Can they sell enough assets and will there be the buyers to make the regulars feel ok . Jonathan some of the regulators have already given that deal the green light. Its a more concentrated industry. Alix we will be discussing this economy as well as the fed and investing strategies for a low rate world. Will be here. We will discuss whether the recent volatility is here to day with Julian Emanuel. Relativesn asia but stability in europe. Jonathan we have a day of gains potentially in europe with the ftse up. 6 . Not much action in the fx market. We are stable at 132. Data come so pretty much unchanged versus the previous month. Helping over in london. Up by 1. 26 . Credit growth in china making a comeback. In a bond market here we are. Coming in by basis point at the front end. We are set up for another big day in the markets. That 30 year treasury auction not going very well here in the u. S. Ares go around the world indepth coverage of all of those top stories. Megan murphy is in new york on translating clinton in a bloomberg all on ohio. Francine the is Francine Lacqua is in france. We will start with the deal of the morning. Monsanto trading free market. Why when the deal price could be 128 . Things johne mentioned is the biggest deal this year. Do you want to be the biggest one in the room. We saw what happened with pfizer allergan. If they combine with each other they will account for 30 of the global crop in market. Going to bere looking very closely. Seen kim china. Alix especially when it comes to the prices. We have seen companies offloading assets to make room to buy what monsanto might have to selloff to make this deal happen. What kind of buyers will be in the market for these . Monsanto whenmber they were talking to other companies about strategic options. We have not seen them so much play in the consolidation game yet. Could also be looking at some of the smaller asset. I think monsanto has been saying for really long that they have been talking to others about options even though the price is not reflecting what we hear is going to be paid today. Alix we are hearing the breakup fee will be 2 billion. Yesterday we heard 3 billion. I think they are looking at all the factors and these numbers keep moving around a little bit. We have all seen different numbers. Hopefully we will have a statement in a few minutes. Alix thank you for joining us. David there is some breaking news. Forward is having forward isward ford motors having an investor day. We want to go back to politics in ohio. Theres an important new poll from bloomberg today. We will bring in megan murphy. I think some people may be a little surprised. This is going to cause shockwaves in the Hillary Clinton campaign. We have him with a fivepoint gap over her in that state. One of the roughest stretches of her campaign so far with the concerns about her health after her bout with pneumonia over the weekend. Belty hurt her in the rust states where there is a huge white workingclass anxiety about the future. David one of the things that struck me about this poll was the reaction of people in ohio to nafta. So many people thought nafta led to a decrease in jobs in ohio. That is really sick thinking. Donald trump has been very overt about catering to this support. Hes extremely antitrade deal. Another really key statistic in this poll he has opened up a 43 among white men without a college education. Really targeting the white vote in the less educated. Those are the people he is still targeting. David you mentioned the Health Issues that came up while this poll was being it. Is there any new news on that . Of ongoing concern about what the state of Hillary Clintons health really is. Megan there were continue to the anxiety until we get transparency from both of them. We will see who steps up and ready for the rigors of the jobs. David thank you, megan murphy. Jonathan European Commission chief presented his speech which was the state of the union. Lets cross over to Francine Lacqua. What was the message from the man himself . The message was very clear. The state of the union is not that great. I hear over and over again after the three commissioners and i have also spoke to the European Parliament president is they need a union that is stronger but it cannot be stronger if the countries are as frail as they are. We heard from the European Commissioner of Monetary Affairs that we need stronger politicians that finally listen to the people. The parallels between what we theseeing in europe and popularity of donald trump are quite incredible. He spent about 10 minutes talking about brexit and then moved on to other things. He was much more levelheaded. Inwas much more emotional the aftermath of exit. Have a listen. We respect and at the same time regret the u. K. Decision but the European Union as such is not at risk. And we would be happy if the request for brexit could happen as quickly as possible so we can take the specific steps that need to be taken and so that relations with the u. K. Can take a new shape. They keep telling me it will be on a friendly basis. No one knows when article 50 will be triggered. See the waning influence from the u. K. Jonathan great to have you with us on the program. Lets get back to the stock market. Futures in the United States marginally positive. Ford stocks now trading in premarket. Saying its total results will fall in 2017 however it will improve. The big part is going to be investing in emerging opportunities. Particularly electric vehicles. Individual movers we are watching. Expecting a sixmonth profit to fall through september by about 45 . Lower toryism on terror attacks and the stronger swiss franc. Hermes also abandoning its forecast. It is the story that will never die. Wants to boost his stake. He now owns 21 . 35 he has toove get permission from those regulators. An Interesting Development for that beleaguered company. Also take a look at some of the miners in europe. Glencore bhp getting outs today. You have copper rising and nickel stabilizing. Better credit data coming out of china. As well. Hese guys a lot of action happening on the individual movers. A little stability in the u. S. And europe. Jonathan coming up, the vengeful return of volatility. The s p hits a twomonth low. Next, Julian Emanuel. He warned you the last time he was here about the declines coming up. More downside ahead for new york city. This is bloomberg. Jonathan from new york city, this is bloomberg. On Jonathan Ferro. Volatility jumps to the highest level since june. Joining us now is Julian Emanuel with ubs. You were on the program in august. He said the market was too complacent. Nearly the fix has nearly doubled. We think there is more downside ahead. Valuation levels near decade highs on the s p 500 with the earnings expected to grow by consensus 14 which we think is very over they are domestic. Youve got clearly Political Uncertainty ahead of you not to mention Economic Uncertainty elsewhere. We think there is a period of adjustment coming. We will need to see more from Central Banks and politicians. The debates are going to be important on the 26th. Its going to be healthy ultimately. We have hada very tight race in the bond market. How much leverage has been built up and how long will it take to wash out . We are seeing its not the actual several itself. Its that the leverage funds are marginal price setters when volatility turned. Thats why you can have a massive down day on friday followed by a huge up day on monday. It will seem normal but you have had this behavior that has built up and needs to unwind. This kind of volatility is going to set the table for more positive environment. Bank of america came out with a note talking about following the trends. Could see some kind of washout like in august. They put that as much as 52 billion. Half of it coming in the u. S. Do those seem like realistic figures . They may be a bit inflated. This is the worlds most liquid market and the these market is self has proven to be more liquid than fixed income. Thats a headline number that should cause concern. It is reason enough until we get less uncertainty in the coming weeks to expect more downside. Jonathan we wake up to a bloomberg poll thats a little more uncertainty. Does raise the politics question. Also there is big news out today about income in the United States having taken a big leg up. Does that give you any cause for hope . Absolutely. No question. Whatay we think about it we see typically when you come into election cycles where the electorate seems to be as disgruntled as it is once the decision is made in the reality of whoever is going to win is known markets tend to rally after that because of a backdrop like that. A congresseality was that wasnt going to go anywhere. David wu bank of america saying the markets trying to wake up to the fact of a potential trump presidency. Jonathan how you play this . The idea that we make a comeback after the election . Longterm investors should turn the television off. The professional traders can do what we suggested they do back in august. What we have had is because people have transitioned the strategy calls are still expensive. What we think you can do is sell and upside call to buy a downside put that carries you through the election in the monetary uncertainty and go from there. Jonathan if you are on the Trading Floor and youve got two screens you turn off the other one. Thats why you didnt put me behind the flashing screen. Jonathan Julian Emanuel might be back after the break. Alix he will be talking about Money Managers piling into cash. Is that a buy signal . This is bloomberg. Alix it is finally official. Buyer is buying than santa. The number monsanto. The number we have been debating comes to be about 56 dollars. 56 billion. In terms of breakup fees the number you need to know is to billion dollars. Sees the deal adding to sales in the first full year after the close and doubledigit percentage in the third fullyear. Theyre going to do it through equity and debt. 128 per share. There up by almost 2 . Monsanto barely up in premarket. 20 below that offer price. 19 billion to be raised by convertible bonds. 107 in the market. You wonder how to explain that spread. Why we have a 2 billion breakup fee. If the regulator premium so to speak. You wonder how much negotiation was done on the overall price and how much did 2 billion really feel this deal. David its a problem related to dispositions that there is going to have to make. The regulators are going to have to sell stuff. Alix Julian Emanuel of ubs is still with us. Seen tieups like this in china chemical. There is plenty of cash out there for m a. We think that trend continues. The news basically gives you the elements that are with us. First of all regulatory uncertainty. When we go back to where we were in august its a very clear that in terms of politics the markets were completely underestimating the concept of regulatory and Political Uncertainty. The other trend is going back to the availability of finance and. Interest rates are still low in an absolute sense. Financing is relatively available and there is a much cash on the Balance Sheet that we think the trend continues. Jonathan the credit market has not seized up at all. I can give you examples of energy companies. The yield pretty low to what was expected. The credit market has not seized up at all. As been a very it has been a very good year for credit. You had the spasm that you had in january and february. When we found out there wasnt going to be a recession and ubs doesnt think there is likely to be one in 2017 either more seeking behavior returns. Alix this is the third leg. Earnings. Why you have companies needing to buy each other. Profits falling 1. 4 in the Third Quarter. If you cant turn those profits you have to go somewhere else. David if you are saying there is still some air to come out of this and there is a lot of uncertainty doesnt that mean you do go to cash and wait until it bottoms out . You can certainly do that. The whole point of volatility getting as low as it has is not a question of people being underinvested. People being over invested. Its natural and healthy for people to go to greater cash at this point. America survey says investors are so much in cash versus a these that in reality you should be going to rise stocks. Cash balance is about 5. 5 . Part of the message from Central Banks over the last several months is that we shouldnt expect the same degree of certainty out of their dialogue because they need more flexibility and in fact they had in over shot of certainty which caused this low volatility. We need more pricing and we think we are getting it. Alix great to see it, Julian Emanuel. If you are a longterm investor go home, turn off the tv. Corporatecoming up, america has more leverage th ever with minimal earnings growth. The risks emerging within one of the safest parts of the market. From new york city, this is bloomberg. Jonathan this is bloomberg go. Im Jonathan Ferro. Lets get a check of the market. After four days of losses. The ftse of and the dax up. A lot of speculation going on in the fx market. The session down marginally. Look at aggregate financing in china. Credit picks up a little bit. You want a proxy for china look to copper. Verye treasury market volatile over the last few trading sessions. Twoyear yields coming in via basis point that 0. 782 . The big story is that the long end of the curve. To really get some insight in the treasury market take a look at what happened with the 30 year auction of treasuries. Looking at the demand for that particular auction. Thats the blue line. The average bid to cover of the last 10 auctions 2. 3. Lower demand a little bit softer. Another indicator i have been looking at. You can break up the individual groups into individual bidders and take the direct bidders going straight to the treasury bidding for 30 years. You see it down here at 4. 6 . That is the lowest share we have seen since september 2009. Say theyhear people are nervous about the Federal Reserve and the bond market. What they are really about is ultra low yields. I think we need a countdown clock for the fed. It is never too early for a countdown clock. We are seeing the push and pull versus indirect and direct bidders. Here is what you also need to know at this hour. Bayer reaching an agreement to buy monsanto. That would create the worlds biggest maker of pesticides. Warren buffett had 1. 4 million wiped from his fortune yesterday after wells fargo fell over 3 as the fallout continued from revelations the Bank Employees had opened more than 2 million accounts without client approval. Donald trump is leading Hillary Clinton in a poll of ohio. He now leads 48 to 43 among likely voters in a twoway contest. That is what you need to know at this hour. David we have a countdown clock going on with the president ial election. 55 days to go and the candidates are focusing on key states swing states such as ohio. Emeritusr in chief says not so fast. Matt winkler writes manufacturing jobs increased under each of the seven democratic president s and decreased under the six republicans who became president in the past eight decades. This is a fascinating somewhat counterintuitive result. Its not necessarily counterintuitive. If you go all the way back in time you start with Roosevelt Truman and there never was a for liftingthat one the United States economy out of the depression which was world war ii. The policies of Roosevelt Truman were prolabor. Start with candy johnson. Another set of economic programs that were both domestic. The Great Society programs. The tax cut kennedy gave us. The vietnam war which was demanding a lot of manufacturing. That was a robust period. We get to reaganbush and people forget that was a very difficult for us economically. We went into a recession. We had the highest unemployment since the great depression. We had a stock market crash in 1980s and and manufacturing jobs plummeted. The real surprise might be clinton. Thats when we got nafta. It was initiated by president bush and clinton signed it. Nafta actually didnt have the impact either way that people thought it would. It wasnt a great benefit. Manufacturing jobs went up with clinton. I would have thought they would have done pretty well with eisenhower. It is leadership and how much of it is larger geopolitical effects such as war . How much does it matter really whether it is republican or democrat . You cant give a republican too much credit for either what happens on the downside or the upside. Having said that, president s are always better smart than lucky if they can be. There were things that did happen that did make a difference. If this was an olympic contest among president s obama winds up number three in terms of creating manufacturing jobs. Thats because he did have a toicy in 2009 which was rescue the Automobile Industry in the United States. We had a poll out just today about ohio that specifically targets the manufacturing voter. And ohio is a very large autos the. Why doesnt the Obama Administration get credit for that . Actually obama did in 2012 running against romney. And he did in 2008 running against mccain. The election hasnt happened yet. There is no question of ohio was a huge beneficiary of the stimulus obama introduced in 2009. The Automobile Industry is robust today. In part because of that rescue of the industry. Manufacturing in ohio is a beneficiary because of hi