from bloomberg headquarters in new york and the good afternoon. investorsding is more speculate they will rise rates later this year. well i gift card be enough? cisco teaming up with ericsson in a deal that could net each company $1 billion a year. julie hyman has the latest. julie: some news just breaking in the past few months that involve the railroads. norfolk southern may be the target of an acquisition offer from canadian pacific. the two companies are in early stage talks. canadian pacific is trying to raise financing for this deal. the deal might not have been in the end. nearlyare rallying by

5%. this company was worth $24 billion before today. we could be talking about quite a large acquisition the shares of about 11%. interesting possibility. let's turn to the broader markets. we are seeing some selling across the board in stocks. all three major averages down more than 1% and we have the juncture toward on writing emphasizing the idea once again that the fed could raise rates at its december meeting. stocks actually held up relatively well on friday and it is only today that we have seen these big declines. if you take a look at the imap we see it is pretty broad-based selling today. consumer discretionary spending down i more than 1%. and a lot of selling today in the wake of the jobs report rate david: what happened in the bonds market? stocks, not buying it

bonds. there is this expectation that rates are going to move higher. the two year yield is unchanged at about a five-year high. the 10 year continuing to move , its highest since july. an expectation that the fed will be raising in december. as for the dollar, which you would think would be moving higher on the expectation, it is not happening. the dollar falls versus the yen by the euro and the pound, a versus the greenback. something that was pointed out today, if you take a look at my bloomberg terminal, he dollars third raises the specter of fed warnings. when we saw the dollar rallying early last year, the fed commented that the strength was a risk to the u.s. economy. and then similar commentary coming in september. both of those comments caused the dollar to fall. but there seems to be

interpretation about the dollar once again. david: thank you. let's get a check from the bloomberg first word news. work has more. mark: thank you. -- excuse me,a following weeks have pressure the president of the university of michigan has stepped down. in their first face-to-face meeting, president obama and the israeli prime minister says they have not given up on the pursuit of peace in the middle east. the two leaders spoke at the white house is violence in the region continues. at the prospect of the deal between the israelis and palestinians appears elusive. >> i also will discuss with prime minister has thoughts on how we can lower the temperature

between israeli and palestinians, and how we can get on a path towards peace. mark: the relationship between the two men grew cold over the u.s. back to nuclear deal with iran. following than meeting with prime minister the president promised a full investigation into an attack in jordan today that killed doctrine people, including two americans. u.s. officials said today that those killed were part of a state department police training program. willa's federation said it defend itself against systematic doping accusations. to sanctionsad against traffic, including possible suspension of the national athletics federation. the acting president said russia should be banned, and that they are not objective and that any doping by russian athletes is

systematic in nature. you can get more of these and other breaking stories 24 hours a day on the new bloomberg.com. i am mark crumpton. back to you. david: thank you. the possibility that the federal reserve may raise rates as early as december has investors concerned. iny dropped for a fourth day a row after approaching a record high. let's bring in mike regan. wlk me through what you think happened here. this breach of report comes out with everything seems well and good. investors have the weekend to digest and then it is that this morning. everyone willsure come today and had a change of heart and change their minds and especially with the shanghai strongte of pretty today. we are just bumping up to these levels that the rallies have faded in the past. above 2100 and the s&p 500 seems to be the lead on the jar for the time being.

we are testing it again on friday last week and not quite getting there. obviously the fed plays a role in the background. and a lot of this could be about valuations in the long run. at about 18.5 to 19 times earnings, 16.5 to 17 times thatrd 12 month earnings, seems to be about as comfortable as investors want to take this market. and peopletes go up are less inclined to push valuations up. you're kind of beholden to what investors think is a fellow evaluation. it is better than getting overblown and overshot and bubbles of the past. we are very late in the business , earnings have flattened out. the market is not getting the head of steam it needs to break through these new highs. i think the fed plays a role in

that and this notion that the rate hike is a lot closer after discharge report is there in the background. but i think it would have taken a lot more to get this through to those new highs. the market seems to be wanting to die right at the 21 level in the s&p 500. david: what you have heard and what you have read is that investors are worried about the rate hikes. people are certainly worried about his, and all the ramifications that can come from if china decides that higher rates mean that they need to devalue their currency again. that is lingering in the back of goal lines. i was reading an interesting commentary at federated investments. he said he had a lot of dinners with his hedge fund buddies recently, and he thinks they are all way too worried. that.of guys like to see they like to see this abundance and worry about everything out there. that means that people are not going to get to bullish and they are not going to overshoot the valuation of the market and take things too high.

but what it does mean is it means a lot of people are left to change their mind and get bullish as time goes on. that worry that people talk about can be good things in some people's minds because it allows for people to change their mind and you can only go more bullish from those depressed levels going forward. surprising that we fear out of this 2100 level in the s&p 500. there and is more or less to where they'll probably face throughout the year. we were talking about the tight range before the august volatility. he we are now and we are bumping or head against the same glass ceiling that we did earlier in the year. david: what will investors be looking for this week when we get information on consumer sentiment? is a consumer sentiment big number. university of michigan all is expected to improve this month to a pretty strong lumber. saleso have retail expected to increase about 0.3%

over the month which is decent. it is not blockbuster, but decent. and excluding automobiles and a gasoline it will be a little bit higher. consumers are little emboldened with the gas price slump that we have seen. not getting too far ahead of themselves and spending too much, though. -- if it hits 91.5 that is a good number. season isearnings wrapping up pretty quickly. there are a couple of earnings, macy's, nordstrom, viacom, that are coming up. we have seen with the trends are in the early season so far. surprises, weg will see those companies own the gaps of what we have seen but not change. the earnings season has less than 50 days left. so we pretty much know the broad strokes. otherwise to me the big wildcard is m&a.

here we are in the middle of the day, hearing about a potential railroad five. -- fight. thet of people wondering if energy sector m&a is really going to take up. you have to wonder what the clock ticking on the end of the year if there is a lot of deals in the part time that people are going to get done before the end of the year. that is a wildcard now. it could push us back to those new heights possibly. that would be a big takeover norfolk southern. we do not see a big macro reaction. that gives me back to the idea that people are pretty comfortable at the levels they are now. really watching the treasury yields, seeing how much higher yields than the dollar gets. david: thank you very much. up in the next 20 minutes of the bloomberg markets mobile blogging makes a good will gesture to customers, but can it

by their forgiveness? bitcoin is becoming more popular, but doesn't have it real value? ♪

david: welcome back to bloomberg markets. let's head back toward markets desk where julie hyman has a check on some new news from citroen. is the focus on short ideas. it is one of the factors that has led to the underperformance

of valium. now he is targeting another special link -- specialty pharmacy firm. it has significantly more downside and is a far worse offender of the reimbursement systemthat distribution that he had targeted when it came to value. all of those things said in a tweet, so we do not have more details on the call as of yet. but it is having an effect on the stock as you can see. down 18.5%. ,e have periodic volatility because we tend to see these halts reflected here in the choppy looking chart that you see. another group that we're seeing declined today is the casinos. this is because of a callout from wells fargo. you can see wells fargo saying for the month of november the macau growth should be down by or 34%.

that is a lower forecast than previously. mgm has been trading down as well. we are also seeing some of the other macau resort down. ynn taking the worst of it today. last month we saw a relief rally because it was the first time since february that the decline in that revenue has been less than 40% -- 30%. if we go back to 30% or 34% we are talking about an acceleration of the decline in that gaming revenue. a little bit of nervousness it seems among casino investors. david: thank you. volkswagen is extending an offer of goodwill to its customers. the company offered $1000 to those affected by those cars in prepaid visa cars and dealership credits. they have customers will see the reward package as a first step

toward restoring consumer trust. for an hour in-depth look i'm joined by jeff green. what is volkswagen trying to do with this thousand dollars gift to customers? >> it seems a little premature. unless they have another guess that is going to come later. we do not know what the fix is, we do not know how far this is going to go. they seem to be coming up with things they have done wrong. they have not had a final reckoning. it is like if you're trying to forogize to your spouse doing something wrong and you finish admitting everything you have done. -- and you give her flowers before you finish admitting everything you have done. almost $8identified billion in cost. nobody thinks that is the end of it. there are 400 consumer lawsuits pending against them. they had to figure out if there's going to be this cost,

what are they going to have to cut and change in order to pay for it? this is not a zero-sum game. then to do something to pay these bills at some point. they are talking about where they are going to go and what makes the most sense to pay the bills. a visa gift to get card for $8 million. cash is up to speed on the revelations. >> first they said we are cheating on emissions, and now e lyinge saying we are about gas mileage. there are several things that keep coming to the forefront as people look deeper at how they are complying with regulatory requirements around the goal -- the globe. david: downgrading to triple b plus. >> that goes into the whole

formula. if your cost goes up and you have to make up for that somewhere. they have to do some real soul-searching. ,his has been some discussion but this is a company that might have to sell something to pay for some of this. david: you have a ceo who has come in and says he needs to turn a new leaf and make a lot of cuts. where one piece -- where do you think he would start cutting? when you talk about cost-cutting, is rmb the biggest one? d the biggest one? yes. they have been growing and adding a lot of products. you're going to see some things slow down. at the very least, they do not have to shut down some production if their sales fall. there are so many different parts of a company where they can take action. this is all about, you're going

to do something, it is going to affect workers in some way. david: thank you. ahead on bloomberg markets, bitcoin bouncing back, rising 50% this last month. what is driving the rally? ♪

david: welcome back to bloomberg markets. bitcoin prices surged last week on the news in major chinese bitcoin exchange will accept direct deposits from banks. but it is a rally that has another spike in the wild west of currency speculation.

ofning me is the co-author the age of crypto currency. will you walk me through what you think happened here? >> china seems to be a factor, but the question is whether there is something fundamental. , peoplethis instinct want to understand markets as if it is something fundamental to work with. the bitcoin market is a volatile place. there is demand out of china, that much we know. we have seen a lot of it happening. the price is a big differential in the premier people are paying for bitcoin in china versus the rest of the world. that's these to the fact that there is a lot of demand. you can get fundamentalist that say this is because people are worried about the chinese economy, capital control. but there is also this talk about a pyramid scheme that was that you now all

of a sudden have it run through bitcoin. them, not read many of they are a gigantic country. just if you get interested to move the price. buy bitcoin with direct positives. in way into the currency. eu recognized as a currency, that it is the future. there is a lot of interest in block chain, the underlying technology which may or may not be based on bitcoin. it can be used with other crypto currency or no crypto currency at all. there is a halo effect that spills over into bitcoin. it might make some sense to buy in. that certainly was a bit of a wild jump we had not seen for some time. jamie dimon said there

will be no real noncontrolled currency in the world, no government that is going to put up with it for long. the technology will use to transport currency, but it will be u.s. dollars. where are we with the claim right now. for so long it was novelties. is it catching on, our governments beginning to take more seriously? i think this misses the point. for too long we have focused on willie dislodge the dollar? the most reported aspect was its underlying technology, the payments it created and the ability to use that ledger and grace places. the questions will people design versions of that that do not use bitcoin? or is there a use for bitcoin itself? , all ofuture world

these unforeseen markets, a lot of demand for bitcoin itself. that they early to say dollar-based financial system is just really inefficient and dealing of what is needed in the digital economy, transferring money overseas or micro-payments to pay for things connected to gadgets. ultimately the coin is going to play this role as the intermediary currency within the broader digital economy. use.is a great it does not mean that mom-and-pop are going to be buying their groceries, but the most interesting thing is that aspect of it. the actual use of this technology as a means to intermediate and make efficient our digital economy rather than whether or not you will put your savings in dollars or not. it is not a particularly interesting conversation. david: we focus so much on bitcoin, but are there other --

for control currencies you are interested in? >> digital block chain that do not have a crypto currency. that is the most interesting competitor to bitcoin in the realm. that is one to focus on. they are using block chain to use all of these non-currency type of applications. that is what is interesting. other than that, there's a lot of interesting initiatives built around different versions either on or off bitcoin. david: thank you. coming up, more of bloomberg markets. ♪

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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. david: from bloomberg headquarters in new york, this is bloomberg markets. let's start with the headlines in the first word news. mark: president obama told

israeli prime minister benjamin yet know who the their countries must work together to fight terrorism. the two leaders met in the oval office today. it is a present have held face-to-face talks in more than a year. russia's prime minister says the country's ban on flights to europe -- to egypt will not be lifted quickly. it will be time to ensure security after the plane crash that killed 224 people. losses for two or operators our operators could be great. the president of missouri university is stepping down. >> resigning as the president of

the united -- university of missouri. this comes from love. avenue -- mu, colombia, the state of missouri. the university of missouri graduate student said he was ending his weeklong hunger strike now that he has stepped down. has: president obama launched a page on facebook. it was to be a place where we can have real conversations about the most important issues facing our country. the first post the need to .ddress climate change you can get more of these on bloomberg.com. back to you. david: thank you.

commodity markets are closing in new york. let's take a look at today's mover. nicholas followed for a straight day. it comes as chinese data shows us as we gold is holding steady this afternoon, oil falling for a fourth day. apache are on the move after $18 billion exporters got in it -- a takeover offer. the -- me to discuss his &a team.from our admim people really love him and appreciate what he is trying to do in the past. he seems to one person who was willing to do these fake mergers and he tried with csx, we look

at that last year. he did not happen. he is now trying with norv. other, which would be a very big deal. $20 billion plus, almost $30 million. normal visitors and canadian pacific so it would be a challenge to get done. he has broached his idea. oned: why is this company that big oil company would be interested in? i have gone a lot cheaper, but they are down most than -- more than most of their rivals. they have had some bad bets that have not worked out for them. they have sold off so they have made themselves a little leaner. even though shares are not down, they are not in horrible shape. they are appealing to companies that want to build up oil and gas in these areas. david: is the story one where there was a move and it was going investors? a barrel of oil was trading twice what it is now, it

was too expensive to do these deals and companies were not looking around. but the bigger companies, and we have not identified the one who made the offer, but the bp, exxon, chevron, even though their shares are down, they have a lot of on it. they are right and i these smaller guys that are worth $40 billion and are now down to $20 billion over the last year. david: what does this say about the m&a industry? a lot of these the company's are curtailing their investments in the megaproject area. up.: we expect it will kick this is done on an enormous run. we had six quarters in a row of $1 trillion each order which is ordinary. but it has helped care and health are. we have not seen that many big deals in the oil and gas space and the energy space. we collect this is the beginning of that run. it will go through the rest of this year, the first quarter and second quarter of next year were a lot of companies will be taken

out by the larger majors. david: talk about what they do and what they do to manage? they are just in better shape than a lot of of the companies. bets, butsome bad others have worked out well. there are a lot of companies in this space that have balance sheets that are upside down. they have become quite vulnerable. we have written about the companies that are smaller and are hiding off ilion dollar assets. we will see more total companies being taken out over the next six months and nine months. david: you mentioned there's a lot we do not know. we do not know the company that made the approach. where do things had from here? >> more deals in the oil and gas space. that is something we have been hearing from a lot of anchors and heads for a while and thinking pointing to not think there's more deals in the bigger space.

david: this stands to be the biggest deal? >> not as big as the shelti all pay 25.y went typical premiums are 35%. deals are 50% because people are banking on a drug that has not yet gotten fda approval all the way through. they are banking on a drug that is a couple of months away. up in the next 20 minutes, president obama needs

with benjamin netanyahu. -- they find a range right can they renew their friendship before the president leaves office? ♪

david: welcome back to bloomberg markets. time for the bloomberg business flash. the world's biggest banks are to cost prevents another lehman brothers collapse. there was enough a plan for banks seen as too big to fail. 18% will have to rise to three years later. bloomberg news has learned that

they are exploring a sale that is working with more -- morgan stanley. they've been reaching out informally to potential suitors, have a market valuation of about $500 million. germany's airline is going to nest -- longest cap and strike ever. -- leftes and used in on the and its union are in talks over wages. always get more business news at bloomberg.com. we will go back to the markets desk with julie hyman. julie: checking out some of the latebreaking stories we have had today, including the one were canadian pacific is potentially be the biggest.

on top of this deal potentially happening. story is latebreaking after they mentioned this on twitter. the company has significantly more downsizing the valiant and is a far worse offender of the reimbursement system. that is the specialty drug .istribution system is planning to hold a

conference call on thursday for details about relationships within suppliers. the shares are higher today. bill ackman, who owns 21 million shares held another called today and his only regret is not being able to buy more of those shares in it -- interestingly enough. i will be waiting for that on thursday. we will be waiting for details on citroen. david: the saga continues. thank you. president obama and israeli prime minister benjamin netanyahu took a step toward getting their strained relationship today during their face to face meeting, the first in over a year. >> it is no secret that the prime minister and i have had a strong disagreement on this issue. but we do not have a disagreement on the need to make sure that iran does not get a nuclear weapon and the importance of us destabilizing

activities that iran may be having take place. us.d: good to have you with setting out to find some common ground today. >> i think that, given the , youict of the last year cannot use the word reset, because we are starting the eighth year of an eight-year term for this president. but to recalibrate, this thebilize deterioration of the last year. everyone has a reason for it. for the president when jeanine is measure does she was to know that his successor is not going , to give theight best chances possible.

also in terms of this prime minister, he sees the perils of partisanship over the last year and would like to mend fences. he is going out of his way to have a more bipartisan business, including a visit to a liberal think tank tomorrow. by how aheadtruck this they are. has been tone changed? it is a done deal. it does not mean that israel likes it but it will be real. they are on to the next phase which is implementation. sending upupgrade foreign aid limits. the would be in place for

next 10 years. that is a prominent topic. trying to find a way to curb the destabilizing activities in the middle east. dealing with iranian proxies that will benefit from a cash injection. i think that is something that is a little more unclear, given the sensitivity, will there be a u.s. israel panel on a new grill implementation? it is too much sharing going to mean that obama might deal it might be used against him? --erally, and i wants to get no one was around to get a nuclear weapon. that gives them common ground. they also talk about syria, and what can be done with that humanitarian catastrophe on israel's doorstep. that will be discussed. and the issue of the palestinians, which as they have

pointed out, the white house announced before, there is going the dust peaceof agreement until the end of this presidency. but what can be done on the ground, they advocated a set of gestures and not regard. they tries to ease the economic situation, whether that will be sufficient. now, it is too soon to know. that will also figure into the discussion david:. thank you very much. politics,esidential president candidate ben carson has been fighting back against scrutiny of his biography. we join to talk about it. talking last week about west point, whether or not he got in there. now some new revelations about he may have not been to jail. .ark: it is interesting

many elites think that dr. carson has trouble with the truth, the weather some of the stories are made up or wholly exaggerated that the threat has been pulled and it is only matter of time before his credibility and his record on his biography, to parts of what people like him, start to unravel. his supporters are giving him lots of money, and a lot of people on conservative media are speaking out on his behalf. -- witheen combative of the press, saying that he is being overly scrutinized and that the things he is saying are true. it is an interesting reflection of the fact that on the campaign trail, you often will see things used in a parallel universe. play whatant to others had to say. chris christie and mike huckabee responding to the criticism. of beingle of days

asked about something and your books, i do not have a whole lot of sympathy. he should answer the questions forthrightly and directly. if he does the american people will accept it. if he does not, then he has a problem. >> i'm not quite argue what he did or did not do. people are looking into his personal life and they are going after him. you have not seen anything yet. david: is he undergoing a lot of scrutiny from other candidates? the: donald trump has been roughest on him. he continues the line of track -- of attack. there has long been a debate with an republican circles on what would cause ben carson to go down in the false because right now he is a strong second in almost everything. opponents used to

criticize him or attacked him. this line seems to be something that candidate are less reluctant to go after them they are in other things. for people who want to undermine his credibility in the short-term, and as we get to iowa and new hampshire next year, this would be the leading candidate that people would put forward and say this raises fundamental questions. in politics and your shrink is your strength. if your strength is undermined, your candidacy can fall apart. john said i was a veteran, when his opponents started to undermine his credibility on issues in his military, that was a devastating critique. david: the most watched event on saturday night, saturday night live. how do you think he did? mark: was not the funniest episode ever, but it did have some funny moments. --ld trump is measured metrics driven.

i think he may have missed an aportunity, and not having right performance. david: thank you. the truck ben carson campaign managers will join him tonight. the speaker of the house, paul ryan, will join for an interview tomorrow at 5:30 p.m. eastern. that is tomorrow night. coming up on bloomberg markets, cisco and eric is in -- ericsson team up to build the network of the future. ♪

david: welcome back to bloomberg markets. erikson is partnering with cisco to develop a telecommunications network is the latest combination in the industry as

equipment makers seek to expand the industry over soaring internet traffic. why the deal makes sense for both companies. >> we believe that the combination of what erickson bring with their position in mobility and wired or wireless, in addition to their network management capabilities inside of the operators as well as their services for rent, 180 countries and 65,000 people, we believe that when you combine that with our leadership in ipl and the data center and networking, that we have a combination to really help our customers be more effect than what they are trying to accomplish today. this joining us now is cory johnson. cory: did you understand any of that? david: i thought this was the greatest contrast of accidents accents. [laughter] jeff: this is very interesting.

of the battlehink , what iswith mobility interesting me if this is the definite company and selling gear. cisco has been the dominant company selling natural -- networking and ip equipment. really getting together, almost like a merger. david: why would they not do a merger? cory: they do not have time for that, basically. they do not think the tech mergers work.

he saw not a much change in cisco share price, but you saw a juniper, they had a partnership and eric said but that is no more. the earth until we were going to be out there in 180 countries selling cisco with the erickson stuff. no longer juniper. david: whereas nokia and all of this? cory: nokia has been a very important company as well. partnership is very important. i remember being on a conference with telecom analysts, and we were sharing office of the time. it more and more. they're getting more business. they made a gutsy call when it was trading below a dollar.

there were making similar kinds of good calls, but it came back from the grave. very importanttelecommunication companies. this is a partnership to be up against. they will feel they have more of the networking equipment that they do not have. david: thank you very much. on bloomberg west emily chang will be in china to interview the chairman of alibaba. place at 9:30 a.m. eastern.

>> it is 3:00 p.m. in new york and 4:00 a.m. in hong kong. welcome to bloomberg markets.

good afternoon, i'm betty liu. here is what we are watching at this hour. stocks are tumbling, the s&p having its worst day in a month as traders start to accept the possibility that the fed is going to hike rates next month. is another oil deal in the work? -- take overd offer from the ministry buyer. two major stories involving bill gross today. investors pouring money into his janus fund while his former employer pimco demanding that his lawsuit for wrongful termination be thrown out. a lot is happening on this monday. we are one hour from the close of trade today. julie hyman has the latest at the markets desk.