Prosecutors will need three weeks of trial to present their case against x Trump Campaign officials, Paul Manafort and rick gates. They have pleaded not guilty to charges they violated federal monday Money Laundering and lobbying laws. They were placed on house arrest and released on multimillion dollar bonds. Areecutors in south africa trying to convince a court to double the prison sentence for oscar pistorius. Told the court that it overemphasized the olympians the disability. He was sentenced to six years in prison for the 2013 murder of his girlfriend. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. Julia live from bloombergs World Headquarters in new york, i am julia chatterley. Scarlet i am scarlet fu. Joe i am joe weisenthal. Heading for the longest weekly gain since 2013. What you miss . The labor market is back from the hurricane effect. Michael feroli for the analysis. Congress came together long enough to unveil their tax reform bill, but there may be cracks in the unity. The biggest takeover of a chipmaker is set to be in the works. Hyman has been following the latest developments when it concerns qualcomm. We have a bloomberg exclusive headline coming out. Julie this is an exclusive scoop from the Bloomberg News deals team. Qualcomm shares are spiking when we got these headlines. They remained at the list at those levels, with a 14 game. Broadcom is exploring the deal. It is considering 70 a share. At theres are 62. 66 moment. We heard from someone in Bloomberg Intelligence who said this could be complicated in terms of domestic chores that would potentially investitu res that would potentially be necessary. Into this could be a cultural fit and this could be an odd cultural fit for the two companies, who have been at odds. Broadcomm bought avago avgo one of many acquisitions the company has made. Itsdcom is changing operations from singapore to the United States. There have also been headlines xpgarding an xp n semiconductors. Qualcomm is attempting to buy nxp, but there has been resistance from shareholders. This might now be a deal that doesnt occur, if the other deal does. We have been hearing from various outlets the two companies are in talks. The two are aiming to finalize details of the deal in december. A deal price could be significantly above 200 a share. Es, we have been watching them in the wake of these headlines we are seeing a bit of a down movement, two thirds of 1 . It is interesting we could see two pretty sizable deals at the end of the year, when creating a market cap at about 200 billion, and the other we could see a deal price of over 60 billion, which would boost the value of this year significantly. Scarlet thank you. Julia whatd you miss . People resumed work after hurricanes harvey and irma in october. Has been some debate about what is going on with wage growth. We will talk about how the fed will interpret the data. Is the chief u. S. Economist at j. P. Morgan securities. You have changed your forecast for the next year. We were leaning toward saw, the what we tomployment rates continues be below the forecast for this year and next year. We think that tightening in the labor market will keep the fed on track. Scarlet when are we going to see the wage gain . We should mitigate considerations. We had that comprehensive of employment cost earlier in the week, which shows more evidence of acceleration. Scarlet shouldnt be confirmed by the earnings . Michael there are compositional effects. Unemployment rates are falling faster than anyone expected. Average Hourly Earnings there are some signs you cant dismiss, but they are not blowing the doors off. Raise theat possibility that everyone is overestimating how close we are to full employment . Had we know it is not 2. 9 h ow do we know it is not 2. 9 . Michael page growth is moderating. We are probably going to pass it pretty soon. Acts, i think they are going to continue to lodge that rate. Some of the thought leaders on the fed, they are emphasizing the tightening. We kind of see this looks curve ips curve the phill trashed, but that is still their framework. Scarlet what does that mean for how fed officials about the backsliding of inflation . Michael this is a puzzle. Scarlet however you want to phrase it. We do think it has confirming a little bit lately. These things do not turn on a dime, and the fed is not going to be too far behind the curve when they do. We have 3 in terms of the fund rate, and we dont want to be far away from your neutral we do get when that turn of inflation. Julia one of the other things we have been talking about when we talk about the fed raising rates is the financial , and talkingsing about Balance Sheet retraction. Do you think that feeds into the mindset, that these are a free hike if they going to december . Theypoint do you think will get traction on financial conditions and that will catch up with them . Michael we have had the fed so far. Marketave had the discount the fed so far. You will see prices react, but some fed officials have emphasized that hikes are 23 times a year. Financial conditions looked easier than they did at this point last year. Scarlet youre looking at four increases in 2018. What do your clients say . Fed started this year with three hikes. It looks much like babel do that like they will do that. Crazy alook little less crazy and they might move higher. Joe the transition from the fed from yellen to powell. Comeentral bankers like to in and hike early on to establish to establish their tough credibility. There is this question of fed independence, which has been raised and that could be a way establish that powell is not going to be a trump lackey. Michael they are just going to try and look at the data and see how it evolves at the end of the day. Scarlet do they think powell will be a wuss . Joe supposedly, that is a thing. Central bankers want to ablish it is not unlike the first day in prison. Julia thank you. [laughter] scarlet the biggest takeover of a chipmaker may be on the horizon. We will talk about. Com broadc oms deal to acquire qualcomm. This is bloomberg. Scarlet broadcom is exploring a deal to acquire qualcomm and is said to offer 70 a share from the company, according to people familiar with the matter. This deal would be the biggest takeover of a chipmaker ever. Shares of qualcomm have jumped 17 percent. They rose as much as 14 today, the biggest oneday move since 2008. Running is to discuss is the bloomberg gadfly columnist from the sutherland Brooke Sutherland. Ceo is known to be a serial acquirer. Looking into potential acquisitions is not a surprise for him. But why qualcomm . The stock has been under some pressure, which reflects the legal problems it faces. The deal makes a lot of sense. We have written before that is likely on the wish list of the ceo. Broadcom would be getting 30 billion in revenue. And it would be very strategic. Both companies have a significant presence in smartphones. There is a major trend in smartphones to add more bandwidth. Broadcom and qualcomm are both leaders in different technologies, which are both critical to adding more bandwidth. Ke, you look at this announcement from president broadcom bringing their headquarters to the United States. That makes doing a deal like this easier. Broadcom is still in the middle of trying to get a deal done and trying to buy Brocade Communications for 5. 9 million. We thought this could have something to do with getting approval for the brocade deal. This is a company that is extremely acquisitive, and chipmaking is very acquisitive. Aty were looking opportunities in the United States and the Growth Prospects and thinking it would be a lot easier if we are a United States company. Brooke talking about all of this is aisitions, gigantic acquisition. Doesnt create any integration or execution does it create any integration or execution risks . There is a saying about the broadcom ceo on the street. In him we trust. He has a phenomenal track record. I followed him for more than 10 with his impeccable track record of integration. This would be the largest deal in the history of the company, but i think the market would give him the benefit of the doubt. Brooke the one thing that would push back on dosh on, we dont know if we are talking about integrating Brocade Communications and nxp, which is integrating its own mass merger. That we have to make point. This is a huge deal. Brooke piling on top of each other. Julia what happens if qualcomm loses . That point. Issues and isst in a legal battle with apple. Qualcomm may be directly under threat. What are we looking at . Brooke that has been some of the pushback from nxp shareholders qualcomm needs us a lot more than we need them. There has been resistance among nxp holders to push for a higher value. Is that this question, going to affect the ultimate value of qualcomm to ac quirers . What you think qualcomm shareholders would be saying to the board . Romit we are still looking at it. 30 has been reported as low. Most are saying closer to 50 . I would say in terms of this whole acquisition we can very well see a scenario where broadcom buys qualcomm and nxpi. They broker an agreement with apple and qualcomm. Broadcom has a close relationship with apple. As we have seen with prior deals, they spin off businesses, like the licensing business at qualcomm, which was such a very big price tag and helped fund the purchase. If this goes through, i expect there to be a lot of moving pieces. Scarlet it unleashes a torrent of deals. It was bloomberg that reported 70 a deal for shares of qualcomm, potentially. Talk about antitrust risk. If the regulators are looking carefully at broadcom and becade and nxp, there has to this issue at hand for broadcom and a qualcomm tieup. Romit you are right. This is the risk for a merger between broadcom and qualcomm. It is not that broadcom or qualcomm has a monopoly on the productbased element of the smartphone, but there is a portfolio effect, whereby one supplier owns so many key basebandgies the modem and licensing technologies that going to the phone it is not that one supplier has 100 of the shares, but you get a lot of power if you own all the key technologies as a supplier that the regulators would look at. A company like broadcom would have to get approval from some of the largest customers like samsung and apple to get this deal done. Brooke forus go to some final comments. You had a lot of emotions going on in your face. Brooke my initial senses, are we reaching some sort of creepy mna . We have all of these deals building on top of each other. A number of these companies were trading at record prices. This paid off for nxp burt but you have to wonder where this is all going . Rb reaching this frenzy moment are we reaching this frenzy moment . Mna has been picking up. I dont know if it is tax form or what it is. It has to make you nervous. Anda Brooke Sutherland romit shaw. Thank you. Scarlet trade will be at the center of President Trumps trip to asia. He earlier called the trade deficit with china, embarrassing. From new york, this is bloomberg. Scarlet i am scarlet fu. Whatd you miss . One of Donald Trumps favorite ways of keeping scores between countries. This is the u. S. Trade balance with china. The red bar japan. South korea, yellow. There are trade deficits with all three countries. Them than wee from export to them. President trump will likely bring this up to his counterparts. Why are these deficits so large and persistent . It is complicated and there are a host of reasons. One is that we have a stronger u. S. Dollar, tweaks the u. S. More expensive which makes the u. S. More expensive overseas. The president prefers a weaker currency has accused others, notably china, of keeping their china hass weak, when been doing the opposite. A lot of this will come into play between president and his asian counterparts. Julia i will pick up on two things. One is imports and the other why kim jongun has been so quiet in recent weeks . This is a chart that looks at what goes on in north korean imports when we see that and forth between the United States and north korea. Corn is what i am looking at. We are looking at spikes going back to 2009. North korea imported far more corn from china during these periods, and tracked missile tests between north korea. On2017, we saw a spike going between june and august. Then they fell back. We think that north korea is stockpiling for imports corn imports in case we see more sanctions. Brooke this is my new joe this is my new favorite thing. We have unemployment data out today. Something is changing about it. This blue line is the Unemployment Rate. Down for. 1 . The white line is the annual deficit of nondenomination gdp. For years, they track each other. They tracked each other. It was a perfectly cyclical indicator, the size of the deficit. When the economy is good, tax revenue goes down, spending goes up. We have seen this divergence in the last two years and we may be heading to an era of structurally higher deficit. Even as unemployment is going itn, we havent seen deficits in the share of gdp fall. There had been mandatory outlays, retirements, not going down the strengthening of the economy. Scarlet just in time for publicans. For republicans. This is bloomberg. Who knew that phones would start doing everything . Entertaining us, getting us back on track, and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit or go to xfinitymobile. Com. Whatd you miss . , stocks at record highs, the dollar rising after the jobs report. I am julia chesley. Liveif you are tuning in on twitter, we want to welcome you to our closing bell coverage every weekday from 4 00 to 5 00. Julia talked about record highs. It looks like a tale of two markets. The dow is barely higher. The laggards, ibm, financial names. The s p in the nasdaq are up. The nasdaq the big winner as weve got word of more potential megamergers between some big chip companies. At aould mention the vix record low. 9. 02, round about it session lows. Could we see a change to the vix . Joe it could happen monday morning. Torlet lets get you individual names. I mentioned the megamerger deal. Bloomberg is reporting that broadcom is interested in qualcomm for 70 a share. Qualcomm is just under 62. Broadcom 273. To move theing Corporate Headquarters back to the United States. A lot going on for broadcom. Shares moving higher, three percent, on reports cbs may buy a health insurer. This is according to lawyers. At now would be valued at 200 a share. The interesting thing, in addition to the reporting the deal could be as early as december, we have not heard a response yet. Julia still waiting. Scarlet pandora shares are down by a quarter after four caret forecasting a loss for the fourth quarter. Deficiencies are being highlighted. Joe lets take a look at government bonds. Not a lot of action today. Of course the headline was be jobs report. We will talk about it more later. Weird numbers here in there. It did not change the narrative much. Bigid see a selloff in some em, turkish fiveyear, showing higher rates. Some anxiety there. The big mover, coming to my terminal, anything having to do with venezuelan bonds. Venezuelanook at the bond going from last night, 48 cents on the dollar, . 30 on the dollar on those comments last the heck out of traders. Talking about a restructuring of the debt. We will talk about it more later on the show. A big selloff in venezuelan assets today. Julia im showing you the dollar he index year to date, on to another game. Snapping back after falling earlier. Some confusion a little bit from what we can glean that given the hurricane damage from previous months. Saying it has tipped the balance coming from the fed in 2018. What we did see is the stronger dollar hitting the highest currencies in the session today. That is what i want to show you. Lira, the the turkish dollar brazil rate, the dollar is higher by 2 or more versus the turkish lira and gains across the board versus the other two. Let me give you a sense of what the returns are at these currencies across the emerging markets year to date. The turkish lira more than 10 gains returned in 2017. All of those guys got hit today. Joe on commodities, not much action. Crude continuing to gain. This is one of the big stories lately, some real momentum in oil. Over the last few weeks with texas oil nearing 56 a barrel, gold is selling off and those are todays market notes. Thelet whatd you miss . , longest string of weekly gains since 2013. To go over the market moves, lets go to michael regan. I go back to the vix because it is at a record low. It is about to dip into the eight handle. We talk about how we are late in the market. Is there no fear or are we not seeing it . Intraday, we briefly dipped below four. If you can bring it up. Eight point 99. We can see the red line at the bottom. Scarlet it happened. Joe maybe we will still get there. Nothing is going on. The vix is a function, implied volatility is an implied function of historical volatility. Everyone believes in mean reversion. It is down to snap back. No one can say when. It happens on its own time. Are right no one is expecting any shocker. Joe one extraordinary thing about this, there was political , all fed news, tax news kinds of stuff. This was one of the biggest news weeks in a while. It is the same story. Earnings news. And obviously tech blowing past everyone this week on apple and off for that and amazon earnings. Bigyone was braced for a swing and we got more of the same. Slow grind higher. The tax reform, a lot of the macro beneficial elements of the tax reform were priced in. Now it is getting into the weeds and figuring out not everyone is a winner. There is definitely some losers. You try to handicap what part of it survives to reach the president. To me, ive got to wonder about the mortgage Interest Deduction cap and property tax caps nationalhat association of realtors are coming out saying, they said this before the bill, based on the framework of the bill, saying this could cause a 10 drop in hou