now we have an accommodative position. i think we will just have to go into the meeting and see. alix: chicago fed president charlie evans isn't sold on another rate cut. all hinges on services. read leavesacturing eyes glued to services this week. an trade war, this time it's europe. the u.s. imposes tariffs on european goods with room for escalation. welcome to "bloomberg daybreak" on this thursday, october 3. i'm alix steel. the markets finding their footing again after the worst start to any fourth quarter in years since 2009. question, has it been able to find a bottom? s&p futures up by 0.2%. a mixed dollar story in the g10 space. you are seeing global bond

buying, whether in europe or here in the u.s.. yields down by two basis points. crude off by 0.1%. stabilization there as well. time for the global exchange, where we bring you today's market moving news from all around the world. joining us from hong kong is , fromly -- is karen le london, emma chandra, and reporter, and in washington, bloomberg's michael mckee. in hong kong, reports say the enact ant is said to emergency ordinance. more.leigh has karen: this would give the government wider powers to make arrests more widely. this is something that would be a major escalation by the government if it does happen. it is purported to be happening

tomorrow by news outlets here. it comes after a protester was shot for the first time tuesday, a major escalation in the violence we have seen in recent months. this is something that has people questioning whether or protests, oralm whether it was fuel anger at the government and bring more people onto the streets to keep this going for a longer time. alix: thank you very much. over in jakarta, a sweeping change to liberals is set to be introduced by the end of the year according to the indonesian president in an exclusive interview with bloomberg. indonesia wants to take opportunities so that the trade war doesn't medic to philly -- doesn't negatively impact our country. we have good relations with the u.s., china. the most important thing is our national interest comes first. alix: what did you learn in this interview? reporter: let me first throw a

couple of numbers at you. indonesia's population right now, about 265 million. joko widododo -- as has found out, indonesia is this shiftto realize in global supply chains. his fixer that is to fix indonesia's rigid labor laws. indonesia has some of the most generous's average package -- generous severance package provisions in the world. his work around for that is to now offer a deal, a compromise to labor unions in which current workers will retain the generous conditions they currently have, whereas new jobs will be covered under an to the laws that will .erhaps cut those provisions

these are aimed at attracting more foreign investment into indonesia. foreign investors have been staying away. alix: thank you so much. then we moved to moscow, where russian energy minister alexander novak spoke on the event of an oil crisis. situation is crisis bound, we will take a decision to reduce or increase the production, and it will be good for the balance. so there are no crisis events that calls for emergency meetings. so we are monitoring the situation. alix:, reordering joins us on the phone. it was a panel of a lot of big players. annmarie: they all pretty much acknowledged this growing risk to the demand side of the story.

what was interesting is they gave no indication of the change of strategy. we just heard novak saying there is no crisis event. the new saudi oil minister says there's a gloomy picture that's been painted. i thought it was interesting that exit and the trade war -- that brexit and the trade war were cited as things that need to be resolved. it is quite astonishing when we sat down for this panel, looking at prices about $2.50 lower than where we were before that saudi attack, where 5% of oil was wiped out of the global market. early in december, they are going to have a big question facing them. are they going to have to cut deeper given the fact that we have expanding stockpiles in the u.s. and these recessionary fears? alix: thank you very much.

is puttingthe region goods. on who are the winners and losers in this? reporter: this marks the latest stage in the wto's longest and most expensive trade dispute. on wednesday, the wto authorized $7.5 billion worth of tariffs in response to the eu's illegal subsidies for airbus. the u.s. has now announced a final list of product it will target. aircraftds includes from airbus, spanish olives, scotch whiskey, and french wine. producers of those products could see their exports slept with a 25% tariff as soon as october 18. the eu will have its own turn to retaliate in a parallel separate dispute over u.s. subsidies for boeing. the timing of that dispute is

delayed until the first half next year. the eu will be, subject to tariffs and under pressure from the trump administration to settle this dispute. alix: thank you so much. now we had to london, where boris johnson just presented his latest brexit plan to parliament. emma chandra has more. did we learn anything new? emma: what we learned is that the prime minister sees this new plan is a compromise. crucially, it removes and replaces the backstop agreement in northern ireland. that has been a sticking point for the government and for many opposition mps. prime minister boris johnson telling parliament he's been encouraged by conversations he's had in the last 24 hours with european union leaders, but that ideal is still some time away -- but that a deal is still some time away. negotiations will begin over the weekend. european leaders saying there are some points in this proposal that they like, some point that they perhaps like less.

what is interesting is that the republic of ireland's prime minister has said the big issues remain. he is due to speak with the president of the european commission, jean-claude juncker, later this afternoon. we have seen a bit of a bumpy session for the pound with all of this back and forth on brexit and the new proposal, currently about 1.22 against the dollar. alix: in the united states, all eyes continue to be on the fed. chicago fed president charlie evans says he is still on the fence about rate cuts. >> the fomc has been moving to what at one point last year looked like a slightly modest position. now we have an accommodative position. whether or not one more rate cut is the right decision, i think we will just have to go to the meeting and see. alix: michael mckee is in d.c.

michael: investors like to say that bad news is good news because i think they assume that means a fed rate cut ahead. today they will probably have to .eal with some good news factoring index that came out earlier this week set off a whole market tumble because everybody thought its adjusted a recession ahead. you look at where the nonmanufacturing index is, and it is way ahead of the manufacturing index, still very positive, right now at 56.4. the services industry is twice the size of the manufacturing industry in the united states. if this comes in as good news, it is going to make it even harder for the fed to justify cutting rates. we've heard from a number of fed officials over the last 24 hours who have all pretty much said the same thing as charlie evans, that we are going to wait and

see. today we've got another four fed officials speaking. by the end of the day, we might have a lot more clarity. we have to wait for tomorrow's job report to get a sense of whether it is bad news or good news, and what that means. alix: thank you so much. coming up on this program, much more on your morning trade and analysis of the markets in today's first take. this is bloomberg. ♪

♪ alix: time now for bloomberg first take. we are going to give you the news, and you get the trade and analysis of the markets. joining us, romaine bostick and vincent cignarella. hear him talk everyday at 9:30.

asset management head of most the asset strategy is also with us -- head of multi-asset strategy is also with us. you come in today, you see a little bit of a rally. we will see what the ism services number is. that will be the key to the day. as mike mckee said in the segment before, there's no correlation between the sectors, so you need to be at least a little bit optimistic, even if you see a drop in the 255, well above contraction level. as we said yesterday about the manufacturing index, we've fallen below into contraction. at the end of 2015, early 2016, the fed was hiking in the economy was doing fine. we will see what services say, but we still need to look at wages tomorrow and next week. i think you don't hit the panic

button at least until next friday. romaine: any bounce is completely predicated on consumer spending, or the idea that consumer spending is still holding up. services will give us a little peek into that. we will get another with the jobs data and the seven numbers there. that is what is going to take us there. i don't think we get a lot of action until the ism number. then we have to look to friday. it could be monday before we start to see some serious buying, and only on positive data. evan: and then you get into the trade talks next week. we are looking into the economy right now, but next week we have the principles meeting, -- the principals meeting, and that is what is going to drive the growth from here. alix: so a multiple-choice question, what led the selloff yesterday? i get tuesday was the ism. yesterday we got adp disappointed, but i was here and that happened. the market didn't really start to move. was it technical? was it adp? was it political?

you had the reports of bernie sanders having chest pains, and that brings in the hole 2020 -- the whole 2020 story. put two sets of data back to back like that, all of a sudden there's something here. but keep in mind, it wasn't just what we saw in the u.s. we had some continued bad data coming out of europe and asia. i think that fed into it, once that number hit in the u.s.. vincent: and the weight of the market, as you watch the tape yesterday and talked to traders, people were trying to buy dips and getting stocks out, and it just kept rolling and rolling. end of did weigh on the the day. warren is not considered a positive for the financial markets. i talked to a guy last week who spoke to his investment funds on said if shest, and

becomes president, we will see anywhere from a 10% to 50% drop in the stock market. sanders supporters, if they are going to pick anyone, they are going to pick her, and that would take them over the line. the pressure was building all day long. evan: i think also, the dollar is strengthening. it is not getting the headlines, but that is going to weigh on earnings of firms is that keeps getting stronger. alix: not just the dollar, but you are also seeing the curve steepen. and you get financial conditions actually tightening if you take a look at this. yes? this selloff is different than the one we saw in august. vincent: there was a rotation out of equity into fixed income. people are getting a bit defensive with the political pressures, the economic pressures. a lot of smart money is basically saying it is not a bad time to hedge because we don't

know how this is going to add up. don't know what the fed is going to do. i don't have a problem with it. romaine: we start off october bad. just because we start off bad, doesn't mean we end bad. see most around, you investors seem to be positioned for the worst, or at least. -- or at least they are prepared for that. data sort of a good thing. maybe that will temper some of the pain. alix: which raises the question, can the fed actually do anything? we've seen an increase in markets expect more rate cuts. now we are 50-50 when it comes to december. we are pricing in a cut in october. doesn't move the market anymore? charlie evans, the latest fed official to speak to bloomberg earlier this morning. >> trade uncertainty has been very important for the weakness in manufacturing. i've talked to so many business executives, manufacturing

executives, who have indicated there's just a good deal of uncertainty. everybody is being much more cautious, and we haven't seen the increase in business investment we had expect it on the heels of very aggressive, strong tax cuts and corporate tax reform. alix: i don't know. that doesn't sound like a fed official that is going to go cut rates. evan: and to the question of is good news bad news, at this point we've seen a rally in fixed income, 3.25% on the 10 year down to the 1.45%. there's not much more that the fed can do. it's not like businesses are screaming out, please lower the cost of capital. what we need is clarity on the trade front. the fed is not going to save us. if the data continues to deteriorate and we don't get a cease-fire next week, there's not much the fed can do. vincent: it's not the cost of capital, it's the preservation of capital. no one knows where to go.

if china heats up, where do you look for your next supply chain? no one really knows. if china calms down again, you don't need to move your supply chain. alix: it raises also u.s. equities. instead?you go you don't necessarily want to go to emerging markets if you are getting a stronger dollar and tighter financial conditions here. if would you go to europe you're going to get taxes on one? that's not a good exact -- on wine? that's not a good example. [laughter] romaine: i don't know, i'm seeing a lot of calls to go to europe. when you compare equity valuations with what you are seeing in the u.s., there's an argument to be made. i believe j.p. morgan made that call last week. ubs might have made that call, too. evan: there are certain places were more of the bad news is priced in. europe is one. japan would be another. cyclicalok at other heavy indexes, compare the bad news priced into europe and japan compared to the u.s.,

where things are still looking pretty full. your downside is limited there. alix: so no one cares about these tariffs? vincent: i care. romaine: i'm a wine guy. alix: i'm a johnny walker guy. [laughter] twoent: but you mentioned spots where it is not priced in. i think there are major hurdles for europe and japan that are not yet priced in. this is the pursed salvo perhaps in a tariff war with europe -- the first salvo perhaps in a tariff war with europe. there's no telling what this sales tax hike in japan. past, retail sales have cratered. this doesn't bode well for or japan.or europe in to that

conversation. and romainearella bostick, thanks a lot. evan brown of ubs will be sticking with me. we used athe charts gtv on your terminal. livemusk fails to up to his own deliveries. this is bloomberg. ♪

♪ viviana: you're watching "bloomberg daybreak." earnings at fashion retailer h&m returning to growth after a two-year slump. in the latest quarter, pretax profit rising 25%. h&m'sedit is going to summer collection. british retailer ted baker losing more than 1/3 of its

value. the apparel chain saying the second half was off to a slow start. full-year was boards -- full-year results could fall. ted baker has been reeling since the resignation of founder ray kelvin. good news, bad news for tesla on third-quarter delivery figures. the electric carmaker delivering a record 97,000 cars, but founder elon musk had hyped the idea of reaching 100,000. after the announcement, instead of rising, tesla shares sank. that is your bloomberg business flash. alix: speaking of tesla, gene munster weighed in on musk's smith. -- on musk's myth. "this is a credibility hit. this is an example of not being-- of elon disciplined and having trouble

managing expectations." this is a trough? do we have more to go? how do you view it? evan: overall, auto sales weren't great, but they weren't terrible. overall, the u.s. consumer is holding up ok. when we are seeing a decline in rates, that should be supportive of the consumer as well. we are not too flustered by that. we will see what the jobs numbers bring and what that means for consumer spending, auto spending going forward. alix: you have the gm workers strike, declining profits. you are having to sell a lot of these cars at a discount to get them off their lots. if you have a crimping profitability for the auto sector, what does that mean if it starts to roll over? does that spread? evan: the auto sector is a key, cyclical part of the index. autos don't look good, that is really not a good sign.

i don't think we are heading lower, as long as we don't get the auto tariffs from president trump. we have to remember, a lot of the parts used in the united states are produced abroad, and there is back and forth on the supply chain. that would be disruptive. if we can avoid those, auto and cyclicals should be ok. evan: evan brown of ups asset management will be sticking with me. -- of ubs asset management will be sticking with me. coming up, i don't think i've ever seen a service's ism number be this anticipated in my history in the markets. you're looking at some kind of recovery in the u.s. equity market after yesterday's dismal drop. this is bloomberg. ♪ sometimes your small screen is your big screen.

and with the xfinity stream app, which is free with your service, you can take a spin through on demand shows, or stream live tv. download your dvr'd shows and movies on the fly. even record from right where you are. keep what you watch with you. download the xfinity stream app today and get ready for xfinity stream tv week.

watch shows like south park and the walking dead october 7th through 13th. ♪ alix: this is "bloomberg daybreak." after yesterday's decline, this day percentagee

point move. we are 2.5 percentage point away from record highs on the s&p. maybe things aren't that bad. not the case, though, when it comes to the dax, down by over to present. services data -- down by over 2%. ing toes data continue rollover. a little bit of a bid into the yen. and the u.s., 11 basis points doesn't sound like a lot, but when you look at the last three days, it's quite a move from where we were. crude also finding some stability, still trading around that eight week low. economic alarm bells beginning to ring in the u.s. some members of the fed are still unconvinced. guy johnson spoke to chicago fed president charlie evans earlier today. >> they hope mc -- the fomc has been moving to what at one point last year headed for slightly modest, restrictive position. now we have an accommodative position.

whether or not one more rate cut is the right decision or not, i think we are just going to have to go into the meeting and see. alix: joining us from washington on the good, the bad, and the ugly is bloomberg's michael mckee. i wanted you to help us on what is good, what's bad, and what the fed will be faced with at their next meeting. michael: fed officials like to say that expansions don't die of old age, but for people in the markets, this one is certainly looking gray and stooped. fed officials are looking past some of that data. here's what i mean. they've cut rates twice. you look at the impact of that in some sectors, particularly on the consumer side, and you can see the yellow line is the fed rates coming down. look at what is happening to auto sales in home sales since then. they have picked up. the fed thinks this is probably going to be good news for the economy because the consumer is driving things right now. conversely, you look at business spending. the fed has been cutting rates,

and it hasn't had much of an effect. you look at what's happened with the white line there is business loans. loans to businesses by banks flattened out. the capital spending in the blue line, which we talk about quite a bit, businesses just aren't spending. they say it's because of trade war uncertainty. right now the fed is looking at a strong consumer, which is 2/3 of the economy, and a week business center. which one pulls the other in the direction it is heading? do week businesses -- do weak businesses pull down consumers, or do can sooners -- or do consumers power business spending? for that, we will look to tomorrow's jobs report, and we had a mixed picture there. on the right-hand side, jobs certainly have been slowing, maybe because we don't have enough workers, maybe because companies are getting more cautious. if you look at earnings, these been holding and starting to

rise again. a real mixed picture for the fed, which is why you have charlie evans and others saying we want to wait for the data and we make a decision. alix: thank you so much. that was a perfect setup for the fed. still with me onset is evan brown of ubs asset management. it also remind me of what citi you hadich is that mixed data points, but we are ok. evan: we are in the same place. we don't think the cycle is ending. the economy is bending, and a lot of it is the weakness in manufacturing. that is spreading somewhat to services, but we don't think we are headed to a recession. we do think that the labor market can hang in, the consumer can hang in. that is the key for the u.s. economy. as long as we avoid a recession in this market can keep going, but there is going to be plenty of volatility along the way. alix: i feel like i year and a half ago, if we saw a slowdown in the jobs number, we would be

like, oh, that is supposed to happen. if we see that tomorrow, is that going to be the narrative? evan: we have seen a pretty quick deceleration in jobs growth. that momentum is a little bit concerning. basis, asall levels long as you are producing 120,000 jobs in a month, that is keeping the unemployment rate steady, and that's what the fed wants to see. but if we start to see this pace of deceleration continue, we start printing jobs below 100,000, then that is signaling there's some genuine concerns here in the economy is in danger of rolling over. alix: for asset allocation, what is the best positioning for that kind of scenario? evan: i think you always have to have a balanced portfolio. u.s. 10on't love to buy year treasuries at 1.6 percent, but they play an important role in diversifying a portfolio.

you can buy treasuries, you can get yield elsewhere. on a hedge basis, we like china fixed income, some em as well. , there's aend scarcity of safe assets out there. treasuries are kind of the one game in town where you don't pay, and you get protections to the downside. alix: it feels like a little bit of the difference this time around, which i say that and i'm judging myself for it, if you come to the bloomberg, it shows the probabilities of a rate cut. we've seen a huge re-rating of what the fed might do, october at almost 80%. i feel like the last time we saw a rise in that, it was preemptive. everything else is that around us, therefore we need to preemptively cut. that is a different kind of scenario we were faced with a week ago. evan: i wouldn't describe the

fed is freaked out -- alix: clearly that is my own personal interpretation. [laughter] evan: the fed wanted to do these two cuts and be done, midcycle adjustment and the like. but now we are seeing some deceleration in the things that matter. this is a fed that is saying we really might have to do more, even though we don't want to. but that's the reality of where we are right now. alix: earnings. two narratives. one is that 2020 earnings have to come down because we haven't re-rated. the other is we could see a savior there and it won't be as bad. what do you think? evan: it is pretty binary. i hate that we talk so much about trade. i wish we could talk about something else, but i think, if next week, between president trump and president xi, if we don't get a cease-fire, if these tariffs go into effect on october 15 and december 15,

there's going to be a massive decline in earnings expectations. that is going to put the economy at the brink of a recession. if we do get a cease-fire and it is one that sticks -- the last one lasted about a month -- then earnings expectations look fairly reasonable at this point. alix: at the same time, you are seeing the bond market particularly high-yield -- the bond market, particularly high-yield, struggle. your debt yield is now increasing. you are struggling, and your earnings don't come in. then you have to rerate because of the trade war. how brutal could it get for some of these companies? what sectors might you totally abandon? evan: there's some vulnerabilities in high-yield that we see. energy is one of them. there's pockets of excess within the credit markets. level, we are not as worried about credit as a whole as some are.

we think corporate balance sheets are in reasonable shape. there's a lot of cash that corporate's have. but we haven't really seen corporate spreads rise that much. if recession concerns are really rising, that's where you are going to see it. you are going to see how yields an investment grade spreads really start to rise. they've hung in so far. alix: looking towards next week, what is the credible deal that , phew, that makes you go ok / phew, okay?s you go evan: if you can gave a kind of positive signal to the market, then that would really help this market rerate higher. alix: in that world, do you go into cyclicals? do you go into value? what do you do if that happens? evan: we've already seen value rebound a little bit.

if we get some clarity, genuine , theyy on the trade front been really quite depressed. alix: evan brown of ubs asset management, thank you so much. it was great to see you. viviana hurtado is here with first word news. viviana: today the impeachment inquiry will focus on the former special envoy to ukraine. firstolker will be the interviewed by the house. more inets will cost the u.s.. so will scotch whiskey, french wine, italian cheese. the trump administration announcing new tariffs on up to 7.5 billion dollars of european products on october 18. the u.s. got the go-ahead from the wto.

it is the largest award in wto history. it also comes in retaliation for a legal government aid to airbus -- for illegal government aid to airbus. opec and its allies don't see a crisis on oil production. oil ministers speaking at an event in moscow. crisishe situation is bound, we will be able to take a decision to reduce or increase the production, and it will be good for the balance. it is a crisis event that calls for emergency meetings, so we are monitoring the situation. 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. global news -- more than 120 countries. i'm viviana hurtado.

this is bloomberg. onx: i will have much more oil today. join away -- join me for "commodities edge." coming up, goldman sachs sees singapore benefiting from a capital flight from hong kong. some earnings are trickling out this morning. constellation brands the latest. that stock down over 3% in the premarket. it looks like an ok quarter. you did have a earnings coming in a little bit light, but net sales in line with estimates. the company now sees for the full year anywhere between nine dollars and $9.20 for earnings. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." coming up in the next hour, an exclusive interview with richard nodde, goldman sachs vice chair. pepsico saying it expects to meet or beat its full-year revenue growth target. and latest quarter, sales and earnings were better than expected. the big reason, strength in pepsico's frito-lay's snack foods, offsetting a broad decline in soda. pathologists at the mayo clinic saying a paving problem tomost likely an exposure toxic fumes. more than 800 people have gotten sick. at least 12 have died. facebook may have to censor online hate globally.

that is the result of a ruling by the european union's court justice. order aould also worldwide removal as long as they take into account international law. i'm viviana hurtado. that is your bloomberg business flash. alix: thank you. we turn now to wall street beat. first up, a $4 billion win for singapore. that's what goldman sachs is estimating to be the potential benefit from the turmoil in hong kong. deals are harder to get done. goldman sachs cohead of the americas credit finance group shares or strategy in a tough environment. cutting trading commissions to zero. joining me is bloomberg's sonali basak. we've all been waiting to see what is happening with hong kong and financial markets, and what is going to move out. annmarie: it's been a slow

--sonali: it's been a slow bleed. $4 billion is an interesting number, especially when the outflows have been the most in more than a year. we've seen little indicators here and there. it is not the only indicator. they are using foreign outflows, interbank rates. but the big global banks might be winning in this capital story. you have hsbc in the region, standard chartered, ubs. the ability to move money across borders is a tricky one. however, it is definitely something that has seen more clients. i think that's why it's been so slow to move in the first place, because it is quite sticky. once you move your money once, you're not going to move it again and again. kong has one of the most open economies. to move it over to singapore,

this is big for singapore. it will be interesting to see how singapore reacts to this and expands as a financial hub. alix: do you feel like bankers and hong kong are going to get moved elsewhere? do you think that's coming? sonali: i think that's a while away because of how complicated it is, but i don't think it is out of the room of possibility in terms of what bank executives are thinking of right now. you're thinking about worst-case scenarios and what do i do with my talent. how hard will it be to move talent there? remember, this is also a stock exchange there, and there is -- remember, there is also a stock exchange there, and that is an important thing in hong kong as well. alix: that's a great point. let's get to our second story. the cohead of leveraged finance at goldman sachs spoke yesterday to bloomberg television. here's what she had to say about deals. >> deals are harder to get done for all the reasons you say, and we are focusing on how we create

the great solution for the client. so we spend our time working closely with m&a colleagues in the financing side of the house. when we are thinking about accessing the markets, with think about variables. we think about geography, with think about loans, we think about is there a way to avail our clients needs. sonali: i thought one of the most interesting things she brought up was the merchant banking division. goldman-s merchant banking division right now is about the 's merchantgoldman banking division right now is about the size of kkr. as yields come down, the private equity division ramps up. alix: if i want to go and sell my company or shop it around and go to goldman, what are they trying to sell me now as opposed to five years ago? what's the pitch? sonali: there's a realization

that deal activity has slowed down quite a bit, so they've been doing a lot more private equity work, a lot more middle-market lending -- deal work, sorry. they also have this huge credit opportunity to flow into. investment grade has still be doing well. leveraged finance and riskier debts have been tougher, but that doesn't mean that financing has ended completely, although large-scale deals and riskier debt has. alix: in a broader sense, is that a bad thing? them, they can't get loans off of their books, maybe they are bad loans. that's not necessarily bad. sonali: but when the banks start to step back, apollo bought about $400 million worth of the loan, and private equity stepped in, which is where goldman-s merchant banking division cayman.

where are they going to step in ? you've seen the private equity industry step in. cokexample, the equity develop, they have stepped in on interesting deals as well. you see banks morphing to address that. alix: interesting. , it is nostory surprise, but e*trade wind up cutting their feeds to zero as well. e*trade, td ameritrade, and schwab. think? -- what do you think? sonali: fidelity, your move. i think that's what everyone is thinking. our bloomberg intelligence nalyst, on a survey on how soon everyone thought it would move, everyone thought it would be a week. it has been much sooner than

that. there are rumors on whether td ameritrade will buy e*trade that have resurfaced. alix: i wonder how people quickly will migrate to other platforms. are they really going to be like, i've got to go over here, this is era. sonali: now all these firms have to diversify their business models. to be seen. alix: which makes the m&a point even more important. interesting. much more on that race to the bottom with one of the most powerful women on wall street, michelle seitz, russell investment ceo. don't miss that. thanks for now. i will see you in a bit, sonali basak of bloomberg. in today's off the beaten street, banksy and brexit. if you have a cynical view of the parliament, this painting is for you.

it shows politicians replaced by chimps. it is auctioned off in london tonight, just in time for the run-up to brexit. the 13 foot painting may fetch up to $2.5 million, and it was done even before this last week of parliament took place, before boris johnson and jeremy corbyn went after each other. go figure. coming up, we take a look at the dollar technical support levels. that is up next in today's traders take. if you are jumping into your car, tune into bloomberg radio on sirius xm channel 119 and on the bloomberg business app. this is bloomberg. ♪

alix: time now for the traders take. joining me once again, vincent cignarella, voice of bloomberg macros squawk.

this chart we are looking at, what is it? vincent: it is called a range average. it is something i used quite a lot when i traded. the function will take whatever period you choose and give you what the average closing price over that period is, which is the white line. to standard snap deviation bends along the side of that. you see the bottom level is pretty much the 107 figure. this is a binary trade we are looking at right now. we have a lot of dynamics coming up, as we have the services number coming today, jobs tomorrow. we still see what retail sales in japan will do and what the fed is going to do, as dollar-yen is a rate sensitive trade. not something i would do in a cash market because this could go either way really quickly, but looking at this on an hugens play, it has

opportunities. so pick your poison. i think the 107 on a long basis could hold, but on the downside, pretty ugly. you're looking at somewhere around 102, so about five big figures on the downside, and up to about 112, 113. it is pretty much a 50-50 trade. services coming out at 10:00. tocent: if someone wants reach out, i will give you a clue how to mess with it. alix: thank you so much, vincent cignarella. coming up on the program, mike wilson, morgan stanley chief u.s. equity strategist, will be joining us, along with alisha levine, bny mellon chief strategist. this is bloomberg. ♪

i'm all about my bed. this mattress is dangerously comfortable. when i get in, i literally say 'ah'. experience deeper rest with the award-winning leesa mattress. this bed hugs my body. i'm now a morning person. the leesa

mattress is designed for every body. providing strong support, pressure relief and optimized airflow to keep you cool. hello bed of my dreams. order online, we'll build it, box it and ship it to your door - so you can try the leesa mattress at home. love it, or get a full refund. and rest assured, returns are free and easy. i love my leesa. today is gonna be great. find out why so many people love the leesa mattress, then try it in your own home. order now to get big savings - but only for a limited time. just go to leesa.com today. you need this bed. ♪ alix: welcome to "bloomberg daybreak" on this thursday,

october 3. the impeachment in cory moves into a new phase today. --se democrats will in will interview their first official, former envoy to ukraine kurt volker. british prime minister boris johnson called his brexit blueprint a compromise from the government. johnson outlined the plan before parliament. pm johnson: our proposal should now provide the basis for rapid negotiations towards a solution in the short time that remains. resignt for one moment from the fact that we have shown great for its ability in the interest of reaching an accommodation with our european friends. alix: chicago fed president charlie evans says the weakness in manufacturing hasn't convinced him of a need for another rate cut. he tells bloomberg in madrid he's open-minded. >> we are well-positioned for a

motto to -- for modest adjustments and headwinds to the economy. if something more severe happens, we would have to make more adjustments. alix: and hong kong, reportedly it's set to do something it hasn't done and more than 50 years. local media saying the government will ban the use of facemasks in response to protests and invoke an emergency law that hasn't been used sensed 1967. in the markets, we are all waiting for the services ism number at 10:00 a.m. eastern time s&p goes nowhere. we were seeing a bit of a bounce in the last hour, but that has now erased. in the currency market, not going anywhere. it is a mixed story in the g10 space. you're seeing money flow into the bond market here in the u.s. and in europe. crude trying to stabilize after hitting an eight week low. what feels like a binary outcome coming in just two hours.

from an risks ranging economic slowdown, increasing tariffs with europe and china, to political risks including impeachment and the 2020 election. ,oining me now, mike wilson morgan stanley chief u.s. equity strategist, and alisha levine, levine,on -- and alecia bny mellon chief investment management strategies. building amount of concerns, and there's always a tipping point where enough is enough. we had a pretty good rally in september off of august lows, and the data didn't get better. there was hope that trade was going to get resolved with a deal and may be the sentiment would get better, and of course, they got worse. littlembers were a softer. we are not in recessionary levels yet, but the direction is wrong. quite frankly, i think the auto numbers yesterday were pretty

scary because if durable goods is the first thing that consumers give up on, if you look back at the consumer confidence numbers, the good time to buy durable goods plummeted last month. that's another sign that the consumer, which has been holding up the world, basically, is may be fading. that's basically been our view. we think that is the last thing to go. alix: so how much do we learn at 10:00 when we get the services number? alicia: it's very strange to have a market where it depends so much on macro data. you're looking for data today, tomorrow with the jobs number, and waiting to see whether there's any sign of a trade stabilization at all. i call this the boiling the frog slowly market because we have hit to hit to hit over the last 12 months, and the market has crept higher. we are only two percentage points off the high, although year-over-year, the market's down. the truth is, the latest data is

weaker. if you look at the forward-looking data, ceo confidence and expectations for a year from now, small business's intentions, all of that is rolling over. the forward-looking data looks really week. it is a question whether the consumer can hold this up or not. i think the jury is still out, but the next two days are going to be very important. alix: what struck me also is the steepening of the yield curve and the financial conditions. it's not just equity markets. you are seeing financial conditions tighten. also seeing that curve getting steeper. do we see the s&p meet financial conditions, or rotation within the index? mike: this has been going on for 18 months. it's not like the market is sort of ignoring -- alix: but this is different, right? mike: i think that's right, but this is how the economic expansion evolves in the financial markets. the curve flattens, and eventually re-steepens.

typically that means you are in a recession because the front end is collapsing. the market is saying the fed will have to cut a lot more than what they are saying. we are at a point where the bond market is probably pushing that narrative a little more aggressively than the stock market is. i just want to bring it up one more time, the s&p 500 is really its own asset class. it's not really an equity when you think about it because it is the bb of the high-yield market. it is the highest quality equity market in the world, so when you are nervous, you buy the highest quality asset you can in that category. the s&p 500 is benefiting from that type of flow, so it is not a great leading indicator in terms of what is going to happen. alix: the question for me is where would you go. if you fundamentally don't want to buy the s&p, where else do you go? can you still get your equity? alicia: the safest place right now is the u.s. because the data

here is the only place in the world where there's any kind of indication of growth at all. we don't see a recession next year, so to that extent, is still growth, so you're here. to the extent you think rates are going lower, you have to be in the bond market. alix: where in the bond market? alicia: if you think global growth will continue to stay low, that will keep the long end of our curve lower also, so you can buy duration here. i wouldn't go hard on it. it is a crowded trade. but it doesn't look like rates are going to spike any time in this world we are and. alix: does that mean you by defensive's, like utilities? mike: it's almost comical. most equity managers are momentum players. they follow trends, and when that works in software stocks, of course that is a trend, so i'm going to buy it. but when it is utilities, it's like, i don't know if that is really good.

but that's what's going on. the most powerful trend in the marketplace is long till lease and staple stocks. every market in the world is screaming, get defensive, and people are fighting it. alix: is the fed fighting it, too? we spoke to charlie evans earlier. here's what he had to say about trade in the markets. >> trade uncertainty has been very important for the weakness and manufacturing -- for the weakness in manufacturing. i've spoken to so many business executives whong express a good deal of uncertainty. we haven't seen the increase in business investment we expected on the heels of a very aggressive, strong tax cut and corporate tax reform. is the fed going to have to play catch-up for the market? alicia: the fed is going to play catch-up for the market. alix: but the market now sees

four cuts for this year. anotherwe think it is 25. it is clearly a divided fed. even the other 25 is going to be difficult, but the ism data from a couple of days ago is probably pushing members to that other 25 basis point cut. i think four is hard here. not falling off a cliff. there's this subtle mechanism and signaling in the market that the fed has the economies back without going too deep. when you have nothing left to do, should there be a recession -- going to deep -- going too deep when you have nothing left to do should there be a recession. alix: what do you think? mike: this whole thing started as an insurance cut. alix: exactly. i think we are past insurance cuts now, aren't we?

mike: that has been our view, that this is a rate cutting cycle that could go all the way. if you are sure that this is an insurance cut, let's take on more insurance. the market believes they are going to do 25 in october. our view is the data is not going to get better in the third quarter. it is going to continue to slide, particularly on earnings. that is the core of our view. people have been too focused on trade and these external events, and not right here at home, which is we have a business cycle that have been rolling over for 12 months, which is why small and mid-cap companies have been underperforming. multinationals are probably the ones most hurt by trade. small mid-caps are underperforming. to domestic economy is pretty slow. alix: we are going to get to earnings in our next segment. thank you so much, mike wilson of morgan stanley and alicia levine of bny mellon. they are staying with me.

coming up, we take a look at the health of corporate america as we head into earnings season. this is bloomberg. ♪

alix: earnings season trickling out, but the rest of the year is going to be tricky, with all eyes really on 2020. this is a bloomberg intelligence chart that shows earnings revisions for next year have yet to come down, raising questions on the cuts to come. with us still, mike wilson of morgan stanley and alicia levine of bny mellon investment management. what's holding it up? alicia: it is a very strange cycle on wall street that investors don't pay attention to earnings until the fourth quarter of the preceding year.

we've just started the fourth quarter of 2019, and this is when you start seeing that trickle-down. if you remember last year, we were at an 11% earnings growth rate in earnings for 2019 on october 1. very slowly over the month of october, that started coming down. so i would expect by the end of the year, if we are on 10% for next year, i would expect by the end of the year, we are probably down to 7%, 6.5%, and in january is when the real cuts are going to come. alix: you were talking earlier about the mid, small, large cap. you're taking a look at the white line, which are s&p forward earnings, the blue is the mid-cap. what does this chart look like in the next 12 weeks? mike: this is a chart we published monday. this tells you everything you need to know. one thing we did miss earlier this year, you see the white line? that's the s&p 500 forward 12. quarter,n the fourth

and that is where we overshot. but now, look what happens since march. it's been grinding higher all year. that's what has propelled stocks higher. the s&p has not sold off because this is grinding higher. i think it is about to rollover. i agree with alicia, this is the time of year and those numbers have to start coming down. if we are wrong, if there's retaliation next year. alix: do we need to rewrite more, or have they -- to rerate more, or have they re-rated enough? surpriseduld be very if the large-cap earnings do not follow the small mid. part of this is a function of large-cap companies that have more ability to cost, but eventually it will cut -- it will catch up to them.

the argument that the u.s. economy is a bastion of safety is totally challenged by this chart. small and big cap companies are not operating efficiently because there are cost pressures, there are demand issues in the u.s. economy. alicia: if you think back earlier in the year, when we had the increase in trade tensions in may, estimates for the third quarter didn't come down until about six to eight months later. wednesday, everything cut estimates for gdp and the rest of between 19. i think we will see something similar here. large caps are dependent on overseas revenue, the numbers are stale, and they will be coming down. there's too much weakness for the rest of the world and the tariffs we slapped on europe yesterday are not going to help the european economy or demand over there. alix: what sectors will get hit the most in your view? alicia: the consumer sectors on the staple and discretionary

side have pretty much been holding up the story that the consumer is driving the u.s. economy. if there's any crack in that over the next couple of days in what we see, those stocks should get pretty hit because that has been the bastion of safety. , and theylike to shop buy stocks for american choppers. alix: it reminds me of -- for american shoppers. alix: it reminds me of a conversation i had with my husband this weekend. he sat me down and said, you've got to stop shopping. so energy might not look as bad as it should. this is another chart from bloomberg intelligence shows where we are. the blue line is the average for where the market thinks we are going to become a versus where we were in 2019 in the orange bar. energy obviously could be the outperform her. what you do with that? alix: mike: look at the expectations -- mike: look at the expectations. comps are priced, so they are

going to have to come down. i think banks are going to have a tough period. i think energy companies are going to have to cut numbers again. high quality industrial, those numbers have not come down yet. and then technology, that scenario is were i think we could be really surprised. i will bring up something that's not talked about this much. these ipos recently are backing up the whole exit of a lot of these private unicorn companies that are unprofitable. think about what that's done in the economy the last five years or so. a lot of unprofitable businesses have been started and funded, and they've been spending a lot of money in the last couple of years. now the messages coming back, you really can't go public if you are unprofitable. i think that is going to back up into the economy. that is a decent size of the economy now because of decent growth for the tech sector. what you spending money on.

software, cloud services, hiring office space? if you are going to be profitable, you've got to cut back on all of that. that is going to have an economic impact with the good quality companies that you want to buy. that will be a surprise in the next six months. we will see a real air pocket of demand for this stuff. alix: to your point, wework did just that. what did you think about that? i thought it is interesting that they might actually cut services versus just something for that risk appetite. alicia: absolutely. if there is no one to buy what you paid for at a higher price, which is what happened to lyf t and wework, the easiest thing to do is to cut labor. it's easy to ask someone to work twice as hard. you will see it concentrated in these areas where you have a

sickly no unemployment, huge , and you become a lot more careful with your own capital. alix: to wrap this conversation up with both of you, what actually makes things better? what is the turnaround to rethink your view? mike: first of all, we are not nearly as pessimistic as we were last year because prices have adjusted. one of the surprises this year in august was even in a recessionary outcome, you may have already priced in in many assets around the world, whether it be bonds or the defensive rotation, even at the s&p 500 level because rates are so low in august. delta, yet the exactly the yet same return.

where there could be surprise from the demand standpoint is we could get some fiscal exogenous shock, but everything i'm reading so far is that the u.s. is an political quagmire. i can't imagine we will get a bipartisan fiscal stimulus anytime soon with impeachment proceedings, non-. i think the -- with impeachment proceedings going on. i think we ultimately get their, but we need a little more pressure first. what impeachment has done means that infrastructure is what impeachment has done means that infrastructure is off the table, a possible signing of usmca is off the table. a blackre looking for swan event. what would that look like? i don't know, maybe germany gets a fiscal policy? christine lagarde comes in and says you have to look at the fiscal side because we are no longer capable of boosting the european economy without that other piece of the puzzle.

if that happens, i think that think thatally could be really positive because it would be a signal that it is time to spend a little bit. but until then -- alix: until then. you guys are sticking with me. coming up, more on autos. tesla tumbling after they failed to deliver what was promised. this was bloomberg -- this is bloomberg. ♪

♪ viviana: you are watching "bloomberg daybreak." pepsico expects to meet or beat its full-year revenue growth target. in the latest quarter, sales and earnings were better-than-expected. big reason, strength in the frito-lay's snack food helping the company offset a broader decline in soda. earnings at fashion retailer h&m returning to growth after a two-year slump. pretax profit rising pony 5%.

risingdit is going to -- 25%. the credit is going to h&m's well-received summer line. it was good news, bad news for tesla when it released furred core delivery figures, a record 97,000 cars -- when it released third-quarter delivery figures, a record 97,000 cars. instead of rising, shares sank. alix: thank you so much. still with me, mike wilson of morgan stanley and alicia levine of bny mellon investment management. to me, that was pepsico talking about growth. under a lot of margin pressure, and that is kind of what you are talking about in terms of the different sectors. mike: boring is beautiful. it can be. once again, it is not sexy. it's not a great story. it's fritos and pepsi. those are staples, and that's exactly why you own these types

of company's right now. people are not going to stop buying chips and soda, even if things slow down. alix: i thought everyone got healthy come the -- healthy, though. socia: we need comfort food, chips and soda are still good. the auto sector was dissected that the rate cuts were supposed to help, and it doesn't seem to be helping. it does seem like there are broader trends at work on the large consumable side. consumers are rolling over. alix: yes, but what about housing? for some, the rate cuts have in some ways stabilized housing. mike: housing went through a bear market in 2017-2018. stocks were down 40%, and things slow down dramatically. i do think rates can cushion the blow. cutting if you do get a

cycle, that is going to stop the housing market in its tracks. people are not going to buy a new house or whenever. long-term, i think the housing sector looks attractive. we are undersupplied in signal why i homes, which is think homebuilders have been doing better. alix: which is the same in europe. thank you very much. mike wilson of morgan stanley is sticking with me. coming up, one of the most powerful women on wall street, herell investments' ceo, on take on consolidation in industries. this is bloomberg. ♪

when you rest on a leesa hybrid mattress, bedtime is no longer simply the time you go to sleep. it's time to switch off and catch up. enjoy me time, and we time. 40 winks or 8 hours solid. the leesa hybrid mattress combines two technologies to give you deeper rest and rejuvenation. 1,000 pocket

springs provide edge to edge support, responsiveness and comfort. while premium foams relieve pressure, keep you comfortably cool and limit motion transfer. leesa's hybrid mattress is not only recommended by experts, experts choose to sleep on it too. order online and we'll ship it to your door so you can try it risk free. the leesa hybrid is american made. built to last. and, because everyone needs a place to rest, we donate tens of thousands of mattresses to those in need. experience the leesa hybrid mattress. right now, it's on sale. order today. go to leesa.com. alix: this is "bloomberg daybreak." i am alix steel. just a couple seconds away from initial jobless claims ahead of jobs friday tomorrow. equity futures want to stabilize

but going nowhere. remember the dax is closed for a holiday today. the cac 40 firmer despite eu tariffs on french wine. we are seeing a move into bonds. the curve flatter but still around 10 basis points as you wind up seeing money continue into the bond market and a g10 mixed for the dollar in that space. initial jobless claims right now. expectations but slightly higher, 219,000 individuals filing for claims for the first time last week. you also had the week before revised to touch higher. mike wilson of morgan stanley is still with me. tomorrow, what is the number you care most about? payrolls.s private that number has been coming down for the last 12 months. the six month average and the 12 month average are reaching areas where you start to worry about the unemployment rate. we do not need negative payrolls to see a rise in the unemployment rate. we need about 75,000 to 80,000

jobs to keep us where we are. anything below that would be troubling. we do not expect that, but that is what we are watching. that was 95,000 last month. if we get another number like that it will raise eyebrows. alix: a year and a half ago, that would've been we are at full jobs growth, that is where we should be. we still hear that from more optimistic economists. why is that not the narrative? mike: this could be another lowell, but we are seeing a broader recession. we are seeing the data much worse than it was in 2015 and 2016. it is not just energy and industrials materials. all of these companies are missing numbers and that is the number one driver for cost cutting. that is the risk. we have to anticipate this. we cannot wait for the number to be negative. we've been talking about -- a lot of this has already been priced. the market is already betting it

will continue to get worse. that is why staples and bond proxies are doing so well. alix: how much confirmation bias do you think will be in the reaction to the numbers tomorrow? mike: a lot of it has already been priced. if you get a really bad number, the curve will probably steepen dramatically, and that could help something like banks. i do not anticipate any wildly low numbers tomorrow, but if it happens, my guess is the market will price in a fed that will be much more aggressive, the purple steepen from the front end, and that is typically a sign of a recession. we were talking offset about how the banks will be looking better. alix: thanks so much. morgan stanley's mike wilson joining us. now we want to get an update on what is making headlines outside the business world. viviana hurtado is here with first word news. viviana: today the impeachment inquiry will focus on the former special envoy to ukraine.

he will be interviewed by house democrats. he played a key role in connecting rudy giuliani with ukrainian officials. democrats call a cut -- a text message to giuliani evidence of highly illegal coordination. airbus jets will cost more in the u.s., so we'll scotch whiskey, french wine, and italian cheese. the trump administration announcing new tariffs on $7.5 billion of new products. the u.s. getting the go-ahead from the wto. it is the largest award in wto history. equity is having an impact on public markets according to the ceo of aries management, and alternative asset manager which includes private equity. >> companies are staying private longer. the private markets are being what they can do for private company.

that is impacting what is going on in a public market. fewer public companies than we have ever had. higher concentration of market cap in the hands of a few companies in concentrated sectors, and passive investing. viviana: 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 for be on a hurtado. -- i am viviana hurtado. this is bloomberg. alix: thank you so much. invesco has been on a deal streak. it's ceo says not doing so would mean extinction. mark flanagan says if you are not a size relative to client they will terminate you. you are basically a dead man walking. we now want to welcome one of the most powerful women on wall street for her take. michelle seitz is russell investment ceo. also sonali basak joins us. thanks for being here. michelle: thanks for having me.

how do you not become dead woman walking? michelle: it is interesting. i read there was a survey done that only 31% of investment professionals feared survival anxiety or had survival anxiety. i think marty's comments are right. we should all be more nervous, more anxious, and have a greater sense of urgency about driving the industry for change to help clients rather than resting and trying to protect what used to be. i said before when i was on air here recently that this is a rebirth for active management, and it is a time of change. i do not believe m&a is a panacea. if you have two trouble companies, putting them together means to have bigger problems than before. extinction,ten your

or strategic m&a can actually serve the greater good for the client as marty was alluding to. sonali: we have seen a lot of the big deals leading to outflows and i wonder what that means for how you are shaping your own m&a strategy at russell? michelle: ultimately, you want to make sure you are focused on adding value to clients over the long-term. even if that means you insert uncertainty, you absolutely need to take shorter term pain for longer-term gain. the industry has been frozen at times, because any change is deemed to be a more uncertain environment and you might have turnover. it is a people intensive is this. whether it is consultants -- a people intensive business. whether it is consultants, there is an m&a activity, that cannot stop you from running a great business. sonali: at just about $300 billion under management, does

that mean we will see something transformational, a merger of equals? michelle: we do not have anything imminent to announce, but i would say we are very proactive about thinking through strategic m&a. we have looked through several things to accelerate what we are already strong at. alternatives would be one. we have $20 billion plus in alternatives and we want to bring that to clients, increasingly so. technology is another key area. m&adesire to do inquisitive would emanate from areas we believe our strength but we want to move more quickly, and would never forestall the possibility of doing anything that would benefit the clients. a year ago you didn't interview with the financial times where you saw massive shakeup in the industry. since then we have see job cuts at state street, blackrock, hedge funds, not just in the more passive industries.

there is a ton of pressure. what you expect for the year ahead after such a bloodbath we've already seen in terms of job cuts? michelle: the industry is changing good with change -- the industry is changing. with change, you need to embrace and not fact. operational alpha is incredibly important. we talk about investment alpha all the time. running great businesses does not mean protecting the status quo. it means staying a step ahead. i like to talk internally. we would rather disrupt internally than be disrupted externally. i would much rather be in control of the changes we need within the industry rather than be in reaction. largek the industry at has more supply than there is demand for many people doing much the same thing. of thet a recent future asset industry conference.

the point is many jobs will change. people will move into different parts of the industry, perhaps. i do not believe the industry shrinks. i believe the industry changes. with change comes adaption. that mean some people going out and other people coming in. a big change happened with charles schwab at e*trade cutting their fees to zero. what does that mean for your business? michelle: it means you need to make sure you are not taking more out of client returns then you should. environment,turn we have to be cognizant of the ecosystem that takes bites of the apple on the way to getting clients their real return. what we are doing to drive those kinds of changes is making sure we have a flexible model. we do lots of solutions as well as service abilities, but our goal is to make sure we are

risk costs to the system. training is one of those areas there is also enormous costs in the system -- trade is one of those areas where there is enormous costs in the system. sonali: you said the individual is still where asset management future lies, not necessarily the institutional investor. how do you still make money off of the individual consumer when fees are being cut further to zero as we go along? michelle: you run a great business. it happens in every industry. it is what the markets are all about. reinventing yourself so you can stay in profitable growth mode so you can reinvest for the future of your client base and make sure you are innovating your way to success rather than coming your way to success, which does not typically occur. that does not mean you stay static or do not look for areas to ensure you are leaner and

quicker and simpler for the client to deal with. get a macro picture, we have jobs day tomorrow, et cetera. what is your view of the economy and where we are? if you had to give me the pitch, what would it be? michelle: the pitch for the industry is job number one is to make sure you produce real returns for real people. we have a serious retirement crisis on hand. it is growing to $400 trillion. 75% of 55 there are to 65-year-old at risk for not being able to maintain their lifestyle and retirement. that is the eye on the ball we have. areerms of the economy, we in the 11th year of expansions and economies are not meant to go one way. you do need pauses. you do need retrenchment to make

sure you have appropriate allocation of risk in the system. when you have overly easy fiscal and monetary policy, you do not have efficient deployment of capital. trying to convince people to spend more when they are not saving enough to make sure they maintain their lifestyle is not a healthy thing to do. we might have to retrace before we move forward, but that is normal. that is what we are supposed to do. alix: ramping it out, you are one of the most women -- one of the most powerful woman on wall street and have been in this industry for a long time. what are women like you talking about? you talk about the industry or your careers, what are you talking about? michelle: i cannot believe the conversations are much different for men versus women, but the thing people probably do not talk about enough is that lives happen. we all run, we run hard. we are very driven.

at the same time, you do need to make sure you do not have people sprint through a marathon. , taking moment to pause a moment to be strategically selfish, to make sure you are at your best capacity, that you are taking care of what the needs are of the family and your lives that matter most. i think recognizing that when you are in a people business, it is about people. more people are talking about that than ever before. alix: a great point. so optimistic. michelle seitz, russell investment ceo. bloomberg sonali basak, thank you as well. we now head over to london, where goldman sachs small business event is taking place. goldman lacqua is with sachs international ceo. francine: thank you. we are in a new building with goldman sachs. let's get on to serious matters,

which is trade concerns. our markets too pessimistic or optimistic about what is going on in the world? >> there is a lot of volatility. we saw that yesterday. it is a good question. underlying economic growth continues to be about 2% or thereabouts, essentially on trend. clearly there is a convergence of issues going on right now. some of the data out of the u.s. has not been good. we've seen bad german data. the issueata, .1, .2, around trade, yesterday the airbus and the tariffs, the trade escalation has gone beyond u.s. china and is now u.s. europe. clearly the market pullback. talking about your commitment to europe, are you hiring anyone to

expand? richard: wealth management growth is one of our priorities. coverageue to hire people, client facing people. i was in switzerland last week. we just opened a new office in geneva to expand our wealth management capabilities. wealth management is a huge priority. francine: are you worried about your? -- are you worried about europe? what your clients tell you? richard: capital markets are wide open. they are wide open then in the u.s. and europe. financing through september at record levels, both investment-grade and high-yield. the investment market is open. a software company out of

germany, a company in scandinavia -- there is a decent amount of m&a activity. there is a lot of movement in the secondary markets joint the underlying business performance for us in europe continues to be pretty healthy. the broader economy, you wanted to be stronger. germany, manufacturing is weaker. that is partly china, slow down in manufacturing data. car parts in the u.s. where the consumer is the dominant layer. francine: do worry about the financial system in europe. something happening such as a no deal brexit that could seize up the market? richard: i do not think so. the authorities on both sides of the channel are focused on preparations for a no deal brexit. ofple are ready for the end october. the important issue will be the immediate aftermath. what happens in those first

weeks in november, assuming we have a no deal brexit? to those go well or not go well? those will be the weeks that set the tone. do people underestimate the issues or is there too much noise when there does not need to be? sides willks on both be there with with liquidity. governmental authorities will be there on both sides to support and minimize the downsides. francine: how is goldman sachs preparing for a no deal? do you have extra traders for volatility? richard: we will be fully staffed up 24 hours and that will run as long as it needs to run, which is what we would do for each of these big events. we have had many over recent years. francine: when you look at saudi arabia, how much of this is an opportunity for goldman sachs? richard: we open to secondary

equity business in saudi arabia and that has gone well. , we alongsideco other institutions at the top line of that transaction. when this happens, this is likely to be the biggest ipo we have ever seen. it is a great company. we look forward to that. million at one of the big banks, we have been involved with the number of m&a transactions. broadly, we are active. what is your commitment like to china? do you worried the trade dispute means u.s. financial companies might be locked out of china? richard: the certain things we may not be able to control. our focus is making sure we are focused on our chinese client base.

it is a broad client base. we have been there for a long time and lived many of the innovations in the chinese market. the chinese corporate community and the chinese government community is strong and is there to help develop the capital markets. it is critical for long-term growth of the chinese economy that they have an efficient financial system, they have capital markets that function and will attract foreign capital as well as domestic requirements. we want to play our part in that. francine: what you see going on with u.s.-china trade? will we find an agreement or will we be boiling over, two steps forward, one backwards, for the next decade? richard: it feels back-and-forth for a period of time. these are the world's great economies. the good news is they are trading. as long as they continue to trade, there will be tensions.

issues will diverge from time to time. put yourself in the u.s. position. the u.s. is trying to renegotiate its supply lines. if it can get better terms with trade, it is good for the u.s. economy. china is trying to protect its own interest. they will continue to trade and continue to talk and on that basis we can move forward. there will be agreements on the way, but there will be no such thing as a permanent agreement. francine: what kind of steps have you taken with abu dhabi following the scandal? richard: we continue to have good relations with abu dhabi and do business in abu dhabi as we do across the region. i am sure many of us would like to put this behind us and we are working with the authorities around the world to try and reach a suitable resolution to this issue. francine: how close are you to finding in a resolution with malaysia? richard: these things have to

run their natural course and it will happen at the right time. sustainability, you have a great new building in london? is this a commitment to london and a more stable london? richard: it is an important point. we spent one billion pounds on this building. we can put 7000 people in this building. we are back in london as the financial sector. francine: thank you so much for joining us. i will hand it back to you. we will have plenty more from goldman sachs's new headquarters in london. alix: thank you so much. uncertainty in the markets this morning. we are looking at the technical levels and what they are saying. if you're jumping in your car, tune into bloomberg radio across the u.s. on sirius xm channel 119 on the bloomberg business app. this is bloomberg. ♪

alix: in today's technically speaking, bill maloney joins me now. s&p futures up four. what do you have for me? bill: when i came in they were much higher. i would rather see the futures up and they get better throughout the day, but we will see what happens. we talked about this churn in august and we are back now. resistance levels, about 2900, above that 2914 and the 100 day 2925. support day starts with 2871rday's close, 2888 and brings you to a retracement level should -- a retracement level. alix: i want to take a look at tesla. they missed the liveries by 30,000. what kind of -- they missed deliveries by 30,000. what are we looking at?

and: look for the 50 day 100 day moving averages. it may be initial support zone in the 26 to 232 area, below that look at 218 and 211 for tesla. alix: pepsi coming in with solid earnings, the stock moving higher. staples are doing well. what kind of break out and we see today? see green onood to the screen, especially with pepsi. look for sellers around 140, which is the all-time high. the stock looks good. alix: what kind of resistance to ec? on the fundamentals -- do we see? bill: potentially sellers coming in, the old highs. alix: thank you for setting us up for our open. bill maloney, you can listen to him starting at 6:00 on the

terminal. willg up, julian emanuel be joining jonathan ferro. in the markets, we took a look at the technicals, now look at how the rest of the market is shaping up. s&p futures go nowhere after the worst start of the fourth quarter since 2009. still seeing a bond market relatively bit. the curve up 11 basis points. banks underperforming the most in the s&p. j.p. morgan and bank of america tracking down. crude rolling over as well. if crude cannot find stability, will equities find stability? 10:00 is the services ism. this is bloomberg. ♪

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

jonathan: coming up, following a tough start to the fourth quarter equity markets are looking for stability. as the global growth scare brings the fed back to the table, facing pressure to cut rates once again, with every single data point becoming that much more important. a read on u.s. services is coming up next. good morning. here is your thursday morning price action. futures up to point, positive .1%. treasuries bid for a six straight day, yields lower two basis points on the 10 year to 1.58. the dollar doing a lot of nothing. euro-dollar around 1.10. let's begin with the big issue in new york city. in the depths of the third global growth scare of the cycle, is the ending any different. joining me is chris harvey of wells fargo