Closing basis and the dow in their own intraday level. We continue with this rally was relatively modest as investors are waiting details on what the fed is going to do with its Balance Sheet unwind. Not expected to be announced when the fed concludes meeting tomorrow. Individual stocks we are watching, sprint and tmobile according to bloomberg reporting have been in talks since august on their combination, theres been talks about them being in talks for longer than that. They could be weeks away from coming to an agreement on some kind of all stocks deal in which Georgia Telecom would be the owner of the combined company. At t and verizon are also getting a lift as we watch that move. On the downside today, in terms of what we are watching, we have some big down movers envision health care is one of them, the Company Announced as chief Financial Officer was up and down and announced a buyback. On its give details forecast, and that could be responsible for some of the decline we are seeing. Security grant is downloaded downgraded and tim kaine is among the Health Insurers 17 centene is declining. Some of the insurers the cover the most at risk patients or have the most mitigate exposure have been hit. That stock is down by 5 . Julia President Donald Trump address the United NationsGeneral Assembly for the first time today. His speech ran more than 40 minutes long and was marked by tough talks for iran and north korea. Trump denounced kim jongun without saying his name. Man isnt trump rocket on a Suicide Mission for himself, and for his regime. Ready,ted states is willing, and able, but hopefully, this will not be necessary. Julia we should be thankful that the pool of candidates here is pretty narrow. With this in new york is margaret tell us and bill theories bill faries. Ministrations president s have not seen their efforts at appeasement and diplomacy work and critics would say this is not the path to diplomacy. This is escalation. Which is it . Margaret the initial reaction has been all over the map, the more hawkish section applauded to hear him talking tough on north korea and iran and democrats and antiwar groups thought this is talk of war. Reaction inside the yuan general simply broke down along the lines of which country they were. You saw the israelis Benjamin Netanyahu enthralled, great speech, amazing and japan very much on board for the tough talk and many others in the room either confused, curious, a little nervous. Our colleague said there was an [gasp] reaction when north korea was mentioned. Bill the u. N. Was a place that was created in the ashes of war, the whole purpose was to try to help the world find a way to avoid a war. Anytime you have a national leader, whether its the u. S. Leader or anyone talking about destroying a country, its not typically what diplomats in new york to work on. Scarlet i cant remember the last time a u. S. President have that kind of tone. Is there an example from recent memory . Covered if you president barack obama, that was not the sort of speech you would hear. There been times a real tension for the u. S. Over the last several decades, and 9 11 was one of those. But President Trump clearly trying to stake out his brand. And part of that really has been to suggest that you can take this America First approach that is the core of his campaign and somehow apply this idea that everybody is out for themselves to the notion of how the u. N. Can work. If everyone is out for themselves for collective reason, there can be action. All sortsrt of rifle of threats that are being dissected now. Its beyond a message to his base to mystically, is he trying to signal to the eu for the u. N. Itself, all these International Bodies the confounded him over trade deals and economic agreements, that he will select the kate with the exception advocate, with the exception of things like iran, for the usa. If its forced to defend itself or its allies, we will have no choice but to totally destroy north korea. Scarlet doubling down there. To the North Koreans hear their speech did the North Koreans hear that speech . Bill they were in a great place if they want to listen to it. Just by the way the u. N. Assigned seats, they had a front row seat just to the right of. He podium they were there for the opening speeches and it looks like they, for the most part left before trump took to the podium. Thats part of the internal politics of the u. N. , who stands up for a speech and who shows up in the room. Turkish president everyone walked in and the middle of it. Werent going to get a positive readout from the president , same as iran. In the North Koreans took advantage of the opportunity to get out. Julia i want to talk policy as well, because senator bob corser bob corker suggesting there has been quantitative decisions made about tax reform and the administration is also behind this latest lastgasp bid for health care. Can they get the votes and what are we hearing on tax . Margaret you are seeing a real flurry of activity, just precisely in the time President Trump has left, back at home, we saw Vice President mike pence cut short that trip for several hours to go back and try and rally the republicans to this and also tolth care talk taxes behind closed doors as well. You can argue the president leaving town may have given a little more airspace to discuss these issues, but theres a real understanding throughout the Republican Party that heading out to midterm season, a potential agreement with democrats on protecting undocumented immigrants really cant be there only a compliment on the board, so youre seeing a real push to try and get it across the line, even if its in on some of these plans terms of tax cuts and on health care. Julia to go to the point you said about donald trump, senator graham saying he gained a new appreciation for the president s tenacity during this health care push. You are learning, Vice President mike pence replied. What a great interaction that was. , thank Margaret Talev you for the rotatable spectrum. But get a check of the bloomberg first word news with mark barton. Mark Antonio Guterres this morning news World Leaders about Nuclear Weapons, saying the use of them should be unthinkable. He also address the General Assembly this morning. Even the threat of their use can ever be condoned. But today, global anxieties about Nuclear Weapons are at the highest level since the end of the cold war. Mark goodyear is the solution to north korea must be political and he stressed to leaders quote this is a time for statesmanship. Committee isdget considering 1. 5 trillion in tax cuts, Committee Member ron johnson said that is the minimum he would like to see. Senator johnson says the cuts would stimulate enough growth to pay for themselves. With that contrast majority leader mitch mcconnell, who said earlier this year a tax overhaul cannot add to the nations quote alarming debt. Hurricane maria claimed its first victim. Officials are reporting one death on the French Island of what bluebay guadalupe. And his retail big on the island of dominica. It will strike the u. S. And Virgin Islands and puerto rico on wednesday. The u. S. Navy top officer said although commanders are ultimately responsible for problems leading to two recent facial Fatal Shooting collisions, despite the Naval Operations combined with budget shortfalls and uncertainty, it made it difficult to do needing needed training and maintenance. The chief of operations testified before the Senate Armed Services committee today. Effort,irst molecule of our first team must go to safety. Safety is first. The matter what the situation, those charged with command must achieve and maintain the standard that ensures their teams are trained and ready to safely and effectively conduct assigned operations. Killed inailors were two separate ship collisions in the pacific in recent months, leading to the firing of six senior navy officers. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am mark crumpton, this is bloomberg. Scarlet coming up, do wall streets bond bureaus have the kiwi unwind all wrong . What history suggest about yields as the fed plans to train gets enormous plans to shrink its enormous Balance Sheet. This is bloomberg. Julia this is bloomberg markets, im julie chatterley. Scarlet im scarlet fu. The fed is expected to announce plans tomorrow to shrink or begin trading its 4. 5 trillion Balance Sheet. Once that big unwind begins, treasury yields may defy wall streets logic. Btv 2005, it g shows during each of the feds cycleses in purple qe in purple, yields rose when they were buying bonds and they fell after the central bank stopped. Where does that leave bond yields when this writ when the fed began striking its Balance Sheet . Joining us to discuss his paul landry. Is there conventional wisdom about bond yields and qe, and if so, how does that unwind . Mr. Landry it acted contrary to what Market Participants excited. I think giving the trends we are seeing globally and inflation as well as growth trends, that we should expect to see rates as the fed starts to unwind the Balance Sheet gradually. This could be also enhanced as well if there was a really good progrowth tax package that comes out of washington, which boosts growth into 2018 and 2019. Julia can you quantify that force . How much of a tick up in rates are you anticipating . Its tough, given every thing else and inflation in whatever it is. But the direction as high. Mr. Landry its difficult to quantify. I was a really depends on the future pace of growth. Growth does begin to pick up, economic growth, i think the long end of the curve will start to rise. I think that would be a good thing. I think it would indicate that investors are expecting better dconomic growth in the perio ahead. Julia give me a cap . What does it not go above . 3 . 3. 5 . Mr. Landry i would say 3. 5 would be a good target. Scarlet does it mean more foreign buying . If you look at japanese bonds and german bonds, they are not attractive compared u. S. Treasurys. As iry i think definitely think the demand as qb comes off, i think investors look to secure those yields as they go higher. We live in a yields starved world and as rates gradually rise, i think you will see more and more investors look to treasuries relative to other Asset Classes as well. Julia theres a few interesting things going on. Canada surprised investors by hiking a second time, and we have the bank of england now in the market 70 priced for november hike. Its gone from being the only central bank that was hiking were talking about hiking to having a better competition here. What defense does that make . Mr. Landry it is factor into the feds thinking as well. You are seeing generally across the globe better rates of growth and inflation starting to pick up. I think the fed, with the model they work from, a full of scarves framework phillips curve framework, and they see growth picking up, they want to get ahead of that and thats why i think that influences them, they want to increase rates as next gradually over the year and a half or so. Youret lets get perspective on equities. Julie was telling us about how its an eighth straight daythe dow off the euro closing highs if they were close of these current levels. Use equities, are they fully valid or overvalued . Mr. Landry weve been saying they are fairly valued, but as long as the u. S. Economy continues to move along at this 2. 5 gdp growth rate and corporate earnings continue to advance, theres no reason why we cant see u. S. Stocks at least continue to rise at a modest low to mid singledigit rate of growth. Its really where you get to a period where there is a recession where you expect to see a big pullback in u. S. Stock prices. Right now, despite the valuation being pretty full, we still think you can get low to mid single digit returns. Graduate gradual rate environment . Mr. Landry that too. Julia robert landry. You can join us at 2 00 tomorrow , former fed chair and jeff rosenberg. Slumpahead, the trading adds to wall street. We dig into results on what they might call shadow for jeffers bigger rivals. From new york, this is bloomberg. Scarlet this is bloomberg markets, im scarlet fu. Julia im julia chatterley. A look at the biggest business stories in the news right now. Sprint and tmobile are hashing ,ut terms of a possible merger according to a person with direct knowledge of the matter. The Wireless Companies have tmobiles Parent Company telecom would have control. Tmobile restarted after spreads exclusive sprints negotiations expired. Walgreens have gotten the green light to buy assets from rite aid. The two drugstore chains of been trying to win approval for some sort of deal for two years. Walgreens will pay around 4. 4 billion for more than 1900 right it stores and three dissertation centers. J. P. Morgan chase is partnering with another rising tech firm to help clients reduce using paper checks. Its the largest u. S. Businesstobusiness payment network. Will lean on the assets established network of 2. 5 million users while they gain access to the client basis of the biggest u. S. Lender. Thats your business flash update. Isrlet wall street trading plaguing jeffries during the first quarter. Sees surgebanking 61 for record. Laura keller joins us from the bureau in los angeles. Laura, give us a break down of the results. Trading revenue was a drop, but how does equities and there with fixed income, for instance . Laura Jefferies Group is putting this drop in trading, reporting a 7 drop overall. Not as bad as some of the larger banks, and as you mentioned, equities were better at about 19 increase from last year. Dropid see a pretty good in fixedincome trading down 27 . Being generally more weighted to fixed income, so this is definitely something that is disappointing for all of our different wall street watchers who really look at jefferies to figure out what might be happening later next month when we see larger banks report. Julia weve already heard from the likes of jpmorgan and bank of america they are indicating their trading revenues are going to be down 15 to 20 . Laura bank of america and citigroup will saying probably about 16 overall trading down and jpmorgan signaling 20 down for the Third Quarter. Its important to remember what some of those executives of talked about is that september is an ever important month for these banks. Eriod,es has a different p they are looking at june, july, and august. Other banks will be looking more at the september period to drive the quarter. To the ideago back that what jeffries says could be a key indicator for what happens with bigger banks. Goldman sachs is Harvey Schwartz spoke with alix steel. Lets listen to what he said about goldmans performance so far. Of the Market Conditions have continued to the Third Quarter. Low volatility. In aggregate, the firm is performing well. But it remains a challenge for us. You mentioned the September Quarter is really critical for these big banks. How does it tend to set up the Fourth Quarter . Laura the Fourth Quarter is generally not the greatest quarter for fixedincome trading, its usually one of the best. Necessarily mean anything. The Third Quarter isnt always correlated what we will see in the Fourth Quarter. I want to pick up on what harvey mentioned about Goldman Sachs. Theyve talked a lot about how their fixed income debts have not been as well and their disappointed about that. Theres a note out today from a Thomas ResearchAutonomous Research and theyve driven the nail on Deutsche Bank, which is also a bank that historically had this really negative balance rating franchise. That note is really illustrated for us how important these fixed income trading apps are. Whether you are talking about Deutsche Bank or Something LikeGoldman Sachs. Julia i do want to talk about the good news, which is theyve been offsetting this trade and andness trading weakness for jeffers the fee increases pretty whopping. Laura without want to forget the positive, julie. Essentially, what jeffries is saying is yes, we generally well and advisories, which is quite interesting, because they are not known for doing that. And maybe that means that some of the other big banks will also have a pretty good quarter on m a deals. Julia laura keller, making reporter for Bloomberg News. Coming up, we speak with audacity founder and his plans to be thought the tech workforce. This is bloomberg. To beef up the tech workforce. This is bloomberg. Breaking news. A 7. 2 magnet magnitude earthquake was reported. We will get you more details on this. It follows a previous big earthquake in mexico as well. 7. 2 earthquake in mexico. Further news to come as we get it. Thanks. The Commodity Markets have just closed. Lets look at the big movers starting with both getting hit me hard today. After thethan 3 region of brazil. Sugar down for the second straight day. Set to expire at the end of the month. A lot going on in both markets. Closergy, crude cannot the 50 per barrel level. Expecting an increase of 3. 4 million barrels. That bearish forecast erasing s based on spec relation finally here with gold and the fomc meeting underway, a decision coming in just under 24 hours. Gold clearly, as you can see, in a wait and see mode. Lets get a check of the headlines on the bloomberg first word news at this hour with mark crumpton. Mark thank you. Jon huntsman, President Trumps nominee to be the ambassador to russia, testified today before the Senate ForeignRelations Committee and took it stance against russia and its interference in the 2016 president ial election. Question,s no underline no question, that the russian government interfered last year and moscow continues to meddle in the democratic processes of our allies. The u. S. Relationship with russia is one of the most consequential and complex Foreign Policy challenges we face. The foreign Prime Minister has concerns about brexit. He appeared on bloomberg earlier today. I have difficulty seeing how after a general election, this government will get its former brexit foot through. There will be a lot who oppose a hard brexit. He puts the chance of a brexit reversal it 30 . Asricane irma cost as much 65 billion dollars of Property Damage mostly from floodwaters according to a preliminary preliminary estimate that also says damage is covered by 80 wase, an estimated at home where homes without flood insurance. Typicallye to homes, covered by private insurers, caused up to 16 billion in damage. In london, Authorities Say the number of people who died in the tower fire in june may be slightly lower than the 80 previously estimated. Officials say the final death toll will not be known until police have completed a thorough search of the building for her also investigating a cases a fraud involving people who claim as well asatives several possible cases of theft after the fire. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. After the weekly policy lunch, you can see, he has been talking about health care and the bill to replace obamacare. Mitch mcconnell has said there is a lot of interest in the legislation. It would replace block grants to states. The question is can they get the. Ew extra votes they need well. Ccain as a lot of questions there. We know where rand paul stands your lets move on to the tech world. Echcrunch kicked off post itself in no elite as a leading authority in Game Changing technologies. One leading name in attendance is said an Online Learning platform which announced registration for a new intro to selfdriving cars program. This alongside a new partnership with lift. Sebastian. Live is thank you for taking the time to speak with us. It is great to be on the show. Question lets start with this program. But this isething different because it is more accessible to students. Yes. It is the buzzword of 2017. Succeed, there will be more than 5 million to 2 million jobs. We want everybody to be a contributor. So you can learn to be a self driving car engineer and join Silicon Valley and many other come companies. With these scholars scholarships, are you explicitly targeting women and minorities . That is a Strong Social mission. We try to bring in people of color and geographically, we have a strong president in the middle east to make sure that young people the middle east have a new perspective on life. So many left behind, smart people left behind. We try to reach people of all ages and all financial backgrounds. More broadly, what is going on in the self driving car space . What we have seen from the likes of google and apple is they fundamentally recalibrated the plans. Why is that happening . What is it about the industry that is sing them to make changes . It is still a tough technical problem. And can just fall asleep drive safely but the race is on. The number of Startup Companies in the last few years enjoying the game have been staggering. The self driving car is the hottest topic. Do you know you are creating a program, a Training Program that will actually given the speed at which the technology is adapting and moving. What job translation have you seen for the students taking the program. It is nothing compared to talk to college tuition. Directly with Companies Like mercedes and google and many others. The original program got 40,000 applications. Over 60 people already found jobs in Companies Like google and many others. A new way of teaching, a new way of holding a university. We strongly believe the companies that hire our veterans will be response before the syllabus in helping us make it perfect. Up withyou be signing the likes of tesla and apple in the future to provide them with what they need to facilitate, do you think . Is that the plan . Yes. That is what we have been doing all along. Artificial intelligence. Instructing you, the leading companies in the space. Them a voice, and eventually, a job. Roughly half of our students find a new job within the first six months. That is a good track record. It is. You can just sign up. You can still get this rate. Sebastian, thank you for joining us. Republican senators are speaking. N capitol hill they have been talking about the bill to replace obamacare. Mitch mcconnell still as i show you live pictures, he says the senate had a deal with the bill before september 30 and senator willpa did in the bill indeed get 50 republican votes. He also predicts some democrats will have a hard time opposing the bill. Very interesting. Talking earlier that that is what they need to do by september 30. And the democrats are responding in kind, saying they need to hold press briefings and townhalls to make sure this does not happen at happen. Gadfly saying this would be extremely disruptive to hospitals and insurers, but it is a deal. Interesting. We will continue to bring you them ons as we get this. From new york, this is bloomberg. It is time for our sector report. Retailers getting hit today. They are tumbling today. Our stock of the hour. Julie hyman, please save me. It was a combination anyway you slice it, it aint good. The spider etf is actually little changed. The Broader Consumer discretionary does not look as negative. What is really specifically retail. You have a number of different stocks falling within the group. The worst performer on a percentage basis is rated after approval for a revised plan to finally take over some of the right eight story stores. It is not as favorable as it was initially. When the two first agree to a deal, you see rated shares pulling back by about 11 . Is the stock getting hit stock of the hour. Youre talking about the auto parts retailer. Initially trading higher this morning after the company came out with an earnings and samestore sales very slightly above what analysts had been anticipating. Is can see that gain melted away in the stock is now 5 , down on the other other retailers are down. You happened basically is have the company saying sales are up 1 and you can see i have a bar chart and it represents the rebound from recent kevin says this is pretty much as good as it will probably get not only for autozone for the rest of the industry. Two and you have the industry right industrywide issue. You are seeing spending generally. I am seeing a chart that looks at retail stocks. Then you have real person consumption expenditures you can see it has been sideways to two down. You have that issue and the online issue. Whatsically outweighing would have otherwise been a solid quarter. Thank you. Thank you for your insights there. A relentlesss to competition and online retailers. Latestal blow is the from the retail industry, a strict a string of kruptcies with many chains all the while global home delivery. Is met us now to discuss thousand. Great to have you on. We alluded to all of the issues the company is facing. The debt is an issue to address. Can they sort out that and continue to function . Is there something more fundamental about the underlying business when it is something also seen as a bit of an albatross here both. Basically the company for years has been kicking the debt problem down the line and basically decided we need to address this right now if we can because they still are relatively healthy company. And toys falling apart r us is actually doing ok. Sales up 2 last year but they lifted operating margins and profits. The overhang has been the debt. You fix that and then go after the stores of investment run ane and you potentially get better result. The time is not great. Is already september. Begins in october and november. Can it organize itself in time for the Holiday Shopping season and is that turnaround realistic . What they said so far is timing is accelerated by press. Eports basically vendors get really spooked by that. They are considering a potential bankruptcy down the line. That accelerates things. They will be open during christmas. They did this because vendors were pulling back, and some were coming off shipments. They looked at that as we will not have a christmas. He managed to detect those to some degree. We cannot engage to the race to the bottom but they are clearly facing other issues and pricing pressures and the like. I guess deliveries also at times superior in that case as well. Talk to us about whether something is to give on the pricing five front. Has always been their problem. Any retailer faces that with walmart, target, and amazon. They try to be price competitive during the holidays and the manufacturers help them out with that. They can do more if they have a Better Capital structure. On the private beside, this is another black eye to private equities. And lbo in 2005, where the company with debt and it has come back to haunt the company to the point were private and equity owners so they lost out on that. We have seen a lot of retail debt. Ies had a lot of need money now to invest online and keep up your storage on a regular basis. And no one did anything about it for years. All right. Thank you for joining us. We will recap headlines from earlier. Shakingearthquake mexico city. One report put that quake at a 7. 2 magnitude. Have beenbuildings damaged and we have seen trading on the Mexican Exchange halted as a result. We will keep you posted on when trading resumes, but we have a trade halt at the moment following the major earthquake. This is bloomberg. Tony blair is a longtime critic of written passes exit from the European Union. The brexit being reversed, he provided insight on bloomberg americas. The idea that written will become some deregulated offshore of europe, it will not happen and the risk we face thef we do the hard brexit, economy will suffer and Public Services will be under threat and you might end up in the u. K. With a labor government further to the left than any labor government has ever been. I would still like to see a more rational the great debate happen in brexit. The greatestht risk in brexit would be a labor government, i know, but i am afraid i have been very frank about this. He can have a rightwing populist punch in the form of brexit and left wing in the form of a labor government with a far left program. A lot of damage. That youinciple it would like the Prime Minister to lay out, what are the most important to specifically address, the Free Movement of people, how important that is that to the british people, and also what Financial Services . If we are to do brexit stay in the union. We do two thirds of our trade with countries covered by trade agreements through the customs unit. I think we would find it very hard to be active in europe on basis what we need to explain are the consequences of the different options. Last year, people voted for brexit that they did not know what the new relationship would the. Point, last year, we voted to swap our house. We have not seen the other place yet. Before he final decision, we should at least look at it and see what we will be left with. How much would it be worth for the u. K. To remain and would you write a check . We do write a check to europe as to the other europe countries. This check is primarily to help east European Countries we brought into the European Union to progress. In 2004 1 poland joined the 3ropean union, a trade of billion pounds per year, todays 13 billion. There is a benefit in our trade. Less it is not about finance. It is about immigration, as you know. The u. K. Made a decision they want control of immigration, not compatible with membership for the single market. You cannot argue against that. It is important to understand the facts. We control that already. The immigration that comes from with in the european area, the majority of it, we need. We need low skilled people and students. The groups, we are getting out of the European Union to control our borders. We already control most of the immigration we have not control very successfully and from within the European Union, when you break down into categories, the people bring a benefit to our country and i think you could reform freedom of movement with the consent of europe to deal with anxieties people have about european immigration without getting out of the whole of the European Union. What is the chance that we do not . I think it is likely it happens but i have difficulty seeing how after the general election, which produced a Hung Parliament in the u. K. , that its government will get former brexit through. People who lot of oppose it and many who will oppose a hard brexit. , but the30 chance truth is, a lot will depend on how the debate develops over the year. That was the former Prime Minister of the u. K. , tony blair. 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. Here are the top stories were covering on the bloomberg and around the world. A major earthquake hitting mexico city. Click is already damaged dozens of buildings in the city passes then guess the city passes district. Currently halted. President donald trump debuting at the United Nations. He wants north korea of the consequences of escalating Nuclear Tensions and urged fellow World Leaders to take a regimes. Inst rogue the assembly is not the only meeting of the minds. The international ceo gearing up for the Business Forum right here in new york city. An inside look ahead. We are one hour from the close of trading. Lets get a check of the markets with julie hyman. Green but marginal. In a for a new record, at least on a closing basis here, even if the game and the nasdaq is only four points at this stage. Is it the last cap before the fed winds of its Balance Sheet . We will find out because that is what the feds are expecting they will announce tomorrow. Are some strategists who are predicting it could finally spell an end or a hiccup in the game we have seen four of stocks. Weve got the s p 500, no retreat and no surrender. That is a springsteen reference if you do not know. Since the 5 pullback brexit vote in the summer of 2016 and since then, nearly a Straight Line upward as we have seen record after record for the for the year. Dow many folks say we are overdue. It does not mean it is coming imminently. One instrumental group over the past couple of weeks has been the financials as we have seen rates on the rise. Today, helping to lead the gains there. Out is as jeffries came with earnings, having trouble with trading like many competitors. The company saying trading in the last quarter dropped to the lowest in six quarters. 61 . Tment banking up we seeing other financials also higher. Jpmorgan kicks it off october 12. On the flipside as we talk about the Balance Sheet and rates, this one is interesting and it comes from brian over at Bloomberg News who points out, you would think, as you see quantitative easing, you would think on while on buying is happening, you would seal see the yields fall and prices rise at that is not what is happening. Here is the Balance Sheet and yellow and the 10 year treasury yield and blue. You would think during those purple times, when you have quantitative easing, that yields would fall but that is not what happened. There is question about what will happen as the saids ounce sheet shrinks. That is one other thing investors will Pay Attention to, and that is earnings. The federal report is after the close of trading, fedex, bed bath beyond, seeming to be the worst of the retails today. I know you will watch the numbers as we see a mixed trade on the stocks today. We will break those numbers after the close. Thank you. Global Business Forum kicks off tomorrow, bringing together an unprecedented gathering us eeos in a single day. Among the first in the morning come emmanuel macron, though clinton, and apple ceo tim cook. That is just the start. Joining us now with a preview is numbers new york bureau chief. His Clinton Global Initiative used to gather luminaries right around this time of year during the uns general meeting. That is right. A big week in the in new york. Descends on new york given more than usual and the traffic in the streets. You mentioned bill clinton and this is the successor of sorts. It is one reason i believe former president clinton will take the stage tomorrow morning. The nexus of political and governmental leaders and businesses. You mentioned tim cook. We will hear from Steve Schwarzman and larry think, paul, a lot of the names on the and finance side getting increasingly involved in june article matters. Will that he at the heart of the debate . What will he be discussing is the theme of the year. Big one. Is a zeitgeist,ent environment, there are a lot of big existential questions around multilateralism and ceos have varying opinions on that. We will hear a lot on climate, could which continues to be something important to ceossnt leaders and and their counterparts and heads of firms around the world. You mentioned a couple of names from the power panel that will take place as well which gets me incredibly excited. Int he the guy who said 2050, robots will outnumber super intelligent robots will outnumber humans . A really interesting thought leader. That panel to me will he fascinating. It really is a collection of very interesting people, importantly, people from around the world. Conference isthis also on the panel. Which has really spread technicals not not just across affect the but around the world. Having that perspective is fascinating to lets go gates. It comes back to the idea that even though a lot of rogue leaders will be there, Justin Trudeau among them, and kristi when Christine Lagarde, it comes down to it, the Business Leaders have become the adults in the room, called upon to do with what elected officials are not agree on. It is an interesting point. Interest. Enlightened in almost all of these cases, these are global ceos is, not able to think just about their own backyard or country or region. They have think about what the environment is all around the world. We love it. Jason kelly, bloombergs new york blue bureau chief. You can watch tomorrow starting at it rock a. M. Eastern, continuing throughout the day. It will be so exciting. There is a panel Christine Lagarde is moderating. The allstar panel will kick things off and then we will get to eventually more of the ceos is her and megan murphy will be moderating one of the panels as well. Tim cook, whom she has interviewed before. The relaunched under business week a couple of weeks ago. Headlineset to the with mark crumpton. Mark thank you. As you are mentioning moment ago, a powerful earthquake shook next the city today, the same day a quick caused major damage to the capital 32 years ago. The Geological Survey says the earth like had a magnitude of 7. 2 and you are looking at a live webcam shot now of downtown next the city. The epicenter today was near the town of s 76 miles east of mexico city. At least one building is said to have collapsed and the city has activated it Emergency Response system. The net the mexican president in new york for the yuan general is reportedly returning to mexico city immediately. Buildings cost city help preparation drills for the anniversary of the 1985 quake and mexico also hit by another powerful quake over a magnitude eight a few weeks ago. President trump attended a luncheon today hosted by the United Nations secretarygeneral. The president spoke about the u. N. In a different light than he did when he was campaigning for office. President trump the word is potential are the potential of the United States in terms of what it has done has been wonderful, but we can do better and we will. The potential of the United Nations is unlimited. In the past, mr. Trump has repeatedly criticized the u. N. For bureaucracy and budgeting. A decision within the Republican Party on a path forward for tax reform could come today according to the Senate BudgetCommittee Members, bob corker, who says he has been skeptical about whether or not as the u. S. Economic growth will allow tax thats to pay for themselves. Senator corker adds he is weighing the numbers ahead of todays meeting, where it is vision could be reached. Senate republicans are making one last ditch effort to repeal obamacare. They need to act by the end of september to use fast track procedure which prevents democrats from blocking it. Several republicans are still withholding support were rejecting an outright. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Scarlet coming up, our exclusive interview with the ceo of about how technology is transforming the global economy. It is this is bloomberg. Earning 1500 an hour. And chairsa director the boardss nominating committee p rejected a request last month to add bill ackman and two others to the board. Israel passes chief of pharmaceuticals negotiated some breathing room. They were able to get looser terms of credit facilities. Payments ine extra case of a Credit Rating down grade. See their investment in toys r us wiped out. The retailer they bought 12 years ago for 7. 5 billion filed for bankruptcy protection late last night. The firms amerco investors sank , filed thein equity rest in debt. At the fax learned about five , publiclyore the day knowledge, oakland two people familiar with the situation. They said this was not related to the release personal data of americans. Say itn familiar involved the same hackers. That is your business flash update. That makes it complicated, especially with senior officials of the Company Selling their own stock the day after the announced hack in july. The company is responsible as they did not know about it at the time but you have got to wonder. If it is the same hackers as well, i has or ability from the company. Even when they hacked a case most recently that took place, the fact that echo effects of itngs it needed to address, gets more complicated. The question of who knows what when. The chain of command as well. Scarlet watch this space as julia likes to say. The power of technology to change jobs is growing. How will the economy adapt . Erik schatzker it discusses the opportunities ahead in an exclusive interview with the ceo of pearl harbor partners. I believe Business Leaders except the idea that inclusive growth is appropriate and required and morally correct, and i believe Business Leaders are interested in working with government, whether it is Public Policy issues, on training, education, and things like that. And also figuring out the right safety net as we work through this transition. We are going through a change now. We have had three big changes from the move to an industrial economy and now from an industrial economy to a knowledge information economy. To a have the right skills so workers can be successful . Lets talk about that economy. Have flaggedeos technology and the power to replace job jobs. He told us last week that technology such as Artificial Intelligence could wipe out as much as 33 of the jobs in banking. Known itce as you have for 40 years that vulnerable to technology . That seems a bit dramatic to me. I am not an expert but there is no question the rate of change is exhilarating. We learned in calculus that the Second Derivative is the rate of change. I believe that is accelerating. Now businesses have to position themselves. Business models change, amazon, whole foods, gm allsting in list, lyft, of these things going on. Financials are no different. How this unfolds, we will have to see. I am more optimistic we will create new opportunities that are unknown today, and that is how i think about it. How is your business different from five years ago . Are a professional Services Company providing advice to companies. Our real goal is to help companies be successful. Today, what you just said is what companies are interested in. When i started in business, technology was seen as a vertical and people understood about applying technology to an issue. The vertical has been knocked over and technology is now horizontal, going across all of the business. People want to talk about that and that is what we are trying to do. We had a former colleague from Goldman Sachs join us, who has been of Software Analyst for decades and knows the business better than anyone. He is trying to meet with all kinds of clients to talk about how this is changing their business model. Gained a big foothold in the Energy Advisory business. Do you anticipate doing more deals like that to expand your firms expertise and increase its footprint . Lets take a second and recount. November, we combined and basically, the firm started at about the same time as our firm. Business fit and culture. Partnersnews is bobby, at Goldman Sachs, it worked privately. On the business side, energy was an opportunity to improve and he brought those skills. A private fit. Going forward, we will consider things like this but we do not wake up today saying this is the way we want to grow. It requires a special fit and feelne we really comfortable with, in particular from a cultural perspective. That deal gave you about 13 ion business for 12 years. We have 13 billion. Lets put a tick in the box for well done. We are now growing and expanding our business and we are doing is that are more skillbased. Whether it is growth or private equity, helping endowments and foundations with outsourcing liquid or having 13 billion is a good start and we would like to grow more. The key focus is the success of our clients and results. How long itndering will be before it goes public. Is wehink the great news started the front 12 years ago it is not even important to the business model. We are not thinking our goal is to focus on the clients. We are similar to the Many Companies that have gone public hear it if that is the right thing for us to do, we will get in line. If not, a lot of choices on how to organize the business. An exclusive interview earlier on bloomberg. Still ahead, it is options insight. Todays trade is all about the tech giant, microsoft. Shares on pace to close at a record high today, up more than 20 year to date but what does the future hold . From new york, this is bloomberg. It is timeout for options insight with julie hyman. Kevin kelly, and there has been individual stock news which has been interesting and cause interaction interesting options. A report by Bloomberg News, that they are getting closer to making some kind of deal. There has been talk about this for a while. You are seeing 113,000 calls traded around 600 in the big block that came out was out into october, the nine dollars strike, so it is pretty telling that they think the deal could get done and they could push sprint above nine dollars per share in a month. Know a lot of talk around august. We saw yesterday a lot of activity around tmobile but it is telling given the fact that the supplied volatility is significantly higher. Also interesting, the stock activity in sprint is also more busy than that in tmobile. Speaking of individual stock events, it seems it can be kind of tricky to trade these right now. Youre looking at your trade with microsoft earnings, attacking it with a specific stock an event for the stock, is that the way you would go with this environment right now . Yes. You have to do that. If you look at the threemonth volatility, 12. 67 is significantly low. You have to go out in individual names, especially those moving in the next month or so. Microsoft is one of those names coming out with earnings. The trade is to go out and buy the call just heading into earnings and then you have a month to play around with it. You want to buy 75. 5. Call and it expires the friday of earnings. You can volatility should pick up into it. If you want to sell later against it it to turn it into a call spread or take profits, you see applied volatility is lower heading into the earnings announced and. Normally moves 4. 5 . Is 3. 5 lied volatility p are great upside as you can see from the chart. This is one way to play at going into earnings. A reminder that earnings season is once again around the corner. Thank you so much, kevin kelly. Scarlet and julia . Thank you. Still ahead, what are the odds of brexit actually happening . We break down the risk between theresa may and her own cabinet. Mark it is time now for first word news. Hundreds of buildings have been damaged and some have collapsed and thousands of people are evacuating homes and businesses following a powerful earthquake in mexico city today. Calculates theit earthquake at a magnitude of 7. 1. The epicenter was near the town about 76 miles southeast of mexico city. Penning . Ique was in new york returning to mexico city. Nearly 32 years ago today, the masking capital was shaken by a powerful earthquake. The french president says he believes President Trump will change his views on the Paris Climate Accord saying im convinced, in the end, he will understand his interests and the interests of americans is in the paris accord. Hurricanes that hit the u. S. And the caribbean are a direct result of Global Warming and President Trump said the climate accord is unfair to american businesses. The u. S. Senate Intelligence Committee will h