sonali: welcome to bloomberg markets. coming up our big interview with ecb president christine lagarde. down on the day off of session lows. the s&p 500 looking at it turned out to the tune of .2%. the nasdaq 100 same. a turndown of about point 2%. off of session lows. you are also watching a bond market selloff underway.

incredible to see the tenure back at 4.2% almost 420 one. one basis point rise. off of a nearly 11 basis point rise yesterday alone. we will keep an eye on the bond market looking at the vix as well. even though you are seeing bond market volatility take off this week the stock market volatility is pretty low, under the 20 handle we have seen of late down to under 19. we will switch gears. before we get back to the u.s. markets and talk about the story of the day we will talk about francine lacqua's interview with european central bank president christine lagarde. they discuss how the ecb views of the u.s. economy and uncertainty around trade policy after the u.s. elections is expected in just two weeks. president lagarde: fair trade is

a key boost for growth, employment, innovation, and productivity. it is something we shouldn't throw away. in any period of time where this country, the u.s., has thrived, were periods of trade, not a period of i will retire behind my boundaries and play at home. no. sonali: a big u.k. media outlet called the u.s. economy the greatest on earth right now. do you agree? where does that leave the rest of the world? president lagarde: it depends where you are on the social ladder. you have to go further than looking at the sort of aggregate numbers or the average numbers. it means -- it depends on where you are on the latter. if you are at the bottom of the latter, if you have a small job with not much income, i am not sure being in the first and best

economy in the world. everything needs to be considered. it is the case that the u.s., for instance, has very high productivity. has a very vibrant technology sector and has had that a long time. it has capitalized on it since the beginning of the 21st-century. and that there is a lot of catch-up taking place at the moment. but you can't look at that in isolation. you also have to look at the people. i think when you look at the gini coefficient, probably not the best way to measure inequality, the u.s. is not doing so well from that perspective. it is also a question of spreading and distribution, salt -- so all people can benefit. sorry, i'm being political now. forget it. francine: do you worry about central banks being political or dragged into the political sphere? president lagarde: no. because, i think there was a huge resistance to that end of

the decisions we make. despite what is being suspected here or there in any place in the world. for the central banks that have the privilege of independence either by virtue of treaty or tradition, it is critically important to hang onto it and defend it. because the credibility of an institution like a central bank is a factor of how independent it is vis-à-vis the politics of and it is precious, it is very precious. francine: do you think you will come under attack more? not you personally, but central banks. donald trump said jf hamel had the easiest job because it is the flip of a coin every month. president lagarde: he should come and visit us. [laughter] i have thousands of hard-working people. economists, jurists, computer

scientists. they work super hard. every day, not just once a month. sonali: for more on markets we are joined by stone x markets chief financial off a kathryn rooney vera. you watch the imf come in and reduce expectations for global growth. there are differences when you look at the data. importantly some of the differences all around the u.s.. where projections were revised upward. think about equity markets around the world. you see money pouring to japan and mexico. i data is showing you growth may not be as strong as you would think outside the u.s.. does that bring money back into u.s. equity markets? kathryn: it definitely bodes well for u.s. equity markets. when it is the prettiest house on the block. you definitely see other economies roaring as well

especially in emerging markets. i was focused primarily on latin america. but returning back to the u.s., the s&p has defied gravity and defied all risks or expectations of any negativity. we have seen the u.s. s&p up 23% . now we see valuations extended. as you mentioned, there are macro risks really being discarded by market participants. in an environment like this especially two weeks before a very tight presidential election i am very -- more cautious than consensus. what i am suggesting to our clients and what affectively i am in my global roadshow, my trips, is to protect your earnings. yes, tech has done phenomenally well and right now it is a great time to be buying options that are relatively inexpensive to protect those earnings, not liquidate, not sell but protect them. sonali: speaking of protection

the s&p tray today is fascinating. another down day after a down day yesterday. we had a flurry of earnings as well. even companies that had a fairly promising guides did not seem to really meet the bar for investors. 3m for example rays to their guidance again for the second time under a new ceo. it did not really need expectations. where do we stand today? are valuations too high for earnings? kathryn: you make a good point. i wonder if the bar is too high. and i wonder if this is such a forgiving market that even when there is a mess the market is ready to forgive that miss. i think it is more of an example of a market that is ready to be bullish, ready to discount. well, maybe there's a mess this time but we will be ok in the future. precisely because corporate earnings are near record or at record. they are phenomenal. so far so good. i think a lot is priced in. the macro risks, oil prices

higher, geopolitical risks. inflation risks inherent in fiscal policy. these are things that over the past two days we are seeing the market take into consideration. the u.s. economy is outperforming expectations and growing above potential that is inherently inflationary. effectively we are seeing a repricing of expectations on fed rate cuts into 2025. e i would suggest, and what i am suggesting to stonex institutional clients is to make safer bets now. look at earnings that are reliable and predictable and resilient and can be resilient to a potentially higher interest rate environment for longer and dare i say that if we get we acceleration inflation, a sweet one way or another, with the fiscal deficit spending, with protectionism, with robust growth all of that, you know him , means higher growth and also potentially stronger inflation.

i think the risk should not be ruled out that the fed is not able to cut and, dare i say, maybe even run the risk of having to resume hikes, depending on how the scenario unfolds in 2025. not my base case but something i think investors will be wise to consider in portfolio positioning. sonali: i am glad you brought up interest rates. at the move in the tenure has been spectacular. we are back to 4.2%. you saw the note by the head of fixed income the cio at t. rowe price as days ago that said the 10 year could get back to 5% and that is a risk you have to bake in. what is the spillover effect? right now that the minority view in the market. kathryn: it so interesting. i am here in miami. last night i was at a finance conference. all of the investors were talking about how incredible it is the fed launched a rate cutting psychic cycle with 50 basis points right off the cuff. and we see the 10 year treasury

moving higher, not helpful to the housing market. and not helpful to the equity market. when you consider how extended valuations are, of 23% on the s&p at how much more upside can there be? there could be. we are a momentum driven market at the moment but the risks are underpriced and one of the risks is a 10 year treasury that not just stays at 420, or whatever it is at the moment, but potentially move higher. it is time to protect portfolios. sonali: what is the biggest risk? around the corner, where two weeks away to the day from the u.s. election. there is a lot of people betting one way or another already. unclear what the waitress look like into next year. -- unclear what the wagers look like into next year. how are you thinking about risk? kathryn: right now i like the steepener. everybody is talking about the potential for a trump win. if there is not only a retake of the white house on the republican side, but a sweep in

congress. i think you will get a rip in the steepener trade. it means higher deficit spending on either side. we will get higher deficit spending. nobody is talking about fiscal conservative them -- conservatism here or responsibility. we will get some form of trade war are more likely than not under trump or kamala harris. i would say both sides have globally adopted a phenomenon of industrial apology, which in my view is a euphemism for protectionism. everybody is talking about tar iffs sanctions" is an that is all inflationary. the output gap in the u.s. is positive. the economy is growing above potential. that is itself inflationary. not to mention the potential for a conflagration in the middle east and the positive impact it would have on oil prices trickling into the real economy. i think the biggest risk is we continue on the current trend. we get additional oomph to the

u.s. economy and additional resurgence we acceleration and inflation and i think the market is prepared for that, not discounting it in the remotest. sonali: that is stonex markets to financial strategist kathryn rooney vera. next a new bloomberg opinion piece that says no matter who wins the presidency, political choice is vanishing in the u.s. as more states fall under one-party control. it is a big topic to discuss with the columnist that brought the data to back it up.

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sonali: this is bloomberg markets. more than at any point in modern u.s. history americans are living in two different americas according to a new bloomberg opinion piece out today showing almost 42% in the u.s. live under democratic control in 17 states and 41% under republican control in 23 states. there is more to what it means for the election and beyond this presidential election. we will bring in the columnist behind the peas today, mary ellen klas with bloomberg opinion. it's worth noting, it's not just in the fact that we are living in a divided nation where one state may vote one way and another may vote on other way. what is at stake for americans living under a system where there are such a distinct versions now of this one-party control? mary ellen: what is very important here is that while we have a lot of focus on the white house and congress, there is

another very important element of our democracy and that is what is happening at the states. because there are 40 states now under one-party control, it has led to some dynamics that people don't pay enough attention to. it has allowed are not of states to move forward with passing legislation that ignores many of the voters in the state and the reason is they passed things with only one party support. because the public is not really paying attention to the legislative races in the state house, the number of people who get reelected and incumbents continue to stay in their job. even when they passed things that are unpopular.

that cycle is something that has led to really a drop in representative democracy in many ways. we looked at data. we looked at what is happening with policies in these one-party states. if we looked at where public opinion is going on one thing that really stood out as although there are 23 republican-controlled states and 17 democrat-controlled states, there is a very big difference in how they respond to governing. what we conclude it is, if you live in a red state, only 53% of the policies passed by your legislature and governor, if you are in one of these trifecta states, 53% of the policies have the support of the majority of voters. but, if you live in a blue state, the match between public

opinion and policies passed is closer to 77%. that is kind of a window into why you should be paying attention to not only who you -- who has been elected at the state level, but what they are doing. sonali: what does this mean for voter turnout. do people feel that they lived in states and it will be one way or another no matter what. blue if you are in a blue state or read in a red state. is it discouraging more voters to come out? mary ellen: what is happening is whatever party is in control, democrats or republicans, every 10 years they revise their districts and does -- draw maps, designed for the most part, not all states are in this situation , but they are designed to keep their party in control and then what happens is if you think the

party in control will always win , it suppresses the number of people that want to compete against them. when there is less competition for the offices, there is less voter enthusiasm. there is less talk. there is less --. competition brings out fans, brings out an audience. this is what is diminishing. this year alone 38% of all legislative seats, over 2200 will be filled without a challenge from the opposing party. it's like they are walking into office without competition from two parties. this is not a what the democracy was set up to enjoy. sonali: i am sorry to ask you such a loaded question with a short amount of time. we only have about a minute left. what changes the direction of travel? if you're looking at so many

races uncontested meaning people aren't willing to go out and be a contender against the prevailing party, how are americans provided with choice? mary ellen: first, work together with people that work together with the opposing party. find the legislation or leaders that are open to bipartisan support on legislation. this takes work and homework. then you do your homework. don't just vote down the ticket one-party. you can split your ticket if necessary. the only way this will return it if people start paying attention to races at the legislative level in their state and remember their vote matters. sonali: a lot of the wealthiest individuals in america are focusing on the down ballot and hopefully a lot of other americans when they go to the

balls will too. mary ellen klas, policy columnist for bloomberg opinion, thank you for your report. coming up, the etf report is back. our weekly look at the latest news, flows, and trends tied to exchange traded funds, an increasingly large part of the market. stick with us. this is bloomberg.

sonali: this is bloomberg markets. i'm sonali basak. time for our weekly etf report when we check the latest news flows and trends tied to exchange traded funds. bloomberg's emily graffeo is with us to tell us about a flurry of new potential etf's call to battle shares. emily: there is a new filing out there that came last week for etf's.

if they are from title exchange traded funds trust. they are funds that do paired traits of different companies. they have not been approved yet. if they are approved, etf traders will be able to buy an etf that goes longer coinbase, shorts wells fargo come along eli lilly, shorts yum brands. the idea is that there are two stocks in each funds and they are supposed to be inversely correlated. you bet against one and short the other. sonali: not your average hedge fund trade. emily: it's not. i don't think that there is any hedge fund out there doing the weight loss versus snack trade. but it is a funny idea to think there is demand out there. we know that derivative based etf's have been wildly popular. we have seen 160 derivative based funds launched this year and that could mean anything. it could be a buffer etf that uses options to protect against downside losses.

it could be a yields-based strategy using some type of options a strategy to bring in more income. we haven't seen many products out there that do this kind of pair trading come along one stock, short the other. we will see if they get approved and if there is really demand for these. sonali: it is seeing how it trades aftermarket to see if people are actually on board. what are critics saying? emily: critics are saying that these are getting popular at least in the derivatives space more broadly diverging from what the original idea of an etf was supposed to be. critics say they are risky for retail investors. they may not understand exactly what they are buying. with a lot of the funds, they provide upside, leveraged exposure. you are only getting leveraged exposure to daily returns. if you buy an etf that goes three x tesla, two x tesla, you aren't getting two times tesla

yearly gains. there is a volatility drag. you are just getting daily return. critics say these are risky products. proponents say it's america. it's a free country. you should be able to trade what you want. if there is a product, issuers should be able to issue it and traders should be able to buy it. sonali: that is one of the main questions. it's not just that it is a pair trade you are betting on it is the leverage embedded in these etf's. how does this one compared to other derivatives focused etf's? emily: some derivatives etf's get a bad rap. they are more simple. they aren't using leveraged exposure, just options to generate income. these funds do not like it will provide more amplified exposure to these stocks. investors need to be careful. are they buying something derivatives based because it is using protection or amplifying the risk here.

sonali: thank you, emily. for all things etf watch etf iq on monday at 12:00 p.m.. stick with us. this is bloomberg. ♪ ♪

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markets. i'm sonali basak. let's check the markets. around three basis point drop on the s&p 500. .3% lower on the day, the kind of day it is. the nasdaq 100 down about .4%. i'm confounded by the bond market. back to 4.2%. bond traders are selling off like it is 19 95. you see a move in the bond

market starting to echo what you saw and the 90's when you saw a rate cut at that time. strong economic data. we will look at where that goes. the vix is lower than it has been, around 20 handle. below 19. still elevated compared to where we have been compared to the rest of the year. midday moving's on the equity side. abigail doolittle joins us. abigail: lots of earnings with stocks moving more than the s&p 500 down about .3%. shares of ge down nearly 8% after sales missed estimates, a little disappointing there. in addition relative to the guide, they did guide profits higher but sales, they kept the same. investors are worried about the stock up more than 50% on the year, into the quarter, still is, frankly. supply chain issues waiting there. we also have issues for the defense contractors. lockheed martin down 5.5%. they missed sales as the f-35

delays drag down sales, the stock having its worst day since november 2022. we will have northrop and general dynamics reporting later this week. raytheon reported today. not a lot of movement for that stock. down about .3%. let's end on a bright spots. gm shares having the best day since november 2022 up a healthy 9.4%. profits grew year-over-year by more than 30%. sales better than 10%. evs grew 60% year-over-year. the high prices and there, we have been hearing so many reports of weak credit around car sales. that doesn't seem to be affecting gm at all. the best day going back to november 2022. jeanne: -- sonali: abigail,

thank you. we will turn to the deal market. it has been driving the market forward. let's get insight with rob brown the ceo of lincoln international. great to talk to you, by the way. all of the major investment banks said the pipeline is really starting to build around the corner. but, this year has been choppy. you look at companies don't have a getting. you heard about supply chain, for example, becoming a problem. what was the last time you heard that? how do you see the next couple months moving forward in the deal market when there are still uncertainties about the economy and the direction of u.s. politics that could drive the economy? rob: a lot to unpack their sonali and it's great to be back. let's start with the market we are in now and then we can talk about what we are expecting going forward.

we were in a better m&a market then we were a year ago or even when we came into the year. the best evidence of that is that the deals in the market are getting done at a much higher rate. one year ago, there was a good level of deals that came to market third quarter, but a lot did not get done. the reason is the gap. the spread between what buyers wanted to buy and sellers wanted to sell was too large. now we are seeing the gap shrink in a lot of sectors. while there is not a huge surge of new deals that i think people have been expecting, that has not really happened yet. the things in the market are getting done. sonali: let's talk about valuations for a minute. i am wondering how much they have actually jumped back. you look at the market. we are having a tough day in the stock market today. generally, we have seen recent record highs one after another. does that mean companies are able to command much higher

prices given how concentrated summer rises in valuation have been? rob: i think part of it is sellers expectations have come down a little bit. optimism, less uncertainty expected in the future. i think the deal's getting done are the best, highest quality deals. those are still getting done at what are considered good values. i think the telltale sign will be when the market comes back. maybe it's not the highest quality or the a quality deals. how big is in the falloff in value from what we saw at the peak of the market in 2021? i would say that valuation for the best businesses are definitely holding up. sonali: i want to bring in from morgan stanley. we had a conversation about what he thinks the deal market and ipo market will do. listen. >> if they have a great growth story why can't they go public? we will continue to be the

underwriter to exciting young companies that only have a small number of years of operating experience. that will continue. the beauty of going public, as larger companies, is coming back. i think it will be a global phenomenon. sonali: i would love for you to talk about this a little. i know you have worked with a lot of private equity firms and private equity backed firms. what happens next? when faced with the idea of going public or selling, how did they make the calculus now? rob: it has been an easy calculus of the last couple years because public markets have not been open. i agree with him. i think you will see a resurgence in public markets in 2025. you are already starting to see signs of that. there will be catch up. a lot of companies had their eye on accessing the public equity markets in 2022 and 2023 and have not been able to. that said, if you look over the last 10 years, maybe 15 years,

there has been materially more capital formation in the private markets than the public markets. some of the increased regulation, some of the volatility in the public markets, and, by the way, all of the capital raised in the private markets that wants to be put to work has really driven that. i do think next year will be a good year for public equity markets. and i also think it will be a very good year for the m&a market. sonali: we were talking about the election. i brought up the prospect of election-related uncertainty. how our clients dealing with the near term as they look around the corner and opportunity ahead? rob: the election it's an interesting question. earlier in the year we were hearing from people. the election won't affect my decision as to do i want to do something or not. some of that was based on an expectation that donald trump trump was probably going to win and they felt that.

i think that with change in candidate at a very tight race we have, in the last 60 days or so, and it could be just getting closer to the election, more people saying i will wait. i don't really expect it to affect the performance of my business. i don't really expect it to affect the valuation of my business. but i will wait. there will be uncertainty. we may not know the outcome of the election for weeks or months after. we might have a contested election either way. i think that one thing that is very important is we spend a lot of time talking about who will win the white house. what happens in congress is equally important. capital markets tend to do very very well in divided governments where no one party can advance an agenda too far one way or the other. what happens in the house of representatives and senate i think is equally as important to people's outlook and at the instability in capital markets as to who wins the white house. sonali: it is harder to

understand what a red or blue sweep would mean or a blue white house with a red congress, for example. you consider what is at stake in the election and what could change if you see a different outcome for congress, what with the biggest risks be? certain sectors could be more affected. if you are a highly regulated sector, financial services or health care, who wins could have more impact on the outlook for businesses or uncertainty for businesses. i think under either scenario, if the economy continues to perform the way it is performing, you will see rate cuts continue. whether they continue fast or slow. i think there is an expectation under either scenario that the cost of capital comes down. i think that clearly if donald trump wins there is an expectation that attack -- that tax cuts get extended and it creates additional capital for

investment. there are people in the business world that you set -- that view that as a positive and the negative is there tends to be more chaos and instability if that happens. how those two trade-off will be difficult to predict. sonali: that is rob brown at the ceo of lincoln international breaking down out of the uncertainty ahead in the market. coming up, a big earnings report from boeing tomorrow. it could be overshadowed by a labor union vote. we will bring you more analysis of that next. this is bloomberg.

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sonali: this is bloomberg markets. i'm sonali basak.

we are keeping an eye on boeing. investors already -- waiting on pins and needles ahead of tomorrow's quarterly repute -- report hoping the plane maker can stick the landing amid tremulous disputes. striking workers will vote on a tentative deal with the company tomorrow. it's today's stock of the hour and here with what to expect is shelia kahyaoglu. we were just talking about how boeing is having such a good week, the best since august. why so good? it's a tentative deal still. is it really that deal people are treading on? sheila: i think people are trading the catalyst. boeing is having a great week. starting the week off well because there is a proposal in place where we were negotiating at all. we will see what happens with the vote. they report tomorrow morning and we don't expect good results. we got the preannouncement out of the way. a free cash flow usage was a lot

better than we expected. we will get the vote, but not the results of the vote until late tomorrow. we are looking for a passage of the deal that requires a 1% majority, the only thing that workers are voting on. sonali: how much risk is there at this juncture. say they don't make it. they don't get a deal. what does that mean for boeing? sheila: it is the second increase boeing has had we are now we are at 35%. with workers striking for 40 days now the first year wage increase is 12%. essentially you are eliminating the wage increase with the number of days you have been on strike. they are getting a 7k ratification bonus. by the pension is still outstanding, a nonstarter for many companies. we are positive, though social media sites are mixed on what they say some people are hoping for pension. but i think the industry as a whole knows it is a nonstarter. sonali: boeing shares down 40% on the year.

people are looking for a catalyst. how much upside is there to boeing at this juncture knowing the challenges they are facing? sheila: a lot of including our target price. you will get the strike resolved. you will potentially issue equity. that's all but certain. it essentially $10 million. that is to offset your maturities in 2025 and 2026. you want to be on a path to free cash flow generation in 2025. we have seen at boeing have moves of 25% within weeks based on deliveries. so was deliveries restart, which we think won't even start until december, to be honest. sonali: what does this mean for their intended capital raise? sheila: we need the strike resolved for the capital raise. management is letting go 10% of the workforce. boeing is over capitalized. they have over 170,000 employees and are building 50% less

planes. management is being active with the workforce and balance sheet, not only looking at equity, but asset divestitures. we saw news reports monday they are selling a small business that has been under the news since march. we estimate about $400 million of proceeds, nothing big. you could see more to come that could be creative. jeanne: general electric one of the worst performers in the s&p 500 today still down more than 8%. i was boeing starting to contribute to aerospace industry woes? sheila: ge has done a phenomenal job. their share price says over the last two years this has been one of the top 10 performers out of the market. they reported a 5% ebit raise and eps rates and a 5% free cash flow rates but the stock is down on a reversion to the original equipment trade. so, more new equipment planes and out of the out of market rates. a lot of my investors are pushing back at me saying, sheila, your aftermarket rate is over.

i completely disagree. i think we will take a step back like we did in june and july on aftermarket multiples because they are at all-time highs but if you look at q4 exit rates with rates down printed, q4 oe rates are down 15% and up for next year. it seems like there is risk in that. i feel -- i still think planes will be slow to enter the market and older planes will stay in the fleet longer. aftermarket trading has legs to go but multiples won't stay where they are. sonali: ge aerospace up 75% this year, 8%. what's 8%? but at the end of the day what you are saying implies near-term volatility ahead. sheila: it's not the only one. as ty, heiko, you look at the share prices. we recently talked about more public. the stocks have been on phenomenal runs. we have basically seen aircraft delays, 400 unit cut out of aircraft deliveries out of 1500 deliveries expected this year. it contributed to 15% plus of

sides of the aftermarket names rooted there are rooms for runs because deliveries won't snap back tomorrow. it will be a slow start even if the strike is resumed tomorrow. sonali: rtx up. our next guest is a bit of a commercial real estate contrarian. head of real estate strategy richard hill bullish on outdoor shopping center says investors are likely wrong about industry and multifamily properties. we will have a -- have him talk about his view and defend his position next. this is bloomberg.

sonali: this is bloomberg markets. i'm sonali basak. rate cuts have begun at it looks like commercial real estate prices are starting to bottom.

many analysts are bullish on multifamily and industrial real estate development. our next guest says those categories can be less attractive than most investors expect. abigail doolittle follows real estate closely and richard hill is head of real estate strategy and research at cohen and steers capital management. let's start with the environment. there aren't as many rate cuts baked into the rest of the year as initially expected. you have to expect if you're going into next year with 50-75, maybe 100 basis points for rate cuts how much pain is left in the system? richard: the leading indicators of downturns and recoveries were left for dead this time last year. they have had a remarkable rally over the past 12 months. up almost 40%, more than 40%. believe it or not, the third quarter was a huge quarter for the sector. up almost 17% making it the

second-best performing sector of the s&p 500. you were right, though, the market was pricing in a lot of interest rate cuts. we think the market probably got a little ahead of itself. interest rates have consolidated a little bit. that happens. are there has been a huge rally as interest rates came down. now it is a matter of how fast and far the fed cuts. abigail: since you and i spoke recently i know you have a neat way of looking at commercial real estate. a lot of people have heard about the five stages of grieving. you apply it to real estate and first you look for the bottom in publicly traded real estate proceeding private. what about cmbs. we have heard about the wall of 1.5 trillion dollars of cm bs could talk everything up. listed rates trough. 12 months later private rates dropped. they are in the process of crossing if they have not already. something interesting happens on the heels of that.

delinquencies don't peak until valuations trough. why? you mentioned in the grieving process. i believe that is representative of the acceptance stage. lenders don't want to sell distressed properties to a distressed market. they want to sell distressed properties into a stabilized market. it is only when you have more clarity on where valuations are that distress begins to rise. but, it's a contrarian late cycle indicator you can get more constructive on private cre valuations. abigail sonali mentioned valuations. even though it's not as many as we expected couldn't pull it forward? could it be closer to 12 months or 24 months for cmmbs. richard: last cycle cmbs delinquencies peaked two years after valuations dropped. it's possible it's only 12

months. look at bank balance sheets, life insurance balance sheets prior to the gse. they peaked about a year after. you could see this work out a lot faster than in prior cycles. sonali: what you think about some of the sectors here? the idea of multi is facing pain. i'm curious what you think that is predicated on. that's a pretty contrarian view. richard: i grew up in a real estate family. we tend to be trend followers in the commercial real estate market. we believe that everything that worked in the past will work in the future. we are a little cautious relative to our peers on industrial and multifamily. great asset classes over the past 10 years. but we think there will be a meaner version. one interesting statistic. everybody loves industrial. but publicly traded industrial reits are the worst performing sector of listed rates this year down around 4% when the sector is up more than 10%. why? fundamentals are great. it's a great asset class. but, we think that supply will

be higher than what the market anticipates and it will lead to long-term growth reverting. it still might be best in class. but if you have good growth, not great growth, it impacts valuations. abigail: you like open air. you are less favorable on multifamily and industrial. i have to talk about the big one, office. in about 20 seconds come your thoughts. you may be a little contrarian there. richard: i was on the west coast last week and somebody asked me the best performing sector. i want to put office at the top of that. abigail: wow. rob: it might go lower before it goes higher but gosh, it's becoming really cheap and somebody will make a lot of money. there are a lot of green shoots emerging. jeanne: richard . a lot of changing expectations in the right market. the 10 year alone just above 420. still stunned by that.

that does it for bloomberg markets on the day. i'm sonali basak. more markets ahead and balance of power is well with two weeks until the u.s. election. buckle up. this is bloomberg. 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 become a this is balance of power.

live from washington, d.c.. joe: two weeks to go but early voting is setting records. welcome to the faster show in politics counting down with 14 days until the election and 15 million people already casting ballots. i'm joe mathieu alongside kailey leinz in washington. welcome to the tuesday edition of balance of power on bloomberg tv and radio. we have the swing state of wisconsin on the list of early voting states today. kailey: there will be a visit to wisconsin by tim walze and former president barack obama. you are right. we are seeing incredible numbers from the early vote already in other battlegrounds. according to the georgia secretary of state's office by the end of today one in four voters will have already cast their ballots. joe: remarkable. we have seen dail