Last month the president tweeted that sondland is a really good man and a great american. The democratic president ial debates will resume tonight with a new pecking order on display. Pete buttigieg sent to take the stage in atlanta is the emerging frontrunner in iowa. His percent nine percentage point lead in the back in iowa is a sign of strength for the parties moderates. Its also a sign of democrats hopes to put georgia in play in 2020 and it pick up opportunities from two u. S. Senate seats. Di arabia and russia the two countries have been the leaders of nearly threeyearold alliance to curb Oil Production but russia has not complied without those levels for three months in a row and its making more money. Meanwhile the saudis have bore the brunt of the cutbacks. Global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Vonnie live from new york im bonnie vonnie quinn. Welcome to Bloomberg Markets, we are joined by both our bloomberg audiences. Here are their top stories we are following from around the world. The u. S. House will vote on a bill supporting hong kong protesters today, escalating a confrontation with china and forcing President Trump to decide whether to side with the demonstrators over threats of retaliation from beijing. Plus an earnings bulb i for targets. Outlookraising its full again on strong sales and profitability. And amazon is planning a big expansion for its Cashierless Store format next year. If the if there latest attempt to compete in the 900 billion grocery industry. Lets get a check on the major averages now after the market moves down all day but quite happy to stay down around a quarter of a percent, the index now we are seeing drops of almost one percentage point for each of the three major indices after a report from reuters there may be a snag between the u. S. And china on trade talks and it may not get a phase one deal by the end of the year. Of course as we know, concurrently the house is about to vote to intentionally back the senate vote last night supporting those demonstrators in hong kong, that may be what is irking china. The Dow Jones Industrial average down more than 8 10 of a percent and the nasdaq down 1 . All day the story had been retail and as you can see it is actually lower now. Itd been higher by 3 10 of a percent. Now, all butght three of them are lower. Is this the tale of two types of retailers, the ones that are getting tons of new order. Many of them though are lower. Gap,ding macys, nordstrom, and on and on. Of course they would bear the consequences of a lack of a truce between china and the u. S. ,e are looking these markets something we havent seen over the past month and may be its been a perfect storm of these record high equity markets and complacency when it comes to volatility positioning. Take a look at bets being made on volatility futures. There is a net short they have ever been on record so perhaps this is causing people to very quickly adjust these positions, perhaps rethinking volatility has gone into a long hibernation for the winter. Stocks are headed for the biggest loss in more than a month after reports that washington and beijing are unlikely to reach a trade deal this year. Here for a look at whats this assetswe have our cross reporter from Bloomberg News joining us. Not to blame you personally, but you were asking this very morning are we at a top for these markets and here we are, it doesnt take much in terms of trade headlines to print the confidence of these up trick the confidence of these equity goals. If you look at the cross option reaction right now, you are not seeing a fresh flow in the 10 year yield, not seeing a new daily hiding goal, you are seeing people taking some off the table and equities. In height is better in hindsight people were fronting a selloff in equities by getting into gold yields back,and again, peaking looking under the hood of the market. A lot of days when its really a trade war related selloff, you will see china centric and u. S. Stocks, you will see them underperform by the 80 to 150 basis points. Right now the extent of that underperformance is about 50 basis points. So far it looks like one of these excuses to have a bit of a healthy pullback and a reset in stocks after theyd been overbought. Vonnie its almost as if the market was waiting for something to come out of the hong kong demonstrations though. Theyve been getting worse and today t china overnight with some pretty threatening talks. Luke the best commentary ive heard from this came from Credit Suisse on the open, saying it might be very possible for china to divorce the hong kong u. S. Political aspect from the trade aspect just because there is bipartisan support against what they are doing or might be doing or might escalate in hong kong. So it really doesnt strengthen their hand or change position too much to kind of wait them out or wait out the election. The trade so far has been the decision to sell stocks versus the decision to buy stocks. Do you think the conditions are right when you look at things like conditioning, i have talked about volatility. When you look at positions to gold in the bond market that the conditions are right for that calculus to shift very quickly. Bee there is going to thats whatcy bias i find very interesting about these two kind of things weve had. Euphoric, often fell apart without record jump. I dont remember what was happening in december 2018. I dont member excitement. I want to point out that if we didnt have that rally after crude oil inventories, many of these would be on the oil stocks are supporting this market a little bit so we have that. Trying to outdo some of the negative headlines. Luke, thank you. Back to retail shares target setting a record high after reportedly beating estimates. Target standing out from its competitors. , robbie owens from bank of America Merrill lynch. Why is target the stand out here in a year where everything from trade to customer demand are headwinds . They are just doing everything right and one of the things they are doing right is the me channel strategy. So target reported apparel sales up 10 . A lot of that was great merchandising under their leadership and terrific private label apparel businesses but also execution of the Digital Strategy which was by online pickup store by online, pick up instore. Target doesnt leave much room for upside, notwithstanding in the recorder. I believe we just published a note the took our price objective up to 150. So that means i think that leaves a little more than 20 upside from here. Vonnie exactly. Literally coming in right now i think that price target. We are there at 125. 10. That brings us to 150 given the news its out in the open. Abbie i think target is in position to keep putting out good news. You are going to see a lot more stores that have shipped same Day Delivery Service that you had last year. Stores,er is about 1750 they will have more stores with driveup as well. So there Digital Business will be supported by that, but they also have terrific momentum in categories like apparel heading into the holidays and they drove incredibly strong traffic results in the third quarter. Targetgood as well for heading into the holiday as well. How much runway does this have in terms of gains to keep putting up these numbers. They very publicly and painfully retrenched from canada but can you see a day where they perhaps flirt with the idea of International Expansion once again . Think they would view the opportunity in the u. S. As still being pretty substantial. So they are just now getting to the point where they will have up,e to all stores to drive ped is still expanding. The apparel number was very strong this quarter, the strongest weve seen in a while. It could stay at a very high because they gain share of the really great things they are doing in their private label apparel business and they continue to see themselves gaining momentum overall from Digital Sales due to things they are doing with their loyalty programs. Manyeyve done things like shops and stores. So a lot of outofthebox thinking. Otherre a lesson for retailers or is target uniquely positioned to do this extra thing . Robby i think its a bit of both. Target is doing a lot of great things. They gave a list of initiatives they have this season, they all seem very strong and should have a big impact with consumers. I think what is really driving the target is they are gaining customer share of mind, they are becoming the place as they gain more digital customers, it appears based on the numbers they put out today that even as they drive digital customers, those are turning into store only customers. Target store sales were up in the third quarter. But it is very rare to see brickandmortar retail put up, especially if the scale target is at. We believe that kind of momentum behind both their digital and their store traffic bodes very well for them into the holiday but also next year. Today onnly an outlier a down market. Thanks so much for joining us. We will take a quick break. Coming up, hong kongs special trading status is on the chopping block. The senate voted unanimously to support the protesters while China Threatens to retaliate. Plus the latest from a key senator next. This is bloomberg. Vonnie this is Bloomberg Markets. Amber Hong Kong Special status is in question. The u. S. Senate unanimously passed a bill that requires an annual review of the trading rules and imposes sanctions on chinese officials committing Human Rights Violations in the city. Senator ben cardin, a senior democratic member of the Foreign RelationsCommittee Told bloomberg the legislation should move quickly to the president s desk. We are hopeful that the house will take up the senate bill so it can go directly to the president of the united states. There is not as much difference between the house and senate bill. We want to get this to the president quickly. The protesters are being abused by the chinese government. We think this can help. Amber its bringing dan joining us now from capitol hill with the latest and this could potentially taint donald trump into a bit of a corner, does he back his own congress or does he sighed with china on the backdrop of this very important trade deal he is trying to get done. Which is the more detrimental party to turn their back on to . Dan theres a lot going on on capitol hill now, so the president is in a bit of a difficult position in terms of trying to get his trade deal through with china and also sort of not angering the Senate Republicans too much on what they feel is a very pressing human rights issue. Democrat,n cardin, a is the cosponsor the bill along with marco rubio, for the republicans and a key ally to the president. Both parties are really pushing this quickly, we expect the house to vote this afternoon or this evening on the Senate Version of the bill. Which would then very shortly had to the president s desk. President trump has not said one way or another whether he supports or opposes the bill but it does put them in a difficult position in terms of the trade deal he is trying to get through right now. Vonnie so for how long could he stall before he has to make a decision . How long can it sit on his desk . Dan assuming Speaker Pelosi enrolls the bill today which we dont know yet, obviously we have to see how the vote plays out. He would have i think about 10 days to either sign it or send it back to congress with the veto message. The issue then of course becomes whether the house or senate would vote to override the veto. The hong kong human rights and democracy act which is being debated right now has passed both the senate and house, different versions of it with unanimous consent, so that suggests there is a vetoproof majority so it would definitely put the president did a difficult position. Amber the u. S. Has issued sanctions against china for its treatment of minority muslims and that seemed to exist outside the purview of the u. S. And china trade ducts. Is there any chance that this could also fall within that sort of realm . Dan its possible, i think there are several issues visavis the china u. S. Relationship that are being revisited and reexamined. One other bill that will come up , that came up last night in the senate that is expected to come up in the house this afternoon is a bill that would restrict the export of Certain Police items like teargas, rubber bullets, and things of that nature, to hong kong police. There is definitely a great interest in sort of supporting human rights in hong kong and in Mainland China and finding any legislation vehicle that senators and Congress Members can find to do that. Vonnie thank you for that. Coming for Grocery Stores and not just through the amazon whole foods acquisition. More on their plan next. This is bloomberg. Amber this is Bloomberg Markets. Going cashier free. Amazon has unveiled plans to launch amazon go through markets and public stores. Jobsn has confirmed these will be separate from whole foods, the Grocery Store chain amazon request acquired. Matt,re we turn to joining us from seattle. Storesl the cashierless work differently to what we are seeing now where you can go in and get your groceries and check yourself out . As far as we know, sources say its the same concept. Amazon is exploring different sides sizes. Grab and go staples, but they are also exploring opening fullsize Grocery Stores. There is one coming in seattle thats about 10,000 square feet and can support up to 30,000 square feet of space we can grab and go and youll be on the other end of that. I guess it sounds really cashierless, but i wonder what problem is this solving . Is it solving a problem for the customers, solving a problem for the Grocery Stores that are already dealing with razor thin margins . What does this achieve . Matt amazon has been looking at physical retail for a long time, the result of years of experimentation. What they are zeroing in on is the pain point of harried Office Workers who dont want to spend time in line at lunch and clearly think that model will work in Grocery Store context as well if you can eliminate just the weight of trying to check out. You are likely to do more volume in the stores. Thats what theyre trying to do with a large Grocery Store model. This need to be separate from whole foods matt . Why can they test this in whole foods first and then expand whole foods . Matt thats unclear but amazon has been clear from the beginning that the coproducts are different from whole foods. There is no plan to retrofit whole foods stores. I think part of this for now amazon is just learning. They can go to town an experiment on new spaces theyve created and designed. But i think as they explore licensing we may very well see amazon come in and retrofit some existing stores are leased exploring as much. But for now, no whole foods as far as we know. Amber when amazon develops Cool Technology sometimes they keep it for themselves the way theyve done with their Logistics Business and sometimes they sell it to others like amazon web services. We know if they develop this do we know if this is successful will it just be for amazon or could be a licensing business for them . Matt it looks like with go, they are trying to do both at the same time. Expanding their own footprint in confirmed heree today that they are planning to license some Technology Behind go now. Who the customers are for that has been reported. There is at least interest or Movie Theater chains, baseball stadiums perhaps. We will see how wide that Licensing Program is but amazon will be considering making that Technology Work in Company Stores as well as their own. Amber thank you so much for joining us with that insight. Sticking with Artificial Intelligence, its not just creeping into retail, a new report from the Brookings Institute suggesting Artificial Intelligence poised to impact the high skilled jobs in finance and tech. They are showing those with graduate or professional degrees now are four times more likely to be exposed to ai then those with Just High School degrees. It is starting to affect the profession. Vonnie researchers concluding its most likely to affect men, prime age and Asian American workers. Also farming may be impacted, we are already seeing drones boost productivity. Its a brave new world a lot will have to navigate. Vonnie you can navigate the bloomberg by going to g tv if you want to see some of those charts. This is bloomberg. Scarlet in just a couple minutes the Federal Reserve will publish minutes from the last meeting. I am scarlet fu. Caroline i am caroline hyde. This is Bloomberg Markets the close. It is a story of trade, concerns about trade, anxiety. 10years, yields coming down further as the search for safety. Pulling from near record highs from down. 6 . Scarlet we have the headlines outcome and the Federal Reserve still elevated risk in october while deciding to remain on hold. The Federal Reserve decided to put Interest Rates on hold following the third cut this year. Most officials sought rates as well calibrated after the cut in october. Many view to the Downside Risk as elevated. Fed officials have been making the speaking going on the speakers circuit and talking up the idea that Monetary Policy is in a good place. Caroline its as though they are stolen the thunder from these minutes. We had testimony from powell, face figures coming fast. Theyal