and 200 injured. the suspect has been killed by olice. the president is taking on criticism of his response to a devastated puerto rico. and the prime minister faces a constitutional crisis in spain. cat aland separatists signal they may move toward a line lateral declaration of independence. from new york city, for our viewers worldwide, good morning and welcome to "bloomberg daybreak." i'm jonathan farrow alongside david westin. alix steele is off for today. to begin, let's kick off the trading week and get you up to speed on the market action. four-day winning streak on the s&p 500 coming into monday at an all-time high with futures positive, up .2%. treasuries stable. 2.34 your yield. euro dollar coming off the back of its first monthly drop since ebruary, and weakness, 1.1745. david: now update what's making

headlines from outside the business world. emma chandra is here. emma: thank you, david. it was' terrifying night on the las vegas strip. police say a gunman perched in the mandalay resort and casino opened fire on an outdoor music festival. the death toll keeps climbing. ere's the las vegas sheriff. >> the number of injured, i do not know yet. but we are looking in excess of 50 individuals dead and over 200 individuals injured at this point. emma: police swat units stormed the mandalay bay and killed the suspect in the shootout on the 32nd floor. he's been named as steven paddock, a 64-year-old las vegas resident with no known terror connection. he's believed to have checked into the hotel as a guest. authorities say they've also located a woman who was described as a person of interest. meanwhile, nearby mccarran international airport has resumed operations. some flights had been diverted

to other airports during the shooting. and we'll bring you more on this developing story as it breaks. david? david: thank you, emma. before the tragic events in las vegas, we thought we knew the washington agenda for the week. puerto rico, tax reform, and a budget resolution. here to tell us about the white house reaction to las vegas and what's likely left of that washington agenda is our chief washington correspondent, kevin cirilli. what do we know thus far from the white house about a reaction to las vegas? kevin: i reached out to the white house, and still no word yet on their response. the president and the vice president are expected to give remarks or have scheduled remarks for later this morning from the white house that would likely be the time that we hear from them regarding what has become the most deadly mass shooting in the united states history with now more than 50 people dead at the country music festival in las vegas on the strip. jason aldean, a country music performer, performing at the time. but still no word yet from an

immediate response coming from the white house. it comes, again, as we are anticipating to hear from the president later this morning. david: we're all trying to react to these tragic events. do we have any indication about whether the president will continue with his plan to go to puerto rico today? kevin: as of now, that is still on, but that, of course, could be subject to change. still no word from my sources at the white house who are obviously still very much going through and processing threes events as they're unfolding. but the president, of course, facing intense criticism on puerto rico for his response, not just from democrats, but also from some republicans. the president, as you said, vid, is scheduled to go to puerto rico later today and into tomorrow to survey the horrific situation unfolding there. david: many thanks, kevin. i know you'll continue talking to the white house today. report as soon as you know something. jonathan: turning to tax reform, president trump and

congressional republicans have unveiled their nine-page tax plan last week. one line may have implications, to prevent companies from shifting profits to tax havens, the frame work includes rules to protect the u.s. tax base by taxing at a reduced rate and the foreign profits of u.s. multinational corporations. with the administration targeting tax havens, what might this mean for the future of those company earnings? joining to us discuss is head of macro strategy. let's begin with you, steven. the small print, do we have any idea on what that quote ultimately means in terms are the numbers? steven: well, we can guess, but at this point, again, it's not really a tax proposal in the sense of having a detailed, line by line bill to look at. it's just an outline. everything is subject to change at this point. jonathan: on the repatriation, the story on what would happen to big cash cows for companies, what it would cost to bring them back. gary cohn has floated out 10% does.

that move the dial? stephen: i think that that gets some of the money back, right? because right now, if they bring it back, they get taxed at a very high rate. so, yeah, i think if you get that sort of a thing, we've seen in the past that money comes back, what the money goes toward is kind of a separate issue and very difficult to ascertain. but yeah, i think some of that money would come back. david: peter, we're going to hear from congress, i guess, about these various loopholes and questions left open. but i thought we were going to go to a territorial tax system. this statement in the outline tends to undermine that. peter: i think they had grand plans earlier this year, and now they're facing reality. it's much more simplistic tax cut to ways to bring money back. it's not that exciting a plan in the end. it's interesting, but it's not the whole-scale reform at one time they were talking about. >> what do you think is more likely? what's got broader support.

is it a broad corporate tax change? are they likely to get both, or is it kind of a one or the other question? peter: it does seem to me we're headed towards the 20% tax rate with this repatriation and some form of off-shore tax to prevent the inversion. there seems to be relatively broad-based support for that. i think the market has to start adapting. the one thing to look at markets really rally on the tax reform. if you start digging in the details ark lot of companies are paying sub-20% effective tax rate, maybe below 15%. i'd be nervous investing in those companies, because you could see tax rates go up. the other big part to me is repatriation. there's this view that the repatriated money is going to get spent on the economy or sent back to shareholders. the reality is a lot of the companies that have big off-shore have been pouring money for the past three, four years, so you may have $50 billion off shore, but $50 billion of debt. i think a lot is going to be used to slow down the debt, not a big windfall for share hordsers.

stephen: we've seen cases where companies bore othered money in the u.s. to pay -- borrowed money in the u.s. to pay a dividend when they had all this money overseas. i think peter is right, it's not just as simple as this money is going to flow into the economy. jonathan: over the weekend, how difficult the national economic council director and the treasury secretary, steve mnuchin, the difficulties they have selling in. david: i was struck over the weekend watching both of them. the extent to which they really have to defend against this being a tax cut on the rich. i mean, that really was the impetus for all the challenges, which really gives the democrats a potential advantage, stephen, when it comes to politics. stephen: it does. i think it's really -- you've got two schools of thought on this. you know, the school that they're trying to emphasize, is look, use the tax code toen courage growth, right? i think for most democrats, the tax code is kind of a black box, and it's just a matter of who are we going to take the money from without regard to what the tax code means for the

economy. republicans are trying to argue, hey, look, if we can get a more efficient tax system, we can grow the pie and we'll get ore revenues from that source. david: more efficient tax system is what he talked about. what you're talking about is tax cuts. that's not broadens the base. peter: i think it's not as aggressive as they would have liked. to i do agree, this attack on who's getting the biggest savings is ridiculous, because the rich paid far more of the taxes, so you can't -- if you're not paying much taxes, it's hard to get a big dollar amount reduction. it's very political. i think the whole tax process right now is going to be a little bit political when you look at some of the other parts, it really affects the blue state in terms of, as an individual level. they're talking about reducing your state and local tax deductions. there's talk about mortgage deductions on homes above $500,000. that's again blue state heavy. i think there's going to be politics, and it's not going to

be clear sailing. >> speaking of politics, how are the deficit hawks feeling with the tax policy in combination with the personal tax proposal? >> well, there's tension there, right? it's easy to cut taxes. it's harder to find the off set. we've seen that. every time someone brings up an off set, whether it was the state and local tax thing, or that it was the whole thing with, you know, tax on foreign companies, and every time we come up with the border tax and all that, we have to find -- if we're going to have a big tax cut, it has to be off set to some degree. so if we can't get these off sets passed, then as peter said, the size and scale of the tax cuts have to be scaled back. >> i'm curious, do you actual have the to see an off set, or do you just get the off set through growth proceed teckses? when you look at the c.b.o. scoring methodology, it seems to be all about growth projection. can they get away with that? stephen: i think the way the law is written, or the way the budget proposal is written, they're going to use the static

models, the existing models, and then they've gven a number. we've heard 1.5 trillion for the tax cut. the tax cut would have to fit within that frame work, right? and what mnuchin and others in the administration would arg sue we'll actually get that trillion and a half back through additional growth. but that won't be formally acknowledged, i think, in the legislation. jonathan: i'm still trying to find an economist who think we can generate that much growth. you haven't found one? peter: two, three years, maybe, 10 years, no. jonathan: peter and stephen, sticking with us. we have a statement from the white house on the vegas shooting. the president has been briefed on the horrific tragedy in las vegas. they say we are monitoring the situation closely and offer our full support to state and local officials. all of those affected are in our thoughts and prayers. that's a statement from the white house. we'll keep you up to speed on any developments in las vegas.

coming up on this program this week, we have a lineup of special guests as we count you down to payrolls friday, including bloomberg columnist, stick with us as we count you down to payrolls friday. from new york, this is bloomberg. ♪

emma: this is bloomberg daybreak. recapping our top stories -- the deadliest mass shooting in modern u.s. history. on the las vegas strip, at least 50 people were killed, and 200 wounded when the gunman perched in a high rise hotel opened fire on thousands of people attending an outdoor music festival. police swat units stormed the mandalay bay resort and casino

and killed a suspect in a room on the 32nd floor. he's described as steven paddock, a 64-year-old las vegas man with no known ties to terror groups. president trump has been briefed on the shooting. he tweeted that the people of las vegas have his warmest condolences. and we'll bring you more on this developing story as it breaks. jonathan: thank you very much n. sprain, catalonia separatist leaders say they may declear independence later this week after more than 85% of voters backed independence. hundreds of activists were injured when they tried to stop police from shutting down the illegal referendum. for more, we're joined by our reporter from barcelona. maria, thank you very much for joining us. walk us through the latest in reaction across from spain and from the prime minister to the messy weekend we had in barcelona. maria: i mean, what a weekend in barcelona. i was on the ground yesterday, and it really got nasty. really nasty pictures. a p.r. disaster for the

administration, as the they wanted to stop the vote. the vote happened. the yes actually won. and then they really wanted to contain this and make it a domestic issue. that obviously didn't happen, making news all over the world. and it's given the independent movement a whole lot of traction. jonathan: in terms of the market, spanish bond yields are higher by about nine basis points. it's a weaker euro story. it's confined really to spain at this point. a lot of people are looking at the prime minister of spain and thinking what's your move? what is the next move from the prime minister? as you call, it it's been a p.r. disaster so far. maria: that's exactly right. the market seems to be concerned about two things. the prime minister has a minority government, and i would say a weak government. the question is, is he going to resign over this? we understand he's not going to do it. he thinks he was simply upholding the constitution and that, honestly, there was violence, but the catalan

police could have helped to reduce a lot of it, and they didn't, so he doesn't feel like he thooze step away. again, a weak minority government. on the other hand, the other big question, what is the catalan administration going to do? the regional president continues on his promise to create an independent stage, this could happen over the next 38 hours, but again, this event is pretty unclear. we don't know if this is going to happen. again, we're being told that if he were to do this, the spanish government would be prepared at least to implement tougher measures, whether that means expanding the region's autonomy or the justice system would step in and he would be dismissed from office, but again, it's a lot of tension here in the relationship between madrid and barcelona. we can definitely say it's been broken at this stage. jonathan: in terms of the political miscalculations that the prime minister may have just made, catalonia, as you know better than anyone, the movement of independence was not overwhelmingly supported within catalonia.

do the images was weekend change that story for the region? maria: jonathan, i was on the ground. i spoke to so many people who were just amazed by the voters and the violence that we saw. a lot of it was completely unnecessary. the government -- the prime minister came out yesterday and said, look, the law has to be respected, and no one is above it. however, this morning, they did kind of try to back track on it and say, look ark lot behalf we saw was absolutely unnecessary, but again, the central government did say if the catalan police had helped like they said they would, a lot would have been prevented. they had an order to seal off schools, and that did you not happen. my school, the doors were wide open. when the national police stepped in, lot of violence took place. so again, a political miscalculation. but you need to keep in mind, the prime minister's base of voters ark lot of people who vote for him outside of catalonia, they actually wanted him to take tough measures. they think the situation has

been dragging on for too long, and it's time to stop it. jonathan: maria, great work. thank you very much. busy weekend for you. bloomberg news reporter in barcelona. joining us around the table, i'm very pleased to say peter and stephen, still very much with us. 20% of spanish g.d.p., the region s. it's certainly a risk if you want the referendum. how do you see this developing in the coming 12 months, never mind the coming weeks? even going back to canada, when quebec wanted to separate, it's very tricky. i think this will drag on, in all likelihood, some negotiation. that gives them more prominent voice, even more independence within spain. i found it hard to believe that it's going to be a true separation. jonathan: within a week, europian politics has reasserted itself, and not in a positive way, in a negative way, at a time when many people have back lot more constructive. is that going to start to fracture? peter: it's definitely a risk. you had more right-wing people

get votes. i thought this was over once we saw macron win. i think europe is heading in the right direction, but it's something to watch out for, whether you can get these splinder groups. i'm still positive on europe and european bank, but want to be very careful watching the mood to look for more disintegration there. david: this happens at an unfortunate time for spain, because it really was on the rebound. that economy was moving forward. is this likely to derail it? stephen: again, i think it's how this plays out. it's a years issue. what's interesting to me, just broadening it out, this tension between an integration and disintegration, right, and multinational organizations, whether it's the e.u. or the u.n. or, you know, with trump kind of talking more about national sovereignty, and as part mentioned, the german elections, kind of moving in that disintegration direction a little bit, and this vote kind of is a reminder of that. i just think it's a tension we're going to see around the

world going forward. do we want, you know, do we want to be national? do we want to be sub national? in the case of spain. or do we want to be international, which macron and others are pushing for. david: peter and stephen, both will be staying with us. coming up, the strategic head of policy research will be here to talk to bus what's going on in washington. live from new york, this is bloomberg. ♪

jonathan: it's the dead u.s. mass shooting in u.s. history. at least 50 people were killed and 200 wound when had a gunman perch in addition high rise hotel opened fire on thousands attending an outdoor music festival. abc news correspondent joins us now from las vegas with more. great to have you with us on the program. thanks for giving us your time. back us through the details and what we know so far. reporter: well, you mentioned what we do know and what is, i

guess, the most disheartening situation happening right here, that more than 50 people are dead, other than 200 injured. this is now considered the deadliest mass shooting in modern u.s. history. law enforcement has confirmed that the shooter here, that suspect, the dead suspect, has been identified as 64-year-old steven paddock. law enforcement saying they found multiple firearms in a room that he occupied. right now, they're saying that they still do not have a sense. mmb. they are calling it a lone wolf shooting, saying that he acted alone and that this is not a terrorist attack. david: he acted alone, but there is a woman that they're looking for. apparently a companion. what do we know about this person of interest? reporter: they actually are now saying that they do feel confident that they have located that person of interest, the companion. they initially referred to her as possibly a roommate, but they did not refer to her as

anything other than a person of interest. so we're not really sure her involvement in this situation, if she was an accomplice. but we do know that law enforcement here decided that they do need to speak to her, possibly to get more information around the motive. david: do what deane about the situation with the police officers? we're told at least one off-duty officer was killed in the incident. do we have any sense of the casualties of police officers? reporter: we have been told at least two off-duty officers were killed. they were attending that concert. but then in a news conference that just wrapped up, they initially said the sheriffs do not know how many law enforcement officers have died. the sheriff saying that one of the officers is in credit but stable condition. one of its officers was off duty and attending the concert and did lose his life. so this is a very fluid situation, because we have, like you said, 50 dead. people trying to get identities on those people. more than 200 injured, and that

number could continue to rise. so i'm expecting to find out that there was more law enforcement officers involved in this shooting. jonathan: the numbers are horrific. do you have any color on the response time of the police? 200 injured, perhaps even more, 50 dead, perhaps even more. what was the response time of the police, and how long did this individual fire on this audience for? reporter: you know, that is a very good question. it's one that we are still trying to figure out, trying to peg down that time line. we do know that shots started about 10:08 local time here this evening, and then we saw that response immediately. i'd say we, because i'm right in the area. we were actually staying in a hotel want door from the mandalay bay, and we immediately, once we saw the emails, all of the alerts coming in on our cell phones, we could hear the police presence. we could hear the helicopters flying overhead. so that response was extremely immediate. but trying to peg down that timeline is something that we are still working to do.

jonathan: thank you very much, joining us from las vegas. we do have a response from the president of the united states, who tweeted moment ago, my warmest condolences and sympathies to the victims and families of the terrible las vegas shooting. god bless you all. the statement from the white ouse reads as follows -- jonathan: we'll keep you up to speed on any of the details as they cross on the latest from las vegas. ♪

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delivers consistent network performance and speed across all your locations. fast connections everywhere. that's how you outmaneuver. jonathan: four days after a record high. the s&p suspect coming into a new and new quarter, looking strong, are futures up 46 on the dow. some decent gains across europe with the exception of spain. the ftse 100 up half a 1%.

the dax up .2. in a bond market, the story as follows. treasury yields just a little bit higher by a basis point at 234. one of the worst months so far in 2017 for the 10-year treasury, with the yield spiking aggressively higher through september. the grind higher continues into october. the story in the f.x. market, dollar strength captures at 132.98. a weaker europe has the european politics continues to reassert. it's down in a negative way. a weaker euro through september, the first monthly drop since february. 1.1746 o that by .6%, is how we trade on the single currency. leads head over to emma chandra, who joins wuts latest developments out of las vegas. emma: thank you, jonathan. it's the deadliest mass shooting in modern u.s. history. at least 50 people were killed and 200 wounded when a gunman perched in a high rise hotel in las vegas opened fire on thousands of people attending

an outdoor music festival. police swat units stormed the mandalay bay resort and casino and killed the suspect in a room on the 32nd floor. >> we located numerous firearms within the room that he occupied, and that's, like i stated earlier, it's going to be a long and tedious investigation. emma: police say the shooter was stephen paddock, a 64-year-old las vegas man with no known ties to terror groups. authorities also say they've located a woman described earlier as a person of interest. meanwhile, president trump has been briefed on the shooting. he tweeted this morning, sending his warmest condolences and sympathies to the victims and their families. and we'll continue to bring you updates on this developing story as we get them. jonathan: thank you. teresa may, the u.k. prime minister has been fielding questions over her errant foreign secretary, boris johnson. joining us over the phone from the conservative party conference is emma ross thomas, bloomberg brexit editor.

great to have you with us on the program. walk us through essentially where the prime minister now stands on the future of boris johnson, because once again, it seems to have taken over events. emma: that's right. we've had boris johnson, on the eve of the article, setting up his independent vision of brexit. now on friday evening, in the sun newspaper, very popular newspaper, he again has sort of underlined where his red lines will be on brexit. it's a big entity in the conservative party. may is trying to reassert her authority, and boris johnson is setting out his own agenda. the big question is whether she can hold on to power, whether she can raise, and if in doing that, she can avoid saying anything that will sort of disconcert people in brussels. it generates a lot of positive momentum if europe. if she has to go back on any of that in the conference, in order to win back the grass roots, that's the risk of what investors are looking at.

up you're looking at live pictures from the conservative party conference. i look at live pictures of this conference, and i compare and contrast this with the labour party conference just a week ago, and what a difference. the party in government seems to be experiencing a very different tone to say the party in opposition, the labour party looked like a celebration. they didn't even discuss brexit. and here's the party in government with a job to do that's drowning in brexit and looks increasingly divided as ell. emma: there is a rather subdued year here. there's been a bit more momentum, a bit hanging over i am nference, fill hammond is not talking about brexit. what he's talking about is socialism. he's talking about how the cuban model has failed, and the reason he's doing that is because as you say, we have the labour party conference, labour ahead in some polls, and labour has risen ahead in the polls by making arguments that you can describe as socialist,

nationalizing industries, this kind of thing. so phillip hammond is setting out arguments that one thought were well in the past, he's setting out why socialism will fail. jonathan: what was interesting about the approach toward the one issue election, they avoided the one issue altogether, and i just wonder, as far as today goes and the following weeks for the conservatives, what the policy initiatives will be to address the kind of things you've just discussed against socialism, but what can they do to off set the movement that's going to the labour party? emma: thief had a couple of initial tiffs -- they've had a couple of initiatives. may mention zpwd on helping people on to the housing market ladder. but inevitably, the big policy area is brexit. when it comes too to have that, she's fighting on two fronts, the party at home, and the negotiation in brussels. jonathan: emma ross thomas, really appreciate your time, our brexit editor. much more on that story

throughout the week. still with us, peter and stephen. joining us now from london is bloomberg's paul dobson. paul, great to have you with us on the program. you fold in the economic data with the politics, and it seems to be a weaker pound story today. paul: absolutely, jonathan. i mean, that's the readout we're getting. the heading is the euro, under the same pressure because of the developments in catalonia over the weekend, and yes, the euro is still stronger against the pound, so that gives you an idea of the negative sentiment that they have at the start of the fourth quarter. jonathan: we're about a month away from an inflation report which many people think will deliver the first rate hike in over a decade. if the conservative party conference, if they conscious they need to do something on the fiscal side to off set what might be coming from the monetary policy side? paul: there has been some talk, strictly from the chancellor. the question is how much leeway have they got there and how

thin would it come down the pipeline. i think one of the really important things from the bank of england is the discussions within government about potential to loosen the pay cap on public sector workers, so if we can get a little more weight inflation flowing through the economy, that makes the bank of england a little more confident that the people can cope with the rate hike, i guess. you know, that's the kind of thing that the market will be looking for in terms of the b.o.e. getting the go aahead. i guess the other discussion that's going to be important with that inflation report is whether it's one and done from the b.o.e. or whether we are at the start of albeit continuing hiking cycle. david: the story we hear again and again is sort of global synchronized growth, success around the world. is the u.k. on the one hand the outliar on this, or is it being dragged along? is it being helped by the fact that everybody else is growing so well?

peter: you've had another story. i continue to think we're getting global growth story. one thing we have to be concerned on is the fed is definitely starting to pull back on its balance sheet. the e.c.b. is likely to start tapering their purchases. you're hearing the bank of england potentially a rate hike. we've not gone through a tightening cycle in a long, long time. i think there's got to be a little bit cautious, because what's going on is rates are starting to rise and not because the economic conditions have really changed, they've just been so far behind the curve. i think that's going to mean it's going to be harder for stocks to grow and continue their current pace. >> i find it really interesting that forward markets are still pricing higher you're sandrow higher pound relative to the dollar in particular. and this has been a really big story of the u.s. equities markets, this dollar depreciation. are we at a turning point with respect to tax policy and obviously the turmoil political until europe? peter: i think near term it's going to continue to ballot

dollar. tenk got too clouded. as we hit the resistance, we're starting to see the dollar strength. one thing that seems very apparent over the past few months, even more so than usual, you have to look at each stock market in currency terms. so we've benefited a lot while the currency was weak, as our currency starts growing again, i think we're going to struggle for u.s. markets. it's going to be good for european markets. but again, that's in local currency terms, you're not getting that benefit. gina: i think part of the dollar story is really about tax policy. are we dependent upon tax policy? peter: i think tax policy, you're talking the fed a little bit more. really going back to the trump pump that we had we back in november and december, all those things are starting to come back. if you look at the markets, whether it's the russell 2000, bond yields, they are all back to november and december type levels, as this gets put back on the table after six months of struggling. david: i wonder if there's a larger peculiarity. here in the united states, we tend to be u.s.-centriy.

in fact, is part of the story the increasing trade between china and europe and the extent to which that is actually supporting the euro? in fact, the united states may be getting left behind, including the dollar as a denominator for a lot of trade. stephen: obviously the importance of china has grown immensely over the past couple of decades, so yeah, that's a big factor. the u.s. economy is domestically seems to be stronger, so that helps not only the u.s., but everybody that we trade with. china is doing ok. europe itself is doing ok. and again, that is not only good for europe, but good for everyone that they trade with. i do think that there's quentin sommerville -- there is a global element to strengthening the he commfment the u.k. is kind of a special case, because a lot of what's going on there was the currency weakening dramatically in the wake of the brexit vote. in the u.k., unlike in the u.s., in the u.k. you've got high inflation, and the economy

ok, but not necessarily great. whereas in the u.s., you've got this really nice economy, but no inflation. europe is kind of more similar to the u.s. so every situation in terms of the central bank is a little bit different. jonathan: i wonder how ok china is. a number of years ago, they delivered a rate move on christmas day. obviously was underreported. over the weekend, they delivered a rate hike, and once again, underreported because it kind of is drowned in the news flow of the last 48 hours as well. how significant was that, peter? peter: a month ago, they changed some of the reserve requirements as well. again, these things would be typically big moves, market-moving news. i think it's left in the background right now because we're very fixated on the daily stories coming out of the white house. i think it's something to watch for. i think if there is something going on in china, it will rear its head, probably another reason to be cautious. david: many thanks. peter and stephen, both will be staying with us.

as commute in today, if you have to leave the television set, we wsh you wouldn't, but if you have to leave the television set, tune in to our colleagues, tom keene over on radio. "surveillance" can be heard in new york, washington, d.c., boston, the bay area, and all across the united states. live from new york, this is bloomberg. ♪

emma: this is bloomberg daybreak. i'm emma chandra. come up, the president and c.e.o., this is bloomberg. david: oil had a nice climb

through most of september. but it headed back down again. here to tell us why is dan dicker, peter. dan, you always are the oil interpreter for us. what's going on in oil? dan: we've had what i thought was a major bottom put into the oil market, and we sort of saw the storms in the gulf coast and elsewhere kind of put that bottom and help accelerate some of the trends. still getting the rebalancing for the past year, and that's going forward. nothing's really stopping that climb. and the question becomes now that we've made this move above 50, will those shale players come back in, seeing a semi profitable price and put all those drilled but uncompleted wells back to work? and there are a couple of reasons why i think that this time may be different than the last several. one is that, you know, there's been a lot of cap ex that they reordered their cap ex numbers in the second quarter. hard to believe that they're going to turn it around at this

point. and not only are the american oil companies running out of cap ex, looking for a little more cash flow, but many of the noncore opec members are also out of money. saudi arabia just moved into recession. iran and iraq clearly are out of cap ex in order to drill fresh wells. and i don't think that the, you know, the projections of either the e.i.a. on either the global side or american side are going to pan out for the next year. i don't think that production is going to increase to the degree that they do. david: stay on the supply side. what about this opec/nonopec deal? is it holding up? are people starting to cheat? talk to me about iraq. dan: well, there is cheating. we can't deny that. but compliance is better than it has been generally in the past when these deals have been made,&these caps have been put into place. so in general, the rebalancing is going on, not to the degree

that at least the words of the agreement would say, but compliance is still in the high 80's, and for opec, that's amazing. we could go back for 25 years talking about, you know, the caps that were put into place, and nobody even looked at them even for a moment. they were just numbers on a table, but didn't really mean much. so they're doing a lot better with that, and it's helping. jonathan: just as basic frame work of thinking about the market right now, a number of months ago, in fact, the last couple of years, you used to think of it as a ceiling. at a certain point, oil would get to a certain price, and then we'd roll back over. where's the ceiling? dan: again, i think that we thought for the entire year the ceiling was $55. we have a large portfolio of uncompleted wells out there that i think a lot of them, they're going to be drooling to put to work if they get -- if oil gets to a profitable price. but again, i have this sense that the projections -- first

of all, the picture globally is better than it's been for years. 1.7 million barrels of an increase a day this year, maybe another 1.5, 1.4 the next year. and the e.i.a. is looking for a million more barrels. i laugh when i see a number like that. i don't think they're going to get it. they're looking for mother million plus barrels from non-opec members for next year again. i find that not really on the believable side of numbers. will there be some rigs put back into play? i think they might wait for a higher price, maybe 55 and above considering how the brent market is taking off to a larger degree than the american market. but i think this is going to be different. i think we break out of our range here. i think we see over $60 bit end of the year and $75 into the middle of next. gina: that's pretty high. dan: no, i've been on the opposite side of this for several years. gina: does that require a demand resurgence in order to get to $75, or is that really a

supply argument? dan: we've got the demand resurgence. that's not missing. there's been global growth and increase in trade and all of that has converted into an enormous demand picture for oil. the question has always been, how much of this lag supply is sitting on the sidelines eating that up? at this point, i'd say not as much as people think. that's the bottom line. david: dan dirk, thanks so much for being here. and peter, thank you as well. if you have a bloomberg terminal, check out tv go. watch us online, click on our charts and graphics, and interact with us directly. just go to tv go on your terminal. this is bloomberg. ♪

emma: this is bloomberg daybreak. i'm emma chandra. recapping our top story, at least 50 people have been killed and more than 200 others wounded after a gunman holed up in a high rise hotel on the las vegas strip opened fire on thousands of people attending an open air music festival. police stormed the mandalay bay

hotel and casino. they used explosives to get into the suspect's hotel room and then kill the gunman. he's been identified as stephen paddock, a 64-year-old man. no information on the possible motive as of yet. police also say they've located a woman they describe as a person of interest. the white house says the president has been briefed on the shooting. he tweeted his condolences to the victims and their families. we'll bring you more updates on this story as it develops. david? david: just as we head into the weekend, we got word that president trump and his treasury secretary have been actively interviewing prospective candidates for chair of the federal reserve, including the current chair, janet yellen, as well as gary cohn and several others. still with us are peter and stephen. so, want to turn to you, stephen. let's start with mr. warsh. we don't know he's the leading candidate. he was reported that way, but we don't know that. let's start with him. what do we know about him and what he would do as fed chair?

stephen: i think he's someone who showed while he was a governor, he had good contacts in the market, and he was kind of the point man or the go-between with the fed and the markets. so he's someone that brings market experience, which is very different than what we've had the past few chairs. i think he's also someone who is very connected in republican circles and has been very public in, i would say, supporting the broader republican/trump agenda, meaning easier financial regulation, supportive of supply side tax cuts. so i think for merks i've always felt -- i was always very skeptical that yellen would get renominated. the reason is i think she's ideologically left of center, and trump wants someone in place who is brightly supportive of what he's trying to do, not just about monetary policy, but more broader. david: stephen, jan janet yellen was a distinguished ph.d. economist with a real

record of publishing in the area. mr. warsh has a lot of great strengths, but he's not an academic and not a leader on wall street. this is not like gary cohn, c.e.o. of mr. sachs. could he command the respect of all of those ph.d. economists on the staff at the fed? peter: that's a good question. i don't know. he does have experience on the board. my sense is that he was fairly well regarded in his time there. but not maybe, to your point, not necessarily as a big brain on the economy, but more as someone who can bring market experience and real-world experience. knowing over the next few years, the president will be kind of remaking the fed board in a sense, if you want to think of it that way, because i think that he's got a number of nominations, and what we've seen so far, trutch doesn't seem to be a big fan of academics. you may have a lot less in terms of ph.d. economists on the board. you'll still have obviously an army of them on the staff.

the board may look ahead different in two, three years. jonathan: that's exactly what kevin warsh has always wanted anyway, group think on this program about a year ago, he said the same thing. the other thing, peter, is economic analysis. it's flawed. and it has been proven to be flawed by the economic data over the last several years. it was confidence that they're going to lead the fed. peter: i think change is good. i think they've become in a rut. they've all been taught by the same school, tend to believe the same things. i think taking a different perspective might be interesting. others have the school of thought that leaving rates so low for so long causes problems. i don't understand right now why they're focused on both raising rates and playing with the balance sheet. i think they should focus on the balance sheet, let one thing do the other. i think someone needs to shake it up could be very interesting. and even within the economics, if you go back, look who's winning nobel prizes right now, it's behavioral economics, away from classical macro economics.

i think some shakeup at all levels would be good. maybe change the thinking, maybe spur some new thoughts out there. gina: stephen, i'd like to bring it back to you on this warsh nomination, and i think this market has been focused a lot on how he impacts reller to policy, but not really focused on any monetary policy focus, because of his markets, background and nonacademic background. how would you anticipate he take the very academically centric fed focused on q.e. and classic monetary policy, how does he take that to a market? stephen: i think the markets are very black and white. what they want to know, is the next chair a hawk or dove? the problem right now is the person that you're potentially replacing is so far on the dove end of the spectrum, or at least has been up until, ironically, until until very recently. anybody other than yellen, the market says, ok, that person is a hawk. i don't know if we can really say that about kevin, but i

think it's probably true that he's less dovish than yellen. jonathan: thank you. thank you very much for joining us. gina will be back. she is every week. peter and stephen, thank you. as we count you down to the market open, we are about 90 minutes away with futures positive. and a little bit later, dan clifton, head of policy research will be joining us. futures are up 60 points on the dow. positive five points on the s&p 500. we come into october and a brand-new quarter at an all-time high on the benchmark in the united states. you're watching bloomberg tv. ♪.

jonathan: a gunman opened fire at a concert in las vegas,

leaving 50 dead and 200 injured. the president spent the weekend taking on criticism of his response to a devastated puerto rico. and the prime minister faces a constitutional crisis in spain. catalan separatists signal they may move forward towards a unilateral declaration of independence. from new york city, for our viewers worldwide, good morning, good morning. a warm welcome to bloomberg daybreak. alix steele is off today. let's begin by getting you up to speed on this monday. a four-day winning streak. futures are up on the s&p 500. we closed out september with a move lower on euro dollar over the month, the first monthly drop since february of this year. and we acted a weakness. the politics reasserts itself in europe t. means a weaker euro. we trade at 1.1741 on euro dollar. david: now over to emma chandra. she's joining wuts latest developments out of las vegas

following the shooting overnight. emma: thank you, david. there hasn't been a mass shooting like this in modern u.s. history. a gunman holed up in a high rise hotel on the las vegas strip opened fire on thousands of people attending an open-air music festival. at least 50 people were killed and more than 200 others wounded. police stormed the mandalay bay hotel and casino. they used explosives to get into the hotel room, where they killed the suspect. >> we located numerous firearms within the room that he occupied, and like i stated earlier, it's going to be a ong and tedious investigation. emma: the gunman has been identified as stephen paddock, a 64-year-old. no information yet on a possible motive. police have located a woman they described earlier as a person of interest. meanwhile, president trump has been briefed on the shooting. he tweeted his condolences to victims and their families. and we'll continue to update on you this story as more information becomes available.

jonathan: joining us around the table, from washington, dan clifton, the strategic head of policy research from. london, j.p. morgan global market strategist. dan, let's begun with you, i want to get your reaction to how the administration is set to respond to the crisis, the tragedy unfolding in las vegas. >> first, it's important to get all the facts straight, and i think there's going to be a big fact-finding mission. who was this guy? i think by midday we'll have a lot of information on who he was, who the person he was with, and i think you'll hear calls from democrats talking about gun control. but i really think the administration will start to look at mental health programs and try to really, if there's some sort of link between what this guy's motive was and what was he saying, i think you'll see a doubling down on mental health programs, trying to help people with drug addictions, or just issues that would cause this is. this is an unspeakable tragedy, how somebody can do this. it's just shocking, but we're going to need more answers. jonathan: you're talking about the policy response. let's talk about a white house

response over the next 60 minutes, the next 24 hours. the statement from the white house on the vegas shooting goes as follows, the president has been briefed on the horrific tragedy in las vegas. we are monitoring the situation closely and offer our full support to state and local officials. all of those affected are in our thoughts and in our prayers. i think that goes, for all of us. but for the next 24 hours, they're in a bind. they've got to approach puerto rico with some delicateness that was absent over the weekend, and now they've got las vegas on the table as well. how do you think they're going to approach those two things? dan: if you think about this, they had eight months without a major crisis. they now have two of them in front of them. you know the president is going to puerto rico. the key is to show support, show unified support for the local officials in nevada. show support for the officials in puerto rico and delivering the resources. the federal resources needed. whether that's going to be the help track down anybody who's involved in the shooting or to be able to deliver food, water, and emergency response to people who are sick or close to dying in puerto rico. and i think that we're starting

to see those wheels of action begin to move, at least for puerto rico, but now that they have that experience, it should help them respond to nevada as well. jonathan: what was clear was a lack of focus. the treasury secretary, steve children, was speaking to the -- steve mnuchin, was speaking to the networks. the president of the united states was taking on puerto rico. he was also taking on north korea. in the minds of some people, undermining his own secretary of state, rex tillerson. what can he do to really focus the strategic and policy effort of this white house? dan: that's correct. i just want to know, you can walk and chew gum at the same time. we had a very important week on tax reform. those guests were prebooked before issues began to develop. there are now 12,200 workers, federal workers in puerto rico. the army corps of engineers was there before this response. they are now delivering generators and gas. you'll have a shift coming in, a navy ship come in by wednesday. the response is really starting to pick up in puerto rico. regardless of what the

president is talking or tweeting about. i think this white house is very, very focused on delivering and making sure the residents of puerto rico are going to be safe. there were 6,000 people with roof problems, which means they don't have houses to live in, and i think that you'll start to see that response really take hold once those roads clear up. that's the biggest issue facing them in puerto rico right now. it doesn't matter how focused you are. if you can't clear those roads, you can't get the help where it needs to go. i think that's going to be focus number one today. david: it's the nature of a presidency that u to deal with multiple things at one. on the own hand, you have two tragedies. at the same time, you said it's a really important week for tax reform. take us into the week on tax reform. why is this so critical? before we had las vegas, we were told this week would be key in congress to see whether it's going to go forward. is that still the case? dan: absolutely. this week, the house of representatives is voting on a budget for fiscal year 2018. that has the reconciliation and instruction needed to clear tax reform with a majority vote in

the united states senate. they have now gotten the votes to be able to pass that, or at least they did going into the weekend. the house freedom caucus signed off after seeing the tax frame work. that's point one. point two is the senate budget committee is now going to start its proceeding on its budget for the same reason. it has the reconciliation instruction. the republicans have a one-vote majority in the senate budget committee. if they're able to clear that bill out of the committee, that budget will move to the senate in two weeks from now. and that will set the stage for the house and senate to conference their budget together by the end of the month, and that will set the frame work for tax reform to begin late october, if not early november. this is a very, very important week, even though you have all these other emergencies going on. deproip your point of view within the beltway, is the administration on the front foot or back foot right now? over the weekend, there was a lot of defending this tax plan saying it's not just for rich people. already they're backpedaling on some of the state and local tax deductions. it felt like they were moving backwards. dan: absolutely.

i just want to make clear that this is not a binary relief. this was a budget frame work, a frame work released to the committees to begin to work on. there was a lot of tack cuts, not a lot of deduction closings. to treat this as binary, something in there is not going to fly, once it gets to congress, it's going to be able to be modified into an actual plan that could likely gain some support. and i think we're at the beginning of the process. they had a lot of momentum on wednesday and thursday. our stock baskets were reflecting a much higher probability of tax reform getting done. we went from 25% to 45% in that respect. but then on friday, you saw a little bit of a pullback as these arguments began to come into play. and so the way i would explain it is, how do you modify it? do you make changes to the estate tax so it's not just repeal? do you make the state and local deduction the removal of that not impact as many people? those are all possible changes that will happen once the political and policy work begins in the committees.

jonathan: you've heard the policy expert trying over over the policy i wonder how the markets are interpreting the chances of that was unveiled last week to actually unfold and end up as legislation? >> well, before answering your question, very hard to get back to an economic peak after the events of this morning of las vegas. i can definitely keep the viewers in europe, it has been the main view this morning, everyone is concerned. i would like to leverage this to express our condolence. but back to your question and more on the political and economic agenda. we have seen the market reaction quite reverse last week after the announcement that there was the possibility of moving forward in terms of tax reform. we've seen it especially at the performance of small cap versus large cap. roughly three persons higher and what the s&p was. so you start to see this

optimism again fueling financial market movement, and we know that small cap in the u.s. are likely to be the main benefit for of any huge tax reform. we see enthusiasm, or at least market become more reasonable in their anticipation of the reform in the u.s. after a lot of disappointment over the past couple of months. this tax reform is probably easier to implement and probably find a wider consensus in the u.s. to implement it, d it's also globally -- it goes in the same direction as what we have seen elsewhere. the tax is simply too high when you see the situation in the u.k., but also across europe and other countries where several countries are lowering tax at the moment. the ambition is to increase the tax base and lower the tax rate, but you see a reflection from markets of this enthusiasm. jonathan: the small cap is the

pure play on domestic tax cuts, but i just wonder what this all means for the big caps, mega caps, apple, microsoft, with huge cash cows of foreign earnings. the details on how these earnings will be taxed going forward, how the cash will be taxed and repatriation story, the details are quite murky. what are you reading at the moment? dan: i actually think we've got good color from the frame work on what could happen on the international tax changes. one, we think that all companies are going to have to pay a tax on any of their unremid foreign earnings that have been accrued overseas. we think that's going to be a two-rate structure, 8.5% on cash, 3.5% on money that had been spent on plant and equipment. that's step one. step two will move the u.s. to what's called aer iter to the tax system. this will bring us in line with the international norms, and that will allow companies to earn a profit overseas and bring that profit back to the united states tax free without incuring a second hear of

taxation. that's very good for apple. if you look, there's a very important bloomberg story out this morning that quite possibly will have to be a minimum tax on intangible income that's setting overseas. these are profits that are generated from intellectual property, and they're looking at about 8% tax rate. i can tell you that the apple, microsoft, g.e.'s are very, very upset over that tax proposal, and they really believe that they'll be a cash cow for politicians if that tax rate goes into effect. but it's a way of protecting the tax base from eroding. all in all, this is a very positive international tax change for u.s. large cap stocks, in particular the multinationals. but we believe that there are really three implications. companies with the highest tax rates are going to benefit. companies are the most cash overseas relative to their market company. and companies that make capital good orders as this proposal allows for five years of capital expenses where companies can write off their capital equipment purchases immediately. overall, we think this is going

to boost economic growth. earnings on the s&p 500 and the markets are going to have to reprice for it if it does get enacted in first quarter of 2018. david: tan is making a very important point. what we're hearing so far, what i'm worried that the markets are hearing is all the good stuff, all the cuts, all the accommodations. but we're ignoring, i'm afraid, things like simplification that we talk about, that simplification turns into let's eliminate deductions, such as interest deductions for corporations, such as real estate tax deductions. are the markets overlooking some of the bad stuff that may be coming along down the pike? vincent: no, i don't think, and we're pretty much convinced that this will lift all those together, and that's also why it is environment active management more important than ever. we have seen also back a year ago when donald trump was elected that market differentiated those companies which would benefit from the regulation from tax reform and so on.

j.p. morgan even build a basket to present those stocks benefiting from this theme. we have to look to buy stocks sector by sector, very important. so no, the short answer, it's not going to lift, but it's still positive for the u.s. economy as a whole. wanted to mention, made it also more important than the headline tax rate, it's also the change which will be made, which are supposed to be made. also to incorporate to a bit more substantially more capital expenditure, and it is very important. jonathan: of course, vincent will stay with us. dan clifton staying with us as well. coming up, what a great lineup as we count you down to payrolls friday, including a olumnist for us. our thoughts, of course, continue to be with those affected by events in las

vegas. details continue to come up, next right here on bloomberg. ♪

emma: this is bloomberg daybreak. i'm emma chandra. recapping our top story -- authorities in las vegas have identified the suspect in the deadliest mass shooting in modern u.s. history. police say 64-year-old stephen paddock perched in a room on the 32nd floor of the mandalay bay hotel and opened fire on a country music festival on the las vegas strip. at least 50 people were killed, and more than 200 wounded. police stormed the hotel and killed paddock. they describe him as a lone wolf attacker that had given no

information on his motive. we'll continue to update you on this story as it develops. jonathan: emma, thank you. turning to europe now, in spain, catalan separatist leaders may declare independence later this week after more than 85% of voters backed independence. hundreds of activists were injured when they tried to stop police from shutting down the illegal referendum. for more, we're joined by bloomberg's maria in barcelona. maria, let's talk about the images that came out of spain over the weekend. what looked to many as the use of excessive police force, an empty barcelona football stadium there to play that game behind closed doors, how important are those images for the separatist movement moving forward from here? maria: they're key, and this is why the government is now in full damage control. last night they said, look, i have to make sure the constitution was upheld. today they're saying, ok, maybe a lot of what happened

yesterday could have been avoided, and it was necessary. also, we're getting the sense that maybe they're kind of saying a lot of it could have been prevented if there had been better coordination with the catalan police. again, remember, catalonia has its own independent police, so the goth now moving from the law will have to be applied to things could have been handled differently, and that's exactly right, to what you pointed out. this gives the independent move a lot of traction, and it backs their case that they're being impressed by the spanish government. now it's a whole different tone from the central government by the prime minister. jonathan: legally it was unconstitutional. the prime minister was in his rights to clamp down on what was to happen. strategically, this was appear absolute mess. how does this get resolved from here? do they offer a referendum or more autonomy? what could be the deciding factor? maria: ok, so again, a little bit of breaking news.

the prime minister on the line this morning, he can get a sense of relief because the e.u. has put out a communique saying violence cannot be justified, but we trust that this remains within spain and that the prime minister can magazine this. so again ark lot that have pressure that was on the prime minister this seems to be dissipating a bit. are they going to offer the catalan government a referendum? the answer is simply no. under the prime minister, given the vote for his party, he can't do that. and again, a little bit of breaking news this morning, the catalan regional press are having a conference inside the office you're seeing behind me. he said they've had no contact. he's not had a call with the prime minister, but again, crucial. the catalan administration is now not sticking to the 48-hour deadline to declare independence. jonathan: great work, fantastic reporting from over the weekend. joining us from barcelona. for more on the reaction to the referendum, we want to bring back in dan from washington and vincent of j.p. morgan.

vincent, let's begin with you. european politics was a positive driving force in the bullish by europe calls so far. european politics in many ways has started to reassert itself over the last week. is that justified in the mind of the investors as far as you're concerned? vincent: not yet. it's too early, and it will mine, as we were in europe last week, we had a lot of interest breaking flew france in terms of new budget, in terms of reform. so it was a positive political story to remain intact in europe, generally speaking, and most which has expressed themselves over the past week, also quite keen to reinforce the integration process in europe. so i would say the catalan referendum or issue that we're facing this weekend is officially revived the political risk in europe. it is at the moment more spanish issue, as you rightly mention it.

i have frustration, because i believe that there's some region in europe for more autonomy, sometime for independence, are not isolated to spain. we see that sometimes france and italy, you may have some desire as well from some regions to get more autonomy. but europe can bring this positivity going forward. it's something called the european region in europe, a region represented in brussels, and if we move forward in the integration process in europe, those regions, the member state, will over time probably disappear, giving the power to supernatural entities like european commission, and underneath, you will have regions better represented. maybe it's too soon to pull the plug now. but maybe a more autonomy and lfrpbl the process to move forward, to more autonomy. it's what i see in many other regions. belgium has made this.

you see more autonomy per region, but still it's the best political frame work to move forward in terms of decoration within europe. jonathan: give us a sense of the spanish economy. it had been struggling, and then it had come back and was doing quite well. at what point does the prime minister need to get this back into under control before it does long-term, permanent damage to the spanish economy? vincent: at this stage it's more damage control from an image perspective. catalonia, we know the heavyweight in terms of g.d.p. in spain. we do not have any independence i know. r as as far as i don't know whether they're implemented. they still do not change the story about the spanish economy, which has been the poster child in terms of reform, but also of the economy recovery over the past couple of year. in my mind, in the short term, it doesn't change the equation.

also maybe underestimate the positive impact of this. we have seen that, again, in the past, we need to be very vigilant to see whether a whole weekend response to these aspiration, which, again, are not only seen in spain, we've seen it in the united kingdom, with scotland not so long ago, so this needs to be dealt with carefully, but the economy came back limited at the moment, although the financial market has been impacted this morning as you can see, especially on the ibex. jonathan: gentlemen, thank you for your time. dan, really strong this morning. thank you. and to vincent of j.p. morgan, with us. sticking we'll bring you the latest from las vegas, at least 50 dead and 200 wounded. details next. this is bloomberg. ♪

jonathan: the beginning of the fourth quarter, with stocks at all-time highs. we start out on a strong foot for the bulls with futures positive, up just over .1% on the s&p 500. .2% on the dow. as we count you down to payrolls friday, let's check out the bond market. what a move we had through

september with yields substantially hire. treasuries selling off, going into a friday with pretty down beat expectations. ahead of all of that, you see some significant dollar strength in today's session against the pound and the euro. the cable rate down almost one full percentage point. the euro down to 1.1756. let's give you a feel of the market this morning. let's get you up to speed on the latest headlines from las vegas. here's emma chandra. emma: the las vegas strip has become the site of the worst mass shooting in modern u.s. history. >> the number of injured, i do not know yet, but we are looking in excess of 50 individuals dead and over 200 individuals injured at this point. eam: police say a man holed up in a high rye hotel opened fire on thousands of people. police swat units stormed the

mandalay bay hotel and casino. they entered the room on the 32nd floor where the suspect was inside am he died in a shootout. he's been identified as stephen paddock, a 64-year-old. no news or information on a possible motive for the attack yet. authorities have also located a woman who may have been paddock's roommate, and they say she's a person of interest. president trump has been briefed on the shooting. he tweeted his condolences to the victims and their families. we'll continue to bring you more on this story as it develops. jonathan: thank you, thank you very much. as theresa may's conservative party holds its annual conference, the u.k. prime minister has been fielding questions on why she hasn't fired her foreign secretary, boris johnson. johnson has challenged her strategy twice in the past two weeks. joining us with the latest on the phone is emma ross-thomas, bloomberg brexit editor. emma, once again, you and i have discussed this already. we have an important stage for prime minister may to take and deliver what she thinks is going to be the future for the u.k.

and she seems to be drowning in boris johnson politics once again. how is she going to deal with this once and for all? emma: that's the question, isn't it? she's facing calls to sack boris johnson, and at the weekend, she was -- she brushed off questions. she's already tackling head on the threat to the sort of political stability that is boris johnson. and that's another thing. as you just said, the pound is down 1% am we talked to investors, and what they're saying, they're looking very much at the political stability and whether may can actually hang on to her leadership position. jonathan: here at bloomberg, a number of weeks ago, we spoke to former prime minister tony blair, and we asked him whether he would fire porse johnson, and he hesitated. what did he say is my differences aren't whether he can go around going against the prime minister, it's the content of those op-eds. i wonder his thoughts on brecksity and kind of exit they

should have, how far apart they are. eam: there has been a sort of con sense forming around the need for -- consensus forming around the need for transition, so companies after brexit, and that can form them, but boris has come out and find, fine, but not a day more than two years, whereas businesses would like it to be more than three years. you know, boris johnson has traditionally been one of the kind of leading possible successes to may. but also, it's not just boris johnson. u know, they also struck a different line than may. she's really battling at home and also battling in brussels. jonathan: talk to me about the party this week. if the party had a substantial majority, just the number of months ago, it doesn't have it anymore. when i lock at the reporting

coming from it, it looks very different on the ground at the conservative party conference. emma: it certainly does. it's quite subdued. some of the meetings on the fringes, not exactly a full house. very different in terms of what the conference, and also was noting that phillip hammond has given his keynote speech, and it was all about labor, all about the fact that socialism is a failed model. dabt that we thought had been sort of ended yergds, but they're ahead in the polls, and they've gone ahead proposing policy like nationalizing industries and this kind of thing. but it resonates with voters, and phillip hammond spent more than half of his speech talking about how socialism doesn't work. jonathan: fantastic to get that reporting from you, our brexit editor joining us from the conservative party conference. still with us is vincent. a lot of people look at the u.k. right now and think it's all about brexit politics. what interests me is not

brexit, it's a socialist movement within a substantial economy, a substantial economy in europe and in the world that is gaining significant traction. what are your thoughts on that? vincent: well, i've seen the similar development not only in the united kingdom, but somewhere even across europe, you're seeing this type of more extreme, the rise on the left, but looking at a clear position on the lts, and that's what you're probably seeing at the moment in the u.k., to feel so different in the political landscape. so it's not a phenomenon which is especially seen in the u.k., but which is across europe. again, we've seen that in france, where everybody was concentrate on the far right, but the far left also won substantial ground during the past election. so there's definitely key in the population in the u.k. and europe, a desire to change

maybe the old political model, change the equation, and to have fresh political movement in this european landscape to better also meet the restoration of the european cities in which apparently, given the preferential spark are not met by traditional parties. jonathan: is this a slow burning, market-moving risk that you could could materialize, or is it a slow burning market risk that just affects valuations in a place like the united kingdom? vincent: no, i wouldn't call it a slow burning risk. but getting back on the u.k. political situation, i'm far from a political expert on this, and i will quote permission, the head negotiate in europe, there's a lack of visibility on what is the positioning on several big items and issues, that brexit,

and you see it locally, this feature also in terms of the frustration of the voter about their expectation. the u.k. voter are maybe defeating that brexit is the number one item at the moment, which is far away from the day-to-day problems. but again, that's indeed seen in the support for the labor, and we hear my analogy, not my rk, and as an economy, i see the british economy is doing well. we have reached low inflation, inflation is kicking in, definitely an confidence. confidence is hurt by brexit negotiations. so on top of brexit, there's a need for me to also better meet those aspiration, but also think about, oh, they want the demow move forward. and that is necessary. david: give us perspective from

the u.k. side of this. from the european side, is europe basically turning east instead of west? by that, i particularly mean china. increasingly as the european economy more dependent on trade with china, relations with china, and with the east than with the west, whether it's the u.k. or the united states. vincent: no, i don't think so, frankly, and you've heard a couple of week ago, so very vigilant about chinese , so ment in europe there's definitely the desire to continue to trade everywhere, including the united kingdom, but not to replace the united kingdom with any other new trade partner. what is a consequence, there's the desire and a need in europe to reinforce europe itself. so also to maybe better look for itself to move forward in terms of integration.

i'm clearly seeing that. we had a european last week, which was totally different topic, which was digital economy. but again, the discussion about political situation in europe was raised. and macron made it also an important speech in paris also about this project, humaner plan. i guess the reaction of europe today is not so much to look elsewhere for a solution, but look internally for a solution. david: vincent will be staying with us much as you commute in today, you can tune in to our colleagues, tom keene and david, over on the radio. sursur can be heard in new york, washington, d.c., boston, and the bay area, as well as across the entire united states on sirius x.m. radio. live from new york, this is bloomberg. ♪

emma: this is bloomberg daybreak. i'm emma chandra in the hewlett-packard enterprise greenroom. coming up, the co-c.e.o. of oracle. this is bloomberg. jonathan: it's the deadliest mass shooting in modern u.s. history. on the las vegas strip, at least 50 people were killed and 200 wound when had a gunman perch in addition high rye hotel, opened fire on thousands attending an outdoor music festival. the suspect has been identified as 64-year-old stephen paddock, who was killed by the police at the scene. a abc news correspondent joins us from las vegas with more. great to have out program. giving us details as they came through in the last couple of hours.

reporter: we are now getting some updated numbers here. las vegas metro police are telling us that they estimate more than 400 people were transported to hospitals. that number is still at 50 dead here in las vegas after that shooting. like you mentioned, they have identified that shooter as 64-year-old stephen paddock. they believe that he was a lone wolf, that he acted alone, this is not a terrorist attack. authorities also saying that they found numerous weapons in a room that he was occupying, but when it comes to a motive, they still have no answer. we're also learning that the person of interest they were looking for, a female companion of this suspected shooter, this now dead shooter, marilou danley, they've been able to make contact with her, and they do not believe she was involved with the shooting here on the las vegas strip. jonathan: one of the questions that spring to many people's minds, something we discussed, how one man could cause this much devastation.

400 injured potentially as you pointed out, with the latest details. have we got any more color on the time line of thousand unfold and had how long it took for the police to respond? reporter: right now we do know that those shots started around 10:08 p.m. here in las vegas. that is pacific time. we have been told the firing of the shots went on for at least 4 1/2 minutes. when you think about the fact that officials say that they also found numerous firearms in his room that he occupied, not giving the exact number, but numerous firearms, that leads someone to believe that he was ready and definitely prepared with not only multiple firearms, but multiple ammunition to continue this shooting and for this tragedy to be as large as it is. david: have we heard anything from the management of the hotel, of the mandalay bay, specificly about how a man could take so many weapons, take them up to the 32nd floor, and have hem in a room? how did that happen?

reporter: you know, we have not heard specifically from the mandalay management about that. they did send a statement, of course, giving their condolences about this situation for the lives that have been lost, but when it comes to those specific questions, which i think are very good questions that they definitely need to answer about how can someone get that type of weapon, those type of weapons that she type of ammunition into your hotel without being noticed, that's something that they need to answer, and it's something that we will definitely be asking. jonathan: thank you am we appreciate your time. we'll continue to monitor the story and bring you any developments as they happen. david: thank you, jonathan n. other news this morning, just as we head into the weekend, we got word that president trump and his treasury secretary have been actively interviewing proximate cause active candidates for chair of the federal reserve, including the current chair, janet yellen, as well as gary cohn and several others. joining success michael mckee, bloomberg news economics correspondent. and still with us is vincent of

j.p. morgan in london. mike, let me start with you. first of all, mr. warsh got a lot of attention, because his rs the first name we learned on friday. what to we know about kevin warsh and what he would mean? michael: he spent time on the fed. he is a lawyer and was the liaison between ben bernanke and the financial community during the financial crisis. he's not an economist. he served for about three or four years before leaving the fed. had worked at morgan stanley before he came on board. now, he is generally seen as more hawkish. he predicted a lot of inflation coming out of the great financial crisis that never happened. and he also has suggested in other speeches that the fed has been too slow to remove its extraordinary accommodation from the market. the markets reacted immediately to his name by raising interest rates a little bit in the thought that he might become chairman. jay powell is the other person who was interviewed besides janet yellen.

he's a long-time investment banker in new york city, worked for carlyle group, among others, and also served in the george w.h. bush administration at the treasury department. a lot of experience. he's been on the fed since 2012. was just reappointed to another 14-year term. both are republicans. like warsh, powell is a lawyer and not an economist. david: perceived generally to be on the hawkish side. one of the questions, the six people who were mentioned, are any of them likely to be doves? jonathan: janet yellen has the reputation. powell has said most recently that with inflation low and growth at a moderate pace, they can afford to be patient. he doesn't define that, but he doesn't seem to be suggesting the fed is behind the kmb or eeds to ramp up their efforts. david: vincent with j.p. morgan, as you look at this, as the markets look at this right now, are they pricing anything with respect to the change in

the leadership of the federal reserve? incent: at the moment, no. the future policy, janet yellen, it's quite fresh in the newsroom. you mentioned the name, you mentioned at the end of last week, but it would be very important, maybe more important to a person than to see whether indeed they're dovish. and i wouldn't say that i consider janet yellen as so dovish. so it would mean that she's somehow kind of behind the curve in terms of dealing with the u.s. economy, the inflationary dynamic, and so on. and i do not think that it is the case. the u.s. is definitely not overthinking, so there's definitely an inflation in the u.s., which may prove that she has been through it or another stance is needed. it was a balancing act. it was maintaining a growing economy and a very long

expansion cycle, which is the third longest in history and may be the longest. tightening is not policy, while maintaining easier financial conditions. janet yellen managed to do so recently. i'm not sure at this stage, when she will be the most difficult monetary over the past couple of years, which is normalizing the balance sheet. i'm not sure that stance is really needed, at least from an economic perspective. i do not see the need. jonathan: mike, any idea what the key defining characteristic of a fed chair that ultimately the president of the united states would like to see? michael: no. that's the strange thing. the comments he's made have suggested he's looking for a "low interest person." he said nice things about janet yellen for that reason. and yet you've got kevin warsh prominently mentioned, seen as a hawk, someone who would raise rates fasterment jay powell, somewhat neutral, leaning towards the jellen side. gary cohn, nobody really knows where he comes down.

interest, of those four, three f them are not economists. david: thank you both very much for being with us. if you have a bloomberg terminal yourself, check out tv go. you can watch us online, click on our charts and graphics, and interact with us directly. just go to tv go on your terminal. live from new york, this is bloomberg. ♪

emma: this is bloomberg daybreak. let's get to the business flash. there's a report that nordstrom may not be able to close the proposed buyout, according to the "new york post." the department store chain has struggled to put together the financing for the deal, which could be worth more than $10 billion. private equity firm has been in talks to help fund the buyout. in the u.k., monarch airlines has shut down. the government is working to bring back 110,000 of its customers who are currently overseas and scheduled to return to britain within the

next two weeks. they failed to resolve its financial troubles. and that's your bloomberg business flash. david: thanks so much, emma. we had a bit of brinksmanship in the media over the weekend, with the walt disney company threatening to pull its programming from 2.6 million new york-area customers of optimun. yesterday, the two companies reached a new deal, which means people in new york will watch the yankees' wild card playoff game against the minnesota twins tomorrow. here to explain the drama is paul sweeney, head of north american research for bloomberg intelligence. so, paul, explain the drama. those of us in new york could see these ads across our television screen over the weekend, call optimun. >> exactly. they're owned by a cable company. they were ating logger heads, like we see all the time in the cable industry about who's going to pay what for the walt disney programming. so always comes down to the last minute, and typically the

parties could come together because no one wants their cable channels to be dark. if i lose any espn and disney, who am i going to call? i'm not going to call the walt disney company in california. david: how much is it a sports matter? viacom did go off, but they didn't have sports. david: espn, which we know has been under pressure, they have been losing subscribers over the last couple of years, that is really hurt the walt disney company stock price. but again, i think this deal shows there's still a tremendous amount of value in the walt disney programming, particularly with espn, and i suspect that a deal was done to both parties can live with. david: going into it, they were saying they were being outrageous in their demands for how much more money the walt disney company wants. do we have any sense who have blinked here? >> we don't, but typically cable companies tend to blink. they pay high single digit

increases for programming they carry. that's a problem for them, but a net benefit for the cable networks themselves. so it looks like the walt disney company probably won here a little bit at the end, but historically, the cable networks have been getting high single-digit price increases ever year. the market does not think that that's going to happen going forward. so i think the best guess here is disney got maybe a mid single digit increase for their cable networks. david: this was important for the 2.6 million new yorkers who wanted to watch the yankees game. but put into a broader perspective, for walt disney, in terms of where we are for the industry overall. >> yeah, this small transaction here in new york was actually very important for the industry, because there's the big concern for the media industry is cord cutting does. that mean that the cable networks don't have as much power as they historically did? jonathan: we've got to cross over to a news conference taking place in las vegas. this is the sheriff reacting to the tragic events in the last couple of hours. take a listen. >> 1-800-call-fbi.

the number 1-800-225-5324. that number is to be utilized for any and all information, especially video information or evidence that we can provide the f.b.i., and they will be the housing of all that critical information. so if you have anybody that has knowledge through your media sources, and they want to provide that information, that's the avenue to go. they'll walk them through the process, and then we'll get them to the online version, so they can download that information. additionally, the coroner's office, as i repeated before, has set up a number for individuals to call, and that umber is 1-866-535-5654. that is for individuals that do not have the ability to come down to the headquarters to

discuss their family and friends in person. now, the other critical piece associated with this in any mass casualty event is the need for blood. united blood services have their services set up currently. they are receiving patients or donors at 6 30 west charleston, and 601 whitney ranch in henderson. so if you have the ability to donate blood, to help the cause, please do so. additionally, the laborers union is offering their medical facility at 7135 west sahara for individuals that want to donate blood. and as always, there's a pod set up for individuals to go to .m.c. to donate blood. and that will be the gist of the updates at this time. i'm happy to answer any questions. reporter: can you talk about

what the scene was like in that room. >> we believe the individual killed himself prior to our entry. we are still going through the search warrant actively at this time. but it's in excess of 10 ifles. we have located her out of the country. she was not with him when he checked in. we have discovered. he was utilizing some of her identification, and we've had conversation with her, and we believe her at this time not to be involved. obviously that will be -- that investigation will continue. as far as his residence, we have officers now there serving search warrant. no, we just made entry just a matter of minutes ago. that's going to be quite some time. we're going to clear the residence first for any

possible explosives, so that will be slow and methodical, and it will take us quite some time before we conduct the search phase. reporter: did you guys find any weapons? >> no, ma'am, i don't know what has taken place as far as the interview with her. i think it's important for you to notice who's standing behind me. we have greg castle, i'm sorry, i always get caught up with your family, greg castle has been integral in the saving of lives. they paired up with our officers out at the scene, and i think their actions and heroic acts were instrumental in saving several hundred lives associated with this event. and then you have our attorney general. he's brought forth his office to help with any future prosecutions associated with the case. and you have the special agent in charge of the f.b.i. as i mentioned, the f.b.i. has been standing next to fbi has bn

standing next to us from the very first minute. they are providing all of the resources available from the federal government. then, you have the clark county commission chairman. inhas been instrumental getting us the resources to first responders as far as refreshment and food and the support of the entire county commission. i have been on the phone with the mayor. to checknded to umc with the patients. obviously, we have our congressman. he is in town to also show us support. any other questions of the members danny before you? >> at one point, you said this was not terror related. some people argue this is domestic terrorism. >> we have to establish what his motivation is first. there are motivating factors

associated with terrorism other than a distraught person to 10 -- intending to cause mass casualties. do you have any insight into what that motive was? >> know, we have not located any have nothin -- no, we located any items within the room or his house at this point. entryer we use a dynamic -- >> was there anything else in the hotel room aside from the number of weapons that made you think he was in there for a while? >> we have information he was there since the 28th of september. he hadno idea whether prevented the housekeepers from entering the room or not. that is a matter of continued investigation. thank you very much. we will provide you an update probably in the next two hours. clarkan: that was the

county sheriff, joseph lombardo, responded to the tragic events in las vegas. he has not established the motivation of the shooter. they estimate well over 400 people were injured in the incident. david: remarkable story. joining us now is kevin cirilli, bloomberg's chief washington correspondent. earlier in the day, we had a statement from the white house as well as a tweet to any other reaction at this point? kevin: i am told trump will make remarks later this morning in response to what has become the deadliest mass shooting in american history. killed at50 civilians the las vegas hotel. i am also told from the acting at my security secretary, this time, we have no indication to indicate a specific credible threat involving other public

venues in las vegas. the acting homeland security secretary saying as of now, no other threat to venues in las vegas. former president obama tweeting out his condolences, joining other lawmakers, including alsoor dean heller, who tweeted his condolences. but we are anticipating new comments from trump later this morning. david: sadly, this is not the first time a president has had to react to a mass shooting in this country. it is a test of leadership, whether the president is. indication of how the president will react? makeally, he was going to comments on deregulation and then had to puerto rico. kevin: there is no word yet on whether his public travel schedule has been impacted.

in terms of where this debate has been headed, the best way to look at this is to look at the donald trump made on the campaign trail. you will remember after the horrific tragedy at pulse nightclub, which up until now was the deadliest mass shooting, donald trump did tweet controversially. it will be interesting to see what tone he strikes now. jonathan: the sheriff pointing out how difficult it is to identify what terrorism actually means. they do not have the motivating factor for the shooting, it is ethical to determine whether it is terrorism. -- we determine kevin: when you look at previous comments trump has made after shootings like this or horrific

incidents like this, most recently charlottesville, he has impressed on this question about whether or not to call it "terror." following charlottesville, the president said call it what you want. so it will be interesting to see whether he directly labels this as an act of domestic terrorism when he speaks. the democratic national committee chairman tom perez is out with statements, and they are using that label. david: thank you. jonathan: joining us now is ian winer, wedbush securities head of equities. what a weekend we have had. the tragedy in las vegas, the president finding it difficult to comment on puerto rico. how can the president focus on

what matters at this point? ian: it is all about his leadership abilities. this is the opportunity for him to step forward. he has a great staff. he is doing the right thing with getting the military involved in puerto rico. is a situation like this tragedy. the key is not to politicize it but look at it as an opportunity to bring the country together. jonathan: i think most people would agree. how strongly do you believe that he has the right people around him? clearly, steve mnuchin and gary cohn are finding it difficult to sell tax reform. are they the right people to be sending that message? ian: they are the right people. as a west point graduate, the general is quite good. but i think gary cohn and steve mnuchin are as good as it gets when it comes to selling a difficult process to the american people. david: how difficult will it be to get the congressmen, the

senators, and the american people to focus on tax reform right now when we see what is going on both in las vegas and in puerto rico. ian: it will be difficult. it was going to be a difficult process before. everybody has a lot of different interests. history, ifrse of we look at what has generally driven people's behaviors, i would not be surprised if this is what you could focus on once you get past the tragedies. david: that raises the question of timetable. originally this week, we were looking at budget resolution. do you expect that gets extended? ian: it will all get extended, but i have never believed you will get any kind of tax reform, possibly ever, though i think the market is believing 2018 at the latest. jonathan: someone messaged me to stop calling it tax reform but call it what it is, tax cuts.

craziestead is the thing that has changed is the fiscal hawks have flown away. this was originally going to require a border adjustment tax. then, obama repeal and replace. you are getting none of them. now, a state and local the duction, which will never happen. ultimately, you have these fiscal hawks all over not spending any more money, and now we will continue to run up the deficit. the risk is to u.s. government bonds more than anything, if we see yields back up. if i ask you how tax cuts impact equities, you can tell me how and where. but can you say with any conviction that we get gdp up to a sustainable basis in the next 10 years? ian: no. jonathan: can anyone? ian: they will ultimately have to say that in order to get this done. they might as well plug in

whatever number they want to in order to make that happen. there is no evidence these tax cuts will wind up in the economy as opposed to in the bank. david: it might. what about capital investments? might that expedite that and lead to productivity? ian: it could. in theory, it should. but if we see anything from company behavior, the money they are able to save, whether through repatriation or outright tax cuts, have been spent on raising dividends and buying back stock. if there is a way to influence them to start spending, maybe, but we have not see that -- seen that. david: let's assume repatriation gets done. that seems to be a broad consensus. that ring money back into the economy and act as fiscal stimulus? ian: it should. there is no denying bringing that money back to the united

states is good for the economy. the question is is a good for the average american worker? a lot of these companies just i back stocks, and that will be good for shareholders, but i am not sure it is good for the employees. jonathan: you mentioned fiscal hawks have disappeared. another group has disappeared. the amount of people who used to say borrow more. those people have disappeared as well. is it not a good thing anymore to take advantage of where you are in the yield market? ian: i am surprised more companies do not. jonathan: talking about economists talking about treasury, not the company's. -- companies. a lot of people were begging the government to borrow more. why does the same argument not apply? ian: as they say in washington, where you stand depends on where you sit. trying to, people are politicize the ability of this treasury to get things done. david: ian winer of wedbush will

stay with us. coming up, a great lineup of guests, including mohamed el-erian, alan krueger, rick rieder, and krishna memani. this is bloomberg. ♪

jonathan: it is the deadliest mass shooting in modern u.s. history. on the strip of las vegas, at least 50 people were killed, more than 400 were transported to area hospital, when a gunman perched in a high-rise hotel fired upon thousands at an outdoor music festival. the suspect identified as 64-year-old stephen paddock, who

investigators say had more than 10 rifles with him in his hotel room. danya bacchus joins us with more. we are learning more about that shooter, 64-year-old stephen paddock. police saying they believe he was a lone shooter in this situation, that he had been staying at the mandalay bay since september 28. get when they were able to in the room, he had in excess of 10 rifles. we know now that they have entered his residence in another part of this state, but it will be sometime before we know what they find. they also believe he killed himself. abc news has been able to speak with his brother. he tells us the family is devastated. he says they do not know the reason for this, that they do not understand. saying that this is unbelievable, that they are

dumbstruck. and that his brother has no secrets in his past. police also telling us they have no sense of a motive for the shooting right now. jonathan: the sheriff says they have found no derogatory , butround for this suspect there will be a lot of questions -- how this individual got 10 rifles into the hotel, and how he caused so much devastation before killing himself as police arrived. danya: absolutely. that is one big question, something it seems they are also continuing to investigate. we know they are looking for a hotel surveillance cameras, trying to figure out how he was able to transport those weapons, that ammunition, into the hotel without being noticed here they are also looking about -- looking at that surveillance video to figure out a timeline. was there anything else that happened or may have led up to the shooting?

looking at that video to see if there were any accomplices. at this point, it looks like there were no accomplices. they are calling him a lone wolf. even when it came to the person of interest, marilou -- marilou danley, they have cleared her. they do not believe she is a person of interest. david: turn back to the victims for a moment. we know there are more than 400 people taken to the hospital. do we have any sense of their status? i do not know how many of them are critically injured. it seems that is also an evolving situation. many taken to multiple hospitals in the area. those hospitals are saying they are overwhelmed. when you talk to different hospitals, you get different numbers. right now, we do not have an exact total of how many people in critical condition, but we have been told the number of

injured has risen. we initially said over 200. police and now over 400 people transported to the hospital. number dead at 50. unfortunately, that number could rise. jonathan: thank you very much so much updates in las vegas. we will continue to monitor the story. this is bloomberg. ♪

♪ over 10: a little minutes away from the opening bell. positive,e a little up by 1/10 of 1%. of about two points on the s&p 500. gains across europe as well. the dax up 2. in the fx market, a stronger dollar story. 52, down by at 1.17

half of 1%. treasuries, yields lower by about a basis point at 2.32. the attention now turns to the tragic events from las vegas. we will hold a minute of silence from the new york stock exchange right now.

jonathan: that was a moment of silence held on the you new york -- on the new york stock exchange following a shooter killing at least 30 -- 50 and injuring more than 400. more details on that shooting as ours progress. twod: trump already made statements. we are told he is going to shortly be coming out and giving remarks to the nation later this about the tragic shooting in las vegas. the president has an awful lot on his platter right now. besides puerto rico, where he will visit, and the tax reform

bill, he is interviewing candidates to become chair of the fed. we learned that late on friday. joining us now is michael mckee, bloomberg's international economics correspondent. still with us is ian winer of wedbush securities. the president said within two to three weeks, he should have a decision. what do we know about the candidates and what we know about how they may change what is already occurring at the fed? michael: we have been told he has interviewed or spoken with janet yellen and gary cohn. they appeared to be the favorites. also, john taylor, who always comes up on everyone's list. formern allison, the chairman of bb&t. the important thing is they get someone nominated reasonably quickly, because unless it is to

keep yellen or nominate jay p owell, you will have an extended nomination process. the way the senate is going, with everything backed up, it will be tough for them procedurally to get it done. david: you have covered the fed for a long time now. how much can we tell from what people say before they are fed chairman about what they will do after they are the chairman. can tell what their leanings are, but you cannot tell what the situation will be. unlike a lawyer being nominated to the court -- case after case comes before the court. the fed basically just makes one is in every eight weeks. that all depends on the situation at the time. we know up to this point, kevin warsh has saidin

there behind the curve. taylor rule,as his which would have the fed funds rate higher, so he would bc as a hawkish candidate. once in office, they have to deal with the fact that this is a 19 member committee. of people whole bunch who will have a lot of influence on what is said. the chair can guide people, but what janet yellen does, she finds out where the committee is, positions herself at the head of it, and moves it in that direction. but if there is significant pushback, the chair will not be able to say i will do it this way -- my way. jonathan: even if you stood on the voting record of kevin walsh, he he voted for qe, then almost medially afterward, criticized qe. is the only known quantity

jerome powell? michael: jerome powell and janet yellen. you can guess where kevin walsh would like to go. the economic circumstances are different from where they were in 2008 and 2010, when he was a voting for and against qe. what will he do in january or february will depend on what the economy is doing. that is the same thing you are hearing janet yellen and jerome powell saying. that is inflation does not rise, it will be on hold. jonathan: when i came across bloomberg that kevin warsh had gotten the nomination, is that a risk off move? ian: anything other than gary cohn is a risk off move, because it means he is probably leaving the administration. jonathan: so you infer is the risk off move is what will

anden with fiscal policy gary cohn in the administration, not necessarily the fed. --: whoever will take out take over the fed has to figure out what to do with $4 trillion in assets they have accumulated. great to have you with us. the opening bell about four minutes away. a monthly winning streak on the s&p 500. beatsquarterly one that it. futures positive up 1/10. you are watching bloomberg. ♪

♪ jonathan: the cash open 27 seconds away. the scores as follows. record high and futures positive on the s&p 500. we close out september with a

sixth monthly advance and on a four-day winning streak. the nasdaq, a 50th record close so far this year. equities balance. positive going into the open. the bond market, treasuries, brutal month. 2.32 and the yield. the dollar firmer against the euro and sterling. up one half of 1%. let's get your cash open. here is abigail doolittle. abigail: the bulls once again in control. the record highs for the s&p 500 . we all so, for the nasdaq, are looking at an all-time record high, with both the s&p 500 and the nasdaq on record closes pay the dow lagging just a little bit -- actually, we have a record there. big winning streak for the bulls.

the head of technical analysis things gains continue. she does not see a two day pullback for several weeks. oftty a short america he this morning, we are all waking up to the tragic events in las vegas, the largest and deadliest mass shooting in modern u.s. history. at least 50 people left their. dead.least 50 people left mgm resorts trading lower. mgm resorts owns mandalay bay. live nation was the concert promoter of the country music festival where the shooting took place. those shares lower. two of the gun stocks trading higher. typically in the wake of the sorts of tragedies, we typically have these reactions. but typically, they proved to be short-lived. turning back to their broader market, looking at g #btv 1136.

chart. a five-year the s&p 500 on pays for its best the s&p 500 on3 -- pace for its best year since 2013. but gains for the s&p 500 and other major averages may extend and become bigger and brighter. jonathan: still with us to help recap the quarter end is ian winer of wedbush securities. the fourth quarter and what history tells us, for those a skeptical of history, what do you say? ian: people use a small sample size to determine what history should do, but it feels like this year, momentum is up. it feels like there is not a lot of people to sell stock. instead, we see bond yields back up even further. i imagine stocks will continue in their trend. environment for

a rally. people will watch what they say around 2018. tax reform expectations are 100%, based on the market. people will look to say what they say it -- people will look to what they say about the holiday. jonathan: two weeks ago, if i asked someone if a tax cut or tax reform was priced into the market, they would say no. are we really priced in? ian: i can speak to their clients i speak to, but whoever is saying there is no expectation is not being honest. whenever anybody talks about what one of the bold -- bull that are, the big one is corporations will spend like crazy. i just do not see it. that is the big event that could people, because all of a

sudden, at the end of 2018, you have nothing. david: you say there is momentum going into the fourth quarter. will that ultimately be because of increased earnings and where comeee earnings, from -- from? ian: i think it is multiple expansion, a direct result of the expectations for tax reform and how great things will be again. that is really all we have had for the last few years, multiple expansion. david: but multiple expansion based on politics in washington does not sound like a solid trade. ian: if you look at the soft data, people are confident things will get better. there is a change in the way people are thinking about the political environment. are they crazy, we will find out. jonathan: joining us now is t.j. thornton, jeffrey said of -- from jeffries, and ana gupte.

the s&p 500 health care index is up 19%. ana: as far as the fourth quarter, there is still plenty of catalyst and a lot of data points that should move the needle, at least on the baseline for some of the sectors. there is still the potential of multiple expansion. we have had a second failure of repeal and replace. it does bring some stability into the market. while we are looking at what happens as far as the appointment of the new secretary that replaces tom price, health care can still continue to outperform. jonathan: the obamacare repeal push is one part of the story. drug pricing was another. where is that debate right now? of the first big news conferences the president delivered earlier this year, he took the opportunity to drill down on drug pricing and we have not heard much since. ana: it has been a

disappointment from the point of view of the private payers, who may have looked for more action in the drug pricing debate. it looks like the pharma lobby was successful in stemming criticism as far as unbridled price increases. they put the emphasis on policy and if it management and attention--deflected away from that sector. whether or not back ats -- gets resurrected is unknown, especially without a cabinet secretary at the top. you might see some action from the commission to move the needle. i doubt there will be anything meaningfully negative. david: you mentioned repeal and replace a failed three times. at the same time, the toinistration has discretion

do damage when it comes to subsidies for the health care insurance. if they were to move forward on that, what would that do to providers? ana: you mean the hospital and health care providers. that would be there is more than just a legislative route to make a difference. i do not know what the administration will do. it is a wildcard. the state insurance commissioners are meaningful advocates of what the pricing will be. but for 2018, i will be if insurers continue to populate the so-called desert counties. insurance companies have asked cfr's are not% if funded past this year.

jonathan: how much pain does it retail have to go through as far as you see? t.j.: one of the things we have looked at is expectations for retailers. the fact is there has been a big rally in a lot of these names, especially lower quality names. there has been a change. i do not think it is purely people think they have gone down , i think there has been improvement in fundamentals. one of the things we have been looking at is for the first time in three years, there were more positive forward earning revisions then there were negative. the first time in three years that has happened. theseinto 3q, and some of companies report later, but expectations are also very low. expectation for apparel down about 3.5%. that is versus what was the percent growth in 2q.

so they are starting to do better, both in terms of stocks and the fundamentals. and the bar remains low, especially for 3q. the expectations of the management, of these individual companies, are they more realistic now? bullet inbit the terms of job cuts, etc.? much thats not so things are great in retail, but expectations on the part of the street and management have been taken down enough where they can finally beat. our analyst makes an interesting comment that just before the housing crash, 2006, 2007, those were good years for retailers. they signed 10 year leases. that gives them for stability to get out of these without penalty. that is one of the ways in which they are cutting cost, just not

reloading -- renewing leases. jonathan: t.j. thornton, thank you. ana gupte of leerink, thank you. we are about 10 minutes into the session in the united states. another record high in the s&p 500. slight move to the upside. from new york, this is bloomberg. ♪

emma: this is "bloomberg daybreak." i am emma chandra. coming up, the president and ceo

-- pgim. now for an update on the latest of elements out of las vegas. at least 50 people killed, more than 400 wounded, and the worst mass shooting in u.s. history. a gunman perched in a high-rise hotel opened fire on thousands of people attending an open air music festival. police stormed of a mandalay bay hotel and casino, using explosives to get into the room, where they found as many as 10 firearms and the suspect dead. >> we located numerous firearms in the room he occupied. it will be a long and tedious investigation. emma: the gunman has been identified as stephen paddock, a 64-year-old nevada resident. police are not commenting on the possible motive yet.

woman theyocated a described as a person of interest. trump tweeted his condolence to the victims and their families. he will speak from the white house at 10:30 eastern time. jonathan: thank you. broader market reaction to the catalonian dependence referendum is looking muted. the pain is confined to spain. isning us now from london lumnistcommunist -- co marcus. talk to me about why that referenda mattered so much to the spanish bond market. >> i do not think it matters a huge amount. in fact, it could have been a lot worse. treasuries are aware that the bank of spain and european central banks stand guard after the italian referendum in

december last year. they are on the spot to make sure bond prices did not gap out. so there is muted reaction. are expected -- we apected them to upgrade it to minus, but it did not. that will have a longer term affect if this goes on, as it looks like it might do. short-term, muted affect. long-term, we could see it seeping into spanish spreads. jonathan: looking at what is happening with the bank of several --with banks of spain, is there something more fundamental here? marcus: all of the spanish banks have been on a good run. a real estate recovery story. just filed itself one

and a quarter for a perpetual deal. nonperforming assets are on the way down. the two domestic banks focused in catalonia, clearly they are the most affected. but i reckon this will be a pause to the good news story, not a long-term problem. they have been on a good run. spend a lotu and i of time talking about this on bloomberg radio. one of the big tailwinds in european recovery is not just better data underpinning the bullish story, it is also the politics. is reassertingcs itself in a way we are more used to -- in a negative way. is that a jump too far for you? marcus: no. it is easy to say there is nothing to see here. equities off a touch. it probably will be the case that these things will recover.

but there is a wider problem. we have a minority government in spain, which has handled the crisis badly. it will be in a world of pain to get this budget through. just after a german election that has not given as conclusive a victory to merkel as she would have one -- wanted. europeanamounts of governments are in minority. it is difficult for markets to see how the e.u. response. -- responds. jonathan: we want to give you economic data. pmi coming int just a little better at 53.1. david: ian winer of wedbush securities is still with us. just to book and -- bookend the discussion of spanish banks, we want to talk about u.s. banks.

as we head into the fourth quarter, what do you anticipate for u.s. financials? ian: it will all come down to where rates are. getlatory stuff will easier. you have to make decisions within the sector. regional banks will be bigger beneficiaries. they are not as opposed to trading, which is not a good spot for these multinational banks. to be iny, you want names that will benefit from rates going up and regulatory handcuffs coming off. both of those are realistic things. comes to rates, the path janet yellen appears to be on would be encouraging. whopeople like kevin warsh appeared to be hawks would be encouraging as well. but what about the steepness of the curve? of the curvepness will drive the train.

but the policy from the federal reserve is just as important. if the expectation is you will get a hawkish fed. the other wildcard is tax reform. if this is not revenue neutral, these bonds will sell off hard. there has been a big the bigs when we got buybacks and dividends coming through. will it be helpful in the next year as well? ian: absolutely. these banks have been handcuffed, especially regional banks, because they have had the most difficulty making loans. it will be a big deal. it will make a difference. it will really come down to what we actually see happen in the middle of 2018. jonathan: i want to fall in the story of who leads the fed. you said if it is not gary cohn, it will be risk off, because it will be a gary cohn-less administration. if it is kevin warsh, and the boxee takes is deregulation --

the regulars in, is that a positive for the bank s? ian: yes, but it is not good for the s&p 500. david: but isn't deregulation going to get done? to what degree. have we seen a repeal of dodd-frank? no. but it seems everyone is on board to fix things for regional banks. david: ian winer, thank you. if you have a bloomberg terminal, check out tv . watch us online, check out our charts and graphics, and interact with us. live from new york, this is bloomberg. ♪

david: breaking news. this is prepared testimony that the equifax ceo will deliver before congress tomorrow.

he reports that they told the fbi they had a problem with a security breach as early as wasst 22nd, and the board also notified. thateo of equifax saying they let the fbi and its board know early on. after remarks last week anerally taken towards december rate hike, janet yellen will speak on community banking in the 21st century. joining us now is michael mckee, our economics and policy correspondent. do we expect hear anything that will evolve into a december rate hike? michael: no. we have been talking about jay powell. he is speaking to a conference on treasury markets.

in maybe someone will ask what he thinks. john williams also speaking. a big week for fed speak, but none on monetary policy. david: but it may be on regulation. that has been a theme. michael: unfortunately, the fed does not have a lot of responsibility for that, they supervise larger banks. but they could weigh in. jay powell has taken over for dan cerullo as the guy running regulation at the fed until we get the new vice chair for supervision. for a lot of people, janet yellen sign her regulation -- resignation letter. michael: people suggested because she pushed back against what donald trump once to do, that will be all for her. but he is a quirky character that you never know. jonathan: walk us through the

infrastructure and the institution that is the federal reserve for someone to go into rapidlytitution and change the group think that exists there. the staff that write the reports that end up on their desks, how will it be to change how this institution thinks? michael: if you have not been working at the fed and keeping up-to-date, you will need some sort of framework for your policy. the new chair will get those things from the fed staff. they will say this is what you get from the economy and this is what you should be doing. david: how does it work if you bring five of your friends with you, because it looks like we have a big turnover. michael: but how long will that take? even if you confirm the chair

first, it will take a while to get to everyone else. and the fed bank presidents do not change in the meantime. to not look for a radical change in policy, no matter who is nominated. jonathan: thank you for joining us. my six minutes into the session, that does it for "bloomberg daybreak." futures positive. up 1/10 of 1%. another record high on the s&p 500. gain on the dow as well. a decent session in europe with the exception of spain. ,he story in the bond market treasuries again stronger footing after an ugly september. our thoughts of course with those affected by the tragic events in las vegas. coverage continues right here on bloomberg. ♪

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vonnie: here are the top stories we're covering from the bloomberg and around the world. at least 50 people dead, more than 400 injured, after what is turning out to be the deadliest mass shooting in modern u.s. history. the suspect identified as 64-year-old stephen paddock is believed to have killed himself after firing at a crowd of more than 22,000 concertgoers. donald trump will make remarks at the white house this hour. we will bring those remarks to you live. donald trump faces a busy week in washington meanwhile after unveiling the republican tax plan last week. the framework proposal clos -- includes a foreign tax. and in spain's catalonia,