hong kong. betty: and a new merger in the health care industry as anthem plans to buy cigna for $48 billion. clinton looks into long-term investing. and new mutations to create rarer new drugs that could save the lives of millions. ♪ olivia: good morning every one and welcome back. i am olivia sterns. scarlet: and i am scarlet fu. -- earningng seizing season began, we have seen the

markets cut back and it is up by almost 2.5%. you can see the nasdaq sinking a little bit more than the others, but it is not off to bed. olivia: we saw sentiment sour, i guess you could say, as new home sales sank. the commodities continue today, trading at near a 13 year low. short iron these and gold futures are trading down. nymex crude is well below as it is just above $48 per barrel in new york. is it a -- scarlet: bear market or a bear market within a bear market?

olivia: yes, and that makes us question the price of brent? scarlet: and economists had predicted that rates would rise a few days ago, existing home sales rose above the highest amount in a just eight years. and in lafayette, louisiana, the man who killed two people and wounded nine people in the aeater was said to be drifter. when police arrived, he turned around and killed himself. found disguises in the hotel room where he was living. up --: and shares are amazon shares are up and they posted a quarterly profit.

analysts thought they were going to post a loss. sales were hailed by a blooming cloud computing business -- booming cloud computing business. and there is a criminal investigation into the controversy over hillary clinton's e-mails. e-mail used a personal account, as you probably already know by now, when she was secretary of state. possiblyr contained hundreds of classified e-mails. the state department says it is reviewing clinton's e-mails and secretary of state sechrist -- secretary of state john kerry spoke today on this. we trying tory: get all the e-mails out as fast as possible and i can't wait for that to happen and i'm sure that hillary can't either and i am sure it will be cleared up with

the final release as soon as we get that done. saida: secretary clinton she did not e-mail any classified material. and there will be an encore for the dinosaurs of "jurassic world." it is the third highest grossing film ever. now universal pictures plans to bring out a sequel in three years. actors chris pratt and bryce dallas howard will return. up in the next hour on arebloomberg market day, we going to measure corporate performance in the s&p 500 with an analyst. scarlet: activist hedge fund will look at hillary clinton's speech and then looking at drug developments. these and more coming up. olivia: but first, let's take a bigger look at the deal

announced today. add them announced it will buy cigna for $48 billion. this is the second mega deal announced in the industry in just a few weeks. course, regulators will have to bless the deal and they are not so optimistic. if you look at shares right now, they are down at 4%. it is trading well below the offering. offers -- stocks tens to the offer price, and in no, if you take a step back and you look at all of the consolidation that we are looking at within the health care industry, if these two megadeals go through, we are going to have five health care

insurers going down to three. health care companies aetna and twoa will be merged with other companies. i don't think anybody thought that there was going to be consolidation, and i think a lot of people are are wondering what this will mean for our premiums that we are actually paying? scarlet: unintended consequences is the way to put it here. one of the things that we should mention is that anthem has said it is actually -- it has not conversationsny with regulators in yet. they are fairly confident this will go through. hope so, they made a fairly public deal, i hope they are confident with it. and there are issues around here whether it will be cigna owning anthem blue cross and blue

shield? scarlet: there are a lot of complication's related to that brand, at the blue cross and blue shield. we've got much more coming up on the "bloomberg market day," and we've got a score card with you, and michael block will be here to discuss it. ♪

welcome back to the "bloomberg market day." i am olivia sterns. scarlet: and i am scarlet fu. olivia: let's tickle look at the top stories crossing the bloomberg terminal in the last hour. prosecutors want to know whether people moved money through banamex's bank. bloomberg news reports that a majority of the sec commissioners have a voted in favor of the directv and at&t deal. it says it would not challenge the acquisition because it would not pose a risk to competition. takenerican airlines have advantage of record profits and

they will be doubling its stock buyback program. shares ofamerican -- american are down and it posted second-quarter earnings that analyst estimates. those are your top stories in this hour. let's go -- scarlet: let's go straight to julie hyman. julie, what do you have for us? earnings, a lot of earnings. visa is higher. but it has less to do with the earnings and more to do with the possibility that it will be reacquiring a visa europe. off beforet it spun it made its ipo, that was back in 2007. it was owned by more than 7000 banks in europe. there is the possibility of it reacquiring it, and the company did come out with earnings that beat estimates, so that also helped shares as they rise by 5% today. as they rose by 5% today.

says their her shares are rising by about five point 62% -- 5.62% right now. and there is a huge drop-off in the shares for biogen idec. this is a lot to do with its sales of multiple sclerosis drugs. the company had three main drugs that treat ms. is teixeira --e tecfidera. to ridssed the forecast the forecast is here and the sales are here and the actual sales is here. the fact that it missed estimates with all three of these drugs is a problem for the

company. and another company that missed estimates is capital one financial's. the company is setting aside money to cover credit card losses and we will likely see those provisions increase this year as well. so even the biogen shares are by far the biggest declines -- by far the biggest liners. capital one financial is pretty close behind with that 12% drop right now, guys. olivia: all right, thank you so much, julie hyman. well, as julie has been telling us, we are more than one third -- more than one third of the way through our earnings season. scarlet: the s&p 500 gained more than 5%, but the benchmark index of the four-day has declined and trimmed that advance to two and a quarter percent. what is the mood of the market? joins us now.

michael, in your note, you say the earnings is a game of real-time sentiments. it has gotten faster and faster as we go on, scarlet. exhibit a in that is amazon. scarlet: it rocketed. amazon, i noted, is very overbought. earnings go not as high as planned and google goes on the road and some of the chatter on the road is that they were not delivering the earth, moon, and stars as the chatterst chowders -- . amazon stock has done well and lo and behold, it is at $100. 1.4 percentt was and what i can tell you is that

there are definitely folks who are short that stock and it happens quickly and violently it they are paring down in the stocks and paring down on the risks in light of the fact that the market was a little overbought. this moves very quickly and it is just a moment to moment thing for us. scarlet: one thing everybody off of is expectations and where analysts set their expectations. we pulled up the sale surprise percent for the s&p 500. now,he average, right companies that have reported are beating estimates by 1.5%. however,ttom line, companies are beating estimates by only -- by almost 5%. wire analyst so much better at gauging revenue growth as compared to the bottom line? revenue growth is so much more easier to massage. scarlet: we know that they can

do that too. michael: i don't know exactly how they are going to do it and therefore it is a moving target for us. olivia: and you know what they are thinking about a buyback. michael: massage and a top line is a little bit harder to do is ok, people say, it they are buying back stock, they are carving this out, therefore it is ok. it has become a really interesting game here, and i think the game is going to continue next week. the two i am looking at is twitter on tuesday night and facebook on wednesday night. again, facebook has become the darling of the momentum crowd. it's not forget, right after the stock went public, the stop was left for dead at under $20 per share, and that brings us to twitter where they had a real tough time the last quarter and a had estimate changes there. everyone loves a product and everyone loves twitter, so how are they going to make money? let's not forget that facebook, right after it went public, the

expectations were low there, the bar is low there. scarlet: one has double digits, one has extraordinary user growth. either any through-line's interns of sentiments? just two weeks ago, analysts that we spoke to said that estimates were going to fall by 5.8 percent. of course that sentiment is broadly picking up, do you see that as well? michael: we see that a little bit. it is not the most exciting thing going on. there was a lot of doom and gloom. i would say it is really about a case-by-case basis. after we saw what came out of the united technology this week, estimates are pretty low, still. a company like boeing came out and they performed well, and that is what it comes down to. i would like to see how the industrials goes on and also the retailers. capital one came out last night, again, a stock at the end of

last week, and i saw a stock that was very overbought. sure enough, they came out, they load everyone back into the pool let's just not say what everyone did in the pool because unfortunately credit losses are headed back up. what does that mean for retail? what does that mean for consumer discretionary? we're going to see that as the weeks go on. scarlet: one thing that we have noticed that the u.s. stock market can't seem to put the ball over the goal line. we get these close intraday highs but how does that fold into earnings season? on, it iss time goes may 19 where that high in the s&p futures was made, and we touched it a few days ago and we fell off that, we are away from it again. we are getting a lot of chatter. sentiment is going down. i think a lot of people are

pressing done here. i am telling guys, hey, don't cover your shorts here but don't be pressing here. if people keep pressing shorts here, that is going to set the stage and earnings could be the thing that really breaks us through. once again, the expectation is really about sentiment. right, michael block, thank you so much for giving us an idea of what the market is focused on. it is the busiest week of earnings season so far. olivia: indeed. still to come on the "bloomberg market day," will regulators actually bless this cigna and deal?-- cigna and anthem ♪

all right, take a look at shares of cigna trading well below the 180 a dollar per share

offer the anthem proposed. the proposal could create the country's biggest health insurer and that causes questions for regulators. we are joined by a biomedical ofineer and the investors cigna clearly don't think this deal will go through. what do think? will regulators give us a green light? that theonally think deal has a decent shot, i would %-60%it a handicap of a 50 probability. with obamacare, there were a lot of regulations put in place and that limits of the margins and limits the capital the company can enjoy -- companies can enjoy. run byre restrictions medicare and hhs on the exchanges. we have an election looming and

we are clearly headed into campaign season. as a result, i do think the regulatory process will be more onerous than typical. it could run from 12 months at the very least to at least 18 months. i expect at there will be a lot of pricing concessions that the regulators will ask for from the consumer for smaller employers and most likely some to vested -- divestorsesters as well. scarlet: there are some complications here because there are limitations. are some bylaws, i think one is on the national level. two thirds of the business of the combined company has to be blue branded. we have done some preliminary estimates on this, the estimate of 65 plus percent seems doable, at65% plus seems doable, but

the local level, i believe it is about an 80% threshold, that seems very global. so at least as far as the limitations of the blue cross blue shield association, they are in fact quite doable. there are other concerns, however, and i am not sure we have fully heard from the management treatment -- management team how they will address this. this is about how the not-for-profit blues in the 36 states where they do not have the blue license and they use blue card, as they call it. olivia: do you think there is a first mover advantage here? do you think it will have any impact on the aetna deal? both of the deals at this point will be viewed simultaneously. as far as the window of 60 days where both of the deals were announced, there will be regulators -- federal regulators

looking at this and state regulators looking at this. if there is one where i have to say that the probability is higher, i would have to say that would be humana. scarlet: do you think the regulators will have an appetite to do only one deal instead of two? i don't think we have seen a president where regulators have come out and said directly one deal is off the table. usually they suggest some remedies to the companies that are proposing the merger. the remedies may or may not be palatable to the companies. scarlet: what happens to unh, united health, which is the currently largest -- which is currently the largest health insurer? : if any one had to be left out of this dance, i think it was fine for unh to be. united has an extremely large scale and they are extremely diverse the find -- diversified.

--y have scarlet: just very quickly, will all of this cost savings get passed on to the customers? will premiums go down? ana: i wouldn't expect the premiums to go up, but i expect there will be a piece of it that will be passed onto the consumer, passed on particularly to smaller employers, that i'm sure they will enjoy some of the margin as well. scarlet: all right, thank you so much, that is leerink partners senior analyst ana gutpe. olivia: this has been fun, thank you so much, scar. scarlet: we have more "bloomberg market day" straight ahead. ♪

scarlet: welcome back to the "bloomberg market day." i am scarlet fu. let's look at the top stories in

this hour. anthem agrees to buy cigna for $48 billion in cash and stock. that represents a 42% increased to cigna since the last close. cigna is well below the $188 price that was offered. this represents almost a year of negotiations that were often unpleasant. they do not anticipate any antitrust issues. >> we believe there is a sense of -- there is a consensus of the overlap between these two companies. there is nothing present that would prevent completion of the transaction. swedish and the ceo joe would be the ceo of the company. and chrysler is voluntarily recalling 1.4 million vehicles. the reason is that it wants to update software in the radios to prevent possible hacking. the automaker says and no defects have been discovered but

it is doing the recall out of an abundance of caution. this includes the cheap durant grand cherokeep as well as dr. wrangles. in an hour from now, president obama will land in the country where his father was born, kenya. after landing in germany, he continues on. he will meet with kenya's president. on sunday, he will be -- as well -- he will meet with kenya's president. he is the first american president to visit kenya since the 90's. those were your top stories of the morning. it is time now to get you caught

up on market action around the world. we are going to start things up in europe where the markets have just close. thanks, well it is macro concerns that have been driving the sentiments in europe today. this exacerbated the sell off in commodities and you can see the impacts on the stoxx 600, europe's equity benchmark. the biggest downward drag has come from commodity producers and oil and gas companies. this is down by about 2%. let me show you the chart of the stoxx 600, and you can see it move as the afternoon goes on. it is down 9/10 of a percent. that is the daily trend. if we look at it over the week, there you go, the first weekly drop in three. this is the first day of losses now.

is losing streak comes after a nine-day rally. yes, we have had some better than expected earnings that have driven positive sentiments, but they have not been able to offset that drop in commodities which has proved a drag on the benchmark. let's take a look at how markets have been performing across the region. a lot of this was green earlier. a total change now. you can see it has declined pretty much across the board. in europe, we also had a disappointing manufacturing day, particularly in germany where manufacturing cooled after a drop in and sports for the first time in six months. no surprise then that the dax looks to be leading these losses and it is off by almost 1.5%. scarlet: thank you so much by showing us the european markets. coming up here on them "bloomberg market day -- the "bloomberg market day,"

peer-to-peer loans and the results, a lending bonanza. cancer drugs are skyrocketing. just how much will the life-saving drugs cost consumers? : cancerhave more from a specialist. and james smith walks us through the iran nuclear deal. those stories and more are coming up on the "bloomberg market day." hillary clinton wants to focus on not today's earnings report. be on a newus will system for taxing capital gains which would encourage a long-term investing. heare also expecting to clinton criticized active investors. we spoke with greg and john- taxon heilemann. i think her attacks on

investors, which is seems to be coming today, our ill-conceived and bad for the economy and economic growth overall. what she is attempting to do, i think, is to put some artificial impediment in the way of the free flow of capital and that seems to be a bad idea for both growth and the economy and for capital allocation. >> she wants a slide on capital gains, so if you go in and out, you are rewarded by your faith in that company. you say it makes sense, but i haven't heard the rationale for that. >> what word did you just say? i think it is latin, because i said it, it is true.

in any case, her premise is that you want investors in american companies to be a longer-term investor. right? i think she is dead wrong. >> why? because she is thinking the way that you hold the stock effects your interest in the long-term. the way you make a stock price in the short-term is to demonstrate to shareholders that you've got a better business plan over the long term that is going to produce even better profits. >> but do we even give corporate ceos the opportunity to do that? jeff bezos is the outlay or -- is the outlier. icahnceos have carl banging down their door, saying it you need to deliver to me yesterday, and by the way, after

i banged on your door and you fall at my feet, i may sell the stock tomorrow, like marissa mayer. that may be right that , whichll the stock would be great for allocation markets. stephanie: why does it necessarily make improvements? greg: in any situation this can be great or not so great, but i think the theory is, if i can get a company to go from earning a dollar a year for every year for the next 10 years in the market's expectation to instead earning $1.20 per year for the next year or next 15 years to show some growth, what happens is that it shows the stocks moving very rapidly and it shows the upside. you can make a lot of money in the short-term and you can get a company on a better, long-term path. away from this

and ask you, john, about the type of road hillary clinton walks here in new york. at the same time and that i am sure she is courting a wall street donors for her campaign, she is also in a way kind of attacking the ideals of most wall street are done many of these points. john: look, as a political matter, what she has on this point is the capital gains proposal is bringing together an idea that the center for american progress, which is a progressive, left think tank with blair f, who is a private efron,investor -- blair who is a private equity investor, there is not a lot of conformity in the equity issues. it seems like capital gains front, it may seem less controversial than the proposals that have to do with executive

compensation. what the obama administration lord, what it tried to dabble in, was that that was the sacred cow. was a lot of people learned you don't want to incentivize or change the tax code or get involved in the questions of compensation. that to me seems like a more politically explosive discussion that even the capital gains one might turn out to be. stephanie: i agree with that. would you believe in change in the tax code and historically, do you think that the consequences are unintended? greg: even if she gets the intended consequences, she will have people moving their capital from a place they don't think is any longer a great opportunity for investment to some new investment that they think is much better. so we delayed the development of nextext uber or the

twitter because the people who would be pulling their money from aeropostale and taking those gains over losses and moving their money to over -- ub er or to any text the cap service -- scarlet: that was activist , mattor greg taxin miller, john heilemann, and stephanie ruhle. and how drug companies are using people with rare mutations to find the next blockbuster drug. ♪

scarlet: welcome back to the "bloomberg market day." i am scarlet fu. let's take a look at some of the

top stories cross in the terminal right now. the government wants to know if amtrak engaged in price scheduling when a crash shut down traffic in much of the northeast. airlines include delta, united, american, southwest, and jetblue. a texas appeal court today rejected one of two felony indictments against rick perry. he was accused of coercing a public official. he vetoed funding for prosecutors when the investigative political corruption. and a surprise from the world of wrestling. ties with one cut of its best-known performers, that would be whole cogan. the company says it has cut contracts against the former per tashard -- former professional wrestler after using racial slurs. those are your top stories. genetic mutations can give people human -- give people superhuman like problems.

that dnaanies think could be the key to unlocking a host of new drugs to helping millions and giving them billions in the process. this is one of the features in bloomberg businessweek. caroline chen joins us now from san francisco. highly detailed reporting, but the question is, why no? -- why now? why is this developing now? why is this taking off at this point? e: exactly, carolin when the first human genome was processed in the human genome tookss -- project, it $13.5 billion to do. now the cost has fallen and it

$1000rting to get towards per person, and that means you can start seeing a large numbers of people and a across large numbers of databases and seeing trends and see what kind of conditions there are and look for outliers and for people who have are extreme and have really extreme mutations. scarlet: what is the most valuable part of this process? is there a database of people with these genetic mutations? having a database is truly valuable to drug companies now because you can really search for ties between what your genes are doing and what your body and how your body is behaving. the medical did community come to realize the potential power of these mutations, such as excessive toilient to -- brazilians pain or both editions like osteoporosis -- resilience to conditions like

osteoporosis? out that they found they could knock out a specific gene, but mice are not human, they are really different, so they are not always the best proxy. humans, you this to can't grab humans off the street and say, i am going to knock out one of your genes and find out what happens to you. so at the guy who doesn't feel pain, he is alike, one of the as,makers describes him nature's experiment. it explains things about the youn body and explains how and i could behave if we mimic these conditions. scarlet: that is certainly very powerful, but what does this do for the gentleman who does not experience pain? that is oneroline: of the ironic realizations i had when i was working on the story.

there may be a few dozen people in the world who don't feel pain, but it really doesn't make sense for drugmakers to be making drugs for this population because there is not a really big market for them. so talking to stephen, he said to me, he is willing to take part in research because he wants to further our understanding of pain as a whole and he does realize there is a need for good painkillers for the masses like a u.n. me, but for now, nobody is working on anything to help him. article,fascinating once again, in this week's edition of bloomberg businessweek. caroline chen joining us from the san francisco. we have so much more coming up here on "bloomberg market day." traditional lenders are getting in on the game as well when it comes to peer-to-peer lending. we are good to tell you how people want to disrupt the disruptors. ♪

scarlet: p two has disrupted the traditional lending industry. betty liu joins me now to discuss. we are not talking about traditional banks like jb morgan. no, this is a company called loan depot dock -- loandepot.com, and they have been able to make aliens and billions of dollars in loans. this is the hot thing. scarlet: like your lending club or others? betty: lending club was an ipo just a few months ago, so these join the big banks,

but the big banks want to fight back. they are coming back to try to disrupt this. non-bank lending, though, and -- scarlet: and the market overall. yes, the market overall, goldman sachs put out a report saying that the loan market is worth $11 million -- $11 billion, that is just a fraction, but it is a growing fraction. while iteer lending, is hot, lending clubs, they -- they zoomed up and now below its ipo price. there are questions as to how viable they are when you get banks coming back on board and fighting with them and

undercutting them with rates and as they loosen their standards as well as the economy coming back. so it is all going to be very interesting. this is all part of the shadow banking industry that the banks would like to see more regulated , from hillary clinton, who i know is going to be making her speech later this afternoon, she talked a few weeks ago about wanting to regulate this part of the industry more. so that could be another damper for the spirit scarlet: -- for this. scarlet: so the regulators have their hands full. betty: and it allows this whole other area to blossom. and there was a rapport issuing the about that the market is worth. have they said anything more beyond that? time, allm time to they have really said is that this shadow banking industry needs to be watched and regulated. because it is not regulated, you

don't know who the characters are. you don't over the characters are making these kinds of loans and whether their standards are -- and what their standards are and the kind of risks you make. scarlet: betty liu will be joining us in the next hour but in the meantime we are joined by julie hyman. julie: let's take a quick look at how the major averages are performing today. today as we have seen recently, it is all earnings driven. reza reports are driving down the three major averages today. let's talk a little bit more about the view of options earnings. joining me now is mark sebastian and he is coming from the cboe in chicago. nice to see you, mark. technologyking at earnings in particular, and tell me about what you see? mark: we are really seeing a theme develop in technology. a lot of times we lump it all

into one big group. but look who is blowing the doors off of earnings, google, netflix, amazon so far. let's look at who is disappointed so far, apple, microsoft, and ibm. and microsoft, they are deliverers of hardware and software and kind of direct services to the customer, where as amazon and netflix and google, they are constant deliveries. what we are really seeing -- ar content delivering. delivering.content what we are really seeing is the content delivering is increasing and with facebook, i think they are going to blow the doors off of things. instagram is still undervalued. i was -- my wife is a fashion , and the company that she ran her business through, recently had a public

offering of $3 million, and this is just a small company that nobody has heard of. so i think the amount of money that can be made in the instagram platform is huge. and if we pull back your a little bit, i think it has a really good shot over popping up in the next couple of days. scarlet: mark, i just want to get into the trade, it is also in earnings, but energy. exxon mobil is down, so what do you think is going to -- julie: mark, i just want to get into the trade, it is also in earnings, but energy. exxon mobil is down, so what do you think is going to happen? mark: like a lot of things, it shall pass, and a lot of that is baked in. right now, i can buy a call in exxon mobil that is right at the money for about the same price as the move it has made over the

last few days. this has given me a basically inexpensive look at earnings. the trade i like buying is the exxon mobil $81 call that is expiring next friday. when i looked at them this morning, they are a little over one dollar now. this is one of the biggest companies in the world and i can get a look at earnings for about 1% of the cost of the company. to me, that seems way too inexpensive and relatively cheap regarding this oil sector being oversold. julie: all right, mark, we will see how it works out. that sharesecting at exxon mobil are going to fall. we will see how the sox will perform. that is mark sebastian. don't go anywhere, more of the "bloomberg market day" is coming up next. . ♪

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scarlet: good afternoon. welcome to the bloomberg market day. hillary clinton is getting ready to deliver a speech about her

economic platform at nyu this afternoon. we will get a preview of what she is going to propose. betty: we will look at the new economics of the wonder drug for cancer and other diseases. are they getting so expensive that people could afford them -- few people could afford them? andlet: wealthy young he'rs teaching them how to buy art. scarlet: good afternoon, tgif. she has a new spring in her step. betty: i am betty liu. let's begin with how the markets are trading. it is a day for the bears. stocks are falling for a fourth day in a row. 84 pointsf by about right now. we've seen declines pretty much all week