munition the secretary treasury has left that u.s. trade rep treasurythis office -- secretary mnuchin has left the u.s. trade representative's office. up 19 pointsclose on the s&p 500. steady gains throughout the day. movesmpressive emphasizing the overnight action. >> volume is not above the average. it is just above the 20-day average, and banks leading the day. volume below average. let's look at what is driving the action in these numbers. abigail? we had a higher close

aaiia cks, but reading is that a three-year low. at a the reading is five-year low. valuations climbing. similar in 2017 into the all-time highs of january. were looking at another low.gent at a three-year the last time we saw that the vergence, it is the bulls that caught up. maybe gains will be in the lead towards the end of the year. >> i'm looking at shares for one company up ahead of her

earnings. unless looking for this company -- analysts looking for this company to be a bellwether. the stock gets 80% of sales from customers, manufacturing and construction markets. as you look at a chart in my terminal, industrials have been lagging for the third straight quarter. this is percent change of performance relative to the s&p 500. expecting a tepid quarter. analysts saying risks are growing, margin concerns pricing , and 29 earnings growth deceleration, so all eyes on the industrials tomorrow to see how this plays out. ,> speaking of industrials copper futures are up more than

1.5 percent amid optimism over a partial u.s.-china trade deal. president trump says he will meet with the chinese vice premier on friday. copper futures so spikes during february and april, now around where it was at the beginning of the year. analysts say a trade deal could be positive for copper and other base metals, prices for the near global rating released wednesday cut the 2020 copper outlook to $6,000 a ton from $6,500 a ton due to diminishing trade flows and anticipated slower economic growth. back to you. joe: thank you. we have a little bit of breaking news. subpoenaed in the impeachment inquiry. president trump said rick perry had urged him to make that controversial call to the cleaning president, so we will

see what comes of this subpoena. still with us is the head of u.s. equity strategy at rbc capital markets and bloomberg's cross assets reporter. what about the recession concerns? some days we get a data point and everyone is on recession watch, and another day it's like, that old thing? how concerned are you about recession and how pivotal is a recession possibility on the market? >> we have said we will not make a call on whether this is the turning point or tipping point. we think investors need the best cyclicals in the best defensives , so by utilities, reits, by .inancials and industrials we are finding sympathy for that view from our clients. if you have watched the market action, the rally, but also the small caps for expectations,

they let the charge and that late-summer rally we had. they have given it back lately. it has been a great way to track how people are feeling. we were hearing at the time the that therewere rally was a pickup. i am not hearing that so much. caroline: you are the perfect person to have here when we have breaking u.s. political news. we hear talks of impeachment, .nd the market was selling off you have done some great research into this, what elizabeth warren might mean for the markets good i don't think it is as bad as the market thanks. >> we put that piece out on monday that caught a lot of attention. we think this is a challenge for the markets, particularly the first half of next year, the first quarter.

we surveyed analysts, and 64% of the industries we cover view elizabeth warren as bearish or very bearish, so we try to talk about that risk for early next year. what came out is perhaps we are not as negative about the center as some market participants. that is what a lot of people picked up on this week. weekshink back to a few ago where the market suddenly tanked, around the said time headlines came out that bernie sanders was getting stents put in. interesting,n elizabeth warren blamed for that stuff, but the biggest policy delta between her and joe biden, it is her promise to ban fracking on day one. that plate u.s.

energy fracking drillers are seeing big short positions built anythingut buys, or like that comes so the biggest policy difference, that is left acting ont people are to prepare for something down a year down the road. septemberestor survey -- in september we looked at what area the market was most at risk. it was a right in question. health care was something people jumped on. when we did our survey, health care was an area of energy analysts were very bearish, financials also. joe: is the lesson for investors to be humble about how realistically they can extrapolate lyrical outcomes to market outcomes? therek back to pre-2016, was a wide consensus that trump

would be worse for the market than clinton. we know the market surged for several months after the election. also, there was a view that trump would be better for energy than clinton. energy has been the worst performing s&p sector since the election. it seems to meet this is very hard to call either way, and when i look at the message of your note, if you think the strong view on what one candidate or party will mean for the market, don't hold that position. right -- >> right. we felt like people were waking up to the possibility of a democratic sweep most people thought trump would get reelected in the senate would stay republican, but there has been a shift. we have noticed some shifting in investor views. we said it is too early to be certain about anything. it is still over one year away and a lot can happen, but now is the time you want to be doing work. we went back to the fact if you

look at the primary calendar from 60% of the delegates will be assigned by the end of march. we think that is when you will .ee markets react in 2016, you remember that night, futures went down, then wheat rallied massively the next day. both sides will right, we sold off a little bit into election day. one point we tried to make in our know was our forecast horizon is on the 6-12 month view. that is what we are focused on when we talk about risks, but little --is like uncertainty in the short-term. investors do tend to figure it out. >> thank you. luke, thank you as well. that does it.

is next in miss?" the impact on trade. this is bloomberg. ♪

♪ caroline: we are live from bloomberg's world headquarters. how stocksnapshot of rallied. joe: the question is "what'd you miss?" caroline: the u.s. and china tried to piece together a deal. it may all be on the table.

war has stocks swinging with every line. -- every headline. president erdogan will open the doors for millions to seek refuge in europe if his country faces undue criticism. u.s. and china's negotiators extending the first day of high-level talks in washington, with steven mnuchin officeeaving the within the last half-hour. president trump set to meet with a key chinese official tomorrow at the white house. welcome jenny leonard from washington. we haven't gotten much news today about steven mnuchin stepping outside. should we read a lot into this, or is this someone just walking outside? >> probably just someone walking

outside. a lot ofe did not get headlines out of these meetings or even presidential tweets has a good sign. it seems like negotiators are focused on what they should be focused on, going over the pieces of paper and legal texts of what can get done in the next 24 hours or so. it is probably a good sign. we know that the vice premier is supposed to see trump tomorrow. thee have any sense of what point of that meeting is supposed to be? >> we don't.

cautiouste, let's be about the fact some of the progress was undone after the president was briefed or he found out something he didn't like and moved ahead with tariffs anyway. from himlong ways away sitting down tomorrow, but the fact we did not get explosive tweets is good. they will walk across lafayette .ark tonight we will see what comes out of that. they will recap how the day went. we are a long way away from announcing a partial deal, but it seems like they are focused on what can be done this week. caroline: and potentially a currency deal.

you broke that news for us. we thank you for making time for us today. let's get more analysis and perspective on the trade war with our next guest. great to have you with us. see aially we could currency packed, one conceived that between china and the u.s. does any of this have real ramifications in the u.s. and chinese economies? get a deal be if you that is the gateway to this grand bargain they are after. bet the economy would responding to is this interim deal would lead to de-escalation of tariffs next year. that is important because we are going into election season, but were dealing with a slow down the economy that is now visible, so it could be impactful if this

deal is credible enough that it could lead to de-escalation. joe: one thing that is striking to me is this happening at the same time as the controversy with the nba and other things. ofiously the ec line reasoning is trump wants a deal and it would help economy, maybe get some business confidence, lift the stock market to new highs. should investors be worried that he wants to run with this big oppositional force, this tension , and that may be investors have gotten his politics wrong? >> this tweet today where he talked about china once deal, but do i? withught that was keeping the vision that it has to be a big deal, constructive, that it

can carry through to the 2020 election. any minimal deal would be a weak deal. it has to be more constructive. , and&p is within the range the 10 year is not far away from the lows, so that tells me there is caution there. romaine: when you look at the markets now, there is clearly a short-term knee-jerk reaction to anything positive on the trade front. into aat translate long-term boost to financial markets for the economy itself? if it leads to de-escalation and it becomes clear that was a ,eans to get this deal together

that would be a boost. if china were to comply saying ,e are lowering our barriers one way we could compare this to the 2000 nine rebound, huge trade resurgence globally. haveis case, you could something similar. if you get any kind of constructive deal, trade volume could pick up. caroline: how would it affect the bond market? we are seeing spikes, yields we have low borrowing costs in europe that don't seem to be changing soon. >> the structural issues there, i thought it was notable how during this trade war escalation that the view by bond markets

had been the low to neutral rate had fallen almost one percentage point, sank the economy would be impacted by trade, and as a there would not be a meaningful normalization in the future. 2016, soook like 2012, we stay in this range of 1.5% to 2%? romaine: we want to get your thoughts after the break. is sticking with us. from new york, this is bloomberg. ♪

period,e in a fragile

but this could go either way. we could avert a more severe slowdown, but i think the jury is out. romaine: that was robert kaplan speaking exclusively on bloomberg today. for more monetary policy, let's bring in our guest. i feel like most of this year, the past year and a half, the market in the fed have been far apart. i guess that gap has narrowed somewhat, but when you hear comments from others, it is not clear the fed will keep using, or that bet can't be fully priced in, despite the fact the market continues to price that income so somebody will be disappointed, either the fed or the market. where do you think that will align? >> in terms of the minutes they came out, this question about guidance and stopping easing, that was notable.

if you are doing that, you are saying to the market that we are not doing a series of cuts. the minutes also highlighted the market may be too far ahead. another attempt to pull those expectations back with the view of the economy isn't so bad after all, but the market has been pretty right about, not just how gdp has slowed down the past year, but what this trade war is all about, a global trade war that has a big impact, so bond markets continue to do fine , other central bank saying there is more action needed here, and if you stay too far behind, the trade war could turn into a global recession. could slip and more clear moves. here is the question, we got

inflation data today, very benign, no evidence of meaningful upward pressure on inflation. does the fed risk one of the situations in which he keeps falling behind 25 basis points here, in the next thing you know we are at a recession in the middle of next year at they are at zero, and in retrospect they should have gone her and taken the risk seriously from the beginning with the more aggressive cut? >> there are people within the fed that do think this way, that you should go faster. there was a whole session on the review of the framework showing you need to take more effective action. yet, we are still in the narrative of next cycle adjustments and it is not changing yet. will that change? we could get a further

escalation of the trade war, because the tariffs are still planned, and real clear evidence that data starts to decelerate that people get on board and say we can't wait anymore. so far there is still midcycle adjustments, waiting for more markets, and the barcode continue to price and a fair amount of cuts. it's hard to think about cuts because of the uncertainty we are dealing with. caroline: the division in the fed is like nothing at the ecb. the chinghi took it on for his last meeting and was ,illing to push through easing even when many were against this. how do you feel this division will continue and what it means for bearing monetary policy worldwide? monetary policy

worldwide? >> there is still the view they are not in deflation and therefore don't need to do more qe, and they are dealing with the strains that qe has put on the banking system in the saving banks in germany, and that is a big deal in the background for their policy, but mario draghi very much understands that learning from the debt crisis in 2011 and the financial crisis right before that europe is too fragile to stay too much behind the policy actions. i would say he was courageous to do that, even though there was a lot of resistance. central banks think about australia and new zealand more aggressive, cutting rates. caroline: we thank you for your global perspective. changing of the guards, one person at walmart has moved to a

new company. this is bloomberg. ♪ ♪

>> not in mark crumpton with first word news. the u.s. attorney for the so the district of new york says two associates of rudy giuliani were arrested while trying to leave the country last night. the u.s. attorney told reporters werethe two businessmen taken into custody wednesday evening. >> they were arrested around 6:00 p.m. last night at dulles airport as they were about to meant,n international

the defendant broke the law to gain political influence while disclosure of who was making the donations and where the money was coming from. >> he says the two men were acting at the request of the ukrainian government official. three house committees subpoenaed them for documents they have so far refused to provide. the panels have also subpoenaed rudy giuliani. house democrats have subpoenaed rick perry in there impeachment inquiry. the chairman of the house intelligence, foreign affairs, and oversight committees are demanding documents from the very to help them determine whether he played a role -- from rick perry to help them determine whether he played a role to investigate joe biden and his family. chuck schumer says republicans need to "put country over president trump" when it comes to taking action

following the administration's decision to remove american troops from northern syria. chuck schumer added that republicans in congress have repeatedly mistreated they are unwilling to hold the president accountable and he does something wrong and added "the president likes to say he puts america first. in this case present trump has put pollutant in erdogan first and america's security interests second." >> it should not have come to this, but republicans by repeatedly demonstrating they are unwilling to hold president trump accountable when he does something wrong have established a permission structure for president trump's reckless actions in. >> we will have -- in syria. >> we will have more on syria in moments. the u.k. and eu have taken a step closer to agreeing to terms of brexit after a positive meeting. the pound jumped by the most in seven months.

our teams together, very positive and very promising. i am now convinced that they want an agreement in the interest of ireland, the u.k., and the eu, and i do see a pathway towards an agreement in the coming weeks. >> britain is due to leave the block on october 31, and attempts to find a deal have floundered over plans for the border between ireland and u.k.'s norlin ivan. -- northern ireland. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in over than 120 countries. i am mark crumpton. this is bloomberg. mentioned, as mark president erdogan officially announcing the turkish offensive into northern syria. the lira near its weakest level,

while turkish stocks and bonds fell. bloomberg's foreign policy reporter joins us from washington with the latest. thank you for joining us. doesis the latest, and how it fit into president trump's previous comments about monitoring turkey's actions closely and threatening to destroy its economy if it doesn't like what it does? >> it looks like turkey is feeling relatively confident about the status of its military incursion and its relationship with president trump. they started an air campaign despite u.s. statements that turkey would be shut out that northeastern syrian airspace, and they have begun a ground campaign that has seen turkish soldiers crossed the border into syria. president erdogan and a startling statement said if european nations doubt assistance some way that he

would send 3.6 million refugees in turkey into europe, so what you are seeing is a president .ho is very emboldened if not getting the green light the u.s. says it did not give him it clearly seems he feels he has permission to take this campaign full speed ahead. caroline: on the flipside, how trumpd in has president become. it seems that he has the iron that not only democrats, but many republicans on other parts of policymaking. >> that's right. it is an extraordinary moment where you have republican leaders who have this initially -- have essentially refused to call out the president of the ukraine scandal, countless other things the president has done in the past, yet this issue of abandoning the kurds seems to have been a galvanizing moment

for republicans. you have lindsey graham and members of congress calling him out and saying he should not have done that. we are seeing a big work its way through congress that would impose sanctions on turkey, but clearly president erdogan feels he has a relationship with president trump that will insulate him from the worst of any economic punishment, even with the president is threatening in his own tweets. to bring youant some breaking news. president trump talking about trade talks, saying they did go very well and they will continue tomorrow. we do have a little bit of response the markets, the yen breaking 108, the first time going back to september 30. a little bit of progress here based on what the president has been saying. let's turn now to emerging markets. stocks in currencies halting three days of losses as china-u.s. trade talks continue.

both sides signaling cautious optimism for a partial deal. joining us now is our guest. thank you for joining us. long forke all year emerging markets it has then this push between negative aspects of trade and positive aspects of central-bank support. where is the balance right now? if we don't get a trade deal, will central-bank support be enough? >> it has been a wild ride this year. forcesre countervailing which lead us to a neutral position with emerging-market equities. we don't think emerging-market equities trade that much on u.s. interest rates. what it does trade on is the u.s. dollar. the momentum in exports, and

obviously exports have not shown much momentum, so that would be a negative. the u.s. dollar, while it is overpriced, and light of the geopolitical uncertainty and road to growth and interest rates -- and relative growth rates and interest rates, we don't see a huge appreciation in the near term, so that leads us to be cautious on emerging-market equities and within emerging markets to focus on defensive markets such as thailand and russia which have become low beta markets. deal the key to unlocking things in terms of releasing that u.s. dollar bid, creating more activity on the trade front and making emerging market and journal look appealing? in general look appealing? >> i'm sure a resolution in

general would produce short-term momentum, but we are not clear that is the underlying problem with emerging markets. first of all, if you look at china,ng markets ex- exports, markets, they have not done particularly well, so we think the real issue is the slow down in industrial production in the slow down in trade. caroline: when you're looking at the conviction because you have, russia, thailand, are you looking at foreign assets, foreign-currency-related assets, denominated dollar debt in russia? investors,nly equity so we look at the equity markets in the currency. so on both thailand and russia, obviously from the perspective

of western political orthodoxy, would not be considered ideal government formats, but it turns out both from the perspective of macroeconomic orthodoxy are defensively positioned and have a current account surplus, low foreign debt ownership. in the case of russia, there is lots of room for monetary easing. they just proposed a fiscal boosts, something like 25% of gdp. thailand, same thing. exposed, but more exposed to the u.s. and europe than china. romaine: there has been some criticism, the currency is strong, but you look at the neighbors and they say the bank of thailand has not matched the

easing they have gotten from venir asian neighbors, and e the imf has urged them to loosen up. do you think the current state of thailand with the monetary and fiscal policy, is that enough for you as an investor? to increasees room our exposure. exposure,d this overexposure, if you will come to thailand for at least two years. and so with monetary easing, should that occur, that boosts the rationale for the exposure. the thaihing is both baht and equities are one standard deviation relative to their history, so they have become a bit of a problem trade and that does give us pause. the other thing is there will be

an election in march, and leaves hadoom because thailand has a few military coups. romaine: i have heard. >> you might have heard, so you want to buy the coups, sell the democracy. [laughter] >> i no. that should go in social science history books. joe: i'd like it. caroline: we love it. please come back. a great turn of phrase. it grapplesg as with a california blackout. we will discuss. this is bloomberg. ♪

romaine: time now for a look at stores trending across the bloomberg universe. a former truck driver now a billionaire thanks to amazon. he built a produce delivery behemoth. list of thezon and company for same-day service, which led to the shares doubling this year. motorsrg.com on general and the 25-day strike contemporary employees. they represent almost 10% of general motors workforce. uaw has agreed to full-time implement for tempora workers.

-- temporary workers. the american express platinum card has one of the hottest forntials for elite status travel hacks to gain hotel and airline perks. thank you. hundreds of thousands in the dark after an unprecedented power shut down by pg&e. shares of the power china plunging 32% today, following the bankruptcy court ruling. for more, we welcome the person who leads the coverage of power and gas for bloomberg news from san francisco. thank you for joining us. massive rolling blackouts across california, but that is not what is driving the stock today. that seems to be a secondary story for investors.

talk to us about the ruling in why it has caught investors by surprise. could use another thing on its plate right now, right? while it was orchestrating this massive blackout to more than 2 million people in california, it has this ruling handed down by the judge overseeing its bankruptcy case, stripping the tolity of exclusive rights organize a restructuring plan and take itself out of bankruptcy. that opens the door to the arrival of creditors to pitch a plan that would all but wipe out the value current stakeholders have in the company. if pg&e loses this bid in its restructuring plan fail, we inld see every shareholder pg&e see their stocks down to zero.

how unprecedented are these blackouts? do we have a sense of how long they might go on? >> we have never seen like this in california before. orchestrated never such a massive blackout to prevent wildfires. the closest thing i can think of are the rolling blackouts in the california energy crisis two decades ago when people were losing their power in rolling waves to avoid a widespread blackout. there has been nothing like that since. as far as how widespread this 6000 in, we are at pg&e's territory, edison another 15,000, and is warning 170,000 are still at risk. san diego is warning another 34,000 could lose power so he could get bigger than it is now. caroline: we thank you for

spending time giving us the news flow. , our septa trade negotiation set for this weekend. we will discuss what is on the table, next. this is bloomberg. ♪

romaine: let's check the business flash headlines. fidelity expanding into alternative credit. the strategy includes direct lending, distressed debt, and financing to generate higher returns and revenues. it is getting into the business was a price war is cutting into revenue from hedge funds and brokerage fees. ul says they have been successful, but retailers sank changing software would be cumbersome and have concerns

over how they would use the data. aramco expected to give the green light for the world's biggest ipo. the board will meet with advisors, the ipo expected to raise $40 billion from aramco ho hope to list on the saudi and acrossoline: the world. trade negotiations kicking off in bangkok. that's look ahead to what we can expect. rcep, what is it? >> the regional conference of economic partnership. the reason this story interests me is because it is a china-led initiative. as soon president trump pulled the united states out of the tpp and 2016, xi jinping was already pushing this initiative across asia. what this would do is bring together the economies of the 10 nations.tions -- asean

pwc saying if this comes through, the gdp of these economies by 2050 would amount to $215 billion. the president of the united states is speaking now. >> i think it is going really well, i will say. we had a very good negotiation with china. they will be speaking later, but they are basically wrapping it up and we will see him tomorrow right here, and it is going very well. >> [inaudible] prees. trump: who took $900,000? >> [inaudible]

pres.trump: i hope it is not true. i hope joe biden didn't take $900,000. for the sake of the country, i hope that is not true, but i don't know anything about it. what? who? i know thew, but whistleblower has been very inaccurate. when we release the transcript of the conversation i had with the president of ukraine, who today was very good, somewhere in ukraine gave a news conference on unrelated things was asked her question, and he said president trump behaved in a perfectly fine manner and there was nothing wrong in any way, shape, or form, something to that effect, so i appreciate that, but the president of ukraine from that should be case

over, because the president of ukraine set the call was absolutely fine. i think he said he remembered it , it was just like the transcript. now the transcript is a perfect transcript. there shouldn't be any further questions, but the president of ukraine just made that statement. >> [inaudible] i don't know those gentlemen. it is possible by have a picture with him because i have a picture with everybody. romaine: you are listening to president trump speaking outside the white house talking about the situation in turkey, the whistleblower, the china trade talks, which are ongoing and will continue tomorrow. a lot of talk about the potential for a trade deal of some sort. they are still talking, having dinner tonight. apparently steven mnuchin smiled when he came out. >> at least they are still

talking. the whole speculation last night is they would leave and we saw futures plunging, so president trump saying they are staying in the trade talks will continue. burke has learned that potentially we could see a t come out.c i don't know how different that would be from what was on the table before trade talks broke down, but there is expectations that it could lead to talks about forced technology transfers and ip. caroline: optimistic. volatility,erms of wouldn't you say? not goodight was picture for markets. we all fell because of speculation there was no progress. we will see what happens. romaine: shery ahn. for more on these stories and others, don't miss daybreak austria and daybreak austria and

daybreak: asia six agut p.m. eastern time. caroline: that is all for "what'd you miss?" joe: have a great evening. this is bloomberg. ♪

taylor: i'm taylor riggs and this is brick technology. we dig into the issue of intellectual property and u.s. companies doing business in china. another privacy alert. if