erik: from midtown manhattan, good morning everyone. here is what we are watching the sour -- this hour. we are looking with brick-and-mortar stores are doing in the fight against online competition from amazon and others. as the price of oil -- has the price of oil reached the bottom and what will that mean for the global economy? i will speak with dana erg -- daniel ergen. and look at hp's different -- disappointing forecast. first, let's look at the markets. julie has an update on breaking new home sales in what is happening in stocks. julie: let's start with breaking home sales numbers.

rising more than anticipated. of 495,000.ce it looks a little bit better than had been anticipated and the contrast of the existing numbers they came out earlier in the week. the university of negation consumer -- michigan -- economist looking for a reading of 93.1. missing estimates, much like a consumer comfort number from bloomberg itself. its own gauge of consumer sentiment coming up earlier today that was worse than estimated. you have the s&p homebuilders etf. it looks like a little bit of a leg down. we will give it a few minutes to kind of shakeout. erik: new hempstead -- home sales is not the only information out. julie: it was a veritable feast, much like matt miller eating pumpkin pie on the side of the set just a few months ago.

yes, i saw you doing that. erik: called out. julie: if the pregame for thanksgiving. you look at major averages and we are seeing a little bit of an increase. if you look at all the economic data this morning, it's hard to get every set read. it was mixed. we had household spending rising lesson forecasted in october. personal spending of just 0.1%. on the flipside we had the durable goods numbers. if you look specifically at orders for u.s. business equipment, that never climbing more than forecasted. we also got the market measure of the services purchasing managers index. 56.5 which is a little bit of a forecasted. a lot of mixed numbers this morning. stocks are little changed. they opened up lower and then turned higher after that services number came out. if you look at how all of this is shaping up in terms of the groups in the s&p 500, we have

health care doing the best followed by consumer discretionary stocks. bouncing back little bit. energy on the bottom. it was leading yesterday and other worst-performing group. we have oil prices lower again today after redeeming about 6% in the prior two sessions. oil coming off today as investors and traders come back and say maybe that they gain was overdone given the prospects for turmoil in the middle east or lack thereof. down about 2% today. quick check on the newly split q, the legacy printer and computer maker coming up with earnings in forecasting misses estimates. we will be talking with cory johnson in a few minutes to did a little bit more into that. hpe commentary was a little bit more positive and that's why the stock is doing better. erik: hp is now the table to companies. thank you very much.

that is julie with the latest on economic data. let's check in on the news with vonnie:. vonnie: russia is sending anti-aircraft missiles to syria after turkey shot in one of their bombers. they are sending a worship to the mediterranean near the airbases used in syria. syrian troops rescued one of the two pilots. syrian rebels say of the body of the second flyer. police armed with automatic weapons guarded schools in the belgian capital as they opened for the first time since security measures were imposed. they also begin reopening after a 4 -- shutdown -- four day shu tdown. belgian and french authorities continued on for these two suspects believed to be directly linked to the canning. angela merkel is down to help france. and the after meeting with president obama, from taliban will speak with her.

-- francois hollande will speak with her. it says -- says germany can boost its presence in hotspots. vice president kuwait -- vice president biden is beating in croatia about except in syrian refugees. it could become an issue as the party discusses europe's response to the crisis. in chicago hundreds of protesters marched last night of the killing of a black teenager by a white police officer. the city released a video showing the opposition in the teenagers king times. the officer -- 16 times. the officer has been charged with murder. that's a look at the first news right now. in get more on these and other information of breaking stories at bloomberg.com. erik: thank you. is the day before thanksgiving.

u.s. retailers have little to celebrate this holiday season. never has traditional brick-and-mortar been so irrelevant. but to the s&p retail select industry index up against shares of amazon. that tells you pretty much in the know -- everything you need to know. matt miller and shannon. welcome. topic for terry lundgren. you are not shy about taking the issue up with him. company stock price performance when he was on this morning. matt: it is sensitive for all showed folders right now. beenareholders have rewarded handsomely by being a macy's shareholder. and they will again. as i said yesterday when i was out there talking to investors, i believe that not only are our

sweaters on sale, or stock prices on sale at this point in time. we have consistently delivered. only ahead challenges, this team has consistently come back and outperformed the market place and we are going to get much stronger numbers. there is something to that. erik: he hit on one point which was the idea that macy's faces --gh comps compared to matt: jcpenney for example. erik: any mentioned the strong dollar. that was another reason -- matt: if you want to compare. if you want to compare to hudson's bay which is another department store that is been killing it. they are in canada but they owned department stores all over the world. i brought up a chart showing an index of all of macy's competitors. and their same-store sales of the past 12 quarters versus

macy's same-store sales. saying theret by are some outliers in here. omps.ney had low c you still can't overlook the fact that macy's same-store sales growth has been lowered than the group -- lower than the group. shannon: there was a lot of different excuses are reasons that macy's -- they are citing the weather. mall traffic is down. consumers, are they spending on apparel? there is a lot of competition for the consumer dollar. that is why a lot of them are banking on the holiday. for a lot of optimism from ceos that maybe people are safe for the holidays. erik: you might hear more optimism from brian cornell tomorrow. shannon: i will be at a target store with him on black friday. there's been talk about black

friday not being as big as it used to be. rei staying close. but for the mass retailers like target walmart, this is a big a day as ever for them. they are expecting record traffic in the stores. i was out of the store on long island yesterday. they said one year planning for black friday. they will plan for next black friday on black friday of this year. matt: it will be interesting to see retail traffic. i graphed the last three years and we saw disappointing numbers in 12 and 14, but a spike into the -- in 2013 black friday traffic tends to be fickle depending on what else is going on. atget and terry lundgren macy's are hoping for a 2013 black friday. erik: and notoriously difficult to predict. they get it wrong pretty much every year. shannon: they are going pay some

consumer surveys. where you going to shop? with black friday for the biggest day of the year. that comes more towards christmas. people do all the last minute shopping. is the biggest shopping event. for target, they said they feel black friday is not just about sales but holding their brand. they see it as an experience. we have all been talking about how customers want more experiences. they don't want stuff. they want an experience. you get the apple store and lululemon. and experience is what customers want and they hope to create adam black friday. erik: that raises the question about macy's. four years they were the -- for years they were the darlings. up 23% last year. was the 20% the previous two years. now it's down to the levels it was trading at in 2012. what happened? he was the formula that

seemed to have perfected all the sudden proved to be not so effective? matt: it still is america's department store. when you think of a department store, macy's or bloomingdale's is the king of the hill. but they are not the discount store that people are looking for right now. and is not the ultraluxury experience -- although i think bloom goes is fairly luxurious in new york, that consumers are willing to shell out for. they need get the discount is. on and the online experience growth even know her -- even more than they have. shannon: so many next earnings the third quarter. that's why the holidays will be super interesting to see what the consumers are spending dollars. where they spending it? third quarter they were all over the place. hopefully that is what we are watching a black friday. i will be asking customers what are you buying. erik: macy's is under a great deal of pressure and walmart. matt: david barr's that we just at $75, macy'sng

was expensive. at $30 in my be good investment to buy now and hold for three years and let terry work his magic. erik: he's got $10. met and shannon, thank you very much. both my college or a bloomberg. pickup bloomberg businessweek. the cover story is all about walmart and how the retail giant is always keeping its eyes on employees. ♪

♪ erik: good morning once again. i'm erik schatzker. time for the bloomberg business flash, a look at some of the biggest is this stories right now. the justice department wants to

know if comcast is too much power over local cable ad market. a person familiar with the matter says the government has opened an inquiry having to do with interconnects, for one provider sells cable advertising to local businesses on behalf of other pay-tv companies. comcast says it is cooperating. deutsche bank has agreed to settle a u.s. investigation into tax evasion. they will pay $31 million in a nonprosecution agreement. focus on swiss banks that help americans evade taxes. theaters looking to boost revenues anywhere they can when the new star wars movie opens. they will be selling posters, keychains and even cocktails called yoda-ritas. they will be paying a higher than normal percentage to disney, the distributor. more news at bloomberg.com. let's take you up to julie to check on some company movers.

the stocks are moving after reported earnings after the bell. julie: i'm still laughing at -rita. is a green? ellis forward to trying one. beer, let's take a look at how that's doing. really interesting story with this because of surprising result of this comfort -- results with this company. is beating estimates and their forecast for 2016 beating estimates. it did see declines year-over-year in its earnings, as well as equipment sales with were down 26 present. those decline -- 26%. those declines were smaller than have been estimated. in addition to that the company forecasted that industry sales 2016.e down 15%-20% for it will fall 5% in the european

unit. it says it expects to be better, less worse than it has during previous downturns. it's not exactly blockbuster commentary but it is less negative commentary. william blair says some of the gains could also be due to short coverage. within my bloomberg terminal. we have the short interest of various measures for deere. on an absolute basis. it's near its highest it is been going back over at least the past five years. on this chart we have the price of the stock in white and short interest ratios. interest of vitamin the average daily volume in orange. is not quite as high. you see relatively high levels of short interest for this company. is7% of the company's float sold short currently. cdc people sometimes coming in and covering their shorts and inducing the stock even more.

a couple of other stocks we are watching on earnings news. one retail clothing 70 doing well on its earnings -- that is doing well on its earnings. earnings in the third quarter beat estimates, even as sales missed. i saw some analysts commentary that is positive on the needs ceo's turnaround efforts for the company. erik: you know what i want to talk about? valeant. down again this morning. julie: not as much but we will talk about it. erik: that is julie hyman of the markets desk. promisedackard investors it would do better can split up. the new company's reported earnings and both missed analyst estimates. that is what the similarities and. ink johnson has more on hp and hewlett-packard enterprise. good morning. how did everybody get it so wrong? if you look the stock prices

this morning, hp inc. is cratering. hp enterprise is trading modestly higher but they cap -- gap is so wide. : they do not break up earnings results for the two companies when they split in november. the results from last night was the last time we will get hewlett-packard results. let us take a moment and think about all the wonders enjoys that they have given us in the 20 plus years. what it has been is kind of a disaster. beside 9% year-over-year sales declined under meg whitman's last quarter with the company. is the worst sales declined it seemed quite a long time. the entire business and almost every aspect of the business is shrinking. the hope is you would have two businesses that would be very different. a steady printer business that sells pcs.

and supplies and printers and ink. and you have a high-growth business. selling network routers, services, software. but across almost every single metric, and all those business units -- look at software. they spent over $10 billion in software evolution in the past five years. they saw a 12% decline. i can spend recklessly. i cannot spend $10 billion. issue used -- it shows you the struggles of hp. meg whitman came in a lot of cash and a good amount of debt. a lot of cash generated from the business. not able to grow the places they are trying to grow. erik: there are quite a few analyst defending their buy calls this morning. they have 16 buys, 15 holds. one says it makes little sense to move to the sideline at the bottom of the pc cycle.

cory: i don't know if it is the bottom of the cycle. will we stop doing -- using mobile devices? are going to go back to using pcs for most of our computing? yes, things to be getting worse in the pc business. microsoft said it was getting a little bit better and i think that's why there is optimism going into the hp report. what we have seen is that the pc business is getting worse and worse. now is dragging printers with it within the is a big supplies -- surprise. is the worst year hp has ever seen. that says bloombergs editor an the west coast. that is cory johnson. what we can back we will be talking -- i mentioned we will be talking about valeant with julie and a lot more. stick around. ♪

♪ the ceo of the largest

independent investment bank in latin america has been arrested as part of a petrobras corruption probe. he doesn't do a lot of television slowing to give a small clip of an interview i did with him a couple of years ago in switzerland. we've created a foundation. we always thought we should be respected for how we behave regarding our business ethics. instead of helping poor people just because we have money. erik: those business ethics are most definitely under scrutiny this morning. hour -- is the viewer chief in sao paulo. have a good video is this? evez is a-- andre est self-made billionaire.

julia: this is one of the highest profile arrests in the car was case that started last year. -- and in june davis of the ceo of the biggest construction companies and in the country. erik: does it say that authorities and prosecutors will leave no stone unturned in an effort to get to the bottom of what went on at petrobras and the builders around the project? julia: that is what investors and some analysts are starting to tell us. how far is this case going to go in how big is it going to get? we thought this was already huge. is one of the biggest corruption cases we've ever had in brazil. it just seems to keep going and with new arrests. we had arrests today. and what the implications of it are for the economy and for the president. erik: wire shares hitting so hammer this morning? they were down 19 -- 19% at one point this morning.

we will bring it up so people can see. is he that crucial to the bank's business or are people -- it's down 26 present. are they selling now and asking questions later? --ia: i think it is asking selling now and asking questions later. he was brazil's golden boy. there was so much around him. most of what we reported was around him. is fact that he was arrested obviously not a good sign for investors. erik: now the golden boy walking run under a dark cloud. julia, thank you very much. we will be back here on "bloomberg markets" after this short break. ♪

erik: we are live from bloomberg headquarters in midtown manhattan. i am erik schatzker. moments from now we will be getting oil inventories. the price of oil retreating after hitting a two-week high.

and i think -- let me just check to julie kumari. -- julie, are we. li wee have: only seen seven sessions were oil is higher the entire month of november. there have been issues with inventories. now i am seeing the oil inventories are a little bit smaller than had estimated. about 1.2 million was the buildup estimated. i'm looking at gasoline. the buildup was larger than estimated. distillate inventories larger than estimated. that is not necessarily good news that we saw the refined products building more than estimated even as crude oil was building down. if there is more demand for crude oil you are making into the refined product, and the refined product is not moving, that is not necessarily a good sign. we have seen that oil has been moving week by week on

production numbers. i will look at those in a little bit as well. not seeing the headlines right off the bat at the moment. little bit of volatility in the make of these numbers. you tend to have a little bit of a delayed reaction here. right now we are seeing oil prices down by about 2.2%. holding steady, where they were before the report. we get changes as people dig through the numbers. i will get you at the top of the hour on how it is all shaking out. erik: if we are talking about oil, no better person to turn to than the vice-chairman of ihs, daniel yergin, pulitzer prize-winning author, global 30 on energy, with us from washington. good morning too. daniel: good morning. back from the middle east could tell us what you saw. daniel: there are a couple things that stood out.

global inventories, seeing that as the overhang on the markets. there was no sign that there was going to be any reversal from this market share strategy. thirdly, what was really was the to me, erik, focus on iran and the sense in the gulf countries and saudi arabia being surrounded by iran and how big a war in yemen moves to them. much less talk about isis and what they call the new persian empire. erik: let's focus in on that point you just made. how is it that that is the case, that if you hear, of course, and throughout western europe right now, the focus is squarely on isis, but it had been before, and you go further east into the middle east, they're are not really paying attention to that problem. all they care about is iran. daniel: they are paying attention -- when i was in kuwait city, they had a bomb in a mosque that killed 50 people.

there is continuing prices activity. but i think that they see iran in the context of this nuclear agreement. iran is a regional power. they feel surrounded because they see iraq as an iranian satellite. you look at bahrain, hezbollah, syria, of course. and then you see a southern front which they regard as yemen. they are at war. they are at war t in yemen right now, not at isis in syria. erik: excellent point. now to the point you are making about production quotas, the commitment to production of the current level. there was talk just a few days ago that the saudi's were prepared to cooperate with other producers in the region. in the more than a blip market. how come? daniel: i think they have got partway on this market share strategy. we can always be surprised.

what may people started think that might be a change, you are seeing a lot of people from saudi arabia and the gulf countries going to russia. when i was in kuwait the mere the amir year before, had gone to see putin in sochi. you saw saudi arabia talking about $10 billion investment in russian agriculture. what the middle east countries say is we are willing to cut if everybody else cuts. we know the u.s. is not going to cut intentionally. doing it inadvertently. the focus is on whether russia will make the cuts come and they don't see that happening. i think the signs are that they will stick with the strategy at least for another year or so. erik: even with the pressure it is putting on budgets, including in saudi arabia, which is running a massive fiscal deficit now? daniel: well, executive, but they still have around over $500

billion of foreign reserves. the strong since i got is they don't up those reserves in the last several years when i ran was out of the market and oil prices were high. it gives them a cushion. it doesn't give them a cushion forever. one saudi said to me that it is good to borrow when you don't need the money. those countries have the wherewithal -- they don't see this as a long-term thing, i do believe, but rather, as part of the cycle, it they will see the s on u.s. production that would have been expected a year ago and much more in cancellations and postponements of future projects, which will affect the oil balance 3, 4, 5 years from now. opec'se saw moments ago pactual production and we will bring a chart up again so people see what is going on. opec is producing well above its official quota. who are the biggest rule breakers?

and is there any risk of the solidarity within opec led by the saudis's going to bring down in that your long time frame you just referred to? daniel: i think you already innocence pointed to the answer to the question that has already broken down. we talk about opec -- those images of opec from previous decades. but it is not really opec. iran's production is down from sanctions and they want to come off. venezuela is down because of mismanagement. it is really the gulf countries, saudi arabia and the gulf countries, that are the decisive forces here. opec itself doesn't have cohesion. rail against the market share strategy but they can't do anything. erik: given that there appears to be growing political instability in venezuela, what kind of a risk -- i use that -- does thatly

present to venezuelan oil production? daniel: when i was in the middle east, one phrase i did hear from a couple people, a paint good blowout. what they meant -- a pint could blow up. what they meant by a pint, a country could elections are coming up there. the leader is way down. it is a classic case of vast economic mismanagement. it was going to be socialism in the 21st century. it is economic disaster in the 21st century. venezuela is one of the countries on the watchlist. nigeria, new president trying to stabilize things, but under a lot of pressure. 170 million people, oil is 70% of government revenues. the other country to watch is iraq, which is one of the countries that has pushed up its production. the inet just recently said that -- the imf recently said that iraq faces an existential threat

to its existence because of isis on the one side and the decline of oil revenues on the other side, and oil is 95% of the government revenues. erik: dan, we're going to take a quick break. when we come back, i want to talk about the amazing resiliency of u.s. oil production. daniel yergin is the vice-chairman of ihs, pull supplies winning author, global authority -- pulitzer prize -winning author, global authority on energy. vonnie quinn is that the new stuff. vonnie: u.s. commander in afghanistan says that some of those involved in the attack on hospital have been suspended. it is unknown how many people have been suspended. international investigators say the crew of the u.s. gunship thought the hospital was a telegram compound. thought 31 people -- the hospital is the taliban compound. at least 81 people were killed. security -- at least 31 people were killed. embassiesas raised at

and shopping centers. it called for attacks on headquarters and appeared on social media this weekend. government the declared a state of emergency after a suicide bomber killed 12 people on a bus carrying presidential guards. tunisia has expensed several attacks by islamist extremist this year. the country is described as the only success story that came from the arab spring ruvell full -- arab spring results. the pope is on the road again. pope francis starts a trip to three african nations. he starts in kenya, then visits uganda and the central african republic. says thed nations planet is halfway to dangerous levels of global warming. the uss average shopper's for -- theat last year's u.n. says average temperatures were 2015 beat last year's record. scientists say that after a two degree increase, climate change

could become cross traffic -- could become catastrophic. you can get more on these and other breaking stories on bloomberg.com. i am a vonnie quinn. erik: thank you. ,oming up on "bloomberg markets " the latest on how russia is reacting to the downing of one of its military jets by turkey. i will speak to former nato commander and will james stavridis. when we come back, more daniel yergin. ♪

erik: welcome back, everybody. i am erik schatzker. ihs,l yergin, chairman of pulled to prize-winning author, back with us from washington. i want to talk about the resiliency of u.s. oil production. it is remarkable to look at the

chart. u.s. oil production remains near its most recent high in the face of a collapse. how is this possible? that theurns out people who do the shale oil are ingenious, entrepreneurial, and become a lot more efficient. service calls are down, you have to keep that in mind. at ihs we have a performance evaluator that lets us look at every well in the country. in 2014, only 30% of the new wells reduced 80% of the new oil. there is huge room for a lot more efficiency. that is what we have seen, as well as continuing innovation. $40 -- $60, this thing would have run out of momentum. we are close to $40, and you are starting to see the impact that u.s. labor action is probably down about half a million barrels a day from the peak in

april 2015, kind of back to in november 2014, with a market share strategy. we will see some more decline because of all the pain there, but it has proven to be much more resilient. i talked before about the middle east and what the expectations were pretty much more resilient than people in the middle east thought they would be when the market share strategy went into effect. erik: there's still a lot of talk that the credit markets are going to shut down oil production in the shale patch. are we going to find out that supply -- that she'll supply is more elastic than some people anticipated? daniel: i think maybe it has been less elasticdaniel: than it was the year ago but more elastic going forward, and it is an indirect -- interaction between wall street but really the financial markets, and she'll producers. this is a capital-intensive activity.

we were looking at our numbers from 2015 to 20 19th, and you see that 40% of the is spent in north america, and a lot of that is in shale but the other thing. there's thatthat time -- famous dry powder, private equity, worth some estimates more than $60 billion. erik, we ared out, starting to see the stress mount up under these price pressures. erik: how much lower our costs in the shale patch now than they were a year ago? it was a year ago that the saudis sprung the thanks giving surprise on us. daniel: remember how tight it was in terms of rigs and people. costs are down 30% from where they had been. at this point service providers want to keep their equipment working. erik: so there has been some impact clearly, if you look at the rig count, on what is

happening in the shale patch. what is of more note is the large multimillion dollar projects that the majors keep canceling. what is the impact of that longer-term? daniel: that is why we have to remember this is a cycle and it will come back. 2015-2019, wet see $600 billion less investment in the upstream than would have been anticipated a year ago. seeing some high-profile projects canceled. i think the mantra in companies is slow down, don't go so fast, postpone, delay, or cancel out right. i think it is going to show up in the oil balance. it is also going to be a surprise to countries who got used to the showing of you will do whatever we need to get in there. companies will be much more selective and where and when they make their commitments to fisher investments. erik: i would be remiss if i did not ask you where oil would be

trading a year from now. daniel: let them put it this way. the next couple of quarters. the limitation day when the -- the implementation day with the iranians, that will put more oil on the market. you will see the oil market get back into balance. one of the question will be what we started our conversation with, what happens to the big question of $3 billion of inventory out there? erik: thank you so much. great seeing you this morning. daniel yergin is the vice-chairman of ihs and pulitzer prize-winning author. amazing stuff from daniel yergin. it will teach you a lot about energy. go to europe, where mark barton sees european shares on the rebound. are, risingertainly for the first time in 13 days. voters are turning away from geopolitical concerns -- france, germany, nato, seeking to de-escalation tensions between russia and turkey.

spain is interesting today, erik. it sought editor production, the theories that could lead to losses for banks. one of the lenders declining in spain today. they day in the u.k. for george osborne, chancellor, after he unveiled his autumn statement. before i come to mr. osborne, i want to bring you the big gainer in europe today. , 10% higher today. the man up despite recent terror -- demand is up despite recent terror attacks. the company reported profits for the first time in five years. have a look at the euro against the pound today, surging up to a four-year high against the euro. george osborne raises economic projections for next year. rise 2.4%owth will

from the early production of 2.3%. he reiterated plans to bring the government finances back into in 2019 and 2020. big day for the chancellor, eric. i will see you in about 40 minutes. we will chat more about it then. erik: yes, i have a feeling we will be talking about mr. osborne at the european mark barton, he mentioned that european stocks are rising. abigail doolittle has the latest from the nasdaq. is especially true of tesla pictures are up significantly after credit suisse is that sank in early january former portuguese short-term concerns that have been plaguing the stock, namely iran fourth quarter volume concerns and model x production ramp, whether or not it will meet expectations. and analyst believes that the report will positively address both and he sees the company reaching 17,000 units in the

fourth quarter and that the economy could earn four dollars in earnings per share in 2016, and that the free cash flow could be better than expected. stock is up about 4% at this time. another stock trading , this stocky higher is up amid much positive commentary out there, especially after the governing put up a much better than expected order last week, raised its quarterly dividend by 13%. today the highlight is on an instant cold beverage maker and its launch in september and out in canada now, one positive year is the cold beverage market is five times larger than the hot market. it is a tough year for this stock. it is something that is left shares trading at a significant discount and do something that would attract new investors to this name. erik? erik: thank you. a little breaking news.

the president will deliver a statement at 11:40 this morning. we don't have many more details other than that he met with his national security team earlier today. there is, of course, all of this conversation yesterday between the president and france's francois hollande about how to respond to isis. there is the video we were talking about earlier released by the chicago police department. we have no idea what the president will be addressing but it is possible a could be either of those issues. more details to come on "bloomberg markets" after this break. ♪

recap what i mentioned before the quick commercial break, president obama will be delivering a statement at 11:40 this morning. it has to do with the meeting he is having with his homeland security team this month, national security team, in fact, -- it onocus is a national severity in the week of this tragic terrorist attacks in paris.

and drafting's are facing off against new york attorney general eric schneiderman this afternoon in court. it could shut down operations between these two companies in their life market and put one out of business entirely. the draft kings legal lineup interns -- includes the star jenny david voice. attorney david boise. >> they have been offered to new yorkers by companies smaller than they come up with denver six and a half years, life and dual, one of the 2 leading properties, and then for the last four years ago, by draftkings. no one suggested, at the attorney general's office or any public official, no one ever suggested that these games were in any way illegal. not a hint of that. erik: here with more on the future of draftking and fanduel, ira, welcome. what are the strong start humans

that the betting sites are making and what is the strongest argument that the state is making? : the state has a simple case that this looks like gambling, we think it is standing by another name, just a smell test. the sites have a strong case to say that in this state, if it is a game of chance, it is gambling, but a game of skill or contest of skill, it is not gambling, and we have data to show that. over time the best winners win repeatedly. ist is where the real rub here. erik: why is the approach that massachusetts has taken to daily fantasy sports important in this case? ira: massachusetts came out came the new york a.g. out and said we are shutting you down from you should be illegal. it is probably gambling but we need to figure out only to regulate this new form. a proposed page limit, 21 and over, no advertising on college campuses, things like that,

looking at ways to mitigate the possible social harm of addictive behavior rather than saying this can't happen. erik: is the expectation that if snyderman wins there will be a domino toppling other states that outlaw effectively fanduel and draftking? ira: i think they're looking to see what president --precedents that set. other states are taking different tacks, and what new york does make it the scales on how the states that have not weighed in do so in the future. erik: ira, nice seeing you this money to have a happy thanksgiving. we will be back here after this short break. jim stavridis will be with us.

erik: it is 11:00 a.m. in new york city, 4:00 p.m. in london, midnight in hong kong. welcome to "bloomberg markets."

from bloomberg world headquarters here in midtown manhattan, good morning once again. i am erik schatzker. the war in the air turns into a war of words. russia suspects that turkey planned to shoot down that warplane. we will talk to nato's former supreme allied commander, admiral james stavridis. president obama will deliver a statement in 40 minutes time after meeting with his national security team. follow from the fed -- the european central bank says it is not concerned about the impact of the federal reserve rate hike. here we are 90 minutes into the trading day. .ulie hyman is standing by we really ought to be talking about oil. i wanted to give an update after the inventories report half an hour ago. there are different parts of this report to parse through in

figure out. crude oil inventory increased was les than had been estimated by the analysts who were surveyed. we did see an increase that was larger than estimated in refined products. but the fact that the bill overall included less than estimated has meant that crude oil is bouncing from its lows of the session, in addition to the production of crude oil was down for the second week in a row. that would be a positive year. we're still seeing oil down, but nonetheless them a sharp movement upwards compared to where it was before the inventory report. erik: we are about u.s. oil inventories. daniel yergin of ihs was on minutes ago saying that the inventories are not just the problem here. here's a stockpile of inventories is building up a globally good he was speaking to people in the middle east and they are concerned that it could continue to weigh on oil prices for months. the inventories number is having an impact on stock prices? julie: yergin is looking much

more big picture and longer-term. but yes, we are seeing an effect on stock prices. intraday correlation, if you will, on oil and stocks. even on the lighter from it does hold up but on the intraday it does. the s&p is the white line. you can see that coming up from the lows of the session, 9:45 is when we got another piece of data. that is the services index for the market, the purchasing managers index, which came out better than estimated that we saw a little bit of the bounce in both oil moving up a little more from the lows of the session. nonetheless, both of them rising -- i want tohat look in the volume before a holiday shortened week. volume in the s&p 500 below the 20 day average, in cases quite a bit. telecom volume is about 50%

below where it typically is over the past 20 days for the average. just something to note here on this holiday they do not necessarily surprising that always good to take note. erik: did you get this e-mail? julie: about the bacon underwear? erik: they can-s -- bacon- scented underwear. julie: maybe i should post that on my twitter feed. erik: featuring state-of-the-art scent emission technology stolen by nasa. -- stolen from nasa. what will they think of next? courtney donohoe is of the news desk. courtney: how do i follow that, erik? [laughter] president obama will deliver a statement little more than half an hour from now. he will be briefing the public on homeland security over the holidays. you can watch this right here on bloomberg tv.

russia now suspects that sure donenned to that warplane near the syrian border. russian foreign minister sergei lavrov says the question should be whether turkey is protecting rebel infrastructure. turkey says it shot down the plane after the pilots were warned repeatedly to get out of turkish airspace. german chancellor angela merkel is going to help france in its fight against the islamic state. i day after a meeting with president obama, france's president francois hollande will be speaking with merkel. he is trying to la line up an anti-terror coalition. in brussels, police armed with automatic weapons guarded schools as they reopened for the first time since emergency measures were imposed. subway system began reopening after a four-a shutdown. belgian and french authorities are hunting for a least 2

suspects linked to the paris terror attacks. newshat is a look at our right now. you can get more on these and other breaking stories 24 hours a day on the new bloomberg.com. i am courtney donohoe. erik: thank you very much. president obama's meeting with his national security team right now and we expect to hear from the president within the hour. we will bring you his statement fly as scheduled at 11:40 eastern time this morning. as corny just told us from more strong words from russia in response to the shooting down of one of its warplanes by turkey. russia's foreign minister says that there are serious doubts that this was an unpermitted -- unpremeditated act. in other words, he believes it was intentional, looks like it was land. marshall also wants to know if turkey sought u.s. permission to shoot down the plane. western leaders are calling for calm. admiral jim stavridis is the former supreme commander of nato and now is dean of the tests

fletcher school. tufts fletcher school. a lot of people are trimming is a dangerous turn of events in the middle east. do you agree? if so, what do we mean by this act of -- what do you mean by this? what could happen? adm. stavridis: i don't think we will see a significant flareup in levels of combat. i don't think turkey and russia will go to war. i don't think this incident will particularly change the course of what is going on in syria. is it dangerous? yes. does it indicate an extremely fractious and difficult to manage battle space over syria? absolutely. that these kinds of incidents occur from time to time. in 2012, turkey had a jet that was shot down by syrian air defenses. so these cans of things happen. i think folks in general are trying to take the tension out of it and they will succeed. i don't see a big flareup as a result. erik: at what point do these events change the game for

global diplomacy, and more importantly, economies and financial markets and livelihoods for the world at large? the reason i asked that question, admiral, is rush is at war with ukraine in the east. .he west is at war with isis saudi arabia and iran are at each other's throats, as they have been for years. and yet the european economy is beginning to recover, financial markets continue to rise, the russians have not turn off the gas taps to europe. it is not like it is business as usual, but all of these warnings over recent years have not amounted to all that much. adm. stavridis: i think you need to the back of the cold war. sometimes people say, oh, gosh, we're back in the cold war. not at all. we still have zones of cooperation between nato, the united states, and russia and we cooperate on everything from counter piracy to counter

terrorism to the mission in afghanistan and many other areas will stop we had significant disagreements at the moment with the russian federation. you pointed out ukraine. overlaying all of that is this sunni-shia divide in the middle east, which provides the backdrop to the current rise of the islamic state. iod.s a turbulent pero there was a lot going on. but i don't see a particular factor that will wrench the global economy in the near future. ifs. let's talk about what what if the russians decided to retaliate an attack turkey in some way, shape, or form? responsibility to respond alone and does it become nato's response ability? almostavridis: immediately, there's a connecticut act against turkey, the nato treaty is clear that an attack on one nation will be responded as if it is an attack

on all nations. but it is highly unlikely that russia will do that. what they will likely do is impress some kind of economic sanctioning against turkey. they will develop diplomatic and political discussion about it. but i don't see a major military response from the russian federation at this point. erik: i know you have given it a lot of thought to the war against isis, the attacks in paris have inspired the french at the very least to respond in force. how is this going to play out? adm. stavridis: what i think we will hear and see in the days llande of president ho thece g concludes a tour of capitals, is an increase effort against the islamic state. how are lined -- i allied seven or eight states that this would entail in this week plus "time" magazine. you will see a greater emphasis on putting boots on the ground to ramp up the aviation campaign to pick out and find targets,

more social sources come more sharing of intelligence, and more cyber. i think those are the steps we will see going forward? boots?hose adm. stavridis: i think they will be accommodation, 15,000-20,000 u.s.-allied boots. we already have 3000 boots on the ground. european allies have over 1000. we will have to raise that to 10,000 to 15,000 that i don't predict 100,000 or 150,000, which is what we had in iraq and afghanistan. the majority will come from the kurds, who have 100,000 fighters, from the iraqi security forces, who have 75,000 fighters, and perhaps over from turkey and jordan, both of whom have large standing land armies. it will be delegate to put all that together, but the level of play from isis to make a significant response. erik: why aren't bombs,

missiles, and join strikes enough -- drone strikes enough? adm. stavridis: because we cannot kill an ideology with hard power. we need hard power to rock them back and put them on the back steps of that this becomes an and game font in raqqa mostly, not in paris, berlin, and washington, d.c. but the long game is soft power. peoplehanging the way think about jobs, opportunity, education, and the economy. it has to be a combination of those 2 things, often called smart power. at the moment we need hard power and we did to get after that in a significant way. erik: admiral, i mentioned the president will be making a statement later this hour. he will address isis, if not directly. just as a matter of visible, what do you want to be hearing from the president right now? adm. stavridis: first and foremost, as we head into the next 30-45 days of the holiday period, to include the christian

holiday of christmas, i hope that the president come and i'm sure he will, will ask all of us indymac in public to be alert, to look around us, as the saying goes, if you see something that makes you uncomfortable, report it. second, he will convey the message that we are going to address isis in a military way, using coalition efforts. i think he will talk about those 2 items in a reassuring way to the american public. but we should not understate the strike here kind of in the united states, and i think you will want to address that with us as well. erik: thank you for spending time with us. happy thanksgiving to you. and roll james stavridis, former supreme allied commander of nato and out dean of the tufts fletcher school. coming up on "bloomberg markets" in the meantime, treasury secretary jack lew writes in bloomberg view an op-ed.

this is message being heard -- is his message being heard on capitol hill? and a direct contagion effect in europe and emerging markets. plus, next hour, bloomberg sits down with the touring ceo. has he kept his promise? ♪

erik: good morning. once again, i am erik schatzker. julie hyman is looking at the health care sector. julie: it is the best performing group today, helping sort of keep stocks afloat. if you look at my bloomberg terminal, you see that health

care is the best performing group today. if you click on health care to do more detail, you will see that the pharmaceutical and biotech stocks are doing well. health care equipment -- excuse me -- helping to account for some of the gains today. include aovers rebound for pfizer and allergan could we had these stocks declining recently on spec elation that the plan to might face some roadblocks, regulatory-wise good but now they are coming back a little bit today. the other health-care story i want to talk about is a valiant, once again in the news after brontë capital and the ceo of that, he published what he said was a list of pharmacies , with namesleant from chess moves and stephen king novels. as you can see, the shares are higher, and if you take a look at the bloomberg terminal, it is

more dramatic when you look at how they were treating the premarket and the drop following the statement from brontë capital. this has been a fascinating story for many of us to watch, but it is clear that brontë has long been short the stock. it looks like investors and traders are sort of taking a little bit less away from this commentary today than they have in some of the past short sales. erik: the revelations of the very least are not nearly as shocking as they had been. julie: right. it is unclear if being named after a stephen king novel is enough to allege wrongdoing. erik: meantime, it is déjà vu on capitol hill. republicans in congress are backing legislation that would soften certain parts of wall street reforms that were put in place mostly through dodd-frank five years ago. you remember some of those

tactics last year when congress attached legislation to the spending bill. today, treasury secretary jack lew warned it dodd-frank critics against trying the same maneuvers again. in his bloomberg view column. aloomberg editor paul an dwyer is here now. he is reasonably strong line which -- "irresponsible," "turning back the clock." why don't i quote him directly? "with the economy showing real signs of strength, it would be responsible to turn back the clock to the era when these monitors were not in place and we expressed the worst financial crisis since the great depression. yet that is what some republicans are jumping to do, and democrats should not join them." who is listening to jack lew on capitol hill? paula: i think in this case he is speaking for president obama.

the treasury secretary has primary responsibility to deal with congress on financial matters, especially the dodd-frank law. it is pretty clear that this is a prelude to president obama saying "i will be to -- i will veto if i have to," even if it s spendingpast bill. erik: the reason i asked to's listing as i've heard a number of people, republicans and street, inon wall washington, describing the treasury secretary as less effective than his predecessor. tim geithner was not exactly the world's most popular guy and certainly not popular in many circles in washington. but he was effective in many respects. paula: well, i am not here to defend or not jack lew -- erik: no my not suggesting you should. paula: i think he is doing his job here saying that attempts to

amend dodd-frank in this manner on a must past spending bill and not in a technical way, but in a substantive way, is no way to run a democracy. think he isot you being listened to, i think his message is coming through loud and clear on capitol hill. maybe not now, because they are all away. but when they get back. even though this isp mu -- and it mightpass be to a government shutdown, we are not going to play ball here. erik: doesn't suggest that paul ryan is not having as much of an impact on the republican rank-and-file as many hoped -- paula: that is maybe getting a little too far ahead. the administration wanted to put down a marker and not wait until orre was a conference report something had passed the house or the senate and it was last-minute and we were minutes

away from december 11. that would not be the right time to act. this op-ed,writing is the right thing to do. over then dicker details because of the treasury secretary said, there may be ways to fix dodd-frank, but it is not necessarily -- erik: doing it with a gun to your head is not exactly the right way -- paula: for making these wholesale changes in dodd-frank that have not been aired from where there hasn't been a debate. night it in the dark of unless you think that maybe there's something wrong with what you are doing? erik: where do you perceive room for compromise? paula: i think there are many ways that dodd-frank can be thed without having to gut intended, which is to make the financial system safer if there are things that can be done to help community banks, because they are suffering. they are overregulated. but it is not because of dodd-frank. it is because of the banking

regulators have really cracked down on them. the community banks are largely suffering because they cannot make a profit because interest rates are so low. why is it -- this is not a partisan questions of don't take it that way -- why is this such a bone for many members of the republican party? i spend a lot of time talking to wall street ceo's, and many of them come even though they didn't like dodd-frank when he was put in place, acknowledge it has made an initial system safer and some, he couldn't brian moynihan of bank of america, -- including brian moynihan of bank of america, saying they wouldn't change it. i think republicans are -- a, some of them are just opposed to what president obama wants to do. b, some of them are just opposed to regular flat out. erik: ideological matter. there are some

things in dodd-frank that are overkill and if they would focus on those things and have a public debate on it, we would be better off. erik: there are things that are overkill to the and later this hour, president obama is planning to make a statement at 11:40 eastern time, about national security, not about dodd-frank. that is a separate issue altogether. the president is meeting with his national security team could we will deliver the comments live.

erik: you are watching "bloomberg markets." i am erik schatzker. president from now obama is expected to make a statement on homeland security, happening in washington. we will bring you those remarks live. we are moments away from the arabian close. -- the european mark barton will be with me as we drove to the most important stories of the day. mark: we will try to squeeze in

as much as we can ahead of the obama statement. the vice president of the european center bank spoke to us earlier, spoke to our very own obstacles. he warned that risks to the euro area economy comes a week ahead team meeting on december 3 when it is expected to increase stimulus. george all-star break, u.k. chancellor -- george osborne, u.k. chancellor, big day for him. my colleague is outside the houses of parliament. i am hoping we have time for battle of the charts. european close is next. we are waiting for president obama's statement. ♪

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ending good we are awaiting a statement from president obama. first, let's take you to mark barton. mark: stocks bouncing back from two days of losses as investors shrugged off geopolitical concerns. the european close starts right now. erik: people, you know how this works. we will take you from new york to london to washington all in the next half-hour, and mark barton is taking it off for us. mark: the geopolitical concerns have been forgotten about -- maybe that is because president obama, president hollande, chancellor merkel tried to display tensions. -- de-escalate tensions. here in the u.k., it was all about the chancellor george