In the final 30 minutes of the thursday session. All of these stocks are rising. Europe is getting for a second day. All of these currencies are getting against the dollar except for the pound. Today, the talks between the eu and the u. K. Not going as smoothly as some would hope. Commodities are declining. A 3. 4 increase in revenue. The Telecoms Company winning orders for its Construction Business and gaining more mobile phone providers as well. The conglomerate that generates most of its revenue from construction is set to benefit from the massive expansion of project. Ris benefiting from a pickup in the local building. Arket shares of British American tobacco have tumbled after the fda said it is seeking to reduce nicotine in cigarettes to nonaddictive levels. The Regulatory Risk has been over discounted says morgan stanley. Remains say that b. A. T. The strongest among its peers. Any potential impact seems more than embedded. They wrote that in a note yesterday. 7 white line, it is done by in that period. The blue line, done by a percent. What a month it has been for metals. What a year it has been for metals. The typical inverse correlation between the dollar and metals is vulnerableng prices to a rebound in the greenback following trumps election. As trumps agenda stalls, there is a weaker dollar. It is keeping metals like copper, aluminum, and lead at higher levels. There is a divergence between the dollar and the London Metal Exchange index now. Will it last . Morgan stanley questioning it. Abigail, what is it like over there . Abigail the bulls are in charge again. We have nice gains for the dell. For the dow. The nasdaq adding to yesterdays big rally. Investors looking aside from the geopolitical tensions that we saw earlier, and buying that di p. It was brief. Averages are higher on the week. Lets look at the nasdaq 100. It has been quite some time since we have seen a record high, but this is the nasdaq 100 since its last alltime high. It is on pace for a new record close. Lets see whether the gains can hold. Intraday high these are some of the big gainers for the nasdaq 100. Gilead sciences up for the third day after the announcement that the company has bought for 11. 9 million 11. 9 billion. Up 3 . This could reflect that the order member has bought more th an 400,000 shares. In the last week in the devastation of harvey, we have had a massive rally for unleaded gasoline. We see it up about 28 . Vonnie, this reflects something in an interesting way that mike mcglone is calling a short squeeze. Online capacity from the refineries has gone offline, but if we look at the difference between the september and october contract, there is a big distortion. Mike lafleur and say mike mcglone says that on the year, it will only be up about 1 . Vonnie we will follow it tick by tick. Lets check in on the first word news. Two explosions rocked a Chemical Plant in the houston area that lost power during Tropical Storm harvey. The French Company warned that the plant without power to refrigerate chemicals could become volatile. Authorities expect the fire to burn itself out. Floodwaters have receded in houston today. Firefighters plan to conduct a block by block search in areas that were inaccessible. The death toll has risen to 31. Harvey has knocked out one offline. Capacity the cost of rebuilding from the storm may be a roadblock for president trumps tax cut plan. May multibilliondollar cost stiffen resistance by lawmakers to any changes not offset by revenue. Ism courtney donohoe, this bloomberg. Vonnie lets focus on the cost of harvey. Firm focusesling on damage done by the storm, wind, and inland funding flooding. It could reach as high as 90 billion, the damage. Tell us how you are modeling this and where you are getting the 90 billion number. Good morning. It has been a long week, particularly for texas. It started as a conventional hurricane and has wanted wondered to houston. It has become the largest disaster in u. S. History. The consequences suggest that the economic losses could be 70 billion to 90 billion. A catastrophic event. Vonnie how did you reach 90 billion . What is that composed of . It is composed of the primarily urban flooding across the metropolitan region. We measured water flows and flo od depth. We modeled it against detailed databases in the region. Industrial, commercial, residential, infrastructure. We are calculating 90 billion of direct damage. Mark flooding is the biggest percentage. How does that relate to wind and storm surge . Guest it is driven by the rainfalldriven flooding. Many hurricanes conventionally drive damage through wind and coastal surge. Harvey is a flooddriven event from rainfall. Will the majority of the losses be uninsured . Guest yes. The insured losses will be significant, but the majority will be uninsured. Private coverage for flood is limited, for homeowners, and commercial and industrial. Most of the losses will be uninsured, which could slow down the pace of recovery. Vonnie what could this rise to . What metrics are you watching specifically . Guest there is always uncertainties. We call these event super cats. When you are gilling with a super cat, there will be surprises. One thing to watch for is the postloss amplification. There will be an enormous demand for reconstruction which could drive inflation in the cost of rebuilding. Other surprises are the ones we witnessed with the Chemical Plant. These events can create feedback loops which can lead to secondary or tertiary implications, such as environmental spills, degradation, or other losses. Vonnie do you anticipate this system having any longterm impact as regards policy . Warehouses should be built where houses should be built, whether on floodwater planes . Guest i have been doing this for 30 years. I am a realist. It should have policy applications. This is a city adjacent to the gulf coast. With climate change, the severity of these floods will only get worse. It should have a significant impact, and houston should be planning for the recovery, and to lay down the policies for resilient reconstruction that lead to the city being better able to withstand these events in the future. Mark can you give us an idea of what the insured loss will be . Guest we expect that the insured losses will exceed those of hurricane sandy, but are unlikely to get as bad as katrina. These losses will be significant, but the Global Insurance industry, the reinsurance capacity for catastrophic loss is 600 billion. The Global Industry has a tremendous reservoir of capacity and capital. Mark what about the National FloodInsurance Program . Guest that will be a problem. The program is already 24 billion in debt to the treasury. It has a credit capacity of about 5 billion. Policyholders00 through the Flood Insurance program. We are estimating that the losses could be the worst ever for the nfip, which will raise questions about its upcoming reauthorization. Vonnie you have been studying these for many years. You have seen lots of natural disasters and catastrophes. How do other countries treat National Natural disasters . Is this a u. S. Centric phenomena . Guest this is a global phenomena. Japan is a developed economy and has a long history of earthquakes, typhoons, and floods. Across europe. New zealand. This is a global phenomena. In the u. S. , we have a make some of private insurance, some publicprivate partnerships. This is an opportunity for fresh thinking on how to get insurance covered more broadly in our society, so we can facilitate more resilient recoveries. Vonnie we look forward to having more conversations on this topic. Mark coming up on the european close, a round of brexit talks ending in stalemate. Both sides deadlocked on key issues. The negotiator for the eu mocking theresa may. This is bloomberg. Vonnie i am at vonnie quinn. Mark i am mark barton. We are counting down to the european close in 15 minutes. Lets talk brexit. The latest round of talks ending in a stalemate. Michel barnier and david davis spoke in brussels. Separation from the European Union and our relationships are inextricably linked. Supervise, to enforce our laws must not and will not the undermined by brexit. This is not about skipping ahead, or trying to reopen previous discussions. It is about pragmatically driving the process. After this week, it is clear that the u. K. Does not feel legally advised to honor these obligations after departure. Lets continue to Work Together constructively, and talk to people about the process. Mark joining us now is the reporter who covers brexit for bloomberg news. Was any progress made in round three . Reporter not really. There was some sort of technical works done on some of the complicated stuff, but when it comes to the politics, these sides are as far away as they have ever been. The Biggest Issue is this bill. The financial settlement that the eu wants the u. K. To pay. The thing is, it is becoming isntthat the u. K. Thinking that it owes anything. Bridging the divide is a most impossible. Mark were any transitional deals discussed . That is Wishful Thinking, isnt it . Reporter yeah. I mean, they have said there is no transitional deal. Discussions can happen until october, at the earliest. The u. K. Have been pushing for it. They are indulging in Wishful Thinking as much as anybody. They are not getting anywhere. The eu is being stubborn, and flexible. That is the u. K. s biggest criticism. They say, you are asking us to compromise, but you will not compromise. We will not move in less you move. They all come back to brussels in about a month. We hope to make progress then. It is not looking hopeful. Mark the u. K. Reached out earlier saying more regular talks are needed. Will the eu grant them that wish . Reporter it is funny. The eu seems to be more in favor of that than the u. K. Both sides have said that they want more regular talks, but both sides it is not happening. You have to wonder whether there is a tactic to say we are prepared to talk more, but you are not granting us that wish. You have to wonder if that is just brinkmanship in this process to get a deal. Until theyems as if, try to find some middle ground on the bill, these talks are not going to move forward, which leads to the obvious question. How do we find a middle ground on the bill . Reporter it is difficult to see any middle ground being found during these regular negotiation sessions. What we are wondering now is when theresa may meets her fellow eu leaders at a summit in brussels, will that be the moment it gets thrashed out . If it does, will it be part of a grand bargain which incorporates everything else, like the transitional deal, the future trade relationship, citizens rights, etc. At the moment, the sides seem further apart than ever. You have to wonder if there will be a political solution. 4 00 a. M. , latenight summit in brussels, that seems to be the way it will go in october. Mark ian will be covering it all for us from the eu in brussels. Vonnie good luck to him on that one. Grocery store fell to the lowest on record. Is it the Amazon Effect . This is bloomberg. Vonnie live from bloomberg World Headquarters in new york, i am vonnie quinn. Mark i am mark barton for the european close, a matter of minutes away. Fell the most on record. They are facing intense price competition. Joining us is charles allen, analyst for Bloomberg Intelligence. You say it is a longstanding issue for carrefour. What are the big issues it is facing . The chief executive has a lot on his hands. It is difficult to know where to start. If we start in the stores in france, the assortments are out pricing of many of the items is wrong, which means the margins have fallen. The internet is attacking their nonfood areas. They have too much stock in the business. I could go on and on. Digital. Did well on guest it gives them a chance. De commercethis rue last year, but they are quite a long way behind their competitor. E a quarter of their main competitor. Vonnie what about the brickandmortar footprint . Anybody saying that they should be doing anything about that . Reporter many of the stores are too big. They have stores that are over 2000 square feet, far too big t hese days. They have a separately quoted property company, and they could sell some space to that. This is some thing that people have been saying for 10 years and nothing has happened. There is so much internal inertia at carrefour that it is difficult to get anything going. Vonnie any activist investors getting involved . I know that casino definitely has one. Has had carrefour activist investors for close to 10 years. The chairman is involved. Colony. S a u. S. Fund they pushed and pushed. None of them found the answer. Mark they found the answer to amazon. It sounds like they have enough on their plate. They have not even begun to worry about the threat of amazon and whole foods. Reporter the biggest threat in france it is a welldeveloped market for grocery online, but ir competitor has four ti mes the sales in that area. Grocery online, they are way behind their greatest competitor. Mark are they quibbling . Haveean retailer shares been hit by the whole foods cutting of prices. What is the knock on effect . Reporter the prices, the banana price and whole foods was cut to something that is about 50 above what little sales these folks do. It is a little bit to go on that. It is a small footprint, and grocery online is wellestablished. It is not as if they are pushing on an open door. Retailharles, the analyst for Bloomberg Intelligence. European equities are trading. We are four minutes away from the end of the thursday session. Stocks are rising today. The close is next. This is bloomberg. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. Mark this is the european close and i am mark barton with vonnie quinn. The session finishing up. We are down for the third belmont, the worst stretch since february 2016. This is the story of the day. We were checked in with charles allen. Shares were down earlier. The biggest decline ever. Lowest since 2012. Frances biggest retailer worrying being the second half of the year will be as bad as the first given the ceo a bigger challenge to turn around the company. They expect the fullyear , 14 nsus to drop by 20 lower today shares. China, pmi data out of the official factory gauge a rebound 51. 7, the blue line in august suggesting the economy may remain robust and policymakers more room to curb financial risks. Nonmanufacturing pmi slipped. Showing theed hike bigger momentum on the factory of the industry push Raw Material Prices higher. The other line is the satellite index and monitors over 6000 industrials from space imagery and some say it is more accurate and slightly below the official data. It doesnt give us a better or clever picture of chinese manufacturing. Heightened risks on the korean financial peninsula and tightening up by the fed has not stopped climbs. The highest level since 2014. The blue line is emerging for theand one reason resilience is better than expected Economic Data as highlighted by citigroups surprise index for such nations which is the white line right there, for at least flows could continue according to the Research Institute in a tokyo until Central Banks talk of tapering starts to dominate markets. A wonderful charge to end the session. 2967. Marty apart from dust of vonnie apart from natural vonnie apart from Natural Gas Prices is the dollar, second recovery for the dollar story. Almost 93. I have some of the fallout and it includes the dollar yen trading at 110 and the vix is down at 10. 71. Aboven see with the yen 110 and some fears that some parody may have gone down. Gas price, among many rising today. Is down below 18 basis points showing you how much yields has been moving the past 2 days. You can see how much agreement is on the board and most of the major countries, equities indexes are in the grand prix at the ruble is stronger today, the medicine and the mexican peso is weaker. You can see rebound, soaring out of proportion for some of the markets. Mark mario draghi made needed to advocate caution when he meets policymakers to discuss their stimulus plans. Inflation picking up more than underlyingforecast pressures failing to accelerate that shows the Central Banks struggle for price stability. To discuss this, we are joined by david powell, a chief economist for Bloomberg Intelligence. Inflationre rate of we should be focusing on today ahead of the ecbs meeting . David powell that is right. The number was driven by fuel cost and what happened was in august of this year, fuel costs went up and downs in stark contrast of last year when they were falling and that caused the increase in the year over year level which is a very little interest to policymakers because they have to look at domestically generated costs. Mark we are hearing in a report, david, that the pace of the currencys depreciation is worrying a growing number of ecb policymakers. Therest report, pressure them to slow down the pace of stimulus removal because of the euros strange do you gauge a sense of unease within the ecb or not . David powell it is going to be a better of unease. Even though they are growing strongly now, the economy is operating below capacity. There is still spare capacity. Surpass what did they are capable of producing to put upward pressure on inflation. However, the rise in the currency is not anything out rages. S. Out rages outrageou not when it was referred to as brutal. The euro is still below what most models would put at fair value. The is not something the ecb will be terribly concerned about and we are not told about a runaway appreciation of the currency that leaves it in over storage. Vonnie what about the capital . Will they make over it therences to allow changing capital or would exactly to politically sensitive . David powell that would be politically sensitive. Tweak the quantitative easing program, my guest and they would want to tinker with the selfimposed 33 my guess would be that will want to tinker with the selfimposed 33 . Their place from a legal point of view if there was a restructuring, they will forgo any rights given it to them. What the ecb did when it was a large owner of greek debt, we forgo any legal rights we would have in a the event of a restructuring. Thats probably the first at least problematic tweaks they can make before playing with a capital. Vonnie what would be the best possible Forward Guidance they could guess in september is they will not start anything in january to keep the markets calm . September,l in which of course is very soon, the meeting is next week, they are probably likely to give an indication that these purchases will have to go on. Because of economy is expanding so quickly, that is the monthly pace can be reduced. There are a couple of ways that can go about it, a fed model where they consistently reduced by 10 billion euros a month or do something less aggressive up announcing a oneoff reduction which 20 billion euros, is what the Bloomberg Intelligence looks for. We will probably have some hints next week they are studying those options but they will probably not lose the details until october. Mark big events in france. Code,veiling of the labor 36 measures in a five severed in five separate decrees. Myseems like the backlash cannot to be as severe as some might have anticipated. Is there real hope that macron could be the president to push this through . David powell there is and that is essentially what he made at the center of his campaign. He said at the labor market is in poor shape in france even relative to neighbors were unemployment is double what it is in germany. He in a press Conference Last Week compared to the austrian levels and say we are more than double what you have here. Those are structural reasons causing that. It is expensive to employ people in france and these measures are and and reducing the total cost of employing. The other big comment from the boe policymaker who is one of the two hawks, the policy to be tightened. He said the risks related to brexit from the eu are not reason enough to hold off raising rate. Would you back him on that . The day negotiations between the eu a u. K. Seem to be a stalemate . David powell i would probably be, i would go with the majority, which is keep rates as a they are. Why dont you back what he says . Rates are at an emergency level. The market is not an emergency level. David powell the starting point from the u. K. Is stronger than the eurozone. There iscapacity and it is operating at capacity. There is not this slack that needs to be picked up. The potential for inflation to accelerate is greater than in aiming iarea and he is am not so sure that it the brexit negotiations would lead to a slow down as a majority of the mvc is looking for. He is looking at surveys and server show theres reason to be optimistic and servers it show theres reason to be optimistic. The rest of the mpc, they are saying we have this big uncertainty and we do not know how it will affect growth, best to stay on hold. Mark there you go. David powell, chief eurozone economist for Bloomberg Intelligence. In the first check word news. Here is courtney donohoe. Courtney of the Energy Department has responded to Tropical Storm harveys disruption and authorized the relief of half a Million Dollar half a billion barrels of oil. Almost a quarter of u. S. Oil refining. U. S. Consumer spending rose by less than expected last month. Revision toward june purchases and rising incomes put the economy unstable footing. It makes up about 70 of the u. S. Economy. A show of force over south korea. Over northn korea. U. S. And south korea joined together and had position strikes. Called. Pacific command it a direct response to north korea to launch. China has announced a start today for the communist party reshuffle. The 2300 delegates will gather on october 18 and president xi jinping will have the ability to reshuffle and as many as five of the seven officials could be replaced. Global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries, i am courtney donohoe. This is bloomberg. Theie more intrigue of family of Jared Kushner, soninlaw and advisor to president donald trump. Plus stock of mover of the hour. Campbell soup going ice cold and we will tell you why. This is bloomberg. Mark i am mark barton. Vonnie i am vonnie quinn. Time for a stock of the hour and we are looking at campbells soup. At onefalling almost 7 point, the biggest drop since february. Emma chandra is here to tell us why. Emma it really disappointed. Shares was below analyst estimates. And sells below forecast. We have a chart that shows sales growth. If you look at a that, they have not seen any positive sales growth for the last 11 quarters. One quarter where things looked flat and then going into negative territory. Also cameit forecast short, falling short of estimates largely because of the company is struggling to change at the same pace consumer tastes have changed. People rejecting packaged goods and looking for more or garnet, fresh practice organic fresh organic, fresh products. Unit. Lls has a different fresh was the one that showed some positive growth about only a small part of the revenue stream. Bloomberg intelligence analysts saying business is not showing turning around and no blocked does no blockbuster program. No blockbuster product. Mark and comments from Warren Buffett not happening, right . Emma right. He came out and approved the idea that they would buy a company and investors interpreted that as a bearish signal for the industry as a whole. Any takeover over campbells seemed to to die down. Vonnie it is a very british term. Pood the idea. Else emma chandra. Mark time for business flash, some of the biggest business stories. Wells fargo fake account scandal is growing. The bank said employees created accounts then thought bringing the total to 3. 5 billion million. They had agreed to pay 185 million in fines. Best buy trying to keep pace with amazon. Com. The retailer is brand same Day Delivery Service to more than a dozen new cities in the u. S. Best buy will cut the delivery fee by more than half to 5. 99. Unemployment benefits in the u. S. Came in lower than expected. To close toms rose a four decade low. The government comes out with the august jobs report tomorrow. There is the latest Bloomberg Business flash. Vonnie thank you. One of the most read stories today, indepth look at president trumps soninlaw Jared Kushner and the building that is hoping his familys real estate holdings. It is 666 5th avenue. It holds half of 1. 2 billion brings up thes question, to what extent is Jared Kushner involved . Joining us is caleb melby. So many different ways we could approach of that and not the least is it is a fantastic story for people who started off with some small apartments and grew into a massive empire accept the inkets on the empire is due 2019 and not a cent has been found anywhere in the world. 666 fifthy yes, avenue is supposed to be the familys big moving to manhattan. They purchased other building since but they baltic at the top of 2006 before the financial crisis. They overpaid for it and have been struggling. They bought it at the top of 2006. They talked twice was a fund in andi arabia mall developer they told to some is really companies and looking for money where ever they possibly could to either finance the debt or raise the building and create a big, new one. Vonnie this is pretty phenomenal. Your reporting suggests executives and people close to Kushner Family members have gone to all of these places, south korea, frances richest demand. The question is, did a this have to do anything with jared . He has testified twice he had not been to deal with fund raising. Caleb melby absolutely want to be clear. A lot happened in 2015 and some in 2016. None of the companies we are discussing in a this story did jared approach a since he has been in the white house. Some were doing trumps president ial campaign and we show for rent interest in a meeting with the kushners for the project not actually invest increased as Trumps Campaign star rose. Vonnie he is a partner in the , he hasborn in nato stepped aside in the matter, what does that show . Caleb melby steve has always run Office Buildings as office haveings and the kushners an idea to knock down the Office Building and put a mall, a hotel and really expensive condos where it used to be. Steve ross did not comment from the start and we spoke to people familiar with his thinking. When he helps refinance the debt the first time, they said he saw an opportunity to be, the buildings sole owner. Vonnie can kushner make any decisions on this building on how to protect the empire, it is the agenda that could set the empire teetering . Does you have to stay away . Caleb melby javert is totally separated from the business. He has divested his stake. This is a process undertaken by his father, charlie kushner. President whoys we talked to 24 hours story. Vonnie his comments are phenomenal. I would urge everybody to read it. It was part of a much bigger hunt for cash. Caleb melby the author. It is on your bloomberg terminal or at bloomberg. Com. Mark a great to chat. The changes in the grocery business up against the slow down over the magic when it comes to earnings. This is bloomberg. Some of take a look at the most telling the charts of the day. You could access of these on the bloomberg by running the function on the bottom of your screen, kicking things off. Mark, i brought a chart to explain how significant the euro strength is in not just on europe, only always affecting worldwide. The white line showed earnings revisions, when it is above zero, more of greece and then downgrades and below, downgrades. More of greece then downgrades and below, downgrades thent more upgrades downgrades. We are losing momentum globally. Ost of it comes from Europe Europe strength is not really moving profits from europe to the u. S. And dragging global profits lower. Btv 3038. Mine at g we have mario draghi and this is important. Cleverly sold. She is a salesman, a saleswoman i should say. Can you outsell her . Vonnie i think given the title for chart, we should make our vocalizing that in a Jerry Maguire fashion. She should be shouting show me the is a tie, we will get her to do it. Vonnie she can get ready. My chart is on the french growth retail who was thinking we were talking about earlier. It is not at the crossroads and hit the red light and this chart is normalized and look how much that drop is affecting. Also dragging down the halo groceryf other French Stores and the stoxx 600 retail index in general. We would have to see how it performs like we are seeing in the u. S. Or something a very peculiar to the French Grocery chain a you can see that at 3834. Mark so topical. She knows how to get me. The fear all she has to do is say show me the profit. There is no time it is a tie. It is a tie. Much a damage has harvey done it to houstons business community. I am vonnie quinn the welcome to bloomberg markets. And welcome to bloomberg markets. From bloomberg World Headquarters, the top stories. We are following this hour, Tropical Storm harveys days of torrential rain and widespread flooding will soon turn into months of unsettled national Economic Data and we will bring you some analysis. Novartis new treatment is providing hope for leukemia patients, but it comes at a stratospheric cost. 475,000discuss at the cancer breakthrough. One of our exclusive conversation with bank of andicas Ceo Brian Moynihan this strategy to implement technologies like Machine Learning and Artificial Intelligence to the business. That is coming in the next 60 minutes