Adolescents and pregnant women. Ofbecause the concentration thc in marijuana has tripled over the past few decades, the science suggests marijuana use carries more risk than ever. It is fundamentally different product, both in potency and methods of use than what existed several decades ago. Mark secretary a czar called it a dangerous drug in the warning comes as Legal Marijuana has grown into a 10 billion industry in the united states. Nearly two thirds of states have legalized it, mainly for medical uses. An increasing number of states are also allowing personal Recreational Use of marijuana. Global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. Live from bloomberg world headquarters, i am vonnie quinn. Amber welcome to bloomberg markets. Here are the top stories from around the world. A shift in the trade narrative is lifting stocks. Optimism that china and the u. S. Are moving closer to a deal. Out exquisitely for the ceo of uber to talk about the companys next move. Dorian barreling towards the eastern coast of florida. Now expected to become a category 4 storm within the next 72 hours. Vonnie exactly. We are keeping a close eye on dorian. Lets check the major averages. They are higher today. 2925, led byt Dollar General that had a great quarter. 25 1. 25 . Highyield debt. The debate over whether we are about to see recession continues. Here is one chart that shows there was one indicator that has yet to signal an economic slump is coming. Says the last three recessions that you see and head highyield yield bonds and what you see now. If you go back to 2009, 20 . Back in 2001, 5 higher than now. Highyield,oking at the coast is clear. Amber certainly Recession Risk is one thing retailers have to think about. A number of them reporting Quarterly Results over the past 24 hours. Tariffs are guiding how they are trading. Take best buy and abercrombie. Missing and beating us vacations on different metrics. The common theme is the warning about their exposure to getting goods from china. As a result that is going to weigh on their outlook going forward. Whichst that with guess, boosted its outlook. It said it is completely mitigated the china affects, saying only 12 of the goods it sources come from china compared to best buy which is at 60 and trying to move down to 40 . Certainly different storylines emerging within the retail sector. It is one story are lifting stocks right now. U. S. Stocks rallying after china indicated it would not immediately retaliate against the latest u. S. Tariff increase. A spokesman for the Commerce Ministry said escalating the trade war will not benefit either side. Joining us from los angeles is sarah mcgregor, who leads coverage on u. S. Economic policy for bloomberg news. I was struck by a note that crossed my desk that said fully once, shame on me. Fool me 47 times, perhaps shame on you. Basically highlighting is this really any different from the narrative we have been getting out of the u. S. China trade dispute for months now . Sarah it would be significant if china did not retaliate right away on those september 1 tariffs. The indication from beijing is at least a round batch of tariffs on 75 billion of u. S. Goods what you put in place as retaliation. The assumption was all most immediately after the september 1 tariffs. It is sounding like that is not the case. The language was a little cagey. We dont know yet how quickly beijing will respond. Anytime tariffs are put in place there is escalation to provoke the other side. It would be a good news story of beijing did not retaliate right away, at least for the trade war. Ultimately the markets are up right now. 110 billion with the chinese goods are about to be had with 15 tariffs on saturday night. It is a significant thing for the economy that showed it was slowing the Second Quarter in the u. S. More than initially thought with the data out today. Vonnie very slightly slower. Is there an opportunity for the two sides to meet . Some trump said today officials from the u. S. And china are speaking. He was not speaking specific if it was the top negotiators. Fromard from sources and the treasury secretary Steve Mnuchin yesterday. They do seem to be trying to move forward with the talks. The next round the negotiations. Steve mnuchin was not specific if it was in september as they initially planned. It looks like they are trying to at least agree to have the next round of talks. But they will talk about remains to be seen. They are super far apart on the issues. It is hard to imagine what they could put on that agenda to try to agree on. Vonnie thanks for the update. That is sarah mcgregor. Lets turn to u. S. Economic data. Sarah mentioned the growth figures and decelerating in the Second Quarter by more than initially reported. The Commerce Department revised gdp growth downwards to 2 . Spending topping all forecasts. Take us through all the data, sarah house. She is joining us from charlotte, north carolina. We got a revision but it was just they very small revision. All told the report is quite decent, wouldnt you agree . Sarah i would agree in terms the fact you are looking at a great quarter in terms of final sales. Revised toending was the strongest pace in about four years. We continue to see strength and resilience coming out of the Consumer Sector and offsetting the headwinds we have seen in terms of the Capital Investment environment. Amber could you make the argan at the Consumer Sector, while the best growth we have seen in some time is lagging. When you look at business investment, which struggled for any material growth over the past year, its a forwardlooking indicator that could spell trouble, perhaps even recession down the line . Sarah it does tend to lag but its also sizable in terms of its share of the economy, accounting for more than two thirds. When you look at just not the current pace of spending but the consumer fundamentals in terms of the fact we are still seeing solid job growth, household ance sheets are in good even if consumers were to be one of the last areas to get hit, there is a lot of wherewithal for them to continue spending a decent rate. Probably close to 5 like we saw in q2. That is not sustainable but we can eke out somewhere around 2 to 2. 25 gains this year. Vonnie why is the Market Pricing into plus cuts from the reserve this year . Sarah they are looking at the Downside Risk we are seeing for the outlook. Also the fact inflation continues to struggle to hit 2 on a sustained basis. To the extent the fed can provide a little bit more accommodation, maybe help contribute to easing up some of the financial tightening financial conditions we have seen over august. I think there is a good reason to expect we will get further easing from here. Amber to cushion the blow from the rhetoric coming out of the u. S. China trade dispute, and the markets are trading up because it is softened. Somebodys whose job it is to model the impact of the trade dispute, which is difficult to do, have you entertained the idea this does not give resolve this year or resolved into the election because this far the only thing that seems to bring solace to the markets is the fact they are still talking and still being nice to each other. Breakthrougheen a on any of the major agenda items the u. S. Is trying to achieve with china. Sarah the good news has been the fact it is merely a pause and we are not seeing at the escalation. A deescalation. Sarah we actually probably will not get a resolution anytime soon. This could well last past the election at the this year or next year. Forecast does to the and Capital Investment, we will continue vonnie today marks two years since Dara Khosrowshahi took the reins at uber. The company has gone public, faced criticism on driver and user safety, and posted of billions of dollars in losses. Emily chang spoke with him at the coveneys headquarters. He says he is happy with the companys evolution. Dara we have resolved all the governance conflicts the company had. There were many legal issues the company was involved with. We got softbank has a partner. You want softbank to be behind you and a big partner and big investor. We have a great investor base. We have taken the Company Public in the Company Revenue has grown 75 since i joined. When you have a path to profitability, i believe. While we have had bumps on the road, and every adventure has bumps on the road, i like where we are and especially like the position we are in now for the next few years. Emily there have been bumps in the road. Yft, ridesharing companys has been transformational. Kenny were bs transrelational over the next decade has it has can uber be as transformational over the next decade . Emily dara really what uber has done has brought transportation an opportunity at this point to what we believe is a small segment of the population. We have over 4 million driver partners all over the world, a huge number and unparalleled. We want uber to be available to everybody. But we are doing now is going to the next step of introducing other transportation choices tuber. We have always gone with pool. We are testing buses in cairo now to bring the price of uber down for to the next level. One dollar, 1. 50, et cetera. Introducing bikes and scooters. Anyway you want to get around your city, we will be there for you. It will be mostly uber goods but we will have other third parties such as transit, one of our partners. Anyway you get around, we went over to be there. If you want food or local commerce that i think we will power uber eats and other services will be there for you as well. Emily can uber be so transformational and stop losing money . Can you create a Good Business for the rights to be a dollar . Dollar . To be a dara yes. If you look at the right your business, it covered our overhead less by about 100 million. The right your business itself is turning quite profitable. We believe the prophets of the right your business not only will grow top line, but grow a bottom line as well. There are other businesses. Eats, autonomous, freight. These are restored gary opportunities we are funding. I believe we will prove to investors we can take on a serial basis big parts of the business, turn the profitable, use those parts to Fund Investments in other areas. Emily there are execution issues. You just had a 5. 2 billion quarterly loss. The stock is trading below ipo price. Investors love shorting it. You have hiring freezes and fire some of your top hires. You said you believe uber can be confident, but help confident in how quickly can you review profitable . How confident are you uber candy profitable . Candy profitable . Can be profitable . Dara if you live in the accounting world, thats a big loss. Loss iseal world our 656. We are lower than q1 in on a good path in terms of our losses. You are right. None of this will be easy. All of this will take excellent execution from all of our teams. Marketing, technology, and we are going to be demanding of employees to be doing even more with less and execute incredibly effectively in order for us to grow the topline and bottomline. Emily is pricing the main lever you pulled the profitability . Dara scale. It is getting big when you have per quarteron rides and trips growing at 35 on a yearend basis. We use technology to be more efficient. Instead of now instead of having to call a call center agent, you can just do it in the gap. These are technology at in the app. These are Technology Innovations that bring down costs. The combination of growing topline over 30 , Technology Innovation to delight the customer and take costs down, and good oldfashioned efficiency. Making sure the corporate costs dont grow as fast as i revenue. All this together give the formula to profitability. Bloombergswas interview with Dara Khosrowshahi. Coming up on the show, we have our eye fixated on Hurricane Dorian has residents in florida are a high alert. Insurers are also bracing for the storm on the possibility of a 10 billion plus storm loss. This is bloomberg. Vonnie this is bloomberg markets. I am vonnie quinn in new york. Amber those in puerto rico and florida are not only bracing for Hurricane Dorian, insurers are on high alert. The potential for a loss has increased as the hurricane gained strength, possibly hitting the coast and the panhandle has accorded gory 3 4tegory as a category 3 or storm. More, lets bring in insurance analyst matthew palazzolo. Thisve been talking about as a 10 billion plus event how does it stack up to some of the most recent hurricanes that hit the region . Matthew if you look at the past two years, we had Hurricane Michael last year. That was about a 10 billion loss. Then we had Hurricane Irma in 2017. The losses there were a little bit more fuzzy. 20mates are kind of in the billion to 40 billion range. And read onlook where the storm is coming in, you are probably looking at somewhere between the 10 billion michael and 20 billion to 40 billion of irma. Amber this is not a new phenomenon. These areas are vulnerable to hurricanes. You seenusing have the insurers try to cover themselves against potential losses . Have you seen premiums go up or is there a limit to how much they can charge . Matthew insurers are reacting to increased hurricane activity. One method is to buy reinsurance, insurance for Insurance Companies. Many of the Larger National Insurance Companies have been doing that. A lot of them are pulling back from these catastropheprone areas. Vonnie i was reading earlier. The reinsurers are the most at risk here. What is the worst possible outcome . Lets say it goes right through miamidade. Matthew that is a worst possible case. That is unlikely in the current forecast to have a direct hit on miami. If youre looking in that 40 be,ion range where irma may every Insurance Companies will see significant losses. On the flipside there is a pricing impact that could help them so they can raise prices after the fact. Vonnie what capacity do they have . Matthew they can weather a storm the size of firm a. The Capital Position of the insurance and reinsurance industry is pretty strong despite there being significant insured losses in the past couple of years. This year to date has been pretty benign. They were able to build capital through the first half as well. Amber it was most exposed in terms of insurers . Matthew this will likely be personal lines event. If youre looking at the homeowners market share in florida, it is dominated by large mutual companies, state run Insurance Companies and some smaller regional companies. The National Companies i cover tend to be in the lower half of the top 10 of market share. Allstate and progressive. They bought aggressive reinsurance. Vonnie we get updates periodically from the hurricane administration. Where are we . Atthew we are currently potential category 4 hitting about mid florida. Look at another update tomorrow. The storm really will not hit until early next week. We saw a couple of days with a lot of uncertainty left. Vonnie we will keep our ion dorian. Dorian. N users, you can interact with the chart shown gtv. You can save charts for future reference. If you want to keep your eye on dorian, it is cyclone. This is bloomberg. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy a new samsung note. Click, call or visit a store today. Mark im mark crumpton. Hurricane dorian is picking up steam. The National Hurricane center says the storm is expected to strengthen into a category four hurricane within the next 72 hours. It will be the first major hurricane to slam into floridas east coast in 15 years. The storm raced past puerto rico and the u. S. Virgin islands causing limited damage. In yemen at least 30 people were killed in airstrikes. Governmentdi backed blamed the United Arab Emirates for the attack. Iran says its not interested in meeting with President Trump unless washington stops its economic terrorism. Speaking at a forum, the Iranian Foreign minister said the u. S. Sanctions have hurt ordinary citizens. He also said dropping the sanctions could help salvage the 2015 nuclear deal. President trump this week said he would meet with the iranian president if the circumstances were right. Chancellor Angela Merkel said
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