90 minutestes ahead from the close. Mark stocks a bit lower today, little changed, down by. 1 . They were higher by. 1 a little earlier. The president stepping back from this immediate declaration of independence. Lets get more spain centric, this is last monday, one day after the referendum through to today. Losses at 4 , now down just 1 for the duration. The ibex marginally lower for the period, investors responding to whats been going on in the last 24 hours, as they are with euro, which is up today for the fourth day. Catalonias president stepping back from that immediate declaration of independence from spain. The spanish Prime Minister stepping up pressure on catalonias government to back away from independence talks. That could lead to the assertion of direct control from madrid. Analysts forecast the euro will end the year at 1. 18. The most bullish at 1. 26. Pnc financial has a 1. 07 forecast. Those are the two ends of the spectrum. Yields in the 10 year the aftermath of the referendum. Today the spread narrowing as much as six basis points. Lower since september 29. A week ago, it had widened as much as 19 basis points. The difference over the eight day trading period has narrowed to just five basis points as they talk about the future of his region in spain. 30 minutes into the trading day in the u. S. Julie we are seeing very little change here in the united states. We have the dow slightly higher, only three points. Barely a whisper higher here. The nasdaq and s p under pressure. Banks are the big drag on the s p 500. Rates backing off a little bit in todays session. Consumer stable stocks continue to show strength. Yesterday, the leader was walmart. Today, the leader is kroger. The Company Might sell its Convenience Store business, a 1. 4 billion operation across 18 states under names like turkey hill commitment market, quick turkey hill, minute market, quick shop. Theres increasing competition from amazon. Consumer staples rising for the second day after yesterday having the biggest collective gain since february. Also watching interesting analyst calls this morning. Johnson johnson being upgraded over at jefferies to buy. Theysts they are saying Pharma Division is under modeled by the street. Thats where Revenue Growth will come from. Dont bet on the Company Getting broken up into pieces, bet on growth. Mcdonalds being mentioned positively at cleveland research. The company is firing on all cylinders. Analysts are more positive on the companys strategy come execution and comparable sales outlook. At cowin. Upgraded a quick look at the u. S. Dollar on the bloomberg. We see a pullback in the greenback. Strategists looking at the technicals and wondering whether the rally weve been seeing or the rebound we been seeing in the dollar has more to go. Looking at the dollar daily change with the bars. Vonnie thank you for that. Minutes from the fomc september meeting released at 2 00 p. M. New york time. Investors will be looking for some clarity on decembers rate increase and the Balance Sheet unwind and the ongoing inflation debate. Top investors and economists have been placing their bets on who will be the next fed chair. Said kevin warsh has been wrong about everything. Explained why he could still get the job. Politically correct from the Republican Point of view, has some family connections with trump. Might still be appointed. Vonnie joining us now is chairman andnd, ceo of holland co. Kevin warsh has a chance of getting it and pull krugman is coming from a particular place when he says hes wrong about everything. What would he be like as a fed chair . Michael i think he will be just fine. From whence he speaks because hes been wrong about lots of things, himself. Worth has been worried about inflation and overspending on securities. Overall, he was the honest fed governor ever appointed the youngest fed governor ever appointed. The market will take it all right, bonds will trade off because the bond market believes hes going to accelerate the unwinding of the portfolio. Powell was that, mr. The author winner last night, is one who will probably get a thumbs up from the markets. Mr. Taylor is the only one hes the third name in the mix and he hasnt been mentioned recently. Markets might have a bit of a problem with him. Vonnie he would almost certainly raise immediately. What will we hear about the Balance Sheet unwind today . The fence on is this. Michael we will hear gradual used on this set many times. Ismatter who gets in there, not in anyones interest for them to be aggressive and stupid in terms of disturbing the markets. O somecan we move on ty in original companies . Stock. Own. Ofy announced the departure a trio of executives. Are you happy with your shareholding or not . Michael i couldnt be more delighted. Thank you so much for that. Its been a painful ride. I believe mr. Flannery is probably a good ceo. I believe the board, if you look at the people on the board, it is a strong board. Having said that, its been one of my worst performers in years. Walmart and Johnson Johnson helped offset part of the decline. What people will be looking at in his november speech to the community is to what extent is he going to safeguard the dividend . Cut ton said it will be a 20 stock. Having looked at the power distance, they think the cash flow for that is being hurt. Thats been a subject of discussion for couple of years now. Overall, people will be looking at some of the parts. Mark what is the right business mi jpmorganx . X . Business mi michael i dont think you have to talk about breakup or anything. Which businesses will flanery in november say hes going to when they start taking things apart, my guess its more than where we are today. Vonnie which ones get scrubbed . Do you hold on to it either way . Michael i give the management time. I did that with ibm years ago and then decided they werent getting it done. I jettisoned that stock after a ibmiod ful per with painful period with ibm. Vonnie jpmorgan among the big banks what to anticipate this quarter for the big banks . Michael disappointing trading revenue for all of them. Jamie dimon himself said to expect that. How deep is the cut . Theres a 20 decline. The offset to that, will the banking business makeup to the plus side seven consecutive quarters of outdistancing the estimates, outperforming estimates, which have all been cut back, of course. We will see if they can do that today. Im not looking for a big surprise to the upside today at all. Vonnie what about the other banks . Any strange surprises there . Hael i think this trading a year ago, we had brexit and the u. S. Political scene with the new election. We had all kinds of volatility in the markets, so people made a lot of money a year ago. This year, the banks have been at nine solid enough things going on and nothing is going on. To the extent that you are relying on trading revenues, you are going to be hurt. Mark i will give you an underarm. What excites you . Withholding excites you the most right now . Which holding excite you the most right now . Michael i only mentioned walmart. Johnson johnson. Over the next couple of years, the surprise for me may well be my holding of microsoft. A company that for years disappointed of it. They have a possibility with this cloud stuff they are doing. It surprising everybody, including me. Vonnie those treasuries might start giving you more value. Michael holland, chairman of holland co, thank you. Coming up tomorrow come in interview with christine lagarde. Lets check on the first word news. Emma the wildfires in Northern California are likely to have a longterm impact on the states wine industry. Four Napa Valley Vineyards have been destroyed. Things may be worsening bring Sonoma County 2000 homes them of other buildings have been destroyed. President trump plans to make the case tonight for Corporate Tax breaks benefiting middleclass wage earners. The president is inspected to say the typical American Household would get a 4000 pay plan. Through his tax his own advisors and say on an annual basis, the average benefit is close to 500. The spanish Prime Minister is ramping up the pressure on catalonia to end its campaign for independence. Taking the first up in a process that could strip the Catalan Government of its powers. The cabinet will formally asked the catalan authorities of theyve actually declared independence. A shocking result for the u. S. Mens soccer team. U. S. Will miss out on the world cup for the First Time Since 1986. U. S. Soccer partners are sponsoring a team that wont be playing. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im emma chandra. This is bloomberg. Minister spanish prime speaking to parliament about catalonia. We will bring you the headlines as they come in. This is bloomberg. Vonnie live from new york and london, im vonnie quinn. Mark and im mark barton. This is bloomberg markets. Oil modestly higher today, 51 a barrel. Opec reiterating a market rebalancing is underway. , the Vice President at blue line. Is this bullish . I think we are just coming into a bit of an equilibrium. We know the main goal of opec has been a stabilize to stabilize this market. We are almost three years to the dates and we broke down that 100 level. They taken big steps as far as balancing the supply and demand sides. Only control one of those, that being supply. Cutshave abided by those for the most part, they are 98 compliant. Thats a lot better than a lot of Market Participants were expecting. 2018, demand was increased today. This puts the demand for 2018 right above 33 million and supply just below 33 million. We are hovering right around that mark of equilibrium. It will be interesting to see what we have going forward. Today should provide a bit of volatility. We have api later this afternoon, eia and iea tomorrow and the Baker Hughes Rig count on friday. Mark we get the fed minutes a little later. How stalled a position ahead of those minutes . Using a bit of a Short Covering rally. We have seen some bargain buyers step into the market. We are not expecting anything really significant on the fundamentals side of the fed minutes later this afternoon. No doubt, there will probably be some shortterm volatility into the market. We continue to find value in gold above 1300. A big, round number. And represents the 50 day moving average. You ande trim courage trim followers to get on board. Trimurage followers to get on board. Kroger rising of this morning. They will sell the Convenience Store business come a 4 billion operation with stores in 18 states. Amazon is making inroads into the grocery business. Uber faces five criminal investigations from the justice department. Authorities are asking questions whether the ride hailing startup violated Price Transparency laws. They are also looking into whether uber had a role in the theft of documents containing amazon ridesharing technology. Forinding the company antitrust violations. Regulators say qualcomm has monopoly status over key mobile phone centers. Thats the latest Bloomberg Business flash. Mark still ahead, the meeting that changed Masayoshi Sons life. The billionaire chief executive of softbank explains how he talked his way into a meeting with one of japans biggest entrepreneurs. Mark this is bloomberg markets. Vonnie as a teenager, Masayoshi Son talked his way into meeting one of japans most famous entrepreneurs at the time, the founder of mcdonalds japan. Son discussed his lifechanging meeting. Masayoshi at one point, it is said you were interested in meeting the head of mcdonalds. My room interested in meeting the head of mcdonalds . Did you like mcdonalds food . What was it . Masayoshi he wrote the book and that book became the bestseller. I was so impressed and said, oh, my god, this is great. The guy who wrote about it must be great. . How old were you . Masayoshi 16. , aalled his assistant longdistance call. Back then, it was so expensive. I made almost a hundred calls. I said this is my name, im a student, could you ask him to spare me some time . She said i will try, but hes not going to meet with a student. I said dont decide by yourself, let him decide. Assistantth the summoning times. Thats so many times. I said this is a waste of might telephone bill. I flew into tokyo and i said i can because the phone calls are becoming more expensive than air tickets. What happened . Masayoshi i said tell him exactly the way i said. You dont have to look at me, you dont have to talk to me, you can keep on working, whatever you are doing, i just want to see his face. [laughter] masayoshi for three minutes. So, im not bothering him. Im just so impressed and respect him, i want to see him. If you tell him that im not going to bother him, im not going to damage his life he said ok. I said if he spends 15 minutes with me he give you some advice. Which was to learn masayoshi i asked him, which business should i do . He said computer. At this age dont look at the past industry, look at the future industry. Thats the one, the computer industry. I said, wow, great. Vonnie you can watch more of that interview with masayoshi shown the David Rubenstein tonight. Still ahead, the keys to tax reform. The senators that may exert the most influence, next. This is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Vonnie live from bloomberg World Headquarters in new york and london, im vonnie quinn. Mark and i mark barton. This is bloomberg markets. Lets check in on the first word news. Emma firefighters havent been able to contain any of the hitting Northern Californias wine country. The fires have killed 17 people and have destroyed 2000 homes, businesses and other structures. Group does not toend to become a piggy bank solve illinois fiscal problems. Rooted inge is less chicago because it barely relies on facetoface training irans president says if President Trump presses ahead with threats to scuttle the nuclear deal, it will be a failure for america, not iran. He said it would be clear which is the rebellious government and that is the side violates international rules. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im emma chandra. This is bloomberg. Minister spanish prime , mariano rajoy, speaking to parliament about catalonia right now. He says the Catalan Government nobodyosition should be happy with violence. You can continue to watch this on live. No one should be happy with the violence at the catalan vote. Rajoy speaking to parliament in madrid. Vonnie in washington, senator bob corker is one obstacle President Trump is facing in uniting senators around the biggest tax cut ever. Joining us from capitol hill, sahil kapur. Just as i was in throwing paul ryan said corker and President Trump should sit down to work these issues out. Grounds and on what will there be problems from senate gop members with this tax plan . Sahil you have the feud between sender corker and President Trump over a completely unrelated matter. Corker has been critical of the president s handling of foreign policy. Over the weekend, he called the n adultouse an day care center. Have figures like rand paul and senator ted cruz of texas who want deeper, larger tax cuts and dont mind the nearterm deficit. They believe, ultimately, it will be made up in the long run. Hes also got moderate and independent minded senators who are never easy to win over. They played a major role in torpedoing the Obamacare Repeal effort in the senate. Vonnie can we rule out any democratic support at all . Is that pretty much a nonstarter . Sahil its hard to rule anything out. Its looking very unlikely at this point. 48 sent democrats signed a letter saying do three things for us before we can support this bill and they did none of those things. Is looking unlikely. From West Virginia says he doesnt want any new deficits on the tax bill. Trump says he would adjust his tax plan over the next few weeks. Exactly how . What needs to be adjusted . Sahil your guess is as good as mine. He didnt indicate whether there would be an adjusted framework to come out. Republicans ive spoken to on capitol hill say they dont respect to release an updated framework. Makinge constantly adjustments and constantly working towards the best bill they can. Be on that, it is unclear what he meant. Vonnie dont miss an interview with the chief tax writer, kevin brady. Thats at 1 00 p. M. New york time, 6 00 p. M. London time. The fourth round of talks to update the north American Free trade agreement begins today. Even as President Trump threatens to walk out. Sarah mcgregor. Mariano rajo what then idea of conditions that trump is going to present today. Some of those conditions make it seem like hes going to torpedo this whole agreement, including renewal it looks like increasingly the u. S. Is proposing ideas that are just really far out there, really offlimits for mexico and canada. One might say these are negotiations, but these are things people would not agree to , its like asking for a unicorn. We are hearing bubbling from the Business Community we heard from the ceo of the u. S. Chamber of commerce is facing these are poison pill agreements. Theres a lot of worry right now about what the future of the agreement is. Yesterday, we saw an interview that trump did in forbes saying hes willing to walk away from this agreement. Mark because he wants the deal to collapse. Does trump want the deal to fall apart . Sarah as hard as it is to imagine that the u. S. Government would want this deal to fall apart given that business interests from the Auto Industry to agriculture have said please save this, thats the rhetoric we are hearing right now. The Trump Administration all throughout Trumps Campaign saying we want to fix these trade deficits, our manufacturing decline is to doesnt even if trump say he wants to pull out, theres a lot of escape hatches to not make that happen. We are waiting to see what will happen, how these talks are going to go. The fourth round is starting today. Is are moving forward. We dont expect anything in the immediate future. The tops of this round were extended until tuesday. The ministers will meet on tuesday. We expect press conferences. We will learn more then. Vonnie theres this idea that there would be a fiveyear desk each party would have to agree to the whole thing again every five years. It would discourage investors investing abroad. Sarah theres a lot of proposals in here that canada and mexico are uncomfortable with. The dispute settlement mechanisms, their companies would be unfairly treated. A mechanism now allows a third country to hear disputes between partners. An interesting one you also mentioned is the sunset clause. This has been put on the table publicly that wilbur ross has said they want a clause so that every five years, the deal expires unless they agree to a new deal. Its raised the idea that this will create such an unusual amount of uncertainty they would be unable to plan five years out. Charles evansp, and says it is too early to call for a december rate hike. More from our exclusive interview with him, next. This is bloomberg. Mark live from london, im mark barton. Vonnie im vonnie quinn. This is bloomberg markets. One of the worst performers for the stoxx 600 today is providence financial. About why to talk shares are down sharply, abigail doolittle. Not only are shares down today, but on the year, they are down 70 , on pace for the worst year since 1981. June. Tory goes back to plunge back in june when the company basically profits would drop by half. Back in august, there was a report in the sunday times in london sing the shorts were circling. This massive decline behind todays drop barclays downgrading shares to underweight. Nalysts slashing targets they have not updated guidance, plus she doesnt like the fact that the company has lots of outstanding. It seems there could be trouble ahead for some of the debts due in 2019. Mark why is this analyst worried about the companys debt . Abigail when you look at the Balance Sheet, they dont have a ton of cash, 215 pounds in cash at the halfway mark of this year. We see right here that the debt due in 2019 roughly 250 million. This is more do than what they actually have on hand, profits are dropping like crazy, plus , if the priorhere obligations are not paid off, those become do as well. They may not have access to the capital markets. Here in the u. S. Today, we had one Main Financial put itself up for sale this week. Who knows . Will Provident Financial go that way . Time will tell. Vonnie abigail doolittle, thank you. One Federal Reserve official says its too early to decide underweight on a rate hike in December Charles evans explains why hes disappointed in the inflation data. Its too early to say. I do think the inflation data have been disappointing. I understand, i read the arguments, ive heard them that its likely due to transitory factors. There have been a number of those in the u. S. Low inflation is a global environment. The whole world is dealing with transitory effects. Im sure some of that is true. Im really nervous that Inflation Expectations are low. Theyve been low for quite some time. Our fomc statement going back to october 2014, weve been regularly calling Market Measures moving down. They continue to be low. Survey measures are also weaker than sometimes we talk about. Expectations are incredibly important. That a benchmark i look at every day. Push thosee fed expectations . What more could or should you do to push the expectations up . Question, a big think really. This comes down to how are we talking about meeting our policy objectives. I think we need to be making our decisions on outcome based monetary policy. We need to be clear in telling everybody we are supposed to be sporting full employment and price stability. The Unemployment Rate is quite low at 4. 2 . Wage growth could be stronger. If stronger wage growth would reinforce that idea better getting inflation to 2 is incredible important. We are willing to go above 2 if that actually happens. We have a symmetric inflation objective. We should be willing to push inflation above 2 . We should be spending some time above 2 . Can i just push a little bit harder on that . What is running hot chicago style . Is a 2. 5 , 3 . Is it the ability to let it run, let it breathe . We shouldnt fear 2. 5 inflation. 2. 5 is not inconsistent with asymmetric 2 inflation objective. We should be spending time above 2 just like weve been spending time below that. Vonnie that was charles evans, the chicago Federal Reserve president. Ahead, the first minutes why the whales economy is in dire straits if britain leaves the european union. This is bloomberg. Vonnie live from new york and london, im vonnie quinn. Mark and im mark barton. Bloomberg markets this is bloomberg markets. Prime minister theresa may refusing to say she would vote to leave the eu and another referendum. She later clarified her comments this morning against jeremy corbyn. We are not looking at a no deal scenario. Toare actively working ensure we set out and get a good britaine right deal for for a Brighter Future for this country. Mark she continued to insist theres no chance for another vote. Carwyn howell jones is here, wales first minister. Any chance for another referendum . Pm jones no. It is immaterial now. The referendum has taken place. Any deal the u. K. Comes up what should be ratified in all the parliament of u. K. , not just one. Mark is it wrong to say if there was another referendum i would vote to remain . Pm jones i would say no. We are past that stage. Mark what is the communication channel like right now between you and downing street . Pm jones downing street barely existed, to be honest. Our communication tends to be with other departments. We would like to have a stronger link with downing street. With. F it we dont agree we dont see why we should leave the customs union. 60 of our exports from wales go to the Single Market. Access to that market was more difficult. Mark you have a relationship greens joint council of ministers. Pm jones we emphasize the point that if the u. K. Is going to work properly when we leave the eu, its own constitutional mechanism has to work well as well, we have the opportunity to get their, we have there opportunity to get there. Mark how close are we to some news on that . Pm jones we are not close to that yet. There are powers that would automatically come from brussels to wales. We agree those powers should be diverted to london for an indefinite period. We understand what they are trying to do. Its certainly important for business. We get that. For us, that should be done by the consent and agreement of the governments. Mark a breakdown in talks between the u. K. And the eu and contingency plans are clearly in place, as we discovered a day or two ago. Do you see talks breaking down between the two sides . Pm jones we will see a lot of this discussion over the next few months. Its massively important that we have a deal. No deal is a disaster. If u. K. Cannot get a deal with its biggest market on its doorstep were there is a great deal of regulatory convergence its massively important we access the Single Market on the same terms as we now, even though mark what do you think is doable . Ites my preference is has more or less market access. Thats a good position to be in until a final decision is taken as to what the uks relationship should be with european union. It satisfies the result of the referendum last year but doesnt create economic chaos that would occur if we had no deal. Mark what sort of economic chaos for wales . Pm jones the Steel Industry would face tariffs. Industry, and 40 tariff. We then have customs at our ports. Have all matter of bureaucracy. If we leave the customs union, a massive amount of red tape is imposed on businesses at a time when u. K. Government says it wants to reduce red tape. Mark if theres a customs union, you cant strike deals with other countries, can you . Pm jones if we are looking at freetrade deals, we should be careful who we do freetrade deals with. If you get it wrong, you ship jobs out of your country. The agreements take many, many years to negotiate. Six to seven years to come to an agreement for britain. Its important the u. K. Look to the models to provide that level of certainty. The grass is always greener on the other side. If we do that, we have to get an agreement with the biggest market we share a land border with. Mark strong and stable was the catch phrase of the election. Many are calling the Prime Minister week and wobbly. Can she survive . Perspective,m our we see governments in london where different ministers offer ferent views Boris Johnson wouldnt have survived if he was in my government. You know this goes against what we said before. You cant stay in the government. Mark how does he hold the remainders and brexiteers together . Pm jones she has to chart the realistic way forward. We know she went to the people of britain and said i want a hard brexit. Back me. They said no thanks. She could work with other parties or more closely with other governments to deliver a brexit that works for britain, but weve seen no sign of that yet from her as per minister Prime Minister. The next election will happen before 2022. We know that. At the end of the day, we dont know its possible. Labor will be ready. Mark thank you for joining us. We are less than 34 minutes away from the european close. This is bloomberg. Who knew that phones would start doing everything . Entertaining us, getting us back on track, and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit or go to xfinitymobile. Com. Mark 11 00 in new york and 4 00 p. M. In london. 30 minutes day in the trading day in europe. I am mark barton. Vonnie i am vonnie quinn and this is the european close on bloomberg markets. Mark they top stories were covering from a bloomberg and around the world. The Spanish Government turns up the heat on catalonia a day after they punted on their independence push. We will last ask david owen whether there will be spillover effect into the euro zone economy. The u. S. Average is flirting with record highs, how high my the s p 500 climbed in 2018 . We will speak with jonathan who just golub increases target. The u. S. Loses to Trinidad And Tobago in the world cup qualifying. European equities