>> from bloomberg headquarters, good morning after this friday after thanksgiving, i'm erik schatzker. it is black friday, the traditional start to the shopping season. retailers are relying on heavy discounts to lower customers into stores. can they really win the fight with amazon? the insurer is set to be considering asset sales. plans to cut $2 billion in costs, reducing management pay. this is following the emissions scandal. here we are about half an hour into the training -- trading day. let's take you to julie hyman. julie: we are not seeing much action on this day after thanksgiving. we are seeing a mixed picture

given the fact we saw a steep selloff in china overnight after some of the largest brokerages were undergoing -- fell 1/10 of 1%. european stocks were not hit by that. u.s. stocks not seeing much effect from that. from my bloomberg terminal, telecom and utilities, health care trading higher. energy, consumer discretionary and materials are the biggest drags on the major averages. 500, 35% below&p the 20 day average. are staying -- we are seen within groups, and average down by 52% or 53%. that is moving, oil prices have turned lower, down

by 2%. libya is looking to increase its output. russia has now taken off the taken -- taken off the table military action. it was the threat of that or question of that driving oil prices. that was after the downing of that russian jet. eri whatk impact is: that having one energy stocks? we have counsel energy seeing the effects of this natural gas and energy conflicts. the one stock i wanted to mention is disney. 10k andout of its revealed that espn subscriptions fell 3%. is nielsen said this

numbers versus paid subscribers. nonetheless, it is concerning. this has been the main source of investor concern about disney. k: that is the goose that laid the golden egg. thank you very much. now, time for news of vonnie quinn. morning toal day in remember the people killed in the terrorist attacks. the names and ages of the victims were named out loud in a ceremony. the main objective of the campaign is to destroy islamic state's in syria. moscow is tight control on inputs of turkish goods. russia may come out with more economic measures that affect

flight, trade, and investments. the president of turkey's firing back at vladimir putin. it is denying russian allegations that they make money by selling oil to turkey. russia backs -- related video footage that shows the aftermath of a russian airstrike. the video appears to show a building and several cars on fire while men rush to put out the flames. the agency the airstrikes targeted was in a civilian area. authorities in brussels say a terrorist attack is no longer imminent. they removed the terror alert levels. police and belgium are patrolling the streets. you can get more on these and other breaking stories 24 hours a day bloomberg.com at

bloomberg.com. -- at bloomberg.com. have several forecast shown an increase in spending. retailers are facing some challenges. shannon is at a target store in new jersey. -- what is target the principal difference between the way those two chains are approaching this holiday shopping season? >> they really are very aware of what each other are doing. the target ceo used to be at walmart for a number of years. they are following each other very closely. one big difference which comes to online, target is offering free shipping on all items. walmart says you have two by at least $50 to get free shipping. target emphasizing online degrees a bigger bet there.

they both started offering their deals online starting last night to get that on my customer. they both opened at 6:00. both were equally chaotic. people lined up. walmart still had body to body people. they crowd in electronics. did suching you can great prices online, people still line up. targets, all marks, best buys, whatever the case may be. customers say they like the experience. --talk about online er instead of eatingik: rik:ksgiving dinner -- e instead of eating think giving dinner?

>> the projection is that fewer people would have come out thanksgiving on black friday as more people go online. we did get some early numbers from a debate. thene shopping is up 24% on day of thanksgiving. that is not even including this weekend. target said they saw orders for by online and pick up in-store up 35% compared to a year before. even if there are fewer people coming to the stores, it may not mean sales will be down. erik: i know you talk to brian -- pickup wasas anticipating a good weekend. how did he characterize the mood of the shopper? acknowledged that there is a cautious shopper. they are optimistic that maybe the holidays will drag them out and get them spending. you can listen to what he had to say.

>> we recognize we do have a cautious consumer. they were in our stores and online today. i am very encouraged about the early trends and we expect that to continue throughout the holidays. said the biggest sellers will be electronics. the apple watch, one of the biggest items. he said they were selling and ipad a second in-store and online. erik: jenna, thank you very much. shannon, thank you very much. --shall: is chief analyst marshall is a chief analyst. brought -- what brian cornell was saying, a cautious consumer. how important is for traffic? >> it is critical. impulse purchase happens 24% of

the time online. 45% of the time in-store. retailers not only want consumers -- consumers in the store, they want them in the store. ik: i am going to mistakenly characterize them as two different industries, amazon, etc., what you call the traditional retailers. what are the traditional retailers doing successfully to get those people into the store? >> bigger offering good in-store great deals. consumers are very deal centric. consumers said they are going to spend this holiday season looking for the really good bargains. it is all about value. we are driving traffic into the store. buy online and pick up in-store. a one-two to go in the store to

get it. the are doing, they are offering additional discounts. you can go in some stores and the 25% off, but then they will give you living dale bucks. it is all about incentivizing you to keep shopping in the store. erik: how much is inventory problems going to be? >> you are seeing outerwear, sweaters, those categories being discounted at 50% off. that is what they are using to manage the inventory. k: what do you see online retailers doing successfully to capture sales from traditional brick-and-mortar? >> they are doing a good job of telling you in every e-mail or social media message, don't bother to leave your house, you will get the great deals at home. i get out of your pajamas?

they are telling you, number one, you can get a better deal online. number two, it is no longer just about cyber monday, no longer about black friday, it is black black week, and it is november, meaning the deal start as early as november 1 online and will continue all the way through the holiday season. you the early checks talk about the pace of shopping? >> we have to learn to read these differently. there are going to be a lot of myths from analysts reporting. you have to read the whole week. can't just look at thursday and friday. number two, the consumer was very determined to get a deal. you were out there looking. 60% of people are looking for those great deals. 16 percent of people are looking for those great deals.

many have started their shopping before black friday. this is a new way of looking at the holiday business. yesterday and today, we are seeing traffic maybe a little bit lighter, but that is because retailers are going to get what they wish for. it was for an earlier start of the holiday season and they will get it. erik: suggesting holiday shopping through past christmas is going to be up some 3.5% to 4%. some people should be happy with that, but why not stronger given a sharp decline we have seen in the unemployment rate and the job creation? challenge is a lack of new and exciting merchandise. if you look at the type five or six items, only one is really a new item that wasn't on the shelves last year offering the consumer. that creates a little bit of a

challenge. number one for retailers. there is consumer fatigue. another key piece is that it is all about price. big-screen tvs, it's all about big-box is going out the door. it is not about consumers grabbing all kinds of product. the are looking for really great deals. taking advantage of doorbuster specials. the present television has come down a bit. of televisions have come down. erik: thank you, marshall. coming up, aig under pressure. the insurer considering asset sales to boost its returns. tensions continue to simmer between russia and turkey. they are saying that moscow will suspend these are-free travel.

those stories and much more right here on "bloomberg" television. ♪

♪ erik: good morning, i'm erik schatzker. "bloomberg markets,." volkswagen facing fines. there are reports that the volkswagen emissions scandal is widening. both the u.s. and german

investigation reports are out on thursday. admission test have been suspended. gold is trading near a five-year low. investors are shifting their focus away from political tensions. now they are looking at the prospect of the fed raising interest rates. you can always get business news on bloomberg.com. aig may follow in the footsteps of peers -- pearson. it is on the table as the ceo tries to boost returns. by dan crowd. this was the news earlier. purdue thinks -- where do things

stand? >> the contractor complicated. you have to decide on wch years of the book you would sell and geographies. there are several companies whose main business is buying from the secondary market. there is the potential for buyers. hancock, the ceo, indicated that she doesn't want to break the company. sometime?by him >> this would be part of the strategy to buy him sometime. selling things from different geographies. as much as hancock site synergies, this isn't a natural fit with other things. ,rik: that raises the question

that is a costuming large. being a systemically financial institution with a systemically financial institution with the penalties that come along with it at the regulators impose. from an operating standpoint, what is the argument against. why does it make sense for aig to remain as larger company as it is right now? >> part of the reason the added all of these life assets with is veryerty insurance cyclical. it can change to a hurricane or earthquake, it can really make you vulnerable. credit rating agencies like that. there are some customers that may be some regulators, too. they also favor simplicity. the are getting pushed and pulled at the same time. , or potentialage advantage, some of your larger

clients, multinational companies, would buy both things. , and need products the same sort of think guarding their fleets of vehicles, physical buildings, some like a one-stop shop. there is an advantage. erik: thank you very much. and exclusive from bloomberg, aig considering the sale of insurance blocks. now, just a quick check of commodities. we mentioned gold is sinking down $13. there is a bigger decline in tradingew york crude, -- back in a moment.

♪ >> will come back. i'm julie hyman.

here to discuss is an analyst. going into the holiday season, it makes sense to buy retail stocks. >> it's a great theme. this should be the best time for retailers, and it is. the stocks of themselves don't outperform. if you look at retail etf's, they typically do well and in positive territory. they are up 2% during the holiday shopping season. the market is on average of 3%. you are better off keeping your s&p 500. if you go back and look at the last couple of years, retail etf have been outperforming the market in general. it is been a great play. a lot of investors will go for xrt.

spider etf's, there are industry etf that go down to the next level and are little more volatile. the just all caps,, and large caps. are small caps, mid-caps, and large caps. that is sometimes a shocker. this one has been 6%. julie: there are other we tell etf's. how is that one different? make up 50%. you are looking at three companies making a third of the etf's. because amazon and home depot have been doing so well, this is up 9% this year. if you keep percent swing between these two etf's.

it is a 1% weighting. toamazon and walmart start suffer, home depot rather, they are going to take our gh down with them. been there are dynamic shares some powershares. >> it uses fundamentals to screen and wait the stocks. you are looking at price earnings. it is almost a goldilocks version. amazon is just 5% weighting. what some people have been doing is going through to the internet ats because of the e-commerce. is are going to see amazon 11% weighting. there is also ebay, groupon, and facebook. that has been an alternative way to get into the retail price. julie: going into the holiday

season, what you need to know about retail etf's. there are some nuances. i appreciate it. erik: think you very much. know thatd, we can the disagrees -- french and russian presidents agree on how to fight isis? we will tell you more about it, next. ♪

♪ erik: good morning, this is "bloomberg markets." a view of police any washington where it is 52 degrees. you are watching -- a view of

downtown washington where it is 52 degrees. you are watching bloomberg television. donald trump mocking a reporter's ability. namesi was on a first he says heat was on a first name basis. times,ng to the new york carson is making an advice trip to jordan to visit refugees. polls,is leading in some but his numbers dropped. drying russian torus away from turkey. dra russian toruswing away from turkey.

it is offering discounted flights. pope francis has arrived in uganda. the poor uganda, the pope visited kenya where she urged leaders to come up with a plan on climate change. resays the common good must ign. plans to disrupt the biggest shopping day of the year. be -- vowed toto followingfull force an officer killing a black teenager. you can get more on these and other stories 24 hours a day on bloomberg.com. erik: francois hollande has another ally.

the french president met with vladimir putin for three hours and they agreed on closer coordination. john is with me from london. disagreement,l is because you can imagine the west and the russians sharing other?tion with each >> it is pretty constrained. i would look at it as a political agreement more than a military or strategic agreement. .t is a compromise -- he pledged to target jihadists. to what extent will putin actually follow up on that. -- what he.lande

was more of a political agreement rather than substantially on a military level. erik: what consequences that? it in economicut terms? what does it mean? other colleagues and government are happy to help him anmake him look like international statesman. it could help ease the economy over time. whether that can tackle the core issues of mounting terrorism. it is one thing to bomb military

states and facilities on the ground, but it is difficult to bomb an idea. we have had lots of news and reports of more jihadists around europe. if you are a businessman looking at the business climate, the terrorism threat is still lingering despite whatever action they may take on the ground. erik: thank you. atn is the executive editor bloomberg in london. we will be back very shortly on bloomberg markets.

♪ erik: welcome back. this is "bloomberg markets." i'm erik schatzker .

it is the error of prolonged erarest rates -- it is the of prolonged interest rates. they are generally risk-free. inre have been no defaults the long time. just trying to share with our bloomberg radio listeners about the municipal on markets. we want to take on the m&a market. we welcome everyone from bloomberg television. let's talk about what is going on in m&a. -plug-ing the pfizer pfizer-allergen deal.

folksbout cheering on m&a , we are looking about $5.2 trillion in deals globally. talk to me about the pfizer/allergen deal. does it make sense? >> there are huge tax savings. has $137 billion in cash overseas. it can't bring it back until it pays $48 billion in taxes. long-term their strategy, which is to split into two companies. that is kind of odd. they want to split in one company focused on new, innovative drugs and one focused

on the old, tired drugs. to do that, they have to get the innovative side bigger. allergen brings them innovative drugs. it fits a natural strategy beyond taxes, but nobody minds saving $48 billion in taxes. >> it's like gaining weight to go on a diet. [laughter] >> this is the former industry. -- it is the pharma industry. it has been built on acquisitions. now they are spinning things off and selling each other's assets and rearranging to get smaller and more focused. >> is in that smarter? you do have companies acquiring assets that are rapidly growing or play to their core and then

they get rid of the businesses that don't make sense. we have seen over our lifetimes a lot of stupid m&a. and not just stupid after-the-fact the fact, but always seems stupid. pharma is just one industry going through realignments to face the future and that requires buying something's and selling something's. a lot of this action makes sense. we have to have stronger companies, not just overleveraged companies. >> looking back at deals gone awry, what kind of touchdowns do they sound like? [laughter] >> good question. insane synergies. 20% of ourg to take cost by some miracle in two years. revenue synergies, going to combine this line of product

with that line of product that don't seem to have anything in common and somehow be a bigger company. think of going back to the western kinds of deals. how is that one company is in all of these industries? does it make sense. >> i feel like we go through this out -- through this all the time. and it seems none of them make sense, especially for shareholders. will we look back at this , iter/allergen deal and say didn't make sense? m&at is amazing as a whole, has been destructive of shareholder value. i think we may have learned something, at least for a while, i am not an optimist of our ability to learn things since we seem to make the same mistakes

every 10 years. back into theome industry and remember those mistakes. think it will pay off for shareholders. what about anheuser-busch? time warner? deals, i don't know, you come by two not so great companies in a not so great industry, and you have a bigger not so great company in a not so great industry. i am not so sure about that one. headhas me scratching my in the same way some of the old hp deals had scratching my head. economy? mean [laughter] >> cory dreams about hp.

>> hp for us is a dream, a shareholder's nightmare. >> the gift that keeps on giving. >> what about the trends looking into 2016. we have seen a smattering of deals throughout, picture industry, what i continue in 2016? >> you have to think it is going to slow down from an all-time record year, it is more likely to go down and up. keep are things that will driving a large number of deals. in slowot of companies growth industries. they will combine and takeoffs out. that is the only way they can survive. the beer deal, we have industries where the growth is coming in other geographic areas. you have to buy somebody to enter.

there is new technology or new science, you have chip companies and pharma companies. things that are trendng and will keep making strong. it will be tough that it will be as good as this year. deals arep interesting because they seem the are coming up in positions in areas of weakness they have a heavy lack of product diversification. companies that are facing massive costs from building fabs. they have to come together in a broader offerings. they don't seem at the are coming from a position of strength. >> i think that is right. -- pc chips are

not a great business. china is the wildcard trying to build their chip industry. question abouta what they could be making. m&a onalking about bloomberg radio. it is time for the bloomberg business flash. the news.t stories in cyber monday is getting competition today. some are calling it friday -- cyber friday. they said spending should hit $2.8 billion. they said cyber monday sales will bring in $3 billion. people would use their computers at work to do their shopping, but now they are doing a shopping on their mobile devices. an industry group said china's economic slowdown will inhibit

traveling. economic confidence in the euro area has matched its highest level in more than four years. the european commission -- the report comes out at the ucb decides to add more stimulus to the economy. you can always find more .usiness news on bloomberg.com now it is time to be you up to speed. we begin in asia. fell's shanghai composite 5.5%. it widened to include two top brokerage. takeaway, still has a long way to go before getting its targets. david ingles filed this report. remain.enges another measure that takes out energy prices.

you have the jobless rate, a 20 year low. a lot of that has to do with a 230,000rce shrinking by people that points to an underlying demographic problem. on that last point, household unexpectedly fell 2.4%. erik: now to europe where mark parker has the latest. we were as low as .7% early. we are a fifth of 1%. it was brought on by that china stock market slump. their biggest decline in three months. that set the tone. we have had our own piece of strong data in the eurozone. have economic competence

matching the highest level in 4.5 years. we are on track for a second year of games. since the paris attacks, the stoxx 600 has jumped. worst-performing over the week. gdp in the u.k., for the last quarter, and increasing .5%. not as good as the previous quarter. all of the group is coming from the domestic economy. i will finish with this -- look at this, euro, yen, longest losing stretch since the inception of the euro in 1999. we are gearing up for next week's easing. now, let's take you to bloomberg's abigail doolittle. she is live at the nasdaq in manhattan. u.s. stocks are flat lighting. abigail: here is the nasdaq we have been watching.

some of the china related stocks as marked mention, the shanghai composite was off 5.5% overnight. it comes after a tough six months. the shanghai composite is dell more than 35% over the last six months. -- shanghai composite is down more than 35% over the last six months. the stock was just at a record high. investors may be taking chips off the table. resorts of chips, wynn is off. news out about my towels trade mccal trade deficitsl's. . erik: thank you. that is abigail doolittle. still ahead on bloomberg

volkswagen planning to cut costs amid the emissions scandal. what it means, next. ♪

♪ welcome back, this is bloomberg television. i'm erik schatzker. flag and announced a plan to say to billion dollars in its bw units. volkswagen announced a plan to save $2 billion. plus, lawsuits over the use of software. one of the things that volkswagen plans to do is offer fewer models. can't be a good thing if you are a volkswagen customer.

think it is good if you are able sliding union. -- i think it is good if you are a volkswagen union. the union has been pushing hard to save money in logistics. that cutting models would result in cutting employees. they said, let's be efficient. there is money to be saved. they have too many models. this is going back to trying to be a big world player. this has been their undoing. erik: what models can volkswagen do without? >> they need a seven passenger suv. if you have a volkswagen polo , sport, our line, and it

goes on and on. there are 23. -- chrysler does this. it is good if you are trying to build market share. if it trying to be toyota -- the toyota. in the long run, you will not see a huge impact in most markets. they may get a nice profit margin. they will have the same cars there. you will have fewer special options. i haven't seen a huge impact on sales get. i am curious to see in november when they report sales. let's see how volkswagen do. will the fact that people who

wanted greener volkswagens, will that catch up to them? erik: there are reports of growing evidence that audi is a part of the scandal. what does that mean? >> they had no choice. body has to be a part of the scandal. let's put itit, that way. >> they are part of the same engine line, they have to at some point say, we are getting a great improvement. what is going on? here is what we did. it is too big of a thing for people not to notice. erik: if it was just a bunch of engineers in the volkswagen unit, maybe it was isolated. if engineers at audi do as well, how could that information not have been shared? >> this will be their undoing.

the are very smart project managers. i don't think all of them were dumb enough to ask those questions. are andhow clever they how quick they are to be on top. if you are at an auto show, you can watch the engineers. erik: thank you very much. great to see you this morning. coming up on bloomberg television, i will be sitting down with andrew balls talking about the ecb. is a more stimulus coming?

erik: it is 11:00 in new york, in0 p.m. in london, 12:00 hong kong. you are watching "bloomberg

markets." ♪ erik: here in midtown manhattan, good morning. i am erik schatzker. cutting the cord. shares of disney are declining after they reported espn subscriptions are down 3% from a year ago. looking at what is behind the drop and its effects on the markets. russia retaliating at turkey, taking aim at the tourism industry. and will mario draghi take additional steps to stimulate the european economy? we are 90 minutes into the trading day. let's go to julie hyman to bring us up to speed on trade. to see notontinue much action before the major action.

we have a next picture. the dow doing the worst of the three major averages. energy shares have an somewhat weaker. of energymix of types producers. oil, natural gas providers -- these are three of the worst performers we are seeing in the energy complex. looking at oil and natural gas, we are seeing a pullback. lately is talking about increasing output. the boost that we saw out of speculation of a rationing because of the mideast turmoil has calmed down to some degree. natural gas, the day after thanksgiving, it is in the 60's in new york city. i want to look at what we are seeing temperature-wise for the new york-area. -- now,looking at the

if i have done this correctly -- i will bring back 2015. this is versus some of the recent years we have seen. you have this november, we are seeing average temperatures at uardiaty airport -- at lag airport 10 degrees above average. it is warm and natural gas is lower when it is warmer. we are seeing a decline in casino stocks across the board. especially those with business in macau. las vegas sands, we had that selloff in china overnight. that is bleeding over into account. yesterday we had the mostly trade numbers coming out in the cattle and we saw the cap widening more than estimated. , and weg out in macau

saw the gap widening more than estimated. the first word news, here is courtney donohoe. courtney: francois hollande is for allies.s search after attending a memorial service for the 130 killed in the paris attacks, he left for malta to address the commonwealth. a group of countries drawn from the u.k.'s former colonies. russia is adding to sanctions on turkey for shooting down a warplane. they say that moscow will suspend visa free travel with tricky. they are making it tougher for turkish produced to be brought into the country already. russian air force says that turkish f-16 ambushed its warplane. one of the turkish fighter jets trust over into syrian air

space before it was shot down. they repeated the position the airplane did not cross into turkey. republican presidential candidate then carson is working to improve his foreign policy credentials by making a trip to jordan to visit syrian refugees. before the attack in paris he was leading in the polls, but his support has dropped after questions on his expertise on foreign affairs. got ittrump says that we wrong. he denies mocking a journalist's disability. he said he did not know what the reporter looked like. the reporter said that he was on a personal name jesus with him in the 1980's. the reporter has a condition limits the movement of his joints. you can get more on these and other breaking news on bloomberg.com. i am courtney donohoe. the european commission

showed confidence matching its highest level in more than 40 years days before the european central bank prepares a decision next thursday to add more stimulus. the chief investment officer at pimco. perhaps not data is enough to drive mario draghi to add more stimulus. if you add up everything that you have seen, and you were expecting above trend growth in europe, at what point would mario draghi act? andrew: we think that will increase the size of their qe program. afterave clearly signaled the turmoil in emerging markets in august, they have made it crystal clear they will be lining up amid speeches. the low inflation will be very important looking out over one year or two years.

it will not get to inflation of their target close to 2%. the low inflation will the what drives mario draghi. erik: is there no chance for a positive surprise on inflation in the months and quarters ahead. i know you're familiar with the data, european unemployment is dropping. economic growth, while not robust, is taking of ports at a stable rate. up to someat not add price pressure? is it because oil continues to remain as low as it is? andrew: there could be a surprise it inflation. i'm sure they would be pleased. you see some improvement on headline inflation related to oil, but part of what central-banks due to target inflation expectations, if you look at forward expectations --

five-year forward -- expectations have been coming down in europe for the long-term inflation outlook. there is the chance of an upside surprise, but also a downside surprise as well. they're looking to anchor inflation expectations. mario draghi and achieve talked about the importance of keeping a close eye on inflation expectations, and acting and you see a worrying decline. erik: you and your colleagues at pimco have talked about a multi-speed world in which, for example, the fed is poised to interest rates when the ecb is talking about raising stimulus, the bank of japan is in full stimulus mode, and perhaps that is several quarters ahead. if we were to prepare, and i have a chart, the 10-year yield on treasuries versus the 10-year

yield on bonds, that has been profitable. to fourast three months months, given how that has played out and expectations are more stimulus, and a rate hike by the fed in december, has that trade run its course? andrew: good question. there are a number of positions that we have, long european, german interest rate risks versus the u.s., the euro currency versus the u.s. dollar -- which have been doing well. further positions to outperform mario draghi will want to try to impress and surprise market expectations. they will be watching that closely. when they have delivered the big increase, in one form or another toqe, they will be looking reduce some of the physicians

that we have there. european credit, central risk, and they have benefited from the expectation. i think you are probably getting to the end of some of those pricings between the u.s. and europe. erik: where do you see the floor for your dollar? andrew: the floor? through parity, but the launch of the euro, you went to the low 80's. .hat seems perfectly plausible another 5% of move, or something like that, we would see as likely. part of the logic for qe is trying to ensure the european rates do not move up with the fed when the fed starts raising rates. another part of the logic keeps inflation expectations. another part of the logic is the currency. there is a clear transition

mechanism from the economy via qe if you can depreciate exchange rates another 5% or so. erik: how about sterling? for some time, sterling, relative to the dollar, was trading stubbornly high. it seems to contradict some of the market forces. sterling has started to back off. will that continue? andrew: i think the bank of england will be the next bank to go after the fed. they have signaled they will not be in a great hurry. the markets to automatically price in them following the fed. sterlingue the currency on duration on the level interest rate risk in the u.k. we think there is a potential for the u.k. to underperform versus the u.s. over the next six months to 12 months. erik: i want to bring it back to today. we saw the shanghai

toposite index selloff 2.5% 5%. not long ago a 5.5% selloff in shanghai would have set alarm bells off globally. that isn't happening today. how come? andrew: the markets reacted in august with a shift in the chinese currency regime, thinking it was the start of a process. markets reacted thinking that that would be a tougher market expectation. by adding risk in our portfolios in the late summer. that worked quite well. i think expectations are more modest now in terms of expectations for the chinese currency moves. they have not done very much since the initial adjustment. i think the spillover from china to the rest of the world is not impactily basis such an

as it was. the fed is very closely watching not only the importance of china as an economy, but the impact on commodity prices. it is certainly important, but it is not the key driver that it was in the late summer. erik: how important will it be to theu.n. is admitted imf sdr as is expected? will it time policy maker's hands further with their flexibility in the currency? andrew: it is symbolically important. important to the chinese. over time they want the chinese are and see to be a reserve currency. that will require a certain amount of liberalization. the logic of inclusion in the sdr as china moves over time to a more market-based currency regime with greater flexibility,

it will be a slow process in terms of the immediate market outlook and the next three months to six months. i don't think it is particularly significant, but it is important to the chinese policymakers. erik: thank you for spending time with us. andrew balls at pimco, looking ahead to the ecb meeting next week and whether mario draghi and the governing council will the stimulus. in the next hour of bloomberg -- the next hour of "bloomberg markets." disney is feeling the heat. what it will mean for the future of disney and the industry. euro area confidence reached a four-year high as they await the ecb's decision on quantitative easing. with the ecb will choose to do. tensions mounting between russia and turkey over the downed jet. ♪

erik: i am erik schatzker. this is "bloomberg markets." it is time for the bloomberg business flash. a look at stories making headlines. gold has dropped to its lowest level in five years. investors are increasing bets the fed will raise next month, and that could make gold attractive heading for its sixth straight weekly loss. cyber monday is getting friday.ion from cyber

that is what some are calling the day after thanksgiving. $2.7 billion per online shopping . cyber monday will bring in $3 billion. those who use their work on monday, canp now simply turned to their smart phones. cheaper stakes and burgers. the cattle herd has started expanding and the animals are fatter than ever. that is after they dropped from an all time high a shortage of beef. you can find more on bloomberg.com. it is time for julie hyman to bring us another check. julie: there were actually things moving today. headlines, which is a rare find on the riding after thanksgiving -- disney is where we are starting. on wednesday,e

the espn subscribers had fallen 3% over the past year. although disney had made comments about espn subscriber growth, or lack thereof, their stock is still down 4%. we're watching viacom. aere have then allegations by former girlfriend of the chairman about his mental acuity. nonetheless, perhaps some of stock. being into the the disney news is not helping. the other media stocks, 21st century fox, time warner, trading lower. disney, the shares have largely recovered from the slump that followed the earnings report at the end of the summer. that sparked a lot of concerns of cordpn and the idea cutters and the effect on disney's channel. this is a record high for the stock.

it was coming up on a record close. on november 20, it came within one point 3% of the record close. looking at the decline, the backdrop is that the stock has recovered quite a bit from its low. ,rik: in perspective like that nonetheless the concerns remain. not a big of a drag as they once were on disney chairs. we turn to paul sweeney of bloomberg intelligence who covers disney and media. the loss they disclose of 3 million espn describe spurs -- subscribers. in percentage terms it is not that much. if netflix where to all of a sudden report the loss of 3 million subscribers, people with panic. paul: you are right. this is news the company disclosed in their june fiscal

quarter in august. espn had lost subscribers, causing disney to reduce the profit outlook for espn for the fiscal year. and spooked investors sparked a selloff in media last summer. this news is not new, but seeing 10kn black and white in the was probably jarring for investors. the unbundling of the pay tv bundle is an issue that all media investors and stocks have to deal with going forward. questioningrs are if the pace of the unbundling will be faster or slower than expected. erik: three years from now, we're really be in -- where will we be in cord cutting? paul: it is a reality. there is no denying that. we know that people on the margin are leaving the pay-tv bundle because there are more options. competitors like netflix, hulu,

hbo. there are certainly alternatives. i think it will generally be a slow bleed off of the pay-tv bundle over time. there is still a tremendous value in the bundle. broadband is a selling point to keep you in the big bundle they offer. i think it is a longer-term issue for the big media companies. throw you and offspeed pitch. should we think about disney and media stocks the way that people think of walmart? last month, or earlier this month, they admitted they had missed the transition effectively to internet retailing. that they would have to make investments costing money. the stock sold dramatically and is down 30% for the year. the we see the same thing in media? it feels so similar. paul: i'm not sure.

one of the advantages drum the media industry, and they learned this from the music industry 15 years ago, it is that they own their content. it is proprietary and has value. the challenge is to make sure as new distribution platforms come into the marketplace, like digital distribution, amazon, hulu, and netflix, that they preserve the economics for their programs. that they do not give it away or undersell it. the content is king. some at redstone made it famous, it is still in play. ball is still in the court of the big media companies to try to create economic distribution models that make economic sense for them. erik: good to see you, i have a great weekend.

that is paul sweeney of bloomberg intelligence. a big week for mario draghi and janet yellen. what is at stake in the european close. ♪

erik: we are moments away from the european close. mark barton is joining me for the next half-hour. the unitedaffing in states after thanksgiving. that is not the case in europe. have a full house. the stocks have not responded to our full house. they came back from the lows of the day. it will finish with little change. the china stockmarket slump set the tone. the euro-zone economic call the dense lifted. this is the chart that i love. the weekly run of the euro against -- it is rising.

it has a weekly declining run, which takes us to next thursday, the ecb meeting. the euro has not fallen for seven weeks since 1999. we will be talking to the deutsche bank chief economist about the meeting next week and the u.k. gdp data. is in russia. the agricultural product will be subjected to additional border checks and authoritarian consultants. we have a special treat. julie hyman joins us. i'm ready for you. it is the big one. the european close is next. stay with us. ♪

erik: i'm erik schatzker. it is 10:30 in new york city and 4:30 in london, where trading is finishing up for the week. mark? mark: the biggest slump in

chinese equities in three months. the european close starts right now. ♪ erik: from new york to london and then to moscow and the next half hour. mark barton, kick it off. mark: improvements on what happened earlier in the session. china's stock market slumping the most in three months because of industrial profit decline. what helped was data from the eurozone. economic confidence matching its highest level. it will not change with the ecb .does next week the stoxx 600 rising for