from bloomberg world headquarters in new york, i am scarlet fu. alibaba setting a singles' day $14.3 billion sales record in china. wantso jack ma people around the world to join in. we will hear his prediction for the chinese economy. alix: and can renewables not cap also fuels? heats up in 2016. inbev following up on its new deal. we want to start with a snapshot on today's activities.

it is veterans day, the bond market is closed, so lots of activity in the stock market. julie: it depends on which market you're looking at, but there is not much decisive activity when it comes to the big picture. today is not really a big macro driver, which means we have this drift going on. if you look at my bloomberg terminal, we have the push and pull going on. we saw stocks decline more, the internals in the market were showing a mixed picture. right now, industrial taking a top spot, utilities on a three-day increase, energies continuing their decline. consumer discretionary is also weak today. there is one stock i want to mention, one of the best for armors today in terms of the contribution it is making to the s&p 500. price target is being

raised to $800 from $750 at morgan stanley. the analyst at morgan stanley is saying it is all about the opportunity from amazon web services. he says it will contribute to 60% of their forward profitability driven by the accelerated adoption of the cloud by the public. alix: what about the brick and mortar stores? a totally different story. julie: and amazon says that it is not based on retail business. macy's is falling sharply today, the largest department store company with earnings that missed estimates, the company cutting their forecast as well. there is growing concern about the state of retail. but wey is macy's down have a steep drop for many retailers. kohl's earnings estimates were cut because of the warmer weather at jefferies. that was one of the reasons

macy's cited for its shortfall. nordstrom, aers, lot of other retailers getting caught up in the selling today. scarlet: thank you, julie hyman. alix: now let's check in on the bloomberg first word news. mark crumpton has more. republican presidential hopefuls squared off in milwaukie, wisconsin last night. it was their fourth debate. one of the more contentious issues, what to do about illegal immigration. fives inre doing high the clinton campaign when they hear this. that is the problem. we have to win the presidency, and the way you win the presidency is to have practical plans, allow people to her legal status where they pay a fine, where they work, do not commit crimes, and learn english. >> the politics would be very different if a bunch of lawyers or bankers were crossing the rio grande, or if a bunch of people

with the journalism degrees were coming over and driving down the wages in the press. mark: the candidates also fought over financial reform. governor -- called for higher capital requirements for banks. senator cruz says that big banks should never be mailed out again. president obama laid a wreath at the tomb of the unknowns on this veterans day. vice president biden also attended the ceremony. earlier, the president welcomed veterans and their families at the white house for breakfast. today is the 97th anniversary of the end of world war i. russia is calling for a new syrian constitution to be drafted within 18 months that would allow syrians to vote on the constitution and choose a president. it says syrian president bashar al-assad would play no role in developing the constitution. a strong storm system drops snow on denver, colorado and is now allow threatening

parts of iowa and missouri with tornadoes. inches of snow have been reported in the rockies. new york will be the first state in addition to boost the minimum wage for all state workers to $15 an hour. governor andrew cuomo says he believes the issue is about basic fairness and justice. the increase will be phased in over time with all employees getting the increase by 2021. that is a look at our first word news. you can get more on these and other breaking stories at bloomberg.com. back to you. to bet: market seem buying time and waiting for the federal reserve to make its nest move. is this how things will look until the december meeting? david joy from enterprise financial is with us from boston. i know you cannot read into it

too much because the bond market is closed for veterans day, but given the waiting around that we anticipate for the next couple of weeks, what scenarios would you say are priced into the equity markets, compared to the bond market? david: the markets have discount on the idea that the fed will raise rates in december. not a done deal, but we don't have too many data points that will push the fed in one direction or another. the jobs report will be critical. the october jobs report was such a blowout number, it's moved out the three average to a longer-term trend. after the morning, that is priced in -- warning, that is priced in. if it actually happens in december, you may see additional volatility but it is pretty much discounted. you are also seeing a movie in short-term interest rates in the bond market. the two-year was close to 90 basis points. close to 60 not too long ago.

i think it is mostly priced in already and the markets have moved on to think about when the second cut comes. alix: that was my question, what kind of rate hike cycle is the market currently pricing and? all throughout the cycle, the fed has been more aggressive in terms of its expectations in the market. suggested thet fund rate is 1.4% at the end of next year. that is a little bit too aggressive, i don't think the markets have that priced in. maybe three additional ones. you might get up to maybe 1% by the end of the year. that would seem to be consistent with where prices are right now. alix: to that point, in my terminal i have mipr, which is one of my favorite functions, because you can look at the implied policy curve.

what it wasine is after the last meeting in september. you can see some market tightening when it comes to the rate hike, but is it enough? scarlet: given that you say we will not have many data points between now and december, we are looking to overseas data and market action to set the tone. that makes is pretty vulnerable. if you go back and think about what the fed had to say about international influences, they talk about market turmoil, markets have calmed down significantly since they made those statements. at the same time, we have seen some stabilization in the global purchasing managers index. china is still contracting but at a slower pace than window statement were made. we have also seen some modest improvement in the eurozone as well. i think some of those more acute concerns the fed was talking about the last time have kind of dissipated.

this is more of a domestic issue now for the federal reserve. that blowout jobs number makes it awfully difficult to ignore. scarlet: speaking of domestic issues, julie was talking about the earnings from macy's. take a look at how retailers have been doing. it's been an ugly couple of days and weeks for the group. here atsee the slump the bottom for the retailers, down to a two-year low. granted, there are specific issues with s&p 500 department

>> recovery that is pretty solid but with inflation still very low and that means for the vast majority of our policy committee we are happy with rates at .5% and have been for number of years. i think all of the committee know there are things we can do to cushion the impact if necessary by lifting monetary policy. that is not my central review --

my central view but we stand ready to do what is necessary to get inflation back to target to keep that recovery back on track. scarlet: on the heels of --nomic related economic data released, wage growth has softened. a case to be made that the u.k. is ready to raise interest rates . some said before the federal reserve. mark carney's case, perhaps you like to see how that plays out before global markets make a move. alix: the idea that the data shows that the u.k. is in a better position of the u.s. take a look at something like the participation rate in the u.s. that has fallen but in the u.k. it has held up to almost 80% meaning there is more slack in the u.s. than in the u.k., a key thing to look at when it comes to raising rates. scarlet: there is the inflation forure, you have prices

both services and goods with services inflation stronger in the u.k. than in the u.s. both countries are seeing negative growth when it comes to prices of goods but it is lower in the u.s. than in the u.k.. another thing that might prompt the bank of england to move sooner. alix: if you have wages and share about bonuses it felt about 2.5%. is that a blitz or something rolling over? --re you have employment employment and inflation moving in opposite directions. scarlet: since the financial crisis began we have seen central banks move ahead with raising interest rates only to backtrack later on. you had australia do that, sweden. no one wants to be caught moving too far ahead and having to turn around. alix: if you take a look inside the bloomberg terminal, i'm going to the work function but actually taking a look at the uk's the u.s.. probability of a move is 21% in december and 26% say in january.

if you take it back to say the beginning of november before we get that killer jobs report, it was down to 14%, meaning that the u.k. is waiting for the u.s. this is what the markets are telling you. scarlet: these external factors, here is what andy haldane had to say. >> we have had a ripple in the emerging market economies. that will hold back global growth. a story we talked about last week in our inflation report. ,n the other, here in the u.k. spending domestically remains robust. without balance of internal and external factors which will determine which way next for interest rates. for now, we are happy where we are. alix: talking about how the u.k. is exposed by comes to emerging markets, sir charles been who was a policymaker we spoke to

him yesterday on what did you miss and says the u.k. is more exposed when it comes to things in china. dynamic playing out. scarlet: the u.s. can focus more on the domestic situation where the u.k. needs to be more mindful of global events. that is something we will continue to look at. more coming up on bloomberg markets. starting sunday, t-mobile will offer video streaming for media sources. what would you watch? alix: scandal. scarlet: we'll bring you that story, next. ♪

alix: t-mobile is introducing free video streaming from 24 different media sources. we spoke with ceo john ledger

yesterday where he discussed the service they are calling binge on. >> profitability is growing beautifully as his cash flow. the model works and this move will not only grow our customer base that will increase profitability relative to guys that are in big trouble and most of what we're able to do is because of the way they do things, not focused on customers and gouging customers. we do them with a good return but focus on customers. scarlet: in today's west coast wake up we are joined by lucas shaw who reported on this story. legere disrupted the two-year contract now it looks like they are disrupting the way carriers charge for data. lucas: they said at the event yesterday that video is now the number one app for anyone on

their mobile phone. your scene competitors try their hand at something with video to appeal to consumers. t-mobile's solution is you should sign up with us because if you do it you will not have to pay any of these overage fees or by inexpensive data plan. you might be able to scale back the data plan you get because of how much data goes to video. alix: the question is, are they going to make up enough to offset the cost when it comes to improving profit margins? lucas: t-mobile is clearly the number three player on the market. a lot of these initiatives they have been offering whether it is the free data per video or free data for music have helped them grow faster than competitors. the one thing the ceo said a lot on stage yesterday was talking about how they are making up more than 100% of the growth in the market now. some of that is him stumping at

his own event. it does seem to have been attracting new customers. at what point did they feel like they are big enough that they can start to see financial benefits to that scale? alix: john legere does a good job stumping as you put it. scarlet: there are some limitations here. you are talking about mobile video and you don't include youtube. netflix is most popular on a tv screen, maybe on tablets where the data also applies but youtube and facebook are big holds. aey said the issue was technical one. with facebook but could not tell which data was from video or another one. i would expect that if they want this to be popular and bring in new customers they will have to make a deal with youtube and

they did say they are in negotiations with them. alix: thank you so much. lucas shaw joining us on t-mobile. when it comes to what you are looking at, it is all about those description additions. you can see how ferocious t-mobile has been. it is that yellow grass and how much they have grown over the last few quarters and months. how much free stuff for the going to give us to woo us over? scarlet: we have more coming up including alibaba and its single day haul. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. 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. scarlet: from bloomberg world , let's start with the headlines on bloomberg first

world news. mark richt and has those. -- mark crumpton has those. republicanop eight backdential candidates are on the campaign trail. >> would eu bailout the big banks again? i will give you an answer, absolutely not. >> higher concentration of risk and assets. if we were serious we would raise capital requirements and lessen the load on the community banks. mark: john kasich accused wall street of showing too much greed . governor kasich is a former managing director of lehman brothers. arlington national cemetery. president obama honored the nation's veterans. placing a wreath at the tomb of the unknown.

he was joined by vice president biden. today is the 97th anniversary of the end of world war i. touristsresident wants to know that sharm el-sheikh is safe. the president was hoping to reassure people in the wake of last month's russian passenger plane crash. the investigation into the crash continues. there's a move to prevent mistry jet disappearances like that of malaysia airlines flight 777. nations meeting for a u.n. conference have agreed to set aside radio frequencies so planes can be tracked by satellite, not just from the ground. fifa has beenof helpless but lost -- has been hospitalized. sepp blatter is being investigated on corruption allegations. he is planning to step down from fifa in february. that is a look at our first word

news. you get news on these and other stories at the new bloomberg.com. i mark crumpton. -- i'm mark crumpton. alix: a record-breaking singles they in china today as online transactions reached $14.3 billion. withet: emily chang spoke jack ma about coming to america and if he wants to engage in competition with the likes of amazon. jack: without the united states -- we are very grateful for the united states. without seattle there would be no ali baba. without the american tourists to come to my city, i would never learn to speak english. without the silicon valley -- people say, when did alibaba come to america.

alibabasay when can come to america? lycee, we did -- i say, we do not go there to compete. if we go there we want to help the small business, helping them to china, to asia. we have such a huge demand of chinese consumers online. we have more than 120 million people even on the mobile phone shopping our site. we need good products, unique products. usa has huge potential. -- i want five years our team to be central to invest in the high technology. helping them to grow and helping them grow not only by the money but helping them one day coming to china. a huge market. emily: they are focusing on india. you are focusing on russia, for example. when do the world's biggest

e-commerce companies collide? jack: amazon and alibaba we have a pretty different model. they buy at themselves and we are a platform. on our site we have a 10 million -- we have 10 million small businesses and 10 million big businesses. we believe any company can be amazon. if amazon is a great apple, we are the apple tree. a lot of companies like amazon, they buy and sell, cloud computing, using our logistic system, our payment system. the is of the services. we want to enable every company to be e-commerce. we are not an e-commerce company. i don't think amazon and us would compete. we want a lot of people as successful as amazon. emily: should amazon be worried? jack: i don't know. if they are worried, they're worried.

by paul are joined sweeney. scarlet: if you look at the share price of ali baba i know it has been on a tear over the past month up 13%. today it is down 2%. this was a blockbuster single day number for ali baba. billion is a little bit better and what the street was expecting. there is concern that singles day has gotten so big $14 billion in sales, perhaps there might be a risk of pulling sales from future periods that might affect the ali baba's of the world. alibaba is a story that since the ipo, the first couple quarters they did not perform well. results were dicey and the stock traded off partly in response to that. it is the last quarter that they reported that they put up good numbers relative to what the street was looking for. started to do a much better job. hopefully today's result will

lend more credence that this remains a strong growth story despite economic concerns in china. alix: you heard emily talking about the relationship with amazon. what is the relationship between jeff bezos and jack ma? paul: at what point are these giant platforms going to bump into each other head-on? it does not appear that is the case yet. alibaba is primarily focused on china. that is where the majority of sales and revenue come from. since the ipo, jack ma has been consistent in saying we will become a global company and he announced in the interview with emily that in 10 years i think 50% of revenue will be outside of china. if that is the case there will be bumping up against amazon all over the world. i think the jack was trying to suggest, their models are different. at this stage ali baba simply

wants to be a major platform for andging u.s. consumers chinese consumers and u.s. merchants and chinese merchants together and take their cut of every transaction. scarlet: one thing that struck me was ali baba talking about how this year they took the event to beijing. we are talking about shopping that is done online. it is not really a location specific. it brings to mind what does it mean when they say they want to bring it to new york or london. paul: i think mobile sales are close to 70% today. i think what they are doing with aging and maybe taking it more globally -- with beijing and may taking it more globally to new york, trying to make singles day and global sales retail day. looking for publicity. taking it from their hometown to beijing today really hyped up

the promotional value of it. hyped up the promotional value of ali baba as the place you want to go for global sales on singles day. if you take it to new york and london i think it speaks to global ambitions. alix: you know that is coming to time square. thanks so much. paul sweeney. scarlet: coming up in the next hour, what is ahead for energy into 2015 -- into toward the 16? will run down -- into 2016? alix: m and a chatter around health care spaces. how is this transforming the industry? scarlet: investors appear ready to dip their toes back into emerging markets. those stories and more, coming up. ♪

scarlet: it is time for the bloomberg business/. according to people familiar with the matter, if pfizer complete its takeover of allegan, allegan ceo is likely to run the company. saunders would then run the faster growing business of new brand-name drugs. alix: job cuts on the way at the world's fourth-largest your maker. cut. 2000 jobs a 15% reduction. carlsburg is trying to reverse a profit decline. scarlet: airline strike is grounding about 100,000 would be travelers today. upon the -- left-handed germany -- lufthansa germany union leaders are cutting the --rier's efforts to fight

carrier's efforts to cut cost. alix: chinese retail sales accelerated in october. this is in addition to single day purchases smashing previous records. the second-largest economy releasing industrial output data. shery ahn has more details. shery industrialized -- industrial output last month rose only 5.6% year on year, missing estimates and slowing for second month. goldman sachs analysts are among those that predict the central bank will take further action to spur growth. retail sales managed to grow 11% in october, beating estimates and seeing the quickest gain this year. scarlet: let's hear from our friends across the pond, eddie lu m mark barton spoke with allen higgins on rate high

predictions. betty: i want to pivot from what's going on in europe to what we saw overnight from china in the softer industrial output numbers. seeingr if given we are softness but also seeing some good numbers on retail sales. the shanghai stock exchange has come back since august. enoughhina has moderated so that the fed does not need -- has the room to raise interest rates. basically, the market knows all about the slowdown on the export side, the investment side. we saw a retail sales hold up. that was enough for the market today definitively. as for the fed, i know they mentioned overseas markets this time but after the employment

report, it would be a huge surprise. we have changed our view. very -- it would be a very surprised. bank of england, maybe next year. maybe one meeting next year. today's numbers, strong employment. in the u.s., that is the big difference. a six year high. six year high in the u.s. whereas in the u k, very subdued. alix: that was betty liu and mark orton with alan higgins on bloomberg markets european close. now for look at u.s. markets. abigail doolittle has the latest from the nasdaq in midtown, manhattan. abigail: one of the worst performers at the nasdaq is horizon. shares are up, recapturing some

of the worst games earlier today. this comes after express cribs says it has dropped lyndon care specialty pharmacy from its network considering lyndon mostly dispensed drugs from horizon. it has -- express scripts sued horizon for $140 million with brian henry saying horizon refused to honor certain obligations as it seeks to recover money rightfully do its clients. horizon fired back saying in a statement, the notion that -- when we take a look at the horizon charter for the last six months we see it has been a difficult second half for this drugmaker amid scrutiny of specialty pharmacy use, drug prices and but a bloomberg eantyst is calling the val situation. lyndon share -- shares

are off significant liffe the stocks today. alix: this week across bloomberg we're looking into the year ahead with a special issue of bloomberg businessweek as well as a summit of business leaders and industry influencers. today we focus on energy trends to keep dry on. coal, nuclear, natural gas, they are going head-to-head for dominance of the energy market. when we see a shift in the balance of power next year? after a year in which oil prices dominated the news you might think the same issues will drive next year's stories. if you focus on oil prices you will miss the larger picture for 2016. we rely on oil of course for transportation but it is not the only game in town anymore. as our reliance on oil shrinks,

we will turn to not just one new source of energy but several. this is different than what has happened in the past. previously, one form of energy was superseded by another. in the 19th century our reliance on wood gave way to coal and in the 20th century that yielded to oil. in the 21st century, the next step will not be an orderly progression from one fuel to the next. it will be a free-for-all. so which source stands the best shot? let's get the easy answer out of the way. it is not going to be cold. although japan and china will add coal plants this year, share of u.s. electricity production has gone down since 2005. cold is too dirty in the place of -- in the face of climate change. nuclear energy is not doing so hot either. several aging u.s. plants of been closed and germany, japan and other countries are planning

to phase out nuclear energy altogether. from there, the energy picture gets sunnier. natural gas is a big success story of the past few years pouring out of u.s. fracking project and undercutting coal as a cheap source of electricity. wind power is as cheap as coal in germany and the u.k. and demand for solar is the highest it has ever been which may have something to do with the price of solar panels dropping 95% since 2008. in spite of all of the some people come oil -- in spite of all of this up evil, oil is still king. , irann high u.s. output probably resuming exports and saudi arabia lowballing to maintain market share, oil prices are likely to stay low for a while which gives less incentive to find alternatives. there is a funny thing about oil you may not noticed, it does not really compete with the others directly. oil mostly powers cars, ships,

and planes while the others mostly generate electricity. the wildcard for oil in 2016 and beyond is how fast cars might start to run on electricity instead of gasoline or diesel. even when you see a big shift, it may signal the true end of the oil age. it won't be replaced by the solar age or biofuel age or wind age. it will be replaced by all of them. the peak oil conversation, one of my faves. the era of big m&a. we will break it down, coming up. ♪

alix: welcome back. landscapehe m and a

is on a surge especially in the health care center from pfizer to allegan. alix: is more health care m&a the right prescription for the industry? here to help us find answers, jeffrey mccracken. put it in perspective for us. how much juice is left? jeffrey: every thing kicked off around the second quarter of last year. that was the first quarter. -- the first quarter since 2007 -- since then we have had six straight quarters of $1 trillion plus and will probably have it again at the fourth quarter of this year. the health care insurance space which used to have four players has merged down to two if regulators let it go. geniant did not get aller

and now potentially pfizer will be able to buy allergan. i feel like the run is going to end pretty soon. sometime early next year we will see people pull back and quit stepping on the gas. the deals are getting so expensive, interest rates are going to rise. you will see push back where a year earlier every deal got a thumbs up. scarlet: we are running out of runway in terms of getting these big deal done? jeffrey: that is what it feels like. if you go back and look at 2006 in 2007, last time we had a run like this it lasted about two years and the financial crisis came in two dozen the. -- in 2008. drug companieshe no choice but to do m&a when r&d was not enough they needed more pricing power because it was sucked away from them.

it seems that the stocks that have done a lot of m&a, they have outperformed. eant.ave val jeffrey: amgen has been opened in the last few weeks that they're looking to do a big deal. i think the financial times wrote recently they want to do a $10 billion plus deal. mostly doing smaller talk in deals, looking to do something bigger now. and investment-grade company, we can handle more debt if need be. i think of an is are agreeing with what the chart shows, they should do big deals. that is why start to feel like we are at the end of it, when everyone feels like they need to do or should do a big deal just because everyone else has done it. alleragn.pfizer and sl

the ceo spoke with bloomberg. let's listen. think to be fair the things that we look to buy are really first in class drugs. while there are a few of those, there are also older medicines which have led to some of the controversy of late. probably does not fit perfectly with the allegan business model. scarlet: the business model is to by other companies. it is distracted by its own problems. what happens next? jeffrey: you back to 2010, everything seems to start with valeant. inders got his first ceo job 2010. he was the ceo of forest and it got sold and then he was a ceo of activists and then he is the ceo now of allegan.

he is done well since two dozen 10 with all of these deals. -- since 2010 with all of these deals. alix: a fed that will probably raise rates sometime sometime ie next six months. jeffrey: i think we will see a lot of health care m&a. i think the $10 million plus ,eal -- $10 billion plus deal that will be a $150 billion deal. ones, we are getting to a point where even the regulators feel like they are exhausted by what has been going on. scarlet: jeffrey mccracken, thank you so much. alix: we will take a technical look at the markets in the next hour. ♪

>> it is 1:00 p.m. in new york. >> welcome to bloomberg markets. ♪

>> from bloomberg headquarters in new york, good afternoon. here is what we're watching at this hour. we will talk to an analyst who thinks it is time for a pullback. scarlet: did anyone succeed? alix: the world posse's expensive dollhouse, worth $8 million. scarlet: let's head over to the markets desk were julie hyman have the latest. column.retty mellow. that is a good description. we see major averages fluctuating but in a narrow way. the nasdaq in particular is outperforming today.

terminal here the and imap on it and the various sectors, industrials and tech are leading what gains we are seeing now. discretionary is only as in the other direction. little bit of a push and pull. look at some of the top performers. xerox is the best performing tech stock classified within that index, nearly 5%. the company held an investor presentation yesterday and reiterated its guidance for the full year in terms of earnings. there does not seem to be a lot going on. it seems that is indeed the catalyst. there is activision blizzard, which said today it's call of duty opening weekend sales managed 550 managing million dollars, more than 75 million hours online in its opening days . a note saying is estimate for call of duty sales for 2016

could be conservative as a result of the numbers. shares are rising by 3%. a little strength in tech here we are seeing strength in microsoft and google. >> it has to be energy. julie: most definitely. oil prices are lower today. there was a build in inventory of 6.3 million barrels last week. we will get the government numbers tomorrow. a push from today because it is a veterans day holiday. see a pullback of about 3%. a deal that is not going to happen, anna yesterday, said it was that bitter? we have with drawn our bid. but it appears to trade at near or full value currently. getting in a little bit big

against the company even as they withdraw the offer. learn, it is not going to happen. shareshat is a lot of you have to deal with in order to take over. but it is in play and that will be the theme in the next few weeks. julie: i hope that they will still see an uptick. thehanie: let's check bloomberg first word. today is veterans day. president obama marked the occasion by laying the wreath at the tomb of the unknowns at the arlington national cemetery, 97 years ago today. russia is outlining a new plan

indicating a civil war in syria, it would let syria vote on the constitution and then choose a president. the plan does not call for the current president aside to step down, a key demand of the syrian opposition. the foreign ministry -- foreign minister in eu proposal that labels goods reported from west bank settlements. officials are downplaying the significance, saying it is not political. the explanation is called cynical and baseless. palestinian activist 10 years ago. hurricane kate back in sustained winds at 75 miles an hour, centered at 260 miles north of bermuda and heading northeast at about 40 miles an hour. the u.s. national hurricane center says kate will likely

surf ande-threatening current conditions. a texas grand jury indicted 106 people in connection with a main shooting outside a waco restaurant that left nine dead and 20 others injured. authorities say the -- this started after an apparent confrontation between two motorcycle clubs. more indictments are expected. you can get more on these and other breaking stories 24 hours a day on bloomberg.com. back to you. coming: u.s. stocks are off their biggest rout since september and macro indicators telling us to respect momentum in the market. katie is a technical strategist who joins us now with more. earlier this month, the s&p 500 got within 20 points of the all-time high.

how extended does the bull market look? short-term only affect about 20% of the constituents of the s&p 500, such that the pullback we have seen has been healthy and has already relieved the condition that occurred. the important resistance for the s&p 500 they sun that high. when you look at the s&p this on a 200 per day average, we just sort of ounce off of that. what is the importance of that level? what kind of follow through might we see? >> we has in the s&p 500 breakout above it. a nice hurdle to clear. i think it is a gauge of the long-term trend, still very higher for the broader market. being at the psychological support level, we will see

buyers step in on a dip below level. that may be enough for the uptrend such that the s&p 500 could reach new highs. with the prospect the federal reserve is ready to begin lift off, you see financials get a lift while utilities and other dividend heavy stocks get punished. obviousis it has become .n the last couple of weeks i think that will persist over the next couple of weeks potentially. what has benefited most recently is the financial sector and in turn, it will start to benefit the health care sector, equally oversold on a relative basis when you look at the broader sector benchmarks versus the s&p 500. >> we're not done with that rotation yet. thing is theother dollar back to life. we have a chart of the u.s. trade weighted dollar index.

little more equal. yellen looksnet that. how overextended do you feel the dollar is right now? >> i think it is just beginning to move and it is not overextended. occurred breakout that in the dollar index and related major currencies, it is pretty major. veryna will formation, a technical time, it reflects a loss of volatility over time. to see an upper move in this case which tends to match or be equivalent to the move that preceded the setup. remembered the dollar index in 2014 was quite explosive on the upside. scarlet: the dollar strengthens in a preemptive move or it is it a catch up at the fed will lift off now? >> at this point, it is a .atch-up move

it is not often you see the currency's move as fast in this short a. bank. -- a period. is it it dollar move or a euro move? i have the euro versus the dollar chart here the euro is valley -- very much under , 100 a day moving averages. my a drug you might release more stimulus, is that what the dollar story is all about? with the next support for the euro is back at the march low. is stillhat significant downside from here. it is kind of across the board for the dollar. thelet: if you just look at 10 year yield on its own, treasuries have had a dramatic well-off in the last couple of days and the yield has moved off by the most in june. what do the charts suggest in

terms of bias? .> the bias is still lower maybe not in the next several days. they have been oversold. the 10 year treasury yield has cleared important hurdles to the upside. the next hurdle i've seen is 2.5%, a level with some psychological significance but notice it did manage to hold the 2% level, really key in terms of preserving what i believe will be a more up move. it gets it to about 3% in terms of the next resistance on the alix: i have got to take a look at oil. coming inside the bloomberg terminal, this is here in the u.s. we have broken below the lows we have seen back at the end of october. are we looking at a retest here of $38 per barrel? >> anything is a possibility when you look at crude oil and it is a downtrend. we have to look at the moves as counter trends.

there are indications there is a short connection that we have seen, and the end result of course is going nowhere -- nowhere. it is a continuation pattern and that comes from the momentum that has improved over time. not that obvious yet here it i think until your above 51 or $52 barrel, you cannot get too excited about the move or the countertrend to move. there are early indications that this process we are undergoing is hard of a phase. scarlet: what is the leading asset >> which one is the trigger for everything else? >> said is hard to say. i would like to think it is equities and the stock market should discount a lot of this information we have on the macro front. it has been top-down driven. that comes with volatility we saw two words the end of the summer. >> awesome stuff. what is the first chart you look

at in the morning? futures? >> right. but the s&p 500, fixed income, currencies, global market, you name it. >> what is the last one you look at before you go to bed? [laughter] >> thank you so much. scarlet: coming up in the next 20 minutes, emerging markets are finally seeing gains after months of declines. how much will the fed's rate hike way on the fed market. alix: is it possible to deport millions of undocumented workers and could a bloodstream and could a budget even work in the white house government? scarlet: a tour of a dollhouse castle of for $8.5 million.

alice: welcome back. scarlet: it was a record-breaking singles day for alibaba. billion of14 transactions. -- $9a needed only 12 billion. alix: it could be soon for miller time. for 100to buy a rival $7 billion in a deal that would create the world's largest beer maker. the combined company would control more than a quarter of the local beer market. they reached a tentative deal last month after weeks of haggling. walmart workers are

loving for higher wages. they want a discount on food. they already see they already see the 10% discount on merchandise but it is not extended to the vast amount of items. the change will not come cheap and it could cost walmart more than $400 million a year if they cave in to the demand. always get more business news at bloomberg.com. over to thehead market desk where julie hyman has a check. julie: horizon pharma, the latest company to be scrutinized over its relationship with his a shelti pharmacy. we have got express scripts appear. it is terminating its relationship. removing the pharmacy from its network that it says dispense mostly medications made by horizon pharma. betweenr relationship valiant and philidor.

this is gaining scrutiny. horizon is staying in a statement that the notion this is so-called captive pharmacy is entirely false. same time, express scripts is also saying horizons enough of phil congressional -- contractual agreements and it is suing the other have been conflict between the two firms in the past. obviously, it is continuing. mankind, a pharmaceutical maker based in israel, apparently, according to an israel website, trying to block the company's share sale, telling them not to buy shares. this is the latest in a streak of declines for the stock. the outlook continues to deteriorate for the company. scientific, it's watchman devices used to close up a portion of the hardware deadly blood clots can perform. medicare is trying to assess whether it can cover this device

but it will now not offer broad coverage for it. and up move or i want to point a company that is down by 1%. lossespany posted more than anticipated. you so much.k still ahead, you want to diversify your portfolio, we will hear from an analyst who says exit: malaysia are some of the best bet. we will discuss next. ♪

scarlet: welcome back.

alix: it looks like a lovely day outside. a little chilly in the morning. scarlet: almost all emerging markets have undergone losses this month but the possibility isan upcoming fed rate hike putting the money back into economies. how is it affecting risk economies? i want to go to carol massar and cory johnson. it looks like we're having some in theal difficulties radio booth. thats the data for china signaled that china is making the transition to a demand driven economy. demand is at risk?

we can now go back. >> they are so focused on iron to and copper when they need be thinking about retail sales, things like record-breaking singles today. the economy, the consumer. it is the focus of aging. they cannot be the low cost labor center for the world anymore because demographics demand it. the at what they did with one job policy just the other day. they had to change it. i think people are using outdated metrics and thought processes. cory: you also see the effect of the recent efforts in china and the way that is a acting. big coatong kong, a store closes. carol will talk to the ceo of rolls-royce and they say they have seen a significant pullback by chinese consumers.

i wonder what effect that has. -- wealthyly welcome consumers. >> and luxury goods. i think the reality of the crackdown, conspicuous consumption will continue. the communist party in china is a total of 6% of the population. in aneed to be thought of good light to maintain the control they have over the rapidly changing country. if there is something they can reputation inthe the eyes of citizens, they will keep doing it. might be a headwind for some companies, but remember they are selling apple handsets in china as well, certainly not as a gift giving tight of thing. cory: maybe this will be tougher for apple because of this change. known fornot a place conspicuous consumption for 1000 years. the fact that a change from one

generation music could change back. sf i think there is some truth to that. the government has stepped in and puts shackles on foreign companies being successful in china. look what happened in walmart where they had stores closed for a small regulatory issue. they have brought them up and race attention to the fact they and somore than china forth, but i think apple will sell a lot in china for the time being. carol: how do you invest in it? we like is shipping companies. that might seem odd, but we will regional shipping take off. southeast asia getting closer together. got currency woes to strengthen the u.s. dollar, dampening trade in that direction from the u.s.. let's focus on the small niche players. hong kong listing games and

other logistic companies and they can play on that on regional trade. cory: you see weakness in china throughout the region. seems like there is a spillover effect. >> the indians need to buy palm oil. everyone needs to buy thermal coal from indonesia. people have specialized in terms of what they are producing, vehicles in thailand and other higher and goods in malaysia. the trade is necessary because people have really specialized in what they do. bulkr you on the big things but a lot of things need to move around the region. carol: i have got to ask you about alibaba because you talked about economies. investors do not seem to like it. >> we really like it. cash.re able to harvest

we have a $124 price target on it. absolutely. it is something you want to own as much as you can. it is just so well-positioned to monetize, continued growth in commerce. carol: thank you for coming by. joining us right here on the bloomberg advantage or we will talk it back to you on tv. >> thank you. alix: still ahead, a lot of talk of fiscal policy last night at the republican primary to bp are and what were the facts? we will break it down. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. 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. alix: welcome back. scarlet: let's start with the headlines. mark crumpton has that from the news desk.

mark: thank you. president obama honored veterans ceremony at the international cemetery. he said a new wave of vets who served in iraq, afghanistan, and elsewhere have skills that can benefit the economy. obama: if tomorrow, after the praise and a salamone is, we sleep the veterans halls and go back to daily lives, forgetting the bond between the service of our veterans and obligations as it is since, then we will be doing a profound disservice to veterans and the cause for which they served. mark: earlier, the president had a breakfast recession for families in the white house. today is the end of world war i. egypt's president made a surprise visit to the airport today. seeking to reassure tourists that the vacation destination is safe after a crash of a russian

airliner that took off from the red sea resort last. russia has a new plan for ending the conflict in syria, including a constitution and it calls for a popular vote on presidential elections. the plan makes no mention of syria president bashar al-assad stepping down. that and other issues discussed yesterday as vladimir met with the syrian leader. greece is racing for the first general strike since the left-wing government came to power in january. workers are set to walk off the moreo protest against yet tax hikes. the prime minister said he had no choice but to implement the dealas part of a bailout and avoid economic disaster. winter is still over a month away but try to tell that to people in the plains states today. a powerful storm system is dumping snow in colorado.

storm and blizzard warnings are in effect with up to 12 inches expected in some areas. parts of iowa and missouri could also see some tornadoes. that is the latest on world and national news. i am mark crumpton. back to you. scarlet: snow in colorado already. bailouts,s, bank these were hot topics discussed last night at the fourth primary republican debate in milwaukee. mr. bush: we ought to raise capital requirements so banks are not too big to fail. >> i will tell you about wall street. there is too much greed. would you bailout the banks? i would give you an answer, absolutely and not. mr. trump: taxes too high and wages too high, we will not be able to compete against the

world. i hate to say it, but we have to leave it the way it is and people have to go out and worked really hard and get into the upper stratum. >> here to help us break down how the candidates fared and what they did and did not a is the senior vice president of the bipartisan center in washington. budget and appropriations for the senate majority leader bill. reveal a clear-cut winner, but who are you most impressed by? >> it is a good question for a was not going to pick a winner and i was going to suggest the republican viewers last night were the winners of that particular debate. they were able to see the differences in the policies of the candidates that were on stage last night. if you pressed me hard, i would i think mr.ankly, k-6 did a great job and mr. rubio did a great job than bush came through and did not lose any ground. thee of the my candidate as

ones who probably came out best last night. alix: said rubio stick out. how does it all stack up against the democratic winners? >> i think it is a good question. tells me rating system is exactly what i was now, this was a good debate last night. they were talking about policies for a change and not personalities. i think there will start to be a filtering out of who will be the best candidate to take on the democratic challenger next year. appear to me would that probably the issues will come down to emigration, spending, deficits, taxes will

continue to be a particular issue. all of those will come together at the end of the day in terms of sorting out a good candidate on the republican side. but it will be a difficult race here there is no question here whoever the candidate is, they will have a difficult race with secretary clinton. i think it will be a tight race. alix: they all have lofty policy goals. out of all of them, who would be the most capable of working with congress to get any goals accomplished? another good question. from my perspective, while we are talking about the we'reential race clearly, also talking about congressional elections in the senate. it is generally believed the house will remain republican in the senate is up for grabs, quite frankly. it is not there who will control the senate or if it turns out republicans control the senate, it will be a narrow margin.

they will not have 60 votes in the senate. occupies the presidency, they will have to work once again to pass legislation and that means compromise. i think it will be difficult for some of those candidates who have a spouse lofty goals as you suggest out there to cut taxes and reduce spending across the board, eliminate five departments of the government. that, quite frankly, i would that it to suggest, could not happen, but it would be very difficult. alix: you heard earlier rand paul talk to marco rubio saying you cannot call yourself a conservative if some of your policies mean you want to increase spending. did you hear it is actually more spending and not less? particularly out of mr. rubio. i also heard from all of them

across the board. all talking about tax reform and i think it is necessary. almost all of them were talking about tax reforms from police my be aective will probably major reduction in revenues which will add to the deficit. overall, it is a combination of trying to balance the budget over the long-term, which we all want to do to reduce the level of debt, we will have to look at this from the perspective of revenues and spending and growth. revenue will be critical. reforms along those lines will be necessary but also i think spending. one thing that bothered me about last night's debate was most of the focus on spending reduction. we are talking about cutting spending, and which makes up less than 7% of total spending. we did not hear the debate about entitlement spending.

that debate took place in little in what i call the children's table debate that preceded him mr. christie really is the one who is focused on entitlement, social security, medicare, in a big way. debate lasted the night focus when it talked about spending, focusing on a very small portion of the federal budget causing our deficits. that because none of them have good ideas on entitlement spending? >> mr. k-6 has talked about and theynt spending all had talked about it. it runs off the tongue so nicely. entitlement reform. it really about what is paired it is medicare and medicaid and social security. major programs that go to the middle-class in many cases. this is a tough one for politicians running for office to talk about what they would do to change the programs affecting

the middle-class out there. >> what are the big donors doing this morning at the debate? bill: i do not know what they are doing. i am a small contributor to the candidates and i try to spread what little money i have out to all of them. i have no idea. i am sorry. alix: thank you so much. thank you for joining us. that is it weird you're talking to donors during these debates rather than voters. coming up next, do investors really think the banks are safer than u.s. treasuries? think about that and we will tie you what is behind the functioning debt derivatives market. >> a teeny tiny home valued index or big way. dollhouseow you a that costs millions of dollars. >> and coming up, stocks are expected to rise after the potential rate hike and we will have a breakdown. ♪

alix: time now for the bloomberg is this flash, a look at some of the biggest business stories in the news right now. we begin with petroleum, which will not be making another run and a crude producer refused to engage in substantive talks. merger would have created an iplorer the is more oil than could door. the largest department store chain in the u.s. reported third-quarter sales that missed analyst estimates. fells says the revenue

more than 5% and among the reasons, unseasonably warm weather and slow traffic, which hurt sales on fall items. and climbing the ranks of the really rich, jeff bezos has passed carlos slim to become the fourth richest person in the world. now worth more than $58 billion. amazon shares have more than doubled this year. you can always get more business news at bloomberg.com. really: how many really 's makes you a billionaire? alix: julie hyman is looking at the markets. julie: if you look at what is going on based on the bloomberg commodity monitor, there is a lot of red on the screen today, mainly in the energy complex. we are seeing some recovery after yesterday's slumped on the forecast.

oil is trading at its lowest since late august and we have got the numbers from the american petroleum institute showing in inventory last week which will get the official numbers from the government tomorrow, a day later than typical because of the veterans day holiday. down 2.7%. , anothertching gold bad stretch for the losing streak we have seen gold on, down another .4% today. same reason people are looking andthe outlook for the fed we will potentially see an intricate -- increase in interest rates in december. copper we are looking at because we see the annual american copper council meeting starting on tuesday. according to the barclays analyst, it is the buyers of copper who have the winning hand right now because of the oversupply we see in the copper market area at the consumers of copper will have better

negotiating power although copper right now as you see is little changed. then i want to get unorthodox and talk about commodities we do not typically talk about. there is sadly not an index that looks that grades, but a story on bloomberg terminal says there is a huge crop of grapes this year that will not cost a drop they are because holding on, stockpiling. one of my colleagues did point out to me that there is a .loomberg wine and cheese index of course you knew this. this is an index of companies that make wine and cheese. there is only one american company on here but it is about 25% here year to doubt yes -- year to date. alix: thank you so much.

the interest-rate slots market is saying yes. that is the real story here. >> we see a malfunctioning in the debt derivatives market. we want to bring in lisa abramowicz. what we see here is the market versus the u.s. treasury in negative territory. a lot of jargon for us. care.own why we >> this is basically the gas in the implied yield in the derivatives market versus the actual benchmark yield with says the race versus mortgages, very important rates around the world. ,ou are seeing that usually historically, there was a premium. >> basically, if i want to a littleit to a loan, more risk for stability. >> you have also got counterparty risk because you are entering into a contract with a bank. a bank goes belly up, that

could cause a problem. you are seeing the yield is on these agreements than the actual rate market. why? all, i have to be completely transparent. people do not know the full answer wide. perhaps a chelation selling emerging market economy treasuries. a lot of people agree that u.s. banks are not holding the same volume of treasury. it is more expensive for them to hold treasuries on their books right now than basically the one treasuries through the agreements, basically selling protection against it. alix: why do we care and why is this significant? how does this wind up affecting me or someone invents thing in the market? >> there are technical and wonky ways that it does. taking a bigger lookout, a really good point that you are seeing these bands being thrown

into the gears that really make debt markets work. there is a big shift in sentiment and the gears get locked? it raises the question, bringing up a liquidity concern, you start looking at tank bounce sheets that declined to the point where they are's -- they are in some cases negative. consequence be in a real shift of the credit cycle? scarlet: what happens when the fed begins to raise interest rates and it starts to have to raise it at a faster rate than what they committed to already. and wes the big question are already seeing the consequences of the lower dealer balance sheets. let's talk about what the balance sheets used to do. >> that was the chart we just showed. a position on corporate bonds, it is quite unusual. get it up on more times we can explain it.

>> this is aggregated exposure to corporate debt. if it is negative, they can have long positions and short positions. shorto banks have a position or, more likely, a lot of them have very little exposure it all and they have actually gone negative some cases. this says they are not using their own money. we will buy your bonds and sell them out to make sure they do not hit the market all at once. scarlet: that is because of increased capital rules. they do not want to risk on the balance sheet. >> that is the main part of it. also, there has been a big exit this of more senior people that have any incentive to take a risk whatsoever of these banks. that is the other reason. >> the other argument is you can still sell it bond. a buyer.ind there are investors out there even if you do not have a primary dealer. >> this is the question i've

heard arguments on both sides. does it pose a risk to financial systems? the federal reserve has come back after studying the issue and basically said, you know what, not really. yous totally fine area if talked to a lot of people on wall street, they say it is totally inaccurate and we think it will be a serious problem for a variety of reasons when you start to see people unable to shift positions quickly. we have not been here before. we have not seen things like this he. thank you so much, lisa. >> coming up up, a dollhouse so beautiful you would want to live there. you would have to be really small and it is valued over $8 million. ♪

scarlet: if i told you there is a 29 room house in midtown manhattan filled with custom furniture valued at under $10 million open for viewing tomorrow, would you go? alix: bargain. what is the catch? is a huge catch. it is small and we're talking about a dollhouse. it has been appraised at $8.5 million. you cannot really move in, but you can start to see it starting tomorrow. it will be on display through december 8 at the time warner center. the dollhouse beat. seriously, how do you value a dollhouse at $8.5 million? >> there are 30,000 decorative items inside, these tiny suits of armor or major taxidermy bottles about this egg that has real liquor in it.

these have been collected over decades. based on the totality of the items, somebody decided it is worth eight point $5 million, more than $2000 per square inch. scarlet: how does that compare to manhattan real estate prices? >> it is a lot more. scarlet: when did it why my -- wind up becoming of value? >> the story i was told was the 17th century wealthy families in northern europe started collecting dollhouses as a way of displaying the finest craftsmanship of the day. it takes a lot of work and expertise to build something so small and so accurate to real-life. by the 19th century, they became mass production items.

you find them in the nursery of every middle-class house. they now seem to be returning to almost a luxury item. the most famous of all was built for clean mary of england in the 1920's. working plumbing in it. it flushes is what i told. it has been displayed. there are a handful of these have floated around. chicago, thego to art institute, there is a 68 or miniature -- you can see the interiors of homes from the 13th century to the 1930's. it is remarkable. you talked about how it has become mass-produced. do people come into their at us and find all houses worth millions of dollars? >> i do not know about millions but if you're in your grandparents attic, you might as well go ahead and check.

then it is on display and where will it go? classical be a the time warner center for a few weeks. check it out. i think the intention is then to toured around the u.s. and perhaps around the world and raise money for children's charities. what the organizers told me is they will then decide whether to go on permanent tour were back into storage. 66 boxes it took to transfer it. alix: unreal. amazing. have to go see it. the world has most valuable dollhouse. incredible. scarlet: we have got more coming up. david will be with you in the next hour. ♪

♪ david: it is 3:00 p.m. in hong kong and 2:00 p.m. in new york. welcome to "bloomberg markets."

♪ welcome to "bloomberg markets" from new york. i am david gura. $14 billion, jack ma rakes down a big day on bloomberg. should amazon be worried? and a deal to buy anb him back, but now, how are they going to buy it and pay for it? a deal to buy ab inbev of. hyman has the latest. julie: we have had this over the last few sessions where we have a mixed session. we was he what happens in the next hour, where we have been seeing a little more decisiveness.