tv Bloomberg Markets Americas Bloomberg November 7, 2017 2:00pm-3:30pm EST
shery: we are live. the dow 24,000, another major milestone. we will get important perspective from jeremy siegel. touches down in south korea. and details on why walmart's mobile payment app is giving apple pay stiff competition. taylor riggs was here. we are low for the session but also the lows, getting a nasdaq,om that, the
getting hit. the worst more than 1%. let's dive into that. charted the ratio of small caps to large caps. outperformedvely but take a look at today. you have this big decline here as it sinks lower than the large caps today. we're back to our lows. we are looking for that senate tax bill to come thursday. let's look at individual stock movers. we are a month out. i am looking here at kohl's and target. they have started those promotions already. expectamerican consumers
to do a majority of their shopping friday. the season is lasting longer. you have to make up for that in volume offset that pressure. some retailers trading lower. malle looking at the rates. they are trending higher on takeover speculation. bloomberg regional mall index. perhaps some good news here. flex financials are under pressure at the moment. we are seeing bond yields decline for the fifth straight session. just something to continue to watch after we solve that threshold kids at 2.3%.
thatongtime bull markets led is now calling for another market milestone. here to talk about what is driving this is jeremy siegel at the university of pennsylvania, joining us from pennsylvania. always great to see you. from 24,000o far even now. it is not outlandish we could get there quickly. as we get up in those thousands each percentage is lower and lower. we are in a award needed world bull market. take a look at japan, the nikkei. u.s. bullt just a market.
>> there is a global synchronous growth story. but, when you look at stocks at record highs do you believe there is a trump trade in effect? ? >> tax reform is important. it is not the only thing driving this market. interest rates markedly low. i'm surprised on the 10 year staying as low as it is. low interest rates, great earnings, those are the major drivers. i do think the market wants tax reform. , the controversy is on the personal side.
i am hoping that does not torpedo the corporate tax reform that i think the market is looking forward to. he tried to quantify what has driven the gains. he made a chart based on the driving reasons and found earnings growth has made out the bulk of gains and the economic data in the united states. one of the biggest things that hurt was downside. in terms of taxes in washington that was more of a negative. if we see corporate tax rate cut in half, how much of that is priced in, and how much of a leg up could we see?
anotherfinitely have 5%. that is more important than the personal. favorableothing that for business, especially corporate. unfortunately i was hoping we hikes.nwind the tax to happen.ot appear it is on the corporate tax side. , that is most of that an extra 5%. thousand. extra that, the good things have happened. then you have to have to keepable earnings driving this market. corporate tax reform could drive
another 5%. i want to get your take on the dealmaking we have been saying. proposed deals. .isney holding discussions how do you fold in this activity at these current levels? confirming we did not see a lot of deal making. we have a more conducive political climate than we did with yields so low firms can swap their stock or do row as they may need to these corporate deals. that is always a positive.
>> that is also a sign corporations are seeing value. when you look at this sentiment investment,etail that suggests they are not all in on this rally. they are not happy about it. what signs are you going to be are startinghings to turn? >> this is the most hated bull market in history. people shaking their heads, i don't believe it. after the trump victory, i don't believe it. that is a climate that does not in bull markets. blue skies, favorable outcomes, and everybody believes 15, 10% per year.
the fact that we do not see that i think means that this is not over yet. scarlet: what is the biggest risk? >> i would say interest rates. if they stay low, we solve that pop above 240, if that starts pressuring up word and we see move, we seeces oil surging. raisenly for the fed to in december. if these complacent bondholders , commodityis if it starts pressuring, that will pressure stops. certainly we will make it more
difficult. alan dershowitz vonnie: -- scarlet: thank you so much for joining us. let's get you checked on first world news. >> the house judiciary has announced jeff sessions will testify before the panel november 14. the committee will counsel the attorney general about what george papadopoulos told them about meetings. sessions will be asked to explain why he denied any knowledge of any trump campaign manager having any connections to russia. addressed aresident group of visiting mayors from catalonia. people did the at the ballot hawks what he calls the spanish governments repression of the wish for independence. he fled to brussels after they
dismissed the regional government because of attempts to secede from spain. prince said's crown today the ballistic missile launched at the kingdom was a direct military aggression by the iranian regime. the saudi led coalition ordered the closure of all ports and grounded all trinitarian flights to the country. the first nation to give women the vote now wants to close the gender pay gap. news in the -- new zealand's new prime minister says she plans to achieve pay equity within four years. addparty is promising to dress social failures including the treatment of women at work. global news powered by 2700
believe it makes sense for north korea to come to the table and make a deal that is good for the people of north korea. let's see what happens. scarlet: joining us now, shawn king. i upgraded you. he is now the senior vice president of park strategies. you say south korea should take the lead. it is clear the president is seeking some kind of deal. jong-un are kim looking for a specific deal with a specific outcome? is willing to he negotiate but the nukes are off the table. which is code for us this of
bowing our defense treaty and even with japan. it was a war between north korea and us, and not north korea and south korea. a precondition which would be the removal of u.s. troops from the south which would lead the south open. it would be a disaster on both fronts. southnot delegitimize the at all. the north is a xenophobia regime. delegitimize the south. we need to put the south forward. when you hear that pyongyang should come to the table should we read anything out of that?
>> this has been my fear, he kim, that he would tim,nored to meet with that he would go around our ally and cut a deal. there is no good way out of this which is why the akoni and sanctions is the best way to go. beene sanctions that have announced, have they had an effect? don't really know. south africa took a generation to end apartheid. sanctions have been willy-nilly. we announced these secondary cities. we have only done the bank, the major banks, we have left them on the table. scarlet: we were all kind of
looking at each other wondering i have never heard of this thing. julie: do you think you'll make progress on convincing china to an act further sanctions or put pressure on north korea? >> if they do it will because med the. same bed, different dreams. it wants to keep the u.s. alley off of its land. we hopefully want it to end. he will listen to it, be polite but not take any real steps. scarlet: why has north korea been quiet? there has been no missile tests thus far. what should we be happy about that? in --rump had his rally
we have the icbm test and a hydrogen bomb test. david they want trump out of asia or they are waiting for this hydrogen bomb test. they want to drive us off of the peninsula. seven weeks of quiet doesn't make me feel any better. want to intimidate or absorb south korea by forces. julie: about this situation, is there -- what is the likelihood there will be a positive outcome? , he is in south korea without an ambassador in place. that is true. i don't think we are going to have a war anytime soon but we
could be in this another 20-30 years. cannot give up the nukes. otherwise they are a poor man south korea. we are going to have this problem. julie: thank you. still ahead, goldman sachs is shaking up the leadership of its commodities business. we have details of who and what my coming up. this is bloomberg. ♪
it is the most ever. they want to become a top arranger of leveraged loans. up its sachs is shaking growth plan. .hey will take on new roles they become head of global credit. >> that is your business update. let's get more on the shakeout. what does all of this mean that they are making these changes? >> it is a time of change at goldman. they go through times like this periodically through the year.
--s is a time when they have they are putting younger people into new roles. learned, they will have 20 coo's. they have not had that in a long time. that is an executive function on top of the trading business. in the past they have had heads of trading desks, global credit trading. coo types at had the top of the business looking of the businesses making her they are working together. gmt,et: if i look at m they are find -- fond of having to people in these senior positions. tell us about the new co-ceo.
what do know about them? >> he is in his late 40's, early 50's. he is a high flyer. rising up the ranks. that is a big business. they have been making inroads recently in the last few years. strength on the fixed income and the equity side has been hedge fund. .hey have done more >> quickly here, some of these changes are being made because the business has not been doing well. goldman is indicate
going to try to write the ship? >> that is a good question. they are taking it seriously and they thought that the structure could help them get farther down the line and fix their woes. it is not surprising they are taking it seriously, but this is an external signal that it is important to them. scarlet: all right. thank you. still ahead, the next shale revolution. the meteor rise over the next 20 years. up, this is bloomberg. ♪
examined the effects on the global oil market. commodities are just closing. crude sliding after touching its earlierprice since june . opec says he could see global oil demand peak if electric cars boom and keep an i on the base metals facing some pressure on constructionse activity. if you need technology for drilling you need core laboratories. extract more oil for less money. ceomberg sat down with the about how they help companies get more and what a difference a few percentage points makes. their type curve
is about a million barrels. they produced 10% naturally. if we came ad technology to that , for anuce that additional spend of a million or $2 million you can see the return on that is the highest return of any barrel they are going to produce. >> more oil for less. >> correct. is the single most important thing you are working on that can help that? >> a client came to us and said we are at nine, 10% production. we said we have some ideas. we tried to go the old-fashioned way. we tried to push more oil. it fell.
way, we found certain compositions of gas, if we expose them we could strip out components of that come in rich the gas, drop the pressure. we have referred to this as gas cycling. >> what is your success rate? >> pretty high. it depends on what the composition is of the gas. >> does it cost more? you have to pay up for it? pay.u do have to imagine if you are going to stimulatell, to incomplete that it is going to cost seven or $8 million. you are going to get a million barrels out of the ground. spend going to ask you to
$2 million i get another half a million barrels out. >> what is the adoption rate for this technology? successes in experiments we have done for several dozen companies. a studyinitiated looking at the equal for formation. ford formation. our clients are going to talk about it for the next couple of years. they are going to have to take that to the field. one of the questions is containment. can i put this recipe of gasoline and get it to go where i want it or is it going to leak into false or adjacent formations where i do not want it to go? we are putting tracers in with the injected gas looking to see in places thatp
is unexpected. >> what inning are we in? seen widespread adoption or is in its infancy? inningse the early reference. we are in the early innings. mostly changes have been mechanical. how much sand do i put away? we are looking at a different approach. we are trying to work at a chemical interaction level. there is some over fracking going on. wells are too close together. an older well and a new well. no one knows what the relationship is. >> that is correct. we have wells that bash each other. that is not good.
one plus one does not equal to in that case. tracers weumber of use that we inject in wells drilled nearby. we would hope we would not see one tracer across to another which means wells would have been bash. applying this technology will help us determine what the proper spacing is. >> what do you think can stop the growth? >> there are certain tier one properties. we define those using 23 parameters. tiern define tier one, two, tier three. , it gives you a return on your investment capital. that is a limiting factor. good reservoir rock.
steel's don't miss alix special on how it will impact the world. that is thursday. thes get you checking headlines. mark: a houston tv station sites a police report which shows the texas church gunman escaped from a mental health facility in 2012 and threatened his air force superiors. the mass shooting revised the gun control debate in congress. when asked what can be done to prevent this, paul ryan said existing gun laws should be enforced. >> this man should not have gotten a gun. he was a domestic abuser. you're not supposed to own a gun. that is why we have these questions, how did this get through the crack's?
mark: the air force failed to violences domestic conviction. theassociated press report pentagon has known for two decades about how your to give military criminal history information to the fbi including information air force did not report about devin patrick kelley who assaulted his wife and stepson while serving. jim mattis said he has directed the pentagon inspector general review circumstances of the case. an attorney for the man charged with assaulting rand paul says he met with capitol police are presented to us to discuss security matters following the attack. rené boucher with assault which left senator paul
with five broken ribs. a judge ordered him to have no contact with senator paul where his family. jerome powell may have to wait until after thanksgiving for a senate confirmation hearing. chances are slim parable will testify in front of the senate banking committee before november 23 but hopes are to move quickly. global news 24 hours a day powered by 2700 journalists and analysts. this is bloomberg. investorsing up, snap racing for third-quarter results. shares trading below its ipo price. analysts are predicting losses, even as revenue grows.
scarlet: this is bloomberg markets. julie: it is time for our stock of the hour. the stock trading below its ipo price of $17. let's bring in cory johnson. it doesn't make any money now. analysts expected -- cory: [inaudible] >> this is a loss, that is the consensus estimate. these are numbers. short of the stock.
betting the fundamental business lacks viability to put it kindly. revenues are going to be important. the number of daily active which you can see the growth rate starting to slow. the growth rate itself, 4.2% last quarter down from 5.1%. i think it is a big deal. growth, now stories has 300 million users. the growth drops to single digits for snapchat. now low single digits. because lessem
than 200 million is less than twitter. one of the other numbers is the ad business. what exactly do they report about that? cory: what that shows you is how much marketers like it. peoplet to have young looking at stuff. they spend all of their income. scarlet: and their parents income. corey: yes. spending more. but is the case they make decisions about what brands they are going to identify with. the purchaser of ax body spray will buy it 20 years for now.
revenueave seen is that per user is a growing much. if you are not growing users you can't grow the business a lot. avenue per user number got to -- $1.05. that is real progress. that is where the numbers could look positive. they have yet to have a single year of positive growth margins. 6 when you look on the bloomberg, they disappointed investors. the stock has reacted falling and double digit percentages. 6 eps eps disappointed.
you see the reaction of the stocks. it falls by 14%. scarlet: snap offers no quarterly guidance. cory: they could change the way they report things going forward but they are going to have to give investors something to attach the dream too. >> when you look at it with a skeptical eye as you should, is there anything that could be or is working for snap? corey: they had a big hit with the dancing hot dog. >> i somehow missed of that. ,ory: your son didn't though. it is a hit driven business. they have shown successful
ability to create expensive realtors. it was a lasting head. -- hit. the stock alone is a fortune. is high tech and expensive to do. what is the next dancing hot dog? for today's sector spider report, we are going to look at technology. -- lk is the text wider is littlee that etf changed today. one of the things pulling it couple of chipmakers.
skyworks solutions coming out and reporting earnings that beat estimates. analyst said that in a note the nearly in-line outlook may pressure shares that it is not good enough. that company reported numbers that beat estimates. stocks up 47%. each closed at records you -- yesterday. we should mention what is going on with the big chip stocks. broadcom making that offer for qualcomm. qualcomm is still reviewing that.
scarlet: we will continue to watch that and see how the company eventually responds. i'm glad you brought up the sector spider etf. you don't want to miss a new weekly show, etf iq which i will be hosting along with our in-house etf specialist. we debut this 5:30 in london. it is the first show to focus on etf's. etf iq wednesdays at 12:30 new york time. let's get you to the bloomberg business flash. there is a game plan for open banking. fundamentally, what do i mean ,y this, taking the challenge
understanding the need to embrace the model and new technology, technology or my -- relies at the heart of the banking relationship. sharet: enforces banks to data with third parties and competitors. amazon's move into the 450 billion dollar u.s. pharmaceuticals market could reshape the industry. the shares of cbs and walgreens have dropped since speculation about entry into that market intensified. it could use its considerable buying power to offer generic. draft will begin live streaming basketball games by european teams. to woo cording cutting sports fans. experience, media
and gaming are going to be in the same place and seamlessly acceptable to customers. it increases revenue and participation. if we can demonstrate that there will be other sports that will be eager to work with us. businessthat is your flash update. walmart versus apple. mobiled in u.s. payments. the growth of these transactions, from new york this is bloomberg. ♪
available in 4800 stores. how close is this race? is it walmart, making this prediction, other analysts are also making similar predictions. >> by the end of next are walmart will surpass apple. it was surprising to hear they were number two. they said we are now the second most used. we said really? we remember them launching this. they had not talked much about it. it is part and parcel into e car e-commerce.into they have created their own mobile payment plan. was this always part of the plan? initially they did have talks with apple. >> that is what we found out, even after they launched their own app, they were still talking to apple to see if there was
some way to blend the technologies, walmart uses the qr code when you are at the register. scarlet: you don't swipe your phone. >> you do not swipe your phone. you have to download the walmart cap. we read the register have to scan the code. it seems like something from a few years ago but it has been successful for apple. they have done a good job of building this out, you can add gift cards to it. it is working well for them. because it is part of this package? walmart pushes all kinds of things. a reward system. >> they have never been one to say we are going to give a special price for this and that. they don't have a loyalty card. sam walton said i'm going to have an everyday low price but
there are bells and whistles attached. we are talking about the core walmart shopper who are still has it is to shop online. arounds still skepticism mobile payments. 20% are concerned about security. some don't know how they really work. there are more concerns about these. the reception to mobile payments has been we are still not there yet. scarlet: none of us use mobile payment systems, right? >> i have apple pay, how often do i use it? is it accepted here? by the time i have figured that out i have brought up my debit card. julie: why is walmart pushing this so hard? >> it is a way of moving more about shoppers, giving shoppers a way to pay, collecting data on them as well. wants, they want
you in their ecosystem certainly. anything to keep you on that shopping at and get you off of amazon is a good thing. for walmart it is about giving you as many different ways as possible. scarlet: all right. thank you so much. so try that walmart pay and let us know how it goes. reminder, steve mnuchin will join us at 11:30 ea reform, discussing tax along with other priorities. rum new york, this is bloomberg. ♪ -- from new york, this is bloomberg. ♪
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. ♪ in newit is 3:00 p.m. york. i'm julie hyman, and for julia chatterley. scarlet: and i am scarlet fu. welcome to "bloomberg markets."
julie: we are live and bloomberg world headquarters in new york. here other top stories we are covering. tax reform, in the spotlight on capitol hill. the house ways and means committee continues its markup of the bill to overhaul tax laws treat we look at what is in and out for now as the debate heats up. a failure in the bid to win boards seats at adp. more on what the decision means for the company. like applenationals and ford suggest a surprise provision on offshore affiliates in the tax bill. we hear from illinois congressman peter roskam. we are one hour from the close of trading. let's check the markets with emma chandra. turnaroundbit of a today, all in the red for the major gauges after hitting
intraday highs earlier in the session. concern in the market over tax reform, the house high going over its bill. the senate dropped its own version of the bill and the could be significant differences they are a must of that might be making investors a little more cautious. also on investors's mind, the tail end of learnings -- the tail end of earnings season. take a look at the bloomberg. the top shows how the s&p has performed since the beginning of earnings season. we are up about one point 5% there, driven by materials and the tech sector. number of companies that are purporting, and when. we see a big spike in the middle of october and very early this month. we are getting to the tail end now, but the companies that are still left to report, the consumer discretion sector and retail companies have yet to
report come in the coming weeks. among the ones that have already we have seen some variations, like michael kors spiking 14% and others, falling. let's look at some notable .overs priceline and privet visor are both down. it was a tough day for them as they had disappointing forecasts, and that led analysts led analysts to question the sustainability. , if other movers on the day we can just switch the board we will see weight watchers is a company that has done really well. they waived the profit forecast. is all being put down to the fact that oprah winfrey took a stake in the company couple of years ago. if you look at the performance of the company from when she took her stake, it is up nearly 700%. finally, let's look at couple of companies reporting after the
bell. we have snap. the focus there will be on average revenue per user, the growth rate of that. it has come down in recent years as it faces more competition from the likes of instagram. , theake two interactive makers of grand theft auto. there is concern about what else is in the pipeline for them. so much,,.ank you the house tax-writing committee is in its second day of work, hammering out details of the republican tax by. senator mitch mcconnell says there house -- there bill markup will be next week. let's get more from sahil kapur. sigh up, tell us what is in and what is out right now as we go through day two of markup. ahil: we have seen democratic amendments designed to put republicans in a difficult locks politically.
the other would limit debt. the other would reinstate state and local tax deductions. the republicans rejected both of them and are now debating various other aspects of the bill. it is a contentious hearing, yesterday.n it has gone down today after members were yelling at each other yesterday and republicans were areas over last-minute changes proposed by republicans. are the republicans likely to win any concessions in the final tax bill and could any of them actually vote for? seeing unanimous partyline votes where republicans vote one way and democrats vote the other way. even centrist democrats have objected strenuously to the fact that this adds tremendously to the deficit, 1.4 trillion dollars according to the latest tax committee estimate. so we are not looking like we are in a situation where
democrats look like they will be able to get behind this. republicans, on the other hand, are almost unanimously by this bill inside the committee. there are concerns about provisions like pass through limitations, and someone that to be broader. about theoncern adoption tax credit going away, for pro-life members, they think that is important to keep. so, a variety of different concerns, which is why this effort is so difficult. scarlet: when you look at the senate side, you have senate democrats meeting with white house advisor gary cohn, and short, to discuss the effort. why is the white house speaking with them? when i have direct conversations with senate republicans? been going ons for a long time. the white house has spent more time speaking with republicans than democrats. but the white house wants to
show it is reaching out to democrats. there are some red state democrats like joe mansion and heidi heitkamp, and they want to show that they are at least engaging in good faith. so this is to wait theater, from group a centrist democrats want to make it look like they're willing to reach across the aisle. but i don't see any indication that even the most conservative democrats are ready to get behind this bill. joe manchin says he doesn't want a bill that adds to the deficit and what they are working on will certainly do that. just when we thought the health-care debate had quieted down, it is rearing its head again, this time in the attempt -- this time in the tax bill, potentially. cruz is calling for a repeal of the aca mandate. what are the chances of that happening? sah: thisi has beenl brewing for a while. i spoke to several house republicans in the last hour or so and it looks like it is increasingly likely that this
mandate repeal will not be in the bill. taxers fear mixing they debate and the health-care care debate will complicate this effort. health care reform died in the senate because you had several not willing were to vote for a bill that repealed of the individual mandate. house freedom caucus chairman mark meadows told me that he does not expect the individual mandate to be repealed in the tax bill. that is not a red line they put out there. bloomberg's sigh neil kapoor. -- sahil kapoor. brookfield asset management is said to have held preliminary discussions with gdp about acquiring a stake in the company that he doesn't don't and taking a private. gdp has already been rising on some chapter about something
like this happening. you can see the shares now, spiking even more, rising the sessiona single in about six years. according to our reporting, the companies have discussed a premium of 10%-15% above the gdp share price. we will bring you any developments we get on this breaking story. let's check first word news with mark crumpton. president trump calls north korea a threat that is a danger to the entire world. the president is in seoul south korea, where he met with the president and called on other nations to stop doing business with north korea. mr. trump also said it is time for kim jong-un's regime to come to the negotiating table. arabia's crown prince, mohammad bin salman said today, the ballistic missile launched at the kingdom by yet many rebels was, what he calls a direct military aggression by the iranian regime.
and response, a saudi led coalition ordered the closure of all ports and grounded all humanitarian flights to the war-torn country. predicts shale oil production in north america will grow faster than expected in the next four years. therding to the cartel, shale industry will produce seven point 5 million barrels a year by 2021. that is 56% higher than opec forecast a year ago. output cuts this year triggered an oil-price rally that helped american producers. the former cattle and president addressed a group of visiting mayors from catalunya read he said next he will defeat at the ballot box what he calls the spanish government repression of catalunya's wish for independence. spanish government dismissed the regional government and parliament because of attempts to secede from spain. madrid says it is upholding the law, but critics claim being
separatist allies, they are being persecuted. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. mark crumpton. this is bloomberg. scarlet: coming up, bill ackman of pershing square will discuss the gdp boardroom battle. from new york, this is bloomberg. ♪
markets." on scarlet fu. julie: on julie hyman. billionaire activist investor was met with disappointment today after contentious proxy battle with adp. adp shares initially declined but as you can see have since recovered and are now higher by 1.4%. bill ackman spoke with vonnie quinn and spoke about white markets are reacting favorably to the proxy outcome. >> when the company came out and characterized the results, the stock went down. i went on another network and explained the facts and the stock is now up today. wise it up? up?hy is it next three has the quarters to demonstrate what they have committed to
shareholders. they won the contest fair and square because they committed to meaningful higher margins, they committed to launching a product to address their losses in the enterprise space, and they committed to returning to growth. it has been a tough quarter, this past quarter and they are expecting the growth to turn, beginning in the middle of next year. if they don't see those commitments met by the company, we will be right back there three quarters from now. some large shareholders were angry that you put adp through an extensive battle and it is a company that has been very good to its shareholders. but you also do a lot of work by the scenes, on adp and you present them with the results. bill: i have never met with or heard from an angry shareholder. during this assess we met with or spoke with most of the top shareholders and everyone of them said we did incredible rish are some the company, that
lifted the veil on adp, that it opened their eyes and help them understand the business, and roxy consciousness is an inherent the healthy thing for shareholders and management teams, because against liberal to focus on the issues. we researched a whole bunch of issues about the company which were not as well-known and now the company has a chance to address those issues. and we are rooting for the management. my goal is not to win proxy fights but to succeed. if this board of directors can get it done without our not having to do any more work, that is a huge win for us. that was bill ackman, pershing capital management's ceo speaking with vonnie quinn earlier today. for the "bloomberg business flash." blue apron fell to a record low today after the ceo highlighted problems with profit margins at its newest fulfillment center.
margins at the center in linden, new jersey, were significantly lower than the average at other facilities. the company has lost about 70% of its value since its june ideal. googles a time of unit will start chauffeurin people in minivans without so-called safety drivers. a pilot program will be held in region in phoenix. shares of weight watchers are soaring. the weight loss company posted third-quarter profits that beat estimates. weight watchers also boosted employee or forecast. almostck has increased for full this year. a key to the effort is oprah winfrey. she bought a stake in weight watchers two years ago, about 9%, and she has become the face of the business. ♪ >> that is your business flash update. let's get back to the breaking m&a news, brookfield is said to
be in preliminary talks with gdp about acquiring a stake in the mall owner that it doesn't already own and taking the company private. bloomberg helped break the story scott joins us now on the phone. scott, tell us about what could be motivating brookfield and ggp? about 34% of owns this company and they were in agreement until the beginning of the year, basically, when they weren't allowed to increase their position further than 45%. so now there has in some preliminary discussions about potentially buying the shares in the company that they don't already own. little about a their assets, brookfield's assets versus gtp's assets? how good of a fit is it to combine these companies?
this would fit naturally in that portfolio because they own everything from office buildings, to malls, underneath their umbrella. and this would be an expansion of an existing position. julie: if we can take a quick look at the bloomberg i just called up the price to the sfo ratio, common metrics that real estate investors use. gp. highlighted bars gd price.rious about where are they in the price process, in terms of determining whether, if brookfield is going to make this offer? that understanding is talks are focused on a 10%-50% premium to where the were trading earlier this week before 10%-15%ws broke --
brokers group. we have had oil rise and fall over opec forecasts today. what are you looking at come on the charts you are watching? we are looking at whether this is a real breakout or a false breakout. we have broken out of the range we inhabited in the past year or year and a half, low 50's-low 40's range. seeing above $55, you can that we have come higher than all the previous peak. what remains be seen as where he go from here. if you look at a longer-term chart you run into a little resistance at around $60. there is always the geopolitical, i think it is exciting to focus on a new sector that people have been overlooking for so long, because it had largely been bad money for so many months. julie: it has been perking up again but not quite as much, if
you look at the stock that produced oil or oil services, they have not been doing quite as well. the bloomberg chart looks at the etf.the oil company that is the yellow line. you see what oil has done, the breakout you're talking about is in white. oil stocks have risen but they haven't -- >> that tells me equity investors are not buying into this. julie: they have been burned before. steve: right. at the largest oil companies have some leverage to the price of oil. they have a cost of production and i are you get above it, you have some leverage. so, stock to outperform if the market believes in it. but it is even more surprising because we have a pretty boy at equity market. a lot of times you don't see it outperform if you have a meandering market with a bad tone to it. but, we certainly have an upward
tone to the market so it is perplexing. look at an you option's strategy related to this, do you look at the xle, or individual stocks? steve: some of each. today i looked at xle, i looked at xlp, which is more heavily weighted to small producers. and i'm just trying to see, do the charts and does the trading activity seem to be showing a continuation of the upward trend? or is it something that may fade? the one that i happened to find seemed to be more likely to be fading a rally than pursuing it. is one of the ones you are looking at. what is one potential strategy you could do around chevron? steve: chevron is really interesting because it peaked around the middle of october, the 16th. and what it happened was, it
sort of found its level and then fell on earnings. not so much for earnings but for cash flow predictions and production flow targets for this year. it really hasn't materialized. you can see there was a gap on the earnings day, and we recouped the gap today but otherwise it just seems to be meandering. the trade i suggested was selling the december 1 15, 120 call spread, and buying the 120 basically saying this is going to meander lower. on the other hand, about 120 is a breakout, chevron is at about 121. so this is a protection against the breakout. if oil is going to find its level in the stocks are not going to follow it, this is the way to take out a few bucks, hopefully, while protecting yourself at the same time. you so much.
steve sosnick of interactive thanks group scarlet: you, julie. still ahead, we speak with illinois congressman peter roskam on the gop tax bill and the way going forward. he is a member of the house ways and means committee. and tomorrow, treasury secretary steve mnuchin joins lumber at 11:00 eastern time tomorrow, from london. bloomberg at 11:00 eastern time tomorrow, from london. from new york, this is bloomberg. ♪ retail.
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a new report says the texas church government escaped from a mental facility in 2012 and threatened his air force supervisors. ton asked what could be done prevent such incidents, house speaker paul ryan told reporters existing gun laws should be enforced. >> this man should not have gotten a gun because he was domestic abuser. we have laws on the books that say if you are domestic abuse you're not supposed own a gun. he was a domestic abuser. that's why we have all these questions with the air force right now, which is how did this slip through the cracks? mark: the shooter identified as devin patrick kelley did serve in the military but the air force failed to report his domestic violence conviction to the federal database used to conduct background checks. the associated press reports the pentagon has known for at least two decades, about failure to give military criminal history investigation to the fbi. that