michael mckee and tom keene.his is "bloomberg surveillance ." ♪ tom: this is as close to a and fedter of market that we have. the two-year, 0.72. that is a yield that is elevated but not yet breaking out as the parlor game to september 17 continues. i michael mckee -- now, michael mckee. rubicon for the bond market is next week when the fed needs. with a -- when the fed meets. joseph stiglitz arguing strongly that they should not raise rates. the call right now is not a close one -- on the contrary, it is as close to a no-brainer as such decisions can be. now is not the time to tighten credit and slow down the economy . an interesting piece, but it is surprisingly full of errors for someone like joseph stiglitz. he suggests financiers and corporate executives paid to go to the jackson hole meetings -- that is not correct. he talks about earnings being down 5% this year. from january they are down, but on a year over year basis, they are up significantly, and he makes this case that the fed is going to raise rates

controversy today, michael mckee and me tonight at 6:00 p.m., ray dalio and michael mckee, we was big michael mckee, as you and i get more -- get ready for more surveillance, risk parity written up in the wall street journal and the ft. >> it is his concept of how you invest, managing to lay off the risk of one asset class against the other, did not work in the last couple of months and has raised controversy because some people say the volatility it caused led to a lot of the volatility in the markets. you probably woke up to read ray dalio's defenses and we will talk to him about that. he is one of the few people i have talked to this week who is not concerned about the fed because he has his own model, we will talk to him about that. this.e will continue with thank you carl and kathy for coming in. with important perspectives on retirees. stay with us. this morning and our coverage tomorrow afternoon at 2:00 p.m. on the fed. stay with us. ♪ michael: good morning. it is 8:00 on wall street and we are on full fed watch. surveying the landscape ahead today. i'm michael mckee along wit

from where you sit, michael mckee with decades of coverage of washington, how can janet yellen and stanleyset of announcements? michael: they are not ignoring them. they will factor them in into their analysis where the united states will be in a year. but that is the key point. where will the united states be in a year, not where it is right now. we do not know what is going to happen, and the longer you wait, the more you still do not know what is going to happen because something else keeps coming up. you go back to may, we thought the fed was going to raise rates in june. now we do not think they will raise rates because of china, australia, whatever. clarity does not come. they have to make a decision waste on weather forecast is going to be. tom: ken rogoff on friday was adamant that they should not raise rates. brendan: i keep going back to what jim bullard told us, that the fed is not comfortable moving during a period of volatility. threee be fine moving it days from now when we are still in april 2 of volatility? the volatility -- michael: the volatility is calm and. willem: if t

i michael mckee, along with tom keene. we have a market check. if the fed is worried about global growth, so are we. starting in asia, the nikkei 362 points. in europe, the stoxx 600 is awful by 1.8%. six points on the day. in germany, down 2.8%, 290 points. that pressure transfers to the s&p. that is a 1% drop for the dow and amenities, 100 73. the nasdaq is off 47, 1% as well. this is being reflected to a huge extent in the bond market. the 10-year note yield drops from yesterday, two .16%. it was almost 2.3% yesterday. the five-year, 1.4 four and six basis points for the two-year note. the dollar.ing your best proxy for immediately figuring out the market impact of the fed. the most traded currencies diving. implications for emerging markets, particularly europe and japan. the greeks go to the polls this weekend. they will answer the big question, who cares anymore? voter apathy is high for the third election this year. polls show that alexis tsipras, the syriza party, and the conservative new democracy party running neck and neck. the preside

i am in new york and michael mckee is in washington.first question in the press conference this afternoon at 2:30? mike: i think it will be why? decision is, people will want to know what is behind it. tom: can a move the markets likely south mario draghi about a: 40 on that ecb morning. kelly have that same kind of energy at this press conference? mike: absolutely. there were -- nobody knows what the markets will do and they don't move uniformly after there is a big newsmaking event, so i would be prepared for volatility after 2:00. tom: michael mckee in washington york.am in new a clock check. we will be with you on bloomberg's "surveillance" until 10:00 a.m. will rejoin you at 1:55 with kathleen hays, look for that worldwide. ♪ tom: good morning, everyone. on cablevision, a site of relief that the rangers and then not involved but a little going on with that transaction. vonnie: that transaction is european cable operator alteese agreed to by cablevision guided at almost $18 billion. paul sweeney joins us. head of alteese decided to

tom: i cannot believe how michael mckee has used the stream over the last 10 days. you were in denver sunday, got back -- michael: it would be great if i could do something like that. tom: has peyton manning lost a step? michael: probably a little bit. but in the second half he came back. brendan: when you and i were out west, we talked about the fan race for the broncos, and they are deeply appreciative of john elway and what he has done. tom: we will get to michael mckee on the fed. he is our arch denver broncos expert. futures negative seven with a new rate structure, the 10-year i am not paying attention to. i'm looking at the two-year. euro,escenzi, the stronger -- the euro-dollar stronger, weaker. mentioned,greeley dollar brazil gets my attention. at 3.90 on brazilian real is a huge deal and a giant story for reading over the weekend. as we get smarter into october already. i doubt the german two-year with a very negative yield as well. let's go to the monitor redux. here are the fed meetings, here is the trend that we have seen of the two-year yield, and what

joining me, michael mckee and david gora. seems like we are set to end the week on a little bit better know because janet yellen has said those canaries in the coal mines do not worry her as much as people thought. tom: we will get to that in a moment, including a moment, including our reporter in amherst, massachusetts. let's get to top headlines with david gura. the fed chair spelled out her reasoning last night in amherst, massachusetts. myet yellen: most of colleagues and i anticipate that it will likely be appropriate to raise the target range for the federal funds rate sometime later this year and to continue boosting short-term rates at a gradual pace thereafter as the labor market improves further and inflation was back to the 2% objective. david: she looked woozy during the end of her speech. the fed spokeswoman says she is now feeling fine. the u.s. and china are agreeing on a new plan to reduce global warming in missions, but the air will still be thick when the .resident meets xi jinping they died last night, and t

tom keene and michael mckee. ael: the new ceo of yours airlines, taking over for jeff ek, who resigned yesterday. here is a story from "the wall street journal." michael: it is going to be a tough job. joining us now, airline analyst george ferguson on the phone. that is a very tough, long-to-do list. what does he have to do first? the merger has not worked very well so far, so it is going to be a priority. the interesting thing, though, he he really has no experience running airline -- running airline. he has to run the network and figure out what is going on and figure out what direction to take the company. theael: do we have any idea scandal that forced smisek to leave, what that will do to the company? george: so far there are no financial implications, but the investigation is ongoing. we are all trying to figure out if there will be some sort of financial cost to this investigation, but right now it does not seem so. tom: is there a best practice model for united airlines? is there another air carrier getti

that brings us to our morning on the treasury, here is michael mckee. ack loo the treasury secretary writing in the "wall street journal" a little bit of a warning to stay on reforms and noting no one expected restructuring to be easy and for years they have in other words, don't that again from jack lew. the u.s. is letting the chinese president know that it can't back slide and there's some feeling that with the instability in china they will put aside reforms because stability is important and they will go back to the old ways of doing things and the u.s. is telling them that's not good. it's an interesting balancing act because on the one hand we want to generate more business with china. xai is meeting with those in china and we want to also push ack on -- in the south china israeli sea and call them on the carpet in cybersecurity issues. peter: if the president made it clear he will continue reform. but we've talked before about how chinese growth and deceleration has continued. but the wag a dog, the pop will you explain getting fed up with govern

from new york, here are tom keene and michael mckee. tom: good evening, everyone.n a beautiful day north of new york city for one of our most anticipated events in the history of bloomberg "surveillance." this is 114 acres north of new york city. michael: a short ride.

i am michael mckee, along with tom keene. moments of silence throughout the morning as new york remembers the terrorist attacks of 2001. markets are lower out of the world, except in china, which finished up .1 percent today. mimihe u.s., the s&p 500 e- futures are trading lower right now. the dows off point to 5%. .4%.q down in europe, the stoxx 600 is off .8%% -- 2.81 points, decline on the day of the dax in .8%, asdown 79 points, well. the russian ruble is falling after the central bank there held the benchmark rank and changed for the first time this year, at 11%. 68.08 to six.for the brazilian real continues to trade a little bit lower, unchanged at the moment. that country getting downgraded yesterday. financial markets in trouble there. the euro going to $1.1270. the yield in the yes, dust in the u.s., 2.2% to the five-year -- 73 basis points for your two-you appeared we watching reaction to goldman sachs' suggestion that oil could go as low as $20 per barrel. not the best case, but they say it could happen. if supply

the 1.1x is down to down to 51.7 in the month of july. 51.1.m i want to bring in michael mckee, he joins me now onset. michael, a little bit of disappointment from the ism index. where does this tell you about where we are in the u.s. recovery story? big drop insaw a next bird orders for the month, which is what you would expect. the interesting thing about the most recent trade and gdp data is we do not see a fall and experts. everybody was waiting for that. we did not see a fall in exports. the production index falls. the quarters gauge is the weakest in more than two years. the fall could be related to what is going on with the dollar. it could also be related to oil, it is hard to separate the two. olivia: i was going to ask, how much do you think the slowdown in the manufacturing sector has to deal with the wave of -- we are not really seeing a wave of -- michael: that will come in october or september once the banks do a reset and credit check of those companies. at this point, we are seeing a little bit less production and earnings from that. that may be pressing down numbers.on t

joining me, michael mckee and david gura. michael: it is like we never left.this morning is incredible. company news today is just -- alcoa, mediadia -- general. there it is. and of course the drama, the aluminum company of america splitting in two is a good way to get the top headline. here is david gura. david: alcoa will split into two and become two public companies early next year. ,ne will keep the alcoa name and the other will focus on high technology products. vladimir putin at the u.n. today. the russian president will talk with president obama at the united nations. the white house says he anxiously asked for the meeting. the u.s. wants answers from him about ukraine and syria. backs the u.s., russia the shaky bashar al-assad regime. he spoke about it on "60 minutes" last night. other solution than rendering them help in fighting terrorism but at the same time urging them to engage in positive dialogue with the rational opposition and conduct reform. said russian troops will not join the fight in syria right now. a new deal gives russia more influenc

michael mckee, are you going to be in washington? michael: on thursday, yes. ♪ tom: good morning, everyone. so much is going on in international relations and economic as we go to the fed day thursday. -- top headlines, in the red this morning, down 1.9%. the longest rally since june. this is after week chinese industrial production week concerns over an economic slowdown in the world's's largest consumer of copper. copperhead finish higher in four straight sessions. copper's nexts move, the chief market strategist joins us from the cme. there has been some recovery over the course of september in copper. what happened to make it fall off this morning? >> you make a great point when you talk about chinese data affecting copper. that has been the story not only since the devaluation but also since mid-2014 when you saw some out of large chinese solar giant hitting copper at 7.5% at that point. the largest purchaser of copper is china. if the weakness comes in any a veryhan 7%, there is high correlation to copper prices and what china's

michael mckee and tom keene.conomic data come out and yields are decidedly higher this morning. like a mckee, the two year yield .7419 is a at the cusp of the breakout to a new high. michael: people reacting positively to the retail sales report or figuring hawkish lee. productionial numbers is not good, manufacturing down .5% and industrial capacity falls back. tom: i thought a conversation ertoff wasel chrtof riveting. michael: he was the second homeland security opposite and he is now chairman of the chertoff group and was -- i want to follow up by what do started telling us which was the gathering storm of their and you've been pessimistic as thele try to plan out coming months. how do you see something unfolding? what is the gathering storm and how does it manifest itself? secretary chertoff: i think it manifest in various ways. first of all, i think europe is under real stress, not just economiccaused by the issues with greece, but now the pressure of migrants which is actually creating a division within th

here's michael mckee. michael: why would you want to run for president? one of the problems out there. about meeting with xi jinping the last week. times," american and chinese presidents do not really know how to talk to each other. they are like computers on different operating systems. he points out all the different ways the country's think differently. we think of american exceptionalism and they think of communitarianism. both countries like to think of themselves as the preeminent force in the world and that is a situation that cannot continue. it: was the chinese that is -- was the chinese visit diminished because of the pope? michael: that is a public relations aspect. the real work is getting done inside the white house. chinese were upset about this, it took xi jinping at the -- out of the headlines. xi jinping was meant to be red obama,t act on cyber by he went to washington state with the tech executives. split because we would rather have the money than the clean conscience? ian: you have american corporations saying we want to do business a

it's nice to sit in michael mckee plus usual seat. : michael mckee is in washington and will go to himng about this, the fed is looking at the economy and unemployment is low. they want to start normalizing rates but we've got markets and turmoil, a chinese economy slowing and the european central bank that cut its inflation forecast. e marketse got som moving in futures were negative all day but now we have a nice pop with the dow up 50 points. to see the two year yield go 0.86 means it's time to talk to michael mckee. : you will bring us some of the headlines in a minute, what are we looking for today? what are the things you have to sort out in a matter of minutes? the time for talking about what they ought to do is over and it's time to talk about what they did. we will want to know why the user stood pat or raised rates and it will tell us something about what they will do in the future. if they stand pat, what do they say about october and how will they get us there? if they raise rates, we want to know about the mechanics. it's not just raising fed funds. it's all about thedot p

i am michael mckee, along with tom keene.roughout the morning as new york remembers the terrorist attacks of 2001. markets are lower out of the world, except in china, which finished up .1 percent today. mimihe u.s., the s&p 500 e- futures are trading lower right now. the dows off point to 5%. .4%.q down in europe, the stoxx 600 is off .8%% -- 2.81 points,

we brought in our editor, michael mckee, and chief u.s. economist carl riccadonna. saying september. and then we say december. michael: the real question is how do we know, how do we decide that it is even a live meeting and a possibility. they didn't even give us a decision framework. janet yellen repeated what she said about we want to see progress and the labor market because that will help bring up inflation, and yet they forecast that even though unemployment is going to go down, inflation is going to go down. pimm: we are going to talk about inflation in a second. i want your thoughts. policymakers have an inclination to get off the zero bound before the year-end. we know where we need to be on the labor front. we have to watch leading indicators of inflation, like the pace of overall economic activity. it is not what the next report tells us, but what the feds a horizon isth over a really. it is going to dip down through year-end. if the economy is going above trend, the inflation will occur. we watched the fed us beaked -- een now pimm: just to point this ide

coming up in the next hour, highlights from tom keene and michael mckee's exclusive lastrsation withay dalio night. plus, stay tuned for the acquisitionltice's of cablevision. new yorkers may finally get a better choice of cable. the second republican debate left note weston's about what many candidates think about the iran nuclear deal. we will hear from bill cohen. those stories and more are ahead on the bloomberg market day. for the faton day after nearly a decade of historically low interest rates. today could be the day the chair yellen announces it could be time to start normalizing. aboutst guest says it is time. he joins me with a look at why he thinks a rate hike would be good for markets. would be a surprise, wouldn't it? right, we are about 25%-20 8% in favor. , the expectation for a rate rise will be much higher. if you go back a couple of months, the bond market will reflect a much higher expectation. what we have had in the interim some worrying development in like the emerging markets. things that are normally not the purview of the fed and its input into raising the f

michael mckee and and tontine -- and tom keene.ations without japan goes to new recent weakness moments ago. that is part of our forex brief brought to you by interactive brokers. are your returns tracked down by high transaction costs? your costs can help maximize your returns. kr.com -- visit ibkr.com. in washington, no one cares about the futures. michael: that is a fact. everybody in washington is focused on pope francis who is just about to arrive at the white house. it is a state visit because he is technically head of state but it is not the kind of state visit we are used to. it has got to be the toughest ticket in washington to be on the south lawn of the white house right now. thereet to live is covering the president and the pope's remarks. what time did you have to get up? good morning. i am a little sleep deprived. and reporters are covering spent the night a few blocks from the white house so as not to contend with road closures. also because, we had to be there at 5:00 this morning to get through the white house gate

michael mckee, bloomberg, new york.ad of the world's biggest hedge fund firm think about the rate decision? in a conversation with bloomberg tom keene and michael mckee, lio says thes ray da u.s. is well-equipped to handle a crisis. reporter: ray, when we look at this, with allf the work you have done, all the experience you have, are these derivative strategies around bonds and equities able shock of thethe next stop fund? >> there are all sorts of embedded risks in different ways. all the time. i would say we are better able to withstand them then we have been before, there is less liquidity in the markets. there's a fair amount of essentially dynamic hedging. dynamic hedging is a way of insurance companies when they take their protection in terms of interest rate risk, that is an issue. by and large, i would say we are better able to withstand them, in terms of not the short-term volatility, but in terms like the bitter -- bigger moves we are better able to withstand them, provided we don't have a big event, like a t

. >> michael mckee, we talk about the big stories.s itsexample, sweden own story in itself as it deals with cap in gdp in europe. >> it raises the question of whether or not the fed is communicating well with the markets at this point. you had build of the come out and say his enthusiasm for rate increase waned. stanley fischer and says we haven't made up our mind yet. today, john williams and the wall street journal comes out and says maybe the rate increases that i called for this year won't happen at all. people are getting whipsawed by this. >> they are. we discussed this in the prior segment. the fed pats itself on the back by saying their data dependent. the data dependence is not a monetary policy. you see stanley fischer's take on his preferred course, john world-classey are economists. but ultimately, the fed is a committee chaired by janet yellen. at some point, sooner or later, she's going to have to get an arm around this and really lay out with her liftoff strategy is. >> does it make a difference if they raise rates to f

tom keene and michael mckee. is it a morning must-read? michael: we will talk about the donald.released his tax plan and analysts note it makes no financial sense. joe wonders if all of the dumb things he says are a giant topless the stunt. publicity stunt. all his life he is at a deep need to be perceived as a winner . he always has to be perceived coming up on top. that is why i do not think he will be at the mercy of actual isers in a primary, to do so losing and everyone will know it, he will be out before iowa, you read it here first. he said they will not even vote. tom: the emotion of this, i will , the shift in the winds, like a mary poppins or weathervane. that ship happened four days ago. -- shift happened four days ago. michael: a number of people have noted in the last couple of days he is not felt, the pundits -- the pundits who say he is done have been wrong. do they continue to be wrong? tom: you have covered politics for decades, is it anger politics? .ichael: sure of the people who say they are voting for him, do they actual vote? many people say they are suppor

michael mckee of bloomberg "surveillance," that really speaks to the moment. michael: it does. about the report, the u.s. abstains from the condemnation of the u.s.-cuba embargo. phil: what we are hearing is that is a possibility. what it aligns with is what the administration has said here the president has called for congress to move for the trade embargo in place since the end of dwight eisenhower's administration. congress is not going to move on that so long as republicans are in control. this is a way to show that that is what they want. tom: thank you so much, phil mattingly in washington. coming up, our conversation without imposing and ruchir sharma on china. ♪ tom: we welcome you on a monday. we are not as fed-infected as we were last week. we welcome all of you with a more eclectic "surveillance." agency says iran is making progress in cooperating with the nuclear deal. the international atomic energy agency inspected a research building and says no equipment linked to atomic weapons was found. the agency will report next month on iran past nuclear work. the u.s. may

[inaudible] >> michael mckee from bloomberg radio and television. if the economy develops as the summary of economic projection suggests, you will see improvement in labor markets, but it won't push inflation up any faster. so i'm wondering what the argument is for raising rates this year as suggested by the doc plot? because even allowing for long and variable lags, you're not forecasting an inflation problem that would seem to suggest the need for a steeper and faster rate path for at least a couple of years. >> so if we maintain a highly accommodative monetary policy for a very long time from here and the economy performs as we expect -- namely, it's strong and the risks that are out there don't materialize -- my concern will be that we will have much more tightening in labor markets than you see in these projection s. and the lags will be probably slow, but eventually we will find ourselves with a substantial overshoot of our inflation objective. and then we'll be forced into a kind of stop-go policy. we will have pushed the economy so far it wi

i am michael mckee tom keene.aught up on the markets at this hour as to get closer to the opening. we will start in asia with the shanghai composite did not move a whole lot and finished up a little stability. fromesident xi has washington, leaving seattle for not soton, d.c. today, much stability in japan. investors unimpressed by the three newster abbe's areas of economics, we will talk about that today. the yen has strengthened considerably -- has fallen considerably over the last few minutes. the stocks, six hundred in europe, lowered by 1.6%. vweurope, it is all about and out bmws diesel cars may commit more pollution on the road then the lab and german stock taking, even though business confidence higher this survey comes up. also in france, the survey unchanged but the cac 40 down 1.6%. here in the united states, the knockout effect spreads were investors are on edge and we are waiting for janet yellen to importantght on an address. ahead of that, markets in freefall with s&p 500 index down 15 points, .75 o

michael mckee will be followed by janet yellen's press conference.ll ahead, reading the tea leaves of the market. we will break out some analysis. ♪ olivia: it's time to get you caught up on action around the world. it started in asia. -- shanghai composed it composite fell 3%. it is down by 1.6%. one big story coming out of the region, chinese indicators showing the economy is falling further into the rust patch. some measures announced on tuesday. >> it is beginning to cool and beginning to change. policymakers seem positive they can rise. chance to jack up the credit tabs. china is embarking on the biggest overhaul in the public sector in 20 years. they will be channeling or encouraging more private capital. they will hopefully make better use of those assets. a more detailed blueprint in the month ahead. it will be affecting tens of thousands of chinese companies. the -- it is a painful transition. olivia: mark barton is standing by. : stocks are falling today after the biggest increase in two months. i hate the semi-can broken record. it's all a

gross,hat was bill talking with bloomberg's tom keene and michael mckee. knew with jack rivkin and alan krueger. bill gross for this in writing, reiterating the idea that the fed is one and done, even if they do move in september or october, were december for that matter. it's going to be a long time before we see the fed go from one hike to the next hike. jack: let's hear from alan. alan: i think they're going to move slowly. my don't know if they would say wanted done. i think he will be data dependence. i think we will see a gradual increase. monetary policy, even after they left office, is still going to be very accommodating for the u.s. economy. i agree. it's going to be a slow process of rate of the amount increases, and secondly, how much the rates themselves are increased. i worry that if they don't do something in september and october, then it is next year. i don't think the fed wants to actually impose another variable when it comes to year-end rebalancing of portfolios around cash movements etc.. they've got their chance in september and octob

from new york, here are tom keene and michael mckee. tom cole and good evening, everyone. beautiful north of new york city for one of our most anticipated events in the history of bloomberg surveillance. this is 114 acres north of new york city. michael:

from new york, here are tom keene and michael mckee. tom: good evening, everyone. we are here on a beautiful day north of new york city for one of our most anticipated events in the history of bloomberg "surveillance." this is 114 acres north of new york city. michael: a short ride. tom: a nine hole golf course. it worked out well. we will be here tonight. michael: we have done this for five years in a row and this is the first time we have been able to use this new facility. tom: is it bigger than delaware or rhode island? michael: it is about the size of delaware but without i-95. tom: we say thank you. we need to get started. when we planned this with mr. dalio, we said we need a fed meeting with a little drama. ray: it's a very simple machine, i think. and so, there are three main factors, productivity, which produces income. you can spend at the into the day what you earn. but you earn is a function of your productivity. for a country it is the same as individuals. work hard, you are educated, you can be more productive if you work harder or more creative. ove

michael mckee of bloomberg surveillance asked francisco, the head of global commodities america for bankrrill lynch, to assess how commodities are faring. >> can -- industrial metals do not too great. it is only just starting. we are seeing mines closed down -- min. the balance was much smaller to begin with. remember when we think about metals, it is important to keep in mind that china consumes half of the world's metals. capita isption per two times that of the u.s. the average chinese consumes 1/8 of the oil of the average american. 1/5 of the japanese. it is a little smaller consumption rate per capita. michael: what is your view of china's economy and what its economy demand will be going forward? francisco: the economies are slowing down pretty meaningfully. we have seen it for a while. look at data or has been pretty flat for quite a while. it has been flat for most of the year. a lot of indicators are pretty soft. think the chinese government will do more measures to stimulate the economy. maybe a fiscal package. maybe more monetary stimulus. i am not saying things will be great

michael mckee, bloomberg.that sets up conversation very nicely and we'll return to it in a moment. breaking news around consolidation in the cable sector. let's get to caroline hyde. we will: as expected, indeed see the european cable operator buying up cablevision in the united states. it will make the fourth biggest u.s. cable provider. tag, meeting price that total enterprise value will be $17.7 billion, including debt. they say they will deliver $34.90. patrick druggie is paying up in cash for cablevision. transaction will close in the first half of 2016. overall they will be using $3.3 billion of cash to finance the deal and $14.5 billion of new and existing debt. this is a leverage deal overall. the transaction will be financed at $3.3 billion in cash. as usual, loading it up to the acquisition company. the finance commitments come from j.p. morgan, barclays stumping up the money. let's take a look at what happened to shares. we did see this by cap an earlier. we know this deal had been on the cost after

we will be with tom keene, michael mckee, and primetime surveillance will be commercial free for oneat 6 p.m. new york time. mark: welcome back to the bloomberg market day. let's get to a check of the markets on this friday. >> it looks like we're seeing a little bit of red, it has been in the green for most of the day. the s&p 500 down 2/10 of a percent. the s&p actually doing pretty well this week. they have not done this well since july. the dow jones industrial average o of 100th of a percent. imact to take you to the function, charting the s&p 500 by sector to see what is doing well and what is not. doing worst is energy. that has been the story of the year. if you look in the sectors that have been doing well over the course of the year thus far, utilities have been doing the best. energy has been doing the worst. the reason for that today, oil. we had this note, from goldman sachs this morning reevaluating their forecast for oil. the big news, the headline from that is the fact that goldman is now saying we could see oil go for $20 a barrel which is pretty startling. the reaso

from new york, here are tom keene and michael mckee. tom: good evening, everyone. we are here on a beautiful day north of new york city for one of our most anticipated events in the history of bloomberg "surveillance." this is 114 acres north of new york city. michael: a short ride. tom: a nine hole golf course. it worked out well. we will be here tonight. michael: we have done this for five years in a row and this is the first time we have been able to use this new facility. tom: is it bigger than delaware or rhode island? michael: it is about the size of delaware but without i-95. tom: we say thank you. we need to get started. when we planned this with mr. dalio, we said we need a fed meeting with a little drama. we need emerging markets imploding. we need fear about productivity in this nation. it would help to have a presidential debate overlaid on top of it. four of the five candidates tonight will be talking about that. why don't you start? michael: if you sold in may and went away, it is time to come back. we will start with ray tonight. interestingly enough

michael mckee joins us. ok, what does this mean? michael: it is interesting.ve given if she had gone to jackson hole. , academicese are dry presentations. maybe that is what we get. was there and he did not give a dry, academic presentation. we may get clarity about what the fed thinks about interest rates and when they might make a policy move. they left the meeting last week rather confused. did.: they do you think that jenny yellen and her cohort are surprised by the market reaction? i don't know if surprised. i'm sure they did a postmortem. but the market is telling them they did not sell their program well. that inflation will go down even when the in employment -- on implement rate goes down. going to raisell rates, that did not make sense to a lot of people. historichael, is there context to be fed saying something and the markets many back and saying we are so confused we will be in the red for a week? michael: it has not been, because the fed has made it what they were going to do. at least sense alan greenspan. it happened once before when bembenek h

. >> michael mckee from bloomberg radio and television. if the economy develops as bit projections suggest, you will see improvement in labor market, but it won't push inflation of any faster. i'm wondering what the argument is for raising rates this year. even allowing for long and variable lags, you are not forecasting and inflation problem -- problem that would need a faster rate path for at least a couple of years. chair yellen: if we maintain a highly accommodative monetary policy for a very long time from here, and the economy performs as we expect, namely it is strong in the risks that are -- and the risks that are out there don't materialize, my concern that will be much more tightening in the labor markets then you see in these projections. the lags will be probably slow, but eventually we will find ourselves with a substantial overshoot of our inflation objective, and then we will bei. that's something we've seen in several european countries. it's not something we talk about today. i don't expect that we're going to be in the pa

tom: there are four american flags against the white wall, and michael mckee, staff is lined up. it looks like the staff of lehman went they went under. michael: to give you some idea theow divided the party is, values voter summit was underway. senator marco rubio speaking to the group when this news rope. he announced it to the group on stage. and the crowd burst into applause. these are republicans bursting into applause because the republican speaker of the house was deposed. tom: excuse me. jump in here. >> i want to mention, we are speaking with thomas davis, who was a republican congressman from virginia and now works for deloitte consulting. phil mattingly mentioned that this is going to make it difficult, even for people who lobby, to get anything done, given the state of the house post-boehner. >> it has been hard to get anything done. congress has been noncredit. we had a highway bill on life support. you are passing no appropriations bills. just continuing resolutions. the omnibus is a check mentality between the republicans and most branches of republicans and democra

michael mckee and myself with dalio of bridgewater.going to embarrass ray with, what is the euro going to do or what are the patriots going to do? the conversation next wednesday at 6:00 p.m. a single best chart. we are thrilled to do this. this is the acclaimed weekly index of bloomberg consumer comfort. up we go, the golden years of the 1990's. down we go. we soar to get back to the midpoint. then it does not happen. there is that little bit of recent rollover we are seeing. this goes back to your idea of structural slowdown overlaid on top of a cyclical slowdown. aren't we supposed to have a recession at some point again? every eight years? lakshman: not every eight years. it could be every one year or every 10 years. with your chart, there is the slowdown. i would read what is going on at the end, that is going to continue easing down. when we look at the expectations or the mexican -- michigan expectation, this is more frequent, this is weekly. they all peaked in january. olivia: all right. lakshman: they were lower in june, they

scarlet: thank you so much, michael mckee and carl ricca donna.imm: join us for live coverage on the federal reserve's rate decision at 2:00 p.m. eastern. this is followed by janet yellen's news conference that begins at half past at 2:30 p.m. eastern. scarlet: michael will be there at that news conference. pimm: we have much more coming up on "bloomberg market day." ♪ scarlet: welcome back. i'm scarlet fu. pimm: i am pimm fox. ramy has an update on what is happening in the markets right now. no, it is not ramy. it is matt miller. matt: we have a lot in common, but our name is not one of those things. we are looking at gains of almost 1% across the board. there are fluctuations this morning in early trading. we are pretty solidly up. and 16 528on the dow the level there. i want to show you a couple of stocks. i'm looking at a really interesting terminal screen. the bloombergis social velocity monitor. you can see a lot of things here as far as what people are tweeting about. you can see the volume of the news here and what time someone tweeted abo

with me, michael mckee. michael, the two-year yield, does that signal that janet yellen has to act?ere going to raise rates -- that is not seem to be the market perception. other factors seem to be at work. tom: 93 degrees yesterday. it was a good time to get a cold. michael: only you could do that. the markets are better. that is a good thing. tom: let's get top headlines with ramy inocencio. ro globale is a

michael mckee, bloomberg, washington. guy: what is happening now. the markets, awaiting this decision from the fomc. stateside?ed julie has the details. julie: u.s. stocks were relatively unchanged until the fed came out and said there would be no increase in interest rates. we saw quitehe -- a bit of volatility. 193dow rising as much as points and then falling as much as 100. the nasdaq finishing higher. investors trying to figure out what all of this means and trying to parse through the janet yellen press conference. stocks climbed to the highs of the day as she gave her prepared statement and then fell as she answered questions, including saying a rate increase is on the table for october. we saw those gyrations across asset classes. the two-year note was also an injured team trade. calling the most in six months. before the beginning statement coming out. we saw the 10 year yield falling, in this case down the most sense june. no change in the interest rates at this meeting. we saw them meeting and other assets. the dollar index falling the mos

tom: i spoke moments ago to michael mckee.he tradition, when the fed official moves to a university such as the university of massachusetts in of the 2 hours drive west of boston, when they make those trips, you don't know what the game is going to be. is a going to be a monetary, market moving each, or is it going to be an narrow, academic, geeky speech? we don't know, and we will only know when it is released. guy: looking forward to the show and the speech. thank you very much. tom keene up shortly. related -- the strong dollar hitting h&m's bottom line. the second-biggest clothing retail is missing profits. this is bad. >> it was actually a little worse than expected. let's take a look at the numbers. a lot of analysts were looking out for this gross margin number. it came out in line with estimates, 59.9%, but it was the weakest third-quarter growth in 11 years. then we had pretax profits at 6.9 4 billion kronor, net income coming in at 5.31 billion kronor. amiss on both those numbers. on the plus side, we did see sales f

michael mckee, bloomberg. francine: let's get a look at how the markets have been reacting. ryan chilcote is at the breaking news desk. ryan: if you look at equity markets, which i have been watching for the last half hour, european equity investors don't appear to be delighted with the news out of the fed, the decision not to hike rates. take a look at the stoxx 600 -- down by 1%. the daxvidual indices, is standing out. is down about one third of 1%, part of the reason why it is the least hurt of the indices had morning is brand, which gold up. the coo made some bullish comments about production this year. finally, the euro did top on the back of the fed decision yesterday. it rose buy almost two thirds of 1% and today it is up just a tad, effectively holding on to the gamin he got yesterday. francine: thank you so much. ryan chilcote there. the china slow down was slighted by janet yellen as one of the fed's big concerns. let's turn to nick. what has been the impact of her remarks on the chinese economy? nick: i think there are two interesting things going on -- that she a

michael mckee and i prepare for back to school. -- you: dark chocolate must have been shopping for schoolne small enough to appreciate it. tom: we were talking about chocolate or the lack thereof in our school lunch. lots to talk about. that's gets a top headlines. here is ramy inocencio. ray micco there is another -- more china exports fell by than 5% in august because of weak demand overseas. chinese stocks fell on the news, but they bounced back to post again for the first time in five days.

he will be joined with michael mckee.t back here on the bloomberg "market day." ♪ scarlet: welcome back to the bloomberg "market day." i am scarlet fu here with alix steel. going to julie hyman. 45 minutes that in trading, and you will art on potential m&a. is almost happy hour. we have been talking about the potential year -- fear dear -- beer deal throughout the day. the offer has not been made as of yet. it would be the largest in the history of the beer industry. here is how the principles are trading. anheuser-busch is on the rise as well. there is owns 27% another large shareholder as well. investor.rge african they would need to sign off on this deal because he is another large shareholder of sav miller. we are watching other beer makers. miller. there is talk we would have to see sab miller exit the joint venture with molson coors in the united states. what is so striking to me is what it really points out is is much beer industry struggling with the rise of craft beer and how it is trying to combat that. it is. i

tom: michael mckee and i were pleased with that interview. a most important day for the global economy, whether there is action or inaction from chair yellen at 2:00 p.m., roughly 7:00 p.m. your time. we will try to talk to a cross-section of people away from the hysteria of the moment. they have been huge benefits over the years of where the putting green is for janet yellen. on "surveillance," sir martin sorrell will join us with the global ramifications of the reality of the economic divergence. ethan harris will join us. he has one of the most important short reads on the shift from greenspan to bernanke. he brings us terrific historical perspective. what i noticed yesterday within your interview was lloyd blankfein picking up that tone of this is a fed that should do nothing. francine: this is a fed that should do nothing. maybe they shouldn't have done so much on forward guidance. that is a whole of the debate area thank you so much. investors preparing for a possible rate hike. on this side of the atlantic, mark carney has signaled tha

first, michael mckee the backdrop to this report.the mario draghi press conference yesterday, you cannot tell me that china and brazil will not affect janet yellen's decision-making off today's report. only to the extent that it would impact the u.s. economy. markets hate uncertainty, and there are two big uncertainties in the world -- how much will china slow, and what will happen when the fed raises interest rates? until that happens, you will see volatility continue. .628 yield, that is a tea leaf out there. michael: that is today's t leaf. the markets go up in the markets go down and the fed knows that, and they will not respond to each twist and turn in the market. today, raghuram rajan in the g20 meeting, if you get back to a more normal reaction function, ordinary way of making monetary policy, that could calm volatility because markets know what to expect. vonnie: the other problem is that august is a terrible month on which to base any kind of reaction. michael: that is an interesting point. augusts, thet 27 number has come

i spoke with michael mckee.as some real .ubstance to the nuance she was slightly ill near the end of the speech but is doing fine this morning. speak, among other people, to james sweeney of credit squeeze. he has been dead on about deflation. lausanne sounders will join us aboutharles schwab market events and how they lead into the markets and what we do with our money. the equity markets have been volatile but at the same time stable. nick will join us from eurasia group. we look at the beginning of our international relations stories. president xi traveling to washington. we have the pope in new york city. i got a glimpse of him last night, which was quite something to see. to thatn traveling united nations, where he will speak. president obama will speak monday. i was in the lobby of the ritz carlton hotel last night and it was absolutely jammed with contingents from the united nations. francine: it is going to be an incredible couple of days. we also had this index physically saying that london is now the f