♪ from bloomberg world headquarters, good afternoon. janet yellen laying the groundwork for an interest rate hike in two weeks. she signals the economy is ready for liftoff. the ecb delivers but some say it was not the bazooka they were looking for. and sears is still struggling to get shoppers through its doors. the retailer posting another big loss. how much longer can this company keep losing money? you about an hour away from the close of trade. i want to head to the market desk where julie hyman has the latest on the janet yellen effect. but it was really the ecb effect. julie: that was the surprise

element of the market. if you take a look at u.s. stocks, we're not at the lowest of the session but close to there. nasdaq fell close to 2.1% before bouncing off the bottom. it's been a curious day because if you look at the action over the course of the day, we saw european stocks fall sharply after mario draghi expanded the length of quantitative easing but not the size of quantitative easing. u.s. stocks turned lower but not by that much. they made a bit of a run of recovery but have been accelerating since . the mario draghi news was well in the rearview mere by the timely release started to see more of a dramatic decline in stocks. the news was such that we really felt a lot of repositioning and people struggling to figure out what it all meant. if you take a look at the group

suffering, is all of them right now. health care declining the most today. not necessarily any particular news headline. it's a long list of groups down more than 1% today. charlie: pretty much already there. the news affecting the bond market. you did see yields spark of gush spike up. julie: all of them going up really sharply. the 10 year yield at 2.33% here. janet also reemphasizing the idea of the economy being on solid enough footing to withstand a rate increase. we get the jobs report tomorrow which will presumably confirm that. the two-year as well also seeing a spike in yield at the same time. actually coming down just in the past a few moments.

and the euro seeing dramatic action today. the biggest one-day gain since march 2009. as we see, it has just gained steam after the day has progressed. i do want to check on oil prices because as we see dollar weakness today, oil has been one of the beneficiaries. opec still meeting those -- still meeting as well. betty: thank you so much. let's get a check on the headlines. mark crumpton has more. mark: new details about yesterday's deadly shooting rampage in san bernardino, california. authorities say the two suspects accused of killing 14 people and wounding 21 others had more than 1600 bullets with them when they were shot dead by police. one dozen bombs and more than 3000 rounds of ammunition were

later found in their rental home . the u.s. house of representatives has overwhelmingly approved a five-year, $305 billion highway funding bill. the measure would also revive the export-import bank which helps american companies sell products overseas. the vote came a day before federal infrastructure funding was set to run out. it sets up a senate vote to pass the measure before tomorrow's deadline. fighting terrorism and russia's escalating feud with turkey were the themes of vladimir putin state of the nation speech today. he called for international teamwork to stop militants and those who support him. he cited turkey, saying the country buys oil from the islamic state. russia has imposed sanctions on turkey sent its jet was shot down. president putin called the action a treacherous war crime. an appeals court in south africa

found all square pistorius guilty of murder. the verdict overturned his conviction on the lesser charge of manslaughter. he fatally shot his girlfriend on valentine's day 2013. he insisted he shot her by mistake and thought she was an intruder. the he faces a sentence of at least 15 years. you can get more on these and other stories on bloomberg.com. betty: thank you. now more on the markets. equities a dropped today. joining us now for more is tom the managing partner at fun stretch global advisors. it really was about the ecb today. >> yes, that makes a lot more sense. betty: what did you think about

the move by mario draghi? >> i know mark is disappointed but i can see a couple positives from this. one is it really does say there is a potential for big policy divergence. it hints at coordination. the second is we think the surprise when the fed starts to move is the dollar weakens. that reverses a huge headwind. it starts to take a lot of pressure of corporate and probably boosts u.s. growth. betty: how is that going to happen, though? rising addressed rates see the dollar weakening? >> the policy rates are moving up. you have to remember that policy isn't directly intervention. the markets have correlated that and historically, development of

inflation and supply of money is how currencies move and i think the fed is busily moving because inflationary pressures are starting to develop next year. that should start to weaken the dollar. i've the 11 times the fed started to move, two thirds, the dollar weakens. history sort of supports the idea. betty: however, even janet yellen recognizes the dollar is likely to strengthen on a rate hike. she spoke about that today in her testimony. we had a part of her, and where she said while it is going to strengthen, she believes it will be moderate. >> one the dollar appreciates well it's moving up, that tends to push important prices down which cut inflation. but if the dollar simply stabilizes at a new higher level then inflation is no longer held down.simply stabilizing the value

of the dollar at a new higher level will diminish that affect. betty: let's say the dollar at least stabilizes. is that still good for equities? >> it will be good for earnings growth because this year the 10 percent move on the dollar subtracted by $10 added s&p earnings. so next year assuming buybacks stay in place and data doesn't worsen -- by the way, we might be at the beginning of the end of the oil production decline. i think we could get high single-digit growth next year. betty: your scenario is on a lot of risk. what if right? what if oil is finally bottoming? what if the dollar actually falls? that a lot of big if's. >> you have to think of where

the market is positioned. the market is position for the dollar to strengthen. you have to start to think about chipping away at the consensus view. if you sum it up, one of the two is likely to happen so you have a case for the dollar to weaken. betty: in that scenario, what would you place your bets on? >> here's some obvious correlations. the first is you want to belong cyclicals next year. consumer discretionary benefited from that. the other is probably more subtle. value stocks were inversely correlated with the dollar so you have to start thinking about getting out of growth into the financials and industrials. betty: do you expect then come

are you betting we might see some of these tech stocks fall? >> well -- betty: facebook, amazon netflix, google. >> for them to perform in line with the market would be a disappointment next year. they have really been doing all of the heavy lifting for the market. you will see people chase the banks and microsoft's. betty: which have been out of favor for a while. >> that's right. betty: the fed likely raising rates -- we actually didn't see much of a change in futures after yellen's testimony. do you think the markets are well-positioned and priced in for that? >> you know, i think most markets except for equities have priced in.

in equities, we are probably taking our cues from the dollar expressing a lot of anxiety. a lot of angst and nervousness because we still have a live report tomorrow. i suspect that because of that the biggest thing to watch is volatility drops. betty: are you nervous at all about this decision? >> i think -- i don't know what the one day, one-month reaction is but do i think the real economy will suffer? absolutely not. i don't think the fed will make a policy mistake to cause a debt crisis. betty: good to see you. thank you so much. tom lee. much more ahead in the next 20 minutes of the bloomberg market day. violence is never far from israel. how does this affect the stock market there? we speak to the chairman of the tel aviv stock exchange.

and sears posting another loss. how much longer can this retailers survive? we analyze the move with the former ecb president on bloomberg markets. ♪

betty: good afternoon and welcome back to bloomberg markets. israel's booming tech scene has given birth to a number of hot stocks many of which are listed in the u.s. investors can invest on the startup nation. it tracks 65 israeli tech companies.

the chairman of the tel aviv stock exchange visiting us and joins us now. thank you for joining us. >> thank you for the opportunity. >>betty: i hear a lot about the israeli tech scene. it seems inevitable. why is this important? >> this is a great opportunity for the foreign investor to buy this eta that combines israeli companies in new york stock exchange, nasdaq other places. it reflects the great creativity of our industry and providing to the world something new. this is what is great about this etf. betty: it puts a bigger stamp and profile on the israeli tech scene.

we have seen a number of israeli companies come to the u.s. to raise money. several of them have listed on the nasdaq. why are they coming here? what about money at home? >> it's a good question. the reason is to get the recognition. this is a really high tech company, and the pricing is much better than in israel. there is much more respect in the world for some of these companies and they feel it they go public in this place, it's like getting some kind of credit naation. we have to do a listing system so companies can be listing here and in israel.

we have developed a system that can support companies from the very beginning. from the very, very beginning and to assist them to grow slowly until they are mature to do the ipo in the tel aviv stock exchange and when they become great, they can go to what ever it is. this is what we're trying to do now in our stock exchange under the assumption we have something to provide to the world. we have great technology that can support and assist in many areas. betty: the tel aviv stock exchange and just the markets in general in israel, you have seen dwindling volume. part of that has to do with msci upgrading israel from a developing to a developed market. that has caused a lot of changes and portfolios and resulted in

dwindling volume. what do you do to reverse this? >> this is the $64 million question. betty: which is why you have been brought in to change it. >> we're trying to make some changes in our system and we are disgusting this session discussing -- discussing this. it takes time. then we need to make the old trading much easier. then of course we try to convince them it's good for them and the investor to be in these indexes. in the meantime, we try to develop another index that provides these larger varieties of high-tech industries in israel. betty: thank you somewhat for joining us. really appreciate you stopping

by. the chairman of the tel aviv stock exchange. much more ahead on bloomberg markets. another big loss for sears. how much longer will investors give this long-standing turnaround effort? ♪

betty: welcome back. time for the bloomberg business stories. uber is accelerating its ways to expand globally and branch out into new services. if looking to raise another $2.1 billion in a financing round that would value the company at $62.5 billion. people familiar with the matter is a cooper has filed paperwork in delaware detailing its plans.

the potential prey $.2 billion sale is contingent on an acquisition by a the index. the printer bring offered because of regulatory concerns that the deal would hurt composition. it would be carlsberg major dutch first major acquisition under the new ceo -- first major acquisition under the new ceo. abigail doolittle is standing by. abigail: joining me today's options insight is the junior market strategist in chicago. thank you for joining us. we have stocks down significantly today in the wake of the big mario draghi disappointment. what do you make of what's going on? >> this might just be the minor pullback we need to bring the

market back up and accelerate to the end of the year. the last couple weeks, we've had this slow grind up and not so much on the table. everybody really believes the fed will raise rates. that was pretty much in janet yellen's comments today. if anything, this gives us a good pop to get in now. abigail: the s&p 500 slice to write through its first 200 a moving average for the second time in three weeks. what do you make of that? >> what i look at is a direction of the paper today, direction of the put call ratio. it is barely up to 20. it backed off a little bit. i would expect the volatility to be much higher given the news we have seen today. again, i think this is a

beleaguered place for those investors waiting for this pullback to get there -- the technicals are there and very important. the last couple times we have gone through, we have snapped right back. abigail: thank you. moving to your trade, ultra asthmatics -- cosmetics. >> revenue year over year expected still in double-digit growth. everybody is piling on this easy trade. not that i think the stock is not going to go up but i want to sell a put spread because if the stock happens to drop i'm ok with that because i would want to buy the sure is below 158 anyway. that area technically is a major support area. i'm going to sell the december 1 60 put and i want to buy the

december 155 put. i can collect about two dollars for that. 158 would be my break even. if the stock drops, i'm even. if it goes up anywhere above 160, i keep the entire two dollars i sold it for. abigail: there's only about 3% downside to that 158 break even. why not choose a strategy that allows for more upside or downside especially in the expectations of a blowout quarter? what gives you this confidence? >> because technically, i'm really using that 200 day average as a major support area. if i was not trading options and just the stock, that would be an area i would look to. volatility is extremely expensive here.

this put spread actually because volatility is so high, i'm able to collect two dollars on that and that's a lot of premium to collect. i don't see the major move the market is expecting. that's just me and the market says other things so i'm looking for decent earnings. abigail: thank you. very helpful. betty: thank you. still ahead, the former president of the european central bank will be here. we will talk about the latest ecb move.

sure, tv has evolved over the years. it's gotten squarer. brighter. bigger. it's gotten thinner. even curvier. but what's next? for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv. betty: you are watching bloomberg markets. let's start with a check of the headlines. mark crumpton has more from our news desk. mark: authorities in california

are still trying to determine the motive behind wednesday's shooting rampage that left 14 people dead in san bernardino. speaking to reporters in the oval office this morning president obama warned against passing judgment before conclusions are drawn. >> at this stage, we not yet know why this terrible event occurred. we do know that the two individuals who were killed were equipped with weapons and appeared to have access to additional weaponry out of their homes. mark: authorities say the two suspects have 16 more hundred bullets with them when they were killed in a gunbattle with police. all u.s. combat jobs will now be open to women. ash carter is giving the armed

services until january 1 to submit plans for the change which end a decade-long ban on women serving in front lines. janet yellen has indicated that conditions are necessary for an interest rate increase. she says they have been met and she wants to tighten monetary policy slowly. she appeared before the joint economic committee today and gave lawmakers and upbeat assessment of the economy's progress since the fed last meeting in october. >> i anticipate continued economic growth at a moderate pace that will be sufficient to generate additional increases in employment and a rise in insulation to r 2% objective. although the economic outlook is always uncertain, i currently see the risk to economic activity and labor market is close to balanced.

mark: the committee meets later this month and is widely expected to end a historic era of the near zero interest rates that dates back to late 2008. police in riot gear toward down a camp today outside a minneapolis police station. it was set up three weeks ago by people protesting the killing of a black man by officers. about 15 people were told to leave and their gear was hauled off by city dump trucks. the european space agency launched a rocket carrying two keeps of gold and platinum and will travel almost one million miles from earth so tie insists that so scientists can -- so scientists can see how they behave in freefall. also don't as gravitational rates ripples were predicted by albert einstein in a century ago

but they have never been directly detected. you can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. betty: thank you. six more months. that's how much more qe we can expect from the european central bank. the last time the ecb raise rates was in 2011 and has been blamed for slowing the recovery in europe. we speak with the man behind the move, former president jean-claude trichet. >> thank you very much. monetary policy is a mixed or of action and communication -- is a mixture of action and communication. where did the ecb fail? >> it is action that counts of course and the markets might have short-term reaction but they take the action seriously.

there has been serious action today with five decisions all-important in my opinion. i expect the market to recognize these were really decisions that count. i really trust the short-term should not be considered any i would say in any way an important reaction. >> the market seems to think there needs to be more stimulus. the ecb does not. who is right? >> what is being done by the ecb and what works were the most important sentences by mario draghi today were if you do more, it's not because it failed

but because it worked. i trust it is true. when you look at the economy when he look at the diminishing of unemployment which has been quite substantial coming from 11.5 to 10.7. when you compare with the pm eye, you see the hook is going in the right direction. it meets a lot of efforts. a lot of efforts a by government, social partners, those who have a stake. the central bank cannot be the only game in town. >> does the market reaction bother you? a central banks created an unhealthy dependency on central banks for intervention? >> again, it was a clear message

of mario draghi today also as was the case we are not the only game in town. not to do a lot of reform. -- you have to do a lot of reform. these important decisions are giving time to other partners to do their job to clean the house. >> will they do that? >> this is absolutely necessary. the message of the central bank is clear. some of them are going in the right direction and making improvements in europe of the fiscal governance, the banking union. a number of governments have to proceed and do their job.

that is true for europe, true for all advanced countries. >> the story we got today was five members of the governing council refused to go along with additional stimulus. how much dissent is there within the meeting and how much influence do they have on the policy ultimately adopting? >> when you decrease rates by 10 percentage points, negative or -.3, when you expand it when you decide to invest these are decisions that are very important. there has been a great majority for adopting these measures. so again decisions in the ecb

are taken on a simple majority basis. most of the time, it is a great majority. in my time, i had two resignations. decisions from time to time are not easy to take obviously. but i trust really that the ecb took decisions that are very important today and the market will recognize they were indeed important. >> how difficult is it to get thea consensus in these meetings? >> as is the case in the u.s. or u.k. or japan, the rule is you decide by a simple majority. it is very important you have as much consensus as possible but it's not necessary in all cases otherwise it would mean that every member of the governing council would have a veto right which is not the case and should not be the case because these

institutions have to take a decisions and sometimes rapidly. >> is it the will of the president? people here think is the will of the chairman. >> you have a large majority or consensus and be more you are reasonably considered you are incorporating all the vision and wisdom of all members of the council. and myself of course and others, we try to have the maximum amount of corporation from the collective wisdom. but that is not mean you are blocked. these decisions have to be taken. >> is it going to be harder for the ecb to move now, to take additional action in the future? will there be a credibility problem? >> i don't think there's any credibility problem. i think the market will recognize rapidly that its own

assessment was not necessarily the right one and i expect we recognize the decision as an important one. the central banks have to cope with new challenges permanently. and different challenges of course on both sides of the atlantic in particular. i trust the ecb in the future and as i have in the past to make the right decision carefully crafted at the right moment. >> denny still make the argument the u.s. economy is too weak to handle higher rates. -- many still make the argument the u.s. economy is too weak to handle higher rates. is there something janet yellen can learn from your experience? >> these can be analyzed from all possible angles.

first of all, my main goal and the goal of janet was to anchor inflation expectations. and during all my time inflation expectations were anchored in line with our definition of price stability. it's not be decision of one person of course, it's the decision of the institution. when we took that decision, it was becausef earning expectation. the price of the volume is skyrocketing and the signal we gave at the time was a signal we were entering inflation expectations. -- anchoring inflation expectations. during all the periods since, we

have probably the best anchored inflation expectations you could find in the advanced economy both against inflation but also against deflation. we never had a threat of deflation as has been the case and others. this anchoring is really decisive and it explains the decisions taken today. >> given the divergence in policy between the ecb and presumably the fed are you concerned about the global economy and the effects on the markets and how this will all play out? >> the central banks have their own chart. the cycles are different on both sides of the atlantic. it is absolutely normal the central banks are reacting with the appropriate decisions to

different circumstances. their goal is the same. the goal of the ecb is to re-anchor inflation expectations. the goal of the u.s. is to perform the 2%. so i am fully confident there is no problem of divergence. >> former ecb president jean-claude trichet, thank you for joining us. back to you. betty: thank you so much. that was mike talking with the former ecb president jean-claude trichet. much more ahead. we will break down jean-claude trichet's comments and what happened this morning with the ecb. joe weisenthal joining me with more. ♪

betty: good afternoon and welcome back to bloomberg markets. you just heard from the former ecb president, jean-claude trichet on the move that happened this morning with the ecb cutting their deposit rate and extending their stimulus program another six m coanchor of "what'd you miss?" he was trying to defend what the ecb is doing. joe: all day, the line has been that mario draghi must have screwed up in the communication over the last several weeks and has seemed to be building the

anticipation for something much bigger. he was really hyping this up it seemed like and today was like ok, there was a cut in the deposit rate and the extension by time of the stimulus. and jean-claude trichet's point he made is monetary policy is based on action and ultimately it's these decisions that can get caught up in the noise and that in the grand scheme of things, that's not what it's about and maybe the euro zone economy is not quite that bad. there is some evidence to that -- german unemployment at record lows, the pmi this week not that bad. so maybe the eurozone doesn't need that big bazooka. betty: i think that is the point

and something lost in the reaction today is that if you don't need that bazooka, there's some comfort in that. joe: could be. the other big lesson today is the danger seven extremely crowded train. everyday day we come on here and talk about how everyone is bullish on the dollar, the h euro. these views have come beyond conventional wisdom. when everyone is positioned that far to one side, you don't need that much of an alteration to get some of the extraordinary market movements we see today. obviously u.s. stocks are down but the real exciting action is german yields, longer-term german yields, even longer-term u.s. treasury's. there are some quite extraordinary moves happening. betty: it is funny you say that

because we had tom lee on earlier and said the crowded trade is thinking the fed will raise rates and -- joe: it has been the most common cliché thing everyone says. still very few people are really skeptical of it. they are like a yacht everyone is in it but what else are you going to do? when you get that extreme where everyone has the same the you, it doesn't take much to get a day like that. betty: we wonder how much of the euro strength today had to do with the short coverage. joe, i know you're going to talk much more about this on your show. much more ahead. stocks plunged today after janet yellen's comments. she was in front of congress. how meaningful is this slide? what do we read into this?

we will be back. ♪

betty: welcome back to bloomberg markets. i want to head back to the markets desk were abigail doolittle is only market head on the closing bell. abigail: what makes it interesting around the open is we were looking at flat market and now we see all three major industries are down more than 1% significantly. when you look at the dow intraday chart, the selloff intensified as the day went on. strong selling pressure into the close. a lot of attention today to bonds. as we take a look at the two-year and 10 year, both are spiking higher. perhaps in anticipation of that rate hike on december 16. the tenure is having its biggest one-day drop since february 20 6, 2015. the standout class to watch

today is the euro, having his biggest today since march 2009. what really stands out about this move is going into the commodity complex. oil and gold have found a bid. that may be counterintuitive to a december rate hike but mario draghi's disappointment has in some ways cast the dollar. oil trading up, gold trading up. it gives the fed room to perhaps raise rates on december 16 without causing another big commodity crash to the downside. you could call these clever bankers really pretty clever on this day. betty: thank you so much, abigail. just a quick note that avon shares are jumping right now ahead of the close. we have a report out from dow jones saying it's in advanced

talks on possibly selling its north american business. the stock up now 11%. there was some volatility in avon shares yesterday on speculation of some sort of activity around because medics company. avon up 11%. we are a few minutes away from the close. i want to bring in oliver who covers the stock markets for us. where do we go from here? i know we are waiting for the fed but what do we read into this? >> today is interesting. i was a bit dismissive this morning went stocks started to fall. it kind of felt like some losses were eminent because the market was expecting one outcome. this wasn't even a binary event. on hundred percent of economists were saying the -- 100% of economists were saying this was going to happen.

to have some kind of tell risk event that goes in the opposite direction --mario draghi didn't come through with what everyone was expecting. when you have that kind of crowded trade, you expect things to get into a whirlwind. but when you look at what happened it's interesting. you have the euro and the dollar spike. however he wanted to bonds and stocks. treasuries tenure up. stocks down 1.5%. if you look at what's happening in terms of those losing together, stocks bonds is little less than one fit of the time moving in opposite directions. you have people that have strategies based on that. you had big losses in stocks and huge losses in bonds as well.

if you look at the combined percentage loss, there are only been three other days in the past 15 years in which we have the degree of combined losses we have seen today. those days are october 9 2008 and june 19, 2013. it's pretty interesting when you look at what is going on with the internal. betty: thank you so much for all of that information. that's it for bloomberg markets. ♪ . .

>> we are moments away from the closing l -- the closing bell. i am scarlet fu. joe: and i am joe weisenthal to alix steel is off today. scarlet: u.s. stocks posting

their worst losses this quarter. joe: the question is, "what'd you miss?" scarlet: central banks take center stage. janet yellen ready for liftoff while european central bank disappointed about europe's qe extension period joe: and we speak to deutsche bank's chief international economist about what he expects about the jobs report. scarlet: impeachment proceedings. will she be ousted? we begin with the markets. a dramatic selloff in global stock. it was not just the u.s., but we kind of finish things off. the worst day september 8. the put side was the euro rallying most in six years on a disappointing stimulus plan from the ecb.