Got to cut again. Lets dive deeper into the action. . Bigail, what were you watching this we take a look at oneyear chart of the s p 500. All the volatility over the last 12 months. More recently going above it just a little bit. Two the index is having a hard time. Another whipsaw back down into the range. Taylor it was outperforming the Broader Market by more than a percentage point. We have had no trade news today. No news is good news. The index has been so sensitive. Thented to look at some of individual stocks. Here in the terminal chart that i am showing terminal customers, the index in blue and creating a divergence here. Analysts are really wondering where the stocks come down for dram. In the case of micron, credit suisse, could have a bottoming out cycle. Micron gets a lot of revenue from dram memory chips. Renita i am closing it out looking at the u. S. Dollar climbing as global fears intensify. Weaker than expected euro zone manufacturing data started to renew concerns. The greenback is mixed versus its g10 peers. , that manufacturing september data rose, signaling the u. S. Economy continued to show more resilience in some sectors even though Christine Lagarde, will take over the ecb as president in november, said the trade dispute is the worlds biggest challenge for the world economy. Caroline some breaking news which revolves around juul. California is conducting a criminal probe related to juul labs. Remember, ultra has a big exposure to this and has made a big investment. We have seen all tria trading currently flat after hours. It goes back to the idea that governments are moving faster than companies in many ways. It is extraordinary how fast the developments of the past few weeks have been in terms of the tides shifting against these companies. Caroline several Health Issues being highlighted. Was it 500 now affected . Joe not necessarily juul. Seven People Killed because of they been related lung disease that we dont necessarily understand. Joe still with us, sandip bloombergs Sarah Ponczek. What we saw recently was what looked like a little turnaround in yields. After the august of bond buying, we saw some selling. The rotation sort of fizzling out of it. Are we just sort of going to slide back into this pattern . Where rates on longterm safe haven assets continue to grind lower . Sandip the spike in 10 year bond yields coincided with value stocks, lending some hope that recession fears are abating and that the u. S. Economy could gradually get back on track. The level of 10 year bond yields around the globe is such a mystery. The bond market has been screaming that a global recession is right around the corner. I expect there are a couple of things distorting those yields and the yield curve. One is quantitative easing pushing prices up and yields lower. Of anforget, a component aging population is a base that craves safety, liquidity, and convenience, and i expect that is pushing yields down. Scarlet demographics. That being the case, especially in the united states, how are you positioned . Sandip i think our earlier conversation makes this easy. If there is a market that is overvalued, it is the bond market. Bonds, that is very easy. Absolutely u. S. Over nonus. Scarlet how about within the u. S. . Theip we still like procyclical sectors. For the more adventurous, energy. At the moment, with volumes being down, it seems everyone is cautious. Sarah one, you do have stocks at alltime highs but you also because, trait again, with bonds, yields so low, where else are you going to go . Today was just a great example, very illustrative, of what we have been seeing. The u. S. Continues to chug along. At the current moment, it is difficult for investors to decide if they want to keep piling into a market close to alltime highs as we are supposed to be seen earnings not receded but growth slowing. The fed has kind of made it clear that they are datadependent and the market cannot absolutely rely on the fed Going Forward as long as data continues to surprise to the upside. Joe sandip, what do you make of the seeming split within the fomc . Some wanted more easing. It is a difficult picture to read. Be amove arises, will it little bit harder for the central bank to react as it has in the past. Sandip the central bank is playing it right. They are a lot late they are reluctantly changing rates. You do understand the dilemma. Your strength in the domestic economy, there is a fear of contagion from overseas but that mechanism is unpredictable and erratic. They are paying more attention and approaching the rate cuts cautiously and nonaggressively. I am really sympathetic to that position. I think they are doing it just right. Scarlet the repo market, there has been a lot of chaos and they have basically said they will come in and do what they need to do for the next few weeks. They were caught a little flatfooted, ready with 75 billion. They couldnt get back into the system. I dont think there is anything systemic or sinister about economic fundamentals. This is purely a liquidity event. At what point is it no longer just an operations issue . Sandip this continues into the First Quarter of next year. Caroline we just get a headline such as more investigations, Legal Investigations into juul, for example, regulatory headwinds dont just affect tobaccorelated companies, but also technology. How do you play out the scenarios . Sandip it is real. You have to think out of think about it at two levels. Verye privacy side, in a perverse way, the very large online ad providers may stand to benefit from Greater Regulatory oversight. They have the scale where they can absorb these costs, they are Martin National they are all to national to begin with. On the anticompetitive acquisitions, those types of phenomena, there may be new rulings that you have to give equal parity to other players and proper display to third party vendors. The worst case scenario, we just dont see. Offsetting all of these risks is the fact that these companies have very high Free Cash Flow margins. They have created a competitive moat based on capital which allows them to enjoy these margins in the mid20 . Prices have come down as a result. We still think they are actually an attractive buy. Scarlet in other words, opportunity. Sandip you see, i am the optimist. Scarlet we appreciate your optimism. Trust. Whittier and Sarah Ponczek as well. That does it for the closing bell. Romaine bostick steps in for whatd you miss . This is bloomberg. Caroline we are live from burglar from bloomberg World Headquarters in new york. A snapshot of pretty lackluster trading today. Volumes down. Joe the question is, whatd you miss . Caroline u. S. Economic data that outperforms the rest of the world. Recession risks and europe intensify as germany suffers its worst downturn in almost seven years. As pressurecontinue mounts from the board to oust the ceo. Romaine some breaking news here on the situation regarding iran. The Un Security Council said it should extend the arms embargo. There is also a headline that france is assigning responsibility to those attacks in saudi arabia two weekends ago to iran. The u. K. , france, and germany also joining in on the declaration. We will bring you more when we get details. We want to turn to the money markets, specifically the u. S. Money markets. A little more relaxed today. The Federal Reserve evaluating the fallout from volatility last week. Too dudley saying he is not worried too worried. We are in a good place. Repo rates are back down to where they need to be, federal fund rates are in a good range. Romaine for more, lets welcome Bloomberg Economics senior economist and a macro fund manager. Not a whole lot to panic about, done . G see, all it looks like it has been taken care of for now but it doesnt mean we dont have a problem. The fed put a temporary patch on it but they need to fix the problem more temporarily. As the Bloomberg Intelligence chief rate strategist has been talking about for some time now, we need to have a repo facility and the fed will need to increase the Balance Sheet once again. And they need to do it pretty soon. Weeke events of the last creates emergency. Is there any cost to Balance Sheet expansion if the purpose is just to ease the reserve shortage in the system . I think there are two important things going on and one of them is just noise. Picture, major issue. Two questions that are fascinating. First of all, the collective human response. 99. 9 of people dont know what a repo is. People are saying, this happened before 2008. That is what is fascinating, we are still ptsd, mental scarring. It shows you about a collective mindset. The second thing which is fascinating, which is a very obvious question to ask. How can you have more reserves than you have ever had in the Banking Systems history, yet there is a shortage . That tells you that the vast majority of reserves have been permanent. That also tells you that you should not be worrying about the federal debt. If you look at Central Banks across the world, you should net that debt off the Balance Sheet. The only reason you dont is you think it is a temporary operation. If it is a permanent operation, you dont have to worry. Those are interesting dimensions that i think are worth thinking about. Caroline the regulation problems, that we have all these reserves but none can be put to use. As bill dudley also suggested today, this and other things are not a problem this time. These are things that we will have to worry down the road. Right now, it is not a problem. I think the fed chose this system with abundant excess reserves. It seems to be working right now and they should be able to romaine ike this like this. Romaine there is an imbalance. The question is, the fed, they obviously know what the reserves are, how they are spread out. I guess i am a little confused as to why it took that last monday and the breaking point to to react. Eric that is fair. People will either say you were asleep at the wheel or you need a better system in place. I would be wondering why we are handing taxpayer money over to the Banking System. There are much more important questions. No central bank on the planet has a problem keeping money market rates down. This is ultimately a technical issue that is very easy to solve. The fed can create reserves at will. The question, why were they surprised by unanticipated demand. That, they should be able to sort. Everyone should be able to sort it out. , yelena. K you eric, you will be sticking with us. Coming up, mario draghi defending the final stimulus under his time at the helm. What his moves mean for europe, next. This is bloomberg. We will continue to carefully monitor, as we have always done, the possible side effects of Monetary Policy. It is crucial to remain vigilant and use the micro and macro policy tools as necessary. That was Outgoing European Central Bank president mario draghi defending the institutions latest monetary stimulus. Investmentss, mmg macro fund manager eric lonergan. You said that the specific approach they are taking, you called it monetary rocket fuel. Explain to us what we missed and what everyone missed in. Challenge,of the deliberate obfuscation. Central banks dont want to tell you what they are doing because it is extraordinary. About negative Interest Rate. Doingks like they are Interest Rates and targeted reserves. What i mean by jewel Interest Rates. If you want to stimulate your economy, if you bring down the Interest Rate on loans, literally everyone is a winner and it works. That if you cut Interest Rates on loans, the private sector gets a stimulus. The problem with negative Interest Rates alone is that depositors are suffering. That is what the ecb has done. I did not expect them to do it because it is so radical. The average Interest Rate on bank reserves, they cut the. Nterest rate it is essentially a loan that they are making to the banks. They are now paying banks in europe to make loans and they are paying more on the Banking System deposits. Whether they have done enough, they crossed a rubicon because the key here is that they are losing money. They have to lose money. You can call it what you want to call it. They dont want to use any of those terms. They dont want to tell you what they are doing because it is pretty radical. These are relatively gray haired, suit wearing individuals who dont want to give you the impression what is different to the qe and forward guidance, becomes l impact if they want to do this, it is potentially rocket fuel. Romaine you think this is a better alternative than just facilitating actual government spending, government invested government investment, things that are longterm. The theory, it becomes shortterm stimulus. What if consumers dont bite . It is thathing about this works if you are willing to do it. Romaine this becomes a political thing. Eric the point is, the financial crisis, it has become a crisis in economics. Part of the problem is you have the Central Banks that are so complicated that you have Nobel Laureates who dont know half of what they are doing. Somebody says, i have never heard of that. A press release. They are doing completely new things. Policy is illegal now in europe. Want togermany doesnt bailout other countries, we are not going to give you fiscal freedom like america has. We will really constrain it. The central bank has all the authority to deal with the cycle. It has hamstrung and is forcing them to innovate with Monetary Policy. What happens with america, who knows. If there is a problem in america, the fed will have to confront some of these issues. Caroline will Christine Lagarde forced germany to start spending . Eric my view is the germans wont shift much on fiscal policy. If you think giving up the bundesbank or pulling Monetary Policy was such a big thing for the germans to do, the idea of pooling fiscal policy, personally, i think it is a step too far. Christine lagarde, we could be lucky with because of her political insight. Caroline thank you. This is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. President trump made a surprise appearance today at a Climate Change summit at the United Nations general assembly. In the past, the president has questioned manmade climate manmade Climate Change, at one point calling it a chinese hoax. On sunday, the president denied he was deliberately skipping the event, pointing to a briefing on flooding in the houston area as evidence he was concerned about Climate Change. Speaking via videoconference from the vatican, pope francis addressed the climate summit. He said, the problem of Climate Change is related to ethics, equity, and social justice. The Current Situation of environmental degradation is connected with the human and social degradation we experience every day. Young people taking up the cause, it is their future, not ours. For the second time in a month, puerto rico is bracing for another storm. They closing schools and offices as Tropical Storm karen looks to produce flooding. The governor has activated the National Guard and has urged peopleto shave urged to seek shelter. Said minister imran khan he is more worried about india that his own country. He spoke to the council on Foreign Relations in new york. It is not heading in the right direction. Happening inat is the last few years, it is not the india i know of gandhi, it is this ideology of hindu supremacy. Mark Prime Minister con added, Prime Minister khan added, the world must intervene for this goes too far. President trump said the u. S. Would be willing to help negotiate the situation in kashmir. 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. Im mark crumpton. This is bloomberg. Attention returning to Global Public markets this week. A string of companies sent to price offerings and debut shares. After some highprofile flops, how will this fair . Lets bring in abigail doolittle. Abigail many ipos, lots of private companies. It is not just in the u. S. , it is really on a global basis. In hong kong, a company relaunching the ipo of its asian unit. It is not confirmed exactly when. The amount of money they are raising, half of what they were planning on raising before. Biotech set kong, to go off on wednesday. Bottom of the range will really be a test of the sentiment. Turning to europe, take a look at team viewer, a software company. They are expected on wednesday, expected to raise between 1. 4 and 2. 3 billion euros. It will be one of the biggest ipos in europe this year. In the u. S. , balaton looking to n expected toto raise 1. 2 billion but wall street is a little bit skeptical. ,he ipo that is not, wework ceo,week, around the delayed to october at the earliest. It has been a difficult environment for different ipos in the past 12 months. If we look at this terminal 500. , and white is the s p in blue, uber. The only ipo to be up over this time period. Direct on theile bottom taking those undesirable honors, down about 17 . Abigail doolittle, great set up. We want to discuss wework trials and tribulations a little bit more. A reporter in San Francisco has covered all the highs and lows. The chief executive has voting control, what he let it happen . What is important to keep in mind is even if he might technically have the voting control to oust the board if they were to try to fire him, that seems like a nuclear option. What it seems like will be happening is a protracted negotiation between some of the investors who may think it is in the best interest for the ceo adam neumann to step out. I think it will be more of a persuasion more than iron handed enforcing. Were to leave, would that help the ipo because people would see the company and more stable hands, or would it delay the ipo and give them time to regroup and perhaps go for a higher valuation down the road . Ellen it could do both. Removing the ceo at this point will be seen a such a major upheaval of the process, certainly not what the company had planned to do when they first started going through the process of going public. It is possible it would be seen as something both dramatic enough to change the fortunes of be soyed ipo, or it could complicated it delays the ipo access to which means a credit facility. That raises the question as to why there wasnt more of an effort. When you think about some of the investors, benchmark capital, the way they dealt with travis , is therever at uber no sense prior to this that he is the wildcard that would need to be dealt with. He has a strong personality. He has always been known as somebody with this outsized personality, known for outsized,. Old decisions reacting seem to be and seeing what maybe they thought was acceptable, doesnt seem like it is. Caroline it is a big turning point, softbank. We know they had doubts about backing adamt neumann individually. Ellen it seems to be an aboutface. In the past few years, it seems like they have been really agreeing that the best pathway has been a lot of growth including spending a lot to get that growth. A change that i dont think many people saw coming. Of Tech Startups that have seen their valuations that have plunged in the past several weeks, we have to talk about juul. I dont know what it would technically be valued at now. Regulators, which public, other companies have turned against them his mind spinning. What do you think about the global 180 that we have seen . Ellen it is possible that this would have the same type of effect for juul as we have seen with wework. Juul, it is not like they are lining up to go public but they have faced a lot of scrutiny. Today, new reports of a probe from the u. S. Attorneys office, from the ftc and fda. Pressure, this is going to be a Major PressureGoing Forward. This Huge Investment that came from all tria last year values from altria last year valued the company at about 37 billion. Im sure executives from altria are wondering why that is not holding up to what was at the time. Caroline thank you. Lets get over to President Trump, who is speaking about the relationship with china. Steve mnuchin said the vice prettier vice premier will be coming next week. Pres. Trump Everyone Wants to meet with us. I consider it a great honor. Cant do everybody. We have turned down for more than we can do. Egypt is a very special, important place. I think you have the largest population anywhere in your part of the world, by far. Caroline we have heard from President Trump saying he has had plenty of bilateral meetings today. Talking about an exemption for soda tariffs, relationship with egypt. From secretary mnuchin, we are hearing the chinese vice premier is visiting next week for talks. Joe coming up, putting matters into their own hands. Deutsche Bank Shareholders are intervening in the search for a new chairman. This is bloomberg. Romaine time now for a look at what stories are trending. Terminal users are learning about the collapse speculators looking to earn from the bankruptcy after investing in derivatives. One of several big payoffs this year for hedge funds and traders who bought the credit default swaps. A story on Petra Diamond which bluestone. 29 caret petra gave no forecast on the em qualityblue g stones are among the most valuable in the world. They found it at a mine famous for producing stones including those in the crown jewels. Can start a selfie detect if you are stressed. It can detect your heart. It can detect Blood Pressure with accuracy and decode emotional information. You can follow all the stories on bloomberg. Com and at tictoc on twitter. Joe a busy day on wall street. Taking thenk chairman search into its own hands. Here with more is what is the latest on Deutsche Bank . The reason this is a big deal is the qatari royal family is taking the search into their own hands. Want a newhey may chairman by 2022. Caroline already having his own tenure being questioned. The sales heme of promised. About b. N. P. Paribas. Sonali they are moving over a lot of the hedge fund assets. Deutsche banks prime broker business was one of the best on wall street. This is one part of their restructuring. It will be quite costly and quite long. Romaine goldman sachs, a story out saying Something Like 15 of their partners will be leaving by year end. In, who is out, right . Mass, they were both elevated last year to the Management Committee after sullivan was named. Now they are taking over roles as asset manager. It say or what do we know overall about solomons strategic fits or goals . Sonali one part that is under covered is Asset Management. Sheela patel. Luke is also given a new role. Investment banker by trade moving over to asset manager. Will they make deals in the Asset Management business . I think that is something to keep an eye on. Caroline from asset managers, ithose pretty proficient is getting quite significant. Are talkinghey about pitching other people. Sonali detectives, please, prosecutors. They had a downtown brawl in zurich because detectives were following the wealth manager leaving for ubs. D said suisses own boar they are looking at the situation. Romaine they had a brawl in public . Sonali this is one of the top Wealth Managers in the world, trying to teach trying to take the phone away from the detectives following him. Romaine World Leaders and diplomats gathering in new york city. There will be plenty of headlines to watch. The showdown between the u. S. And iran likely to overshadow the meeting. Addressesdent trump the meeting, irans delegation will be in the second row. The relationship obviously between the u. S. And iran right now is fractured, to put it mildly. What do we expect trump to say in his address . Two weeks ago, heading into this meeting, it would have looked like things were on track rouhani tond hassan have a sit down meeting on the sidelines. Since then, we had an attack on the saudi aramco facilities, irans foreign minister has warned about conflict leading to allout war. The u. N. Meeting, these kind of meetings can still take place. We do know that President Trump is likely to address iran tomorrow. Two years ago, when he was worried about north korea, he ,alked about little rock resulting in three meetings since then with kim jongun. Get a hard line and then get rouhani to the table. Joe obviously, the attack on the Saudi Oil Facility has decreased the odds of a meeting. Bill we just had a rather surprising statement from germany, the u. K. , and france. They came out and said that they feel that iran was behind the aramco strike about 10 days ago. They also called for a new expanded agreement with iran which would go beyond what the Nuclear Agreement called for and it would take into account irans Ballistic Missiles program and its behavior. This is something that Trump Administration has long been calling for. They felt that was the biggest weakness of the 2015 deal. I think there will be some padding on the back by Trump Administration officials ahead of the statement officials in the statement ahead of trumps speech tomorrow. Caroline we just saw u. K. Prime minister Boris Johnson saying that trump is the one guy who can negotiate a better deal. He was calling for a trump deal to resolve the irani crisis. When you have allies coming into support the united states, does that make it less likely or more likely . The fact that they have come out and pointed the finger is surprising. Question, ifes the you are going to blame iran, what happens next . Mike pompeo said his job is to begin forming a coalition. I dont think he meant a military coalition. I think he wanted everybody on the same page to go back and pressure iran. I think what we are seeing with the european statement today. Caroline thank you for spending some time with us. Coming up, more trouble for carlos ghosn. They are on the hook for millions in fines after the fcc the sec says they failed to disclose millions. This is bloomberg. Automakerthe japanese nissan and ask chair carlos ghosn as settled with the sec over hiding millions of dollars in pay. It put the company on its heels. Of nissan,s he chair but talk to us about whether this fine, which actually isnt that big for carlos ghosn himself, how does it affect what is happening in japan or other legal wrangling. He settled the allegation. 2010, japan had a new rule about disclosing more fully executive compensation. Eache case today explains, friday variety of different totems avoid disclosing it investors. Regardless of how this turned out with the sec, he is out. Joe when did he get out . Is ew months ago there a few months ago. There is an investigation in france as well. This settles the sec portion. Romaine his successor who came in after him and up stepping down from nissan. We are talking about primarily for failing to disclose a certain amount of pay. I know the situation was a little bit different because theres no evidence he orchestrated it. I dont understand why this case has gotten to the level of criminality in japan when it seems like a corporate governments Corporate Governance issue. Ist the sec lays out backdating letters, a pretty clear intent, state of mind of what was going on. They tried this in a variety of ways. A company that wasnt a real company. Intent, theproving sec and conceivably in japan as well, they will have that information. Caroline he is barred to serve as a director for the next 10 years and he focus is now on what he faces in japan. The u. N. General assembly continues. President trump, macron, Prime Minister johnson all speaking tomorrow. Joe i will be watching the u. K. Supreme court ruling on the legality of Prime Minister johnsons suspension of parliament. Romaine nike reporting earnings after the bell. Bloomberg technology is coming up next. Joe this is bloomberg. I am taylor riggs in San Francisco. This is bloomberg technology. Asing up, pressure rises some Board Members of wework consider ousting the ceo after the delayed ipo. Plus, snap to attention. The giant seems to be helping the federal trade position