vonnie: welcome to bloomberg markets. i am vonnie quinn. stocks moving lower. let's get a quick check on these markets. the s&p 500 relatively unchanged . counter factors weighing on the market and pushing the market higher. the golden dragon index was down about two point 75%. mainland -- 2.75%.

mainland china is closed, taiwan reopens friday. we have crude oil moving higher substantially. brent is above 75 and a new york crude is above 73 from some comments from president biden about the middle east. we will get to a moment and the two year yield at 3.6930 after better-than-expected services reading and the jobless claims that were not as bad as we anticipated. let's get to some of the movers on the equity side. vista is hitting a record high after nikkei reports alphabet is considering buying electricity from nuclear power plants for its data centers. nvidia is surging in the session as tech is one of the few positive groups in the s&p 500. we also got more headlines tied to nvidia and ai as it expands a

partnership with accenture. and levi's is slumping after the company cut its full-year guidance. lines across its home market and the doctors brand. we also got a wave of economic data in the u.s. that included numbers that showed services expanding in september at the fastest pace since february 2023. sarah hung from alpine woods spoke about the data. -- sarah hunt alpine woods spoke about the data. >> we are getting payrolls tomorrow. there is a lot that is coming that the bond market will react to. since early summer yields have been coming down. it has been fairly directional and not as bouncy as some of the bond moves had been earlier. vonnie: for more we are joined by bloomberg's michael mckee. take us into some of the subcomponents of this data.

what showed strength or expansion. michael: we start with the headline, the highest since february last year, and that seem to come out of nowhere. we have strong orders for services and business activity. prices paid were also strong. there is inflation and a good growth component to all of this. the thing that will catch a lot of peoples i, you heard sarah talking about it, tomorrow we get the payrolls report. the jobs number for the services industries went down below 50 for the first time in a while to 48.1. does that suggest we will see week hiring and will that worry the fed? that is something we will have to see after we get the number out. we have a lot of crosscurrents going on in the labor market these days. one good news from the labor market is jobless claims coming in at 2.25, that is up from 200

-- 225,000, up from 219,000. seasonally adjusted and nonseasonally adjusted were down. it does not look like companies were laying people off. are they hiring? tomorrow we will find out. vonnie: and we will be looking for the unemployment rate as well. positive data overall but can we think the 50 basis point cut for any of this yet or have we that to look forward to? michael: we have that to look forward to. it will take months for that to work itself into the economy. there is a boost in terms of car sales. we have seen more activity in the housing market but after that it will take a while before it has any effect. vonnie: why is consumer confidence softer given we are seeing all of these positive signs out of the economy and services would entail people spending on services? michael: the consumer confidence numbers went down. the university of michigan went

up. they are restrained. the problem seems to be people are worried about what will happen going forward with all of the headlines in the middle east , even though gasoline prices are down, people are worried gasoline prices will go up. there is still the question about inflation having gone up. the price levels have not fallen. there is all of the uncertainty about the presidential election. there's a lot going on on consumer's minds and there is some concern in the conference board's survey about whether jobs will continue to be very available going forward. vonnie: i am sure that is behind the vix above 20 today. that is bloomberg's michael mckee. oil surging following middle east tensions. what president biden said about possible israeli retaliation in iran that has markets reacting. this is bloomberg. ♪

vonnie: this is "bloomberg markets." i am vonnie quinn. moving oil markets is this short comment from president biden after a reporter asked about israel possibly hitting radian oil infrastructure. >> do support israel striking iran's oil facilities? >> we are discussing that. vonnie: it was a comment that could mean anything. it is not clear who we are and what kind of attack that would be. let's say there is to be some kind of attack on energy infrastructure in iran.

does the u.s. have any choice but to support israel? >> not really. it was a typical biden off-the-cuff remark where any of those things is open -- we discuss it. what does it mean by any of those three words? it is the sort of thing that moves markets. the reality is no matter how much the white house is discussing it israel will make its calculations based on opportunity and availability of targets. we can say that with iran it is a target rich environment, a lot of different targets to choose from. military targets, it is a heavily militarized country. oil infrastructure would hurt iran considerably but it would also hurt the global economy and hurt the u.s. and the chances of kamala harris in the elections and their other civilian targets. electricity, the electricity

grid, classic things like bridges and other infrastructure. israel has plenty to choose from if it decides to attack but it's decisions will be made based on what it thinks are the lowest hanging fruits, where can it strike without endangering its own forces and where it can inflict just the right amount of pain. there's also the question about whether or not israel hits iran's nuclear infrastructure. this is very widely distributed. infrastructure is spread out all over the country. israel could choose to attack one or more of those targets. we know the white house does not want that, biden has said so, but we also know netanyahu is not paying attention to what biden is saying. vonnie: what we know about what capabilities iran has? there is speculation it does not have the capabilities we once thought and couldn't get help

from another country? bobby: iran does not have a contiguous border so there is no ground offensive iran can execute against israel and that constrains its options for direct action. it does have a network of proxy militias all over the region, some of whom are very close to israel. the problem is at this moment israel has several of those militias on the ropes and is punching very hard. hezbollah is greatly degraded because of the loss not only of its top leader but an entire echelon of leaders as well as the successful israeli campaign to disrupt the communication infrastructure. how mass -- hamas has been greatly degraded over years worth of israel operation. the who these in yemen are little -- the houthis in yemen are far away and can fire rockets but those rockets can be anticipated by the israeli iron dome infrastructure.

that leaves the iraqi militias who do not have the same level of military capability. it is a moment of weakness on the part of iran and a moment israel wants to take advantage of. vonnie: another thing that is happening is a cultural moment in iran. there is a new president. obviously the supreme leader is the supreme leader. there were nerves around what would happen culturally in iran. is a moment where it can afford to step back? bobby: the regime depends very much on its anti-israeli ideology. you take that ideology away in the regime loses some of its reason to exist. i cannot imagine they would back away from that. with that being one of the core elements of its ideology, a lot of things then click into place. yes the president is more moderate than the supreme leader

, but he is essentially powerless. in the iranian system the president does not have a great deal of authority. all he can do is when the supreme leader says jump is to ask how high. the concern in the israeli regime a few days before the missile attack was launched, the concern was whether responding or attacking israel directly would be falling into a trap. the concern was not so much cultural as strategic. i think ultimately the decision was taken by the hardliners that whether or not there was a trap, this is something iran had to do in order to try and restore some of the prestige it has lost in the region. it had to make a direct attack on israel and now has to live with the consequences. vonnie: is netanyahu afraid of iran at all?

he has to continue to pacify the hawks in his regime. there seem to be more of them than ever before. he seems to have fronts in battle. bobby: he is fighting two ground wars. his sense is iran, this is a unique opportunity. not for decades has iran been this week and this vulnerable. having provoked israel with that missile attack it has all but drawn a direct attack. as much as the larger world wants to see a de-escalation of tensions in the region, nobody can reasonably protest if israel chooses to respond to a direct attack. vonnie: thank you so much for all of that context. this coming after president biden said "we are discussing it" in reference to any potential attack by israel on iranian infrastructure. coming up, private capital

enters a new era of lower rates. money over to cover -- the money under cover is next with ken kencel. this is bloomberg. ♪

vonnie: i'm for bloomberg money undercover, where we cover the unique challenges and opportunities facing alternative investments. lisa abramowicz joins us for that. lisa: i am here with somebody who has been in this market for a very long time, ken kencel, president and chief executive officer of churchill asset management who has money under management at affiliate capital and is the manager of nuveen. we have been talking about it in terms of public debt markets and a 50 basis point cut that changes everything. how much have you seen a turbocharging of the activity

that has already been going on in private credit? ken: great to see you in great to be back again chatting about private credit. the decline in rates and the normalization as we head into the new rate environment has been a real spur for economic activity, certainly deal activity in the private credit market. we had about $33 billion of activity in the second quarter. that is the most active quarter in private credit we have seen the last three years. as a firm error activity is up over double in the past year. i think rates coming back and more normalized rate dynamics is good news for private credit. it is certainly good news for companies trying to address the higher rate environment. that is also taking some pressure off underlying businesses. i think that points to a very active 2025.

we are extremely active now towards the end of the year. lisa: you are tasked with looking at the balance sheet and understanding how healthy these companies are and what their business prospects are. there is a question of are we in the precipice of some downturn, or margins expanding or shrinking? how attractive are the companies coming to you saying we could use a loan? ken: in terms of the quality of the companies we are seeing in the quality of the deal flows we are seeing over the last couple of years, it was only the highest quality businesses that could put themselves up for sale because they a good story in terms of performance and ability to pass on price increases which were significant. frankly private equity was looking to drive returns of capital and saw that with their highest performing businesses. historically it has been the highest quality companies and a deal flow we are seeing today is still reflective of that. areas like software, business

services, health care, high-quality businesses, strong revenue, market-leading companies, that is what we are seeing in terms of the deals coming to market and being sold which drives private capital and private credit activity in private equity investment. lisa: if there are mostly high quality companies looking for loans -- ken: they knew deal environment. -- the new deal environment. lisa: is everybody and their mother who wants to get into private credit. this is a popular area. how do you source good deals on good terms at a time when you are facing off with a lot of competition? ken: there are a few things driving the private credit market that are important if you think about driving quality deal flow. i that lenders are in a unique position because it is only those five or 10 firms that can write a $500 billion financing check and deliver a one-stop

solution to their clients. it is a small universe of firms that has that and those firms are the ones seeing the lion share of deal activity. those are the firms that are driving high-quality performance to investors which begets raising more capital and there is a bit of a shakeout in private credit. i would say the largest direct lenders are taking share and to the better opportunities for lending and financing standpoint. those are the firms as well that would have historic relationships with the private equity community. you think about firms that have done 10 or 15 or 20 financings for private equity firms, those of the firms that will get the first call. as a result i think you've seen a bit of bifurcation in terms of deal opportunities and financing but also in terms of portfolio performance. vonnie: how much quds -- lisa: how much do you see companies consolidating with each other versus the ones that are not big enough just going out of business? ken: there will be smaller

managers that have built a good track record but maybe find themselves pressed in terms of capital raising in the ability to keep up in terms of being able to provide capital to their clients. you will see firms not in private credit. some of the traditional asset managers that have recognized that private credit has a long-term seat at the table that need that capability and want to deliver that capability to their clients and their investors. you will see some of the smaller teams, and we have already seen it snapped up by the traditional managers and you will see some m&a activity there and also some of the large alternative managers looking to get into niches where there may be great growth opportunity but they need a team that can approach an address that opportunity. lisa: a lot of people have wondered whether we will see consolidation among regional banks.

maybe the better question is how much to the questions around the health of regional banks open up the opportunities for people like yourself to get lending share and a lot of these particular geographies? ken: it is a great question. if you think about private credit over the last 10 or 15 years it has been the story of cash flow lending, traditional cash flow based lending. the banks have historically continued to play in the smaller regional businesses, asset-based lending, inventory finance, more asset-based activities. what you have seen are the largest managers saying there is not only an opportunity traditional lending, but also in some of these more niche areas where banks play where they are starting to reduce their capital allocations and are looking to pull back on some of their investment activity and you see m&a in areas where the asset managers are looking to expand their footprint. lisa: we have also seen a number

of banks say we do not want to lose these clients. we are going to go with apollo and partner with this consortium. would you ever be interesting and partnering with a big bank? ken: the banks have great client relationships. they have long-standing credit cultures. they are looking for ways to leverage those relationships and deliver more for their clients. the question is does the economic model work for them in terms of delivering that financing and that capital? increasingly banks are saying we have great relationships, there is real value there. how do we deliver alternative solutions to our client? forming a partnership to be able to offer a larger syndicated loan client, not just an underwritten distributed syndication, but also a fully committed private credit alternative that is literally a one-stop shop, here is your commitment letter. by the way you are trying to do

an m&a transaction in three weeks. you speed uncertainty and confidentiality are important. the large-cap market is one where you have companies choosing between a syndicated alternative or a private credit alternative and banks realizing that are looking for ways to form partnerships to deliver those opportunities. lisa: we are talking about all of the ways companies might be interested in taking actions. i talked to some executives who say i do not want to take any actions ahead of the election given the fact there could be potential differences in policies. how do you see that? with the companies you lend to, just a reluctance to make big moves? ken: certainly in the middle market, our market and all of our financing or for companies owned by private equity firms. i would say there is a tremendous desire to create liquidity and deliver capital back to investors. the last two years have not been great in that regard.

distributions by private equity firms have been low for the last couple years as a result of m&a activity. i think private equity is gearing back up for increased activity, both on the new deal side. we have seen that in continuation vehicles and secondary vehicles where private equity firms are picking one of their two or three highest performing businesses and putting them in a cv and selling them to a continuation vehicle to create liquidity for investors. we are at a point where there is a little bit of hesitancy regarding the election, but i think that hesitancy will give way to significant activity in 2025. lisa: i could talk to you for the rest of the afternoon but unfortunately we have to leave it there. ken kencel, pleasure having you on set. vonnie: thank you so much. coming up, we are talking new

u.s. economic data with subadra rajappa. that is coming up in just a couple of moments. right now we have wti at $73.33 a barrel, up 4.6%. this is bloomberg. ♪ ♪ ♪

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>> welcome to bloomberg markets. let's get a quick check of those markets. plenty of counterweights. the buoyancy of the economic data pushing up stocks. semi conductors are seeing a little bit of enthusiasm. we have energy stocks higher as oil rises. that is offset by some of the selling we are seeing in hong kong and mainland china stocks. mainland china does not come back until next week. he s&p 500 flitting between gains and losses.

down a point. 110 stocks higher. golden dragon index down 2.3%. crude up 4.6%. we had a short comment from president biden saying we are discussing it when it comes to the potential for israel to maybe attack iranian energy infrastructure. not clear what he meant. we are waiting more on that. a small move in u.s. yields. the two-year moving by four basis points this morning's economic data. when it comes to the economy, former new york fed president and bloomberg opinion columnist bill dudley said he has been too pessimistic about the risks of a so-called hard lending for the u.s. economy. he joined bloomberg surveillance this morning. there come a regional view was the fed would be late to take monetary policy. as a consequence come inflation would go up and the market would get very tight. the federal reserve have to tighten monetary policy a lot.

the unemployment rate would have to go up at least half a percentage point and trevor cash and trigger the sum rule. it does not seem like it is leading to recession. if you look at gdp numbers, they have been firm lately. second quarter, 3%. third-quarter tracking 2.5%. it is not look like the conclusion is going to pan out. it is too soon to say for sure. that is why the labor market has so much attention focused on it. i thought it was interesting the summary of economic ejections at the last fomc meeting. they actually think the downside risk to the labor market are rater than the upside risk to inflation. they are worried about the same thing. that is why tomorrow's labor market report is so important. if the labor market starts to deteriorate, then i think the soft landing story will start to come into question. that is why the fed cut 50 basis points couple weeks ago.

>> a lot of people share your journey in terms of changing views and not understanding which models are accurate this time around. what in your analysis makes you think this time is different and some of the classic indicators that have foretold recession no longer work? >> number one, you had all these fiscal transfers during the pandemic. businesses and household balance sheets are in better shape and they typically are late in the business cycle. look at debt service cost for household service sector. people locked in low mortgage rates during the pandemic. second thing is different is financial conditions have eased before the federal reserve cut rates. financial conditions were at the tightest a year ago. since then the stock market up, bond yields down, credit spreads tighter. when you look at the level of short-term rates, financial conditions have eased and that is supporting economic activity.

>> what is to say we are landing at all? >> the fed would like to grow to, 2.5% -- to grow 2, 2 .5%. keeping on that nice edge, growth not strong enough to cause a resurgence in inflation, not weak enough to lead to deterioration of the labor market that would lead to recession, that is going to be tough to keep on the knife's edge. vonnie: former new york fed president bill dudley. joining us with more on the u.s. economy and a look at the jobs data, associate general head of u.s. rates strategies. that was a nice opener. dudley saying he got most of it right but slightly changing his mind on and out come. when the evidence changes, you change your mind. start with your vision for tomorrow's jobs report and what argument it will uphold. >> for tomorrow the consensus is

for 100 50,000 jobs to be created and the unemployment rate to remain at 4.2%. our economists and others are looking at an upside surprise to tomorrow's payroll print. the magnitude of the upside surprise is what i have been looking to see. if it is 100,000 more, we could see a selloff. for the most part, the market is focused on weakness in the data. if we do get a print that is 150,000 or below that, that is when you are going to see a rally in the bond market in reaction to weakness in payrolls. all indications are this is going to be a fairly good print. we have had strong jobs data this week from joel's as well as adp so indications are we could get at or above consensus print tomorrow. vonnie: are we in the process of avoiding a recession?

>> that was never our best case. we think the market is pricing in too many cuts both for this year and in aggregate over the next year or so. looking at the markets pricing in almost 50 basis point rate cut at the november meeting. a total of three cuts by the end of the year. the fed has told us they are going to be cutting 50 basis points in november and december for a total of 25 based -- 25 basis points for november and december and a total of 50 basis points by the end of this year. the market is overpricing cuts between now and the end of next year. given the fact the data has been strong. vonnie: given that with swaps pricing in half basis point for november and now are we not even sure we are going to get a 25 basis point cut in november?

>> i think the fed is most likely going to deliver 25 basis point rate cut in the november meeting. the risk the market is not accounting for is from the elections. if we see a repeat of what we saw in 2016 after president trump won and we saw a republican sweep, the price action in the bond market was for the yield to rise meaningfully and for inflation expectations to rise. that scenario is not what the market is accounting for. under those circumstances even the fact the elections are two days before the november fomc meeting, the fed might take a cautious approach to easing at the november meeting if we see that price action. i think the tony five basis point -- the 25 basis points seems the most likely outcome but we should be considering

other scenarios. vonnie: we will get one more jobs report but if the next two jobs reports are benign, with their be a case for another 25 basis point cut? >> the fed is looking to frontload rate cuts. so if we do get data both the november -- i mean tomorrow's print for september as well as the october employment report that is due in early november to be in line with expectations, and i think the fed will stay the course and deliver a 25 basis point rate cut at the november meeting and another 25 basis points at the december meeting. that is our best case and i think they will stick to that trajectory and try to frontload rate cuts as much as they can. vonnie: i'm curious because the mood index all elevated relative to the likes of 2021, it is pretty muted at a time when we

are seeing the vix 20 and print -- and plenty of instability around the world. is the u.s. treasury market solely focused on macro economic policy in the united states and the election and maybe not enough focused on potential geopolitical turmoil? >> i think you hit the nail on the head. the pricing i the volatility markets especially in bonds seems to be much more focused on the trajectory for rate cuts. what you tend to see is as the phantom box on rate cuts, you tend to see volatility come off. you are not seeing much of a geopolitical risk premium or any risk premium related to other economic events that could happen like the port strikes that could lead to some volatility in the data over the upcoming months. vonnie: a vigilant do we need to be for that? you said they will likely trade

between the election and the next fomc but if there were to be a sudden uptick in geopolitical tensions more than there is already, would that create massive volatility in the treasury market? >> typically what you tend to see is the bond markets and broader risky assets tend to not react that much to geopolitical headlines. we would have to see a significant escalation before you start seeing higher volatility and a reaction either either the bond markets or risky assets. four amount -- for now you are seeing an uptick in commodity prices especially oil. perhaps modestly high inflation expectations on the back over that. these types of events tend to not have much of an impact in the markets. vonnie: inc. you for joining us today. -- thank you for joining us today. coming up, levi shares sagging

after the company's earnings reports this morning. those details next. this is bloomberg. ♪

vonnie: this is bloomberg markets. time for the stock of the hour. shares of levi strauss tumbling after it narrowed its full-year revenue outlook. the company revealing it is exploring a sale of its dockers brand should levi strauss president and ceo spoke earlier on bloomberg. >> we are confident in our long-term strategies for the business and we see the business growing to 10 billion in sales over time. our strategies are working.

let me start with a little context for the quarter. this bike coming in at the low end of our guide, underneath that there is a lot of strength in the business. clearly we beat our profit targets, our earnings were strong and as it relates to revenue, we were up 3% on an adjusted basis. the levi's brand was up 5%. did have a couple areas that underperformed. namely our china business, mexico and on dockers. in terms of china, i would say we have our own executional opportunities. it is a big market. we see the long-term potential. vonnie: for more we are joined by julia who is reporting on this story. we are off our lows but we are down a bunch on levi. why? julia: i think the analyst expectations were incredibly high going in. there were a lot of tailwinds to support a strong quarter

including a lot of denim trends such as wide leg jeans that were helping boost sales. young say song -- beyonce's song from earlier this year. analysts were disappointed by wholesale numbers. that is why investors are struggling to see why they would want to invest in levi's but there are still strategic shifts for the company is putting in place such as there direct to consumer which is very strong should their brand is doing well. that is something incredibly poor and to focus on along with the fact the beyonce collaboration, that is expecting to bring in a lot of attention. vonnie: she has had some forays into apparel under the past have not done very well. people want beyonce's voice, maybe not what she brings in terms of clothes. talk to us about the weaker parts of the business. they are looking at dockers. julia: this is not the first

time they have tried to sell dockers. in 2004 they were thinking of selling to a private equity firm but it did not end up selling. . it has been underperforming for several quarters. it makes sense why they are trying to offload this company. we heard michelle, she seems confident they are going to be able to do so. vonnie: any ideas of who might be looking at it or what they are trying to do in terms of shopping it or are they in the early stages? julia: they are in their early stages and they have not given us a lot of guidance. vonnie: talk to us about beyonce. what are we expecting to hear? julia: it started with beyonce naming a title on her cowboy corridor album levi jeans and they said it was completely organic and now they are going forward with this collaboration where she is doing a lot of advertisements but i think there is a lot of expectations and they are going to have to deliver. they're going to have to show that is going to move to higher sales. vonnie: they are going to have

to keep up with the trends. did i read skinny jeans are back? julia: i'm afraid they might be shared wide leg pants have been for the last 10 years dominating the markets showed there is a hint of skinny jeans in back but they from the wide leg pants. the fact those have been such a huge part of their sales and it is having consumers shop for other things like t-shirts that fit the wide leg pants so that was a tailwind this past year. they were helped by that. they're going to have to stay on top of these trends. vonnie: will be interesting to see what impact beyonce has in the coming quarter. another area for levi's to explore. thank you for staying on top of this for us. julia reporting for us on levi's. coming up, a new etf looks to capture the outperformance of china's biggest tech firms in the most recent days. this is bloomberg. ♪

vonnie: this is bloomberg markets. a new etf looking to capture the performance of china's biggest tech firms. around held china dragons etf will hit the market today. here with what to expect is isabel lee. why do we have a new etf?

? we have some etf so that tackle these kinds of companies. as about: what sets this apart is the focus. they tracked 30 to 50 stocks but this would only targets five to 10 and they are what round hill calls china dragons. china dragons are those that exhibit economies of scale, exponential growth and solid fundamentals. five to 10 stocks, four in -- for now in this quarter they chose nine. that includes alibaba, byd and they will be rebalanced quarterly should the round hill ceo told me unlike other etf's, you want to focus on what you like. this is a narrow focus of nine stocks. you don't want the smaller companies to dilute your holdings. inc. about it as the bloomberg might have since seven index. vonnie: it is pretty concentrated. in china there is of the danger the leadership decides to focus on one particular industry. are you taking a bigger risk

than it might look at face value? isabelle: if you inc. about a broader question, it is china in general. there two ways people look when they invest in china, it is go big or go home. valuations are very attractive. is it cheap for a reason or that is why we should pile all in? with the bull market really come a lot of hedge funds and money market managers are feeling left out because they are under exposed and they are piling in. we have some of the exchanges feeling like they cannot take in all of the trading activity. that is a risk you take with e.m.. the upside is far higher. vonnie: how do they manage to time it right after some of the stimulus moves from china because it would be a good time to debut. isabelle: the timing is good for them. that is the thing with etf's. they made the filing earlier this year. you don't know when it will improve. the sec might get back to you with some questions. when i talked to the ceo, he said they were thinking about it

even when china stocks were not doing so well because of client demand. vonnie: what about fees? does it compete with some of the others? isabelle: it is very competitive. it is only at 59 basis points. it is lower than most of the etf's in its category. some are usually 70 to 60. it is an active etf. i went to vonnie: ask you about the broader china market because we are seeing adrs in the u.s. trading but mainland china is closed. hong kong was open and we saw stocks soaring. developer stocks coming off the boil today. what should we anticipate for after the golden week? isabelle: that is when traders will recalibrate. even if the markets in asia are closed, etf's are open. we have goldman sachs saying maybe the stemless measures of china may not directly address the medium-term challenges. traders are feeling optimistic all over the world.

we have these benchmark it indices crossing territory. vonnie: remains to be seen whether we will see more fiscal stimulus. more stimulus trade into the arms of the consumer. we isabelle: isabelle: have goldman saying what makes this round different from all the other rounds is how it is more targeted. it is more streamlined. you see some binance. maybe this will set it apart. we have naysayers saying this will not fix the fundamental problems. vonnie: i always think of the phrase macro tourism. people have been going into the market but exiting very quickly again. thank you for joining us. bloomberg's isabel lee. chinese automaker xpeng who is partnering with vw in china is the king at several options in europe to localize production and sidestep tariffs the block is leveling on ev's made in asia's biggest economy. member states are preparing to

vote friday on tariffs as high as 45% on imported ev's made in china. the company's vice president spoke with all of her crook in berlin. >> u.s. markets are very porton market -- very important market. one of the alleged tv markets. a market that is right for technology innovation. at the time right now i think the policy is evolving and challenging for chinese companies to enter. vonnie: that was xpeng's brian groome. markets right now come a lot going on. to the downside we have the geopolitical risks causing oil to rise. uti is up within 5% at 7365 a barrel. brent crude is above $77 a barrel. this just after president biden said he was considering what to do and how to discuss the potential for israel to attack infrastructure targets in iran.

we are far from that possibility right now. the market trading on the hypothetical. the stocks index higher, the chips making a rebound. to counter that, we have some of the china stocks trading in the u.s. much lower. that does it for bloomberg markets. i am vonnie quinn. ♪ it's our son, he is always up in our business. it's the verizon 5g home internet i got us. oh... he used to be a competitive gamer but with the higher lag, he can't keep up with his squad. so now we're his “squad”. what are kevin's plans for the fall? he's going to college. out of state, yeah. -yeah in the fall. change of plans, i've decided to stay local. oh excellent! oh that's great! why would i ever leave this? -aw! we will do anything to get him gaming again. you and kevin need to fix this internet situation. heard my name! i swear to god, kevin! -we told you to wait in the car. everyone in my old squad has xfinity. less lag, better gaming! i'm gonna need to charge you for three people.

>> from the world of politics to the world of business. this is "balance of power." ♪

live from washington, d.c. >> joe biden sends oil prices higher. welcome to the faster show in politics. as the president tells reporters discussions are underway about possibly striking iran's energy complex. we are seeing the results in crude oil prices. i'm joe mathieu alongside kailey leinz. welcome to the thursday edition of balance of power. the president's comments landing heavy on the energy markets as he touches down in florida for another day of surveying storm damage from the hurricane. kailey: he will be in georgia after surveying damage in the carolinas yesterday. oil prices climbing up 5% on wti. $73 65 cents a barrel. considering potentially this translating ultimately in higher prices at the pump as we get closer to an election. we will hear from the