Is a fitting continuation of what we had in august. Take a look at this chart going back to the fed meeting. That kicked off this downside volatility. Tons of headline risk, but up and down, it tells you that nobody knows. A lot of uncertainty. A real battle between the bulls and the bears. It moves upr or not to alltime highs or back toward last years lows. And is a longerterm chart it may speak more to the range starting in 2018. It is pretty useful. We are looking at volatility on stocks. In yellow, currency volatility and in blue, bond volatility. If you look at starbucks year to date through yesterday, the coffee chain was up 50 . One of the top 50 stocks in the s p 500. Today, you mentioned volatility. Just a bit of a roadblock. There you can see, down 7 10 of a percent, but nowhere close to where it was earlier today. Starbucks had fallen more than 3. 5 at the low point. This was after an investor presentation, executives at starbucks did tell investors that the 10 plus percent growth rate for profits probably wont continue into next year. They also said they are going to be reducing the Share Buyback account. We will see what happens going forward, clearly, even though we see a little stumble today, the stock is resilient. Joe. With us, Bloomberg Intelligence chief equity strategist. Gina martin adams and senior portfolio. Bellre talking before the about the skew we are seeing in the evaluations of defensive industries for growth. What would it take for some sort of leveling out. Is that something that powell himself could do, is it rate sensitive . Do we need to see it on the data side, is it traded . I suspect the largest potential upside movement would be found from some form of trade resolution between the u. S. And china. It does seem there is skepticism as to how much Monetary Policy can affect the economic conditions. There is a lot of skepticism regarding how much Monetary Policy can improve economic conditions, but it is clear that this year, the drag on manufacturing is clearly related to trade, which is dampening business investment, the weak point in the economy. That is the sickest the single largest potential to reinvigorate economic prospects. Scarlet give us your sense of what happens next. The dollar is something everyone is focused on. We know the president is focused on it. As long as the u. S. Economy looks relatively strong, it seems the dollar will continue to rise. That creates kind of a problem, because that will invite the president to come in and push it down. If you look at today, a classic risk on day, the dollar is weak. The dollar is in important barometer and i think it is one of the things we are watching in order to take on risk more generally. If we do see a significant decline, to me that will be indicative of a Global Economy starting to bottom and pickup. To a narrowing of the gap between the u. S. And nonus growth and that would be the signal to get more bullish on things like emergingmarket stocks, which are very attractive, but wont do well in a strong dollar environment where there are significant trade tensions. Caroline they were on a tear today. How long do you need to see weakness in the u. S. Dollar to be able to vindicate the evaluation . I would want to see the dollar i want to ask about the dollar in the international scene. Multinationals are more heavily exposed in the rest of the economy. Gina if you put it in perspective, trade is 30 of Economic Growth in the u. S. Also 35 of the s p 500. The differential is not that significant, however multinationals tend to be Larger Companies so they have a bigger sway on performance. They are a bigger share of overall earnings. In particular, when you look at tech companies, tech has the most exposure overseas among all sectors in the s p. It is also the biggest segment of the s p 500 and it was the biggest earner last year and has really struggled this year. You do see this manifested itself in the s p 500. I think it goes back to trade. The risk has created this inflating dollar environment. That is depressing multinationals, but it is not the only story. Has sectorch specific issues. Slowing phone sales. It is not really related to the dollar. Certainly, regulatory pressure, suppressed evaluation. This, but is part of it is not the endall beall. What will make a much more material improvement would be a stabilization and improvement in european Economic Growth as well as chinese Economic Growth. Scarlet which is far beyond most peoples control and we have no certainty of any of that. You mentioned you like old. You like silver. You are neutral on bonds, within equity, where do you want to be . Ed we are skewed offensively in terms of equity exposure. We are overweighting higher quality, even though the evaluations are higher relative inoverseas, we still think an environment where growth is weak and recession risks are elevated that you want to be in the u. S. Within the u. S. , we are focused on larger cap, higherquality names stand higher cap. Scarlet so not necessarily utilities . Ed not necessarily on those sectors, but more defensively skewed in terms of country allocation and market cap. Caroline what about the tech market . Today, it actually rose. Where do you see the rally going . Think sovereign bonds are incredibly overvalued. You have a situation where more than 25 of sovereign bonds are in territory. That seems excessive to me, but as you mentioned, the momentum with lower yields is not something i want to step in front of right now. Neutral on fixed income more generally, but we are overweight u. S. Treasury right now, given the fact that it is one place where you can still find a decent yield. They be not decent, but positive. There is also a very impressive diversification benefit. Even though the yield is basically nothing on days when the stock market is risk off, they balance things out very well. Ed yeah, treasury and gold and other Precious Metals provide that diversification. Scarlet we want to thank you. That does it for the closing bell and for me. Romaine bostick is stepping in where the team will have the latest on the brexit showdown. We continue to keep an eye on pound versus dollar. This is number big. This is bloomberg. Caroline live from bloomberg World Headquarters in new york. Rally,a snapshot of the it seems as the risks receded today. Joe but the question is, whatd you miss . Caroline brexit chaos continues after Boris Johnson proposes a after theion government moves to block a new deal brexit. Further warnings for the fed. Bill dudley clarifies his Bloomberg Opinion piece calling on the central bank to make clear the u. S. Trade war is the greatest threat to the economy. Perhaps, u. S. Stocks and political tensions appear to ease from hong kong to italy to the u. K. U. K. ,start with the because just six weeks into his tenure as u. S. Prime as Prime Minister, Boris Johnson called for a general election as he suffered another defeat over no deal brexit. View, and the view of this government, there must be an election on tuesday the 15th thectober, and i invite right honorable gentlemen to respond, to decide which of us goes as Prime Minister. I look forward to the day his government and his party and all the austerity and misery he has done this country are kicked out of office and we prevent leaving we prevent this country from rushing out. Caroline now, the debate continues. We await the vote on the snap election in 20 minutes time. Westminster is still outside. We thank you so much. It is unlikely to get the votes he needs to have the election as soon as october the 15th. Johnsonsot in boris to call this election. He may say he wants an election in october, but the house of commons has to back him and that is looking far from certain. There are a number of convoluted options that now sit in front of us in the united kingdom. Parliament may back Boris Johnsons call for the election on the 15th, however, it is increasingly unlikely that the opposition will do that. What they want to see is the legislation that has just been commonsn the house of become law. Some opposition parties want to see it go further and have the extension agreed before they will do anything. There has been this other possibility, Jeremy Corbyn may actually call a vote of no confidence in the government, where that to succeed, there would be a period in which the current government Boris Johnson would have the option of trying to form a government. If he couldnt, Jeremy Corbyn may be given the opportunity. His it is no means certain as we go toward this election. Just because they want it does not mean it has to happen. Joe it sounds a we are finally getting clarity on how this is going to go. [laughter] so you are a comedian. Well done. It is coming further and further down the rabbit hole. It has gone from slightly sublime to now being ridiculous. It is totally unfathomable it is going to happen. It is by no means certain that we will have an election. We may see a jeremy go a Jeremy Corbyn government formed without in election. There are whole range of options on the table, none of which has any degree of certainty. Even if there is an election, it is by no means certain that Boris Johnson will win. There are some who believe that there is a machiavellian master plan at play here. From the outside, it does not look like that. Caroline you have got to laugh. Thank you. Lets have a quick look at breaking news. Slack is coming out with its first set of numbers after going public. Losses per share, . 14. Second quarter, . 98. Revenue comes slightly ahead of expectations. Is upping thenue previous guidance. Nevertheless, we are off by 7. 6 in afterhours trading, looking for a Third Quarter adjustment of eight centsnine cents and the Third Quarter, perhaps in line with what we have seen. We will have to dig into those reports to understand why the money is coming off the table. Romaine high expectations. Lets turn back to brexit. For more analysis, we are joined by a Wesley College professor of Political Science and faculty director at the Madeline Albright institute for global affairs. Thanks for joining us. Maybe you can help make sense of what has been going on in the u. K. Right now and give us a sense of who is actually in control at this moment, given the loss of the motion by Boris Johnson. Making sense of this is a pretty tall order, but i will give you the best shot. Who is in control . I think it is completely unclear. Certainly not Boris Johnson. He has very few instruments here. His attempt to rest control of parliament by having the queen suspend sessions has not only failed, it managed to mobilize opposition to his own position. He is backed into a corner. He has lost a number of his own mps, 21 defected over last night. He has kicked them out of the party. He is now calling for an election. I would argue this is a lastgasp for his position and he is hoping that through this election, not simply that he can return to power, but that basically, he has once again a referendum to leave the eu without a deal. Joe how strong is Boris Johnson in the event that another election does happen . Stacie i am going to echo what the reporter said. It is absolutely uncertain. He is incredibly weak, and i think we saw this the last time theresa may called in election in an attempt to shore up her position, they ended up losing seats. The one wild card here is Jeremy Corbyn, the head of the labour party. In many ways, what Boris Johnson seems to be trying to do is make this both a vote on brexit and on Jeremy Corbyn, and the fact is, there is a lot of opposition withinmy corbyns labor britain. We could see conservatives gaining seats. We could even see a resurgence of the liberal democrats, because they are the one party that has consistently opposed leaving the eu. The amount of uncertainty around this election is just astonishing. That is not even to bring and the people they are supposed to be negotiating with, the eu. Boris johnsons main argument has been, i cant tell you what my negotiating stance is. I need to keep no deal brexit on the table if im to get any sort of good deal out of the eu. In some ways, to play devils advocate, is he right . Stacie he has made the argument that this is his hammer. If the eu is not willing to accept a deal, if they are not willing to take the irish backstop off the table, then the eu is going to be punished, because without a deal in place, this will be chaos for europe. You can look at the way the eu has reacted. Yesterday, they released a list of items to Small Businesses of what could happen in case there is a no deal brexit. That being said, there is no sense that this threat has brought the eu to the table. As a matter of fact, insider reports suggest that negotiations have been going nowhere. The idea that this has been effective seems problematic. Joe great stuff. Thank you very much. Now, coming up, google paying a record fine for a child privacy breaches. Why that company is settling, next. This is bloomberg. Caroline we have live pictures of a relatively empty house of commons, but we understand debate has come to an end on the snap election. , nowpeaker of the house mps are heading to the voting lobby. We will see whether, as expected, it is unlikely of the house will support a general election. Includingon earnings, on palo alto networks. Eps Company Announcing 1. 47 vs estimates, 1. 28. Revenue up 22 yearoveryear. Romaine right now, we are going to turn to google and the story that went on there. Another fine for google. This time, youtube agreeing to to a record 170 million settle claims that it violated childrens privacy laws. Most of that money will go to the federal trade commission. Youtube has been accused of failing to obtain parental consent on collecting data for kids under 13 years old. Coming to us from washington, d. C. , these finds are normally not gargantuan, but this 170 million, this is like 1 10 of 1 of what google earnings in a typical year. What is the point . Is athe point is that this large fine for childrens privacy. It is no question a drop in the bucket for google. It will be easy for them to pay it. It is like looking through the couch for loose change for them. This is a large fine for childrens privacy, 30 times the previous record which was just a few months ago. They are thinking they basically got back their own budget for the bureau of consumer protection. It doesnt go to the ftc, it goes to the treasury. They got 30 times what they had gotten in february. Caroline is there a risk that this goes more global . Could we see other areas the eu is ahead of the curve when it comes to finding big tech giants. Our other countries going to feel like they also want recompense . Ben they have not signal that the way they sometimes signal things. It is important to note that one of the things the ftc is doing is saying, if you are aware of ,he children on your platform the children flocking to your video creators, that is a big problem and a regulatory move that folks in europe are starting to signal. I would not be surprised if we did get them saying that they want to collect their own fines. We have not seen moves that. Romaine thank you for joining us from washington. We want to bring you breaking news. This is the Earnings Report for slack, a company that just listed publicly a couple of months ago, back in june. The Company Appears to have missed on some of the key metrics. Shares are getting punished, down about 13 . Second quarter per share was . 14. That is better than what analysts were expecting, but when you look to the guidance, that appears to be where some of the issues are. Expecting a loss per share of eight centsnine cents. Caroline always a volatile option, pricing in a 20 move. Coming up, decoding a busy week. Well go through the headlines made by central bankers and what to expect from chairman powell. This is bloomberg. Im Mark Crumpton with bloombergs first word news. In the u. K. Members of parliament are set to show down with Boris Johnson over britains divorce from the European Union. After seizing control over the parliamentary agenda, johnsons critics are voting now in an attempt to pass a law banning him from taking britain out of the block without a deal. Prime minister johnson earlier asked lawmakers to back his call for a snap election. In my view and the view of this government, there must now begin election on tuesday, the 15th of october, and i invite the right honorable gentlemen to respond to decide which of us goes as Prime Minister to that crucial counsel on thursday the 17th of october. This Prime Minister claims he has a strategy, but he cant tell us what it is. He hasnt told the e. U. What it is either. Say whethernable to hes even made any proposals whatsoever to the e. U. Britains brexit envoy traveled to brussels for technical talks with European Union counterparts. The e. U. Says it is still awaiting proposals from britain. Officials in South Carolina are warning about the potential for lifethreatening flooding from hurricane dorian. Rising seas could add as much as six feet to normal tide levels. Officials in Georgetown County say anyone who doesnt leave may be putting themselves at risk. Dorian has weakened. Forecasters say it could make landfall as a category one storm on north carolinas outer bank