a.m. in tokyo. i am vonnie quinn. i am david gura. welcome to bloomberg markets. from bloomberg's world headquarters in new york, we are covering stories from san francisco, to washington, to frankfurt. stocks are moving lower to him about not making big moves, tendering weeks of calm in the markets. what will cause u.s. equities to breakout question -- breakout> vonnie: investors are closely watching the ecb decision today. see anhey do not immediate threat to the euro area. david: will consumers show excitement for the new iphone when it is released in just a few weeks. the markets close in about two hours. let's head to the markets desk where julie hyman has the latest. julie: we have a little bit of a pullback in the wake of mario draghi signaling there is not

more stimulus coming, at least not imminently. we have seen stocks stay steady after the initial drop after those comments. we saw the effect throughout the bond market and on the dollar as well. we see the yields on the u.s. treasury market across the curve climbed today. on the 10-year for example, the year -- yield has bumped up. it is gaining steam as the day has gone on, up seven basis points. 1.6%. also a seen technologies weight on the s&p 500 -- you heard questions about apple and whether there will be strong demand for the new iphone seven. they are sending the stock lower today, about 2.5 percent. among other pressures, wells fargo downgraded the stock to a market perform, saying the prices are largely priced into the stocks. -- thepany forward is company twitter is meeting

today, and there are no bids on the table, according to cnbc. retailers are not performing well. we have a mix of different retailers. supervalu, following on the heels of sprouts yesterday, on the numbers, missing investments in grocery stores. tractor supply coming out and missing its forecast. pier 1 getting a wrath of downgrades as well, suffering from weak traffic and weak numbers as well driving that stock down. david: and hermine -- tropical storm, hurricane, cyclone, all iterations, causing trouble. julie: not trouble if you are able for crude oil. we saw a large drop in the inventories because of tropical , as davidine, or pointed out, whatever iteration, whatever part of the cycle. the big bump in oil -- 4.5%. we see above $7.50 a barrel. -- $47.50 a barrel.

exxon are higher. it is remarkable when you look at a chart of the weekly inventory change. look at the bloomberg -- this is a year to date chart. it was the biggest drawdown going on the way back to 1999, 14 .5 million barrels, and the idea is with a disruption in the gulf, you had a disruption in imports as well. that is why you have a drop in inventories. vonnie: thank you. some headlines crossing the bloomberg now as well -- the federal reserve, the fdic, and the office of the comptroller of the currency, according to congress required under the dodd frank act, are urging congress to repeal a section of the act that allows wall street firms to make investments in nonfinancial copies, prohibiting merchant banking, in fact. the banking index is still up .5%. banking stocks not unduly

impacted by the headlines yet, but it is a merchant banking man, and it is to address soundness concerns and maintain the basic separation of banking and commerce. dodd frank lives, david. david: it continues to fight another day. david: now let's checked on the first word news. mark richt and has more from the newsroom. new poll shows donald clintonfeating hillary in white americans with no college diploma. among all likely voters who have not done pass title, clinton leads trump 47% to 42% in a two -way contract -- contest pitted was in a nursing moment for gary johnson when he was asked on msnbc when he was asked about the besieged syrian city of

aleppo, he responded "and what is aleppo?" after the appearance, he told markel up and that he needs to know -- learn more. the only surviving attacker in the belgium terror attacks says he needs to speak to a judge. this is refusing to speak to a judge. his attorney says he is not obligated to explain his silence, but it is "obviously linked to the constant surveillance. 132 people were killed in november's attacks. as we approach the 15th anniversary of the 9/11 attacks, a found that was raised at ground zero has been found. it was lost during the cleanup of the area. a man first showed up at a washington station in everett, washington, in 2014, saying he believed he possessed what became a powerful symbol of hope and encourage following the attacks. forensic analysis confirmed the flag's authenticity. it is back on display here in

new york city. global news 24 hours a day, powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. vonnie: thank you. we are seeing more evidence that investors are kicking the dividend addiction. this time it is showing up in options markets are paying the most four years to pay against losses, and one of the markets biggest dividend etf's has explained all of this. .et's bring in joseph ciolli he wrote the story for bloomberg news. kicking the addiction or realizing there cannot be much further to go, so they have to find something else? a combination of both, and you have to frame this in the context that it has returned about twice the s&p year to date, it is only -- and it is only the last month or six weeks that it has been lagging and it looks like the gig has run up. the reason it has been doing well year to date is because

bond yields are so low and people are looking for yield elsewhere, so companies like utility companies, telecom, and consumer staples are out there getting dividend payouts that exceed those of the bond market, and we see that come off a little bit, and, really, it is indicative, sort of, of this rotation from safer stocks into riskier assets like energy, banks, and things like that. david: i want to pull up a chart we are getting a lot of use out of -- looking at the s&p going up or down by 1%. it has not gone up or down by one person now in 40 sessions. joseph: that is a great way -- 1% now in 40 sessions. joseph: is a great way to discuss this -- the net result is not been too great in either direction, hence the 1% stat we saw there. as i mentioned, as people are filing out of the high-dividend stocks, we have seen the biggest inflows in about six -- 16

months for the energy etf, the biggest one that. we've seen banks reaching highs. we have seen the s&p technology index at a 16-year high. we really are running in place, though. it is taking money out of one area and putting it into another. vonnie: bonnie, -- joe, not to be too black and white, but is this the smart money or the dumb money question joseph: -- money? could calluess you it the dumb money -- i do not like to use the term. i have some clients to keep happy. the smart money is a little one hedged, less bullish, and there are some considerable big vix positions built upon the institutional size. david: this is a credit suisse model looking at market contagion, speaking to the degree of which rates are overarching every thing. explain what we are seen as we see the uptake in the last year or so. joseph: hoc inequalities -- it

shows the correlation between stocks, bonds, all of these things -- and it is at the highest since they started using the gauge in the mid-2000's, and what it shows is the markets are not behaving in the efficient manner it is supposed to. you should have a pulley system -- if it is pulling out of one area, it is going into another. these things are all moving in the same direction at an unprecedented level. people are trying to figure out why is that -- it cannot be because economic data isn't great because it has not been, and really, it comes down to global easing from central banks. you know, the fed -- everyone is talking about the rate hike. i will believe it when i see it. hopefully by the end of the year -- a lot of investors think possibly december, after the election. the ecb, although draghi cap things on hold, very much accommodative, and the bank of a-easings that perm central bank.

all of those combined and the bank of england -- you have all of this access, cheap money other, and it is lifting all of those. david: great to talk you. appreciate it. joseph: think you. vonnie: coming up, markets around the world -- and debt markets around the world slump after mario draghi said policymakers have not discussed an extension to the bond buying program. as a central bank shifting gears on additional stimulus? david: can virtual reality become a subscribed painkiller -- we will explain how these pogroms work. isnie: the time in new york 2:10 eastern p.m. we are looking at the euro 50.ding at $1.12. this is bloomberg. ♪

david: this is bloomberg markets. i am david gura. vonnie: and i am vonnie quinn. time for the latest bloomberg business flash, i look at the biggest stories in the news -- dell will cut 2000 to 3000 jobs and most will come in the u.s. in areas such as supply chain and general and administrative positions, as well as some marketing jobs. they are looking for cost savings of about $1.7 billion in the first 18 months after the transaction. the new company will have 140,000 employees. david: wells fargo will pay $185 million to resolve claims that banks opened credit card accounts without investor approvals. regulators have been investigating whether wells fargo pushed employees too hard to meet sales goals and did not prevent questionable behavior. vonnie: apple isn't a

long-standing tradition involving iphones. it will not announce the number of iphone seven's it sells during the first weekend. the company says it knows before the first preorder that the phone will be a sellout. and that is your bloomberg business flash. well, investors were closely watching the decision out of frankfurt today -- ecb keeping its stemless program unchanged, a sign policymakers do not see an immediate danger to the euro area from the brexit followed. was told a kiwi extension is inevitable. click it is -- >> it is pointing toward it ended. draghi made it clear the government counsel is not satisfied with the underlying trend in inflation, and they are committed to keep on purchasing assets until they see the path

of inflation back on a sustainable direction, in the direction of the targets. so, no move today, but i think inflationsts of 1.6% in 2018, that is not quite in line with the target, and therefore that all points toward an extension, probably at the december meeting. are used to this juvenile game -- looking at expectations, and looking at president draghi and say you have to beat them. does he have to do more of that in december. another round of ken druggie beat and jump over the hurdle? -- draghi beat and jump over the hurdle? mworth: there were expectations today -- it is a hard thing for the ecb. the ecb cannot control market expectations. druggie is doing a pretty good job -- mario draghi, is doing a pretty good job of not sending any signals. he is keeping the information

close to his breast, and we will see what the market prices in. it is still pricing in a bit of a cut and an extension. i think we will see that. no big reason to be concerned about what is going to happen in december. andrew, let's talk about how you trade this -- tighter spreads and a yield curve, spain over germany. spain trading at a record low in terms of yield -- your thoughts of how high the spread can get? how high can it get? mr. bosomworth: previously thought it could get down to 75 basis points on the 10-year. given some of the longer-term concerns about where the eurozone is heading, you know, that is really probably the tightest level. if the ecb does do what we think it does do -- will do -- and that is told allocation of the purchases away from germany, it could come in a little bit more. but we are really talking about

25 basis points from here. jon: i want to talk about a different spread, italy versus spain, and it is a political risk spread. you have had spain trade under they for a period, and with referendum upcoming in italy, is that a spread you would like to play? mr. bosomworth: we are, sort of, broadly neutral on that particular spread. yes, we have a bit more of a preference for spain owing to owingonomic fundamentals, to the uncertainty of the referendum in italy, but even if the outcome of that referendum where to be a rejection of it, i do not think it is the end of the world in terms of the eurozone. $1ember, the ecb is throwing trillion plus of liquidity at the entire market, and a large share of that is going into countries like spain and italy. that force alone -- that

technical force alone is going to cap widening. jon: how controversy will it be awaye ecb decides to tilt from the likes of germany, italy, with significant risks on the horizon, to be fair, in both of those countries? how politically sensitive with that decision be in several months time? mr. bosomworth: as you talked about before, there are the three rules the ecb has set itself it probably will have to adjust if it goes ahead with an extension of qe. all of those three roles are controversial if they are to be relaxed. i think that capital -- relaxing the capital is one of the least controversial, and it is not that controversial because at the end of the day, it is the central banks doing the risk sharing. they are taking on the risks of the government bonds they are purchasing, and therefore if the bank of italy and spain are

buying more government bonds from respective governments, the taxpayers and the poor countries are not going to bear eventual losses from it. yes, the controversy obit is what are the fiscal implications , thehe various treasuries finance ministers. call it the legal path of least resistance to actually move that one. i actually think buying bonds relaxing facility and the 33% constraints, those are more controversial than the capital key jon:. in about 20 -- capital key. jon: in about 20 seconds, what will give us a safer curve than you anticipate question mr. bosomworth: get the governments to spend more money. david: that was bosomworth earlier today -- andrew bosomworth on "bloomberg " how virtual reality is being

used in hospitals next. ♪

vonnie: this is bloomberg markets. i am vonnie quinn. david: i am david gura -- the next time you are at the doctors office, you might want to ask for a prescription for virtual reality. caroline chen reports on it in the latest "bloomberg businessweek," and she joins us from san francisco. let's start with the motivation. this is a means for distraction -- patients that are badly hurt, and this is a way to get outside thinking about the pain they are in. caroline: the theory about using virtual reality for pain is similar to medication -- the idea is if your brain is not focused on the pain, patients actually feel last pain, and the more you ruminate on the panama the mind dwell on it -- more you ruminate on the pain and let your mind dwell on it,

the idea is to distract patients. he do not have to train and practice appeared you can put a headset on and be brought to a different world. vonnie: it is a phenomenal story, and if it were to work, it would be amazing for people in chronic pain. who decided to try it first, and is it gaining acceptance? caroline: actually the idea of forg vr and things like vr pain has been around since the early-1990's, but what has changed now is the cost is coming down. back in the day commit one point, a headset was $35,000. now the price is more around $600. it is becoming more economically viable, and the software is getting better. that is one of the drivers coming in here. the other driver from the perspective of hospitals is that hospital costs are going up and up and the government is putting in more incentives for hospitals to get patients out of the hospital sooner.

if the patient is feeling less pain and can go home a day earlier to my that is a good incentive for hospitals to try to push him to leave sooner as well. david: these are early days for the widespread acceptance of virtual reality and the early days of studying the effects of this, right -- there are still a lot of medical tests going on? caroline: right, doctors want to do larger scale studies because there are questions we do not know the answers to. patients report anecdotally that it helps them, but we do not know if the effects last. on,t only when you have it what happens a day after you take it off? are you better, are you able to take lower amounts of medication? the other questions are what types of pain it will be able to help. they are using it for acute pain, burn victims, for example, what if they could help people with chronic back pain, could be a huge market. vonnie: our companies making for burnsoftware

victims, and are there profit margins? caroline: you can be profit margins -- a lot of startups are creating specific software, intending combing and soothing. for example, one with burn victims, one with burn victims, when it has been used his snow world, where you are introduced to this icy landscape, and you throw snowballs at penguins. else to them something do, and makes them think about something cool, cold, especially for patients that have been dealing with burns and that kind of pain. it seems to be helpful. david: you mentioned one motivating factor -- the cost of medicine and hospitalization. another is the growing opioid addiction. caroline: absolutely. doctors are increasingly aware of what a big problem opioid addiction is across the nation, and they are looking for anyway in which they can not use them

or reduce the dosage given to patients. right now, a lot of patients given a virtual -- virtual reality headset are still on pain medication, but some are able to use lower dosages, and that could reduce chances of becoming addicted. doctors are open to trying all sorts of technology now to see what they can do to lower the numbers of people becoming addicted. vonnie: our thanks to caroline chen. you can meet her wonderful story in the latest global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. -- in the latest "bloomberg businessweek." forbs above $47 a barrel wti after an unexpected plunge in inventories. ♪

david: from bloomberg world headquarters in new york, this is bloomberg markets. i am david gura. vonnie: i am vonnie quinn. david: commodity markets are

closing in new york -- let's look at the biggest movers, starting with gold. futures are in the red. it swung between winners and losers. mario draghi played down the need to commit to new stimulus for now. is surging after the energy information administration said crude inventories fell 14.5 million barrels last week, the biggest drop since january, 1999. for more on oil, gold, and other global comedies, we are joined by chris gaffney, who says now is a good time to buy commodities. andme ask about something can you send -- slower global growth has kept a lid on commodity prices. in light of what we heard from draghi this morning, what makes you optimistic estimate -- optimistic? mr. gaffney: the emerging middle

class in china and india will create demand. demographics show a majority of those people are younger consumers. on the consumption side, i think that is going to drive demand on commodities, and in more particular, diets are changing. as they get more disposable income, they change toward a protein and sweeter diet. india is the number one importer of sugar. we think that is going to drive the demand side. also -- david: go ahead. mr. gaffney: central banks have started a policy of trying to -- zero interest rate policies, which will support precious metals, of course, non-interest-bearing, and at the same time governments are starting to read old infrastructure, and that will increase demand for industrial commodities. david: you bring up china in your thesis about agricultural commodities, and let me ask you about steel -- the overcapacity

we see that. to g20 talking about how curb production. what is your forecast for steel going forward, and how is that affecting -- affecting iron ore? mr. gaffney: it will range trade, with his posting -- cutting of capacity. it will weigh on prices in the iron ore sector in particular. that, in particular, will probably weigh on prices and dress them lower. vonnie: how has the u.s. dollar and it's more recent weakness b everbank,ing you at chris se?c. clinton: i have been chris?-bank, mr. gaffney: ideal with commodity investors, and it is an opportunity to add diversification.

individuals are a little scared of the markets. there is certainly a lot of uncertainty out there. precious metals and commodities in general added to a portfolio can help decrease the overall risk of the portfolio. david: let me ask view about gold -- we have seen gold in these highs that were lower than they have been -- what you think accounts for that -- those highs not being where they were? mr. gaffney: well, again, the hawkish tone that some fed members have started to take, and, also, we are seeing the ecb, kind of, take a hawkish direction, and expectations of interest rates have kept a lid on precious metal prices for now, although they were the best-performing sector over the first half of 2016. now, chris, you would not recommend to retail investors that they by contract unless they are very very experienced and they are able to

love her up a little bit and not worry if things do not go their way. how would you take advantage if you wanted to diversify a little bit? right, and i think institutional investors can certainly take advantage of the futures contract. theink it is better -- broad-based bloomberg, 30 index is a great broad-based index. there are a couple of etf's you could buy. that tracks the bloomberg commodity index. it is a great alternative, low-cost alternative. we have created a principal protected cd's return will be off of six different commodities -- it is the market-safe focused commodities cd. that is another way investors can add commodities exposure with no risk. vonnie: chris gaffney, president with everbank was markets. let's check the headlines at

this hour. mark richt and has more from the newsroom. : powell says he never tried to influence hillary clinton on e-mail used during her tenure at the state department after a newly released exchange between the former state secretaries that democrats claim provided clinton a detailed blueprint on how to skirt security rules. colin powell accused the clinton team of trying to "pin her private e-mail server use on him." she tried to balance the need for cooker -- quick cooking vacations with security issues. is set for the first veto override of the obama administration, voting on a bill that would allow families of 9/11 victims to sue saudi arabia. president obama is opposed, saying u.s. service members and the mets opposed would be -- depomed's abroad would be threatened if the principle of sovereign immunity is weakened. congress might not have enough

votes to override the veto. nearly half of americans disapprove of obama care of going to a new gallup poll out today. 51% disapprove of the health law. 44% supported in november, the same survey found 49% were against it, while 47% were for it. dallas police chief david brown, who became the face of a city reeling from a deadly sniper ambush is opening up about his retirement in october. chief brown says simply "it is time to go." the firstublicly for time today about his decision to leave the department after more than 30 years, six as chief. global news 24 hours a day, powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. david: it is clinton versus trump, so why is vladimir putin

getting discussion today? donald trump is campaigning on the heels of the commander in chief form nbc held last night right here in new york city. trump: let the beginning made the statement -- ♪

vonnie: this is bloomberg markets. i am vonnie quinn. david: and i am david gura. in a news conference earlier, hillary clinton donald trump for his praise of russian president vladimir putin. sec. clinton: he praised russia's strongman vladimir putin, even taking the astonishing step of suggesting that he prefers the russian president to our american president. now, that is not just

unpatriotic and insulting to the people of our country, as well as to our commander-in-chief, it is scary, because it suggests he will let putin do whatever putin wants to do. david: with just two months until election day, national security has emerged as a central piece -- central issue. vitaminu have to think food in the kremlin watching this layout would have to be somewhat tickled over the fact there was donald trump praising him, at least as a leader. john carney wants to be treated :s an equal, and it is -- john he wants to be treated as an equal, and he is delighted. vonnie: it elevates his status -- is he even watching it? he is a state leader -- as in other things to do? john: he has small things to do

like running one of the largest, in geographic terms, countries in the world. he will be watching, feeling that in a sense this is what about, to coin a popular phrase -- making russia great again, and he has looked at it as getting russia back into the debate. he wants the life where the rush of-america talks with a big talks that happened every year. he is part of the election, syria, in variety of different places, and my honest impression is at some point he will think this has gone far enough, but at the moment there is nothing but good news in all of this. in this wide-ranging interview you asked him about this u.s. election in light of revelations that russia had the democratic national committee as well. what was his level of engagement, as he described it, with what was going on here? john: to be fair to him, there was an element of bemusement. you watch these people watch

that stuff -- he does look at the american election, to some extent, with an honest reaction that it all looks like a bizarre circus. that was a genuine emotion. i think he looks at that -- he denies the hacking the same way america would deny hacking russia, he would point out, but beyond that he says it is up to the american people to choose the candidate, and then he goes out of his way to slightly point out that hillary e-mails had some fairly nasty things in them. vonnie: right, it was fascinating because he was statesmanlike that she did not take any chance to feed off the comments -- john: a slight opportunity -- saying why was there the fuss about who fact -- who hacked into the e-mails when people should have been looking at the ingredients. sure, but in terms of coming down on the set of one candidate or another, he

absolutely did not. what would a clinton presidency and a putin relationship look like as opposed to a trump presidency? john: i think there was an element where we give him a variety of choices, notwithstanding the wonderful words trump has said about putin and the east, i think he would be happy with a week hillary. everyone sees tropical volatile character. that is not something putin wants to deal with. a very strong hillary would also be a problem, but a slightly weakened, tarnished hillary, where he can point out what she has done wrong -- that works quite well, i think, because putin, fundamentally is an opportunity -- opportunists. cemex andeakness -- in the middle east, or if he sees the opportunity to grab crimea, he will go for it. if he sees an opportunity in the

baltics he might go for that. from his point of view, there are risks in a trump presidency. to some extent, be careful what you wish for. david: last question -- you have paul ryan, the speaker of the house, criticizing what donald trump said last night. this is an issue that is divisive in the republican party as well. john: yes, in a way that i am sure vladimir putin would note that such divisions don't occur in his party. this is a big thing -- national security is not something you joke about -- it is fine for me and you to joke about, but it is not great if you are leading congress or running for president, and fundamentally, it is about a split in the republican party, and the republican party has always been the hawkish, strong party. trump on the whole does back that, but with putin, he has a weak spot of some sort. vonnie: hillary clinton is convening a bunch of national security and former national security figures tomorrow, so

i'm sure we will hear more about national security tomorrow. bloombergethwait is editor in chief. david: time for the bloomberg business flash -- the biggest stories in the news. buyer ag is moving forward with a sale. they are working with j.p. morgan chase on the sale that could fetch more than $1.1 billion. buyers selling peripheral businesses, pursuing a takeover of monsanto. the federal reserve is urging congress to repeal making powers here to goldman sachs would be among the banks most contested in the recommendations issued today by u.s. banking agencies. the report is required by the dodd frank act. and that is your business flash update. vonnie: let's head to the markets desk where julie hyman has the latest sector spider report. julie: i'm looking at retail

because we have a lot of retail news -- earnings from various retailers, and we have a lot of negative reports today. that is pushing down the srt -- the retail etf -- down by about 1.5%. there is one stock in particular mitigating the declines. i will talk about that in a second. the bad news first -- tractor supply company big drop that stock. it is leading etf down, down 17% today. the company cutting its full-year profit forecast, it's four-year sales forecast as well. it basically says it has seen trouble in areas of the country that are dependent on the energy business to where it has a lot of its stores. even though -- business, where it has a lot of its stores. even though falling oil prices might have been good for consumers, they are not good for consumers in the energy business. that is what is leading to the cut. raymond james, wedbush, all downloading those shares. it is not just tractor supply. supervalu following on the heels

of sprouts yesterday. store chain coming out with numbers that missed estimates. companymports -- the ceo will be stepping down after the company reported a second-quarter preliminary loss that was worse than estimate. barnes & noble as well, the interim ceo and founder, saying this is a terrible retail environment -- one of the worst he has seen in his 50-your career. i do not think we have time for it, but tailored brand is higher today -- the owner of men's wearhouse and joseph a bank reporting earnings that beast -- beat estimates. david: julie hyman at the markets desk. twitter has spent the better part of a year entailed in rumors and speculation of a possible sale. we will discuss why there is so much chatter around the company. this is bloomberg. ♪

david: this is bloomberg markets. i am david gura. vonnie: and i am vonnie quinn.

apple again showcasing new iphones and new apple watch -- was it a hit? a tech analysts weighed in on "bloomberg ." have a listen. : they havedam delivered on expectations, and what they have been clearly is created expectations. the mix toward the upper end. to. -- david w.: you take the? way, are they doing what other companies have done? lamba: the companies are moving six months behind each other. it is not the point where we see evolutionary features, which a

few years ago we were seeing. i felt point, they deliver on some big step up in front you know it. at this point, the smartphone market, the way we look at it, it is not a massive growth market. it is the market that will become more of a replacement market,. -- replacement market. on: let's look at the analyst ratings and see where you sit. you are looking for what, $120? back at the envelope -- back of the envelope cap you wish, you are 12% upset. what gets us there? be betweenit will now and here and there will be positive that a point about the iphone 7 options. had two daysy only of ship and spirit there is a natural uplift a natural up the statement of this quarter. next quarter there will expand distribution much faster. i think we will have quality in terms of uptick.

that can get us closer to our price target. david w.: if you are tim cook, and you have to get every nickel and dime out of the release -- where do you look them up what about geographically -- are the markets they could pursue more successfully? mr. lamba: expansion wes, they've been a good job. india is one of the markets they were fortunate -- focused on. david w.: are they way overpriced for india? mr. lamba: absolutely. that was our conclusion. any to come up with phones at a lower price point. in terms of geographic expansion, they are more or less stamped out. david w.: you are confident on your target price -- $120 -- what kind of multiple do you need to get there? mr. lamba: nine to 10 times free cash flow. it is not an egregious multiple that we are looking for. when it comes to the sentiment on the stock, it is fairly

muted. at this point, expectations are not that high either. vonnie: and that was a securities analyst on apple. david: staying with technology, let's look at twitter -- shares of the company are down. lately it seems the stock price rises ont -- falls or speculation the copy will be sold. why is information so often unreliable? podcast --n holds a host a podcast. you can call it market chatter -- it is a perpetual coffee. alex: we talk about why twitter is in a kafkaesque situation when it comes to m&a. here is the riddle -- the puzzle. twitter may be acquired one day, i think, for sure. at this point there are a lot of people, maybe not running twitter, but close to twitter saying this company should not be an independent company anymore, however their valuation

is pretty rich. with a premium on top of that, you're talking about an $18 billion company that has limited growth prospect at this point, at least from a user standpoint, and loses money every quarter. the going question is somebody might be willing to take out twitter, but only if the price comes down, but investors keep pushing the price up, assuming somebody is going to buy twitter. they never get low enough for anyone to come along and buy them, at least they have not until this point. so the question is, we think there is a buyer out there for twitter, but is there a buyer at this price, and if not, at what price? and if twitter never gets low enough to that price, because investors keep jumping on, assuming the company is going to get taken out, then what happens? then, of course, you turn that question over to the bankers and say can you figure out someone to buy the company. is coffeeu say it

task, but it is not changing, doing anything to monetize this. isx: at this point, twitter going through a little bit of a -- i do not know if i would say crisis, but certainly they are looking at themselves saying what do we need to do to monetize? they are starting to buy live sporting rights, digital rights to sporting assets, so they have some thursday night football games at this point that they spent a decent amount of money on to try to transform the business, in essence, to say maybe we can figure out how to put together digital advertising, which is, in part, how they make money now, with some live sporting events commanded that will jack up the costs of some advertising we are able to sell. dopanies like this have to clean traded on eyeballs. if you think back to facebook, which paid $23 billion, or whatever it was for what'sapp, that was a value acquisition.

-- eyeball acquisition. part of twitter has to do with eyeballs, but a lot of that is growth. a lot of it has stalled because the growth has swelled -- stalled. david: alex sherman, a reporter here at the burglaries. you can listen to new episodes of "deal of the week." downloaded for your ride home. streaming,aking of markets streaming live on twitter. david: double plug. tobias levkovich will be joining us, making his case for the markets pulling back at the end of the year. this is bloomberg. ♪

it's 8:00 p.m. in london. vonnie: welcome to bloomberg markets.

♪ vonnie: we are covering stories today from san francisco and the u.k., and here is what we're watching. stocks coming back in the final hour of trading. are bracing for markets, we will hear from someone from citigroup. u.s. stockpiles dropped the most in 17 years. vonnie: drone deliveries are coming to the virginia tech campus. is this the future of the service industry? are one hour from the close of trading. let's head to the markets desk were julie hyman