We will dig into that in a few minutes. To theot confined financials. A relatively broad selloff. Groups Like Health Care are leading the downturn in todays session. At the lows of the day of the moment. The dow down 1. 5 . The nasdaq is really bucking the trend. In todays session we are watching what has been going on with crude oil as the meeting in algiers is happening among opec members. You can see crude oil prices up more than 3 in part as it looks like saudi arabia is opening the door to future Production Target deals. It is contingent upon access on our ron. The dollar falling today also. Offshore drillers doing among the best. Transocean leading some of the games in todays session. At the dowing movers. Goldman sachs initiating coverage of some of the stocks. Morgan stanley out with negative commentary. Marriott is the only one on the approved list. Winners. Ip side realty even as hotel stocks fell off, Real Estate Investment trusts going higher. They seem to be benefiting from lower rates. The yield, which has fallen 12 basis points, many of the real estate socks have been real estate stocks have been the winner. A good tradeoff between the financials and the reit. Mark crumpton has more from the newsroom. And donaldry clinton trump square off tonight in the first of the president ial debate. In a new poll, shows them tied in a twoway race. The survey has the candidate each with 46 when thirdparty candidates are included donald trump leave 4641. There are predictions tonights could be the most watched president ial debate ever. You can see it all here on bloomberg tv. Our coverage will include 30 minute preand post debate shows led by mark halperin, john heiman and the bloomberg political debate team. Police and houston, texas, say nine people were shot and wounded by a lawyer who had urged who had issues with his farm. We shot and killed the man after he reportedly fired shots at officers. A bomb squad robot is looking at a portion of that is believed to be the shooters. Nine people were treated and released. Jury selections underway in the the charleston, south carolina, church suspect. 80 jurors reported to the courthouse today. He is charged with hate crimes and obstruction with religion in the june 2013 religion deaths of nine black parishioners at the manual amd church. Adio location data shows missile that downed a malaysian airliner over Eastern Ukraine in 2014. It was not fire from territory controlled by firebox rebels. Todays claim came two days before the reports on where the ending was fired from flight 218. More than 2600 journalists and analysts in more than 26 countries. This is bloomberg. Time now for the deals report. Every monday we circle in on the m a analysis. Today were talking about private equity. Standing byccracken with ahead of u. S. M a at rbc capital markets. Has advised a number of major acquisitions. Thank you. Veto hereky to have with us. Good day, sir. I know that rbc is one of the biggest banks and has a great balance sheet. You use that a lot in private equity. We are way past the 2006 timeframe when you had a huge lbos. Now . Is the strategy it is interesting, this year we have seen the strategy is quite a bit of monetizing the better investments. They have been looking at a fundraising cycle. If you look at the larger , the blackstone, apollo, tpg. You mentioned 2006 and 2007, the private equity sponsors driving 35 market on the m a side. Only a quarter of the marketplace. The firms focused on technology or software have certainly found more opportunities. Diamond resorts and fresh markets. It feels like in terms of taking Companies Drive it, we are in an era where typically the deals are 500 million, perhaps 3 billion at most. Is that the right time, the value they are going after . There has been a number of factors driving that. One is that financing is readily available. What happens in those types of transactions, the low mid market, they are readily able to get the financing from one, two, maybe three banks. There are multiple tranches, many more banks that need to be involved. As we look at the backup for the half of the year, and everyone is it acting at december rate hike, you want to get deals done quick. Private equity funds do not want to partner anymore. They are partnering the strategic rationale. Talk about those two funds and what the expertise is if you. Ill they have built up a long history and a very successful track record. Vista is targeting an 8 billion fund. They are pursuing much larger transactions. Earlier this bot solaris for a little over 6 billion. They just did info blocks a couple of weeks ago at about 1. 6 billion. We of been active with both of these funds. The buy side of the corporate. We actually advised ncr on buying vigil in sight. They have found success primarily because they have identified a niche industry vertical. Not just technology, more in the software space. They have Standard Operating Procedures have put in place where they believe we can obtain similar to a corporate. As a result, they can out bid a lot of the brethren and be comparable to a corporate ire. Corporate buyer. They have also built many of the companies after the initial investment. That certainly helps to lower the overall cost. How much dry powder do the private equity firms have gekko a number that keeps rolling every quarter. In the u. S. Over a billion of dried powder as of the last quarterly information. If you look globally, it has to be over 1. 3 trillion. That is an amazing number when you consider the funds out there. A number of the fundraisers have been varies pacific funds. You are seeing some of the most recent funds that have been of size like the folks at brookfield that have raised 14 billion and 15 billion funds respectively focus on infrastructure. You are actually seeing general fund and specific funds with significant capital. Theyre trying to find the right places right now to put that to work, which is certainly tough in this environment given the level of evaluations. You are at rbc, so i would be remiss if i did not ask you about canada. Are they more outbound or inbounds focus . Two years ago the Canadian Dollar was generally on par with the u. S. Dollar. From a buying perspective, if you go back the past two years, there has been an incredible focus outbound. As a result, outbound activity inbound2. 5 times activity. For four years before that, it was actually the reverse is the reverse. Canadalarger players in are looking outbound to grow. The smaller players are becoming much more targets. We have been incredibly active on that fund. I think we are running out of time. Appreciate your time. Thank you. With the head of u. S. Mergers and acquisitions at rbc capital markets. Scarlet Deutsche Bank shares dropping to a record low after a report saying the German Government will not jump into save the troubled lender. More on the chart next. This is bloomberg. Julie you are watchingjulie i am juliemarkets. Hyman with scarlet fu. Deutsche bank shares dropped to a record low after immediate reports that the government will not jump into back the lender. Losing 53 of the market value the sheer. That is something you are focusing on, the market value. Every day it seems like we see another like low work in the stock. Investors are selling off the bond. Julie what is interesting is the report that the German Government will not bail them folksnd yet, not a lot of believing that. The investors said the German Government will bail them out. Is the National Elections next september. All of this is being reflected in the stock. Line is the shares, and then we have the cocoa bonds. The yield has been spiking. About what it was when there was the last round of questions. Stockoming as we see the falling. Scarlet here is a longerterm picture of Deutsche Bank. He calls it the fall of Deutsche Bank in one chart. The white line around the bottom is the market value. The blue line is jp morgan. Once upon a time, they were both valued at the same level. Since then, the valuation has taken off. Citigroup has just been provided as another point of contrast. Citigroup has had its own , not necessarily with the same issues, but the good thing versus bad bank. Market value is considerably higher as well. This is something investors will have to grapple with. It is not so much which a bank has gone down but that it has not recovered in the same way the u. S. Bank has. The troubles plaguing the european Banking System have maintained. Hours away from Hillary Clinton and donald trump taking the stage in the first head to head debate. Of the head to the site debate next. This is bloomberg. Scarlet tonight Hillary Clinton and donald trump will face off at hofstra, university in new york. Complete coverage of the debate here. You want to tune in for full analysis. Again, beginning at 8 30. Julie now, lets head to the site of the debate. Eagerlyth everyone else awaiting this evening. Good to see you. I am here with sarah huckabee, eager Trump Campaign advisor. The entire room will be filled with analysts. What kind of donald trump will we see tonight . I think you will see exactly what we have seen on the campaign trail. He will talk about his passion for america and putting american america first. He is not a scripted career politician. That contrast will be start tonight. We have seen donald trump who has made some quite controversial comments. They have been politically incorrect. Is that the donald trump that will show up tonight or will he be more scripted . I think he will be more respectful and really president ial tonight. I do not think we will see any of that tonight. One of the things people will be watching tonight is to see particularly how candidates make the appeal to independent voters who are not that thrilled about donald trump or Hillary Clinton and are making the lesser of two two equals argument. How are they going to reach out that are not excited about the candidacy . In the large part we are looking at an america where 70 of the voters want change. Hillary clinton represents everything that is the status quo. Contrast that with donald trump who is new and fresh. I think that it is going to be a big appeal. We have a new poll out that locked. Ey are when you factor in third party candidates, trump has the lead, a slight edge. Candidatesirdparty factor into the Trump Campaign strategy moving forward . I think the message is the same. It is talking about the economy, national security, putting the america first. Donald trump is the only one doing that in this race and the only one who really has any credibility to do that. Your critics will argue donald trump has not beens pacific on policy issues. Wells fargo collapsed just the other day. Can we expect the Trump Campaign moreart to release specific policy, whether it is combating isis or how they deal with Financial Services regulatory insurance . He has done that over the past two months. He has done quite a few policies teaches and will continue to do that leading up to november. What is the worstcase scenario tonight . I do not think there is the worstcase scenario for our team. We are surging in the polls. There is a lot of enthusiasm, unlike anything i have ever seen for a republican nominee. Debatee is to lose the tonight, is that game over . I do not think that is going to happen, so we are not going to worry about it. In my final question, what happens if donald trump is . A lot a lesser moment of people i speak with saying perhaps he is not as scripted. What does he have to do to convince people that he knows the ins and outs of the business . Donald trump is incredibly smart. He has the ability to take tons of information and process it quickly. I think you will see that tonight. The American People are looking for authenticity. I think you will see that in a big way from donald trump versus the robotic Hillary Clinton. Thank you all very much. We will all be watching. Coming up, his Silicon Valley reid hoffman has taken a strong position against donald trump. Strategy. His unique this is bloomberg. Scarlet buy from bloomberg World Headquarters in new york, and scarlet fu. Julie this is number markets. Headlinen with from first word news. Mark crumpton has more from the newsroom. Mark c. donald trump is looking to apply his new campaign discipline at tonights first debate. Trump and Hillary Clinton face off at new yorks half for university. Politics survey, it shows that the two are in a dead heat with 46 each. Trump leads when thirdparty candidates are included. You can watch the debate on tv. Mberg t theter will livestream bloomberg broadcast. A vote could be held this week as democrats and republicans promised to override president obamas legislation that allows victims to sue1 saudi arabia. Protests continue for a six night in charlotte, north waslina as the curfew lifted. About 100 people gathered across the street from bank of America Stadium before the Carolina PanthersFootball Game to protest the shooting. A lawyer for Joaquin El Chapo guzman will argue that his client was the victim of torture. Says specialt security measures are needed after his escape from the maximumsecurity prison near mexico city in 2015. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am Mark Crumpton. This is bloomberg. Julie thank you so much. I want to take a look at what is going on in stocks right now. Selloff today, kind of triggered by Deutsche Bank, but really broader than that. The s p is more heavily weighted towards energy stocks. Take a look at the bloomberg. Energy shares, although they have pared gains considerably, still the yunnan to 1 10 of 1 . Utilities and real estate early in the green. We are seeing a deepening of the selloff today. Financials are lower yet. Health care though is also part of what is going on today. Off. R is selling michael kors is leading some selling very. A relatively broad selloff that we are seeing. Some investors are saying there are some trepidation around the debate tonight. Scarlet i was going to say, that may be one reason that the bonds are lower. The debate highlights the degree of uncertainty out there. Morgan stanley actually published a note saying that investors are underprepared for the possibility of a Trump Presidency. They maybe need to think about this as more of an outside chance that this could happen. If he does become the president , you are talking about president who could very quickly put into effect many of his policies. His policies are on trade protectionism as well as the economy. These are issues that perhaps investors should price in as they look ahead to november. Julie i just quickly wanted to bring up the 10year note here on the bloomberg. You can see, on the right side of the screen, yields are the lowest they have been in about a months time. Of course, the fed factors into it. , pushingeard last week Great Expectations into december. As you point out, perhaps investors are not adequately handicapping, ensuring an unexpected outcome in the president ial race. Scarlet there are a lot of questions about what this means for commodities. As we try to figure out if donald trump is ahead of the polls or not. This might be the ultimate safety point for investors. Speaking of the intersection between politics and business, a number of heavyweights have announced their support for Hillary Clinton. Others have simply come out against donald trump. You have reid hoffman offering to donate 5 million to veterans if donald trump releases his tax returns by october 19, the day of the final debate. Emily, i will hand over to you. Emily reid hoffman joining me here. We are on television and radio, so welcome to our listeners and viewers. You have gone further than heavyweights, promising 5 million if donald trump releases his tax returns. This would go to veterans. Why did you take it a step further . I think it is important to reveal income taxes. Income taxes do not live here you can know whether a person is honest about their wealth, there for lambs 30 there for them t philanthropy. The cofounder of facebook offering 20 million to republicans in this election. Money for anfering interview. What concerns you the most about donald trump . I do not think he has a policy plan. I think he asserts he will make things better for the middle class, by dont think he has plans for any of that. Emily what would be the impact of a Trump Presidency on Silicon Valley . It would range between disasters and terrible, somewhere in there. That is partially because what we do is take these risks to build global products. We built these things, like iphones, google, and other kinds of services to represent america to the world. Would greatlyes damage that. T is not a single deal emily you spent some time with hillary. What has been your impression . My impression is she waxy be a great leader. She iss questions, curious. She is very focused on small business, on essentially how does every american get a job in the future and how to we make . Hat happen is investing in Small Businesses . How to we make it all happened so we get a Better Future together. What do iches it with do, how to get everyone involved in making that happen, what are the ways you can help doing this. About theme questions economy, about middleclass, about technology helping the middle class. Letteryou sign a supporting hillary claim. Clinton. What do you think she has to do to attract Younger Voters . Hillary is a competent leader. What she does is goes how do i get everybody on the boat to make something happen. She does not issue a totally big vision that will allow people with her charisma she goes, i know how to govern in an effective way. What i would hope to see more of her, i think what the young people need to understand is it is not the, i just sell a vision, it is, im a competent leader, and she has your values. Votehould c get out and. Emily what will you be watching for today on the debate . On hillary side, it will be the question of can she reveal more of her personal persona on stage. She naturally says, i have read goes to a bunch, so she a guarded place. Hopefully she can bring more of her true self out. Ird know her policy, and it is all good. I hope to see a single policy regulation from trump, and not just attacks. About, trust me, i will do it, how will you do a . I would love to see anything. Emily it is clear to you what is the right decision. It is not clear to many in america. The polls have tightened recently, why do you think that is . Important its people understand that we are worried about our future, we are worried that we are overextended globally, worried what are childrens jobs will be. Them important to solve and get everyone to work collaborate to make this happen as opposed to making vaguely racist slogans and other kinds of things. Crisis,like we are in and want to change. That is important. I think the way to do that is by working together. Emily a number of people in Silicon Valley have come out against donald trump. Peter teal, a longtime friend of yours, not only supports trump, but spoke at the Republican National convention. Have you spoke to this about. With peter . I have. For abouten arguing 20 years. I think he feels intensely that we need radical change. Part of the reason he was willing to give what was by and large a good speech at the convention i thought, guess, we are builders, but, Hillary Clinton is the candidate for that, not donald trump. Because we both value truth, we talk about this a lot. Argument a constant about this. I think i am right, and he is inventing policies. Emily do you think this will hurt peter . To think he will lose out on deals . Because he is such a strong supporter of entrepreneurship, the impacts will be minimal. Most of the questions i get from people here who are strong business people, tried to be good americans both in the u. S. Gonebroad asked, has he crazy . Why does he have the fuse he has . We know what we need to do to help america, that is hillary, not trump, why is it off in this weird place by himself . I explained that he things we need a really radical change. Emily lets be clear, you dont think he has gone crazy . Maybe a little. Not decide to put your name out there lightly. Why did you decide to step up to the plate . There have been a lot of Business Leaders out there tiptoeing around their disdain for trump, and im sure some are doing the same for Hillary Clinton. Do they have an obligation to speak up . I think they do. Candidates are close together, i think it is a reasonable position to say, i will be inclusive by being apolitical, just not comment. I think this is literally two different planets of choices. On the one hand you have the most prepared candidate in history who has a lot of experience, great ratings as secretary of state, will be great on foreign policy, experience in the white house as first lady. Look, i know how this game is played, i can start from day one. Then, you have a reality tv star. When youre in that situation, you say, we have to step up, this will matter deeply to all americans in the next four years, what will be our standing in the quote . Larry summers says we will go into a recession nearly immediately if we choose wrong car here. Lets make the right choice. Business leaders normally try to stay out of this, trying to be inclusive to shareholders, customers, but, i need to step up, as a leader, and say, what i think. Julie i know you speak to everyone. You have the Biggest Network and Silicon Valley. What have you been trying to encourage people to do behindthescenes . Ive been trying to encourage them to determine where they can lead. Rbc, the more power and resources you have, you can leave more. Speak out about the things you think are most important. At the very least, inform the electorate. If we think this will be a complete disaster for business you want to be a voice for what is good for business, step of and say what that is. You dont have to engage in the vitriol that is so common from trump. Say, here is what i think the right decisions are and what you should think about going to the polls. Emily you posted about the political process. When it comes to be an electrode process, what makes you most angry . The way that elections are run today . There are a lot of things. The most is difficult. I think the thing that is most a little like the instruction of the confirmation of the ninth justice. We are in this boat together, lets work together. We might have points of difference. Lets work together. Lets not do lots of namecalling, create fictions around birth certificates, not to any of that. Lets say, how do we actually figure out a way to improve the boat we are on because we are all on it. That is the thing that most frustrates me about the political process. Created a card game deck. Trumped up what is the idea here . Games, they are things you do socially. It creates the context in which you can have a conversation. I think it is absurd that we have a reality tv star running for president. Be informed. T, absurdityf severity is very good education, we thought this would be a good way to haveedutainment. People can play it and think about it. That this is a game everybody can buy, including from your pruning. Last question for you. If donald trump is elected, what will you do . We moved to canada . Will you leave the country . What will you do . Citizen isation as a to stay. For the first time in my life, i have the emotional impulse saying, vancouver is not such a bad town. I saw that a motion in myself, and thought, i have to step up. If i, who feels very deeply about the patriotic responsibilities as a citizen, if im having that emotion, i had to step into the game. Emily thank you so much for doing this. Great to have you as always. I will send it back to you in new york. Scarlet a reminder that bloomberg will have complete coverage of the debate. You will want to to it in for a full analysis. 90 minutes of election fun tonight. Julie we have breaking news from italy. December 4 is the date that has been choosing to vote on constitutional changes, streamlining the way that italy is run. As we saw in the uk, it could cause renzi his job. Be a big one,uld like you said p coming up, we will find out what bank of America Merrill lynch head thinks of operations. This is bloomberg. Scarlet opec leaders rather now. Saudi arabia has offered to cut production if iran promises to cut their output. For iran to grow production from here, and they have doubled exports, as we know, to increase production from here on, they have to make big investments. Im not sure the money will be available for iran to make those investments. That will be a point of contention. In general, iran will be better at 3. 54production Million Barrels a day. Isshortterm, what is funny if we see a saudi cut, it is really a whole. Internal demand is not really there. , it would nots really be a cut for them. They are producing more than that now. Bei dont think there will an agreement for a cut. Towards anrt working investment freeze and potentially a production freeze down the line. Interest are becoming more line. In places like china, we have seen production down 10 yearbyyear. Mexico,ies like venezuela are suffering as well. I think we are getting to the point where the market is going to a deficit. That is probably we want to keep it, at the deficit that put a little pressure on prices. A lot of other banks are not as optimistic as that. Some say the cut has to absolutely come from opec, there is way for it to be drained from the market. What do you see as different from the 61 forecast for next year . First of all, were not optimistic on the supply side. Obviously, if nigeria comes back in full force and bolivia, that is probably going to end up leaving us around 50. If we have negative demand that we could be back into the low 40s. There are a lot of countries around the world experiencing a supply drained. Balance eachisks other out, more or less on the supply side. As long as opec does not continue the price mowar so to speak first we had the saudis selling one Million Barrels per iraqis. N the that is a lot of oil in two years. As long as the investments are tamed a little bit, that will lead to higher prices. Scarlet still ahead, Hillary Clinton and don trump go headtohead in the first president ial debate tonight. We will hear from astrologers who believes that hillarys chances of being president may fall after today showdown. A reminder that Bloomberg Television will have complete coverage of the debate. You will want to to an end for the full analysis. The debate begins at 9 00. This is bloomberg. P. M. In new york good afternoon. Julie welcome to bloomberg markets. From bloomberg World Headquarters in new york, were covering stories from San Francisco to myanmar. Here is what we are watching. U. S. Stocks lower today let by losses in the Financial Sector with Central Bank Meetings out of the way, investors are shifting their focus to the opec meeting as well as the u. S. President ial election. Tonights president ial debate figures to be one of the mostwatched political events in history. Com and Hillary Clinton told donald trump and Hillary Clinton hold opposing sides. Your next vacation, we would take you on a most exotic vacation. Were halfway through the u. S. Trading day. We had the luxury of looking at the markets as well. Julie is here with the deadlines we are seeing inequities led by financials. Lets take a look at what is going on because indeed we are trading lower. It is a tight range from major averages. They were lower out of the gate in we have remain lower for much of the session, and we have seen many attempts at recovery today so to speak. If you look at the s p 500 over the course of the day and trajectory we have seen, there is virtually no balance nono bounce. Not sure we have the chart to take a look at the decline. Here you have it. It shows you the height range we have seen today. Maybe a slight attempt at recovery between 10 and 11, but not much of one. What is falling today . Consumer discretionary is one of the big laggards today. Michael kors one of the worst performers in the s p 500 today. It looks like this may have been a bleed over from what is going on in europe as well. One of the analyst firms say luxury goods may shift to a normal industry with more moderate costs and capital discipline needed. Michael kors by the way is drawing higher than typical reader interest on the bloomberg. Kate spain and ralph lauren also caught in that. Some other big losers we are watching, lands and falling sharply down 14 down after the departure of its ceo. She was hired from dont to end up on a last year so quitting suddenly here. Smith wesson trading lower. It will not get an Army Contract to replace beretta pistols. Winning that contract was not built into his financials it says, but it looks like these chairs are still selling off. Calmaine the egg producer with a quarterly loss larger than expected. Egglly, a quick chart on prices because it has been so remarkable. Have seen a huge surge in prices last year, but they have come down sharply and are now at the lowest in nine years. For a company like cal maine not good news. Scarlet not good news. We want to check in on the bloomberg first word news. Mark has more. Mark some people are talking about super bowl type viewership numbers tonight for the first president ial debate. A new National Poll has donald trump pulling into a tie with Hillary Clinton. Each has 46 . Thirdparty candidates included, drop leads trump leads. You can watch tonights debate here on bloomberg tv beginning at 8 30 p. M. New york time. Our coverage will include 30 minute postdebate and predebate shows. Livestreamer will the bloomberg broadcast. Millionaire donors are overwhelmingly favoring Hillary Clinton in the president ial race. She has selected 21 million for her campaign. It is supporting tax from u. S. Donors on the bloomberg billionaires index. Donald trump has received only 1 million. George soros donated 12 million to the Clinton Campaign. Jim simons has given 7 million. Police in houston, texas, has a nine people were shot and wounded, one critically, by a lawyer who had issues with his firm. Police shot and killed the man after he reportedly fired shots at them. Numerous others were found at the scene. A bomb squad robot is looking at a porsche that is believed to be involved. The suspect at a Washington State mall shooting is in court today. He has been charged with five counts of murder in the first degree. Investigators have these together a picture of a troubled young man with a history of runins with the law, including charges he assaulted his stepfather. Authorities are searching for a motive. A retired canadian iranian professor is savoring the taste of freedom. Iran today released the 65yearold on what it called humanitarian grounds, ending months of tension alongside other dual nationals swept up. The statement adjacency says he was flown out of iran and richard to canada via oman. He had been detained since june. Global news 24 hours a day powered by more than 2600 journalists in more than 120 countries. This is bloomberg. Scarlet they do so much. We will stay thank you so much. We will stay with politics. The latest National Bloomberg poll shows the two candidates in a dead heat. Our next guest says his 70 call on clinton being that expresident is likely lower after tonight for 90 minutes tonights faceoff for 90 minutes. Great to speak with you. Thanks for talking with us. At this point in the election cycle, it seems like everyone in the country knows who they want to vote for or at least to they favor, and the election hinges on who shows up at the polls. Are there really any undecided lets that would be swayed by tonights debate . Chris it is a great question, and i think the answer is yes. The uniqueness of this election is twofold. You have two viable thirdparty candidacies who are drawing a votes fromof the both candidates and you have that you literally have the two most unpopular candidates in a history of American Polling between trump and clinton, very much this race to the bottom folks are not sure who they want to vote for less. Julie it seems like from a lot of the commentary out there that perhaps more to lose or more to prove in this situation going into this debate. Is that your take as well . Chris i think that is right. It may be totally unfair, but this is the political reality we are in where trump can win this debate by not losing, meeting all he has to do is sort of pass this president ial litmus test given his low expectations, the fact that people are fairly or not barely grading his performance on a curve, which has been a source of real frustration for the Clinton Campaign, but that is the reality we are in. Scarlet what we understand, Hillary Clinton or her campaign gave mark cuban a front row seat to get into the all caps had into Donald Trumps head. Is this are trying to tempt him into making offthecuff remarks . Chris what i think you will see from secretary clinton as evidenced with the cuban invitation is a lot of clinton staying on offense while also showing her boys, her resume her poise, her resume, etc. The Clinton Campaign is awful than yesterday to show that the clintonor campaign is helpful that they and trigger ap twitter storm from mr. Trump. His preparation because that he is not doing much preparation. This is his first live headtohead debate. He has been scenarios without been other people on the stage, and we may hear from him for longer stretches of time on policies than we have heard before. Es the of to that task . Is h up to that task . Chris through the republican 12ates where he had 4 to people on the stage, he could go to more style than substance. You need both. In a 90 minute debate with two people and no commercials, you cannot hide. There is no safety in numbers on the stage this time around. Aying to provoke not only bullying response from trump, but also maybe along the lines of an aleppo moment which happened to gary johnson freezing when asked what he would do with the situation in aleppo. To bring up trump tripping up trump on basic issues of domestic policy, foreign policy, etc. Has beenjulie recounting how stocks are down and bonds are higher in part because of uncertainty over the president ial election. What kind of Market Impact could tonights debate have on assets tomorrow and Going Forward . Chris really, the spread on the outcomes is pretty enormous. If hillary had a real command performance, she could in theory candidacy once and for all by a command performance and by trump basically imploding and vice versa. Dont forget marco rubios entire candidacy selfdestructed with one that debate performance. One bad debate performance. For cultivating on a clinton folkst could come for betting on a clinton win, it could come to a crashing end tonight. Scarlet thank you so much for joining us by phone. Julie of course, that uncertainty and suspense is why it is going to be such a must watch. A reminder, you can watch it right here. Hillary clinton and donald trump will face off in their highly anticipated debate in new york. Bloomberg television will have complete coverage of the debate beginning at 8 30 p. M. Eastern time. This is bloomberg. Scarlet you are watching bloomberg. I am vonnie quinn. Mark i am mark barton. This is your business report. Mario draghi speaking out on Monetary Policy and calling on european governments to do more to boost the economy. Marriott is the worlds Biggest Hotel chain, it is announcing big expansion planes in the middle east plans in the middle east and europe. Mark continuing nuclear test and a motive behind the latest threat. Mario draghi is speaking out on the fate of europes economy. A call on governments to do more to counter slowing growth. It is expected to continue as moderate and steady pace, but with slightly less momentum. On the positive side, incoming information continues to point to the economy being resilient to global and political uncertainty. Mark the company that just became the worlds Biggest HotelCompany Workforce in the middle east and africa. Marriott will add 30,000 more people. The company just completed its 14 billion purchase of star board hotels and resorts. And airline is supporting a resolution to reduce pollution. The United Nations plan would require companies to offset their emissions growth by funding environmental initiatives. Airlines say if there collusion with the controlled, it will be easier to have a Single International standard. Vonnie time now for our bloomberg could take what we provide contact and background on interests. North korea conducted is stiff and most powerful nuclear test in a decade. The countrys aggressive tone how the world on watch. The bloomberg could take team takes a look at what is driving north korea. Give us some things north korea does not have. A human rights record to speak of, Political Economic freedom, or enough food to eat. Here is what north korea does have. A Nuclear Weapons program and an pretty young leader whose finger is on the button. Here is the situation. 2016, 85. 3, magnitude earthquake was detected here. It was north koreas fifth nuclear test in a decade and a second in a year. It was the most powerful so far. While military experts say north korea exaggerate its north korea has been ruled by a family of aggressive dictators since 1948. Each intent on a Nuclear Strategy that has deepened the nations isolation, which is why the the u. S. Has 30,000 troops stationed in south korea packed with firepower such as f16 fighters, Nuclear Capable be to stop bombers in the region b2 stoealth bombers. North korea has a history of escalating and the escalating issues. South korea with support from japan and other nations will provide the cost to make up for the energy it is losing. It leaves the u. S. And the world in a tricky situation. Korea, sanctions as not worked. Neither is ideal, especially when his erratic behavior including executing his own uncle was added to the mix. Vonnie you can read more about north korea and all our quick takes on bloomberg. Com. Scarlet this is bloomberg markets. Julie companies thinking about snapping up twitter may be biting off more than they bargained for. The social Media Company is said to have a lot of potential, but it has more than its fair share of challenges, including a lack of growth, identity crisis, and slowing sales. Lets go to bloomberg radio. They do so much, everybody on bloomberg radio. We want to talk about twitter because bidders are vying for it. We have a Technology Reporter here at Bloomberg News who has been following this story. There is the data, but a lot of other things that go along with this acquisition and some of those things are not so great. Twitter is one of those companies that has always been a little trouble. The board has been a little bit conflicted. There has been a lot of management turmoil. Ceos in and out. Ceos in and out. That, what we dont know is if jeff would go along with an acquisition. He is already the ceo of square. When he joined as the leader of another company . That is up to be decided, but more than that, there is this growth problem that a buyer of twitter would have to contend with still. It is an asset that is slowing in growth quarter over quarter, and if you buy it, you will have to invest in making network. Making that work. Issues are sizable. You have u. S. Growth growing to a halt. You have International Growth at in thean 3 i think numbers of users and it is still a relatively young business that has been around for a few years, but he would think it would have a lot more room for growth and the only place it is going is the lowest revenue per user. Has had 55 56. Million users for the last six quarters. Before that, it was 64 million so it has grown that much. For twitter, they would be acquired in the midst of undergoing this new strategy to be more of a video player. They have all of these streaming deals, these streaming apps for apple tv and other platforms. Any buyer will not have any data unless those moves are contributing to growth. And i can take some time. Industry observers, do they think this is a smart strategy for twitter . Is a strategy being driven by the chief Financial Officer at where. Previously worked for Goldman Sachs and the nfl. He thinks he can turn twitter into a media property and i think what rest of the table is it gives people another window into twitter, the service. When you go right now to twitter and try to get an account, you have to figure out who to follow, you have to come up with what does this serve me, what does this do for me . By doing this video strategy, you are giving people another avenue for which to use twitter, the product. They can watch football on thursday night, and they dont necessarily have to figure out who to follow or how to tweet or any of those really confusing very wonky things that dedicated users of twitter understand over many years. We have reported salesforce is looking. It is not the company, but one of the Companies Looking at twitter. This is an odd pairing. I wonder if you talked to people about this what they think of salesforce. They have to take on a ton of debt or use shares. Sarah it is something they are evaluating right now. I think a lot of Large Tech Companies are evaluating and have evaluated by twitter. For salesforce, this would help them fill the gap they linked in with phil this would fill earlier this year. That i see little bit of sense. It is something about how people work, shop. Sarah we use twitter to build our professional profile. We use it to build our personal brands, connect with people. To find stories. I use it really more than i use linkedin for that purpose and same goes for politicians, sports stars, celebrities. Twitter is a professional use case. We have 15 or 20 seconds. There is internal disagreements about whether or not. Company. Not to sell the company. Sarah jack does not own as many shares and so we will leave it to the top shareholders to decide on this. We got to run. Thank you so much. Fun together to you guys in television tossing it back to you guys in television. Scarlet you can catch more radio interviews on sirius xm, bloomberg. Com and vbr go on bloomberg. Coming up, how the market crash of 1987 impacted markets today. Analysis coming up. This is bloomberg. Julie from bloomberg World Headquarters in new york, im julie hyman. Scarlet im scarlet fu. The first word news this afternoon with Mark Crumpton from our newsroom. Hillary clinton and donald trump square up tonight in the first of the president ial debates. A National Poll shows them locked in a tide race. The survey has the two candidates each with 46 of the vote. When thirdparty candidates are included, trump leads clinton 46 to 41 . There are predictions that tonight debate at Hofstra University could be the most watched president ial debate ever. 8 30an see it all here at new york time. Our coverage includes 30minute twitterpost shows, plus will live stream the broadcast. The u. S. Congress resumes work today on legislation to give the government running past midnight friday. Speaker mcconnell has proposed a stopgap funding measure but Many Democrats and republicans say they will oppose it. Democrats object the bill does not include my to fix the water contamination in flint, michigan. In iran, former president Lockwood Ahmadinejad has decided against making another run for president. The supremely are advised him not to run because he is a polarizing figure among hardliners. John, whose 2009 the election, sparked wide spread protest and remains a controversial figure in iran. Of Violent Crimes in the u. S. Increased to nearly 4 last year, according to stats by the fbi. That is largely due to a number of murders. Murder and manslaughter increased 11 in 2015. And aggravated assaults also jumped. Global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Julie thank you. If you look whats happening in the markets today, u. S. Stocks are selling off, at the lows of the session at the moment. Financials, health care, and Consumer Discretionary have been leading the declines today, although its been a relatively tight range on the s p 500. , who is livebigail from the nasdaq. It is certainly a risk off sentiment today. The nasdaq at session lows, down. 9 . This started in asia. The nikkei was down more than 1 . We saw strength in the yen dollar, a safe haven extended to europe. We have the Energy Complex and rally mode. 1 . We saw strength intypically, th. Stocks a tailwind, but that is not happening. This kind of day that we see behind beta names react, even on a lack of news. Microsoft,es alphabet. These are two of the biggest drags. Biotech is also getting hit today, down more than 1 . Ne and gilead are down sharply. Take a look at a weekly chart of the nasdaq. There is reason to think that this volatility may have more to go. This is roughly a year and a half chart. At the end of august, the nasdaq put in an outside week. This is when the candle from another week extends into the next week. We see the last four times this has happened, it was accompanied by congestion and pretty slides down. It will be interesting to see if this happens again. Julie usually, not everything is down. What is bucking the drum 10 today downtrend today . Western digital is higher today on bullish comments from cleveland research. They say that checks are and see the potential for earnings to grow up in fiscal year 2018, considerably above current consensus estimates. That could support a mid70s stock. At one point, the stock was down more than 40 . Now down less than 5 . Cleveland research thinks this could turn positive as early as this year. Julie thank you, abigail. We appreciate it. Scarlet the option model is one most widely applied economic theories, but it doesnt explain everything in the options market, including something no as the smile. Mcdermid is a theoretical physicist. He is out with a new textbook called the volatility smile and she spoke about modeling and valuing options and what the future holds. What people are interested in is is what the underlying volatility of the stock will be. Options is a way of getting a handle on pricing uncertainty. Before 1987, if you look at the options market, it told you, whether the market went up or down this is a chart of s p 500 implied volatility prior to 1987. Options for increase and options for decrease, almost no change in the chart. As the uncertainty of the market moves down, the same uncertainty for the market moving up. Post 1987, there is a change in the landscape. People pay more for downside protection. The crash, people pay more for protection, and its been that way ever since. In currency markets it is known as a smile. The crash, people pay more for protection, and its you would think the idea of protecting a crash would always cause more, but the 1987 incident was so dramatic, it permanently changed things. It also meant the existing models for options did not really work. Thats right. My book, along with my cowriters, talks about the principles of modeling. We try to take a downtoearth approach. Mathematics, but not complex mathematics, on how to build reliable models. The second half is really about trying to look at exclamations the on the classic black scholes model. You have a great explanation of what is a financial model. We say it all the time but people dont know what it means. When people talk about financial models, what are we doing . The first thing you are trying to do is make an analogy between the Financial System and something you understand better. Black scholes is based on assuming the uncertainty in stock prices is like the uncertainty of smoke coming out of a cigarette, in that it will wave around. That gives you a sense of what is going on. The second thing you are trying to do with the option model is figure out how to value something air liquide and peculiar like an option. You are trying to build an engineering system, replication you how canat tells i manufacture an option out of a stock and a bond. It is a little bit like fruit salad. If you want to know the price, you want to know the price for the fruit, sugar water, and canning. If you want to know the price of options, black scholes showed you the price of it under an assumption. A problem that you and your people are working on . Negative Interest Rates. Less for equity options, but if you are doing bond options, Interest Rate swaps, that is very important because there is no lower bound. That was emanuel derman, professor at columbia university. So what exactly does volatility look like . There is a function that we often use in the bloomberg. Both aretwo lines, dollarpay so. Two months out, you have the volatility smile for the peso. Is septemberne 2015. You can see the volatility is much higher now because it is seen as a proxy for Donald Trumps chances. People are nervous about what will happen then. As we have been talking about how the debate could affect markets, how the election could affect markets, the peso is the most direct proxy we have seen materialize. It, thisay to look at looks at overnight peso volatility. You see the spike on the right side of the screen. We have a clear event risk. Presumably, we will see some of ons being tweaked in the wake of tonight. A lot of volatility going into that. One of the more fascinating market developments of this election cycle. Julie it is not like the peso does not have other things to react to. Yet, that spike up before todays debatejulie is remarka. Coming up later today, could brexit benefit ireland in the long run . Irelandsew with central bank governor. This is bloomberg. Scarlet this is bloomberg markets. Im scarlet fu. Julie im julie hyman. Prime minister Justin Trudeau so far has positive ratings among canadians, but if anything has talent his honeymoon period, it is western canada. That area is populated by their most popular indigenous people, and they do not like giant projects. Petronasproject is the lng project which is just below alaska. With more perspective, lets bring in pamela ritchie. Tell us about this decision. It feels like this has been coming forever. Justin trudeau has promised to have a decision october 2. That is on sunday. This project, as you mentioned, is to be funded, the consortium petra noss of malaysia and would be the gateway to lng in canada. This is a big week and a big decision overall. Many of canadas population that are indigenous are located and are very much divided on whether the land they have control over should be used for the development of the industry and fossil fuel development, versus those who think it will be very difficult and dangerous to the overall habitat. This is also the home of greenpeace, so a lot of activist frustration against this. If you look at british columbia, is the province with the most projected projects slated for growth in canada. Diversification away from the pd oil side of canadas oil industry. More natural gas and lng projects planned, if this decision comes to fruition and gets the green light. It could see them started and have more money committed to them overall. Ultimately, for canadas exports to be oil side of canadas oil industry. Altered, Natural Resources , away from the u. S. , away from e of oil going to the u. S. , new Growth Markets in asia. In the industry catches on and eventually, to europe as well. Hasar, Justin Trudeau signaled a little bit that he may be giving the thumbsup to for newral gas industry areas of the industry to be developed. Perhaps bringim at the big guns, the duke and duchess of cambridge, william this weekare in bc visiting. A lot of eyes on bc and this decision. Scarlet thank you. It is time for the Bloomberg Business flash. Carnival says thirdquarter earnings beat estimates. Those results were boosted by the results of the north american and european brands, as well as deployment in the caribbean. The company also boosted its fullyear earnings outlook. Bank of americas Merrill Lynch fined 12. 5 million after an investigation into m ini flash crashes. Rolling stone Magazine Publishers are selling 49 of the magazine. A staple since 1967, the startup will have no involvement in the editorial side. There. Nge scarlet there are so many people who do not even know what Rolling Stone is these days. Coming up, some of the most spectacular dives in thescarlet, from antarctica to india. This is bloomberg. Julie welcome back. Walt Disney Company is working with Financial Advisors to evaluate a financial potential bid for twitter. Momentsjust breaking ago from alex sherman and sarah frier. After receiving some inbound interest, as we have talked about over the last several days , twitter has started the process. Salesforce. Com is also considering a bid working with bank of america. Foresentatives for twitter and disney were not available to comment. Taking a line lower, twitter going higher. In the recent round as peculation, salesforce. Com was this is a more concrete report. Scarlet this is a question that we will be asking paul sweeney, who covers media companies, how well twitter fits in with disney. Disney is very fr familyfriendly. A lot of people were saying that salesforce coming in to buy twitter was more about using its analytics. Using the data on the consumer and using that more effectively. You wonder to what extent the disney and twitter brand work together. This is something that we can put to our expert guests. Julie how much is disney going to capitalize on twitters Marketing Power . Which twitter is only beginning to use in terms of promoted tweets. When disney being what to expand that . Twitter has been trying to get a leg up with media. , who bring in sarah frier broke the news. Tell us about what you know. Alex sherman and his sources broke the news, im helping. What we know is disney and twitter have a relationship. Jack dorsey is on the border disney. This is a Longstanding Partnership that could make. Ense many analysts have brought it up in the past, many investors. Disney gets content. Twitter wants to be more of a content player. They have been doing these ,treaming deals with the nfl trying to make Live Streaming a new avenue through which you can understand the twitter product. Julie many analysts have broughp in the past, many investors. To that point, what are some of the properties talking about Live Streaming that twitter would be able to tap into with this kind of deal . They have gone proficient at streaming. Disney owns espn, which is the destination for sports. Twitter has been focusing on sports deals and its expansion of streaming. Disney owns video. Live sports is the one that everyone pays a premium for. Userit comes to twitter, growth has been slowing down and they are not able to monetize in a way that they had planned for, investors anticipated they would. Right now, twitter is a niche product. Product, butche for a very influential audience. It is celebrities, journalists, sports figures, politicians, people who are perhaps the most influential people starting the conversation. When bidders are looking at this, they look at the brand. This is where things start, the center of the conversation. With that, some troubles come along. Disney would be a little worried about the harassment that occurs on twitter, the trolls that are there, misinformation. That would be a challenge for them. Has beenis speculation around for twitter. It heated up around the Board Meeting recently, and then nothing happened. There does seem to be a turning point here. Do we have any insight what happened, is a just a matter that the buyers are more interested . To our sources, there was some interest from salesforce, and thatdo we have d twitter to think, we need to see if this is something we can do. Maybe this is a strategy we should pursue. People were saying that it was a little bit open for sale. Scarlet lets bring in policy. Paul sweeney. When you heard the disney was working with Financial Advisors for a possible bid with twitter, doesnt make sense to you . It should not be a surprise to many media investors. We have seen a lot of companies try to buy their way into technology. You are a large Media Company, what you see here is a rare asset. Not too many social media platforms that are theoretically overay with a user base of 300 million. ,learly, Technology Companies it makes strategic sense. For a Media Company, this could be a play to get into the social side of the equation, which may benefit some of their existing businesses. Julie and financially, how does twitter fit in in terms of its size, what disney may have to pay . They have a fantastic balance sheet. Probably has been one of their strategic positives over the long term. This will be a large transaction, a rich valuation. The company is trading at almost five times revenue right now. Enough for to be big them to choose, but it will be strategic. Julie thank you. Much more coming up on bloomberg. This is bloomberg. Welcome to bloomberg markets. Vonnie we are live in new york. We are covering stories out of San Francisco, germany, and saudi arabia. Incks almost every scene their monthly advance over the session but bonds are on the as investors search for a haven before tonights first president ial debate. Wti inching closer to 46 a barrel on developments out of algiers. Haven before tonights first president ial debate. Saudi arabia has offered to cut production. And anticipation could not be higher as donald trump and Hillary Clinton share the stage tonight in the first president ial debate. A new bloomberg poll shows the candidates are essentially deadlocked. Markets close in two hours. Julie hyman more on deal chatter around twitter