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tv   Bloomberg Markets  Bloomberg  November 23, 2015 10:00am-11:31am EST

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from bloomberg world headquarters in new york, good morning. here is what we are watching -- brussels remains closed while the government there warns of an eminent terror attack in police arrested more than 20 people but the prime suspect that there's a taxes still at large. gettingies are crushed and they have not been low since 1999. argentina elected a pro-business candidate as the new president. some economic data -- existing home sales -- julie hyman has more. julie: we are seeing a decline in existing home sales larger than economists are addicted which is a decline of 3.4% but
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5.30 6 million homes. this is after a gain of 4.7% of the prior month. economists were looking for a figure of 5.4 million on an average day so it's coming in a little worse than anticipated. this is not necessarily a number that will move the overall market but i am watching the xhb which is the homebuilder etf and we're not seeing much movement. it remains higher by about half of 1%. it looks to be taking a little bit of a leg up after these headlines came out. erik: thank you. coming up come the best week of the year for the s&p 500 and stocks appear to have stalled today. surprise due to the fact we are in a holiday short week. it is thanksgiving and traders will be off friday. -- off on thursday and friday will have some activity. julie: we are seeing a little
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changed mixed market. it's a holiday weekend by intends to go down and very little change across the board with the nasdaq doing the best and it's only up 2/10 of 1%. it was the best week of the are last week and we only trading 2% below the record high for the s&p 500. we are approaching the record levels once again. terminal, you can see it's an even split of red and green. telecom and energy are doing the worst in consumer discretionary continues the winning streak from last week and materials are gaining as well. when you look at energy doing poorly, there has been this energy selloff that has been going on. it is now a baiting to some degree. we see crude lower but the rest of the energy complex has turned positive and metals remain lower. oil has been an interesting story this morning. we had a report that saudi
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arabia was saying it was prepared to work with opec and other producers to stabilize global all markets. then we had analysis saying it's a reiteration of commentary by saudi arabia last week. initially, we had oil coming up and now it is fading in the wake of that. metals are still having a rough session. erik: volumes are down in stocks as you would expect but they are not down as much on the dow. i figure that is the pfizer effect? julie: most definitely and we will talk about that in a few moments. pfizer and allergan are both down after confirming their deal is done. erik: we will be back to you shortly. right now, let's take you to the first word. vonnie: thank you. we begin in belgium where police have arrested five more terror suspects in raids across the country.
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more than 20 suspects are being held and the belgian government warns an islamic states terror is in belgium and they are in the 20th day of a lockdown. schools and subway systems and stores are closed today and we will have an update shortly. the nato headquarters is feeling the effects of heightened securities in belgium following the attacks in paris. some staff members are being asked to work from home. visiting group seven canceled. authorities saturday's raise the alert level in brussels to the maximum rating. an islamic militant group says only two gunmen carried out the attack friday on a hotel in mali. an african news agency received a note reportedly from the group. it identified the two gunmen killed at the scene. witnesses and officials but there could have been more. at our first word news and you can get more on these and other breaking stories
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24 hours or day at the new erik: thank you. let's go back to our stop -- our top story -- brussels remains on lockdown for the third day as authorities on for more suspected terrorist. the brussels bureau chief is there. why don't we begin with what is the latest? we are looking for developments to find out if this one individual has been apprehended but that's not the case? >> that's correct, with the raid today and the detainment of five individuals, none of them were knowrime suspect who we was in the attacks in paris and then came back to brussels. have is the national security committee is going to meet today. now on we be meeting expect a press conference from the prime minister when that is
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over in about one hour or so. then we will see whether they will continue the lockdown they have and whether the subway will continue to be closed and the shops and of venues closed or whether they will see if the terror threat has eased a little bit. with the prime suspect still at large, it seems unlikely. erik: what is it exactly that the belgian police or authorities are warning of? is it an attack that would be similar in nature from paris? that's why it is so scary. they say they have precise information about an attack just like the one carried out in paris on november 13. talking about attacks on cafes and concert venues and sports arenas. it's exactly that kind of attack they are worried about. that's why they have shut down
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the subway and they have shut a lot of the downtown area. at the same time, the trains are running ok in the euro store from london to brussels is running ok and the airport is operating normally. the higher security in these places has not shut everything down. erik: european leaders continue to talk about steps they can take in sharing intelligence. of president of france and reddish prime minister have been a communication so what have we learned? mr. cameron went to paris this morning to have a talk with mr. hollande. he is trying to build a coalition in paris to strike at the islamic state in syria and david cameron told him he will go back to the u.k. parliament and try to push through the regulation in order for the u.k. to join the airstrikes against the targets in syria. this is a big step forward for david cameron who had been reluctant to go to parliament with this proposal before.
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now the situation has changed with what happened in paris. francoisile -- hollande will meet with president obama tomorrow and then angela merkel on wednesday. erik: good speaking with you and i hope everyone else in brussels remains safe. let's look at commodities slumping by one measure to the lowest level since 1999. below its perch on price and has not been as low in 16 years. dan davis of barclays is with us to explain but we will start with javi in london. er blanc the saudi's have been making noises about cooperative with other producers in crude supplies. on the strength of that, read crude rose to almost $45 per barrel. now it's back almost unchanged,
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what happened? indication of how the market is. cabinet hassaid the established the oil situation and the saudi arabia was ready to cooperate with opec and other countries to stabilize the market. immediately, the market reacted and it took a 10% climb. brent prices rose by about two dollars. saudi arabia has been saying the same thing for the last two years. it implemented a policy of market share. this was not new and did not indicate a change in saudi policy and the market quickly reversed losses. it's an indication the market is short and hedge funds have been that thing on the downside of the market. opec meeting in december indiana, we will have a lot of volatility going forward. technicals and
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positions or is there skepticism about the fundamentals that any effort to cooperate on supply levels may not see the necessary follow-through by any individual opec members? >> you are absolutely right. i think the market is skeptical that even if there is an agreement to cut production, who will do that? has followedabia through any production cuts with other members of the opec cartel. indicated there is no intention for them to join. if you look at other companies, in 2008, is to stabilize oil prices, mexico or norway are making the same noises. we don't see any need for production cuts of this moment. erik: let's raise the same question with dan as a concerns copper but also other metals.
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to what degree is the continued decline a matter of positioning or technicals. are there more fundamental reasons for the continued slump? >> i think that's a great question because it cuts to the heart of the matter. the tactical position is important. what is really going on in copper and across the base metals is a destruction of fundamentals. the major development that have happened is one in which you are familiar with, the ongoing slowdown of china. china has driven the market for base metals which is 45% of demand. as china slows, the demand for these markets slow as well. we have also had an important story coming out of the carpet market -- copper market. which is owned by chile and represents 10% of global supply announced they would not cut production. we have a market that is oversupplied where demand is slowing down in which we see no
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foreseeable supply cuts in a horizon and we have had this key producers say they are not cutting production. have you it target as to how low we may see copper go? at barclays, we forecast quarterly averages so we don't have price targets. we say this is what he will average over the quarter. in august of this year, we put out the forecast that copper had room to go down and in fact we saw the price move in alignment with that. the fourth quarter of 2015, we forecast prices will average pound and.20 per $4850 per ton. if you look at the average for the three months of the fourth quarter, we are close. there have been a few forecasting that oil may
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drop into the 20's. are these voices calling for continued declines growing? sachs isnly, goldman the most bearish in the oil market. they predict we will see prices in the low 30's. others think that prices could go to $20. the sign is that more and more people are believing that prices will remain low particularly when you look at 2016. they thought oil prices would recover in early 2016 with the good weather we were having. is probably the biggest change, not only how low oil prices could go but also that the recovery seems to be postponing to at least the second half of next year.
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erik: it begins to feel like capitulation. lastoke with boone pickens week and he had been calling for oil to have $75 by the end of the year he says that forecasted no longer valid and he is out of the oil market right now. we thank you. now to breaking news -- elliott management reports a 6.4% stake in alcoa which is more commodities news and elliott in particular is seeking a constructive dialogue with management. it believes a spinoff will create more value for shareholders. activism is alive and well this thanksgiving week and we will see you in a couple of minutes ♪ area
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erik: good morning once again. it's time for our market update with julie hyman. julie: we are starting with the deal we mentioned earlier, pfizer and allergan finally after weeks of discussion, potentially the deal is getting done on the companies are coming to an agreement. $160 billion which is a record industry3e drug . pfizer and allergan are trading lower but there are a couple of things behind the price action. one would think that at least allergan which is getting $363 per share would be trading closer to the deal price but there are a couple of questions investors are asking. there is thisone would think tht overhang with u.s. treasury making noises about cracking down on tax inversion deals because this will be structured so that technically
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allergan will be buying pfizer so pfizer can get tax benefits from being domiciled in ireland. there are also questions about a plan to split the pfizer business once the deal is done and how it will affect the timing and how it will affect the structure. that is what is up for discussion this morning. there is other drugmaker news --. ellankrott is a stock that has fallen along with valeant. the company's earnings seem to reassure investors to some extent that sales of its top drug to treat things like lupus and breathing issues in critical infants came in above estimates. you can see the shares bounced up i about 8%. the company also said there are a lot of assets it is looking at for potential m&a activity in
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its balance sheet is strong enough to be able to perhaps make those deals. i wanted to look at gamestop. are so notable today was shares down 14%, the worst-performing stock in the s&p 500 after the company came out with earnings that missed estimates. the forecast is also below estimates and it seems as though they are lower than expected sales of software and hardware. it has had some delays in store openings that have hurt its numbers. erik: thank you. those are some of your moving stocks. hour, cant half potential terrorists find an easier way to enter the united states? some argue the visa waiver program may be a threat to national security. argentina voted for dj john sunday, electing the center right election leader. we will look at why could look to a big change in doing business in argentina coming up
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. ♪
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erik: you're watching "bloomberg markets." it's time to look at some of the biggest business stories making headlines now. diebold will maker will buy di build its -- will buy its main competition. deal for petco. canadaital partners in a pension plan investment board
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have agreed to buy this pet supply chain for $4.7 billion. inwas taken private way back 2006. if you want to five for fle free in first class for the rest of 170 millionust put dollars on your american express card. one chinese billionaire did this print when the sale closes on this painting, he will put it on his amex and he has the invitation only black card. get more business news at new questions are being raised whether the united states should temporarily freeze its visa waiver program as a means to increase border security . that is something jeh johnson says we should not be doing. >> the visa waiver program is important to lawful trade, travel, commerce, it's a popular
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program that people use virtually every day. there are security enhancements we have made and we should evaluate whether more is necessary and i am happy to have that conversation with our friends in congress. erik: the backdrop to this are the terror attacks. for the a manhunt suspected mastermind. alex wayne is with us from washington. let's talk about the steps the u.s. government is taking in its effort to prevent a terrorist style attack here. i saw the new york city police just last night on 60 minutes saying in some cases, u.s. authorities remain surprised we have not seen anything of that nature since 9/11. record ofhere is no anybody trying to take advantage of the visa waiver program and launch attacks at least not
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since 2001 when you might remember the infamous shoe bomber, a british citizen, was stopped midflight trying to light up on him off in his shoes. he is the last guy that i am aware of that tried to get over here from a country eligible for the visa waiver program. lawmakers are giving it some fresh thought now. you might remember it was strengthened after 9/11. they made new requirements for a visa labor countries. you have to have a readable passport and now you have to toe a biometric passport provide additional security in that program. erik: based on what you're are saying at 11 has to imagine, given the fact this program has been in place and strengthened for the last 14 years, there are no parallels to be drawn between the visa waiver program and what appears to be lax oversight in
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the resettlement of migrants given we have evidence of two of the suspected terrorist may have passed through greece. >> what's going on in europe is different from what's happening in the united states. europe has been hit with a flood of millions of migrants who are forcing their way over the land borders. the united states, it's harder to get to our country. fortunately for us. the current refugee system here, syrian refugees have to undergo nearly two years of examination. erik: i'm afraid we have to end it there but we will be back after the short break. ♪
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erik: this according to people familiar with the matter.
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marking -- exchange market, if it is something we see in the equity market and he is expanding his oversight as we know. this is his latest target. he is investigating possible spoofing in a foreign exchange. let's go to the first word. quinn: we began with david cameron it. he wants the u.k. to join the fight in syria. he met with the french president today. he will ask parliament to elaborate to join us-led airstrikes. >> it right to take decisive action to stop terrorists where they are threaten the lives of innocent civilians. u.k. will do all we can to support our friend and ally france to defeat this death cult. quinn: he will meet with president obama, anglo merkel,
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and vladimir putin. vladimir putin is in terror and. he will meet with iranian president and the highest authority. the two countries will discuss the civil war in syria. the fight against islamic terrorism and cooperation on gas and oil. hemisphere, here -- there is a missing out malaysian airliner. southwest australia, only one piece of the plane has been found since it crashed march last year. it is military in the south china sea. protect theto islands. challenged the chinese claim but it's part of their territorial waters.
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there was a crash of a u.s. military helicopter. it went down. it is not sure which service the victims along to. let's look at our first word news. you can get these raking stories at the new erik: thank you very much. let's talk about argentina. he is promising big changes for argentina. leftist12 years of populism. potentially big implications for the argentine economy. welcome. i am dying to talk about the holdouts.
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i spoke with the bond investors who did not participate in argentina's restructuring. this.begin with maybe i will begin with you. what is the potential for a quick deal? when you're the new government is anxious to put this behind them. >> the holdouts have indicated they are willing to negotiate they were trying to get to the table in 2010. credit thatr been a the holdouts wilma go sheet. -- going to negotiate. the difference was if they wanted to resolve the issue. obviously, they were going to do it. it's going to be a much faster process. how it gets done is a mystery.
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there are three or four ways you can do it. you can do a big swap or a new issue. it deals with all of the holdouts. we don't have to reinvent the wheel. they could start negotiations. it takes a strategy to go with it. >> the other piece you have to remember is part of the mandate was not about just fixing the economy, but some domestic issues, crime been the biggest and inflation. there is a willingness in settling. you need to do a couple of things domestically first. i expect they will probably focus on how we bring in foreign investment to ease the inflationary pressures and imports of a massive
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devaluation. that is going to happen in four or five devaluations? the argument is for one massive devaluation. you are one and done. side, a 50% devaluation has massive domestic impact. he's got to stage this, including bringing foreign investors. notadministration was willing to settle. they said they were. the terms were the 2010 terms. remember, the first right-leaning president since 1983. policies, wet his are trying to do an overlay on domestic, he's closer to a reagan republican. i think that's positive.
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i think he understands international capital market. he wants a settlement. i do think the markets here are going to get ahead of reality. that does not mean we are talking about years. we are talking about quarters. erik: what hearing out of monasteries? -- minus aries? >> in order to take the massive steps, they will have to get born and direct investment on the other side. that is very important. i have interviewed him. he is the only politician i've ever met that answered my questions. that's saying a lot. i have interviewed all the other candidates. he answered all of my questions very directly. that is really helping to propel this. we are hearing answers for the first time in many years. >> he intended on resolving the
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issues, he is also boxed in greater --. erik: i spoke with a banker over the weekend. they would love to be hired i argentina. it'sthis person told me is going to get very busy very quickly. suspects -- once there is a president, they will know who to talk to. they will know who is in a position to start making decisions. >> after the first round, it became clear. the banks had to do a u-turn going into the first round. covering.ave been
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now, you have to wait. we have heard some rumors that he may take it on himself. that would be kind of impressive. he may direct the whole things himself. if he understands the issues, he may be able to understand the process. it's important they send the right person to engage with the holdouts. it's been better for the last decade. i think the banks, it's a balancing act. the banks have the best relationships. i would be sure you can get three or four banks involved. >> i think that's important. we saw several banks try to skirt the u.s. court system to
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help argentina. area problematic there is no lack of interested up anchors. there is no lack of interested capital market investors. we have more investors in argentina then you have seen since the country became democratic. on bringingcus companies down. getting a deal done is quite easy. i think it will happen. you need to offset some of the domestic pressures that are going to happen. one thing to keep in mind is we will see a tremendous amount of supply hitting the market once they engage with investors. i think the really big question
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is are they going to be meeting all of the other demands that investors have aside from negotiated with the holdouts. they may not have been as involved. they don't want to just see negotiations holdouts. they want to see the other hard things first. they are going to have to do way more. erik: josh mentioned there is a risk. when you look at the price of argentine bonds, trading at a considerable premium, what do you say? hans: there is still a lot of room. it may be rich in the timing. there are a lot of expectations. if you look at the discounts just before the first round to eight points of that is the
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crude interest. that's a decent rally. i think that's fair value. for people to -- one of my concerns would be there is so much corruption in the administration. ofre are a lot of rumors just ugly things around the bond exchanges. you have allowed the judiciary to be independent. there could be some nasty noises coming out of argentina. goes to the sale of derivatives. funding and investigation right now. there was a police raid to get information. i think that's a good point.
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what skeletons are going to come out? does that tie their hands? it's not an outcome. erik: gentlemen, thank you so much. thank you. making tanks safer, is the federal reserve doing its job? stay tuned. ♪
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erik: mark barton is in london to talk to us about stocks. what's up? mark: commodities according to
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the index are at a 16 year low. moving withs are the price of oil. what happened to the euro today? interesting news from the eurozone on that manufacturing activity. investors are choosing to focus on the negative side, input costs barely rose. put costs fell for the ninth month is here. appears before you a k -- u.k. lawmakers. the will he say about economy? the market is saying sometime in 2017,ginning of
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economists are saying next year. they are miles apart. they're looking forward to it. that is mark barton with us from london. stocks of turned green. let's go to the nasdaq with abigail doolittle. stocks are trading flat. we have been watching too struck straight higher. one is amgen. toy have a contact distribute cvs. this is playing out exactly as he expected. this sort of deal could be the key going forward. there could be a declining growth model into 2016. that has been frustrating to amgen investors did shares are flat on the year. turning to another winner, in arab red shares are popping
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after the upgrade -- stock was upgraded to buy. they are benefiting from chipotle's issues with e. coli. his new price target of 210 suggest the stock could move up 20% from current levels. it's similar to amgen. this has been volatile and sideways for the year. it is now up slightly on the year. erik: thank you. that is abigail doolittle. is it time to ease up on small banks? the bloomberg team talked to daniel. this is what he had to say. think we've done everything we should do. we need to take a look and see if there is some way to simplify some of the regulation in place. me is michaelh
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mckee. it's an ongoing question, how the fed deals with regulating small banks. he was pretty straightforward. he said there is a window of opportunity to ease up. michael: the question is not just a fad, but the other bank regulators. how much of the requirements for large banks that could bring down the financial system. banks work hard. reporting regulations in particular are so onerous that it costs the banks a lot of money. that may affect their ability to make loans. it's coming out of their profits. it's been a battle since they started writing the regulations over whether small banks should be subject to the same kinds of rules. the regulators are saying we can
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probably back off a little bit. erik: why is there even a debate at all? michael: the system itself came under fire after the great recession and the credit crisis. dodd-frank was written as an omnibus law. the regulators were given the right to write specific regulations. looking at they are the benefits and effects. it's not a one day we switched on the light kind of thing. it's taking a long time to figure out. regulationuch more and capital requirements might they be subject to? introduced the total absorbing capacity. he suggested there might be even more ahead. i wasn't playing it for you. we can see the outlines of the framework that will be in place. that framework is not fully implemented.
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we still have to do the resolution planning ross says. we have to make sure the banks can be resolved. we have some liquidity regulations. implemento going to the higher capital charges that are applicable to those largest banks. erik: he talked about shared counterparties. why is that so important? to londonou go back whale. are they trading with and what are they holding? you, thenn't pay maybe you can't pay the next round somebody. there has not done enough disclosure after the lehman brothers failure. the fed got together a bunch of traders from the various banks and they said they did not really know what everybody held. that was a problem going
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forward. are trying to increase disclosure. they are trying to get more information to make sure that if somebody has a problem, the rest of the system is aware of it and to do something about it. they're trying to do is make sure everybody has enough regulatory capital that they can absorb more losses. thanks very much for taking this opportunity. it's a rare interview with a fed governor. every compliance department was listening very closely. everybody, consolidation in the travel industry has been enough. we will talk to the former president of next. ♪
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erik: the travel industry is in the merge -- middle of merger fever. consumers see dozens of sites. they are all related and give you the same deals. welcome. there has been a lot of consolidation. we mentioned the expedia deal. how much room is left for companies like yours to compete with expedia, which has become a giant and airbnb which is a giant in the other? : there is still plenty of room in the travel category. it makes up less than 10%. fore is so much room serving the needs of the fastest-growing travel category, which is the independent hotel as well as millennial travelers. some of those hotels are part of
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the home away network. cheryl: no. of i'm confusing it with another site. what i'm as theyo get at is to, isare they not going the inclination not to elbow out the likes of your company and others that are trying to capture what's left? cheryl: some consolidation is logical. they are competing with each other. once again, that allows for new entrants to come into the space and serve the needs of new travelers. it creates disruption. where do you think they are going to look? cheryl: i could not tell you.
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standpoint of thinking about how they continue to consolidate, if you look at the two companies, expedia has become a travel store. it was to serve all the travel needs across the board. millennialk about is travelers who are the fastest-growing category. serving their needs. it's a very different experience. are looking for unique experiences, on-demand service. that's what we bring to the category. erik: we thank you very much for being here. millennials and a way to get into the independent hotel. a different kind of consideration in the drug industry.
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erik: it's 11:00 in new york city. markets." "bloomberg
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from midtown manhattan, good morning. this is what we are watching. brussels remains locked down. police are searching for suspected terrorists. the government warns attack may be imminent. commodities prices have not been this low in 16 years. is the market overreacting or ? pfizer and allegan are combining for a transaction. we are 90 minutes into the trading day. let's head to the markets desk and julie hyman. julie: stocks returned more positively. we are not seeing big gains by any stretch. firmly in the green. it seems to be individually
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stock driven versus a big macro drive today. alcoa is helping top the list. they are increasing material stocks. said hadanagement 6.4% a six point 4% -- stake in the company. alcoa is planning to split up. it will be interesting to see what elliott might be encouraging the company to do. it doesn't seem to be a particularly big news headline. amazon stock has been trending up going into the holidays. today, at once again is trading at a record. it's one of the biggest contributors to gains in the s&p. tyson foods is doing the best
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percentagewise. they are up 9.5%. the strength of the chicken business that is helping things. the beef business continues to struggle. part of what has been helping the company is the falling price of chicken feed. erik: how about an update on commodities as well? commodities.the julie: we're seeing some volatility in energy prices. the country officials indicate in saudi arabia they are willing to team up more with opec and stabilize global oil prices. it's going to be a reiteration of commentary. there was a spike in and they came down. it seems as though they are recovering once again, half of 1%. i wanted to check on the dollar
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as well. see an inverse trade between the dollar and commodities. the dollar is rising also. we talked to the federal reserve. they are concerned about low inflation. we also heard from the san francisco fed president. there is a strong case for a rate in peace. take a look at treasuries. the tenure in particular is unchanged right now. we do have a lot of treasuries coming to market. erik: thanks very much for the up date. here is the first word. arrested 20ave terror suspects and belgium. they can't find the leader. the city of russell's remains locked down. schools, stores, and the subway are closed. a error -- paris style terror
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attack is imminent. david cameron once the u.k. to join the fight. he met with the french president in paris today. he says he will ask parliament to allow britain to join airstrikes against the islamic state. >> it is right to take decisive action to stop terrorists threaten the lives of innocent civilians. the united kingdom will do all in our power to support our friend and ally to defeat this evil death cult. increaseromised to counterterrorism cooperation. the french president will meet with president obama, and/or merkel, and vladimir putin. john kerry is heading to israel. he will propose ways to improve conditions for palestinians. the surge of violence is in its second month. an israeli woman and three palestinians were killed yesterday. two palestinian teenage girls
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were killed. they stab demand. -- stabbed a man. americans say they are as excited about the iowa caucuses as they are about the new star wars movie. they are still 10 weeks away. star wars opens next month. that's a look at our news. you can get more on these breaking stories 24 hours a day at the new i'm courtney donohoe read desperate --. erik: i might be more excited about the star wars film that i am the iowa caucuses. the belgian national surety can -- security conference will hold a press cap it's. the city remains on lockdown. we are in brussels. let's talk a bit more, jones.
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you gave us a very good update. be learned from this press conference? jones: the big thing we are looking for is whether or not they ease the restrictions on the subway and on the businesses in brussels. that theunlikely terror level would be reduced at this point. the main suspect they have been searching for in the raids across brussels and belgium is still at large. there is still that factor out there. there is a threat. the prime minister said a precise and eminent threat, they are fearing something very similar. everybody is scared. one of the things they are going to do this time, they will talk about the level read we will
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have that. be checking on that. press conference should be anytime. there are three suspects were taken into custody. they have been charged with the paris attacks. they are helping to plan them. 21 who have been apprehended, we don't have any details. we do know there is a prime suspect. know they came back to brussels. he was seen by the police. he is still a large.
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erik: thank you very much. carl icahn is turning up the heat on aig. he may be trying to shake up the leadership. maintaining an active dialogue with shareholders. they plan to take action and update investors. the aig drama. david, you about an opportunity to look at what carl icahn had to say. what impact is this going to have any near-term? david: it's going to make for a tizzy holiday -- busy holiday. you have one of the world's most prominent activist investors ratcheting up the heat.
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they may be accelerating changes. erik: john paulson also has a plan for aig. to what degree are they at odds over what to do with the company? how similar are those plans? >> they agree to the heart of the operation would not be as systemically important. complete --nce a paulson says maybe we could do less. we could strip down to that. erik: carl i want is a equity investor. you look at credit. if they are successful in getting the company broken down,
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what does that mean for creditors? david: whatever outcome there is, it will not be positive. it could be neutral or slightly negative. i don't think it will be awfully negative. these are insurance companies. promise, a financial mess to be there in the future. essentially they are selling their credit worthiness. thatan engineer strategies would cause a credit rating to drop little bit. you can't let them drop over. the outcome for bond investors is neutral to slightly negative. eric: how is aig holding -- handling the pressure.
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we're going to have constructive conversations with all shareholders. in be hard for credit ratings. just splitting up into three does not deal with all the regulations. that is on a state-by-state basis. that, he says he would still sell a lot of assets. fastder moving forward how they are going to see those developments. will they choose to sell something faster or bigger. if you put yourself in carl icahn's shoes, doesn't a breakup make sense? david: i think the change makes sense. the middle ground that paulson strategy that the
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may make the most sense. it may be the most feasible. guyve got a very profile saying your returning single digits. your top competitors are in the double digits. you need to do something. you've done a great job of fixing aig. forward and move boost your shareholders. they need to accelerate that. pragmatic tomore probably sell its and pieces of aig rather than to a three-way split and figure out how you are going to portion that. carl icahn is implying. who could run aig? >> there are a lot of people who
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have been at aig for a long time. some people are saying he would he a really wonderful candid and you want the person in charge of restructuring to be at the helm. thank you very much for being here. david, always good to have you with us. miss had to break, don't an interview with the secretary of health and human services. it's at 2:00 right here. ♪
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erik: let's take you right now to julie hyman. she is going to bring us up to speed on some stock movers. julie: i want to focus on some companies that are being affected by analyst ratings. tradings shares are higher. after their investor day, they represent the best risk reward in that particular industry. they have a top performance. shares are up by four and a quarter percent. we've got golf pro continuing its recent incline. the company has been on a losing streak. they are down another 5.7%. says his peers to be tracking to the low end of the forecast.
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this tracks with other commentary we have as of late. conducting been inventory in stores. there is relatively flat store -- sellthrough. if you look at my bloomberg terminal, this goes back to 2014. $24 is the ipo price. we have had the shares decline. they have gone below that price. downgraded over at deutsche bank. that is still above is right now. the shares are down percent. part of it has to do with valuation. that type of advertising will likely continue to decline.
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erik: thank you. that was julie hyman with some stock movers and analysts commentary. these two companies are joined together in a $160 billion merger. the plc is key. company founded in new york city. they are using it corporate domicile to ireland. if they can pull off an inversion, who is next? -- followsz carriers this. theant is trading way below price. it's no supplies that this happened. we've been gearing up for it for a couple of weeks. erik: a lot of what's going on is investors are disappointed in
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the price. i think they thought they were going to get 400 a share. there is concern and i'm not sure if the concern is legitimate. treasury is going to pull some rabbit out of a hat to block the deal, to make this inversion deal not work like they did last year. would think those are the two reasons why the share prices are trading below. i don't know if you have any thoughts on the lack of strategy. cynthia: this is not an deal to cut necessarily. they have a lean operation. that is not with julie happening. that is obviously the logic. how do we bring these combined organizations, they are coming together. what shareholders might be looking for is operational improvement.
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if that isn't what the deal is for, what is the deal for? cynthia: he tax thing is very compelling. allegan's tax is closer to 15% levels. the tax component is a very large part of it. when you are an irish company, you don't have to pay taxes on overseas profits. that alone is very huge. that is the structural argument. >> they will combine tax rates. the cut will be 10%. that's a lot more money going to the new company. you will start to see huge advantages that will start rolling up. that's when they will be able to sell off their generics business
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which is pretty lucrative. erik: you mentioned there might be some concern among investors that the treasury department to do something. it's very clear based on what we just heard, congress needs to act in order to prevent further inversions from happening. >> i will think anybody should have any faith the congress is going to do nothing. i don't think republicans want to do anything about this. i don't think we will see any changes in 2016. erik: they want tax form and that's not point to happen anytime soon. this is anact enormous inversion, this is gigantic. is there any talk about who might be next? cynthia: it's hard to see that inform a right now. he is not interested in a transaction for inversion take. he has not looked that
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direction. you are looking like russell companies have to very large deals. i do think that's in the mentality of some of the companies that are in the position to do this now. maybe in biotech you can see it more. i don't see companies like that doing deals like this. >> i think j&j would struggle to do this. it can only be done if you're not a name people know well. pfizer is a common name in new york, but i don't think most consumers talk about them. j&j is a very well-known name. it's unlikely they would ever do something like that. erik: thank you both for coming. russell's remains on lockdown. we will bring you the latest. that city is on the highest
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alert. ♪
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erik: are moments away from the european close. mark arden will be with me from london. we are going into the most important global news stories. i am looking at european stocks. most individual markets are down. mark: you just completely spoiled my narrative area i have been saying how stocks have fallen. engineeredt to do i this sudden change so you would have to think on your feet. mark: the stoxx 600 is falling. that was the best week in a
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month. do you know how important your role is today and about 25 minutes? we will get to atul of the charts. erik: i am thinking about how i could possibly be helpful in this endeavor. we are looking at the manufacturing and services industry within germany. i think i will give you some technical analysis. i know you love your charts. i will be looking at the bloomberg commodity index. welcome aboard. i will see you in a second. european markets are set to close in just a second. stay with us. ♪
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to bloomberg back markets. r.i.m erik schatzker. it is 4:30 p.m. in the afternoon in london where trading is just finishing up. we wrap up trading over the next 30 minutes.
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mark: european stocks retreating from their highs. the european close starts right now. ♪ erik: we will be taking you from new york to london to brussels in the next half hour. at the chartlook just in case it floats tiger. he threw me a little bit we talked earlier about the index. we rose to a three-month high last week it had the biggest weekly gain in over a month. it looks like it will finish the day lower. the big movers today were commodities. the bloomberg commodity index fell from a 19 to


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