♪ vonnie: from bloomberg world headquarters in new york, here the top stories on the bloomberg from around the world that we are following. u.s. stocks have erased earlier losses. the rebound coming after a report from axios that a decision on what has advisor steve bannon's future is imminent. foot locker gets caught up in the retail rout. the footwear chain suffered its worst decline since after the recession after reporting a bleak outlook. we will take it with of the winners and losers from this week's earnings frenzy. and apple's iphone is giving a little known supplier a long-awaited payday. we dig into the latest details about the long-awaited iphone. let's get a quick check on the markets now. we did see a rebound following that axios news.

the dow is actually flat right now. it had been lower earlier. it spent most of the session in the red and the nasdaq as well up one third of a percent. it spent pretty much all the session up to a few moments ago in the red. gina martin adams is with me. let me ask you. thatis purely on the idea the chief of staff john kelly might fire steve bannon? toa: it's always difficult attribute any days market action to any specific events in washington. i do think there are number of things contributing to stocks today. the first is the energy sector is actually outperforming. it has been a big drag on the index for a while. any sort of performance and energy is generally very positive for stocks. utilities are also outperforming. utilities are very defensive sector. i'm not sure you want to draw

too many conclusions from the market activity today. maybe there's a little bit of stabilization into the equity market. fridays are usually stable days. vonnie: until after the markets close anyway. gina: and we go to the weekend. i'm not surprised to see market stabilizing after a really rough day yesterday. vonnie: the timing was just a little bit iffy though. if there were to be changes at the white house, it would show that the chief of staff is at least making decisions. we've not seen anything from him since charlottesville. it does seem like he was put in there that nothing happened. gina: if the market was responding to steve bannon being fired, it would show up in tech stocks and not other stocks. it would not show up in utilities outperforming the s&p 500. that is where we struggle to sort of attribute any sort of individual action in washington.

you can say that at least there does appear to be some stabilization today and maybe part of that is the perceived stabilization in washington. vonnie: you have pointed out a few little interesting nuggets this week as we approach the end of the week and you were doing the equity in review with a look back at you do. small caps are now oversold. gina: yes, which is really interesting. small caps have had a very tough year. small caps have erased all their outperformance postelection. as we know, they were some of the primary beneficiaries of the trump election. in november and december, these stocks outperformed s&p. they are now not connect with the s&p since the election. this summer has been particularly difficult for small caps we have a very small percentage of stocks still rising. a very large percentage are flashing oversold signals. we are watching the small caps index as one sign that perhaps

we can find some stabilization here. if that occurs, it should help the market going forward, the broad equity markets in the u.s.. vonnie: the biotech bear markets on the other hand seems to be coming to an end. gina: this is interesting because what i think we have seen over the last several months is actually biotechs getting a little flow from the equity investor. in the spring, we noted that biotech's were outperforming the s&p 500. some of that is m&a speculation and news. bio techs have held up quite well over the summer even though some of the rest of another former leaders have been pretty poorly. vonnie: we want to move to your next chart because you always point out very fascinating things that we have seen through the week. it is 3317 for anyone looking at the charts in the bloomberg library. here we can update it because we have the university of michigan data that shows a happy consumer. gina: a lot of conflicting signals from the consumer space

this week. you teased at the beginning that you are going to talk about earnings. most of the earnings were consumer earnings. most of them either disappointed or the companies guided down expectations. what we have noticed is that particularly in the small-cap space, the consumers here in united states are very concerned about rising food and gas prices. this into be really struggling with this rise in food and gas prices. theire allocating more of income into the spaces and the result is a bit of struggle on the consumer space. contrast that with generally decent retail sales numbers and economic data seems to be for the solid, but the earnings data has been pretty rough. vonnie: gina martin adams, fantastic. you can talk anything. let's get a check on the first word news now people her. here's mark crumpton. mark: in finland, the main news agency has reported that two people died in a stabbing attack reported 200 miles west of helsinki.

police have reportedly shot and killed the attacker. as many as six people were wounded. authorities are devising people to stay away from the city center as the manhunt continues for other possible suspects. secretary of state rex tillerson is condemning heat speech -- hate speech and bigotry is un-american. speaking at the state department, to listen also confirm that one american was among those killed in yesterday's van attack in barcelona. >> we express our deepest dympathies to the love and thethis individual others who suffered loss of life and we offer thoughts and prayers to their families as they will be dealing with a very, very tough few days ahead of them. mark: tillerson called racism evil and pledged to diversify the overwhelmingly white ranks of the senior diplomatic corps. he also sought to calm fears that he might limited programs designed to recruit minorities.

a growing number of prominent republicans this criticizing president for his reaction to last weekend's violent white supremacist rally in charlottesville, virginia. 2012 or can presidential nominee mitt romney issued a statement this morning, warning that the president's rhetoric may provoke "the unraveling of national fabric" and called for him to apologize to nation. follows 10io's statement scots comments and tennessee republican senator bob corker. the u.k. will send out a vision for brexit. it will lay out the opposition wearable want to negotiate with the european union. critics say the government has not presented a clear view of what it wants from the brexit talks. global news 24 hours a day powered by more than 2700

journalists and analysts in over 120 countries, i am mark something. this is bloomberg. vonnie: coming up, foot locker plummets as investors brace for years of pain. we look at some of the winners and losers of this week's earnings across all the retail sector. this is bloomberg. ♪

vonnie: this is "bloomberg markets." i am vonnie quinn. arees of foot locker plunging today after an ugly earnings report showed lower profit, sales, and margins. the country also forecast lower for the rest of 2017.

emma chandra is here with more. why foot locker? with foot locker, it was all bleakness. emma: they really was a terrible earnings report and the stocks down. the company lost a quarter of its value today. we were hearing that the biggest problem was footwear sales. there were no big hits. -- the airrdan's jordans, adidas, none of them sold well. there were no innovative products at the moment, which was quite surprising. that is one of the big reasons why it took a big hit today and analysts have also been saying that this is something that is across the sports apparel sector as well and it could be many the years of pain. vonnie: surely the ceo new the stock would drop off after saying those things, but they

probably did not assume it would lose a court of its market cap, but is literally down play 5%. 25%. analysts are seeing something much longer term, aren't they? emma: there been some of retail reports and that is the shift to e-commerce. it has been quite surprising that people of not picked up that people are buying online and a lot of analysts are surprise that things continue to be so bad and foot locker has not necessarily improved what they're doing online. have a good chart for you at g #btv 4465. this shows the problem across retail when we're talking about e-commerce. it is general merchandise with the blue line versus online sales at the white line. you can see that finally toward the end is not necessarily good for brick-and-mortar. vonnie: emma, we are going to thank you. breaking news now -- we know that the president has told aides that he has decided to push out steve bannon as chief

strategist. there discussing how and when to do it. this is according to "the new york times." "the new york times" has reported that he is decided to push out steve bannon. there's been a lot of speculation as to whether bannon we go. john kelly was undertaking a review and we are waiting to see if that review would produce the recommendation to fire steve bannon. reportingear times" that president trump has told aides that he is trying to push out steve bannon. there discussing how and when to do it. -- they are discussing how and when to do it could let's bring in kevin cirilli. hardly a surprise, but we are waiting for an official return from chief of staff john kelly . hasn: president trump reported told aides that he has decided to push out steve

bannon. i've been talking to sources all afternoon about this. they have been anticipating that steve bannon is under review for quite some time as well as republican conservative political strategists. several said quite likely that steve bannon was brought in to usher in some of the conservative base that was with them candidate donald trump on the campaign trail. the president ultimately decided yet not done that. we take a broader look at what steve bannon has come to represent within the white house especially in the lens after the charlottesville response that this is someone who is seen largely to have a direct line of communication with the base of the conservative party. therealso tell you that about hisncern ability to connect with the base of the republican party. that could pose some political .rouble for the white house

they said essentially that this is someone who still going to have president trump's cell phone number. the ideological differences between steve bannon and the likes of gary cohn as well as steve mnuchin cannot be underscored enough. that is a storyline line that we will be following for quite some time even with steve bannon outside the white house. vonnie: obviously phasers have been forming for quite some time and they widened a lot in a few days. after charlottesville, it was clear that something was going to have to give. he did not have friends with the likes of gary cohn and h.r. mcmaster. plenty of people were asked if steve bannon was going to say and when they did not give a definitive answer, it was clear that his time was limited. is that why he gave a follow-up

interview to a british newspaper? gave: their review that he definitely had time to look at it. you are looking up the market reaction to this and you're looking at the political volatility index. stocks of bumped upward upon news of this and political risk indicators -- there it is. the vix index has somewhat largely diminished upon news of this. that is fascinating and speaks for itself. on the flipside of that, the ideological differences in what he said in that interview with the american prospect, especially in regards to north korea and singling out the likes isgary cohn, i think that interesting because it notes the ideological differences between the nationalist wing of the republican party as well as the globalist wing of the republican party. to steve bannon supporters, they don't like to look at it through the prism of republican and democrat as terms of nationalist

versus globalist as the ideological spectrum that they would like to look at it as. i can tell you i spoke with a republican strategist who works at the white house quite frequently and he said that steve bannon is still going to have president trump's cell phone number. bannon will still be able to have direct lines of medication with the president. the president is someone who really still parse the people even if they don't have an official title. journal kelly has tried to clamp down on that to some extent since he has become chief of staff to president trump, replacing reince priebus. least with orbits around the president trump, first and foremost you have the president-elect at ric reince priebus and said we were supposed to get health care reform and that failed. he looks at steve bannon and said we were supposed to get conservative support and that failed. let us note that president trump

is scheduled to go to arizona and the white house pushing out a press release just moments ago about that. i think we will be hearing about sheriff joe arpaio heading into that rally. vonnie: he is in camp david. avin, think about it for second. if it does happen and we should note that it has not happened yet, but according to this report that has come out that the decision has been made and that president trump is going to fire steve bannon as chief strategist. they're just talking about when and how to do it. if that does happen, would that convince some of the gop senators, particularly bob corker in the last couple days saying that this president is not competent in this position? kevin: there have been several top republicans, including , a verybob corker senior republican within the upper chamber, as well as tim scott from south carolina, who

told by's news that he was not going to "defend the indefensible." everyone for mitt romney as well as both former president bush's also coming out in criticizing president trump's response to charlottesville. i think when you hear that caliber of republicans criticizing, dear ministration has tried to force the debate about statues, but republicans very much being moved by the press conference in new york city on tuesday. really calling that a type of response that they disagree with. for presidentuble trump legislative agenda when he comes back. source with a senior with an paul ryan's office today that says that president trump house speaker paul ryan have not spoken since tuesday, that prince conference -- press conference.

that's interesting that they have not spoken since tuesday. there's a lot of division amongst republicans in this white house. vonnie: standby for a moment. bill cohen.ing in literallyse, it is walls ruling the free world. this is gary cohn pitted against steve bannon to a certain extent. not happened yet, but "the new york times" reporting that the decision has been made . -- itic the gary cohn looks like the gary cohn faction has one. bill: if that is the case, then that's a very good thing. it shows that john kelly, the chief of staff, is coming on and through with his pledge to sort of clean house. it is hard to say that this president will "ever normalize"

in a way that we might all feel if youable with, but have gotten now rid of spicer, andon, and reince priebus the briefly tenured anthony scaramucci, then you're really sort of talking about a much more perhaps calm her white house, a more organized white house, a less backstabbing white house. that's a lot to ask for, but i think that this would really be frankly one of the best things that trump has done since he has become president. vonnie: there are now multiple reports there about this. abc news reporting that band and reside two weeks ago and it became effective on monday. a lot of conflicting reports on what is happening, but it's clear of one thing. likely will not have the ear of the president as much as he did. what will this mean for the likes of john kelly? does it give him greater

stature? does it prove that he has whipped into shape a little bit? bill: absolutely. it's a clear victory for john kelly. it fortifies and strengthens his control over what has clearly been a wild west end of white house. i would now expect a more sort of military discipline given that he is a general over the white house. there,bannon out of especially after the events of charlottesville and the president's unfortunate reaction to it, i think it would be a serious calming influence. they might actually begin to get onto the agenda that they promised the american people that they would focus on, which has been completely diluted and all this -- and all this that has been going on. vonnie: definitely some insiders agitating for that. stick with us. i want to bring in marty schenker.

there are conflicting reports. times"a new york saying that trump is still debating, while abc news saying that steve bannon resigned two weeks ago. what does it mean for the so-called all right movement and that vein of thinking in a macon society? -- in american society? marty: i think is alive and well frankly. with all deference to bill, i'm not sure it will make a tremendous amount of difference in terms of steve bannon's access to donald trump's ear. they really both think the same way about the world and this country. steve bannon can talk to donald trump anytime he wants. all yes to do is pick up the phone. he may not be physically in the white house. ultimately this is an issue about the nature and character of the president. bannon's departure does not change that. vonnie: let me ask you why the stock market might be rallying

on this particular news. it still seems like this is why. as soon as these reports, the stock market did make a quick reversal. is this to do with bannon leaving the white house in one form or another was it just unrelated? to tell's always hard exactly why the stock market does what it does, but marty makes a very good point in that steve bannon will probably still talk to president trump. frankly forthe ceos many of the ceos who sort of quit the councils in the last few days will continue to talk to donald trump. i'm sure that jamie dimon and schwartzman will talk to trump as needed. i think if i were a stock market investor knowing that steve bannon was no longer going to be in the white house, that would make me feel a little bit more comfortable. trump always does

things to defy conventional whic wisdom, but i would take some comfort from that. vonnie: effectively what difference will this make if indeed it does happen or perhaps it has a even already happened? you said he will have the president's ear. it's not quite clear how much it of his ear sean spicer has. there's also the idea that bannon will still carry on and do what he is doing on the outside. marty: right. i do think the market is rallying less on the departure of bannon and more on the ascension of kelly as a chief of staff. he does want to impose a single-minded vision on this white house. a sign of that. at the same time, remember that

trumpelly cannot control at his news conference. you all remember the photos of him looking down at his shoes. he has prevailed on this matter of steve bannon although we will not roll it -- we will not know what role he will play. we will see what kind of discipline he will impose on the president himself and we'll have a test of that in phoenix. vonnie: at least taking away the spotlight from the president right now anyway. our thanks to bloomberg chief washington correspondent kevin cirilli, marty shanker, and bill cohan. we will continue to follow this story throughout the afternoon. this is bloomberg. ♪

this hour, news at reports that white house chief strategist is out. let's go to craig gordon. shanker, i want to

start with you, craig. get us up-to-date with what we know. newe are reports from the york times that steve bannon is leaving but there are conflicting reports about what gave rise to this. >> a personnel move is only donald trump can do one. he seems to be saying to the new york times, that bannon is on his way out. the timing and circumstances are unclear. we've seen this before with trump. he is seen as being reluctant to fire people, even those who have let him down and ban and then it seems to be on his way out in a weird state of limbo. david: something else we have seen before, it is not clear whether he is jumping or he is being pushed. here were also reports that turned in his resignation a couple weeks ago. >>