tv Bloomberg Markets Americas Bloomberg October 23, 2017 2:00pm-3:30pm EDT
hurricane harvey operations and we are glad to have been some help to our gracious host. we have a close partnership to transnational security, terrorism, and cybersecurity. support to the defeat isis coalition. we are one of the first countries to anticipate and are still the only asian country to have contributed military assets and personnel. official president trump when we met, singapore will extend the existing appointment to the operation into 2018. naturallytrump and i discussed the situation on the korean peninsula. if you like to keep watching, you can at tv . the president of the united states enters on the relationship between singapore and the u.s. and centering on three things. the business relationship between the countries.
resolution included last-minute changes and tweaks the house could -- tweaks, and the house could bypass it. spoke to a senior aid who says we are anticipating this will be voted on thursday. they are bypassing a lot of political drama and they are trying to get this done this week. we might even see it wednesday night. most folks are saying thursday is in the budget will be done. it will totally be finished and in the tax-writing committee and the house and senate will get to work. that is where it is going to get a little interesting. aarlet: it is going to get little and. there's a lot of confusion over what kind of changes will be included. there was talk of no longer making deductions available for contributions to your 401(k). kevi yesn, president trump: tweeting out earlier today that is not going to be the case in "there will be no
change to your 401(k). this has was been a popular middle-class tax break that works and it stays." that is good news is your blackrock. behind theso working scenes against that. the white house is depending the state and local tax deductions. i got my hands on the talking point from the white house earlier today, and they write, we also want the tax code to be fair. of eliminating state and local tax reduction, why should someone in wyoming pay less of the federal tax than in new york? it is just not there. both republicans are against eliminating this. they think it would be unfair to them. privately behind the scenes, there is some potential wiggle room. i think we could see the number of tax brackets that the president wants to reduce from
seven to three, maybe at the end of the day going to about four. give a majorl address on this in washington tomorrow. president trump will likely be on president -- capitol hill tomorrow. scarlet: a full press effort here from the white house. of course, one of the big questions that everyone is still wondering about including investors is what qualifies as a pass-through? it is down from the current 39.6%. it is not clear that we figure out what would be a pass-through, what would it be a pastor. -- pass-through. kevin: we will not know until he gets the public hearings. public hearings like it was for health care. i think that is where all of this will go. last week, i was talking with the financial services sources
that represent the big financial institutions and washington, d.c. and they are all in on this and working very much as tax-writing committees are trying to get some type of definition that would appease them. i think you'll hear -- be hearing a lot more about that. the bottom line, i can tell you this budget gets passed from the it is stillrsday, on the timetable to getting this done by the end of the year. scarlet: we'll see how it all develops. thank you so much. i didn't get to my obamacare question as well but we will get to it over the next few hours. turning to the race for the next fed chair, president trump says he is very, very close to announcing his fed nominee. i emphasized it. on sunday, trump told fox business networking is considering john taylor and jerome powell for the top jobs.
he indicated janet yellen remains in the race. are very, very close! not sure that we have any further news, but give us a sense of what i would mean if we do see this tie up of jay powell. >> j howell is for similar in terms of his monetary policy and philosophy to what chair yellen does. i do not think we'll have a big deviation. obviously, and other is a camp out there that is arguing that john taylor is not hawkish or might hawkish as they suggest. nonetheless, he was a vocal critic of qe and he argued for an earlier start in interest-rate normalization as well as a more aggressive p ath. when we look back over the past
eight years and see 2% gdp growth, i hardly believe we can make a strong argument for the should have been e aggressive. pretty untroubled vision as a result. trumpish as a result. >> at jackson hole, yellen made it clear that she believed in most of the regulation put in crisis. the financial she drew the line in the sand but she is not willing to tolerate it will sell rollback, not to say jay powell is either but it shows the line in the sands maybe a little softer than where chair yellen drew it. is an ambition economic
agenda. if you want to run for reelection he will have to carry blue-collar workers. if you put them on it will take away the punch bowl too soon as the economy is trying to gin up bee pressures, that will negative development for trump. you want to put an infrastructure plan in place and he doesn't want the fed to his mother that when he does enact it. julia: that is the perfect way to talk about ray dalio's comments. talking about the fed meeting this in the bottom 60% of the economy. it masks what is going on. there is the quote as you can see. what you make of ray dalio's comments. ? >> the yellen fed a particular has done this, where she has
been more focused on lower andme demographics statistics in the economy. she is looking to broaden measures of the unemployment rate. she highlighted the unemployment rate and various demographic segments. african-american, hispanic, asian, etc. she is looking at this broader pool and saying things like you cannot necessarily trust the official unemployment rate because it is not capturing a lot of this life that may still be in the economy. chair yellen is very much aligned with this i have to 'sink maybe mr. dalio comments are an endorsement of sorts. the timing is important. scarlet: if you go back to the ray dalio comment, what he says is if i were running fed policy, i would want to the economy -- does my question. should someone like rate dalia kobe in the -- ray dalio be in the running for venture?
-- fed chair. >> is a smart guy. it is either an endorsement of yellen or sign his hat in the ring, himself. i do not really think it is the latter. julia: do think he is a possible candidate? >> i do not know with a personal relationship is but i know that is one of the key details. he wants to have a good working relationship with them. scarlet: going back to the idea of a two-seater economy, he identifies the top percent and bottom 62%, which i thought was top 40% andng -- bottom 60%. it depends if you're looking at home prices in average earnings. if you're looking as 1% as extreme, when you are widening the band to the top 20% versus
the remainder, you still see a huge divergence between the two but maybe it puts it more in terms that people can understand. when you're talking about 1%, you are talking about a rarefied segment of society. julia: and he broke it down in terms of those who can benefit from the market rally and a proportion that doesn't. that inequality gap we have even among those two proportions will only increase over the next five to 10 years. scarlet: do you think when it comes to fed chair, there is a different person in the lead every day? are we talking about the same for candidates and it is that someone is talking about one candidate over the other? >> i think there are broader surveys in the finance sector. muchld not place too credence in this betting sites. sites have a very narrow segment of the population. from a few tweets and public
comments, i think we have reshaped our expectations to some degree. i do not think this is a horserace in the final stretch in every day it is a different candidate in the lead. i think he has really been consistently moving in one direction, and i think the front runners we are looking at now, yellen, powell, and john taylor, i think they have largely been the front runners along. we do have a see -- we do see a few candidates dropping by the wayside but there are plenty of vacant these at the fed -- of vacancies at the fed. chief u.s. economist for bloomberg intelligence. thank you so much. let's get your check on the bloomberg first word news with mark crumpton. mark: rex tillerson made an afterunced trip to iran returning from a surprise visit to afghanistan. he went with the president and said there is a place for moderate elements of the taliban
in afghanistan's government. he also said america's commitment to afghanistan is not unlimited. consider the current situation in afghanistan, we were talking about this a few minutes ago, and you look a few years in the past to what the circumstances were, afghanistan has come quite a distance already in terms of creating a population,brant much more vibrant government. secretary tillerson added there are opportunities to create what he calls a prosperous afghanistan society. president trump will meet with on hislippine president trip to asia . the president has been criticized for a muddy crackdown on drug dealers. he threatene to crack downd when the ambassador's complaint. the top lawyers for 19 states will urge a federal judge to force the drug and -- trump administration to pay subsidies
the president cut off this month. theyttorney general says are required under law and something that will harm consumers. the opposition says there are no authorization. theresaheresa may -- may is optimistic the brexit negotiation will have traction before the end of the year. we haven't reached a final agreement, but it is going to happen. i have a degree of confidence. i have a degree of confidence that we can get to the point of sufficient progress by december. after the current speech, the current speech was a step forward. mark: may faces a new challenge to them brexit bill. the opposition labour party may join within rebels within her own party. in california, 5000 firefighters are still battling 10 active
wildfires from one of the deadliest places in the state's history. they began on october 8 and totaled more than two dozen large blazes at its peak. the death toll stands at 42. the california department of force. of fireevention -- prevention warned that there is still a chance of fires due to gusty winds and low humidity. global news 24 hours a day. powered by more than 2,700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. scarlet: coming up, general election's post earnings slump continues. from new york, this is bloomberg. ♪
markets." hello pressure is seeking a market valuation of up to $1.8 billion of the kicks off its ipo this week. shares are expected to start trading in frankfurt november 2. investors' appetite. paper has been value drop since june. -- $1.9 billion. it provides cloud communication services to businesses in about 80 countries. halliburton boosted profits in north america thanks to fracking operations. it has rising orders for fracking work. experts have been in favor of operating wells that have drove
but do not fret. has 238 proposals for cities and regions across the united states, mexico and canada hoping to become the next home of the company's second headquarters. bringnnounced promises to thousands of jobs. the proposals came from 43 u.s. states as well as washington, d.c. and puerto rico, three mexican states, and six canadian provinces. that is your is the flash update. good luck, mexico. can you imagine if donald trump response to that? scarlet: second the hours of programming right there. let us take a look at general electric and another hit to the stock. a disappointing third-quarter response. this prompted multiple downgrades with most analysts --ning of an attendant --
impending dividend cut. and analysts told us friday that the debate over the dividend is irrelevant. here is why. priced int be already. even more importantly, if this is something that should have a $15 million of year, it shouldn't be a problem. they're underperforming to the tune of generating half the cash they should be generating. scarlet: brooks sutherland, a columnist for bloomberg, joins us now. ke has a new column saying they need to settle in. this is part of the acceptance process, right? even though it didn't recover on friday. brooke: it did. i think it is partly because they had a very good earnings performance. he is very frank about the challenges ge is facing and with a can-dom attitude. we will work through this, we will tackle everything, which is great. afterk that is refreshing
the predecessor was very defensive when people question him about his cash flow challenges and these struggles businesses. i think this is good change of a new start to look at the actual numbers and you realize, this is not going to be the type of thing that will work itself out next quarter. you are in for a long, tough walk. julia: people are coming out in going we need to rethink our price target on that one and a lot of analysts are saying there is a problem here and it is accurate and you heard scott david saying that is already in the price era of 20% to 30% cut in the dividend. would you agree with that? if you go back to before friday where the stock was trading at, i do not think it fair to say the price has the dividend cut because there were people before friday's numbers of saying the dividend will be fine and i think we saw a
meaningful tone shift there. i think you have to take into account a lot of the shareholder base is retail investors who on this for the dividend. i still get a mills about people about people who get angry when they had to cut the dividend there. i do not think you can underestimate the reaction of the type of investors in the cut does happen. julia: free cash flow though. if you get a map and you look at the reduction in the amount of you kind of have to question whether something has got to give. do think people were assuming they can do whatever it takes income with -- come up with some miracle? > i think that missed the lowest expectations. i think that shows what the whole problem is there. they are island that the dividend -- sorry, the share buybacks, but they also said they will postpone the ge capital dividend because they
have to work out some issues with insurance there. that is a source of cash that is no longer coming in. when you start about all of this up and you have to pay for capital expenditures, pensions, i think it is a little tight. i think that is what people are looking at. ge has gotten rid of a lot of businesses over the past couple of years but it kept its dividend at the same level. as less cash flow just by nature of getting smaller but it is dealt the same sort of dividend, which doesn't make sense. scarlet: sticky of getting smaller, john flannery will be presenting on november 13. that is really show me time for him. when are we thinking in terms of the spinoff possibilities? brooke we talked about: $20 billion in assets invested shares. that is not a lot of company as biggest ge. cap.& its market people are pointing to is larry divisions like energy connection
the lighting business maybe transportation, the locomotive production. i do not think we will see anything massive and he alluded options on the table but he came from health care, which is the one that everyone sort of wasting. option.ge breakup he talked about growth opportunities there andhow it fits with the company's digital -- and how it fits with the company's digital strategy. scarlet: you can read brooke's commentary on the bloomberg. coming up is an inclusive interview with danny greece. from new york, this is bloomberg. ♪
members are not cheating on their output cut deal, investors are convinced. oil has been held above that $50 level for the past two weeks. union cut its deal by 1.1% for the year. , climbing on supply concerns. the biggest gain since september. one inch of rain over the weekend. the wedding the harvest. -- delaying the harvest. let us look at the bloomberg. erased their have 2017 losses, circled in yellow. the rebound hasn't fully hit
prices yet. average retail prices for chocolate were down 7% from the prior period. $2.7cans will spend billion on helping treats this season -- on halloween treats this season. think about the dental care they will spend on in the following month. risen morees have than 60%. their are expanding online reach and introducing apparel categories. >> it has been a fun time. we have built this company for the future. celebrating the 60th
anniversary this year. we are opening stores this year. in chicago. lots of really new products. >> this has been part of your strategy? stores, reflection -- your flagship new york store. can you give us an update on your store strategy? wholesale entirely a brand three years ago. we continue to grow. gone from zero to 28 .5% of the sales being directed at the consumer. >> companies are looking to
e-commerce, changing the way they shop. you are planning a few more. how are they progressing? >> strongly. marrying apps with partners,tores and who remained extremely important to us. that combination has worked. bricks and mixing mortar and e-commerce been a response to department stores struggling as consumers change the way they shop? >> we started out with the direct to consumer strategy. happenedegy itself
before this narrative existed. brand, we are a global we help drive traffic into these stores. that benefits them for partnering with us. >> looking down the barrel of the holiday season in the united states, this quarter is very important. are you able to give us any hence on sales -- any hints on s sales? >> this quarter has always been the most important. we look at this on an annual basis. we are feeling really good. growing for the last few years. i expect that to continue. >> the winter jackets -- you introduced knitwear. how have customers responded?
how our sales progressing? gressing?e sales pro have built technical features into all of the products we make. >> all of the changes, store growth, e-commerce, new categories, how is that funded? >> cash flow. we have been generating strong profitability. all of oururer products -- we manufacturer all of our products in canada. we are very proud of that. jackets made in canada is like a swiss watch made in switzerland. >> are nafta negotiations concerning to you? we have been around for 60
years and there have been all kinds of changes. candidate and the united states have a strong relationship. and the united states have a strong relationship. there.dian goose ceo >> let us go to the first word news. welcome todent trump the singapore prime minister to the white house, where a contract for singapore to produce -- to acquire boeing aircraft was signed. presidentommission on the future relationship with the united kingdom are on hold until the rights of citizens are assured and a financial settlement is reached. he brushed aside media reports that may was desperate for
european union help at a brexit meeting. sidential's pre director isital scheduled to appear before the house intelligence committee this week as a part of russian -- of then the russian meddling investigation in the 2016 presidential election. butterball -- bowe bergdahl will get life in prison for walking off his post in afghanistan. lt for desertion and misbehavior before the enemy. the hearing is expected to take several days. global news 24 hours a day, powered by more than 2,700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. nfl's national anthem controversy.
something now? >> big things are coming the next couple of years. the collective bargaining agreement comes up in 2020. of all theiations television contracts will be coming up as well. roger goodell handled that the last time around. their trust in him to do that again. a lot of conservatives are calling for his head. look -- everywhere you felix: people are furious with how goodell is handling the national anthem protests. that is par for the course for how he has been over the past couple of years. one fan base or another is
always furious at him. booing him. but he doesn't work for the fans, he works for the owners. scarlet: he is not a public servant in any way. there has always been misconception about what the nfl commissioner does. he doesn't answer to fans or shareholders or any people on twitter. he has to look out for the interests of the owners. scarlet: all of this bad press, the declining television ratings. does it hurt the nfl financially? >> they are taking a dip. all of the owners recognize that. feel like this controversy over the protest has been dragging on and they would like goodell to come up with a solution. everyone, with a few exceptions,
are more or less on board the approach the -- with the approach that fidel is taking, trying to work with the players, rather than laying down heavy-handed rules about fines or being benched. scarlet: he kind of talked through it. felix: right. long as the owners are on board with that, which i think they are, we won't have any repercussions for the five-year contract extension. had talked to members of the nfl's compensation committee the >> part of the bigger meeting. he set the compensation is still on track. ishe said the compensation still on track. he will be around for these next
rounds of negotiations with the players. scarlet: president trump's controversy. there has also been noise about revoking the nfl's tax breaks. that would matter more to the owners. felix: the concern of the owners is really, they are concerned about fans. they want this to go away. have seen roger goodell navigate through incredibly whethercontroversies, it was domestic abuse, head injuries. even things like deflategate. one after another. roger goodell has taken a huge amount of criticism. an underappreciated service on behalf of the owners. the owners are free to sit back outside of the controversy, and
are continuing to make a huge amount of money on the league. scarlet: a public punching back. and that is ok by them. thank you so much. hour. to the stock of the t-mobile. third-quarter results reported earlier today. comparison with v erizon. scarlet: a good quarter for t-mobile. out is thehat stood fact their subscriber numbers are much better than verizon's. relative to been those subscriber numbers. new subscribers relative to verizon, at 600-3000. not surprising.
verizon has to worry about their dividends. a growth story. the biggest story to come out of this is the fact they did not have a traditional conference call. there was the possible deal with sprint. a lot of speculation. i was speaking to a reporter earlier today, who was saying due diligence has taken longer than expected. it will likely be announced within a few weeks. flame,fan the possible they didn't have that conference call. on wednesday. scarlet: awkward. abigail: you are right. scarlet: what do the charts show
? you look at everything from a technical perspective. abigail: this is an interesting chart. into the bloomberg and the longer-term chart. in white, t-mobile. holding that of trend. the buyers are willing to let shares consolidate. the sharessuggests could climb above 70. sprint, in blue. not so much. a year today -- a year-to-date basis, t-mobile holding on to gains. sprint is trading down 20%. there is less than a 50% chance this deal gets approved, alex thinks. that deal with at&t five years ago was blown out of the water. another two years ago.
-- the one difference is the trump administration. it is very low risk. both companies want this to go through. julia: consolidation is essential. they need to tackle verizon and at&t. extra competition. big gains for them. we shall see. abigail: yes. julia: negotiation is part of what is going on. thank you. scarlet: it is time for the bloomberg bussiness -- businessflash. adp says it strongly disagrees with its shareholder advisory
recommendation, after it for a pushts support for three seats on the board. ackman established a convincing case that adp is underperforming. stake in the% company. blankenship is the next ceo arconic. elliott management was awarded three board seats as part of a truce with the company. $1.6 billionsell of bonds to pay for more shows , thetract more subscribers biggest dollar-denominated sale ever for the world's number one online television service.
scarlet: the boy scouts of america said it will be accepting girls in its cub scout program and will have an ingles program for the older girls. scouts reacted by stressing the power of -- girl scouts reacted i stressing the power of a power -- by stressing the of a single gender environment. i talked to the ceo of the organization. >> it doesn't take away from our
focus. we are doubling down. scarlet: what do you think led to this decision? >> many factors. membership is a big one. scarlet: the girl scouts has no plan to change its programs. it affects your long-term strategy to reverse declining membership. >> we are seeing membership improving across the board. we are very excited. we are looking at a program to make it relevant to girls. we see that tying in with what is going in stem. we want them to be technology literate. transforms everything we touch, from the cars we drive, everything. we want them to be technology
literate so they are the creators and makers of technology. we are providing programming. what about boy scouts of america? our programming is very specific. we introduced 26 stem badges, badges, and have cybersecurity badges in the lineup. nor other organization is providing that hands-on stem experience. it is not just being technology literate. a big part of girl scouts is the leadership and mentorship. potential --th girl potential, and ask her to apply it to make the world a better place. that is a big differentiator.
why so many women persist in careers and technology. you don't just learned the skill, you have to apply it. but that carry adult is a fourth model. caring adult is a fourth model. you learn it is ok to seek help from a mentor. when you get into a professional career, you don't feel like you are a fraud if you ask for help. scarlet: talk about the challenges of leading the girl scouts in the current political environment. girl scouts is not read or blow. we are girl scouts -- girl s couts is not red or blue. it is girl scout green. really positive change through civic action. changeead positive
through civic action. more than half of all the civic elected officials in america are girl scouts. former girl scouts are in congress. has there been any conversation about joining forces with the boy scouts to create a scouts of america? : we are two separate nonprofits. separate organiz ations, and we will do what we do best. scarlet: from new york, this is bloomberg. ♪
julia: we are live in bloomberg markets headquarters in new york over the next hour. the top stories. are kicking into high gear with the tech sector. ofwill dig in to the details what we can expect from microsoft, alphabet, amazon, and more. a possible unveiling of president trump's fed chair, so on. reformstanley says tax will get done. we will hear from one of the biggest don't makers on the street. on the street. the dow was the one holdout of the three major averages.
the earnings reports have been weighing on the major averages. the nasdaq is evidence of the ,nderperformance we are seeing perhaps a head of earnings. -- ahead of earnings. session.se on the but now traders are taking a lower look. analysts are warning general electric could cut its dividends. the today performance is negative. we are watching a couple of the oil service stocks. halliburton, pulled down. lliburton, margins came
in below estimates. hughes, falling victim to earnings that missed estimates. as for the earnings season overall, interesting commentary from the bloomberg us stocks team. -- from the bloomberg stock team and earnings -- equity strategy team. are going to be quite important when they report. i want to look at under armour. the stock went lower after the cofounder reportedly is said to be taking a sabbatical. those whoy allows have been there for 10 years to do that.
the company is also exiting its outdoors and fishing business. the reaction from those headlines. scarlet: thank you. a big week for tech companies. amazon, microsoft, and twitter report third-quarter results. bloomberg is our equities strategist. give us an assessment of what we have seen. >> there has been a good start to the earnings season. banks are reporting fixed ins -- fixed income, currency commodities. they fell 20%. outside of that, you saw a fair amount of shrink. well.ooks performed
but there was compensation for losses. ofia: what proportion earnings for share comes to what was said on friday from ge? peter: we were trending a minute single-digit earnings growth. ge is trending 82%-3% year on -3% year-on-year growth. seelet: do you expect to her things like currencies, higher wages, oil prices? is their context for white ceos might of had trouble -- for why ceos might have had trouble delivering?
peter: earnings growth has tried coursed higher over the of the year. there has been a combination of all these things. julia: let us go back to the tech sector. paypal.y, on the top and the bottom line at this stage. peter: technology continues to be an area of great strength for the s&p 500. driven by the internet and the other is semiconductors. scarlet: commoditized, right? peter: for the internet, companies like netflix, reported a miss on the bottom line.
it proliferated that continued high-end growth. amazon and google may not hit on the bottom line, as long as they continue to proliferate this high-end growth, they can get more shares. since 2010.st pace talk about what is going on in this industry. tech is on pace for its fifth straight double-digit earnings growth, fourth straight year on year sales growth. this others -- this other chart shows how it shipped and chip related companies are outperforming relative to the broader index, especially when you look at internet software. bitcoin has something to do with
us. peter: a little. this momentum is driven by its underlying fundamentals. semiconductors are going to double the pace of the s&p 500 index. top paces from there are coming from the semiconductor space. people are trying to mine for more bitcoin. it has been driving the price of digital currency higher. people are speculating the likes of nvidia can benefit. julia: what about exxon mobil? peter: caterpillar. exxon mobil. the heaviest week of reporting for the s&p 500 index. julia: great to chat.
let us get a check on the headlines on the first word news with mark crumpton. mark: the chairman of the joint chiefs of staff isn't scheduled to hold a press briefing next hour -- is scheduled to hold a press briefing next hour, coming as the controversy continues regarding the operation where for american servicemen were killed -- where four american servicemen were killed. rex tillerson made a surprise visit to afghanistan and iraq, meeting with nation leaders, saying he seeks to establish a stronger alliance against iran. the stops in baghdad and first toan were his either country as secretary of state and were done in secrecy because of security concerns.
two regions in northern italy claim victory in a referendum demand for autonomy from the state. the vote could strengthen the anti-immigrant party in it next year's regional elections. 5000 firefighters are still battling 10 active wildfires in one of the deadliest blazes in the history of the state. andfires began on october 8 totaled more than two dozen large blazes at its peak. forest and fire prevention has said there is still high fire activity in southern california. global news 24 hours a day, powered by more than 2,700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. the crisis in spain is coming to a head. the prime minister is preparing
to take power away from the cbble n government -- rebel ataln government. we have this report from the dreaded. >-- from madrid. >> the governor and acted enacted article 155. this includes a veto over the cap the line regional -- catalan region parliament. the regional president is open to address parliament on thursday. still on the table is the unilateral declaration of independence. mightgional leader consider coming to madrid to explain his case before the senate. the article gets voted by the
senate before the end of the week. could benal president trying to reengage with madrid for a final time. the senate will have to have the final say on this. said the debate will take place, when we can expect to have a final vote. the cabinet will meet after the vote is held to explain related measures. julia: quite fascinating. by the end of the week, we will know what the decision is going to be on the catalonia side. give the catalonia government aid unilateral declaration of independence? scarlet: we will be looking for that. it has the potential to move markets. coming up, we will be hearing
ameritrade is the first training service on social media -- trading service on social media. that is your bloomberg business flash. m&a volume isl down 10%. the head of m&a at morgan stanley is surprised it hasn't fallen more. he spoke with our bloomberg deals reporter earlier today. is happened this year is the actual number of deals -- have somedeals, we things in the pipeline. overallrprised at the level of activity. oshiba, whereutx, t
it was a lot busier. >> why do you say that? >> we have so much uncertainty on taxes. if you don't know what the we patriots and rate is, it is hard rate is, it is hard to do deals. it is the uncertainty on figuring out valuations. high now. is so i am not saying it is overvalued, but i don't think we would feel compelled to do deals as much as before. things aren't going well. companies fell flat on the market.
down 25%. ceo's are asking if they should do something. the fact that it has been busier has been surprising. ande will see the sprint t-mobile merger. this deal has been speculated for years. companies backed off when regulators told them, don't bother. why now? is it, why not now? or is there some other reason this makes sense? isthe regulatory environment better, even though there is uncertainty. fcc, we had a change in the fcc> when the comcast deal was blocked, there wasn't any antitrust issue wanted. the fcc chose to block it.
they have a broad mandate. it needs to be in the public interest. >> exactly. the fcc was much too politicized. theydeal gets announced, feel a better regulatory environment. >> are there certain sectors you think, it seems like these are a little higher than other ones -- hotter than other ones. beene last few years have product-based. it is going to 10 year. a couple of tech deals have been announced. border check could be difficult. tech could be
difficult. where you guys have been active is activism. pg in the. &e.pg do you see that as a win? >> you have to look at this from a different perspective. the percentage that voted for the dissident was 37%. two thirds of that were not. that was rob kindler of morgan stanley. julia: looking at how to trade wayfar. -- mayfar.
a lot of catalysts. volatility, which is the key metric of how we measure option prices, rises into earnings. wayfair. implied volatility embedded in earnings, which are next thursday, is 40 volatility points higher, following earnings. which makes sense. a lot of uncertainty. but you can't walk in and buy options, if you buy them the day after earnings, that implied volatility classes -- collapses as soon as the venevent is over. think about trading around earnings. pricing'snk about the
-- pricing of the options you hold? jim: exactly. wayfair. mckeever initiated coverage after a -- at a buy. you were talking about a collapse in volatility following earnings. how do you account for what happens after that? jim: $66. early in development of the online home goods market. there is probably an opportunity for them internationally, and domestically. not an expensive stock. target, that represents that enterprise value on 2019. not a very expensive stock. you have a 40 volatility point
arnings.uilt into e ,f there is a constructive bias how do we take advantage of that? we want to talk about the calendar spread. 3,want to go out to november call. sell -- and sell 76 an 80-strike call in january. do this closer to earnings next week. implied volatility will continue. we want to exploit that next week. as long as the stock doesn't go down too much, if it is flat, too up, we win. in a perfect scenario, the stock ons up toward the 76 strike november 3. that option expires.
we sold back and we are left holding the 80 strike call in january. are taking advantage of this term structure. julia: thank you. -- julie: thank you. jim of mkm. abe hits asia, shinzo the bull's-eye. we will discuss what his election means for easy money. and three arrows. from new york, this is bloomberg. ♪
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