a warm welcome to "bloomberg daybreak." to the market as we kick off a fresh trading week. up nine points on the s&p 500. in the fx market, up to four days of euro week this. we trade stronger, up a 10th of 1%. alix: it was a dinner at martha's vineyard that sparked at&t's acquisition of time warner. the telecom merger is the biggest takeover announced so far this year. that same deal could face challenges in washington as donald trump and hillary clinton raise antitrust concerns. chinata tumbled after can theed deadlines with takeover of the herbicide and pesticide maker. that is what you need to know. david: for more about the big

deal between at&t and time warner, where joined by walter, an analyst who knows all things media, as well as megan murphy. let's start with you, walter. describe this deal. walter: it is a large company getting a lot bigger. if people talk about vertical this is just basically and at&t adding another asset into their bundle. of a lot of industries that are effectively in decline, whether it is time warner or at&t, facing more growth challenges on the wireless front, is listing challenges on the wireline front as well. premium froma 36% what the stock was trading at before this happened. walter: but with the debt markets where they are right now, half of this is being paid with cash, so the company believes that the one important thing they can continue to do is

increase the dividend and have that payout ratio not be materially impacted. jon: we are going to talk about the regulators. let's talk about the debt market. you have some strength in sterling credit markets. is sterling dead -- are the credit rating agencies going to like this deal? walter: i am not sure they will like it, but will they do enough about it to have a significant or moderate or any increase in the rate? let's look at a deal from last week, a lot smaller in scale. over 3%, they used the spectrum to back that borrowing. of speculation that they could do the same if they needed to. at&t are arkets, major issuer. but there should not be any incremental risk that a significant paying off the debt. david: alix: -- megan i want to bring in

murphy from washington. we had both campaigns speak out on this. here is what mr. trump had to say. tryingmp: they are desperately to suppress my vote and the voice of the american people. as an example of the power structure friday, at&t is buying time warner, cnn, a deal we will not approve in my administration because it is too much concentration of power in the hands of too field. david: not to be outdone, hillary clinton's campaign said she wanted the regulators to take a long look at that. how political is this likely to be, and will he get through? again had ace slightly odd situation of donald trump taking the position along the lines of bernie sanders.

he tied it in with something that is interesting. he tied in his administration blocking the deal with what he feels is unfavorable treatment of his own campaign by the media and putting it into this theme of a rigged election, rigged media. he has been building on th for weeks. hillary clinton came out and said that tim kaine said we need to take a close look at these mergers. it is all in the context of an obama administration, taking a harsh antitrust stance. we will see in washington, while people are putting in the odds at 50-50, it will get more scrutiny because it is now wrapped in this political dynamic. has a $500 million breakup fee if it does not work. that is not much, considering the risk. is whatthe key thing role the fcc will play.

if there is not a formal role, they can use the alj lever, the administrative law judge, which gives at&t tremendous power in the ongoing dialogue they have with the doj with any negotiations. if you look at the release at&t put out, there is something that said this is a nation of laws. if this goes to doj, at&t feels good about their chances. alix: you were antitrust lawyer for years. time warner has one cable station and they stole that -- they sold that. david: this is an antitrust issue that should be in front of the department of justice. they have a license that gives the fcc some jurisdiction. walter: all of these past deals have been antitrust issues. luckily for the government, they have had this ability to rely on the fcc.

they cannot formally -- if they cannot formally do that this time, they have to make a good case with who they know is going to win. david: it is not just the presidential candidates who weighed in. capitol hill also weighed in pretty strongly. they were a little burned about -- the deal of contest nbc deal with comcast? megan: this is something that they feel with the american people is concentrated power, particularly when you talk about things that affect every day people. it is interesting that donald trump is saying his administration is going to block it. we have not seen reaction to the deal or in the market with that mostly because in the polls most people do not think he will win. tying into this broader theme that the system is rigged against people, with mergers like this, things that he said about other parts of the economy -- that is interesting territory for a presidential candidate to

be in. walter, at the heart of this is nbc universal and comcast, how regulators were not happy about that. synergies were not where at&t could make the deal go through, what assurances are theirs to the doj to make it happen? walter: if i am watching sunday ticket on my phone, i am not getting charged data on my bundle, so maybe i can watch it be oh -- maybe i can watch hbo. if the government wants to give back zero ratings, fine. david: what they have asked for typically is for other content to provide access to the system. preferentialere access to the wireless system? walter: that is the issue with nbc. in part with some of the controversy over hulu, you can

have behavioral remedies that even if it is resolved in some type of complaint, the government's hope would be that the behavior remedy is that we do not go through this process in the first place. they would look for more structural concessions and any consent that they have with the doj. alix: thank you very much. megan murphy joining us, and walter piecyk. emma chandra is here with "first word news." , france,ice in calais have begun dismantling the migrant cap known as the jungle. at least 8000 migrants will be relocated elsewhere in france. earlier, police came under attack. california, angs, tour bus slammed into the back of a semi truck, killing 13 people and injuring 31.

it happened early in the morning when the bus was returning from a casino trip. republican political strategist karl rove does not believe donald trump can be elected president. he told fox news, "i do not see it happening." he says even if trump wins ohio and florida, it will not be enough. global news 24 hours a day, powered by more than 2600 journalists and analysts in more i am emmaountries, chandra. this is bloomberg. it is not just at&t and time warner we are keeping an eye on, there is a lot more news coming out this morning. front and center, rockwell collins and be aerospace. rockwell makes cut control systems, and the other company makes galleys and comfort items.

also, getting into the market in the u.s., china. this is the next step of china companies coming to the u.s. this is a bet on the u.s. housing market. also we have a deal in some trading areas. ameritrade and td bank are buying up parts of scott trade, combining two of the largest online brokers, paying to put billion anding 2.7 1.3 billion as well. thank you very much. coming up, shares of syngenta fly off with kim china. from new york, this is bloomberg. ♪

jon: from new york city, this is bloomberg. shares of syngenta are declining after kim china -- what does it mean for the 43 billion dollars takeover on the table? joining us is matt campbell. great to have you with us. talk us through what we have learned in the last couple of hours. matt: we have seen a hick up in the syngenta process. there appear to have been no -- there appeared to have been no concessions, which is unusual in a situation like this. there is a bit of a question mark hovering over this transaction. bloomberg news reported that can a isa -- that chem chin

anotherg a merger with company. i think investors are probably right to be cautious about this deal. at least for today, and going forward into we have more clarity. jon: there are three megadeals on the table in this space. table in this space. monsanto being another one of them. what does it mean for this deal? it looks like it could be held up. >> we are not sure. these things do tend to come in waves. antitrust regulators like to look at situations around competition and market access, to look at how a series of transactions will impact an entire industry. i do think regulators may want to have all of these deals moving forward before they rule on any of them, so to speak. we just do not know. this is an industry in huge

flux. questionsenormous both with the antitrust situation in europe and the united states, and they will look at great detail with every aspect before we go down the road. the epicenter of all of this is china. you bring up the deal with chemchina. with this m&a spree, the chinese companies in the last year or so -- how are they learning to navigate israel a tory issues in places like europe, and have a built up the expertise to navigate them ineffective way? matt: it is important to note there is a long way to go for chinese companies when they are doing global m&a. it is not anything like a level playing field. currency significant concerns in many countries. that popped up in germany with a company called extron. but for the most globalized

chinese companies, they are getting good at m&a. hourlybaba he -- for baba, there is a track record of deals around the world. that is a huge change from even a few years ago where successful chinese deals were enormously the exception. it also could drive up assets for asset prices. we have more competition if you are a big american company. you may have chinese competitors coming after you. great to campbell, have you with us. syngenta stocks, down about 7.5% on the session. coming up, a big week for global earnings. december on the table for a rate hike. most people think so. in global markets, futures positive.

euro that is marginally stronger. from new york, this is bloomberg. ♪

alix: this is "bloomberg daybreak." we had a time of speakers, and we will hear from four of them today, including m bullard and mr. dudley. dean served as a senior economist at the fed. thank you for joining us. you take a look at where fed fund futures are trading -- what more can be placed in when we hear from the speakers this week? dean: i do nothing we will see a lot more priced in this week. the data that comes out will be the determining factor and whether the fed moves in december.

the speakers will likely keep december in play, pointing to that as likely, but we will not know for sure until we see the next important parts. alix: it seems like the story is no longer december. it he comes what we see in 2017. the hawks may win short-term, but is the dovish call still there for 2017? dean: that is what we have been hearing from those in the middle of the committee as well as the dovish side. they want to move slowly. they will hike in december, they believe. they want to wait a while after that to do the next hike. whether they are able to do that will depend on the data as it comes out. the more hawkish, the moderate to hawkish members are concerned about a significant overshoot of full employment. the: i wanted to key in on dovish feeling for 2017. take a look at the bloomberg.

we thought the fed fund would look like two years ago for 2016, and what it is now for 2017. the yellow line is what we thought 2016 will look like. the green line is what we think 2017 will look like. the idea is that market expectations have re-rated so low, they are pricing in hikes for next year. i think that is what is happening, and i think the fed is ultimately going to have to push back against it somewhat. they think they will move faster than the market does. we will have to see. we are likely to see inflation moving up and the unemployment rate falling. alix: at one do you feel there is an overshoot? at what point are we on the hawkish side? through 4.5% and head to 4%, that is when the

concerns increase for even the more dovish members. stanley fischer, the vice chair, pointed out there is not much success in the past in the fed pushing up the unemployment rate a little bit. inflation too low and is too high, it has almost caused a recession. alix: is it that data point that will re-raised the market higher? dean: in my view, it is. it is a combination of two things. i think inflation is going to the fed's target next year. the core pc inflation moving up to 2%, and i believe the unemployment rate is heading down to 4%. that combination is likely to have the fed moving faster than they have been. alix: will that be enough for lyle brainard? over and over we see stanley fischer and janet yellen lead to the -- lean to the moderate to

hawkish cap. why will that change the game for lyle brainard? dean: i am not sure they will. they may have the sense from the picks upde if the fed the pace. those more moderate dubs, likely leadership, will become uncomfortable with the unemployment rate falling so low. alix: we wind up getting 4% unemployment, inflation moving higher. that re-rates the market for 2017. is the feds ability to have the market listen hindered? dean: i do not think so. three descents in the market press direction. i think the fed can guide, and those descents will not the rate

higher. alix: we get the first read of the third gdp. what is your estimate? for 2.5am looking percent, about in line with what the market is looking for. it is a rebound with what we have been seeing. we have several week quarters -- we have several weak quarters. inflation, lowe unemployment rate. maki.you, dean maki the chief economist joining us from stamford, in connecticut. david:'s other look at top -- now we are looking at top stories. my favorite, jonathan, is about at&t/timerole in the warner merger. you have not heard about the dinner at martha's vineyard that came before -- peter was rupert

murdoch's aid and many people thought he was going to take over. he was behind all this, getting randall stephenson together with time warner to talk about what is valuable, at a dier at martha's vineyard, at glenn hutchins' house. also, interestingly, gary ginsberg plays a prominent role. closet over to became a aide. it is all in sister was. jon: i am looking at governor carney in the united kingdom testifying to lawmakers tomorrow. he agreed that the actual full term would be eight years, to 2021. given the political pressure he has come under recently, with lawmakers there weighing in on his future, it will be interesting to see what he commits 32021. -- it will be interesting to see what he commits to through 2021.

alix: what kind of terminal with that create? we are nowhere near executing the final negotiations leaving the e.u., and we no longer have the head of the boe. jon: he was one of the most stable voices. only full of institution in the united kingdom. to take ae are going look at and discuss the time warner/at&t deal. will that deal see approval yeah care that is the big -- will that the lc approval? deal see approval? from new york, this is bloomberg. ♪

♪ alix: this is "bloomberg daybreak." it is 7:30 a.m. on wall street. here's what you need to know at this hour.

it was a dinner in martha's vineyard that sparked at&t's $85.4 billion acquisition of time warner. the merger is the biggest takeover announced so far this year. that same deal could face speeds bumps in washington as donald trump and hillary clinton raise antitrust concerns over the parent. kevin china missed a deadline to make concessions of its takeover of the herbicide and pesticide maker, raising concerns that approval may be delayed. that is what you need to know this hour. jonathan: a decent bit of cross the board. the dow almost up 10 points. in europe, some broad-based gains. 16 out of 19 industry groups are gaining in today's session. a decent upside on the price of the eurozone. giving us a stronger euro after four straight days of euro weakness. $1.09.e just south of

atding at 173 and crude $50.39, down 9/10 of 1%. breaking news now. alix: t-mobile earnings are coming out here. the estimates were 22 sets, but if it is, it looks like a fairly significant beat. looking at that full-year guidance and they raised it on the high-end and low-end and now expected to come in to work with 10.2-10 $.4 billion. high-end,r the continuing to have to spend a lot to get a lot of those customers. nonetheless we will go through these numbers for you as they trickle out. sees netstatement here adds at 3.7-3.9 million for the whole year. that is higher than previously expected. raisece raised and a full

as well. those are the figures you want to focus on. the company had total net adds of 2 million. continuing to add the subscribers. david: we will come back and talk about the t-mobile and the fit with the at&t deal. the lead british bank lobbyists had a piece of the observer. one of the main banks may pull out of london because of brexit. according to anthony brown, their hands are quivering over the relocate but. ton. bigger banks are expected to start the first quarter of next year. joining us now is tom keene. i didn't realize there was a real o relocate but. tonb. tom: the guys talk in the book about taking and such and i like the idea that it starts with

smaller banks away from those more visible banks. the question is will they move in entirety or just a small part of the business. winning to the some nation a small part of each business moving. david: how much is this signal of how much is this noise? tom: the passport is part of it, but the answer to the posturing is that is exactly what it is. no one knows where we will be in november. almost certainly from my weekend reading, no one knows whether brexit will be in the first quarter of next year. david: this is where the rubber meets the road. to makere a bank trying decisions about long-term investment and we will get back to you the next year, it is awfully difficult to make those. tom: that's an important distinction between new investment and existing investment.

don't that against london. i do not see london disappearing after you look at hundreds of hundreds of years of success. with that said, at the march, thanks may begin to move. david: you also have a lot of infrastructure investment that you would have to replicate somewhere else. tom: i saw one article and i can't remember it with the idea of let's go. and's back to the symbolism those messages that the send nott can to calm everyone down, but a send not to calm everyone down, but a plan for this long divorce. david: there is a section on how this affects mr. hammond's budget. 11% of total tax revenues in england come from the financial industry. tom: the only equivalency is switzerland and zurich where you have the mass dominance of two financiala huge

services impact for switzerland. it is way more than what we see within the united states. london is the pivot point. good morning to all watching in edinburgh, but it is a pivot point. david: as they come forward with their budget, there's a dilemma here because you might have to cut taxes on banks to keep of their. tom: where i would really go is over the weekend, and a lot of smart work. writeup in wonderful the telegraph on inflation dynamics. to me that will be much more front and center for the chancellor, the prime minister, and governor carney. the quality and character of a presumed move higher in inflation in the united kingdom and what they can do about it. david: especially with the pound. tom: at&t can bid for the united

kingdom. [laughter] david: in for a penny, in for a pound. thanks so much to tom keene. tune in from 7:00 a.m. to 10:00 a.m. every morning eastern time for bloomberg surveillance radio. alix: i want to highlight some key things coming out of t-mobile's earnings here. in particular, how many subscribers they are adding. net adds last quarter came in at 2 million. their full-year forecast is on the high end. the point of that is that we are showing t-mobile keeps adding users. the difficulty with verizon and at&t have been less successful and are pivoting more now to content. that is what we see with the at&t and time warner deal. jeff mccracken joining us. global m&are

team. make a distinction between the two mobile worlds we are seeing. on one hand and sprint and t-mobile on the other. jonathan: for the better part of job thate, the only t-mobile and sprint had were to donate subscribers. that changed in 2013 when t-mobile got its act together. for the last two and a half years, it has put up just a series of phenomenal results. it does not show any sign of letting up. it is no surprise that at&t and verizon continued increasing pressure and their core business is looking elsewhere. alix: you feel t-mobile and sprint can continue adding subscribers at the kind of growth they need or will they have to move and diversify more into global content? at&t and verizon have

75% of the industry subscribers and close to 100% of the industry's free cash flow. growing and sprint are at a phenomenal pace, but it's still a very small piece of industry overall. there's a long way to go. alix: jeff, the real question that came out of the deal was who is going to be the next? can't sprint survive without teaming up? jeff: i think it's going to be more about the content guys. you will see what is comcast going to do, what is just a coin to do -- disney going to do, just facebook or apple get involved? the reason at&t moved on this was that maybe google could get involved. they are one of the few people who could top and at&t bid. david: people are excited about two wonderful brands getting together and maknd it's

exciting. tell me how they can make more money off time warner more than they can. jeff: now they've got this extraordinary content. they have hbo and cnn and they own the rights to batman and superman. those two things together, they can just charge you more and make a lot more money because they have got the mobile device. david: you said the magic words -- charging more. that is what regulators are talking about. that's pricing power and regulators don't like that. jeff: we will find out a year from now whether this actually gets approved. everyone assumed the comcast figured they could get time warner and i got locked. at&t gotyears ago, lots trying to bite t-mobile. even though they are not

competitors that are merging together, it is just some of the biggest names. they can do lots of things at at&t. they can harm their rivals. they can say you cannot have time warner or you cannot carry your products on directv. alix: they probably have the promise no pricing power in order to get the regulators. idc that playing out? -- how do you see that playing out? i do not think they get any icing wer all. the distribution business improves how much they can get paid for content. i do not think they are actually competitive issues with the deal at all. it probably gets through, but it's coming out of really awkward time. at&t does not know who they will be dealing with at the doj or sec for the approval process on the steel. it makes analyzing it really difficult.

as you pointed out, you heard both sides say that they want stronger scrutiny in big deals like this. this is going to be the first deal presented to the new administration, so it's went to be a challenge. alix: you said there is not pricing power, so did they overpay? they are paying over 13 times for 2016 ebitda. did they overdo it? jonathan: the phenomenal thing about doing deals in an environment where financing costs are incredibly low is that you can make a deals like this pretty easily. and technically does not dilute down at&t shareholders even though they are paying a big price for the transaction. alix: thanks so much. jonathan and jeff mccracken, thanks very much. for more on those t-mobile earnings, tin and at 11:45 a.m. eastern.

legere joins "bloomberg markets." you will want to show up and watch that. we are 15 days away from the election. while the polls show a decisive clinton win, should we be trusting them? could we be headed for a brexit like surprise? that's next. this is bloomberg. ♪

emma: i'm here in the hewlett-packard enterprise green room. coming up in the next hour, tim ryan on the tight race in ohio. ♪ from new york city, this is "bloomberg daybreak." let's get a check in the markets

for you quickly. and s&psachs coming out 500 earnings estimates for 2016-2018 led by the strategists. they are cutting the estimates. the equity market stays high a bit with features across the board. euro weakness. $1.09.f manufacturing and services for the day. david: it is now 15 days away from the election and the race is down to the final stretch. hillary clinton is maintaining her lead with likely voters according to a tracking poll. she's up 12% over donald trump. for a closer look now at the polls and whether we can count on them, we turn to megan murphy. give us a sense. there is an overwhelming upon its a polls going one direction, but is it possible they are wrong? megan: it's always possible they

are wrong, but it's really clear that there is a directional shift that is different from the snafus we have seen when talking about brexit or the scottish referendum. this would be almost a historic cap or polling mistake. in terms of how we are polling this race, it's not just one state poll. it's a large number of polls showing very similar gaps and also showing her quite sensibly ahead and several of these key battleground states that are really going to make the difference. in florida in particular, donald really has no pathway outside of florida. polls have shifted in her favorite. ohio,see him trending in a key battleground state. david: there are polls that show him ahead. there is one that has been most accurate of the last few elections. should we be pay closer attention to that? megan: it is the wrong numbers

and it is the coalition behind him that even need to put together to get him to the white house. is a huge shift among women support and among male voters as well. less educated voters have been the bulwark of his campaign and we have seen a move away from them. those trends are likely to be exacerbated in the absence of another game changing type of event. he tried to reset the town this weekend. i'm not sure he can do that with the kind of speech we saw. david: that's another story -- the gettysburg address, so to speak. thanks, megan murphy. the polls are winning one direction, what could they be mistaken? in an election that has been anything but predictable, investors could be bracing themselves for the same in markets. we are reaching out to christina cooper. , how do you score this at this point in terms of the risk to market volatility

christina: we think the greatest risk is a trump win because a clinton win has been priced into the market. we want to make sure we are protecting our portfolios from the crisis. what we learned from the brexit mode is that quite often those being cold are not truthful, especially if they perceive their opinions to be a popular. david: people may not want to admit to a pollster they are supporting donald trump, but once ty go to the voting booothth, pulled the curtain and be surprised. christina: most investors think it will be a clinton when, so we n for thisinla political black swan events. david: how do you protect your portfolio? christina: to include gold in it because that is essentially a trump hedge because there is so

much uncertainty that goes along with a trump win. beyond that, you can be very selective and health care. pharmaceuticals and biotech would likely fare better in a trump presidency as opposed to a clinton presidency. you can go sector by sector. one play you can be confident will do well with either candidate as president's infrastructure. both have proposed big infrastructure spending because it seems to be support of both sides of the aisle. that is probably one of the few things that will get through congress. that is the big issue. what is congress's composition starting in 2017 and would they be supportive of either platforms? jonathan: the easiness of brexit was that if you told me leave, stay, i would tell you what would happen to the pound on those outcomes. what happens to the dollar on the likelihood of a trump

presidency? kristina: we would see the dollar appreciate. one is the assumption rightly or wrongly that chair janet yellen would resign quickly and someone would be appointed that would raise rates quickly. david: there's also about whether it would affect the current accounts. take the risk the other way. it is still a long shot with the possibility of a switch in the house. what would that mean for markets and how do you protect against that possibility? longshot, buts a we could see many more of secretary clinton's proposals actually be passed and that environment. i think that is one for you could see the stock market dropped in the near-term. perhaps not as visceral a reaction as brexit, but certainly some fears. protecting a portfolio from that downward volatility makes sense. jonathan: there's always the near term and the long term. you think they are going to do

something about health care. history tells us they do not do much about drug pricing. why will it be different this time around? kristina: that's a great point. in the near term, it's a very much voting machine. reocks may react, but thei may be very well nothing that changes. over the longer term, we have to take a wait-and-see approach. jonathan: great to have you with us. kristina cooper, head of investment strategies. up cant-time warner tie have an impact on the bond market. we will tell you why next. this is bloomberg. ♪

alix: this is "bloomberg daybreak." time now for all the charts. we are going to look at the at&t

and time warner deal and what that means for the bond market. thanks to lisa abramowicz for parsing the charts. at&t is the that largest nonfinancial u.s. corporate issuer in the country? it has issued about $80 billion so far. it's total that comes in at 120 billion. days she is how much more debt will at&t have to issue in order to get this deal done? how much debt will they actually have to issue? at concern is three levels above junk right now. does that wind up coming down? does its credit rating get cut? what would that do to the bond market? at&t has been notorious for having a ton of debt. it is right over here around

2015 that it was 3.8 over here d 2015 that it was 3.8 times. that was right around the time at&t bought directv. slowly that has been coming down. priority, butt a how does it stay low? does it wind up getting higher and by how much? at&t says it can keep it at 2.5 ebitda, but we do not know what those adjustments are. rating says that if it gets above three, that could force it to lower its credit rating. to put it a different way, this is at&t and time warner net debt. it is half the time when a purchase price. is is the 2018 estimated ebitda. it's a huge difference. it's not a total one-for-one. have to purchase price will be in equity. it's going to be in much better shape than if it had to raise all of it in cash. it is a stark difference and just shows how much debt it has and the fear if we get any kind

of credit downgrade. to then: if you go sterling debt market, there's a decent bid throughout much of the session so far. sterling debt for time warner has had quite a decent year. today down three pence on the pound. there is the potential for more debt and the potential for a downgrade on the other. we will bring in that chart just a moment because that is not it. coming up on this program, the polls are tight right now in ohio. what is hillary clinton doing to firm up a win? democratic congas been tim ryan on the strategy to win. after four days of weakness, this is bloomberg. ♪

♪ jonathan: good morning and

welcome to "bloomberg daybreak." i'm jonathan ferro alongside david westin and alix steel. the tone of the market is a bullish one as we kick off a fresh trading week. dow futures up 80 points, s&p futures up almost 10. in the fx market, four days of euro weakness. we are almost up a 10th of 1%, still south of a dollar nine cents. alix: it was a dinner at martha's vineyard that sparked at&t's $85.4 billion acquisition of time warner. the media and telecom merger is the biggest takeover announced so far this year. that same deal could face speed bumps in washington as both donald trump and hillary clinton raise antitrust concerns over that pairing. ta tumblingyngen after a missed deadline of a takeover of the swiss herbicide and pesticide maker, raising

concerns that approval may be delayed. that is what you need to know. david: let's go back to the deal that everyone is talking about, at&t's colossal deal to buy time warner. alex sherman joins us now with jennifer and laura keller a bloomberg news. i think it's only proper to turn to you first. bloomberg broke the story. what are the most important elements? and i'm my take on this not seen all much written on this yet is that i think the deal is sort of a damning critique of what is tv everywhere in the media industry, this idea that was coined seven years ago by comcast on a stage at a cable show in 2009. you can get tv on any device you want. that was the idea. you buy tv from comcast or time warner cable and you get the stuff not only on your tv but

your phone and tablet, and the house and out of the house, but it has not happened. here we are in 2016 and that still doesn't exist. my read on this is that at&t is buying time warner in part because they have thrown in the towel on this idea and it's too hard to get the content companies on the same page. why don't we just by time warner and then we can forcibly say we're going to push something where you can get directv in your home, video through at&t on your mobile devices, and at least we will have time warner content? enoughhere's good stuff with time warner the other companies will jump on board. david: you somehow how to open up that other content to disney content and 20 for century fox content. its: it strong enough on own that if the other ones don't come in, that somewhat of a compelling product. particularly if you get sunday ticket, which directv has. maybe can bundle of it. alix: that raises a great

point. pricing power for at&t -- regulators not going to like that. what is the probability that this can get through regulation? jennifer: is difficult to say. they will be able to appoint a new member at the department of justice. we have heard donald trump and hillary clinton voice opposition to the deal. they will try to put in people to view things the way they do. if you step back as an antitrust person, this is a vertical deal. of vertical deal is an easier deal to get through that horizontal deal, a deal between two classic competitors. regulators have to think about efficiencies. vertical deals usually come with a lot more efficiencies in the combination than a horizontal deal. vertical deals do not generally

temnd to be faced with efforts to block. jonathan: the markets say no. would you have not expected a decent bit in today's equity market off the back of a deal? we are nowhere near the offer price. surprising to me because there is precedent for a deal like this to go through. we will have to see once the market opens if that changes a little bit. comcast and nbc went through. there were conditions on that deal, but that is the closest parallel to this deal. comcast timee that warner did not go through. those two companies did not really compete against each other and regulators decided that overall comcast was too big. it had too much internet power. is there some precedent for this deal to be blocked? come up with your own idea that at&t will be too big or they have too much content.

a new regulatory body may make a new decision. i think it is possible. david: going back to the difference between vertical and horizontal, isn't that the difference? at&t and t-mobile -- didn't go through. you had time warner cable with comcast -- didn't go through. did but with a lot of restrictions. how many restrictions may be required here? jennifer: we could see that as a benchmark because it's an extremely similar deal. some of the same concerns will apply here that other content providers are going to be denied distribution and there are ways to discriminate against other in distribution and content. there was some dissatisfaction and the way that consent order played out. i see that as a benchmark. i suspect they're going to be efforts to make that more rigorous if they are in this situation. i would expect a consent order that is tougher than that

consent order. jonathan: big wall street banks writing big checks to this deal. walk us through it. laura: i'm sure they will be happy to hear that they think the deal will go through. this is a big deal for banks. america --ank of those two have signed on to finance a loan that is underpaying the steel. deal. it is $40 billion and jpmorgan itself has taken $25 billion back. it is the biggest the company has ever taken on in a single deal. this is something that banks really do believe in. we are looking at estimates of $110 million-100 $30 million that they will split just off the loan fees. jpmorgan will probably take some of the advisory fees as well. david: as of their issue of how long it takes and how the market

might change during that time? ultimately i would want to go to the capital markets and have bonds. laura: exactly, david. that is why it is called a bridge to bonds. they anticipate and hope that they will be able to sell this to investors eventually. because it is alone and there is a risk out there that the deal will not go through, then that is something we need to worry about. forhe time they get it investors, they may have a very different fear going on. we may not have this amazing credit bonanza we do right now depending on how long it takes. if we anticipate what this deal will be, you will have less of a risk on that. even so, you can look at the spread on the investment-grade debt now compared to what it may be a year from now if the deal takes that long to close. that may be something that they were not anticipated. david: many thanks to our

bloomberg team. alix: we do have some breaking news. a chinese company that is privately held is an airline services private company. it is buying a 25% stake in for $6.5 billion. it would reduce blackstone stake. this is another example of outbound m&a and china. it is not a full purchase, but a huge chunk now owned by this privately held chinese airline services company. i feel like that's a very significant thing we keep seeing with chinese companies. david: is not about to end either. alix: for or what is making headlines outside the business world, emma is here. destroying ae migrant camp known as the

jungle. they will be relocated elsewhere and france. many migrants stay there while trying to jump onto trucks into the u.k.. they came under attack. a plane headed to the libyan coast to monitor migrant traffic crash just after takeoff. all five crew members were killed. the plane was a two top metro liner. libya is the main point of departure for thousands of migrants to be taken to europe by boat. hillary clinton's campaign will spend an extra $1 million in two states she is unlikely to carry. she is leading with that i should push that the democrats can win the senate in missouri. a new poll has are leading donald trump 12 points. global news 24 hours a day powered by journalists and analysts in more than 120 countries, i am emma c

handra. alix: u.s. equities climbing higher today and t-mobile up after earnings. the number you need to know -- 815,000. that is the total number of monthly subscribers that t-mobile is able to add. full-year net adds could come in at 3.9 million/ they. the m&a story is continuing at any sector you look. take a look at this. rockwell collins off by 2%. they are buying aerospace for $6.4 billion at a 20% premium. cockpit control systems -- makes cockpit control systems. rockwell can pipe more data into airplanes and that is what they are betting on -- smart planes and jets moving forward. syngenta is down hard in europe.

may be inllion deal jeopardy due to the fact that it missed a deadline to make concessions to an eu watchdog. also be has some earnings trickling out here. it did beat q3 estimates, but it cut its full-year forecast due to sluggish conditions in america. that is what you need to know in that quarter. david: up next, democratic congressman tim ryan on the tight race in the key battleground state of ohio. this is bloomberg. ♪

david: this is bloomberg. with the election a couple weeks away, donald trump is leading in one critical back to -- battleground state and that is

ohio despite mr. trump falling in national polls. john kasich has withheld his support for his party's nominee, which could help hillary clinton in ohio. for more on how this could impact the election, we're joined now by congressman tim ryan. thank you very much for joining us today. perspective your here. are you surprised at all that mr. trump seems to hold a narrow lead over mrs. clinton? tim: well, the polls are moving and the last poll i saw had it at a dead heat. i think that's about right. she has made significant gains in the last couple weeks. people are starting to move in her camp. i think a lot of the education that's going on with a lot of our rank-and-file union members and watch trump is talking about are two different things.

she is talking about the future of ohio. donald trump is talking about the past not to mention all the personal stuff. you will continue to see the number moves in her favor. david: you know the voters of ohio very well. what is it about mr. trump that does appear to have some appeal in your state to ohioans? tim: in all fairness, i think he hit a couple of issues that really struck a chord here. the issue of trade and i think the economic inequality. the problem is that he has zero credibility on both of those issues and that is what people are learning now and that is why people are moving away from him and toward hillary. he talks about he is want to be the guy that takes on china for the workers in youngstown and he will take on mexico for the workers in akron. you find out he is outsourcing office products and shipping those back into the country, basically taking advantage and making money off the current system. he had no problem with it.

we have suit manufacturers here in ohio that would've been happy to have that investment if you were so concerned about that. you also have the issue of china and chinese steel. you find out that two out of his last three construction projects that he bought chinese steel and aluminum. we have seen a lot of politicians come through our community and try to peddle snake oil and they are starting to sniff that out. that is why the changes happening. chordginally struck a with the issues that were really important for people here, but he is not the guy to do it. we know you have got to redo the trade deals. and we a new trade model need someone who can sit in a chair for longer than 30 seconds and hammer out the details that are going to benefit the environment and working-class people in places like youngstown. people are recognizing that hillary clinton is the person to do that. david: tell us about the down ballot in your state. you have a vigorous fight over

the senate between mr. portland and mr. strickland. the polls indicate that mr. portland is still leading. where is that headed? tim: it's interesting because portman is leading, but the lead is narrowing. what you are seeing here is a tremendous get out the vote operation for hillary clinton. there are offices all over the staffers, tons of volunteers turning out for the democrats. rob portman got himself in a bit of a pickle because now he has alienated himself from trump. a lot of the trump people and i'm hearing this on the ground in the mahoning valley, they are not voting for portman. you will have a significant number of trump people who are not going to vote for portman. they basically think she betrayed their candidate. you will have increased

democratic turnout because of the ground operation. you will see probably a slight decrease in moderate republicans and general republicans because of the tenor and tone. they may not want to go to the polls. you will see the trunk people who will go to the polls and not vote for portman. this is a senate race you have got to keep your eye on because this could be a sleeper. david: one last question and i will travel across the aisle to another mr. ryan, paul ryan. there may be attempts to unseat him as speaker of the house during a lame-duck session. d put any credence in those reports? tim: i spent a lot of time trying to figure out the tea party caucus in the house of representatives and i've not been able to do it. i'm glad i am tim ryan and not paul ryan because i think it's a shame, but i think he's going to have a big fight on his hands. the trump super

ultraconservatives, the all right movement, i could see them wanted to take him out. they may happen. he had some trouble getting votes. john boehner told the end of his tenure had a lot more people peeling off. the systemic problem within the republican party has not changed. if anything it has gotten a lot worse. it will be interesting to see if they want to take them out. the bottom line is that i think we can pull this country together. we can agree on issues about rebuilding country, a big transportation bill, basic tax reform, investment in research and development, and these guys on the alt right would to take out anybody who could be constructive and that may end up being paul ryan. david: thank you very much for joining us. alix: coming up, the euro

halting a four-day run of losses against the dollar ahead of a full plate of fed speakers. this is bloomberg. ♪

alix: welcome to "bloomberg daybreak." the euro is ending four days of losses against the dollar. the euro-dollar still around seven-month lows. joining us now is the international head of affect strategy. speed ofwe seen thie rally in the dollar? explain it. >> it really comes on the back of expectations that the fed is likely to hike interest rates at the end of the year. the change of expectations with respect to the fed is most of the story. a lot of people are now thinking it's a little bit of a relief rally. many polls are showing that

hillary is more likely to win the november election. perhaps that is the rally too. we did have an indication from the ecb president last week that the quantitive easing program would not be ending abruptly. there could be a continuation. i think things are getting quite interesting and there's a standard argument. below that there is another argument and that is that people out there are really beginning to think that inflation could be on the rise in the u.s. i'm not sure that i buy it, but there is that school thought out there that u.s. yields could be on the rise. that would take the dollar higher. alix: how much more juice is there? this is short positions versus dollar short. in terms of net short, the market has been much more short that it is now. in terms of the dollar, we are nowhere near where we were back

in 2015. that suggests that there is a lot of juice and a stronger euro dollar pair. jane: position is part of the reason why we have not seen the euro-dollar move lower. isther or not the market inclined to really increase its dollar longs, it depends on the consensus of you about where the fed is going to go in 2017. most people are of the view that the fed will go in december, but how much is the fed going to go in 2017 and beyond? if you look at rate inflation and productivity, there are a number of factors that could suggest that the fed may could go once next year or not at all. there are people that are beginning to think that inflation is on the rise and that is the difference. if you think inflation could rise in the u.s., you're certainly likely to be a dollar buyer. i'm not that camp, at least not yet. jonathan: before we run away with the idea of a broad-based

dollar rally, let's not get too excited. let's not talk about the inflation story in the united states. talk about it in europe. there have been declining inflation expectations, a euro that weekend off the back of it as the ecb steps in. headline inflation improving, but the euro is weak or. er. the bass effects are in the favor of an upside surprise to headline inflation and yet the euro is weakening. how does that reconcile? jane: if we look at the relationship between the euro and the yield curve in europe and the dollar and the yield curve in the u.s., certainly this year there is a lot of evidence in previous years that the u.s. yield curve, which has been the overwhelming influence. if you go back to the beginning of last year and think about what the market was again in terms of fed interest rate

hikes, it would start hiking in june of last year and then hike progressively. if you compare that to the market thinking about the fed now, there is a significant adjustment. that is to push the u.s. yield curve down. that has had an overwhelming impact. you could say that it prevented from pushing their currencies down. jonathan: jane, great to have you with us. aroundo then in and $1.09. a big week on both sides of the atlantic. we break it down. from new york, this is bloomberg. ♪

jonathan: from new york city, this is "bloomberg daybreak." let's get a check of the markets. decent bid for global equity. positive nine points on the s&p

500. a decent rally across the continent in europe. we switch out the board quickly. this is the tone of the fx markets. four straight days of euro weakness. an upside surprise on the p.m.i. .09.g us back towards $1 the oil minister in iraq over the weekend basically suggesting the second largest producer of opec should be exempted from cut exemption. cutting alix: it was a dinner that sparked at&t's acquisition of time warner. the media and telecom merger is the biggest takeover announced so far this year. and that same deal could face speed bumps in washington. and speaking of mergers, shares item plunge after china missed

denials of the swiss pesticide maker. and sticking with the deal with time warner and at&t, we want to take a deeper look of what it winds up meaning for the debt market. it's a really good one. at&t is the biggest non-financial issuer in the united states as much as four times as the biggest issue for he junk bond market. the next closest is verizon. and then it goes way down to $65 billion for an highs per bush. what will happen to their credit rating? the s&p says if it's over three times, the ratings might have to downgrade the stock. the issue would be as it gets to junk. we're way before that, there are three ratings that has to go to

to get to that but nonetheless, the debt market is feeling the pinch. this is the spread for 2026 at&t bond versus the bloomberg index. how much more these companies have to pay over the 10-year yield. you can see that spike up there for at&t debt. that is up, much more than the overall index. so the stress is being felt in the individual bond market. so what does happen when a huge issuer of a market winds up getting downgraded? for that, i want to take a look at sprint. sprint back in 2015 was downgraded. it was the biggest u.s. junk issuer. it was already junk but nonetheless, its downgrade had a significant impact. you see a spike here in the bloomberg barclays high yield index. that raises the question. even if at&t is downgraded -- my computer -- the big question

becomes what happens if at&t is downgraded? does that have a bigger effect the overall corporate bond market? david: it was my fault. i was told to fix your terminal and i made it worse. could it lead to distortions in the market overall? we're joined by the head of high yield strategy of bank of merril where we hear what key banks are looking at. michael irgese not going to ask you about at&t specifically. but i do want to talk about the overall bond market. this is a very big issuance of debt in the capital market. can something this big have effects. > any time you have a huge mna transaction, off situation that effects bond markets and we've had situations that we've had effects. back in 2005, for example, when

ford and g.m. were downgraded into high yield, it was supposed to be a huge yield for the investment market as well as the high yield markets and at the end of the day, it didn't amount to much. having said that, what this most important thing is we get into 2017 is what's going to be the appetite for investors for mna transactions, for companies that need to acquire their growth and can't grow organically? and from my perspective, the macropicture and the reasons behind mna, acquiring grow versus growing organically becomes a bigger question. alix: you make a great point, michael. we had $66 billion worth of mna death issuance that was down from the second quarter. what does it mean for issuance? in the technical picture which seems to belie all fundamentals. >> that's a great question. as we look back over the last

several years, a third of all issuance over the last two years, 2014, 2015, was related to mna. this year, about 20% of issuance is related to mna. the first two quarters was anemic. you had substantially more. and q 4 will be lighter but going forward, we should expect a lighter calendar. we should expect lower mna because investors don't want issuers to lever up and grow their acquisition. we've seen it in the performance market that acquire other companies. they outperform in 2014. they've underperformed in 2015 and 2016. so the message is leer. he message is grow organically and don't do it through leveraging transactions when you do that together with the fact 259 so much of the markets have

pushed out mature this the picture looks less than it did. alix: wrapping up with your focus, if we get a steeper yield curve, what is the fallout in your world? >> well, i think my world is underappreciated in terms of the amount of rate risk, particularly in double b's. double b's are the most sensitive to rates. so they're most sensitive to changes in rates. 18, w back in september an 19 basis point caused a double d portion in long duration high dwreeled have a negative total return for the entire month from one move that lasted about a eek. it's something that we're very much worried about, particularly in longer duration papers. so double b's and long duration double b's and despite not

loving fundamentals, single b's and leverage loans. alix: michael, thanks so much. so great to talk to you. john? jonathan: european earning. a huge week from both sides of the atlantic delivering earnings and the banks over in europe delivering as well with barclays and deutsche bank coming on thursday. we're joined with chris wheeler. great to have you with us on the program. big question then. trading revenue on the bond side of things in the united states, massive. did they take market shares off deutsche bank? >> yes. i have to say that most peep probably beef they did. deutsche bank is distracted by a whole host of items that they had to deal with. the europeans will do better in 2016 because when the markets performed the way it did,

everybody in -- enjoy sommed benefit. but what we'll certainly see is u.s. banks have continued to take share and that's partly because the u.s. market has been so much better. cryer n:on how does john navigate because he can't give s an update until he knows the materials? >> i think i've said to you and your colleagues many times. for john t a small victory here and there. and he will be posting some small victories within the numbers. people expecting another loss. there's going to be a question mark about can they gather anything for additional litigations in the quarter. and also as we just touched on, you know, are they still getting revenue coming in the door where it's probably chatting about what's happening in the bank as soon as the morning meeting is over. david: compare and contrast barclays with deutsche bank. there's a perception that bark

cleese is further along in the -- barclays is further along. will we learn these announcements that will indicate hether that is right or not? >> it has two businesses in the form of this u.k. retail business. 20% business and bark collie -- barclay card. and to a degree, it's further along the line in trying to understand what tpts its investment bank to looks like. jonathan: further along the line in terms of what they want the bank to like for a start. so when get the numbers out on

thursday, we're going to talk about anybody taking market share off deutsche bank. shouldn't it be bark clays? -- barclays? >> certainly, i was there since 1988. and it ought to benefit from that. but i understand where he's coming from. but it does seem the strategy statement is what they've got would than what they like. jonathan: i want to ask the c.e.o. to the board today. george soros may be weighing an investment. we talked about a deutsche bank evaluation. what is the risk for them right

now? apart from the bank going out of business full stop? >> well, i suppose one has to think that while we've had a lot of stats about -- chats about deutsche bank, if it could get into trouble. the problem of that if something spills over into italy and for the government to come in. and i think that clearly, mr. lindsay is talking a lot of people to the e.c.b. about what the backstop would be to ensure this bank is still functioning going into the referendum in december after which i suspect we will see some smart investors coming in and thinking about financing the balance sheet. jonathan: we've seen this game a couple of times. you come in it looks like a depressed valuation and you get diluted. and then you get diluted again him. question to you is given the

valuations for european lenders so far, they are depressed. we have been rallied. what is left from what you look at? how much is it is just a valued rap? >> we've had 70 points in time when went thought the worst was over. if you want the corporate governance issue, the regulations issues being sold but for the european banks, they've still got a long way to go and a lot of this is down to the leverage and the lower risk waitings on the balance sheet and the u.s. banks. so it's a bit technical but it has enormous impact. david: chris, thanks so much for being with us today. coming up while europe stays focused on bank earnings, here in the united states, we are getting a slew of companies reporting. a preview of those next.

this is bloomberg. ♪

emma: here in the hewlett-packard greenroom, coming up, we'll be discussing at&t's time warner takeover with the chief market strategist. alix: it is a huge week for u.s. earnings this year. general motors, twitter announcing tomorrow. and then you have alphabet, amazon and apple are set to report on thursday. but the question is what's the growth process? take a look at e.a. go. it's everything that you can find when it comes to earnings

on the bloomberg here. overall sales growth, 2.6%. earnings growth, almost 3. this is supposed to be a grim quarter but we're seeing growth on both end of the equation. david: and it's about time. the earnings have not been growing for some time. so we'll see when that starts to turn around with 35% reporting in one week. jonathan: it's pretty significant as well. if you take the financials, we were celebrating a big quarter come trading revenue. this time last year, it was ugly, ugly because of what happened in china. we talked about paralyzing volatility. that's exactly what it was that time last year. the base effects is there. david: energy. something you know well. alix: sure. david: the comparison year over year has got to be fatal. alix: if we take a look at the chart that we have where earnings growth estimates are for 2017, over 13% growth for

2017. are we going to hit that? most people say no. so you've estimates need to come down for next year. is the market priced for that? even still, there's like 10% growth for next year? so they're still having higherest stats. david: it feels like every quarter. it's coming around the corner and then it doesn't come. alix: how much worse in 2017 needs to be? that's the question going forward. we haven't gotten that clarity. david: alphabet's out. twitter is out. general motors is out. it's going to be a quite a week. alix: time for bloomberg transfer. we're going to look at the top stories. you can find these on read go. ok, guys. i'm taking a look at what happens if u.k. banks move their operations. what's the technical issue that we see? the e.c.b. would need to

authorize this. they would need to improve some mathematical formulas that u.k. banks needs to do business and that's going to take a really long time. it's not that difficult. jonathan: it's very unlikely they're going to pull out any time soon. they argue people are going to start running away out of london t the beginning of 2017. this is the financial center that's been building up over centuries. the very idea that on the flip of a coin, a chief executive of a large u.s. bank is going to pull out their whole presence from london is ridiculous. have they started contingency plans? yes. they started that before the vote. have they intensified? absolutely. the idea that they pulled the trigger at the beginning of 2017, come on. alix: the e.c.b. is not set up to manage these expectations and look at the bank's formulas and say i approve them to. david: how much of this is the

negotiation with the bank sending a message saying teresa, pay attention with us. jonathan: it's 11% revenue. they know where they've got leverage. so that's some of the stories we're looking at on the bloomberg terminal. this hour and the -- emma chandra with your business flash. emma: t.d. aamer trade and dominion bank has agreed to buy scotttrade for $4 billion. they will get banking transactions as part of the deal. it is the largest stakeholder with more than $17 billion building a u.s. branch u.k. microsoft has better brace the sticker shock. the company is raising cloud services and business software by 22%. the reason, the big demrop the pound since the vote to leave the european union. microsoft consumer software won't be effected.

the s are falling to hit chem china. it missed the deadline to make conceptions. t is based in switzerland. that's your bloomberg business flash. jonathan: thank you. coming up, we speak to the chief arkets strategies david door roff. and alphabet and apple coming off. and over in europe, we have deutsche bank and barclays delivering numbers on thursday. and we count you down for the cash open. the tone of the market looks like this. futures up 91 on the dow. 0 points on the s&p 500. we're about 1% on the d.a.x. so euro, still south of $1.09. from new york, this is bloomberg. ♪

david: this is bloomberg. it is time for battle of the charts. we have lisa brown stepping for alex rodriquez. go first. you're the guest. >> i want to take a look at history. sprint this biggest issue for the high yield index in the u.s. and last year, in september, sprint was downgraded by two notches by moody's and it surprised markets. you can see here. the white line is yields on sprint bonds. you could see that that climbed rapidly and the blue line is the rest of the high yields market. it really followed sprint's bond yields going up. in other words, sprint in the biggest issuer of the high yields was the leading issuer in the high yield index. why do we care? look at at&t with more than $120 billion of debt. they are the biggest issuer in

the u.s. investment grade bond market. it could set them up to a downgrade leading to a surprise in the u.s. investment grade bond market. david: this is a great chart. in fairness right now, i think at&t say taking will not have to go into high yields. >> right. they would have to be downgraded by three notches. even a slight downgrade, this is $120 billion of debt. it could have some substantial ripple effects. david: alix, they think it's going to be 2.into next year. alix: right. anything over three times it and gets dicey. but the adjustments are what we don't know about it yet. >> it's not so clear. david: good. >> over in china, something really fascinating has been going on. it hasn't gotten a lot of

attention. these white bars here are capital outputs when it comes to china down by about $72 billion. a lot of money continuing to leave china. this yellow line here is dollar and the onshore u.n. rates and that has been increasing, meeting stronger dollar and you have weaker yawn. back -- yuan. back in january when we had all the turmoil in the market, now you have the weakest level for the u.n. since back in september of last year. and what's happening? nothing. the markets are totally calm. they're completely fine. you have stronger dollar, significantly weaker yuan. the offshore yuan fell to an all-time low. and that's a really interesting development in the market. is it sustainable or is it going to haunt us? david: and when you see those white bars, the big deal investing in hilton right now. does that add to it? i wonder how much of that is

acquisitions in the west. >> that's good outflows, right? it's not money leaving for payments. so it's a great point. you have to consider the status of those white bars. david: good bad outflows. love both charts. i like this one just because of the hillman investments. sorry, lisa. ok. thanks for follow the charts. jonathan: thanks, david. coming up, jeffrey's chief market strategist david zervos will be here. and alphabet, apple, coming up, the united states and europe, deutsche bank and barclays. and we look ahead next. from new york, this is bloomberg. ♪

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jonathan: a warm welcome to bloomberg daybreak. i'm jonathan ferro along with david westin and alix steel. futures of 96 points on the dow, 10 points on the s&p 500. thank stocks up in europe for the fifth straight day. south fx market, the euro of one dollar and nine cents -- 1.09 dollars. the iraqi oil minister would like an exemption from reduction cuts. alix: it is the biggest takeover announced this year. billion dollar acquisition of time warner has wall street banks writing some of their biggest checks to write the deal. chemchina missed a deadline to make concessions over 43 theion-dollar takeover over pesticide maker, raising concerns that the approval may

be delayed. a huge week for u.s. earnings. 35% of the s&p reporting earnings. goldman sachs siding earnings -- lower estimates over earnings concerns. david: let's get back to that big story, the at&t purchasing time warner. what is it mean for other content companies like time warner? zervos andis david chris marangi. caucus, you're a shareholder, how do you feel? \ >> we are very happy. off aol, timeun warner cable, the publishing business, the entertainment business getting sold. david: you are very happy because it was a 36% premium over what time warner was trading. how would you feel is an at&t shareholder? >> less enthusiastic. i think this is strategic.

let's talk about the price versus where we are trading. we are 28 minutes with the cash $88.16. the b market, why? >> the treasures are looking at two different things. the time to close with a gay year they hope. over the weekend was a lots of things in washington lining up against the steel. the probability is not much better than 70%, but i think it will close. it kind of goes with all the political uncertainty out there. this is going to end up banging around the department of justice for a while. optimisticaybe being considering how long these take. eight seems like both sides of the political spectrum came out somewhat negative towards this over the weekend.

theoes feed antiestablishment, anti-wall street, anti-big corporate rhetoric that is been dominating the election. alix: chris, where you confident the deal will get done? >> there shouldn't be issues. it depends on if the fcc gets a crack at this. the fcc will take a more aggressive stance than the department of justice. shouldn't the anti-competitive issues that wayt be addressed with some like the comcast deal. importants is an point. the antitrust division is charged with antitrust laws. fcc is a much broader standards. is it in the public info -- interest? >> i think that's exactly right and the point on the fcc is important. the doj is a much stronger hand

and a much more complicated hand if it gets involved. >> they are very professional. they will judge on its merit. jonathan: what does this say about regulators currently? chemchina and syngenta have not come forward with concessions early enough, we will look at them. monsanto has an offer on the table. near on that deal either. why is this happening globally it seems in a big way? pushere is a general against bigness. it is hard to overcome that ms. situation. also with theoric time warner deal is who will be next? where you see that rhetoric going? >> disney is 150 billion equity cap company. this probably only one buyer,

which is apple. i think you will see further consolidation in the content arena. there are going to be smaller deals. amc,ree radicals, discovery. after this deal, assuming it gets through, you have four kingdoms. everything else is going to get turned around, including cbs viacom which is in the midst of its own potential merger. >> i think it's going to be the backlash. it is the bigness you talk about , it happens in jobs, what happens in consolidating to back offices, middle offices, organizations. people think about those things and they are put at the hot points in this election and they

are put the hot points in europe. jonathan: let's talk about other business, debt. in a market today with sterling debt down 3/10 on the pounds trading in the u.k., that's indicative of their market saying one, we may get more debt. my question he you is going forward, these companies have had this beautiful backdrop of very cheap darling costs, will that be there? wayn europe and felt that if you listen to mario draghi. he was in no rush to move and certainly quelled this talk of taper and things that people have been nervous about that led to a rise in yields in europe over the past month or so. as far as the u.s. goes, we can talk about that at length. the december rate hike odds are there. doesn't seem like janet is

interested in moving rates a lot. she is this concept of the high-pressure economy, running things hot. for guys like at&t, that sounds like music. for rateectations height increases are so low in 2017. last year we saw a record m&a driven by the low absolute cost of borrowing. that will change anytime soon. while the central banks around the world are giving away money, corporate buyers are taking advantage. david: i have an unfair question to illustrate the point. you're a major shareholder in time warner. you will have a fair amount of the new company. i won't ask you literally if you hold on. but figuratively as a have investor, do you hold onto that or sell it? >> we will evaluate the price of

the time it compare with the prospect. there may be better opportunities. one of the rationales that at&t has given is it diversifies them and their revenue stream and makes them less capital-intensive. that is true but i can achieve that were fully on myself. isn't it really the story to the can't find a growth on their own? >> it's possible. jeff dukas was there for the awol merger. he saw that didn't work because the executioner strategy. the prospect aren't great going forwards let's take the money and run. jonathan: you've got a very different view. >> i wouldn't agree with that necessarily. jonathan: quite clearly if you're on the other side of the trade as a time warner shareholder, if you look at this from at&t's respective, this

isn't a good deal at all. >> the world is definitely changing. it is going to be painful. maybe at&t helps time warner along. jonathan: you sit around a table and you don't only fishes, it's you. zervosarangi and david -- chris marangi, thank you very much. >> british prime minister is looking at the role in shaping brexit strategy. been warnings there could be a confrontational crisis if may does involve u.k. nations in talks to leave the european union. the top hillary clinton ally donated to a political candidate whose husband is the fbi investigated the

e-mail scandal. mccabe is the wife of andrew mccabe, the deputy director of the fbi. a spokesman for the governor says it was only -- the goal was only to get joe elected. elected. hillary clinton's campaign is pending at her $1 million in two states she is unlikely to carry. can helpves the extra party with senate and government races in indiana and missouri. an abc news poll has clinton leading trump by 12 bits. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm emma chandra, this is bloomberg. futures stillity moving higher this morning although s&p futures at the highs of the session. s&p still down in october. the third down month in a row.

keep your eye on oil prices. can equities hold up? we are keeping our eyes on t-mobile was -- who had a killer quarter. it raised full-year subscriber growth and doubt forecasts. continuing outbound m&a from china. uribe service -- airline service buying 34% in blackstone stake in chilton -- hilton. continuing that theme of china companies also buying, general work stock down by 3% paying about $543 a share. that is china ocean wide. outbound chinese m&a buying u.s. companies making a pet on u.s. housing. throws aming up, iraq

wrench into the opec agreement. third of s&p 500 companies will reduce earnings this week. will we see some surprises -- release earnings this week. will we see some surprises? ♪

jonathan: this is bloomberg daybreak. breaking news on that deal between at&t and time warner. the at&t ceo speaking on a webcast saying by any definition this is a vertical merger. deal with time warner does not eliminate any competitors. the conflict can be addressed by a regulatory conditions. the market though, time warner is trading lower.

that is not nearly off the price. -- offer price. david: those conditions could affect the value of the deal. jonathan: quite clearly there is a political split between the price and where time warner is trading. at&t down by 2.61%. let's get up to speed on commodities with alix. alix: we are putting the oil future focus of it 1%. the question is what will opec do? increasing their production targets and putting pressure on saudi arabia. russia is the latest to do it. they just issued its optimistic 2000 35.o saying they could is over 11 million barrels of oil. their pessimistic conservative forecast was down to about 9 million barrels of oil a day

meaning that if you are iraq or russia or libya, you talk of the amount of production you can ofduce 2 -- before any kind -- so any kind of freeze cut helps you. joining us is scott bauer of training advances. it's not just russia, but iraq saying they want exemptions. they want to produce over 5 million barrels a day. what is the downside risk? i really think there is very limited upside. the downside is in the near term about 46 or so. with iraq and russia coming out, your eye ron -- iran on the other side trying to rally the countries in opec buying them to really jump on this -- behind them to really jump on this. the next opec meeting is not until november 30. there will be a lot of job earnings before that.

this projected or proposed cut is already priced in in the marketplace. there is very limited upside, but the downside is about 46 or so, almost 10% lower from where we are. alix: what if it is a freeze and not a cut? what is the potential for downside? are looking at 42 or 43. i don't think we get down there yet. the new norm even before this 45 toed cut was in that 50 range. i find it hard to break that 46 but i do think there is a very real possible we hit that 46. raising your production forecast will be the theme. thank you much, scott bauer. --h giants in focus, alf apple, alphabet and twitter all reporting earnings. this is bloomberg. ♪

♪ from new york city, this is bloomberg daybreak. -- st. louisome fed chairman at the moment commenting on the rate increase. if we look at the summary of recent economic progression -- projections. this just one rate hike and then we state of the next three years. low interest rates likely germane the norm for the next three years. they are flatter than the rest of the committee. we kind of nobody thinks about this. making projections out too far anyway, how will you make them. jonathan: have one hike in real estate of the next three years. a new regime, as at what he called it? that was mr. bullard. .arning season in full swing results from 35 of the s&p 500.

among the names reporting, some massive tech companies including alpha and alphabet. we get gm as well. staying with us is david zervos. cap on the upside is earnings growth. the floor is rates at near record lows. what gives? >> i certainly don't think the rape -- rates give. outlook --a publish bullish outlook. i think she is pointing to the employment data and saying hey, i was right. we've been adding more jobs than people forecast. wages aren't going up, inflation seems steady. i think she is par for the course. earning wise, maybe some surprises. the dollar isn't that big of an issue. it's flat after the big site from the end of the -- spike

from the end of the tape. maybe some surprises. jonathan: here is a question. let's say she runs the economy get that elusive inflation story because is allowed to run the economy hot. was that mean for companies? do they faced higher -- face higher costs and tighter margins? we may see a better multiple fine, but how to the companies operate in that environment? >> inflation is better for companies that can prepare for it and look for it. it's usually those that are a little more oblivious to what's going on that get hurt with an inflation tax than those were focused on it. the economic studies show inflation doesn't hurt those with wealth and access to financial market, it hurts those who don't have access. it is probably somewhat togressive tax cut in a way

get this somewhat higher inflation. alix: talk to me about next year. i've a chart that shows expectations for earning growth is 13%. even goldman sachs has cut their projection. what does david zervos see? guy.u know i am a macro i don't spend my time digging into the weeds. i think earnings growth is reasonably -- probably likely to be on the higher side only because i have a weaker dollar because ie world think the fed is going to act more like jim bullard is talking about. i think janet is in that camp as well. i think the strength of the we saw from off -- the end of the taper up to nearly 100 is something they want to avoid. they told her they want to avoid it. end is nice -- a nice tail for earnings.

that's how i think of it from a macro perspective. seeing thees really same likely prospects for growth that they -- are companies really seeing the same likely prospects for growth that they saw five years ago? i would say probably guess. the world economy feels a little healed. china is on a buying spree. the china story has gone away from and out low scare story -- outflow scare story to one that they are investing in the world which is good. s me hotsee what get and bothered. the election is still a risk if something turns negative. david: at&t this morning sees growth in buying time warner. is janet yellen really behind this deal? in the sensitive your company, what you do for growth, what did you buy something cheap -- sense that if you are a company, why -- what do you do for growth,

why don't you buy something cheap? ofas rates of the short end long and architected to stay lower for longer, the herbal rates to do a deal like this becomes lower and that is all we are seeing. we have seen that through this whole cycle that that is what brings people into the deals. the problem is we have not seen this filter to consumption as we hoped so companies are nervous about all of the investments they are making and consumers have been rightfully nervous and i think that goes back to the stimulus going more to market. jonathan: the conversation david and i had on friday was the opposite. with the ecb lending survey showing on -- using credit for restructuring, not investing. yes you spend on tech, if you want the efficiency, but when of these companies going to get optimistic about growth. they been waiting seven years for it. >> there is a lot of beating up

of policies going on today. from take the big picture 2010. we are 15 million new jobs, that is pretty good. you might think they are crappy jobs, but there is 50 million, something happened. are we overstaying are welcome with the qe? are we giving people stupid stuff of the end of the cycle? there is a real risk of that happening and maybe this is the one. exactly the last time the market sort of peak was the time warner aol deal. the fact is it works that way somebody riding it. is the market up opening as we kick off a frustrating week. futures of 101 on the dow.

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on the dow. futures up almost 11 points. the tone of the fx market, the euro with a bit of a bid, we are still down $1.09. manufacturing and services for the continent. oil rose after the iraqi minister said they would like to be exempt from cuts. think the open deal in doubt. 15 seconds into the cash open. let's get a alix steel. alix: we are seeing green across the screen for all major indices. this really echoes what we saw with the futures market but the s&p up by half a percent. oil down by about 1%. can the s&p sustain any gains if the oil starts rolling over? smart --r helping to

and without markets as well. we want to highlight earnings trickling out. up despite the -- cutting its outlooks. the stock inching out again. .imberly-clark off by 2% they were hurt by a pricing more wind comes to children and adult diapers. seeing growth about 2%. on the high-end babes in about 5%. riding it out was boise cascade off by 10%. this applies lumber products for builders. we have seen lower growth and single families and a downtrend in multi family unit. is boise cascade a warning on ?he housing industry today back to the big deal of the morning. at&t and time warner. this is one way you look at it. data track that

comes from bloomberg intelligence. you can see growth of over 150% all the way out to 2000 and one. the egg -- 2021. this is why verizon needed aol and yahoo!. the video percentage of mobile traffic climbing higher and this is how verizon and at&t are trying to pivot and extend their offerings to capture this growth. david: that is a great chart. it is exactly what this deal is about. to continue that conversation with what the deal is about. rich greenfield said the market has it all wrong. of play, not an offense of move saying if time warner and its management team are confident in the future of the media sector, they would not be selling now. the harsh reality is that the legacy cable network has been over earning for decades with

and on virtuous circle of pain about to begin. still with us is jeffrey's chief market strategist david zervos. now joining us is bloomberg's alex sherman. jeff is widely seen to be a shrewd businesses. -- businessman. is it no coincidence that he is a seller now? >> if you follow rich greenfield, he talked about this for years. i'm not saying he's wrong. to some degree the evidence is right there. the ratings for these cable networks consistently go down. the general trajectory is down much across the board. there is clearly pressure from hulu to getand content elsewhere from cheaper. time warner is a legacy media company to some degree. this was a great offer price,

way higher than the $85 per share offer. this is even beyond that. shareholders should to some degree say he did up the evidence in front of us. >> if at&t were here they would say wait a second, that's true for the turner, but this is got hpo and warner and those things are really valuable -- hbo and warner and those are valuable. >> i think we all believe that for a long time now and it feels is the next leg of that trade of the media consolidation. david: to be fair i do see this from both sides. at&t also bought directv 18 months ago and i thought mike white, the ceo directv did great job of selling at that price. i thought oh my god, this is a

declining satellite business here. do understand what at&t's general perspective is is that clearly people will be watching tv on their devices, it is moving slowly. tv everywhere is moving slowly with this concept of you by video for your tv and watch on this device. it was coined by jeff view kissing 2009, we haven't got there. jeff in 2009.k by at&t said it will force this to happen and everyone will follow us and i convince everyone to sign up for at&t wireless and charge higher fees because they are using all this mobile video on her service and if i can't, at least i force competition to respond instead of the other way around. jonathan: the elephant in the room is the banner that says time warner at the 87 handle. what is that tell you? >> the market season regulatory

risk on this deal and i think with reason. proxy is comcast buying nbc and that went through. you can't discount contest trying to pry time warner cable in that deal not going through. a lot of people thought that would go through and that is not a competitor buying another competitor it is not at&t and t-mobile which was rejected. in that deal you have to sort of figure out alright, i guess we can say comcast is going to have too much power over the internet, but you can see the rules starting to be stretched about why that deal didn't go through and i think people are looking at this one and thinking that regulators, particularly hillary clinton, may want to be tougher on that. donald trump said he would block the deal. the rules could change again here and regulate his to figure out a way to block the deal. like at&t can

selloff acids and whom, it makes the deal go through. what did they do to make sure they have pricing power but not enough to wind up hurting regulatory chances? >> they will have to rely on the condition. -- did all onle the table. all -- put it all on the table. >> there are a lot of lawmakers who think that they didn't go far enough. it is very difficult to make sure they don't have more onerous conditions. >> the political climate for this is awful. this is the worst time in the world to do something like this. premium on the merger going further that being put into stock price and probably, rightfully so. jonathan: did they really want

to make this deal happen a couple weeks before the election? >> i was told this was on par to go through next week. maybe our scoop accelerated it a little bit. this was in fact ready to go according to my sources for monday. i know other obligations talk to other people that said no, our scoop accelerated it and it was going to be postelection. the people i spoke to said you know what, this was on track to be announced and our scoop on thursday or wednesday only accelerated it a little bit. david: there were some reports that apple was sniffing around. might it have gotten accelerated in case someone was swooping in? >> i don't think so. apple can still bit at this point. there is a $1.7 billion reverse break fee. that is small for time warner. i suspect there is probably no dder. fitter -- bi

according to the people i spoke to our close to time warner, there'd expect anyone else. jonathan: alex sherman, thank you for joining us. shares of syngenta down the most in over a year after chemchina missed key deadlines to make concessions to eu watchdog. bloomberg newsy reporter eva. walk us through what we are seeing. >> what we learned was that something did not happen that we were expecting to see remedies go in on friday night and the companies did not do that and we are in a situation where we are waiting for a decision from the european commission by friday on whether they will clear the deal without conditions or open a longer extended probe. because ofes drop

the added uncertainty. if we see a longer probe, you may see a band. . this was something the market wasn't expecting. this one looked less problematic and might see this go to a phase two of a long investigation. jonathan: another complexity added to this. bloomberg reporting that sino chem and chemchina my get together. eu regulators are taking very deep looks at any competition it deals. they do see possible issues when you see if you are number of suppliers. those are things that are concerned about. chem deal doesn't have any affect on the eu process.

most deals in these concentrated industries and consolidated industries get a real thorough going over. that is the trend rather than what's happening in china. jonathan: coming up on this program, european bank earnings. we've seen monte de paschi aares pop as the bank shares new business plan. barclays and deutsche bank numbers dropped on thursday. from new york city, we are about 11 minutes into the session. stocks are up about one half of 1%. this is bloomberg. ♪

♪ >> this is bloomberg daybreak,

i'm emma chandra. meets witheff kerry ubs and cement power. , about 40the markets minutes in. the dow up over 100 points. a decent bit on the nasdaq as well. let's look at some of the movers. cross over to the nasdaq were abigail doolittle is standing by. >> we do have one m&a mover, pe aerospace.-be they will be bought for $8.8 billion. this represents a 22% premium increase from friday's close. is talking above the next generation of planes.

it is allowing them to juice revenue growth. rockwell collins has low single-digit growth and this will use them to double digits. really helping to create that growth in company is talking about. bestile on pace for its day in years after putting up huge third-quarter earnings. they are also saying that they have raised a full year at 3.9 million from 7 million and even on today's strength, this stock is trading at a big discount to its peers. back to you. jonathan: speaking of the weeks ahead, here is the week ahead for earnings. 35% of s&p 500 companies will be earnings made a big week for some of europe's biggest banks. october the seventh, barclays and deutsche bank release their quarterly numbers.

zervos is also with us. i want to begin over in frankfurt. we come up on friday and exactly this. the big question is whether deutsche bank lost significant market share on the fixed income trading side of things. what are they expecting? question. the we are looking at a probable decline in the fixed income trading revenue according to analysts. they are bit more analytic than they were two weeks ago. there will be certain amount of rita cross from the u.s. banks and difference of opinion among theysts -- read across from u.s. banks and difference of opinion among analysts. there is definitely a degree of pessimism. if you are retrenching or pulling out of businesses, may

be less than the staff and they are bound to lose some revenue. alix: which european bank will come out the strongest against the biggest desperate investment banks in the u.s.? -- against the big investment banks in the u.s.? >> each company will say themselves. will probably say something similar to barclays. the others might have their own opinions. who comes out on top depends on the situation therein. european engine recovers and strengthens deutsche bank, then yeah they could benefit. it could play into deutsche bank's hands or the could be a europewide slowdown that hurts them. i can't answer that just yet,

but neither can the banking analysts. looking at what's happening in europe you have banks like deutsche bank trading at a third and you are valuations at present opportunities. looking at the european lenders, what your thoughts right now? >> i'm not a big fan of europe and i haven't been. david: we have a problem with your might. try it again. >> can you hear me now? that last year we did it away from europe. we got very concerned about the ecb's commitment last december and that's when we shifted focus back to the u.s. and in this developed.y i'm not focused on europe. i was happy with what mario

draghi said last week but i just don't trust them. every time we see this run up and financials get a bit of a tail wind, it feels like someone comes out with a club and beat them on the head so i am not excited about this. david: do we expect the european relief. give them some or did it to make it on her own -- do they have to make it on their own? >> that's what we've seen from banks in europe. of seeingestion revenue eroded by the rates at the ecb. it is tougher to make money in lending at the moment. you got initial cost and compliance cost. -- they haveo slim to slim down that balance sheet. everyone wants to get into wealth management and expand the base. you've got to ask, are there

enough wealthy people out there to supply these units? we will have to see some winnowing down of business fields. it is not a supportive environment at the moment. even if you've got the yield curve. we have analysts saying it be a foolish time to go in with optimism and there's a lot of evidence to support that. it is a tough time for european banks. alix: only so much cost-cutting can get to that far. nicholas, thank you so much. david zervos, great to see you. always a pleasure. up at the top the next hour, it is bloomberg markets. vonnie quinn joins us. >> very interesting to listen to david zervos. maleyl talk with matt

who isn't quite as optimistic. iowans to the 30 year treasury in the u.s.. also speaking with john ledger in a later hour. what does he make of this idea that at&t might be rushing away from the wireless spectrum and what does it mean for their plans to merge? alix: always so exporting -- so outspoken and feisty. coming up it is the countdown to the u.s. elections. we are two weeks away until americans choose who will be the next president. latest all show hillary clinton with a lead over donald trump, but what could still go wrong for clinton? we look at that next. this is bloomberg.

♪ bloomberg, i'm david westin. 15 days until the election and a lot is at stake for both major parties including the house and senate. than is a 60% -- greater

60% chance of a democratic senate. what is this say about the election and how the top of the ticket is doing? we bring in making murphy one more time. in a nutshell, what could go wrong for hillary clinton and what could go right for donald trump? have done polling on this in terms of what kind of event could shift to this and you're looking at the type of major event you would need to turn this around for donald trump. something like a terrorist incident in the u.s. which would benefit him on a national security front or something of that level of unpredictability just because the polls have gotten so wide. hillary clinton will want to continue to press on her advantage and what he should be focused on is does he want to be embarrassed in this election? does he want to lose by historic proportions. he want to lose by historic proportions. i can tell you he does not. even really lacks an effective

ground game, he will be trying to get out the vote wherever you can. david: since 1952, we have had a shift in the house when you have an open election for president. what could possibly cause that sort of shift? >> we are seeing senate races and house races in play that we never would've expected to see in play at the start of this race. ,issouri, nevada, new hampshire indiana is in play. pennsylvania and north carolina. they could really tilt the balance of the senate. it is not just be trump effect. in some cases he is giving the ticket a bit of a boost among certain voters. each of these issues is playing out over different issues affecting the states, whether it is gay marriage and gender or issues in lgbt in north carolina . it will come down to state-by-state contest and it could be a truly seismic change in the u.s. if we see the senate and house tilt. david: megan murphy, thank you so much.

jonathan: hillary clinton, who will she be along side with? david: elizabeth warren and then michelle obama. that will be something to watch. jonathan: big earnings on both sides of the atlantic. tech earnings coming up in the united states. in the market, 26 minutes into the session, equities up across the board in the states. in the fx market we look at the --. with a marginal yields go higher to 175. bloomberg markets up next with vonnie quinn and mark barton. ♪

vonnie: it is thai fund a.m. in new york, 10:00 p.m. in hong kong. from new york, i am vonnie quinn. mark: from london, i am mark barton. welcome to "bloomberg markets."

vonnie: we are going to take you from new york to madrid and cover stories out of washington, russia, and the u.k. in the next hour. at&t has agreed to acquire time warner for $85 billion to the deal may be lucrative for the banks during the financing. regular three uncertainty could cloud this new partnership -- regulatory uncertainty could club this new partnership. mark: national chemical miss the deadline to make concessions to european merger watchdogs, another megamerger that may be in flux. vonnie: equities getting a boost from earnings to start the week and we talked to one equity strategist who says the market is becoming coiled for a big move. about 30 minutes into the monday trading session in the u.s. let's go straight to