tv Bloomberg Markets Bloomberg October 27, 2015 2:00pm-3:01pm EDT
from bloomberg world headquarters in new york, good afternoon. i'm david gora. apple and dissipation. how many iphones to the company sell less quarter, and as that company matter? hit in theother big pipeline to keep the momentum going. to raiseis looking some cash. sell millions of barrels of oil from the strategic petroleum reserve. we had to the markets desk where julie hyman a standing by. julie: ibm saying it learned the extremities -- securities and wasange commission investigating his transactions.
ibm says it is cooperating in this matter. you can see the shares taking a lead lower. they were already lower on the session, falling further on these headlights is coming out. ibm said it was authorizing additional $4 billion for a buyback program. that's not helping the stock right now. i want to check on late breaking news coming out on starwood hotels. planning tos are bid on starwood hotels. chinese firms seen bidding on star wars hotels -- starwood hotels. seeing a big stock reaction, shares up by 5%, surging as these headlines are coming out. overall, not seeing much buying action in the major averages. we've seen declines across the board, worse than activated -- estimated earnings are waiting
on matters. in terms of late breaking news, we have to talk about what's going on the pharmacy industry. this potential acquisition of right aid from walgreen, that according to the wall street journal that these two were in talks and the incredible surge we've seen in rite aid shares today. ever core i assigned pointing out in a note that the cast and relies on walgreens. their shares are taking a leg down. cvs is the main competitor, the larger competitor in terms of number of stores to right aid is rising as well. david: on the macro side? julie: that economic data we talked about, and a lot of concern being raised by companies out with earnings that this may be extending from their earnings reports to bigger economic concerns. chevron's trading lower with oil prices today, continued concern
about supplies. ford shares are lower after that earnings miss estimate. it blamed that on the tax rate. ups is down after its ground shipments in the u.s. led to disappointing in terms of its profit. and we're going to be waiting for earnings after the bell from apple and twitter. apple is doing nothing, twitter isn't either. apple shares did fall yesterday after one of its suppliers came out with disappointing numbers. david: thanks, julie at the market desk. let's get to mark crumpton at the news desk. u.s. officials say for the first time, iran is being invited to join international peace talks about serious civil war. russia deliver the imitation, but iran has not yet responded. the next round of talks gets underway thursday in vienna. u.s. secretary of state john kerry, amsurg a lover of and several other top european
diplomats are scheduled to attend. a united nations resolution condemning the u.s. embargo against cuba has one overwhelming approval. is the 24th year in a row that the general assembly has approved a resolution condemning the embargo. tuesday's vote had the highest number of countries voting yes. 191. the two no votes were cast by the united states and israel. u.s. defense secretary ash says the obama administration is preparing to accelerate its military campaign against the islamic state. secretary carter says the effort will include more and heavier airstrikes in syria. appearing before a senate panel, secretary carter describes an approach that will focus largely on the city's of rock a in syria and ramadi in a rock. conservative republicans in the u.s. house of representatives concede there is not much they can do to stop it to your budget deal. as speaker, days john boehner is trying to get the measure approved in order to avoid a debt crisis next week
and a government shutdown in december. the deal would take budget showdowns off the table until after the 2016 presidential and congressional elections. another part of that budget deal -- the u.s. plans to sell millions of barrels of oil from the strategic petroleum reserves. the sale equates to about 80% of the government's holding. the oil is stored in four sites around the gulf of mexico. that's a look at the first word news right now. you can always find the latest news on bloomberg.com. david: thank you. anticipation is building for apple's earnings. the company scheduled to report in two hours after the close. analysts estimate revenue of $2.8 billion. most apple watchers all come down to the iphone and how many company sold. joining us is john butler and commentary on a -- amit gary on
amit daryanani. john: iphone now in the last quarter was over 65% in total sales. it really has come down to apple almost being in your play smart phone company in some ways. it really drives the growth, it drives all the results, and if you look deeper within that product portfolio, you realize china is driving the sales growth within the iphone franchise. all eyes are not only on iphone, they are on china as well. how does the turmoil in volatility we've seen in china play out when it comes to a company like apple? john: it's hard to say. alibaba posted very strong results today. it took everyone by surprise. that's the big question with apple. does apple have a strong enough
global brand to rise above the fray, any sort of weakness or choppiness that may be going on in the chinese economy right now. we see in a couple of hours. my vote is they probably are for now writing above that any sort of turmoil or volatility. i know you were talking a lot about this report from dialog semiconductor yesterday, trying to divine what apple's earnings are going to look like based on a very intricate supply chain. what did we learn yesterday and what could vote for today's earnings? amit: we learned the december quarter, a reference to about apple.the revenues from the implied numbers are up 2.5% year-over-year. of there's majority worse than yesterday.
think is not a clear-cut one-on-one relationship. there are a lot of things in the middle. that could skew dynamics as we go forward. david: how important is this coming quarter? we're heading into the holiday season, historically a hugely important time for apple. the december quarter is the best quarter apple has. a strongalso lacking iphone 6. given the macro headwinds in the china concerns everyone has. upper level units year-over-year, which should be very impressive given how strong it was last time around. david: where is apple right now? the latest iphones don't look physically that different. new features were added. what is this company thinking
about going forward when it comes to product? john: that's a great question. that's where i think the smart investors are looking. they are looking out a year, looking out 18 months and saying where is apple going to be? i we headed towards a product transition where iphone sales plateau and we don't have new products yet picking up the slack? time will tell. apple watch has great potential in my view. pay, other services like tv and apple music, together i think can help bridge that gap. but they are still not big enough to do that. i think as people look ahead, they are hoping for those who -- those new products to flip the boat. the on that, apple has to get more and more into content. they have this great global brand right now that they can really leverage. they have a cool colter the resonates with millennials, with
the younger crowd. and frankly, the tv product that is baking in the oven right now is a good start. but i think longer-term, content ownership, perhaps even production for them to me wouldn't seem out of the ballpark. it seems like a nice fit. david: john, thank you very much. amit, thank you. that's john butler and amit daryanani. in the next 20 minutes, a healthy dose of earnings from a big pharmaceutical manufacturer today. what is the forecast for the next quarter? congress wants to sell millions of barrels of oil to help pay for the budget deal. is this a good time to sell? john boehner gives the next bigger the house at parting gift by avoiding a government shutdown. ♪
david: welcome back to the "bloomberg market day." i'm david bureau. gura.id walgreens is near a deal to acquire write it. the transaction will expand the company's role in the distribution of medications in the united states. the newspaper said the deal may be announced tomorrow, citing people familiar with the matter. the journal to not say how much walgreens would pay for the acquisition. pfizer reported third-quarter profit that beat analyst estimates. the company's results were boosted by drugs for pain of
breast cancer, which outperformed expectations. revenue fell more than 2% to $12.1 million. pfizer also raised its 2015 sales and profit outlooks. shares of ups drop the most in two months after third-quarter sales missed estimates. average daily package volumes fell .8% due to slowing industrial production that weight on business-to-business deliveries. revenue was also hurt my lower fuel surcharges. you can always get more business news that bloomberg.com. julie hyman is looking at health care and pharmaceuticals. julie: you were just talking about pfizer, let's first look at the map on my bloomberg terminal to see what groups are on the move. we talked earlier, there's a lot of selling today. however, health care is the one green spot within the major averages. you can see we have pharma, biotech on one hand and health care equipment on the other. the farm and biotech groups that are doing the best today on the strength of the
earnings reports. you just heard about pfizer, we are seeing shares rise after that earnings report came in better than estimates. shares are trading higher by about 2.5%. that wasn't the only one, we had a trio of big reports. market coming out with numbers that are beating estimates, sales of its top drugs for diabetes coming in ahead of estimates. there were concerns over those drugs because a study over the summer had shown a competing medication from eli lilly was perhaps more effective. still held that it up, shares of not quite as much as others, but gaining 1%. out withyers squibb new numbers, developing new cancer treatments. it to oncology drug coming out of beating estimates as well. all these guys are coming back. the other thing to point out that many of these big cap pharma stocks have sold off along with specialty pharma and biotech over the recent concerns
over pricing issues. there was a lot of optimism that they would come back with his number started coming out. david: julie, thank you. to dig and more, we bring in cynthia koons with bloomberg news. let's start with the big trio. is there something that unifies those three companies when you look at the earnings they reported today as it comes out? hadhia: some existing drugs really good numbers, some of the new cancer drugs that mark and bristol-myers has brought out had good numbers. it looks like a really great quarter across the board for a lot of product in the portfolio. there were spots of weakness, but overall, the sales fees were strong enough to leave these guys to increase their earning guidance for the year. it was an impressive quarter. david: we hear much mention of future dealmaking? they didn't rule out
big deals. mark's ceo said don't rule him out, they are still looking, they can still do big deals of they want to. pfizer's management team said they could do bold transactions. they are not ruling that out by any stretch. it was interesting, the topic of the market sell up came up, and the assets are cheaper and is it easier to do deals? pfizer says they don't think anyone selling prices changed necessarily. it's still going to be tough to do deals and get the value they want out of it. but they are definitely in the market and still looking. they made no secret of that. david: julie was mentioning this concern over drug prices going back to late september with hillary clinton sending out a tweet that started this groundswell of interest in that. did that manifest in these earnings tonight? answeredmerck's ceo that head on. he says there's a difference between companies that raise the price it for narrowly on small products.
the big pharma companies still increase prices, but they do it at a much smaller pace in terms then bigre incremental 1000% increase is on an old drug. they are trying to distance themselves from that behavior. they said it still going to be an issue and they don't see going away because it is something that's going to be top of mind in this election campaign, we are seeing that already. at drughen you look development, other diseases that are attracting the most? investment ? julie: the breakthroughs are really lending themselves to more cancer development. the drugs that bristol is bringing on and mark a ring into the market, they are getting good uptake, the results are. doctors are using them in bristol is using to broaden their portfolio. they are trying to say we want to remain the leader of something we have gotten ahead on and we want to make sure we stay there because merck and pfizer are developing similar drugs and mark is in the market
as well. it's very competitive. oncology is the area where these guys are trying to make their mark. about the me ask you report that walgreens is interested in acquiring rite aid. not totally surprising giving walgreens has talked about expanding more the u.s. market place. , he hasince the merger said they could do a good deal of their looking across the landscape in the pharmaceutical benefits manager space, where that would allow them to control the prescription flow of it a bit more. it's not surprising he would describe -- decide to go the way of the retail channel. that's when a background is more than managing a pharmaceutical benefits manager, which is a very u.s. specific type of business. it's something that is management team would be new to. the market has been waiting to see what their big move is. is it buying express scripts or buying a rite aid? if this is it, it's going to
make them a formidable competitor. they have something like 8200 stores and write it has about 4500. they will be the clear market leader. david: that's cynthia koons with bloomberg news. still ahead on the "bloomberg market day," via bank on the us-mexico border had an unusual problem. too much cash. ♪
tom: they got into the retail banking scheme about 10 years ago in california, by buying a number of regional banks. they included a number of banks on the border with mexico, where this branch is located. david: people began to look at it as cash was being carted out in trucks. it had an overabundance of u.s. currency. jesse: that's right. branch wasular experiencing a tremendous unusual outflow of cash that was one or two or more trucks a week would pull up to the bank and hollowly cash, which is unusual if you are not bring cash to service customers. it certainly drew a lot of attention from the agencies that
, and certainbank law enforcer agencies as well. david: what's the status of that? when you look at who might be investigating, who is looking into it? have about a half-dozen agencies that looked into this, including the justice department. in the u.s. attorney's office in san diego. they have been interviewing current and former employees of the bank to sort of get a sense of whether there was a break of controls within the institution. some of the information they developed was that some bank officials may have impeded efforts within the bank to try and scrutinize these customer accounts. thatust going to mention one of the things they are looking at is whether or not the bank withheld documents from the banking regulator. david: you cover financial
regulation in a really interesting facet of the stories of the bank ended up hiring somebody who had regulated the bank previously. you note in your piece that this is an entirely uncommon. -- this isn't entirely uncommon. jesse: that's exactly right. bankss case, it was the own direct examiner at the agency that oversees the u.s. banks. the office of the comptroller of the currency. she went straight from examining the bank to being hired as its main compliance person in the state, which is in necessarily that unusual in the common revolving door cents. david: tom, these investigations are ongoing. it's a company that the prided itself on having a sterling reputation was tarnished a bid by the interest rate rigging scandal area i gather that something that complicates this going forward. there was a deal the bank made
and as this goes forward, could change the parameters of that. correct. at this point, investigators are still looking at things. it's unclear exactly whether they found any sort of criminal conduct. the yes, they are currently operating under a form of probation with the government, in which they are not supposed to commit any other sort of crimes in this time, as well as they must cooperate in ongoing investigations. this agreement is supposed to expire in a couple of days. the justice department may have to have that extended a little longer. and jesse schoenberg hamilton, thank you. more market day ahead. ♪
mark: the european union is stepping up talks with the united states on a new trans-atlantic data agreement. top court said american deal gave spies that are details. the u.s. and europe have been in talks for years. officials in, jordan and israel hope to have surveillance cameras mounted around and inside the jerusalem center of recent violence. the goal is to provide live streaming of the compound revered by jews and muslims. the compromise was brokered by secretary of state john kerry last week. federal investigators say the recall system for faulty tires and leaves motorists at risk. the national transportation safety board says manufacturers have no it to contact most tired -- tire owners.
u.k. authorities are looking into possible money-laundering connected to fee for -- to fifa. david green, who leads the u.k. serious fraud office disclosed the probe as lawmakers question him. at least 14 soccer executives have been indicted by the u.s. the world series stars tonight -- starts tonight in kansas city. that is invoked as will start for kansas city while matt harvey takes the mound for new york. z will start for kansas city while matt harvey takes the mound for new york. that is a look at our first word news right now. commodities markets are closing here in new york. let's take a look at some of today's biggest movers. low.umbled to a two-month
the u.s. plans to sell millions of barrels from its strategic petroleum reserve as part of the budget deal. natural gas fell below two dollars for the first time in three years before recovering later in the session. we have the chief strategy officer of stka international. thebig a deal is it that u.s. is considering selling off some of this petroleum reserve? steve: for oil prices, it is not a big deal but is a huge mistake for the u.s. david: why do you think they are considering it? ted: it may be some survey budget deal going on behind the scenes. it doesn't make any economic sense. if anything, they should be buying oil at this point in time, not selling it. david: it isn't something that has been done much in our history. ted: it is very rare. i have been in this business for several decades. it has only been done twice and when it was only needed.
it is mystifying us to why they are doing this. david: let's talk about natural gas, dipping below two dollars. how big a deal is that? ted: it is a big deal as it affects oil. our relationship between natural gas prices and oil prices, which is not discussed much in the market now, people should be more focused on it because natural gas prices are low and oil prices can only stay so high. what: i am curious russia's involvement in syria has meant for oil prices overall. what effect do you see? definitely a premium built into the oil price because of the fear of what russia is doing in the middle east and what iran is doing and the deal recently signed with the world powers. how that affects oil prices affects -- adds to the price a bit. the price would david: be lower, i'm sure. when you -- the price would be lower, i'm sure.
david: when you see what russia is doing, oil prices has to be a drag on that economy. ted: absolutely. at what is going on in their own economy in the ukraine and this certainly benefits them if oil prices go higher. it is hard to know what is going on in their minds, as to why they are really doing this. it would it be a positive for oil prices. if they goes up, it will help them. david: are there other countries like russia where they are so dependent on oil and these low prices are really having a deleterious effect on the? ted: definitely. venezuela is having a difficult time. opec, all the opec countries are having a difficult time. they all have major social programs they have to fund. those programs are not going to change because of lower income from oil. they still have to fund those things. they have to pay for it with oil. eventually, they will have to cut production in order to get the oil prices back up. it is not sustainable at this.
david: what do you say to investors who see the geopolitical turmoil and wonder about -- how to approach it, how best to invest in light of all that? ted: this is one of the best times in history to invest in oil. there are a lot different ways to do that. the fact that oil prices are low are grading the conditions that will eventually result in higher prices because demand will go up . it is a boost to the economy. the money is going to the consumers. companies are cutting back on capital spending. first of all, eventually prices will go back up. second, a lot of companies can do really well in this environment anyway. so an investor should be taking advantage of the situation. as long as the prices are low, they will find really good opportunities. fundamentalse the are pretty strong. ted: yes. david: the meeting of the federal reserve right now, when you think about their calculus as they weigh whether or not to raise rates and the popular
opinion is that it is not what happened in this meeting, to a eigh ondoes oil wi this? ted: they have to face the fact that near-term oil prices are going to be a stimulus to the economy. that occurs, eventually oil prices will start to recover. they have to think longer-term what is going to happen. so they have to balance the whole thing and decide what to do. but the economy differently is weak right now. fed, is sitting at the would think oil prices is -- oil prices are good for what they want to do. david: thank you. next 20 minutes of the bloomberg market day, john boehner living up to his promise to clean up the barn for the next bigger. he gets the budget deal done. why is paul ryan not happy about it? jack dorsey back in the spotlight. will the new ceo have good news?
david: welcome back to the bloomberg market day. it is time for the bloomberg business flash, looking at the biggest business in the news right now. in theould be a takeover semiconductor business. microelectronics is visiting a bid for fairchild semiconductor. there is no word yet on the size of the bed. fairchild has a -- of the bid. fairchild has a market share of $1.1 billion.
prices are up 5.1% in homes. it is the biggest increase in a year. americans are not as optimistic in their outlook about the economy. consumer confidence index fell in october. the number is higher than the average during expansion. you can always get more business .ews at bloomberg.com stocks are hovering around the lows of the session. it is not just the usual suspects. they transports are also struggling today. julie hyman has more. julie: struggling quite a bit today. take a look at the etf that tracks the transports, the theer transportation etf -- recitation 80th.
and spirit, both of their earnings beating estimates. however, jetblue making a capacity forecast with reasons for concerns. there are already concerns in the airline industry with drunk has to be -- with growing capacity. ups coming out with results that mr. the average estimates. the company talking about u.s.ne -- that missed estimates. the company talking about declined. air side of transportation. david: how about trains? julie: you can find any relief there. roadrunner transportation systems, not exactly a household name. this is a rail broker. the stock is down 48% after coming out with a negative forecast and saying it is seeing waning demand for certain
segments of product, things like meat and various types of poultry. we have seen some of those n.ices wai also demand has been waning. i was e-mailing with the bloomberg intelligence our lists talk about retail demand as well. inventories that retailers have been building up, he sent me this chart. we are looking at same-store sales, comparable sales, and inventory compared to sales. this is where we certain to see inventory creep up and retail sales come down. this has been evidenced in earnings from companies like vf corporations who have talked inventory.ldup the dungeon's industrial average versus the transport. the dow is down 1.5% year today.
turn spurred -- transport is down 4% year to date. if you look at it as a predictor for the u.s. economy, underperformance for them is not a good sign. david: house speaker john giving soon to be new house speaker a budget deal. speaker boehner: the alternative was a clean debt ceiling increase without any additional support for our troops and without any entitlement reforms. so this is a good deal for our troops and for taxpayers and for the american people. david: the house is expected to vote tomorrow on a deal that will increase federal spending by $80 billion over two years and raise a federal borrowing limit through 2017. i wonder about this dealing context of john boehner's legacy. he talked about cleaning up the barn. there is a lot of cleaning to
do. how big a deal is it to get this deal than? --n: i would like to say look, boehner's legacy, he accomplished an important thing here in the sense that, politically, the last thing the republican party wants or needs heading into an election year is another opportunity to shoot themselves in the foot by either messing up the debt ceiling, having a government shutdown, all which would be a bad thing for the party. cleaning out the party is not a significant political compass meant in the short term. -- a compass meant in the short-term. it is not something that he will want in his obituary. this is my grand achievement as speaker. but given that he is leaving, he had a couple of discrete roles and he got those done by getting this done, assuming that it passes. there has been a lot more
hemming and hihawing. think republicans recognize the politics of this. they want to avoid a bad political outcome. second, it is a parting gift to boehner. and it is a welcoming gift a paul ryan if he becomes the new speaker. he will have enough headaches to deal with. he has this headache now not to deal with. the party is giving him that as he walks in the door. david: what do you think about his lack of involvement in the crafting of this deal? was, i think his attitude one of the conditions that which i will take this speakership is that you get this deal done for me. he has played this in every instance in terms of how ryan has managed his procession into the speakership. he has handled it by conserving his leverage by using his leverage, and in this instance, there is no reason for him to
get his hands dirty if he didn't have to. reactionat has the been in the freedom caucus? john: there have been some presidential candidates who have already spoken out and said should i do this. i think boehner believes he has the votes. democrats are going to give him the votes necessary. he needs about 30 votes or so from house republicans. he is going to be able to get this done. i think the amount of squawking will be relatively muted on the part of the far right. paul: yesterday, we had showing dr. ben carson with a lead in iowa. there'sll shows that out even further. john: it is a good poll. the new york times cbs poll is a real poll.
we are seeing a carson moment. the question is whether that extends now two other early states. carson has four different polls in iowa now. that a national lead and a lead in iowa, the question is what happens in your of hampshire -- in new hampshire and the southern states. someone -- there is a clear top-tier now, donald trump and ben carson. that is one of the most interesting dynamics we will see on the debate stage tomorrow night, as well as the question of what jeb bush does tries to right the ship or put a plug in the whole of the ship -- in the hole of the ship. david: what has the dynamic been between ben carson and donald trump? how is it going to look tomorrow? john: it was once very cordial.
note is less cordial. it is still the case that ben carson is not what donald trump worries about the he can afford to have ben carson win the iowa caucuses if he wins the subsequent states. if he wins new hampshire, where he has a subsequent lead. the last two iowa winners did not ultimately become the republican nominees. so he is not the one that donald trump worries about him he is more worried about jeb bush then ben carson. -- than ben carson. he is sometimes a reactive guy. he has been criticizing carson in the last 36 hours that he has before. himself.d to restrain last thing trump likes is to be set in place in any given survey. david: when you look at what jeb bush has to do tomorrow night, is it to really stand out in a crowd? he has restructured his campaign.
john: he needs some moments. the thing about these days come in the end, nobody measures your performance over the course of the night. no one measures the two heart -- the two-hour-long debate. who wins the debate? someone like carly fiorina who has a moment. that is the moment that gets played over and over again on television for the next two days after that debate. that is what you need. it is hard to script them. every campaign tries to skip those moments. but some of it has become a nation -- you have to have prescriptive moments and anticipating attacks and be ready to counterpunch and having enough spontaneity animal this on your feet to be able to seize the moment -- spontaneity and have some nimbleness on your feet to be able to seize the moment. thanks so much. plane you have to take a out to denver. john: i am on it. david: be sure to turn in -- to
million. monthly userstive -- growthtart with the user figure here. this is something that has been dogging twitter for a long time. focus has been on getting people to use the service and continuing to use a service. sarah: absolutely going to be looking at that number. the twitter has tried to redefine its audience, people still -- investors still keep closely focused on that user number. in the time since twitter has gone public, it has been surpassed by instagram and whatsapp. now five times the size of twitter. the company needs to prove that it is still a critical social the world.t impacts of course, it does, but it is a
small niche of people that use it. david: let's talk about how they have tried to redefine themselves. i've noticed the lightning bolt device.my sarah: jack dorsey has been trying to ramp up the product pace. moments is a new feature that highlights some of the biggest things happening on the twitter app. this is meant to make it easier for people who are more casual users to understand the bigger things that are going on on the platform without having to go toough pesky deciding who follow and building a base of people you have to pay attention to. this is somewhere you can go and see what is happening. that is good, but twitter still needs to appeal to people who don't even have accounts. and need to redefine it they started to do that last week. they gave a one billion people
feed tweets outside of twitter itself. that is a big number. that is an audience that they cannot monetize yet. but they hinted one day they might be able to. david: how important is ad revenue to this copyright now? i imagine they would like -- to this company right now? i imagine they would like more. twitter's ad side of the company has done a lot better than the product side of the company. at a main has been it -- adam in charge of that side. he has retained his employees and sought bigger buys. bainch as people love adam , can he keep those advertisers increasing their spend year after year to continue what is rapid growth? their sales growth has been slowing the last few quarters. dorsey has done a
lot over the last use -- these last few weeks. what do we expect to hear from him? sara: i think he will have to display in all the moves he has made, what they had up to. he has cut 8% of the workforce. he has a new executive chairman added to the board. he has a whole other company, square, going public soon. he is going to have to sort of explained to investors here is what is good to happen next. david: thanks very much. coming up in the next hour of the bloomberg market day, can the world's most valuable company deliver another blockbuster quarter? ♪
betty: from bloomberg world headquarters in new york, good afternoon. i am betty liu. we are watching apple. world's most valuable company deliver another blockbuster quarter or will there be some surprises? markets are dipping lower as the fed [indiscernible] walgreens boosts its quarterly closing. how an acquisition helps walgreens battle cbs. -- battle cvs. julie hyman has all the latest on the breaking news. julie: let's start with