Performance in the s p 500 right now. Saying ite and fitch weighed heavily on their quarter, down 13 . A little selling in the treasury market today. We will be talking about all that in just a moment. In europe, one of the bigger stories today, italy. Prime minister conte has accepted the mandate from the president to come up with a government, sending the ftse mib up to the best performance in europe. It is up in europe as well, potentially on china comments. The italy 10 year yield currently firmly below 1 right now,. 96 . The except to the exception nokia is the vonovia. Coming up, it is the end of the gso era in credit. We will speak with Bennett Goodman about his departure from blackstone. China indicating it will not immediately retaliate against the latest round of u. S. Tariffs announced by President Trump last week. Beijing instead, beijing is emphasizing ways to deescalate the trade war. For more, we are joined by john ryding, rdq economist and founder. John, looks like theres a bit of a better tone in markets, but is this china really backing down, or is it just playing other card . John theres no way of knowing how this trade is going to go, when it is going to escalate and deescalate. What we do know is in the end, both sides lose if we continue to escalate. If you look at the markets, the equity market seems to want, every time trade deescalate, to go higher. The bond market looks priced for near recession. Its not just trade we are not entirely sure whats happened to. Markets seem somewhat bipolar in terms of how they look at the economic outlook. Vonnie thats the thing thats very confounding. We have Economic Data today that really wasnt bad. Gdp was revised down a tick, but still at 1. 2 . The market is still pricing in more cuts by the end of the year. Why do the markets have so little confidence in this economy . John i think it is because the fed has really signaled it is going to take appropriate action , which means cutting to try and offset trade tensions that Monetary Policy has no ability to offset. Markets have taken this view that the fed is going to give some more. The fed very likely will look to cut again until the all clear is sounded on trade. As we know, that is unlikely to happen very soon. In terms of the gdp report, it was a little more good news in there. If you back out of the private sector and look at what domestic businesses were doing, then the domestic nonmanufacturing sector showed strong growth, 3. 9 yearoveryear. And been tories are taking off inventories are taking off in the gdp number. Trade is an issue. But if you dig down, the private sector seems to be doing quite well given the trade tensions and the problems with tariffs. Vonnie exactly. Theres mixed data out there because if you look at companies reporting, you get another picture. For example, best buy talking about its inventory going from 60 to 40 for those products from china. Abercrombie fitch reporting a terrible quarter. Youve got some of the big Machinery Companies also getting guidance its very concerning. So what you go on . Do you go on ceo comments . Do you go on the hard data that might have a bit of a lag . John i think you have to think picture. Broader the. Private sector is doing well, but what is not doing well in the private sector is Capital Spending. Capital spending growth has stalled out. Being lede sector is by the consumer, and thats a very unbalanced picture in the economy. Theres growth in Consumer Spending over 2 of overall growth in the economy. Inventory is swinging things around because youre trying to get inventory in ahead of tariffs, having supply chain disruptions, so it is hard to get a read on the underlying growth picture. Is what we do seem to see that uncertainty about trade is hurting Capital Spending. In the long run, that is unhealthy. Datakeep the eye on profit , on the Capital Spending data, the things that really tell us where this economy is going to be going forward. Vonnie if the fed does cut by more than 25 basis points or cuts more than twice more this year, would that be a mistake, john . John i think it would be. I feel that we are on track to get them. But to cut more than 25 basis points, look, the signal about cutting is a midcourse correction, 50 basis points is an insurance policy. 50 basis points is trying to head off something more serious in the economy. I think that could undermine risk assets. Bond market,he which seems to be pricing in near recession conditions. If the fed were to resolve the another, that or will have a big impact on risk assets. Vonnie it is one of those things that is floated from time to time, but the idea of an ultra long bond. Would let ever even come into existence . John i dont know if there would be demand. What we hear from some of our clients is that actually a shorter dated long bond, there would be a lot of demand for twentyyear bonds. I think the idea of going out for 100 years, you would probably want to go for 50 or something. 100 yearsyears is a long time. An ultra long bond issued right right an ultra long bond now would have to have been issued just after the first world war. Im not sure there is that demand for a 100 year asset, especially if it comes from Pension Funds and so on. That person hasnt yet been born and wont be born for a few decades. I think looking at, say, a 20 year x a lot more sense than looking at a 50 or 100 year. Vonnie looking at the curve, is there any part of the curve that is correctly priced to reflect what is going on in the economy . Ratesi would say interest reflect the fundamentals of the economy far too low. But to reflect what the fed is the market may be pricing into much from the fed. I think we are discounting the risks of not having a little bit of an inflation pick up. We get more tomorrow with monthly inflation data. Weve paid a lot of attention to things like the trimmed mean estimates. Rather than just throwing out food and energy, you throw out the big movers and look at whats happening to the Central Distribution of prices. That hasnt shown the same kind of decline weve seen in core inflation. , think that, looking at that we shouldnt discount that inflation is running may at 2 , maybe picking up a little bit above that. Obviously next week brings a lot more information with the payroll data, a new look at wages. But some measures of Labor Compensation are creeping up towards 4 . That is either going to be a problem for Profit Margins and growth, or it is going to be a problem on the inflation side. And then theres the impact of tariffs that have yet to be fully felt by the consumer. Vonnie john, we have a lot more to talk about. I also want to ask you about the ecb and brexit. John ryding, rdq economics chief economist, stays with us. Lets check in on the first word news with kailey leinz. Kailey dorian is aiming to become the first major hurricane to slam into the florida coast in 15 years with winds of 115 Miles Per Hour and drenching rain. It is already carrying winds of about 85 Miles Per Hour after racing past puerto rico and the u. S. Virgin islands wednesday. 1020 20 democratic president ial hopefuls have qualified for the next debates, but 10 2020 democratic president ial have call if i for the next debates, but for others, it is the end of the line. Kit digital brand is among those who will not take the stage next month Kiersten Gillibrand is among those who will not take the stage next month. The Trump Administration will tighten its policy for children adopted overseas by u. S. Military personnel. Adopted kids will no longer be guaranteed citizenship. Previously, these families were considered to be living in the u. S. Even while stationed overseas. Hong kong police say they have protests fromy the previous organizers of marches, citing public safety. It is a move likely to anger public demonstrators ahead of a planned 13 straight weekend of protests. 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. Im kailey leinz. This is bloomberg. Vonnie thank you. Coming up a little later, le tote is buying. The president and cofounder Brett Northart joins us later. More with john ryding next. This is bloomberg. Vonnie live from new york, im vonnie quinn. This is bloomberg markets. Lets get a check on Global Markets with emma chandra in london. Emma we are looking at a risk on sentiment on both sides of the atlantic. All the major indexes in america and europe rising by more than 1 at the highs. Looking at a gain for the s p 500 around 1 . The nasdaq 100, the biggest stocks within the nasdaq rising a good 1. 3 today, really showing how its big tech leading the rally today. This as china says it wouldnt immediately retaliate against new boosted tariffs from the u. S. Of course, investors liking that news. Tech stct on mega cap ocks really showed in the new york faang index. That is moving a lot today, gaining more than 2 . Its really been on the sidelines as of late, but we seen the index advance up 3. 5 this week. That would be the biggest weekly advance for the index since around mid june. Outside of tech, a big day for retail. Best buy slumping after it came out with secondquarter results, down some 9 . Doing better on comp sales, though they still missed. They also lowered their fullyear sales forecast. The concern seems to be around their uncertainty about Consumer Behavior in the second half of the year. Better,tores doing dollar tree and Dollar General both rising. Dollar general up some 8. 6 percent, hitting a new high today, as they boosted their fullyear guidance despite the threat of tariffs. Lets take a quick look at all wheel, arising again. The rally continuing. Oil, risingok at again. The rally continuing. Vonnie thank you. We are back with john ryding of rdq economics. Lets move to mainland europe. You have italys 10 year yield at 95 basis points right now, 69, at nine, germany at 70 right now, and france at 41. Then you have Christine Lagarde telling the European Parliament that the ecb hasnt hit the lower bound on Interest Rates. Where is the lower bound . John who knows . We used to have the lower bound at zero, and that has obviously been broken, but you cant cut Interest Rates to make them to negative. Then people start to take enormous efforts in order not to pay for the privilege of the bank storing the money. When the banks dont past that negative rates along, then they absorb it, and you are taxing the sector you need to drive the economy, and negative Interest Rates become counterproductive. I think, regardless of whatever Christine Lagarde says, europe is within 10, 20, 30 basis points of an effective lower bound of what the central bank can do, which means probably more asset purchases rather than a move to lower rates further. Vonnie shes obviously signaling to the European Parliament that shes going to continue the type of policies mario draghi has been effectuating. She says the precise mix deployed will have to depend on the nature of shocks and outlook on inflation. Are there shocks affecting the outlook for inflation on the horizon . John germany just printed a lowerthanexpected inflation rate. German inflation is at 1 . Germany may, quite likely is, in recession. Is the problem with europe that too much emphasis is being put on Monetary Policy and not on fiscal policy. Germany now has the fiscal space without breaking ecb rules to undertake significant fiscal stimulus. Thats what tax cuts and stimulus in journey would be much more helpful for the european economy then making Interest Rates in germany would be much more helpful for the european economy than making Interest Rates lower. Seen t the data you the data. You seen german gdp come down, running a surplus is the economy goes into potential recession. To me, theres no rational reason not to undertake some kind of fiscal action in germany. Vonnie i have to ask you about britain. Obviously Boris Johnson looks to be suspending parliament now. What happens next, and where does the pound go . What happens to the british economy . John the unfortunate probability of a no deal brexit continues to rise. If that happens, that is going to be short run negative for sterling. The reason is because the legal default is that the u. K. Leaves the eu at 11 00 p. M. London time on halloween, and whatever the Legal Authority, and i think the Legal Authority is there, for Boris Johnson to prorogue gate parliament, it is clear, the intent, to me. It is clear the intent is to prevent action to prevent a no deal brexit. The only thing parliament has been able to agree on in this hold three year or so mess is they do not want to leave without a deal. That is the only thing that we are on course for unless some action is taken. So it is going to be interesting political theater and very constrained political theater. It is no way for a modern country, a large country in the g7, to be running its Economic Future or political future. Vonnie john ryding, rdq economics chief economist and founder, thank you for joining. This is bloomberg. Vonnie york, im vonnie quinn. This is bloomberg markets. Its star wars attraction galaxys edge at disney world in orlando. Plus, a hurricane is threatening the state. Reporter this is the second star wars themed attraction they have opened. They opened one in anaheim in may, and there were some restrictions on the people who could go to these attractions. You could only sign up online, or if you stayed in one of the disney hotels. To make up for that in florida, they are going to be waving those restrictions and hoping that attendance is better. Themeparkese are two expansions costing 1 billion each, and one of the rides isnt even open yet. How much can disney afford to wait for this to gain traction . Do reviews start keeping people away . Reporter one of the attractions is open, one of the rides is not, so i think the demand for star wars and the fans of star wars are sort of insatiable. Disney has made a huge bet on star wars, so i think it remains to be seen just how any people go to this one in orlando. Vonnie attendance is down in the last Earnings Report at team parks. That has been the one place disney could always count on for cash flow. How important is it that this new themepark works . Reporter the themepark business has always been very reliable for disney. On the other hand, theyve got this very big streaming service they are launching right now, so i think they would like the themepark business to remain steady as they make this big transition in their Media Business into the streaming future. Vonnie it always feels like disney has so much confidence in its future that it would open parks like era disney before they are even ready like euro disney, for example, before they are even ready. This streaming service doesnt begin until november, but they are offering a humongous deal to people who sign up and preorder, right . Reporter thats right. They just had their big d23 expo, and people who were part of that fan club, if they signed up for a three year commitment, they could get it for about four dollars a month as opposed to 6. 99. People are really paying attention to the price points of all of these streaming services. Youve got netflix and amazon, and now apple, disney , hbo max. The consumer is probably going to start wondering how many i can actually afford. As these details come out about streaming services, how much they are charging, that is a big thing. For disney to offer a discount, there were reports that the website where you could sign up actually crashed, so the demand for that disney seems to be pretty high even though it hasnt even started yet. Vonnie three years of a very competitive price. Thank you. That is bloomberg gerry smith. It is time now for the latest business stories in the news right now. Best buy delivering slower lowerthanexpected Quarterly Sales and reducing its outlook for the year. It was a rough start for the electronic retailers new ceo, who took the reins in june. Missedles rose 1. 9 , but projections. They also lowered their fullyear sales forecast. The u. S. Economy grew a little more slowly in the Second Quarter than initially reported. Stronger Consumer Spending offset by weaker readings across other categories. Trade actions are weighing a little more, perhaps. Inflation is down from 2. 1 . Blackstone group losing the last of its cofounders. Gso Capital Partners bennett gso, is the g in leaving. He is coming up next, right here on bloomberg television. Vonnie live from new york, im vonnie quinn. This is bloomberg markets. Big news in credit today, with a high profile departure from blackstone. Erik schatzker is here with one of wall streets most six x of most successful executives. Erik that would be Bennett Goodman, leaving one of the most successful firms almost three. Why . Bennett a host of reasons. First and foremost, i think the firm is in good shape. Our president has been running the firm day today for the last two years. I think the firm is hitting on all cylinders, raising lots of capital, deploying our funds and smart investments. I think everybody is kind of ready. On a personal basis, ive accomplished what i set out to do, and after 15 years, i think it is time for some new challenges. Erik if theres one mantra or one principal you want to survive after you leave, what would it be . Erik