vonnie: we're live from bloomberg world headquarters in new york for the next hour. plus, houston, boston, and dublin. the dow and s&p erasing their gains for the month. some of these consumer stocks drown -- drag down the market. >> vice chair continuing the on the federal reserve. highlights of his conversation on bloomberg television coming up. vonnie: donald trump is surrounding himself staffers packed with moguls. a preview of what a meteor empire -- media empire would be run by donald trump? david: we see the dow down .4%.

172 and the nasdaq down .4%, 20 points, trading pretty narrow at the end of august. vonnie: taking a look at the bloomberg, the top markets and the movers we will see in europe , of about .5% to 1%. u.s. here in uws -- in the there will not be that much movement although we are seeing consolidation and moves higher at the u.s. dollar index. when it comes to sovereign bonds, there is not too much going on. .oing nowhere fast financials saying early this morning in terms of commodities, you see the index down almost 1% including gold and crude oil

moving down intensely today. ago,: apple a few moments on pace for its worst day and four weeks. the longest streak in nearly cointreau months. there was a bit for hershey that fell apart. aboutseeing it now up 3.7%, hershey down at 10.9%. vonnie: trading about 11% higher , 80 right now. david: mark crumpton. just thinking about the apple story we were following. the white house same the obama administration is concerned take thetax tears will brunt of the decision.

>> obama administration officials not surprisingly have heard from officials that will who are concerned about the way they're being treated by foreign government. particularbe a surprised to anybody. the obama administration repeatedly indicated the to pay american taxpayers and businesses when they are being treated fairly. received what he calls the shoulder deals for taxes and island. retroactive tax assessments by the eu commission are unfair, controversy -- contrary to legal -- is sharing the rule of apple. telling reporters today he

believes apple -- he tweeted -- apples earnings in 2015 were the highest are ordered in any corporation in history yet apparently the is not enough. he focused his insurgent presidential campaign on income inequality and banking reform. the move is fueling speculation next year.to enter the finance minister will take over the duties on the economy and the industry. today, the earlier police forced the evacuation of a high-rise and nearby luxury hotel. immediate reports of casualties. the latest in a series of fires to hit the united arab everest. the fda is concerned about

possible effects of tattoo ink and is investigating. the pop larry of body are explodes as related tools and inks are readily available online. is growing about 9% per year. it could be a 1.1 billion dollar business by the year 2020. global news 24 hours a day powered i more than 2600 overalists and analysts in 100 20 countries. this is bloomberg. back to you, david. david: the august rally in crude oil has investors piling into energy stocks at the fastest pace in 16 months. theight angle toward downside. joining us is the chief investment strategist, michael. there is a piece on the about investment strategy right now, that people are moving back to stocks that are more cyclic will.

is it playing out that way in your portfolio? >> absolutely. a great heavyweight fight is going on. in one owner, you have a high-yield dividend paying stocks. utilities, telecom. havee other corner, you financials and energy. if you like high-yield or's, you believe a recession is potentially on the horizon so .ou need that income on the other side, perhaps it will continue and there is not a lot of cheap assets. energy in particular is quite a value opportunity. in august at some of the economic numbers have rebounded, now an estimated growth rate of 3.5%, it seems as though value cycle is are running -- winning of the round. vonnie: let me jump in because i have a chart on my bloomberg.

to's, it hasergy been on pace, the most in 16 months, quite surprising. does that mean we are late to the trade? >> no. energy, it is really interesting, this time around, the troubles that energy suffered, energy stocks have -- book valueok terms more than the mid 1980's oil crash. a sizable discount relative to the market. is interesting is now what you are seeing is capital expenditure products and now you're beginning to see cash flow growth return a little bit. earnings a little better. here in a lot of ways, less bad is good. in a world where assets are kind valued at best and

expensive at worst, energy and cheap assets. is still some opportunity here particularly if the expansion continues in the second half of the year. you have written we have seen these all-time highs because of four great growths. when you look at the all-time highs, how rude and fundamentals you think versus just wind hope? >> i think there is hope in the market, a real hope is growing that monetary policy will pass the baton onto fiscal policy. in the u kng that and japan. both canada's promising a big economic reform of business spending. that is a great hope. increase government spending and confidence which will then turn into better gdp numbers and and the so-called earnings recession.

my concern is there is a lot on those interconnected hopes and my view is underlying fundamentals are at value and it is tough to come by right now. stocks are expensive at worst at a time when earnings growth continues to roll corner -- quarter over quarter at a negative basis. i need to see the change. vonnie: why wouldn't you look outside the u.s. at this point? michael: the thesis has been for markets like europe and japan, that you have some tailwind, relative values that are more attractive. you would have had a profit picture that seems to be better than that is not materializing. you have triple headland of monetary policy, lowering the currency which would boost export growth. the problem is the aggressive monetary policy we have seen in

many places has not worked in the way in which most folks thought. currency has increased and we have not see that just seen that faulted and experience as a result, a bit of a challenge from that perspective as well. david: i wonder what you heard last week out of jackson hole when you are this morning talking to john keane about -- tom keene about the way forward here. where do you see that playing out and how much of it is told in? >> what is really interesting is we have moved on from the old market coined terms of use to be called risk on risk off, it is .ow fed on, fed off it seems we're incredibly focus on every interview, every statement, every speech the fed has and that is part of what is from energy,

industrials, the technology segment of the market doing well. they arelear signal confident the economic expansion will tell you even if we are in the middle to later stages of economic expansion, those types of sectors do particularly well. all middle to late stage cycles and sectors. vonnie: thanks. up in the next 20 minutes , since donald trump has entered the political arena, he has held a massive amount of media attention. could this translate to a media empire? the smallest amount of new discoveries and oil since 19 -- what does that mean for future m&a deals? in on thet's check

major industries. .4% now.s down nasdaq 500 down and the down 19 points, almost .4%. this is bloomberg. ♪

vonnie: this is bloomberg markets. david: time now for a look at some of the biggest stories in the news right now. iraq's prime minister saying the company would agree to freeze output. a shift from august 23 when he said iraq had not raised production enough. formal talks during industry

conference in algeria -- in september. vonnie: rival high-frequency trading firms are in talks to build a chicago to did -- to japan communications link. installing in nine of microwave towers on the west coast. involved inis trading. of gatoradesion by theed organic department of agriculture. strong race, lemon, and mixed berry organic. they plan to expand it out to natural convenience stores in the next few weeks. that is your update. vonnie: let's turn to the presidential race. donald trump has never been shy about criticizing the media. here is a recent apple from the

campaign trail. mr. trump: the system is rigged and the biggest rigger of the system is the media. it is rigged, it is crooked as hell. vonnie: would it be his surprise if trump the end zone media empire? the rumor is doing the rounds that he will start his own empire. is that all that would be left? if he loses that election and goes to the final round? >> we have known for a wild donald trump cable ratings magnet. he started to surround himself other very smart people in the cable business. stephen bannon, the former chairman of breitbart news is running his campaign. ailes, the former founder of fox is advising his campaign.

has fueled speculation that maybe if he does lose the election he might have ambitions to start a media company. david: oprah winfrey started a network of her own and there seems to be disappointment from viewers and advertisers that it was not 20 seven oprah. you have to populate a channel with more than just the to dealer figure -- the figure there. laura ingram, and culture, i suppose you could have them on this channel how difficult would it be for them to fill a network? >> it is a lot harder to start a cable news network than people think. you have got to buy a cable network and that is expensive. think about how much al jazeera paid or tv. then you have got to build a channel 24 hours of programming. that is all very expensive and then you have got to convince came providers to carrier channel and that is not a

guarantee as well. vonnie: are there channels to be picked up? if you people in his team probably would not mind some sort of media operation. >> there are cable channels that he could potentially start his own network by taking over what was formally al jazeera, there was a channel called vivid that also shut down this year. clear hows, it is not he separated from fox news and whether he is able to start a competitive network, but he surrounded himself with people in his campaign now that know a lot about working in conservative media. start hisyou does not network, glenn beck could be his model. he started the blaze, an online only subscription service. any indication how well that is

doing and how much opportunity there is in that space for subscription web service? >> a lot of people thought that following glenn's model might be a better blueprint for trump. he got up to about 400 thousand subscribers. there have been reports that his media business is not doing as whatas it once did hear donald trump has been able to do where he has cultivated a large money donating to his campaign might also be willing to spend the aim amount of money on subscription video services. a lessght not be expensive way for donald trump to parlay the following he has developed in his campaign to a media company afterwards. >> thank you, jerry smith. ahead, today's options inside.

this is bloomberg. ♪

vonnie: time now for options inside with kevin. spoke,he last time we jackson hole, we had a lot to talk about where the treasury market is headed. seems like we might be looking at friday now here's what is the options market telling you? >> you can see a lot of yield sectors are getting hurt. was at the utilities etf and you could see 2.6 times the yount being traded, showing people are starting to go hedge themselves. that is interesting.

last time we saw that, sickness july 12.e back we have seen the utilities sector come down 7% since then. that is two times the amount of sector actually gives. people are worried the fed will raise rates and it will affect the utility sector. vonnie: would that the also good now? we are seeing indications and one way we do that is the volatility in that sector is elevated over the market, signaling the uneasiness of investors. the utilities sector trading at 18. the market has been sub 15. a lot of nervousness when it comes to the utilities sector. people have started to sell off as well that you have not been a lot of that. they are bundled in with financials here that will been

out to you soon. health has been another spot people are getting out of especially with their worries now. vonnie: jackson hole or any kind of interest rate increase? >> there is regulation as well as increased here you have seen that financials. there are other areas you can go in the market and tech fest in a great refuge. you look at the tech sector and it is still trading at great valuations comparing -- compared to volatilities. we will get to that in a second parent i want to ask you, does it matter to options traders whether it moves 25 aces once or 50? >> i think it brings on a lot of uncertainty. what the fed has done is they have not guided well. we have rate hike increases and for this year, they have not even done one yet. we are not certain as we will do

one hike or two hikes. physics is low, treasuries are trading a range. where is the volatility? >> further out the curve. you actually have to look further down the curve, trading at 17 or 18 now. beyond 20.could go growth stocks, particularly amazon in the larger -- >> yes, facebook, apple, which gives a great yield. great valuations, great balance sheets. utilities are still take to the dollar. the dollar getting stronger, you tend is the it in there. that is not have any, right? volatility is lower in the sector around 15.

just get rid of utilities exposure or if you want at your risk on trade, 100 and 17 strike , that is all you can lose. vonnie: you are avoiding december. we will check back with you about how that goes. thanks, kevin. david: coming up here, back on the table. $11 billion of transactions were announced globally in july. hopes of a steadier market. this is bloomberg. ♪

matt: live, you're watching bloomberg markets.

let's check on the headlines right now. we go to mark crumpton. mark: the head of the fbi is saying the bureau is actively hackerso determine if -- a metal this fall. cyber security conference in washington. effortake seriously any by any actor, including nationstates, maybe especially nationstates, that moves beyond a collection of information about our country and that offers a prospect of an effort to influence affairs in that country whether the selections or anything else. mark: federal officials have raised the possibility that this are trying to disrupt voting in november. hillary clinton has an eight point lead over donald trump in

pennsylvania according to a poll that showed clinton leading trump in the battleground state. gary johnson, 39% support trump and 36% back clinton. chris christie has vetoed an attempt to raise the state's minimum wage to at least $15 over the next five years. the republican announced his action earlier today saying increased cost would burden small businesses. democratic leaders have said they would pursue a constitutional amendment to raise the wage without the need for the government and's approval. killed while surveying the group passes defenses. a syrian national. brazil president has failed to convince the senators who will decide if she is permanently removed from office.

questions answered from senators for 14 hours in her impeachment trial. lawmakers expect the senate to vote on wednesday. global news powered by more than 2600 journalists and analysts in more than 120 countries. this is over. back to you. you, mark. let's go live to the nasdaq with abigail doolittle. abigail: after the nasdaq tried morning, theh this nasdaq has mainly been lower all day and right now, the nasdaq is down about 3.1%. the index is down half of 1%. the top story on apple, today's not the first day for apple. it is the fifth in a row.

the company has been ordered to pay up to $14.5 billion in taxes to the european union and the european commission is saying that ireland recently gave apple a big tax break between 2003 and 2014. shame for the balls out there. we had an announcement for the september 7 event to launch the iphone seven. .his is what drives the stock the company passes iphone sales. we see the investor feelings around the iphone last year, and down in sentiment, growing bearish and bullish. we have the stock rig out of the trading range most recently with the stock back in, question is whether or not the break down -- whether or not this is real.

perhaps it could stay out of the trading range. it appears what had been a bullish pattern in that there has put in a partial fulfillment to take stocks reef we hire but the stock could just be down in the trading range not just on that issue that around investor ship toward the iphone. perhaps less pleasing than they would like. vonnie: talk to me about a top performer? a fantastic -- >> a fantastic day, the best in three years. news, $23gher on the billion bid for hershey after two months of stalled takeover talks. many are happy about. some have thought her she was slow-growing and would drag. on the news, the stock is down

less than half of 1% on the year. investors remain enthusiastic that the bid was dropped. perhaps we will seize this turn positive on the year in the days ahead. you so much come abigail doolittle. explores only, showed 1/10 annually and experts for data this year they will find even less. explorationt their to the bone, a new supply discovery since 1947. the crudethis mean to outlook? and analyst joins us from houston. much.you very this kind of discovery i imagine does not show up in the price immediately. into a while to turn production and hit the market. ultimately, this has to be a medium-term, someone bullish for

the oil price. when do we expect to see market ramifications of a dramatic slowdown? >> thank you for having me on. you're right there is a long lead time associated with this. longer-term volumes wealthy three to five years from now. one of the questions that we get well-positioned to fill the gap if we are not as wind today. in an area where we see the biggest amount going forward is right here. spots,the few bright approach and $12 billion in the m&a market, a testament to the world-class states that it is. ,bout 100 and 65 in the region

up from a low and there is a realistic chance for that to double by the end of the year. if you're looking for somebody ,o fill that gap moving out their well-positioned to do so. >> im glad you mentioned the permian basin. showing rakesrt in this west texas ace and rising to a seven-month high. to the permian basin, the country policies against, three,umber that rose by the most since january. people from your house have been potentialout a increase in m&a in the oil industry. you highlighted one of the areas with a pickup. >> absolutely. i think the increase is a testament to what transpired

over the last 10 years. we are getting on two years prices began to fall out. what you saw happened, it migrated to the parts. as well as to the core parts of the permian basin. that process, they sharpened their pencils and examined their structure and the thought down the cost of oil quite considerably and nowhere did they do better than the permian basin where we now have trailing locations that we could conceivably drill and make money at these prices. after two years of not doing much, a lot is saying was his next. they're looking for a place that is scalable, where they can generate concerns today and the most important day is they are looking for nasa where there is entry.

there is still plenty of scope for the deals that are transpired this year and quite a lengthy pipeline expected to come over next year. >> i am looking at a chart that shows inflation at dictation and oil. they track closely because inflation expectation are kind of based on price of oil. i wonder if it is sometimes the other way around. maybe the consumers only willing to pay a certain amount of oil based on inflation is patience. far do you think about how it could rise considering what it simmer is willing to pay for it right now? >> fundamentals are tightening of the little bit. strengtheningttle averaging around $43.

to 54.y get with the operators are thinking about this, if you use the m&a , what is the long-term price they think, we go through and we value these deals, particularly in the seller deals. -- billionion death plus dollar deals. it is really how the industry is thinking about it now. tech is,e you're done i want to ask you about the state of the local economy. i am looking at the manufacturing index. it has not been in expansion since 2014.

the texas economy does not seem to be booming in the -- like it did in the years after the crisis. worried about a recession it to the -- or do they feel it has gone to a level that it wasn't. is funny. where you hope for higher prices at the pump. people understand a robust oil and gas industry is good for the state of texas. what you find is that is what you would expect on the economy. the big driver of gdp postrecession. we know folks down here are hoping to get things back on track. looks like we are going to. set for recovery particularly in

the west texas. be an increaseto consensus that oil is not going back anytime soon. >> it is not something we are expecting to see. in a long-term, looking at oil prices long-term, you will look at the cost of the marginal barrel to meet demand. how much does that cost? you're looking at that low $70 price range. >> thank you very much. fischer talks to us

, japanese economy, and much more. our exclusive interview with stanley fischer. this is bloomberg. ♪

matt: dell says it expects to closes acquisition next week. today they have received clearance for the deal to go ahead. are expected to begin trading on the new york stock exchange on september 7. isurity exchange commission

giving to a corporate insider who helped a regulator uncover fraud. it is the second biggest payout ever. the whistleblower attorney says the unnamed employee tipped the regulator off to improper -- improper accounting at monsanto. spacex has a taker for the first flight of one of the group rockets. it will send its next on anications satellite up rocket. spacex has uncovered six boosters following liftoff. the launch will take waste this fall. -- take place this fall. >> vice-chairman stanley fischer today continued on data driven rates by the fed. said the central bank does not operate and that -- in a vacuum but is rather very got -- cognizant of economies.

we are sensitive to what is going on. one hears and reads about and talks about it. is happening in japan, for instance. account.hat into we are not in a position where it just rates need to be negative and we are not planning to do anything in that direction. we certainly follow the debates and the series of negative interest rates. >> with the negative rates, i spoke to you pretty much when it and we had a conversation with you may be a half a year ago i cannot remember. have you learned about negative rates in the crucible of the markets? you have you learned in the last banks whichentral are implementing them, there are

four or five of them, based we think they're quite successful and are staying with that approach, possibly with the exception of japan, thinking it through and they have said they will come back to try and make .egative rates work better one of the interesting , theopments i have seen work of to a certain point and productive.counter tom: precisely. that is a critical point. an outright scam. he is not a public official anymore, i understand, but there was a raging debate about the efficacy of negative interest ,ates for central banks government, and banking itself. what about efficacy for savers and that the?

>> clearly there are different responses to negative rates. they are very difficult to deal with and accept. typically, they go along with bute decent equity prices we consider all of that and we have to make trade-offs economics all the time and the idea is lower the interest rate, the better it is for investors. that is one of the great disappointments of reaction to very low interest rates, is to be found. >> that was fed vice-chairman stanley fischer and an exclusive interview this morning on bloomberg tom keene. pretty fascinating comments they're talking about how, in his view, there is evidence that negative rates are working out. i have a chart here in my bloomberg. a lot of people pointed to this

one, the japanese bank index. you can see how much they got clobbered in the boj cut rates into negative. a big surprise. you can see financials. elsewhere perhaps negative rates not working so bad. matt: a j.p. morgan economist also says we can see negative rates are working just by central how much the bank, in this case the ecb, has been able to move retail rates with its own target rate. if you show the chart we have, we can see how much the ecb was able to move rates for stuff in the tightening cycle, secondly -- secondly in the easing cycle. 2008, betweennd 14 and 16 in an enhanced cycle.

obviously, a much bigger impact. >> this is a transmission mechanism we have an talking , mark a big discussion carney has really put a? over -- a question mark over this. the potential moving out of fed rates. if you look just at qb and forward guidance, that is my question, is that enough? matt: a lot of fed governors would say yes and a lot of people on the markets would say no. i think that is the interesting take. about us, we will talk home prices not just in the 20 cities as an average, because we know that was a move up to 5%. i will break you down -- break it down, depending on where you are in the housing market here that is next. this is bloomberg. ♪

matt: this is bloomberg markets p or i and matt miller. we will look a different graphics that illustrate some of today's market trends. i want to look at that index. come inside my bloomberg and you can watch me making this live. with march 9, 2009. i believe that is the guy we finally turned up on the s&p. at some cities compared to new york, the white line there, and see what the housing prices have done as soon as the stock market finally turned around. i am talking here about the third tier, the lowest rung in a top-tier. mightare like what you expect to be upper-middle-class homes in each city. san francisco at the very top, the biggest gain since the turnaround in the. market.

purple, also much bigger gains in new york -- the new york. then portland, i had just seen that show with fred and had never actually been there. apparently it rains a lot in portland. i do not under stand the draw. clubs it is pretty mediocre if you look at it. >> i am looking at a chart about apple. look at my bloomberg. matt miller is responsible for the beautiful colors and the headlines that you see on this chart. really what it is saying is ok, recorday have to pay a 14.5 billion dollars plus interest in back taxes, but actually if you look at cash and revenue, it is on solid ground andinterest matt had this as wef you look at the debt, that has been increasing. so if we look at the prophet

amount of $14.5 billion, we're three months of profit. with that level of debt, perhaps not so easy to shrug off. >> a lot of that cash is overseas. big jobs report, it is a one. it could determine whether we get a central rate hike. ise people say maybe there something quirky about this one, if we miss on friday, do not be surprised. that will probably not the odds of a rate hike down. that is it. matt: check out the major theages as we going to close. down across the board. this is bloomberg. ♪

♪ >> we are moments away from the closing bell. i am matt miller. joe: i am joe weisenthal. "what'd you miss?" scarlet fu is off today.

♪ matt: u.s. stocks closing lower, dragged down by apple. joe: "what'd you miss?" matt: u.s. stocks retreat from record highs. , asset market action class by class. pay $14.5 ordered to billion after the european commission said ireland illegally/the company's tax bill. >> lawmakers on both sides of the aisle, we speak to goldman sachs about what is next for the country in the market. let's kick it off with market minutes. stocks down across the board, but some in individua