Among the top issues will be zero down Greenhouse Gases by the middle of the century. That is the cornerstone of the green deal pledged by incoming the Incoming European Commission president. Global news 24 hours a day, onair, and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. In his 1 00 in new york, 6 00 in london, 2 00 and hong kong. Im shery ahn. Welcome to bloomberg markets. From bloomberg World Headquarters in new york, here are the stop top stories on the bloomberg and around the world that we are following. Stocks in the green after china says it will raise penalties on violations of intellectual Property Rights. Its trade deal imminent. N versus oxime. Carl icahn is about to receive control of the board. We will have details. Drug pricing transparency. To medications cause three four times in the u. S. And elsewhere, and what President Trump proposes to do about it. In the meantime, halfway into the trading day. Green, risk on across the board. Small caps also performing. Kailey leinz, what do you have for us . Kailey small caps are performing, up about 2 , the best day for the russell 2000 since september. As for the major averages, it is a risk on day. The s p 500 and the nasdaq at new record highs. The data 40 points shy of a record high. The nasdaq getting a boost from that Ip Development development. What is leading the performance is technology and health care. If we drill into biotech, take a biotechthe nasdaq index, up 2. 4 today, at its highest since october of last year. The biggest driver is medicines company. Novartis agreed to buy the company for 9. 7 billion. That is giving a boost to other names in this space. Arrowhead pharmaceuticals getting an upgrade on the back of that novartis deal, saying it supports the outlook for that deal. Technology,or, after those china ip theft crackdowns. It is giving a boost to some of these companies, nvidia, applied technology. Materials. Apple also getting a lift off the back of that, up 1. 25 . These tech name did not need an intellectual property boost in terms of market performance. If we look at the s p 500 Technology Sectors performance so far this year, it is up more than 40 this year, on pace for its best year since 2009. I should mention valuations are now at their highest in 12 years. Shery thank you so much. Ok. O miss vonnie, so thats our next guest wonders whether conventional wisdom may be too optimistic. We welcome marc chandler. Ray to have you with us. Of course, we are seeing the dollar index hitting an almost sixweek high, a lot of trade optimism out there. Ray to have you with us. Are the markets getting ahead of themselves . How big of news isnt that china is giving this supposed concession on ip . Before last week, the s p 500 and the dow jones were both up six weeks in a row. Last week, we saw profittaking. Are the markets getting ahead of today is showing us it is not so much about chinas ip action but buying on the dip. If people have not given up his bolus bullish sense of the santa claus rally coming early. Shery we have seen the vix gain ground toward the end of the year. Is this what we will see as the market seems to be moving on trade headlines . Marc it seems to be the case that we have the santa claus rally and then profittaking. Higher in0 gapped september, protecting it at about 3100. Im concerned that we are getting ahead of ourselves on earnings, and news. The only currency that is up today is the british pound. We are getting ahead of ourselves on brexit even. After this election coming up, there is still the possibility of a deal at the end of next year that will not be struck, and then they go back to the wto. There is still the risk of a hard brexit. The market is getting ahead of itself. Shery sterling outperforming today. What happens if you dont get something substantive . Will it be easier to reach bottom again . Marc you have this reality now, so maybe it is buy the rumor and sell the fact. Shery we also have not been factoring in the fact that President Trump has a decision coming up, the hong kong human rights and democracy act. He says he is planning to sign it. We seemeantime, prodemocracy movements in hong kong gaining ground. How do you factor into the markets when you dont know what will happen on a geopolitical side of things . Marc it is still an unknown. More than a month ago, there was a deal in principle that was struck. Overnight about china passing these laws about intellectual property protections, the problem has never been what china says. China often says the right things. We often draw a distinction between what they say and what they do. That remains a big problem. The enforcement of these statements and loss, how will they be enforced . Shery that is an important point. They already have these laws on intellectual Property Rights. It is not that they dont have the laws, they need to enforce them. Marc this is why its a mistake to think about the u. S. China confrontation as being like the confrontation in the 1980s. Some of the people that President Trump surrounded himself by work in the Reagan Administration as they negotiated with the japanese. But the chinese is a different challenge for the u. S. , different value system. This is going to come to bear, which means we can suspect a sustained struggle between the u. S. And china for years to come. Shery a different issue having hong kong in the mix. Hong kong is a Financial Hub. Do you buy into the idea that it is being threatened as a Financial Hub . About chinese history, the idea that after the communist mao revolution, they punished shanghai at the time. I thought the same thing might happen to hong kong over time. Develop as a more important Financial Center for greater china. I think what these demonstrations are showing us is they are accelerating this move. It will not happen overnight. Property rights are Still Holding up. Alibaba just held its ipo in hong kong. Over time, i think these demonstrations illustrate that hong kong is part of china, as if anybody would be confused by that. That means overtime we need to sign off on hong kong. Shery alibaba starts trading on tuesday. Dend for cashs jumpg in the city. This chart on the bloomberg showing it remain elevated despite the fact that we have seen a little bit more conciliatory moves. Some have laughed in my face when i ask about the hong kong dollar breaking the dollar peg. What do you think of those remarks . The hong kong dollar, the stability is to elect the golden egg. It is still important for the stability of hong kong and Chinese Companies to raise international capital. I think the peg is sound. Every once in a while people get the idea that they will challenge it, but not in the spot market. Where you challenge is the forward market. Differentials are wide and a way to defend the hong kong dollar. Not betting against the hong kong dollar, but that Interest Rates have to rise. Bass. Tell that to kyle our thanks to marc chandler. Coming up, carl icahn goes after occidental. The billionaire investor and critic of the company is said to be seeking control of the board. We will have the latest. This is bloomberg. Shery this is bloomberg markets. Im shery ahn. Time for the Bloomberg Business flash, a look at the biggest right now. The news the largest luxury goods deal ever. Lvmh has agreed to buy tiffanys for more than 16 billion. Right now. That will raise the french conglomerates profile in jewelry and gives them access to a bigger chunk of american choppers. The deal values tiffany at 37 above the Closing Price on october 26 and the wind bloomberg reported the initial approach. Ebay is selling its ticketing business stub hub to a swiss ticket reseller. The price is a little more than 4 billion in cash. Stub hub is one of the most popular sites to buy and sell tickets to Sports Events and concerts. Ebay bought the company in 2007 4 310 million. Teva pharmaceuticals and other generic drugmakers have held talks about resolving a u. S. Price missing and get fixing investigation. One of the possible outcomes with the Justice Department is a part deferred prosecution agreement. Drugmakers would admit to certain allegations but would not be indicted. In return, they would pay fines and cooperate with investigations. That is your business flash update. Lets turn to a Bloomberg School. Carl icahn is trying to seize control of occidental petroleums or. Icahn plans to nominate a slate of 10 direct ors. She has been a vocal critic of the company over its three 7 billion takeover of anadarko petroleum. Joining us is the reporter who broke the deal, scott deveau. Congratulations on this group. Tell us what this would entail. Carl icahn has tried in the past to put directors on the board, and that did not help out. What he was trying to do was solicit support from shareholders. This time around, it will be looking to replace the entire board at the annual general meeting. So what exactly is carl icahn so unhappy about in this deal . The original point of contention is this 37 billion takeover of anadarko, and also the fact that this transformational transaction didnt go toward the shareholder vote. He also has an issue with the financing they took from Warren Buffett because of the price of the coupon attached to it. It is actually quite pricey. For that reason, thought it should have gone to a shareholder vote. Shery how is that playing out with other investors . His stake is pretty small. Scott the overall share price has fallen about 40 since the news are merged that oxy would go into a bidding war for anadarko. A lot of that has to do with oil prices. But the amount of leverage they took on in order to pursue this transaction is also weighing on the stock considerably. Somess you would say that of the investors that were originally in the stock prior to the takeover have obviously fled , or the overall value and prospects of the company have gotten more murky. Shery if he gets his way and puts 10 directors on the board, what will he do . Scott he originally said he wanted the company to launch a strategic review, including a sale of the entire company. That would be presumably the avenue he would pursue. Shery who would try to buy this company . It is huge. Scott two in the u. S. That could be potential buyers, pursuingtself, who was anadarko at 33 billion. Now the combined anadarkooxy company is valued at 35 billion but has more leverage. The other one would be exxon. Whether either of these companies are interested remains to be seen. Shery what is occidental saying about it, how do they want to stay these issues that icahn is not happy about . Scott a lot of it comes down to paying down debt. They will sell assets based at 10 to 15 by 2020, use the proceeds to pay down debt, in order to increase the Financial Stress on the company. They were also curtailing spending next year by 40 . That will also let them pay down debt. Shery what are analysts saying about the plans, do they prefer those plans from occidental, or a carl icahn takeover . Really focusody is right now on the dividend, the Financial Health of the company. I think there is a divide on whether the dividend is sustainable. Community the analyst believes it is because it is largely hedged. That think ite oil prices continued to tumble, could be a problem for the company. Shery what is the next day we had watch out for, the deadline for the nominations . Scott the deadline at the end of the week on friday. What we will likely see is a formal nomination of these 10 directors. We will likely find out who they are as well, and then we will go from there. Shery scott, thank you for that. The latest on the anadarkooxy deal. Americans spend more on Prescription Drugs than anyone else in the world. They take a lot of pills, but what sets the u. S. Apart from most other countries is its high prices and the obstacles to lower drug prices. That is next. This is bloomberg. Shery this is bloomberg markets. Im shery ahn. In the news today, Teva Pharmaceutical and other drugmakers holding talks with the Justice Department to a criminal antitrust probe of alleged pricefixing by the company. Its the latest on one part of the conversation surrounding Prescription Drug pricing. Joining us from baltimore with more is dr. Gerard anderson. He is the professor of International Health at the Johns HopkinsInternational School of public health. Thank you for joining us. We also heard from the president , tweeting on friday about allowing importing of drugs, Prescription Drugs from other countries. We have not heard more details, but should pharmaceutical companies being nervous . Who should be most nervous . The people that should be the most nervous are the branded companies. The is concerned that generic drugs, which about 90 of the drugs sold in the u. S. Are generic drugs, are generally inexpensive compared to the drugs and other countries. But for the branded, specialty drugs, those are the ones that are most expensive, those are the ones congress is focused on, and the ones the companies should be most concerned. Shery it seems congress is considering legislation on this front. What are you expecting in terms of policy that can actually come forth on this issue . Gerard there are two wr areas, one is rate of increase and drug spending. Do we keep raising the list price, the price the drug company announces. That goes of 6 , 10 a year. I think this is likely to pass in congress. Ratesss will say the increases can go of no more than the inflation rate, which are be substantial. Essentially, you have seen for everyone time the Drug Companies have lower the prices, they have increased the prices on average of 90 times. Much more likely to raise the prices than lower the prices. The second big area is looking at the prices in the United States visavis other industrialized countries. We just wrote a paper that was published that said, on average, we pay three to your four times more than other industrialized companies or the same branded drugs. President trump has already focused in on a certain subset of branded drugs, those that are prescribed by physicians, part b drugs, but the bigger ones are the part d drugs, the ones you get at the pharmacy. Four times more expensive. It is hard to justify why the united dates should spend four times more. Shery i found that system really interesting here in the u. S. Very concerning. Alsoave big farmer but you have these pharmacy benefit managers. The Drug Companies themselves are trying to generate justify the prices because of the r d and how much they invest. Are they worth all they are charging the patience for patients for . How much does it take to invest in this research . Gerard the investment starts at the National Institutes of health, which puts 30 billion a year into research. Much of that goes to Academic Medical Centers like Johns Hopkins. They are the ones doing the initial research. That is where we get most of the initial innovation. Then it typically goes to venture capital. They see something promising developed and bring it forward another step or two. Then there might be other parts of the market that get engaged. It is not until the drug is really developed an almost through the whole fda process, that in most cases, the Big Pharmaceutical Companies get involved. The research, development has already been done, and then they buy it. They need to buy it at a higher price in order for the research to continue because you have to motivate people, but at the same time, they are not the ones doing the innovation. Shery your thoughts on medicare for all . Is there an upside to have this giant negotiation entity to go shooting prices lower . Gerard may be a part of medicare for all his having the government negotiate prices. What we see in other countries is it is one entity negotiating prices. In the u. S. , there are literally hundreds of entities negotiating prices. That does not make for a good negotiation. The reason why we spend three to four times more than any other country is the way we buy drugs, which is essentially not having one entity by the drugs, but having hundreds of entities by the drugs. Shery everyone seems to be against these pbms. Is that a sector of the industry where we could see change . Gerard i think so. One of the things we are working on is with a large corporations, asking them to look at their formularies. What drugs they have on their list. What we see is they have a lot of unnecessary, ineffective, what we call wasteful drugs on their formularies. When they look at it, they say, why are they on the formularies . An example of this would be a branded drug which is more expensive than a generic drug, having the branded drug on the formulary because the pbm gets money for that particular branded drug, and the generic will not pay a payment to them. What we see is we are paying a lot more for these drugs because of the pbms. They are negotiating lower prices but they are putting the wrong drugs on the formulary in order to make a substantial profit. Shery thank you so much, dr. Gerard anderson. Professor of International Health at the Jon Hopkins UniversityBloomberg School of public health. Course, supported by michael bloomberg, founder