david: good afternoon, here is what we're watching at this hour. major biotech and from cynical companies are set to perform -- deliver earnings this week. can they convince investors to jump back in? a temporary slip or an ominous shift. iphones last quarter? the market desk, where julie hyman has the latest. not a whole lot happening today. , stocksolume is down are muddling along today. today was a relatively quiet day in a busy week for earnings.

major averages are trading lower and if you look at the official polls within the s&p 500 here are the worst performing stocks in the s&p 500. apple falling head of its earnings announcement tomorrow. semi-conductor had these disappointing results. falling along with oil prices today following the general downturn we have seen recently for oil and oil producers. tough tech besides apple doing quite well, microsoft rising and introducing new products. fading in the rebound that we are seeing with those spy technology pharmaceutical shares, they report their earnings next week erie it david: microsoft -- week. david: microsoft opening up a new store? julie: they been going up over the last two days from the earnings on thursday.

let's take a look at my bloomberg terminal. what we have seen from microsoft really goes back more than 10 years with this sort of tight trading range. 20 to $40, call it, in the stock. a lot of value investors said they thought the stock was undervalued. the minute you bought it, it didn't really pay off. .hat really changed this year with these latest golf the stock is breaking out above that range. another technical indicator here, you can take a look at the relative strength index here and expand it. here,ed and green range going above this red line, these are technical signals being overwrought. broken out above that line, we will see triggers but it has not happened yet. let's get to the first

world news. mark? mark: thank you. pakistan says it will not be issuing any appeals for international health in the aftermath of today's deadly earthquake. officials say that they have the resources they need for rescue and relief work. at least 147 people died in pakistan. 33 others in afghanistan. a pakistani official says that civil and military authorities are trying their best to reach those affected by the quake. canadian authorities are taking over the search for one person still missing after a whale watching boat sank on vancouver island. five british nationals died when the boat with 27 people on board went down yesterday afternoon. authorities say that members of from ariginal community tourist community helped to rescue several passengers. it's not clear yet what caused the boat to sink.

speaker of the house john boehner is reportedly looking to finalize the budget before he leaves congress this week. they are trying to sion agreement on a two-year spending deal that would seal the borrowing authority passed the 2016 presidential election. under the plan, spending caps for domestic discretionary spending for defense and nondefense programs would be raised during the two years. filed as soon as tonight. much ham, sausage, and other processed meat is apparently just not good for you. the world health organization reports about the relationship to cancer that puts processed meat in the same category and danger as asbestos and cigarettes. farmers in the meat industry are rejecting the claims. that is a look at our first world news right now.

david, back over to you. david: i also want to desperately reject those findings. september 21, hillary clinton tweeted about pharmaceuticals. the sector has not been helped by the saga continued. over the next few days we will get earnings from big biotech companies and drugmakers. thank you very much for being here. let's talk about valiant, first of all. there was a conference call, first of all, executives responding to the allegations made by citroen research. >> a lot was set on the call. a lot of details about management coming out and giving that kind of detail with a lot of questions that have been raised for them to buy out investors. these have to go through and properons channels. they did a good job putting them at ease, saying look, it may not

be as bad as that, but it goes to investigation now. david: there was some mention of the fact that they might refer to the stc and what they have done, research wise. asthika: there will be a lot of posturing. the one risk that they alluded to as well is that there might be -- maybe not as grievous allegations as they had originally intended, but there might be some issues with the way that they issued the drugs. the may have been instances where they push drugs on the customers that they should have gotten earlier, with maybe an extra prescription or whatnot. other than that, it's all up in the air right now. shifting to earnings on biotech pharmaceuticals. is this the story that hillary clinton alluded to what it comes

to biotech and pharmaceutical's? that being drug prices priced unfairly, they are too high. david: a lot of these companies -- asthika: a lot of these comings are going to steal clear that. -- steer clear of that. they will be looking at what their numbers are and how they performed. a lot of the company valuations have been driven by these particular drugs. let's start with biotech. tomorrow we have gilead reporting. the key thing to look at here is how they are doing. we know that in the u.s. there was a bit of a slowdown because we have the so-called warehousing affect. now we are seeing strong growth, like we used to see in the u.s.. the rest of the world is bouncing back and analysts are looking for $7.8 billion for the quarter.

that is a 30% bump euro for year. is that geographical thread one that we will see throughout earnings season as well? be aka: no, it will case-by-case basis. this is a situation that was unique to gilead. they had a massive launch when they launched the drug in the u.s.. you saw some unprecedented numbers coming out. when people got super excited on the first few points, the party hit that 11:00, 12:00 hour. looking at the rest of the world, japan, they have a bit more growth out there. let's talk about vertex as well. this is kind of a niche drug? is one of these companies on the brink of a turnaround. has a highmpany valuation, but because people are looking at this particular

drug or can be, this is the first quarter we will see company reported sales at a longer had. first they were expecting a lot that was, ok come small, but when you consider the other drug that was considered 150 million this quarter, it is applicable to more than three to four times the patient population over the drug alone. analysts are calling for $.5 billion in peak sales by 2018. people are going to have a lot of eyes on this. another one as we take down the list. amgen, people have been watching it closely as well. asthika: amgen has a very steady revenue basis. comfortable, mid-single-digit growth for forecasters. sales, basically what

these drugs are our drugs that reduce your cholesterol will level. these are reprocessed numbers reported in the first quarter of the market. they set the yardstick by which we could then look at these numbers later on as well. on the status of drug development, are we seeing a lot of them come to market? asthika: right now we are having a bit of a quieter time. these drugs just started launching. stuff that we can expect to come out in the industry, it is a machine that is doing what it is supposed to do. i would actually put my necktie on and say that these drugs are revolutionary. david: thank you for your time, asthika.

coming up the next 20 minutes, duke energy is adding one million natural gas customers with a price tag of $4.9 billion. they did not come cheap. --the company buying bad paying too much to buy piedmont? sales falling to a one-year low, raising new worries. and why is hillary clinton believed my one person most likely to be the next president? ♪

david: it is time for the bloomberg business flash. biggest stories in the news right now, the second largest shareholder in square is leaving the board ahead of the ipo. he plans to stay on as an advisor but plans not to serve on the order of public companies. since been on the board 2011. that retailncerns sales growth at whole foods is slowing. often at lower prices, topline the most recent quarter. temporary workers to deal with a 12% increase in shipping this holiday season, up more than last year, fedex and tips its handling the record numbers of packages in the day after

thanksgiving through christmas eve. volume spikes are expected on three different mondays. you can always get more business news at bloomberg.com. let's get back to the markets desk, where julie hyman has a look at companies that are moving today. julie: merger monday, as we like to call it. let's start with the auto parts industry. pep boys, agreed to be bought by bridgestone, the japanese tire giant. it is interesting because it is a 23% premium to the close on friday, but it is more than 60% above where it was trading this spring when deal speculation first surfaced. the company has benefited from the auto replacement cycle in the u.s.. the average age of vehicles is getting higher and higher. nearly see shares rising to the offer price.

we are looking at a big chinese deal today. partnership creating china's ,iggest online travel service they are agreeing to a share swap and partnerships. now they are going to own 25% of sea trip as well, these stocks are rising on this news. in addition to that there is a real estate deal we have been talking about. buying apartments from equity residential 45.4 billion dollars , starwood capital. they are trying to capitalize on the increase we have seen in the home rental market. of course there is a bit of a sellingere over what these properties says about the rental market as well. finally, ice is going to buy interactive data, provider of research on a lot of different topics. stocks on billion in

this, as you can see they are falling a bit as they make this acquisition. david: before i let you go, we are going to talk about about duke energy acquiring piedmont. how are those companies doing in light of that? julie: this is a classic trade on an inquiry, duke following piedmont, natural gas is rising. the price on this is $60 in cash , a 40% premium. here we go, rising yearly to the offer price. if we have time to take a quick look at my bloomberg terminal, i went back 10 years to ligety m&a activity in the utilities for gas companies, particularly gas distribution companies. every few years we get a surgeon deal volume here, kind of interesting, but this year has been a busy one in particular. there have been a lot of new deals in this particular space. very cool.

i'm going to bring in kit connolly to talk about the strategy. why is duke doing this? mentioned, it is, and to be buying gas utility properties. a big reason for that may be the central reason, the gas side has the growth and the electric side doesn't. this is pretty much a reversal from the way the situation was maybe five years ago. david: i understand that part of this is the atlantic coast pipeline. that's correct. duquette a small part of it, piedmont had a bigger part of it. now do kaz a combined even bigger part. the reason they are so interested in that is that it is a regulated business, but once it gets approval than the regulators typically allow you to earn your money back and earn

a "fair return" on it. those are large investments, that's kind of the core of what the utility is trying to do. david: duke is not building it? kit: that's right, dominion is. they are a significant player in a variety of gas properties in the marsalis and utica shale. they have been doing that for decades. dominion has been a very good stock and i think that other companies like duke look at their situation and realize that ofestors appreciate the kind growth that you get from a gas investment. it for them worth to get another billion customers? given a long-term plans, it makes sense. they focused in their call with investors on what they are doing overtime.

they conceded to the pain of a significant premium, but they said -- let's look out a few years. we want a bigger footprint and we want to be able to make this investment while they are a smaller company. we can borrow the money, cheap capital, invested in a very good business, we have a bigger base to grow on and the future gets bigger and better from there. i want to ask you about that footprint. i grew up in north carolina, i know it as a southern company. other aspirations to get out of the northeast into a wider area? kit: they are. they said it's not just a regional idea, that this gives him a platform, a balance sheet, a set set of expertise to really move. you got the impression further outside the southeast. david: very good. kit connell it, thank you very much. still ahead, september was a bad month for new home sales,

hitting a 10 month low. what does that say about the economy? stay with us. ♪

david: welcome back to "the bloomberg market day." sales of new homes dropped 11.5% and came in at 468,000 according to the commerce department. that is a 10 month low. joining me to break down these numbers, victoria stillwell, economics reporter in rdc bureau. put it into context for us. we were talking about good news as of last thursday. victoria: the broad trend was

pretty good, homebuilder confidence was at a decade high, we had see housing starts. in new numbers that we got there were disappointing but we needed to think about it in terms of the data that we got, showing general improvement. starting in the northeast, those have the signs of the worst performance. a real decline there. what is the story in the northeast? homes fell 62% in september, but it is a volatile theory, like the entire report. we want to see if the trend has burned out. to give you some context, in 36%.t sales there were up in may they were up 108%. that series does tend to jump around a bit. sales also fell in the south. a big market.

we will see what happens in later data sets. david: we have grip -- graphs that show how those numbers bear out. why is it so volatile? victoria: to give you a sense, the confidence interval here ranges from a drop of zero point 3% to a drop of 22.8%. i think it is a reporting issue. you will get revisions later in the month. in following months we will have a better sense of it. lastly before you go, what are the headwinds they are facing? victoria: one thing that construction companies are complaining about his labor shortages. have all talked about not being able to find the skilled labor that they need, holding up the production process through a

viable landmark, they have a hard time finding those as well. we are also seeing a bit of a tight lending standard market here. we need to see wages increase here. they are likely to take the plunge. think you very much, victoria. still ahead, a look at the economic risk of dwindling water supplies. we will look at why some -- what some companies are doing about it. ♪

bloomberg world headquarters in new york, this is the "bloomberg work day." with guitar bloomberg first

world news. the education's were cut a stand,uch of back preventing officials from getting a precise picture of casualties. authorities say that more than 30 people killed and at least 147 others in neighboring pakistan. they were as far away as the indian capital of new delhi. the humanitarian group says that as many as 100,000 syrians had been displaced in the last three weeks. the refugee council says it is because of the fighting and russian intervention with a new wheref displacement troops began a ground offensive earlier this month. a new report finds that donald trump is widely unpopular among hispanics. full finds that many of

the gop candidates would probably struggle to win hit significant hispanic support in a general election. are the and marco rubio favorites among hispanics. the poll suggests that even they are a hard sell. even one of his rivals, ted cruz, has received the backing of a texas billionaire. they have given millions the former texas governor, rick perry, who quit the race last month. that is a look at our first world news. latest onind the bloomberg.com. back over to you, david. gold snap, the longest slump in three weeks as the dollar boosted the appeal of gold as an alternative investment. crude oil is lower after inventories hit the highest in the season after 85 years. weather forecasters predicted warmer than average temperatures

for the -- for the last few weeks. we're talking about water and how it affects businesses around the world. joining us now is a special advisor to the carbon disclosure project. commodities,about particularly agricultural commodities, water is very important. >> totally integrated into commodities pricing. as we all know, all the water we are ever going to have his ear and most of it is locked up in ice melting into the sea. we are losing at that way and companies all over the world are beginning to recognize that water is obviously a critical input and issue of output. what you do with it, use it, how you conserve it, how clean you keep it, these things are all showing up on the bottom line with risk management and investors being more interested in thinking about water as a business factor. i'm curious about how

willing companies are to do -- to talk about what they are doing. they are being asked by investors to disclose, the same way they would with any other plansal to explain their and uses of water. we were getting quite a lot of disclosure on this. this is the first year we actually scored the companies, but we have been collecting disclosures on water for about six years for just about. companies are getting more and more used to disclosing things, but it is a question of going through the entire company, not just the department, all departments. ,nteresting technology changes cleaning them to do it they do to make the car. they are substituting a very fine oil for the water instead. you get some economic and

technological innovation that goes with it as well that is pretty exciting. david: names and companies doing well with this. colgate.rd, toyota, david: not confined to one sector? paula: all sectors. what we are ready the mind is but their ability to integrate water planning into the end -- the entire value chain. one of those suppliers doing about water? what are the procuring departments doing about water? regulatory risks, are they tuned into policy changes? for example, in chile they face a $3 billion extra cost because of desalinated water. , butllion is a big number

we are not advocating desalinization. they begin to require mining companies to use the satellite water as opposed to freshwater. it is so depleted. huge costs could be impending as a result. david: is that often the catalyst the company will face? a big bill that makes them want to face water issues more seriously? is there pressure to think about it more seriously? what causes the change? >> for the one thing, water itself. california homes lost 21,000 jobs this year alone. the department of economic said that there is an immediate effect, immediate impulse. you have to act separately, of course.

of course, there are reputation and risk companies with consumers who are keen to have clean water. we just saw the outrage over the spill in the colorado river that was caused by a mistake by the epa. we should be. no eyes without water, very simple. david: water will be on the agenda as well? >> climate change expressed as water. we think about clouds traveling, the atmosphere is very similar to the astronauts, it's the same relationship to the earth as peach fuzz is to the peach. where waterfalls, doesn't fall, it's almost expression of clouds building up with relationship to

temperatures. when we talk about temperature rise, we are talking about it over 20, 30, 40 years, people tend to push that out, but the water impact is today. that's a very important distinction and i hope they will take that into consideration. their relate to what's in immediate day-to-day situation. i think that people cannot relate, even the most boldly, to something beyond 2020. water is today, it's not 2020. david: thank you so much, paula, with the water disclosure project. coming up in the next 20 minutes, will hillary clinton be the next president of the united states? mark halperin think so. will the latest earnings help to power the nasdaq to a record? ♪

david: welcome back. time for the bloomberg business/. another monday, another series of deals to talk about. the energy sector, duke energy is buying piedmont natural gas. 4.9 billion dollars, serving business and residential customers in tennessee and the carolinas. the other involves bridgestone, buying pep boys, bridgestone has a deal with an equity value of $830 million that represents a of 23% of the closing price on friday.

yahoo! says that more than 30 million people logged on to the first game to ever be streamed live. that's more than 15 million unique visitors. get more business news at bloomberg.com. julie hyman is standing by. we are seeing a little changed market with a bit of a negative tenor headed further into the afternoon. as david was earlier talking about the economic data from today, i looked at the terminal to see when the last time was that we saw new home sales fall by this much. 11.5% was last month, going all the way back to july of 2013 to get that big of a drop. on an absolute basis we saw it declining through last november, definitely a little some of hick up versus the other housing data we seem.

lumber liquidators is seeing a drop inspection. a top billed maker and provider of insulation to these companies. we are looking at the supermarkets today's. otr global is making comments about whole foods and sprout markets. recent check of bosa fires shows a negative trend for these companies older's -- orders. cleveland research came out to talk about and say that same-store sales may be flat. the prior estimate had been progrowth of half of 1% to 1%. whole foods has been struggling with competition from other grocery store chains that have been getting more and more into

the organic scene. david: walmart among them? julie: definitely. david: today is hillary clinton's 68 birthday and republicans may be giving her an early birthday gift. mark halperin says that clinton is getting better at managing her likability. mark halperin joins me now. a provocative titles your piece here. most likely next president is hillary clinton? mark: not a prediction nor advocacy. i think she's the most likely. if you take a snapshot of where we are now, disarray on the the fact thate, joe biden didn't run, bernie , the fact that she worked on her public presentation in a way.

state activists there, testimony for the benghazi committee. even when she is at her best she is presenting better and i think her presentation now is good enough for people to get elected depending on who they elect. what is clinton derangement syndrome? mark: it has gotten a lot of reactions and republicans say -- we are not in denial, we get it. grassroots, elites, a lot of republicans cannot think straight. they are in denial. the party right now, the

republican party, isn't doing great much to try to mitigate and lessen those advantages. ben carson was taking a double-digit lead over donald trump. benika: ben carson -- mark: carson has a lead in iowa. trump can make to arguments about that rather than be in denial about what the polls say. he can come back to iowa and start spending money on paid ads , he can maybe campaign there more aggressively, or he can say you know what, i'm in 49 other states. he may not view him as an ultimate threat, but i don't think you would mine much. i suspect you will see these polls publicly. i think that privately he will work harder and see if he can't get back in the first place. are to talk about how ben carson is doing, he

sounds flummoxed. he does. his whole campaign is based on being first. once he's not first, he will quit. he is a bit flummoxed, i would say. that a lot of evangelicals, it is a place where carson's personality played better with some. he can choose those expectations but it will not be very trump like. he can start trying to do more with the message on integration, leadership. those in second are still pretty popular now and i suspect that if you try to look at my reporting and trust my instincts , i don't think that trump will give up in iowa. the first with a little bit more. jeb bush campaign, retrenchments there, how is that

we do -- how is that retooling the focus? it involves spending more resources in those early voting states. trying to sustain traction and raise money there. wantedh is not where he to be. the irony of a guy with shock and all on the financial side, saying there was so much money that no one can compete with me, he's now acknowledging that he will have to win it another way. enough toformed well restore confidence in the establishment that he is the best person? christie,o, chris those guys are not setting the world on fire either. there is still time for jeb bush to come back. his situation is bad, bordering on dyer, but it is not the

disaster and the end of the line do some people are talking about. at least not yet. david: i appreciate that, mark. you can catch mark tonight on "with all due respect." the wife of bernie sanders joining them at 5:00, eastern time. gearing up for apple earnings after the close tomorrow. sale ofomes down to the one product in one country. we will explain, next. ♪

to "theelcome back bloomberg market day." we have the latest line from the nasdaq, looking today at tesla. >> tesla is one of the movers over here at the nasdaq. otherwise the result a lot of shuffling around. last week'sn of

moves, the good report their best quarterly sales in china tsonga face-off 1345 units, topping the first and second quarter sales quite nicely. elon musk said that china sales could match u.s. sales in five to six years. something interesting may emerge here. target is as price little more than $303. clearly some investors are out there, something to keep in mind on the investor side. apple, what is going on here, semi conductor reported a somewhat weak third-quarter.

78% of this revenue comes from apple and it is not clear in terms of what skyward's revenue is. when we take a look at the supply chain analysis it looks 67 customers, a little bit less than 5% attributed to apple. not a huge amount. some investors seem clearly concerned. david: alibaba, twitter, apple, all reporting third-quarter results. joining me to discuss, emily chang. something that abigail was what we can divine about what the company is doing based on the supply chain. emily: the number one thing that

we will be looking at is that iphone number. drives the majority of the revenue and we will be looking to see how well sales of the six asked and six s plus actually did. they added new features, a new color, the rose gold, we will be trying to look at how well they did. that is one of the numbers we will be looking at. on china there are a lot of concerns about how the chinese economy is a huge huge market. still trying to figure out how well the product is doing, if it will be a mainstream success. it looks like it will be a niche product. we were talking about the ipad in what was happening with the tablet. is that the case for apple as well?

emily: looking at 10 million compared to 48 million, the ipad is just a completely different category. they are making some changes, coming out with a bigger ipad. criticizing saying it is not the most innovative thing that could possibly do, but it is showing more signs of success for those who are finding it more useful like graphic designers and musicians. yes, i think the ipad is becoming a different kind of product. jack dorsey will be on that call, what can we expect from that? emily: it was very sobering last

time, we are not going to see the kind of the -- the kind of mainstream growth and even last ceo he before he became was making strong moves. he was giving back one third of his equity to stocks, bringing in other correspondence. former google others as executive chairman's. will be -- we will be looking at him in a black box when it comes to twitter. we are expecting some strong revenue numbers, but here we will be looking for color and his take on how he has been managing both jobs, going into the roadshow. square as far as we know has publicly filed to go public. he will be swept best-selling that square ipo and that will be a big part of his life. david: let's say that he is going to leave the board of

directors, how big of a deal is that? emily: it's not a typical that they scale back their role as they go private. mark increase and sat on the board of facebook. he could stay on as an advisor. a 17% stake in square. though, it is a bit of a lot for it to not happen there. bonnie ross will be on later. this is "the bloomberg market day." ♪

>> it is 3:00 p.m. in new york and 3:00 a.m. in hong kong. bloomberg markets

day. from bloomberg world headquarters in new york, good afternoon. i'm betty liu. markets are on the verge of closing lower as the four-week global rally takes a break. how worried should investors be about slowing global growth? merger monday. back in a big way. bridgestone buying pep boys. what is fueling the acquisitions? and what really happened at aig during the financial crisis? on why benttorney bernanke is telling the wrong story. about one hour away from the close of trading on this monday. let's go to the markets desk where julie hyman has the latest.