Crisis and travel concerns. We begin with a market rally after and eightday losing streak. Good afternoon. Good afternoon. At the midpoint of the trading day, u. S. Stocks are rallying as we close out the trading week. U. S. Data is showing new Home Construction rose in september after slumping a month earlier. Consumer confidence also surprised wall street, rising this month to the highest level in seven years. Saying theyed in, will start purchasing assets in the next nine days. That said, the s p 500 is still down roughly 6 or says the highway saw september 18. An economist at lpl financials says the markets seem to have a. Y the dip mentality most of the traders get ready to hit the weekend. Will the gains last on monday, or are people stepping in because it looks like the market was oversold. We have also been watching treasuries how our bonds doing . Essentially, falling for a second day. The 10year yield up the most in one month. Look at what is happening, spiking through the 2 level. Yesterday, it was essentially flat. St. Louis fede president , not known for being a dog or a hawk, but his quantitative data of easing should stay in place, it could explain the yield movements you are saying. Thank you. More on the markets, joining me from philadelphia, bill stone. Welcome. Good to see you again. Thank you for having me. Bill, the markets are ending the week in rallymode. Trace the arc from the beginning of the week until today what happened . Is todays strength a relief rally or the start of a surge . . Surge . The hard lessons from the start. What we wrote earlier in the week was the week now were in the midst of i will call it a Global Growth scare. You combine that with the ebola news and maybe they are related with the worries that if it is bad enough it impacts Global Growth. This around, and drove bond yields on the 10year down to 2 . We have gone this bounceback. Ext week is an interesting one i believe that longer term the fundamentals still look good here in the United States. The one side, on optimistic because we will get more earnings reports next week. I think that will turn out fine. Obviously, we have a few around like we just had, that disappoint, but on the whole those will be good. Next week we get another batch ineuropean data, the pmis particular, and they are not likely to show things getting better. Hopefully, at least, if they show stabilization that will help us hold in here. Bill, you much of the fundamentals, even with europe and asia seeing their economy slowing, and with ebola fears, the u. S. Remains strong, but why was that not enough to calm the markets this week . I come back to some of the psychology that we have gone so much longer than normal on our cancellations, three times longer than normal without even a 5 pullback on the s p. You have recent holders, you might want to call them weak holders that are more apt to pull the trigger and sell. That adds to the mix. 2, thes a tough 1, cassette in a probability around what though worst cases are around that, nobody knows. It gets difficult and that feeds into investor psychology. What about the comments st. Louis fed president bullard made to Michael Mckee yesterday . The market wase looking for . Maybe it was enough to snap the streak. In my sense, i always thought the fed was that a defendant datadependent. I am hoping we do not have to do asset purchases because that is not a good sign, of course. That. Mixed feelings on if that is going up, maybe that is the sugar high, and i am not too interested in that, but maybe the snapping the psychology that nobody could help this thing was part of it. Bill,l, you mentioned you mentioned europe, the ecb, saying it will start within the next days to purchase assets in a new program to support the economy. Is this an example of another central bank stepping into quiet fears . I think they have been making talking about it for some time but i am sure it is part of the communication strategy. It felt to me and probably most people that most of the fear rested around europe. Most would agree the u. S. You could disagree how strong it is, but you would not say we are on the precipice of falling apart. Europe, i would not put it that far, but it is not anywhere near robust growth, and that is being nice, today. [laughter] you spoke about corporate earnings not too long ago. The numbers we see right now are they enough to give investors confidence at least through the end of the year . I think if we get through and come out somewhere, again, as you always expect to do, above the consensus numbers, i think it at least sets the table to get us through to the end of the year. Part of it is, of course, people will be thinking about where is the economy going, will europe be weak enough that it will impact multinational earnings . In the big picture, i still think we are seeing continued good earnings growth. What do you value stocks on really in the end is really earnings. Fromll stone joining us philadelphia. Thank you for your time. Thank you. Lets get to the top stories president obama has named ron our, or the ebola is the response coordinator. He is a former chief of staff to biden and served as chief of staff to Vice President al gore. In dallas, officials are asking healthcare workers to sign legally binding document not to go out in public for the time being. Nurse official says a infected with the ebola virus is stable and resting comfortably the National InstitutionNational Institutes of health. It is impossible to say how she is doing compared to others. This is an individual patient and you treat each individual patient as an individual patient. T is how we are concerned how we deal with this patient. Phan delivered a video where she is seen in her hospital bed smiling and talking. Morgan stanley reported third earnings that almost doubled and Beat Estimates excluding a tax benefit and adjustment. Earnings topped the . 54 average estimate. To 8. 7 billion from 8. 1 billion one year ago. They have also cut staff. Groundction firms broke on more apartment complexes in september, pushing up the pace of home building. Housing starts rose 6. 3 . Most of the gains came from apartment construction, which increased from 18. 5 after plunging in august. Federal reserve chairman janet yellen says she is gravely concerned by u. S. Income inequality, but did not offer policy prescriptions. Speaking at a conference on economic inequality, chairman yellen said the lower half of u. S. Households by wealth held 1 while the wealthiest 5 held 63 . The extent of and continuing increase of inequality in the United States lately concerned greatly concerned me. The past couple of decades have seen the most sustained rise in inequality since the 19th century after more than 40 years of narrowing inequality following the great depression. Chair yellen also made no comments on the current state of the economy, or on the future course of Interest Rates. A category four hurricane is headed toward her muta. The prime bermuda. The Prime Minister is telling people to head for higher ground. The eye of the storm could pass within 29 miles by this afternoon or this evening, close enough to be considered a direct hit. There are still 1500 storms without power due to a Tropical Storm just a few days ago. Those are the top stories were following this hour. Coming up, the equity markets slides and centralbank policy is it there to help . We will look at what needs to be done to appease investors and what the fed is doing. That is next. Two weeks than Federal Reserve policymakers will hold their next meeting. The fed has said asset purchases will probably conclude at the end of the month, but yesterday st. Louis fed president James Bullard said his colleagues should consider delaying plans to and the bond buying program. Lisa abramowicz and josh wright join me for perspective on the markets and Monetary Policy concerns. Thank you both so much. Best about the feds lets talk about the fed best laid plans. Throw a wrench into the plans or give a frenzied market some pause . I thought he was trying to give confidence because he said what will the extension of purchases do not that much in practical terms. It is more of a psychological boost, that the Federal Reserve is not stepping back from stimulus and they will keep easy money policies until six this sufficient signs of acceleration. What are those sufficient signs, josh . The fed has been about jobs and inflation. The jobs numbers continue to be strong so far. The interesting number is inflation numbers. Market expectations of inflation have declined more than real data, so now were talking about real Economic Data versus market expectations. At some point, because we are talking about a data dependent said, you have to go by the numbers on the numbers tell us and elation is still below the target of 2 . But the coreght, numbers the more important numbers, they have not moved nearly as much. Certain point, the fed is going to remain focused on real Economic Data on and it will take a Larger MovementFinancial Markets for the fed to respond. From the bond market perspective, people were definitely thrown by the idea that the u. S. Economy could be dragged down by the rest of the world, the slowdown in europe in particular. These folks have told us for the last couple of days there are still problems, a slowdown, but hell stone of pnc bill stone of pnc said the fundamentals are good, so no one has to go oh, my god, the sky is falling. The stronger the dollar gets, fed getsconcerned the about exports. Is that a virtuous or a nonvirtuous cycle . That would be a nonvirtuous cycle. [laughter] concern, can inflation accelerated beyond the 2 target in a meaningful way in the back trap of the target backdrop of the target . Flex given mr. Bullards call, if they do not conclude bond buying, how will the markets react . Back to the moves you saw in the time after the crisis each time we had announcement of qe, bonds and neck with his are moving together because people feel the fed will be behind Financial Markets. 10year is back at 2. 19 . People are going back into highyield bonds, corporate bonds. I have to wonder, at one point does it start being that bad news is good news . News of more stimulus at one point at at what point will it be viewed as a negative for risk assets . The interesting thing is we started to see that this week. You had a bad retail sales number, and it looks like an outsized move, but for the first time in a while it looked like you are getting a number normal trade. Most crucially is the fact that shortterm funding markets those rates did not rise. That is very different from what we saw during the crisis. Josh, i guess, both of you, talk about the pros and cons of mr. Bullard making his comments when he did. Was he speaking to the markets or his colleagues on the fed . You know he is a nonvoting member. That is right, and he is an independent thinker. He has great intellect and is very creative. He has been outspoken about ideas that are away from the consensus. Sure. That makes him unpredictable. It is hard to say how much is talking to the markets or fellow committee members. A big piece is how they community, and if he can provide a staff to the markets, even without this nonconsensus view, he is doing what he set out to do. Which is i am talking to you, but really not talking to you. Right. The bottom line is we will remain accommodative despite what tea leaves you are reading. We have about one minute left , but a question for chair yellen, she was talking about income inequality, she said she was deeply concerned and americans impacted by this are deeply concerned as well. Could the fed drive this discussion so policymakers act . Tothe fed has the ability raise the profile of these issues and the fed has not always taken that opportunity. That is interesting about janet yellen with this Federal Reserve. They have a circumscribed mandate, but they do not have a lot of scope to stand be on that and the times it has, they have gotten into trouble. It is interesting the fed is coming out with this because arguably their policies boosted the asset prices for people that are wealthier, own the assets, and have not really benefited lower income people in the u. S. As much. It is interesting that they are bringing out this divergence, the potential risk to the economy. It is arguably one byproduct of their policies. Lisa brahma said lisa abramowicz, josh wright, thank you. We will go back to mia saini. Bottom line continues in just a moment. After yet another ebola travel scare this morning, the man expected to be appointed ebola czar has his work cut out for him. What will it take to calm fears about ebola . A coordinated response and that is what americans need. Vincent that amber could have been sick and traveling sick much earlier than originally told. Hundreds of frontier passengers for multiple flights are being informed about exposure. This morning we wake up to find out another Dallas Health care worker was on board a Carnival Cruise ship in the caribbean. After the news broke the ship was denied clearance to dock in mexico. They are now heading back to texas. The rest of the passengers are getting a 200 credit and 50 off of a future cruise. These new surprises might not be putting americans at great risk, but they are creating travel anxiety and reloading travel plans for a lot of people. The government have this under control or could we see more travel scares . Would not be surprised. I have been asking Health Officials if other doctors or nurses are traveling and all the cdc has told me is internationally, no. They have not answered questions about domestic travels. Since another travel fiasco is not out of the question, i just called the cdc a few minutes ago willk how the new czar help deal with future problems, and all i got was i have no information for you. Shelby holiday following the ebola crisis. Thank you. We are approaching 26 minutes past the hour. Bloomberg television is on the markets. Here again, mia saini. It is looking pretty good as we close out this trading week, stocks on their way up. , based off of it severed head september 18 hi is still off. The dow is off 5. 5 as well, of how give you a sense october is living up to the hype of not being the best month in the calendar year. Shares of Urban Outfitters are trading at a new 52week low after the retailer said an ongoing sales slump could hurt Third Quarter profits. They have posted strong gains at anthropology. A profit thated topped analysts and it raised the lowend of its fullyear earnings prospects. The company said slow Market Recovery have boosted sales of thermostats and air purifiers. We are on the markets again in 30 minutes. Stay right here. Welcome back to the second halfhour of bottom line on Bloomberg Television. I am Mark Crumpton. Thank you for staying with us. The dow industrial average is seeing its first advance in seven days and european shares ended and eightday losing streak. Trish regan joins me. An interesting week. Friday. Where we are on we have been all over the place, a return to volatility. It is an exciting story to report on during the last hour of trading. We have seen incredible swings. We will see how much this holds up. What happened in the last couple of hours yesterday . On thosee market loans, and i guess for the past couple of days, and what was the traders sentiment is said we do not want to and the day like this . There is uncertainty. No one is sure if the Federal Reserve will be there should we need them. ,ou have the bullard comments qe might be something that might not actually or would be continued. You could put the taper on pause. That gave people optimistic thinking the fed will be there, and then started taking what does it mean that the fed needs to be there . What kind of situation are we in . Is europe going to be that bad . Recently, when you wrote the oped for usa today you talk about fed transparency, and maybe there is too much transparency. I talked to danny blanchflower. He said we are onto something it is like the quiet period before earnings. Typically before a big meeting of the central bank in the u k, people go silent for a specific amount of time. Total radio silence. They do not talk to the media. The market begins to value things that what they should be valued, not thinking the fed is going to do this, and there could be something to that maybe you do not want this much communication. It almost sounds like the market has to do its own homework as opposed to getting a cheat sheet or a crib sheet from the fed. It used to be like that. Years ago, you did not know whether or not the fed had raised rates, cap m study study. Kept them you had to look at the markets the next day. Coming up, jeff sachs on street smart. We will talk about ebola, and he is the author of the end of poverty. He has tried to tackle this issue of income and wealth inequality. We might talk to him about what janet yellen had to say. She gave a speech on growing inequality. The boston fed summit. , theregan, street smart top of the hour. Thank you so much. See you there. Stay with it. Bottom line on Bloomberg Television continues in just a moment. Builders started work on more homes in september Housing Starts climbed 6. 3 , surpassing the millionmark for the third time this year. A senior economist at wells fargo joins us from north carolina. Mark, welcome back to bottom line. Did to see you again. Good to see you again. Thank you. Why does it seem like it is two steps forward, one step back . All we haveeally been able to manage and a lot of that has to do with the damage done during the housing bust. A lot of folks are feeling uncertain about job prospects. We recovered all of the jobs lost during the recession, they were not quite the same jobs that were lost. More peoplemillion working today than prior to the recession, but we have 2.