Every friday. The second a major decline for major averages, the first weekly decline for the s p 500 in nine. It was on a eight week winning streak, and this is partially due to concerns or at least a andh of tax cut legislation when Corporate Tax cuts could happen. If you break it down, you see some underlying weakness and specific in specific groups, namely energy, which is down 1 , and health care as well. You have consumer stocks both stabled and discretionary shares. Oil,u go through them we are seeing it lower with higher earlier in the session, and then it came down. Oil stocks have been following along with it. It felt rather sharply around midday. There did not seem to be a other than thest rolling over of stock markets globally. If you look at oil and some of those declines, crude itself is percent, and these are some companies that are seeing declines today. There was also a story out of china, post trumps visit the re that there was not the finalization of oil deals that were expected to go through while he was there. Consumer shares are on the upside, and some of them are on the upsidere that there was notf nordstrom, but jcpenney up big after the earnings report. They had a big limitation of inventory that helped sales top analyst estimates, and they said they do not have to expect that to do that liquidation again. Kohls coming up after its earnings report, as is macys. Nordstrom is the exception. Comparable sales down 0. 9 last quarter, worse than what anticipated, and also a fly in the mid for the quest to get taken private. Curiouslly, some trading today outside of stocks. We saw a steep drop all of a sudden in gold, still somewhat unexplained. There was something of a block trade that went on when the drop was happening. We are also seeing a big climb in yields. It moves there, so the 10 year is seen increase of six basis points, back up to 2. 4 . The dollar has not gone much of anywhere. A bit of a curious day here when it comes to rates and assets outside of stocks. Ladies . Julia thank you, julie. Lets turn to tax reform and the dueling gop proposals in the house and senate. Can the differences be resolved . Republicans are seeing disappointing election result and also the boy more controversy. Yearsest has worked many as a senior congressional at eight. Great to have you on the show. Great to be here. Julia the key differences i can see are the number of tax brackets and the timing of Corporate Tax cuts. Do you think we can align the two proposals we have on the table here somehow in order to get to this by the yearend . Whether we get it done by year end or not, i am not sure. Her 4060 on with whether we will get it done by year end. I expect some of these pieces will fall aside, and we will be able to compromise, but the roy moore situation is seriously complicating things. Julia how . You have a situation now where after the elections in virginia, you have members saying do i want to support the party or my district . The roy moore thing makes it look like to i want to support a party that has a potential , or do any tot support my district more because look at the Election Results . If it is more the districts than the individual pieces, some of the direction that credits we have been talking about here will be what is most important. That will make the compromise very difficult. Julia lets talk about this. It is allegation, we know nothing about the details and that whole situation will continue to play out. Willu think that roy moore step aside . Do you think he needs to do that, just because of the confusion and the concerns surrounding this, or do you think you should remain, and people will make a decision based on whether it is party or person . You have asked this question two different ways. Will he and should he . Will he . Certainly, yes. They are not hitting in the party, saying directly. Scarlet if the allegations are true, they would say to step aside. And they district Just Announced they will withdraw all Financial Support with more. Will he . I do not think so. Would be difficult to replace them under the circumstances even the election law in alabama, and that is that dilemma for a lot of other members. Inis particularly difficult the senate, where he would serve, simply because it is such a narrow margin. Scarlet this makes what has already been an unusual tax reform process even more unusual. You have been in washington many years, you wear many hats. You are a budget specialist with seat to observe policy. This is not simply have a sausage gets made, is that . When you go back to the last time they tried a major reform, it took three years. There were hearings, members had to vote against this one or more times, a lot of times it was left for dead, and they came up with a compromise when they realize it was in their interest to do that. Since then. Anged hyper partisanship, things like bloomberg we report on a minute by minute basis, twitter reports where you can get a report inside the room. The size of the debt, the deficit, and all of these things make it much more difficult to do this here. Bythey do not get this done the end of february, it will not happen at all. Julia and we were talking about the elephant in the room, and that is the silencing behind this and the 1. 5 trillion room to maneuver. But they have to strip Something Back out and it will cost more. To what extent do you think this will be growth additive, and if they actually managed to divide the plan that will pass . Listen to bloomberg rather intently, and all the experts you have are saying it will not do much for Economic Growth. Julia tax cuts for corporations, i guess. Stan from a fiscal policy standpoint, we should not be doing a Major Economic stimulus, whether on the tax side or standing side spending side. We had our of her is not the time to be doing this. Scarlet i know your take is they are doing it because of political reasons. But Congress Needs to fund the government and raise the debt ceiling in one months time. How did that get tied up with the tax bill and commenting matters . Stan the current government funding runs out december 9. I expect they will extend that to december 31. At that point, the tax bill and the funding bill will come together at one point. It means that members can be bought off with dollars in a funding bill if they will vote for the tax bill, and vice versa. Also externally possible of the president says if i do not have a tax bill by december 31, when this next bill will veto it, we will have a government shutdown, and i will hold my breath until i turn blue until we get a tax cut. Julia that is what makes alex fun, but also frustrating. Scarlet frustrating is the word if you are looking for some thing to get done. Stan hollander, thank you for joining us. Collofessor stan ander. Lets get you a check on the first word news with emma chandra. Emma white house says President Trump will not meet with Vladimir Putin vietnam due to scheduling conflicts. Are attending the asiapacific summit there. Both sides are working on a suitable time and format for a meeting, but u. S. Secretary of state Rex Tillerson says a ting is a relevant irrelevant. The Trump Administration is under investigation for ties to the russian government during the 2016 president ial election campaign. Collect chinas big bang moment. The government is taking another step to liberalize its financial industry. China will remove limits on foreign banks that fund companies, and they will be allowed to take controlling stakes in chinese businesses. We spoke with jpmorgans ceo. This is going in the right direction. These conversations are very possible, and this is good for china, and good for International Players that want to have a part in that market. That is an interesting, attractive market. International banks and security firms have been frustrated for a long time by. Wnership caps in brussels, brexit talks have ended for the week with no breakthrough. That is according to European Union chief negotiators. Of twoise the point sides failing to reach an agreement by next month. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im emma, this is bloomberg. Scarlet . Scarlet coming up, china making a historic move to open its doors to foreign Financial Firms. We will discuss what exactly this means for the worlds secondbiggest economy. From new york, this is bloomberg. Julia this is bloomberg markets. Im julia chatterley. Scarlet im scarlet fu. China taking a big step towards opening its Financial System, allowing overseas firms to take majority stakes in inventors and insurers. Joining us now is patrick and for messer at columbia it Diversity School of international and public affairs. He is a former business as well as a this is a symbolic move, if nothing else, but you are skeptical of what this could mean. Why is that . Patrick my attitude toward chinese reforms is chilly. I have heard to dante decades of decades of plans and promises to open up chinas financial sector. None of them have materialized, some of them have taken a direction that was different from advertised then advertise. You might remember a couple of years ago when they announced the shanghai freetrade zone. It would be a fundamental game changer, and we never hear about that anymore because nothing happened. , and all about delivering announcements are fine, but the action we need to see what happens. Scarlet we do not have any details right now, but what would you need to see to convince you that this is more than just something symbolic, something more than lip service . Patrick i need to see actual market penetration. Eveign bankthat have been given access to china have often not been able to penetrate the market because of other things like nsing, being able to open branches, all kinds of barriers that can be put in place. Aboutare kind of excited this, because it is potentially a big market, but i think it will take a while to see what it really means. Seen a lot of praise jpmorgan, Morgan Stanley saying this is fantastic news, but when i look at what the history has been like, it has gone in the opposite direction with the likes of citi,goldmans sacs Goldman Sachs pulling out. Do you think they will be cautious despite the {here . The open praise here . Patrick i was around in 2000 china during the last big invitation or in banks foreign banks to come participate in chinese banks, and it did not go the way they planned. They did not get the Market Access or control they thought they might, they ended up happy because they were able to cash out their shares, even though they had a minority stake, they were able to cash them out at a profit. It did not give them the kind of Market Access they intended. Julia im looking at some of the details here, and they are saying foreign firms will be allowed to own stakes about 251 will do 51 , and they this after three years following the new rules becoming effective. Patrick maybe at some point julia 35 years on all of these lines. Scarlet two weeks . Julia exactly, in the next two weeks. Patrick it is like the china life free trade zone sean high free trade that shanghai freetrade zone. , and maybevague there will turn out to be an opportunity. But why now . Why are they asking . Chinese s have accumulated a lot of bad debt. Scarlet that is the white part of the bars on the chart. Patrick maybe they really, really want to recapitalize. When i have seen china invite Foreign Investors into previously closed sectors, it is often because the sector is doing poorly or has problems, and they want to the capital. They frame it as a big reform an opportunity, but it is actually about plugging a hole in the dyke. The chineses Financial System need outside money or do Foreign Companies need majority ownership of chinese owned ventures and chinese joint ventures in china . Patrick they need to have real did notion, banks that function as part of the state own system. Would be a huge opportunity if they were allowed to do that. Julia in securities and insurance, but not in lending. No, i think because chinese banks tend to lend based on political relationships and have banks that did not necessarily do that would be a good thing. That china for the Banking System has been separated out from the rest of the world. It has been insulated. Itt has maybe been good for in some ways, it has not been buffeted by the financial turmoil in the west, but it also means that the west is less exposed to some of the problems that have been growing within china. I do worry a bit about the increasing that exposure of western institutions to a Banking System that is far from transparent, and has some deepseated issues. Great point. What about xi jinping . This bolsters his credentials, his reform credentials. He is remaking his image, seen as one of the most powerful chinese leaders since mao zedong. Is this more for his domestic audience . Patrick i think they know they need to reform the Financial System, and in many ways they are 4, 5 years behind where they said they needed to be. In terms of his reform credentials, he has a full plate of things he needs to deliver on and has not delivered on. Scarlet this just adds to the list. Patrick look, they talked about , for instance, creating a system of deposit insurance in china as an initial reform, and that took about two years to wrap their minds around that. So financial reform is moving very slowly in china. Yes, it is moves in the right direction, that is great. But i would not count those chickens until they are hatched. Scarlet julia 1392 word statement from the white house here on what happened to the president s trip in china, and at no point was this mentioned. Do you have something to say about the timing here, and that xi jinping chose to announce this when President Trump was in the region, and yet no sense of coordination over this at all . Do you think that was meant to happen or am i being a skeptic . Patrick it is tricky to draw a straight line. It is possible it was brought up. American Financial Companies have complained a long time about the lack of access to the chinese market. It is something the government has brought up in these sorts of meetings. To bringd be something up again. Feeling that the timing of this comes more from the internal reform process within china. They had a meeting where they were talking about putting , kluber kind of a Super Ministry that would oversee financial stability. It did not quite end up that way, it turned out to be a Small Committee among a lot of other agencies, but that process might have driven this announcement. Julia patrick, thing to get your thoughts. At hief strategist as it management. The worlds biggest shopping spree is back. What alibabas president says about the strategy behind singles day. From new york, this is bloomberg. Scarlet this is bloomberg markets. Im scarlet fu. Julia im julia chatterley. Lets stick with china, where alibaba kicks off with it and singles day shopping bonanza. The online retailer racked up billions of dollars in sales in the first hour, expected to top last years record. Shoppers from 190 two countries scooped up discounted items. We spoke with alibabas president , michael evans. Michael this years singles day is boosting efficiency by implementing a whole lot of new technologies and capabilities as part of our new strategy. That yound pop stores just referred to are very small haves, but typically they a capability in a small, local market. With the benefit of technology and digitalization, we are expanding their capabilities to deliver their products to a larger group of consumers. Billionsa had invested into Offline Retailers, like Grocery Stores and Department Stores several years before amazon announced its acquisition of whole foods. If china had the u. S. When it comes bp u. S. When it comes to merging online and Offline Retail . Michael we do not look at it as a competition necessarily, but the work that has been done in the integration of online and offline not just in terms of the Technology Integration but the data and the efficiencies for brands and the Consumer Experience through personalization has been enormous. We see the impact of it in our daily business, we will see the impact of it today and 1111, where it a lot of the new retail initiatives are being rolled out. We believe this is the retail of the future, not just in china but for the world. It has been almost one year since jack ma told donald trump to spurbaba is going one million jobs in the u. S. Is there any tally on how many jobs alibaba has created . We had a fantastic event in detroit for more than Farmer Associations and entrepreneurs, many of them are participating today in 11 11, selling their products for the first time to chinese consumers. We have tons and tons, literally products Fresh Produce from apples, blueberries, and vegetables that are being sold as part of this a , so a great deal of work has been done and we are making good progress. Scarlet that was alibaba president michael evans. It is time for the business flash, a look at some of the biggest business stories in the news right now. New ceo, day for the considering every options. Ge shares have fallen 37 this year, wiping out 100 billion of market value. Billionaire albert for has has increaseder his share in burberry. And that is your business flash update. Julia Global Markets giving back a little ground that is making a dent in oils longest stretch. From bloomberg World Headquarters, this is bloomberg markets. Commodity markets are closing in new york, so lets get you started with oils wild ride. W ti holding on with a weekly gain in stocks and bonds. Oil value up by almost 2 , largely driven by tensions in saudi arabia, the worlds biggest crude exporter. The kingdom conducting a political purge that could stir opposition, also stepping up warnings against its longtime rival, iran. Moving to gold, it is up for the week as u. S. Tax debates fuel uncertainty. You can see what is interesting is what happened earlier today, that big led lower in the far right panel. About three hours ago, lets take a closer look at that. This chart shows exactly when everything went down, about 11 10 a. M. New york time, almost 40,000 contract that is that lower panel right there, each representing 100 ounces of gold, traded in a span of 10 minutes. That accelerated that decline. We are still trying to figure out what was driving it, but it is still something people are focused on. Julia a great chart, thank you scarlet. Next, the great shale revolution. Alix steel took a trip to oklahoma to find out how fracking is causing earthquakes in the state, and how trump regulations might impact the industry going forward. Dutchyoull passed round roads lined with these, and they are at the center of a controversy in the energy community, pitting Oil Companies against local communities. When people worry about fracking, they often worry about the chemicals that are going down the well. That is only one part of the challenge. Alix Mike Brownstein is managing director of the Environmental Defense fund, an environmentalist the oil industry could listen to. The team has done more than 70 different basel disposal well visits over the weekend the years. This ancient water comes up, and it has the chemicals you put in there, plus all the constituents that were in that water to begin with. A lot of it is solved, heavy metals, and sometimes even radioactive material. This all comes up as a soup, and the question is what do you do with this soup . Index theindustry soup into disposal wells. It is a relatively safe practice, but the volume of water putting into those well as wells is causing seismic activity, earthquakes. 20 barrels of water in oklahoma are produced for every barrel of oil, and the more production growth, the more water you get. There were almost 900 earthquakes in oklahoma, and before fracking took off, there were just one was just one. This is the data we have been working with. Alix a lot of the responsibility has fallen to state governments. Has decades of experience in water treatments, but none when it comes to earthquakes. We never thought that oklahoma would be at the center of this issue. Alix the occ began regulating disposal wells in spring 2015, after the Oklahoma Geological survey of a formal position that oklahoma earthquakes were in the arbuckle. Before i got here was when the commission put out its firstorder, telling people to change their injection wells. The director of the Oklahoma Geological survey. As injection went down, you saw a drop in seismic activity. We are now saying ok, that injection is beginning to flatten out, but when are the earthquakes going to flatten out . The injections word is by a minimum of 40 , and many wells have been shut down completely. We dropped from having 903 magnitude three plus earthquakes in 2016,o having 623 and then down further this year, to wear, depending on if rates change very much, it might be in the 300s. 300 earthquakes is not acceptable. One of the big problems we have right now is that there is no agreement in the Research Community as to the current seismic activity, how much of it is tied to current disposal and how much of it is just the result of years and years of disposing in the arbuckle and building up this pressure . I think the commission will wants to keep tightening down on injection until they are really confident it is that a level that people are comfortable with. Alix company push back on the directive has been limited, with only two Court Challenges over the past four years. Both of which were dropped by the companies. I do not think there is any legitimate concerns over the environment from fracking. Ceo of Continental Resources is an Ardent Supporter of deregulation, and says issues from wastewater does azil can be mitigated. Our company is ycling these fluids wastewater disposal can be mitigated. Our company is recycling these fluids, we want to reach a goal of 75 recycled. Alix the Trump Administration has thrown a wild card into the future of federal regulation. When you look at what is going on with the prior administration, they sought to eliminate in america. Frankly, there are some that look at the Trump Administration and assume that they do not have to do anything because they now have a government that will eventually protect them from any future regulation. I think that is a fundamental misread. I think most americans want to see america be an oil and gas producer, but they also want to know that america is doing it right. Alix steels full special airs globally this weekend. He will wants to catch it on saturday at noon, new york time. Lets get a check with emma chandra. Emma President Trump one strata live asian nations, but only if they are willing to play fair. The president s in vietnam for the asiapacific summit, saying the u. S. Will not on no longer join national deals like the transpacific partnership. Instead, he wants oneonone agreements that will not take advantage of the u. S. Read the talks ended the week with no breakthroughs, that according to the chief negotiator in the u. N. He has given the u. K. Two weeks to come up with a better offer on the financial settlement. A french Prosecutor Says that three Chinese Students were injured when a car grow into a group of students drove into a group of students in france. The driver was known to police and was not listed on a registry the driver acted deliberately and has been arrested. Aman accused of bombing german bus seven months ago will go on trial next month. Two people were injured when three explosions hit the bus as it left for the team stadium in a championship game on april 11. He faces 28 counts of attempted murder, two counts of bodily harm, and setting off an explosion. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im emma chandra, this is bloomberg. Julia . Julia coming up, celko holdings is back on the market, and ready to make deals. We talked to the companys ceo about their ipo, strategy, and nafta. That is next. This is bloomberg. Julia this is bloomberg markets. Im julia chatterley. Scarlet im scarlet fu. Julia to accompany on the proper acquisitions, celko holdings is back on the public market. Yearold canadian filmmaker close their ipo, and joining me now is alix casaubon. On the ipo. Ons tell me about the money . One thing that we found when we took over at the beginning of july was that though many opportunities are in with the company are within the company, like organic opportunities, such as expanding the output of , and producing an additional 70 output, just with organic opportunities. Some of the money will be used for filling that up, also going to the auto sector, penetrating further into the Auto Industry. Celko has a history and that, but the other purpose of the ipo is having the stock as a currency to be able to go and acquire businesses. The strategy there is very key. Julia where are you looking . Primarily north america. I have a history and my company of buying company that keeping the Balance Sheet incredibly clean. Here, the objective is we have virtually no debt. We have also taken all of our legacy liabilities and put them off of Balance Sheets into trust. What we will do now is take this company, which is unique in the film industry, and use this as a platform to go and acquire other businesses and grow the company, so we have the organic growth and the inorganic growth. That is another term for m a, which is something we specialize in and intend to develop this company. Julia i want to talk to you about the highstrength steel for auto manufacturing. If i go back to 2006, 37 of your consolidated shipments were in the Auto Industry. Today it is now around 3 . How can you scale that up at this stage, particularly when you have competition from apparent u. S. Steel out there . Something toroduce you you have never heard a steel executives say, and that is tactical flex ability. We do not want to go into the Auto Industry. We want to be in the Auto Industry because we can have that as an opportunity for us to be able to get the highest margin. That means it will be there, we will develop it, but if we find better markets elsewhere, more profitable markets, we will pursue those. We will be in every market appliances, service centers, to makers for the energy industry, auto, and others, and we approach the markets through tactical flexibility. That is an operational term and a marketing term. Not talk about the elephant in the room, which is china and what they are doing. What are you seeing in china in terms of capacity . Kevin steele market and some of the relative strength we see in the moment continuing to 2018 . Quite goodnd is around the world in terms of infrastructure building, auto consumption, and so forth. China is good news at this stage, because china has announced policies to address their pollution concerns and also the Economic Performance of some of the entities, and actually pulled back production in it not only steel, but aluminum, think, silicon metal, and other products. Aroundrices are going up the world, experts are going down, and we are at a healthier balance than we were. We have no a perfect opportunity where we have china pulling back, good, strong world demand, telco is a producer sitting right on the great lakes with access to the run markets as well as grenadian markets. We are seeing the access of a macro trend and a megatrend. That is in china in terms of the environment in china environment, and the megatrend is. Julia i know 97 of your sales are generated in canada, so whether there is acquisition in north america or just acquiring contract in north america could be made more challenging by donald trump and his policies. How concerned are you about the review that they are doing at the moment about potential National Security threats, of external steel, and also buy america restrictions as well for you to compete for contracts . The beauty of the company is the lowcost position. The information out there in terms of cost curves, you will see that. But the other thing is the position on the slate. We sell 97 of our current product in canada. The entire world market is available to us. U. S. , mexico, europe. We are selling their right now. Julia so you will shift somewhere else as donald trump makes it harder to do business in the United States . It is all about cost. If you have the right cost, the world is your oyster and you can ship wherever you want. Julia what about nafta . Are you going to be concerned if they do not reach a deal in the future . We have every possibility taken into account, and have plans to deal with all the thing that things that could happen in regards to nafta. This is a unique steel company. Most of them are saddled with debt, with legacy liabilities. We are not. We have a Management Team with a track record that knows how to build businesses. We willnvest in stelco, build with you. And now ouro ceo, stock of the hour is jcpenney. So friendly strong sales in the third quarter, as earlier shares rose the most since january 2015. Emma chandra is here to talk about what is going on. To likeere was a lot about jcpenney. We saw a key metric here, the growth exceeded expectations in the last quarter, and we saw that with a lot of slowmoving merchandise that helps comparable sales, but that also means they will have less of that. . 33 ons still a lot of the share, but it was smaller than had been expected. One of the things you can see is that jcpenney is following through on their plans to close ,oors, the under Stores Underperforming stores where they are not getting much traffic. These are the numbers and , andions that jcpenney has this is the third quarter. You can see that big drop in locations. They are continuing to do that same thing, moving into appliances, away from the department and fashion. Scarlet they had pronounced a lot of the bad news, so we saw a stock the stock took a dive. This is the Third Straight day of game, and even with the recovery we are not back to where we were. Emma the stock has been doing poorly all year, and the idea of the retail roller coaster and what will happen with a number of companies we had a nice chat. Chart, i want to show you this here on the bloomberg terminal. What we have here is for the First Time Since 2015, two Department Store chains have posted positive store sales in the same quarter. So there is a lot going on there. What if it is jcpenney, which is the white, and the other is s, and it is the first time you have seen two Department Stores post increases. You have to start somewhere, emma, thank you so much with the good news for the retail sector. I had a veterans day, we speak to former u. S. Marine corps captain christopher perkins, cofounder of veterans on wall street. How Financial Firms are recruiting veterans as we get ready for veterans day. From new york, this is bloomberg. Julia this is bloomberg markets. Im julia chatterley. Scarlet im scarlet fu. There were almost 21 million veterans living in the United States last year, around 9 of the adult population. One in 10 were women. 453,000, 450,000 were unemployed. Unemployment rates range from one. 8 in indiana to 7. 6 in washington dc. To changeuest seeks that. Christopher perkins is citigroups Global Market head of otc clearing and a former United States marine corps captain. He also cofounded the veterans on wall street organization, dedicated to honoring military personnel by facilitating Career Opportunities in financial services. Great to have you on the show. Thank you so much. Julia talk to us about how you went from being in the marines to being in charge of something that i think is so incredibly important at citi . I served in the marine corps for nine years, i was in the battle of ramadi. Hundreds of took wounded and killed, 16 killed in action. Was commanding i a battalion of merchant marines. I had someone who wanted to get into finance. He asked if i had a resume, i said i do, and i show up. People do not know how to deal with me at the time, and they said what do you do . I said im an artillery men, so i make highly accurate calculations, but also manage risk. Isnt that what you do . They said yes. One thing led to the next, and i ended up the associate program ate groom brothers lehman brothers. That was an experience within itself, because i started getting into derivatives, iran is prime brokerage, and then sorry, go ahead. Julia that is an expression worth fighting for. Ask the crisis hit. Gosh, leveraging the experience in the marine corps, going through that it was a terrible time, but one of the most educational times. It was a time when i could leverage those experiences in the marine corps to do everything i could for my clients. Scarlet grace under pressure was one of those skills you leverage. When you first join nor spoke with city, people were not sure what you brought to the table. Has that changed since you first joined . We have been working hard to educate employers and everyone who will listen on the value of veterans. A try to hire 1000 veterans year. We do it because we think it is good business, not charity. Why . They bring to us these skills you cannot teach. Scarlet leadership skills in particular. I do not like to call them soft, and that is exactly what it is. Communication. We can accomplish the mission. We know how to build teams, work together, and frankly, we have a strong ethical base as well. Those are all crucial when you think about financial services. Julia we are hearing this pop up around a lot this year, precisely the benefits to having those with a military background and military experience. What more needs to be done to encourage people that this and those were still serving and thinking about a career in the future, to make them understand there are opportunities . It comes on both sides . We are working very hard. I believe that the transition to civilian life actually starts when you enlist, or when you start your service. On technology, working on education, trying to reach into the Services Early as possible, because when you get out, it is very difficult for service people. A lot of the time what they do is they seek jobs and not careers. Why . It did not save money they could not save money during their time of service. Julia and there is training involved in well. As well. You cannot just come out of their trained. Is that part of what you are doing at citi . We are using Financial Education tools, working with partnerships to tell veterans about the opportunities and finance them beyond. I think at the end of the day, veterans are valuable. We are trying to hire them because we think it is good business. Lets go back to your history. You began at lehman in 2008 . 2006. Happenedwe know what to lehman brothers, so there has been a lot of change as you began your career on wall street. Derivatives were once a dirty word that many blamed the financial crisis on without really understanding it. How do you think that has changed . How has that evolved in the last nine years . I was right in the middle of this. Iran the derivatives prime brokerage, and i saw what happened when firms go bankrupt. I started at citi the next day and had to clean up my mess at lehman brothers. After that, the g20 came together and said we think these incidents should essentially clear. It was a 120 trillion industry and i found myself in the middle of it. I led the team that started to essentially clear derivatives for clients, and why kenny marine, what do you do . You find the best people, build the team, and try to accomplish the mission. When you hear politicians talking about the prospect of deregulation of financial services, what do you think about that . Lexa think this is a place where governments, regulators, and participants in banks agree. We think that is the right Market Structure for the business. We still have some work to do in tweaking the capital rules, but at the end of the day, Everyone Wants to make this thing called clearing work. Scarlet christopher perkins, thank you so much. Thehappy birthday, by way. Happy birthday to the marines, semper fi. Scarlet happy veterans day to you. The market is overdue for a correction. Find out where molly us is investing as volatility returns. This is bloomberg. It is the required p. M. In new york and 8 00 p. M. In london. Im julia chatterley. Scarlet and im scarlet fu. Welcome to bloomberg markets. Are from bloomberg World Headquarters in new york. Here are the top stories we are covering on the bloomberg and around the world. The credit market giving a warning to investors. Andpeak with Burns Mckinney qualcomm, we have the tech week in review. And a fed meeting in less than six weeks and the market is getting ready for we will see what other opportunities there are. And lets get a check of the markets with the julie hyman. Julie things are perking up. Things are a green. Agreeing. S p 500 my little change. Dow in the red. And it has been muddling along, investors paying attention to what is going on in washington and no big developments on that front today to drive trading. Despite the nasdaq now managing to get a gain, it is still negative for the week. Take a look at the bloomberg and we have the Weekly Performance of the three major averages. This would be the First Time Since september 8 not all three of them have declined on a weekly basis. The s p 500 in particular has had a weekly gain streak we have seen, and the dow as well before this decline, so it is an interruption of momentum. The biggest contributors to the week on the s p 500, specifically if you look at index points you have apple and it is a contributing the most to the gains we have seen on the week, jpmorgan and bank of america dragging the most on the gains. Some banks hit the most yesterday as we were talking about the Corporate Tax cut potentially being delayed. And back to todays session, we are watching earnings, getting to the end of the season, but we have a number of companies reporting, among them with retail we have jcpenney, which we were just talking about a moment to go with emma chandra, shares rising and news core also beating estimates, largely on the strength of their digital portfolio. And in video they are rising as well. Numbers beating estimates on the strength of their data center chips. And Hertz Global Holdings they are not faring as well. Even though they did beat estimates, and analyst says the stronger numbers are only a pause before we see the beginning of steeper declines for the company. That is what is going on on the earnings front. To get a summary of the s p 500s performance, take a look. You can see on the chart down here, telling you the number of companies that have reported day by day, that we are getting to the end of things. At the same time, the s p is up about 1. 2 over the course of earnings season. You might see some stocks moving more by the macro factors like the tax debate and less on the big earnings reports. Interestingly, we still have yet to hear from walmart and target within the retail industry, so it will give us a more complete picture of what is going on on that front. Scarlet thank you, julie. Julia check of headlines. First word news with emma chandra. Emma in the alabama gop senate race roy moore is tied with his democratic rival. This according to an opinion poll, the also found 54 to not think that roy moore should drop out of the race. 73 of surveyed republicans believe he should remain in the contest. This is the first poll since allegations surfaced that he had a sexual encounter with a 14yearold girl in the 197 0s. Rex tillerson says he could see the u. S. And north korea agreeing to talk at some point. At first it would only be a conversation with the regime, not formal negotiations. North korea has not launched a missile in almost two months and Rex Tillerson says he does not want to over interpret that. Secretary of state Rex Tillerson also warning countries against using lebanon as a vehicle for a larger fight in the middle east. He said the u. S. Backs of lebanon independence and recognizes the prime minister. He unexpectedly televised his rate his resignation last week, while Authorities Say he is being held against his will. Tillerson said there is no such indication, but washington is monitoring the situation. European nations to imagine a World Without nuclear weapons. He warned that policies from the cold war era provide a false sense of security. France has endorsed the yuan treaty calling for the elimination of atomic weapons. He said the use of such weapons catastrophic. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im emma chandra. This is bloomberg. Scarlet ok. Now coming up, broadcom making a push to become the biggest chipmaker in the world. How it plans to be inside all of your digital devices. Tech roundup is next. This is bloomberg. Scarlet this is bloomberg markets. Im scarlet fu. Julia im julia chatterley. Time for a look at the biggest stories right now. But as Telecom Equipment giant ericsson says they are looking outside the country in a push to recruit engineers. The ceo tells bloomberg that they need to limit fx exposure as costs sorar. We have a swedish space. Inhink it is important sweden, because we have a lot of our r and d there. When we recruit new engineers we are looking at little more outside of sweden, but we are committed to recruiting in sweden as well. Julia ericsson blaming currency headwinds for delaying their targets this week. And in a new twist that pits jack dorsey against himself, square in market value for the first time. The chairman of square is also the chief executive at twitter and cofounded both companies. Score has seen shares almost triple this year, driving the value to more than 15 billion. Twitter shares have lost a quarter of their value over the last two. And that is your business flash update. Scarlet lets keep talking tech. If you take a look at broadcom, a 150 million bill a 150 billion bid to take over qualcomm would put their chips in almost every device on earth. Apple also pushing to make a. R. Everyday part of your life. We every in emily chang. Emily who better to talk about it than brad stone and mark, who cover Consumer Technology for us. How willand qualcomm, this reshape the landscape . This is an earthquake. This is probably the thirdlargest chip maker in the world after intel and samsung. You have a combined company, another company that qualcomm is trying to buy, which controls pretty much the entire chip empire for the smartphones. If you take out all the components of the companies, you will basically be left with inexpensive ipod, out of the iphone. Emily and broadcom has been aggressive up to this point. What could stop this from happening . Qualcomm does not want it to happen, so any normal provisions of resistance, but also regulation. The regulatory review. Hotcam and from broadcom are spending time with donald trump right now, including amateur to asia, so they are lobbying here. Stuck in p is already regulatory review, so clearly they are taking a look at these deals. This qualcomm is in position because of their relationship with apple facing litigation. A lot oftrying to pull revenue that qualcomm has relied on for so many years. Broadcom is also, apple is a so ifustomer of theirs, this happens how would that change the relationship with apple . Apple and qualcomm are in a little bit of a war, because they have been a supplier for the chip that allows the phone to make phone calls. We did the math and broadcom, if all the deals go through together they would own about 40 of the chips inside of an iphone and some capabilities they would own is the ability to connect to wifi and do apple pay. Could combined company basically say at one point if apple tries to go all intel, if you could just out of iphones you will not get the chips you need for wifi. We think it is a war now, but it could become nuclear in a war in a year. Would not be pursuing the deal of the key customers were not comfortable with it, so maybe apple views broadcom as a more amicable partner, than it does qualcomm. Emily also purchasing a stake in snap. The stock crashes, then goes back up with the tencent investment. And he ceo of snap have had a long history together. What do you make of the twist . You know, he was an early investor of snap. I asked if they ever considered another investment and he said they had gotten close and it did not happen. A lot of mutual admiration on both sides. You look at the other deals, they invested first and super cell, the videogame maker, then they acquired it. They have been looking for western strategy for a long time and they have not done well in the west. Perhaps it is setting a stage for a deeper partnership. Emily is it a hail mary for snap . Tencent just bought their shares on the open market. Emily they have not discussed it to a certain extent. Perhaps. I know evan admires the tencent folks and what they have accomplished, so the extent that tencent could be an active investor and bring that wisdom around the social media to snapchat, im sure they would welcome it. Apple working on an a. R. Headset that could come out as early as 2019 or 2020. Yes. We were waiting for it. And so yes, apple working on that. We broke the news in 2016 that apple was working on a headset, glasses the next big product and now we have more detail. They are working on an operating system that would power it. And they are hoping to have the Technology Ready by 2019 to release something as early as 2020. What would you is you put the glasses on to be able to see maps and directions. I would look at you and it would be a camera on it and it would some the everything about emily chang. Maybe the devil horns would pop up. No, just the good things. Emily we are looking forward to this group. Scoop. Back to you. Julia thank you. Loved it. It still ahead, options insight with oil with their weekly gains, rallies in more than a year. Xle. Ke a look at how from new york, this is bloomberg. This is bloomberg markets. Scarlet time for options insight with the julie hyman. Chris joining me today is kaman, the two strategist at macro risk advisors. Interesting day for you to come in. A lot of back and forth with oil this week my trading lower today. But there has been a lot of renewed talk about opec versus shale. Saudi arabia is in the mix as well now, in terms of speculation surrounding oil prices. What is your take away for oil over the coming weeks, given all these factors . When i was last on the show and now we have been bullish for the first time this year since april, but the markets move so quickly we are already stepping back to the sidelines. November 30 we have our second biannual session for opec and we believe the market is running a little too hot into the event, so given what we have seen with the surge in pricing in equities, the tightening and the commodity, we see opportunities to reengage in bearish trades already after the catch of trade earlier this month on the bull side. Julie what about saudi arabia . If we see any increased tensions, is there a threat to supply as a result of that . I think there are two things with the saudi arabia story. The Ballistic Missile risk, the yemen proxywar war, we cannot handicap for that. As far as what we like to call the game of thrones style reach we lookrol from , at it two ways. It is cut and dry from a saudi perspective, this is a print making a bid for control rin prince making a bid for control. From the Western Point of view, he has been such a visible kind of face of the saudi markets for so long, that it makes the western perspective different, but we are not getting hung up on that. We think that the saudis are behind him and his consolidation of control not actually derisks the longerterm story. Julie you are looking at the xle, which is tracking Oil Companies, which have been lagging the gains we have seen in oil. If you think we are going to continue to not think robust action in oil prices, what do you think . We are showing your trade. Basically we are isolated the november 30 event, and xle has a little bit of skew, you can extract value on it, so we will sell the november regular to buy december, to basically carry yourself long delta through november to gain downside exposure in december. We also like this trade for people who might be leaning short in credits, because november is a national underwrite to a credit short. Then you get shorted delta into december. Julie interesting, given the attention to what is going on in the credit market and with opec. Chris, thank you. Julia thank you. Now house and Senate Republicans is releasing their tax reform proposals, but there are key differences between the plans that could threaten one of the key items on President Trumps agenda. Pat toomey spoke to us about what could be in the final bill. Yet, i is not knowable am guessing there will be elements of each. The big fundamental things are really the same. These bills have the same architecture in the sense that as mulvaney pointed out, there is direct tax relief for middle income families, together with some simplicity, and on the business side we have the same big policy change, dramatic reduction of the corporate rate from 35 to 20 , immediately allowing capital expenditures, really good policy, and moving to a territorial position. Julia philosophically it could be a similarity, but with details there are massive differences. Take us through on the senate side of things, full repeal. Some republicans do not want that. I was the just there is a lot of overlap, even their. There. The house does the same thing as the senate, except there is a carve out for tax reductions. We will haggle over that and we will figure out a way to resolve that. Is there wiggle room . You are from a state where it would punish quite a bit and it could hurt in the midterms. Pennsylvanians on the house ways and Means Committee voted for this bill in the house and im supporting it because it is good for pennsylvania on balance. It is good policy to get rid of the state and local tax deduction, it is a mechanism by which federal taxpayers subsidize jurisdiction. That is not good policy. There are differences, absolutely, but they are not they are not wide chasms. Will it address carried interest. . Some say yes. The tax we have, it is not, but the committee will work its will, and then the senate floor will work a there will its w ill. I expect there will be amendments and carried interest will probably prevail, so my guess is by the time this is over there will be change in the policy. The mortgage interest adduction will stay and so does that you state tax. The mortgage reduction remains, it remains with a cap of 1 million. The house takes it down to 500,000, so we will work that out. The east a tax, we take the same initial step, to double the exempted amount. An individual will be able million,mpt up to 11 a couple 22 million, but beyond that we will leave the policy for the duration. Whereas the house repealed in overtime. Where do you see the bill, up until now everything we have talked about you have said there is a difference and there should be compromised, but where . On all these things. The corporate rate goes down to 20 immediately in the house for, and on january 1, 2019 the senate, so there is a difference of when we get to the exact same place. We will find a way to reconcile that. One challenge is there is a limit to how much revenue we can forgo in the budget window, so it is a matter of putting the pieces together. We have been working for many months. We will get there. You remember the supercommittee, remember that . I do. You went to washington with the goal of reducing spending, so how do you, you know, sits with the 1. 5 trillion increase in the shortterm and who knows what it will do in the longterm . If we pass the reform we will shrink the size of the deficit. It is not just a tax cut, this is a reform of our entire system and a significant reforms on the individual side. It is progrowth to lower the rate to 20 to allow full expensing of capital expenditures, to move to a tort oriole system and territorial system. We will generate and create incentives for Huge Investment into the United States, Foreign Investment and direct Foreign Investment. All it takes is for 10th of a percent of extra Economic Growth to fully fill in the revenue hole. I think we will get more than that in response to the tax reform. Scarlet that was republican senator pat toomey speaking with vonnie quinn. Still ahead, does the stumble in highyield signal trouble ahead for fixed income . We will put the question to our guest. From new york, this is bloomberg. Im emma chandra. First word news. The white house says President Trump will not meet with the russian president in vietnam, because of a scheduling conflict. Both leaders are attending the summit there. The kremlin has said both sides were working on a feasible time, but Rex Tillerson has said the meeting was irrelevant. Progress on issues is not likely. The Trump Campaign is under investigation into ties with the russian government during the president ial election campaign. And the yuan secretarygeneral says it is essential that piece is reserved in lebanon, warning the conflict could have devastating consequences to the region. He told reporters that the United Nations headquarters today, he has had intent contacts with saudi arabia and lebanon, and also with other countries in the region, where with an influence in the region. Another roadblock coming up in the brexit talks. The European Union calling for a trade rules to be the same on the in ireland and in Northern Ireland to avoid a hard border