tv Bloomberg Markets Americas Bloomberg November 12, 2018 1:00pm-3:30pm EST
could take another five days to extinguish. suburban losnd angeles could burn for the rest of the month. more than 6700 homes and other buildings have been destroyed and nearly 150,000 people have been evacuated. acting u.s. attorney general matthew whitaker signaled that some of the critics worst fears about him won't come true. bloomberg has learned that whitaker has told associates that the justice department won't cut the budget for the russia probe. whitaker had said that the mueller investigation could be halted by withholding funds. a new report says that north 13 undeclared missile operating bases. the center for strategic and international studies in washington says that this undermines the trump administration claims that the outreach to pyongyang had pushed the regime to give up the nuclear weapons program.
the 13 sites are reportedly believed to have underground facilities containing mobile launchers that can be quickly dispersed to other locations. the french president today welcome to the u.n. secretary-general for talks at the lsa palace. it came a day after he and angela merkel opened a new peace forum in paris after commemorating the 100th anniversary of the end of world war i. warning that the world today has several of the ingredients that led to the failure of the peace that followed world war i, including trade conflicts, increasingly polarized politics, and the failure to solve inequality exposed by the 2008 financial rises. global news 24 hours per day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton, this is bloomberg. ♪
>> 6 p.m. in london, 2 a.m. in hong kong, i'm shery ahn, in for vonnie quinn. welcome to "bloomberg markets." from bloomberg world headquarters here in new york, here are the top stories we are following on the bloomberg and from around the world. u.s. stocks drop, the dollar rises, attend a selloff flying as theresa may fights to save her brexit plan. m&a monday private equity farm and elliott management have agreed to purchase a fina health for 5.7 billion dollars. counting the costs for california, utility companies are facing the very real possibility that billion-dollar blazes could become an annual occurrence. for now let's get a check on the
markets. abigail doolittle is here with us. u.s. bond markets closed on veterans day remembrance, but equity markets are under pressure. abigail: you are right about that. down for of third day, sharp declines, the dow and s&p 500 are on pace for the worst day in a few weeks. october 24 was the worst day within the selloff of october, the worst month for the nasdaq, this october of 2008. that really helps you to understand the selling pressure we are seeing here today. the bears are really trying to take control of the recent rain. weighinglook at what's in on the markets and the losing of confidence in the tech sector, there is certainly a lack of losing of confidence here, the worst three days similar to the nasdaq since october 24. again, a big, bearish day for technology, october is down 4.8% and it has so much to do with
apple and the apple suppliers as there are more signs of week demand for the iphone. taking a look at the bloomberg, we are going to see a confirmation of bearish activity. up top we have two sectors trading higher. sectors closing higher right now, the bond market is closed, no competition from yields. the other sectors lower on tech down 3%, most of them are down 1% or more, energy is down 1% despite the fact that we have a bit of a rally for oil. breaking historic losing streak. as you will also note, financials are lower, here are some of the big sector losers here for the financials, investors perhaps remembering how bad october was for the financials. this sector, down about 5% in october, investors selling it. toing a look at the year
date chart of the financial sector, take a look at these declines, down 4.6%, many on the street worried about this, saying it will be hard for the market to climb out of the recent rut without the leadership of the financial sector. doolittle, thank you so much for that. our next guest says that stock markets around the world maybe signaling a bear market around the corner. joining us from boston, jeffrey chiefop, charles schwab global investment strategist. thank you so much for joining us. the relief rally following the midterms was really short-lived. why aren't investors welcoming november after all of the volatility from the previous month? a good question. usually they do. i think it's important this time to note that global economic growth is slowing. it's not even a question of , theer it's slowing or not
question is how fast it's slowing down. what's different this time, though it every other time we have seen a slowdown is that none of the other major central banks are looking at stimulus next year. china may be the only one, but everywhere else the fed is expecting high grades, the ecb is expected to end qe, even the doj is expected to slow down their pace. everywhere around the world the slowdown is becoming further entrenched with the market becoming more vulnerable. shery: no wonder, we are of course seeing financial conditions starting to tighten just because of all the factors that you mentioned. global tightening and economic growth slowing down. charts on the bloomberg are showing exactly that, when it shows the u.s. financial conditions, they are also slowing and on top of that you have global financial positions and yellow starting to slow as well. how vulnerable are markets and when could we see this long-term
frenzy and asset classes reverse because of this environment? 4 -- jeffrey: it's interesting, it usually happens ahead of the yield curve and the closing of the gap between the unemployment rate and the inflation rate in major companies -- countries. we still think that that is a year away, so we could be nearing the point where we start to see reversal between growth and value and many other longer-term asset class relationships that have really defined the market for the last eight or nine years. many investors may be unprepared for this kind of reversal, especially a number of them having just come into the markets. , this may be the first bear market they really in 2019.e, beginning
that's so true, we haven't seen this in years. tell us more about the sectors that would gain favor because of this reversal. it's fascinating, between growth and value, the -- they tend to, it was 2007 where they started to outperform, a year before the 2008 recession started, even 10 months or so before the stock market eke out. assuming rotation in the value, with more defensive areas, the markets begin to evolve here. look for the markets to rotate away from tech, as it is seemingly doing today. other areas, larger or small-cap stocks, less credit dependent and financial conditions dependent. finally, international over large-cap u.s., u.s. stocks have done well and depended on the tech sector performance and that
may begin to reverse. shery: earlier you mentioned the gap between inflation and unemployment. on wednesday we saw the unemployment rate at its lowest levels in 48 years. when you take a look at these two factors, where are we? how close are we to a recession and if that happens, how long will these declines last? two very good questions. a 1.2% gap. given the rate at which things are coming down and rising, it could close in the next 16 to 18 months in the u.s., the u.k., japan and germany, others as well. we are looking for that peak maybe sometime in 2019. looking to what it means for markets, usually those peak right around a turning point. we may still have some gains ahead of us moving increasingly towards that rotation with this
happening. there seems to be a new inflationr expectations. falling in october, we have seen crude prices enter a bear market. guys, if you take my terminal on the bloomberg, you can see what's happening here. from everything you have told me so far, despite the fact that there seems to be some debate over where inflation is going and the direction of bond yields , are you telling me that you are more concerned about growth than hedging inflation? jeffrey: i guess i'm saying we are getting nearer to an overheated environment in the economy. we believe that 3.25, maybe as high as 350, might either peak for this cycle, reflecting concerns around inflation, suggesting an environment where it is really going to be more of a focus on growth slowing over
joining us to tell us why ge is in one of its deepest slumps in its 126 year history is our bloomberg opinion columnist, brooke sutherland. what exactly did the ceo say that was so bad that it led to this? brooke: it's more what he didn't say. one of the biggest frustrations from a couple of weeks ago was the utter lack of detail. decisive on some things, ruling out equity, giving up on some specific parts of the plan and in other ways not having answers for the fundamental questions around his company, including the church a prefer the power to turn that around, how credible are the ge numbers and how will it reduce the mountain of leverage against the company? and today we didn't have any answers to that. this chart on the
bloomberg showing revenues continuing to slow. this huge chunk of the division is really in terrible condition. anything that we could engage from his comments? the big issue for the power unit isn't the revenue, it's the cash flow. when the cash flow isn't coming in from the business, it makes the overall outlook look poor. the health care business, the concern is that you have a poor cash flow outlook that is going to shrink over time, even with the cuts that they did, stacked up against a pretty significant mountain of liabilities and cash flows that we don't have a including right now, the sec doj investigation into their accounting practices and an investigation into its subprime mortgage business, as well as the potential for that liability legacy insurance business to widen further. i think there's just a lot of
unknowns at a time when ge business is not doing that well overall. you mentioned aviation and that is really a crown jewel for the company but they don't get a lot of credit for it given the poor olio structure currently. what exactly did they say about cutting debt? didn't, which is why a think you are partially seen such a big stock fight today. priority,this a great, i think you has to say that, but how do you go about doing this? options are to potentially sell a bigger piece of the health care business when it spins off. a 20% stake, they could monetize a bigger piece. the problem with baker hughes is that that's a complicated asset to sell, they have already put it out there that they are interested in winding it down. in terms of how much cash it gets coming in the door, that's a difficult one and we don't have a lot of details as far as
the plans. shery: brooke, thank you so much for that. president trump sent a tweet about the american cable association having big problems with comcast, saying that comcast routinely violates antitrust, we are seeing comcast hitting session lows following president trump's tweet, now losing one point -- 1.2%. this after president trump quoted charlie gasper reno, saying that comcast has antitrust issues. comcast falling to session lows, up to 2% at one point. we will keep you updated for more on that company. let's talk about another story right now, a big deal that happened overnight, we had heard that after months long
contentious campaign to force a sale, athena health has given in, a private equity firm and elliott management will acquire the company for $135 per share, 5.7 billion dollars. our bloomberg deals reporter, ed hammond, is here with this story. i remember breaking this last night and we were thinking that this has been going on for quite a while. it has been pretty contentious, like i said, the deal was pushed by elliott management, who had refused this at first. how did this come about? they refused it, but they refused it at a higher price. i think, look, this is a process that has taken a while to play out. they have really interested parties. for the shareholders, 135, look, they will be relieved, they got
a deal done, ultimately. it's a slightly lower price than could have been achieved earlier in the process, but they are going to participate in the take private with veritas, a good fit, we would call this a clause i strategic rival company. what was the initial issue with the company? why did they bring about the offer that didn't happen? and then you see that investors they put a it? ed: floor under it assuming that there would be higher offers. they thought the company was undervalued by the market. not something that investors understood well and it made more sense to sit as a private company. you have seen those statements coming out today, they will benefit from being a private company, from being under that umbrella. to be fair, some have put their money where their mouth is, they will participate and hold it in
their at green coast baker, essentially the private equity fund specifically for this purpose. they hang out with the option of -- look, no one else shows up? we will buy the company. ed hammond, thank you so much. time for a look at the bloomberg business flash. netflix will test a lower-priced version of its film and tv streaming service in some markets. ceo reed hastings says the company hasn't committed to lowering prices anywhere, but it does want to experiment in countries where the per capita income is significantly lower than in the u.s.. shares of austria and british american tobacco are lower as they may restrict menthol cigarettes, hitting a business that generates anywhere from 20% to 25% of the company profits. campaigningbeen
shery: breaking news on the bloomberg, president trump saying that saudi arabia shouldn't cut oil production. oil prices he says should be much lower based on supply, of course. we had seen the abu dhabi expressing the need for oil producers to cut $1 million per day from october levels and they announced fewer shipments from last month.
500,000 fewer barrels per day in december than this month and now president trump is saying that saudi arabia and opec should not be cutting oil production. we are seeing wti prices taking 1%.t, falling to a 10th of they had been falling more than 20% since the october high. in other news, back-to-back one billion-dollar wildfires are threatening california utility companies. to as of the states largest plummeting on reports suggesting that the equipment may be to blame for the deadly wildfires. birding at both ends of the state, david baker is from san francisco in here with the story. great to have you here with the story. couldn't they just use bonds to pay back parts of these david: it's all in that they had utilities dealing
with the costs going forward, but the way the language of that bill came out, it was explicit about what to do about wildfires last year going to the wine country and they were explicit about what they could do going forward after the start of this coming year. there's a bit of a doughnut hole there as to what happens with fires that happen this year in 2018. there is some guidance as to what they can do with state legislators and regulators, but it not exactly filled out. this is not the first time they faced these wildfires. in 2017 they had to deal with this huge catastrophe. so how much money are we talking about right now? david: pg&e are the largest utility in the state. the estimates of their liability from the last event are higher than $17 billion. the estimates that we are seeing
here today for the current fire in their territory, the campfire or, if they are found responsible for it, somewhere in the ballpark of another 4 billion to $5 billion and what investors are worried about is not so much how this is going to be recovered, the costs of this fire, what happens if this is just a yearly occurrence? shery: devastating not only for the infrastructure, but for the people living there. david, thank you so much for that and the latest on those california wildfires. getting you a check on the markets before we go, the russell 2000 is moving through this year's gains and taking a look at what the wti is going after trump said that the opec shouldn't be cutting oil production. this is bloomberg. ♪
circuit chief judge said during an emergency hearing today there need to reassure certains that the integrity of the is protected.ount governor rick scott who's lead nelson has shrunk to points. democrats say the goal is to counts.hat every vote >> what we saw over the weekend starting thursday with the governor's press conference and continuing right on through the weekend with statements from the governor, senator rubio and president trump, is an attempt undermine people's faith and what's happening in florida and in ourne's faith democracy. that's the wrong approach. a dangerous approach. mark: all of florida's 67 counties face a thursday
deadline complete recounts. veteran richard ojeda for 2020.run he lost his bid for u.s. house week.ast ojeda joins john delaney for 2020 bid. international monitors say iran s abide by nuclear limits with world powers. since thest report u.s. reimposed oil and banking sanctions last week. atomic energynal said iran is still allowing informations while keeping capacity and materials low threshold allowed. mounting on british prime minster theresa may to
her brexit proposal. joinedative lawmakers forces with northern ireland democratic unionist party to may's government. they are promising to reject the treat northern ireland differently and tie u.k. to european rules indefinitely. on air and tictoc on thaner powered by more 2700 journalists and analyst. i'm mark crumpton. .his is bloomberg shery: live from bloomberg world in new york.
>> i'm amanda lang. here are the top stories that around thewing from world. u.s. stocks dropped. pound is sliding as theresa may fights to future. political .erger monday, company.e ceo of the aurora cannabis report earnings in canada, its revenue jumped over year. shery: let's get started with the markets. trading here in the u.s. we are seeing stocks under pressure with the dow seeing twos. day in over the s& s&p 500 losing 1.5%. gainingtors that are now defensive, real estate and the nasdaq falling more than 2%. apple and apple suppliers are signs ofit as we see weak iphone demand.
russell 2000 falling ###-##14%. markets here in the closed because of veterans day remembrance. close eye on oil prices as well as we have seen trump tweet about cut oilabia and opec to production. surge:we did see a brief higher for are the broader oil market. saudi arabia said it will cut. president trump saying, no, prices should be lower. i want to take you inside a look prices.ian oil this is canadian western select, you can see there that it is now below $20. this is an extremely low price. at a steeps to trade discount to west texas. the reason for that is this is locked.y we don't have the pipeline or the refinery capacity to get market.vy oil to it is sitting inside our
atritory and it is trading a steep discount. producers contemplating whether in.ot to shut that down shery: let's discuss more on what's happening on the oil markets. they are taking a u-turn. this coming after president trump tweeted hopefully saudi arabia and opec will not be cutting oil production. oil prices should be much lower on supply. at a time whenng saudi arabia expressed the need cut.il producers to >> the saudis have been making lot of noise. disablize theg to oil prices. saudis and the rest of the this week ineting dhabi.
they are looking to ache million market.out the that has not pleased president trump. stabilized.rice it has been after 10 consecutive decline for the u.s. marketings. shery: we have to ask tina whether opec has the power it you throw in domestic oil production in the u.s. but the deal with iran to shipments tollow russia for instance. even if saudi arabia did membere other omechanic -- opec members, is it enough? >> you heard the russians not necessarily sounding like they again.o eager to cut they struggled to stick with the the resthat opec and of the country laid out. $2 million cut that came in response almost directly to president trump's tweets in past. the president, of course, has a
marketay in the oil because of the consumption and huge up swing in production. if you're talking about 2 billion-barrels a day. ast's what the u.s. produce an increase from the month of august. there's a substantial amount of swing production in the market now. shery: we seeing this chart on whenloomberg showing production cut were greed. declined.duction we saw in the green, circled there, production rise. the price of crude has been pretty stable. uncertainty over iran playing in prices now? >> you saw that in the prices in october. huge runup. october.year high in we've pointed out it was more than 20% decline just in the space of that month. if you think about what's going the pricing, it's
been increasingly volatile. was expecting whole lot of output to get pulled out iran sanctions. what happened was the u.s. granted lot of waivers and it morethe market lot reassurance that they will continue to stay some form of output. you so much for that. tina davis for energy and commodity. with the recent prices, investors will be keeping eyen release of u.s. consumer prices. inflation and risk are dividing the bond market. to talk about it is catherine. bring up this chart on the library showing the price is also u.s. and ten-year break falling. what are the bond markets thinking? this seems to be in inflation expectations falling. what they're hedging for? >> absolutely. this is one the biggest markets thisbond year.
as you can see from that chart, break even indicate that markets aren't expecting much of the pick-up in inflation. however, on other side of that, big voices saying, intoe up, the end of 2018 2019, we're going to see some of those price pressures start to build. shery: of course, one of thing that could happen is the federal narrative.ieves that not the narrative that inflation will be killed bait. what happens to traders who are cut on the wrong side that? >> absolutely. this is what markets care about how policymakers think we're headed from here. at fed rate hike examination -- expectations we're pricing in two hikes. it should give us pretty good insight whether we might see whether theck up or federal reserve can really continue on their current path.ted shery: i'm not sure traders are
factoring in the chinese economy that could affect demand for commodity. it's a downsize risk to inflation. who believesmp that inflation will probably not see a big surprise there. one the pillars ever arguments. this ties into the trade tensions between u.s. and china. up andaw tariffs pick slow down in the chinese economy, that could hurt their commodities, which is just one more disinflationary impact we have in the global economy. shery: thank you so much for that with the latest on the bond expectations for inflation. you know who can be helped being bond market, virtual assistance. coming toing abby 2.0 play. this is coming from alliance bernstein. fixedhan 60% of their income trade depends on abby.
this digital assistance can scan points. of data traders mightnd have missed some. amanda: it takes all of the out of it.ons know if you saw last week, the china has come up with a virtual news anchor. they're coming for all of us. shery: we're going to get we?aced aren't amanda: yes, as some point we will. are seeing brexit trend well. the pound down in more than a week. u.k. ministers are dropping. sunday times reporting that prime minster theresa may may lose four more cabinet members. resigning over the brexit plan. to speak today.
feeling has been that theresa may's political future rides on this. it be point of knife? she actually fall if there isn't enough support? week isuestion this whether a deal is going to get done in november. u.k. government really wants because if it doesn't get a deal in november, making have to start those no deal preparations that stockpiling foods and medicine able tomight not be bring in easily from the e.u. wednesday, is the u.k. and gote.u. side will say, they the tech ready to get that deal. that's why it feels we're at the knife point. shery: this coming after the shock resignation of joe johnson minister.rt
what are the fallout of in going to be? johnson obviously, the washer of boris johnson who the foreign minister who resigned. support may's brexit plan for slightly different reason. here. more pro-brexit joe johnson is remainder. showing, people like joe johnson, they don't want to be associated with this government. don't want -- -- they can't see way it will go well. and theyetting out want to say they voted against to getl that she wants through parliament. of real outcomes here, we have seen some minor moves around the edges of change theirat are plans. how much that do you think will if there isn't a real deal with the e.u.? >> you mean how many we'll see businesses moving away from
the u.k. if there isn't a deal? >> yes. >> all businesses like anyone in evaluating their plans. one of the things that's interesting about the situation. it's fast-moving. if you step back and look at the bigger picture, nothing is much. changed that i think there's a lot of time, may that over make decisions to move away from the u.k. doubt we'd see from 29th of leaving. of businesses some said that they will. you so much. we'll hear from sap mcdermott talking about the nature of sap buy softwareal
shery: this is bloomberg markets. amanda lang. amanda: sap ceo and ryan smith about the sap $8 billion deal to buy qualtrics. why it's great business move for both. a listen. >> let me give you the details on the price. 13.5 times 2019 revenues which is consistent with the high profile cloud companies in this environment. one.s number number two, they're growing at basis.a year over year cloud company that's
growing. sap is also growing. by business in the cloud 40%. if you combine two 40% companies. is the fastest growth story in the enterprise application cloud.e industry in the let's add one other thing, ryan has 9500 customers, sap got 450,000. we're operating at 193 countries the world. 22% of his revenue is outside u.s. like that growth fuse all over the global economy and see what you get. to market in 25 industries. the business case can be achieved with ryan just maintaining his constant growth rate out into the future. -- sap doing the same. on the analyst call, i told them, we're going to be the
growing business over company to world in the cloud number one. us for double digit revenue growth. number three, total operating digit atowth at double a rate greater than the revenue growth. the company is benefit around that. for ryan smith, amazingnovator and company called qualtrics, keep doing what you doing. don't stop. use all the infrastructure and power of sap to spread your word everywhere in the world. all he has to do is that. does that, this is the biggest and most successful move of businessry software. >> just to be clear, when i said estimatedhat, 2018 revenue. you're saying future revenue 40%.baking in the how long do you think to keep at 40% to justify the price you're paying? for how many years?
be hard for me to imagine him not growing double that. if hee business case, maintains the 40% growth for a he doesozen years and that on the top line with sap, down,fter that it slowed he's got global scale. renewalsrgins, we not with the cloud. it's going to be a growth juggernaut. even if the rate top line with better renewals and lower cost down to 30 or even move.'s still a home run shery: sap ceo bill mcdermott smith.ltrics ceo ryan amanda: we are keeping eye on apple today. this is an interesting story. one of it's supplier warning a big customer has said it will take fewer shipments down the road. people have done the math on said apple is the biggest
customer. they are concerned facial apple.tion software is shery: take a look at the stocks they are falling. other apple suppliers are falling. getting to my bloomberg and the splc functions which this company said one of their were askingomers for meaningful reduction in their shipments. that's apple here. can see that. speculation on iphone demand. seeing weakness cross suppliers that get a check of as wellder markets because we are under pressure. nasdaq, the dow all falling today. dow falling the most in over two weeks.
>> commodities is a head wind. we had to offset 400 million quarter. it's a billion dollar headwind year. stories today,he lines once the huge canada made recreational legal.na this can be affecting medical marijuana. amanda: lot of people taking some time they are competing with recreational users. there's a problem they are unable to get their part to relieve pain. we're talking about cannabis first of the pot producers reported results premarket.stock was fallen. since
heavily into the medical space. the revenue really did soar. fullhey capturing the potential of legalization? >> yes, this is quarter end of september 30th. the revenue number we saw just under $30 million. that's largely medical. also $600,000 did come from provinces.ents of pretty early numbers from aurora, it was the commentary that stood out today. some of theey were top sellers of cannabis products in the provinces they've been from includinga selling about 30% of products so selling theio and top four best selling dry flower columbia.n british they seem to be doing quite well in the legal recreational market. shery: we were talking with amanda about the shortage of medical marijuana. any what the price
looks like for aurora. is ramping up their capacity quickly. about 70,000 kilograms production rate. now they're moving up to 60,000 kilograms. they are careful to scheme supplies set aside for the as the market as well international market. they're not putting that in the recreational market. can put allid they their supply up to the end of next june. they're keeping some aside for medical patients. fory: thank you so much that. we got to remind viewers that bloomberg news can interact with everything they've seen here including the charts. from toronto and new york. this is bloomberg.
should be il prices lower based on supply. the kingdom plans to reduce by about half a million barrels next month. it's the second time saudi reversed course after a summer surge in prices was ollowed by a downturn in the market. in the meantime, canadian prime minister justin trudeau says his intelligent agencies have heard recordings of the illing of saudi journalist jamal khasoggi, speaking in paris today, prime minister trudeau became the first western leader to acknowledge tapes after the turkish government announced it had provided them world powers including the united states, the saudi arabia. the trump administration reportedly is trying new tactics limit intellectual property by china. according to the "wall street u.s. will use export controls, documents, and other measures. launched ogram was with a crackdown on a chinese
oficonductor company accused tealing from micron technologies. charles network is seeking bipartisan in the government. a spokesman for the network says major campaign for both arties to jointly discuss divisive issues. the conservative network dropped ens of millions of dollars on advertising to help republicans running in last week's midterm elections. global news 24 hours a day on ir and at tictoc on twitter followed by more than 2,700 overalists and analysts in 120 countries. i'm mark crumpton. this is bloomberg.
p.m. in new york, 7:00 p.m. in london. headquartersomberg i'm scarlet fu. stocks fly, techs leave the apple and r with suppliers tumbling assigns mount of weak demand. oil rallies, opec and its allies groundwork for supply cuts next year. and never let you go as the u.k. away from the sh e.u., currency fall in unison, hat as investors follow the twists and turns of the brexit battle and the budget drama. all of that coming up. the u.s. market closes, let's get a check of the markets right now, the s&p and asdaq falling for a third straight day. among the decliners, technology, nature and cretion financials. rates and utilities holding up better year and small caps selling astim to the well. the russell 20100 now negative
2018. bond market is closed for veterans day, but the e.t.f. there is demand for longer data treasuries with it up 2/3 of 1%. a story this is, it can't stop the bleeding, even fter the c.e.o. tried to reassure investors, it down for the 14th time in 16 days falling low of 772. let's take a deeper dive now into today's market action with covering equities, bonds, currencies and commodities. we'll begin with romaine, what watching? >> i'm looking at home builders again, depending on who you ask, an industry that is steady and stable or starting to slip a oftle bit, maybe heading off a cliff. bank of america merrill lynch morning saying this things aren't necessarily good. otherownloaded a bunch of stocks in that group, the s&p 500 home builder index having year now since the housing crisis and the next
chart is going to give you a why.le bit of hint affordability is the issue that continues to come up and again and again when we talk about the markets. bank of america, merrill lynch put it like this. ffordability issues in a u.s. economy that is seemingly willing itself into a slowdown. when you see mortgage rates rise you see on did as the chart day and you're seeing the drop-offs in some of the builder stocks. not only are we getting hurt on people not ide with either to afford homes or the homes they want, home builders squeezed on input costs and labor costs as well. are the lower and first-time home buyer type of homes and we'll get to that a more of a peak >> to that side of the american reported.gs are abigail. 500, and the s&p dow and nasdaq down for the third day in a row. up for a third day in a row. it's hard to know which came
or the egg, icken whether there is a flight to safety that is causing money to come out of stocks or money out of stocks on the tech weakness finding the safety. either way, the dollar is higher. the techs suggest that may continue. we have looked at this chart a few times over the last few months. we have seen overall an uptrend, there has been a choppy the heart of this trend channel, the bloomberg dollarindex, this is the index d.x.y. has really taken year-to-date high, weeks possible, there was cause for a dollar weakness. confirmed for 100 or maybe even above the range, that could flight to safety ahead at one would continue, emma. a tough day for big of the on both sides atlantic. a band on nsidering
cigarettes. down more than 10%, its biggest stock dropped 1999. british american has a small mount of share, they also, newport, the most popular of the menthol cigarettes. the profit comes from menthol cigarettes. slightly less than its peers and imperial, but significant coming from ofit menthol cigarettes. this is all part of the f.d.a.'s prevent young people from taking up smoking. a number of studies showing that more ed cigarettes are likely to hurt young people earlier. we know the f.d.a. is also going the makers of e- cigarettes that are flavored. week.rd from that last we saw the jule was struggling on that. number of analysts are weighing in on the news today. many of them saying any ban years in the making and
may never materialize. that alysts are saying investors should buy it. caroline. greatne: thank you and a round-up there. stocks are in the red but all to mixed picture in the green. enchmark marks rebounded as saudi arabia to curb output and it.s its allies to do >> no country should do it alone, and should do it alone. colleagues in opec and the thatec countries recognize here needs to be a collective ollaborative with the majority of producers. caroline: oil fell from a high when president trump tweeted, opecfully saudi arabia and will not be cutting oil production. should be much lower based on supply. he head of energy and natural resources joins us now from houston.
regina, it seems as though the listening to trumps tweets. should it? egina: well, i think the market is overreacting to all kinds of things, so i would not going that the tweets are to have a material difference in the price. think opec in particular is enjoying the fact that it's relevant again. to ok for them to continue exert their influence to the extent that they can within the market and influence price. that's an interesting dynamic.eading the is it possible for opec to get ahead of the curb, or because it's reacting to market pricing, it the will always be somewhat behind it is ve in whatever supposed to do? reacting always be and behind the curve. as you pointed out, this could ofthe second u-turn in turns price outlook within a year. i do expect they will cut production. that it will hit by a million barrels per day which
is what the overhang seems to be. expect that it will not just be the saudis that will end action.ng caroline: we're talking very much about the supply side of the equation, regina. what about the demand side. there has been a question of global tensions, the dampening chinese growth, europe in the doldrums, how do we know that there to support the price point as well? egina: you raise an excellent point. that is part of the picture. it is not just the supply only move right now. we're seeing overall i.e.a. forecasts of demand growth coming down. still means that they expect growth, but they don't expect demand to grow as much or the reasons that you just pointed out. we're seeing gasoline demand shrinking and u.s. began lease increasing, which is having a further dampening on crude price. opec has to make some big moves some ger moves to offset of the demand downward pressures on the price that we're seeing
as well. speaks of the demand downward pressure, break it down further. extent does u.s. demand less because it's constant with the inting demand here? regina: i think you're right. developing countries are very demands.ng that's where you see the i.e.a. softening its forecast. the u.s. began lease demand and the fact that gasoline stocks are increasing is something that watch as well because that has an impact for the more mature countries and what we're ultimately see down the road. the ine: what about u.s. -- not on the demand side, side, the shale that is adding to the overall glut of supply, how much do we coming off the accelerator pedal there for shale supply? see the foot on't coming off the accelerator at all for u.s. shale providers. anticipate that they would relatively quickly fill
ends up hat opec creating if they're able to drive more production consulting. concern about ss takeaway capacity and seeing rig the first ease for time in quite a while. i think u.s. shale is on a track. to consider is, it's not going to be able to fill all see e demand gaps as we demand continue to increase by a lot of estimates to 110 barrels it falls off. that's 10 million barrels per day greater than today's demand 100 million barrels per day. per deum production is not going gap.e able to fill that in the short term, the u.s. roducers are pedal to the metal. michelle: that's an an important distinction. going to the opec production moment, are applicants consistently or do they lose efficacy each time that they're undertaken? regina: i think they continue to be effective, we have to take
things.ration the other the market had priced in cuts crude and eight countries got waivers in advance of the midterms. anticipate that the administration may consider some of the wires now that the are done.ections the production cuts and iranian supply will all have to be in.ored caroline: of course, regina, your role is helping educate the the clients indeed that you serve. how are companies setting hemselves up for such an unpredictable part of the market when you have tweets coming from opec meetings nd coming in the other? regina: everyone is comfortable, they're in the money at 60 for w.t.i. and in branson. at 70 for i don't think anyone in industry, the clients that i and running nicked for the door. they're trying to make
reasonable decisions on a step step basis. the rest of it tends to be considered a little bit of white and they're moving forward with their capitol projections and the disciplined spending committed to their investors and to their shareholders. scarlet: regina mayor, thank you so much for your perspective. we should note as well that oil given up a lot of its gain. it's just barely holding above the unchange marks, still positive, but not by very much. coming up, falling like dominos, apple suppliers hit by slow down in sales of their iphone 10r, industry t in the ahead. banking on bonuses, why some of all street could see higher payouts while others may see cuts. and merger monday, why the $8 jewel in the s a crown, but are investors buying it? next.s this is bloomberg markets the close. ♪
caroline: time for our top calls, the big movers on the back of analysts recommendations. up i'm checking up wells outperform, market perform, $55 a share from 30. turn around story saying it's one of the most nteresting names heading into the next year. next, bank of merrill lynch for oading the group underperforming. the analysts saying profit estimates and price targets on home builder stocks after a sobering outlook last week. and finally, sky works, an apple supplier getting downgraded to buy.al from
$85 rice target lowered to from $116. 3.7%, scarlet.by scarlet: we're sticking with suppliers.its shares are sliding due to weak iphone demand sparking concerns investors. here with more is bloomberg intelligence covering networking r and company. we're looking at an revised has ok from a company that investors worried again. earning season has largely ended makers.apple chip we have a picture of the demand robust as some might have wanted to see. what makes the outlook a little here?ent >> thank you for having me. um adding their earnings cut 10 days later. since theyhanged and did cite one customer which had
have been apple. there was some sort of change on change part to make them their forecast. caroline: laying some of the blame at apple's door, it hasn't been mentioned by name by the company. are we always blaming it on wide or a semiconductor issue of its own making? > the way i view the semiconductor names are twofold. one on the broader industries, and industrials, for the apple supply chain, they ere actually on their own cycle. it all depended on apple volumes and apple unit volumes. pple at the end of the day, talking about one of the largest stocks in the index. apple stock on the index is bringing down the index overhaul. carlet: at one point do sales
stabilize? are there pockets of growth for the companies that do rely on apple? inventory adjustment is coming a little bit sooner than anticipated. e look anticipated. we look at prior cycles as far cycle, these 10 happen in the fourth quarter or late in the fourth quarter. is eems to me that apple tightening their supply of the of ne 10 possibly because weak 10r demand and so if they're tightening the supply now, we can probably see some stability on earnings as well as revenues coming into the first-quarter guidance. we sawe: interestingly, caution that apple is facing weakness in china as well. how much can you blame china or indeed the trade tension it is between the u.s. and china? we look at china's market weakness in china as that has bl part.18 for the most the trade tensions isn't going to help because the chinese
has often quite a bit into the third and fourth quarters because of the weaker economy. as a result, you know, if there is a weakening chinese bertphone demand, i wouldn't urprised if apple is going to find some hit to it as well. scarlet: tough times ahead for apple suppliers, thank you so much. talking , we're bonuses, big bonuses are headed to wall street, but not everyone cashing in big checks this holiday season. we'll explain. this is bloomberg. ♪
infrastructure. we are very clearly, ot going to build a problem in our backyard. we are interested in building which will be enjoyed by all of the nations in this world. ll bee ournjoyed by all of the nati >> a quick look at the latest. tobacco is lower today. regulators reportedly may restrict menthol cigarettes. that would hit the business that 20 to 25% of the company profits.
the food and drug administration campaigning against youth smoking and menthol cigarettes are popular with smokers. netflix will test a lower priced ersion of its service in some markets. the company hasn't committed to lowering prices anywhere, but it experiment. netflix is looking for growth in companies where the per capita income is significantly lower in the u.s. and the new york yankees are going ahead with plans to buy the yes network. the regional sports channel was old to 21st century fox four years ago. no word on how much the yankees pay, though.o and that's your business update. of paying bigking onuses, bigger bonuses are coming for almost everyone on wall street. they should be cashing in, banking reporter hanna levin joins us with the details.
it sounds like there is going to winners here when bonus season rolls around. pretty bonuses are up much across the board this year, equity traders and salespeople are leading the charge there. they could see their comp rise pretty big that's a jump. caroline: the flip side of volatility, we're not going to see so much hey day for one part of the bank. hanna: that the same volatility boosts equity trader hurts dvisors, they are not as enthused of doing the deals with the jittery markets. scarlet: certainly something people are keeping a close eye on here as they manage expectations with the bank. ahead, what is the outlook for 2019 bonuses as well extrapolate?ue to hanna: according to a johnson 2019 ssociates survey, might not be as rosie as 2018. if you think of the financial
bonuses going down after that as regulatory affected lower profitability, we might be hitting a peak in 2018 it looks projections a bit lower. caroline: the lower fees situation must be playing into all of this. hanna: there is some pressure on fees looking out into 2019. pressure on geopolitical tensions that could have an affect as well. scarlet: when you look at the here for what people are likely to get paid in bonuses, what hint have we along the way.ks they have given numbers out at mid-year that gives an indication of what they're aside? hanna: johnson and associates year survey earlier this with looking at these same categories. the numbers were a bit lower. hey have risen a bit for the end of the year. scarlet: the volatility to thank for that. of the : some parts business do anyway. much, t: thank you so hanna. speaking of volatility, the
check of the markets right now, arrows for u.s. equities there. you're seeing the nasdaq and s&p third lowing for the straight day. it was was above 19, above 20 earlier. caroline: across the atlantic, the pound under pressure. it looks as though a deal could be edging between the e.u. and the u.k. does it mean she'll get to be in her own home in terms of getting it passed in parliament. have turnedl prices around. they are lower for the 11th straight day. losing ends a record streak. caroline: trump tweets from new york. this is bloomberg.
to the ne was headed dominican republic when it went down. >> we take comfort also from the in the midst of hat tragedy we saw heroism, we saw the men and women of the fdny come forward o do all they could to save lives. that heroism reminds us every of the good in humanity. mayor helped place flowers at the 587 memorial park in queens to honor the victims. president trump's demand to build a border wall may spoil speedy 's plan for a exit. congress returned for a lame duck session this week hoping to avert a partial government shutdown and pass some other ills, but the president isn't
ruling out that he may insist on wall funding in exchange for signing legislation to fund key government agencies. issues such as proposed sanctions on russia may get pushed into next year. a new report says north korea has 13 undeclared missile operating bases. the center for strategic and studies in l washington says this undermines the trump administration's its outreach to pyeongchang has russia may get its un's regime to give up nuclear weapons program. the 13 sites are believed to underground facilities continuing mobile launchers that can be quickly dispersed to locations. palestinian militants today ired dozensch rockets and mortar shells into southern israel. the country's national rescue seven said at least people were wounded in the attacks. in response, israeli war planes targets throughout the gaza strip and deployed its system to intercept additional rockets. it appears to be most intense
exchange of fire between the two sides since the 2014 war. a fighting was triggered by botched undercover israeli raid gaza. bloomberg news 24 hours on air tictoc twitter, 2,700 journalists and analysts in 130 countries. crumpton, this is bloomberg. scarlet: from bloomberg world headquarters in new york, this "bloomberg markets: the close," i'm scarlet fu. caroline hyde. abigail: another down day, the dollar strength is not working or at least dities wasn't earlier.
let's take a look at what is happening on the day. see the s&p 500 futures lower, well off the lows and the 500 on pace for the worst for the he futures worst day, the objectively selloff for the tech sector. worst se, that was the month of the nasdaq since 2008. take a look at the bloomberg index up ever so slightly. earlier it had been up more than percent. we'll take a look at a little bit of a reversal. inising dollar up three days a row. typically that would pressure commodities. that is not happening because of that is y complex probably working against stock. as for stocks and commodities over the last year, let's hop bloomberg and see what's happening here. we in yellow are looking at the on therg commodity index year. while we're looking at the s&p 00, these are aspects or segments of the risk silo of assets, if you will. year n see earlier in the they were trading fairly poorly
as sometimes happens. we had the commodity complex for the last few months. the commodities leslie quid. if investors are going to take risk assets, t of they're probably going to go where there is leslie quiddity. trading higher, the commodities a little volatile, it.6% on the year. one question could be that i bloomberg ke of intelligence, thanks so much for joining, mike, is that commodity weakness, is that a sign ahead sort of weakness for stocks? i know that your expertise is commodities. michael: it's for both. the stock market, both of the trends continuing is very bad. tighten in the environment of both stocks and down. are going bigail: that's an interesting come commentary. natural gas is still higher, about oil, what is going on there, it had been
higher too, breaking a record straight? mike: that's the line in the sand. in crude oil sustains before that, that's a negative sign and take the fed off the table for tightening next month. going down and vix going up, that's not a good sign for more tightening. you il: so a bright spot, trading idea or strategy, hop back into the plaople and take a look at your wonderful chart. mike: it's the monthly chart of natural gas potentially breaking the significant of trading id 2017, that's the narrowest range gas futures. the one-year curve in natural that's an oxymoron of natural gas. look at the trend, very bullish. he problem is, it's at the peak, the highest level we have seen in a long time near what we around 2014 peak and then if you can go to the bottom here, managed money net 16% of open interests, that's the most ever 2006.r database since
money managed in that position are very long. the market is breaking out. november, it's early in the year, the market started price winter.d it's too early to get excited around natural gas around $4. based on the weather in new york, it might support natural gas being bullish. thank you so much, great to have you. scarlet and caroline, back to you. much, t: thank you so abigail. we want to focus on the fed for a moment here. speaking with san francisco fed president mary daly. we talked about the u.s. seb bank's rate timeline. she says it wouldn't be need tong that we would go up again in december and a year.e of times next i think that's what will be needed. more highlights from our conversation later in the day. aroline: let's turn our attention back to stocks. shares in the california utility as the wildfires will bring new liability.
on the story is romaine. 37%, the were down worst we have seen since they have been a publicly traded company. out, that a lot has to do with the fact that some people are starting to the fire on me for the utilities and trying to assess what the liabilities are to be, not just the cost of deal with the falloff for that but the potential lawsuits. is the same company that got caught up in the liabilities with regards to the fire that a year apa valley about ago. those losses were around $15 billion, $17 liabilities on pg and everyone's shoulders. that knocked the stock down a bunch. they cut their dividend, completely suspended it in december. faced with the prospect this company could be on the hook for millions of dollars more with the current in northern california. scarlet: shares of edison nternational in similar fashion. romaine: a separate fire there,
getting conflated that edison is dealing with. there is a similar issue where there are reports out that the company has contributed to said the fires may have been sparked by their equipment or something related to their power lines. concern again is that the liabilities are going to fall on them and they have to shoulder this burden. weighing on the stock. they didn't have the same issue as much to the same extent that and e did last year. they're in a little bit better position financially, but the these companies too big to fail? at some point, you get to a tage where state regulators there have to figure out, do you let these companies off the hook financially or do you just let out and potentially decimate the value. caroline: particularly, this is annual occurrence now? romaine: absolutely. this is the worst wildfire we northern in california, the camp fire that they call it in terms of property loss that we have seen. it's the third most severe fire that we've had really in the last couple of years. injuries, k through the three most severe ones have
occurred in a very short time even the c.e.o. back with the previous fire in 2017, he said, yeah, climate change and the changes that we're seeing in the atmosphere are contributing to this. have a very dry atmosphere up there. you combine that with winds and a power ngs and put line up there that may or may not have been working properly nd you have the recipe for disaster. scarlet: what it comes down to, aroline, these companies for investors, what happens if it happens every single year, these and ires and damage liability, it's not sustainable for the utilities. caroline: the business model left with, the breakdown, thank you. up, the largest ever deal s it ramps up its battle against rivals. we'll hear from the c.e.o. this is bloomberg. ♪
scarlet: it is monday after all, and bill and ryan smith our david weston on deal to buy illion qualtrics. let's take a listen. 13 1/2 timesice is 2019 revenues which is consistent with the benchmark cloud companies in this environment. so that's number one. growing at they're 40% on a year over year basis, pristine cloud company and the experienced management category that is growing. s.a.p. is also growing our business in the cloud by 40%. you combine two 40%
companies, oh, my goodness, this growth story in the enterprise application software industry and the cloud. one other thing. ryan has 9,500 customers, ok, 450,000.as got we're operating in 193 countries 22% of his revenue is outside of the u.s. views all over the global economy and see what you get. e also go to market in 25 industries, so we have 15,000 alespeople in 25 industries that are now selling qualtrics fuse.e, let that grow a can be with case yan with his growth rate out into the future. at an analyst call, i told them fastest software company in the world in the cloud. count on us for double digit growth.evenue
number flee, total operating income growth at double digit at revenue eater than the growth. so the design of the company is all i needd that and in the business case is for ryan innovator, great this fantastic c.e.o. and amazing company to keep doing you're doing and don't stop and use all the infrastructure and the power of s.a.p. to your word everywhere in the world. all he has to do is that. is the that, this biggest and most successful m and a move in the history of business software. bill, just to be clear, when i said 20 times that, that revenues, imated you're saying future revenue, 2019, 40%. ow long do you have to keep increasing that business 40% in order to justify the price you're paying? how many years? bill: first of all, it would e -- first of all it would be hard for me to imagine him not growing double that. or the business case, if he maintains the 40% growth for
half a dozen years and he does sinner gistcally on the line with s.a.p., and after that, it slowed down a little scale, we gotobal margins, renewals, lower cost of sale with the cloud. to be a grow ng juggernaut. lineif the rate at the top with better renewals and lower cost of scale goes down to 30 in future years or 25. it's still a home run m and a move. caroline: that was bill mcdermott with ryan smith, he get a word in edgewise in that clip. about not only this particular tech deal, but a number of tech things that are on today. let's get your analysis first of s.a.p., $8 billion paying qualtrics. >> they were valued at $2.5 billion in a private funding year. last we know those private valuations
companiessful growing are already quite highly valued when you look back at the history of tech deals. that reminds me of i.b.m. going out and buying a successful in the cloud and just paying a lot lot ney for it and from a of analysts' perspective doing a ail mary for some of these older legacy companies that have good products, but aren't as up-and-comers.e scarlet: does it feel fomo, excessive and paying prices, valuations? > the company would push back on those terms in that interview i.b.m., hen i spoke to she was very defensive of the valuation. they kept coming back to it even after we moved on to discussing other things. wanted to make it clear she wasn't paying for it. are.companies
caroline: let's talk what a big d with alibaba, spending spree overall. >> it went well once again. really knocked it out of the park even though things in as hotna economy are not as they have been recently. we have the trade war, a lot of tweets about trade wars that flying back and forth. for me, what this was that alibaba s successful in the domestic chinese market. the sales in the u.s., talking a lot, a big part in their further plans. they didn't knock it out of the outside of china. i think russia was decent, hong kong, a tiny market came in the u.s. was third. so the story of u.s. tech and chinesets world tech growing in their world is continuing. there doesn't seem to be a lot yet.ossover scarlet: i didn't hear anyone u.s.appy day in the raising 21 billion in a i.p.o.
unit of d be another soft bank? gerritt: it's known to most as a telecom. that's what's going public here. fund that tinue to war chest that they are sort of building up to go around the major nd invest in these eals, the ubers of the world, those kinds of things. it's also tied, there is something going on in the where e telecom market the government is pushing back against the pricing those kinds thing, the ompanies need to bring their pricing down. there are three major players and there is a sense that the artificially high. getting out of the gate before some of that happens. scarlet: thank you so much. from new york, this is bloomberg.
occupy those senior positions in national football league. out el is one executive is to puncture the glass ceiling. he has been a high powered and was ent commissioner of the united football league. he is out with a new book, the line of scrimmage, inside the front office of the nfl." in today's business of equality, conversationngoing about the bottom line impact of diversity, i sat down with about his talked career journey. michael: i didn't have mentors peoplehe way, which most do. they help shepherd your career. i did it on my own. for opportunity and wherever i found, i went through that window. didn't stop and reflect on what are the down sides, what if this doesn't work out. i'm in a good position now. kept moving, trying to find this goal of one day being commissioner of the league. hat's what guided me in the process. it wasn't money. it wasn't any of those kinds of things. scarlet: you took a lot of lot of things that maybe conventional, the
conventional route would kind of frown upon. from your book insular the nfl is. coaches, executives, networking and familiarity trump everything. are not part of that circle. michael: it's corporate america in general. the story resonates with so many people. face, the les that we labyrinth of working those old need a moral you principal and compass for ourself, it's easy to get washed up. scarlet: you were in charge of football operations. jacksonville the jaguars. it was ok to ike take advantage of your position of authority and actively reach coaches, take a chance by hiring perhaps less experienced black coaches? michael: i think so. you have a responsibility when you're an african-american in a
leadership position, i didn't my career.t away in early on a thought i had to own stature and bring along others. the window of opportunity is very narrow. when you get opportunity, you have to exercise it. people look to you to do it, room. why you're in the you have to stay in your skin and be comfortable in that position. downside was there a in that position? did you get any negative feedback? michael: sometimes decisions work out. when that happens, people look at you. by the right ded principals, you have wins and losses and that's business, too. scarlet: you instead why the nfl excludes blacks from the oaching ranks, thinking positions versus skilled positions. talk about the implications on the hiring of head coaches. we have silos everywhere. in the nfl what has happened is, they have separated the players two positions shall the skilled position players, predominantly the african-american players and the "thinking" positions which have
been white players and minantly, quarterbacks offensive linemen and linebackers. so what is unfortunate is that to become a head coach usually happens from the thinking positions and not from positions and what has happened is black coaches coach all of the skill positions, white coaches typically coach positions.g it's a backward system where here is no really active pool to allow a fair level playing field for blacks to escalate positions.oaching scarlet: there were rules put in place to make sure that job outrviews included reaching to black coaches. michael: they did, and the rooney rule was a part of that. t allowed blacks to get an interview and a foot in the door in the process, but again, owners had been so conditioned into believing and of ng the ma tricklation coaches from the thinking positions, it was too daunting a them to make that kind of reach. caroline: that was speaking in equalities,iness of
scarlet, now to the fed. just been speaking with san francisco fed president mary daly. on the phone. talk us through the top headlines. what did you think mary daly was saying? re-gina: a couple of she said g things included that she sees it likely that the fed needs to raise december and have potentially another two increases next year. he said that is kind of her model forecast. she is not sure what is going to appen after they hit the deciding line between monetary policy. she is uncertain about that and asaid she is going to be how markets and the economies in the economy react to ate hikes in the interim see if further will be appropriate. she sounded not too worried about inflation. sees those risks as really he benign right now. she happens the inflation to be the fed's 2% goal and not worried about the stock market falloff. asked her about that. people thought things had gotten
pricey. bit this correction might have been an appropriate needed one. caroline: amazing conversation. going to be keeping an eye on the headlines coming out of story. now, a quick check on the markets. it's a down day across the board. nasdaq, technology leading off lower. look at what is happening to goldman sachs. 2006.utal sell offsince scarlet. scarlet: a global decline as well. 1.3%.dex off by caroline: oil closed lower. this is bloomberg. ♪ [ phone rings ] what?!
ready for christmas? no, it's way too early to be annoyed by christmas. you just need some holiday spirit! that's it! this feud just went mobile. with xfinity xfi you get the best wifi experience at home. and with xfinity mobile, you get the best wireless coverage for your phone. ...you're about to find out! you don't even know where i live... hello! see the grinch in theaters by saying "get grinch tickets" into your xfinity x1 voice remote. a guy just dropped this off. he-he-he-he. mark: i am mark crumpton with "first word" news. in california to death is to 31 in the most destructive wildfires ever. butso-called camp f could
take another five days to extinguish. the woolsey fire could burn for the rest of the month. more than 6700 homes and other buildings have been destroyed. nearly 100,000 people remain evacuated. a florida judge set you has seen no evidence of wrongdoing in broward county. in an effort to reassure citizens that the integrity of the state recount is being protected, the judge did ask that anyone who with any evidence of voter fraud or irregularities report to law enforcement. european union partners increased political pressure on prime minister theresa may amid signs that some progress is being made in brexit talks. the main obstacles is how to keep goods going smoothly across ireland and northern ireland and the u.k. ireland's foreign minister spoke
to reporters following talks in brussels. >> clearly this is a very important week for brexit negotiations. the negotiating teams have intensified their engagement. the support and solidarity for that work is very, very strong. we will have to wait and see where that goes. new.he issues aren't mark: france's eu affairs minister stepped up pressure on prime minister may, saying that the ball is in the british court. is a tsipras reports that stand -- the associated press reports that stand lee, creator of spider-man, the incredible hulk, man, has died. he was 95. as the creator of marvel comics and later the publisher
come he's considered the architect of the contemporary comic book. when heed in the 1960's brought the fantastic four, spider-man, and numerous others to lie. stanley died -- stan lee died in los angeles at the age of 95. i am mark crumpton. this is bloomberg. caroline: live from bloomberg world headquarters, i'm caroline hyde. scarlet: i am scarlet fu. this is "bloomberg markets: the close." tumbling apple stocks amid signs of weak iphone demand. the president hits out at a
potential supply cut. and never let you go -- the u.k. struggles to push away from the eu. investors follow twists and may's brexit battle and the italy budget,. scarlet: first, let's get the markets for you with an hour to go. astley in my head as a result of what you said, caroline. [laughter] scarlet: major benchmarks off by 2%. above 20 earlier. king dollar is the theme for the day. against all the g10 currencies right now. aroline: the euro, the pound -- the pound in particular, could we get a deal that part may will get through parliament? scarlet: what a situation she is in.
will futures turning lower. we're looking at the 11th straight day of losses for the wti, longest streak effort. oil already in a bear market. let's look at action with our markets reporters. we'll start with romain. lost in all the noises the fact that retail stocks, specifically multibrand retailers, have actually been on fire, doing very well. you look at the retail sector subsector, it is up about 22% on the year, but more importantly, it has outperformed all the subsectors -- take the financials from food, media, anything. a lot of the names like target, advance auto parts doing well. it is the department stores -- ohls -- a lot of these companies will report into next week. here's a hint as to why we're seeing the strength.
consumer confidence is still at an 18-year high. weeks.ere 6% in recent that is the fourth time we have seen the measure rise by 6% or more. retail sales data, we will get an update from the government on thursday. aret now most economists expecting the number to continue to be above the long-term historical average. remainsw the consumer strong and retail stocks remain strong is. emma: thanks, romaine. ge cannot break the stock tumbling more than 10% at one point today. ge is edging ever closer to the bear market low of six dollars 66 ounce. -- six dollars 60 successful to this after an interview with the ceo attempting to soothe investors he has talked about a sense of urgency in terms of
selling assets and dealing with debt. the surprise new ceo took over october 1. initially investors cheered that and the stocks rose, but since then, the stock down more than 25% since october 1, when he took over. really extends the selloff we when itn for ge's stock wiped off $200 billion in market value. ge is in full crisis mode. the problem we were talking about their bank -- talking about their and a number of federal accounting probes. she is the third worst performer year to date on the s&p 500. all of the action drawing further analyst action. street low is over jpmorgan at
six dollars. abigail: ge is in a world of pain today, but take a look at the ship sectors. semiconductor index, lows of 4.7%. that is the worst day of the october selloff. canec worst month -- mastec -- mastec, worst month since november 2008. it has everything to do with momentum. apple suppliers from they cut the q4 forecast when one of the largest customers made a meaningful reduction to its orders. apple, they didn't name the customer, but apple is one of their large customers. more of the supply chain weighing on -- apple is not on this board, but it is a make desperate draft for the major averages. -- it is a major draft for the major averages. this is a truly ugly chart.
trend, that the sideways year-to-date high in march giving way to the selling of which we see in october. air pocket in buyers. what i would like to point out, look at the stocks breaking my ,rom the near term uptrend suggesting this could put in another low on the year. the recent low of the stocks in october was lower than the february low. that suggests we will see more selling action for the major averages. the technicals in this chart are pretty gruesome, for lack of a better way to put it. caroline: looking at how tech is performing today in general. political risks across europe are front and center once again. pound fallinghe in unison. kick off the talks on the
8%.o-dollar, up . loggerheads can does not look like it will get easier tomorrow. >> at times that said we are keeping the budget at 2.4% -- italians as that we keeping the budget that 2.4%. the fun thing about the whole thing is the italians lowered the growth estimates. it means the deficit will likely be higher. does not bode well for the euro or any compromise at all. scarlet: if there is no compromise, what happens on tuesday? longey not resulted in the -- today not result it and muddle along? >> kicked the can down the road or offer some kind of capitulation on their part.
to this and we will let you do that. scarlet: everyone can save face a little bit. for thenk it will try, times of basically said we are not altering our budget and the europeans have basically said this budget cannot stand. there does not seem to be any place for compromise. caroline: it is pretty bearish for the euro at the moment. was bearish -- most bearish since march of 2017. it is not just italy, though. goldman sachs coming up today say that the ecb may have to pull back from rate hikes. vincent: i have an interesting chart, we can to this up. what we are seeing in europe is harmonized inflation is following oil prices very, very closely. the oil prices on the white line. seen an 11-day drop in wti. we expect the harmonized
inflation rate to drop into the fourth quarter. bottom panel is the euro. as the inflation has come down, as oil has come down, so has the euro. there is a real possibility going into q4 that the ecb will not be able to normalize -- as you said, the euro will be in more trouble. not just the fiscal side of things, but monetary policy as well. scarlet: not only kicking the can down the road -- the theme continues. let's talk about the u.k. and brexit, and caroline, i'm looking at you, because every day there is a new something indicating it is in trouble. caroline: yeah, and on friday we had this surprise resignation of a pro-remain politician, ironically the brother of boris johnson, who is pro-brexit. isws you how split the u.k. when families are polar opposed to even though we are creeping towards some sort of a deal with
the eu, the question is whether it will be too much compromise for theresa may's cabinet to swallow. vincent: you hit the nail right on the head, that is what it looks like. they are in a deal, 95% on point, the cabinet will probably push back and not go for that. say they are missing is the biggest part of the picture. ireland. if you don't solve the irish border situation, there is no deal is good for any. scarlet: there is a lot of pressure on the pound. the dollar is rising. is this that the other currencies are falling or is there reason to bid up the dollar in the current environment? vincent: it is kind of both. the whole risk-off scenario -- visit to paris
where he was alienated or alienated himself to some extent. that is the issue the anti-trade issue for the if you see the situation, the president of the united states slipping away from european and global leaders, it doesn't bode well for future global trade talks. the dollar comes back as a haven. caroline: cool for holiday bull markets at the moment. etf trader the longer dated treasuries higher by 61%. caroline: where is the haven? it is just the u.s. dollar? vincent: pretty much, and you saw bonds doing well. gold has not performed the way you would expect a gold to perform on your. -- perform all year. don't really want to hold hard commodities.
caroline: great that we have an etf for that. .reat to get your opinion you name it, he is on it. let's have a quick look at what is happening in the broader markets. missing tech stocks that are we are seeing tech stocks -- we are seeing the tech stocks leading the charge lower. worst ofachs is the the particular stocks. scarlet: all the indexes are at lows. tech and discretionary are falling even more. give you a sense of the see of red. reitstilities and positive right now. caroline: we have seen china rebound but everyone else is in a risk-off sentiment. interestingly, any reprieve we saw in crude didn't last long. all it needed was a trump tweet
scarlet: with less than an hour to go before the markets close, it is veterans day, so trading is later than average, but you are looking at losses once again for big caps and small caps. bidding for treasuries, as indicated by the etf that tracks longer-data treasuries. ge one of the bigger losers out there. $10 for general electric which is off more than half its value
this year. caroline: time for the bloomberg deals report. pharmaceutical research company is trying to make the most of the momentum surrounding the legalization of cannabis in canada. company.ce from the >> thank you so much, caroline. i'm joined by the ceo of corbis pharmaceuticals. australian said in the senate, there is no hotter -- as caroline just said, there's nothing hotter than pot right now. >> we are focused on a very vast network of biological signaling molecules and receptors. the important thing is that it is endogenous to our body. what is derived from the plant and those compounds interact with your brain. into a third bucket.
our molecules do not exist in nature. they are traditional pharmaceutical drug. but what they do is they interact with the system and that is what is so exciting, the potential of what we can do with that biology. orbus specifically we focus on your immune system. >> you are focused on red diseases like lupus, cystic fibrosis. that is a big market in itself. why not go after some of the bigger autoimmune conditions like arthritis? yuval: the thing we believe at corbus's restart with these orphan diseases, which get tens of thousands of patients. the patients are very, very ill. high morbidity, significant mortality. we can make this week and it makes much more sense for a copy of our size to target those with experimental drugs.
if they make it into the market as pharmaceuticals, moving to more common diseases becomes much more tangible. one of our compounds will start clinical studies next year. pharma, i'mg looking at this and i think, hold on, when did these products could target -- one day these things could target some thing like arthritis. why don't they just build up in this space? yuval: what is interesting about the system is that the biology has been there for a decade but there have not been any drugs. big pharma has shied away from it, focusing on other areas. we have a competitor with johnson & johnson, but what is interesting is that it is behind where we are. >> it makes sense for them to potentially buy corbus? yuval: that is a
provocative idea. it makes sense for big pharma to look at the companies that have built up expertise in biology in conducting clinical studies. >> let's look at cannabis discussion, partially why we are here and why there is a much focus on the stock. if you look over the last six months, there is correlation. what you don't actually have anything from the plant in your drugs. is this the market misunderstanding what corbus does? yuval: i'm not entirely sure about that. the one thing we have in common is that the synthetic and the body'srived target the system. the plant-derived ones target brain activity. at corbus, our focus is outside the brain. it is on the main system. >> a lot of times we sit down and cannabis many ceo's
they talk about it as being a panacea that will solve all kinds of different maladies. how farther can be cannabis industry go? yuval: when we look at these difficult-two-treat diseases, the answer lies in traditional pharmacology. traditional pharmacology focuses on here is the biology, i will invent the synthetic compound that will bind to that biology. attacking those types of diseases is probably a little bit too challenging. >> thank you so much for joining us. back to you. scarlet: fantastic conversation, ed hammond, senior deals reporter. more on the market fallout next. this is bloomberg. ♪
insight." i'm abigail doolittle. joining us is matthew rowe of headwaters. the nasdaq is having its worst day at one point since october 24, it was the worst of your october, which was the worst month for the nasdaq since 2008. talk to us about what that means. matthew: it is progressive volatility selling post-election. we find great opportunities in the tech sector and qqq. the trade i will highlight today is a way of being long volatility with no directional exposure. abigail: that is really smart, considering the whipsaws we are seeing. some of the technicals our bearish and anything goes. talk to us about your trade. qqq is the technology sector etf. it benefits from a number of things -- investors selling,
cheaper volatility in the call structure, and a lot of selling electionction -- post- from alternative risk premium. today pay off well. abigail: that seems like a really smart strategy for sure. matt rowe, thank you for joining us from headwaters. we still have the dow, s&p 500, and nasdaq lower. we look forward to having you come back sometime soon. live from new york, this is bloomberg. ♪
mark: i am mark crumpton with "first word" news. in her first interview since being named head of the san francisco fed, the president told bloomberg that u.s. policymakers should be gradually lifting interest rates. she says that will help bring an economy that is running above potential in for a soft landing. daly voted for the first time at the fed policy meeting this month and will vote again in the mid-december gathering. officials are expected to hike for the fourth time this year. a florida judge says he has seen no evidence of wrongdoing in vote counting in broward county and urges all sides to "ramp down the rhetoric."