With some of the worlds le ading experts and how to take care of and protect Health Care Workers from ebola infection. Meantime, president obama defending his strategy against Islamic State. There is skepticism whether airstrikes by themselves will be enough to stop extremists from capturing more territory in iraq and syria. Be president has said that the campaign has already had success. So far we have already seen some important successes, sils advance on isil, destroying targets and fighters across iraq and syria. Back that has been the target of frequent attacks and Islamic State has come close to seizing the citys airport on the crackdown on socalled tax and versions may have its biggest yet. Abby says its board will meet by next monday to reconsider a deal to cut its tax bill to require shire and move its legal address to the u. K. , but new treasury rules make these inversions less attractive. Shareslunged in london, down as much as 30 in trading. A big acquisition and shipping, csr,omm agreed to purchase a pioneer in Bluetooth Technology in this deal would give while, more access to products using smart phones, cars, and personal navigation devices. And the Kansas City Royals one win away from their first world series appearance in 29 years. Billy butlers sacrifice put the royals up toone over the orioles. Stunning. In march, the Kansas City Royals odds of going to the world series was printed in scientific notation. Meanwhile, take a look at what is going on there, the national league, the st. Louis cardinals mishandled the ending, so that gave the giants a 54 win. Game four is tonight in san francisco. Data check,a equities, bonds, currencies, commodities and oil, oil, oil. Currencies do nothing. Nymex crude, that is a correct print on american oil, we do not have a 79 handle print yet, but there it is. Turning onto the next screen, please, the fix 22. 79, the better number from 24 yesterday but still shows the turn in the markets, a 30year bond, brent crude, not on a watch there yet and you can see the spread there too american, 80. 88 with texas. What are the knocked down affects to other parts of the market . Here is the canadian dollar. O, canada here is the weakness going back 40 years. We are allerrible, going to die, and here is the oil rally, call it the china rally, canada doing much better. You can see the abruptness of this improvement, and here is the first giveback of loonie , 1. 12, so there is a scale of how it comes back with oil. I remember when i was a Hedge Fund Guy and we were trading a lot of oil stocks. The demand for oil shares in canada was so high that we were going out and buy in canadian dollars. There it is, the carnage and it continues today. Helima croft joining us in the next hour. Of germany,data out our very own International Correspondent hans nichols is in berlin and german states are calling on Angela Merkel to boost infrastructure investment. What is her likely response . Nein. Is committed to having a balanced budget. Gavrielly sigman growth has made that clear. Everyone wants a balance budget and the federal level in that means no spending. Consistency within a greater germany of since of support of nonausterity. May be the auto sector, so down the rhine and visit and go all the way down to stuttgart if you can, even get on the canal and visit the auto companies. You look at the trade, the top trading partner for germany as france. Russia is about 11 on that list. They think the economy has a cyclical problem or a structural problem, look to see who they are talking about for experts because if they are concerned about russia, that is an indication that they think a slight downturn may just be cyclical. If they are talking about france, they are talking about a euro zone, that is a structural problem and for that the resolutions are more spending or something for mr. Druggie, by that i mean government bonds, not just assetbacked securities. Weaker certain extent, data undermines merkels leverage with italy, which is struggling under its own difficult Economic Situation right now. How is this shift changing the relationship between miss merkel and mr. Renzi . They are still sort of trying to you to know each other, so everyone is trying to get a sense of what renzis plan is, what his plans will be to tackle structural problems in italy, and in some ways all of these budgets it is a test for merkel but it is also a test for the new guy in brussels,. Anclaude all of these budgets will have to be midweek submitted to brussels and brussels can go you nay. Ate go yea or france buildy like get away with 4. 4 deficit duty spending . There were no exceptions for portugal, greece, why is there going to be an exception for france . But whatexpects it, does i do to the weakness of these european institutions . All right, hans nichols. Thanks for the perspective. We are pleased to bring you the global chief investment strategist at citi private bank. Profitsnows investment the way he does about Lisa Abramowicz is with us as well. Have there been any injuries . Not so far. Triage will be done a bloomberg news. Steve whiting, these are exciting times. What should investors do . Would be careful to think this is all about american stocks, for example, and you have been bringing in europe and the loonie. Yes it done this coming to grips with what is driving bats, the fact that the oil price could be down 20 in a world where we are always worried about geopolitical things, coming to grips with all of these across Asset Classes and should make investors parts not pause. Stors markets have had half the volatility. That is veryt of material in that we are having a real shift in policy certainty. Say imid2011, you could very certain that cash yields in the United States will be zero even 12 months from now because the fed told you so. They are not saying that anymore and you cannot be so certain. Within this conversation, this is what you do so well, oil prices up. Croftdy get her limlima quick. Eting, we all know intrinsically this is the benefit to american consumers, gdp, which means i should own stocks. Reallyenergy sectors are really big part of the american stock market and it has been deigning, growing, so American Energy investment has been growing doubled digits, and production has been growing double digits, and as we said, we will end up shrugging off geopolitical stocks but we lose the benefit when we have a drop. There are beneficiaries for sure but that is something we lose on the down front. One thing i keep talking about with sources is that energy plays a bigger role in the u. S. Economy arguably than ever before and it is hard to fuel some of the gains in the stocks, particularly the credit market. High yield bond fund shooins from Credit Companies have been robust, how much in this cycle will Lower Oil Prices certainly harm the market more than it will help them based on how much it will increase the growth will slow rate of energy investment, the idea of continuous, multiyear periods of doubledigit growth will subside when there is this much oil in the near term, but there will be stressed. I think you might have some worries in particular about marginal plays around the world. There are some marginal players everywhere, but think about the very vulnerable sovereigns and high oil prices. Steven, we started with europe, and you said investors should be calm rather than in panic mode over german data. There should be legitimate concerns about a very slow, toerate recovery, but suddenly say oh, my god, august had a 4 decline in Industrial Production when auto production still nearly in half and subsequently doubled in the month of september. That data is yet to be reported. We know these things. We knew the american durable goods order is still 10 because of a three quarters trop in aircraft orders. That is not permanent, so there is a sense of this being overstated. Steve wieting with us of city Corporate Bank citi private bank. The world is coming to an end. Buy bandaids. Speaking of bandaids, as we are noting, ebola has affected the second person here in the United States, so our question of the day, is ebola high enough on the u. S. Agenda right now . A second patient. Tweet us bsurveillance. We will be right back. Good morning, everyone. Ebola front and center dot the president of course speaking on the Islamic State yesterday. This is below the turkish and of course, with all of the challenges there of the Coalition Fights the Islamic State on two fronts, this is the syrian and Turkish Border nicely north and east of damascus. Good morning, everyone. Bloomberg surveillance. Earnings come from revenues and as earnings season is upon us, we must consider linkage of Corporate Sales to our american animal spirit, but is a better economy enough to make for better cash flows to si sustain . Steve wieting is for citi private bank. Things are great. John golub at rbc talks up 10 earnings growth. What is your number . Earnings growth for the year. We will see a 3 or 4 above the lower estimates, there may be that boostth 4q, but will help throughout the year. Said evaluation is a 10 return. Modest hysteria on a modest correction, down 3 , down 4 , down 5 . Do you froth at the mouth that this is the opportunity to buy new chips or you have to wait given what we see an oil in the bond market . I think it depends on your perspective. If you cannot tolerate knowing that you might have another leg down, this is not your opportunity. Absolutely cannot have variability in stock prices. Stocks are risky volatile assets that will lose money at some times, but you do want to see what happens to the highyield market, what happens to credit markets, and if you see stabilization across Asset Classes, i see no reason why we have a new global downturn. We see an example with j j news yesterday, blackrock Third Quarter adjusted 5. 21. Gs per share, a big beat here for blackrock, the worlds biggest asset manager. When you look at earnings results, what we be hearing, listening for from the companies on the Conference Call as the markets in the macro environment look drastically different than they did in the Third Quarter . You dont get that much forwardlooking guidance. You need to look at macro conditions. You need to look at what will be the drivers of future earnings and often you will not get that in the earnings results, but if the company can earn a lot of money right now, then you have to sort of challenge yourself and say why is that going to immediately change . When you look at the oil market, the futures significant drag on oil revenue and profits in a benefit for someone else. We thrilled to have Lisa Abramowicz with us as well from our bond team a bloomberg goes fromyone bond analysis to my prices down, my prices up, what is the swap factor in the bond market . Some of these are down 2 , down 3 , they have rolled over a little bit. What is the swap factor right now . The big question is one of the shorts going to get blown out of the treasury market . We have a very sensitive short position ongoing, and when that happens, that can allow deals to go a lot lower. Scarlet, you see the wall street journal com. Hedge funds hit. Rates are going down. And riskier debt is doing well, and that has been doing badly over the last couple of months that is the leading indicator you are looking at were Corporate Credit is moving. Corporate credit is the interesting spot that has arguably been the most inflated by fed policies, so if anyone can say there is a bubble, this is one area. The fed did not by corporate. Credit tht. The fed have left yield spread high relative to yield rates, but there is really no deterioration in future defaults. When you see generalized improvement in profitability, that would improve high yield. You can look at these markets as being bull markets. Many will say there is no risk of default or less risk of default, yet we talk about bubbles. Is there a bubble when full faith and credit goes yields down, price up . Wieting, i steve have never seen is, how do you participate as an Institutional Investor with prices . Here here. . Do you buy at the top of the market . Real aftertax returns for a long time are negative or slightly negative, but they are providing an offset for other assets that would like more from a valuation perspective. They are going up in price, and portfolio volatility, and you can take a look at the u. S. And market where a two per 2. 2 , youcent at have 50 basis points swiss i do not mean to cut you off, but adam, i miss to this this morning, the german 10year is. 8823. And it is negative on the twoyear. Seven countries in europe right now where the two year yield is negative. I completely missed this. Jon ferro in london, if you are listening, you failed. [laughter] i failed. I want to point out when we come back later we will be croft by helima formally of the cia talking about oil, down another dollar. You are watching bloomberg surveillance. Good morning, everyone. Bloomberg surveillance. I am tom keene, with me scarlet fu and adam johnson. Lets get to the morning mustread. A fellow economist, i would like you to comment on, steven wieting, and these numbers are stunning spending government was 49. 8 of gdp in 2013 yet output is lower now than it was at the end of 2011. Ynesians call this a liquidity trap in reality it is a Big Government trap. Keynesian experiment is failing once again. Ease andlow some budget positions, we do something and then you go onto a decade like grace had where you just like greece had where you just spend widely. What happened to inflation and depressed economies . There has to be a balance between short run and longrun. You can take a look at american history, all of the periods where Government Spending expanded, gdp was at its strongest often itd crowd out private investment and when the Government Spending came back, gdp slowed every time. Short run performance of the economy is very clear, performs ynesian. S keen th but you cannot build up an economy where government spend ing crowd out everything else. I would be careful about consolidation at a time when you have weak economies and fragile recoveries. I think that a lot of people are too pessimistic on where the eurozone is that if you take a lick of spain, the take aral, if you look at spain, the peripheral, easily adjusted 400,000 in he Second Quarter in the economy in spain, so that is an important thing to know while germany is slowing. This comes while the german state is pressing on july merkel Angela Merkel to spend more money. Our politics show with all due respect is tonight. Good morning, everyone. Bloomberg surveillance. Futures 4. Stabilities in the market over the last couple of days except oil, west texas, 80. 79. Further datauick check, which is most of it when you look at oil moving today, futures again today 4, and there is nymex crude, that is enough on a data check. Lets go to hong kong. Protesters overnight in hong kong clash with police. There was pepper spray use, batons were also used in fourstar we will head over to ivan mann who joins us live right now. Give us a summary of what we have learned overnight with the protesters continuing yet arrests as well. Yes, scarlet, the old way we can describe it that it was definitely a very violent night here. Take a look at the backdrop behind me. Take a look at bc of people. We have not seen this many people for weeks now, i cannot even tell you how many are out here, but this is just remarkable. At the peak of this process we saw about 200,000 people out here. It is what some of the groups were telling us earlier, but they are right here now because of what has been going on right now in the last 48 hours with the clashes with police, as he mentioned, and overnight we saw some very violent scuffles here. Lets go to video to show you. This happened kind of at an underpass close to where we are standing right now near the government headquarters. Officers had to bring in the pepper spray, the batons. They were even confiscating paving stones and Manhole Covers the demonstrators had used. 45 people in total were arrested last night. Heroesght for the citys is as quitting in the last couple of days. The started again two days ago and we have just learned in the last couple of hours here that there was a government briefing that was scheduled for tomorrow with the chief executive and other government officials. We have learned that meeting now postponed due to security reasons. We are not exactly sure what it is but maybe it might be they are trying to avoid some of the student protesters with people here behind me, but right now we have learned that it has been postponed. The meeting has been postponed. To what extent has the protesters, the students lost the goodwill that they have earned in the last couple of weeks a . Well, i think people have just started to see kind of the pain that they are feeling right now. They are talking about it on the loudspeakers they are hurting from all of this. They are reacting to the video and again we actually saw some pretty graphic video coming in that we saw this afternoon. It exploded on social media. Theas created quite controversy. This is video from a local Hong Kong Media channel tv b. Bloomberg cannot independently verify it but it apparently shows a prodemocracy protester, also a member of hong kongs civic party, allegedly being picked up, brought to a corner, and then beaten by several police officers. The man, apparently has name is ken zhong, he was taken to the hospital. Hong kong Police Released a statement that they are now investigati