whether it is central banks. it is a more stable, global economy. caution heading into the weekend. technology, the nasdaq is -- >> i am looking at the dow industrials because boeing and johnson & johnson were the big drivers. each of them off 6%. product liability is a common theme. boeing theby powder, 737 max 8. doesn't look like a resolution is forthcoming. that drags the dow industrial down and exacerbates the uncertainty over the u.s. equity market by the trade situation and by the slowdown in china. joe: let's go into the action. >> i am thinking about a

selloff, the dollar index. looking at a four-day chart of the dollar index, we will see the -- it is the worst stretch since late june having everything to do with the strength in the british pound, emerging market currencies. it has done technical damage. it is a one-year chart of the dollar index. in chargeuptrend, above the 200 day moving average. on this week's weakness we are coming back into the range. today we slide back. this suggests we are likely to see the dixie go down 9650. if it is below those levels it could get interesting considering i breaking of support but there is more -- a breaking of support but there is more ahead for the dollar. >> there certainly is a lot of indecision. look at relative asset classes or within the equity market,

according to mid davis research, you look at the relationship between stocks and bonds, it has not been so indecisive. the two are both up to such extremes since the 1990's. if we look at the equity market we are seeing something similar. the push and pull between those things growth is going to return albeit slowly. we could go in to recession. are looking at is the spread in weekly performance between msci index, defensive stocks and msci that looks at more cyclical stocks. we have seen outperformance alternating over the past five weeks. that is something we have not seen since back in december. , andke with one investor he said this is masked frustration for investors because there is no trend. metalm looking at a base

we don't hear a lot about but it is in the industrial space, nickel. it is having his worst since 2016. growth is weighing on demand for the metal. the chinese economy grew at its weakest pace since early 1990's. this provided little upside for the global economy, the first recession since 2009. plunging inventories on the london metal exchange are contending with underlying supply conditions. cash contracts have traded at a smaller premium to futures. this suggests the squeeze is actually easing. traders are moving stockpiles from china to other asian warehouse is to capture profits by delivering it -- warehouses to capture profits. the heightened concerns of slowing global growth leave little hope for the materials and base metals industries.

breaking news now on what has been\for boeing. -- the backlash for boeing. this is the biggest one-day slide since february 2016. it felt -- 2016 those shares fell. the pilot to expressed worries about its safety was back in 2016 in private messages. still a concern is ongoing. let's go back to the senior global equities strategist at wells fargo. how much are we going to be individual company story and earnings stories going forward to break us out of a trading range? all about boeing and j&j but is that not the rule? cameron: those can explain a lot on a day-to-day basis but in aggregate you get some outperform and some disappoint.

you see a trend of greater than average disappointment to get us to roll over. if you look at the absolute level of earnings in the s&p 500, it has not gone anywhere. since after the tax cut. the longer that versus, surely -- that persists, surely the greater the risk you start going lower in a more meaningful fashion in earnings and you would think the market would follow suit. 500 is: you say the s&p trading fair value at this moment. how are you determining that? >> we are looking at historical valuation levels, as we look ahead and try to figure out what adp is, margins, level of economic activity is going to be. we are in a low interest rate environment. that affects valuations. we are in a slowing gdp

environment. that can affect valuations. it is a valuation perspective and trying to figure out when earnings are growing slowly, or barely growing as they have this year, it is a matter of what is the market going to pay? you need to get a good feel for the next 12 months in terms of -- in terms of the economy, make a call on the trade situation. you need to make a call on the central bank situation which will be easy. another factor, are we going to see fiscal deficit spending on a global basis? that might not fan out. -- dan out for over a couple of years it will. we feel comfortable with the 3030 level at the end of the year. read on the your economy? everyone is having a hard time

putting a finger on what is really going on. this is important and crucial with the fed meeting at the end of october. does this look like an economy going into recession or one that is not that great? cameron: the real issue is what is going to be the catalyst which might push us into recession on the one hand or three accelerate things on the other hand. you would ordinarily say the easing will give the economy a boost. at the end of the day it is not interest rates sensitive sectors that have taken us down. it is the trade stuff. unless you get a meaningful resolution, you will have this overhang of uncertainty which leaves us looking for other catalysts to tilt us one way or the other. we know not central corporate debt is high.

certain sectors that is coming under a lot of pressure. if it were to be exacerbated, it would feed on itself. that could catalyze economic downturn and we have an election coming up in a little over a year where the economic and could beckdrop radically different. some of the sectors which really us entire decade could be under pressure. your take, looking at wirp function which is world interest rate probability, 86% -- that is what the market is pricing in. do you price in that chance?

scott: almost certainly they will. we have one more cut this year, in october. we get one more next year. not just the u.s. federal reserve but -- is going to be continuing to be easier. also the global central banks are figuring out what they can do to stimulate the economy's. clearly in this entire cycle, monetary policy has not worked to weigh in as in the past. we have heard central bankers talk about fiscal spending. as well see more of that move ahead. there is not much chance of a recession over 12 or 18 months. we are going to be plodding along, close to 2% growth in the u.s. nothing to write home about. stocks in low interest rate environment can grind higher with which will be a modest

earnings growth looking ahead. scarlet: all of those adjectives don't get anyone excited, modestly higher. sounds like we are churning along here. underneath --risk risks underneath the surface which might resolve the tumble from last year? cameron: that comes down to the micro structure of the market. i think there are reasons to be concerned. passive investment has increased. which is increased the correlation across s&p 500 stocks. i was looking at this today. if you look at the one year across s&p 500, reasonably elevated. the volatility of the index is not.

the reason is the volatility of each individual stock is low. anything that would cause the volatility to go up, assuming we are relatively highly correlated because of passive investment, you would have not quite a parabolic but substantial increase in index level volatility which is what we observed in the fourth quarter of last year. maybe it is algorithmic stuff like quantitative strategies. the ball tracking fund. work it rumsfeld trade is known unknown, but the catalyst is unknown unknown. scarlet: always putting down rumsfeld. scott and cameron, thank you. that does it for the closing bell. romaine bostick is stepping in next with more analysis on u.k. prime minister boris johnson's latest efforts on the brexit deal before the deal vote tomorrow. this is bloomberg. ♪

♪ fromine: we are live bloomberg world headquarters. here is a snapshot of how we close lower on the week. risk aversion towards the weekend. joe: what did you miss the majority caroline: boeing falling the most since 2016 as a pilot -- we learned a pilot expressed concerns three years ago. boris johnson is urging lawmakers to went the exhausting impasse, but -- to end the

exhausting impasse. softbank's plan that could value this company below $8 billion, a fraction of its january valuation. johnson may have reached a brexit deal with that you but eq but mp's -- the -- with the e.u., but mp's at home have different ideas. emmanuel macron is adding to the pressure. in the future but i do not think we shall grant any further delay. i believe it is now time to put an end to these negotiations and work on future relationships and put an end to what is ongoing. caroline: let's bring in the council of foreign relations senior for europe. is macron helping with the game

-- that this would be a vote to leave with a deal or no deal on october 31, or is he being himself and working to get this to end? >> macron is channeling his , wantingrles de gaulle to extend to britain to join the european union. but he is helping boris johnson, trying to get the deal across the line. it is boris johnson's dream that the european looming -- european union leaders would say it is this deal or no deal. whether people believe it in the house of commons is a different story. joe: let's talk about what could or could not happen in the house of commons because in addition to the questions of whether boris johnson is going to cobble a majority for this deal there

is the left when amendment. that is not only -- not the only vote that might happen. explain the mechanics. matthias: so that amendment is by a conservative politician who has voted for theresa may's deal three times and wants an orderly brexit and he wants to make sure if boris's deal gets across the line, if brexit only really happens once, all the legislation is passed on the u.k. side to make it orderly. that is called the withdrawal agreement bill. it will take a few weeks to get through the house of commons. it is saying if the deal passes and the amendment passes, boris will have to ask for a technical extension which could make brexit only happen on november of october 31.

labor will go in favor of this because they see it as undermining boris johnson, while most of the tories say it helps them have an orderly brexit but it could lead to confusion and undermine boris' case. romaine: explain how the general election falls into all of that confusion. if they get the vote passed this weekend, do we still go to a general election and when? to go to ae need general election a matter what. this doesn't have a majority. it is clear the majority which theted with theresa may, dup members, they are not god. -- now gone. they are not voting and feel like they have been sold out by boris. either the deal passes and the left-wing amendment will kick in, we will have an election early spring and it will be easy

for boris johnson. he will be the man that delivered brexit. if he does not pass and your viewers know it is really going to be a cliffhanger, we may have an election as early as next week which could be thanksgiving , november 28 or a week after that. do you think businesses have any way of planning? is the case to just wait and see how the months unfold? matthias: i think realistically this will happen. the biggest thing for business now is the no deal scenario in the short-term is less likely. here you have a tory government, forest who has put his full weight behind an orderly brexit. that is where the pound has gone up as much as it has because business is excited by some sort of certainty. if the deal doesn't pass and we

have a new election there is a new few months or weeks of uncertainty because then you multiples. johnson suffers from having alienated so many people back with the votes a few weeks ago, now that he needs or has almost no margin of error? i don't think so. what i have been surprised with is how many of the quote unquote actls who voted for the ben and were expelled have already come home. in the end the tory party when it comes down to it, i expect them to unite because they know it is their only chance to stay relevant and to win. they want to stay in power and to win the next election and it is amazing how almost all of them with one or two exceptions

have not quite committed. i think of the 21, 18 or 19 have. really appreciate you joining us. stay tuned to bloomberg for a special on brexit on saturday. we are carrying the vote in parliament live. sunday there is a one-hour special hosted by anna edwards and guy johnson at 2:00 p.m. new york and 7:00 london. cancel all your weekend plans. coverage onexit bloomberg. romaine: shares of the company with the biggest one-day slide after a pilot apparently warned boeing about max issues three years ago. this is bloomberg. ♪ ♪

joe: boeing will continue to cooperate with a house panel after shares of boeing suffered their biggest one-day slide since february 2016 following 6.8%. quoteane manufacturer was concerning messages from pilots about the safety of the 737 max 8. boeing is pushing back. let's bring in brooke sutherland. what are the allegations about what boeing may have withheld and what is their claim as to why they did it? >> there were a series of instant messages for pilots that theerned the mcat system, flight system at the heart of the fatal -- the pilots raised concerns about this system, the

ability of pilots to handle it. as we know from the investigations, that is what contributed to the crashes. we have different alerts and the pilots not able to bring that plane back up. this creates a lot of concern. why are we just finding out about it now? out boeings finding did notify the boj about this, but it is not sure -- there are implications for the criminal probe of boeing. romaine: after the lion air crash, boeing was insistent this was not their fault. then you had the ethiopian air crash and it was harder to have the done liability. i don't know why they went to the doj instead of the airline regulators when it is normal procedure anytime something like

that comes up. did know this, why weren't the planes grounded? if this was a problem your own employees raised concerns about this system, why was boeing not more proactive? this has been a question for investors and people who followed the company why they did not take more aggressive action in the wake of that second masks -- macs crash. it raises the question of where was management and the board? did they tell the appropriate people and if they didn't, it is -- caroline: back at that moment it was the u.s. was the last two admit -- last to admit it. therefore the action of the executive management? questionk there is a

whether the ceo will be around in a couple of weeks. boeing already has one, they took the step two separate german and ceo. -- chairman and ceo. whether some of the board members need to go as well, and this is not the left we have heard. someone will speak before the house october 30. expecting a lot of scrutiny. >> putting all of that into perspective of bloomberg opinion. as the threat of recession sitting with -- policymakers show restraint but can they -- this is bloomberg. ♪

. everyone uses their phone differently.

that's why xfinity mobile lets you design your own data. you can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. all with millions of secure wifi hotspots and the best lte everywhere else. it's a different kind of wireless network, designed to save you money. switch and save up to $400 a year on your wireless bill. plus, get $250 back when you buy an eligible phone. that's simple. easy. awesome. call, click, or visit a store today.

through. then we will know if the math deal. up to the says his s president country's military operation in syria could end after fighters have a -- along strip of territory its board laying out a key an ition for ending offensive. kurdish led forces who fought u.s. backing has struck a eal for president assad to deploy streets to the area aising prospects for a wider escalation and questioning the jahiihadists want

aware of discussions between member states on how to ring those people to justice, those who need to be brought to justice. there are discussions with different options. what is important is that is done and human rights are respected. issued a an leaders trong come united nations -- -- come nation. they condemned the offensive syria and e. rufrplt ouncil president said the u.s. turkish agreement it lay down arms five days was not a serious initiative. houseism paoefplt investigations of wrapped up a week questioning with the actions with ukraine testimony that was a eduled for today from deputy assistant secretary of

defense was delayed until 24.ber secretary of state mike mom ayee spoke to political following democrats' hamming of it -- handling troubling. johnson may not get the chance to put his brexit deal it vote saturday. support is growing for a movement of alliance of former opposition s and members to delay the decision by withhold more t. would approval until the bill that implements it is law. passed johnson would be unable to put his deal it a vote to ing him to seek a delay brexit. executive he chief officer of three major technology countries has died. taking a ounced was leave of absence for unspecified health related reasons. chairman larry ellison said was brilliant.end and

he was 62 years old. first all female space walk team made history today. replacing a broken part of the international space station grid as they fixed it and in a hfr first time century of space walking that men were not part of the action. they said they were just doing their jobs after years of train women had steps of paved the way. this is bloomberg. former u.s. treasure sees a better he than one in three chance of recession next year. federal reserve to ilt monetary policy toward

avoiding that. it is a fair amount of pprehension the geopolitical overlay with the u.s. and china conflict. in sense of new instability the middle east. he questions raised by increasingly erratic united states. risk premium al isn't that much in markets but economic much in activity and business spending related tond that is the chill and sense of a risk of slowdown. tha that is made more serious with black hole monetary dynamic ith countries that have zero interest rates, seemingly unable them with growing

concerns about the long-term of zero e effect interest rates and with a sense parts of the world like the united states that aren't at interest rates are one down turn away from that. down turn away can you set the expectation that you recession? u.s. how far is it and what will it ook like and who will be most impacted? >> bloomberg estimated with some model that you are proud of that there was a 27% chance within 12 months of a recession having started. aat would correspond to about 35% chance of a recession having 2020.d by the end of that was in the neighborhood of on mittsrhaps slightly particular relevanative -- relevance to my

guesses. you have the prospect of the ecline in confidence as people start to see a recession and self-fulfilling proff rophecy and they reduce spending and a feeling policy authorities can't do a lot about it. how low omes given interest rateser, i think you i think you are, have more of a threat from the economy with what is europe difficulty in maintaining momentum with the effects of ain theit and with a sense that future of the chinese economy is rather unclear from here. > you were listening to u.s. treasure secretary, former, summers. from the federal reserve and

german finance ministry to the bank of china uthorities have acted with restraint. as they goror the i.m.f. meeting misjudger is this will the severity of the slowdown as they try to calibrate policy and the risk to morph into reality. strategist and welcome. we ave a recession tracker are incredibly proud of. it is currently 27%. if it is as ow accurate as larry's guess. >> i put my trust and favorite in you. whether we are headed for a there's no doubt growth worldwide is slowing. models andok at your try to get a grasp of how severe it will be, how severe do you will be? >> for the rest of 2019 we think will continue to slow but we expect it to stabilize for 2020.

there are risks that are out there. laryer do agree with summers is geopolitical two largest he economies u.s. and china having conflicts not only trade human rights issue on top of trade and technology. how does it affect economic decisions is like this. and investors are thinking about possibly world ng to a different trade order and they are seeing in the future what that would slower -- would mean is productivity and growth and i will cut down my investment. it is a sever fulfilling rophecy and like the

[indistinct conversation] >> from the e.m. perspective you an make a very good argument that things do not look good for whether were reasons strur of ctural problems, lack animal spirit. strong dollar, et cetera. said e.m.f. has underperformed for like nine not a surprise. -- optimism so from the urther pain trade war not priced in or is the pessimism that we can all agree on reflected in the market. m. a resolutione. phfplt between the u.s. and china on will be very t beneficial. ut what we always say is emerging markets is not one big

asset class. be pockets of growth even in the environment where having the na are trade war those countries that ave diligently reformed their economies and those not directly tied to the u.s. and china trade ar such as mexico and brazil, there are places i can find value. >> what i have been surprised this week we had the longest winning streak for emerging markets since april rest of the market was questioning the china-u.s. mini and not getting overexcited about brexit apart from the pound it seemed to think it is wonderful. >> this week we have seen the dollar investment go down which is always positive for markets' currency. another thing as you know the no deal brexit

looks like it is diminishing for is very positive overall risk appetite. stocks, it is good for the cyclicals. a move away from the passive into cyclical which cyclical which is positive. there are pockets of growth even in the u.s. but those two risks that the u.s.-china trade war they are having talk which is markets and the probability of a no deal brexit like it is diminishing. his is positive for risk appetite and emerging markets. >> great stuff. ahead.e plant this is bloomberg. ♪

>> banking on brazil i.m.f. says in brazil'sa pickup economy. we spoke with their central bank president at the world banco meetings in washington, d.c. iscussing the pressure facing monetary policy. basically we have co-haorpbtg to keep a speech through the time. mainly been looking at the reforms, how reforms are the local and situation in terms of growth, nflation, inflation expectations had you it is moving. the reality in the last mentioned that e thought we decide in every meeting for the central bank it to have that

because it has power but we need it fuels into the gain st rate curve and stays within a good limit. room do you iggle have to cut rates further? know that now. do weirst question we ask hink we should have the conditions and how much should it be. you ok at every meeting have a debate and have the wenario, risks, and we think have room for lower rates. but it is going to depend on how develops.io >> what do you see in the economy that makes you worry? actually i think we are becoming more optimistic. we have had a couple shocks the year to year and a half. they had one that shaved off a

growth and one tragedy the mining industry and deceleration that shaved off a little more than .25. it had an impact from those. see further we started to elements that tell us people will start to revise growth higher. we have had employment doing better and we had sectors like ing people construction and this is all taking off. is the slack in the economy reducing? still have a lot of slack. of one of the t biggest recessions we have ever had. base is very low. we have slack, the slack is not a home genius thing. on which sector. greating all of

-- aggregating all of that. >> how do you see the labor improving? >> i think it is starting to show signs of improvement. there is improvement that will continue. if you think of the generation this year we are at record highs. he number came out yesterday was the best since 2013 so i think there is a tendency there. the minister was talking bout reducing reserves to rest debt. how does that affect your policy. bank >> we have independence and what we have been seeing with the as rves we see them insurance and first you need to read eople that what you about reserves costing a lot of money to brazil is not the reality. in the last 15 years it is last 10 even and the years we made over 100 billion so what is the cost and benefit.

we think the reserves as an insurance has done well and we changing lking about that right now. central bankazil's president. let's check the headlines. coke zero sugar had first quarter growth. it beat the average estimate and water e betting big on and low sugar. largest yoga -- lost market share. tkpwrrg has said they are plan for we her a work that may value it by low $8 fraction of the $47 billion it commanded as recently as january.

plans with sidering jpmorgan chase. billion valuation. had 10.k has i think of another five billion and equity but they are under water. >> you had a private valuation 47 then going to the i.p.o. at or above that and now you say is only worth eight billion which is still a lofty number but i don't know. joe, you seem to think it is a good investment. i would probably be a buyer if we were at eight billion. there is a good risk reward. is huge and growing fast in theory and if they shed some of and get people excited about the idea of liquid office i think people are counting them. c.e.o.

and chief officers and creative vice chair all of that. a and their investment in wide pool company. > they were invested in a wide pool company? 8.1. should bump them up to like we are eel accountable. just an optimist. empties their wallets. is catching $500 million for the rights. this is bloomberg. this is bloomberg.

time for what is trending. enriquez out manuel

the second parent in two days guilty for plea to patching in college scandal. accused of ife were taking part in the scam. wife hasn't indicated she is changing her plea. story on com has a for the fall. it uses fruit juice and spices artificial flavor. four including pear and innamon and nasa unveiling two new space suits as part of the mission to send astronauts it -- platoon by 2024. mobility and er have inclusive sizing after the irst all woman space walk was

canceled because they didn't have proper size. you can follow those on the bloomberg.com and ticktock on twitter. about another story and shows like seinfeld they are great it watch nd companies with getting in bidding wars and one is expected to pull in a cool half billion. o.m.g. to about that kill kenny. be loving in his grave. half a billion? remember billion and these guys are leasing a show. it is not like there are buying it. whoever gets it could be hbo max don't exist d both yesterd $450 million to

$500 million to have it only streaming rights and only u.s. that is just the place we are in with these streaming wars apple, comcast, at&t, disney trying to steal netflix and they have seen how much success want tohas had and they bring back the shows they own or get something else they think and sellers like viacom and others who created it licking their lips. forgotten that south park on existed until a week ago part of the nba and clean story. alk to us about the economics of some of these classic shows or south park or seinfeld friends and how much they anchor the value proposition for some these streaming services? >> south park is an interesting case because

economics of that particular show are different than sort of back to a prior era of tv where the independent producer could hold on to because of a deal the creator of the show made in like was first really blowing up. initially they had the rights to relate to that didn't cable money then in 2000 they ad a joint venture with viacom where they got 50% ownership which is unusual now when you companies trying to own a show from the insystems and they inception want to own every right so there to o extra money they have distribute. s for how much one show can boost the service reported data more than w commands 5% or 6% of showing. >> thank you on all things south park. do not miss this. in connection welcome laurels -- expected to makers

vote on a brexit deal. rate decision thursday and burg testifying before congress. >> this is bloomberg. >> this is bloomberg.

[captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org ♪ i am taylor riggs in san francisco information is bloomberg tech nodge. coming up, soft wang puts together a plan that may value the co-working company below $8 billion . that is a car cry from the $47 million evaluation it had in january. plus, remember a tech