optimism to grow. if we were to get a definitive agreement on the one hand and a deferential or cancellation of the december tariffs on the other hand, that would be taken well. but by the same token, we've more or less priced out the risks of it all breaking down. . the problem is we hear different things from different sources in the white house, and clearly there are competing agendas. we will not name names, but even the president's comments today, you have to really parse them. you have to have a degree in which literature to really interpret them. it is almost like interpreting a fed statement because the placement of a word here or the position of a word their changes the meaning. caroline: we close that the highs of the session which means record highs once again. the dow jones industrial average

just three points higher, but that means we are at another record high. fancy that. let's dive deep into the action. abigail, what are you watching? abigail: i've got bonds on my mind. we have stocks higher on the close and on the week, another weekly gain, the fifth in a row for the s&p 500, the longest winning streak since early march, so clearly a risk-on tone, but confirming it is the problem we are seeing on bonds. a significant back up over the last five days for the five-year yield, the most in more than a month, and the 10-year yield, the most going back since september, and that was the biggest move up for yields for that 10-year yield going all the way back to 1962. a representative from bank of america merrill lynch reppert -- recommended shorting five-year futures. he's been bullish and bonds, but recently, there has been a trend

break. he has been supportive of the data from the ftc, net position's going back to 2004. he is making the case that in 2019, you have the positioning getting the closest to net long that we have seen going all the way back to 2015. it suggests we could see bonds pullback even more. >> thanks, abigail. taking a look at a nasty day in brazilian markets today because a judge ordered former left wing president lula should be released from prison, and it caused a massive selloff in stocks. the ew z, the ishares brazil etf dropping about 3.5%, and the currency, weakening more than 1.5% against the dollar, putting it up close to that low for the year that seems like it has been a support for .he currency since about august brazilian law actually prevents

lula from running for politics again due to his conviction, but he is obviously still very popular, influential in the country. tv footage shows crowds of supporters waving flags and shouting messages of support. the concern is that his presence out of prison may bolster the left-wing political party in the country, and that would not be good for president bolsonaro's market-friendly policies. especially with the situation in chile being as volatile as it is, people are getting a little bit nervous in brazil. >> thanks, mike. i'm taking a look at shares of yelp, which have rebounded from onearly 8% drop on thursday a third-quarter earnings beat. while revenue topped analyst estimates and while analysts were actually positive, there were concerns about deceleration in certain metrics, like jeffrey's example which said deceleration's in unique device

growth represented the lowest growth in company history. to be clear, it did grow, but it was the lowest in the history and citigroup set its third quarter was in line with estimates, but the fourth quarter revenue came in just below estimates. wedbush said the results are still better than many investors feared. has a cohen said lopez long road ahead in the business turnaround on the company looks for more consistency in its execution. joe: thank you. still with us, a portfolio strategist at richard bernstein advisors and bloomberg macro strategist cameron. earlier, we were talking about skepticism that the macro data is really going to gather momentum. does that also call into question the rotation we have seen in equities? people say if the data is picking up, that will be the case for buying more cyclically

sensitive, value oriented stocks. does your view on the situation also mean perhaps that rotation is going to be fairly short-lived? >> absolutely. that is the key, right? i think they are saying people have gone in and the other growth is going to pick up. i think it is possible, but i just think the risk/reward is not great with how much the markets have run. i still think people are better served being in high-quality, stable earnings growers. going very least, you are to see more volatility. as we've seen, if you are bullish on trade, which i'm kind of more on the optimistic front that we will eventually get a deal, i think even if you are bullish, if you look at every negotiation the trump administration has done, it looks like you are not going to get a trade before you get the trade, so you have to get priced out before you get priced in. quality.id you like what qualifies as quality?

no one goes around saying they want to buy low quality stock. >> the best way to look at quality from my perspective is earnings stability and strong balance sheet. that, to me, is probably the best measure of quality. this is over a long period of time, but very simplistically -- scarlett: [indiscernible] compositionlity does tend to shift over time, but even some list a quick, i think people can just own simplistic sectors. if you look at this earnings season, last earnings season, next earnings season, look at the numbers these companies are putting up, but cyclical sectors are posting negative earnings growth, not just this quarter, not just last quarter, but also in quarters to come, so i think that tells you their fundamentals are just not holding up in this environment. caroline: how important a read on the economy will earnings be in the consumer sector? we are getting walmart, jcpenney , all the earnings in the retail sector. >> those are kind of concerning.

if walmart does well, that is not necessarily a great sign for the economy. there's not many for aris -- in the not many ferraris walmart parking lot. let's put it that way. we got retail sales on friday, and that will be interesting, but let's not forget that the economic cycle was held hostage to the business cycle, not necessarily the consumer. the question we need to be asking is not if people are going to go to walmart and spend, but if his nessus are going to start investing in the first half of next year. obviously, we've got a trade deal that removes one impediment, but there is still a political backdrop that people will have to consider because there are some pretty stark policy choices that could be confronting businesses. are you really going to write a check for a 100 million dollar equipment order if you think, for example, your corporate tax rate might go up? maybe you will not, and the closer we get to the election, i think the more reticent businesses are -- will be to

invest, which means you are going to maintain, i think, this headwind of his and his investment in this country. in europe, you have to sort of think that the brexit situation is going to be done and dusted. good luck with that, right? to envisage the animal spirits being unleashed on the continent. scarlett: we are just renewing our call for any purchasing managers out there to let us know that you are there and let us know how you make your decisions. >> yeah, i want to know, like filling out a survey. >> we definitely have to make that segment. a couple of months ago in the news business, we had all these stories about what the yield curve inversion means and why, and now the 10 is at its steepest all year. i'm curious, do you think that is a little bit of over optimism, too, and i'm curious how the recent fed moves and the shape of the yield curve play

into higher thinking about the rest of the market. >> from my perspective, you've gotten the signal already. you get the yield curve inversion. people freak out over recession. no recession comes immediately. the yield curve on inverts, and eventually, you go into recession. i think you have gotten the signal, from my perspective. i think the reality is what the signal told you was that fed policy was getting too tight relative to slowing growth outlook, and you combine that with other issues of liquidity like the repo issue that is ongoing, or if you look at the fed survey that came out this back to flinging standards. the way to think about the yield curve is when people think about risk, they think of one big risk that is going to bring down the whole system, and that's really not how it works. our analogy is really like popcorn in the microwave. you put it in the microwave, nothing happens, you get a pop. profit starts slowing. couple minutes go by, another

pot. you get more and more pops, and people are waiting for the world to collapse after every pop, and that is not how it works. yields are growing, and they are seemingly separate, but that tells me risks are going up in this environment. have powell next week. what do we need to hear from him? >> to me, i think people have been overemphasizing the fed both ways, but, listen, if you think the fed is really important, i think this relative importance is lower today because the fed for the rest of this year and into next year, a lot of those cuts have been priced out. it is an easier job for him. he does not have to worry about disappointing markets. he is in a wait-and-see mode. if the data gets a lot worse, he's going to cut. he has told you he's not going to raise rates when he sees signs of inflation. the relative importance of the fed commentary is lower here today. scarlett: nevertheless, he will still have a big target sign on

his back. that does it for "the closing bell." "what'd you for miss?" this is bloomberg. ♪

caroline: we are live from bloomberg world headquarters in new york. here's a snapshot of how u.s. stock markets just managed to

put in another record day of gains. joe: the question is -- "what'd you miss?" caroline: the president says the u.s. has not agreed to a terrorist rollback with china. stocks gain ground. the s&p just rises, and it is a fifth straight week of investors staying optimistic. and aramco's push to go public. why saudi arabia needs to rein in its valuation ambitions. : investors whipsawed the last couple of days after contradictions by president trump on the trade data from china. >> they would like to have a rollback. i have not agreed to anything. china would like to get somewhat of a rollback, not a complete rollback because they know i won't do it. frankly, they want to make a deal a lot more than i do. : mario parker covers the

white house for bloomberg. of the day, i guess we set phasers back to zero. is there or is there not a trade deal right now? mario: you described perfectly. there seems to be this one step forward, one step back type of dance we have been in for the yearr part of the last where there appears to be progress for a resolution between two of the world's largest economies, and then there is a step back or an about-face, and so there continues to be an immense level of uncertainty. caroline: you're going to be sticking with us as we bring in our guest, a man who has long been helping u.s. investors look for asian investments. how do you navigate the headlines? where do you stand in terms of optimism? >> right. i think you have to take a secular view of what is going on in the world and then trade

around the noise, so to speak. i would say in the context of your comment, the noise to signal ratio seems like it has never been higher, particularly in the markets i trade, which are in asia, and most of that is due to this trade war narrative, right? say in the context of the tariffs specifically, i think the trade war is just about over. caroline: yeah? >> yeah. i think the chinese and the american policy makers have learned how to communicate, and it has taken a while, right? we saw that when the deal was supposedly broken back in may, and there are all sorts of backstory's. you can read all sorts of media impressions of what caused that, but we seem to be back on track you takei think if president trump's word from last week when he said we are 60% of the way there, that is pretty far from where we were back in

was supposedly not going to be a deal happening. what concerns me -- should i keep going? job: i'm curious, from a sort of broader perspective, are there certain aspects of investing in asia that are more attractive than other aspects? we talk about asia in the abstract, but there's china, there's the vietnam story, which is its own secular thing, there is korea, which is seen as a bellwether. what is genuinely interesting and does not just seem hostage to trade? >> good question. if you go back to the secular mob and looks at flash what they called the secular revolution. i think that puts forth the sort of secular growth story really well. that's the tailwind, right? that is what asia is growing on.

i mean, that is the generational growth story if you will. are for expectations china's gdp to be twice america's by 2050. it's like india's gdp will be roughly where america's is in the same timeframe -- it is why. romaine: if we do get some sort of resolution on the first phase of this deal, there is sort of the promise we will see increased purchases of u.s. goods, primarily farm goods. in the context, though, of what brian was talking about, have we seen such a huge shift in some of those purchases by china, by other countries away from the u.s., to latin america, two other asian countries where maybe u.s. farmers are not going to get the benefit out of this that they had when we first ?tarted this

>> sure, brian makes a good point, and that is something frankly u.s. farmers are hoping for. u.s. farmers are and have placed a bet that china will be a growing market and have such an insatiable appetite that they will be able to fill. during the course of this trade war, china has increasingly shopped around for alternatives, particularly as you mentioned, in south america and rizzo. the concern is that some of those relationships will be solidified going forward and farmers have made their combs known to the administration in order to extract agreement from china to buy x amount of products going forward so they do not necessarily lose that market. caroline: you sound pretty confident that the trade war is pretty much over. what is the one contrarian call you're making, the one investment you are looking at that perhaps the market has not

caught up on because they do not share your optimism? >> again, headwinds and tailwinds and treating the noise. if the noise turns out to be the signal and the signal is negative, we continue with terrace, there's a lot to be concerned with. we have had two section 232's and five section 301's. if those tariffs move forward in december, if they rethink the tariffs that were supposed to recently come in, that jumps 150 billion dollars. if we look at that, against nominal gdp in america, growing somewhere between $700 billion year, that isn a a huge consumption tax, right? that is a massive consumption tax hike. i think that would be, hands down, the biggest risk. when folks come on your show and talk about the fed needs to do this, that, and the other thing, i think what the fed is doing

makes sense, but i think the market still -- if we don't start waving back some of these tariffs, it is underestimating the effect. caroline: what are you short? >> it is all most a perfectly bifurcated situation. if i'm right and the trade war detenteor we are in the of something along those lines, you could continue with the sort of risk-on thing we've seen over the last few months. if this thing falls over, if we don't get phase one done, then all the trades we've had on reverse. and we are going to see that acutely in asia, particularly in countries where they have some domestic issues. hong kong stands out, right? side ofld be the other my optimism. joe: great stuff. really appreciate your perspective.

oil has fallen since hitting this year's peak in april. trade tensions curb consumption and global supply need to expand. we will bring you the latest on oil and other commodities next. this is bloomberg. ♪

feedine: wework, the drip of news continues. it will invest in non-core businesses including meatup. thatwill divest the wing is female focused. they will invest in conductor as well, and sco company they bought back in 2019, it would seem. off baseo divesting

iq, and easy to you -- and easy to use cloud-based business. joe: meanwhile, oil has rebounded as investors shrug off a comment by president trump that the u.s. has not agreed to fully rollback tariffs for china. for more, let's bring in tina davis, bloomberg energy and commodities editor for the americas. thank you very much for joining us. in ones, it feels oil is of those modes where it goes up on good macro news and down on bad and sometimes it seems to react specifically to oil-related events on the supply side. what mode are we seeing with oil? is it just right now doing what people think, risk on, by oil, good news for the economy? >> for the past month, we have seen the correlation between the wt off and s&p really fall off, and i think that was a

reflection of what you said -- geopolitical events specifically aimed at oil. you're talking about the attacks in saudi arabia, attacks on tankers in the strait of hormuz. that takes you outside what the broader indices are doing or following equity markets in general, but today was an exception. we saw the oil price moving in line with stocks. romaine mentioned whipsawed earlier. at one price, that at one point, we oil price was down, but ended the day unchanged. romaine: joe likes to talk grain, so i want to talk grain for a second. when the report came out eventually after it was delayed for a little bit, we got some data on corn and one thing i thought was interesting, and this ties into the trade war, is it seemed to so -- to show a shift in some of the demand, supply, going to brazil, russia, and away from the u.s. >> we had a six-minute delay,

which is eternity for markets to sit and wait for these numbers. when we eventually got the numbers and actually even before we got the numbers, you started to see corn markets moving up in anticipation of some good news, and what we got out of the report was the news that the u.s. stockpile was down but global stockpiles are actually up. you saw the trending down of the corn prices as the market kind of digested, if you will, that news. it was not entirely a good news scenario for the market today. ?aroline: very briefly, gold >> oil actually had 4 positive days out of five. gold is having four negative days out of five. you are seeing the idea that we are looking for the whipsaw effect of the trade headlines, we had one trader call it a nauseating week in terms of trying to stay on top of things. any good news for the trade war is bad news for gold. romaine: coming up, the law of

unintended consequence. could elizabeth warren's wealth tax drive billionaires crazy? we will talk about that next. this is bloomberg. ♪ the game doesn't end after that insane buzzer beater.

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>> i am mark crumpton with bloomberg's first word news. john bolton has said to cut short a july meeting with ukrainian officials because u.s. officials allegedly demanded investigations into trump's political rivals as the price for a meeting with the president. chicago's mayor named former los angeles police chief charlie beck superintendent, a day after the top cop announced he is

retiring. choice fork was the the job. beck says improved community live -- community relations are key. >> that is my number one goal, to bring the city together because they trust their cops and you know what that says? that is a big lift. will help in the nationwide search for a [indiscernible] he will work closely with eddie saidon, whom the mayor has it agrees to remain on the job [no audio] 2021. that is if utilities don't start resources now.

to power roughly 2.5 million homes. 2021.ust be replaced by [no audio] pompeory of state mike called the unveiling a monumental moment before helping remove the cover on the embassies terrorists. terrace. courageously announced against me even -- evil empire. he oversaw in new the leaders

that didast germany the very same thing to their people. >> saturday marks the 30th anniversary of the fall of the berlin wall. global news 24 hours a day, powered by more than 2700 journalists and analysts and at tictoc on twitter, in more than 120 countries. >> elizabeth lawrence proposed -- elizabeth laurens proposed rren'sax making -- wa proposed well tax creating controversy -- wealth tax grading controversy. joining us now with more on the story, brandon i want to start with you.

proposal and you are talking about a big hit to a lot of folks wallet. you show there are ways that some of these billionaires could avoid some of the tax. >> we wanted to get a sense of here are things people are expecting, so where would you logically put your money? privatecommonality is equity stands out. maybeant to talk to you, it is popular right now to propose a wealth tax on billion errors or wealthy people. what about the difficult work of crafting an effective law that can raise taxation? how much is already being put washington?

>> there's a lot of concern that it won't work, it is too extreme and that it will be challenged on constitutional grounds. you see both house and senate democrats coming up with alternative plans, looking at other options, so if foreign is elected and says we are going to do this, actually here are some other plans and we can still raise trillions of dollars of revenue and not have a wealth tax. already tried to look at the law of unintended consequences and make sure they are on the hook for pensions and liabilities. do you think she has really followed through? >> you have to see how everything would get implemented, but the hardest

doesn't nail down proposals,te equity this is where i think you will see unintended consequences. on and we focus should point out other candidates like bernie sanders also have their own form, there is a sense here that this is a lot bigger and there's a lot of support in congress for something like this, at least on the democrat side. if foreign does not end of president, is it possible this could work its way through congress? >> any democrats running through president, you see a tax hike on the wealthy. they are looking at income taxes, tactical -- capital gains

taxes. it is more than likely will see some sort of tax proposal. if you see sanders or worn, there's a chance they will want -- or warren, there's a chance they will want to push that. >> thank you for your perspective. private equity not the only financial sector that could be impacted by the next person in the white house. there may also be an impact on the real estate market. by aore, we are joined managing partner, here. -- pierre. [no audio] without failure, it is not slow down before an election? >> every election we see, you

always see a slowdown and a lot is due to consumer confidence in the theater of what policies will be white house in act that correlate with the pricing of housing -- the price of housing? elected thatate is does not have policies that are pro-real estate, that will have a negative impact on their investment. it trickle-down or is it across the board? >> election market is more on how the economy is doing. i think if only it impacts the market across the board. >> when you compare the two political parties, there's a lot

of sense from the democratic side whether it is raising deductions, do you think it would be politically feasible and if so, what type of impact what it have on housing? reform, a lot tax was taken away or reduced. if a democrat is elected, it , that is one of the biggest concerns we will have in 2020 if the democrats take control, will it have negative sentiment as opposed to saving for buying a home. renters want to be -- want to remain renters as opposed to buying a home. >> do you think leading into an

election year, they tend to overstate the impact of change and ultimately laws regarding anything move much more slowly than you think? >> that is a fair statement to make. if you take bernie sanders, in theory it would have a detrimental impact on the homebuying market because it would suppress rent. practically speaking, from a constitutional perspective, does the white house have authority to do that? to iron outke years after a number of lawsuits, so to your point, that is a very accurate statement. side,t about the supply

whether it is a formal housing -- affordable housing. are we going to see that come to bear? >> that is a key component of the social fabric of any big city. when you talk about creating national rent regulation, the question coming up is should owning property should be for-profit -- should owning property be for-profit? who's going to create affordable housing? that is one of the biggest concerns. >> let's talk about the mid-level real estate market. possible that whoever is president in 2021 what have to deal with this.

what does the future hold for fannie and freddie? >> i was at the conference in washington and they were talking about conservatorship the next year or so and what the mac has done is provided a great amount of liquidity for the marketplace which has been a very good outcome for the real estate market. i don't know what will happen when they come out. are the regulations more stringent? will they start lending more accurately? side, youe home our look at the number of smaller investors in order to facilitate pointvestment, at some whatever the solution is, it will look different than it does now. does that worry you? >> at the moment i would say no

because i feel like we are at a healthy perspective with the banks. banks are lending at a healthy , yet it has not been overly conservative. >> thank you. news, companies coming up with new ratings and a united kingdom outlook. this as they change their overall rating on the country. we will have to see how it turns out. signs are not looking too good for them. >> they have some stuff coming up. >> coming up, saudi arabia

stock for itsing upcoming ipo. this is bloomberg. ♪

[no audio] that is according to a presentation a public this hour stop -- hour. we had transparency on the business and we know where they're going to get out of. putting their money where their mouth is and starting to show some signs of progress.

a real effort for transparency in an effort to show investors progress. >> most of this we more or less new in terms of the fact they will go back to their roots. we heard it in the softbank presentation, the business of really -- renting real estate and charging more. >> this is been saying -- doing what they said they were going to do. think what you're getting at is what does that mean long-term. they still have long-term leases and a short-term business model all stop a lot of issues that investors have been concerned about have been there, but there has been some progress. >> let's turn to another big story, we are supposed to get another perspective over the weekend. that ifd china, we know

you are a saudi citizen, you have to. is that a law? >> they want the>> royal family to buy and. some of them have members that were detained. international investors, they want international interest. >> is the interest there russian challengeis is the and it is not so different then we work. when your valuation is higher than what the market takes it is, how do you price? over $1nk it is -- $1.7 trillion, but one point to trillion dollars is where some of the banks saw. how do you get investors in when

there is that much of the spread? >> always great to have you. let's get it quick check of the latest headlines. it will be hong kong's biggest share offering. alibaba hopes to raise $15 billion. there will be a listing in hong kong next week and that couldible] happen as soon as tuesday. china is considering further cuts to subsidies for electric vehicle purchases. they are holding off until they can look at a lecture parcel data the next it -- electric car sale data. that is your business flash update all stop -- update. musk offered to tour the

intory and it seems to be the works. probablythese two were difference if they weren't so against each other. elon musk calling him mr. unicorn. the response from david einhorn seem to be saying you cannot say we have factual inaccuracies in our numbers. the -- us about what what a inaccuracies -- what factual inaccuracies we have. love our headline, he burns the shorts. does that happen really?

stock.it is a $337 >> on ironically, i always get a kick out of this, which is how little the stock has done overall. down, a fairly narrow range for the last five years and look at their. >> we were looking at the performance. if you are a long-term investor, this is not good, but if you are in a short-term trader, this is like from heaven. i feel like he won on the burns front. the way he says our business has some similarities and

differences. >> scoreboard. >> let's tally them up. short.with their short >> coming up, it turned out to be the year of spike selzer. how drinks like why call became -- claw -- white cloth became popular and who is still trying to catch them. this is bloomberg. ♪

>> hard selzer. you may recall one of the hits cabbagemer, the low and like outsold beverages budweiser in the u.s. be more than ao

one summer craze? >> i think so. there are people increasingly interested in counting calories even when it comes to alcohol and declining beer israel. people are moving away from beer and moving towards drinks like this with less calories and less carbs. [crosstalk] you look at sodas cap -- the popularity of white claw, it was the only thing out there. i'm wondering from a competition standpoint, does it hurt the white claw brand itself and do others pick up? >> it reminds you of lacroix.

everyone said it is not that hard to make this stuff and then they made it. sam adams makes truly which is big in england. consolation is coming with one, buschs a bush -- anheuser . the question is can they continue to dominate the market like to have? >> back in the u k, hard cider is a big thing. for the man and woman who doesn't love beer or admit they don't love it, it is a great option. is a window into the trend. the beer has not done great, it is their hard cider and seltzer that has propped him up.

>> thank you. that is all from which in this -- what'd you miss. >> bloomberg technology is coming up next. have a great weekend. ♪

i am brad stone inserts and -- in san francisco. this is bloomberg technology. coming up, battle of the billionaires. againstk strikes out einhorn. plus, streaming services like netflix are coming for you.