guy: i am guy johnson. welcome to bloomberg markets. ♪ vonnie: stocks are lower. jones gives her take with the fed minutes as well. we hear from vice president martin in an exclusive interview. they arriving canada with an update straight ahead. go to abigail doolittle. abigail: we have an update, a down day, and today is clearly a

down day. the dow leading the way to the downside. down nearly 7% on disappointing revenue. year-over-year, we see all the sellers taking control the big rally and major averages since march. take a look at what happens with the averages. moves to the upside, followed by big moves to the here are last week, the number of points lost her each of the averages. the dow recovered through yesterday. somewhere between roughly 50%-70 5%. still a lot of work to be done if bulls want to move back from the all-time high in september. the nasdaq tells you there is an erosion of confidence and a

number of factors including rising rates in uncertainties and mix earnings reports. netflix.k at take a look at the game. the fourth quarter, this comes after the disappointing second quarter reports. now investors have a lot of confidence. downgrades out there. rating,uisse cut its the shares down 2.6%. plus, a survey of private homebuilders. that is consistent not with the

sentiment index yesterday but a lot of housing data we have seen recently. onething to keep an eye consider that was the top of the market. finally, it of the fed minutes at 2:00 p.m., the bloomberg dollar index relatively strong. that is after two down days. it will be interesting to see what if any new cues will come out of the fed minutes. vonnie: thank you. investor's scouring how high officials may push rates before pausing. the minutes, as president trump doubles down on his criticism of the federal reserve. fixed income strategist to charles schwab joins us now. what is the biggest risk today in fed minutes? >> ella guess the town would be more hawkish than anticipated.

we heard a hawkish tone coming out. various comments have been going around saying things like they may go beyond neutral or we are a long way from neutral. even more hawkish, i would think that could affect the bond market. vonnie: the president's, some the fed constantly, are they just noise? the categoryhem in of noise. i am sure it is not terribly well appreciated, getting public criticism. on the other hand, they are able to compartmentalize and push that away. guy: will the fomc give any hints it believes trade tensions are inflationary? yields wasmove up in a real yield moves. change the game. >> i think they are more focused in terms of inflation on the labor market and potential for the tightness in labor markets to drive up wages that way.

they expressed concerns about tariffs but it is a double-edged sir -- sort. it also diminishes growth. i think if they are able to look at trade tensions a little better than through the problem or the issue in the labor markets. guy: a lot of people are trying to understand the framework, where the equilibrium rate is. do you think we'll get any hint as to how they are structuring the framework and how this discussion actually works internally in terms of whether or not they have an understanding. >> i wish they would provide the information. we recently had the architect of one of the models to determine the neutral rate and come out not as goodis maybe a guide as he once thought or as models had indicated. i doubt we will get anything precise about it. i do think we have to take

projections the fed is providing to say it is probably around where the market has been around two and three quarters, that would probably be the neutral rate. funny: we have a great story about hedge positions elsewhere, and how lucrative that has been for managers. how much value in charles schwab? not really embraced that. is probably more of a temporary thing. but for ford investors, it has become a headwind for them to invest in the u.s. market. for u.s. investors, we have not looked favorably on european bonds for quite some time because yields are low. i think it is a bit of a headwind for the u.s. market. funny: -- vonnie: i want to show our viewers a look at treasuries attractive overseas.

just as cap he was saying. let's get to the report later today. does china get cold -- as in -- >> the pressure -- the treasury report didn't think it would be a manipulator. we'll think that either. a lot of this has been due to the slowdown. part of which is due to trade tensions. and their desire to reduce the credit exposure they have. he could try to use that but i think it is probably an unproductive way to go at this stage in the game. about looking at the bond market on swaps basis. said you thought it was a temporary phenomenon. are you indicating you think the dollar will come down? at the moment, i have got treasuries yielding 3.1, but

when i get to the headspace, the 3.3, bonds at 3.8. you don't believe that will be around for very much longer. once we start to see the dollar coming down, that would unwind quickly here it that what you are saying? >> the trouble is it is hard to time that sort of a move. the dollar has been stable. it probably has more upside. market decides it knows where the terminal rate will be for the fed, it is -- if that realization comes into the swaps market, i do not think there is a lot more widening of the spreads taking place. it still remains a factor for foreign investors. but timing the change in the market will be difficult. ready think the dollar goes? how important is that in terms of setting up your policy framework?

>> it is important. it has an effect on foreign capital flows, which are clearly important to the u.s. market. but also in terms of inflation in fed policy. we see it up a bit from here. i think a lot of the positive news is built into where the dollar is. vonnie: i have to ask you briefly about a demand for turkish bonds. the 10 year yield is through -- is at 3.15%. it seems to be a nice risk environment. >> a great question. turkey has taken some steps with releasing this pastor who was in prison, and who has helped ease some tensions with the u.s. there is hope that some economic sense -- sanctions will be lifted and that would be put aside. that is given a lift to turkey. has alreadyeconomy

slipped fast. the markets have adjusted rapidly. i don't think turkish bonds look terribly attractive for u.s. investors. of people are willing to say the worst is over and perhaps the same story in russia. guy: thank you, joining us from schwab. let's get the latest news to bring you. here is kaylee. kaylee: mike pompeo says saudi arabia knows it needs to act turkish officials have said privately that they were killed inside the saudi consulate in istanbul. special counsel robert mueller is on the verge of delivering his findings in his russia investigation. those findings will be issued soon after the election.

he is close to rendering judgment on these aspects, whether there was collusion in the russia campaign and whether the president obstructed justice. plane had to return to washington air base because of smoke in the cabin. a spokesperson said everyone is fine and everyone is safe. it is not clear what caused the problem. theresa may having problems at home and abroad when it comes to brexit. her latest proposal would be rejected in parliament. they plan to keep the irish border after brexit does not have another report. global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.

money: coming up, leaving the financial crisis behind. businesss next as the is freed from crisis oversight. this is bloomberg. ♪

vonnie: the financial stability thesight set -- decided special risk for u.s. systems. i found to escape this label. , we are very

pleased they drew the conclusion major. the big factor was the we don't fundn assets. it ledanding how those to the right conclusion which is that we are a stable business model. note is interesting to that general electric all have too big toof the

fail label in the past couple of years in this crisis. what is it mean for investors? i imagine it might free up costs immediately. will start by saying what it does not mean for investors. does not change everything. has been a good supervisor and enhanced supervision has not had a negative impact on our businesses for the management of capital at prudential. you point out, we will save some expenses. some investors may be relieved by less around regulatory outcomes. concern about some of the what if -- scenarios that come off the table. i think maybe this opinion will provide helpful transparency into liquidity issues in a company like credential. all good fork investors.

>> i want to pick up on this point about uncertainty in the regulatory forecast and some outcomes we might see. what we have seen with metlife and now prudential, do you think ultimately what we are seeing is a regulatory landscape that might actually ship from to --ing like a baster i'm sorry, away from the asset base and more to it will space? >> there are two levels to the question. day-to-day supervision of companies p are us, life would go on with new supervisorhe group and companies around the world. there is a day to day operation level when it comes to specific companies. more generally, the theme for treasuries as it relates to systemic risk is around and

activities based approach as opposed to designating individual companies. we support that approach and believe it is a more effective way to mitigate risk. we do not really know what is coming at this point. there will be something before too long about the activities being reviewed their there will be some approach to mitigating , including lending for example. >> any concern that would be a redesignation at some point? >> in the case of prudential, this is a substantive finding and we don't present systemic risk. newark -- new jersey, and you do a lot for the community, no?

>> a share price and a balance have onhe impact they communities we are involved in, particularly newark, it is important to us. we are big impact investors. they made investments of about $2 billion. coming on bloomberg tv. back to you. >> thank you indeed. appropriately washington. marketsoment, european under a bit of pressure. markets joining that story as well. put these down, the s&p is down by point -- half of 1%.

even the philadelphia semiconductor indexes trading lower. those are the markets, this is bloomberg. ♪

guy: this is bloomberg markets. it is time for the media moment. today, we're looking at how u.s. tax reform is playing out at the state level. let's send it over to taylor riggs. taylor: let's turnover to a senior director at u.s. public finance group. marcy, great to have you. new jersey has been hit pretty hard by tax reform. he has been working on -- from your credit analysis, how much of an impact is that to residents and doesn't

even allow it at this point? you for goingnk down the path of allowing services, that is one that residents potentially -- took place in 2017. the higher tax states, putting that cap at $10,000, whereas there, it was unlimited, state in turn what that does is they could possibly constrain the amount of taxation. to hire services, one is, new

not paying on the pensions. they have a lot of infrastructure needs just for transit, which always seems to be in the news. allowing this charitable areas.on, look at other >> we are wrapping up budget season. some of the local cities. >> sure. ahead to fiscal year 2020. very concerned about what happened with tax reform. years, taxes to fund the increases.

somewhatar to be unwilling to do that. they were very contentious. in the review is at the same party this time around. there is a lot of concern about raising taxes. the government is concerned as well. it particular program he is expanding. all of that is going to have to be out ahead of 2020. again bet season could contentious for them. >> a senior director at the u.s. public finance group. >> thank you taylor riggs. >> stories are in the news right now.

all among those, goldman sachs. outcry on disappearance. a million dollars yesterday from the msci etf. that is the latest bloomberg business flash. >> will keep a spotlight on the saudi scandal. mike pompeo to continue his investigation. that is next. this is bloomberg. ♪

jonathan: a few hours to go before europe shuts up shop. most european markets under pressure today, down by .6%.

a -- a critical eu summit. car sales not continue to sag. vonnie: this week, 6.4 9 million barrels include oil. week of billsurth once again. let's look at gasoline inventories. the inverse down by more than 2 million barrels. finally come utilization was flat. let's take a quick check of wti,

trading under $71 per barrel. it is down 2.3%. the fourth week of stockpiles. >> here is kelly. >> president trump is -- the president will withdraw the u.s. from an international treaty that gives chinese companies discounted shipping rates for packages sent to the u.s.. special counsel robert mueller is getting ready to handle findings on key aspect of his rush investigation. president trump for obstructed justice.

president trump warning central american companies to turn back migrants back to the u.s. they travel through their borders on the way to entering the u.s. illegally. a caravan with as many as 2000 hondurans enter guatemala this week. british primates or treason may has been through a crucial european battle over brexit. negotiatorsave deadlock. she was told her latest brexit reporters were parliament. global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. vonnie: thank you. mike pompeo has been speaking. saudi arabia is cooperating in this investigation.

we're joined now for saudi arabia. if not, what does it mean about reporting on saudi arabia. >> the saudi government is willing to -- involved iney were any way, denying allegations that he had been killed in istanbul. now they have changed tack a little bit. and he said the saudi government would cooperate thoroughly on this investigation. >> mike pompeo also said the u.s. needs to be mindful of its relationship with saudi arabia.

i am assuming that means this will not go so far. classes is uncertain. probably some of the strongest we have seen against saudi arabia and the 10 years i have been covering closely. saudi arabia is such a pivotal ally for the middle east. also in terms of its role in counterterrorism. along with his relationship, minimizes of not to what happened, but the administration is probably cautious about how to proceed. there is a lot at stake now. >> right. withouts, would it work the u.s. and saudi arabia? >> that is uncertain. the trump administration has been looking to make up for the

decline once the sanctions have taken effect. that has to be something that is a concern. prices have been higher. it is a difficult thing to proceed with despite what the evidence may lead to. quite how will the royal family and saudi arabia recover from this? clearly, we have a long-term plan in place at the moment. elsewhere sense of it , stabilizing any of that? >> it is difficult to determine. the royal family returning ranks. concern, it is difficult to determine what the royal family is thinking. >> d.phil. like there will be a

change for you? >> i don't know. if you are looking at saudi arabia, he will continue reporting accurately on the company. we will sit on a shoulder and people will look out and be more cautious possibly. >> thanks to bloomberg's bureau chief glenn joining us from washington, d.c. special counsel robert mueller posting key findings according to sources. we are by bloomberg's investigative reporter for enforcement. do tell, what will we know when the time comes. >> we might not know.

learned is next month most likely, mueller will render judgment. make some able to kind of decision as to whether and possibly -- these are two of the pillars investigating for a year and a half. it is significant. we'll probably get to it next month. >> how much will he actually learn. >> very little on its own unless there are two courses of action, if there isn't -- an indictment. filed against a significant campaign operative, that is the way of putting this into the public domain. if it is a conclusion mueller itself reaches, he does not feel to file any charges at

the time because of sensitivities. it is something rod rosenstein would be kept apprised of. eventually, there would be a report and whoever his boss eventually is. congress or the public >> would they be over at that point? >> we do not know but highly doubtful. only if a final determination is that there is no obstruction, that wouldn't be the end because there are still a couple of cases for saint petersburg, russia, that are continuing. and some other words -- work with loose ends. it would not be an end to mueller at all.

there were legal action, it would bring it well into 2019. >> the pressure is now on for the pressure, the administration is getting tired and there is some legitimacy to the concern. do you think the timeline is viable? >> yes. i do not think mueller will be swayed by come -- political concerns p is not ignorant of them. he has delivered something in the public eye at certain points when people in general and the administration and the take you wanted to go away, it could he that without getting into the ultimate findings, that there is some significant number that alerts people to continue reasons for it. the way people

have been operating in the past year and a half. there is a debate for the legal team. he made that clear. >> thank you very much indeed joining us for the latest on what we will learn and when we will learn it or let's talk about what is happening in the markets. they're coming through for secretary mike pompeo, you can see it is making gains. lower.lar is trading the indications are that turkish officials are working with saudi officials and mike pompeo talking about this, this goes

along with the comments we saw in the last few days from the president as well. the lira slowly making gains on the back of that. they are continuing to fall. this is bloomberg. ♪

vonnie: a quick check of u.s. markets now, the dow jones industrial average is down 1.1%. in the last few minutes, it

doesn't walkaway from saudi arabia, he doesn't want to a coif and saudi arabia. the u.s. needs to fight terrorists. the president there giving some insight to potential foreign policy before the sanctions on iran take effect november 4. >> the big sleep -- legal market for recreational use. alexandria from toronto. doug, incredible volatilities. anticipation is greater than the hit. they have had a huge run-up to this point.

so to speak,e news that they have been experiencing incredible days on the year. vonnie: incredible stocks, i noticed some were out at the dispensaries today, tweeting in the restaurant afterwards. a lot of fanfare and activity around that you are not a lot of pot smoking, to be honest. i talked to one of the people behind the event. he basically said pot smokers aren't up at this time in the morning. [laughter] having said that, my colleague, christine, one of the first places where we saw stores open. there were 130 people plus lined up.

>> that is the big question. companies tied to canada a lot of those companies are very small. a lot of it don't.

the cannabis sold ingredients. is that where the focus is shifting to now. rolling jointsst . the medical -- the medical cannabis has been released for a while. the big he is already looking broad for new markets for that. they're looking at the market for oil, the bd, ingredients that could go into other things. edibles will eventually be a market they will look to. ofthere are a lot opportunities and these companies are eyeing them at this point. >> one thing i have not seen a great deal written about is the

tax take on this. what to the canadians make from this? insight is not a lot of as to exactly how much will come through to that. they obviously put the legislation there. ofot of the other aspects this legalization have been downloaded and they have their own set of rules in their own ways of going about online opening them to the others. the numbers are not there. >> thank you. doug alexander joining us. vonnie: still ahead, analysts

are now debating how high the stock can go. we will have a look next. this is bloomberg. ♪ his is bloomberg. ♪

vonnie: time now for futures in focus. we're joined from cme. traded upon because of the fed minutes, because of the concerns geopolitical and otherwise? >> there are outlining -- outline concerns. how hawkish will they be? will there be any sort of remarks to president trump has is content, definitely a

cautious trade ahead of that. there is momentum to the upside now. vonnie: do you anticipate anything, minutes that might give direction. i think they will say monetary policy is where it should be, --itor inflation, >> i am not quite sure when, inventories, what is happening. >> we have all the geopolitical concerns and the iranian sanctions coming up in a couple of weeks and yet we are starting to see big guilds. yesterday we saw a draw.

-- the numbers that came out a few days ago's show a much here. bill in supplies there is a pressure on demand. where is demand now? so much supply is out there that it is just now a big push and pull between what we have an inventory versus the geopolitical risk. >> thanks to scott bauer from the cme with us. >> the stock of the hour, a very prominent growth stock, one re-engaging with the market over the last 24 hours. netflix blowing away most metrics last night. indicated, that may continue. stock over two days up by 10.52%. the market elsewhere getting crushed today. movie celebrates to the downside. taylor riggs, this was a dream set of numbers.

is itestion is sustainable? taylor: that is always the question. so far, so good. if you look at what happened during the quarter at almost 7 million subscribers again. international has been key growth for them to, million came from the international base versus less than a million from the domestic base, it is big for them. as you know, it is always about future guidance. stick with me in my terminal, it will be about q4. q4's have been very strong for them in the past. this is the rate at which they are adding subscribers. this quarter was 5% and some -- it willre saying, be a big show they keep coming out with, certainly helping them boost subscribers we are seeing.

>> does this give netflix and little bit of breathing room for fresh content? they do and cash flow is always an issue when you look at netflix and trying to get them to slow that down or watch some expenses or spending. .nalysts are ok with it so far, this is really bullish on this stock. want to come to my terminal, we have been analyst price action relative to some estimates. at 360 three. still, analysts are well above that. almost 400. increases,ice target goldman sachs raising it, rbc calling netflix, pretty much open growth story. this caught my eye. capital analysts, he lowered his price target not because of anything fundamentally wrong with netflix because -- but because you increase the rate at which you discount the flip -- the cash flows.

that actually sort of lowered his value of it. will be back in 20 minutes. >> thank you. that is taylor riggs stock of the hour. big thing in crude. the u.s. will impose tariffs on the eu pending talks. he is also saying he wants the eu to take action on standards and not just on tariffs. it has always been a big complaint on the trump administration. down seven cents on the euro dollar is weakening as well. crude is a big mover in the last few minutes down by 2.71%. this is bloomberg. ♪

covering out from the bloomberg and around the world, from the markets, falling flat, not building on yesterday's gains. is the cycle higher? oil is really under pressure right now. netflix, surging. tech stocks seem to be back in vogue. will it deliver following the move? and rising now, leaders gather in brussels to discuss brexit. we are going to bring you the latest from brussels on the italian budget. under pressure right now, let's find out where the form is and where it's not right