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tv   Bloomberg Markets  Bloomberg  September 26, 2016 2:00pm-4:01pm EDT

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vonnie: we are live in new york. we are covering stories out of san francisco, germany, and saudi arabia. incks almost every scene their monthly advance over the session but bonds are on the as investors search for a haven before tonight's first presidential debate. wti inching closer to $46 a barrel on developments out of algiers. haven before tonight's first presidential debate. saudi arabia has offered to cut production. and anticipation could not be higher as donald trump and hillary clinton share the stage tonight in the first presidential debate. a new bloomberg poll shows the candidates are essentially deadlocked. markets close in two hours. julie hyman more on deal chatter around twitter. now disney may be one of
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the bidders. disney is said to be working with an advisor on a potential bid or twitter according to people familiar with it. disney has $5 billion in cash. heard paul sweeney talking about the strength of its balance sheet. , as we, salesforce.com have been talking about, in potential bidding for the company as well. twitter has been lower today, downgraded by oppenheimer, asking questions about the price that twitter could fetch in a deal. seeing shares move higher at the moment. disney, on the flip side, is moving lower. seeing shares movea little legr on the session with the broader markets, down 1.6%. we will bring you much more on these headlines in this potential deal. in the meantime, we are seeing a sellout today, stocks hovering
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around the lows of the session. we had a selloff in european banks that spread to the u.s. we also have concerns about global growth persisting. generally a risk off by us to the markets today. we are seeing the biggest two-day loss in the s&p in more than a week's time. in the meantime, bonds and yields move lower. nearly a three-week low on the 5-year note. the fear factor abroad is boosting the so-called haven demand for treasuries. at the shorter end of the car, a auction. opti u.s. shares are trading at a record low as well, as they did in european trading. 22% drop in shares on speculation that may have to raise more capital.
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financials are also feeling the pain today, one of the worst performing groups. of 64 stocks in the financial index is up on the day. if you look at some of the losers today, here you have citigroup, bank of america, suntrust, comerica. it is not just the large-cap banks, but the regional ones are also caught in this downdraft. david: thank you. now let's get a check on the first word news with mark crumpton. mark donald trump looks to apply his new campaign discipline at tonight's debate. he and hillary clinton face off at hofstra university in new york. in recent weeks, trump has risen in the polls. in a new survey, the two are in a dead heat with 46% each. trump leads when third-party candidates are included. debate here onhe
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bloomberg television beginning at 8:30 new york time. includes pre-and .ostdebate broadcasts twitter will also live stream the bloomberg broadcast. next week will be the vice presidential candidates. mike pence and tim kaine will debate on october 4 at longwood university in virginia. tents says he is holding mock sessions with wisconsin governor scott walker. also says he is doing a little bit of studying and plans to take the weekend off to prepare. debate yet on kaine's prep. teachers in chicago have voted overwhelmingly to support a strike. 95 percent of teachers union members voted in favor for a strike. the earliest date for that walkout would be october 11. stepbia is taking a big today toward emerging from its long nightmare of bloody
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violence. the government and the country's largest rebel movement will sign a peace accord after four hard years of negotiations. hasa's conflict killed more than 200 20,000 people and driven an estimated 8 million from their homes. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. vonnie: now to fixed incomes. treasuries yeldon the lowest in two weeks now. investors are paying more attention to u.s. politics. the rallyalso signs in bonds is about to fizzle. joining us now is kathy jones. to a more cautious stance over the past fewvonnie:. something has got to give.
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either we will have a safe haven bid that keeps treasuries strong, or we will go into a -- a morenvironment risk on environment where treasuries selloff and riskier bonds continue to rally. right now, we have this extraordinary year where everything has moved up a lot. total return on 20-your treasuries is of double digits. high-yield bonds and emerging-market bonds, incompatible trends. what do you read into that increase across the spectrum? >> it is a little more common in the last of the years with all the central bank intervention. but to have the long-duration bonds doing so well, safe haven bonds, at the same time that you are seeing the riskier bonds do well, moving to valuations we have not seen for quite some time, it doesn't seem to me that that can last. vonnie: let show the audience a
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picture of that. see the amount of returns. it has been in every asset class. where is the most vulnerable? >> two places where i would be pretty concerned. one is in high-yield market. defaults are rising, fundamentals are deteriorating as the market is rising in valuations are getting rich. i would be cautious there. international developed market bonds. how much more can central banks push those yields down? if you buy a bond at a negative yield, you want to sell it to somebody at an even more negative yield. david: duration wise, what is attractive to you? 25staying in the three-year your area.
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the curve is really steep there, so you get a maximum amount of return for the unit of duration risk. i would not go beyond seven years as an average duration. vonnie: the bank of japan is moving things around for the u.s. yield curve, too. what kind of impact do you expect with the bank of japan now targeting the zero rate for the 10-year? >> we have seen yields move up 30 basis points from the lows, based on speculation that japan was going to make this change. if they succeed in keeping yields above zero, which is debatable, then they will probably live yields and most sovereign bond markets. not hugely, but the idea that they could go to ever lower debts is now diminishing. the debate tonight, 9:00 local time.
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to what degree is the election went on the bond market right now? >> it is a difficult one to draw a straight line between the bond market and the election. recently, aseeing, it gets a little tighter, there is a greater degree of uncertainty. you might be seeing people move more toward a safe haven bid. the secondary question becomes, both candidates have endorsed the idea of more infrastructure spending, government deficit spending. what impact will that have down the road, assuming they can get something through congress. this morning, talk about tips getting more attractive. recommendingou be people move their money? we like tips. we think the breakeven rate of
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inflation that you need is still well below the 2% that the fed is targeting. investment-grade floating-rate notes, for short-term money, if the fed raise rates as we expect , the income should adjust up. we like investment grade corporate bonds. we don't think they are extorted narrowly undervalued. we think they are fairly valued. they yields are not spectacular, but in the intermediate term, investment-grade high quality bond should do ok. vonnie: kathy jones, thank you. david: one of the biggest banks in europe is in the fight for its life. what is next for the bank and the industry. this is bloomberg. ♪
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vonnie: this is "bloomberg markets." i'm vonnie quinn. david: i'm david gura. wall street would have to come up with billions of dollars in additional come at all in a revamp of the fed's stress test. the change would raise the minimum capital targets each back need to get a passing grade. they say they could also scrap parts of the exercise that lenders have criticized. extend tould not the next round of tests here and merrill lynch has been fined $12 million in an investigation into mini flash crashes. the investigation found that they cause 15 market disruptions over two years by sending erroneous orders.
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that is your business flash update. vonnie: deutsche bank and its fight to survive and thrive. it will be keeping one eye on berlin, the other on washington. that is where u.s. regulators are considering a $14 billion fine on the bank. should that happen, a synergy -- a senior german official says do not count on german citizens for a bailout. dakin campbellis who covers banks. a chart puts the market caps of citibank, jpmorgan, and deutsche bank in perspective. you can see deutsche bank is really flailing. at what point does market cap become an issue? >> it's a good question.
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the $10 a share market is something that everyone looks at . they looked at it with lehman brothers, bear. at some point, this feeds on itself. it feels a little bit like it is beginning to feed on itself now. there would be some who would argue there is a lot more to come on this, or it could get worse. we will have to see. deutsche bank has challenges. david: how important is the veracity of this report? the last time you were on, we highlighted the doj settlement with deutsche bank, which they walked away from. what happens if there is a settlement with the doj? >> certainly, they would like to see the settlement be agreed to, the bank be able to put this behind them. the question is how big will it be? at soc gents -- one
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has said 5.4 billion eurosn has said 5.4 billion euros is threshold. anything lower, deutsche bank should have enough money to pay for it. is one reason why shares are down so much. anything higher, they may have to issue shares. that is one reason why shares are down so much. david: have the parties responded to this article? issue new shares at a much reduced price. that would be bad news. nobody thinks it will come in at
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14. the question is where it will come. i was having a conversation with a colleague and said maybe pick the middle, 8 billion u.s. dollars may be a place to put it. that is still more than 5.4 billion euro and i will not do the conversion, but that would be about seven billion dollars. anything higher than that, deutsche bank would likely have to issue shares. the threat of this litigation is so central to what they are trying to deal with. what are people saying about how much time they have to figure this out? good question. in reference to the last question you asked, deutsche bank so far has said that we are not going to issue shares, that's not on the agenda. n, we thought, six months ago, thought he had six years runway, but with the performance
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of the stock price, it looks like he is starting to run out of time. i want to show the viewers what it looks like now for deutsche bank. 2006, during the crisis, they were a lot higher, but creeping back up again. thanks again to dakin campbell. david: still ahead, how spotify is trying to perfect the playlist and creating careers or musicians in the process. this is bloomberg. ♪
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david: welcome back to "bloomberg markets." new music can be overwhelming, but spotify thinks it has found the answer. we profiled the man behind their
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weekly discovery service. the whole issue with streaming music is that you can listen to almost any song that has ever been recorded immediately on your phone, but it is too much music, it is overwhelming. the samele listen to stuff they have been listening to, and how do you listen to new music? spotify has come up with a solution. they recommend new music every week that you may like. a lot of these recommendation you to stop -- i have heard the stop, i know this before. it is like the old amazon, if you bought this, you may like this. it is different, in that they are recommending things via algorithms, not just some guy with great taste. >> to be fair, amazon uses algorithms too, but they are introducing you to music that you are unfamiliar with. where they system
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pay attention to what you listen to, and they have this database full of music, analysis of music on people's playlist, how they listen to it. how manyke song a, people put song b next to it, and if you have not heard song c too. you may like it, they have a pretty good database to draw from. it is the discover weekly service. they do it once a week, they do it on mondays, and it is a curated list. >> that is the funny thing. i mentioned this in a meeting and a couple of people came up to me and said, i love that service, this is why i have stayed a subscriber. i have not even looked at spotify in about a year because i had joined apple music and had done seen it before. it is kind of amazing. they add a couple of songs,
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covers from artists that you like. know you like this, so you may like this stuff. it is kind of contagious. 40 million users have tried it. during the time that discover weekly has been around, they have gained 25 million new users. they are not saying that is why that happened, but it must have something to do with it. david: who is running this for them? when you think about it. he is 36 years old. his career has been in music discovery. you think this stuff is new, but not really. , a companyast fm that developed algorithms for spotify. he does not claim -- nor does anybody else -- claim to have invented it -- but he is a product guy.
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he kind of figured out a way, he help them figure out a way to make people want to use this thing. there were people at spotify saying let's give everyone a personalized playlist every day. do you want to hear 30 news songs every day? no, you don't, so they came up with only monday. some people want to recommend 100 songs or so. it is a matter of making things digestible and approachable. sometimes that is the problem with services. they were, but you are put off and don't want to do it. carol: what is cool, you start about anstory talking auto worker that becomes a dj, and thanks to spotify, is now touring europe. they do find new music. >> that is also the idea. people are spending more time on spotify now that discover weekly is working and people are into it.
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but they are spending less time with artists they are familiar with, more time listening to newer artists. that is good if you are an auto worker in sweden and you want to be a dj. blow up and all of a sudden you are playing at festivals and everyone is switched on something. that is what happened to this guy. forlso has ramifications the broader music industry, who will be the gatekeeper in the future. david: you can read that story in the latest bloomberg businessweek. the artist he was talking about at the end, his life really has changed as a result of this. tens of millions of people listening to his music now. what is interesting, this divide among music services, who is using algorithms, and who is relying on this rarefied set of enthusiasts, spotify is sort of down the middle.
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mathematically driven but driven by mu music. -- new music. vonnie: i am going to have to check it out. coming up, the commodities close. an offer from saudi arabia to output. our take on the prospect for a deal ahead. output. let's get a check on some currencies. 130.37.is stronger at this is bloomberg. ♪
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vonnie: welcome to bloomberg world headquarters in new york. i'm vonnie quinn. in new york,ets
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let's head over to julie hyman. julie: oil specifically has been having a good day. up by 3%. member, opec meet -- opec leaders have been meeting in out years. there's been a lot of talk about what might come out of it. saudi arabia seems to be expressing willingness to cut production if rival iran does the same. that has been boosting prices today, along with the fact that the dollar has been trading lower. around the high of the session, it has been hovering today. the rest of the commodity complex, this is the energy complex. we are all seen gains in gasoline, heating oil, and natural gas. really seeing that ripple effect across the energy markets. when you take that back and look at the opec strategy over the last year, it has definitely changed. take a look at the bloomberg market year.
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this is looking at opec's market share versus non-opec market share. from 33% to 35% over the past several quarters. you see the bump up we have seen in the market share. part of that has to do with the fact we have seen shale production in the u.s. scale brett -- scale back as prices fall. that has to be part of their strategy, their willingness to give up some on the price to gain market share. we will see if there is a turning point ahead. david: for more perspective on the opec meeting now taking ,lace, let's get to dan juergen who explained the challenge is to output cuts. it is also producing a lot of rumors and speculation right now. thatems to be seasonal their production would go down anyway right now.
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the sticking point continues to be between iran and saudi arabia. are they both willing to compromise? the answers and differences are very deep. there is a presidential election coming up and they can't seem to be giving away anything. it is a hold, if they are lowering production anyway, but the financial stress, i have heard that they are going to inject into banks to help them survive. theseghest since 2009, do stressors really move their hands right now? they are all stress. look at venezuela, which has destroyed its own economy. there is pressure in saudi arabia. they have over $5 billion in foreign reserves. they aren't in the same position as other countries. the other thing to keep in mind is that saudi arabia set of this whole international energy forum
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. that is what the meeting is in algeria. they are irked to have it taken over by an opec meeting. bringing consumers and producers together. >> the third prong is that the potential ipo coming in the next few years with the debt market of this year or next year, what part of those two potential moving events for saudi arabia have to do with that? i think they're looking at a number of different things, including right now the recognition of prices going up with u.s. production going back into the markets and so forth. what your point is is that they are preoccupied with your domestic reform program. the ipo is part of it. these prices now, as opposed to november when they meet, or next year, it's early in terms of the
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ipo. that's really where so much of the central focus is. the future of this reform program. >> the only thing the crown prince will carry about at the -- care about at the end of the day, they were near a freeze deal with iran. they got a call to shut it down over like 12 hours. what is the risk of something like this happening this time? dan: quite high. the tengion with iran is so central. neither want to cut production to give more barrels to iran. they are saying they want 4 million barrels per day or more. they have been vague in terms of changing what they want. the depth of the animosity is so great, it makes it difficult for them to come together in compromises. if there wasn't this animosity, it was certainly be more likely that something could happen. right now i think that one outcome they could see here
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would be the serious discussion of consultations picked up in november when opec meets. what we heard even a few weeks ago is -- the markets are tightening anyways, opec freezing isn't going to do much difference. now big oil is looking at projects that were profitable at 100 but could now work at $50 or $60 per barrel. is the backdrop different from what we saw eight weeks ago? it is a recognition that the industry is recalibrating to a lower price level. 80.sed to be 60 to i was in the houston of norway for their big offshore oil conference. the ceo of the big company there , $25 on one new project. on rebalancing that's going
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to adjust to a lower price environment. vonnie: let's check the headlines now on the first word news. mark: some people are talking beingviewership tonight as big as the super bowl for the first presidential debate. coverage begins here at 8:30 p.m. new york time, including 30 from theeamble bloomberg politics team. plus twitter will live stream the broadcast. we will have more on tonight's first presidential debate of 2016 coming up in just a few moments. protests continue for a sixth night in charlotte, north carolina is the mayor lifted a midnight to 6 a.m. curfew. of emergency was proposed following the fatal shooting of keith lamont scott.
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100 people gathered across the street from bank of america stadium before the carolina panthers minnesota vikings football game to protest the shooting. montgomery alabama, the first capital of the confederacy, said to become site of the home of a memorial for black lynching victims. there were more than 4000 and the state. officials say to the goal is to help americans heal acknowledging a part of the nations painful past. the italian prime minister has picked december 4 for referendum on constitutional changes. it could also prompt his fall from power. theas been branded as mother of all reform and is being closely watched by financial markets as it could prompt financial instability just as their economy struggles to boost sluggish growth. global news, 24 hours per day,
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powered by 2600 journalists and analysts in one -- in over 120 countries. vonnie: coming up, we are hours away from hillary clinton and donald trump taking the stage in their first debate. the pressure is on. the race is currently in a dead heat. next, we will take a look at what goes behind the race. ♪
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♪ vonnie: this is "bloomberg markets." david: let's turn now to the race for the white house in tonight's first head-to-head debate between donald trump and hillary clinton. they are in a dead heat, each with 46%. when third-party candidates are
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in the mix, trump has a slightly need. ann joins us now with more. explain the catch up over the last week. so much is happening. day by day? who knows. poll,ot just the national which is kind of reflective of the national mood, but you are seeing it in state polls as well , where the elections are won or lost. a couple of weeks ago the bloomberg politics poll in ohio has trump up several points. that.s critical for it does seem to solidify the that there is momentum for donald trump and also some pullback for hillary clinton. particularlye: with women and young voters. that's interesting and a good thing for donald, but is it
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enough? young voters and women have always been the core of her success. true in theinly primary contest. she had a terrible problem with bernie sanders over that, but they did come home after a solid convention this summer. the problem is, they don't have much enthusiasm for her. when we look deeper into the tea leaves, they are just more reluctant to vote at all. david: help us with the polling science. the two-person race, the four-person race. what is the use of looking at these major party candidates together? ann: smaller balance for show themany more, those are major parties that are there. the trick is, as we size up the race, there is such negativity for both of those candidates that anybody's name in the
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third-place there is going to dilute where people are in terms of a choice between the two. we do it both ways so that we can see the head to head, really understand their strengths and vulnerabilities against each other. that is meaningful to see what the drop-off is there. right now adding extra candidates to the list that we offer is taking more votes away from hillary clinton than from donald trump. vonnie: interestingly, 49% of those surveyed said it clinton will perform better, 39% say that donald will perform better. interesting, they obviously feel that he won't perform as well, yet they think he has a good a chance of winning. there's another little piece of funds data in that poll. it's between three and for that rate her intelligence as accident -- excellent or good.
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it's in the 50% to 60% range for donald trump. people are expecting her to bring her smarts. it's one of the ways that will be interesting to see who stacks up. very interesting. thank you for joining us, and seltzer -- ann selzer. tonight's debate could prove the ultimate test of whether the republican presidential nominee's newfound discipline can hold when he needs it most. we are in the spin room tonight. may murphy joins us. what are you hearing? his script?k to does he have enough script to stick to? megan: that could be the question. he averaged well in the debates he had in the republican primary. one-on-one.t
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will he be able to fill the air time in a debate where he is expected to get half? that's a big question. detail to backe things up tonight. asking him some of the tough questions he hasn't even been asked yet. how much is it weighing on them? how could it make them adjust? lots of nervous clinton staffers. it goes to what ann said, reflecting the changing sense of momentum with those states given people pause. it might prove to be another crucial swing state. very on critic double election. -- unpredictable election. their own polling comes from
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when you try to look at the map and how they each stack up. one thing that they also know is that the bar is much higher for her. one concern could set her back, that has always been the case in the sense that people are looking for her to outshine him. they think she is smarter. issue going to be able to show that tonight? vonnie: does the debate move the needle at all in terms of electoral college votes? megan: they will all be targeting on -- undecided voters. this is a grace where we could get as many as 14 states.
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he knows he's got a bit of wind in his sales right now. tonight what he has to do is not really lose. the bigger risk for him in terms of whether he has a huge gap or one of those moments that flames out endlessly in the media, she will be looking out tonight. million, that's super bowl viewing figures. people are interested in what they are calling the debate of the century. you don't want to miss it. david: do we expect both of the candidates back on the trail? what will we see in terms of a surge? only tomorrow, but late into tonight, spinning on who they think won the debate. on the republican side it's how quickly through social media and surrogates he is able to spin the idea that he won, regardless of how well he did. it was a very erratic set of performances. he was subdued and reverential.
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-- it truly a reverential was truly a personal attack. we don't know what kind of donald trump we will see. disciplined. teleprompter. he will be in that room behind me all my long and into the morning on the tv shows, spinning put their message is, who they think one, and how they will head forward into those key battleground states over 40 days now. megan, thank you. she will be there for us, megan murphy. forure to tune in tonight our special coverage of the first presidential debate. ground in on the hempstead, new york, before and with the event, teaming up twitter as the exclusive streaming partner for the debate. tune in. for the bloom -- bloomberg business flash.
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working with a financial advisor to evaluate a new bid for twitter according to people familiar with the matter. after receiving inbound interest, twitter has started the process to evaluate a potential sale. salesforce.com is continue -- contemplating a bid in the process. the ceo is also on the board. european union hasn't asked to approve of a new takeover. turning it into the world's largest supplier outside those chemicals with two other big takeovers pending. with a buyer's bid from on santa. by a, is considering three internal candidates as part of the search to replace their interim ceo as part of a management shakeup. davis,cutives are wade
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viacom international, and human resources. -- that's if you're bloomberg business flash. david: coming up, reid hoffman is taking a stand against presidential candidate donald trump. we will hear his point of view, next. ♪
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david: this is "bloomberg ." the number of heavyweights that have announced her support for hillary clinton, others have come out against donald trump. they offered to pretty -- give money to veterans if donald trump releases his tax records. reid: i think it's important for the democratic process to understand the value of our
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leaders to review income taxes. so that you can know if the person is honest about what they are asserting about their wealth, about their philanthropy and care of america. it, that is anng important political thing that we should not allow as an american citizen. cofounder of facebook offering $20 million to democrats in the selection. if donald trump sits down for an interview with him. what would you want the most from a sitdown interview? reid: i don't you has any plans for any of that public service. i think he doesn't know that these are real problems. we need experts to solve them. people who are consulting with people.
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that's what we need, not donald trump. >> what would be the impact? reid: between disastrous and terrible. risks to build global products. we build these things, iphones, google, other kinds of services to represent america to the world. his policies would greatly damage all of that. the whole world would look at it as much worse. that over the long term? it's not that kind of thing. it's the kind of thing for you invest in the long-term.
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that's the kind of thing i see her doing in her career as a public servant. asking me questions about how i build middle-class america, it's not trump. >> you have spent time with hillary. what's your impression? reid: she is going to be a great leader. she asks questions, she is curious. she asks how she brings america together, she's very focused on small business and how everyone gets a job in the future. in education and computer science? small businesses? >> what do you think she needs to do to win younger voters? to in the people who don't even want to go to the polls? one of the challenges is
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that they love a big vision. they love obama for that. i do, too. hillary is a competent leader. what she does is she goes -- how do i get everybody in the boat to make something happen? she doesn't say she's going to go issue something big that will allow people with her charisma. i know how to run a democratic process and govern in an effective way. david: reid hoffman, speaking with emily chang earlier today. vonnie: the dermatology business, part of a new strategy ahead of a acquisition from on cento. bidding.about this is bloomberg. ♪
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vonnie: 3 p.m. in new york, 12:00 p.m. in san francisco, i'm vonnie quinn. i'm david gora. welcome to "bloomberg markets."
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♪ live from bloomberg's world headquarters in new york, covering stories in chicago, ireland, and germany. considering a bid for twitter. will the story have fairytale ending? fireworks tonight as donald trump and hillary clinton face-off for the first time. how are the markets preparing for tonight? shares at deutsche bank fell to a record low. the question now, will the after government step in the $14 billion in fines? julie hyman is standing by with the latest. julie: stock selloffs today, doesn't seem to be necessarily linked to the debate, though theystrategists think that are under preparing for the potential outcome of this election. all the major averages are hovering around the lows of the
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session, tweeting and a tight range today, selling was sparked overnight around the globe. if you look here in the u.s., financials are the worst performing group today that has something to do with comments from the x fed governor that the new federal rules in place may lead them past the rates or capital that is affecting deutsche bank as well, the need to potentially raise more capital. all groups except real estate are lower today. can see, financial health care is the other underperforming group today. they decided not to split into two separate companies, which would have been the biggest in the drug industry industry. -- history. you can see that the shares are selling off, 2% in an unexpected move to the company. we've got that specialty weakening in today's session as
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well. one of the worst performing stocks in the s&p 500 today. would -- we are seeing this selloff. it is right around as different financials. regional banks, suntrust, bank of america, the classic dealers and assetn stanley management. the pain is really shared among different types of financial stocks. finally a check on that latebreaking news, the exclusive the disney was in talks with advisors to make a bid for twitter. you can see them moving sharply up on those headlines. flipside, taking a leg lower. .ow off by more than 1.5% we will continue to bring you developments on that story. let's check on the
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headlines with mark crumpton. and donaldry clinton trump will square off tonight. a new national survey shows them tied in a two-way race. when third-party candidates are included, trump leads clinton. there are predictions that tonight's debate could be the history.hed in you can see it all right here at 8:30 p.m. with 30 minute pre-and post debate shows. as well as the bloomberg politics team. twitter will live stream the broadcast. a disgruntled war -- disgruntled lawyer with numerous weapons angrily shot drivers today in houston, one critically, before being killed by police. three more people sustained in
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the -- injuries. the bomb squad is looking at the portion that belonged to the short -- shooter. the justice department is looking to award $20 million to law-enforcement enforcement agencies to help them add or improve their use of body cameras. fatals after several shooting's of black men by police across the nation. the russian military says that radio location data shows the missile that found a malaysian airliner in 2014 wasn't fired from territory backed by russian supported rebels. two days before dutch lead investigative team was to , killing allort 298 people on board. global news, 24 hours per day, founded by 2600 journalists and
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analysts in 2600 countries. david, back to you. let's get back to the markets and how they might be affected by the debate. , i read something this morning, an analyst positing that his market has not priced in it trump victory. how are they positioned ahead of the election? historically the markets have priced in what they think the outcome is going to be and they are usually right but in this case if the market is up, expect the incumbent party to win. i agree that i don't think it trump victory is priced in at this point, though that's not likely what's going on in the market today. vonnie: it depends on which market to. the mexican peso, approaching
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19.87. pay solooking at volatility, we have seen a huge spike ahead of the debates. a 30 point range on volatility. is this indicative of not knowing the plans? just that it will impact mexico, for example? trumpyes, fundamentally poses more uncertainty and that is why you are seeing some of the markets beginning to anticipate that. david: looking at president, have people made radical adjustments in some way? some people do and i think the different thing about this one is that both candidates have such high unfavorable ratings that it is the tendency of
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anyone, an investor is no different, to try to make decisions about one's own on favorability ratings. be aink that that would mistake. boxes checked. vonnie: senate races are probably almost more interesting and could even tip the balance. is that what you're looking at for your clients rather than the actual presidential election? paul: in our report we were considering not just presidential or senate outcomes, but a congressional or presidential senate outcome together. we have four scenarios of the different probabilities to. vonnie: the one with a positive -- david: the one with a positive impact would be democratic president and
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republican congress. how do you come up with that paul: looking at the dollar market impact exchange value with price to bonds, that's the most positive for up moves in those three markets over the next four years. vonnie: emerging markets, turkey got downgraded as it approached three point 9819. is this an isolated case? paul: we tend to believe they have significant challenges to work through. that said, the fed has been the main driver and as it looks more dovish, it looks less inclined to raise rates and boost the interest in yield in the country and around the world the benefit
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of the emerging markets. fundamentally, it still looks weak to us in challenging going forward. david: i wonder the degree to which the foreign markets are looking with worry that they will have to hold off to see what happens in november? there is potential for volatility around the day of the election. we will see some volatility as winsncertainty around who in the presidential race. those uncertainties remain in the market. as long as it remains on an think thatectory, we they will have potential buying opportunities for investors. vonnie: how poorly other banks performing in the last while? paul: there aren't many
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scenarios that i can think of that would be favorable for financials as a whole, although withu have the republican congressional majorities, that could open the door to negotiations or talks about reducing the regulatory burden. even then, that sort of scenario is going to take time to develop . it's not a november 9 or even january 20 story. it is something to keep an eye on. david: thank you. vonnie: coming up, we learned that walt disney is working with financial advisors on twitter. join us for live global coverage of the bloomberg market's most influential summit. including credit siu's -- credit and the ares management
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ceo. this is bloomberg. ♪
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david: welcome to "bloomberg markets." i'm david garre. -- david gora. vonnie: and i'm vonnie quinn. a trading hub that could be amplified by a more isolated united kingdom according to our international treasury management agency ceo, connor o'kelly. connor: the future isn't what it used to be, and that's certainly the case now. caution.talking
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for us, the uk is the healthiest trading partner. to put that in perspective, 3% of the pounds are traded there. as biggest china. this is very important. i think probably in the short-term they are seeing lower sterling. there's an aggregate in certain sectors. berlin for boston, long time. that taking think of the destination has been part of our policy for 30, 40 years. they are likely to be amplified.
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>> are some large banks it may have to leave lublin -- london for dublin? i don't thinknor: this is about the next few years. this is about the next 10 years. it is a profound implication. strategically of britain were to isolate itself, the potential center could be very significant. vonnie: i was connor o'kelly, speaking earlier with david weston. -- that was connor o'kelly, speaking earlier with david weston. david: looking for access to financial records proving that he was forced to resign, the state judge handed gross a partial victory today while placing limits on information that must he turned over.
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howard asset management will stop charging existing client management fees on any investments they make to hedge funds according to those with knowledge of the matter saying the changes involved the main fund and the multi-strategy fund. the plan to take a 20% cut of the profits. that is your business flash update. vonnie: turning to a developing story, walt disney working with financial advisors for a bid on twitter. thisre just speaking about , how twitter could possibly monetize its assets. looks like having disney by you could be one way, right? some rumorsard about google and we were able to verify that salesforce had some interest.
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verifying that they were working with bank of america. disney has also hired a bank and are going to the process now of looking at twitter for the next few steps, managing those presentations, which will be typical in a case where a company is talking to another company about a potential acquisition. a public company from a due diligence standpoint. say, a yahoo! transaction, even though it is public. part of yahoo! that was being sold. this may be an easier transaction from that. don't really expect a long ten-month drag out process here. ifhave no idea at this point a deal will actually happen. we were talking about what could become from entry between twitter and salesforce. looking at these companies now, it looks like it will be the
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company here trying to woo something a bit newer. there is one more obvious way that they fit together. twitter from a strategic standpoint has decided to invest more money in programming. nfl.ruck a deal with the obviously twitter is used to some degree when there is something interesting to watch live. disney is a large television .ompany they have a lot of sports programming. they obviously have their own other tv channels on there. awards shows, things like that, that fit well with twitter. disney uses the platform to promote its own life programming , maybe funneling out its life programming. there could be a strategic vantage -- advantage.
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it's just a lot of money to pay for it. vonnie: right. rico throughout a $30 billion number on friday, way over where twitter is mark at this point. if it is $30 billion, that's probably going to be a lot for any company to swallow. there is a reason for twitter to lowball itself at this stage, having some talks. if that number is correct, for sure that number would come closer and closer together. what is interesting is that twitter is at least going through the actual process of being told ok, here's what we expect. we want to hear a bid for you. this was kicked off on friday from a sales force initial interest. there is perhaps some strategy there to say -- let's start the process and flesh out the interested buyers to see who's there. will google jump in at the end? google has an existing search
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partnership right now. maybe they jump in at the end, we will see. vonnie: this could get exciting. david: still ahead, options insight with building materials companies at 41% today. ♪
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david: this is "bloomberg markets." vonnie: time for options insight. julie: joining me today for jim shooterght is of mk am holdings. i want to talk about the two big news events of the day. one of them that we have been talking about a lot is the debate coming tonight. as has been talked about throughout the day, interestingly my the only direct proxies to this race has been the mexican peso.
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you are looking at a version of that, i guess, in a trade .ooking at cemex sort of a proxy for what we are seeing with the peso ahead of the debates? it might be -- jim: it might be. his numbers have tracked the mexican peso, which has depreciated 15% year to date. there aren't that many ways to play. , but withuid products individual stocks there are approximately 25 and only three have options open for interest greater than 80,000. fairly liquid. so --ave about 180,000 180,000 or so. one of the most liquid individual stocks in options terms that people can express a
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view about. the peso volatility has been remarkably elevated going into tonight. have we seen that happen with those options also? it's been pretty quiet. two years ago there were five times as many options open. relatively quiet, we think that will turn. seeould be a trigger to some interest coming back into these mexican products. julie: ok, what do you do with the stocks? , that'sterms of cemex something that analysts wanted to see, reduction of debt load and tracking that was profitable on an annual basis after six years of losing money. is mexico'satalysts central bank.
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number one, also one of the big topics tonight will be fiscal policy and infrastructure spending. 23% of the revenue exposure in the u.s.. number two, a sort of tailwind potentially if the mexican peso stabilizes or strengthens a bit. what about a headwind for trump gaining tonight or in the polling? jim: certainly a possibility, hasthe same time cemex increasing polling numbers for trump, so what happens going forward? again, fundamentals with tail end for the peso. twitter, disney,
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reporting interesting finds. just to finish on cemex, we want to buy the jam. one by to call spreads, a invitation from sales force. it's already worked out pretty well. you need to be patient. leave it there, back to you guys. david: this is bloomberg. ♪
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bloomberg world headquarters in midtown manhattan, i'm scarlet fu. joe: i'm joe weisenthal.
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tracy: i'm tracy alloway. scarlet: more with mark crumpton. trump and hillary clinton will meet at hofstra university near new york city. in recent weeks trump has climbed in the polls by learning to stay out of his own way. the new bloomberg politics survey shows clinton and trump are in a dead heat. third-partywhen candidates are included. you can watch the debate on bloomberg television beginning at 8:30 p.m. new york time. our coverage will include 30-minute predebate and postdebate coverage led by john heilemann and mark halperin, and twitter will lifestream the broadcast. presidential nominees have revealed their guests ahead of tonight's debate. guests include's a woman with cerebral palsy recently featured in a campaign ad she will be inviting the dallas mavericks owner mark
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cuban. donald trump has invited a survivor of the attack on the u.s. embassy in benghazi, libya. the trump campaign did not invite gennifer flowers. senate majority leader mitch mcconnell says the senate will vote wednesday to override president obama's veto of the deflation to allow families of the 9/11 victims to sue the saudi government could the president says it could open the door to lawsuits and foreign courts. says he for el chapo will argue that his client has been the victim of torture. the attorney says that the legal team has submitted evidence of alleged abusive treatment in prison. the government said special security measures are needed after his escape from maximum-security facility near mexico city in 2015. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries.
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i am mark crumpton. this bloomberg. scarlet: thanks so much, mark. stock markets close in 30 minutes and you have read across the screen with the dow and the s&p and nasdaq in line with falling equities. financials are the big laggard, with deutsche bank shares declining to a record. let's check in with abigail doolittle who is at the nasdaq. quite a selloff of the nasdaq it index down by 20%. biggest to-day drop since september 9. that drop was the return to volatility on interest rate hike fears. we have bonds trading higher with inverse yield and price trading so bit of a rally there in bonds and yields. we also have the yen, clearly investor rallying. we clearly have investors
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seeking a safe haven. they are jittery around something, not entirely clear. it could be ahead of the first presidential debate. tracking the most on the nasdaq are the big day today, according to a bloomberg intelligence analyst paul sweeney he says they tended to selloff on reports of a volatility. amazon, microsoft, and others. biotech is selling off pretty big. an earlier -- and earlier a bloomberg intelligence analyst told our team that this could very distinctly reflect investor jitters ahead of the debate on fears that price hikes, drug price hike concerns, could be raised as a topic. hillary clinton last summer tweeted about prices and it sent the sector into a bear market, one that remains.
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it is still down more than 25% from its peak last summer. scarlet: hadn't realized that. .ood point, abigail one name is gaining. it is soaring 60%, on pace for its best day in record in 16 years. small-cap biotech is the second biggest boost to the nasdaq apple. real strength there. the company said that their melanoma drug method primary endpoint. fitzgeraldat cantor has $13, suggesting that the 70% today, good more than double here. we go to bloomberg and take a look. this is a long-term chart of the
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viropharma -- array biopharma. the buyers seem to be pushing this one off the bottom of that range. marigold sees pressure.. $13 per share. maybe the stock could double after today's huge day. scarlet: abigail doolittle live at the nasdaq. thank you so much. joe: european banks are in focus after deutsche bank fell to a fresh low after growing worries over capital buffers. the next is trading worse than any other industry group in the region. joining us now for a look at the health of european banks in europe overall and what is going on the global economy is making greene, formally of roubini global economics. thank you for joining us. on top of everything going on in europe these days, this massive
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bank that keeps spiraling lower, what is the key source -- tracy and i were talking about this earlier but what is driving so much investor anxiety here? megan: the investor anxiety this time around sparked by merkel reportedly saying she would not bailout torture bank. that is driven by politics entirely. there is no doubt that the german government would actually bail out deutsche bank. it would be politically unpopular, although i think she could spin it. i think merkel is taking this stand to say to other governments that this is the stance we should all be taking with the new rules, and that is particularly the case with matteo renzi with italian banks. tracy: do you think it is deutsche bank being important to the german economy or to the financial system? megan: i think they'll looking at it through both lenses, to be honest.
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if there is a good chance that deutsche bank were to go under or to have a series that would not just affect the german economy and the financial system by the entire european financial system as well. scarlet: deutsche bank is not in danger of failing anytime soon. we are having a theoretical conversation of what would happen if it needed to be rescued in any way. why is it automatically unpopular for germany to rescue deutsche bank? the company is a big employer in germany. megan: i think it is just unpopular to bail out banks generally these days. they are seen to be the cause of the crisis in 2008 to begin with. the merkel administration could say that we bailed out spanish banks, portuguese banks, greek banks. we should bail out our own as well. there is a way to spin it to show that they are providing solidarity. joe: you mentioned that the comments from merkel seemed to be directed at italy, that they
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have similar issues. also today in italy we got the official date of the constitutional referendum coming up. anddo you see that looking the stability of the renzi government? megan: there is a good chance that renzi kaluz the referendum and he has said he will step down if it loses. he has made cameron's mistake of time his fate to the vote. -- tying his fate to the vote. it is unclear what might happen. he could end up being told to form a new government. there could be a new election in which case the five-star movement could win. there could be a ton of a volatility and political instability. tracy: aside from italian politics there have been concerns about italian banks. has germany locked itself -- walked himself into a bit of a
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corner and potentially having trouble with deutsche bank? megan: i don't think it has been that theays implicit rich countries have slightly different rules than the quarter ones. germany can bail out its banks even ait says, italy, you can't do so. i think that is just another example. scarlet: does the european central might need to step in and say anything regarding deutsche bank or the time bank? megan: i don't think so. mario draghi has always stepped in and said we need consolidation in the sector anyhow and people have been saying that as a potential solution to address the weakness on deutsche bank's balance sheet. i don't think this is for mario draghi to step in. i think this is an issue for heads of state. in both germany and italy's case, you could end up seeing leaders decide they are not complying with the rules, it is
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too politically unpopular to bail in. there would not be any repercussions. that is the essential bombshell that could undermine banking unions and therefore the structure of the eu. joe: i want to go back to the politics stuff. obviously, politics is huge in the u.s. today, but then italian elections in december, and the french vote with new polls showing sarkozy starting to gain in the primary of his party. do you think investors are not paying enough attention, or should investors be paying more attention to these votes we have coming up, perhaps there is too much focus on the u.s. and they are being ignorant of everything else going on? megan: it is a huge 12 months in europe. there is an austrian presidential election, referendum in hungry on the -- hungary on the relocation of refugees, dutch general election.
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there are populist parties doing well in all these areas. will they actually get in? populistnot, but the parties can have a loud voice and shake the discourse. that is something that underpins the u.s. and europe, the rise of populist movements across the in response to rising inequality and things like that, really sluggish recovery. i think that is here to stay to even after these elections we will have fractional politics. tracy: joe just laid out a laundry list of political events coming up. when you look at europe, it feels like there is a smorgasbord of concerns to choose from. what is weighing most heavily coming european -- weighing most heavily, in your opinion? megan: i think the time referendum, and if it is not, it should be. this could have a ton of volatility italy not only has the banking crisis, but italy could be a spark for a lot of volatility. joe: megan greene, thank you
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very much for joining us. scarlet: we are just hours away from the first presidential debate and tech leaders can no longer keep quite about the candidates can especially reid hoffman. >> it would range between disasters and terrible. [laughter] somewhere in there. scarlet: we will have more on the linkedin cofounder and why his buddy peter feel is backing trump. this is bloomberg. ♪
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this is "bloomberg markets." i am scarlet fu. this drop comes as a company overhauls holdings to the
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company is trying to calm investors spooked by the resignation of the founder in may. bank of america's merrill lynch forced to pay over erroneous orders. and that is your update. tracy: a number of silicon valley heavyweights including marc benioff, reed hastings, and eric schmidt have announced their support for hillary clinton others have something come out against donald trump. billionaire onto the newer -- en agreedeur reid hoffman to donate to veterans if trump released his tax returns. emily chang sat down with him. reid: i think it is in our
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interest for them to release their income taxes. income taxes don't like you know whether they are -- don't live it you know if they are honest, but there b, their care of america that you can see that indian context. if you are hiding it, that is an important political thing that we should not allow. emily: mark cuban is offering $2 million to charity if donald trump sits down for an interview with him. what concerns you the most in particular about donald trump? reid: i think he doesn't have a policy planted he asserts, i will defeat isis, fix the economy, make things better for the middle class. i don't think he has any plans for any of that. i think he has no demonstrated record of public service. these are real problems. we need expertise to solve them. we need people who have plans, who are consulting with people.
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that is what we need and that is not donald trump. that is hillary. be the impactuld of a trump presidency on the american economy and innovation and silicon valley? reid: it would range between disastrous and terrible. [laughter] reid: somewhere in there. these risks with global products and we are essentially in silicon valley, we build these things like iphone and google and other kinds of services to represent america to the world and to bring back a bunch of positive economic into the u.s. system. trump's policies would greatly damage all of that. the whole world would look at us much worse. i think the questions around how do you invest in innovation and how do you do that over the long term -- it is not the art of the deal, single deal where you pay your contractors later. it is not that kind of thing. it is the kind of thing where you invest in the long-term. that is the thing i see hillary
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doing her entire career as a public servant. there have to be questions about how i build innovation and included middle-class america. that is not trump. emily: a number of people in silicon valley have come out against trump. and yet there is peter thiel, a longtime friend of years who not only supports trump but spoke at the republican convention. have you spoken to peter? reid: i've spoken with him a number of times. peter and i have been arguing for 30 years. we were undergraduates at stanford together. part of the reason he was willing to give by and large a very good speech at the convention, which was come i felt to me yes, we are builders we should be builders, but hillary is the candidate for that, not trump. he and i can because we value truth, we talk about this a lot and we are in a constant
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argument about it. i am right and i think he is inventing policies for trump that trump doesn't have. emily: do you think this will hurt peter with entrepreneurs in the valley? do you think he will lose out on deals? reid: i think because he is such a strong supporter of entrepreneurship, the impact would be minimal. but the questions i get from strong business people who are trying to be good americans, both in the u.s. and abroad, has he gone crazy? why does he have the views he has? literally everyone who knows i know him, that is the first question i get. we know what we need to do to help all of america and that is hillary, not trump. why is peter off in this weird place by himself? i have to explain that he thinks that we need a radical change and he is inventing policies that i've never credibly seen from the trump camp.
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scarlet: that was venture capitalist and cofounder of linkedin, reid hoffman, speaking with emily chang. tonight's debate at hofstra university could be the most watched the debate in history. you can watch our coverage beginning at a: 30 p.m. eastern time, including pre-and post debate shows with john heilemann and mark halperin. this is bloomberg. ♪
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scarlet: this is "bloomberg markets." i am scarlet fu. starting without foreign central banks are no longer buying treasuries the way they once were whether it is china, japan, saudi arabia. it is the most sustained pullback on record. the light lower
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there and that comes as yields have been backing up as well. there has been a selloff in not just treasuries but also japanese bonds and european bonds as well. why are these central banks cutting their states? every country has its own reason, of course. china's selling treasuries to defend the u.n. and then you have japan's swapping treasuries for t-bills as well as cash. negative interest rate approaching of dollar demand at regional banks. itsi arabia needs to plug budget deficit following the collapse in oil prices. this matters because the about-face by foreign central banks along with the fed's intention to tighten monetary policy means we are closer to the end of this low-yield environment, low rate environment. denmark's regime change for interest rates. -- that marks regime change for interest rates. joe: all right i'm getting ready for tonight's big event, the debate between hillary clinton and donald trump. not is a survey question of
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who people favor but who people expect to in the debates. 49% expect hillary clinton to perform better, 39% expect trump . of course, the way people frame these debates is not about who does better but who meets expectations. lay people are saying that all trump has to do is show up and has his shoes tied and he will win. hillary clinton supposedly has to be flawless and charming interface and innovating great it is really not that extreme, the difference between the 2. not even 50% of the respondents think hillary clinton is going to outperform during the debate. the fact of the matter is that it is not as skewed as people think and maybe, just maybe, the candidates will be judged on who does better. so much excitement for that. that is what i'm watching. tracy: all right, and i have some excellent news for anyone who is looking forward to breakfast tomorrow. we're looking at egg prices
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here. they have a fallen 51% from last year's hybrid we have a supply glut thanks to production restarting after the avian flu outbreak. it is impacting some egg producers, however. the largest u.s. egg supplier scrapping its orderly dividend today after the drop in quarterly dividend today after the drop in prices --scrapping its quarterly dividend today after the drop in prices. scarlet: falling prices are great for the consumer. look athe fed does not food prices in their inflation measured but this does not help the inflation story. joe: wasn't there something like bird flu or something like that? tracy: exactly right, production got cut because of bird flu and now bird flu is gone. joe: i remember when fast food restaurants cannot source enough eggs. i'm very relieved we're back to
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plentiful eggs again. scarlet: lots of different restaurants integrating eggs in their sandwiches. when there was unlimited bacon -- that is it for "bloomberg markets." "what'd you miss" and the market closes next. you have financials leading the decline. 10 out of the 11 groups in the s&p 500 are lower. the exception is real estate investor trusts. the dow off by 161 points. this is bloomberg. ♪
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are moments away
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from the closing bell and there is a lot of red inequities today could the dollar is weaker versus the yen. i am scarlet fu. joe: i'm joe weisenthal. tracy: and i'm tracy alloway. joe: the question is, what'd you miss? scarlet: global stocks defined as larger bank leaves -- deutsche bank leads the rout in financials. joe: plus, philip lane joins us ahead and we look at the challenges for ireland's economy. tracy: and one of the most anticipated debates in politics. donald trump and hillary clinton are deadlock in polls ahead of tonight's face-off. scarlet: the tao is falling more than 150 point-- dow is falling more than 150 points. a lot of references to how this could be a game changer.

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