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tv   Bloomberg Markets Americas  Bloomberg  September 29, 2017 2:00pm-3:30pm EDT

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scarlet: we are live at 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. president trump ending the week for another pitch with the gop tax report. they want to cut the corporate way to 20%, and could deliver a $6 billion windfall for biggest u.s. bands. -- banks. and trump could have had another change of heart. president and his treasury secretary met with former governor kevin warshaw and more warsh and -- more candidates for the new fed chair. and south korea banning initial point offerings, making this the second blow to cryptocurrencies this month. u.s. markets close in two hours time on the final training day of the month -- trading day of
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the month, not just the third quarter. like we are seeing a few new record highs we close on this day. s&p in the nasdaq on track, so i will call the dow jones mostly unchanged. i want to look at the s&p, on track for the eighth straight quarterly gain on tax reform. trump coming out and saying tax reform will be the rocket fuel for the economy. and then the nasdaq here, up 6/10 of 1%, by far the biggest gainer of all of these. the last record close we had was on september 19. keep up these games, we could see some new winners here. we are seeing a lot of these stocks on the nasdaq continue to outperform. they are driving the outperformance in the s&p and the nasdaq. i'm am focusing on facebook, that record high with 173. closing in, but green on the screen.
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deeper, micron technology's came out saying a market for the memory chips are good. so all of this playing in today. how do they compare that to the s&p and dow jones because this can be very volatile route the quarter, like scarlet said. not only is at the end of the month, but the end of the quarter, so we can have a look at how it has been doing. this massive decline year with a 3% loss on monday, but we are now up 3.3 percent. despite some volatility, ending up for the quarter. come into my terminal here to aboutt up, we are talking not only low volume, but low volatility as well. this would be the first time in a decade that we have had quarterly turnover here at less than $1 trillion. really low-volume, not a lot of buying or selling in either direction. that also ties into the vix a
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little bit. if you take a monthly chart of the vix going back 30 years, we have never seen it this level four. the last time it was, it was in 2007. chart, idea here on this going back. some low-volume all-around. that is how we are wrapping up the quarter. scarlet? julie: thank you so much -- scarlet: thank you so much. let's get to the latest on tax reform. president donald trump reporting his over paul plan today to manufacturers -- overhaul plan today to manufacturers in washington, calling it "rocket fuel" for the economy. pres. trump: my administration is working every day to lift the burdens on our companies and on the workers so you can thrive, compete, and grow. plane very center of that is a giant, dutiful, -- beautiful, massive, the biggest ever in our country, tax cut. is chiefjoining us now
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washington correspondent kevin cirilli from capitol hill. --.we also have kevin, i want to start with you. the president going and making his case for this tax cut. why is it so important for him to do so, travel around and talk up this package? kevin: he took his pitch to manufacturers earlier today, ok -- who will play a key role as one of the constituency is lobbying on capitol hill, who will begin crafting the tax policy. of course, the manufacturing community greeted this is a very receptive response, i talked to federal ceos a guide of the speech -- several ceos ahead of the speech and after who said they like what i had to here, and are hoping for more details on how exactly he will pay for it. they want the lowering of the corporate tax rate to 20%, they had hoped it would be 15, but they are glad the president is holding the red line on 20%, and
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this new issue of instant expensing. that would be opposed to the depreciated asset scheduling we have seen over the current tax structure. they like the idea of being able to have those kind of did options. take a listen to how the president himself tried to frame this, about why it is needed to lower that corporate tax rate. pres. trump: our current tax code punishes companies for doing business in the united states and encourages them to leave. that is what has happened, for so many years. that is one of the reasons, probably the prime reason, that companies are leaving our country. kevin: democrats are continuing to criticize republicans for continuing to push lower taxes on the wealthy while subverting the middle and lower class. the president and republicans pushing back very much against that criticism, suggesting the reason jobs are going overseas
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is because of the high tax rates on companies, as well as the burden on the lower and middle class. julie: so the debate is still pretty philosophical this point. what are members of congress doing right now? until the house ways and means committee introduces the bill? the past couple of hours, the senate budget committee unveiling their framework for the 2018 fiscal budget, essentially to get out of the wonky political rhetoric for a second, that would be the vehicle to move along tax reform. they have set about on november 13, the deadline for the deadline coming to fruition. the folks i am talking with say they are on schedule. they are on pace to fulfill what president trump has called for as well as treasury secretary steven mnuchin, which is to have some form of tax reform
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completed by the end of the calendar year. so far so good, and is one ceo "music to our ears." scarlet: one of the industries that has not moved abroad at all might be one that is the most, has the most to gain from this tax cut. it banks. we are not talking about companies that have taken manufacturing elsewhere, like tech firms for example. today, a story on that looking at how much these companies might have to game. big banks in the u.s. -- what will be the windfall for them? >> they do some stuff overseas as well, but the biggest banks, especially the ones that look like they will benefit the most, are very u.s. banks, such as wells fargo, bank of america, big retail branches all around the country. the biggest chunk of their revenues and profits are in the u.s.. banks get fewer deductions than other industries, so they will gain more than anyone else if the rate goes down, and a lot of
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deductions go away. it is not clear if they will all go away, but assuming they do, the top six banks i looked at for this analysis would gain $6 inlion, $6.4 billion a year additional profit by keeping some of the taxes they pay to the irs. aarlet: and to borrow metaphor, this would be "rocket fuel" for their earnings, because so much optimism surrounding banks was on the deregulation side with president trump's agenda to make rings and polar and -- things simpler and get rid of rules for the banks. how about tax cuts for these big banks? >> i wrote a few weeks ago about the deregulation attempts, the treasury report that suggested the easy steps they could take without having congress change any of the laws, reform dodd-frank. regulators easing off on the rules, and that could be many miller -- many more billions of dollars then the tax cuts.
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but that adds into it, so when we put all of this, there is a lot of rocket fuel and they could all go to the moon. julie: kevin, to bring you back into this, is there anything in the tax reform package as it stands that is industry-specific? or is it blanket corporate tax cuts? fuel, rocket man, we are talking a lot about rockets. there are no specifics right now on how to pay for it. i pressed the ceos of the national association of manufacturers conference about if this is optimism that is perhaps premature, and they they are that cautiously optimistic at this point. they have been meeting regularly with the big six, and they have been assured by the rebel it -- republican leadership, including mitch mcconnell and paul ryan that they have been working very the scenes toind build consensus, unlike what we saw on health care.
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the illustration they pointed to was the house freedom caucus, because when the framework was released earlier this week, the house freedom caucus came out and gave a glowing endorsement of it. that is not what we saw when the health care debate was happening. the they are seeing that as a positive step forward when you talk about things like this -- the state and local tax deductions, it has been said it is up for negotiation. the president stayed away in his address this afternoon from giving specifics on how to pay for it because they are pushing off that to the tax-writing committees to build that cohesion appear on capitol hill. whether or not they can do it, i will be visiting for the next couple of weeks trying to figure it out. scarlet: or take the blame if they can't. kevin cirilli joining us from capitol hill. let's get you a check now on the first word news this afternoon with mark crumpton. trump wellhead
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to asia in november. the white house announced today the president will visit japan, south korea, china, vietnam, and the philippines. it will be president trump's first visit to the region as president, and it comes among rising tensions with north korea. they hope this will "stand then the international resolve to confront the north korean threat." president trump in his treasury secretary steven mnuchin reportedly met with uber institution fellow cabinet -- isin marsh -- warsh, who being flagged as someone to replace janet yellen as fed chair. >> the core pce, the fed's preferred measure of inflation, is a very bad proxy or the underlying strength in the economy. it is not a perfect proxy for policy should be, or
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for the broad case of financial stability. last he also suggested year that the fed needs "new air and new ideas." it is said that the fed chair is still an open race. your european union originals -- european union officials have ruled out interfering between spanish officials and cattle on officials before the upcoming upper run them -- referendum. alanlog officials --cat officials and spanish officials have asked the eu to step in before the vote. and a man charged with a deadly shooting at a tennessee church shootingevenge for a at a black church two years ago. he is accused of killing one person and wounding six others at a church outside nashville last sunday.
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specifics were not released, but the note referenced retaliation for dylan roof, a white supremacist to killed nine worshipers at a church in south carolina and 2015, and has been sentenced to death. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton, this is bloomberg. scarlet? scarlet: thank you, mark. coming up, former white house chief strategist steve bannon has a plan to remain a political force. his next move involves, or should we say targets china. from new york, this is bloomberg.
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♪ this is bloomberg markets, i'm julie hyman. scarlet: and i'm scarlet fu.
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let's get back to politics. former white house chief strategist steve bannon has gone to go -- has promised to go to war -- has promised it to take on china. joining us is our national correspondent joshua green, "devil's bargain: steve bannon, donald trump, and the storming of the presidency." great to speak with you. thank you for making the time. wizz steve bannon steps of the rhetoric on china, he talks -- what isy about that even mean? it means when american firms partner with chinese companies, they have to force technology transfer, which bannon tells me in this piece essentially saps the essence of american capitalism. if the u.s. government does not take steps to more aggressively confront this, the u.s. will become, in his words, a
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"tributary state of china." so the news in this piece is that he has been meeting with henry kissinger in plans to form a group that will pressure the american government and raise try to geteness, and president trump to follow through on some of the more aggressive actions he promised as a presidential candidate, but has not yet followed through on his president. gotlet: then and of course most of his relevancy in the white house from with -- bannon, of course, got most of his relevancy in the right house -- white house from his relationship with trump. can he affect policy in this point, either through this group or through his continuing direct connection with the president? mr. green: it is not yet clear, but there are two avenues through which bad and can affect trump. number one, the two of them still talk. in one of the minor news items in my piece, i report that when hong kong in
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delivering a speech on u.s. economic nationalism on september 12, he called president trump from hong kong and they had a discussion. he would not tell me what it was about, but i assume it was on china and what trump could do in terms of confronting them. another way he has influence over president trump is that since leaving the white leading a populist, nationalist faction of republicans from the white house. where president trump endorsed indidate luther strange alabama, he ran against roy moore, an outsider insurgent bannon andy breitbart news, and he absolutely trounced strange, humiliated trump of the candidate. bennett is now in colorado recruiting additional republican challengers to run against incumbents in other races.
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-- if he continues to do this, he will continue to have more say in how republicans run issues white china, and what kind of pressure the white house will come under and how it should be addressing these issues. doesn't he risk angering the president though, and damaging their relationship? mr. green: he may risk angering the president, although bannon, very shrewdly since leaving the white house, has said publicly to me and other reporters that he is not confronting trump. he is going to war on behalf of trump's agenda, as he put it. the interesting thing is that he trump'sg to war against candidate in alabama, but so long as he is not criticizing him directly, saying look, i am staying true to the spirit of donald trump of the ideas that he put forward on the campaign trail -- donald trump's ideas that he put forward on the campaign trail, he might have some success. if you look at how donald trump
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is blaming his humiliation and alabama, it is not steve bannon, but the white house. scarlet: i want to go back to china a moment, because you antioned steve bannon gave speech in hong kong and has met with chinese officials. so he is in demand from the chinese. how does this offset the president up for his first asia trip in november? will steve bannon play any role in that trip? mr. green: i do not think he will, but it creates tension. bannon is pushing trump to be more aggressive, do what you said. i think trump, now that he has become president, understands the issue with china is not as black and white as he thought it was on the campaign trail. and there are reasons, including the influence on north korea, why a u.s. president might not want to come out and slap china with a currency manipulator designation, or do something militarily in the south china sea. both of which are things trump promised to do. i imagine he is getting a lot of
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encouragement inside the administration, inside his own white house to try and get along as best he can with china in advance of this november trip. what will be interesting to me is what will happen after that trip and whether bannon's ideas will have more currency than. julie: josh, thank you so much. bloomberg is businessweek's national correspondent, we really appreciate it. this story on steve bannon in the latest issue of bloomberg businessweek. next, what we were told about president trump's immigration policy and how it affects the tech industry. from new york, this is bloomberg.
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scarlet: microsoft has been among the tech companies actively opposing many of the trump administration's decision on immigration. spoke to emily chang about this and other policies coming from washington. for us, it comes
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down to what are the timeless values that have to translate into these principle stands that we take, whether it comes to immigration, making sure we do everything we can to protect our employees, which are contributing not only to microsoft but the american society, in case of dreamers, taking a principled stance. that is how we look at these issues. at the same time, we are not elected officials. i do not have a mandate. we are subject to laws, but we will fight for what we believe is the right of our people. emily: we have seen the nfl pushing back against president trump, starbucks has gotten pushback from shareholders. have you gotten any of that pushback from customers or the board? mr. nadella: on the board or even in our management level, perhaps the biggest recognition -- if i have learned one thing in my three and a half years as a ceo -- is that true, multi-constituent nature of the
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job. the shareholders, customers, employees, the government, it is all of these forces simultaneously, all the time. for a large company like ours, a large, multinational company like ours, really balancing this is all that is required. emily: you have met president trump twice now. what is your impression? times, the: both conversations were centered around immigration, why i think immigration reform can drive american competitiveness, making the case for it, as well as making the need for american infrastructure, in particular digital infrastructure, and those conversations were good and he was receptive to those ideas, now we need to keep working and making sure there is action on it. emily: we are seeing drive to further regulate the tech industry, from google, to facebook, from the u.s., to
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europe. are you concerned about the threat of increased regulation? [please stand by] mr. nadella: how to small businesses become more productive? how to large businesses in those countries become more competitive? how does the public sector become more efficient? that to me is ultimately how we have to measure out success. tot will cause governments say are these companies country beating or not? -- contributing or not? that was satya nadella, speaking with emily chang.
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♪ julie: from bloomberg world headquarters in midtown manhattan, this is bloomberg markets. i'm julie hyman. the mahdi markets are closing,
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so let's take a look. oil has been bouncing -- commodity markets are closing, so let's take a look. oil has been bouncing around, but it has been a winning month itsquarter for oil, posting biggest quarterly gain in over a year. time, 9% in in that september as positive demand forecasts rum opec -- from opec are turning that around. gold prices are looking to be slightly lower on the day, but if you look at the month, posting the worst since last november. a down about 2.5% on the monthly basis, and rumors that the fed could raise rates in december are out ruling jitters over north korea. bloomberg, we the have a chart breaking down the parts of the bloomberg commodity index. bottom, energy on the as you can imagine it bounced
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during the quarter but not enough to salvage the year. build down 12.5% on the year. the next for worst-performing groups are agriculture, negative on the year by 9%. purple line is precious metals, which even though we looked at gold having precious metals on the year of eight point 2% and on the quarter 2.2%. on that -- 8.2 percent and on the quarter 2.2%. on the top, that big yellow line there, -- it should be precious metals i suppose, but it is industrial metals. that is up 16%. a lot of money going into gold, especially with north korea and the saber rattling. now the future of the federal reserve. treasury trump and secretary steven mnuchin met yesterday torsh discuss the possibility of him becoming fed chairman. he the president -- the
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president has met with other candidate, yet is reportedly not close to a final decision. we spoke earlier to jetblue it -- jack lumen in an exclusive interview. >> i was there when janet yellen was appointed, and when i was there, i had the meeting with all of the candidates before they met with the president. advising him,aff i was about to be treasury secretary. tim geithner was in the conversation, and it is a small circle. the head of the nec, treasury secretary, chief of staff, that is the circle that in my experience talks to the president about that kind of appointment. ultimately, it is an appointment that is of unique importance. arguably, the chairman of the -- it is in that list of the very most important economic and inns in the world,
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my experience we have had extraordinary individuals chair the fed, who have done so with integrity and intellect. we do not always agree with them, but i have never had concerns about their capacity and their dedication and integrity. >> it does not matter if you -- inn active in mission mission or part of the business group? it is quiet, like the university without students. you could have -- hear a pin drop in the hallways. as a matter of personal style, i have talked to people who want to go to the fed who wonder if it is an environment they want to spend their days in. people talk about technical things all the time, and you're not involved in the day-to-day transactional business on many days. you have the meetings, you have international meetings, and then you retreat into this appropriately kind of academic
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environment. when i hear about individuals from the business world, i always have suggested you want to make sure it is a place you want to go work. julie: that was former treasury ew in any jack l exclusive interview. let's bring in michael mckee, one of our correspondence. warsh --his reputation is not uniformly positive, we can say? not uniformly positive, but he does meet the test of being serious, and he has integrity. he would take the job very a hugely, he is not break the crockery type of monetary policymaker. he was the fed governor who handles managing the day-to-day operations of the building, and that has not always gone over well with some of the people
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there. but he probably would not make a lot of or tried to make a lot of monetaryn policymaking. he is pretty straightforward in that regard. he might be seen as a little more hawkish, because he predicted a lot of inflation -- it has not,, but so have a lot but sor people -- come, have a lot of other people. they might turn to a more hawkish thing, but it is a committee and he would just be one vote. scarlet: didn't he resign as fed governor in 2011 because he was at odds with the policy? kevin warsh -- michael: he resigned shortly after, pending a -- penning an with in where he disagreed qe2, because he thought so much to bond buying would lead unrestrained inflation. it did not happen, he resigned. you do not know what the real reason is. scarlet: how influential was he
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as a fed governor? i do ask because he did serve in the white house under george w. bush, was in charge of the day today, but was he an influential voice? not on monetary policy. during the financial crisis, he andone of the top bankers terms of reasoning with wall street. he worked with the banks and that. that, and had discussions on how to save the economy. a macro economist without with a note today criticizing his for cap -- warsh's forecasting ability. everyone is criticized for that, so how important is that of the job, ultimately? michael: it is important. we talk a lot about the fed is the economic projections, and the fact that -- the fed's
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economic projections, and the fact they have missed a lot of them. he would probably be relying on the staff quite a bit, and he help producing the forecast. that might be more mainstream because that is where the staff is coming from, but probably not a big deal where he forecasted a lot of inflation and it did not happen, because you can name a lot of fed voters this year who did that. scarlet: quickly, how much staff turnover is there when there is a new fed chair? does the staff stay on or do they bring in a new crowd? michael: they bring in an executive office, but the permanent staff, research people, directors of departments stay on. so no immediate changes would be likely. we want to also make it clear that he is just one person interviewed. the white house said others were interviewed, and maybe this is a trial to see what wall street thinks, what reaction you get. but he is young, 47 years old, so younger than most fed chairs. it might be that they want to see people think.
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dealbreaker is calling this "the apprentice: federal chair addition. " [laughter] mark: really scarlet, the apprentice edition? the president is living the u.s. tax system for forcing businesses out of the country. he presented his plan for an overhaul of the tax code while addressing the national association of manufacturers today. pres. trump: our current tax code punishes companies were doing business in the united states -- for doing business in the united states, and encourages them to leave. that is what has happened for so many years. that is one of the reasons, probably the prime reason, that companies are leaving our country. president has yet to score a signature legislative victory more than eight months into his term.
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president trump is hoping to sign off on a tax bill by the end of the year. have unveiledcans a fiscal budget resolution for the upcoming year, which they ase to push through as much one point $5 trillion in tax cuts in the coming months. it will not allow for a full peel of the affordable -- full appeal of the affordable care law. for smaller room attacks on obama care, including repeals of individual mandate. the vote is scheduled for later in the week. the united states is warning citizens against travel to cuba and is ordering about 60% of its staff off the island. the embassy and have honorable also stop processing visas indefinitely. that is according to the associated press, which identifies a travel warning order today that says american citizens could be at harm. american officials have been
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experiencing symptoms such as brain trauma and hearing loss. according to the house of commons, repairs to the elizabeth tower, as big ben is formally known, will cost $82 million, up from the original estimate of $44 million. comes from then name of the bell in the clock, which falls silent in august ahead of the 15 year restoration project. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton, this is bloomberg. julie? julie: thanks, mark. coming up, aig could be a step closer to leaving the financial crisis in the rearview mirror. why they could be released from the "too big to fail" status. from new york, this is bloomberg. ♪
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♪ this is bloomberg markets. i'm julie hyman. fu.let: and i'm scarlet our stock of the hour, tyson foods. they are the largest meat producers. that i boost in and consumption of meat -- a boost in consumption of meat -- this has to do in part with beef. beef margins and prices have been writing across the board. the company is raising its earnings forecast -- rising across the board. the company is raising its earnings forecast your this is just a prerelease, where they are talking about increased guidance for the year, and it does have to do in part with beef, although the company ceo
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said they think all segments are going to be improving. i was surprised when i look at the breakdown of the company revenue. when i think of tyson, i think of it as a chicken company. however, if you look at it we have a full screen of the .ompany's revenue of theres in beef, 39% company revenue, and then shares and chicken and pork. a largerse, chicken is slice of the pie. it is a higher-margin business. it also bought a company called a preparede, i meats company. scarlet: in that prepared foods category? note: exactly, it has expanded on that but it will. jobs,o caused -- cut 450 which is helping the outlook. scarlet: i am sure investors like hearing that as well. let's move on from that stock to
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aig, because what is going on their? julie: it is -- there? julie: aig was central to the crisis of 2008, but the financial stability oversight council is meeting today to reevaluate whether a "non-back financial company -- "n stillk financial company proposes a risk to the economy." so it has been under this iffy designation or possible designation. what does that mean for aig, if it is indeed aig that they are talking about. >> it is not only aig that the government is planning on moving the "too big to fail" tag, there are no only about $150 million tied to compliance and whatnot that is owed by aig.
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but what it does mean is for the first time in about a decade, aig has a chance to get bigger. the ceo has been saying for a wild that he wants to go and do acquisition, -- while that he wants to do acquisition, so it not only removes that cloud, it is a chance for them to move on. scarlet: how was that designation obstructing aig? how was it preventing them from doing what they want to do? be carlat example would i can, because he came into the staff in 2015 and said you have to split up. analysts say this is definitely off the table for the near-term now, because it shows it has --ten all enough to escape small enough to escape the label and the cost associated with that. the fact that they had an activist, to staff -- come on to meant theyse of that had to go through buybacks, dividends, and now the activists
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can sleep a little easier. let's take a step back -- aig, which by many was blamed as one of the main players in the crisis, how much has it changed from that entity, both in size, best the, how it may market. is it more risk-averse now? what about the size? what is it look like. >> they have sold the most $100 billion worth of assets. they paid back the government out of profit when it came to the bailout. all of the things that made it a conglomerate. so aircraft business, ski resorts, not things you would think an insurance company would have to begin with. the ceo since 2005 have been trying hard to make aig an insurance company and solely an insurance company, one that is still across the world and still in life, retirement, and diverse insurance operations.
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aircraft leasing, ski operations? out the window. thank you so much. coming up, wide agreement that bitcoins explosive growth this year is based purely on speculation. so why do people continue to bid it higher? we look at the history of traders who thought they could beat the bubble. up 311% year to date. this is bloomberg.
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♪ julie: this is bloomberg markets. i'm julie hyman. scarlet: i'm scarlet fu. alie: the bitcoin hits bubble, and everybody knows it, but is that based on value or pure speculation? business and finance do not agree. >> i have some special concerns about virtual current seas. partially because of the secrecy factor -- currencies. partially because of the secrecy actor. we worry about large cash
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transactions because they can be used for bad purposes. aching something easy to do that, it has those same characteristics. many ways, virtual currencies might give existing currencies and monetary policies a run for their money. >> this will be the biggest bubble of our lifetime, but doubles happen around things that fundamentally change the way we live. the railroad bubble, railroad changes where we -- the way we live. the internet bubble. you can make a whole lot of money on the way up, and we plan on it. >> it strikes me as i do not is. where the "there" i know the technologies being -- are very important, and they are being used more in real-time financial transactions, but the exchanges themselves seem to have a bit of fraud attached to them. scarlet: so if traders know
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bitcoin is a bubble, why are they not abandoning ship? stephen, especially in congress with the third person we heard from, he said it is a bubble, but we are buying it. not only buying it, but creating a fund just to buy it. how does that work? --this is the traffic fake classic trader fallacy in bubbles. i know it is a bubble so i will not get hurt. i will make money on the way up and know when to get out. but they never know -- you believe you know the top more than other people, and that never happens. once it is in a bubble, it is very hard to measure. so we tried to be numbers crunchers that gadfly, -- at gadfly, and we have been seeing other evils like hey, why not move your 401(k) to bitcoin? that was a bubble in the housing market. sign isbubble is -- ien traders come out saying
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know it is a bubble. so what is the time frame from when you hear words like mike -- likead -- no broad it happening to be in the six-month rain check a we cannot not know, but that is what has been done. scarlet: we have seen china ban initial point offerings and trading on cryptocurrencies. to what extent do governments play a role in pricking the bubble or slowly diffusing it? >> because it is about how useful this currency is. whether you believe the valuation measures people are putting out there. whiching people call nvt, is network value-transactions. as government takes people's away to use bitcoins, it should change the value. you look at a number of
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other historical parallels, particularly recent ones. mostly the tech bubble and the housing bubble. the people that thought they you say, but, as were not successful. are there any one of these that stands out to you as being the closest parallel to what we are seeing right now? i think miller, prop -- druckenmiller, probably. stocks, andinternet argued with his fund to get out. he is more skeptical than others, but he hired a few in tech stocks, and they did really well. the fund was up big in late 1999, and that is what made him believe he could ride to the bubble. scarlet: and you have chuck prince, who famously said when the music stops, things will stop, but the music is still
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playing and we are still dancing. julie: it is hard to take profits when things are going well. t, it is ate this nv 50 and traders are saying it is not too expensive because it used to be at 150, but how do ow that 50 isn't too expensive? scarlet: you can read stephen's piece on the bloomberg or on our website, or on tv go let's get the bloomberg business flash. the deadline for disney to renew its contract with cable operator artiste has been extended until october 1. for could be blackouts networks like abc and espn. disney is asking for a new agreement that includes more than $100 off espn service. volkswagen is trying to learn
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back u.s. buyers by lengthening warranties on most 2018 u.s. cars. the warranties will roughly double to six years, or 72,000 miles. this comes from volkswagen's recovery from its image and standards -- scandal a few years ago. co-working company your work plans to open its first location in manhattan next year, but it's name will not be on the door. the chinese company's name -- and that is your business flash update. coming up, as the third quarter winds down, how have trends wound up? this is bloomberg.
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>> we are live in bloomberg world headquarters. here are the top stories we're covering.
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julie: markets are poised to in the quarter on a high note. the republican framework set the stage for capitol hill's agenda in the final quarter of the year. uber is looking to amend fences with london. the chief executive is negotiating a deal to provide this service from being banned in the city. the next shock to hit europe could arrive this weekend. the feud between catalonia and madrid will come to ahead head in the independence referendum. we're one hour from the close of trading. the final trading day of the quarter. a little bit of an update. >> let's call the dell flat and
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the s&p and nasdaq had headed for gains. and also look at the russell 2000 more than 5%. the quarter on pace for a record. this is emerging as an interesting story as we have been getting more details from a tax plan. they pay a higher tax rate and companies in the s&p. willhinking as they benefit the most. as we look at this bloomberg chart, this shows the russell 2000 index relative to the s&p. you can see it is outperforming the s&p by 6% since the election in november. ago andook at a month has climbed 6% since we had tax reform without moving to the
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forefront of the legislative agenda. we will be waiting to see how they perform in the coming weeks and months as congress gets to work on turning the tax bill into actual legislation. amazon,ke a look at netflix and alphabet. the have been helping to lead the s&p higher and they are outperforming the s&p across the quarter. on the last if the third quarter. let's take a look at financials and we're going to switch that kbw bank index is higher for today. the highest it has been since march. on news the president had been meeting with fed chair candidates. he met with the former fed governor and former executive director kevin walsh.
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financial stocks are going to benefit because of his views on deregulation. citigroup down a little bit. with aocess is still long way to go. back to. headlinese have some are, president trump is said to have interviewed jerome powell who is a governor and the fed for that chief position according to the wall street journal. we will keep you posted. if you look at markets, they have closed in the last trading session of the quarter. treasuries are on the short end selloff. prospective the big, beautiful tax cuts. theourt the -- quote president.
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i know you look at different asset classes, let's start with treasuries. especially on the two-year. at the highest since 2008. is this a meaningful move? for letting me be here. i -- in terms of a meaningful is it a meaningful move? we have gone back to normalization. i look at the ncaa has been in the news and i call it the hot hand. the only thing that moved in the hot hand are equities this short end of the treasury curve. everything else has been difficult. commodities, 10 year, 30 years, even bitcoin. so you stick with the hot hand. julie: you think the yield move continue.
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guest: the curve is going to continue to flatten. i am not sure, historically the shape of the curve is more important than the interest rates and the shape flattening is not about -- tends not to portend growth. -- it is hard to fight it. thelet: do you see infecting -- that infecting stocks? yest: everyone says eventually. i think there is more uncertainty, when you look at underneath the fundamentals of the economy there are more divergences and that suggest a higher probability of volatility.
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and fundamentals have to line up the fundamentals can divert and you lose money by trying to think you're going to be right. that is not what we do. we try to be a disciplined approach. the disciplined approach says the trend is up, there is no real divergence right now, do not get aggressively negative from a training point of view. julie: i thought there was an bank ofing quote from america, merrill lynch. this was in the mliv blog. the reason to be bearish in -- is there is no reason. when the momentum is in your favor, one tax reform is coming, doesn't it make you an easy if the picture looks too good? guest: in this business you are always uneasy. if you are not you're not doing your job. if you look at
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track records, the track records of getting things done through this congress, if it is not zero it is close to zero. tax reform will take place in the way it is done. i find that hard to believe. the socks that have benefited, and trading you why the rumor and sell the fact. bank of -- the note could be saying sell the fact. it is here but unlikely to happen. you could do a spread because the technology companies which do not benefit because there tax rate is lower. maybe you want to be short nasdaq, long s&p along those lines. the nasdaq has outperformed by 100 basis points. scarlet: are people buying the rumor, is that why people are buying stock? tost: i am not smart enough figure out the recent they are buying it but it is acting that way. that is the rumor. the russell has it out and transports two.
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julie: we will rewind the clock by 30 years, we are coming on the 30 year anniversary of black monday. a notice there was alignment between technicals and fundamentals. walk us through what you saw. guest: there's a lot of things different, the maturity of the markets in the advent of distribution of information which equalizes but one of the things that was taking place back then was the assumption that portfolio insurance and risk did not exist. there was not -- that was not going to take place. you could eliminate risk by using this tool. there is a certain aspect of that today and a similar thing in the sense that stocks index futures were five or six years old. for those of you with children you could talk to a five-year-old but they are not that rational. we have similar aspects today with all these volatility
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products. you think you fully understand them, we probably do not probably all -- understand all the embedded leverage. if something happens it is likely to accelerate. wewe see something lining up will be much more aggressive in trying to benefit from that that it is not there yet. you for your time. check of the headlines with mark crumpton. mark: the deadline is fast approaching for young immigrants who want to renew their paperwork under an obama era them fromat shields deportation. president trump is phasing out the deferred action for childhood arrivals program and asking congress to come up with a replacement. people in the program whose permits expire between now and march have until thursday to get renewals. the president is open to negotiating on the deduction individuals take for stake" --
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state and local taxes. gary cohn joined us earlier. not allowing for the actions of state and local taxes. we're willing to work with the tax writers on the dials we have in the system. used ine deduction is high tax states like new york, new jersey and california. eliminating it would raise money that can be used to offset the proposed tax cuts. me floridaasked for died.g home has a 57-year-old patient has died. a criminal and investigation is underway following the deaths of the rehabilitation center in hollywood hills in florida. officials say some who died had body temperatures as high as 109.9 degrees. nations, notnion
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including britain will be coming any post-brexit world. donald tusk said today he would be presenting what he called a agenda in two weeks following eu vision statements from french president emmanuel macron and others on how to reform the block. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: thank you. coming up, theresa may goes -- against the ban stop. we will discuss. this is bloomberg. ♪
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scarlet: this is bloomberg markets. is facing a snag. and stepping up offerings for the echo. let's go to emily chang. with our techre reporters who have been bringing up these stories. you're back from a trip to seattle where you visited amazon. remind us what was announced and the significance of it. >> i was at amazon's headquarters and the announced so many new devices in the
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family of products. echo -- they announce the spot. it gives you the weather, it is an alarm clock, you can make calls on it, and i'm surprised that amazon was the first because it seems that it will be a hit. emily: how does it stand out from the echo and other home speakers? >> this also the best doubles the home speaker and they have this echo plus model which is discounted price of 150 versus 180 and it has a smartphone hub so you can connect things like lights and locks to your speaker.
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emily: what will the delay mean? >> this is what is what -- what is happening. anytime apple announces a delayt and there is a issues withearly production. they can get some units in store and out to customers on that day. emily: do you think that a significant number of people who want it will not be getting it ?hat day byif you do not order this 12:02 a.m. on that night you were not getting it until the third. we are going to see a lot of people trying to order this thing at the same time. to uber.w
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prime minister theresa may has stood up for uber saying the ban is disproportionate. ube still operatingr in london as this is being appealed and reviewed. is the labor -- we have the labour party and theresa may. we have a bit of political the middleh uber in of it. the ceo is going to london trying to make nice and this is a top priority of his to get along with london and try to make sure that uber remains operational in one of its most them -- profitable and important cities. they seem to have grabbed the bull by the horns. you had some political supporters in the country. bely: the ceo will
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there. contrite struck a town, we have made mistakes so maybe there are some reforms they could make to signal stronger change. from where i said it seems hard to believe that uber ever shuts down in london. ridersare 3 million some and people would be upset. if their government is taking it away that would be frustrating move.dangerous political emily: and also thousands are relying on it for income. wanted to talk about the status of softbank. --otiations have become and contentious and that has to do power [inaudible]
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>> basically what has happened is benchmark and other early investors have been demanding from softbank some sort of cannotce that travis come back a ceo or the chair of the subcommittee. what has happened is softbank has indicated verbally they are willing to put some constraint on travis's leadership. if that is going to be in writing or in what form, that is still being negotiated, the deal is coming together. emily: does travis have the power to veto that? has three board seats out of 11. he has -- the actual control is ambiguous and contentious. he does not fully control the board and benchmark and its investors have a lot of power a multiparty deal where there is a lot of leverage on every side trying to get it
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done to clean up the governance and get the money. it is a complicated deal going on. emily: the game of thrones continues. i know you will keep us posted. thank you both, back to you. thanks to you, emily chang in san francisco. time for the bloomberg business flash. the equifax board is forming a committee to review the sales days after the company was hacked in july. the three executives unlettered worth -- shares almost $3.8 million. procter & gamble's chief executive officer said last -- nelson phelps has not paid attention. said theavid taylor company has made progress in their turnaround. will face attle
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shareholder vote on october 10 supporthas thrown its behind it. that is your business flash update. is pepsi losing its fizz? the company has been under pressure due to weaker soto volume. from new york, this is bloomberg. ♪
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scarlet: president trump said he will make a decision on tom price. he has not been pleased with reports of tom price using private jets to fly around the country for government business. president trump to make a decision tonight. julie: with me is scott bauer. he is a senior partner at the cboe in chicago.
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thank you so much for joining us. we appreciate it. trading advantage is the name of your firm. have seen in recent days stocks continue to take legs up that it kept activity day by day. how much of an upside to you think the tax talk has been for stocks and might continue to be? -- in when you look at macro at the market, it impacts small caps the greatest. i don't not think the dow has impacted it so much yet. now that the groundwork is laid, there is some optimism as well. like you said, it is very tepid, it is a day by day situation. i do think the upside is still there for the s&p to get another two and half percent this last quarter. if we can get something done here. that is a big if. julie: it will be different
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depending on what sector you are talking about. you're not so optimistic on pepsi. why not? guest: i am really not. discounting all the news about the tax reform and what may happen there, the whole sector, the consumer staples sector is under pressure. not in a defensive time right now. the economy is expanding, many people do not think it is but it is expanding. pepsi and some of the others have been under pressure. their volumes have been declining, people are looking for healthier drinks. they have so many headwinds. even the the stock is well -- it is down almost 10%. i see further declines. i am buying a put spread going into earnings for next week. it is an expensive put spread. two dollars wide for this coming
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week, october 6. costing $.55. very limited risk for move i truly believe is going to be to the downside. if i am wrong, i run but it is the reward to risk on this type of trade that sets up to be very nice. julie: we will be watching. appreciate your time. scarlet: still ahead, the fight between spain and catalonia said to reach fever pitch this weekend. what to expect from the referendum. you're looking at live pictures and barcelona. this is bloomberg. ♪ is this a phone?
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a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. mark: parts of the proposed
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legislation simply are not realistic. >> it is just a framework so it -- we have to be cautious because a lot of the details are not there. from what i have seen there are dangerous ideas that are out there. fiveantasy that you can do to $6 trillion of tax cut and ise them pay for themselves just that, it is fantasy. fantasy may be good for fiction but it is not good for fiscal policy. mark: the debt ceiling debate used to be an unpleasant form of leverage but has morphed into what he calls political extortion. residents of san juan, puerto rico have begun waiting in long lines in hopes of getting cash from their banks. etm's are unusual and monetary transactions are having to be done with cash. hurricane maria devastated the u.s. territory

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