Transcripts For BLOOMBERG Bloomberg Markets 20161028 : vimar

We are 30 minutes into the trading day in the u. S. Julie hyman has the latest. Julie we got numbers of the university of michigan. Their consumer confidence, their final rate for october coming in a point lower than the initial estimate at 87. 2. This matches the lowest level since 2014. Looks like the Expectations Index is lower at 76. 8. Therent conditions folks who were serving a more pessimistic about the future and the present. We have stocks mixed with the dow and s p higher. The nasdaq is little changed. The s p 500 is lower for october. It is the Third Straight month decline. You see a drop in 1. 6 . We have not had a lower october in about four years time. Barring any kind of miraculous turnaround, this is how to and end the month unless things change early next week. Watching oil prices as well. Heading lowerl once again going into that opec meeting in the anna as the members try to hammer out a really agreement on production. We will see if that theres any kind of fruit. We have been watching the bond market in the wake of this mornings gdp reading coming in higher than the initial estimate at 2. 9 for less quarter. We are seeing yields falling. They had been going up quite a bit going into this report. This is the first session in seven we have seen a drop in the yield on the twoyear note. It is only down a basis of point. As vonnie mentioned, we had a miss for amazon. Amazon, trading lower. Amazon. Com, the company is ramping up spending. Investors asking themselves, is this a lengthy increase in spending, or temporary . Amgen beating estimates and raising its forecast. Sales of its top drug, the volume of that drug, falling by 7 . It is an arthritis medication. And an injection coming out missing estimates even though it sales rose. All of these weighing on the major averages. Mark . Mark we have had a good run in october. That could run looks like it will come to an end. Today, for the fifth consecutive day, something we have not seen since midseptember. Travel and leisure up. Noble nordisk losing a fifth of its value. I will come to that later. That is continuing to dominate. Ubs shares up 2. 5 . Thirdquarter profit beating estimates. Pledging to deliver cost cuts. They did report a drop in earnings. Bonds trading sales climbed 5 , but that was the weakest increased among the worlds biggest lenders that disclose thirdquarter results. Rbs shares lower. This is britains biggest government lender. The bank took a big charge for restructuring and litigation. Almost 900 million pounds. Focusing on domestic markets. Seem to be bearing fruit. Revenue of the three core markets rising. It faces continued cost from looming u. S. Charges another litigation. It also says it will meet a deadline to dispose of its consumer unit. Finishing off with the banks, all the banks beating. Frances biggest lender reporting estimates earnings that beat estimates. Its target. Ained shares are up by a fifth of 1 . Vonnie, this is one of the best performing bank stocks in europe this year. Scherzer up by 1 this year. The stoxx 600 thanks banks are up. All the banks seem to be beating estimates. Vonnie time to get to bloomberg first word news. In iraq, a senomyx state Islamic State militants are using civilians as human shields. That is according to the united nations. To you in is taking place around the city of mosul. Islamic state uses civilian hostages to make sure certain areas are not attacked. A judge in Northern Ireland has rejected to challenges to the brexit process. The judge said it will be premature to interfere with the brexit profits at this time. He rejected challenges related to a vote by lawmakers on article 50. Three senior judges in london are looking at similar challenges related to the article 50 vote. They will be bundled into a single appeal that goes to the Uks Supreme Court later this year. There is a report cap Vice President joe biden is at the top of the list to be the next secretary of state Hillary Clinton wins the white house according to politico. The Vice President almost ran against clinton in the democratic i marries. A sense clinton in the democratic primaries. It is game three of the world series tonight. The series between the cubs and the indians moved to chicago tied. Ticket brokers Say Something is are paying more than 10,000 for a ticket for the first World Series Game at wrigley in 71 years. The cubs have not won a world series in 108 years. The indians are seeking a first title and 68 years. Four hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Vonnie . Vonnie thanks. That give at the u. S. Economy. The week was frontloaded with comments from fed officials. Earlier today, we got the most Critical Data of thirdquarter gdp. The u. S. Economy grew. Is a chief financial economist. Are seeing ats strong dollar. Thanks for joining us. Lets start with the chart. Number 4614 and shows if you take out trading inventory, not doing so well in the quarter. Bethe trade story might lasting, but economists like to take out inventories because they go up and down and they rarely stick. It is a temporary factor. You take out inventories, the number was 2. 3 today, which is still the indian many countries in the world. It is strong enough. It puts people back to work. And for the fed to restart their rate hikes. Hopefully a year later after the first one. Vonnie exports were up. We cannot always explain it. Soybeans were up quite a bit. There was some capital goods as well. Might haveorts turned. The forget, a lot of the exports decline was basically petroleumbased products. Exports are bottoming out and doing better. Mark what is the outlook for the dollar. That is a gdp chart. This is the trade saidweighted dollar. It is approaching the levels we saw in january. It was one of the reasons why policy makers rose rate slowly as it originally forecasted. Is a different this time . Chris no. What we are doing right now as we are trading off relative shortterm Interest Rate differentials. People think the fed is getting ready to go. The rest of the world is not raising rates. You are right to point out what happened in january because those dollar highs in january coincided with the crashing commodity prices. So, oils not 20, 50. I would be skeptical with a strong valid trend we have seen will continue. To will peak out here. Mark what about Consumer Spending . Rose less than expected, 2. 1 last quarter. Do you have concerns about the consumer, the bank the backbone of the economy . Chris i always have concerns. I am an economist. [laughter] im surprised it was two point 1 because it was running 2. 6 in august. It was a little bit weaker. Services may have not been i what they were. We are looking at what is going on and how far is the fed behind the curve . He will get the inflationary data on monday for september . If inflation goes up 1. 3 , which i am expecting some of the fed on the feds model should be 1. 5 on monday. The fed is behind the curve based on their own model. Vonnie explain that to us. The cost index was it is not unhealthy, but it does not seem optimistic for employment forecast. On the other hand, it is now at 1. 7 . Does employment have anything to do with the . Chris we think the economy has to run hot for a while anyone to see weight pressures. Inflation is not going to last. Related to pass inflation. That was one of my jobs as an economist at the bank. Hr calls me in december and asked me how much inflation went up last year. Index theirompanies gross to pass inflation. I dont think wages are the beall and end all if the economy is running hot. What i see is based on some of these unemployment claims data. Unemployment rate should be dropping to a new low in the next three or four months. That was certainly we start the feds rate hike. The on the fed rate hike, team was meant to be diverging among the worlds Central Banks. They predicted to raise rates more than they have. Its unchangedding focus. We have to wait until december to see if things will change. What is the theme among Central Banks . It was divergent they share. What will he be in 2017 . Chris the diverted factor in the fact that the u. S. Is getting ready to raise rates, and that strengthened the dollar early in the year. That was one of the things. That gave yellens. They did not want to go as quickly on rates. The banks are rebounding and talking with each other. The u. S. Should be able to go its own way here and reset rates to normal because it economy is normal for the is normal. Vonnie we have run out of time, chris. Chief financial economist. Asked for joining us. Coming up, amazons outlook spooks investors. We will have more on amazons earnings. That is next. This is bloomberg. Mark live from london and new york. A dreary london backdrop. I am vonnie quinn in new york and this is bloomberg markets. Time for the business flash. How has lost a lawsuit on the company treats its u. K. Drivers. They are whether entitled to holiday pay. This is according to a law firm representing the drivers. The case brought back the case brought by two thirdquarter profit for 21 as mastercard beat estimates. Consumer spending increased. Mastercard has been planning partnerships with Companies Like google and samsung and developing its own mobile payment platform. General electric is in talks with a partnership of one of the Oil Industries multiservice providers, baker he is. He says an outright purchase of the company is not one of the options. Companies have been for partners as a way to cut costs. This year, baker hughes terminated plans acquired by halliburton because of antitrust concerns. That is your Bloomberg Business flash. Mark . Mark shares of amazon are falling. The Company Posted thirdquarter estimates earnings that missed estimates ahead of the holidays. Amazon reminded investors it will spend on the things that make it customers loyal, even if that means a thinner Profit Margins and a weaker stock price prior to the earnings release. Rosebezos the we charlie in new york and elaborated that one of the key drivers of amazons past and future success. The thing that connects everything that amazon does is the number one our number one philosophy of principle, which is customerup session, as opposed to competitor up session. We were always focused on the frommer working backwards the customers needs, developing new skills internally so we can satisfy what we perceive to be future customer needs. Operatingons expenses increased 29 in the Third Quarter. Primarily on video programming and new warehouses. Still ahead, mark, billions are at stake. More shares are vulnerable than others. This is bloomberg. Bloomberg markets. Im vonnie quinn in new york. Mark and i mark barton. Vonnie lets get over to bloombergs julie hyman. Julie everyone has been talking about the increase the have seen in rates before today. We will talk about what etfs may benefit and not benefit as a result. We will talk about etfs in our weekly segment. Go up in therates product rotation is for a rate increase in december. That we mightk see some offense within each of market. Yes. Past fiveback at the years and there were two times when rate significantly increased over a stretch of months back in 2013 and 2015. And 2013, they went from 1. 5 to 23, which is not much if you go back three years, but it is a 100 increase in rates. Where is the money going to go . If you look at etfs, there is 3 billion that have floated to think because of policy. What we saw was gold and emergingmarket for the hardest hit. And 25th times, 2013 income of gold is on the left. A total of about it billion dollars in outflows a total of about 8 billion in outflows. Gold can change over time. Largely speaking, rising rates for gold. Markets is a risk on play, rate rise. , you see a total of 3 billion out of em. When you dig into the etfs, you see em saw upwards of 15 billion come out, but there were other etfs that offset it like img, which is a dirt cheap one. That took in money. This is a challenge for etfs. There is this large group of people, retail investors, are allocating a matter what happens. That my can offset and the way that money can offset an e. M. Yen should see a lot of outflows, but the retail did not catch up. Julie this raises a bigger question. We talk about the criteria by etf. To choose an you are implying who is investing in that etf . What kind of investor could be a factor. It is really liquidity. There are certain investors who could care less added charges 69 basis points. They want to be unseen, unnoticed. They would not use a swap etf. It 14 advisor would have basis points. Julie on the flipside when you are using at a rate increase environment, we have seen real estate stocks go down, we have seen utility stocks go down, so presumably, in the etf world, they would also potentially be heard by Something Like this . You would think. They took in a little bit of money during the two. Turned into periods. That is a product where you have hot money and retail. The retail offset it. Took in a little bit of money. The reason for that is people are in dividend stocks for other reasons. The most interesting category was highyield. High heels lost 2 billion. You look at where the money went, a line where the money went was shortterm highyield and senior loans jumped. They took in 6 billion, and offset it. Like e. M. s summit will see money shifting from certain products to others. On the surface, then it flows will look flat. Julie what does well . In lp does well. There was a huge rally. They took and money despite the rates rising. Was that is rising look out for financial etfs. Thank you so much. If you are a birth plan, you can read more on erics research on this topic and others regarding etfs. Vonnie always fascinating. Two pharma giants. A friend competitor is surging. A look at how their jobs are pulling them in different directions. This is bloomberg. A little warmer here in midtown manhattan. Sorry about that. Live from bloomberg World Headquarters in new york, im vonnie quinn. Mark im mark barton. Lets get to bloombergs first word news. Heres Alisa Parenti in new york alisa Hillary Clinton is entering the final days of the president ial campaign with a huge cash advantage. According to filings, the democratic nominee has 153 million as of october 19. Donald trump has 68 million on hand. Trump has repeatedly pledged to spend 100 million or more of his own fortune on the election, but so far hes put in a little more than half that amount. President obama has set a record when it comes to prison inmate releases. Hes now ordered more releases in a single year than any of his predecessors. The president commuted the sentences of 98 more people yesterday. This year alone hes granted clemency to 6 8 people, more than the past 11 president s combined. Germany needs more public spending on infra structure, but may spend its Budget Surplus on election giveaways, according to an economist appointed by Angela Merkels government to look at boosting investment. Hes concerned that merkels government may cut funding on aging roads and public buildings. And parliament is set to confirm mariano as Prime Minister tomorrow. The day taker leader lost a confidence vote yesterday. Tomorrow his socialist party rivals have agreed to abstain in a second vote that should give him a simple majority. Rajoy has been acting Prime Minister for 10 months because no party could gather enough votes to form a government. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im Alisa Parenti. This is bloomberg. Vonnie . Vonnie alisa, thanks. The worlds biggest maker of insulin falling by the most in 10 years. The denmarkbased company slashed its longterm profit target in half because of price pressures in the u. S. The c. F. O. Addressed the issue in an interview on. Weve been telling investors we expect approximately 5 negative impact on u. S. Sales next year from a lower pricing, so you can say we are only getting into the storm now. We cant in any way say that he worst is behind us. Vonnie joining us now, kristen. Is it a good idea for these two companies that are such specialists in one particular thing to get together . They get 85 of diabetes business, whereas percentage looks different at sanofi at less than 20 . When the diabetes market came under pressure, novontis felt the pressure. Onnie why are we seeing the pricing pressure . Its basically because theres a lot more competition in the market. There are a lot more products in the market. Pricing pressure . Were also seeing the entry of what they call similar, so cheaper copycat versions of the mother expensive insulin entering the market. Mark benefited, kristin, from sticking to its diabetes treatment. Does todays news highlight the perils of one relentless focus product, on one path of the diabetes. One could say, mark, if you live by diabetes treatments, you die by diabetes treatments. When theres pressure in the market, you are going to feel that pressure. Mark theres a new chief executive company. The Companies Cut 1,000 jobs recently. Profit forecast, do we expect a change of focus from the new chief executive . Right now, they say that diabetes is what they do best. And they are going to battle through the storm, and thats what theyre doing right now. Theres a transition going on t the end of the year. Vonnie we are seeing sanofi losing out to fizer in the pursuit of cancer drugs. Whats the plan there . They did miss out on the acquisition opportunity. What theyve said is that theyre constantly looking for other opportunities that may present themselves, but theyre going to focus on their own cancer pipeline right now. Vonnie lets just have a isten to this sanofi c. F. O. On byebacks. Have a look, kristen. Our share price was somewhat undervaluing the company, and it was a good time to be head of what we said, and this is why were not asleep on the euro buyback. It doesnt preclude us from eventually looking at acquisitions if and when they make sense, and they are hankfully sound. Vonnie is there anything out there might make sense for sanofi . Kristen there are a couple of companies that i think investors are speculating maybe , you know, possible takeover targets for anyone, not particularly sanofi in particular, but the company has signaled really strongly that its going to be a smart shopper. Mark essentially sanofi is benefiting, kristen, from more diverse portfolio. There is a big debate in the drug industry, and youve got astrazeneca to narrow its portfolio. Glaxo facing calls to spin off its Consumer Health business. When we look at the industry in its entirety, where is it heading . Ess is more or bulk is best . Kristen there seems to be a dichotomy. You do see Companies Like astrazeneca shedding assets and trying to focus more on its cancer pipeline. You see Companies Like glaxo saying, you know, we want to have a kristen there seems to be a co business. Its been a great, you know, cushion for us when the drug business has been difficult. And then you see Companies Like, for example, bristolmyers in the u. S. , which has been very, very focused on cancer lately. They actually sold off some h. I. V. Medicines so they could focus more on their cancer pipeline. Theres a split in the industry. If you look at the news today, you can see the perils. Mark where is sanofi exceling . I know it got a lift from the early flu vaccine, the diabetes franchise, that obviously fell similar to novo nortis. Kristen well, vaccines, as you said, there was a very pleasant increase in the vaccines business. But theyve also got a rare disease drug business. Sales are up there. So theyre doing well with their diverse strategy. Theyve also got an m. S. Drug, a pill, which sales went up. I think it was about 50 in the u. S. On u. S. Demand, rather. Vonnie sorry to interrupt. I thought you were finished. We are seeing some Insurance Companies coming out of the obamacare exchange, and im wondering if this is putting any kind of pressure on the drug companies, or does that have something to do with their performance right now at least . Kristen its hard to say, vonnie. I think the Insurance Market is definitely having a bit of a shakeout right now, and it will be interesting to see how, you know, the changes, the royaling of the market and obamacare, will filter through to the pharma industry. I mean, certainly theres been consolidation on the pharmacy benefit manager side, and with bigger pharmacy benefit managers, youre going to have greater pressure on prices and drugs. Vonnie kristen, thank you for that, much appreciated. Mark coming up after suffering the worst month in more than two years, is this a sign were seeing an end to the bull market . Is it the start of a bear market . This is bloomberg. Vonnie youre watching bloomberg. Im vonnie quinn. Mark and im mark barton. Choice hotels out with better than expected. The chief executive discusses its growth strategy. Vonnie and why the rise of private jet ride sharing is bad news for plane manufacturers. Mark in todays quick pick, we examine the sustainability of the u. S. Affordable care act, known as obamacare. Vonnie earnings from hospitality chain Choice Hotels came in better than forecast. They reported domestic room revenue in the Third Quarter outpaced that of rivals, and they beat analyst expectations on profits and revenue. Bloomberg spoke with chief hotels c. E. O. On how well the leader sector is holding up. Youve got the cycle, which has peaked, but its moderating very slowly. What is noticeable is on the business transient and on the group side. Theres been some softening. We dont participate in a big way on the group side. And on the Business Training side, were actually still building some of our share, but obviously its the leisure component thats holding up so well. Mark this is bad news for plane manufacturers, because of new technology, flying in a private jet is no longer for business moilings and the super wealthy. But a new people are buying the planes. New jet deliveries are fall more than 6 this year. The Charter Market booked 5 more flight hours in the last three years. A surprise drop in Third Quarter profit. It was the first time they announced results since completing the record takeover of its biggest rival. A. B. Inbev no longer expects sales growth to beat inflation this year. An International Agreement will create the worlds biggest marineprotected area in the ocean next to antarctica. 24 countries and the e. U. Agreed on the deal t. Comes in an area in the rough seas, about twice the size of texas. Commercial shipping, commercial fishing will be banned, but scientists will be able to catch fish in certain researching zone. Vonnie time for our quick take, where we provide context and background on issues of interest. The obamacare as the u. S. Affordable care act is often called is an array of Online Shopping centers dubbed Health Benefit exchanges. The big question about the exchanges has always been whether they can attract enough consumers insurers to work. Exchanges are aware of people who dont get through insurance through the employee and government can go to buy coverage. Insurers need to have plenty of young or Healthy People to offset the cost of older or sicker enrollees. This year, some of the biggest u. S. Health insurers, like aetna, unitedhealth, and humana, theyve all pulled out, saying theyve been losing hundreds of millions of dollars. According to the keyser family foundation, in the signup season for 2017, at least 1. 4 Million People will lose their plans and have to find new ones. About 77 of current enrollees would still be able to find plans for less than 100 a month once theyre taken into account. Heres the background. The idea of universal Health Coverage made its way into politics in the early 1990s as part of president bill clintons failed plan, written in large part by Hillary Clinton. In 2006, when massachusetts launched its own universal Healthcare Plan under mitt romney, exchanges were at the heart of it. The recent defections have underscored a vulnerability of the exchanges. Without private insurers, theyre empty shells. Heres the argument. The u. S. President ial election will also play a big role in quhaps next. Clinton has backed the creation of a public Insurance Plan to add competition on some exchanges. The republican nominee, donald trump, has joined the rest of his party in calling for obamacares repeal and has said that medicaid could help provide insurance to those who cant afford private plans. You can read more about healthcare and all of our quick takes at quick take on the bloomberg. Head to bloomberg. Com for more stories. Mark always see the end of a bull market and the start of a bear market in fixed income. Bonds suffering their worst month in more than two years amid speculation that major Central Banks may be moving closer to scaling back their extraordinary stimulus measures. Today, jim keane and Portfolio Manager of the 18. 8 billion Blackrock High Yield bond fund addressed the structural issues of the fixed income market. If you look at the structural issues, i mean, whether it was from the early 1980s all the way through the mid 2000, it was an aggregate debt that was built up in the system. So a lot has been done since the Global Financial crisis. But the structural issues with regards to all the head winds from demographics and all the debt in the system certainly have shifted from some of the private sectors in the banks on to government Balance Sheets or to to Central Banks Balance Sheets, but those will still be a long head wind to growth. There was some demand, too. Does that mean that in the belly of the curve we are seeing the demand show up, even though the long end is still struggling . Yeah, if you look at the structural, majority of clients in the world still have a longer term viability that is going to be somewhere between 4 and 8 . So as you start to see yields back up, it will start to be interesting for many clients who start to buy into it, because everyone still has the same problem. With all the negative Interest Rates in the world, when you look at most fixed income assets that are less than 3 , construction that people are trying to earn are going to be in 48 . So its a positive for many investors to actually start to be able to buy into that, but right now, youre in a bit of transition. Central banks are starting to tweak their policy a little bit. Growth and Inflation Expectations are starting to pick up. So people are pausing as it starts to increase over the short term. Talk to us about volatility. We havent seen a lot. Stock market currencies, everything else. Do you expect that to change . Do you think there will be a ickup, and if so, why . Some do expect an increase in volatility. I do think volatility is picking up, but you have to separate out success tell i can risk and volatility. Its certainly been called for a long period of time, as youve seen in an enormous amount of Monetary Policy thats come into with certainty. The markets look certainty. As you start to shift some of the policy and move towards data dependency, you start to move a little bit more volatility, and i think Central Banks will start to be more regional focused. Youve seen that in currencies, in volatility. I do expect its going to increase, and thats going to create opportunities for clients to invest, but to jonathans point, i dont think it changes the structural issues that will set a longer term trend. Vol is still going to be around, but on low growth or low expectations of return. To bring up the chart, it was the v. I. X. , the 10 yee treasury market. The question, is thats why the safety is supposed to be. Volatility is so low, but every time its gotten this low, volatility has been spiked. Its like the safety is the risky. We associate low vol with some kind of complacency. I would wonder why so much cash has not been put to work. Also, if you believe whats happening in the bond right now, a recalibration of growth, then why so much cash sitting there on the sidelines . I hate that term, but take the bank of america, survey, cash allocations, that moneys got to go to work. Why is it not . We agree. Theres been a lot of uncertainty, whether its in regard to elections or different policy decisions, and when you look at fixed income rates around the world, the cost of not buying into a 10year german bond thats trading at displeasure is not hat high relative to cash. I think that is part of why investors wait for the expectations to buy, and buy better opportunity. That being said, were in this for a long period of time. O as investors ton so it cash, its a different risk profile. Because the negative relative to the goals that they have, or 5 or 6 , you compound that year on year, its a different and all of a sudden it is a risk profile. We do think theres a lot of opportunities in the market, and structurally people should be putting their cash to work. Mark that was the portfolio of the 18. 8 billion Blackrock High Yield bond fund, vonnie. Vonnie still ahead a new investigation into the Foreign Exchange markets. At look at who the government is investigating now. This is bloomberg. Mark live from london and new york, im mark barton. Vonnie and im vonnie quinn. Theres a new investigation into the manipulation of Foreign Exchange rates. This time u. S. Authorities are investigating currency options desks at several brokers. This comes after a number of banks were prosecuted for colluding to manipulate rates. Joining us now with the latest on this bloomberg is bloomberg executive editor for global legal financial regulations and enforcement. Quite a title. A mouthful. Vonnie is this all coming out of the same original investigation . Are we now into the broker, middle man portion of it . Its not exactly the same investigation. We know a new investigation was begun maybe about a year ago, and this is the new York Attorney general. But its in the general area behalf weve been looking at. This time, the emphasis is on the intradealer brokers, the middle men, and theyre involved. In this particular case, were concerned about the action. Vonnie its spearheaded by the u. S. We know that most Foreign Exchange operations are headquartered in london. This is a matter of jurisdiction. They oversee this part of the market, but its natural for them to jump in here. And this is something that people have been wondering about for a long time, the Options Market seems like it would be maybe because its a little bit its easy to make a lot of money with small bets t. Seems like ripe for activity. Mark what are the middle men alleged to have done then . Its kind of interesting. Some of this may sound familiar for those who read about what was going on. We dont have rigging of rates, as we did there. But there is this idea that maybe some of these bids werent real f. Youre sitting there and make a lot of money based on how much action there is in the market, theres not much action. You float some bids out there. They call that flying bids, apparently, and that might not be real, but its to drum up business. Another thing that feels very familiar to us with our investigations is this idea that if you have favorite customers and make a lot of money with them, do you give them preferential information . Again, if youre middle men, you can see a lot of whats going on in the market, and therefore, you can suggest to someone, hey, this might be a good move, and this is coming, and whether that kind of activity was going on. Mark its a bad time, the middle men, the brokers, winnie, because you suppose thats fine to reinvent themselves. Financial markets are shifting. Thats right. Everything is moving electric. So these voice brokers, the people who got on the phone and helped deals, their businesses have been under siege, and its certainly threaten and had certainly being squeezed. Thee been consolidating and shrinking. Theres deals outstanding. So, yeah, this comes at a very difficult time for them. Vonnie who decides whether a rule has been broken . You go and get tailored for a suit, because, you know, you might like the way the suits, the tailor build up the suits, or it can get you a little bit off. Is that really a problem . Small advantages build up over time. I dont have to be in power. I dont know what theyre finding. But the questions would be, did you tip someone off in advance and say, hey, heres a good moment, youre my favorite customer, and that customer got a much better deal over the long run. Also, why are you using the middle man if thats not really whats working is now if somebody is getting an advantage over you, why are you using them at all . Mark sorry, really quickly, how is this going to conclude . Will sanctioning be imposed ultimately . We dont know. Its still in the investigation stage. Its been about a year. I dont think we expect a very quick resolution, i dont think theyre at the end game yet so. Im not looking for it in the coming weeks. I think were thinking more like months here. But potentially well see the kinds of actions weve seen against some of the banks and others. If its against individuals, against confirms for not having the kind of controls in place. You could be looking at fines and penalties, and presumably something could be referred to a criminal action as well. Vonnie winnie will be keeping an eye on it for us, thank you for that. Mark . Mark coming up at the european close, were going to speak to an icelandic pirate. Yes, thats right, the pirate party could be close to ousting the countrys conservative government in elections this weekend. Have a look at how stocks are faring. Were 30 minutes away from the end of the friday session. Looks like were down the fifth consecutive game. That hasnt happened since the middle of september. Stoxx europe 600 is down. Have a look at whats happening to currencies today, as we await another fed meeting next week. The pound is down against the dollar. This is bloomberg. Mark 11 00 p. M. In hong kong. 30 minutes left in the trading day in europe today. Vonnie i was stepping on you, mark. Mark you were. Vonnie this is the european close on bloomberg market. Mark were going to take you to new york. We are going to cover stories out of washington. The u. K. In the next hour. Heres what were watching today. Bad week for global bonds. Well talk to a fixed income manager, whats driving this setup when yieldhungry investors might start jumping back in. Vonnie u. B. S. Reports profits fell, and the Securities Unit was hurt by a slump in equities trading. The c. E. O. Talks to bloomberg about the latest quarter and where the firm stands on cutting costs. And before an election in iceland, a young party called the pirate party is on the cusp of succeeding