tv Bloomberg Markets Americas Bloomberg November 2, 2018 10:00am-11:00am EDT
vonnie: top stories we covering from the bloomberg and around the world. caps on to the midterms, could a strong jobs report give republicans a boost as democrats look to take control of at least the house. and is a trade a truce on the horizon? president trump tells his cabinet to jeff a deal with china ahead of the g20, but how far will the two countries have to bend? and then, gopro's ceo weighs in on how the company's cameras have been caught in the crosshairs of the trade war between the world's two largest economies. and apple losing more. a friend to of the markets with abigail doolittle. abigail: we have gains for the dow and s&p 500, but the nasdaq and the nasdaq 100's tech are lower. the nasdaq 100 is down 6/10 of
1%, so really underperforming the dow and s&p 500, which are on pace for their fourth update in a row. all these averages on pace for the best performance since march, but weighing on the averages, truly on the nasdaq and nasdaq 100, apple. here is a chart of apple, shares lower, down 5.4%. really dropping off of from yesterday's 1.5% gain. this of course on the fourth quarter report with the outlook for the all-important december quarter, the holiday quarter, disappointing. plus, they will not be reporting unit sales anymore, so investors worried about what is happening here. a little bit of a similarity to amazon in terms of weakness for the december quarter, and b shares on pace for the worst day since april of 2016. that after they reported a disappointing quarter as well, decline in revenues, the first in over a decade. a similarity to that
disappointing quarter as well. and as for what is weighing on those averages, apple, let's take a look at the different indexes. we we will see that starting off with the russell 3000, 4%, working its way down to the nasdaq at 9.5%, and the nasdaq 100 helping to explain that index's larger loss of 13.2%. but take a look at the x ok, -- big weighingis a their. -- there. as for what is working, take a look at starbucks, up 11.3%. absolutely soaring, on pace for its best day since 2012. they beat estimates. the u.s. is nothing back on a change for the menu to the better bidand -- better. and investors clearly liking that. chevron and exxon are also higher on earnings beats. chevron, helped out by record production.
exxon helped out by the permian basin. investors wondering in terms of the recent rally, do you buy the dip, or is it a false start? we will see either way it is all about volatility. s&p 500 this year. a lot of traders talk about when the stocks climb, do they take the stairs? we see that between april and september, not 11% move, but october -- we see them taking the elevator down. volatility tends to breed volatility. and we see in march, we had a long patch of volatility, so this could suggest more big moves ahead. guys are not you feeling the rally in the way that asia and europe do. europe is up, going for our best week in two years for european equities here. the dax is really leading it. we were up a bit more earlier on. the energy sector being driven higher. this is the trump trade a story
into the asian and european story this morning. and you can really feel it in a number of different areas. italy's slightly aside, yields coming down with prices coming up a little bit. a very bad pmi number earlier on. but you could cynically say that the president has fashioned to engineer a nice rally in global stocks. let me show you are asia was. this really popped on the back of the news. bloomberg reporting earlier on. up, the guy up by 2.5%, and the hang seng up by 4.21% on the back of these numbers. asia had an incredibly strong day. europe has had a strong day. and the u.s. markets, not feeling it in quite the same way. vonnie: partially because of jobs reports, potentially. hiring rebounded by more than 4/10.
and the annual wage gains topping 3% for the first time since 2009. and the monthly wage gains, that could be where it is that. from bring in lara rhame fs investment solutions. we saw wage growth, we always see wage growth, but it is not exactly exciting. why, if companies are reporting better revenue, is it not getting past down the food chain? lara: that has been a conundrum. withmehow have this trend a job growth and wage gains have been disappointing, particularly when compared to the last expansion, and they were not exactly robust then. so looking forward, we are starting to see the inflation picture look less favorable. we have oil, oil had a bad month but it is still up from where it was last year. if we do not resolve these trade disputes, we could be looking at a lot of consumer goods tariffs coming up in january.
and then we had a gradual creep with wage inflation. numbers earlier this week, wages and salaries at a cycle high. so nowhere near the last expansion, but they are still creeping up and it is something we need to watch for corporate profits too. vonnie: so plenty of wage growth there. but why is the but as a patient rate still where it is that? -- participation rate still where it is at? this is the reason why the fed is not talking about holding. lara: demographics play a role in the participation rate. and i think we still see some geographic movement. states with the unemployment rate below 3%. but we also on the other side of that have the unevenness of some states or the unemployment rate is higher. the average is at 3.7%, but there is inequality across the country. so as we see at the margin these extra bodies into the labor force, it is still a slow
process that is moving forward. i think if i look ahead at what the fed's projections are, the inflation piece is the hardest to buy, because it is so benign. guy: lara, good morning. um, if i take a look at the bloomberg, 72% is the probability of a fed rate hike in december. given the data today, is that number two low? -- too low? they will continue to move in the 25 basis point increments, but the markets only had about 45 basis points total for next year, i think that is too low. even the fed says it will be three rate hikes next year, at least. so we have a tale of two markets. equity markets are extremely positive, the bond markets with the yield curve flattening are looking a little more cautious about the long-term outlook for the economy. we will see markets, i think, with amplified volatility as
they sort out which one is right. there is a crisis of forecasts going on depending on where you are looking. guy: is a three .1% number a late cycle number? 3.1% number a late cycle number? lara: it is not. for anybody concerned about wage gains, if we compare it to inflation, the real wages have not gone anywhere. it is consistent with low productivity growth. and we still see an environment where the fed has the luxury of acting with caution and being gradual in the rate hikes. i think the concern we would get from markets is, should the fed feel the need to speed up the pace of rate hikes. they usually go eight times a year, every meeting, not every other meeting, so we are still in a place where the fed is able to treat the markets with a little more care. vonnie: we have not seen a tweet from the president yet, will he try to make hay from the jobs report again, even though the average monthly numbers over the
last two years are lower than they were before this? lara: it was interesting, as i was thinking about the effect this number could have on the midterm election, because i think the strong job gains we have had leading up to 2016, do not provide the democrats with a significant boost, this is an example of how we have become complacent about the really strong above trend jobs numbers. the reality is 200,000 jobs a month is probably not sustainable, given our low labor force growth. guy: lara, is the phillips curve now working? are you waiting for a long time for it to work -- is now that moment? lara: i think we are still in a place where because of the split, the carving out of the skilled jobs, the middle income jobs, we are still seeing the situation where we are getting a lot of job gains from lower wage areas. but it is creeping in. we have had gains from
manufacturing, construction, health care, all these were over 25,000 jobs. so i think that we can finally be in a place where the nonlinearity of the phillips curve is at that flexion point, but it is hard to predict. i have been wrong like everybody else in thinking that will implement rate will give as that low implement rate will give us real growth. we may be waiting a few more quarters. vonnie: thank you. let's check in on first word news. hasey: the united states removed a turkey from its official sanctions list. the treasury department lifted the sentience onto officials who -- for the detention of an american pastor. ohe was released last month. and the national rifle association is facing a cash crunch after pouring money into donald trump's 2016 presidential campaign. that is hindering spending on midterm elections that from the republican hold on congress.
the nra had a decline in working capital last year, prompting it to borrow against life insurance policies on top executives and a take out a loan. michael bloomberg, founder of bloomberg news, is donated to groups that support gun control. u.k., police have launched a criminal investigation into allegations of anti-semitic hate crimes within the opposition labor party. authorities say they are acting on a dossier of information given to the london police chief. the file details cases that describe media postings by party members. global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm kailey leinz. this is bloomberg. --nie: guy: let me pick it up. coming up, donald trump says, show me a deal. the president tells officials to
guy: i'm guy johnson. vonnie: i'm vonnie quinn. this is "bloomberg markets." guy: let's talk about where stocks are right now. most of the global markets extending gains earlier on, the u.s. market not so much. this on news the president has asked cabinet officials to draw up a potential trade do with china. we are joined now by shaun donovan in washington. shaun, let me start with you. there are cynics out there, you
can decide whether or not you are in this camp or not, who would argue the president's desire to talk about a trade deal and get global stock markets rallying comes nice and neatly just before the midterms, is that the perception in washington? >> that is a question everybody is asking. the timing comes not just before the election, but after a tough month and financial markets. and we know the president likes to gauge his progress on the economy by where the markets are moving. we have seen in the earnings season that is about to wrap up, some clear signs of stress related to these tariffs and to the trade war with china. that is the noticed in the white house. and they are constantly rethinking the strategy. we still have some weeks ahead of this g20 meeting, there'll be a lot of internal debate. and this is not something that
is resolved or set in stone today. vonnie: romaine, in some ways the optics are almost as important as the actual deal itself. if you look at china for example, the reference rates for yuan was set today. remaine -- romaine: sentiment matters and for the last two months there has not been one-on-one discussion between president trump and xi. the concern was, how can you make progress if nobody is talking?if we take donald trump -- if we take donald trump at his word, we can think, at least they're trying to get something done. if the timeframe will be as compressed as donald trump says it will be, at least if they are talking that is optimism. and this matters a lot more for what you see in the chinese stocks, rather than what you see here in the u.s. sanctions,wn, given or tariffs i should say, are already on chinese goods, isn't
there a way to make a win-win situation for both the leaders? shawn: the first step we should look for is a cease-fire. do not forget, the white house has also been working on plans that would see an escalation of tariffs. the president himself has talked about slapping tariffs on another $257 billion in trade if a deal is not forthcoming. i think the best case scenario for the g20 meeting is a cease-fire, some kind of pause in the tariffs and agreement from the president not to step up these tariffs they announced in september from 10% to 25%, as a first step. and some confidence building measures. then some arduous negotiations. guy: let's talk about another kind of aspect to this story, what is happening in the price. commentary suggesting maybe the u.s. is going to allow temporary waivers for countries to take
iranian oil. that is something that will keep the gas price in the u.s. a little bit lower. again, maybe i am being cynical, but this all feels like a -- like the politics influencing economics, politics influencing the market, politics the driving thing. romain: anytime you get announcements like this this close to an election, people are going to parse it for something it is not. you bring up oil prices, the potential waivers they are going to give out or that bloomberg is reporting they are going to give out, that is a bigger deal i think than the news we got on china. a you some market reaction on thatnd early this morning on the u.s. side. if that does materialize, that could sort of provide a boost to this market, much more so than trade. even if china, if xi and donald trump talk at the summit, in a deal, a concrete deal will take weeks if not months to actually
fleshed out, so it will become before the market has something tangible on the chinese trade front they can trade off of. vonnie: and in a way it feels like on many of these geopolitical issues it will be a long time the market will see anything tangible, so in the u.s. today we have a different market, you know, sentiment playing out than we did in europe. is it all on earnings, is a down to the companies to decide what is happening? romain: when you look at global markets, nothing is really up. everything is down. even the developed economies in europe. you look at their stock markets. corporate earnings is what has saved us, but we are seeing issues with some of these companies with slowdown in growth and some of it is tied to trade, some of it is independent of it. so as long as it does not get worse, the u.s. can still outperform the rest of the nation's, but you are starting u.s.e money moving out of
equities and into other assets. and more strategists call in the bottom of e.m. and starting to shuffle money over there. guy: i am sterling to understand how the markets will react to the midterms, what is the latest chatter in washington about what we're ultimately going to see next week? shawn: there has been narrowing in the polls that we have seen in the last few weeks, but i think the expectation in washington, both on the republican side and on the democratic side, is that the democrats could very well end up with the house, control of the house of representatives after tuesday, and republicans will hold on to the senate. and we will have a bumpy ride from thereafter. i think that, you know, a lot is hanging on what happens on tuesday. and you know, getting back to china, the chinese are watching too. vonnie: thanks to both of you. shawn in washington dc, and romain here with us in new york.
vonnie: from new york, i'm vonnie quinn. guy: in london, i'm guy johnson. this is "bloomberg markets." vonnie: time now for etf friday with abigail doolittle. abigail: it has been such a volatile period for the markets recently, october the worst month for the s&p 500 since 2011. tons of volatility and where does it leave etf. joining me is tom. your put out research talking about how volatility is hard to find in equity or fixed income, an etf that could hold promise. talk about the equity side.
>> the market has been going up the last couple days, but when you look at the equity universe with etf's, half of them are underwater. half the market of etf's have negative returns. so i looked at this historically, to see the spikes and losses. what has to happen is pretty much every two years we have these really big spikes in losses. and the other thing that is interesting is the velocity. so it reaches as high as 70%, said 70% of the market etf's are at losses. now we are at 45-50, so it will be interesting to see if the trend holds true and we will see a bigger spike. >> that could suggest there could be more pain to the downside for stocks? in my understanding that? >> if the trend stays true. because it has gone as high as 70% in the past. >> that is interesting. an inside look the major averages, perhaps off of etf, but what about fixed income? >> equities is impacted by the
markets, fixed income is a rate story. you have this time where you have losses of spiking in equity, etf's and in fixed income etf's. so about two thirds of the market is underwater of the last year. so what was interesting, in october you had nowhere to go. equity losses going up, fixed income losses going up, that is why we had a shift in october to short duration products. the safe haven. >> so i know you have also done work around leveraged etf's? >> this is really interesting. wha we tend to see ist during big down months in the s&p, you have traders who are hoping for a quick rebound in the market, using leveraged long etf's. we saw a big acceleration coming into this product. and it was 3.6 billion for the month of october, a record, coming into the leveraged ones. most of it was tech, hoping for a tech rebound, but right now it
is paying off for them because the markets have been going up. >> while, the leveraged etf's not for the faint of heart. tom, thank you so much for joining us for etf friday. guy: thank you, indeed. still ahead, gopro. going downhill fast in the markets this morning. um, the pictures are kind of speaking to it. there you go. downhill fast. stocks down, having an interesting morning. down 18% currently. we look at about this next. this is bloomberg. ♪ show me movies a grinch would love.
knew there would likely be eight countries wave from excluding imports entirely, but we do not know which eight countries. we know that some of them are likely to include japan, india and south korea. richard pompeo said, he expects iran's imports will go down by one million barrels. that is even before the sections go into effect. he says negotiations on the countries are still ongoing. the main headline here is that exports from iran will go down by one million barrels. that is pretty significant. the obama administration reached 1.2 million barrel removal from iran. the price of oil now trading lower, but it is improving from earlier this morning. 53.68, pretty much as expected, guy. guy: is get to first word news. kailey leinz. kailey: hiring in the u.s. rebounded last month with a gain in payrolls that was more than
forecast. the figures from the labor department showed that georgia 50,000 jobs were added -- that 250,000 jobs were added in october. annual wage gains topic of percent for the first time since 2009. and in maine, prosecutors aeking a 25 year sentence for separatist leader. spain, oscar seeking and 25 your cents for a separatist leader. activist and civil servants have been indicted because of their push to break away from staying. and north and south korea will -- their attempt to cohost the olympics. as part of reconciliation will send aicials combined team to the handball championships in january. rivals vowed to actively participate in international events hosted by each other and
organize more friendly competitions between them. global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm kailey leinz. this is bloomberg. guy: thank you. gopro shares taking something of a hit in today's session. this after the company reported results earlier on. sheila when joins us from san francisco with the company's ceo. over to you. >> that is right. here with me is nicholas woodman , founder of gopro, thank you for joining us. we are seeing shares tank this morning come investors not enthused that this is a product driven company and now investors do not have a clear window into the future. what will drive that secular growth? nick: our best-selling camera out of the gates ever. in the first 30 days, the new flagship camera has gone on to
become the best-selling gopro ever. and our other products, hero 7 white and silver are selling in line with expectations and we are very confident we will have a great holiday quarter. >> let's go beyond the cameras. the drone market was very difficult, there are many regulatory challenges, but how are you thinking about entering other adjacent markets that are attractive to your consumers, like wearables, alternative reality glasses? nick: for the time, we are focused on our core business of helping people capture their active lifestyles. we are seeing growth, we are predicting 5 million total units of self through this year, which is up 16% year-over-year. in the fourth quarter alone, we are seeing 50% higher sales than last year. so the core business is growing. and we are making investments in new types of cameras, like our fusion 360 degree camera, which
has 47% of the 360 camera market. so we think that we have enough growth opportunity and potential to restore profitability to gopro, just by focusing on the core business. >> trade tensions are ongoing and the company mentioned in the call that if the cameras are included in the tariffs, you would move production out of china next year. if that was the scenario, where would you move production and how would impact cost? nick: we are prepared to move production of our u.s. bound goods out of china in the first half of next year, if we are forced to do so. but we are not making that decision yet. and to date we have not been included in the tariffs, but several consumer products companies have made a case to be excluded from tariffs lists. we are working on that. so if we are included on a list, we're working on being excluded. >> but what countries are you
looking at? nick: we are not sharing that information at this time. >> i want to talk about margin expectations, lower than what was expected. you already reduced headcount dramatically, but how are you thinking about that revenue per employee number, wheill we see more restructuring? nick: no, we are looking at a successful holiday quarter. we are one month into the holiday season. we have our best-selling gopro ever. and our silver and white and $299.re $199 so the sales trends are clear. we will have a successful holiday quarter for gopro. and that sets us up with low channel inventory at the beginning of the year, a great set up for a profitable q1. >> how much of the camera sales are from refreshes from existing users versus reaching a new base? nick: we have shared that roughly half of our users of the
yearo app are using 4-6 old gopro's. we have a lot we can do to etc. customers to upgrade -- excite our customers to upgrade. and part of our business is working on new customers. our marketing teams have done a good job globally. but with hero 7 black, we are seeing a lot of social commentary about customers being excited to upgrade. and those who have upgraded are socially sharing that they are really happy with the purchase. so gopro is a virally driven business and is so far the social commentary is doing a good job of driving our business in this holiday. >> you talked about partnering with larger organizations to help the company scale and you have signed agreements with adobe, but what about partnerships with other consumer facing companies that can extend the brand further? nick: there may be opportunities, but this year we
have narrator focus to super serving our core customers. and we are seeing growth in the business. we are looking at growing sell to 5 million 16%, units this year and gopro will be profitable in the fourth quarter. a we will even bend profitable for the second -- even b e profitable for the second half of the year. we are where we want to be. >> i want to talk about the subscription product that gives cloud services to your customers. how else will you add value to make the user want to pay in monthly fee on top of the quite expensive cameras? nick: we have been successful with our plus subscription service so far. last court, we grew 16% sequentially to 185,000 paying subscribers. and we will be testing more pricing tiers and more benefits, to enhance the value proposition for our customers and find a program that really clicks to
drive that subscription rate further. >> would you consider offering it for free to extend as a marketing tool? nick: there are several new approaches we will be taking to see if we can increase the growth rate for plus, but we are pretty happy with how it is growing to date, 60% is quite good. -- 16% is quite good. >> i want to talk about the spherical camera product. are there plans to monetize that 360 degree concept? nick: as you noted, we kicked off a partnership with adobe where we have made thousands of gopro video clips available to users licensing the clips to use in their own productions. it is a revenue share partnership with adobe. and we have the opportunity to increase the number of gopro videos, the clips that we will include in the program. and we intend for more of the
clips to come from our users, the quality of user generated content we expect to improve, now that hero 7 black is in the market with its hyper smooth the video stabilization. so we may be entering a new era of higher quality ujc, and 360 footage captured with our fusion camera could be included in the stock program as well. >> nick, thank you for joining us. vonnie: selena in san francisco, thank you, with the gopro ceo there. let's keep talking tech. apple's announcement that it will stop disclosing units, sparking concerns. shares down 7% now. some analysts praising the move, others are unimpressed. who has aing in one, hold rating on apple. lookinghat you were forward to the results, because
you are thinking they would go to the upside, the how did you actually received the results? nehal: as far as units go, it didn't disappoint. is simple because of the way that the, you have the ax going upand m against an 8 and 8 plus released in the same timeframe. it will be more difficult not because you have the 10 r, versus the 10, so the year-over-year trajectory should slow down in the december quarter. but the unit are probably pretty significant as a concern, but of course we are not going to get that. vonnie: you raise your price target to $201 from $200, but you kept that hold rating. are you going to make changes? r, i raised10s, 10 it.
and the pricing scheme was going to be much better than what i had previously expected. so i had increased my asp on that assumption. now we have the guidance and this has actually gone up far greater than i expected. the gross margin guidance is lower than i had expected. and as such, that is driving the price target down to $212. that is a reflection of where earnings go, but the real question is, how will the installed base, iphone installed base project? will it be double digits, low single digits, or will it decline? if it is the last one, will have big problems. certainly, the retraction of units brings that specter up. so they did talk about the overall installed base growing in double digits year-over-year,
but that is overall, you have -- what we really care about is the iphone units, because that is the linchpin on how all services are attached. especially with subscription services. so when you factor in wearables up 50% year-over-year, we think that the iphone installed base is in the low single digits for year-over-year growth, and that is a bit problematic. guy: good morning. how much of the stock price moves today are a reflection of the fact that china is a problem for apple? nehal: in this particular quarter it was not a big problem, it was up 16% year-over-year, slightly below the corporate average of 20% year-over-year. so i do not think that the stock reaction has anything to do with the results from china, because those results were decent. i think this has to do with life guidance, and part of the fx, and because of the fx you are seeing diminished demand in the
emerging markets. but the big issue here is that, how are we supposed to get confidence that the services is going to be secular growth here if we do not know the installed base will continue to grow. we never got there in the first place, but we were able to ask looklate -- we are able to at -- but we do not have that anymore. guy: i get your point about the numbers and how they are generated this time around, but if you are worried that the installed base is not growing, the only way you can seriously get the installed base to pick up is to do better in places like china. so it is coming off such a low base, and while yes, the numbers are getting better, they are not -- this is supposed to be the new brave frontier for apple. they were going to take significant market share in china and that has not happened, so the fact they are having problems with the installed
base, the fact they were not published unit data anymore tells me they do not think china will be the store anymore. nehal: that with india was a disappointment, and other potential driver for installed base. and you also have those switchers from android apple, that is also another driver. so all three of these drivers are probably not kicking in in any way whatsoever, which could be a reason they will no longer be providing unit growth, or unit numbers, which is how we back off on the installed bases. vonnie: bring in the price target down to $212 after those results. thank you. let's quickly talk about where alibaba shares are. it came out with numbers earlier on. i think profit was ok. the shares premarket were pretty positive, even more positive than they are now.
trading pu by 5.5% -- up by 5.5%. however, the company has trimmed their predictions on holiday sales. and we are coming up on a really important day for alibaba. and we have been speaking to the executive vice chairman about the trade tensions between the u.s. and china, take a listen. >> it is a good thing that the two presidents are sitting down and about to talk, and we hope that some good things will come out of that. and tension will be reduced. guy: that was the executive vice chairman of alibaba, the guy who will effectively be taking over from jack ma. here is the picture from over a couple of months, you have to bear that in mind in terms of gains today, the stock being knocked around a little bit. coming up, secretary state pompei oh saying that european union will not receive a waiver
vonnie: we have breaking news from deutsche bank. i believe you have the details, guy. guy: details coming through. and i am assuming this is in a stress scenario. their ratio here said the hit about 8% in the stress test. starting to get those details. we were expecting this later. deutsche bank's intraday up by 2%. and it looks like it fell a little bit on the back of that,
but is coming back up. you can see the headlines, this about the hit it percent in the stress test. -- 8% in the stress test. vonnie: time for our quick take, background on issues of interest. 1mbd deals for goldman sachs. the bond deals that took place in 2012 and 2013, goldman under scrutiny for years in its role for raising $6.5 billion for one mbd. it is at the center not of a global scandal involving claims of embezzlement and money laundering. and the first charges against individuals by u.s. prosecutors, at least three current orf our former -- four former executives from the bank were implicated. goldman's former chairman admitted in a plea that he had bribed officials to get the
deals. he left the bank in 2016. robert ng has also been charged in conspiring to launder billions of dollars in doesn't from 1mdb. so how does goldman get involved? shape in 2009 as a way to drive investment into malaysia. goldman advised them on early initiatives, including the government's acquisitions of energy holdings. the election in may and is now facing government charges. he denies wrongdoing. the new prime minister in malaysia says his country wants to recoup some of the goldman fees. it is an ongoing story. you can read more about goldman sachs and all of our quick takes on the bloomberg. vonnie, still ahead, oil weakening as the u.s. softens its iranian sanctions.
vonnie: that to a developing story. mike pompeo has told reporters the european union will not receive a waiver from iran oil sanctions. in other words, the european union will not be permitted to import oil from iran. some countries will be at least in a short timeframe, a small amount of oil. for the latest we go to kevin cirilli. kevin: i just got off of a call with the secretary of state, mike pompeo, as well as steven mnuchin briefing reporters on the sanctions that are said to be announced on monday. the european union will not receive an exemption, but there are going to be 8 jurisdictions
that receive waivers from the president's decision to quit the iranian nuclear disarmament agreement. we should note that these are temporary waivers from u.s. sanctions on the import of iranian crude. now, bloomberg had previously reported that some of those countries include india and south korea. china is still in talks with the u.s. and we should note the president and the administration facing criticism from republicans for not going far enough on this, led by senator ted cruz. they would like to see the sanctions go further against institutionsancial connected to the society for telecommunications or swift. vonnie: thank you, kevin cirilli. we will talk more about this in the next hour. guy? guy: we will be talking about oil now, futures in focus. wti at its lowest since june. his on the news for iranian
oil, not applying the waivers to the european union. i want to bring the oil stored together with the payroll story. you think that investors should look at the oil story, rather than the payroll story, if they want to guide for what is happening with the fed and where they go next. >> absolutely come obviously we have a strong dollar -- ab solutely, obviously we have a strong dollar. we still have the 62 handle coming into focus. we have not seen that since april. and move that over to the metals. we still have copper and aluminum way down. and every time that they try to reach new highs, they are getting depressed. i think it is a sign of a global slowdown, and ultimately ethic inflation is in check. jerome powell, look at the commodities. guy: if we get a deal with china, and we saw this in the
asian session today, some of those metals are going to catch a big bid. chris: yeah, but like you said, i think we are way off. i think ultimately the tweet was nothing about really a deal getting done, i think that the news has come out that clarifies that this will be a long process and china will not do anything until the midterms, no secret there. guy: thank you very much, chris. up next, talking a lot more about what is happening in the markets. you can be cynical about the president and his talk of a china deal, it certainly is boosting the global markets today. we will talk about that next. this is bloomberg. ♪
i'm guy johnson. vonnie: i'm vonnie quinn. i'm guy johnson. vonnie: i'm vonnie quinn. this is "bloomberg markets." here are the top stories we are covering from the bloomberg and around the world. talk of a tree do between the u.s. and china sending stocks soaring in asia. europe is still up. the u.s. is down now. the early cynics may have suggested the president was trying to talk about it as a way to get stocks rallied into midterms. if u.s. price action is anything to go by, it's not working. yes we are getting some wage inflation, topping 3%. should a december hike from the fed now be baked in? italy's pmi data shows the biggest slow down in four years. we will -- take you live to rome. let's go to the marked