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tv   Bloomberg Markets Americas  Bloomberg  November 6, 2017 2:00pm-3:30pm EST

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scarlet: we are live in a bloomberg world headquarters in new york over the next hour. here are the top stories we are covering on the bloomberg and around the world. empty-handed, president trump fails to win concessions during his stop off in tokyo, which doesn't bode well for the rest of his asia trip. a saudi setback for citigroup. in banks billionaire backer the country is arrested in a far-reaching anticorruption drive. going hostile. broadpoint is ready to launch a proxy battle if entente rejects a offer. u.s. markets close in two hours time. julie hyman is keeping track of all of the moves. we are looking at modest gains, once again. julie: it's been a flaccid day for the markets after closing, we do see an extension of those gains, but they are modest when we look at what's happening with the major averages. we do have a lot of deal
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activity, a lot of speculation that has been going on. in the past few moments as we have been talking about, there was a report from cbc that disney and 21st century fox held talks for disney to take over some of fox's various networks. not a fox news or business channel, but the cable networks like fx, for example the two sides. no longer in talks. we definitely saw some stock reaction. disney spiking and coming back down, bouncing around as people try to figure out what to make of all of this. 21st century fox was actually trading at a 52-week low, it had touched that around midday. it obviously turned a layup and is now trading higher at about 6%. it's not just the two individual stocks where we are seeing the reaction, we are seeing it among this ripple effect. there is a lot of turmoil within the cable industry, people cutting cords, the rise and
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surge of streaming services. perhaps there will be some kind of consolidation. the other player we have to show strengthenedould a combined cable network company be more formidable competitor to netflix? you saw netflix shares fall, down about .501% but they all reacted, to the website -- they all reacted to the flipside. broadcom is making that offer for qualcomm, $105 billion not including debt, as we have been reporting. dealis by no means a done as we have seen qualcomm say it values the company to low and broadcom potentially going hostile. between this potentially enormous technology deal and some activity in the cable industry, it's been an interesting day. scarlet: a lot to discuss here.
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there going to stick with breaking that disney and 21st century fox held talks in recent weeks. the parties are no longer in discussions according to cnbc. we are joined with the latest by chris. give us some context, they held talks, according to reports. but they are no longer in discussion. doing know if this was last year, five months ago, five days ago? timeframe.know the we are going to be looking at it hard. this, youons like have to take a step back and look at the personalities involved. , it may be that he sees the whole cable bundle unraveling and wants to take some profits in that business. it may be all terrier motives, he's been trying to buy the rest of sky tv despicably all terrier motives, he's been trying to buy
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sky tv, it's been looking like he's trying to get regulatory approval. to gete's trying pressure on the regulators saying if you don't give meet what i want, i will give it to somebody else. we have bob iger, who is due to retire for good in less than two years. everyone felt that he was looking to do some transformative deal before he leaves. this certainly would be that. julia: from a management perspective, if they believe that the landscape has changed so dramatically that scale is important, that is something that disney has. it. don't have i can see why disney would be interested in this, as they look at tv assets, they look at movie tv studio options that fox provides. we can see why it would work for both here. >> from disney's standpoint, they have had this big problem.
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coreand a lot of their networks are losing subscribers in the traditional cable bundle. they are making this push to go directly to consumers. streaming services, news services, this could potentially give them the past in channels that they can go and offer a package from the edgier stuff that fx does. it's certainly a bigger investment, and if they control sky, as well, bigger investment in distribution fits disney's thinking today. julia: the tv production assets, and the international exposure makes a lot of sense. scarlet: that is something that disney would consider. certainly we are not getting any further details on this, because the discussions are no longer in effect. if you look at the share price, disney got a pop on the report, but it has come back to work it was. -- where it was. fox has remained higher, 6.8% on the day.
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about fox being a potential acquisition target for anyone else? >> know, it was the opposite. they have tried to buy time warner, and that didn't happen for them. they are trying to get deeper into the entertainment business, it didn't work. everyone assumes since the murdoch family controls a stake, that fox was in for sale unless they wanted it to be. its unusual incident -- it's an unusual situation, the acquired company jumps, and the acquire edicts because they are not sure how they are going to finance it. up.his case, both are it shows the schizophrenic nature of people thinking about the media business. disney should rise, if you believe it is in decline, fox is up. julia: we shall see. scarletbloomberg's elliott bureu chief,. julia: president trump is continuing his tour of asia,
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while getting along with prime minister shinzo abe. he left empty-handed in terms of japanese agreement on trade, let's bring in richard from washington, the former bureau chief for the financial times and the author of the book "asia's reckoning." thank you for joining us. to lay out the story, you say the relationship is strong, but riddle. what do you mean by that -- but brittle, what do you mean by that? >> they have a very good personal relationship. mr. trump in office has been very pro-u.s. japan alliance. like a lot of people in washington, the japanese worry about mr. trump's personality. they worry about him changing his mind on issues he's just make commitments to. the deepest japanese worry is that mr. trump will go to china and make a deal that undermines japan. scarlet: is that a reason why the president did not walk away from japan with any trade wins?
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>> i think mr. trump is interested in bilateral trade deals, the more importantly debts and services in the american favors. that's not the main game in japan, the main game is multilateral trade, and particularly the tpp. that is a toxic word in washington. in asia, it is still the main game. japan does not want to do a bilateral trade deal with the u.s., that would diminish the tpp. they are keeping a seat warm for the u.s. to hopefully come back there one day. julia: tie this into some of the made.ts donald trump he said "massive amounts of military equipment from the united states will be bought from japan going forward." we know there was an annoyance on the side of the president that when north korea sent a missile, they did issue it down. they didn't know if that would happen in the future. he also gave a critique that
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japan doesn't by any united states cars, that the ship overseas to the united states. are seeing a fiery rhetoric from the president, what does it mean for the trade relationship going forward? you say japan is focused on the tpp. >> i think the u.s. has a two track approach. they close on security issues, the u.s. and japan has a close relationship discussing the tpp, north korea, and the like. and of course strengthening the military relationship, on trade, we go back to the 1990's. mr. trump came of age politically, japan was his main target. that.ever gotten over about 70% of japanese cars sold in the u.s. are made in the u.s.. i don't think mr. trump is caught up to that. he wants to find any pressure point he can to improve the u.s. position. julia: you alluded to china, because if japan and china were more closely aligned, it would
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make the united states less relevant. donald trump is petey and -- piggy in the middle, what do you expect to come out of the tour of china? >> i think the focus will be very ceremonial. the japanese like a good ceremony. they know the key to donald trump's heart is putting -- is flattery. the chinese will certainly do that. in terms of the substantial talks, i don't think there will be much on trade. the u.s. is focused on the nafta negotiations, we will get some similar rhetoric that mr. trump had in japan. the real focus is turning up the korea, and the u.s. looking for further commitments from china to put the screws on north korea with that type of sanctions. scarlet: you mentioned how japan and china both know how to flatter president trump, how to get their way with him. what can and will the u.s. offer
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from its point of view? we are talking about giving the -- faced by flattering u.s. -- donald trump. what capabilities does the u.s. have? washington,ere in the general discussion is what can they give us? if you're sitting in tokyo, china, beijing, it's what can the u.s. give to them? it's a negotiation, it's not a one-way street. i think china would like the u.s. to dial down the rhetoric on north korea. they would like a bit of uncertainty. alternately, the chinese have said they wanted north korea and the u.s. to talk together directly. they say that's the key to call me things down on the korean peninsula has to call means things down on the green peninsula. mr. trump has made a position, he said he may do that, just not very quickly. scarlet: keeping his options open.
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richard mcgregor, former washington bureau chief for the financial times and author of the book asia's reckoning. thank you for joining us. let's get a check of the other headlines with mark crumpton. mark: police say sunday's shooting at a small texas church appears to have been caused by domestic situation. authorities say the gunman sent threatening text messages to his mother-in-law before the attack. >> the suspect, we can't confirm, is devin patrck kelley. he is 26-year-old white male. he currently was residing in new braunfels, texas. of thener of the death shooter will be determined by a biologist during the autopsy. investigators found evidence at the scene that the subject may have died from a self-inflicted gunshot wound. mark: 26 people were killed at the church, 20 others were wounded.
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in washington, a federal judge said she is inclined to remove former trump campaign officials from house arrest. paul manafort and his associate rick gates will stay confined at home for now. the judge says she wants more information on their finances before deciding. manafort and gates will appear in court today, were accused of money laundering and other crimes. theresa may is calling for what she terms a new culture of respect in public like, following what she called troubling allegations of sexual harassment and abuse in british politics. she made the remarks during a speech today to the confederation of british industry. the scandal has triggered a resignation of the country's defense secretary and investigation of her deputy and suspension by their parties of several conservative and labor lawmakers. in saudi arabia, banks have started freezing the accounts of those high-profile suspects in a corruption case. that's according to bankers who have knowledge of the matter. billionaire investor prince
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allah beam was one of those arrested, along with government ministers and top officials. it is seen as a power play by saudi crown prince mohammad bin salman. global news group -- global news 24 hours a day powered by over 2700 journalists and analysts in over 120 countries. i'm mark crumpton, this is bloomberg. scarlet: more on the saudi shakeup and the spotlight that it places on citigroup after its billionaire shareholder is arrested. from new york, this is bloomberg. ♪
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♪ julia: this is "bloomberg markets." i'm julia chatterley. scarlet: and scarlet fu. julia: to the shakeup in saudi ministers, and,
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former top officials were arrested in what authorities are calling a crackdown on corruption. among those arrested were prince allah we -- prince all will lead. for a closer look, we are joined by david campbell, he covers wall street for bloomberg news. the prince has been an investor in citigroup since 1991, so he is a long-term shareholder. he has been helping the bank tried to acquire a banking license. let's lay out the relationship and go from there. >> he's an investor>>, we have looked at the filings, he doesn't show up. he holds less than 5%, we believe, according to what we can tell. he has not been real forthcoming on that over the years. at one point, he did have 5%. we also believe he is a client of the bank, we are working to understand how big of a client
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he is. perhaps more importantly, he is a booster of the bank. we have had him on this program talking about citigroup and his expectations or the bank. -- for the bank, he has come in when it needed fresh capital, he provided it. that was also his initial investment in 1991. he is firmly in citi's camp. to some extent, he is a sponsor within the kingdom for citibank. i think there is a real question to whether he is the only sponsor. some of the reporting i have done suggests that the bank's base of support is much broader than prince will eat -- prince all we. which raises the question to how important it is to the bank's future in that country. scarlet: we mentioned he was in -- process
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>> not to cross the line into what they can't do. they have been able to do something. scarlet: they have enabled bond sales, they are certainly getting tc's romp the kingdom. to receive expected that license later this year and begin doing business under that license. i have not talked to anybody who thinks that licenses -- that license is in jeopardy. julia: how important is saudi arabia for citibank's bigness overall? i guess my other question would be we don't know what the charges are, they may be
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unproven, nothing may go from here. do you think there will be a cautiousness in general? areuse a lot of people looking at the situation and don't understand what's going on. tothe analysts we talked over the weekend, certainly that was the number one thing. if you are looking to dole out business to international banks going forward, are you going to choose one that has ties to him, who clearly is to some degree with the royal family. going forward, the question is how much does that mean for citi's overall business? media, which is what the business rose up, it is a smaller region for citibank. we are not talking billions of citibank, they are a
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u.s. -- their u.s. business is much larger and importance. if the matter to them, worst case plays out, it would be disastrous. -- it would not be disastrous. scarlet: there's a lot of concern and caution right now. thank you. still ahead, in 2015, valeant paid to increase female libido. now it is walking away. we look at what went wrong. this is bloomberg. ♪
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♪ julia: valeant is getting out of the controversial female libido business. it says it will give the pills to its original owners for almost nothing. in return, it will end a lawsuit. let's bring in bloomberg's health care reporter who is following the story. around $1ught it for billion, the are giving it back
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virtually free and and a lawsuit. forhe deal was pharmaceuticals, it was one of the last that they did. a drugent $1 billion on that had just been approved by the fda, no one knew what it would do to the market. it fell into a lot of controversy with several issues and really never put any resources into this drug. it looked as it just languished and they never had time to develop it. julia: they cut themselves when it didn't gain traction, there was also the suggestion that it didn't have much impact. >> this also comes back to the price, they put a high price on the drug and the pharmaceutical benefits managers weren't sold on covering it. without the right kind of insurance coverage, people want able to get it. that was the beginning, and usually a company might work to remedy that, but they didn't have the resources or time you put into it.
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the original owners sued and said you are not doing work you need to do, that's how they ended up coming to this conclusion. scarlet: talk about the drug itself, this is a breakthrough drug. no one had done anything like this, right? >> it's controversial, it was rejected by the fda in the past. what it does is treats women when they have low libido and severe stress is associated with that. there are people that are you there is a lot of potential, but it is unknown because it didn't have time to hit the market. they wouldn't like that characterization, because a woman would take this on a daily basis, whereas viagra may be taken as needed. there are safety precautions around a drug that is taken daily as well that a company needs to address, as well. scarlet: did insurers improvement? >> that's what we'll have to see. when the new owners take it, they will take a new approach, in the next maybe few months we
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will really see what the potential is. tablets, andfor 30 if people are taking it every day, that's an investment. scarlet: that adds up for something that is not proven effective. bloomberg health care reporter, thank you so much. still ahead, the next show a revolution, a look at the meteoric rise of shell, how it's transformed the global energy landscape and why it shows no signs of slowing down. her interview with the ceo of devon energy is coming up next. from new york, this is bloomberg. ♪ is this a phone?
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call, visit, or go to ♪ scarlet: from the big oil but he mets to the nimble but, not players, michelle revolution will study the history -- the
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shell revolution will study the history on the global oil market. closing inarkets are new york, wti piercing a two-year high today, rising the most in three months. you have seen it up about 30% as the saudi shakeup rattles investors. bloomberg alex sat down with an interview with dave hager, the company is at the forefront of technology in unconventional resources after announcing a record producing well in oklahoma. we have been pursuing the advanced technology angle for several years. we started in 2010, first bidding our data in great shape. we are chasing a multimillion prize that we think we can get through the use of advanced technology. we are pursuing technologies currently and several different areas on the subsurface side, in order to better characterize a reservoir. on a drawing completion, on the water management side, we have a
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very specific areas of technology we are pursuing. >> does that technology wind up helping make current wells more productive and extend the life? or does it make rock that wasn't viable, viable? dave: both, it improves the economics of the current wells, improves production rates. we are able to expand -- extend the life of those wells. an example of something that you are using today that you want using one year ago. dave: one of the biggest things is how we are getting in billions of data points every systems.l of our one specific example would be in our completion technology. there has been a lot of talk about companies that are using more sand in order to better fracture the rock. we are certainly doing that, we are one of the leaders of that. some companies talk about how
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they are using a 1.0 or 2.0, we have gone to a continuous improvement model over hydraulic fracturing operations. we are getting data in from the field as we are conducting the operations, and modifying often on the fly, those actual completions. those 1.0 and 2.0's are becoming obsolete, that's not something we were doing when year ago. >> i'm hitting a control room watching the completion process, how does that speed back loop help me? >> it helps you because you see how the rock is actually reacting to the hydraulic fracturing operations itself. how it is taking the job. is it properly working with the design that we have? its the modifications that need to be made on the fly, we have the capability and are doing so. ini intofests itself
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more productive -- into more productive wells. >> i'm also guessing you waste less resources? >it's a much more efficient approac to the completion operations. areow much of your budget you spending towards this technology, and what do you expect it to be in the next five years? dave: our overall budget is actually fairly minimal. it is not so much the cost of doing a new technology, it really saves you dollars by embracing this and seeing this as your friend. >> there is a story in the market that the more you have to spend on the market, at some point it will outweigh the efficiencies. dave: i see absolutely the opposite way. this technology is driving the efficiencies. our drilling and completion costs have gone down 40% since. some of that is due to lower service costs, a large part is
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how we are drilling and depleting our wills more efficiently -- wells more efficiently. the rate of production we are getting out of our wells, we are getting 450% of the amount of production out of the same type wells as we did in 2012. 4.5 times as much in the first 90 days. a direct result of the application of this technology. we are also drilling wells in the right place, that has to do with the use of this technology, as well. >> if you can walk me through maybe one problem you have had that you were able to fix because of the new technology that you wouldn't have been able to fix five years ago? dave: one obvious issue is what we would call geo-steering. often 1-2 miles deep and two miles horizontal, and we
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are trying to stay within a specific zone when we drill the horizontal. >> you are wanting to drill in between here? dave: between here and here. when we are the first -- we are the first ones to drill horizontal. started, that would have probably been a 100 foot into bill -- interval. a 10e are staying within foot interval 99% of the time. >> you had to survive at 50, if you were to write the headline with the technology you are implementing, what does it look like? dave: our plan is to thrive at 50. we have to accept that this price environment is here for the foreseeable future. our plan is to use technology as a differentiator to cause us to have our performance in this current environment. we think technology is the key to do that. julia: don't miss alex's hour-long special on the me are
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-- the meteoric rise of shale. on bloomberg television at 9:00 p.m. eastern. let's get a check on the headline with mark crumpton. mark: authorities in texas say law enforcement went to the home of the suspected church gunman three years ago to investigate a domestic violence complaint involving him and his then girlfriend. a spokesman for the county district attorney's office says sheriff deputies were called to devin patrck kelley's home in 2014 to investigate a report that he was abusing his girlfriend. no arrests were made. in japan, president trump and prime minister shinzo abe are talking tough on north korea. prime minister abe said he will impose additional sanctions over pyongyangs'missile and nuclear weapons development. president trump warned what he
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with the era of strategic north korea is overrated michigan's chief medical executive is facing a court hearing tied to a legionnaires outbreak during the flint water crisis. prosecutors will try to persuade a judge to send dr. e wells to trial on charges of involuntary manslaughter, obstruction of justice, and lines to an investigator. he began today. five others face the same charge, including michigan's health director. of7 is on track to be one the three hottest years on record. the united nations says the year is on pace to follow 2015 and 2016, which were both affected by a powerful el nino. the statement came ahead of the star of the climate change conference, which is being held in germany. global news 24 hours a day powered by over 2700 journalists and analysts in over 120 countries. i'm mark crumpton.
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this is bloomberg. broadcom is ahead, bracing for a battle as it explores an unsolicited offer from qualcomm. bloomberg was the first to report on at this megadeal, we have the latest next. you are with bloomberg. ♪
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♪ julia: this is "bloomberg markets." i'm julia chatterley. scarlet: our stock of the hour is michael kors, the shares are surging around 50%. currently at their highest since april of 2016. this rally is prompted by better than expected earnings. julia: the story of earnings
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season with some retailers. we saw better etf's, better sales, they raised in both of those things for the first year. as adescription of it luxury retailer, they have been trying to re-embraced idea of them as a luxury brand. the products have become associated with discounting to department stores. we know they are struggling and use discounts to drive traffic. what we saw in this report was that michael kors is being successful in getting people to pay full price. you saw gains in both margins and sales rose in the american region for the first time in six quarters. we have a chart which will show you that. that was less than in previous, and much better than analysts predictions who have been expecting a decline of about 4.8%. the ceos said they were pleased, but they are still very much in transition.
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not the only u.s. retailer refocusing in the same way as michael kors. >> ralph lauren is another one trying to do that, the less associated with discounting. the other is coach,. they have been calling department stores and closing some of their stores, being associated with just handbags, they want to see more high-fashion with shoes and clothing, as well. if you take a look at the bloomberg terminal, i have the s&p global luxury index. -- if you compare that with the snp's consumer do or pearls -- at and be consumer duels. julia: it's the way to go. scarlet: you can't have it everywhere. thank you so much, emma. bloomberg reported on friday
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that broadcom wants to acquire qualcomm 41 $30 billion. now, broadcom is saying is prepared to go higher. shares of both companies have spiked, but quickly give up their gains. we bring in cory johnson, and ian king to give us the latest. let me start with you, ian. broadcom willing to go hostile. do we know if they've made contact with some of the big investors to secure the by in ? >> at this point, you have to say let's playr, nice and wait for the board to get back to you. behind the scenes, qualcomm didn't like this, $70 a share is a lowball offer. regulators can't help but spend at least one year looking at a deal of this nature.
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obviously, broadcom knew what to theyt from our reporting, are prepared to take this to the next level. scarlet: global offers are very interesting, since qualcomm try to buy an xp, and an xp saying that was a lowball offer, as well. julia: what broadcom has said is deal,rrespective up that this offer is still on the table. how does that work? how do they defend themselves if they are going to take it to the next level? >> if you are thinking at it from the bar, state of things, what they will be willing to pay shows how much they are willing for this company. a company with xp as much greater value. it has more value than it does with nxp then without. it shows you they have the capacity to change the qualcomm business model to make the deal worth doing. julia: where does apple fit in
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that? if they lose the deal with apple, you have a stream that gets chopped. >> the reason qualcomm's stock price is depressed, the reason it's down 20% is because qualcomm's business is threatened. it has always been threatened by the idea that they cannot enforce their patents and licensing agreements. it is a problem that was realized in china in the last couple of years. the notion that one customer --ld be so important that was inconceivable 15 years ago. now, it is a shooting match. the idea that you have a company so technologically adept that they could just write in to create something similar to qualcomm really shows the power of apple. apple is certainly a big part of this deal. scarlet: it just goes to show apple's influence and broadcom
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counts it as one of its biggest customers. aboutre analysts saying what a change of management would mean for this relationship with apple? >> before we go there, i spoke to the ceo of broadcom about this very point. i said how are you going to get this through regulators? are you sure your customers like this? he said read what's in the release. we've already spoken to them with the indication, he didn't, and say that. strong hints that we wouldn't be doing this if we didn't think we could get it done. we know that getting it through the process would in all getting a sign off on our largest customers. you are dealing with a man who is very sophisticated, he really knows what he is doing. he really likes his chances. julia: talk to me about the practicalities for broadcom and what do we see here? do we see them separating the intellectual property from the chip making part in the business
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to get that done? >> several analysts have speculated that that would be necessary and would make sense. others have said you wouldn't pay $70 for qualcomm as the chip business. that doesn't make sense. that, asked him about what do you do with all of the regulatory issues, the lawsuits? he is smiling and saying don't worry, i have thought about this, i know what i am doing. discuss.enty more to thank you cory johnson and ian king. it's time for the bloomberg business flash, a look at some of the biggest business stories in the news. new york fed president william dudley retires next year, it widens the leadership overhaul at the central bank.
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an outspoken promoted of changing the culture, since today, he has no objections to minor changes passed during the obama administration. thatt me speculate congress will make changes to the dodd-frank act. the scope is confined to small bank release and adjusting how the volcker rules apply, i have no objection. fed in thenew york wake of a financial crisis, he also said that the fed has started to search for his replacement. the world's biggest hedge fund firm has begun the year in one of its funds. it climbs 3% in october, according to people familiar of the fund, which targets to present volatility. it has now gained nearly 2% this year. that's your business flash update. from new york, this is bloomberg.
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♪ abigail: if it seems women's progress has stalledabigail:, new data put a final point on it. women around the world won't see economic gender equality or to 17 years. theounding the setbacks, wtf found that the gender gap widened for the first time since 2006. in today's walk the talk, bloomberg's ongoing conversation about diversity in the workplace, i sat down with ahead of gender education and work in the u.s. i asked her what to make of these bleak statistics. saadia: it is a bad year in what was a fairly good decade. a stalling of momentum around gender equality, which is one of the main findings this year. factionally calls governments and business leaders to start looking at this issue more seriously.
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scarlet: i like the way you put it, stalling in momentum. that is encapsulated by how the united states fared, it fell to 49 from 40 fifth place last year. number 23.e u.s. was does there seem to be any indication of a trump effect? saadia: there are a couple of things happening. the u.s. did start out at a fairly good position compared to other countries. what happened is there really haven't been -- hasn't been that much progress. when it improvement comes to economic participation of women. there aren't that many more women that are in leadership positions. in a lot of other countries, there have been those changes. it's not necessarily that the u.s. has gotten worse, other countries have become a factor. this particular year, there are fewer women in the cabinet than before. effect on the an
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political empowerment score, that led to the drop of four ranks between last year and this year. scarlet: talk about the countries that have scored high, iceland, for instance, were they doing -- what are they doing? saadia: the nordic countries have this long history of social inclusion, valuing the quality as a part of their growth strategy, that has led them to where they are today. the second aspect is the very clear effort they have put in place in the last 10 years, the instruments they have used to do so. that provides a lot of learning to other countries, whether they have a history of inclusion or not. what they have done around childcare, board quotas, these from.l things to learn . they might not be done in the same ways, they may not always be publicly financed, there could be commercial opportunities to greet similar systems. those systems do help families balance work and home, that is
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going to be an integral part of the changes that are needed if we want more women to join the economy. scarlet: there's an argument that for a country like iceland to achieve it is easier because it's smaller, they don't have the scale that the u.s. and china would have. saadia: certainly those are countries with smaller populations, they have put a higher value on capital overtime because they realized that is one of their core resources. i would argue that this is going to change for some of the larger countries, to. if any country wants to succeed in the midst of this current , humanogical revolution has got to be the most important resource they are going to have to invest in. that is going to be the core asset for the future. if you want innovation in your economy, creativity, human capital is going to be the core element to invest in. women of make up one half of the
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human capital. i would argue it even i more important for those large economies to be able to maintain those growth rates. scarlet: there are some leadersscarlet: that are taking advantage and capitalizing. canada is adding more women in governmental roles. are these isolated high-profile examples, or is there a real shift in how women are transitioning in politics? saadia: there are these high-profile examples. they help shift mindsets for everyone else. they also shift mindsets in those countries. it's been proven time and again that when young women and girls, as well as their parents, and young boys and men, see that there are women in leadership positions. particularly they see quality -- the quality in leadership positions, their mindsets change. the second aspect is.
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what decisions to those people make? they are going to be former representatives of a larger pool of the population if there are those women in leadership. at the same time, in both canada and france, there are going to need to be more efforts to integrate women into the economy. a similar problem to the u.s. they do well in having the right raise of talent -- based of talent, economic integration is not there, not in a way that is proportional to the telomerase. scarlet: that was my conversation with the head of education, gender, and worked at the world economic forum. julia: coming up, it is setting for a week for the republican tax plan. average joins us. -- sky bridge joins us. ♪
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these plans can combine your hospital and doctor coverage, with prescription drug coverage and more, all in one plan for a low, or even no, monthly premium. so call now.lan for a low, or even no, monthly premium. so call now. we can answer your questions, even help you enroll. i deserve to get the most out of my plan. we'll make sure your doctors are all connected, you know what your copays are... and you can save on prescriptions; plan members saved an average of over 5000 dollars last year. medicare open enrollment ends december 7th. if you're done with complicated, if you're doso done... complicated, so done... call now to enroll in a plan from unitedhealthcare, like aarp medicarecomplete. [sfx: mnemonic] julia: it is 2:00 p.m. in new york, 12:00 p.m. in san francisco, 8:00 p.m. in london. i'm julia chatterley. scarlet: i am scarlet fu. welcome to "bloomberg markets
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julia: we are live in bloomberg world headquarters in new york over the next hour. here are the top stories we are covering on bloomberg and around the world. with president trump in asia and house lawmakers debating the textbook and we will speak with skybridge capital partner troy gayeski. wilbur ross speaking about his stake in a shipping firm with ties to vladimir putin. plus thomas saudi arabia launches a sweeping anticorruption crackdown people we will speak to charles robertson about the impact to markets. we are one hour from the close of trading. let's check in the markets with julie hyman. marketse're seeing strengthen a little bit more into the close. it has been an inactive trading
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session in terms of the magnitude of the gains, although they are enough to push leverages to new records. today is all about ripple effects. let's look at the bloomberg for the groups that are on the move. energy in the top spot in 2% to follow by real estate and consumer discretionary. telecoms are in the bottom. the effect is oil prices, as it would be in the energy group. this seems to be tied in part to the corruption crackdown going on in saudi arabia and speculation about what effect that could have in the region and the oil supplies from that oil-rich region. crude oil trading above $57 of barrel. then we have the ripple effect from this report that disney and fox had been in potential talks that are no longer ongoing. it seems as though there is still speculation about a deal not only between these two
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companies, but just in the industry generally. it has been struggling going on in terms of falling ad sales with people cutting the cord and rising streaming services. perhaps this could be a time for more deals to at least be talked about. we are seeing that media group generally rise and that is boosting the consumer discretionary groups. we have the ripple effect in telecom from the disintegration the t-mobileou -- talks. they held an investor update today come talking about not wanting to give up control of the combined company, the fact that sprint could be in for a tough couple of years. down,le is down, at&t is verizon's down. the real estate group is one of the best performers today. with less consolidation in the industry, more customers for .hose tower operators
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another example of a ripple effect today. scarlet: thank you so much, julie hyman. investors are watching and winning for progress on tax reform in washington while president trump travel across asia. former treasury secretary larry summers spoke with us about the tax plan. mr. summers: fundamentally, this is an tax reform for the best this is not tax reform. this is taxcutting. and it is a rather indiscriminate, nonstrategic a kind of taxcutting that i think is likely to increase unfairness, is likely to cheat the future, and is not likely to provide significant benefits in terms of economic growth. is troy joining us gayeski of skybridge capital. tax reform is something that comes up a lot a new discussion with clients, i am sure. do you see this as tax reform or tax cuts come and how does that factor into growth? troy: it is two thirds tax cuts and one third reform. it is clear that republicans are
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focused on getting corporate reform done as aggressively as possible, and they're looking for ways to grab revenue. if you look at the personal side , it is not terribly efficient how they are reallocating it. on the corporate side, the best estimates we've seen from software, a political economists, is that should add 10 to 30 basis points a year. you compare that to $1.5 trillion over 10 years and that is somewhere around 75 basis points of additional growth, without adjusting for inflation or higher interest rates or more aggressive rate hikes or things like that. julia: if you take it out of the basis-pointan to 30 potential increase, a significant portion could be enough by stronger dollar and higher interest rates. troy: 10 to 30 and terms of the corporate reform, which leads to higher productivity, and that the outright tax cuts.
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let's call it 100 basis points. many look forward and saying that instead of hiking to to three times next year, they hike four to five. tod markets were less going finance the deficit at these low rates. get get 25 to 30 basis points back of that. there is no clear answer to this. it is unclear what happens 12 to 18 months forward. at that point it is a guessing game. scarlet: there is a lot of noise and mixed signals. what do you look at the gauge progress were setbacks? troy: what we are focused on this year into next is opportunities focused on military reform, because that is when you can count on. it is too early to make defined that's based on corporate -- defined bets based on corporate reform. look at banks, classic example. the banks really hard after the election. this year they have been trading sideways.
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-- reforms happened as a bit and it will continue on the regulatory side. his pricef texas for into this -- -- how much of tax reform is priced into this is difficult to gauge. in terms of uncertainty, focus on what you know you have already gotten and will continue to get. knowns. known troy: as donald rumsfeld said. [laughter] julia: some people say that there is optimism that some thing will get done and others have more caution out there. i think investors are cautiously optimistic in general. it would be a political disaster if republicans don't get something done. the question is, what is that something? does it benefit corporations versus the highest marginal taxpayer? it is clear there is going to be winners and losers, and the
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losers are more than likely going to reside in the inner part of the country that have higher marginal tax rates. let's look at the markets holistic way. there is a temptation to compare what we have seen now with what we had in 2007. do you think there are meaningful parallels? the most meaningful parallel is in corporate credit markets. we had healthy appreciation but not out of control appreciation. they are very, very tight. corporate credit is where we have seen the most deterioration in underwriting standards, and if you compare get to gdp, we are back to where we were precrisis. biggest biggest parallel we were seeing. we were discussing animal spirits, and you are seeing those come back more in the equity markets, akin to the late 1990's cycle. in 2006 and 2005, the animal spirits were focused on credit
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and credit extension. julia: tie everything together. how do we make money right now? troy: there is still enough things out there, particularly with securities tied to regional banks, securities types housing markets, also opportunities focused on m&a more as long as you avoid a recession, you can make six to 8%. the question for investors is do you want to flip your hat towards greed and chased bank stocks or things of that nature that have 20 to 30% muslims we don't have a recession -- 20 to 30% rates, as long as we don't have a recession?' julia: does that mean a 30% upside in technology? troy: if you look at forward revenue growth, there is reason to expect for the next several years, 30% more upside in the sex, barring recession -- 30% more upside in the stocks, barring recession.
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scarlet: does that mean that europe is out? europe does have a great sure of --hnology company does not europe does not have a great share of technology committees. troy: regional allocation in europe -- interesting to point out, there is very little tech there. it is based more on hard m&a, meaningful discounts, better earnings growth, better technical picture. on a relative basis can we did think that on a relative argument, particularly if you strip out tech, europe is meaningfully better. reat!: g vote for europe. troy: brexit schmexit. [laughter] scarlet: what julia says every day. julia: troy gayeski, thank you. let's check on the headlines in
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"first word" news with mark crumpton. mark: i'm sorry i'm getting in the way. as we just mentioned, the ways and means committee began work on a republican tax overhaul plan. committee chairman kevin brady called it a monumental challenge, but added that legislation will help spur job growth and boost the economy. brady: from top to bottom, the tax cuts and jobs act is the most transformational tax reform bill since president reagan reform to the code in 1986. >> legislation have to solely by the majority party behind closed doors, which would definitely is not made public until late last week, puts the well-connected first while forcing millions of american families to watch as their taxes go up. mark: the ways and means committee is expected to spend 40 finalizing the bill that the full house. asked before thanksgiving. campaign officials
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paul manafort and rick gates cannot travel internationally even under revised bail terms. today, ahearing federal judge also said she would revise the release conditions depending on what assets the men pledge to secure their freedom. gates, under house arrest, have pleaded not guilty to felony charges. on japan toling exercise the string with our actions and words. the statement from the chinese ministry of foreign affairs came after president trump called -- full a joint press conference with prime minister shinzo abbvie that japan will be able to shoot missiles from north korea "out of the sky" with military equipment from the u.s. he also called on china and pyongyang to engage in dialogue. after meeting in milan, the group has come to an agreement
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that climate and environment-related factors can exacerbate health risks and create new threats. the ministers said there is a need for greater awareness of the issue. global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. julia: thank you so much, mark. we will be talking about president trump's asia trip. for now, lloyd blankfein, ceo of goldman sachs, tweeting julia: how true. scarlet: coming up, the paradise papers add to drama in a d.c., and commerce secretary wilbur ross in the spotlight, facing financial disclosure questions. wilbur ross on the record with us. this is bloomberg. ♪
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this is "bloomberg markets." i am scarlet fu. julia: i'm julia chatterley. time for the biggest business stories in the news right now. apple is selling bonds to fund stock buybacks and dividends. the iphone makers planning 6 to 8 bonds, and that the 30-year security could yield 1.18 percentage points more than treasuries. walmart has been put on notice after target and best buy rolled out free shipping deals for the holiday season. the move highlights the importance of retail industries, the so-called home delivery
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system as a testing battleground this holiday season. walmart has yet to announce its strategy for the black friday promotional period. that is your "business flash" update. black friday! scarlet: day after thanks giving. wilbur ross is under fire for business ties to vladimir putin's inner circle. he reportedly failed to tell congress about his business relationship with putin's son-in-law and emotion oligarch under sections. ross told bloomberg yesterday nothing wrong. secretary ross: we had no business ties to the russian individuals under sanction. prior to my joining the board of navigator, they entered into some charter arrangements with a russian hydrocarbon company. i had nothing to do with the negotiations, never met the
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people under sanction. they never have been under sanction. there is nothing whatsoever wrong with navigator having a deal with them. second is to the disclosure, much has been made that it wasn't disclosed. , in three places, on my form 278, which is public document. .3,, and, as well as the office of government ethics website, public website. .gov.ymbol is oge >> ok, couldn't be more clear, but with hindsight, there are allegations of ethics, creating a conflict of interest. do you think you should have divested this? secretary ross: well, there is
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no conflict of interest. we don't regulate shipping. that is why the oj the -- oge retained shipping interest. francine: would you welcome an investigation into this? secretary ross: investigate what? francine: you have done nothing illegal? nothing illegal, nothing improper at all. came to an independent decision. before i meet with any corporate that ithe oge clears, a, can meet, and b, the extent to which i can participate in conversations. i've never sought a waiver from any of those strictures. francine: secretary, you are keeping the stake? secretary ross: i didn't say that. you said anything improper.
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there's nothing improper with the way we handled the meetings or the investment itself. francine: we keep the stake -- will you keep the stake? ross: probably not. i have been selling it anyway, not because of this. francine: what is the president's stance on dealing with china when comes to tariffs and steel? secretary ross: we hope for specific deliverables. we have a trade mission of 29 u.s. companies over there, and we hope to come away with tangible and hopefully large deals for them. tradene: are you talking post brexit? london hasoss: several different things. i spoke to the trilateral commission. things, asinds of
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well as meeting with various government officials. i went to the balfour centennial dinner. francine: secretary, if there is a brexit that which the u.k. out of the eu, how quickly can the u.s. have a trade agreement with the u.k.? it should gos: pretty fast, because why we cannot negotiate right now, that is rooted in under ec rules, we do have a working group that met in july in washington, is meeting next week here in london. they are kind of scoping things out and going as far as they can without violating the eu regulations to make preparations. ♪
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"options insight pur."
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i'm julie hyman. everyone is talking about tax reform and the new fed chair. you are looking ahead to the new holiday season. what are you looking at in terms of retail stocks and your firm's expectations for the season? >> this is earnings-related, because 80% of the s&p 500 components that a reporter, about 80 or so of the ones that have to report are retailers. it is earnings time and retail season and it is a mixed review. we saw michael kors this morning, stock up 12%. awful lot of this version can meaning some of the outcomes others come there could be real risk. volatility has to be expected. julie: you don't want to come in and put a trade on the xrt, for example? individual stocks winners and losers? >> we actually want to do both. julie: ah, ok.
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>> the national retail uperation pegs holiday sales 3.64%. look at confidence, highest since 2001. also, there is a little misunderstanding in terms of performance and retail. if you look at the s&p at the industry group level, retail is actually performing welcome the sixth best performer out of 24 industry groups your today. that is really colored by the fact that amazon has done so well. you mentioned xrt, and equal-weighted etf. that has underperformed. what we're saying is let's take a shot at the broad swath of retailers doing a little bit better in your and to catch up to the broader market, even given the fact that you will see volatility in individual stocks. is bigand so that picture. to get more specific, you sent me a trade, and i have to say, i did a double take and forgot
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that this company has changed its name. i guess it will take a little time. tapestry, which was coach, and now it has incorporated other pieces to become a tapestry, so to speak. reported akors strong report, what are you looking for from tapestry? >> how analyst has a very constructive long-term view. that said, we are very cautious. they're going to report tomorrow morning. this is a structure you can use across the space if you a long the stock and want to hedge it. you can put on the caller, and that is what we are talking about with tapestry. julie: how does that work? >> go out to november expiration, and we want to put on a 38, 44 cp;;ar/ collar.4 you are selling the upper strike call. you are doing that for flat. one thing you want to make sure
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is that the strikes are 12% apart. otherwise you trigger a constructive sale. it is a taxable event. what you are committing treason selling stock, up about 7%, and in exchange, this committee to is -- what you are committing to is selling sex mother about 7%, and an extension it trades 50 - that is what we want to caution against. jim with the retail playbook. julia: still ahead on "what'd you miss?," charles robertson will be joining us with his insight on saudi arabia. this is bloomberg. ♪
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mark: i am mark crumpton. it is time for "first word" news. police say a shooting in texas. to have been caused by a domestic situation.
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sentrities say the gun man offensive messages to his mother-in-law before the attack. >> the suspect is devin patrck kelley. he is 26 years old. he was residing in texas. the cause and manner of the the shooter will be determined by a pathologists during the autopsy. the investigator found evidence at the scene that indicates the subject may have died from a self-inflicted gunshot wound. mark: 26 people were killed at the church, 20 others were wounded. defense secretary jim mattis is facing questions from nato allies and partners about what the next six will be -- next steps will be in the fight against the islamic state in syria. secretary mattis is holding a series of meetings on how to preserve peace and ensuring that islamic state militants don't regroup. commerce secretary wilbur ross says he does not have any ties to the russian


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