daybreak." happy halloween. i'm alix steel, alongside david westin. jonathan ferro is off today. here is where we are trading at this hour. futures in the u.s. relatively flat. s&p futures off the highs of the session. in the currency market, it is all about monetary policy divergence. boe is, the fed, the seeing weakness in the euro and weakness in the found -- in the pound. you have yields coming down slightly, a little bit of buying at the long end of the curve. but it has been an ugly month from global bonds. crude is up 5%. david: here is what you need to know right now. a mega energy merger. its oil and gas services from baker and use --

from baker and hughes. and a week for central banks. the bank of japan, federal reserve, and bank of england are all meeting. in the spotlight, mark carney's future at the boe. this will be a statement week. we are eight days away from the u.s. election as hillary clinton allies are escalating attacks on fbi director james comey after he told congress he is reviewing a new batch of emails that reportedly came from secretary clinton's private server. now back to ge. alix: ge is merging its oil division with baker hughes. our guest joins us now from london. walk us through the specifics of the deal. >> the way you have to think about this, i hope it is not seeing anyone, we are lot of deals. some of them have not worked out. ge, it isppening at

taking over two thirds of the company. baker hughes gets one third. baker hughes gets the vice chairmanship. it should be noted that the ,hareholders get a cash payout $7.5 billion. if you look at the shares in premarket trading, at the moment it looks like the baker hughes shareholders are much happier than the ge shareholders. the ge shareholders are not doing badly either. release, jeffress ml saying that this transaction accelerates our capability to extend the digital framework to the oil and gas industry. will this be an oil services company, or at the end of the day will it be a technology company? >> it is going to be a little bit of both. ge brings in the software, baker hughes brings in the equipment,

marry those off, and hopefully there will be a stronger offering in terms of being able to provide the lead in the industry and offer you the full range of services. made: jeff immelt has no secret that this is a priority move for general electric. et to backing his b things up a bit? >> he is thinking about what the industry looks like now versus when we were building it. what i it goes back to was saying moments earlier. he is marrying technology with heavy equipment, jamming them together, and hopefully they are offering -- alix: what happens to halliburton? schlumberger is a $35 million company. halliburton is left out of the cold. that deal with baker hughes ulnot go through. what option is on the table for the third oil services guy?

>> i am cautious about predicting anything in the way of mergers and acquisitions because the track record shows that it is difficult to deal. having said that, one of the obvious options is to do little add-on spared you do partnerships. that means you do not have to come up with a whole bunch of cash up front. you can do the strategic moves that do not necessarily transform the company. you also have to look at what baker hughes has been doing since the halliburton deal has fallen through, which is cutting costs way above expectations. and a lot of layoffs. the key never to look at -- look at the baker hughes number, they were a lot better than we were three or four months ago. it tells you something about the kind of environment that they are operating in. alix: stewart, thank you very much.

we will be following this story throughout the next three hours as well, looking at the regulatory angle as well. in other stories, it is a big week for central bank. the bank of japan, federal reserve, and bank of england are all meeting this week, but the big question mark has to do with mark carney's future with the boe or he did get some support over the weekend. saying that i think mark carney has done a tremendous job, a fantastic job during his tenure there. i think it was a brilliant appointment. joining us from london is kit juckes, societe general's global strategist. what does the market anticipating carney's potential announcement and staying on the boe? kit: friends of mark carney say that he s planning to announce his full term -- announce that

he is staying his full term. it is unlikely he will leave. some of the concerns on the back end of last week have faded away. it certainly has not provided any kind of short covering rally for sterling. it looks as if this is a runaway track. we all worry about the uncertainties created. alix: moving -- moving beyond mark carney's future, talk about the central bank in action or in action this week. it is widely expected that the bank of england -- that the bank of england will take your foot off the accelerator a little bit. the dollar has been strengthening. will that continue? kit: the driver of the dollar is what is happening at the other end of the yield curve. the grind higher in treasury. let's assume the data this week

-- we have the federal reserve meeting, and you have the labor market report on friday. by the time we come out of the decemberwe think a rate hike is a shoo-in in the u.s., it is not a big shift. but with the gradual rising u.s. yields, that is what is underpinning the dollar more than anything else. if we continue to see that, the path of least resistance will still be the stronger dollar. what happens with the other central banks is equally unsurprising, but it is about what theme bank of japan has done successfully, which is to japaneseort of cap the government bond yields. so 10-year yields are staying very low. that is giving that the -- i think that can continue. alix: goldman sachs offers a

different look. take at the u.s. trade-weighted dollar index. being we are back at 2015, near we saw in levels at the beginning of the year. financial conditions are tightening. does this change the monetary divergent thesis? kit: well, at some point, if we go much wouldr, certainly the fed be concerned if they got too much of a tightening in policy as a result of a stronger dollar. they would rain back in their expectations of what to do. i do not think this presents the rate rise in december, but what it does do, it reinforces the market believe, which is really want this year, one at most or two. but there is a consensus in the market now that this is not a

central bank that will go one for year. the stronger the dollar, the harder it is to argue for the second, third rate hike next year. at thef you take a look world implied probability of interest rates, there is nothing priced in for next year at the end of the day, which means the markets can no longer get any more dovish. does that mean that no matter what happens next year for the fed, the dollar will have to grind higher? kit: no, i think the dollar is helped i having so little placed in. what the dollar needs to -- the dollar needs to go a significantly higher from here, a sense that the economic cycle has almost the most interesting number out this week. it might be the unemployment rate in the u.s. in other words, it is not going down because the labor force is growing again.

i will get a little more maybestic that there are 2, 3, 4 years left in this economic cycle. i think that is almost more important for the dollar now than anything really shorter. david: kit juckes, societe generale, will be sticking with us. now let's get headlines outside the business world. news aboutatest hillary clinton has emails appears to having some impact. according to an abc washington post poll, she just holds a one point lead over donald trump nationwide. 46% to 45%. last week had her up with a 12 point lead. the poll was taken after james comey said that the fbi discovered files. italy has been rocked by its most powerful earthquake in two

months. buildings are affected. the quake was a magnitude 6.6, the strongest to hit italy and 36 years. canada and the european union has signed a free trade agreement that has been delayed by the small region of belgium. the canadian prime minister was in brussels. the eu had to overcome objections to the deal from the french-speaking will only a region. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries, i am emma chandra. this is bloomberg. alix: equity futures relatively flat, but there are some movements to the upside. will be buying the company, the implied price, 66.50 per share. that would be a premium over the price last week when rumors -- over last week when the rumors

trickled out. this was over a $30 billion deal. nike, on the flipside, down slightly premarket, cut to under four form -- to underperform. to $46 from $55. that is a 12% downside from friday's big oil is looking as to where that will bring oil low.s, at a one-month it is a diverting picture, much like what we saw friday. this is why. buylowered the neutral from from goldman sachs. saying basically there is no catalyst to drive the stock higher. we learned friday they would potentially write down 5 billion shares of oil. they see strong volume improvement for the company diverging. coming up, another dramatic turn in the u.s.

election. the fbi director said they are looking into new emails from the clinton server. emma chandra just told us about the abc poll, but things are beginning to tighten before the latest news. could it all be a game changer eight days before the vote? we will look at what we know, what we do not know, and how the markets are reacting next. this is bloomberg. ♪

alix: this is "bloomberg ."ybreak baker hughes and general electric are combining in a company that will have about $32 million worth of revenue. general electric oil and gas company merging with this new baker hughes. that should be accretive toge earnings. this will be a technology and

oil services company. ge saying this will be the best digital technology solutions for customer productivity. if you are a baker hughes shareholder, you're getting a $17.50 per share dividend. david: what was already an unpredictable election took another turn when the fbi informed congress that james -- the fbi found more emails relevant to the clinton -- still with us from societe generale, the global strategist there. marty, bring us up-to-date on what is going on with james comey and the reaction to his letter in congress. marty: it has been a crazy weekend and a crazy morning. frankly, no one really knows

what is going on beyond the statements of director komi. there has been cuts of press -- of director comey. until last night he did not have access. he had to get a subpoena in order to read them. he had not read them himself. marty: that is correct. according to reports, there are as many as 650,000 emails, and going through them will take beyond the election. this is going to be an open question. now we have to see how it plays out on election day. david: so these emails were come across on anthony weiner's computer? why would he have 650,000 emails from hillary clinton's server? marty: there is no indication all those emails came from the server. they did apparently get the metadata that showed that some of them did.

but we do not know how long anthony weiner has been using that laptop, maybe for 10 years. it is all a lot of speculation, very few facts, and that is why democrats and republicans are asking for more from director comey. alix: let's talk about the market reaction. bloombergk at the here, it is pretty typical. you get the blue line, gold, the soaring. the yen also down. the emerging markets stock, the white line, also down. is this what happens if trump wins? is this a precursor? >> probably. with the positions that we have been seeing since october, expectations of donald trump winning were fading, and a bunch of assets doing well as a result

of that had already happened friday afternoon. of what us a taste might happen. yeah, why not? alix: so when you take a look at what you are going to do with volatility over the next weekend half, how do you factor the october surprise in? kit: the markets are going to be choppy. what really will matter now will be the opinion polls. we have so little information. the question is how it affects the outcome of the election. we are all more cautious of opinion polls than we used to be, but we will take every single piece on board. we are concerned about an uncertain outcome are in my guess is that we are nervous and choppy rather more than rushing off from one side to the other crazily. we are going to be edgy all week. thed: marty, pick up on

opinion polls. there was an abc poll out over the weekend, a four-day rolling average that had friday in it as one of the days that indicated that a third of the people really say it raises questions in their minds about hillary clinton. is it too early to get a sense of how this plays out in the election? marty: i think it is. 10 percentage points in that poll is really remarkable. so, like this entire season, you have to take those polls with a tremendous grain of salt. i think it will be a couple of days before this all sorts out and pulling comes in from battleground states. but the bottom line is this will be a tight election. it was before this revelation, it will be after. tuesday night is going to be a nailbiter. alix: none of us are sleeping that night. the other big thing that has happened in the market ties in with the election uncertainty as well as a selloff in the global bond market. you can see this is a bloomberg

barclays total aggregate return index. you can see how much global debt has sold off in the last month. is this a start of a bear market, or is it the end of the bull market? kit: is not the end of the bull market. since ihe bull markets started working in 1984, this is the 10th time i could say it was the end of the bull market, the beginning of a bear market. to be gray of bit enough and say we are going back up. i think we have seen the lowest yields until the next recession. i think we have seen particularly with the lows in inflation expectations -- this is driven by a pickup, a small pickup in real yields and a slightly bigger pickup in inflation expectations. we are no longer moving toward the world where inflation is lower forever. we are getting a little bit of inflation back into the system, and that is probably healthy.

it is not a huge mover in yields. or do weit about oil, no longer have deflation? kit: we have an uptick in wage growth, so wage growth is trending higher. it is oil, crude, commodities. textbooks, it is tuition fees for everybody studying. we got from oil prices in particular is somewhere behind us. alix: that ties back to the election, right? if we get a hillary clinton presidency, what does that mean for yield? will it go back up? what happens on the down ballot? in the senate when it switches over, i wonder this news from the weekend, does it have more effect on the down ballots specifically rather than the presidential race?

>> that is probably the case because down ballot people say they can counterbalance a hillary clinton win, so republicans are taking advantage of that. it may play out more in the senate and the house than it does the potential race. schencker is our senior executive editor of international government and economics. kit juckes, thank you so much for being with us. societe generale global strategist in london. will investors race back to safety as the fbi renews its review of hillary clinton's emails? this is bloomberg. ♪

david: this is "bloomberg. this is when we take a look at top stories our viewers are reading on the bloomberg as well. you have a timely one. alix: i find it interesting that

this week the big news will be, will mark carney announce that he will stay through 2021, or will he resigned by 2018? if he resigns, he might say it is for personal reasons, but is it actually punisher -- is it actually pressure from the government? david: for whatever reason he decides to stay or go, the effects could be wide because he is the one after brexit that has been the common denominator has kept it together. alix: the government has been confusing. how are they interpreting if their stall work has been gone? ." e of "bloomberg daybreak we will be right back. ♪

i've spent my life planting a size-six, non-slip shoe into that door. on this side, i want my customers to relax and enjoy themselves. but these days it's phones before forks. they want wifi out here. but behind that door, i need a private connection for my business. wifi pro from comcast business. public wifi for your customers. private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. emma: it is 11:30 a.m. in london. this is what you need to know this hour.

deal oferger would be a $32 billion. they are looking to bolster isrations and a conference scheduled. the bank of japan and federal reserve and bank of england are all meeting. in the spotlight, mark carney's future is overshadowing. the financial times reports he is ready to serve a full eight-year term and will make a statement this week we are eight days away from the u.s. election hillary clinton's allies are escalating attacks on fbi director james comey. that is what you need to know. is where we trade before the the ftse is off by 4/10 of 1%.

features are relatively flat getting a little bit of steam. a the currency markets, it's modestly stronger dollar. you have euro dollar trading around a one-month low. monetary potential policy divergence. sterling is lower. yields are unchanged on the 10 year for the bond rout. is -- they could not reach a deal over the weekend. david: i am shocked and that's very surprising. the twists and turns are dominating the news cycle. when you get past the accusations, what might the election mean to the u.s. economy. matt miller says that when it comes to jobs, trade with mexico has helped u.s. workers more than it has hurt them. napster was neither the killer nor creator of employment its

enthusiasts and detractors say. matt winkler is with us now. specifica look at companies. -- tell us about the story in mexico. cementt's the largest maker in the americas. it's business is coming. the biggest single market is the united states. construction in the u.s. is also blooming. otherwise, they would not be booming. the u.s. is doing very well and set max is doing really well. it's coming for commercial real estate development. this came from your piece. explain exactly how it is

helping them do so well. you said production is up. there is the bart chart there. matt: what is going on right now is there is a lot of commercial development in the u.s. that uses cement. another way to look at things is there is a wonderful company called kansas city freight based in missouri. it has also been booming. because it transports stuff from mexico to the united states. sinceb roles are up 9% the recession ended. it's doing very well. jobs are up because of nafta in this case. so his business booming because of nafta. nafta made it much more efficient for u.s. companies and mexican companies to do business with each other. david: if mr. trump are sitting here, he would say that's all

fine and good, but if it wasn't a u.s. company we would have that same growth except we would have had u.s. employees at the cement. that except we didn't have company. it already existed and we are taking advantage of it. he talked about ford shifting reduction of the compact car to mexico. ist is missing in this story ford is keeping all of the employees that it has in michigan and they are making suvs and trucks, which are the most in demand part of the automobile market. a trump we do get presidency what happens then? : it probably comes very problematic for us and them. it's disruptive. american business it's hurt and jobs will be lost for sure.

nobody wins. david: let's take a look at jobs. you have a piece about construction workers. it has gone up in this country. and: construction workers inufacturing, they have been a steady upward rise since the end of the recession. if you look at manufacturing as one category, it's the biggest percent increase since harry s truman was president of the united states. that's kind of a sunning -- stunning marker of how things have gone. david: somehow that message is not getting through effectively. you are going to help with that. we want to talk about trade and other issues. piece that a news came out. jason kelly is here with us now to take us through beyond trade. you talk about black swans.

what the black swans you are concerned about with the election? jason: comp is always the big black swan on the landscape. one of the things in our reporters discovered is the other thing the market is talking about is what if there is a democratic sweep? that is the other thing that andd kind of rile people up throw some uncertainty into the market of hillary clinton wins and there is a democratic congress because there could be much more extreme things happening that investors may not like. alix: what asset classes we see the most volatility? jason: people are looking at financial services and pharmaceuticals. rhetorically, there is a lot of concern out there that financial services given both sides and especially the clinton side fueled by the

bernie sanders wing of the party have talked a lot about wall street and increasing regulation on financial service firms and also on drug pricing, that is something people have taken aim at. the question is where does the rhetoric the regulatory action? alix: this is a great chart on the bloomberg. as it moves higher, it means clinton is gaining in the polls. you can see that when ever clinton winds up gaining, you do see the stock take a hit. drug pricing thing. david: drugs appear to be a loser if hillary clinton wins. really is question again given everything it people are talking about rhetorically, it's been a big issue for clinton down to the speeches she gave after she left the obama

administration. you wonder about what happens with dodd-frank and what happens with something like carried interest. that is near and dear to the private equity firms like like stone and kkr and others. that is a tax loophole that could get closed. look at how that placed her given how much the banks of been in the crosshairs on both sides. david: both donald trump and hillary clinton have indicated they want to pull back from carried interest. much: there hasn't been the candidates agreed on. well oneet has not done either side. matt: the one thing they agree on is infrastructure. they have declared that they want to commit themselves to infrastructure. i want to say one thing about hillary clinton. she has been consistently somebody who is willing to work

with her opposition and her adversaries over and over again. anxietysure the markets is well-placed. pragmaticnerally been in the way she has gone about it. you've seen that in the wikileaks release of her so-called speeches or alleged speeches. republicans who worked with her in the senate will say the same thing, that they can work with her. presidencyinton which is essentially priced in at this point is probably ok with most investors. what they worry about is a democratic sweep. david: thanks so much to jason kelly and matt winkler. coming up, oil falls to a one-month low when talks failed to reach an agreement on output. ge agrees to combine its oil and

gas. we will take a look at that deal next. this is bloomberg. ♪

a: -- emma: steve ratner us to talk about the economy and the election. it's a mega energy deal. ge will combine its oil and gas business in a $32 billion deal. futures had a one-month low. there looking -- joined by -- walk us to the particulars of the deal.

off: ge did not like all weaker cues. ge did not want to buy all of baker hughes. tomonths ago, ge was willing spend $8 billion to take out the pieces it could get. ge is in the oil field services. they are not much of a player. ge is not how they run. in the jet engine space or transportation, they are 1, 2, 3. control of aot company that will be third behind halliburton. >> i think it moves to second. be 35.t will you put money in this business and you look at what it's going to be. do you want? dan: i like being a baker hughes shareholder. alix: today you do. baker hughes has gone

from 42 63 or four. it's a good deal for them, unbelievably good. david: is this a bet oil prices going up? does this make sense of oil prices don't go up? dan: everyone is going broke. everybody is going broke at $50 oil. it only question is how fast everybody knows these prices are unsustainable and at some point they have to turn around and they will. this is a bet for ge to get into the game and buy a down and dirty oil service company. baker hughes is that old school kind of thing. ge is very much the digital new seismic imaging thing on how you do spacing and wells. they make for a heck of an organization.

dan: this is an opportunity. it's not 30 something a barrel anymore. they can cut a lot of gems. as the cost creeps up, then they can make money. they have wanted to be in this business for a long time. you wind up having they are satisfied with their market share. what will this new baker hughes be? : it will have a lot more penetration in that down and dirty well areas. they have great client relations. they really didn't have the technology to take over a lot of the bigger contracts that are out there. with ge's imaging stuff i think they've got a great shot to do better and better. david: do they overlap or not overlap? it sounds like there's not much

overlap. which one is it? dan: i think this will go through in the way halliburton had trouble. i think it goes too easily. david: at cost efficiency? dan: they are going to be able to take out a billion in their oilfield business. i think this is going to get approved by regulators. themave a big tree with alix:. are they going to have to sell any assets to get the deal done it? sale is fine. jeff: it's not because regulators manned. down the road, they never wanted to own. they will probably sell those things off eventually. it may be because they don't want to own some of them. alix: they are basically going to sell the assets they didn't

want. david: if you're running halliburton, this is not good for you. what do you do? jeff: i think they'll go after someone in the five to 10 range. companies that are bigger than what ge was that are smaller than acre hughes that halliburton can go after. : there might be another move like that. alix: do you like this new baker hughes? dan: if i was trading the stock, i would be out here. it's such a tremendous run. enormous by win ge only wanted a piece of it? as ahave done very well shareholder. i would take the money and run with it at this point. alix: it's up 1% on the deal. you would not have expected that. jeff: this october has been incredible. thisook at the at&t deal,

may be the biggest month in history. this might be the busiest month in terms of global m&a. the companies are still moving to spend money, not knowing who the next president is. .avid: we have centurylink jeff: that's another consolidation in the telecom space. alix: i don't let you go. we've got some crazy earnings from exxon and chevron on friday. exxon might have to write down 5 billion euros of oil. can you talk about the divergence we are seeing? dan: this is going to be the november surprise. i think there's going to be a monster deal coming by november 30. toss inthe saudis will the barrels they have to to make the deal work. they are ready to do it. they're looking to get some help from somebody.

they will throw it in all themselves. i think in general now is the time to start getting into some oil companies. by the end of the year we're going to see a rally. alix: what's the best way to play it? dan: take your favorite oil company. they are all going to be winners. watch the sure to markets today at noon. the ge oiljoined by and gas ceo. now for other stories. this is him a chandra. theirsony has cut forecast by 10%. has an impairment on the sale of its battery business. for boeingts deal will be finalized soon. 111 have agreed to buy

aircraft from airbus. sincere the first license 1977. stores that sell handbags are slashing their line up for the holidays. luxury retailers are introducing far fewer handbags this year. barney's rolled back 41%. that's putting pressure on handbag makers and may lead to mergers. that may -- this is bloomberg. david: coming up, treasuries are set for their biggest tumble in 20 months. that's next on off the charts. this is bloomberg. ♪

alix: it is the upside to the global bond rout arid the ecb has more bonds that it can buy.

here are charts and help to the story. this one is showing is in that bond flows over 12 months. in terms of up and inflows, the outflows are the blue bars in the inflows are the orange bars. the red line is not flows net flows are down over -800 alien euros. -- billion euros. the idea is now because there is so much selling going on, ecb has that any more bonds to buy. they may have 580 billion euros of lawns of -- bonds global. are 1.7 trillion euros they could not touch. that really helps ease pressure on mario draghi to change any framework for their bond buying program.

these charts get into the details. the green line is what it is right now. the white line is where it was. the red line is the deposit limit of -40 basis points. the ecb can't i anything below the red line. in august, they could not buy anything shorter than seven or you eight -- eight years out. they increase what they could i by about two or three years. that's a big number when it comes to germany. this is the german five-year here. this is a negative rate of 40 basis points. @pthat means they get more to. all three charts are telling the same story. david: i want to point out specifically one bond as well done.

this has to do with portugal. of all the places you might not have looked for bond strength, it's in portugal. this is in read go for yourself. it was expected there would be a downgrade. that did not happen. there bonds are up a half a percent. the u.k. bonds were down 4%. germany was down over 2%. of all the places to look, portugal is doing well in their bonds. alix: you are going to see more inflows in the german then you had before. there was always some kind of political risk around portugal. muche not going to have as buying. it's not enough to wash out. david: apart from the so-called bond rout, there is a structural

reason why there is money that needs to go to hans. retirees are looking for yield. it limits how far down the value of bonds can go. alix: it's a fascinating sea change in the market. we are talking about thoptions the ecb had. they could change how they value it. they could go to what a company is issuing. all these crazy things we're going to favor. david: now they are everywhere. alix: is that crazy? steve ratnerour, joins us to discuss the u.s. election and what it means for the market. this is bloomberg.

,l david: welcome to bloomberg

daybreak on this monday. i am david westin. it is actually halloween. jonathan ferro is off today. we want to check the markets. you can see both the dow and the s&p are up slightly in premarket trading. they were down earlier in the day. the ftse is down almost half percent of the dax is down 2.6%. -- .2%. the euro is flat pretty much. we have crude down because opec is not getting its act together. they cannot get a deal with non-opec suppliers. this is what you need to know. it's a mega energy merger. ge is combining with baker hughes. company will boost operations amid a slump in crude prices. a webcast is scheduled for 8:30 a.m.

we will speak with them later in the day. and boe of japan, fed, are meeting. they are going to serve a full eight-year term. mark carney will make a statement this week. we are eight days from the u.s. election. after only told congress he is reviewing a batch of e-mails that reportedly came from hillary clinton's private server. for more of the big deal of the isning, the oil division being merged with baker hughes. on the phone is a top-rated analyst for general electric. jeff, let's start with you. jeff: ge is going to on 62% of acre hughes. they are not buying all of it. i think there investors would

have crucified him if they had done that. there were a lot of pieces ge did not want to own. eight months or more ago, they hughesying to buy baker when it was in talks to sell to halliburton. the government blocked that deal. geer hughes is a seller and is willing to be an opportunistic buyer. havelike that oil prices stabilized and they will probably go up going forward. it's a good time to buy baker hughes. alix: you have a market perform on general electric and do you like this deal? >> i think it's a powerful combination for both companies and from a ge shareholder perspective, it accomplishes a lot of things. it gives them access to the bottom of the cycle to rise as an oil price overtime.

puttingers the company on the table are huge. $1.6 billion by 2020. compare that to the halliburton deal. of the talked about $2 billion. this is still a huge number. this does a lot of things for the future of that particular segment as they start thinking about exploiting additional oil fields. how do you get the wells to be more and more productive. i think it's compelling. ge puts some accretion on the table as well. management will control it. i think there are a lot of reasons for ge shareholders to applaud the deal. we will get more details in the a.m. ence call at 8:30 we will get a better chance of the multiples of the relative

valuation. alix: we do have some breaking news for you. team health will be bought by blackstone in a deal valued at $6 billion. team health is a health care outsourcing company. aat merger does include carryover for 30 days. the stock is delayed on opening the two that. david: i want to come back to these shareholders. they took a big position. they've been working closely. they wanted to see more deal discipline from the company. jeff: this should be a good example of deal discipline. ge could have bought all of baker hughes. the reporting was they were going to buy all of it there is some deal discipline. will anything be sold here because of regulator push back?

i do think anything will be sold because regular leaders are worried. ge will down the road get rid of and baker hughes assets sell them to halliburton or some of the other players in the space. does this tell you about the nature of this industry? is this ge thinking oil prices will go up? steve: i the gets a very clever deal if they don't put up cash they control is huge entitynd they can rearrange some pieces. oil services have in a tough sector. you have to believe in the long run oil prices are going up and that's the bet general electric is making. david: did you take seriously the statement the they are going to bring technology to bear in this area? steve: it has improve the productivity of really and everything goes on.

i would not honestly think the ge is single-handedly going to change the economics of the oil filled service does this -- oilfield service business. few years ago, we were reporting on ge. the story is they wanted to be an industrial company and next decade they wanted to be an oil services company. where do you see that going? >> i think the most important thing is they are exiting ge capital. we talked about that a couple of years ago. that's gone. media is gone. left,ou look at what's including oilfield services, that fits squarely into equipment and services and solutions that are very much down to a broad line. the question is picking the right industry in making sure about increasing or stabilizing oil prices and driving the cost of all of that

down. that is a key issue for them. david: no matter how you cut it, this is consolidation. how do you feel if you are a customer? are you worried prices will go up? jeff: i'm sure they are a little worried and i look at it from the ge per spec. they were 11th in the space. that's not how they operate. they are going to be second or third now going forward. the customers might be a little worried. there are oil rigs sitting doing nothing. we are a long way off from onshore. offshore has so much inventory. you're not going to see that rise for a long time. david: we see a backlog of

mergers. department of justice is going to deal with how they're going to plow through all of these mergers. steve: they are going to have a lot of work to do. i don't think this particular deal is going to be a major antitrust issue. privatene is taking a company. there is one big elephant in the room that the next justice department is going to have to deal with and that is going to be very complicated. you, rounding it out with do you expect any antitrust issues a regulatory delays? >> i think following on halliburton baker hughes, regulators are going to look closely at this. there are a lot of subcategories where these guys do overlap. i'm sure those will get a deep look. my view is there is nothing that should block this. alix: thank you so much.

we appreciate it. premarketare up 1% and baker hughes is up 7% premarket. we should note that the -- be sure to watch bloomberg markets today at 12:00 p.m. eastern. i will be interviewing the ceo of acre hughes. -- acre hughes. send me all your questions. this is what's making headlines. emma: hillary clinton's allies around up their attacks on james comey. reviewingose their files that may be related to an investigation of clinton's e-mails. harry reid said he may have broken the law by revealing it so close to an election. he suggested the fbi may have

damaging information about donald trump. italy has been rocked by its third powerful earthquake in two months. this was in a central mountainous region. it was a 6.6 earthquake. expanded the crackdown on news media in the wake of that failed coup. they prosecuted warrants for 12 other executives at the paper. they are confused -- accused of making -- helping a terrorist organization. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. more on that breaking news we brought you. blackstone is buying team health. that will be 4350 share. the total is $6 billion.

team health is not trading yet. blackstone is off by 4/10 of 1%. the deal is fully committed. it's easy to see how open the debt markets are. over in europe, big oil is off to a rough start. bp and shell are near a one-month low. they could not reach a deal with non-opec reducers over the weekend. they are not willing to freeze or cut production. the next meeting is november 30. we looking at some of the homebuilders. home depot and lowe's are lower today, downgraded. in a home owner survey, they found moderation in remodeling spending. third m it up with that and a deal, we are looking at level three shareholders getting 650 share.

there is a 42% premium. rumors of the deal started. about 10%.wn by will three is one of the largest providers for netflix and google. david: coming up, the world's largest advertising company repeats -- reports an increase in sales. we will look at how brags it may be affecting the company. this is bloomberg. ♪

david: shares are up after the company reported a jump in

third-quarter net sales. spending.fter it cut for more on the future of the company and what to expect, we are joined by martin sorrell. still with us is steve ratner. it's good to have you back on the program. it was the highlight from your point of view. martin: it's a very solid statement in a very solid third quarter. with --tinued strength which i think surprised many people against last year, blaming the election which i think is creating scripture to your own purpose. he u.k. has been good. have beenspain strong. asia-pacific, china we saw strength which we needed.

the first half of the year was weak. september was strong. india was very strong. australia and new zealand and japan, mature economies in asia. latin america was strong. we are up 7% in latin america. brazil, the olympics surprised people on the upside. afnd trica a middle east are probably disappointing, not a strong as we would like to see. there is disruption there in many respects. from a functional point of view, advertising and media are strong. public or stations -- relations strong. was datar part of it and management. overall, pretty good. the world is slow growth. it's not even goldilocks, it's

really too tepid. it's too cold. i would like to see 50 basis points. projections for next year worldwide is about four. we are in the early part of the forecasting cycle. next year will be very similar to this year. the rogue elephant is brags it -- brexit. i think brexit will have an impact next year than what we've seen so far. that has been my view all along. it must meet the u.k. economy will grow slower than we thought it was being part of europe. in the u.s., it's very difficult to predict. there are better experts on this than me. win, it'strump was to unlikely but still a

possibility, we would see some disruption in of short-term. said, it depends who the other four he selects are. david: we are to get as much as we can. on andmade a big push buying. look at the mix. how is that going compared to the rest of the business? martin: you have to look at it in the context of our 75 billion media books. depending on how you classify the market, about a third of the market. billingsbillion of our if i include triad, and acquisition we just made, retail sites are also program at it, just under 2 billion. we estimate the market in the

u.s. is about $16 billion. that's about an eight of the market. our share is on the lower side in comparison to what we see elsewhere. we have room to maneuver and it's a big growth area for us. that is our main platform, powered by software and platform. it is growing still around 20% a year. growth and seeing is we are going to do more in addressable tv. you were talking about at&t and time warner. is optimistic view on that it's about targeting advertising in a more effective way, tv advertising using data and content. that's where i think it will go. david: i did want to ask you, some people have said they are

worried about it because of the power it creates. martin: it depends. the biggest market power is google and facebook. they had 76% of digital. -- which our biggest is more than twice to the next group which will be fox news corp. are -- fox news corp.. third would be facebook. if cbs and viacom were to get together, that would be 1.7 billion. most of the traditional media is 1.7 5 billion. there is not much power. i think it depends on the way at&t and time warner goes. if they emphasize the this is a

new form of advertising or a different form of advertising time premium content and warner is a great source of content, it could be very powerful and helpful. if it's a mobile company or a telecom company with a media company that is worried about the traditional media, it's a different story. david: thank you so much. you are sticking with us. alix: it's a big week for those central banks. they are all deciding on monetary policy. should there be any surprise decisions on the horizon? this is bloomberg. ♪

alix: it is a huge week for central banks.

it has to do with mark carney's future at the boe. steve ratner is still with us. let's look at the biggest rest of the markets this week. steve: i think it would be if mark carney were to leave or step down. it appears he is going to stay on. a really capable centra banker. it's good to have him at the helm of these turbulent times. the criticism as he did too much too early when the economy didn't need it. what do you make of that argument? steve: it's a tough decision. boaty expected the brexit and i think you did the right thing. he had to put foam on the runway. you had to really cushion any possible blow. i think the inflation thing will work itself out. david: are we getting closer to

a world we don't hinge on every word coming from these central banks? where we are in a world governments are not acting in any way shape or form. they are essentially doing nothing with policy frozen. these are political considerations. central banks become the only thing in town in terms of managing macroeconomy. until that changes, we will hang on every word area -- word. alix: let's take a look at the bloomberg. it's a totally different world as we look at the 25 basis points. the blue line is the probability of a hike. states has different to do with inflation which puts mark carney in a conundrum. david: there' not much doubt there's going to be inflation in the u.k. steve: there's not much rate interest rates are going to have

to go up. i know we will talk some more about the fed here. the question is when and by how much. i think the emergence of inflation in the u.k. has changed the odds. alix: what is the risk of a monetary policy divergence? steve: you're always going to have the virgins. we're not going to raise rates this week. i think december is highly likely. the next year, we will see. alix: thank you very much for joining us. twist in oneother of the most unconventional presidential races in history. guidee your u.s. election to the market. this is bloomberg.

alix: welcome to "bloomberg daybreak." we are just an ho froa little ty upside.

they are up by 1/10 of 1%. the weakness is in europe with the ftse 100 off by 4/10 of 1%. the story in the fx market is still a relatively stronger dollar. the euro-dollar around a month alone. the pound continuing to be hurt. in the bond market, the bond route takes a pause. the 10 year yield off by one basis points. still a very modest move considering the downside we have seen in the last few weeks. watch equity futures to see if they can shake it off. opec yet again makes nothing happened over the weekend. david: we are now just eight days away from that big vote coming up. what was already an unpredictable election tech an unprecedented term over the weekend -- took an unprecedented term over the weekend when the fbi informed congress it will be investigating clinton over her server.

campaign praised the fbi while the clinton campaign took a different view. >> this is the single biggest scandal since watergate. we never thought we would say thank you to anthony weiner. >> it's not just strange, it is unprecedented and it's deeply troubling. >> it's just extremely puzzling. why would you release information that is so incomplete when you haven't even seen them i material yourself? david: joining us now is anthony and it just happens to be the one person who is pro-trump. one is decidedly pro-clinton. as a person who has been for trump, is this a good weekend for you? anthony: it does not get much better than that for this weekend. at the end of the day, there's obviously something there. we are all going to speculate on what it is. honestly i don't know. for the director to be making an announcement on that friday, i

don't think he's making an announcement and there's nothing there. that would probably be a sign of malfeasance. i will take him at his word that there's something seriously. david: when he testified before congress, he did give his word that if he found something he would reopen it. anthony: there has to be a threshold of seriousness for him to want to do that. i think something is there that crossed the line. we are going to learn that soon. steve: what they have seen is metadata, headers and e-mails suggesting that they were to and from the e-mail server. that is all he knows. basis, i think he had to say this is what we found. it is not clear that there is anything in the e-mails beyond the e-mails that have been read and released. anthony: there is already speculation from new york agents that are basically out there into the press saying that they

have information related to mrs. clinton's e-mails. it was a good weekend for us. if we can focus on the policies, you guys are talking about sluggish growth and the fed said centric global economy. mr. trump's policies will them the tide of globalization. is going to show why he is going to make a better president from supreme court policies, taxes, regulation. there is a whole host of things that he could put into place that could lead to tremendous growth for the world. david: i suspect there are a lot of viewers that would agree with you 100% and yet, both candidates seem to go back to these pyrotechnics on both sides. anthony: because it works. david: if it works, is this a sort of who is ever in the news the most loses? anthony: i don't necessarily

know if that is case, but there's definitely evidence going back to the election of 1800 that the ad hominem attack works. the reason why there were always been negative ads is that it works. i like policy. stephen i get along great even though we are on the other side of things. i think we should have a debate on policy. if we can really explain our ideas to the american people, we will win. david: let's go to policies and ideas. what about what anthony says that donald trump has come up with a plan that is basically progrowth. this hillary clinton support a plan that is progrowth? steve: the problem with donald trump's plan is that it would blow a massive hole in the deficit. we are talking about the $5.8 trillion in tax cuts over the next 10 years without any specificity of to how they will be paid for. hillary clinton would like to spend an extra trillion and a half dollars on critical needs like infrastructure to get the

economy going and match that with tax increases. with all due respect to my good friend anthony, i think the markets have voted. when you look at how the markets behave, even when the statement came out coming you look at how they behaved during the debate. the marketslear believe more strongly in what hillary clinton stands for the what donald trump stands for. anthony: listen, mr. trump is a disruptive personality and he has got a disruptive program. the notion of the $8 trillion blowing a hole in the deficit is really not true because you're not factoring in all the growth and all the payroll taxes that could come from that new employment. david: this is the dynamic scoring idea. anthony: it is and it isn't because it did happen and it did work in the 1980's. where steve and i will disagree is that if you look at her tax proposals, she claims that taxes sort ofal and the store

hard to grade of a way where you if you i security for six months and hold it for a year, this nonsense is going to slow down the capital change and regress growth and lead to more deflation globally. at the end of the day, the united states with one quarter of the world's gdp has to be the action of growth to solve the problems. the policies these guys have come up with is not doing it. david: last word. steve: we agree on solving the problems in growth. even if you believe in dynamic scoring, mr. trump's budget analysts only claim credit for a third of those dollars. you will still have a massive hole in the deficit and i think that is actually anti-growth. anthony: he gets the last word. david: you got many words. [laughter] david: thank you so much to steve. anthony will be staying with us. alix: thank you so much, david.

at what hasa look happened in the global bond market, there has been a toll on riskier issue is. take a look at argentine debt. they popped at 6% as investors fled sovereign bonds. at the same time, the country is looking to raise $4 billion to help fund several projects over the next for years. joining us now is clarissa, argentina's investment promotion secretary, talking to friends like black rock about investing. clarissa: thank you for inviting me. alix: if you look at what happens globally in terms of investor risk, they want to take on less risk. how do you go in and take a pitch to investors to take a look at argentina? clarissa: argentina is one of the countries that nowadays has more potential to bring investments. the bond market is different from the real sector and that we are trying to get people.

the bond market takes into account demand and supply and there has been a lot of supply. i think the itc sector is quite underdeveloped in argentina and that is where the potential lies in bringing it up to date to world standards. alix: argentina is back and see other a frontier market -- considered a frontier market for what is the biggest question investors bring to you? clarisa: what they are most worried about is continuity. they understand that there has been a change in the government and the government's approach to investors. what they are worried about is what is going to happen with the future governments? that is the biggest question. alix: inflation is still very high at 40%. argentina is still in a recession and there is weakened consumer demand. how do you sidestep those issues? clarisa: the thing is that we are coming from 12 years of

stagnation and not very good policies. nothing can be done overnight. the things done overnight are not sustainable. we have to look for a little more patience because we are going in the right direction with the right policies. the right policies, once you see it, you have to wait for the crops to grow. this is the same case. you have to let these policies get there affected fo. for that, you need time. alix: apple will not send the iphone there because it means iphones have to be assembled in argentina. what laws will be changed to attract foreign investment? clarisa: that is one of the issues. there are many of the issues that have to be changed. byare try to tackle them one one, but that's definitely very important in this sector. what the regulations are, what you do, what do you allow people to do.

our main aim is for convergence. alix: how quickly do you think that all can change? clarisa: the thing is when you're are talking about regulations coming you have to go to congress and you never know what the timing of congress is to discuss the laws and maybe change them and make modifications. we are trying at the same time that we are sending a law to congress at the end of this year. we are trying to set some decrease that are going to set up the rules going forward. alix: i started the segment talking about the 10 year yield in argentina up over 6%. comingenvision the money from investors as a stringent cost over the long-term? clarisa: it depends a lot on the returns. maybe the returns are so much higher because there is the huge disparity we have and what we

are doing and what is being done right now. there.urns are alix: returns will trump anything else. good luck on your roadshow today. isa, argentina secretary of investment promotions. ge agrees to combine its business with baker hughes. one analyst already predicting antitrust issues. we will take a closer look at the deal and get an update from the conference call next. this is bloomberg. ♪

emma: i'm here in the hewlett-packard green room. coming up soon, the ge ceo and

the baker hughes ceo. alix: back to our top story of ge agreeing to combine its oil and gas business with baker hughes. the investors call the story minutes ago and julie hyman joins us with the latest. antitrust chatter continuing to come with commentary. what are you hearing on the call? julie: nothing yet because they have not begun the questions yet. undoubtedly there will be some about antitrust and what the two parties will be doing to get regulatory approval. we have only been hearing for the leaders of the companies. ge was just talking about what they could gain access to as a result of this deal, what he calls the store. as a company, baker hughes will have access to not only its own in-house expertise on oil and gas but also services and deals

with some of its other companies. he also just talked about the synergies between the two companies. about $1.6 billion in savings by 2020 and talked about the deal adding four cents to ge's earnings per share in 2018 and eight cents by 2020. some of the commentary coming out so far undoubtedly there will be questions about antitrust. there will be questions about the timing of this deal. he did say that this was the right time and the appropriate time in the cycle to do this deal, because the two parties together will be stronger to whether the short-term difficulty in the oil market. a stronger, longer-term player wants difficulties are resolved. alix: julie, thank you very much. much more from you as the call goes on. be sure to watch "bluebird bloomberg markets" today. antitrust, front and center, david.

david: i love and try to us -- antitrust. if they scare mucci -- anthony scaramucci has written a book out today called "hopping out of the rabbit hole: how entrepreneurs turn failure to success." most important, congratulations. tell us why you wrote this book. anthony: i think it is super important for us to try to share our stories with people coming after us. to write that sanitize story of success that you often read in a magazine. i wanted to write something that was very real. we were on our knees in 2008 and thought we were going bankrupt in 2009. , thetatus consciousness abject nature of your personality working on you. i try to write a book where someone could pick it up and

read it if they are young entrepreneur or someone thinking about starting a business where they can get a real view of what's going on, not that i made it now, so let's sanitize my past and all the mistakes i made. david: timing is everything. you started a hedge fund just before the 2008 crisis. anthony: we were doing great in 2006 and 2007. first in the end of 2005, but then we went into a tailspin. we were down 22% in 2008 and have 5% reduction. we watched going from $4 million in capital to $200 million in capital. it would be easy to play conservative, but you want big. is it dangerous for entrepreneurs to go big when he maybe overextending? anthony: i think there is an ethicist. the messages of the book is to live without fear and to live your life in a way that you do what you want to do without fear that it's not going to work out.

in march of 2009, ben bernanke was how covering money and president obama said not to go to las vegas. by safed -- my staff said to go to las vegas. became last year and we had mayor bloomberg with you. it was a big event today, but it could've been are going away party. we had no idea. it was a binary fact. i tried to right in the book. it looks brilliant today, but it could've been another layer of failure for us. resist fearsage to -- how does that apply to the markets today as people are investing i right now? anthony: the growth globally has to worry everybody. the central bankers, why we haven't focused on them is that we have not been doing enough policy for major governments to stimulate growth. season endscampaign

on the side of mr. trump to boost growth in the united states and also with the world. if you're sitting in this current stasis, structured credit is working. high-yield dividend stocks seems to be doing well. becausetime for caution at some point if you cannot get the growth, no matter how much engineering you have, you will not see earnings. david: historically we are due for a recession in the next 18 months or two years no matter who the president is. they will have a tough time. anthony: we typically have a recession every seven to nine years, but i see this as more of a silly putty expansion. we see very low 2% growth. this would be the first presidential administration in eight years and no quarter over 3% growth. we did a revised print last week, but it's still not where we could of been if you look at the historical analysis. we are going to grow a little longer than people expect, the same way rates are going to stay

lower for longer. this is just a different environment we are all in. david: anthony, thank you so much for being here. by the way, his name is anthony not andrew as steve wynn called him in the book. anthony: what italian model names their kid andy? [laughter] david: time for other stories making headlines at this hour. here is emma with your bloomberg business/. flash. emma: three biggest ships of japan will create the world's largest box carrier. they have stepped up in turmoil in the sea cargo business. all of them predict they will lose money this year. iran has agreed to buy 111 aircraft's and almost the same number from knowing. boeing was granted a license to

sell jets to iraq for the first time since 1977. millennials push for coffee is setting a record. young adults are increasing their coffee consumption at a fast enough pace to make up for all the americans drinking less coffee. brazil is crop in leading to higher prices. that is your bloomberg business flash. worldwide suffered their biggest monthly selloff since may of 2013. more on that in battle of the charts. that is next. bloomberg.loomb ♪

david: this is bloomberg. i'm david weston. a big week for central banks . the federal reserve, bank of japan, all meeting.

discussing mark carney's future at the boe. this is "bloomberg daybreak." time now for battle of the charts. joining us is matt does look cool go up against alex steele. alix: i ask him for charts and i take his brain. let me make that disclaimer before we go. i'm looking at the zipper function and it's the market implied probability of a rate hike now versus where we were two years ago. this green light is where we are now, expecting rate hikes through the next three years. the yellow line is what the markets thought back in 2014 out through the next three years. you can see how much the curve is actually regraded between now and the next year. the markets only looking at something like 30 basis point moves. before we would see a huge jump, but nevertheless, the idea is that you have some much pessimism baked into the

market, the market is not expecting any more rate hikes. can the market price out any more rate hikes if the fed's dovish? that's actually dollar positive because the market cannot get more negative. david: it's not just expectation, but it's a pe. matt? matt: i brought something similar here actually. the biggest story recently has been the big selloff in global bond markets. the white line shows the 10 year treasury yield. if you look at the blue line, which shows investors expected average fund rate over the next 10 years, you can see that has come down a lot this year, too. if you consider that lower for longer and easier fed policies they did to expectations that little more now, if you subtract the two coming can see that treasuries are getting the cheapest they have been going back several years after accounting for this lower for

longer mentality. the whole expectations theory of interest rates and terms premiums coming up, a lot less risk premium baked into the market. david: maybe people are buying treasuries because they're getting that cheap. to great charts and i am voting for matt. matt.i'd vote for david: the fonts of all was the. more on the big energy deal of the day. ge combining its oil and gas business with baker hughes. the webcast is going on right now and we have the latest from it. this is bloomberg. ♪

♪

david: welcome to "bloomberg daybreak." it is halloween, also monday october 31. i'm here with alix steel. jonathan fair has the day off. we are edging higher and we have seen the footsie in the dax both down. the ftse down almost half a point. we will go down to other assets. the dollar strengthening against both the euro and the pounds. the 10 year yield is basically flat and opec does not seem to be getting its act together. alix: a mega energy merger. combine its oil and gas business with baker hughes. the companies are seeking to boost operations amid a global slump in the crude crisis. and big week for central banks. the bank of japan, federal reserve, and the bank of england all meeting this week, but

the big spotlight is mark kearney. full eight to do a year term and is making a statement this week. hillary clinton's allies are escalating attacks at fbi director james comey. this is after he told congress he is reviewing a new batch of e-mails reportedly coming from secretary clinton's private server. david: let's get back to that big deal of ge and baker hughes. jeff mccracken is here with us as well as jennifer read. bloomberg intelligence senior analyst grou. why don't you lay out the deal? jeff: this is ge being opportunistic. they want to be big in the oil services space and they are 10th and 11th and that is not the gui. in the transportation space, they are 1, 2, 3. this takes them to number two in the world.

they are going to be between halliburton in terms of the oil field service based. . they do not have to spend as much money. instead of $30 billion, it is cheaper. david: to see success, they will have to share the upside. jeff: it is unlikely they will go through regulatory scrutiny. this is it like how alert and baker hughes were number two and number three are coming together. they cannot find a way to make that deal work in their mind. alix: we are going to pivot to jennifer. that was a $37 billion deal. halliburton and baker hughes couldn't get it done. what's different about ige and baker hughes tie up? jennifer: in that deal, you saw horizontal competitors who had some areas that the department finds over 97% share,. now you see companies play in

the same area generally but are much more couple mastery when you dig in and get to those details. there might be a few areas of problematic overlap. compared toly small the entire deal side and the regulators will get in there and look at it. they are educated about this having not long ago finished off looking at halliburton and baker hughes. alix: they are allotting eight months of this. they think it will close in 2017. is that realistic considering the size of the company? jennifer: i would say it is. i might have said it's not because of the last two years, the agency is taking a lot mor ti to get through deals, especially deals in complex industries and where concessions might be made. what the parties are likely banking on is that the boj is up to speed and also knowing ge's business fairly well. that might move things along quickly. i think eight months is quite realistic. david: many big deals actually

don't succeed. normally it's because of culture. we have two very different cultures here. now we have joint ownership. ge is in the driver seat, but they don't own 100%. is that going to make the other cultures more difficult? jeff: i don't. ge is going to run the company. ge will have the majority of the board. ge is good at these kinds of things. people trust and rely on ge management. given a couple years, but i think ge will make it work. after going as low as $30, oil prices are heading back up. alix: when you take a look at how antitrust regulators will look at this deal, there is some overlap. the issue with halliburton and uses that the sellers were not good enough for the assets they want to sell. is that the case this time around? jennifer: my understanding with the halliburton and baker hughes

deal was that it was the package of assets the companies were willing to divest. regulators were not happy that they were fully place of competition when it comes to mergers. there's that they problematic antitrust issue. i believe it had more to do with the buyers as well, but a lot to do with what the parties were willing to sell. , you are talking about far fewer areas and lines that would need to be divested and other possible buyers out there. i think this is very different from the way and issues of the other deal. alix: we are listening to the call and will keep you updated. jeff mccracken and jennifer rie, thanks. be sure to watch "bloomberg markets" today at noon eastern. the oil and gas ceo will be joining me.

.hat is t mean for what does it mean for halliburton? i will be watching that throughout the rest of the day. the fed, and boe making announcements over the next couple days. joining us now is michael mcdonough. what you care about the most in the next 72 hours? michael: a whole lot of nothing . [laughter] it will be interesting to see what the boe end of the adjacent is, but in the u.k., did a lot better than expected. the bank of japan just made major changes. they don't know how that's going to go yet, so they're going to wait and see. we do have an election coming up

relatively soon. they're not going to do anything major before the election. the market is expecting anything , but they will be setting themselves up for december when they actually will move. alix: peter, how much more can the fed set themselves up for december? what more can actually do? peter: one, the employment cost index, which came out on friday, indicates there inflation objectives are moving toward 2%. to gdp of flight or was there and the unemployment levels down to where it should be. it is almost where i would say that percentage is probably too low and the probability of a hike in december is much higher. the question is -- does this put them on a path toward globaliz normalization? not toward rising rates because aggregate demand is weak. i think they will start in december. david: what does normalization look like?

what does 2017 look like in a normalized world? peter: they should probably raise two to three times. the rate should probably be 1.25% to 1.5% given where inflation is an inflation expectations. david: you come down on one side of the debate with the fomc. we do not want to kill the golden goose, but we have to worry about overshooting. peter: the issue with the golden goose is -- and i try to get this one line in every time i'm here, monetary policy is defense and fiscal policy is offense. the golddiggers has to be what's going on with the fiscal policy -- golden goose has to be what's going on with the fiscal policy. i think you just mentioned there's an election next week. what happens there and what goes on with the senate in the house and those dynamics. alix: let's back out trade and back at what we saw in terms of inventory. growth is really 1.4%.

what kind of overheating do you think the fed is going to want to see? michael: it's not great, but at least it's positive. that's to three rates, pretty normal. i think that is justified with what we are seeing. the data is trending in the right direction, but you are not going to be really confident if you are the fed to go more than two or three times next year. that's really what matters. if the fed moves in december, that's not really going to do anything to markets. what matters is how much the markets expect the fed is going to do next year. if the probability of two to three increases goes up significantly, that is what you need to move. alix: your looking at policy divergence and that will have ramifications. david: in the fx. alix: and across-the-board? michael: you would, but it's still pretty gradual. you have seen some pressure on the dollar, but i do not think

the expectation of two fed rate increases, especially the track record of not following through, is going to do too much to move markets. you'll need to see economic data improved dramatically. you will need to see the probability of multiple rate increases to have a significant impact on any asset market. the markets go too far in expecting the fed is going to tighten, it could have an adverse feedback loop. peter: complacency is far too high in the marketplace. you see that with a narrow ranges. the deal thisn morning with expectations that energy prices have actually boughttomed. i've not sure if i seen the evidence of that. we rallied recently but they did not take the highest out from june. there are too many people saying the status quo is all right and we are going to model forward. that is not my opinion.

fiscal policy is nowhere and that is a problem for the u.s. economy. alix: a catch 22 feet book feedback loop is what goldman sachs highlighted. take a look here. the idea is that as you have the dollar move, you have financial conditions tightening. are we at a repeat of what we that is making the fed hold off more than they want to? david: ask often as peter is in the december fight, if the fed sees it moving up, will they get nervous and backup? peter: the question is what is the dollar. against the euro, it has not moved at all. if you look at some the leading commodity currencies such as australia and canada, that is a sign of worry. that is not necessarily fed policy. that is the aggregate demand policy and they are still relatively weak. david: we want to thank right now michael madonna for being with us. peter is going to be staying

with us. tonight and for our coverage of the fed decision wednesday this week at 2:00 p.m. eastern time. for an update on news outside the business world, we go to emma with first were news. emma: news about hillary clinton's e-mails appears to be having some impact on her support. ,ccording to an abc news poll clinton holds a one point lead over donald trump nationwide. last week, the same poll had clinton with a 12 point lead. the poll was taken after fbi director james comey said the bureau had files that may be connected to clinton's e-mails as secretary of state. more than 50,000 people displaced by a series of powerful earthquakes. the latest was 6.6. it is an amount region still dealing with clicks from late last week. it destroyed a medieval tower.

in venezuela, the president met with the opposition party to diffuse political standoff. they've offered to mediate standoff between the two sides. they also want the release of what they call political prisoners. global news 24 hours a day powered by more than twice 600 journalists and analysts in more than 120 countries, i am emma chandra. alix: u.s. equity futures relatively flat across-the-board, but the s&p off the highs of the session as oil rolls over, off by over 1%. the s&p has been down for days in a row. the last two days, we saw yields starting to back up and money flowing into treasuries. that dynamic seeing a shakeout in the market. in terms of individual movers, i want to focus on lows. that stock up 5%. the good is that it had better results of 90% owned financial

arm of the company. the downside were weaker results in diamond offshore. you had some good side and some bad side with the market paying attention to the good part. is them ar. zimmer biomet did cut its expected revenue growth, hurting the stop today. by 3%, evenlth up though it cut its full-year 2017 forecast. fit toee the former prophet fall by single to high single digits. avid: your favorite, oil, his trading at a low as opec fails to agree on a freeze. you will speak to michael: on whether we will see a deal. this is bloomberg. ♪

alix: today we are putting oil as a future in focus, off i over 1%. this chart really tells the story. the disappointment has to do with the fact that opec and non-opec producers cannot get together and come to terms with a roadmap of how to cut production. this is why. these bars show the difference between the official opec estimates for individual countries versus what the countries actually measure their output to be themselves. venezuela thinks their output is 200,000 barrels a day more than what opec thinks. iraq thinks it is over 300,000 barrels a day more than what opec thinks. the reason why that is so key is why would venezuela or iraq want to cut or freeze at a level they don't believe in? and math has turned pivotal trying to come up with a legit agreement to freeze or cut

output. the time is ticking. they only have about four weeks to do that. let's turn to the trade. joining us now is allen met with, chief market strategist. with that in mind, how can any deal get done in the next four weeks? alan: the devil is always in the details here. we have to heard these cats and bring everybody together. these are somewhat independent countries. that is always a challenge when you have a cartel. the positives and negatives of having this group together. alix: they are also trying to get members like brazil concert . with the downside potential left in oil prices? alan: the price is still relatively positive considering the noise last week. crude oil is down two dollars. we stalled and traded between 50 and 52, so that target at a two dollar breakdown move to 48. let's see if that holds support.

underneath that is 46. the focus is on the dollar. that might help out crude oil. other narrative is that saudi arabia will have to get a deal done. damage theirant to credibility and they will do whatever they have to do. if that happens, what is the upside for prices? alan: your guests have been talking about how crude oil has not been taken up to june highs. that is the upside target. what you want to look at is that there are also some macro teams that are very positive. was 55rude oil target and we had gdp come out last week. we might have a positive earnings growth quarter in stocks. we're not have that in a while. some positive things that can be supportive of a crude market. alix: alan, great to talk to you. more on what that means for opec. we will be joined by opec's

general secretary himself to see what the policy may be. stay with us. this is bloomberg. ♪

david: this is bloomberg. back to our top story of the day, a mega ur energy -- energy merger. gen baker hughes make a deal with $30 billion. julie hyman joins us with the latest. we have been talking about antitrust issue and i understand that has come up on the call. julie: they've not gotten any direct questions about antitrust. one of the analysts got to it and passing. will be heading the combined company says we have done work on that and we feel confident going forward, but that was it, so only a brief allusion at this point.

it seems like the analysts are not concerned enough to make it, the questioning -- top of the questioning interestingly enough. some of the questions have been around the savings that will be coming out of this deal, the cost benefits to the two companies. there that express confidence about decreasing costs and some code locations of baker hughes and ge's oil and gas operations. i'm going to send it back to you guys. david: that is julie hyman listening on that all-important investor call. alix: joining us now is that opec secretary-general. thank you very much for joining us. opec talks have been front and center for the past few weeks and the next four. realistically, what is the percentage that we will get a cut from opec november 30? >> thank you very much for having me. if you will recall, on the 20th of september, opec took an

all-inclusive decision to restore stability to the markets and all are member countries agreed to the algiers according to limit production levels to arrange a 32.5-33 million barrels a day. we remain committed to the importation of this accord. alix: what does committed been? you give a production number for that? the market seems that everyone wants to back out. you give a production number foriraq and libya now want to sm exempt. no, the decision in algiers was an all-inclusive one. all 14 member countries agreed to this accord. in addition, it was agreed to form this high level quality of technical experts to work out

and except will framework for the implementation of this accord. ld its first meeting in the end and we still have a month before november 30, so we are on course. in the markety was that iraq sees itself producing more oil than opec itself is iraq producing. they do not want to cut or freeze. they want to produce more. you think that is wrong? mohammed: no, i do not think you have got the right information. theral days ago i met with minister of oil of iraq. that was together with his prime minister and the president himself. i got a firm commitment from the

highest quarters in baghdad that they are committed to the implementation of the algiers accord. i do not know where you' getting your information from. alix: they are trying to prove to reporters that they are actually producing 4.7 million barrels a day. they are going on what some are considering a charm offensive. would you be ok if iraq froze at that level? from time to time, our member countries do have some differences with secondary sources. as you know, opec has adopted to use six different secondary analysis andts decision-making. because of communication difficulties, sometimes member countries do have significant data asns doing their well as the data being churned out by the secretary sources.

-- secondary sources. iraq is one and have taken the right steps to resolve this with secondary sources. the issue they have is not what opec, but it is with the source reporting data. in baghdadssured me that they are making progress with the secondary sources. do not forget that some parts of iraq are still inaccessible because of the difficulties they are facing. alix: so how much do you want iraq to cut production? mohammed: iraq has committed itself at the highest level in baghdad to me that they would join whatever consensus that the rest of opec member countries will agree on november 30 in order to restore stability to the market. alix: can you give me a framework for that? house it really going to work? are you going to take a massive

cut and divided up between members who are going to be participating? as a going to work? -- how is it going to work? mohammad: is a work in progress. we spent the weekend in vienna working on scenarios and the latest data, including the september data. we deliberately fixed the next meeting november 25 in order to toe all the october data i update our database and reach a decision that will eventually be taken by the conference. alix: you can see why markets are confused. on the one hand, it seemed like lgiers would be a combine cut, but that he hear reports that nigeria will be exempt. that he hereby iraq wants to freeze. you understand why the market

skeptical of what the market is doing? mohammad: it was agreed by the that iran in algeria would be conveyed -- would be considerations in the framework in the limitation of the accord. there's nothing new in this. they are all signatories of the accord and are participating in the discussions we had here over the weekend. the issue of exemption does not arise. alix: you also spoke with non-opec producers like russia, brazil, mexico, oiman. how much do you want non-opec countries to cut? talksad at the weekend in vienna, are non-opec friends

are very open. we looked at the numbers for each of the member countries and we looked at the various thatrios, but don't forget this committee is not a decision-making committee. it's a committee of high-level experts that will that will evey advise the ministers so i think it's premature for me to state what exactly we are going to get from non-opec. alix: if they don't cut does opec still cut? >> they are all committed. the countries include the ones that attend the meetings here over the weekend. they have made commitments to join in opec to take in the appropriate supply decisions on november 30. alix: i have heard russia is not going to cut. maybe they will freeze. brazil was just observing.

kazakhstan is actually going to raise output next year. are you saying those reports are wrong? all three of those countries are willing to cut production? >> at the end of the day we are interested in the next supply cut. the issue of whether to freeze -- at the end of the day by the november 30 conference we're going to look at the next supply cut to the market from each member country. this is what we are going to inform the market. we remain confident that our non-opec friends would also contribute in this regard. alix: i understand what you're saying. it's the overall net supply. it seems hard to see where that is coming from except for saudi arabia. are they actually going to do that? you we are all

committed to this. november 30 we are optimistic that we are going to get the required supply cut that will go a long way and rebalance this market to bring the rebalancing forward from the current projections. remained too low expensesong with the particularly on investments in the upstream. alix: you keep talking about commitments and you feel pretty confident in the commitment. what is that commitment? how do you trust them? it would be premature for us to put numbers on the table because discussions are ongoing. between the meetings of the

high-level committee we are going to have extensive also committed themselves to join. they have been playing a very important and construct the role in this consultation. alix: do you expect and opec and

non-opec cut or freeze to actually boost oil prices or stabilize them? >> the objective for us is to the issue of the talks which have risen to the highest levels in recent times. wedding down on prices. -- weighing down on prices. our common objective is to restore stability on a sustainable basis. alix: it's less about how far the price rallies and more about our commonstabilization? >> yes. no pricement we have target. thise committed to restore balance and minimize the volatility we have seen and

maintain this on a sustainable basis. as to be attract the lost investments that we have seen especially in the e&p. our industry is capital intensive. we need heavy investments on a continued basis which we have lost in the past two or three years. we have seen severe contraction in investment and some of the estimates are putting this contraction in the region of $1 trillion. this is threatening future supplies which is in the interest of producers not consumers. you said it russia has committed to join opec. russia could actually produce 4 million barrels a day more over the next few years. russia said they would not cut, they would only freeze.

would you be satisfied if russia froze their output at 11.1 million barrels a day? withhave personally met the minister just this monday in vienna. russiaassured me that will play its own role in the implementation of the algiers accord. in addition to that russia had been at the forefront of mobilizing other non-opec producers to play their part. we are quite satisfied with the leadership role that russia has been showing in this regard. alix: thank you for your time, mohammad barkindo joining us on the phone from vienna. towas really interesting hear the rhetoric coming out of opec that we don't hear from report in which is that everyone

has committed, we can't tell you what that commitment looks like but we all want to do it. david: he was very confident they would come up with a al and non-opec people would be in. he couldn't give you specifics. alix: he didn't seem to care whether it was a freeze or a cut. he said he was concerned about the overall supply picture. saudi arabia could still be on the hook for the lions share of when a cut actually happens. david: he is emphatic the price has been too low. we have to check on the market open. seven minutes into the trading session and we have equity indices grinding a bit higher. oil has continued to slide lower. oil prices are now off by 1.5%. the nasdaq up .2%. we have a lot of m&a as well.

there was much more in premarket. level three also being bought by centurylink. team health holdings being bought by blackstone. david: that's what we are going to talk about next. we will talk about baker hughes and ge. we will look at that deal and how it's going forward. that's next. this is bloomberg. ♪

>> this is bloomberg daybreak. i'm emma chandra. martin crackhead and ge oil and gas ceo. ♪

is bloomberg. i'm david westin. the chief strategist of quad group is still with us. joining us from his office in new york is robert shoemaker. and julie hyman has been listening to that conference call. of highlightse aside from the fact that antitrust was not discussed much. the company talking about the tax savings that even though ge 62 and a half percent of the combined entity they can combine for tax purposes 62 andt of the combined. one of the things on the call is that an eventual spinoff would be in theory possible. speaking of spinoff the company announced today that it's going

to be spinning off its water business as part of the valuation of the company during with bakerssions hughes they decided to spin off the water business which they said today accounts for 250 million to $300 million. david: let's go to robin shoemaker. i have only heard positives. give me some skepticism. >> i think this is a positive deal for baker hughes and ge. it's an outcome of the severe downturn we have been through. this is an opportunity for ge to acquire a business at a relatively low point in the business i call and further cut costs and deliver products and services to their customers at lower cost which is what we need in a low oil price environment. they are very excited about this. david: this is a troubled

business. there's a lot of excess capacity in oil services. >> there is excess capacity. that doesn't go away. they are going to be a low-cost provider of high tech solutions and that's the goal. eventually the oil markets will rebalance and the projection for 340 of the company is billion dollars in revenues versus a $24 billion run rate today. clearly they see upside. we would agree that we are at the very low point of the business cycle. alix: where does this leave halliburton? halliburton basically couldn't get this deal done because of antitrust concerns. there are no antitrust issues

between ge and baker hughes. they do not overlap in any significant way and this will get regulatory scrutiny but we think there are no antitrust issues here. for halliburton they just go forward with their current plan. baker hughes is now a larger company. it's a much stronger competitor to halliburton. that's also going to appeal to the antitrust regulators that they create a third oil service company that is much stronger than it was previously. david: we just heard robin talk about rebalancing. opec is trying to rebalance through a deal. do you think that is on the horizon? i do not. i'm very skeptical. when i hear all this talk i'm always mindful of george soros's

book on theory of free concernedy and to be of inflection points. i do not think this is an inflection point for the oil market. it sounds like technology is improving. we are going to get more supply and aggregate demand is still muddling through. i think there's going to be downward pressure on prices for longer than people think. a cut fromu do get opec it really only trims about 11% of global production from the market. there is still a lot of rebalancing to go. this really a bet that oil prices will be coming up? i think oil prices will gradually recover. from the $30have level to roughly the upper 40's and low 50's.

rebound there will be growth opportunities. right now the north american market is the one oil services market that is in recovery mode. internationally we are not in recovery yet. midink when oil reaches 50's we will see a much stronger demand for oil services internationally and a much broader global recovery in oil services. i want to thank peter for joining us today and robin shoemaker. we 15 minutes into the trading session. the nasdaq is up. the dow is relatively flat. we are joined by abigail doolittle at the nasdaq. abigail: we have some winners on the open after last week's decline. micron shares are up more than 2%.

bloomberg intelligence analysts saying this reflects a recent data report suggesting that nan pricing has increased across the board. if fixed income tech analyst is sing the recently pricing of the companies loan suggests the company will save $24 million per year through 2022. some bullish activity for micron. we may see the stock rise. this happened back in 2013 ahead of huge upside suggesting that we could see more upside the head for the shares of micron. alix: thank you, abigail doolittle. oil is falling today.

we will get a take on the market's take on our exclusive interview with mohammad barkindo, opec's secretary-general next. this is bloomberg. ♪

david: this is bloomberg. i'm david westin. coming up, bloomberg markets. what are we looking forward to today? vonnie: we will be speaking with a lot of souls today. we will start with andrew levin dartmouth economics professor. we will also be speaking to oppenheimer chief market strategist about the markets. we have wonderful interviews with the ge oil and gas and baker hughes ceo. we'll also go to iceland where there was a little bit of a surprise in the election. the pirates did not overturn

anything. africa be going to south where charges against the finance minister have been dropped. that's all coming up. alix: oil dropping down over 2%. the meeting concludes in vienna without clear commitments. we spoke with mohammad barkindo, opec secretary-general. he remains confident about getting a resolution. progress has been made and we still have about a month before the conference on november 30. we are on course. cohen joins us. >> as we head into the wind or -- winter we will get some tightening of the market. what we are seeing is a political process. a meeting of technical

people. there's another one planned at the end of november before the final opec meeting. this point saudi arabia has turned over a new leaf. he wants to have a victory at this point. he has given the license to conclude an agreement and to cut some production. some of that is normal. the end of the summer they normally reduce output and if they can package all of that along with what other countries are going to be doing naturally as a result of low prices that may be enough to ensure that shortstop reinitiated positions on the market and take it down further. david: it's not a big secret that saudi arabia really wants a deal here. >> for many of these countries

they are going to stay exactly where they are. every country has a road ahead of it. no political agreement is going to do that. what's important to understand is the balance of supply and demand in the market right now. it still becomes a little bit more constructive next year. purely -- clearly the key uncertainties are what nigeria and iraq are going to do. that could clearly reduce the effectiveness of any kind of political agreement we could see at the end of november. wti: this is charting versus brent. the white line is oil price. the difference in two months versus three months. the blue line is brent. the lower you get the weaker it is.

brent has become weaker than wti recently. does this make opec's job harder? it does. if we are seeing wti time flat that means there is still some constructive element in the oil market right now in north america. mexican demand is extremely high. u.s. production continues to ick lower. opec production is up almost half a million barrels a day. brent. weighing on in north america it's getting tighter. alix: that's what i raised to the opec secretary-general. is this all going to be about saudi arabia to get any of this done? he didn't answer. david: he has a real problem.

he has opec members and non-opec members and the united states. goes high price enough -- how much can they affect the oil price? >> this is a key question. you have drilled but uncompleted wells. the question remains how elastic is shale? how quickly can it respond to a higher price? our view is it is not a light switch. you have to understand it's part of a bigger picture. longer-term shale is going to need to grow but it may not be enough to meet incremental demand of one million barrels a day. being here, you for barclays head of energy and commodities research. alix: we talked all the time. intoe nearly 25 minutes

the session. let's get a quick check on the markets. seeing weakness across the board when it comes to equities in europe. the dow relatively flat. the nasdaq the best of the bunch. in the fx market it continues to be a grind harder for the dollar. weakness continuing in sterling. meeting andthe boe the potential of mark carney. will he or won't he stay on through 2018? oil continuing to roll over, off by almost 2%. david: the only thing left to say is happy halloween. thanks for joining us. stay tuned for bloomberg markets. ♪

,onnie: it's 10:00 in new york 2:00 in london. i'm vonnie quinn. mark: i'm mark barton. welcome to bloomberg markets. ♪

vonnie: we will take you from washington to london and cover stories out of new york, venezuela and japan. hillary clinton's allies escalate attacks on fbi director james comey in an effort to stem political damage after the reopening of an investigation into her e-mails. is this latest october surprise enough to change voters minds? the fed and the boj are expected to hold steady. we will also look at policy moves at the bank of england and questions around governor mark carney's future. general election combines with baker hughes creating