the yeah, it was quoted. it's an uphill. caroline: cannot 3000 handle. so close. joe: the fed has to cut. can't have s&p below 3000. caroline: it would not be right. look at the performance of the small caps. scarlet: pretty unbelievable. they did better yesterday even though texted better. that's a huge divergence between what the small caps and big caps are doing. caroline: maybe yields are pushing that a little higher. let's go in with our markets reporters. thinking so much about that s&p 500 3000. i am thinking about the russell 3000, 1600. aboutys were just talking

the outperformance versus small caps. more than 1% on the day. you have the russell 2000 above its 100 day moving average. that 1600 level, very important. what really stands out, the russell 2000, at about levels seen this time last year during all that volatility. the rising rsi and bullish momentum is suggesting we could see the russell 2000 in the near term climb again to that 1600 level. should that happen, we will see whether the resistance can be broken through. >> i am looking at the yield curve. the three-month 10 year is steepening. it is positive for a fifth straight session. you can see how it folds into the banks. there is commentary that says profitability -- they can be profitable in a flat or inverted yield curve. it does not cause a recession

because it discourages bank lending. instead, interest rates versus the shape of the yield curve is what matters to lenders. we can see big gains from the big financials. morgan stanley leading the gains of 1.5%. up ing revenue is going the 90's. big banks continuing to. renita: i am looking at. gold, the second largest creator of the commodity. it is rising today. look at this intraday. after third quarter production for the metal was slightly below levels in the previous, they were still in track to meet guidance for this year. in the third quarter, gold costs

have sailed and are expected to be 11% or 13%. goldg that time, spot prices averaged out at $1400. -- $1474. that is 20% higher than the year prior. gold prices have rallied. they are expected to continue into your 2020. -- year 2020. joe: thank you. we have a bit of breaking news. the commander of the kurdish lead sdf says they are accepting the cease-fire. it has some momentum. we will see if it holds. still with us is alyssa levine. luke kawa is with us as well. we just talk about what an extraordinary day it was.

excluding the point about the strong dollar, what is signaled here that is worth paying attention to? we know there are a lot of headlines on the trigger perspective that are worth ignoring. -- from a perspective that are worth ignoring. luke: the banks were the story of the week. i mixed yield environment, backing that point. i was agreeing -- it seems that anything that has been beaten up in the past is getting the bed now. now.d scarlet: i want to turn to you on brexit. we just heard about the latest in syria. brexit this week, starting to an impact on assets. it starting to have an impact on u.s. market as well.

people haveeem like priced in brexit anyway? in thehe nonstory here eu -- in the u.s., but it all happens through the bonds and fx market. it's about trade and how it affects the u.s.. -- u.s. if you kill your trade partners, you kill your asset as well. the reason a negotiated brexit matters, because you strengthen the pound. we are finally strained to weaken the dollar a bit. marketbilize the bond and the european banks and the london banks. this is ultimately good for apposite -- positive sentiment transition. all of the macro events get mediated through markets. that's what you are seeing today. even though it is priced in. it is grading stability. scarlet: energy secretary rick perry has told the president he will step down soon -- soon.

we have been reporting this throughout the day that this is a result -- or it comes, as i should say, that he is being scrutinized in the whole ukraine as well. that the democrats had begun impeachment inquiry over. the timeline is not clear. he does intend to resign because of his scrutiny over the situation. rick perry, soon to be former energy secretary. many questionset from clients focused on internal politics in the u.s.? concerns, 2020, -- alicia: shockingly, very few. get questions on the fed, valuations, is the bond market in a bubble, almost no question on internal politics. i think the mercy -- market is

pricing in a trump victory. i think that's what's happening. medic investors expect that. the rest of it is noise. the issue is what happens with the senate ultimately in the impeachment hearings. that is what is being priced in. that's what the market is expecting. we have been getting questions on internal politics. in joe: terms of global politics and trade, you mention earnings. if we were to get continued momentum trade, would that swamp earnings in terms of signals? luke: probably not. it's difficult to see traction being made in the short order. it seems very difficult. it's boring to say earnings will matter and drive the stock market.

the market is predicting the classic no volatility during earnings season. a low correlation environment to persist for now. were high, when they because we are excited to move off macro. we >> will obviously be getting evidence over whether china's economy is suffering more from the trade tariffs. with the gdp numbers, and retail sales coming up. while investors interpret bad news is good news given that likely will have to stimulate its economy? alicia: to the extent that it will bring china to the table, bad news for china is good news for the u.s. market. wasother thing that we saw the beginning of the yuan's creek massive inflation in china. problem ininternal

china, and after some way how to take some of the heat out of the trade dispute. meeting is in two weeks. there's a future petitioner they're going to cut. luke: what are set the rate ahead of time, and artemether adjusted? alicia: the market is saying that it is going to cut 25 basis points. i think there's a probability the jay powell will say, we have had our midcycle adjustment and we know the market is pricing in 25 or 54 next year. we are not going there. we think we have done our job. >> if you look at january 2020 -january 2022, the fed funds futures spread, that is back to pre-initial cut pricing.

maybe this is a midcycle adjustment on the china data. it has been underwhelming data. the bigger problem is the lack of transmission mechanisms. here -- you see local government saying we don't know if we have shovel ready product s. china chinaer risk in that it hasn't been effective because they are not able to get the project the same way they used to. scarlet: risks to be mindful of. alicial levine and luke kawa. that does it for the closing bell. romaine bostick is stepping in for "what'd you miss?" we have more of rick perry, who is resigning from his post because of the scrutiny over his role in the ukraine situation. from new york, this is bloomberg. ♪

luke: liveluke: from bloomberg's headquarters in new york, i am carolyn hyde. here's a snapshot of how u.s. stock markets rallied into the close. the s&p 500 not through the 3000 level. joe: the question is, what'd you miss?? caroline: a brexit breakthrough. boris johnson an agreement with parliament, but will the eu back the deal? cease-fire in syria. the u.s. holds back an additional sanctions, but will

set -- both sides stick to the truce? flirting with all-time highs, u.s. stocks retreated after some point piercing 3000. we did not close over. romaine: just to bring that breaking news on u.s. energy secretary rick perry. he is apparently stepping down. this is according to two people familiar with the matter. rick perry is said to tell donald trump that he will step down soon. apparently it's because there's a scrutiny over his role in the ukraine. caroline: fascinating political events unfolding. let's think about the ones falling across the atlantic. saw a brexit breakthrough, but it was barely there. boris johnson spoke -- struck a deal with the european union, but he will have to face u.s. parliament.

positiveemained pretty in a news conference earlier this afternoon. this is a great deal for our country, the u.k.. it's a great deal for our friends in the eu as well. thean take back control, as phrase goes, of our money, our borders, our laws, and we will be able to do free trade agreements around the world. i am very confident that when my colleagues in parliament studied this agreement, that they will want to vote for it on saturday. we aree: from one that, going to bring eric nelson and maria. he can get confident it through parliament. should the confidence be there? the answer is probably no. we have been here many times.

you know when the negotiators get to an agreement, both sides say it's a good deal, and that is when the u.k. parliament steps in and they decide they don't want to vote the deal that gets rejected. we go back to square one. what is clear is the prime minister is not in a position to guarantee the deal will be approved. he was asked many times. he complete dodge the question. he was asked if you'd be forced to ask for more time. we would ask the europeans and they would say they're hoping for the best. they are hoping for the worst because we have seen this story play out many times. the understanding is the prime minister is running short of 60 votes. he needs to get 60 mps to change sides in two days. that of course is a very difficult task. joe: we have seen the pound, it

it had an impressive week over the last several days. the momentum towards this deal, it could fail. one trading day before the votes, what do you do? eric: i think it hangs more or less in the balance for the short-term. right now, i would say the expectation is that it would fail. optimismt is, there is from more -- for more than just a near-term vote that goes through. boris johnson, and quite a good position. negotiated a good deal. they will bring it to parliament. if you voted down, they will say look, i tried, and i will take this into an election. i have a deal if you want to vote it through. > when you look at where the markets are right now, is this a situation where folks will be caught offguard, they way they were when they had the resolution and everyone was on one side of the trade, and then

when brexit passed, everyone had to reassess, is the positioning everyone had to reassess, is the positioning that extreme or more balanced? eric: i think there's a bit of upside if the deal goes through. it is more or less balanced in the sense you could seep substantial downside if it gets rejected. don't thicken no deal exit is on the table. markets could certainly think that in the near term. is there discussion to let the date go past the theoreticallyould get a technical extension, even if he gets the deal through. maria: there is no need for more time, because there is a deal done. this is the hour with the u.k. parliament should get its job together -- it's stuck together. what do you do.

the prime minister finds himself in a situation where his deal is rejected. that is the possibility. he cannot guarantee it will be voted through. what do you do? dear greta more time? if you look at what they have done throughout the negotiation, the eu has shown they are able to be flexible if that means we get to a deal. they don't want to be blamed for no deal brexit. they don't want to push the u.k. out of the eu and they want to avoid the hard brexit. they still believe the best way to lead is with a deal. when faced with a choice of what to do, a deal or more time, they would likely go for more time. they are trying to pile pressure on the u.k. parliament so they can get more time, because there it -- so there is a deal done and time to vote it through. joe: you talk about this big gap boris still has in terms of getting the sufficient number of votes, couldn't there be a number of people that are like, let's just get this done.

let's get it over with, move on, there's is not much political upside to going into a new election and being blamed for being part of the faction that caused this long national nightmare to go over, and may be in the end, that through. maria: that is also a boris johnson is betting on, the idea that there is so much brexit fatigue, that the country just wants to move forward and that there is no indication to suggest that if they put this to a new vote and you go to a new election or second referendum, things could fundamentally change. this the time to get brexit done and focus on new things. the europeans are very tired of this story as well. they want to move on. they feel like they have better things to focus on. there is a new commission in place in november. that aspect is really kicking in. they are both hoping that the public is tired of the story. you look at the opposition in the u.k., but the liberal

democrats and the others are saying that the primaries are managed to negotiate a deal. reason to see any change their vote. that may have to change. this is all politics and this is what the europeans are betting on. the prime mr. seen as a true brexiteer and perhaps that is what gets him through the finish line, look. i want to get this done. it's do it. romaine: let's assume we get past the actual vote here. and you get into the idea of negotiating some sort of trade deal. thatve the boe who has economic impact of whatever comes out of this. where did that leave you in terms of looking at the market, and where to go beyond the actual brexit deadline? erik: it came out and surprised markets and said that rates should be cut if this uncertainty is entrenched. will drag on well into trade

negotiations, which could take up to four or five years. willdoesn't mean the boe cut rates. i don't think they will hike rates anytime soon. steadiness insome the u.k. rate or even downside. for the pound, that means you're not going to get a ton of upside after the move higher on the back of a deal going through. thanks so much for being with us. we appreciate it. be sure to tune in this weekend, we will have special coverage of the brexit vote in parliament. we will have a special show for you on sunday. but he had. this is bloomberg. ♪

rick perry is set to step -- step down through his role with ukraine. joining us now is kevin. this is not much of a surprise? a group says that rick perry has notified president trump he is stepping down and resigning from his post. as you mentioned, this was expected earlier in this summer. hasin recent weeks, as he been forecasting publicly that he was looking to leave the energy department. it also comes at a time in which he has faced scrutiny for how he has committed gated with rudy giuliani, the president's personal attorney, on the matters pertaining to ukraine. the wall street journal had reported just the other week that secretary perry was in contact with giuliani on the issue of ukraine. which thet a time in

impeachment inquiry in the democratic-controlled house of representatives has been increasing their pressure and increasing their oversight and probing into the coming occasions a administration officials, along with rudy giuliani. romaine: can you expand on the things we have learned out of the testimony? perry's name seems to come up a lot, along with kurt volker trio,rdon sondland, as a who at some point, appeared to be tasked with handling the white house issues with regards to the ukrainian investigation. kevin: i will make quick -- three quick points. i was just on capitol hill, talking to sources about this testimony. what they can say is that democrats are suggesting there was some type of shadow foreign policy being operated from rudy giuliani as it relates -- relates to ukraine. because of that, giuliani was putting senior administration officials like secretary perry

and mike pompeo in a quagmire, for a lack of a better word, and the sense that they had to deal with rudy giuliani on foreign policy. the second point, president trump, pushing back on that. you heard earlier today at that press conference from mick mulvaney, in which she said the president gets to decide who goes where, as it relates to foreign policy. the final point, is now that lawmakers are back in recess, or from recess, speaker pelosi has said that she would like to have this impeachment concluded by the end of the year. we are getting word that mitch mcconnell has suggested this will and i the end of the year as well. things are moving quickly. thank you, kevin. coming up, a brexit breakthrough and a cease-fire in turkey. how will these events impact the economic outlook?

we will discuss the latest, coming up next. this is bloomberg. ♪ this is bloomberg. ♪ is is bloomberg. ♪ from the couldn't be prouders

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was am mark crumpton bloomberg first word news. the united states and turkey agreed to a five day cease-fire in the attacks on kurdish fighters in northern syria. that will allow the kurds to draw roughly 20 miles away from the turkish border. anger, viceof president pence says the purpose was to end the bloodshed. >president trump then spoke to reporters before a campaign rally tonight. >> this is an incredible outcome. this is something they have been

trying to get for 10 years and they couldn't credit they never would have been able to get it without someone on conventional. the united states has accepted what he calls the importance of functionality and added that turkish armed forces will control such a zone under the agreement reached with the united states. trump'sresident appointees is stepping down. they notified the president today that he will be soon leaving the post. he has come under scrutiny over his discussions with ukraine. it is not clear when he will be resigning. mitch mcconnell open the chamber by praising elijah cummings as a living legend with friends and admirers all over the political spectrum.

overnight after complications from long-running health problems. >> by all accounts, he was a powerful voice on the national stage and a strong advocate for his neighbors and his values. close friends and admirers all across the political spectrum. the cap on will lower its flags to mark the significant loss and remember a life lived well. house flag was lowered to half staff and present trump, who sparred with him, saying i got to see firsthand the strength, passion, and wisdom of this highly respected leader. for johnson says he is confident that the death

boris johnson says he is anfident that they will pass brexit deal for the prime minister's political rivals and crucial allies have said they won't back this latest agreement, putting the future putting the future in doubt. global news 24 hours a day, powered by more than 2700 journalists and analysts and at tictoc on twitter, in more than 120 countries. huge developments across the globe in recent days with the turkey and syria conflict with between thel truce united states and trying to -- china. thanks for joining us. let's talk about what is going on with regards to the u.s.-china trade to the

potential we could see at least some stabilization of that relationship. how do you think that could affect the u.s. economic outlook russian mark >> i think anything that puts a truth in place and roll back some of the tariffs would be a positive. i think it would be a positive primarily because it would take out the concerns and things would intensify. i still think the damage has been done in terms of uncertainty about trade relations going forward and that will weigh on global growth, but i think clearly anything that gives us a truth or more is a positive for the global outlook. hone in on the damage that has been done. let say there is a truth ordeal. what is the longer ramifications from the injection of uncertainty here tend your

attempt to -- uncertainty. can you attempt to quantify? the immediate impact is the drop in business confidence we have seen from up measures that have gone down over the last year to the lowest level since 2009. we can see that impact in terms .f business spending it is the main catalyst for slowing of global growth and it is now where the damage is being done and where the risk of on.ption is really centered i don't think we should think these things will turn growth around anytime soon. even if we get a deal between

u.k., wed they -- the are not suddenly going to see a huge upside in terms of business decision-making and spending, so is there a sense that capital spending remains entrenched, theicularly at the walls of gate can be ripped up so quickly . interestinghat is is it is starting to broaden out the labor market. i would distinguish what is happening that was to the even know that we have a truce with what we think is a real breakthrough between the eu and the u.k. which takes out the risk of a no deal brexit. the u.k. outlook could be affected in many ways by what happens, but the only way that brexit can affect global outlook

is if there was a no deal outcome. >> one thing we saw earlier is data out of germany cutting their forecasts for growth, but at the same time the economic minister came out and said that any economic stimulus package was not needed. at wondering when you look the global economy, not just in germany, but really across europe, why are we now seeing a little bit more concern to provide more boost where we can't get it out of a monetary policy? it is the part of institutional framework in , part of it in germany has to do with the german attitude towards fiscal policy and i think specifically in

germany, we have had weak growth, but have not seen labor markets and consumers yet. that, i think is starting to happen here. your point is a good one. we have negative bond yields and global economy that is slowing materially. there's some action on the monetary side. we are not getting enough action and would probably like to see -- would probably like to see that. report itst to third-quarter gdp and september activity data on friday with expectations further economy.ting in the shery, what are the key things to look for? expected torter gdp slow to a three-year low.

the problem is a lot of for costs -- forecast path that may not be able to reach that goal, bloomberg putting that number at 5.9% growth. citigroup forecasting 5.8% in 2020 for the past several weeks. as the chinese economy slows down, what happens to all the other economies that depend on china? to the other chief and he talked about the potential implications for other economies. >> it is not that they will be the cause of any major shock, but their reduction of demand on a number of commodities does have an impact in latin america,

asia, africa, etc. >> david shaw, but other economies will suffer as demand down.ina slows >> we know the chinese government has been active. what have they been doing? >> they talk about fiscal .upport coming with china chinaroblem is that corporate debt has reached 155% of gdp. activity data, we are expecting retail sales to pick up. >> we will keep a close eye on how that unfold. -- unfolds.

up, turkey agrees to a five-day cease-fire with syria. how markets are handling the turmoil. that is next on bloomberg. ♪

has agreed to a brief cease-fire in syria to allow for it kurdish retreat and it will last five days. mike pence announced the agreement. >> with the implementation of the cease-fire, the united states will not impose any further sanctions on turkey and once a permanent cease-fire is

in effect, the president has agreed to withdraw the economic sanctions imposed. >> joining us now is the managing editor at the markets media. you. to have the originalh did sanctions have? >> it had no teeth, a big set of guns really. there was no fight on it -- no .ite on it these are not the sanctions we are seeing against iran or even russia. these are light sanctions and so it was more about the blue medic act of going down and sorting this one out. senatorsrried about

passing another bill that would have more bite? there were talking about of turkish purchases sovereign debt. >> mike pence has said this is a turkish prime the minister says this is a temporary pause to allow cessation for who they call the terrorists to come out, but turkey is not seeing is -- this at the moment. is it possible that congress could further force trumps hand, which would result in sanctions? >> i think that sanctions can that. if you look at the track record, you take russia, we had

sanctions for more than five years, russia's economy is not going gang busters, but it is surviving. you look at the emerging markets thern this year, russia is number two performer to date and .hat flex quite a solid economy , it of what sanctions do actually forces economy -- bestmies to actually internally what they can do the economy. has the tensions really been, particularly for the people who want to understand. does it put people off? what we will see tomorrow is a tremendous job in turkish assets

and i think by extension, emerging markets. we are at the longest rally since april and emerging markets really are coming back. i think we will see this as another positive signal. we had the u.s. economy signaling that it make cut rates we have seen the positive news on the trade war leading to a settlement can we have seen other noises from the brexit side, which is kind of a funny one because we are seeing news that is more towards what is actually happening. from an emerging markets perspective, this is -- riskngly back on

back on. >> they wanted to be positive wheny much all day long you try sometime this, it is always precarious when you're dealing with less data points about the economic factors. when you look at the emerging think the wayu has worsened? -- worth it? >> think it is worth it because you are coming into a situation where investors want to get back in and i think that reflects the global appetite, but the stars have not been aligned. of weakeningkdrop growth, whether it is china, india or looking at a situation in latin america from brazil to argentina, there has been

specific of points that have been going wrong, but also the macro picture has not been where it needs to behow long that las? >> really appreciate your insight. now, the world bank and international monetary fund meetings were underway today in washington, d.c. bloomberg spoke earlier with south african reserve bank governor about what needs to be done to boost sentiment in the sentiment in the economy? , weased on our analysis found that we could provide further accommodation.

-- terry policy is one side monetary policy is one side. that drag sound -- drags down. matt tends to dampen household disposable income. cut be aa rate solution? is managingast around that and in july, we felt compatible when our forecast showed that come we needed to cut rates in november, but , we couldhe outlook

cut rates in july. on where thisble and the economy is big enough for us to survive. >> why would you not cut interest rates at the moment? >> we are not in the [indiscernible] be anyate would not different than what we have seen in the past two meetings. -- c --second

that us the -- let us see. [indiscernible] >> that was the south african reserve bank governor there. from new york, this is bloomberg. ♪

>> update for you on general motors. to continue its strength for the workers until you a double -- uw agreement is uaw agreement is ratified. ratified.as to be 1%.ently off by 4/10 of weekend, an airline company will test its 20 hour

flight from new york to sydney. company plans to keep everyone hours.ix apparently, you will be on this flight. what is going on here? >> it is a high-altitude look at laboratory.atory -- >> what is the goal? out howoal is to figure they can easily burden of jet flights.king superlong 20 hours,proaching that is almost a full day and night, so the idea is how can we do this better so that when you likeff, you are feeling

you have not a -- not gone hours [no audio] up with want to go to sleep, then they give us heavier food light creamy imposter. -- creamy pasta. under the impression that plaintiff could not even five for that stretch. is that possible? >> i hope so. we are assured that the plane will make it. they have done everything they can to ship it back. -- they can't to strip it

to strip it can back. >> noah thank you for telling us about it. from new york, this bloomberg. ♪

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