impeachment as well, that the money and the

energy or on the progressive side of the ledger. we have seen what increasingly over the past few decades is the true believers come out, whether they be on the left or the right. energy withthat funders that want a progressive direction, and i don't mean small dollars. i'm in bid dollars -- i mean big dollars. you get the likelihood of warren or sanders, and warren seems to have more fire. the thing that would concern me were i a biden advisors is that his numbers are but they are, but they don't go up. what that indicates to me is that the base that is going to get out there and vote are overwhelmingly with somebody other than biden. alix: what do you think, liz? alix: i actually have a question --liz: i actually have a question. what we learned in the last

election and brexit is that the polls don't work anymore. should we pay attention to that as market for dispense, or do we just kind of ignore it and expect the unexpected? terry: i think that's an excellent question. my answer to that, very simply, is don't pay attention to polls is a primary indicator of anything in particular, especially for national sentiment. national sentiment doesn't matter when you are doing a primary process in a variety of states. and don't even pay that much attention to the state polling. i think you bring up a very good point. in my view, president trump is president for one overarching reason. i was calling the election very narrowly for clinton. but polling always showed that college-educated white people particularly, which is something 30% odd of the electorate,

always said they were 2-1 against trump. if you look at exit polls, they came in somewhere between 10% and 20% ahead of clinton. the brexit effect was as real here as it was in the brexit debates. i wouldn't put a lot of stock in polling at this particular point, which is 600 to 1000 people snapshot, plus or -4%. it doesn't bear out as an investment strategy, certainly. alix: here he haynes and liz ines and-- terry ha liz young both staying with me. we have some breaking news. in a corporate presentation, pay the says it will dividend of $75 billion in 2020.

any change in that is appealing to foreign investors who want to buy in the ipo. that dividend probably doesn't hurt either. coming up, open for business. the u.s. plays down reports it is limiting investment for chinese investment -- is listingsinvestment and of chinese company's. this is bloomberg. ♪ erg. ♪

alix: a u.s. treasury official says there's no plans to limit investment and listing of after acompanies report. week&p did sink to a three low when that news broke friday. still with me, liz young and

terry haines. we can blame it on trade, but this has been out there in different forms, whether it is senator marco rubio or others. what did you make of it? think this i becoming public at this particular time is gamesmanship in the sense -- and i am not saying that in a critical sense at all -- gamesmanship on the united states' side to say that if you're not willing to come forward into a comprehensive deal, what the president has called a complete deal recently, we are prepared to take more drastic action. that drastic action includes, can include denials on the basis of national security, cross-border investment flows. it can include a lot of different things. it as a means at to encourage the chinese to be

serious about getting the complete deal that is done from the perspective of a former completet official -- deal that is done. from the perspective of a former government official, i look at it as an exercise. you look atow do some thing like this? it clearly affects the market. liz: it does. i don't know that the market expects there to be a complete deal anytime soon. i don't know that anybody expects one before the election. maybe a lightweight deal. but at what point does the market get sick of this being a bunch of lipservice back-and-forth, good and bad? when do we actually run out of steam? is it going to take economic data here faltering? i think that's possible, but right now i think even just a little bit of trade rhetoric that simmers under the surface, the market doesn't seem too upset about it. alix: it seems like the next shoe to drop could be with europe and the u.s. we are awaiting that wto ruling

which could deal with tariffs that the u.s. could slap on europe. that feels a little more palpable. liz: that feels more palpable because europe is a little more fragile. one thing no one expected at the beginning of this trade war was that europe would be hit so hard by it. it was intentional we would go after china, and we didn't realize, i don't of that everybody realized how dependent europe was on global trade. the pullback in trade volumes and manufacturing numbers out of europe, and germany teetering on recession, europe is definitely more fragile than southeast asia at this point. alix: terry, how do you see it? the airbus ceo said a trade war in aviation would be a lose-lose game because the supply chains are integrated. what is your base case for what goes down between the u.s. and europe? isry: what i look for, one

everybody should remember some sort of ruling is expected today in favor of the united states vis-a-vis airbus. it also needs to be understood that they will be a ruling early in 2020 for the european union on boeing, so there's some reciprocity. i look for this. i go back to the overall mood music between the united states and the european union that has existed since july 2018, when they decided they were going to engage on a variety of subjects. i look for the possibility of tariffs between the u.s. and the eu. maybe the united states tries to get the eu to put agriculture on the table, which it very much wants. maybe the eu refuses that.

i think the base case here is for continued negotiation between the u.s. and eu, and not necessarily the imposition of an immediate tariff scheme or an immediate ramp-up. oath entities have tried very hard and succeeded in avoiding that over the past 12 to 14 months, and i look for that to continue. alix: so do you want to take on more or less risk? liz: for the time being in europe, i would not be taking on more risk. in the u.s. you can still hold a good balance of defense and cyclicals. i'm ok with risk in the u.s., and even in small caps in the u.s. because we could play catch up here if we get a little bit of a de-escalation in trade rhetoric through the end of the year. we don't see a recession coming, which make me ok with risk for the long-term, and even the medium-term here, despite the fact that we are going to have a pretty politically charged year in 2020. alix: that is definitely the case.

pangaea policy, thank you. liz young of bny mellon will be sticking with me. coming up, we will be speaking investment's cio of global equities. fun thing she has to say about being a woman in the investing world. this is bloomberg. ♪

viviana: you're watching "bloomberg daybreak." buykstone group agrees to portfolio of u.s. warehouse is $5.9 billion, including debt.

last february, colony said it would conduct a strategic review of its assets to salvage it stringing market value. ab inbev got it right in a second attempt at its asia listing. shares of budweiser brewing rising. the beer maker raised $5 billion in the second biggest ipo of the year. that gave the unit a $45 billion valuation. in july, the deal was put on hold because of lackluster demand. after a tumultuous year, softbank is back where it started. in february, a 5.5 billion dollar buyback announcement gave the stock a shot in the arm, but now the share price is below where it was in february. wework's attempts to go public are hurting softbank. that is your bloomberg business flash. alix: still with me is liz young of bny mellon. what do you think about this ipo thing? the one conversation is we are

finally pushing back, investors not wanting to take on that risk. liz: i still think investors are interested in taking on different kinds of risk, and ipo's are one of those types. ipo's are now happening so much later in a company's lifecycle. if using of what a j curve looks like, they are happening much further after that dip than they used to. a lot of the positivity and opportunity seems to be muted. we've seen, as a result, a lot of disappointing ipo activity. alix: when you pair the ipo -- when you pare the ipo back to different levels of the market, that spread is not taking on as much risk in the s&p. does that have a consequence? liz: i don't know that they are that interconnected. i think the debt market fear has been a little overdone. bb space,e bbb and

those companies are so large and have so much flexibility to do other things before there would be a default on their debt, i think the ipo space is a little less predictable. i think it is more difficult to see what the evaluations should be because there are companies that have so much more in intangible assets, and it is so much harder to value those. it is tough to really put your finger on what things should be priced at. alix: what does this one debt meaning for innovations? if you have company's like juul, wework, that are private, supposed to be public, what do investors?r liz: the way you can value intangible assets actually becomes more difficult as we move forward. if you come in as a competitor to some of those companies, it is easier to take over intangible assets then it is to take over the tangible assets.

so the competition gets stronger, and you could become obsolete a lot quicker. alix: for more on all of this, we are joined by rupal bhansali, cio of area investment -- of ariel investment. great to see you. i read your book rather than playing with my five-year-old's ponies yesterday. the tech buston and boom. if that what we are seeing in the ipo entech market now? rupal: absolutely. in the rush to go public, a lot of companies that have not reached their path to profitability are going public because the market is ripe for inflows of money into that. we are seeing the results of

it, an excess amount of supply. alix: do using this is a turning moment, or a blip? rupal: i think this is an inflection point. i think investors would be advised to pay attention to what is going on because this is exactly how it started out in the year 2000. nobody is prepared for a bear market. we had such a short-lived correction that investors are very complacent. as a contrarian, as you know, and one that pays it and into not just making money, but also avoiding losing money, this is a time to pay attention to risk and positioning your portfolio for risk aversion. alix: we are going to get to that. rupal and liz are sticking with me. this is bloomberg. ♪ mberg. ♪

alix: this is "bloomberg daybreak." i am alix steel. you made it to the third quarter. congratulations. s&p futures trying to eke out again. our performers in europe -- credit suisse in the spotlight.

who might they fire on this buying scandal. in other asset classes, strong dollar story in the g10 space. cable losing steam but still trying to be positive. the curve was deeper but now we are flatter. selling on the margins. crude off over 1%. if there is no military war between iran and saudi arabia, what kind of political risks do you want to train out of the market. the question becomes how do you counsel for risk? rupal bhansali writes in her new book there is another reason to invest in equities. it is your invitation to a seat at the table to celebrate innovation and a struggle to overcome challenges and the ingenuity to solve problems. rupal bhansali and liz young are still with me. you also talk about equities like children. you hate them short-term but you love them for the long term. walk me through your overall

thesis when it comes to equities. rupal: in the long run, it is the highest return asset class. the keyword is long-run. in the short run, equities are imposed and in for a long correction and a big correction. we position portfolios defensively in net cash companies. the balance sheet risk as opposed to earnings risk is the biggest risk confronting investors. alix: interesting. as a contrarian investor, that is tricky. you have to wait and be wrong until you're right, would you have experiences of in the age of financial crisis. can you walk me through that? rupal: as a contrarian you are guilty until proven innocent. that is what markets require you to be. you have to have a non-consensus point of view. i've experienced many times in my career. this is hardly a big one for me. correction that led to the 2008 correction, the

1998 correction, i've been through all of those. investors should realize that after a big rally a correction is likely. as night follows day, a correction follows a big bull market. alix: how do you look at that? if you did not play momentum in the short term, if you take two years of short-term you will get burned. liz: i have said you must be present to win and you have to stay invested. the trick for investors and one of the things everybody struggles with, professional investors and individual investors, is to stay invested through those tough times and realize some of their shakeups, whether it is a correction or a bear market, can actually be healthy because it shakes off the excess. once the excess is out of the system, it becomes more rational. alix: which goes to your point. you have three prongs of investing going forward. the value will outperform growth. passive will prove to be penny

wise, pound full of pure -- pound full of -- pound foolish. when does it turn for you? rupal: it is already turning. you never see a correction coming, you never see a rally coming. you have to position your portfolio where the value is. the spread between value and growth is as large today as it was in 1999. if used kept waiting every single day for the correction to have been stuck with growth for the next three years. you would've lost 80% of your money if you went in the nasdaq. it is not about when a market will turn, it is about if it will turn. when it does, it is too late to reposition your portfolio. alix: which goes your point is not about making the money, it is about not losing money. a different mindset than we usually talk about. has proven its metal in fields as disparate as sports,

science, silicon valley. that is what the book is about. nonconsensus investing. in terms of investing in particular, the way arithmetic works, you lose more money than you can ever make up in gains because when you lose, you are losing from a higher number, when you make your making from a lower number. you need quadruple the gains for every loss you make. better to focus your research and investment habits are not losing a lot of money than trying to pick the hot stop which is the way most people face investing. liz: we know the math. you lose 10%, you need 11% to get back to zero. it is exponential. how does psychology play into that? investors feel the pain of a lost more than the joy of again. you talk about that in the book? rupal: absolutely. there is a chapter devoted to it. there is a chapter devoted to

research on how to be nonconsensus and manage risk and how to take advantage of the flows into emerge as a victor instead of victim. all of these things are in markets, but there is always a way to make money from them as opposed to lose money from them. alix: a good tie-in to the conversation is about the fangs. forget fangs, you're looking at mang. you take the sexy stocks and put them aside. what are the mangs? everyone knows fangs aregs the growth momentum stocks that have been working. i think the best days of those traits are behind us. the opportunities with the mang, companies like microsoft and for ain, they can stand telecom billing software, nintendo, which is going to kick nokia, which people

keep misunderstanding, is actually a property company. alliple examples of mang, of which are in my international and global equity funds. i believe this is the investment play at hand. if your contrarian, if you have the right kind of research backing up these investment opportunities, they are all extremely undervalued at single-digit multiples and have dividend yields between 3% and 5%. both in crime and growth is undervalued. -- both income and growth is undervalued. rupal: they are diversified by sector. i.t. works when we have a narrowly red -- a narrowly led rally. something more diversified might fly under the radar but outperform. rupal: that goes back to this notion.

as a goodarted out idea but now it a very common trait. with passive, people think it is a panacea. it exposes you to a lot of risk. you get the good, but you also get the bad and the ugly. i think there be another inflection point not just from growth to value, but also passive to active. you have to pick your spots because the entire market will not go up. alix: you dedicate your last addendum in the book to what it is like to be a woman in an investing world. the quote i chose was this. you wrote the onus should not fall exclusively on one gender or the other to make rooms more inclusive. each side gets -- needs to get out of their comfort zone and not followed into familiar patterns of behavior. what you mean by that? byal: women are diffident nature sometimes and they need to get out of their comfort zone and in a setting where they have to interact with other people, they should make themselves known to the audience by

introducing themselves, having a handshake, talking to colleagues. men should understand women do not feel comfortable talking about topics they love to talk about like sports, even the markets. if they can acknowledge these differences and make spaces comfortable, speak their opinion, make eye contact, a lot of these things have happened with me where the men think the men are the decision-makers and that is how to win business, and they ignore the women in the room. it is a huge mistake. more and more women are breaking through the glass ceiling, not enough of course, only 2% in our industry. i feel men should make women feel comfortable, but also women should try to make themselves be heard and be known. the women in finance campaign is a step in the right direction, and folks like you who are putting women on the panels, all of these steps institutionally

as well as by each person will go a long way into encouraging more women to be in the industry and diversity is something important in financed, especially in this day of age. i am hoping the last chapter of the book is equally red by both men and women as to how we can do better. alix: what is it like for you? liz: i have had a wonderful experience in this industry as a woman. bny looks at diversity as an important piece. when i mentor younger women, one of the quotes i like to use is don't waste your seat at the table. it is important to be assertive and take as much responsibility, if not more responsibility, than the men in the room to make sure we are standing up and being hard. nobody has ever accused me of being a wallflower. alix: thanks very much. rupal bhansali, such a pleasure. read the book. it was a lot of fun. liz young, bny mellon, always a pleasure to have you here. now i want to get an update on

what is making headlines outside the business world. viviana hurtado is here with first word news. viviana: the head of the u.s. house intelligence committee expects to hear soon from the whistleblower at the center of the impeachment in rate. adam schiff says it depends how quickly -- can be completed. meanwhile, donald trump wants adam schiff investigated for treason. saudi arabia's crown prince warning war with iran would bring down the global economy. the prince telling cbs's 60 minutes he prefers non-military action to stop iranian ambition. he also denied ordering the brutal murder of jamal khashoggi , but the princes he takes full responsibility. hong kong cleaning up from a weekend of protesting and bracing for more. demonstrators throwing gasoline bombs at police. they responded by using tear gas and water cannons. tomorrow, the city's planning for bigger protest. that is when china marks the

70th anniversary of chinese rule -- that is when china marks the 70th anniversary of communist rule. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. alix: breaking news. fannie and freddie mac headline. they will be allowed to boost their capital by billions of dollars to protect against potential losses. this is a key step by the white house to push to free those mortgage giants from u.s. control. all of their profit went back to the government and now they can keep more money to themselves. that frees up their business. the other one we were just talking about, the revolving door of ceos. martin emmrich's will be -- tz will be succeeding the current ceo. she was a chairman of february this year until now. she will be taking as ceo of

thyssenkrupp. two ceos in just the last couple of years. ceo.g up, petroleum the sea of western refining is up in today's bottom line. interact with the charts shown using gtv . check it out, save the charts, gtv . ♪

todaya: coming up later on "bloomberg markets," steven wieting, citigroup chief investment strategist.

now dear bloomberg business flash. another big name has fallen in the retail apocalypse. fashion chain forever 21 filing for bankruptcy protection. liabilities of up to $10 billion. the la-based chain has more than 800 stores globally. the plan is to close most of the stores in europe and asia. gold is set for its best run in eight years. this july it is up almost 6%. that marks goals straight straightarly quarter early increase. -- quarterly increase. concern about the china trade dispute also has investors looking into gold. i am viviana hurtado and that is your bloomberg business flash. alix: thanks. it is time for bottom line. we take a look at three companies worth watching. sonali basak and brooke sutherland joined me now. first up is looking at credit suisse and its board meeting looking into this spying scandal.

fallingyou see shares five days in a row last week amidst the scandal. you now see what will become of the scandal and who will be held liable. the credit suisse board is likely to back the ceo ahead of any investigation relief. with that said, look at credit suisse shares, they are up 14% on the year compared with 3% decline on the year at ubs. alix: fairpoint. looking forward to any headlines on that. third, brooke is looking at plans for the breakup of emerson electric. brooke: this comes from a report from bloomberg news that puts emerson stairs at 3.4%. the breakup has long been talked about for emerson. the idea that you put in automated equipment business into one unit and its commercial hvac systems and things like insync a raider into another

business. emerson pursued rockwell automation not that long ago. rockwell potentially -- a potential buyer for that automation equipment, part of emerson. it will be interesting to see how the company responds. the ceo has been in the seat since 2000. he previously said he does not want to do a breakup, he wants to leave that to his successor. ill be interesting to see if he does take the initiative. obviously has he has a lot of experience with the company and is among the best place to execute a breakup. another one for the industrial industry. a lot of spinoffs among industrial conglomerates. alix: the new ceo wrapped and all of this. thank you very much. the third company is another activist investor story. marathon petroleum. two of the top shareholders released a letter calling for the ceos replacement. the letter lists a number of reasons for their call like an

underperforming stock, failure to deliver growth and profitability, and poor governance. jeff stevens, the writer of the letter, joins me now from arizona. he is a former board member of endeavor, which marathon previously bought. i know it is where you are. thank you for joining me. why launch the campaign now? jeff: thank you for having me this morning. obviously this was a very difficult decision for us. we have always been on the management side, being involved with three public companies, and marathon had severely underperformed its peers and was making poor decisions of structural decision that would affect it going forward. when the plan came out, which we support, we believe it was a good land to help add more shareholder value. we believe there is a lot more

that can be done, in particular at the ceo level. we believe a lot of decisions that have been made will affect the company going forward without a change at the ceo level. therefore, we have asked the ceo to step down. we would like to see a new ceo brought in and replace a lot of the management and bring in the people that can take this company and move it forward. alix: who? jeff: there are many talented people out there. these are great assets. these are assets that should outperform their peer group and they have lagged the last year. we believe there are many people. we would like to work with the independent board members to help bring the right person in. alix: it is a twofold question. you talk about the underperformance. this is america's top petroleum and its peers going back five years.

the red is where elliot came into advocate a breakup of the ampany, and the result is merger of endeavor and a pipeline. there was a proposal to spinoff speedway. there were minor changes ways. will anything minor work or is this different? we do not believe they followed through with the plan elliott had laid forward. we think that is why there needs to be a change at the top. we believe if we bring in the right person who executes on the elliott plan, and also will continue to build upon the changes we believe need to be made at the management level, we believe this company can excel and outperform even what elliott has proposed. alix: marathon is standing by gary. firmly andly set unanimously supportive of gary as ceo. ivan reached out to marathon

myself or a response but did not hear back. what you think it will take. how much support have you been able to garner when the board is still behind him? jeff: when we release this on friday, we had a large group of institutional investors that own the stock reach out to us and overwhelmingly, they support support thean, they removal of gary or for gary to step down, and frankly, it was overwhelming. the majority of the top shareholders reached out to us. were all aligned. we believe that if the shareholders are hurt, this change to be made in the elliott plan to be implement at the right way. alix: do you want the job? jeff: we did not write this letter or go public for management positions at marathon. we are just large shareholders that want to see the stock

returned to what they should be based on these assets. alix: would you take it? [laughter] jeff: we are not applying for the job. we believe there are several talented people that could take this company to the next level. we are there to support them or help them in any way to make that happen. alix: if the marathon board does not work with you. if they stand behind gary, what are your next steps? that as wee hoping go out and talk to shareholders and their stories and their -- we believe this is a strong, independent board. if there given all the facts, if they look at this carefully and they evaluate the elliott plan and they look the issues we are talking about, we believe that we get to the right decision. alix: thanks a lot. appreciate you spending time. thank you very much.

jeff stevens, marathon shareholder and former board member of endeavor. coming up, fannie and freddie taking a step closer to returning to the private market. i am watching the changes to the capital structure, next. if you're headed in your car, tune into bloomberg radio heard on sirius xm channel 119 on the bloomberg business app. this is bloomberg. ♪

alix: here is what i am watching. fannie mae and freddy back. -- freddie mac. they will be allowed to boost their capital. both stocks up free market. they will be allowed to retain their earnings until the capital buffer hits $25 billion for fannie. for freddy, it will be allowed to hold $20 billion. under the current bailout arrangements from the financial crisis, both are restricted from holding more than $3 billion in

capital, which meant they cannot survive without government control. if they can get to $25 billion, if they can get to $20 billion, maybe they can survive without the government. it will take them a while to get there. there are still significant challenges to recapitalization, and one of them will be to the outcome of the 2020 elections depending on how long this takes. it does go stocks i am watching. that wraps it up for me. coming up on "the open," strategic head of fixed income research as we wrap up the last day of the third quarter. this is bloomberg. ♪

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jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪ jonathan: coming up, wrapping up

a messy third quarter going into the back end of 2019 with stocks up 18%. the trump administration playing down reports it is plenty to curb investment in chinese assets as improving economic data in china is met with the great wall of doubt ahead of next week's trade talks. with 30 minutes until the opening bell, morning. here is your monday morning price action. futures rolling over into the cash open 30 minutes away. futures up two points on the s&p 500. for thelar sub 1.09 first time since may 2017. a weaker euro, much stronger dollar. in treasury, yields up a single basis point on the 10 year to 1.69. slightly improving chinese data met with a wall of doubt. >> i would still be very cautious in interpreting this as a recovery. >>