betty: good morning. i am betty liu and here's what we are watching this hour. the largest corporate takeover in u.k. it history. great to by s&p miller for $106 billion, a deal that will put one company in control of 30%, one in three of the beer drank in this global market. hillary clinton debates her rival. for the first time tonight, she will take the stage with fresh questions about her tenure while secretary of date. will be able to read playboy only for the articles because the magazine will stop publishing nude photos of women. what that change means for the online publishing world. a half hour into the

trading session. i want to head to the markets. julie hyman has the latest. julie: ending installing the rally that we had seen go on last week and stretching into yesterday. still down versus the 10 day average just as it was yesterday on the holiday. trading lower. one contributing factor is economic data out of china showing imports fell for an 11th straight month, the longest streak of declines in six years, adding to concerns about the chinese economy and the ripple effect around the globe. and a look at my terminal you can see the groups doing the best and the worst today. most are doing worst. it is a broad-based selloff to we are seeing flip-flopping in terms of which groups are doing the worst. andier with energy materials leading declines, right now, it is consumer staples and industrials taking a hit. financials along with it.

it is interesting here that already in the early session, we have seen a little volatility sector wise. when energy was declining, i was taking a look at oil prices because we have the international energy agency say today that the global surplus will persist next year and the global oil demand growth will convert to long-term trend levels down from where they are this year. -- stillt there is it at a softer economic outlook out there for russia and saudi arabia. we have seen oil volatile as well, though now, it is turning higher. that may be mitigated the declines we see in energy stocks. betty: bond markets were closed yesterday for the holiday. see a decrease in rates. we are seeing some buying in the treasury market. used the yield on the 10 year going down. in addition to that, to the flows we are seeing and the chinese economic data, something

else interesting worth mentioning in regard to the bond market. we heard from a federal reserve official who is more dovish. a lot of fed officials were saying we could see rates by the end of the year. yesterday, saying the central banks should not raise interest rate prematurely. a different tune than what we have in recently hearing. betty: thank you so much. let's check first alert news. vonnie quinn has got more from the news desk. thank you we start with malaysian airliners crash last year. ukraine has prompted denial from russia. investigators say a russian missile fired on rebel territory and destroyed the jet. the russian company that makes the rockets diffused that. investigators say it exploded just outside, killing all 298 people aboard. two incidents in jerusalem today. violence has hit the city in the

last month. a pair of palestinian men shot passengers on a bus. at the same time, a driver rammed the car into a bus station and stepped bystanders. two israelis and one attacker were killed. needs merkel says turkey to stem the flow of syrian refugees. its turkish with leaders speared germany is expected to accept 800,000 refugees this year. tonight in las vegas, hillary clinton will debate bernie sanders and her other democratic presidential rivals for the first time. they will be joined by governor martin o'malley and former senators jim webb. we will preview the debate during a special one-hour edition of all due respect. live from las vegas starting at 5:00 eastern right here on bloomberg tv. leonardo dicaprio's production company is teaming up with paramount to make a movie about

the volkswagen cheating scandal. to aquired the rights proposed book on the story. right now.ook you can find the latest news on bloomberg.com. betty: thank you so much. we want to get to big tech news this morning. a week after being appointed ceo of twitter, jack dorsey is making his first big round of job cuts. the company is laying off 336 employees or 8% of its workforce . signaling the resolve to slash costs. thiseeted out earlier morning, made some tough but necessary decisions that enable twitter to move with greater focus and reinvest in our growth. we are joined now with more parity sounds a lot like a ceo. we have to do these tough things. >> he does. when he was the interim ceo, he had some strong words about the product not being where it was.

it looks like now that he is in full time, he does not think the company needs more than 4000 people to basically work on one product. he is bringing down the workforce and says we need to being -- to be more noble. but the company needs to be more focused and that will be the bottom line. to $15a hit of up million in the fourth quarter in cash cost to bring the workforce down by about 8%. he is getting in here and moving and shaking and saying, we need to pair down and do it now. makes sense but it is not pointing to where the growth is coming from. understandably, he has got to cut fat twitter. what our shareholders and analysts saying they need to do? >> they need more. you see things like moments. project lightning. a new thing you are seeing in your app. it shows relevant news. it is basically aimed for the

non-twitter super users, people who are not necessarily as entrenched in curating their own feet, who are there more casually. there is criticism that there is no emergency -- no urgency to see this move. are hundreds of millions of accounts that are not being used. when you have all of these users they're trying to use these numbers to sell to advertisers, to beef up that topline and potentially make a profit at some point, they still need to figure out what exactly to do. betty: i'm looking at the stock chart here. investors like it, up about almost 6%. classics exactly. big news on the move. a lot of these changes internally were made by committees. they just were not efficient and things were not getting done because there is too much discussion going on. it seems like dorsey maybe paring back on these things so

they can be more nimble and maybe the fact that back in the day, what twitter was a fast-moving startup, that disrupted. hard to do that. they are now a big company. thank you so much. now to the deals front. time to raise a glass. is it too early for beer? the biggest beer deal in history. s&p miller to finally agree for $106 billion. the deal still faces regulatory hurdles. joining us now, matt campbell in london and with me on set is jennifer, a bloomberg intelligence analyst who covers antitrust law and m a day for us. matt, first to you on the details. 106 billion dollars. is this finally the price to get it done? at what cost? matt: i think they're probably raising a glass here. certainly not too early. it has been done, many offers

back and forth. five or six offers. almost all of them were rejected. what we have now is finally a successful agreement to create a titan of a brewing industry. one in three worldwide, half of the entire industry will come from the one company. you are an antitrust regulator, you will look very suspiciously at exactly what it could mean for consumers. you will be. one in three beers will be consumed by all of us. our the regulators going to let this pass? jennifer: absolutely there there will be rigorous scrutiny. this will trigger everywhere. we are talking about probably a year or even more. i feel this is a deal that could be fixed here no way will this go through 100% where they will have all those brands and we will be a global beer company.

in the u.s. and china and likely other places, concessions will have to be made and some brands will have to be sold. in the united states, miller competes through a joint venture. to be perfectly honest, it is a fairly straightforward ask. with that would go the miller brand and likely distributions that the center also utilizes our owns or has contract. you sort of bring things to status quo in the united states. it is a straightlaced drip -- fairly straightforward fix. betty: what about other beer makers? half of the profits will go to one competitor. an amazing situation. this was already a pretty consolidated industry. you can name just about any big beer brand and it is owned by one or four or five companies. carlsberg,heineken,

you have got to get nervous wondering what you can do to add scale against a giant that will be created. there is not a lot out there to buy. most national brewers and emerging markets will be bought up long ago. on the other side, you're getting squeezed by the craft world. it is a hard business. isn't this happening at sales are where beers slowing down. request you are right. growing somewhat more slowly than you would like to many people are turning to wine. are drinking a bit less. craft beer is really taking very serious market share in place like u.s. and the u.k. betty: does this trigger other acquisitions? classic could. as matt mentioned, there is a lot of consolidation already.

i certainly think it could. another thing matt mentioned i think could be a problem is distribution. craftally with growing beers, they have to have a way to get to the market. one thing that happens when you have a couple of big your companies is they start to tie up. self -- shelfe space. one thing to look carefully at toto make sure they get those by these craft beer is making inroads now. will theo do you think the hardest time? regulated in different markets, which regulator will give them the hardest time? >> i think in the u.s. and possibly china. ande may be some european latin american companies. in 2013, youe this had a situation where the

combined share was 47%. it was a year-long review. the same as the attorney general has now. stringentre divestitures as well as distribution. if you had a year and a lot of issues with 47%, you have got to imagine 70%. betty: amazing. before we go, what about the structure of the deal. unusual andcture more complicated than other m&a deals you have seen so far this year? >> i think it is more complex. what is going on is this is a cash and shares deal but the shares being offered are really intended for only two shareholders. most people know it. and the domingo family from columbia control just under half . if they sell for cash, it is huge. being offeredare

a funky, restrictive share >>. it will be locked up for several years. it sounds a bit weird but it gets them out of the tax bill. there is more complexity than you would see generally. it is mostly cash and an enormous amount of cash indeed for a transaction worth more than $100 billion. a huge transaction. thank you so much. much more is ahead in the next 20 minutes of the bloomberg market day. get ready for the flurry of bank earnings. the close today. wells fargo, which companies are poised to do the best. and barclays is close to naming a u.s. banker as its new ceo. the main challenge, should he get the job, is to get revenue on tougher rules and regulations. hillary clinton is his/her democratic rivals for the first time tonight. can she solidify her status as the front runner and what are

the chances and outside candidate like martin o'malley or jim webb, that they might gain traction? ♪

betty: ge agreed to a $32 million deal with wells fargo pair the bank's spying ge's corporate financing unit. folks like an emissions scandal is bringing dramatic strategy changes for the company is cutting spending on a factory upgrade.

there will be a new focus on hybrid and electric vehicles. cars tofix 11 million test that were rate to trick emissions tests. bloomberg news is reporting that , as part of the $67 billion deal, about $3 billion equity, we will put in about $1 million worth. you can always get more business news at bloomberg.com. julie hyman has a check on some of the big movers. julie: twitter has been battered this year after its cut in forecast on the departure of the former ceo dick costolo on the late for a permanent ceo to be appointed. jobs, itit is cutting was like the market is happening. reports of this

happening yesterday. a note this morning saying this could be a positive impart because if you look at twitter its costs peers, structure do not look very competitive. look at the bloomberg terminal. we're looking at twitter's revenue versus google and facebook. revenue.ch lower its stock-based compensation as one percentage of sales is also much higher. the cost structure is much higher in part because of the theer of employees versus amount of revenue it has to do if it is cutting employees, the numbers should in theory improve. other numbers we are watching is that hasing company preliminary third-quarter results below analysts had been anticipating. the company had lower-than-expected earnings growth in its management solutions business.

that told down the overall numbers. the latest cultural industry to support members, cutting full-year earnings forecast, to cut as many as 12 percent of its workforce, it has joined companies like monsanto recently, and they have been hurt by the slumping brazilian royale and just generally the slumping agricultural industry. it is a pesticide maker. you.: thank still ahead, barclays may finally have a new ceo. we have got the 411 coming up on jes staley. ♪

betty: welcome back. get ready for a string of results at banks.

jpmorgan kicks things off today. the goldmanose, sachs report on thursday, morgan stanley ends the parade next monday morning. the benchmark for the quarter and other banks. we have got our eye on another banking story. britain's second-largest lender is close to naming jes staley as ceo. is erikus now schatzker, who follows the bank for us, as well as allison williams. allison, to you on the earnings and what we might expect, what do we think jpmorgan will report and how does that set the tone? allison: the most interesting thing is trading's results. jpmorgan, city, bank of america, they say the underlying was 5%.

amorgan will have next are business solidification. trading revenue. that is what we will watch for. theyt's see what progress make on cost-cutting. revenue growth is hard to find. the only room these banks really ise to boost earnings through the ongoing cost-cutting effort. it gets boring because that has been a story for so long, it is a zero interest rate environment. once rates start to rise, the banks have operating leverage and the banks will finally see whether they are capable of delivering these results. as janet yellen told us, it is lower for longer. it was lowerught with a possible rate rise from the fed. jpmorganre is a connection between the two's

stories. the banks reporting this afternoon and the british bank looking for a new boss. the head of investment banking at jpmorgan, prior to that, the head of asset management at j.p. morgan. out, probably a fair way to characterize it, in the wake of a london trading scandal. not because of the responsibility to the london trading scandal, but something of an internal struggle, and he lost. he ended up becoming a managing partner at a hedge fund here for the time being, it is still his job. he has been laying low and he is now likely to take the job. we have got bank of america, wells fargo, goldman sachs, and all of those. is there one in particular you will be watching out for or one you think will stick out? allison: city will be of they expect toe

see some pressures of the emerging market stress. set to be setting aside more loss. planning for future losses, they do not think they will see a pickup for this quarter by planning ahead in their view. to eric's point, they will look about cost cuts across the bank. revenue is lower in the second half. i think it will be lower for companies to meet their targets. to for the the banks broader economy, what are they seeing from customers and generally. you, allison williams and erik schatzker. talkingead, we are democratic debate. ♪

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betty: you are watching the "bloomberg market day." i am betty liu. vonnie quinn has more from the

news desk. vonnie: we begin with the middle east, the taliban are filling out a northern afghanistan, and they say they are retreating to prevent further civilian casualties. u.s. and afghan forces drove them out. they say shops and markets have reopened and shop -- life is returning to normal. the us-led air strikes against the islamic state are taking a deadly toll. it's doing little to reject territories. a senior pentagon official tells usa today that 20,000 militants have been killed since the bombing started in august of 2014. stilld little ground and hold to major cities. new troops quickly replace foreign fighters. iran's parliament passed a nuclear deal with the west today, nearly two thirds of the lawmakers voted for it. in the league council can still send the issue back for discussion.

the plan makes iran scale back its tickler facilities at least to start with. vladimir putin issues a strong defensive economic policies. russia's president says he believes the peak of the nation's economic crisis has passed. the decision on the national bank is irresponsible. the e-mail server hillary clinton used was vulnerable to hackers. the server use remote access software that allow direct internet access, which has prompted warnings from the government. they are looking into whether classified messages were exchanged. that's a look at the news, you can always find the latest news on bloomberg.com. betty: thank you. staying with politics and hillary clinton, we are just hours away from the first

democratic debate starting at 8:30 p.m. tonight. five candidates on the las vegas strip. hillary clinton needs to so why she should be the front runner. and hillary -- bernie sanders is trying to show why he is the best. the other candidates are trying to get noticed. joining us is michael bender, first to you. and your analysis of this debate. hillary clinton has the most to lose, where is her vulnerability? michael: she's going chapter answer questions on e-mails. this is the first debate, generally in these first debates, democratic candidates come out with their most positive messages and there's not a lot of attacking each other. that benefits hillary clinton. clinton is going to be the only

woman on stage, we saw this a couple of weeks ago in the republican debate with carly fiorina, just by being the only woman, she will stand out on that stage. she did well in 2007 at 2008. she is knowledgeable, articulate, and this first debate -- hillary clinton should do well. the expectations should be pretty high for her. delegate, are you fired about watching this debate? -- doug, are you fired up about watching this debate? doug: i agree with michael. if you are hillary clinton, you have been reeling from month on this e-mail scandal story. you have to look at this debate as an opportunity to change the conversation. she has typically done well with this. to michael's point about being the only woman on stage, male candidates often have a real difficult time walking that fine line between being persistent and aggressive and going over the top in criticizing female candidates.

that is something that hillary clinton will have as an advantage. it works for her in 2000 when she was debating rick lazio. she should look at this is a prime opportunity for her to reset or campaign it, but she also can afford to make any mistakes. perfect,e has to be she has to come out perfect in order to keep that frontrunner status that she has right now. do we have that photo? you may not be able to see this, but there is a photo out there about podium number six. joe biden is going to do the crazy and come out on stage, and joined the debate. there is the photo. vp biden debate podium. even if he doesn't jump on stage , aren't they going to kind of be debating biden himself, just in case he does join at some point? michael: it goes to clinton and how important tonight is for

her. a strong performance tonight from clinton can take biden out of the conversation. if she can get some momentum, the argument for a biden candidacy diminishes. same with sanders tonight as well. he needs to show that he is actually a viable candidate, and a viable alternative to clinton. remember, sanders is doing very well in the polls, i that a lot of the people support bernie sanders, have never actually heard words come out of bernie sanders' mouth. this is his chance to edition -- introduce himself. betty: they are looking for an alternative. do they think republicans want biden to join the race? doug: they absolutely want biden to join the race. as a republican, i would rather have joe biden's podium then clint eastwood's empty chair. we know whether joe biden is present at the debate or not, he will probably be a question and certainly be a topic of

conversation. that is something that clinton doesn't need right now going into this debate. betty: speaking of bernie sanders, he spoke on meet the press over the weekend and spoke about hillary clinton is now taking the position that he had long held, one of them being very anti-wall street. i want you to listen to part of that conversation. up for working families in the middle class and being prepared to take on virtually every aspect of corporate america come a whether it is the military industrial complex. talk about what has to be done to turn around the collapse of the american middle class and the outrageous level of income and wealth inequality we have today. betty: mike, how does clinton defend herself as bernie sanders says you are a holly come lately on this? i think clinton is

going to have to much problem taking a harder stance on anti-wall street policies. she has already shown a willingness to do that in the campaign so far. i think the interesting thing is going to be how sanders delivers a message there. -- that message there. the words are a message that a lot of democratic activists want to hear. as we saw in that clip, sanders is not the most energetic person. he takes himself very seriously. i would be interested to see how he relates himself to a television audience tonight. betty: you have an opinion about the other guys? martin o'malley? michael: i was with martin o'malley this weekend. he is somebody to watch. he is good on the stump, good in debates, he has an aggressive message he wants to get out of there. part of hillary clinton's flip-flopping on so many issues, the tpp being the latest. at some thing he will bring up. he is good at these and something to keep up with.

all of these democratic candidates have one key difference from hillary clinton, the oppose the iraq war going into it. that is something that hillary clinton will find yourself on the defense about. candidates need to be smart and methodical about how they pursue that. heye, andg high -- former deputy chief of staff to eric cantor and michael bender, a bloomberg politics covering this for you. tune in tonight for a special respect," livehe from vegas, right here on bloomberg television. much more ahead of the "bloomberg market day." may extend the longest losing downk in 10 years, imports 17% and other warning signs for the country's economy. playboy magazine has a major shift, it will no longer publish photos of fully nude

women. the magazine seems to have larger leadership -- readership from this move. what is fueling these megadeals after choppy waters in the market? ♪

betty: welcome back. just over an hour into the "bloomberg market day." time now for the business flash. j and a $10 billion share buyback, twice the amount budgeted last year. their third quarter profit beat wall street estimates led by the u.s. consumer health business. upscale burger chain smash burger is selling a 40% stake in the largest restaurant company in the philippines. smash burger says the $100

million deal will boost its international expansion. they run more than 3000 restaurants. starbucks started deliveries today in the empire state building for two dollars fee. the company says workers in the newark landmark -- new york landmark can get food and drink develop -- delivered in half an hour. if it works, they will extended to other new york links. pretty cool. you can always get more business news at bloomberg.com. time to get you caught up on the action all around the world from hong kong, to london, to the nasdaq in new york. mr. global market check. let's start in asia with the nikkei dropped 1.1%. the hang seng was also dropped about .5%. the shanghai composite index up .210% -- when 2%. more red flags as income slumped for the 11th straight

month. china surprise you when -- yen devaluation gave a boost exports. 3.7% in dollar terms. the three-month of contraction is hardly cause for celebration. the mystic demand mainly comes from the -- domestic demand comes from falling prices, and extended the longest moving streak in six years. china's trade surplus to $60.3 billion. will they bow down to market pressure for a weaker yen? betty: let's have europe where mark barton has the latest from london. mark, we caught the winning streak yesterday and we are continuing to dig in our heels on this. market: wayne on china. that is disappointing, import numbers dragging down numbers across europe today, stocks are

falling for a second day from champs to chumps. miners entered that nine-day winning streak, which was the longest winning streak in 15 years. that comes to an end. check out glencore continuing to fall, down .3 .5%. millerpside is as a.b. --sabmiller. is why are those shares trading below the offer price, andrew holland says it is misplaced fear that the deal won't happen. we will believe him. have a look at what's happening to lvmh, the third worst decline or in france today. the biggest luxury goods company reported third-quarter fashion and leather goods sales that trailed analyst estimates. that indicates softening demand in china, leather, fashion is

the largest division. this is interesting. sterling has fallen to its the eurovel against since february, eight month low. why is that? consumer prices in the u.k. have turned negative for only the second time since 1960, betty. -.1% year on year. that hasn't happened since 1960, pushing out expectations for rate hikes in the u.k.. of a divergence because economists are saying it's going to happen in the second quarter of next year. traders are saying we're not going to get a rate hike here until the last one third of next year. have a look it's what happening -- at what's happening in the bond market. the most interesting story when it comes to the macro side is german investor confidence, which fell to the weakest level in a year.

we have a german volkswagen emission scandal. worries about emerging market demand as well, china of course highlighted that issue today. it comes after a week of factory orders, industrial production, and export data as well. the second days declines, betty, up to six days. i enjoyed that winning run. betty: you did indeed, mark barton in london. we are back with him in the next hour for the close. with a look at how new -- how markets are trading, matt miller is up. up .1%.e nasdaq is a number of down arrow stories, starting with the airlines. jetblue came up with passenger seat,evenue per available only up about 1% in september. of 3% in august, it is slowing down. analysts don't like to see that,

as a result, j.p. morgan cut their rating on jetblue to a neutral from an outperforms, saying there isn't the gross there they want to envision. the price target now only $27, down from $28. a number of downgrades across the airline sector, including american airlines trading at the nasdaq, downgraded by ever-glory isi and alaskan at ever corp.. earnings were in line on the eds, but just not making it there on the revenue side. that is a theme we see across the market on all listed stock today. it's particularly worrying because it's not optimistic that the economy is going to recover, it's disappointing that the slowdown based on september sales. they said they have finally found a full-time ceo, the cfo who has been with the company since 1996 is going to step up into the top job. their current ceo will remain chairman of the company.

i want to talk about angie's list today. tcs capital came out and said not only does it own a bigger stake than we previously knew about, it previously owned 7.8%, now it owns 9.1%. it really wants to recommend to the management team that they should consider combining with another company like home advisor, according to tcs. it's the third largest shareholder, this kind of activism has been known to shake things up. they want angie's list to get together -- whether that's buying another competitor, being bought by another competitor, or maybe a merger of equals. back to you. betty: maybe. matt: never. there is such thing as a merger of equals. betty: matt, we will get into that another time. matt miller at the nasdaq markets. still ahead on the "bloomberg --ket day," playboy magazine that's a story matt miller would like. they are making a huge decision. hugh hefner says no more nudes

in the magazine. we will have that story, coming up.

betty: welcome back to the "bloomberg market day." i am betty liu. starting in march, men may start reading playboy for the articles. nudewill stop posting photos of women, next spring when the magazine relaunches with a new design. publications, playboy has fallen victim to the digital age. paul sweeney joins us with more. it's an interesting retelling of what happened, the ceo wanted you have to's house and nervously propose this idea, and he left her said yes. if you have to recognize the internet has made a lot of content in the playboy magazine kind of irrelevant today. -- even hugh hefner had to recognize. milliont was above one

in circulation. paul: down for probably 5 million back in the day. it's trying to reinvent itself and carve out a niche where it thinks it can thrive. the magazine say they are targeting young men in urban areas, they are trying to target millennials, trying to be smart and hip, and having a pictorial isn't that -- betty: is that because the same customers can get the same kind of pictures online? paul: they can get that and more online. it's not the calling card for the magazine anymore like it used to be. when you think about playboy, it's really a licensing company. the magazine loses money, but it is a great promotional vehicle for the brand. the real value of playboy, the company, is in the brand, its logo was one of the more recognizable logos in the world along with apple and nike. it is all about licensing their

brand and their logo around the world, and they put it on all types of things around the world -- everything from liquor, glasses, everything. it's a very well-recognized brand. it's a very well-recognized brand. the magazine moves money -- loses money. is this a move to make it profitable? paul: they always try to redesign the magazine as trying to change. this is trying to broaden the audience a little bit, to really target younger, male oriented demographic. maybe even some females as well. there are a lot of magazines that are in that niche, you think about men's health or fhm or maxim, there are a lot of titles and a lot of competition there. but there's also a lot of advertising dollars there. i think the company is trying to say we certainly have this great brand, this great logo, let's try leverage this brand some other way in the magazine space

and see if we can carve out a niche. could do you think there be other advertisers or different advertisers that may come on board with this move? paul: i think so. they are trying to expand circulation and the number of advertisers that may be willing to advertise in the magazine and see if they can broaden their readership for the magazine. hopefully attract a broader list of advertisers. betty: because of magazines, i don't know if you saw the latest star in a magazine, vogue on snapchat. can we release photos? kind of breaking the mold here of what is silicon valley ceo looks like, he's wearing corduroy pajamas. i think it's pajamas, and a coat. it was funny, it went viral overnight. there's a story out about snapchat and how they are struggling with their audience. they wanted to put together a snap channel, and they snap --

they scrapped that. snapchat obviously has a great presence in the marketplace. a lot of people of the platform, there are a lot of users, the user base is growing. in a lot of internet companies and social science, they are trying to monetize. it's advertising, it's subscription. they are getting into video or those types of things. of these companies that are experiencing rapid user growth, investors are saying we want to see even more user growth. they are always trying to reinvent the wheel. snapchat will have hits and misses, but they are still growing the user base. betty: average people should remember those photos are permanent. hoodies.ody's -- no betty: paul sweeney from bloomberg intelligence. much more ahead in the next hour of the "bloomberg market day." global m&a deals are on track deal, the biggest

corporate takeover in u.k. history. that's on top of the dell emt deal that was announced yesterday. we talk with the head of global m&a at jones day, about the state of the market. that's coming up at the top of the hour. before we go, a quick check on how the markets are trading about 90 minutes into the session. we're coming back from our losses, maybe some of those m&a deals are helping. the s&p up .1%. we will be back. ♪

betty: welcome to bloomberg market day.

♪ good morning. i am betty liu. here is what we are watching. the newr glass to beer market. eber will control about one third of the global beer market. johnson launch a $10 million buyback plan. the housing commodities slumped impacts efforts to fix decaying roads and bridges. we are about 90 minutes into the trading session. julie hyman has the latest. we are now up. stocks turned around.

volume is lower than the 10 day average. relatively easier to push the market around. notable, we are seeing stocks in the green, even as chinese imports fell. that was putting pressure on stocks. importsre here, chinese , all of the down bars are declines. we see that for 11 straight months. stocks rising in the face of that. ,f you look at the chinese etf both of these holding up well. we see the a share etf turn higher.

one commodity that has not managed to be resilient is copper. copper prices are lower right now. down about 4/10 of 1%. let's talk about oil. julie: oil was down yesterday. it looks to be rebounding today. up 2.5%. the increase is interesting. the oil glut is going to persist fear. the fix is on a long losing streak. falls, it will be the 11th ring -- session overall the 11th straight session.

betty: let's check in on first word news. vonnie quinn has more. investigators say a russian-made missile brought down the boeing 777 in ukraine last year. the report says ukraine should have shut down the airspace. all 298 people on board were killed. more violence in jerusalem. attack. three israelis and two attackers were killed. report underscores the issues europe is having with migrations. is number of migrants morning than twice the total of all of 2014. more than 710,000 migrants arrived through september.

vladimir putin is defending his economic policy. ofsaid he believes the peak the economic crisis has passed. hillary clinton versus -- when democratic presidential hopefuls meet for debate. vegas and is in las is hosted by cnn. tune in tonight for a special one-hour "with all due respect" on that debate. that is starting at 5:00 p.m. eastern. that is a look at our "first word" news right now. betty: thank you. 2015 could be the biggest year for global m&a. of mergers1 trillion

and acquisitions were announced in the third quarter. this week, we have seen the biggest tech deal. dell agreeing to buy emc and we -- to buy -- beverage. the head of globe are m&a for just day. mn day might take a hit. what happened here? >> there was a bobble in august. it did not change the pipeline. the m&a pipeline. companies are delivered --

delevered. they are trying to make themselves better. they haven't wrapped in this it wrappedthey have in this context where they are looking for return in capital, not just ee, not just growth, not just the stuff we measure stocks by. what are you returning on? betty: the money is cheap now. notrt: the big banks are lending that much. look at these last two deals. ding istion-len profitable for big banks. they are lending to credit-worthy parties. amount of leverage for the dell-emc deal is a sign of that. robert: including, i do not know

the details about the beer deal, there may be some high-yield debt in the dell deal. there is plenty of money available. .ceans of money available companies need to grow. what has driven it this year. it is not about getting bigger. bigger, we will send her guys, we will be more profitable. it is about being better and it is about on return on investment. betty: how can you say it is not about getting bigger? at the end ofok deal and do i have to redefine

what it is? this is a strategic transaction. part of this is about the e.m., emerging markets. it is slowing down short-term, but these are big companies. predictions are hazardous. anything is possible. anybody who says they know what is coming, forget it. betty: it may be easier to predict m&a than the company. there is no question they will break the 2006 record. one thing about the bloomberg numbers, people were worried the number deals were down slightly.

as of september 30, the numbers were up. you see a lot of companies looking at modest deals. activity in the pipelines for investment bakers -- investment bankers and all the rest of it, they are just bursting. what about the valuation being paid? it is different. in the old days, it was we will pay, synergize, that is what you said in your press release. pe-based. was today, it is still that. ist shareholders are asking what are you doing with that balance sheet. how much are you returning on

that investment capital? what is driving this reconfiguration, not just mergers. it is making companies better. when are we going to get a lot of mergers in energy? we had the shell announcement in the second quarter. going to be a lot of -- betty: i thought you would see more. you are going to see more. b end of this month, you will see the new companies. they have reverse space loan calculations that come out at the end of the month. there will be a lot of shotgun weddings that will have to happen.

things.e combine it, synergize, survive. you will see a lot of distress deals. you see the coal space, what will be left, it is a tough contest. valued lessnies are than actual assets? it is ridiculous. they are empty. a tough space right now. we expect energy to be among, if m&a last most active quarter this year and first quarter next year. what is going to die down? we have had so many drug deals. are we done? hard to say. you look at the level of activity, some of the people ask us what are going to be the hottest areas and a not so hot.

it is across the board. spot. is in a funny i think it is broad. it goes back to the fact that last year, $1.1 trillion of stock was bought back i companies. that tells you something. they were investing in their own stock. investors were saying ok, we want you to do that, but you have to invest in your own business. you have to have something long term. it becomes financial engineering after a wild. robert, thank you so much. much more ahead in the next 20 minutes. we will hear from brendan backed out. -- brendan bechtel. we will find out how they are dealing with falling commodity

prices. sales in key drugs is lagging. a big buyback program. twitter cutting up to 8% of its workforce. we will hear what jack dorsey is saying about that decision.

coversbechtel group energy, metals, mining, and infrastructure. this map highlights projects in

north america alone. how is it reacting to economic shifts? brendan bechtel is the ceo of the company. alix: a great pleasure to have you with us. when it in the trenches comes to commodities. have we hit the bottom in prices? brendan: it is hard to predict that. we think about commodity prices, we think of five to 10 year cycles. across the range of commodities and customers we serve, if you look at the five year cycle, the value is half. about how help think we can help them do more with us, to continue to build major capital projects in a constrained environment. alix: your business feels the impact in the early stages of the business cycles.

where are we in the cycle. they you expect to feel bomb? -- when do you expect to feel the bump? gas customers are talking about 16% to 20% reductions. they have said what can you help us do to become more competitive? how can we innovate and do more particularly thinking about jobsites in the future. can we use big data? faaeceived the first license and authorization to operate drones commercially for the first commercial operator. we are pushing the limits of technology to help figure out how can we be more innovative and help our customers do more with less. i am not sure there is a whole much more to go down.

alix: your competitors, the stock prices tracks the oil price lower. those competitors be trading? brendan: the way i would think concentratedow all are they in different areas of the market? we are more concentrated in the that -- in the gas value train. while we start to see the oil gas spread eroding, it makes -- of the products fell.your backlog

where are you now in your backlog. what segment, what countries are you seeing the least demand from? brendan: our backlog was at a record high. that was not normal. we were unusually fortunate with the work that was awarded at that time. we are trending back towards what would be normal for our company. we have the most robust backlog of any engineering company in the u.s. the game for contractors is about making sure you have diversified backlog across geography and industry sectors. we feel we have that. alix: where is the weakness? brendan: the oil markets are the toughest. we benefit from being more focused in the gas-value chain. that is coming under pressure. 80 to 100 liquid --

alex is the other part of your business is you raise money for projects. projects widen over the last few months. how tight is the credit market from where you sit? brendan: it depends on who they -- lending to waste to. we have a track record that allows us good access to credit. the credit access is not an issue, so much as finding the right deals. we invest in as much as is thesel for making sure projects happen. we are not a significant investor. the weakest country you see? aside from china. brendan: in terms of what? alix: finance. --ndan: i would have to say

there are pockets of brilliance everywhere. obviously, the decline in chinese demand for key commodities we focus on, particularly liquefied natural gas, copper, and aluminum, a lot of that is driven by lagging demand from china. alix: still china. we cannot seem to not blame china. thank you. betty, back to you. they: she was with president and ceo of bechtel, brendan bechtel. we will be back. ♪

betty: welcome back. our first story -- jack dorsey's first big move since being named ceo of twitter. theill cut about 8% of workforce. most will be in the product and engineering departments. twitter moreo make accessible to users. ge selling finance units. wells fargo has agreed to buy assets. among them, financing for manufacturers and distributors. a ceo has been shrinking the finance arm as he focuses more on industrial operations. homebuilders are being affected by a shortage of builders. the 700,000most fewer construction workers to handle the load.

you can get more boot -- more business news at bloomberg.com. julie hyman has a check of the company movers. julie: humana in the process of buying aetna. humana reaffirmed its forecast for the third quarter. shares up 2%. shares of at not have been rising. why is this good news for the stocks? humana said the cost associated with its acquisition of at not, they are not changing. it is previous guidance the company gave up -- gave out. acquisition is expected to close sometime next year. after ahave exposure brokerage said gaming revenue was stronger than expected. revenue, 9.1 billion during the first 11 days

of october. that is according to credit suisse. good news for las vegas. las vegas sands better than 2%. a look at the revenue estimates, below this line, negative decline in revenue. the dotted lines are estimates for both companies revenue. partly becauseve it has been so bad. betty: thank you, julie. still ahead, betting on a buyback. we will go through johnson & johnson earnings. ♪

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what. you don't have a desk bed? don't be left in the dark. get proactive alerts 24/7. comcast business. built for business. tand that's what we're doings to chat xfinity.rself, we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. betty: midtown manhattan, you are watching the bloomberg market day. vonnie quinn has more from our news desk.

says someadimir putin countries have quote oatmeal in their heads. they do not understand russia wants to help the fight against terrorism. he is speaking in moscow. along route -- a long-awaited report on the malaysian airline that crashed in ukraine. a russian missile brought down the plane, killing all aboard. -- from and where area where russian rebels had been operating. in jerusalem, an outbreak of violence escalated today. ao palestinian men boarded bus and stabbed passengers. another attacker rammed a car into pedestrians. three israelis and two attackers were killed. joe biden will not be at the presidential debate on cnn.

persuade biden to run. will run an ad before that debate. biden has been considering a run for months. tune in for "with all due respect." will be live from las vegas at 5:00 p.m. eastern. that is a look at our "first word" news. our newsnnie quinn at desk. on the markets, shares of johnson & johnson trading around the unchanged mark. the largest pharmaceutical maker is out with earnings beating analyst estimates by four cents a share. , likeortant drugs arthritis medication. cynthia. bring in

she covers johnson & johnson for us. also, jeff. cynthia, let's start with you on the numbers and what they show cynthia: a bit of a mixed result. in terms a clear beat of this drug or that drug was the reason behind it. revenue was not as strong as was expected. a better tax rate. it was not a beat where they are able to grow the franchise. what investors are looking for a strength in the pharmaceutical business. more of the growth is supposed to be coming from. betty: and, is that how you would. almostast year, they had $2 billion in sales of alessio.

adjust for those things, they grew 5.5%. that would be good. betty: but they have the headwind. this is the interesting topic of conversation. what are they going to do from an m&a perspective? they announced a $10 billion share buyback. day is putean in and a is put onthat m& hold? that is not the case. it was up there in terms of looking for opportunities. betty: we have a comment from dominick caruso on this. what are you doing with this capital and why put it to a buyback? >> we have a copper allocation

strategy that starts with paying dividends, followed by value, then we consider other ways to return value to shareholders. betty: does that make sense to you? jeff: they have been looking on fronts. i would like to see them get back to their strategy, smaller acquisitions and licensing. why don't you think they are doing that? are looking. valuations are high and they are conservative. i am glad to see the share buyback. i would like to see it on an ongoing basis. returning cash to shareholders every year. if they can get an extra 2% to 3% of earnings share in by that, that would help. betty: have they been inquisitive on the buyback front? it became a hot bidding

war. with -- on thes drug. they have revenue from the drug. onre are a lot of questions whether they paid too much for that asset. they demonstrated a willingness to be disciplined. we see some fallout in the biotech or's -- biotech sectors. it is not necessarily that straightforward. disciplined is the word i would use to describe the management team. betty: the way they look at allocating capital. what about targets now? not think there is anything public i have heard about. they are active on the venture capital fund. of small,a lot minority investments. they get a call option to

inquire if it looks -- to acquire if it looks promising. betty: cynthia mentioned headwinds with the currency. johnson & johnson operates all over the world. emerginghey in markets? cynthia: they brought that up on the call, relating to devices. they are seeing pricing pressure in that business. not necessarily a surprise. a sense of bearishness on what is going on in the markets. it will be interesting to see how this plays out. what johnson & johnson says tends to be similar across the industry. we should expect to hear similar things. betty: what about raising drug prices? cynthia: they have never been as

-- jeff: they have never been as aggressive as other companies. they are one of the more conservative players. betty: why? jeff: they are focused on developing new and innovative medicines, not acquiring legacy things. when they come out with a new diabetes medicine, they can command a premium price without controversy. that is the strategy they stick with. betty: thank you for joining us. much more ahead in the next half hour. we are going to look at stocks moving in the nasdaq, including jetblue. shares falling more than 6% after jpmorgan downgrades jetblue. we will tell you why. jack dorsey announcing he is cutting eights percent of the workforce -- cutting 8% of the workforce.

ishael purvis, why he cutting estimates of the s&p by 13%. what is he worried about? ♪

betty: breaking news. -- going to close their macro funds. that is being confirmed by the fortress group. they are cutting dividend paying share accounts by 13% and redeem operating units. he has been overseeing the macro fund.

some facts about it. about $2.3 billion as of june 30th of this year, fortress saying and confirming they are going to close the macro fund this year. shares halted at 11:00 a.m., pending the news. on two other business stories. a big change for apple's imac. they are adding retina displays that will enhance and detect image quality of photos and videos. has nott years, imac gotten that much attention from apple. bankers says just daly is the top choice to run the bank. ceo was bob diamond, resigning under pressure three

years ago. a coffee chains as worker in the new york landmark and get food and drinks delivered within half an hour. if it works, starbucks plans to expand to other new york buildings. you can get more business news at bloomberg.com. european markets closing for the day. let's head to london where mark is standing by. mark says european stock fell for a second consecutive day. the 11th straight decline in imports. badnews out of china means news for the mining industry. nine days of gains, the best run since 2000. two days of losses. were hit hard today

after switzerland said to impose a 5% leverage ratio on its biggest banks. data, or should i say deflation data? is that going to delay the bank of england when it comes to interest rate hikes? german investor confidence fell to the weakest level in a year as the largest economy stands to suffer from the volkswagen in missions scandal. emergingowth in markets. r than thisove company. 44 pounds per share. a 50% premium to september 14. the speculation surfaced. what is interesting, it is

trading below the offer price. the deal faces months of scrutiny and antitrust regulations around the world. will that derail the transaction? sap shares up 5%. , it is arter sales sign the software company is making a transition to the cloud without sacrificing margins. leone, worst performer. it will miss its 2015 earnings target. back to you. mark, thank you. for a look at how the u.s. markets are trading, matt miller has the latest, live from the nasdaq. tesla, trading up 2.6%. an interesting market story.

jim chanos said he wanted to short it. about 1000 media outlets came out with why he was wrong and tesla shareholders are loyal. that could be a reason it is up. on its ownpublished website, a couple of reporters were caught trespassing at the giga factory. they got into their car and ran into a tesla employee and were arrested by the local sheriff. on theirheck it out website. interesting stuff. bottom line, everyone interested to know what is going on in that factory. a couple of reporters climbed over the fence to figure it out themselves. a couple of social alerts. up that will set tell me when a stock is off more often than usual. coffeeppened for curing

-- keurig coffee. yesterday, i was talking about the stock. today, it looks like it is coming back from the drop. it got a number of mentions on social media. a writeup, saying to short the stock, but it is gaining a little today. jetblue and american airlines, both listed on the nasdaq. jetblue got a downgrade from jpmorgan, they were worried about the passenger revenue per -- per available seat mile. only 1% growth from september to august. 3% growth in august. a lot to go through at

the nasdaq. back to the breaking news. getting more information from the fortress investment group. might know the gratz -- mike beogratz is going to retiring from fortress group and will be stepping down from the board of directors. investment group is going to buy out his shares. said, we have, he had a challenging two years. i do not believe the environment is conducive to achieving best results. under management, about $2.3 billion, that represented 3%. of assetspresented 3% under the entire management.

fortress investment group closing down there macro fund. ahead, including be big news out of the west coast. aitter announcing restructuring plan, including cutting 8% of the work force the stock is rising. emily chang joins us now with the reaction. emily: this is something we were expecting. when the permanent ceo was named, they would have to make hard choices. 336 jobs here, 8% of the workforce. company toexpect a have to refocus like this. twitter has some challenges ahead. jack dorsey said we feel strongly that the engineering

team will move faster with a smaller and more nimble team. this is not easy. it is right. most cuts will come from engineering and products. the goal is to enable twitter to ship products more quickly. there has been overlapping responsibilities, decision-making. twitter wants to move more quickly, more like a start up and get back to its roots. mentioned engineering where we would see those cuts, where do you think we will see the most impact? what is going to see the most change? emily: hopefully on the front end. we are not just talking about twitter, we are talking about the vine, periscope. twitter unveiled its new moment feature. been interesting to see the traction. this is supposed to give more

mainstream twitter users access to content surfacing around big easily, more excessively. for example, the blue angels were performing and there was interesting content on moments where you can see from the pilot's point of view. to see things that cater to more mainstream users but does not alienate some of ore users that love twitter the way it is. ahead on the bloomberg market day, we check on the options market. ♪

betty: welcome back. time for options in sight. julie: let's look at what stocks are doing now.

aeing a little rebound after lower open. we have given that up again. volatility in the session. joining me is kevin kelly. i find myself wondering why there is not more direction and at volume is down. we are drifting now. what is going on? waiting forone is earnings, to see what sectors will perform in this lower interest rate environment for a longer time period. we see the leaders are the former laggards. oils up, materials and industrials up. some interesting things happened last week in the markets. staffers do not think we will get inflation above 2% until the end of 2018. julie: we heard an officials say

we might want to keep rates on hold. we have not been hearing that from other fed officials. kevin: we may have negative deposit rates. fed is in this quandary, too. until we can get tax implementations, we are relying on the fed for everything. julie: you are not the only one expressing this view. it is being placed into the market at this point. is realhere opportunity. julie: from trading perspectives, what you do about that? kevin: you can follow blackstone. there is a 15% discount in the public markets to what the he has done two

acquisitions. that is pretty telling in the market. you want to get to market leadership that can increase dividends and their m&a. julie: why the nasdaq 100? tech has been nowhere in that conversation. you want to take a look at the top 10 constituents of the nasdaq 100, that comprises roughly 50%. apple, google, comcast. you have leaders in the space. they can do this year repurchases. low rate environment, we do not see profits grow. they can please shareholders with dividends. microsoft has a great dividend. google is ringing out there expensive -- wringing out their

expenses. you are buying a leap. it is a long-term callout. you buy the 4400 right here at this level. it cost $350. you get exposure to those leaders on a global basis. currency settles in and the dollar does not have impact on tech and health care. bio techs go back up and you can participate. if the markets are up 8% by then, it is a good bet. julie: more market day, coming up. ♪

it is new in new york,

5:00 in london, and tonight in hong kong. scarlet: welcome to the bloomberg market day. in new york, 5:00 in london, and tonight in hong kong. from bloomberg pulled headquarters in new york, good tuesday afternoon. alix: here is what we're watching their financials getting ready to flex their muscles. major bank earnings begging in earnest -- beginning in earnest. jpmorgan out just hours from now. ab inbev of thing hits proposal to sab miller. if approved, they would command 30% of global beer sales, so how went to shape the industry? democratic presidential candidates take the stage for their first debate tonight in las vegas. none more watch than hillary clinton and bernie sanders. scarlet: we start with today's activity in the markets. let's o