His own apartment by a White Dallas Police officer called the guilty verdict in the case a huge victory. A texas jury convicted former Police Officer amber guyger in in killing of botham jean 2018. Geithner was off duty but still in uniform when she shot the accountant. Geithner testified she mistook jeans apartment for her own after a long shift and that she believed he was an intruder. She said she could for her life. Her lawyers call the shooting a tragic but it isnt the state. We the jury unanimously find the defendant amber guyger guilty of murder as charged in the indictment. No outbursts. It is signed by the presiding juror, juror number 11. Prosecutors question how she missed numerous signs she was at the wrong apartment. The jury is expected to return this afternoon for the punishment phase. Guyger faces five deal 99 years in prison. Global news 24 hours a day, onair, and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Shery live from bloomberg World Headquarters in new york, im shery on. Amanda live in toronto, im amanda lang. We are joined by our bloomberg and Bnn Bloomberg audiences. U. S. Factory gauges unexpectedly fell deeper into contraction, posting the weakest reading since the end of the last recession. That as the Global Economy flashes clear warning signs. Plus, the Great American debt binge. Deleveraging that was supposed to sweep over Corporate America appears to be on hold. Vcs and execs from private discuss whether the Financial System industry of ipos is working. Who will not be at the table . Bankers. Shery lets get started with a quick check on where the markets are trading. We are seeing major indices falling more than a percent. Stocks falling, treasury yields falling. The s p 500 now falling the most in over a month. Very sector is in the red the client being led by industrials, banks down as well as rates move lower. We are also seeing a lot of industrials being hit on that surprisingly weak manufacturing and data volatility. Also gaining ground, the vix, surging for that 20 level. We know that october is one of the most, if not the most volatile month of the year. Take a look at these trade numbers we got out of vw to. They have now cut their forecast for global trade growth to the weakest level in about a decade. We are talking about trade World Merchandise trade for this year, growing only 1. 2 . Oft year, 2. 7 coming off growth of 3 in 2018. Amanda, this is not helping the manufacturing numbers. Amanda no kidding. While trade slows, we see the cost of trade going up. Ae ism number today is warning signal. Take a look inside the terminal. For some perspective, you can see that big dip, credit crisis levels, just under 48. Ins is the second month contraction, a cause for concern. We were back here in early 16. We could easily come out of this again. We are told the low 40s is a reliable predictor of recession. We are not there yet, but the u. S. Joining europe with something numbers. Manufacturing also showing the worst month since october 2012. Michael mckee is with us watching this always. Lets characterize the numbers. When we say we were here and 16, does that mean the fed can look through this, or are there differences now that we need to Pay Attention to the contraction . Michael there has been talk that this could be Something Like 16, which was a Manufacturing Base recession, dragged down growth of little bit but did not push us into contraction. The question is, does manufacturing pull down the consumer, or does consumer pull manufacturing backup if demand stays strong . That is what the fed is waiting to find out. The one thing you can say, and i brought along a chart to show ism numbers do not necessarily predict recession well. With gdp, but as you can see from the green line, the 50 mark, in theory, marks the difference between expansion and contraction. There have been a number of times were we have gone below 50 and not had a recession. Shery does it make a difference when we see some money external headwinds and we see several other areas slowing down in the world . Michael the slower other economies get, the worse it is for u. S. Exporters, the people that buy our products. The question is, does domestic demand continue to hold up . Get a goode will read on thursday with the ism nonmanufacturing. Looks at the Service Industries and others. Friday with the jobs day, everyone will be looking at wages and salaries to see if we are still making enough money to go out and shop. Are hitting the key point, the connection between the Manufacturing Base and what happens with the consumer. The numbers here show inventories were the culprit. We have seen manufacturing lightning up on inventories, maybe in anticipation of slower buying by consumers. Does that become a selfleveling prophecy, where businesses are cutting back, and that affects their suppliers and employees, and it becomes circular . Michael exports were the biggest subtraction this time, down to the lowest level since the middle of the great recession. Inventories also reacting. The question you come up with is what do Going Forward into the Fourth Quarter, the Holiday Season . They dont want to be stuck with too much stuff. If they think there is a problem in the economy, we will see retail inventories in particular shrink or not grow as fast. They are telling us they may not see the growth in sales that we want. We saw that in the Fourth Quarter last year, Consumer Spending weaker than people anticipated. Shery how much does this have to do with the manufacturing slump, with industryspecific issues . We have seen south koreas semiconductor exports dropping 30 last night. Michael car production in mexico is being hurt by the gm strike. A lot of factors around the world playing into this. It is hard to know. Sectors reported contraction. Only three were growing. At this point, its pretty broad based in the United States that we are seeing a slowdown. I should point out, canada rose. 51. You are doing something right. Amanda we are doing our best. Michael send us whatever you have got. Shery michael mckee, thank you for that. Of course, today, marking 70 years since the founding of the peoples republic of china. For the last 40 years, its grown faster than any other economy in history, as political unrest in hong kong and the ongoing trade conflict continue to weigh on the second largest economy. How has Growth Potential for the country changed . With us now is daniel rosen of the rhodium group. Talking about the manufacturing slump we are seeing around the world but china is also feeling the pressure at the moment. Pmi numbers earlier this week. Have tons of data on china, most of it telling us that things are going just a little bit better than expected. There are sos, many indications that we can see that things are not going as smoothly as that. Credibility of chinese data right now is not something that anybody is having a good night sleep based on. Gdp numbers, they continue to report nothing changes. Whereas, if we look at physical activity, we see things bouncing all over the place. Pmi, individuals are supposed to have a better point of view on these things, but everyone knows that the 70th anniversary is a special date, and now is not a good time to be expressing your doubts about how things are looking. Things dont feel all that great to us. We have these projections from the World Trade Organization about the growth of trade globally. It doesnt look good, versus recent trends. ,ow seriously will that affect on top of Everything Else happening in china already, that import economy . Daniel we had two first order forces. One is the Macro Economic outlook. A lot has been deferred. Chinas Financial System needs another dose of heavy medicine in order to free up the potential the country has. There is another good 10, 20 years of solid Growth Potential. But it only starts after some major reforms have been. We have these macro problems that we can talk about, but at the same time, we have political problem for china and United States which are unprecedented. You are looking at the trade numbers today, here in the states, these weird inventory figures. Nobody knows whether there will suddenly be an extra putative tariff right before the christmas season. Folks have had to hold unnaturally large inventories because so much of the world trade system is being disrupted. Has already been directed at supply chains, semiconductors, but the past week, we have seen Financial Markets pulled in as well, and that makes things scarier. You see any potential that those Trump Administration measures could play out, where you are trying to limit Chinese Investment . What would that mean for this scenario we are seeing already, economic decoupling, morphing into financial decoupling . Daniel your colleagues have done a great job staying on top of it. There have been a lot of rumors that the white house is doing policy planning, shall we say, for what it would look like to add financial decoupling. That is being pushed into the disruptors on the outside, who want to disrupt first and do the math later. Not good for the u. S. Economy to talk about pushing chinese firms off listing here in the u. S. , for example. Mostly, the white house has been trying to understand the repercussions of all of that. They have reached out and asked a lot of people for better data. They dont have the data they need yet. What gives us pause, this white house sometimes moves before they have the data to make a rational decision about what makes what works. Up in about two weeks, we have the next round of u. S. China talks, and nobody is quite sure who will blink first. Expect theyou impeachment process or the headlines about it to have any bearing on those talks . Daniel it is fascinating, thinkinge split 50 50, the risk of impeachment will cause the president to want to set the china issues aside, so they are not a first order of purification preoccupation for his team. The other half of the debate thinking there is no better time for him to wag the dog by letting a bonfire around the u. S. China relationship even further. Im not really sure. It could go either way. Certainly dont think it would be in the president s interest or the American Interest to introduce more risk on an certainty into the economy, as we saw that start to happen with this financial decoupling, and then the white house wisely locking that back and producing that risk a little bit. That may be a harbinger of things to come, and we may see that in the face of domestic concerns, a little less china adventurism, rather than more. Amanda great to have your thoughts, daniel rosen. Coming up, Companies Globally sold a record amount of bonds in september. It was no different for Corporate America as they ramped up their own borrowing. What does this say about the health of Bluechip Companies . That is next. This is bloomberg. Shery this is bloomberg markets. Im shery ahn in new york. Amanda im amanda lang in toronto. Boring is back in style. Borrowing is back in style. Central banks have been flush with their own debt. We have our own Corporate Bonds reporter molly smith. What is interesting is the sheer level, up 63 . Investment grade borrowing up yearoveryear in july. Also a reversal. Companies said they would lighten up on their leveraging and they have done the opposite. What is going on . This analysis that Morgan Stanley had done to show leverage right now in the investmentgrade index is unchanged from a year ago, that is looking through the entire index of Investment Grade companies. Ann we look at it from individual company level, there are companies that are following through and deleveraging. At t, ab inbev, but others have not followed through , where leverage has stayed constant, and that is why at a broader index level we see it staying the same. As this chart shows, a lot of companies are still borrowing. Shery didnt we talk about this last year when scott minard came out and said the selloff in ge debt was the beginning of the collapse in ig credit . Is this all central bank . Molly a lot of it. You look at it from the outside perspective. If you are a corporate cfo, why not . The money is there for the taking. It would be different if investors were not be willing to invest, but they are. All of these yields have been very well received. It seems there is plenty of cash to go around for these companies. Exactly, the question is why not . Amanda the concern is there are some measures including income to net debt that are rising. Is there a concern that we not able companys are to manage as well as they should be able to . Molly thats always the concern. The idea when you take on more debt, it supposed to stimulate more growth, and your leverage ratio will stay the same if you are borrowing to fund project, will then lead to additional revenue and earnings. Like you said, a pitfall could be, if an economic slowdown or government it Interest Rates start to rise again, that would throw these plans of course. Right now it seems companies are refinancing debt in granted, october will be a slower pace than september. But there have not been any broad issues yet. Are there any Success Stories you could tell us about where some corporations have cut down their debt . Molly definitely. The ones i mentioned before, ge, ab inbev, at t. Different strategies, but some combination of cutting a dividend or selling assets, using those proceeds to pay down debt. To its inbev ipo business, those proceeds went to pay down debt. They have also cut their dividend. At t has been more on the asset sale side. Shery molly smith, thank you. The latest on corporate debt. Coming up, its been a tough year to go public. Why Silicon Valley investors are meeting to discuss redesigning the whole process. This is bloomberg. Amanda this is bloomberg markets. Im amanda lang in toronto. Shery im shery ahn in new york. From wall street to Silicon Valley, venture capitalists and entrepreneurs are meeting in california to rethink the ipo business after a year in which the biggest deals flopped. To break it all down is sonali basak. Are any of the bankers involved here . Very few of them. The financial industry representatives that are there are very interesting. Its the New York Stock Exchange president , stacy cunningham, Citadel Securities, not the traditional goldman and morgan, who the venture capitalists feel have under price these ipos. They want higher prices at the beginning so they can cash out more. Theipo model really favors fidelitys and the black rocks of the world that buy in the night before. Amanda it used to be when an ipo was properly priced, insiders made their money, the banks made her money, but there was money left on the table, so the aftermarket could make money. When we look at the performance of recent ipos, it is not the case. We are not making money. Much of that plays into the thinking by these entrepreneurs . Sonali it doesnt hurt their case, that they feel the market should find a price, rather than artificial price set by the banks and small set of investors. What youre seeing with the direct listing is, the first one, there was a dip after, but they started to perfect it with slack, where it was much more stable after they started trading. Shery we expect airbnb to go down that route next year. Make complete sense. If you are airbnb, you are profitable, you are a brand name, you dont need the wall street marketing machine to push our stock all over the place. People know what you do. The market can find the price on its own. We talk about the role of the direct listing, the fact that bankers are being left out of the meeting, does this spell trouble or do we see this as a niche in the market . Sonali direct listing could still be a niche model, thats correct. With that said, it is no small thing that so many are meeting in the valley right now. More than 100 privately held firms and their executives were invited to the meeting. Like i said, many bankers were left out. That said, the lawyers were not. The exchanges were not. There is a big contingency pushing this new model forward. Shery what are the new risks here . The point of having these intermediaries is to have some stability. Sonali the way it worked before, the bank was a stabilization agent. They had a lot of levers to keep the stock stable. What is happening in a direct listing, it is not a there are no humans involved. You still have Goldman Sachs and Morgan Stanley. They still take input from a lot of investors. Then you have citadel, Citadel Securities using their technology, and matching were all of these orders are coming from from the bank and retail division. Slack,we talked about airbnb, but it may not apply to the smaller companies. Sonali that is the concern across wall street. You dont knew to raise money in a direct listing, so doesnt work for the smaller cash burning companies . Probably not as much. Does it work with companies with a lesserknown name . Had a lesserknown names and airbnb and they were perfectly successful. Trend, a fascinating thank you for that, sonali check. Sak. Lassic ba york, thiso and new is bloomberg. Sometimes your small screen is your big screen. And with the Xfinity Stream app, which is free with your service, you can take a spin through on demand shows, or stream live tv. Download your dvrd shows and movies on the fly. Even record from right where you are. Keep what you watch with you. Download the Xfinity Stream app today and get ready for Xfinity Stream tv week. Watch shows like south park and the walking dead october 7th through 13th. I am Mark Crumpton with bloombergs first word news. The ukraine president said no one explained to him why u. S. Military aid to his country was delayed. He told reporters today he stressed the importance of the aid repeatedly in discussions with President Trump but he says he was not told why the money did not come through until september. The president asked the ukrainian leader in a july phone call to look into his democratic rival, joe biden. Everf the most violent is for a city. Than 80 people arrested. One demonstrator was shot by police. Hong kong authorities are defending the incident saying the officer made a splitsecond decision that was lawful and reasonable. Numerous rallies against beijings increasing groep raised against hong kong after had celebrations. In taiwan, surging for victims after a towering arch bridge collapsed today. The collapsed sent a burning