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tv   Bloomberg Markets Americas  Bloomberg  October 31, 2017 10:00am-12:00pm EDT

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ahn and welcome to bloomberg markets. ♪ here are the top stories we are covering around the world , president donald trump playing defense from the fallout of the indictment of three campaign aides. the cooperation of george papadopoulos could be the bigger threat. 126 million, the number likely to get center of lawmaker scrutiny of tech companies. general councils of facebook, twitter and google are set to face questions from the senate judiciary committee on how they fail to keep russians from interfering in the 2016 election. and european research roles are shaking up the financial industry. paul hamill, citadel mobile head takekes, joins us with his and much, much more. , plus, more.
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we are 30 minutes into the u.s. trading days. julie hyman is to it breaking economic data. is on consumer confidence, coming in ahead of estimates. the confidence index rising to about.9 versus -- 125.9, quattro points better than estimated by economists. in addition, we have the chicago purchasing managers index higher than estimated at 66.6. very little change at this point in time, the nasdaq gaining a not muchre but movement. let's go to a there is movement deal talk and earnings. we have a lot to talk about. rockwell automation gassing up big as shares of emerson electric fall. emerson has offered to acquire rockwell automation, trying to become one of the largest providers of equipment and software to make
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factories more efficient. they rejected an offer in cash and stocks. emerson has now confirmed it has made an offer to buy the company. elsewhere, we are watching earnings. a couple of companies in the food industry are than estimated. kellogg's helped in part by the weaker dollar, boosting their international sale and has helped offset weakness in the u.s., where grocery stores are getting more pricing power and pushing back against some of the food companies. on the downside today, companies that have been done relatively well frequently, but under armour down after the company's outlook was much worse than estimated. suffering as apple says it is designing iphones and ipads for next year that to not use components from the chipmaker, migrating to likes it
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intel, and number liquidity -- and lumber liquidators have shares that turned around. vonnie: the first chart -- charge is on the program the special charges election, and one thing is clear. he is building a case that donald trump's campaign was in close touch with russian officials, who aimed to defeat hillary clinton. stephanie baker has been andrting on paul manafort he was indicted yesterday in washington. on one hand, this is an individual story, one person, and whether he committed criminal acts, but it has the potential to be more, including dragging in what is now a presidential office. stephanie: yes, the charges against paul manafort and rick ,ates are straightforward
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involving documented money miller isthat alleging cash that robert mueller is alleging that they were used to high taxes and paul manafort did not report foreign bank accounts or register under the foreign agent lobbying role. i think the more significant indictment we saw yesterday was against the former trump campaign foreign policy advisor george papadopoulos. his attemptetailed to set up a meeting between in andand cooking -- put based on emails he said to higher-ups in the trump campaign, we understand one of the individuals was manafort. thatnk this is the issue will hurt manafort down the
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line, whether or not robert miller will use the money fraud, and tax conspiracy allegations to put pressure on him to provide more information on the collusion investigation. gates: but manafort and and their indictments do not mention russian collusion. sherry: when you are talking about the case, how intertwined are they under the russian investigation umbrella? stephanie: manafort was chairman of trump's campaign when papadopoulos tried to set up the meetings and was corresponding with higher ups in the trump campaign and several of the individuals named have not been understand who some of the individuals are. does comeon is, it
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very close to manafort whether or not they can prove he was involved in signing off on any of those conversations that papadopoulos had with contacts in russia. i think that is where the investigation is going and where miller will try to tie the cases together. mueller will try to tie them together. vonnie: where is your own reporting taking you now? will be easier to access document to have not looked at yet? stephanie: the most interesting thing about the indictment against manafort and gates was the long list of companies that used to channel the money. some were familiar to me, having tried to identify the accounts. what it doesn't get into is where the money came from. has accused manafort and
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gates of laundering a $2 million through entities in cyprus by not accounting and registering their work as political lobbying -- formerkrainian ukrainian president and his party. that is a big question mark over the investigation. can they prove that money laundering charge, based on their failure to register under those rules and that is question on their case going forward. sherry: stephanie baker, t y, global's business business correspondent. big tech under the microscope. lawyers from facebook, twitter and google have ascended on capitol hill to explain russia's use of the networks to meddle in the 2016 election. hearings come one day at your robert miller's criminal criminal-- robert2's
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-- robert mueller's investigation indicted members. joining us now is kevin cirilli. we obtained this testimony from the hearings and it shows that russian meddling went beyond just being about ads. which social media was the worst here? kevin: i think it is remarkable to watch the evolution of facebook public comments. they are now saying in that statement obtained by bloomberg news that 126 million people were reached by these russian ads. ort is 126 million people 40% of the united states population. they will face intense pressure and scrutiny from folks on the series of hearings underway this week, including from the judiciary subcommittee hearing. i cut up with the chairman earlier today.
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take a listen to what he told me. once,the end result of they will take every precaution they can to make sure that foreign governments cannot use our platforms, like google, facebook, twitter, etc., to influence our elections because we have to maintain confidence in the election. to which they can show us that through self-regulation at the extent to which they know that it is a problem they have to deal with, then i would say that is what we want. if they cannot show us that, it could lead to possible regulation. kevin: i caught up with senator susan collins yesterday, who was as to why facebook was selling or accepting ads in rubles, and launch andid not internal investigation. the action like groups like twitter and facebook have taken our largely self-regulatory and
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there is legislation on capitol hill that would be a bit more aggressive, quite frankly, and what we have seen from silicon valley. vonnie: what will the general counsel say to defend the companies today? facebook has said they had been hiring people making huge efforts and twitter said they are now not accepting from places like russia or places that raise question marks, is that connect customer kevin: no, -- is that enough? kevin: no. i think self-regulatory is an issue to watch. the lawmakers in both parties here on capitol hill that i talked to make the case that it is ok if it is a free speech argument but who is speaking? the notion that russia or china are not disclosing their purchasing these ads, in which facebook admitted reached 126 million people, is perplexing to
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lawmakers on capitol hill, who feel the carefully crafted image of transparency wasn't held up by lawmakers -- i'm sorry, business leaders and silicon valley. vonnie: kevin cirilli, see why. we will get back to you once the hearings of started. -- kevin cirilli, thank you. he will get back to you. emma: the active leader of catalonia said he will not speak . he spoke in brussels, when he said he would return to spain once guaranteed a fair trial. he says he will stay away from spain while he makes catalonia's case to the european union. the worst case scenario to theresa may's cabinet today from david. david will brief them on case negotiations with the european union. according to a person familiar with the matter, they are speaking -- davis is talking about compromise and talks could move to trade.
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in the u.s., a gradual phase and for the corporate tax cuts being discussed. they have looked at the schedule 35% to 20% bysh 2022. the tax bill is set to be released tomorrow. home price gains have accelerated in august according and prices rose 5.9% over the past 12 months, higher than before and matched estimates. buyers are competing for available homes, driving up prices. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. sherry: t y -- thank you. investors are waiting from cues from washington. the dollar searching for direction ahead of the unveiling of the tax reform bill expected tomorrow. we will have the details, next.
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this is bloomberg. ♪
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♪ this is bloomberg markets. i am vonnie quinn. sherry: i am shery ahn. vonnie: it is time for futures in focus. first headed for its back-to-back monthly gain since last year. despite opec and analyze trying to clear a glut progressing. joining us to discuss this from the cme is dan deming of financials. let's start with oil. you see a nice balance and you anticipate it will continue and
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maybe push higher than $54 a barrel. dan: i think there is a chance for that. you are seeing a tailwind in the oil complex and you continue to see the russians and saudi's with a nice concerted effort to keep them moving forward. i think you'll get a little push back from shale providers, but overall, it deals like the trend is higher short-term. vonnie: what about the u.s. dollar? strengthening seems to be stalling out, what do we need to continue for it to strengthen? some kind of open proposal on tax reform, which we are supposed to get this week? dan: sure. you have a fed announcement tomorrow that could provide a further strengthen the dollar, and appointment of the fed chair moving forward but that could certainly impact the dollar. coupled with the fact that u.s. economic activity continues to look strong.
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all of those provide a tailwind for the dollar and you see this further strength because of it. vonnie: are you anticipating friday's job report, expected to be a blow away report would give back, will they be major moves she we get a 350,000 figure? dan: i think you see that being priced in. overall, the trend has been higher in interest-rate and that helps to support the dollar. it feels that it could essentially support that number would economy. withe: tliv to dan deming kkm financial -- thank you to dan deming. sherry: still on the show, how our markets pricing in the possibility of the tax reform and the new leadership of the fed. we will look at that with merrill lynch, next. this is bloomberg. ♪
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♪ this is bloomberg
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markets. i am vonnie quinn. sherry: i am shery ahn. unchanged at the moment. the nasdaq higher by .2. investors eyes are pinned on washington this week. republicans are set to unveil their long-awaited tax reform bill. who will take the reins as the next fed chair? how our markets pricing it in? we are joined by the head of u.s. equity and quantitative research at bank of america merrill lynch from london, savita subramanian. we know we will have an overhaul plan, the consensus seems to be that as soon as we get tax reform, there will be a boost for the markets. my question would be how sustainable the boosts be in the long run? great question.
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from an earnings standpoint, it is a positive. if we get a cut from 35% to something lower in the corporate tax rate, that would be accretive to earnings. the question is how much companies retain the benefit? that is ready you need to look at companies with pricing power. what typically happens when there is a policy driven earnings windfall like tax reform, companies are more competitive with less pricing power and had the benefit over to their end-user to lower prices. math is acut -- our cut in the corporate tax rate of 35% to 25% could add as much as 10% earnings growth to s&p earnings but we estimate half of that benefit will be handed over to consumers or passed along to lower prices, etc. it is a good in but maybe not as great as it is slated to be. vonnie: it might take a while for that to happen.
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the other things that might happen is to get this phased in tax relief the culprits, which he reported -- for corporate's, which means we would not get a full tax break until 2022. if that is the case, what does that do to the present earnings? savita: exactly. that is the big question, the timing and magnitude. there are has and have-nots under the scenario, so you want to look for companies that would get the repatriation act, cash overseas they could use to increase dividends, buy back stock. be would also probably willing to pay for companies that are paying a higher domestic tax. the example, companies with more domestic sales would benefit more from a tax cut, even a small one it there close to paying a 35% tax rate. i look at the market and i think that the benefit is probably
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going to be more likely from a psychological rather than fundamental basis, if that makes sense. sherry: after the tax bill, the senate passed the passive. it needs 50 votes. there will be holdouts. if there isn't a tax reform this year or early next year, what could be the negative impact on the stock markets? will we see a reaction as expectations faded reform? -- made of reform? -- fade of reform? savita: let's look at what the market is pricing and today in terms of a tax reform bill, and we found the market is discounting exactly what it discounted prior to the trump win. we found the market is not really anticipating anything. is kind ofthink
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interesting. we're back to the pre-election expectations of no change to the status quo. rates and to the next fed chair, we had this scenario, where nobody is expecting a break and trend or the market is discounting a dovish fed chairperson, and what that basically this is anything that makes the status quo would be perceived as a big surprise to the markets. --nie: servetus of iranian so be distant remy and -- savita subramanian, thank you for joining us. emerson electric has offered to buy rockwell automation. rockwell shares her story on the of $24th a market value billion at yesterday's close. if emerson is successful, it would become one of the biggest dividers to make factories more efficient. drugmakerso, the
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raised its earnings forecast for the year and pfizer says it will decide what to do with its consumer health care business next year. they are considering a thin off. archer daniels midland came up short in the third quarter, one of the world's biggest processors posted weaker than expected profit and sales. they are struggling but the circus of corn and soybeans in ae u.s. -- struggling with surplus of corn and soybeans in the u.s. vonnie: breaking news now, bitcoin surging. futureshas announced contracts now. i went to give you data as we head towards the one-hour mark in the session. stocks are unchanged with the exception of the nasdaq at .25. the vix trading just above 10. the dollar index unchanged but still well above 94, on its way to 95. peso athave the mexican
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19.2. sherry: breaking news out of rockwell automation, confirming they rejected the proposal from emerson. we have heard emerson electric had offered some -- to buy the company, but rockwell automation now saying that it has rejected the proposal from emerson. the company, of course, rockwell had a surged, and they value of 24 billion at yesterday's close. vonnie: still ahead, a sitdown interview with erik schatzker from the floor. ♪ is this a phone?
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see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. ♪ sherry: welcome back. this is bloomberg markets. i am shery ahn. vonnie: i am vonnie quinn. sherry: let's get a check with emma chandra. seems to be mueller
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building a case that the trump campaign manager in touch with russian officials who wanted to defeat hillary clinton. combine a fort has pleaded guilty to lying to the fbi about contact with russian operatives. george papadopoulos is cooperating. george papadopoulos pleaded guilty to lying to the fbi about contact with russian operatives and is cooperating. executives from facebook, google and twitter will testify in capitol hill today. according to testimony, facebook will say that about millions of people had ads from kremlin to the newsfeed. a deal allows advisors to expect competitors without fear of eating sued by former employers.
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morgan stanley says the agreement will replete opportunity for gamesmanship. in the, the sexual harassment allegations -- in the u k, the sexual harassment allegations has reached the center of theresa may's governments. the woman has downplayed the incident. globaglobal news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. vonnie: thank you. erik schatzker is live from the city go security -- the citadel security trading with an exclusive interview. erik: thanks. i am here with paul hamill, who runs the fixed income currencies and commodities business versus goodell securities -- four city dell securities. -- citadel securities.
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mifid is roiling the financial industry, how do you see it? paul: this stems from the commitment the g20 made to reform financial markets, and make them more robust and resilient. it is largeently -- and impactful and everyone is focused on it. erik: how will it affect your business? paul: we are in the market of -- erik: providing liquidity. are: we have been active several years in europe, preparing for the swaths. it will impact us because it will bring more trading to electronic venues, more robustness to the market in the form of clearing and clearing is a fundamental pillar, which to move oil from
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the old bilaterals documentation structure. then they can focus on new has the best price and where i can see the best execution. erik: it sounds like you think or expect it is going to be good for your business. how good? paul: i think it will be good for everyone in the way the model is set up. what tends to be good for the us.et is good for if you build your business around where you want markets to be fair and more transparent, we can thrive in that competitive situation and we expect it to begin for us. andstors who benefit most something we have seen in u.s. with dodd-frank, they benefit most because you have more transparency and it needs to better execution and we have seen it leads to tiger prices for investors. that is something we have -- tighter prices for investors. i like that idea i like that ie
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reality is it is not good for everybody. not always good for the service providers or vendors. who is most vulnerable? paul: i do not know who was most vulnerable. i think if you are well positioned and preparation is done -- the most important thing about the reform is to be ready. fairview to plan and prepare -- pay of your to plan -- failure to plan is what leads to problems. i think our clients are at different stages of venues and that will play over the course of the next year. erik: i would like to know what you are hearing from clients. do they understand what these rules and timelines are and how they will be affected? paul: i do not think there is the level people would like to have of understanding and i think that stems of the challenge that some rules are still not clear. we have two months to go. still notules were clear on we have seen progress in areas like trading mandate and requirement to provide
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impartial access, but there are a couple of critical areas everyone is watching closely because they had be resolved before year's end. erik: and those are? all: -- transparency. and we have seen some flawed calculation part of the european rule, which would turn much not subject and that is the complete opposite of the u.s. as we are aware that is a challenge, we are working to resolve it. because investors are paying. one of the biggest complaints is the cost required. if you get all the cost of transparency with the benefits, it will be a long time before it is fixed and that could be a bad outcome for investors. regulatorsif mifid succeed in sorting out these
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lingering issues by january 1, it will not be perfect. what in the european market will still need work? paul: i think preparation. we are two months out, so if we change at this point, which we think would be the right thing to do it transparency requirements, the venue requirements are still not even clear who needs to trade which products on which platforms. the fact is there are two months to go and it is unrealistic to expect everyone will be ready on january 3. i do think we will see the setting in as people react to this final details that will come out the next months. erik: what if these transparency and the new issues either do not get sorted out -- the venue issues do not get sorted out or not though you would like to see them sorted out? from havingansition some reporting and public about transparency
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and price are two of the biggest potential benefits to investors and two of the biggest costs. outhey do not get sorted the way i think the market would expect them to, we expect it could take up 12 months to 18 months to see the changes implemented to fix them. we will see a lot more of that negative sentiment around the in regulation itself and people are required to pay for it. erik: so it will be that much quicker to embrace it if it is fixed? paul: yeah, and we have seen that in u.s., a lot of reports that highlight the widespread support in the markets for reforms. in the u.s., there was a big test remission in the market but they came together at roughly -- there was a transformation in the market. erik: you are referring to the treasury from earlier this month. how do you expect citadel to fair under the changes church or
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he proposes? paul: the expect they are -- well, because what was potentially discuss at one point with the introduction of uncertainty and moving backwards in terms of robustness and instability, and we see a powerful reform that outlines the desire to lock in gains with small but important changes to make the market stronger and safer. we are pleased to see, for example, an appetite to change rules that make clearing more accessible. that has been something people have been concerned about, providing clearing services, and that looks like it will get resolved. we are pleased and will continue to go on and invest in our business. erik: how important is regulatory change as a factor in deciding where to invest and how aggressively you do it?
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hall: i think having a certain path and the products we transact in is desirable. erik: for everybody. paul: if you look at our european business, we are confident the commercial by of the proposition we have is one of the top market makers and equity, we price treasuries differently, and it delivers a different experience to clients. what kind of reforms, like dodd-frank, do, is they make it easier to get it to the clients, so it is on a value versus over the phone and we have a better shot of showing how better our prices. it does not mean we need those changes. they act as a tailwind to our business. erik: i want to ask about uts, .he focus -- etf's the focus has mostly been on credit, but more people are beginning to talk about the impact they have on the treasury market.
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what do you see? we see an increase in volumes in our business related to the etf market making from some of our clients involved in that. trendlly, it reflects the , the growth trend, we have seen towards passive investing. that is linked to volatility in the market we are in. in this path, you would expect it to grow. of course, there is a different conversation on what it will look like in 2018 and the impact it would have on investing. erik: is that a business you feel you have to build, more etf capability? paul: etf is growing in our business. erik: you are huge on equity side. -- largest in u.s. paul: largest in the u.s., but accurate -- active liquid
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benchmarks is surely somewhere we will invest. erik: you have been building a swaps business aggressively. migrating out of the vanilla products you started with. where do you stand? also, what is next? paul: we have some good news. we are thrilled to higher a new leader who joined us a few weeks ago so we are formulating how we will engage clients. the work we have done throughout the course of the year, and that work is to move beyond the liquid benchmark products and the of the universe of swaps, which are more complex and package driven, about 60% of the market. we have been doing that in anticipation of our new leader arriving and to help build up over the 18 months. business, itsury
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is predicated on expanding the client base. that is something we are focused on in europe and asia next year. erik: great seeing you. thanks for having us. paul: pleasure. erik: it is paul hamill from the citadel securities, for now, back to you. sherry: great interview. coming up on the show, he turned the small french code maker into a global -- coat maker into a global brand. we will analyze every -- burberry, next. vonnie: we will be speaking with headed executive services at citadel in the next hour on the number television. this is bloomberg. ♪
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♪ sherry: welcome back. this is bloomberg markets. i am shery ahn. vonnie: i am vonnie quinn. time for our stock of the hour, shares of under armour plunging. it is their worst day in nine months. abigail doolittle is here to tell us how bad earnings are. abigail: they missed sales and actually,stimates -- they missed sales and not earnings but the real story is they posted a decline in sales growth for the first time as a public company. we have a good to menstruation if we look at -- we have a good 2007.f we look at you can see the growth the company has put out a sales wise, growth year retail story and down 4% in this quarter, quite a ding and they slashed
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sales and revenues with profits by 50%, huge after already lowering. there are a few reasons. the story is ugly. the company talked about competition from nike. toe is allowing retailers discount their peril, so there is inventory to compete with under armour apparel. they the likes of dick's, went bankrupt, and they lost channels of distribution. they have been trying to replace those through the likes of dsw l's but they are in a downdraft, down 50% of the year on the stock. sherry: they were talking about stores closing, the combination of factors, but i saw their sneakers were supposed to help. abigail: everybody thought they would, the footwear, the curry four that has been delayed, and
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it is a big piece of their business. about 21% relative to apparel at 67%. the fact that the growth isn't hitting for that chunk that was supposed to hit numbers and an issue.really we have a look at the growth declining. in the bloomberg, this is bloomberg intelligence breakout of the footwear business and we has been declining, going against expectations for gross year segment of their this risk, so under armour is in pain. apparel isn't working, especially in the u.s., footwear is not working, so it will be interesting to see what they do to turn the ship around. vonnie: coming up -- sherry: bitcoin getting a boost from the cme. the world's biggest exchange operator planning to introduce a more serious look for bitcoin.
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details, next. this is bloomberg. ♪
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♪ sherry: welcome back. this is bloomberg markets. i am shery ahn. vonnie: and i am vonnie quinn. christopher bailey is out of the trenches. urry'srries chief -- burb 17 you run said he -- created chief in his 17 you run says he will leave. here to talk about what is next for him and why it could be what that fly.eeds is at a time when we see creative
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directors stay one year or 18 months, if lucky, this man has with burberry for generations. >> he has, indeed. he is part of the team that turned around burberry. but that time has come for another reinvention and that needs a fresh creative director. sherry: of course, we had seen him take on more roles, not only the creative director but ceo, so how stretched was it when he came to his position in the company? andrea: he gave up the role of ceo announced a two months ago with a new chief executive that took over in july, so he had already gone back to be the creative your but it is -- creative director but it is difficult to step back from ceo to taking a backseat, as much as he says that is what he wanted
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to do. vonnie: you say it is time for another reinvention, but why? they brought in an in-house retail store designer recently and it seems to be doing well with the younger generation. why change if it isn't broken? andrea: it has struggled with sales growth over the last couple of years. it was reliant on asia, the chinese market, and it has been trying to reinvent itself by drinking back the burberry check. that is what it needs to appeal to millennials, but it needs to do more. vonnie: any names in the mix? andrea: the main one is of celine, because the new ceo worked there before he came to burberry. the idea is that they could come over and she could work her magic. she would be a good fit.
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her aesthetic fits well with burberry values with clean lines, strong tailoring, star wear and she has had successful bags with celine, which burberry lacks. sherry: tliv for joining us. andrea felsted of gadfly. bitcoin surging to a new record. right now, look at that. a boost of about 5%. that could be the biggest exchange operator as they plan to introduce bitcoin futures. it could help professional traders and investors get serious about currency. joining us to discuss his coming over so -- camila. they have laid the groundwork and they have started a bitcoin index last year. andhey started the index the derivatives will be based on the index rise.
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ais is not the first time major firm comes into the sector. ceo eisaid the earlier that they are exploring bitcoin derivatives and there has been platform approvals to trade bitcoin derivatives, but it adds to this end it can solid -- and it consolidates it. vonnie: it has been it good time for bitcoin, up today on the stock price, so a nice balance. , even an etfe contract? camila: bitcoin is surging so much now because people are seeing this move by the cme as an indication that investors will come into the sector. they have been largely staying on the sidelines because of the risk of going into bitcoin, that
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with derivatives, they will be able to hedge volatility, and, yes, we might see an etf that approval from the sec because the lack of a derivatives market was one of the main reasons given for rejecting earlier proposals for an etf. chief: our own editor in spoke to the chairman and addressed getting into cryptocurrencies. have a listen. >> we are taking a methodical look and will make. that decision when the time is right i am not prepared -- make that decision when the time is right. i am not prepared to tell you now yes or vonnie: no. if regulators have approved it, is this risky for cme? such a i think this is big asset class that everyone is careful in making statements,
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but i think more and more people are realizing they cannot ignore it. after this 500% search this year, businesses are looking for ways in getting into this. we see them responding to that. vonnie: t y for joining us on bitcoin. coming up, -- thank you for joining us on bit coin. coming up, as a decision for the new fed chair is about to come out, what will it mean for military? and tomorrow we will be speaking with pershing square's bill ackman on the fight with adp. you do not want to miss that interview. this is bloomberg. ♪
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vonnie: it is 11:00 in hong kong. mark: i'm mark barton, welcome to bloomberg markets.
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vonnie: these the top stories we're covering from the bloomberg and around the world. facebook, google, and twitter are under the microscope today. they will testify in the senate on russian influence on social media. could this set the stage for more regulation on big tech? the leader is painting himself as a leader in exile after fleeing to brussels. on he wants to make cattle independence the european union's problem. this is the 800 pound drill it in equities trading, bitcoin head of executive services. we are 90 minutes into the trading day.
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julie: the company's second ranking executive who is the executive director and the president is the target of a civil investigation by dozens of state that have been conducting the probe into generic drugs and the legend price collusion among the makers of those drugs. this individual is being targeted specifically. the state's attorney general's are suing mylan. this is part of an expanded complaint against pharmaceutical companies that involves 45 states and the district of columbia. this is according to the connecticut attorney general. -- thethe first from mylan shares are down 5% at this point and falling on these headlines in we will keep you posted on any other headlines from the probe. it looks like prosecutors are
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looking to widen this to other drug acres as well. we will keep an eye on the headlines very let's take a look at what going on overall in stocks. we have some very slight rallies going on across the board with the nasdaq outperforming the other two. two thirds ofut 1%. we've been talking about small caps. this is an interesting chart i wanted to show you. we took a look at this issue. the tech rating in the s&p, we talk about how it does to the stock market and the nasdaq. of the s&por 24% 500. tech stocks are only 14%. when we look at the gains this year, it is interesting the tech is not as large a part.
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of course, we are watching the companies that will go -- be on capitol hill and we will see general counsel testified about the role of fake news or russian propaganda outlets on various social media site. their shares are declining just a bit in today's session going into that hearing this afternoon which we will be covering. we went to touch on the chipmakers after apple says it is no longer going to be using qualcomm chips in its next-generation of phones and ipads. intel may be the alternative. micron shares of also been soaring. mark: stocks are up for the fourth they. that's the best run since over third. let's get to earnings. they could not avoid the trading slump. fromates and tepid demand
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clients. commodities fell by 26%. bnp did increase stocks. this is the lowest quarterly sales and almost two years. they missed analyst earnings last order you it did eat estimates. to the world3.1% they got company cut its sales forecast and reduced our clean spending. that continues to weigh on revenue. wpp is having the worst year since the financial crisis. unilever is scaling back the advertising budget. it is troubled industry, not just troubled. they are a big gainer in the eurozone in putting elation data. economy underline
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why the ecb kept it from monetary stimulus. below 1% forlling the first time in five months. vonnie: now to washington as investors assess the fallout from robert dollars investigation. the conversation about russia's meddling in the u.s. election will continue. tech giants had to capitol hill. with grassley spoke kevin's really about the congressional probes into russia. >> they are not interested in who runnings these countries. they want to discourage confidence in the democratic process. they are autocratic and they don't like democracy because it might sneak into russia. it might challenge vladimir putin. that's what they are fighting. vonnie: kevin joins us now from capitol hill, our chief
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washington course on the. it's impressive -- correspondent. talk inhis is all the washington right now. let's start with the indictment yesterday. what's next for paul manafort? kevin: this moves to the courts. there is a strong feeling within the trump sources that more indictments are on the way. this is ricocheting through washington dc, is ashley with george papadopoulos. thatindictments could, and really this is just the beginning of what's going to be an aggressive probe. vonnie: how much of it will be public? presumably, these initial court appearances will be short. kevin: there will be that quarter parents tomorrow. yesterday, we saw how -- paul manafort at the courthouse.
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i spoke with susan collins remain worried she said the notion this is going to be wrapped up in the end of the year is far-fetched. this is going to be wrapped up next year at the earliest. >> the russian currency, that should have been a huge red flag that a foreign government or a foreign national was inappropriately and illegally under current law it's illegal trying to give something of value to an american candidate. about the is talking other big thing in the room, silicon valley's role in this and if they were tipped off regarding the russian effort to influence the election. the general counsel is set to
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testify in a series of hearings. the first is this afternoon and we will be covering that. vonnie: where you anticipating they will say? some companies of made public their defenses. kevin: they are on a collision course with the mueller pro. -- probe. that they were somehow not able to figure out the extent of the russian meddling, particularly when they were paid in rubles, this is it fake news. this is russian propaganda. there is bipartisan legislation looking to address that in put forth that a republican and democrat chairing the committee that will be later on this afternoon. the notion again facebook is evolving, it's evolvement of their disclosure and. they will say that 126 million
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people got that added. vonnie: that's a lot of the voting population. thank you for that. stay tuned for live coverage of the big tech testimony on russia at 2:30 p.m. new york time. mark: he is briefing government on brexit contingency plans and taste negotiation -- in case negotiations break off. payis insisting the u.k. $70 billion for obligations. the u.k. wants to move on to trade talks. let's bring in david our london bureau chief. let's come out of this meeting. david: it was about brexit. the only thing they talked about was the details of these extra things that are happening.
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how to help with the process of brexit. there are going to be 5000 people helping with the text implications. it's to show something is happening. the real talks are still in deadlock as was announced. mark: there aren't actual talks taking place. they want them to be more regular. david: the chief negotiator has agreed to the request for accelerated talks. we don't know what that means, how many times they will meet. they have agreed. the pound did take a leg up. people are taking this as an optimistic sign the will see more negotiations. mark: compromise, will we see a compromise? david: that is crucial. when she said the talks were deadlocked last month, they said by the next summit both sides
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are going to shift the position. we have not heard any sign of that. it comes down to money, which site is going to blink. mark: is there a middle round? 20 and 60 seem to be the opposing ends? david: the prime minister got it they are willing to offer another 20 billion. they don't want to drop this too soon. they are both involved in a lot of breaks mentioned. we will not hear any specific details until the last minute. mark: sexual harassment at westminster, this is the last thing prime minister may needs. david: many of us remember the last conservative government with john major and these allegations with sleaze. this is the last thing she wants. we have one of her chief
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ministers having to apologize for something he did 15 years ago. crucially, she has confidence in all of her ministers. she does not look at this as a reshuffle. the scandal, this witchhunt as it's been called is continuing it. it shows no times of abating. mark: thank you for joining us today. our london euro chief. courtney donohoe has more. courtney: president trump renewed his twitter attack on the mueller investigation. he said they news is working overtime. robert mueller is building a case of the campaign was in close touch with russian officials who wanted to defeat hillary clinton. advisor foreign-policy pleaded guilty to lying to the fbi about his contact with operatives. he is now cooperating with
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prosecutors area -- prosecutors. rose over the previous 12 months. they were higher than the month before. buyers are competing for a limited supply of available homes, driving up prices did in the u.k., the sex scandal swirling around westminster has reached theresa may's government. -- he apologized and the woman downplayed the incident. the leader of catalonia says he will not asylum in belgium. he said he would return to spain once he is guaranteed fair trial. he said he will stay away from spain until he makes catalonia's case to the european union. global news 24 hours a day
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powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. thanks a lot. coming up, we will continue cap lumia. what was the ousted president goal and where was catalonia heading? this is bloomberg. ♪
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vonnie: live from new york and london, i'm vonnie quinn. mark: this is bloomberg markets on bloomberg television. the independence movement is losing steam. carles puigdemont the separatist leader fled to brussels where he's out to reporters and insisted they would not take up arms. >> this government in relation guaranteeians need to
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there will be no conflict, no violence. the republic of old cannot be built on violence. mark: what comes next in catalonia? let's bring in roderigo. what was he doing there? rodrigo: i don't think the achieved much so far. the idea was he would seek asylum and belgium is one of the few where they can seek political asylum. he put those rumors to rest immediately. he said he wants to be in the capital of europe and make his case for an independent catalonia against the spanish government in europe on the european scene. he is preparing seen or his hearty -- party to run in the elections. the: it seems they won
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power struggle with carles puigdemont. the next thing is feeling the divisions the leg the nation. how does he achieve that? when this partd of the power struggle. expecting him to control catalonia for longer. so far, the government does not seem to have made any effort to try and heal or bring together catalans or when over their hearts. that's a big question. thenow, the focus is on campaign ahead of the election. it's a little bit of a comical scene. you have colleagues getting into the car and driving to the south of france and heading to brussels and saying they are not
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in any physical danger so they will not live for asylum. is he helping or hurting the wishes of those who would have catalonia be independent? rodrigo: it's true that he said that. he also said the spanish government was going to be belligerent and was preparing a violent crackdown. that is the case is making. the initial impression is what is trying to do is make a case for the people who want to vote for him and are convinced by his argument. there is a reason he is abroad. he was to bring them together. whether it works or not is a big question mark. if this helps the broader question, it seems a bit comical in the eyes of a lot of people. mark: thanks for joining us. mark, it's time for our
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bloomberg business flash. they have rejected a takeover from emerson electric. not in theve was best interest of the company. they are confident rockwell will take direction. they have a market value of $24 billion. midland came up short in the third order. one of the biggest merchants posted weaker than expected profit and sales. adm is struggling with corn and soybeans in the united states. that is your latest bloomberg business flash. mylan is down 7% currently. the company's second ranking executive is the target of an investigation into price collusion among generic drugmakers. that is next right here on bloomberg. ♪
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mark: this is bloomberg markets, i am barton. vonnie: mylan was down as much as a percent off its lows of the session right now. the drug company executive director has become the target of a pricing collusion probe. state attorneys general are seeking to sue him as part of an expanded complaint against pharma cubital -- pharmaceutical companies. talk to us about the individual case. we have a group of 45 states that have said they have this earlier probe of drugmakers. they are expanding it and going after the number two executive mylan.
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this is different than the cases we see in the drug industry where sales reps or a regional manager does something they should not. this is a senior executive at one of the biggest generic drug manufacturers who is a target. that's why mylan is down so much this is a company issue at the seniormost level. these are not a couple of bad apples in the salesforce somewhere. they are alleging widespread collusion among a dozen drugmakers and more than a dozen drugs. this is something they say is hurting american consumers and is a big deal. vonnie: is this one person representative of an endemic issue? true: one of the things to know is there is a parallel criminal investigation going on. we have seen some executives from a smaller drug company arrested. this is another shoe that is dropping year. there will be more news that
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continues to unfold in a parallel state and federal investigation as we go. there is an aspect of this that saying there is high-level collusion going on by these companies. that's the allegation, this is not a corporate issue and not a bad apples issue. we going to see more news here. mark: the expanding civil case could not come and worst time for an industry that is going through turmoil. drew: it's the worst possible time for this. they are facing increased competition from a number of new generics coming on the market. pushda says we want to competition and bring prices down. throw that on top of these parallel investigations, it's trouble for the industry. they are in a rough patch. they have not responded, we
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don't have an answer from them. they were taken by surprise. we will hear from them hopefully in the course of the day. they tend to speak their mind about these things. we don't have an answer yet, but we are expecting one soon. mark: thanks a lot for bringing us up to speed on this developing story. facebook, google, twitter heading to capitol hill to discuss the scope of russia's influence on american social media before the election. this is bloomberg. ♪
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vonnie: live from bloomberg world had what is in new york and london, i'm vonnie quinn. mark: this is bloomberg markets on bloomberg television. much check on the news with courtney donahoe.
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courtney: the ousted president of catalonia portray himself as a leader in exile. carles puigdemont will press the case of independence to european leaders. to spainkey -- go back unless he is guaranteed a fair trial. the head of the un's environmental program predicts the u.s. will live up to the paris accords. program executive director says the question he gets most often is what about donald trump? corporate america is going greener no matter what happens in the white house. consumer confidence is the highest in 17 years. the index rose more than expected this month a proxy fight is heating up. plans to complain to regulators
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about misleading statements. they prepare for next week's shareholder meeting. ackman has shareholders for the board. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. vonnie: i will be speaking with purging squares ceo bill ackman. you don't want to miss that. he will address all of those issues as well as the latest on the sec revelations. facebook, google, and twitter will give a panel more details on how russia may have use the social media forms to influence the u.s. elections. joining us is a columnist for bloomberg gadfly. you can access it on the bloomberg. this is a wake-up call for investors, it's part of what
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they get paid for, regulatory risk. expand on this a little bit. why are they paying for risk? >> i think this is important or investors. they invest in firms like google and facebook in part because they believe they're going to get better than market returns and they have read google and facebook -- have. those stocks are very popular and the company's make a lot of money. it doesn't make sense they should get paid to invest in them. the reason is they are unregulated which is great for profit. it probably coming. that will have a negative impact on stock area that risk is what investors get paid to take. vonnie: they are able to afford many lobbyists. why'd you think regulation is so certain. they don't want to alienate
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these companies. >> i don't think it is certain. that's where the risk comes in to play. think about this relative to banks. we know the regulation is. what the negative impact of regulation is going to be we can say. with google and facebook, we don't know. we don't know if regulation is coming. that introduces some uncertainty around profits. that uncertainty provides the premium things to well. mark: one of the solutions they will put over to to ensure there isn't similar meddling like this in the future western mark >> that's a really good question. the way to think about this is relative to other media companies. if you look at the reach they have, it is multiple of the reach the traditional media has today. traditional media is very highly regulated.
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firms like facebook and google not at all. you have to look at traditional the companies and say whatever filters the government puts on them are probably going to be applicable to facebook and google as well. that will have a negative effect on content and advertising dollars. that comes from those sources. mark: thanks a lot. he is a columnist for bloomberg gadfly. to find his commentary on the bloomberg. stay tuned for our live coverage of big tech testimony. vonnie: thank you. now to the latest buzz on bitcoin it. announced they are planning bitcoin futures. scarlet fu spoke with the ceo about going and joins us. birthday,t's a nice
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$6,416 per bitcoin. this is the biggest futures exchange operator. it's launching a bitcoin futures product. this is the biggest inducible -- institutional endorsement. the cma has launched an index the tractor real-time price and stock price of that coin. when i spoke to the ceo and chairman last week, i asked him where the cme was in terms of introducing bitcoin futures. >> if we decide to get into the dough business -- crypto i think we could be quite successful if we went down the path. give investorss
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a safer way to trade bitcoin. there has been a lot of interest, but just as much nervousness and weariness. they want liquidity and need liquidity before jumping in and a buffer to know that they can hedge their position. in terms of timing, cma is looking to launch this product by year-end. the cbo has put in an application over the summer. they are looking at the fourth order or first quarter. vonnie: the derivative contracts for one thing, what about approval for an etf? i know they are dying for approval. scarlet: it was turned down because of the lack of derivatives as a way for institutional measures to trade. they were airing on the skied of caution. and analysts said now that the
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see me is launching bitcoin, he could see it in 2018. this is definitely a step toward that. one question out there is how much volume they may want to see in bitcoin futures before giving approval. another thing we should note is there are bitcoin etn's in europe. they are listed on the stockholm exchange. we have seen success on that front. mark: the unceasing ascendancy of bitcoin it continues. the shares are at a record high. be a never ending thing. scarlet: the interest is there an exchange operators are jumping on the way the in terms of people wanting to get a product there that they can really embrace and use. etf says being the next step is a convenience.
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it's simple for people to understand this might be the next thing that pushes bitcoin into the mainstream. vonnie: we shall see. mark: thanks a lot. scarlet fu has the latest. coming up, that had of executive services at citadel security weighs in on regulation and how it's shaping the equity market. we are live from the trading floor in new york. this is bloomberg. ♪
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vonnie: this is bloomberg markets. mark: i am mark artan in london. let's get live to the citadel trading floor in your rid that's
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where erik schatzker has been speaking with executives running the electronic trading -- trading arm. we have another exclusive interview. erik: i'm here with the head of execution services. it's nice to see you. knowel as some people may is the 800 pound gorilla in the equities trading business. you touched 20% of all transactions. where'd you go from here western mark is there more share to be taken western mark joseph: great question. we do trade one in every five shares. we are the largest market ticker for retail options market anchor. our focus is frankly doing what we do in an even better way. we spend a lot of time focusing on our existing business of how
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we can deliver more value to our clients and we are looking to ask band -- expand. we've been building out our capabilities along those lines. europe is another area we are introduces some changes so we are looking at ways to leverage our u.s. capability into europe. we feel like we can leverage our equity. erik: i want to talk about etf's. are there structural limits to how big you can get? joseph: we work with our clients to understand where we can fill and spannedniches in different pockets. i would not say there are any structural limits did people are concerned about redundancy and back up and we spent time with our clients getting comfortable with our infrastructure and stability.
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we continue to grow. erik: we have seen regulations reshaping equities market. you have seen it from your seats at barclays and ubs and schwab. this is about to go into effect. joseph: it will be interesting. it goes into effect in two months. it's a little before final exam time. everyone is scrambling to see what it looks like. we are some of the direction of the equity side where -- a lot of what they are focused on our things like transparency and best execution and more structured ways of trading. i think it's good for the markets overall. market makers like us to tend to do better in markets that have a high degree of investor confidence and are very transparent. it's something we plan to are taken. erik: clients are rethinking the
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value and cost of execution thanks to unbundling. forces people to thank much more specifically about the cost of research versus execution. in the u.s., people maintain that distinction. you are allowed to bundle them together. in europe they are or seen them as two separate categories. it's interesting to see how that will evolve on the research and banking sides. erik: these kinds of changes our local, but they tend to be global in nature. is it inevitable that the u.s. market whether it likes it or not will have to adopt the changes western mark joseph: we are seeing that spill over now. there was recent guidance from the regulators to navigate the paradigms. side has beenobal looking at how to adopt something. the u.s. accounts already had
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something to miller people are thinking about this globally. erik: the conditions and executions are in research as well western mark that seems right or a pricing war. joseph: that remains to be seen. the first phase will be people looking at the quality of what they consume and making sure if it's research or execution, making sure what they are taking in is in fact worth it. erik: you raise a provocative point. what happens to firms the got pay because they produced good research that have lousy execution? joseph: it's hard to say who is going to fare better or worse in the new environment. what we will see in what we have seen in other markets is people who move quicker will fare better.
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one direction we will likely see is one of scale. which and of the spectrum ends up surviving tends to favor people who are able to operate at a higher degree of scale. erik: what are you doing to make sure you get the most territory in that route? joseph colon one of the things we are launching in europe is a trading venue called a systematic internalize her. one of the changes that comes out is a more structured way for market acres like us to supply liquidity to the market place. that sits well with our existing model and allows us to take what we have developed and take it to europe. from is there flow back europe to the u.s. western mark joseph: for now, they are
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relatively distinct geographies. it enables us to leverage the technology and market knowledge we have developed in different locations. erik: does this represent an opportunity western mark joseph: it's a positive step forward for the european markets. it plays into the strength we have as a market anchor. erik: let's talk about etf's. you are a participant in the market. you mentioned you want to expand. how'd you do that? growth followsr our clients growth. what a great invest the echo for investment for retail. some of the asset allocation trends out there just continue to grow. fixed income etf's are something you mentioned earlier with paul.
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that's an area we see additional adoption of. some of our growth is mirroring growth we see from our clients. the other piece we see is institutional adoption of etf products, a newer phenomenon but it's a newer area. it's a new area of growth and one that we have been building out to service. now that institutions the etf's are there and have a track record, are they investing faster? joseph: because of the size and magnitude the clients trade, it has potentially more impact because of the amount of liquidity they consume. erik: what you need to do this to serve the clients better western mark joseph: -- better?
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joseph: part of it is leveraging the block market. we are the largest market anchor in etf's for retail. we are finding ways to leverage the different when resources that we have across different client bases. erik: there is a push to allow crypto currency etf's. the exchanges want because they see huge volumes. joseph: we are taking a look at it and paying close attention to it. our involvement will probably follow what our client interests wind up being. i think it's too early to tell if this point. a lot of people are playing -- pain is attention because it's a ying close attention without dealing with the messy intricacies. erik: you make a point.
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there are some see intricacies. vehicles aso create a matter of principle that allow people exposure to something that is unregulated? joseph: that will be a big focus of what they look at when they go through the filing process for these products. i am sure the ability to surveillance activity and to make sure that we don't react rocked will be the implications you outline. erik: i want to thank you very much. i appreciate it. back to you. mark: great interview. thanks for joining us. he is back a little bit later. vonnie: we are getting headlines
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from donald trump at the white house. he is having a tax reform industry meeting. he said tax reform is going to be a stork, never anything like it. the house should pass the bill by thanksgiving. get playback of that in just a minute. coming up tomorrow, i will be speaking with bill ackman on his battle with adp before that crucial shareholder vote next week. that is at 12:30 p.m. eastern tomorrow. this is bloomberg. ♪
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mark: live from london and new york, i am mark barton. vonnie: you're watching bloomberg markets are it trading
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higher is airbus. we discussed it yesterday after the military aircraft manufacture had q3 earnings. why it popped today is abigail to litter -- doolittle. abigail: they missed earnings slightly and be revenue slightly. they had trouble getting there turbofans. that's the new engine that goes into the a320 family of airplanes. it is their most profitable airplane family. basically, they cut planes of the been produced waiting for engines. that they beat sales slightly stands out. the delivery, not so much. the deliveries are down on the year. we see the deliveries going down. that they beat sales despite those delivery issues is impressive.
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the earnings miss is due to the the mostng shy for probable playing. -- profitable plane. they will deliver 200 of these. mark: it sounds like they are dependent on technology for that engine. abigail: they are at the mercy of united technologies. it looks like the team did a good job convincing investors and analysts they feel strongly about the idea they will have enough engine to deliver these a320s by the end of the year. stands out as an investment opportunity, boeing and airbus are up on the year in a big way. in blue we are looking at going on the year.
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in white, we have airbus up 40%. i was chatting with george ferguson and he had a great point, that 66% gain for going, everything is priced in. airbus has these issues. if they can fix this, the stock good sore. ar. vonnie: our thanks to abigail to litter -- doolittle. mark: we are near the end of the tuesday session. this is bloomberg. ♪ retail.
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under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store
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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. there are 30n and minutes left in the trading day. vonnie: in new york, i am vonnie quinn. this is the european close on bloomberg market.
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>> please sit down. we have a great group. thank you very much for being here for the incredible work you are doing to help us pass the really historic tax cuts. there has never been anything like this. it's also reform. it's also simplification. we are covering everything, there has never been anything like it. the economy is doing very well. a lot of jobs are going

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