i am scarlet fu. market seeking some direction as stocks fluctuate between gains and losses. after three years of losses, from the election of a new president in argentina to the plunge and commodities, we explore which nations may be poised for kickoff. is going in the record books as the best year ever for m&a. pfizer targets a tax move to ireland. are one hour away from the close of trading on this monday so we need to check in with julie hyman for the very latest. julie:now in the red

there doesn't seem to be a catalyst for this. -- in the red. julie: there doesn't seem to be a catalyst for this. recovering to some extent right now. declines. seeing some the s&p 500, clearly there is some movement throughout the session. here you have that downward and off the bottom. oil prices may have turned negative. there may be a correlation with that. we will talk about that in a moment. i want to talk about some other asset classes. we have existing home sales coming in the low estimate. we continue to have fed officials. john williams of san francisco saying december is likelier than not. 2.25%. the yield was a relatively elevated yield. hasthen the dollar today been higher up a quarter of 1%.

that is how fed talk is being interpreted. weaker: you get commodity prices. basement is taking a hit today. julie: let's get to oils -- base metals taking a hit today. julie: let's get to oil first. we weren't seeing that in verse trade between the oil and the dollar, at least not 100% as we have seen it in the past. oil prices are down 2/10 of 1%, that coinciding with a little come down in stocks. metal feeling much more pain. gold, silver, copper, although's trading at or near multi-year lows here as in the minds of investors and traders, the fundamentals continue to be lackluster. scarlet: lackluster is a good way of putting it -- lackluster is a generous with putting it. let's check the headlines.

mark crumpton has those at the news desk. mark: the belgium government is keeping the capital brussels on the highest state of alert, at least until next monday. the rest of the nation will stand the second-highest level. beingasures are instituted after what is being called a serious and imminent threat in the wake of the paris terror attacks. belgian schools and the subway system will reopen on wednesday. the french defense ministry says it has launched its first airstrikes from the aircraft carrier. france is carrying out strikes against islamic state targets. as part of the crackdown on -- thest financing country's finance minister says the aim would be to restrict the ability of extremists to use the

cars for anonymous money transfers. islamic militant groups say only two gunmen carried out the attack on friday. a statement was received reportedly from the group, claiming responsibility for the attack. it identified two gunmen at the scene. the gun men are blamed for killing 19 people at the hotel. the houston ghazi committee is being sued by a former republican staffer. said he was fired for handling classified information. the committee was engaged in a partisan investigation. these andt more on other breaking stories 24 hours a day at the new bloomberg.com. i am mark crumpton, scarlet, back to you. scarlet: we are going to emerging-market equities. stocks were down 12% thanks to the depreciation of local

currencies. chief investment officer of emerging markets, he sees three in 2016.ers china's growth and commodity prices. jorge joins us with more. of those three risks, which has the potential to surprise the most. jorge: i think china. difficult to say interest rates are going to surprise anyone. no one is scared of the boogie man anymore. surpriseld potentially us. is a little bit more or less difficult to read. scarlet: surprised to the upside -- downside?ere go

jorge: i think a mild recovery into the end of the year and early next year. they are switching models from an expert model to a domestic treatment model. that is not easy to do. their blueprint for how china gets there -- jorge: nobody has done a very transformation. singapore is a great example, but there is still those that remain exposed to international markets. jobh korea has done a good going from a successful model to a middle-class for power. they are still very dependent on the international markets. scarlet: the scale is massive. this youn spite of all have upgraded china to most preferred of the emerging markets.

jorge: they have a current account surplus. it is a bit of a tactical maneuver to be more defensive in the raid of new hikes. would assume betting on anything industrial or commodities is not really good right now. >> the banking sector is quite attractive on an evaluation basis. scarlet: let's talk about some other markets. specifically, because of stocks are plunging today. if this was a buy or sell on news, why are bonds defending their gains today? jorge: that is a relative performance. probably one of the first things they will do is settle the view with bondholders.

the other thing he would try to do is to value exchange rate, which is not entirely good for stocks. to measure he is likely undertake a probably not good in the short term. financial markets should see through it. scarlet: are we talking the rest much of ayear? how honeymoon are investors willing to give him? would say a few months. a very educated population, great fertile land, and a very terrible government. i haven't seen the possibility open for argentina since the 90's. how does the election change the stocks? will there be fewer in -- fewer speculators? more long-term value seeking?

jorge: eventually they deliver on the process. he won by a small margin. beside some of the metros, the medicine has to be dropped by argentina. large fiscal deficits, a lot of issues with the rule of law. a lot of changes, it is not going to be easy. >> no one believes the inflation numbers coming out of argentina right now. will argentina and the excitement over the fact that it is the market available to international investors have any kind of ripple effect down the road? jorge: i think politically the important message goes to venezuela and brazil. they have been flirting with populist governments and policies. this is the beginning of the end

of property bias in latin america. this is good news for the region overall. from an investment point of view , shall be the goods, show me the economic team, show me the policy that will be implemented, and show me the political support. scarlet: chief investment officer. we have much more coming up on bloomberg markets in the next 20 minutes. donald trump is searching in the republican presidential race as terrorism becomes the issue most on the minds of voters. new york attorney general has a new target. launching a probe into currency -- we will explain. and pfizer's 160 volume -- $160 billion deal -- this wave of takeovers is not eating to a wave of gains.

scarlet: it is time for the bloomberg business flash, a look at some of the biggest business stories in the news right now. dieselike an says engines have been approved for 90% of vehicles in europe. it is a sign the company is making progress. a german automotive regulator approved a software update for diesel motors and has given its agreement in principle to a plan for 1.6 liter engines. there is a dealer -- a deal on the table to buy cat can -- to buy petco. the investment board will buy

the supply chain. whole foods campaign to appear more affordable may lose ground on thanksgiving dinner tables. a bloomberg and television -- bloomberg intelligence study holidays caught -- holiday feed costs 20% more at trader joe's. you can always get more on that story and other business news at bloomberg.com. in light of the paris attacks and the fax that congress and most americans oppose resettlement of refugees here in the u.s., terrorism is one of the biggest issues in the 2016 presidential race. bloomberg politics comanaging editor joins me now. has a topped the economy? >> not that surprising in the

wake of paris and global instability that has spread. it is now at the top of the list among republican voters. how long that will sustain, whether that will be the case throughout 2016, too soon to tell. well in of who is doing the early states. >> who is seen as most competent? >> by 30 points in terms of, this has got the horse race number up here. in terms of dealing with the economy, trump is up in the low 40's. terrorism andys

immigration are conjoined issues. trump is benefiting from his strong man persona, even though he continues to generate controversy after controversy. he is in the middle at six or seven flaps. to be pushing him higher in the polls. >> it is probably encouraging him to speak up on other issues. person who has been heard by this is ben carson, who is foreign affairs -- whose foreign affairs, lack of knowledge, laugh at that lack of knowledge, lack of experience, seems to really have fallen in iowa. now in third place according to some pulling in iowa. dr. carson, his moment seems to have come to a relatively quick and. as much aboutknow foreign policy as his advisers had mentioned. had he taken a stance?

>> very hawkish. he is not far to the left and trump is not the far right. is it helping ted cruz, marco rubio? >> hurting carson the most. now seeming to gain more altitude. sort of in second place in new hampshire. both those guys are talking about foreign policy. the first new ad of the campaign is out. starkall about isis, very foreign policy centric ad. at some point this is going to be an important issue. look at donald trump

and say maybe not the right guy to have. really want that guy to be commander-in-chief? they hope to convince people they are just as tough, but may be more common sense. >> bloomberg politics took a poll and asked what voters are excited about. >> they are really excited about the iowa caucuses. the super bowl was always going to win this. i find it insane that people are more excited about the iowa caucuses. double the number on march madness, which is like a national religion in our country. i guess people care about politics now in america. there was a big debate about

whether pumpkin pie was a pie or a tart. because it doesn't have a hard crust? how do you account for lemon meringue pie? those are all tarts to you. scarlet: you can join them for all do -- for "with all due at 5 p.m. eastern time. stocks are now lower after a choppy session.

scarlet: welcome back to bloomberg markets. after bouncing around in early trading stocks are slipping to the red as gains in energy companies have faded. julie hyman is standing by with what is going on today in the options market. options, a trader is joining me from the cboe. good to see you as always. action,this lackluster not surprising that volumes are down. where are you seeing the activity center in the options market? >> i would expect that volume will trail lower as we get into tomorrow. what is different about trading options this week as we only have 3.5 full trading days this week. pullbacks and implied volatility drag.

not a whole lot of eight options coming across today. some looking out a little bit , spending the first half of the day in a four point range. >> we will get to your trade in a minute. is there anything that has caught your eye where you are seeing a lot of volume generally? >> one of the things we did see is a bit of bearish activity in the retail etf. it really is the last major week of earnings until we get into the next cycle. it looks like someone did come in today and look at some protection. downsided be protection against the catalyst of earnings we have this week. it is also the beginning of the most important time of the year.

let's talk about another company coming out with earnings. the legacy hp as opposed to hp enterprises. companieslike these are going to combine results but give details on each. you are looking at hp versus the enterprise part. >> an incredibly strong track record on earnings. if we take a look at where the stock is trading right now, we see a moving price at about $.80 past exploration. what i can look to do here is from the 15 call spread, $.20. they are going to cost me $.40. i'm going to get 1.5 on my money. ofdownside is only a maximum $.40. if the stock doesn't move at all

i can capture a little bit of premium. going to beyou looking for in terms of confusion over the blended that are maybe pro forma, it is unclear how it is going to be reported. what is your concern that there is going to be some downside volatility when these numbers come out because of that? >> there could definitely be some confusion but this is a short trade. if we get the numbers and get an initial pop, i should be able to take it relatively quickly. these options expire on friday and i lose a day and a half worth of trading. premium should come out of this and i should have a pretty good idea of what i will be able to do right away after the earnings come out. q, not: talking about hp be confused with hpe. have a good thanksgiving. scarlet: thank you so much.

as we had been reporting, pfizer for $116 by alec and billion, that will allow the drug giant to gain a tax base. she has urged a crackdown on these kinds of deals. gop front-runner donald trump tax aversion disgusting and that our politicians should be ashamed. arjun o'malley says he opposes the deal. still ahead, currency traders going under the microscope and launching a probe into other brokers are placing fake orders. details next.

scarlet: you are watching

bloomberg markets. we want to begin with a check of the headlines. mark crumpton has those at our news desk. mark: belgian authorities are increasing security over fears of a terrorist attack. the alert level is at the country's highest with the rest of belgium at the second-highest level. after 16 people were detained on sunday. brussels remains on lockdown. the city will reopen wednesday. the paris terror attack has hurt the cities to raise him industry. 10 days after the violence, museum ticket sales are down 30%. there also no lines of people waiting to get to the top of the eiffel tower. tough talk on terrorism appears to be helping him in the polls. the republican presidential candidate has reclaimed the lead with 30% support. ben carson, who at one point was

leading trump, is now in third place with 19%. trump has a commanding lead with 32% support. marco is in second place with 13%. other recent polls have trump searching. an associated press analysis find airplanes spent 23 minutes and 32 seconds taxiing between gates and runways. that is the longest it has been over last year. the reasons include massive runway construction projects, schedule changes, and new distant runways that relieve congestion but require more time to get there. 24 can get more and these hours per day on the new bloomberg.com. i am mark crumpton. back to you. scarlet: we want to head to abigail doolittle, live from the nasdaq, taking a look at two stocks heading in two different directions.

starting with electronic arts. abigail: ea is one of the worst performers. gamestop missed its third-quarter estimates and guided it's for -- guided its fourth-quarter profit of you down. demand for the star wars game was weaker than expected. the question will be whether or not this impacts numbers for ea or will be a one-day negative headline, especially considering this companies history of strong performances. that beatent in earnings estimates eight out of -- they -- beaten erred had been earning estimates eight times. stephen anderson thinks that they will benefit -- that panera e.l benefit from chipotles coli problem. the news price target suggests the stock declined by 20% at current levels.

something that may be welcomed by investors, considering the stock is flat year to date. scarlet: abigail doolittle at the nasdaq. the largest u.s. banks could face tap -- could face capital requirements to pass the fed stress tests. earlier today bloomberg spoke about the decision with the governor. he is a member of the federal open market committee. >> the stress test has been the most important infant -- most important innovation. now central banks around the world are conducting rigorous stress tests.

they thought it was a good opportunity to step back. easier for supervisors and the banks who have to go through with it every year. how do we make sure we are not missing something in the stress test. the most rigorous scenarios can only capture so much. we heard in the widespread consultation for academics, for analysts, we need to think further about enhancing the macro element of the stress test. although we haven't decided how to do that, i think there is a that at thechance some of theay or

capital surcharge as a post stress minimum, or through other mechanisms such as one you and there earlier will be some net increase in the post capital requirements. >> we have seen presidential candidates doubling down on dodd-frank and others like donald trump repealing it if he were president. >> dodd-frank has become a bit of a symbol for regulation. david was asking a moment ago from commodities what we did on capital in 2010 wasn't explicitly called for by dodd-frank. we need to specify where the regulation needs to go. it and where it

was just about right. >> erik shot a man is setting his sights on a new target, manipulation in the foreign exchange trading markets. his investigation looks at brokers who may be placing fake orders in a technique known as spoofing. first explain to us what current seeing -- what current see spoofing is. >> putting out a whole bunch of orders and canceling the orders in a strategy to move prices up or down in your favor. brokerss we have putting fake orders in illiquid

currency. there is not a lot of trading. a year in those markets. upthose efforts to drum interests, they are putting fake orders allegedly. i'm interested in this trade and different things like that. it creates a false sense of demand. basically how active that market is. mount a could they defense that they are just trying to create liquidity in the market? orders -- it is probably not legal. it was a very powerful corporate

crime law that allows the basically goral to in the financial institutions and look for fraud and then crackdown on a white color crime. scarlet: would we see regulators jumping in? would they be coming in with their own investigation? >> you see one regulator, one law enforcement agency, like the attorney general or department of justice. be they ares would over in the future and other types of derivatives. scarlet: how does theophilus prosecute these crimes compared to federal prosecutors? very powerful even comparison to other laws. he has all the same tools at his

, and i will definitely watch if there will be any individual on this. they always look to see what the company is doing wrong. on the market and on main street, specifically it is the individual preferences. under the martin act and new york state law it possible in this case. >> we had a big wall street bank hang $6 million in fines. the guys are being scrutinized are not these big wall street banks. >> that is why this is such an interesting twist on what happened in the market. with those big settlements that happened on wall street, you do see a lot of change in practices and regulation happening. you arend a niche where

not seeing that yet. you can look at it many years back until present day, and he is probably going to find something. you get access to company records. it is interesting he took that approach. it is a pretty interesting case. i think of them for the broker-dealer angle of it is something new and something we haven't seen before. >> a great story, very well reported and investigated. much more coming up in the next 20 minutes. speaking of currencies, the search in the u.s. dollar continues to be a headache for janet yellen as the bank ponders whether to raise interest rates in three weeks time. we will take a look at the impact the currency will have on its decision. it is a record year for an the day but stock prices are on average not rising as high as it used to. why investors are becoming more worried about valuations, especially in those takeover targets. and coming up on "with all due

respect," johnna marked will be joined by anita dunn -- john and mark will be joined by a anita dunn.

scarlet: it is time for the bloomberg business flash, a look at the biggest business stories in the news right now. may back securities from export revenues. the brazilian oil giant has $24 billion in debt, coming to you in to the 16 and 2017. the plan would create a special

purpose of the occult to issue securities as a way to protect .ondholders from the risks shares of alcoa climbing higher on news that l.a. management bought a six point 4% stake in the largest aluminum producer. constructive dialogue with alcoa. posco ceo putting banker compensations on notice. bankers earn too much and should not be cashing in like on turner's. .- like entrepreneurs he says staff bonuses will have to reflect the cost of conduct. the bank will re-callow -- will recalibrate the way they treat valley. -- treat value. businesses at bloomberg.com. the expected date for the federal reserve to raise rates gets closer, many will worry it will be harder for the bank to achieve its goal.

the rate has been below target for three years. weisenthalnow is joe , the cohost of "what it you what'd you miss?" talking about how the fed may have missed the boat when it comes to raising rates. the fed is now putting the economy at risk of a recession. this, dide have said the fed miss its window? to that ish back hiking so you can cut or hiking -- if the economy isn't in good shape now to withstand the rate cut, they were not there in terms of momentum, employment, inflation, it is hard to argue we were there six months ago. what important thing to bear in

mind is the fed is not looking necessarily economic momentum. it is looking at hitting a certain number on inflation. that might justify a rate rise, doesn'thot data necessarily justify i hike. scarlet: before the october jobs report everyone was saying the economy is spiraling downward. we had this patch where we are not sure what was going on. the numbers are so dismal that we were ready to write things off. i think everybody forgets some basic lessons, such as don't make huge sweeping conclusions. another thing said one million times is don't open too much on the first hike. we keep hearing these things and we know we should not get excited about one jobs report or

one that decision. scarlet: the fact that it is coming down faster than the fed is expecting is leading to questions on how well it is forecast. joe: a lot of people criticize the fed and say the fed doesn't know what it is talking about. gdp will hit a number if we keep going slower. on the employment front, every year it has dropped faster than you would expect. people are relatively sure we are near full employment. year of a be another fall in the unemployment rate, then you can imagine worries of overheating. scouting i so wish i was part of the conversation later -- scarlet: i so wish i was part of the conversation later today.

coming up on bloomberg markets, the close of trading just minutes away as we had to break. here's a look at shares for retailers who will be reporting tomorrow. and's -- and signet jewelers.

scarlet: welcome back to bloomberg markets. u.s. markets close in just about 10 minutes, stocks are off their lows. julie hyman has a market check. julie: we had that big rally last week. now it is a stalling out on a holiday week. checking the latest volume numbers. volume at about 13% below the 10 day average. all three major averages are down, but not down by mary much

-- by very much. we did have some volatility in a tight range. seemed as though stocks were moving in tandem with oil prices . energy is now turned around and it is the best performing in the s&p. consumer staples, the best performer consistently throughout the day. particularly on the shorter end of the curve, the trend has certainly been higher. that tends to be it for utilities. we have some individual news. earnings beating estimates. strong demand for chicken at the same time costs are declining. kellogg and constellation brands getting up rates separately. and then the other big market story of the day has got to be the big drug deal.

pfizer agreeing to buy allergan. it will be a good -- be a reverse merger. tax -- $363 per share. i mentioned oil prices. that was a big part of the session. we saw those volatilities and the oils in the day. volatility in the oils in the middle of the day. in the end it comes to not in terms of price action. scarlet: julie hyman, we have a minutes to go -- have eight minutes to go. us how pfizerd and allergan are set to merge in a $160 billion tax aversion deal , what does that mean for further takeovers across the u.s.?

a booming m&a market seems to be having a diminishing affect on premium. ere to discuss this -- all of her, you have written about this and the takeover premiums have started to narrow. oliver: today's deal with allergan and pfizer is at a 20% premium. if you go back to where they were treating the day before, new started milling about this in late october. that is what the averages in terms of what companies are offering other companies. if you look at the stock moves related to these deals, but target companies are getting a smaller boost following the amending announcement. that even including stories in which there has been speculation or rumor. that is the lowest we have seen or moves in the last 17 years or so, usually when you have markets and there's a lot of m&a higher,g and prices are

you do see those premiums come down a little bit because some of those premiums -- some of the stockanies say market is generally in evaluating -- in elevated evaluation right now. you are seeing that more across the board. this particular case is interesting because allegan is down by 3%, the average day after moved to 16%. is very particular to the steel that maybe warranting some caution. scarlet: is a driving stock prices lower instead of giving its usual pop? >> there is a bit of an overhang in terms of one deal that is not when a close for another 12 months. allergan is going to wait until it's they vested -- that is going to happen at the beginning of next year.

the merger can actually kick in. shareholders are going to be holding on to this for 12 months. a lot of political favor coming out as you can expect. trouble came out and started bashing it -- trump came out and started bashing it. a lot of crying over spilt milk here. there is some actual deterrents to it. scarlet: we have inklings that was going to happen. we have been reporting for a while that pfizer and allergan would get together. a lot of it has been baked in, isn't it? oliver: it surprises to see that the was only $2 billion in synergy announced there.

they had $4 billion of synergy. and an all-star deal with a little bit of cash thrown in there. >> if you do take it back to it was, of course obviously a target company that people were talking about. stocks of 5% in october. the s&p has been flat. that is still way below, when you think that the -- think that it was priced in. happens, -- when it happens, not really surprising. scarlet: that does it for us.

are moments away from the closing bell. i am joe weisenthal.

and i am alix steel. scarlet fu is doing other work. saw itsfalling after it biggest weekly jump of the year last week. joe: the question is, what'd you miss? expected,te hike is and we weigh the odds and what they mean for the market. plus, negative interest rates. europe digs deeper into negative territory. going strong into the holiday season, and our guest whycharts that he says show , but, of course, we have to begin with the markets. it looked like markets were going to be able to sustain that rally we saw, and the best weekly rally that we have seen di