scarlet: from bloomberg world headquarters. it is "bloomberg markets." i am scarlet fu. the commodity index job to its lowest level since 1998 since yesterday. is there a turnaround? yahoo! is scrapping plans to spin off alibaba. what is next? in the deepest recession in 25 years with inflation running into double digits. we will hear from two central bank directors who call for an interest rate hike. first, we want to get more on today's market activity. let's head over to ramy inocencio. now are wellkets

off the session lows, giving up all of the gains that we saw earlier. the turnaround started around 10:30 when the u.s. crude inventory numbers came out. it has been up and down for the markets. the s&p 500 is in the negative down .25%. it was positive for most of the day. the dow is raising its positive number, up about .10%. of s&p 500 --p materials are the biggest leader, up i 3.3%. this is because of talks of the potential merger between dow and dewpoint. the biggest percent gainers. energy is higher, number two. up by about 1.5%. utilities are up by .5%. let me get rid of the appointment reminder.

let's take a look at crude, it is trading lower right now. down by .3%. it spiked at 10:30. that was when the crude data numbers came out showing inventory fell by 3.6 million barrels a week. yesterday, we saw oil hit lows not seen since february, 2009. we are on track to continue the decline. alix: the huge built in distal it -- 5 million barrels? this is a different capacity. you also mentioned the rebound in overall materials. obviously, dow and dewpoint are andng it a lift -- dow dupont are giving it a lift. ramy: yes. dow is up by more than 10% and riding on the coattails, -- up by2.25% and -- chemical up

2.8%. back to you. alix: thank you so much. look at let's take a first word headlines. let's check in with mark hampton. mark: let's go to paris where the u.s. secretary of state says america will increase the amount tomoney for climate grants $860 million by 2020. secretarycrary -- john kerry also called for ambitious global tactics on climate change. the united states has long supported the notion of, but different possibilities and capabilities. with each of us doing the best we can. it is only fair to have higher expectations for developed countries and a sliding scale in approaches for everyone else. we recognize that. part ofe money will be

an existing promise by wealthy nations to jointly mobilize $100 billion a year in climate finance pirate -- finance. a third gun man who attacks the music hall in paris has been identified. he is a 23-year-old from strasburg. two of the three attackers killed themselves with suicide vest. the third was shot by police. in brazil, a supreme court justice has halted the impeachment committee. that panel was to decide whether to open proceedings against the president. committeee ruled that members must be chosen by party leaders and elected in an open vote. joe biden says if donald trump wins the republican nomination for president, he would be easily defeated by hillary clinton. in an interview with bloomberg news, the vice president says clinton wins in a

walk. donald trump's call to stop muslims from coming to the as is states was responded to as, i don't know what his motive is, but i know what he is preaching is a very dangerous roof for america. personmerkel is time's of the year. the magazine says she has shown leadership during the refugee crisis and the greek debt standoff. among the finalists, donald and the black lives matter movement. that is a look at your first word news right now. you can get more on these and other breaking stories 24 hours new bloomberg.com. i am mark crumpton. back to you. alix: commodities are seeing the worst slump in a decade. the last time it was this low was december, 1998. i was still in high school. no, i was in college. scarlet: we have seen how anglo

american and glencore have been for -- been forced to cut costs. joining us now is ken hoffman. alix: is supply cuts really aren't affecting prices, what is the number one thing a driving metal? >> the u.s. dollar. you can look at what the dollar is doing and say that metal is going in the opposite direction. it has been driving us for quite some time. alix: you also look at the u.n. -- the yuan. you look at the onshore and offshore rate. what are they and why are they significant? we look athe things is the carry trade. all of a sudden, if people have to pay a lot more dollars to do these financial traits, they will not want metal.

a will put metal back on the market. if i am a traitor looking at 2016, the thing i care about is and the -- the yuan offshore yuan. it is like a black market yuan. that will spook metal traders. scarlet: there are signs that china is guiding the yuan weaker. what does this mean for metal prices going forward? if the yuan is to materially weakened, it will have a major negative impact on metal. it would cost them a lot more to get the metal and they wouldn't do these financial trades i have talked about a lot. it would be negative over the long-term. 25 there could be up to million metric tons of copper tied up in this. it is a big thing we watch. dollar short term, you on long-term. alix: thank you, ken hoffman.

up, cosco is the biggest loser in the s&p 500. we will see how the drop in gas prices are impacting the sales. alix: the web portal is considering packaging all of its other assets into a publicly trading company. scarlet: plus, can brazil overcome the economic woes? ♪

alix: welcome back to "bloomberg markets," i am alix steel. scarlet: it is time for a look at the bloomberg business flash. a new survey says global investment banks face five years

of cost cutting. they will earn a 9% return on equity in 2020. higher regulations and a slump in trading revenue. fromet: walmarts imports china have displaced foreign hundred 50,000 jobs in the u.s.. the study comes from a longtime critic of walmart policy. walmart has called the study flawed, it doesn't take into effect the jobs created. clan's one time owner has an owner. it is martin shelley. who made headlines recently by raising the price of a job by 5000%. he bid $2 million. he tells bloomberg he hasn't even listen to it yet. he is saving it for a rainy day. scarlet: we will be talking about that later on with one of the reporters on the story

available on liberty.com. business can get more news at any time on bloomberg.com. scarlet: ramy inocencio has a couple of individual movers. at somesically looking retail. first, we had to athletic wear shares areon plunging right now, down by 9.7%. the company missed the profit targets that it had already lowered from before. it blames warmer winter weather as well as the discounts in needed to follow on to move the stock. another retailer casualty is cosco. lossese accelerating the down by 4.5% but it has pulled up from the session low when it most in three months. it missed the early -- the earnings estimates. up as are sales were

bright spot. investors are not paying on to that. pharma is falling right now. falling by 6%. they make cancer fighting drugs and is below the 50 day moving average. they've announced a secondary share sale. is that goes through, it turns out that would be a 7% dilution for current shareholders and investors here. they are not liking and are pulling out of the stock. scarlet: thank you so much. we will check in again in about half an hour. alix: yahoo! has scrapped the long-term plans with alibaba after investors were worried about tax risks associated with the deal. scarlet: yahoo! shares are trading down. they are erasing the earlier gains. they are exploring a reverse spin off in which assets and liabilities excluding alibaba stakes would be transformed into

a new company. the: marissa mayer export situation on an investor call this morning. driven by our all about mistake -- the separation will provide greater transparency to isure that yahoo!'s business accurately valued, especially as we continue to improve the product at operation. scarlet: joining us now to discuss is our technology reporter. i know they're going to be a lot of critics out there who say this is a failure for marissa mayer. yet you have analysts who say this is a positive for yahoo!, that it is not spinning off alibaba. yes, there are concerns about the tax issue. it had been neighborhood on the stock price for quite a while. so this says they are addressing that. it basically says that they are betting on something more secure to get a lower tax rate.

that's it. other folks on wall street are saying, here we go again. you'll have to wait a year more for another sort of restructuring thing. necessarily get a lot of excitement. alix: in part, this is what star board wanted. they didn't want to see the spinoff of alibaba so why are shares down so much? >> it gets back to the fact that yahoo! isn't doing enough to vacate some folks. they didn't signal that they are going to sell everything, or anything like that. the chairman said that wasn't on the docket. -- they have made no decisions to sell the company or its assets. so there are some folks who said hey, yahoo! is going to get sold and we will make tons of money. maybe that isn't quite as clear. there is some tampering of

excitement over what might happen. yahoo!: when it comes to , people have a hard time defining what the company is. yes, it is a web portal. for a while, ursa minor wanted to turn it into a web -- a media portal. i think they do have some stuff that is very valuable. by a lot ofill used folks and their sports property and fantasy sports are a major brand. yahoo! news has a great amount of different places to get breaking news. you do have media assets that are strong. but despite the criticism, they still do have some assets that folks might want. the criteriauld be of a sale for some of those businesses? sayn: you would want to

hey, i can expand my digital place here. despite the fact that yahoo! may not be the most cutting age, it is digital. older mediare an company, you can say hey, i can get a bunch of media folks on my side right now. they have some advertising technology that is rigidly focused. so there is a place for a potential buyer but it is just about whether this would be a right place for anyone. it is a consultative asset. scarlet: talk about marissa mayer and what is next for her. how long is she tied up for at yahoo!? how much more of a honeymoon. time will investors give her? : the honeymoon has always been a question for marissa mayer. we have been reporting for a while that hey, it is about over.

the honeymoon is about over with marissa mayer. that said, she is still there and she is engaged. i do think we are entering a new chapter and phase and there could be a lot more scrutiny about hey, how are you going to turn around the yahoo! business? we will have to see if she can do that. there will be scrutiny around that. scarlet: bryan womack, thank you for joining us today. joining us from san francisco. alix: moore is a meyer is the 23rd best paid executive on bloomberg's ranking. yes, shares are down more than 10% since 2000 14 but her stock options are still in the money. so in terms of pay, she is feeling pretty good. much more coming up on "bloomberg markets." we will be with you after this break. ♪

scarlet: welcome back to "bloomberg markets," i am scarlet fu. to flyhe first airline airbus to the u.s.. ed has pushed market share in the u.s.. delta american airlines and united are saying not so fast. they say government airlines -- government subsidies are giving qata an unfair advantage. first and foremost, we have an open sky with united states and we are going to exercise what is allowed by the government in the open sky regime. we are opening new roots in the united states in january two

ally and boston in march and eventually at atlanta. in june. however, what is being said about our carriers is not true and we have filed all the relevant documents to the government and i will now leave it to the government to decide what they have to do. and if we are exactly complying with the agreements that we have signed between the two countries. >> which part of that is not true? the industry group in the united states has come up with a some of the subsidies at $42 billion the between you and emirates. which part of that number is not right? claiml, that is what they to be the total subsidies that we have received. i cannot talk about my friends but i can tell you about qatar airways.

frommount we have received the government is an equity in a business that is owned by the government. but what the american carriers are not talking about is the biggest legal subsidy that they get under chapter 11. they also have fly america policies which is an indirect subsidy. delta is receiving fuel subsidies from the government in georgia. so mudslinging does not work. they should stand up and face and give their passengers good value for the money. -- removing capacity and charging excessive amounts to the passengers -- the american is not fair. it and what they are worried about is the high standard and product that they supply to your customers in america. qatart: that was airways's ceo.

-- the company reported and earnings miss. alix: thank you so much. the u.s. warehouse retail giant is the focus of this weeks the numbers don't lie segment. cosco sales are slowing at the numbers are affected on the strain on the u.s. dollar and gas prices. same-store sales overall are actually positive. they be around 5%. but the issue becomes for cosco, where can it grow? at the heart of its business, it is a brick and mortar store and it has some areas it could expand. cosco in the blue it has a big presence in the west but compared to sam's club and bj's, if fall short in the northeast and midwest. thatard today on the call they will open 32 netbook eight and skin 2016 as part of the

expansion. that it haside is to spend that much more money in order to grow. -- this this year ago year alone it will be double to what it was in 2010. the fiscaln and for year of 2016, they are looking at $3 billion. that really puts the pressure on cosco's earnings. but they can make it up a little bit in terms of their product and this is where the private label, kirkland, can help out. it is on the rise. it makes up about 20% of total items sold. when he 5% of global sales. this can go a long way in helping margins, especially because they are spending so much in other areas of the business. as with any business, it comes down to the numbers. annually, the10

members are now over 16 million and they just added 25,000 cardholders a week. this is the lifeblood of the business. are hoping these membership numbers will support it as it tries to expand in the middle of falling gas sales and slumping overall sales. perspective.t i am one of the millions of cardholders. you get in earlier. i live in the suburbs. we have much more coming up on "bloomberg markets." commodities, oil and markets is what we will discuss. ♪ 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. tand that's what we're doings to chat xfinity.rself, we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. alix: from bloomberg world headquarters in new york, welcome back to "bloomberg markets." -- alix steel fit

. scarlet: i'm scarlet fu could let's go to the bloomberg first word news desk with mark compton . mark: a bombing happened in baghdad killing 11 at a mosque in isis has point responsibility could have targeted iraq's shiite majority could one third of russia's airstrikes target the islamic state could tha andt is the u.s. envoy fighting the militants. the u.s. accuses russia of bombing rebels that want to overthrow president assad. policemore officer charged in the death of freddie gray is testifying in his own defense. william porter was the second witness called by the defense. prosecutors say that porter failed call for a medic after gray said he knew no one and he is also accused of failing to buckle great into a seat when he was riding in the

back of a police wagon. the maximum penalty that porter faces is 25 years donald trump's comments on muslims continue to spark criticism from fellow republicans. iowa governor terry branstad was the latest away and 2:00 a.m.. i wantnot taking cited people to come to iowa and share their plans and visions to lead america back and get rid of this huge national debt, restore american leadership, to restore our commitment to renewable energy. that is the kind of leadership that we need. mark: branstad is days away from reaching a milestone could he will be the longest-serving governor and u.s. history. the hollywood blacklist drama three screenived actors guild nominations including best actor for bryan cranston and best actress for

helen mirren. wasraight out of compton" nominated for best ensemble. the awards will be broadcast live on tnt and on tbs. does ithat is a look at a first word news. you can get these stories 24 hours a day at bloomberg.com. back to you. alix: between commodities and oil, the commodities market is a train wreck. us now from joins los angeles with more. maryland, we hear there so many stores is a stress with corporate credit rented liquidity has been the undercurrent this whole time. boilingt bring it to a point? >> yes, i think it is a force five hurricane with lots of debris flying around. you have a lot of components.

you have lack of liquidity. trading debts are being excoriated by many of the big firms. you have the commodity patch. you have the oil patch and you have got the big dogs, china, who is not a whimpering puppy tried to take care of its own problems. if things cannot get worse, we already had in the first 11 months of this year $1 trillion worth of downgrades. not all oil. it is a lot of physicians. alix: it's an investment grade as well. wells fargo parted that credit cycle of the last 20 years and shows every time that you have the credit cycle peak that you wind up having about one sector that was about 200 to 500 basis points wide from the overall corporate market. we actually have that chart now. we are not there yet. all the way on the right coming we have where we are at right

now. we are in the metal cycle versus the other peaks like homebuilders and technology back in 2000 that means that we have more bad room to run in investment grade. youlyn: i cannot agree with more. but we are seeing is something i cannot remember. i've been doing this for 36 years. the fact that we still have that aret grade bonds selling at distressed levels -- that tells you everything about how bad it is. orther it is a chart fundamental analysis, it just doesn't feel like it is over yet. we has had some positive things happen just yesterday and today in the oil patch. we have a long way to go. scarlet: you talked about how we are potentially looking on more downgrades.

still fairly modest. we are nowhere near the levels that we might be if we're headed toward a catastrophe. marilyn: we are certainly headed for more problems. the work that we are reading says default rates will probably double next year. my guess is that it will be many of the struggling companies that have not gotten their proverbial acts together and have not done anything in order to try to help their balance sheet. in plain english is that the credit cycle that we had post credit crisis is over. became very fiscally responsible and pay down debt. this whole 0% interest rate and toge them to borrow give people more dividends, borrow to repurchase shares at an equity oriented it has come balanceroost and these

sheets on positions that are not in the oil or energy patch are starting to catch up with them. the default rate will absolutely increase in 2016. alix: we flashed a chart of what was happening in the treasury market. we are looking at the greenspan conundrum -- actually, that's the default rate. ignore the title. look at the default rate. this is a fault rate projection for wells fargo. you can see of picking up in terms of like 3% next year. do you think this is the call for it? marilyn: i do not have a statistic. i will unabashedly keep my fingers crossed and hope it is not as bad as everybody thinks it is going to be. who arevidual investors many in your audience that are managing their own portfolios, what they have to do now is stop being complacent and look and see for those distressed or corporate bonds that they own that have gone down a lot, has

management done anything to ameliorate it? cutting theirm i dividends or distributions i should say by 74% in order to maintain their marginal investment grade. that is good news. it certainly does not guarantee longevity, but it does tell you that they got the memo and they are trying to fix it. and: if you're an investor waiting for management to change their tune, in the meantime, do you think equities will return more to credit in the next 1-3 years? marilyn: that is a tough question. i think probably yes. but i do not think it is going to be a slamdunk. i think it is quick to being that an net. -- neck and neck. the bond market and treasury land has not done much of anything else. it has been the corporate area and where those spreads are. i think we might be in for some more trouble equity wise and wise in the first

quarter of 2016. i do not think we will go into bear market territory, but i do think a lot of this has been overdone. scarlet: final question to you -- what kinds of companies are in best position to sell that issue debt in a policy normalization environment? , the creme de la creme. the microsoft, the apple, the johnson and johnson. the excellent quality companies that by the bye do not need the cash. they are going to be the ones that are the major issuers. might i add that we only have three aaa names left in corporate america. aboutells you everything how denigrated balance sheet have become. marilyn, i want to get back to what i was saying earlier on the overall treasury spreads and taking it from the corporate world and into the overall government world. we have seen as the

flattening of the curve. if we're looking at a greenspan conundrum or a set height rake -- said rate hike, it means they cannot tighten monetary policy that much. what do you think? that is i think absolutely given. i think it is already baked into the short-term and with a long-term and up and down around 3%. i do not think we will see much action. i also do not think it is going to be a surprise. said on anybody if the raises 25 basis points next week if anybody is a price. i think the surprise would be that they do not raise it and i do not think that is in the cards. scarlet: marilyn cohen, thank you for joining us from los angeles. alix: coming up in the next one in minutes, china cut its reference rate to the weakest level since 2011. what does it mean for the global economy? scarlet: the impeachment process is helpingthe marissa

us to play nice move. alix: they're going to speak with a china-based economist who says that the nation has not contributed to the nation's global economy in the last four years. that's a little contrarian. i like it. ♪

scarlet: let us check in with a look at the markets with major avenues falling to session was when a. what are you seeing right now? ramy: the s&p 500 is down by 1.1%, almost one .2%. the dow accelerating losses down 1.8%. -- 0.8%.

nasdaq the biggest loser at 1.8% there. intraday. the s&p 500 you can see that what has happened is that we saw a peek around the 1030 mark. that is when u.s. crude data came out saying that we saw lows of about three months. ever since then, we have been losing steam. now we are down by 1.2%. let's bring up that u.s. crude data as well and we can also see that those numbers also fell ever since the 1030 mark. that number show that they came out by 3.6 million barrels less than expected. we are seeing this fall over the past few hours. the s&p 500 down by 1.2%. down.utilization was also that means we are moving one supply glut from natural crude to the product market. refiners are not working as much and will not use as much crude.

definitely a big mover for the day. thank you so much. ♪ you are watching bloomberg. i'm scarlet fu. alix: this is your global business report. scarlet: laser focus on opec members the past week with the head of commodities at j.p. morgan chase. attention should be paid elsewhere. alix: you his lafortune is a defeat for marissa mayer and along planned spinoff of the alibaba stake. scarlet: volkswagen clears a big hurdle and its emissions probe ahead of the press conference on thursday. first, we want to start with oil. the commodities have seen a ton of volatility after last week's opec meeting. john morgan says that the real catalyst lies in u.s. production. >> the catalyst that people are looking for to turnaround around oil price is some adjustment in the u.s. apply. it looked like u.s. apply to eat a few months ago and it's awfully quickly enough to rebound in the global market.

the past focused on the couple of days has been open and not producing above target, that's a misguided focus to me whether or not the u.s. adjustment resumes and that several months. yuan'shina cut the reference rate and it's a feeling speculation that it's trying to release pent-up pressure before the expected u.s. interest rate hike. gaveet: the ceo of i cap his thoughts on britain withdrawing from the european union. in sixave offices continents around the world and a very big presence in new york . london and new york are the hubs. business will be better off staying in your. i certainly not have made my mind up. decided to give up its long planned spinoff of

its stake of alibaba. it will spinoff its main internet businesses. investors have been voicing concerns about the tax implications of an alibaba spinoff. scarlet: the massive volkswagen scandal has cleared one hurdle. in the investigation found that there was no cheating on carbon dioxide emissions, narrowing the impact of the appropriate it dodge'sns that the w damages of almost 2 billion euros. alix: for more business stories, visit bloomberg.com. scarlet: let's move to brazil's political instability. it is taking a toll on the nation's economy. it's accelerating at the fastest pace in 12 years. fuel this is adding to the of the fire under dilma rousseff with threats to fix brazil's economy. is joined by the director of international affairs from the central bank of brazil.

at the last meeting of the central bank of brazil, you are one of the dissenters. he wanted to raise the benchmark that and you lost fight. given what is going on right now in brazil, given the recession that is forecast again for another year, why is inflation the most important problem? obviously we do look at the economy quite closely, but i think when inflation reaches double digits as it hasn't result, we have to be very extremely careful in making sure that we have adopted the right monetary stance to make sure that next year inflation will fall and continued to fall until it reaches the target that we have, which is 4.5%. brendan: one of the things that we have seen with consumers in brazil is that savings have drop since 2010 at 50% household

savings of gdp. it used to be at 19%. credit conditions are not great. for the central bank be doing more to expand credit for one avenue of growth for brazil? tony: we do not see problems necessarily in the credit markets. obviously in a recessionary environment, the demand for and the supply of credit is going to fall. this is just part of the cyclical adjustment that the economy is going through. what we to do at the central bank is make sure that inflation enters a downward path. when that happens, real incomes will begin to increase. i think that will give that purchasing power to the consumer and also because the falling inflation will be seen as something that will strengthen business confidence and also confidence in the banking sector. i think the will be a greater supply of credit and a greater demand for credit. the one great contribution that we can make for the recovery in the brazilian economy is to make sure that inflation does in fact

enter a downward trajectory. it is something that we do expect to happen next e year. brendan: the prime driver of inflation in brazil is the weakening real. is the main interest rate -- is that the right path to bring inflation down or would economic growth achieved that as well by making it more valuable? want lower we inflation as we believe that is a necessary condition for growth. reaches theon levels we are seeing right now in brazil, there is my short-term trade-off between growth and inflation. the best thing we can do and this is what we are working hard for the economy to recover is to bring inflation lower. brendan: what is your stairstep path then? if your target rate is 4.5% and looking at 10% inflation right now, what is your prescription for rate hikes and targets to get it down to that target? at the last know,

meeting i voted for a 50 basis points rate hike could we will have a meeting in january and look at the data again. a decision will be made at that point in time. that said, our commitment made by the entire board not only myself is that inflation will begin to fall next year. it will reach the target by at most the end of 2017. you're going to work very hard for inflation to be a target before them. brendan: what we have seen in brazil is a sensation of all of the legislation and plans for economic growth while the impeachment proceedings move forward. in the absence of legislation, can the central bank do anything to help either inflation or economic growth? policy istary independent of these other policies. again, monetary policy can't do everything. policies other

must come into play, but does mean we cansn't abandon our response abilities to bring inflation down could we have all the means and capacity and political freedom to make sure that that will happen again over the horizon that we have indicated to the market and for the economy. we are going to work very hard to make sure that happens. i do believe that the level uncertainty in the brazilian economicverall due to factors and noneconomic factors will decrease as we go into next year could that will be good news on the inflation front and also good news for the recovery of growth. brendan: within your own economic model, and we are looking at closures of mines even this week with an brazil as the commodity super cycle ends, and also the political uncertainty, which do you see is the greater challenge -- the change in the underlying fundamentals that drove brazilian growth over the last decade or the uncertainty that we see right now with the government of dilma rousseff?

look, many, many emerging markets are facing problems of the commodity super cycle. brazil is just one amongst many. its ownntry has particular political situation, institutional situation through which it has to make these adjustments. yes, brazil is facing difficult times right now, but i believe if you look at, for example, the current account deficit which is close to 5% of gdp is falling banksapidly, some are forecasting that this will be better next year could the adjustments are taking place. i'm very hopeful and much more optimistic in terms of the market in terms of 2016. brendan: tony, thank you very much. he is a lone voice for now, but that may change. scarlet: thank you so much, brendan greeley. alix: we'll be right back after this break. ♪

alix: welcome back. let's go to abigail doolittle live from the nasdaq where she is looking at apple helping roll over the market. we have stocks quite weak at the nasdaq in the stocks are down nearly 2% and that is the case. apple is a big influence today. the biggest index point influence, in fact it shares are week in the report and that apple will no longer pursue a and online streaming tv service. take a look the stock that is in a tight range between 107 and 123 since late august. it's really not doing anything. it looks as though investors may be waiting for big news perhaps around holiday 2015 where the fiscal first-quarter report in january to break that range. another stock dragging is cosco. this is the fourth biggest in

point influence. shares are down after the company missed its first-quarter estimates. this comes at a tough year for retail. on the conference call, the weakness sounded less about the consumer with the management team talking about adverse currency effects, i.t. costs, and stock compensation expense among other reasons. shares were at a record high yesterday. now they are on pace for the worst one-day drop in three years. good perspective, especially since cosco was at a record high. alix: we will be right back after the break. stay with us and "bloomberg markets." ♪ 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. tand that's what we're doings to chat xfinity.rself, we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. alix: it is 1:00 p.m. in new york and 2:00 a.m. in hong kong. scarlet: welcome to "bloomberg markets." ♪

scarlet: from bloomberg would headquarters in new york, good afternoon. i'm scarlet fu. alix: i'm alix steel. here's what we're watching at this hour. canada is far away from needing stimulus, according to the government of the bank of canada, who says his country does not need qqq like the u.s. or the u.k. exclusive tve interview. scarlet: dow chemical and dupont to be in late stage merger talks. what could be the industry's biggest, nation ever. buyerhe mysterious for the wu-tang album has been revealed. who is it? if you have been watching bloomer television with scarlet and i, you will know who he is. scarlet: want to head over to the market desk where ramy has been tracking the movements and

they lot of selling this afternoon. ramy: we started the day in the green and now we are all firmly in the red. let's take a look at the numbers right now. the s&p 500 is down by 1.1%. the dow is down by seven cents. the nasdaq is the biggest loser down by 1.7%. u.s. crudeer inventories saw its biggest fault in nearly three months. that came out at 10:30 a.m. when we saw that inflection point in the market started to go deeper into the red. alix: it was oil that helped lead us down. oil just continue to roll over. nymex crude is down by 1.3% right now. also at session lows. take a look at its performance and you can see the spike right here that happened at 10:30 a.m.. that is when u.s. inventory data shows that it felt 3.6 million barrels a week could w.

we have tracked declines and we have seen since monday. it's down not as much, but half a percent here, trading at $2.06 right here. year to date, it has fallen 30%. the future may be brighter. that is according to credit squeeze. their animals came out with a note today saying that they see solid significant growth over the next three years has low prices have taken away growth in the supply. let's take a look at treasuries also. the 10 year yield is off the session highs right now. it is only by one basis point -- 2.23% of the yield at that. investors have been pushing the yield lower since monday by as much as 10 basis points. one more thing since we have got time. let's check of u.s. dollar is doing against the euro. the euro has actually risen to a one-month high after the ecb

said markets formed unrealistic citations for more monetary symbols. alix: i love it. blaming the markets -- we didn't do it it. scarlet: let's head over to mark crumpton for first word news. mayor rahmchicago emanuel apologize for the toy 14 shooting death of a black teenager. 17-year-old laquan mcdonald was shot more than a dozen times by a chicago police officer. mayor emanuel expressed regret that it took more than a year dashboardice - video was released and the white officer charged. >> responsible he for what happened because it happened on my watch. -- i take responsibly for what happened because it happened on my watch. we're going to fix it. i want you to understand that it's my responsibility with you. we are also going to begin the healing process. the first step in that journey is my step and i'm sorry.

also spoke ofr residents mistrust of chicago police, calling it unacceptable that there are parents in the city that feel they have to warn their kids to be wary of officers. the u.s. secretary of state john kerry says the united states will increase the amount of money it provides for climate to 860from 430 million million by the year 2020. the money will be part of an existing promise by wealthy countries to jointly mobilize $100 billion annually in climate finance. the money must be approved by congress. there is a new bloomberg politics purple strategies poll out. it deals with donald trump and his comic on muslims and the republican presidential race. doug usher joins us now from washington. thank you for your time. let's talk about the methodology that you used to come up with the results. online opt in

methodology of and i could this is a fast-moving story and we wanted results as quickly as possible and we use the best methodology we could in the timeframe to get a sense of what american voters mak think. mark: a lot of people when they criticize surveys say it's not representative of the electorate . was this one? the demographics bear out to what other polls found. this overnight poll is a great sense of the america public today. thinglet's get to the that everyone is talking about -- donald trump and his comment on muslims. they've drawn support the nick johnson criticism. like?re the numbers doug: we are surprised and a bit disturbed by the numbers we found. we asked voters that they would favor a proposal to ban muslims from entering the country and we found that 37% of voters favor it.

50% oppose. i think the most dramatic finding is that among republican primary voters, that is people who say they will vote in a primary or caucus in a republican side, 60 5% favor the proposal, with 52% saying they strongly favor it. mark: we have about 30 seconds left. is mr. trump still leading the republican field? doug: every poll indicates he is. there are moves in iowa that might indicate that he is coming in first or second pretty close. i think that everyone should take notice here is that his comment about muslims is not going to sink him with republican voters. these primary voters seem to be amenable to this kind of proposal. mark: doug usher of purple strategies joining us from washington. it is part of that bloomberg politics purple strategies poll. thank you so much. german chancellor angela merkel is time's person of the year the magazine has said that she is

shown leadership during the refugee crisis and the greek debt standoff. among the other finalist -- donald trump, uber chief, and the black lives matter movement. and breakinghese stories 20 for hours a day at the new bloomberg.com. i mark comes in. back over to you. thelet: china has cut yuan's reference rate to the weakest level since 2011, fueling speculation that the bank of china is trying to release pent-up depreciation pressure of fort and expected u.s. interest rate increase strength and the dollar. alix: this comes as exports are shrinking 7% in dollar terms from a year ago. joining us now from washington is derek scissors, the residents dollar at the macon enterprise institute and chief economist of the china-based book where you give a unique perspective on what is happening in the ground in china. what kind of depreciation are we

going to see in the yuan if we see this reference rates cut? >> i do not think we will see the reference rate cut too much. value currency stability. you set this up perfectly. it is a stress test. they are turned to see what happens when the fed raises interest rates and what traders are going to do with the u.n. in the dollar. too not think the goal is valuation. it will not solve economic problems and would ring its immense amount of political criticism. they're playing at the fringes and not doing anything fun of. -- fundamental. scarlet: are you saying this is overblown? derek: i think it is overblown in the sense that we have no evidence from the asian financial crisis in 1997 to now that the chinese will be responsible on currency. they love stability. they are not interested in significant evaluations. china's currency is very stockant to a lot of

markets in the east asia. i understand why people respond very cautiously to any hint of irresponsibility. i think it is very unlikely especially after the imf included them that the chinese which is not to be irresponsible. alix: the chances of a global recession are about 55% next year and that would be led by china. what do you think about that call? is that a backward looking call or is there some meat to that? derek: i'm amused when people who do not follow china talk about chinese growth. alix: to be fair, he is their global economist. he definitely has a reputation of being involved in economies around the world. derek: my point being that the chinese are not going to report anything less than 6.5% growth next year. you're either saying that chinese official statistics are completely wrong, which is not an unreasonable position, or you are saying something that doesn't make any sense at all. unofficial way chinese data that the chinese will lead a global recession.

again, this may be a reasonable statement like right now that china's growth is really 4%. next year, it's going to be 2%. that combined with weakness around the world leads to a global recession. what you cannot do is use official chinese numbers and get that call. does a chinese recession or recession with chinese characteristics look like? derek: that's a good way of putting it. china has accumulated an enormous amount of debt. that is the biggest macroeconomic problem. people are talking about the manufacturing sector is shrinking or needs to shrink. what you get is elements of the chinese economy doing really poorly, not 2% growth. it's contraction for several years. all other elements do ok and we have this dual over china doing ok or not doing ok. part of china is going to have a real a session, but only part. alix: how much of the government stimulus is showing up in the data? how much do you see it there? derek: china has far too much

credit and too much money floating around. i do not see governments stimulus is having any durable effect whatsoever. maybe it shows up one month and is gone to months later. the biggest problem is a pile of money into the system in 2009 and it's like they are taking a host to a lake. you look at the money coming out of the hose but it is not changing the lake at all. scarlet: there is a problem of allocation as well. you other thing that pointed out in the past is that china has been exporting deflation. it has been going on for some 15 years. is that harmful or beneficial for the rest of the world? derek: that's the way to put it. it was beneficial in 2005 in 2006 when the world was booming and china cut prices down. now it is harmful. the world does not need more chinese steel dump on the world market. the world has changed and china has not changed. it is still exporting inflation. that is hurting the world and making china a worst trade partner. to find william

batters call from citigroup and his point that was without some massive consumer focused stimulus, chinese growth will slip left 4%. do you think that china needs that kind of stimulus? derek: i do not think china is a able to execute that in a short time. everything has been done through statements. the banking system is overwhelmed with liquidity. people can talk about stimulus all they want. it will not work. what you have to get from china is a durable, painful transition to a conception led economy. that is not going to happen in 2016 or 2017. in that respect, i agree that china is a threat. scarlet: tools might have to change is looking derek scissors -- the tools might have to change i as well. derek scissors, thank you. porsche is joplin's going up for auction. how much the car would go for?

scarlet: we will take a dive into the potential dupont and dow chemical merger. alix: cutting interest rates by may has jumped nearly 20% since yesterday. we will hear from the bank's governor on the countries road to recovery. ♪

alix: welcome back to "bloomberg markets." i'm alix steel. scarlet: i'm scarlet fu. time for a look at the biggest business toys are not. alix: aaron mask and says the federal reserve should not raise interest rates next week. he says that doing so could jeopardize economic growth and worsen inequality . ask and says that janet yellen

may know something i do not know , but i don't understand why it is so important to raise interest rates when there is so little to be afraid of. the fed meets next week. scarlet: boston college says the number of students sickened after eating actually restaurants last week and has could that80 two 120 has propped tempora closure of the restaurant in boston. the illness is now norovirus. there are waiting for results of e. coli test. alix: the vaccine against dengue fever has won approval in mexico. the initial steps toward preventing the mosquito borne infection puts half the world population at risk of the coming says the vaccine is awaiting approval in 19 more countries. you cannot was get more business news at bloomberg.com. scarlet: let's head over to the markets desk where we have been checking on individual company movers. you're going to start with some winners today. ramy: a potpourri of positive stocks.

i'm not a verse on it, but are you fans of vera bradley? scarlet: you don't even know what there is. ramy: they are the maker of tote bags. they are rallying. point 5% because the company says it was able to cut the number of special sale days by 50% last quarter. it also raises profit guidance. this jump is the biggest jump since october 25. vera bradley doing well there coul. over to energy stocks. sun edison is leading the pack right now. up 16.5% because it is revising its merger terms to buy its rival after winning blackstone's approval for the new bit. blackstone is the majority owner. that deal with expected to come sometime early next year. staying in energy, shares definitely bouncing back today from several days a weakness. freeport machen and up near 5%.

they have both been on steps to preserve the following cash reserves. freeport is going to suspend its dividends completely and also cut its capital spending budget. this comes on the heels of kinder morgan slashing its own dividends by 75% yesterday. alix: thank you so much. scarlet: still ahead, you could own a piece of music history. we're going to get behind the wheel of janis joplin's uniquely painted portion that hits the chopping block t tomorrow. matt miller with the porsche. alix: that's really cool. ♪

scarlet: welcome back to "bloomberg markets." i'm scarlet fu. alix: i'm alix steel. janet joplin bought a used

porsche and now you can buy. the psychedelic vehicle is guaranteed to stand out on the record -- on the road. the car could fetch half $1 million, substantially more then she spent. let's head to bloomberg radio where cory johnson and carol massar has more. >> just another day of work for bloomberg pursuits reported. tell us about this porsche that you got to drive. >> this is her famous porsche. we have all seen it in the photos with the psychedelic paving. it is called the history of the universe. it has jellyfish, butterflies and a little roadster convertible from 1960 four. she bought it used in 1968 and had her friend dave richards paint everything we see. carol: it's gorgeous. >> it is striking. true 356 lover, and this is a really special model to a lot of porsche people, it's a little

sacrilegious to have that painting on the car because it really nice car. to joplin fans, this is it. it is the primo thing. cory: talk about the car itself. >> exactly. this car basically has a volkswagen components, but it is a porsche. this is a very old, old school porsche. it's about 100 horsepower engine. carol: that's a lot. >> a lot of the time. it will take over 10 seconds to reach 60. it's not incredibly fast, but it has such personality. is a four-speed manual. it's in the age formation manual transmission. it weighs next to nothing, under 2000 pounds. you still feel like you're going fast. cory: what is her history with this? >> she bought it in 1968 and she added the radio. it's hers completely. obviously the paint job and interior seats.

those are all things that she after herself. driverve that as a daily in san francisco. we all know how the hills are in that city. i really respect her with that clutch. this is a young woman driving. i respect her so much. it was her daily driver. carol: you got behind the wheel and you drove it. how did it drive? >> like a charm. i drove it in new jersey. it is being sold by sotheby's. the habit at a warehouse in new jersey and they're holding it until the sale in new york. i went up to new jersey and drove it on the back roads in new jersey. it is really fun. you feel so connected to the road. you really do. carol: who has owned it since? hannah: since janis died, this was the last thing she drove before she died. it's been owned by her brother. it was parked out on the street the night she died could you do

for like you're touching a ghost. since then, it has been owned by her brother and sister. it was shown in different museums around the country. the owners were her brother and sister and have owned it since the 1970's. it really is pretty special. cory: isn't there a janis joplin movie coming out right now? there is a resurgence in janis joplin. i saw a broadway play under discussion as well. janice is hot rayna. -- janis joplin is hot rayna. carol: you love cars and no cars. what's it like to get into a car like this? there are more technologically advanced cars, but this has a great heritage. hannah: i think the real thing is that you get a sense of it has a personality. i know that it's cliche to say, but it really does. it has its own little quirks. the pedals feel different. there's no power anything could no power steering or power brakes. you like you are operating a machine. you do not feel as close to a machine with a lot of modern

cars because it is all electronic. cory: here is hate the turbos because it does not have the same connection. hannah: it is a human and machine on the road. what a connection. carol: what are they selling for? hannah: 400,000-600,000. that is way normal dent in normal 36 would get. carol: it could go up higher? cory: we have seen big numbers for cars this year. hannah: this has been a great year. cory: for sellers. hannah: i think the economy is doing pretty well. the auto industry is doing well. all those things -- the auctions the summer at pebble beach. those all were strong. carol: we've got about 10 seconds here. hannah: it even had musical notes painted on the dials. carol: very cool stuff. good day at work?

hannah: great day. can't complain. carol: hannah elliott, thank you. we toss it back over to you. thank you so much, cory johnson and carol massar a bloomberg radio cou. if you were to drive that, you the doctors would be out. alix: still ahead, a potential big merger and chemicals. dupont and dow chemical said to be in late stage merger talks. why the merger would ultimately dismantle both giants. ♪ 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. tand that's what we're doings to chat xfinity.rself, we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. >> welcome back to "bloomberg

steel.s," i'm alix >> and i'm scarlet fu. mark: starlet and alix, thank you. said the 13th amendment was freedom for all. anniversary 50th of the ratification to the amendment to the u.s. constitution. he called on americans to push otry in all of g its forms. a reform pushed back bill to turn significant control of school accountability and testing to the states. expected to is sign the measure, which would federally mandating math and exams to high school. states would be encouraged to on overall testing. republican front-runner donald controversial call to stop all muslims coming to the nited states is being criticized on both sides of the

political aisle. among those weighing in, vice anticipate.ide he spoke with bloomberg from erg on his return ukraine. margaret joins me now. thank you for your time. i'm ice president, imagining he's in the camp of those who believe that the trump were out of line. >> clearly, he said this is a dangerous brew for america, that he doesn't want to motive to trump, that even if he initially thought that this was just an act for donald trump, he now believes he's erious about running for president and the vice president's prediction is not only will he not get elected resident but if he ends up being the nominee, hillary clinton would take the general election in a walk. >> margaret, one of the reasons the vice president decided not to run for the white house is his son bo. you spoke to him about this. first off, does he have any his decision not to run?

secondly, this is a man who has in hisnced great tragedy personal life before. up? is he holding >> yeah, well, mark, he says that he knows that he made the right decision. i don't think that that's to say he has no regrets about it. i think every time he watches donald trump say something on the stump, hillary clinton o'malley it, martin or bernie sanders try to figure out how to counter hillary about , he's thinking what he would have done a little bit, whatter would have said, how it might be if he were there. he said he's fully come to terms with the fact the time was not right for him, he wasn't ready. it just didn't make sense to run. so he's at peace with the he's not even if completely at peace with the decision. preparing to endorse at this time, he said that he wants primary voters to have their say without him weighing in. bloomberg's white house competent with her story on the bloomberg terminal and

bloomberg.com on vice president biden. his quote was, "i made the right decision." much.ret, thank you very that's the latest first word news at this hour. can you get these and other news stories at the new bloomberg.com. from the first word desk, i'm crumbpton. alix and scarlet, back to you. mark. thank you very much, dupont and dow chemical are in late-stage merger talks. valued at ould be $120 billion. that would be the largest deal and latest mega deal of the year. scarlet: it's interesting what's coming afterwards, which is they want to demerge. big guys, $65 million market caps each before this came out, they come together. one company. then they separate into three companies. an ag business, psych seeds and fertilizers.

that would be hardest hit by seeds and crop prices and general difficulty in the farming space. have specialty business and commodity business. up with of the chemical pg dupont name. the other the dow name. people don't have to worry they will not know the names and miss these names going forward. one will be specialty. one will be commodity. alix: this isn't the only time m & a deal and after you merge you spin off assets. is this the way to exist and lock up value? way of people trying to be narrowly focused. any time somebody does a deal a outside their sweet spot, 80 some% in some of the area of or ag space, if they go outside of that, beat them up badly. they try to be focused and sole off anything not part of the unthat's a big reason activists are so successful. they see companies where they

different businesses and there are only good and two and one. they take a stake and get other them to behind encourage spins or sales. >> another reason why they're plitting up afterwards is there's concern about antitrust, right. o what except to antitrust regulators weigh in or give their blessing if they know it's going to be broken up afterwards? get this ll help them across or passed to regulators. egulators i feel in the last year, year and a half, regulators have become more strict or taken a more scrutiny these deals. they had so many big deals. fizer and we had biggest and a.b.i. and health insurer companies are coming together. are nk regulators in d.c. getting exhausted. a lot of companies in the same space. four one buying number and two buying three. and that's what is going on here. companies comeer together. sangenta and chem china

round the corner going to probably try to buy sagenta. for grant or approve them. liquid der what the by the end be left of the day? we look at businesses that are saving its production business. five, at the years from now people will be he couraging these companies to diversify and conglomerates and people that win out will be bankers and lawyers to do the deals. lawyers -- >> i was going to say. you don't get paid by the deal. >> unfortunately, we don't. for several years people, and i think some of this is -- comes from the financial crisis of 2008/2009 where companies don't want risk. they want to know what they're buying. don't want their companies they're putting a lot of money they're noll nant and number one and two.

say let's ople will diversify and be a conglomerate. that's a good thing to be. wanted to be ople in the '60's to '90's, diversify. > what we're talking about combining and breaking apart once again, that's complex. what are the risks associated with that? thing important is ed breen will be the c.e.o. or he is the c.e.o. dupont job n to the when ellen coolman stepped down maybe a month or so ago. largely because the tryon activists were pushing for changes. background. a good i believe tyco he helped it break up and separate into a businesses.ferent they are somebody who has done this before. maybe not at this level and size in he has experience up.aking these companies scarlet: is this a deal that would make sense if we were not these crop prices, like do they make sense during a drought? >> i don't think so. it was a month ago, hugh grant, not actor but c.e.o., said everybody is talking to

everybody. anticipated at that time and ape lot of people anticipated what might april were smaller were companies spin off their division and ag merge with ag. ut this is in essence the perfect deal. dupont and dow have a ton of synergies. they will be able to execute on that and create three very companies, cused which is what the market wants right now. >> a lot of room for cross cuts. alix: good stuff, thank you very much. sk thes coming up in the next 20 minutes, will canada cut its benchmark business rates. the odds are rising for a may cut. we will hear from the bank of canada governor on bloomberg xclusive on his plans for the future. put upthe album recently for auction. who was the highest bidder? you know him if you're watching a rlet and i on television few weeks ago. >> and what is bristol-myers' next move?

farm test.

scarlet: welcome back to "bloomberg markets." alix: it's a time for a look at the biggest news in the markets now. yahoo! will package all of the besides alibaba company.ewly traded they will tighten its folkous in 2016 and prioritize property and group. apple is dropping plans to develop a live internet-based tv service. according to people familiar matter, apple will focus on a platform for media companies to sell directly to the app store. apple's plans to sell a package of 14 channels for about $40 a

into resistance from media companies. they wanted more money for their shows. alix: and a new study said almarts tim ports from china eliminated or displaced million jobs in the u.s. walmart called the study flawed and said it does not take into created in jobs distribution and logistics. scarlet: you could always get news at ness bloomberg.com. alix: let's head to the desk. you're looking at the losers now. this has to do with stocks in the retail as well as the consumer discretionary areas. first off, i want to go to costco. costco right now is at session lows. see now it's pushing minus 6% right here. hat's because it missed its earnings estimate, which came in at $1.09 a share. expected they would $118 a share.17 or

one bright spot was 1% higher quarter but as you can see, investors are not hanging n to that but the missed earnings estimate. moving on to lulu, lemon and the world. to whirlpool first. whirlpool is down by 5.7% here. because rival electrolux said it's going to reduce costs appliances. that area has been hurt by slower sales and there could be effects for whirlpool. basically, some of the markets are being affected, for example china, as well as sweden. whirlpool facing similar headwinds. seeing is the biggest intra day drop since october 23. guys, back to you. testing bankrs are of canada's stephen poloz's optimism.

>> he said he hopes he will not use extraordinary stimulus and spoke exclusively ith our "bloomberg markets" anchor pamela richie. governor polozid say he was willing to take? they're at the benchmark low of 5.%. that's in position to stimulate a certain except. the message is we still have irepower to do more if needed, aunt hypothetical. here's how he thinks he could maneuver. it egative rates, taking down. e gave us an actual point of negative .5%. guidance as well as asset purchases. through the recession canada did q.e.employ any form of this is a new tool for canada to be talking about. canada is outlook for low. the expectation is that there

paying from the oil patch. the federal government is planning to do quite a lot of further into deficit to spend on infrastructure. mr. poloz thinks this might be meaningful ost measures to be deployed to help with growth. i did ask the governor how far feels the canadian economy is from needing extraordinary stimulus measures this is what he said -- stephen: we think of this in our terms as a zone of uncertainty in which we have a forecast, we believe in, and then there are two sides to all of those risks, balance risks. that zone we believe there's a reasonable probability that two years from now we will be inflation. the economy operating at full capacity. so if something were to happen us significantly outside of that zone, that's when we would need to look at options?our and what we talked about today, making it clear that there are ore options than we thought back in 2009.

>> so the bond visitors as you quitened off the top, not as optimistic about the canadian economy but really his message esterday was we have the tools if we need them. alix: we have the tools if we need them. you see stephen poloz, you think of his predecessor arney who went to run the bank of england. how different are their styles? >> it's interesting. arney saw the canadian economy relatively unscathed through the recession. there was a lot of accolades that.were attached to generally speaking stephen poloz slightly quieter presence until earlier this year when he cut rates really no one saw coming. was expecting to see a rate cut out of canada at all and shock the market. he did it again and again. further shock there. so he's made a name for himself. at the time, which nobody really knew, we were in the middle of a technical recession and here he is cutting rates. so highly criticized for not telegraphing that and shocking

market. i asked him if he felt somewhat vindicated looking back that cutting rates, we were in fact in a recession. how he responded. stephen: we still have not it was a a recession, mild contraction because it was a very pinpointed kind of thing. we could see the other sources growth continuing to gather moment momentum. do a question when positives outweigh negatives? which are still there and will be there for years. they already started to in the half and we're very pleased to see that. i would just say the staff did a calling that.f i think making the policy move did buffer it to some extent. of the effects are still unfolding. scarlet: he's quite humble about the fact his staff did the cutsrch and that's why the were -- there was a decision there. one of the bright spots he sees are exports but there's probably to go for exports to start to make up for some of the oil s we see out of the

patch. scarlet, alix? scarlet: how is the fiscal coming from the new federal government in ottawa, what did he say about that? > he had not said anything about that for some time. people were wondering, this is has got to calculate into your how you would stimulus the economy knowing this is coming. o three years of consecutive deficit spending is the plan out of the new trudeau government, with the budget which will come in february or march and we will see exactly what those plans are. it is expected to go into infrastructure, green infrastructure, potentially infrastructure, better on the technology front. all of these things hoping to older new sectors or help sectors in canada. carlet: thank you very much, pamela. coming up on bloomberg markets, jacking up theom rice of his skim but martin clan'si is a huge wu tang

fan. he paid over $2 million for a copy of the group's latest album.

scarlet: welcome back to "bloomberg markets." i'm alix steel. scarlet: and i'm scarlet fu. if we look at the market, the session, with the wow off by -- we go, 100 points. used toing looking for it in the second column there. 500 losing 1%. nasdaq 1.7% deficit. alix: you could say it would be much worse if dupont was lower. 54 points to the dow. imagine what that would lube like if it wasn't seeing that rally. scarlet: we will continue to eep you posted of any new

headlines. mean while, the owner of the most expensive album ever has revealed. purchased in shkreli the wu tang clan's new album for more than $2 million. will get to martin in a moment, but first tell us what was behind computer tang clan releasing a single copy of its latest album. wu tang is iconic rap group. from new york, you know who they are. they're famous, they would be from staten island. heir idea behind this was take a stand in the digitalization of the music world to kind of put a art. back on and they continuously compare it to like the renaissance when patrons would pay for expensive painters to make them something. and this is -- this is their stance. they say if you can buy a auction nd sell it at to the highest bidder, why can't

you buy an album? a way to compare of probability of doing it like this versus launching on spotify any other kind of release? can you quantify the numbers? you look at the numbers per stream on spotify, they make money.an a they did one album and made $2 million. this is the biggest debate in the music industry now. you have people like taylor swift and adele pulling their they're m spotify and selling records like they used to, back like ten years ago. nd they're actually selling albums. people are buying the cd's. a i don't know if this is harbinger for things to come, will we see artists sell one bidder?o the highest i doubt it. the point of music is for to hear it and you think fans. but it is interesting to see this concept for them actually did work. alix: so tell us then about the idding process for this particular album. were potential bidders allowed

to hear the album first before putting in a bid? >> yes, so they were allow to hear about 13 minutes of the kind of like a highlight reel. people who have heard that have is great.lbum it sounds like the griddy, real wu tang remember in the '90's. from the first album "36 chambers." but the process basically was was he ended up closing -- he was -- the deal album was sold in may but they didn't end up finishing the process until november. few months in there where they went back with like legal things, a deal like done before.r been so it was quite a bit of paperwork so it took some time. rumors of other iddies were quentin tarantino and ben horowitz. scarlet: are we ever going to hear any of the songs? are there restrictions what he can do with the album? ow do we know if there will be

another protect your neck or "cream "? >> one of my favorites. to martin ly up shkreli. there's an 88-year clause with buying the album. so.buyer, martin, has total control except for commercially on the album. so he can literally send it to space. he can go bury it somewhere. he can leak it to the internet for fans for free. i'm sure many would like that. kick-start of that started because of this. fans who wanted to make enough money to buy the album. cannot make money for 88 years. he cannot commercially sell it. scarlet: got it. annmarie, thank you very much. alix: we have breaking news concerning g.e. and halliburton. we have more. >> breaking news now. advanced id to be in talks for halliburton drilling assets. g.e. is looking to buy drill and drilling service divisions of halliburton company. we can look at g.e., we are

now, by .6% up higher. just on the bloomberg terminal right now. they're divesting assets to win antitrust approval for its akeover of baker hughes incorporated. this is according to people familiar with the matter. fetch as off could much as $5 billion in total for the oil fields service provider. will be watching this as it continues. .7%, guys.w up scarlet: i should point the out go from a the bid to finance company to industrial company to oil services company. analysts are looking at 2020, decade when it will shift into an oil company at the end of the day. much. thank you very we will be right back with more "bloomberg markets" after this.

>> it is 2:00 p.m. in new york. to "bloomberg markets". ♪

>> from bloomberg's headquarters . here is what we are watching. reverse spinoff, the phrase of the day as yahoos latest plan to keep its alibaba stake and spin off its web business. dow chemical and dewpoint late stage merger talks, would create biggest transaction in chemicals industry. donald trump under fire for anti-muslim comments. what does the public think? let's head to the markets desk. ge is said to be in advanced talks for halliburton drilling assets. they want to buy the drill bits and drilling service