Billion for the president s u. S. Mexico border wall. The European Union wants to change the rules governing identification checks in snogging. Id checks are banned in the 26 travel zones through the european commission, some of including, germany, sweden, and norway introduced in 2016. Under current rules, they expire without the possibility of renewal. Those nations want to extend those checks for two years, citing security reasons. Fired sevenitary cruise missiles today at Islamic State targets in eastern syria. This is progovernment forces closed in on the militants. Two submarines launched the seven missiles from the mediterranean. A Russian Ministry Spokesman Says intelligence showed the targets,hit the destroying a command center, communications, ammunition depot, and killed on unspecified number of fighters. Global news 24 hours a day powered by over 2700 journalists and analysts in over 120 countries. , this iscrumpton bloomberg. Julia live from bloombergs World Headquarters in new york, im julia chatterley. Scarlet im scarlet fu. Joe im joe weisenthal. Julia u. S. Stocks slipping from records, oil pumping 50 a barrel for the first time in a month. Joe the question is whatd you miss . Scarlet President Trump says hes close to another deal. Does this mark the start of a genuinely bipartisan relationship . Track,on gets back on will todays report given the greenlight light for the Federal Reserve to move up by years end . Quarterly results after the bell, analysts looking for its cloud strain to result in a payroll forecast favorable forecast. Julia a lot of confusion in washington. President trump says hes close to a deal with democrats to permanently safeguard deportation. Nearly one Million Immigrants brought a legally to United States as children, people with prediction protection he promised to end on his first day in office. In more, lets bring bloombergs congressional reporter, with us from washington. What a day. Steve of iowa saint lasting damage. President trump saying hes not worried about the response. Whats going on . A lot of confusion. Democrats put out their statement, saying there was a. Eal then trump tweeted first thing this morning that there was no deal, that the wall is still in the mix. Least a framework of something on Border Security, to deal with the immigrants, and deal with the wall later. Just the circular messaging and confusion signifies this is going to be tough. Changing messaging from the president showing how much pressure he feels. Its uncertain was going to happen i had ahead. Joe he laid out the exact framework for a deal, leading a lot of people to think there is a deal. How our Republican Leaders on capitol hill spinning the fact that they are the ones on the sideline in these negotiations . They are saying there is no deal, Still Congress that are still going to be involved in deciding. Republicans are trying to embrace the overall framework, and leave a stamp on the Border Security package what would look like. Billion and Border Security money authorized with less ability for dhs to use it for different purposes. Based on sector by sector needs. They are already trying to put that out. Paul ryan has a very different situation, conservative toublicans are not wanting go through this immigration deal. He has to deal with the fact that they are pressuring him not to do something that lets the majority of the Republican Congress is on board with them. Julia what do you think is most likely . Than donald trump caves and gets funding for border wall security or thatocrat support, he simply have to hold the line and say he cant get away with doing nothing as far as the wall is concerned. He seemed to catch a gain in his tweets by suggesting it would be amped up for security, but he wasnt specific. He said the walls already being built because republicans in congress have tried very hard to turn this into something more pragmatic and turn it away from the wall. They want to see something that is oriented towards fencing, technology, Border Patrol agents. In the legislation i mentioned, there is the potential for there. O be funding for the wall they have been trying to push him to see levees as a wall, trying to define it that way. He has political cover if he wants to take it. Bloombergs congressional reporter joining us from capitol hill. We have breaking news. Federalmogul is said to be considering a sale of its engine parts business, the president would of the about 1. 5 billion. Lets bring in david welsh. Give us some context for this move. Do we know why he wants to sell this business . Its been in the auto parts business for a long time. He bought federalmogul before the company went bankrupt in 2001. He turned that into equity, earlier this year he bought the rest of the company. He has had this investment for a long time. Its tough to find a buyer for the whole thing. Auto parts arent exactly a sexy sector, right now. This is a good business, its a good brand name for people who know performance parts. I think there was a little interest, they found an advisor to run it and see if they can get a good price. He doesnt have to sell this thing, he has all of these auto retailer businesses, and other brands that sell through those channels. He can make money off of them and work it, but if someone gives him a good price, im sure hell be happy to sell it and make a little return on this longterm investment. Julia youre saying hes seeking around eight times according to the conversations, is that price tag too high . Its a pretty fat one. Autoparts companies have in six, they sellr most of their parts at retail, maybe 78 and the time. They got what ive been told, he can get at least 74 it. Seven four it. Joe tell us a little bit about the general conditions for the aftermarket auto parts industry. We know there has been the used car business seeing deflation that hasnt been robust. How does that followthrough from the parts perspective . One of the things that hurt the aftermarket is it you have amazon, a lot of online business. When it becomes about price, it becomes tougher to really get good pricing. In terms of the retail for these aftermarket parts, you have a handful of big players out there with stores. Its tough for some of these brands to get really good shelf space from these guys. He really just sees a good time to get out of it because it doesnt look like uprising or profitability is going to get better. Julia i was implying that this may be a bit rich. On that line, who would like this who would buy this . Is mostly private equity firms that are working at it. There arent a lot of Strategic Companies that are in the gasket business. We are talking about sealants and that sort of thing. Dana corporation does it, but you are talking about a couple of companies. They may even have antitrust there. Its hard to say. Private equity firms do like the auto parts business, it does have pretty good, steady cash flow to it. Cvccould see players like looking at it, at events at it would be a private equity player thats not afraid and has a business. Welsh, thank you so much with the breaking news. Hedge fund manager about the rest investment will provide his scorecard, for he thinks are jamaicas finally making the turnaround this is bloomberg. Scarlet whatd you miss . The worst is over for italian banks. Fears of nonperforming loans have been resolved. They have 12 billion under management. He spoke with bloomberg surveillance anchors earlier today. Said back in december, prices would have been resolved, and it has resolved. Fundamentally, you are looking at accumulation of the stock performing the created the capital about 50 billion euro. From credit,ro thats the most important. You see in the npl data that growth stock not performing low shank by 20 billion. They you had the solution of chancellor, i think what happened is if you go back to when the vb of the was set up, until he spent zero money to look up some banks. Injected iscapital being 6 , almost 40 for the u. K. Italy was just low. The overall cost is less than 3 of gdp, half of what europe did. The beauty now is it is stable, and needs consolidation, to cut costs. Its a small region, we are looking at small amount of capital. The new ceos competence, good, i think he will accelerate the disposal of nonperforming loans, then he can raise capital. What is Deutsche Bank do in what is johnonths, cryan need to do to get Deutsche Bank going . I think he has done a terrific job. He took what i would do fine a casino, going on for 20 years, trying to turn around and improperly run bank with decent businesses, and decent management, and great client franchise. I think this takes seven your adjustments, using 23 these adjustments. Brexit, as soon as the rates and that are back at about 1 , you are going to get a return of about 8 sustainable. I think john and his Management Team are doing a terrific job. Over the last 20 years, Deutsche Bank never made the single euro profit, because all the profits that made were fake because they have been to raise capital and take losses. Now the profits they are making our sustainable, clear, legitimate. I think on a good footing. Thinkl take a while, about for 20 years the u. S. Bank making room profits and real investments. There a few years ahead. Julia time for the Bloomberg Business flash, a look at some of the biggest business stories in the news right now. The u. S. Has sanctioned 11 people and companies for supporting irans Ballistic Missile programs. The Trump Administration announced that economic sanctions and a deadline to extend century relief under the nuclear deal. Allowed hackers to access data on 143 million u. S. Consumers. The software fix was available month ahead of the breach, raising questions about the companys management. They face a federal trade Commission Investigation and to testify before congress. Thats your Bloomberg Business flash. We have also been getting headlines of President Trump. He was speaking earlier to reporters aboard air force one. He also mentioned the daca program, this ties to what we were saying earlier about the timing of some kind of agreement and how and when did he brings in the mexican will funding. We will watch that very carefully, we are moving rapidly on the wall, working on a deal for dreamers, and the public turns to her journey attorney general Jeff Sessions and President Trump saying he didnt ask Jeff Sessions to resign. Joe this is spurred by a question of a New York Times story that just came out in which he apparently humiliated Jeff Sessions after an appointment of robert mueller, trump was apparently curious about that. Ago,et this happened long but we are only getting the report on it now, which is why the question went to the president tsai of air force one. We will keep you posted on whether there are any comments on daca or the attorney general. Its time for our stock of the hour, both stocks posing doubledigit gains. Emma, tell us more. They are rising, and it had today gains over 20 . The post financial crisis terms of operation may change. Few developments over the next couple of. Days that may suggest that might change. One of which was a letter from six democrats, including the chairman of the Senate Banking community. Hsa and treasury calling on the agencies to allow the companies buffer. Up a capital and also talking about a resolution from the rnc that they should change quickly exit. Joe these stocks surged massively after the election on hopes that the new Political Climate would bring out a change in the ownership structure. A lot of hedge fund names in this, they still have to win in court . There needs to be a political change, just the existence of the buffer will be enough for them to win. Wewhat were hearing is already know that Steve Mnuchin is treasury, he wants to get rid of they want to get them out of government control. One quick thing i wanted to show btv 4000. These two companies are the last two in the world the absolutely huge. Its something that speaks to how things have changed. Thoset bringing about calls for change in structure overall. Dollar, with a weakened is there such a thing is that carry trade in 2017 . This is bloomberg. Scarlet im scarlet fu, what you miss. Theres been no back carry trade so far, this year. You are a money at a low Interest Rate and then converted to a currency where there is a higher yield. This is w crs function in the bloomberg. Plus interestn return of the expanded major currencies against u. S. Dollar. New mexican peso is the next trade, barring in dollars and converting to peso. 23 return for the body, return for the mexican peso. All the way down to the worst performer, the hong kong dollar, pegged to the u. S. Currency. The dollar index has shown the dollar about 10 down since midjanuary. In converting the currency back. Julia i guess the mexican peso is one of the biggest shockers. From one funding currency to though white line is showing you whats going on there in terms of this sterling fall. The blue line is showing you u. K. Cpr cpi. 2. 9 that we got this week. Our visit we have the bank of england, today they didnt move. The kept the qe program the same. Nikkei the recognized the have a problem with inflation. Warning that they have to start moving pretty soon on the economy. The speed limit of the economy has shifted, it shifted after the financial crisis, it shifted more with this adjustment to brexit. The rate at which we can grow is less than has been in the past. The time to take ones foot off is now. Lerator Julia Goldman sachs today said that what they were expecting is the third price in the egg of england in the Third Quarter they expect a hiking in november. Lets talk more about inflation, we have a fresh data out of the u. S. Today. It was a little bit hotter than a little bit of good news for that people who want inflation to rise. I stole this from matt basel core inflation excluding housing. Thats a lot of exclusions, we will talk about that. It has fallen close to its lowest level going back in decades. People have to eat, people have to close themselves, and live in thaters, the point is not there is no pricing increase, the point is to say that price increases are not broadbased. Its a few categories, including shelter. Theres a substantial shelter inflation, we are not seeing the general rise that you would like to see signaling an economy thats firing on all cylinders and maximizing the capacity. We will see how it shakes out in the months to come. The market closes, the dow adding to advances up point 2 10 of 1 . This is bloomberg. Julia whatd you miss . Trading at are record high. North korea inflation accelerated and august. I am julia chatterly. Scarlet i am scarlet fu. Joe i am joe weisenthal. We want to welcome you to our closing bell coverage every weekday from 4 00 to 5 00 eastern. Scarlet but is begin with market minutes. A close without conviction, but this is the fifth straight day hired for the dow, which is at a record high. The s p and nasdaq are inching back a little. Any of thetime for markets, especially since monday. Another gain for the dow. Scarlet this on the heels of an interesting inflation report. Let us look at a couple of individual names. Ceoer moothe says there are changes. Morgan stanley downgrading. Mac getting a boost after they asked Steve Mnuchin to let Enterprises Capital curtail their payment. We are awaiting oracles results. They just crossed. We are looking at the trade. No change. Perfect timing. Adjusted earnings per share, . 62. Revenue of 9. 2 billion. Better than what analysts were looking for. The margin in the First Quarter was 41 . Julia also set of upgrades coming in. We want to hear details. We will review that shortly. At what happens in the bond market today, bonds. G with the u. S. Inching up to 1. 3 . At 2. 19. Ield u. K. Twoyear yields at 0. 38. The chatter is that another h ike will come soon. They may see one thanks to past year inflations of currencies. The twoyear yieldless sharply higher in the u. K. Julia possibility of a hike in november to take out the brexit hike. As you can see, 1. 4 higher sterling. Lling for headlines over north korea. We also see this is a bit confusing for the higher inflation number today. To what extent is this impacted by the hurricanes we have seen and the damage . Reading that will be a tough one. I want to point out some of the gains we are seeing an emerging markets. Matt gaetz for turkey. The central bank keeping its commitments until the inflation outlook improves. Joe on commodities, let a single look at oil. At oneabove 50 a barrel point today. Oil had a nice street. I will show a chart in a second. Optimism about demand. Gold up modestly, but not a huge move. Copper pulling back a little bit. Some of these Industrial Metals have been slowing down this week. Heres is the loyal trips and mentioned. A sixmonth chart. Back in june, we were talking about kumal will this go below talking about will this go below 40 again. The International Energy agency saying yesterday the demand would be the strongest in two years. A bull run for oil. Those are todays rocket minutes. Scarlet whatd you miss . Our next guest says it is more important to take risks and at. In equities. He is a global strategist in the asset Management Team at jpmorgan. You see a synchronized upturn in profit . Uest right. I think we are seeing a synchronized upturn and economics. We also have japan growing above trend and europe growing well above trend. The u. S. Is doing ok. Emerging markets are recovering. Theres a synchronized upturn in market growth, as well. It is important for us to take risks at this point. Where you should take that risk, we think a cross regional correlation is extremely low. You have added diversification benefit for doing that. Julia you can test it for serving saying there is a large underweight. There are a lot of people worrying about a thousand things in your view. Patrik that is right. We resisted doing that. And if a consensus call to be underway in the u. S. We think the u. S. Is worth taking some risk. Clearly, we like to say this is one of the most hated bull markets. People try to find the nits to pick. You worry about valuations, which we think dont tell you anything. They try to worry about labonte yields, which we dont really think well have a negative message out there for the market. For us it is more important thing risk on an invested. Joe im intrigued by this idea that rather than try to figure out the best value around the world, it is go along risk. Is it a general philosophy of yours that it a waste of time and you lose money by trying to get too cute . Anil dont think so. When you look at it at this point, it is so synchronized it is very hard to pick between different markets on that basis. The valuation things are pointing in Different Directions correlations are low. We think at this point it is better to be diversified. Scarlet how is the how has the idea of taking risks changed over the years . Will make the argument that it is more nuanced now than before when everything was dependent on the fed. Patrik right. But goes to the low correlation point. We are away from the risk on risk off mentality. We are lower correlation and volatility environments. Stockpicking is currently better. There is more opportunity of this point. At the same time, that also means more diversification benefits and portfolio active. This is what we think being broadly across gets you the extra kicker. Joe in the wake of the elections, there were specific trades that people were calling trades, whether steeper spreads or small cap versus large cap. I have a couple turkey or. The point is, all the different i have a couple of charts here. The differentall trump trades faded since january. Is there any hope or the trump trade to come back to life . Patrik we dont really see the record levels are driven by politics. Nature the fact this is a global uptick in growth tells you it is not that driven by whatever u. S. Policy is. In thee is a tax deal u. S. , that would be a positive. We would absolutely welcome back. Julia we have had a number of , trying tovestors tactically reduce risks. Do you buy into some of what they are saying . How do you reshape the portfolio if you think equities can rally . Just think of everyone else talking about this. Patrik people worrying more that that might actually make a more positive. Valuationsead what mean. Theyre absolutely worth for equities. They tell you how much downside there might be, they tell you what low run risk potential is, they are useless for trying to time the top of the market. They peaked at valuations higher than what we are today and lower. They are very important, but do not try to use them for timing. A time to read risk rerisk. We love it. Global strategist at jpmorgan. Scarlet let us reiterate oracles results. . 62. Revenue beating the highest estimate in our survey. Billion. The stock hitting a bit of a boost here, up 2 in afterhours trade. This is bloomberg. Julia whatd you miss . Beatinging estimates. Let us bring in cory johnson. Corey is in san francisco. , this isy imagine down quarter on quarter once again. They bought son, it has been a problem over there. They have been trying let the different ways to fix it. Companies are not by a harbor like they used to hardware like they used to, but they are buying software. Showing terrific success right there. I was trying to calculate numbers and it looks like you 84 yearoveryear growth in a cloud business. It is amazing. A fraction of their business, revenue forllion in their cloud business. Remember, the way they build this is it moves a lot of to the from the top line ation processes of clout software. They are showing strong growth in the cloud business. Growth not to compete with the likes of sales forces and sap and microsoft and others, but also competing directly with amazon with their own cloud offering. Amazon is competing with oracle in their database offering. They are going headtohead. Oracle is showing strong results here. Scarlet you mentioned the strong growth. Is the growth organic or through acquisitions . Oracle is ais serial acquirer. If we look on the profile, the company made three purchases this year. About hisou tell us ambitions when it comes to m a . Has a famed acquisition team. Withinwn Investment Bank oracle. A lot of the Big Technology companies have this, but oracle is famous for getting answers back to potential Acquirer Companies really fast, doing a lot of work, and being ready to make deals when prices are to get attractive. The other Software Company look at the billions that Companies Like salesforce or ibm have spent. They see their software fortunes not growing as much in a lot of ways and fueling themselves by using acquisitions. It is this will that lots of companies are using oracle inclusive of that, but no real rate acquisitions affecting these results here or net sweeping the largest of them. Steady growth here. I think you can see and the results. In the marketing was inspecting a bigger move from oracle. A 5. 5 growth. This is after the numbers thatsted they wont be extreme. We will see what happens with tos and have some time digest it. We will be listening to a Conference Call to get the latest from oracle to better understand what theyre doing and how they are looking. The results look strong. Julia i want to talk you about margin expansion. I know this is something been talkings about a great deal. There is more than a 10 increase in margins. Cory i didnt have enough time to dig into see exactly where that is. It is good news. We will figure out why with some more results. I will have it tonight. Coreyt we have to give sometime. Let us go to Mark Crumpton with our first word news. Mark Chuck Schumer and nancy reached a deal with President Trump to protect children brought into the u. S. By undocumented immigrants from deportation. Senator schumer share details of last nights dinner we spoke in the senate today. One of our most productive discussions with about the daca program, in which we all agreed on a framework. Additionaltions an Border Security measures excluding a wall. Mark what how does the president did not strike a deal with the democrats on daca, but they had a constructive conversation. They say he wants to pass something that includes legal citizenship over a. A period of time. Powers willorld meet during the uns General Assembly next week in new york. That is according to a person familiar who says the meeting is full for september 20. It will be u. S. Secretary of state Rex Tillersons First Encounter with his iranian counterpart. He is expected to meet with on thes foreign minister sidelines of the General Assembly meeting. President ialial envoy to the antiIslamic State coalition is calling on kurdish leaders and iraq to delay and independence referendum. He says washington, paris, london and baghdad developed an alternative plan. The referendum is scheduled for september 25. Turkey, iran, and Iraq Central Government are opposed. For the first time in 300 years, there isnt a single living person on the island of barbuda according to usa today. The government ordered the complete evacuation of the island after almost every tilting had been destroyed by Hurricane Irma. Officials say the islands may need to be almost completely rebuilt. Global news 24 hours a day. Powered by more than 2,700 journalists and analysts in more than 120 countries. Im Mark Crumpton. This is bloomberg. Scarlet . Up, how isming alibaba extending its reach in asia . Ast our exclusive interview with its vicechairman. From new york, this is bloomberg. I will ask you this one. As you are talking about rebalancing. This is from allen in new york city. How often should i review my trade plan when managing my portfolio . Quarterly. Perhaps you do this with client all the time i would say perhaps quarterly. It may depend on how much the markets have moved. If you have a quiet time when nothing much is going on, you may not really need to do much. If it is a really busy time and a lot is happening, you might want to do it more frequently. Withen find in my group providing some of the advice on financial planning. The big changes you make have to do with your life and not with the market. School, buying a new home, selling a business, whatever it is. That is also what triggers a review. I agree. Absolutely. To tie the and, if youre discussing more on the micro level, i have a trade plan set up. I am literally trading the markets every day. Should i be checking back in with the strategy . Look intoont want to that strategy every single day, otherwise you cannot give it another longevity to see if it is successful. Personally, one thing is give it a month or two months, or at the very least paper traded for about two weeks to see what happens before you decide to continue watching it live, ab. Com livespecials. Scarlet Revenue Growth with alibaba is fairly steady. Let us take a dive into the bloomberg. You can find our charts using the function at the bottom of our screen. This is the quarterly Revenue Growth yearoveryear. Of a growtharter rate below 30 . There has been a steady improvement. Between june 2016 and now, weve stabilized this growth rate between 50 and 60 , the envy of the companies. Joe this is incredible. A company with a market cap of nearly half 1 trillion. Frisbee growing revenue for it to be growing its revenue at 50 , it is really incredible. It speaks to the way things are these days were Tech Companies can get bigger and bigger. Also had a phone year. I want to give you a comparison here. That is amazon. Worlds moste the valuable ecommerce company. Look at how they stack up. We see it doubling the shares this year compared to the 27 gain and amazon. Not too shabby on that, either. Joe, you are talking about 100 billion. Company is just 7 billion shy of the u. S. Rival. The gap has been closing in the last quarter hasnt helped because amazon disappointed investors. Scarlet have ever purchased anything from alibaba . Joe i purchase something from alibaba. It is good story. It is too complicated. Scarlet now you started it. Joe it is too complicated to say on air for 30 seconds. I will say it during the commercial. [laughter] julia you are keeping it from the audience. So sad. I would like to see a crossover in terms of the consumers of both. Alibabadnt expect an consumer but you would with amazon. Scarlet i know someone who lets to personalized versus and she 500 of those verses from china. Julia has he tried to do it on amazon . Scarlet i dont think thats possible. You cannot buy them in bulk like that. Let us sick with alibaba. The Company Place to push heavily into Southeast Asia, where has already taken a state malaysian ecommerce leader. Our chief north asia correspondent spoke exclusively at alibabas 18 anniversary. Chairman of the company says that he is to provide platforms for ecommerce and payments. Want to be able to serve 2 billion consumers over the next 20 years. We should be going outside of china to have access with these consumers. With a mobile wallet and also ecommerce is really the best way for us to grow that internationally. Another part of the online and offline world. I was reading up saying that 10,000re 10,711 7 11s. Is that a model x be replicated throughout Southeast Asia if there are these kinds of kiosks . I think everybody will be different depending on local circumstances. If you can walk in and by a mutual fund at a convenience store, that is one possible use case. Banks and brokerages are not going to like this. Not,ether they like it or new technology and innovation is coming, so they will have to try to think about their own business. Themselves. T do you see yourself or are there any targets on the radar to buy brickandmortar retailers and Southeast Asia . Joe t you never say never, right . Right now we dont have any specific plans. We know other parts and companies that bought vendors. Also the lead investor in the latest round is leaving indonesia for ecommerce. Has ec your new concept in china translating to Southeast Asia through these purchases . I think we have to take this step by step. I think Southeast Asia over the next five or even 10 years will penetration with ecommerce taking more share of overall retail. Is a bull market, Southeast Asia is probably less than 3 ecommerce penetration, specifically to indonesia. This year, they will have less than 15 billion for the whole country, so theres a lot of growth opportunity. We want to take this slowly stepbystep. But you have to be fast, dont you . Because others are also investing. I know the motorcycle ride sharing, they have invested in other websites. You are interested in grab, as well. Is there a land grab right now for these kinds of assets . T theyre following us and see that we have already. positioned ourselves through well and their plane to catch up again. Since we only have our position, we want to work with local entrepreneurs. That was Stephen Engle speaking with the alibaba cofounder and vice chairman. Jacks month, what a colorful personality he is. He is out there championing his companys culture. Julia youre talking about the Michael Jackson scarlet i am. Julia do we have a video . We do quite fascinating to watch. A performance in front of his employees. Look at this. There we are. Scarlet this required a lot of reversal. Joe it is amazing. Ia lori going to set . What were you going to set . Scarlet Mark Zuckerberg or jeff bezos doing this. Maybe they are and we dont have the video. Julia there is more to come on this anyway. Tomorrow, you can join us for an unprecedented access to the alibaba group, including interviews. Program onpecial friday at 5 30 p. M. In new york. We just start your Michael Jackson. Mark it is time for first word news. President trump blames the employment of special Counsel Robert Mueller on attorney sessionss decision to recuse himself from the russia investigation according times, sayingk the president blasted sessions in the oval office and said he should resign. Sessions reportedly called the is. The experience the most humiliating. President accepted President Trump denied, asking sessions to resign. Tennessee senator bob says he has a meeting with the president tomorrow. You will announce monday he is undecided on seeking a third turn and set a third term in says the president requested the meeting. Tocomes after activists plan have him opt out of seeking reelection. Corker says the decision is coming very soon. An army Spokesman Says the soldiers were injured today during an explosion at a Training Exercise at fort bragg in north carolina. The soldiers are part of the u. S. Armys special operations at the and were training base. They were taken to a local Medical Center for treatment. Ofy didnt know the number soldiers injured. Est average and risen have risen to a record high level for terror related offenses. An increase of 68 percent. Police made wide ranging streets after deadly attacks in london and manchester. Global news 24 hours a day. Powered by more than 2,700 journalists and analysts in more than 120 countries. Im Mark Crumpton, this is bloomberg. Scarlet let us get a recap of todays market action. Again. Climbing the s p edging off that record high, losing almost three points. The nasdaq down by 0. 5 . The dollar is weaker. Julia whatd you miss . Inflation is finally picking up misses wasmonths of behind the for the Federal Reserve to justify raising rates. . Stephen gallag . R joins us now. Great to have you on. The market seems like it wasnt sure how to react to the inflation rates today. To what extent do we think the Hurricane Impact is feeding into these numbers . I know it is only one data point. Guest let us start with the hurricane. Early to see how it affects price data or any other data. We saw some impact there and jobs. Gasoline prices are captured over the whole month, but pretty much Everything Else is captured over a specific time. Earlier in the month. Predated, the hurricane. Gas prices were up. I think will probably see a little bit more continuing into the next month and then falling off. Corepi itself, we saw , almost over 0. 2 , and that 0. 3 happen before the hurricane and that is what the fed is observing. Scarlet we know gasoline is related to the hurricane. Prices are also moving. Is there Something Else that is pushing this up . Stephen we are waiting to see shelter prices come down a little. Running between 3 and 3. 5 . It has been saying in that range. The Hotel Industry has had a lot of noise. We had a big plunge in the previous month. A snapback this month. I think the survey was conducted prehurricane. I do not think the hurricane affected that. I think that is noise in the data. Shelter costs are 40 of the overall for the primary ownership. 25 of the overall cpi index. That is running above 3 . That really is the key to this inflation measure. Joe we have this month, the number came in a little bit harder than expected on both core and headlines. The broad trend from this year previous years is pretty underwhelming. If you look at this various pi services and energy and more fellow little bit. Housing at its lowest level. Big picture, what did we learn in recent years and this year about the relationship between inflation and the supposing drivers like Unemployment Rate . Weaker thanis much we could have imagined. We are guilty of having misspelled skirt. Thisnemployment of phillips curve. A lot of service goods, which should not have global competition, they are running up toward 3 . It is on the goods prices. Maybe gasoline is in there, durable goods, cars, they are extremely weak. Stephen are you subscribed to the idea that globalization has been the Deflationary Force and has made the calibration sort of uncalibrated the models . Absolutely. We could have globalization without the technology. The competition forces producers to embrace the Technology Grade how do you stay competitive . Is the best Technology Available if you want to compete against china and other cheap producers in the world. It is hard to split those two big forces apart from each other. They go hand in hand. I think theyre keeping the prices down on a lot of traded goods and world. Julia if you get paid in the United States, or if you are Business News television, you are concerned about inflation. Where is inflation . What role now and how do we gave are inflation expectations. Guiding what we see in terms of actual inflation . Type back everything we discussed into what the fed does or doesnt do over the next few months. Stephen [laughter] that is the question. Inflation and inflation expectations. There is an elegant explanation the fed put out several years ago. We want stable prices. That is the point where it doesnt interrupt business decisions. Inflation expectations are at a point where you are not rushing to buy a good before the price goes up even further or you are not holding off on a purchase as you are waiting for the price to plunge. Pe are in a stable price riod. We talk a lot about expectations, but we are in a iod of pricing and it is generally good. In terms of the fed and upcoming decisions, next week is too early. I think they will have a Balance Sheet announcement to give us. We have had a string of softer inflation readings earlier this year. They have time to check it out. I think this latest report the kiwi are watching is the energy. Ort and that is pretty close to the 2 target. Janet yellen and a few other fed officials talked about moving sequentially since the week weak the fed will be ready to hike again in december. Spring. Were probably going to get some kind of effect from the hurricane on auto sales. Working think we might see a surprise and . In that report . Stephen you dont know the extent of the magnitude. These are sales over the entire month. End of thes of the month that could be tied to hurricane harvey. We saw in new auto sales, very weak, 16. 1 Million Units in the month. One of the surprises is we have autohis string of weak sales in our mind, yet the retail sales report have been really firm on auto. To look for a surprise. We may have substantial revisions. Theonly could hardly weaken auto sales is expected, but we have to come off of the bizarre firmness the retail sales reported and we can get a much deeper plunge. Julia i think we can go with what retailers are saying from themselves as well. Kind of strange. Joe you mentioned technology earlier. I have to ask, if companies are embracing technology and globalization, the hypercompetitive world, what is up with productivity . Au would think if there is massive adoption of new tech, we would see a pickup in productivity. [laughter] stephen my answer for that is because we are pushing out the more productive workers in putting on these new, cheaper, younger workers who need a lot of training. I think it is a matter of timing. Julia even those robots. Scarlet stephen gallagher. Thank you so much. We will be watching tomorrows retail Sales Numbers closely at 8 30 a. M. Reserve. , the federal decides. Janice henderson, bill gross, Jeff Rosenberg of blackrock. The coverage begins at 2 00 p. M. And we will take you through Janet Yellens news conference. Coming up, Hurricane Irma and math skills at a higher purpose. This is bloomberg. The mechanics of how they do a are still to be discussed. The republican reaction to a gentlemans agreement between donald trump and senator schumer has not been that positive. [laughter] a lot of things that have to be worked out. I do think is it is significant they are talking about this. Annual orecome an every other year of that. Market doesnt like it because of the uncertainty. We have to be watching it carefully. This i think is a much bigger issue for the bond market then maybe the potential for the government shutdown. When weo back to 2011 had the credit downgrade. Only did equity sellout the bond market wasnt really happy. Is there an opportunity if we push it up to the line again even if they decide not to raise the debt ceiling, the extraordinary measures may. Since a february or march. What happens if we push it to the limit . We have another credit downgrade or spike in volatility . In 2011. Ries rallied l to continue watching schwab ive, go to the website. Scarlet whatd you miss . One of the worlds quantum was forced to flee. Is gearing up for a battle that is much bigger than ets his Climate Change in his. Right. You met withdave because he was you met with dave because he was in town. She brought traders with him and set up shop in a hotel. Essentially, he said, we will stay here until we know the full effects of irma. It was pretty interesting timing because he is working very hard for his foundation on Climate Change issues. He has done a lot of research. This Foundation Donates to causes. This is a big project for him. I love the reason he picked it. It is because he could prove Climate Change is manmade himself. On his own, he could download the raw data and show, yes, Climate Change is manmade area i want to do nothing with that. I think that is a perfect reason to choose a cause. It . A what is he doing with dani currently, youdani can look at his website. He has all the data. He says, it is civil multiplication. I must admit, i cannot do it but he certainly can. That is one of the things showing what you can do. He is also working on predictive modeling. This is forte. He got his start as a Data Scientist doing some health care stuff. He is known as one of the best hedge field, not even in funds but in building predictive models. This is his bread and butter. Joe tell us more about his performance as a quant. His threeyear annualized return of 30 . If you look at the databases, that was a number one globally. One thing i think is fascinating about david vogel is how he has how he gets there. He started out in data science. I know we talked about it before how they like to start at economic rationale for why they are doing a certain strategy. She doesnt care. You want there to be a reason, but he starts with the data like you would if you are researching Climate Change. He wants his c to see the data work first then he will meet with other people and the hedge fund. He doesnt start with the economic story. It appears it is working well for him. Julia working backwards. Dani exactly. Julia it is normal to have a pet project. Is it normal to kind of go off on a divergent path like he is with Climate Change . Dani it is kind of surprising quants are into Climate Change. It makes sense because it is a time series data, much like Financial Markets are. Youre looking back over time on how things change. That is exactly what you are doing with Climate Change. Scarlet he was discovered during a netflix competition. I wrote a story about this a couple years ago. He was doing a netflix competition. A greatpet project, thing a lot of quants do. They take a list of people competing and you know all of them saying, looking for a job. Is inerent quant charlottesville, and that one is having 50 returns this year. They sent many mill saying, do you want to team up on this netflix competition. They got along really well and ended up convincing him to start his own hedge fund. Carbon tax. We tried in europe but he came up with Something Else. Dani burger. Thank you. Up next, we will hear from Michael Milken and why he sees a huge opportunity in that digital disruption of the financial industry. From new york, this is bloomberg. Julia whatd you miss . The golden age of private equity. Of the what a pioneer junkbond market told us this morning in singapore. She asked about the future of the banking industry. Of banking andk Financial Institutions, you are talking about to the consumer an individual one billion people on the planet are going to want to going to one of facebooks websites every day. Amazon, alibaba and so on have millions of customers. Tose individuals feel closer these companies then they do their Financial Institution. Alibaba is well on its way to financial the largest institution in the world. That relationship will be a technology one. Your mobile smartphone will be your bank. There is a dramatic change on that relationship. You say alibaba could be the Biggest Financial Institution in the world. Does that mean the life of jpmorgan will not be nimble enough to adapt to the changing environment . They have different deserve different needs. Financing of companies, making Financial Markets, advising people, that is one element. Who is depositing your paycheck . And where are you paying your from . When you are charging your phone, that could be another. The challenge to traditional banking as we know it has always been these new Digital Companies and the seven most valuable companies in the world today are digital. This revolution that started with a microchip, a computer on a chip, has dramatically changed all industries and will continue. In the next 20 years, the revolution of biological information and data genomes, phions, will change just as much. In anticipation for the future, what needs to be changed . We need to go back and understand what were the central causes of problems in the past. Asian go back to the crisis 20 years ago, it was related that a few Financial Institutions held a countrys finance and access to capital. In thailand you had five banks. If they got into financial trouble, the whole country is in trouble. The corporations and businesses and individuals who are dependent on those few Financial Institutions for access to capital. In the United States, this were financial4, institutions got into trouble. We switched to public and private markets. In the 80s in the United States, your Banking System runk substantially. Bank of america did by 50 but it didnt affect the economy because it was being finance by public and private markets. The evolution that you are not dependent on any one Financial Institution but tens of thousands Institutional Investors can finance a country, that was the lesson of the asian crisis and 97 in 97. You talk about the market and credit. Do you think credit is being priced appropriately now by the market . Right now, i would say when you talk about is it being appropriately priced, there are many parts of credit. Today, the yields are extremely low. Therefore, you are not really getting paid much of a premium to invest. Even more important is the covenants are gone. There are very few are very few maintenance covenants. That is why private equity is attractive. S grows 2000 the private equity companies. This is the golden age. You can leverage and borrow without covenants. For equity holders, you have very unusual rates of return. They areplain and dust playing an extremely important role. This will continue. Private equity firms today control more businesses that companies that are listed. Michael milken speaking earlier on bloomberg. Scarlet it is time for the Bloomberg Business flash, a look at some of the biggest this next stories. Reegle is being sued by th former female employees. There being accused of paying females less than men. Two thirds of the workforce and 80 of technical staff are men. China is asking the u. S. For fair and transparent business environment. This is after President Trump locked purchases lots purchases of a semiconductor because of security concerns. A spokesperson for Chinas Ministry of commerce that the u. S. Should be objective and check should not be used as a protectionist tool. Had tors to toys r us scale back shipments as it struggles to refinance debt and avoid bankruptcy. According to people with knowledge of the matter, they have been in talks with lenders over a new loan that would allow the country the company to continue offering through bankruptcy proceeding. That is your business flash update. Coming up, what you need to know to gear up for tomorrows trading day. This is bloomberg. Scarlet the dow climbing to another record high. Joe the central bank of russia is announcing its race decision tomorrow and the s p ratings will be updating. Sales 8 30 retail a. M. Eastern. Scarlet rajoys in the new mercedesbenz. Mercedesbenz. Joe 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. Alisa im Alisa Parenti in washington, and you are watching bloomberg technology. We start with a check of your first word news. Chuck democratic leader schumer and House Minority leader nancy pelosi say they reached a deal with trump to protect children brought into the u. S. By undocumented immigrants from you for tatian. From deportation. One of our most productive discussions was on the daca program. We agreed on a framework. Alisa the white house says there is no deal on daca. President trump blamed the appointment of special Counsel Robert Mueller on the attorney generals decision to recuse himself from the russia investigation. That, according to the New York Times. Trump blasted sessions in the oval and said he should resign. Sessions did hand in his resignation, but trump didnt accept. Trump denied asking sessions to resign