big way. amazon prime to $1000 a share. alphabet hits an all-time high. weaker consumer spending and shrugging off political chaos in catalonia. markets fromropean drama in spain. good morning. this is bloomberg daybreak. i'm a jonathan ferro alongside david westin. 0.25%s are positive, up on the back of strong tech earnings. that makes up the bulk of the s&p 500. it is the biggest waiting on that index. that index. on euro-dollar at 1.16. down comes through a bit, seven basis points. -- one basis point.

david: emma. governmentebel of catalonia is making a last bit effort to gain concessions from madrid. tosident puigdemont wants gain concessions before a vote on independence. u.s. defense secretary james mattis visited the denial tries zone that separates that demilitarized zone that separates the two koreas. he says president trump wants to avoid war if possible. the national archives has on thed 2500 records assassination of president john f. kennedy. successfully appealed to

the president to block the release of hundreds of other records. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. david: thank you. will congress finally reach left off on tax reform? yesterday they passed a budget resolution that sets the stage for an actual bill next week. then the fun begins with lobbyists and hearings. what is to come? what is between us and actual legislation? >> when you crunch the numbers from the budget that passed yesterday in the house, 20 republicans voting against the budget, now most of those have issues with the elimination of the state and local tax that option issue. i cannot with one of those representatives, peter king from new york, to talk about why he

is opposed to this. take a listen to what he told me. >> seven of the nine new york republicans voted against this. it is usually considered to be a partyline vote. this sends a clear message that we would not be able to vote for the tax reform bill if this is eliminated. >> i spoke with chairman brady, one of the dominant lawmakers in the tax writing process. with 20 republicans voting against this and entire democratic caucus, that is still not enough to stop tax reform. it is still unlikely there is a broad enough coalition to stop tax reform when they finally put forward a bill. david: at the same time, the numbers have to add up. they have already been able to debtow $1.5 trillion in

reduction, but the number i have heard is two point -- 2.9 trillion dollars. that leaves $1.4 trillion left. >> a lot of asset managers are very concerned about that. you will hear more from them in the next two weeks. that markup is scheduled on november 6. the next step is november 1. that is when we are finally going to get a bill. fors arehen these paid going to become more controversial. david: thank you. jonathan: let's get to the fx market. dollar bid comes through for a second straight day. this is the dollar index with a 94 handle today. percentagee full point over the last 48 hours. anding us is andrew brenner

troy gayeski. let's begin with you, try. does that have legs? >> we think so. there was a lot of hope towards tapering of the ecb towards the end of the year, that got a lot of trends started in the euro, and quantitative managers jumped on. that drove record long lengths in the euro versus the dollar. we think reality has stepped in. the ecb is not going to hike until late 2018 at this in soonest. the jonathan: does one of the ingredients need to be what is happening with tax reform? >> you have better growth. you have the fed cooperating slowly unwinding the balance sheet. hiking, clearly. at this point, you have a much

more powerful than a 1% followthrough, you will need to see strong evidence of tax reform and discussions of fiscal stimulus next year. jonathan: this is the moment of truth for the bond market. there is some risk given what could happen on the fiscal side of things and what is happening on the monetary side of things globally. do you share that view? >> i do. . i don't think you're up to throw in the towel just yet. you have fiscal stimulus coming through in the tax plan. you have a new fed governor coming. right now it looks like it is going to be john taylor. he has his taylor rule, which would double or triple the fed funds rate if it was implement it without being mitigated by

other members. i think we are in the point of truth. i don't think the us economy is that stronger i am not that optimistic -- the u.s. economy is that strong. i'm not that optimistic going into 2018. david: we caught up with a former member of the federal reserve. he had some views on taylor, basically endorsing him. >> i am supportive of john. given my criteria of what i think is needed, a kind of leads to picking john. david: what do we really know about a taylor fed chair would do? on the one hand we have the taylor rule, but he also tends to be supply-side. he tends to let it run. if we got tax reform heating up, he might not clamp down. >> there are people studying his

background, and they realized he is a much more believer in progrowth, regulatory relief, tax reform, and the ability to run the economy at a higher rate in the next 12 or 36 months. if that is the case, you will not see the dramatic change in monetary policy, but you will see more aggressive regulatory relief, which can get moving pretty fast. jonathan: is this a potential fed chair that believes we are not at full employment, there is more potential in this economy? >> if you look at his speeches from the last few weeks, absolutely. he is saying what the president wants to hear. we can grow it faster. we can improve the economy dramatically. we can take back and reform. if it goes like this and the economy does start to pick up, you are looking at much higher interest rates in the long end.

it is inevitable. jonathan: is that your conviction call, the long en d? >> yes. i don't know if i would be short treasuries at this moment because i'm not sure the tax plan is going anywhere anytime soon. if you just listened to kevin cirilli, you have the 401(k)s you, the state and local taxes you, and you only won this budget thing by four votes. you don't have any credit support now. we are going into the holiday season, so senators are not going to give up their holidays. jonathan: i don't see that happening. andrew brenner and troy gayeski staying with us. coming up, carly fiorina. we will be talking politics, business, and her new foundation. we wrap up the trading week for you. let's if the futures. two hours and 20 minutes away from the opening bell. futures are firmer.

this is bloomberg. ♪

jonathan: catalonia's president is out of options as senators in the capital of madrid are expected to pass legislation today to seize control of everything in the insurgent region. in the market, it looks like this. the euro trading at its weakest level against the dollar in 13 weeks. europe isot to say insulated from what is happening in spain because of what the ecb has been doing.

10-year treasury coming in about a basis point. the paint is in spain. .he ibex is down the stoxx 600 is positive about 0.5%. let's get the update on what is happening with spanish politics. always great to catch up with you. i have lost the plot when it comes to spain. every time i wake up, something else is happening. get me up to speed. maria: good morning. essentially that is a fair description of the situation. we have seen again a roller coaster day. there are two votes set to go ahead today. one in madrid, one in barcelona. in barcelona, we are waiting on the parliament to reconvene. an hour ago we got a leaked document saying the catalan parliament is going to vote on a declaration of independence.

this is crucial because october 10 when the catalan regional president made this declaration, it was a symbolic move. they did not vote on anything. it looks like they will vote on this bill. thee is a team inside catalan parliament saying this cannot go ahead as planned. the opposition party and catalonia says they will not participate in this. in madrid, the central government is essentially waiting to get the green light to implement article 155. we have talked about this for days. this would essentially hand madrid sweeping powers over catalonia and get rid of the catalonian administration beginning with carl's puigdemont. jonathan: i am wondering what the exit strategy could be outside of independence. there was some discussion about regional independence. what doors can be opened?

maria: that is right. they are backing themselves into a corner because madrid now feels they have an upper hand. the central government says they are going to go ahead with this article no matter what. if they backtrack now, it is a little too late. rajoy made it clear this is the only way to go. there is no question if they wanted to approve this, they could. in barcelona, there are tensions playing out in this coalition. the more radical side wants this declaration. there is a lot of frustration in barcelona when yesterday puigdemont appeared to back away from this decoration. the more radical elements are saying we have to do this now. us this are telling idea of a regional election could help ease tensions.

is madrid going to do it? we think we are just waiting to hear from the senate to get rajoy the green light. jonathan: we see pro-independence demonstrations taking place in barcelona. troy gayeski with us. the periphery, but that changed. mario draghi said we are going to be in this market for a long time. >> good luck with that. the bottom line is the european economy has transitioned into higher growth this year. as long as you are growing 1.5% with anoint size --2%, upside surprise. this is an opportunity to invest in europe, the best since 2005 or 2006.

you have less downside if something goes south. up days of people talking shorting peripheral bonds are mainly gone because of the ecb and growth. jonathan: can we really say the politics on the screen does not matter for markets? >> it doesn't right now. there doesn't seem to be any great effect. i have a great chart of the active catalonia bond that has been going straight up. the reality is this is not the issue in europe. the issue in europe is that angela merkel cannot get a coalition going. she spent 11 hours yesterday, and she cannot get a coalition. this is going to be the biggest problem in europe next year. it is not meant to be the catalonia situation. if you really think spain is in trouble, look at five years ago. i don't think spain is in trouble right now. if you go 20 basis points, that

is not a headline. david: the big story in europe is clearly the growth. >> and the ecb. david: that is the remarkable thing, markets are handing it to him. he has growth going and is keeping the euro down. italy and their election, germany? both european economies are large and fast. when they get pointed in one direction after having slow growth for years, it is tough to shake it out. there's nothing dramatic in the near term that says incident growing at 2% you will grow at 50 basis points. a german coalition will be messy, but markets assume they will have a more progrowth bent. david: any clouds on the horizon it comes to european investment? havecron really wanted to

an integration of europe that ie merkel cannot deliver. me, numberthat scare one is brexit. i have never seen anything handled this poorly. mario draghi is out in 2019. then it will be wheaton in, a hawk beyond hawks. you have a window, but it will probably close. jonathan: that is something we could discuss, whether he is excellent going to get a hike in before he leaves in 2019. this spread has blown out to 237 basis points. how much oxygen is left at 237 basis points, the widest spread since 1990's. >> two or three weeks ago you had an exceptional spread, you

have seen some compression. that is not a position we are involved in. we know a variety of macro funds that are. most of them are turning their positions -- trimming their positions. brenner ofew natalliance securities, you are leaving. troy gayeski is staying with us. this is bloomberg. ♪

♪ david: a blowout earnings quarter for big tech. google beating estimates. joining us is troy gayeski of skybridge capital, and joining us on the phone is scott kessler, director of cfr a research. let's start with amazon because they had a particularly strong quarter. they raised their top line and

managing costs. is this a turnaround? >> thanks for having me. i am responsible for the tech sector research efforts at cfr a, a colleague of mine is responsible for amazon. we have been constructive on the stock with a buy recommendation since the beginning of last year. we have been encouraged by accelerating growth in revenues from the quarter just reported. tohink they pointed international traction as well as the fact that aws continues to execute well. the growth story is intact. they have delivered when it comes to profitability a lot better than people expected. david: let's talk about google. concerned at all about the increased costs they have had in tracking this traffic because they had remarkable growth in ad

sales? >> acquisition costs have gone up. i believe they were 23% of revenue this quarter. last year i think they were 21% of revenue. it is really driving revenue gains. we have seen strong revenue growth. i think they through 24% compared to the prior year quarter. what is noteworthy is we are seeing strong volume growth driven by mobile, but the pricing pressure related to that has kind of flattened out, so we are seeing declines in pricing, but they are comparable to what we have seen over the last couple of quarters. it is still a really strong growth story. i don't think people are appreciating that is indicated by the multiple. jonathan: to some extent it was insulation away from the d.c. story, with this secular growth

story independent of what is happening with the federal reserve, if we get fiscal stimulus coming through, do you tech tovot away from something more domestic? >> it is an interesting concept. if you think about this time last year when the election u.s.ned in the there were a lot of cyclically oriented sectors that it better than the tech sector. people have realized and snapped back that tech is the better performing sector. we have seen signs were people have been rotating to more economically sensitive sectors, but tech historically performs very well amid environments of rising interest rates. people very well could

be successful with continuing with the tech trade, but they might be more selective regarding valuations. jonathan: what is harder shorting bunds or tech? >> with tech you might wait five years to make money on a tech short, but you are vaporized meanwhile. jonathan: coming up on the program, don't miss carly fiorina, former republican residential candidates on politics, business, and her new foundation. we wrap up the trading week for you. after six straight weeks of gains, will we get a weekly drop? ♪

jonathan: quite a few weeks of gains on the s&p 500. will we get a week of losses? looking at the board at the moment, we might array some weekly losses at the moment. on the s&p positive

500 after really disappointing results stories from the tech sector. that is the biggest waiting on the s&p 500 and boy, did it deliver the last 24 hours. the dax is up three quarters of 1% because of the euro that keeps heading south. euro-dollar move the lower yesterday and moved lower again today, down the third of 1%. you see that did coming in for bunds. now back down to 0.41%. as a tough trade. let's get an update on what is making headlines outside the business world with emma chandra. emma: i want to take you to barcelona now with the rebel catalan president has entered the regional parliament and is preparing to speak. he wants supporters to accept regional elections rather than in th a declaration of independence. lawmakers are not likely to vote on an independent resolution. a capitol hill in the u.s., republicans promised to unveil

their tax reform bill next week. they cleared the way for the legislation by clearing a buzz budget resolution, but emergedling block for high-tech states like new york and california. stanford professor jon taylor argues that faster growth is possible if policymakers focus on changes that encourage investment and hiring. he says it could bring back high levels of growth and it could bring back micromanaging. global news 24 hours a day powered by 27 or journalists and analysts in more than 120 countries, i'm emma chandra. this is wilbu bloomberg. david: she wanted to be the first to know president after she climbed to be the first woman to head a fortune 500 company, hewlett-packard. is startinga a new foundation to teach

leadership skills. we welcome her now. you are a ceo of a very large company and you decided you wanted to go to washington and run the government. as you thought about that process, what from the business world works in washington and what doesn't? i think the country is sorting that out about a president right now. carly: first of course, the federal government and business are different in some substantial ways. we have three coequal branches of government, something the president sometimes forgets, but there's a congress and the executive branch and the judiciary branch. on the other hand, what a think businesses do is focus on results, i'm actually producing results. i think the american people are so frustrated because we figured out that for quite a long time now results do not seem to be the most important thing in washington sometimes.

sometimes the most important thing is winning again. sometimes the most important thing is preserving the system as it is. sometimes the most important thing is giving a speech, not solving the problem or given results. david: ceos are really judged by results. disney andp city and the really good ceos limit the results they are going for because a company needs to focus. it's hard if the head of the company is focused on two things at once. is this president properly focusing on the limited number of objectives? carly: we will see, won't we? in the end, the support thing this president can do is produce results. it is what he promised and that's why he's in the white house. he needs to produce results. tax reform is a credibly important now, not just to keep the stock market going, but because it would be a tangible result and benefit to american companies and intricate people. -- the american people. david: was health-care reform a

detour on that route? carly: health care reform needs to be reformed desperately and democrats made a huge mistake when they passed health care reform on hugely partisan basis. sadly republicans made the same mistake. forgetth parties did is the american people need to support the plan here. in neither case did the american people understand the plan for health care reform so it failed. , tax: as you suggested reform will be very important to the judgment history has for this president and his first term. as a former ceo, what matters most? what would you do if implemented? carly: first of all, predictability. we cannot have one your changes or even five-year changes. as you know, big companies and lots of big companies plan over multiple years if they are doing their job well. predictability and stability would be helpful. another thing would be helpful

is to limit the rates. -- lower the rate. there are gyrations that come please through and loopholes they try to take avenge of and that 76,000 page code -- 76,000 page in that code. it's important for smaller companies and families because all i complexity favors companies that can hire all the count of the lawyers. even a big company is spending enormous amounts of time and energy trying to make that complexity work for them. and finally, it has been talked about a lot, allowing companies predictably and for a long-term future to repatriate cash. companies are doing all kinds of things to keep money out of this texas tech. is exactlytriation its tech because that such a big issue for tech companies that have money offshore. as you look at these earnings that we had in yesterday from

the likes of google and amazon, what you make of the tech sector at this point? it seems to be really on a tear, particularly with the mega tech companies. carly: well, it is on a tear. what these mega-tech companies now need to think about and what the american people need to think about -- and i'm no fan of regulation -- the power they are amassing his enormous. in aller to influence kinds of ways. so i frankly find it disingenuous for facebook to say, oh my gosh, we didn't know our platform was being misused. these companies have amassed enormous power and have to be thoughtful and careful about that. consumers need to be thoughtful and careful about that. in washington, republicans and democrats are starting to pay attention to the. that. david: we see a push for regulation on both sides of the limit. techu were running a company today, how would you get from of that so it's ok for your business and still applies to

what people need? carly: the first thing i would do and what i tried to do that continuing ard, long tradition of there, is i would be transparent, open, a collaborative. in other words, i would not just pull up the drawbridge and say we don't want to talk about it, you don't understand, there's a problem here. that isn't going to work. not anymore. the first thing i would do is come forward and say let's try to work together around the sources of concern, because there are real sources of concern. david: tell us about your new charity. we don't know much about it. carly: we created it and staffed it up, unlocking potential. it trains people and teaches people how to be leaders. leaders has nothing to do with your position or title. leaders exist everywhere. we frankly need a stronger civil society just as we need a more responsive political system. we left leaders up whether they are in wounded warriors or places all of the country. leadership can be learned. i've taken 25 years of

leadership experience and turned it into a curriculum. david: carly fiorina, thank you so much for being with us. jonathan: thank you. today,as you commute in he continued to our colleagues tom keene and david gura on "bloomberg surveillance" radio which can be heard across the u.s. on sirius xm. from new york, this is bloomberg. ♪

emma: this is "bloomberg daybreak." i am emma chandra here and the hewlett-packard enterprise green. room. steve corwin at 9:30 a.m. eastern time. this is bloomberg. ♪ jonathan: pbs's capital bus has rebounded and the third quarter.

manus cranny sat down with the ceo and asked him how concerned he was about repressed volatility levels. >> first of all, i think volatility is particularly at a sensitive issue for us around the effects on major currencies. we are one of the leaders in the fx market and global activity on the major currencies is affecting business for us. say weral, i would talked about volatility and i mentioned it in the past that it's like cholesterol. there's good volatility and that volatility. -- bad volatility. what we are missing is a constructive, positive volatility. we don't want destructive volatility. seehat sense, you can global activity is pushing more and more investors put passive and very different

other forms of investments. manus: even on a healthy volatility 2018, is that what takes the idea of the curve? sergio: we are not open for it, but we are prepared to manage any kind of market conditions/ . it's very important for us to not going to wishful thinking about the environment. it's a very challenging environment. growth forwe see gdp the forecast set to be revised up again, but geopolitical and .ituation are very complex we are entering a challenging quarter in terms of seasonality. i think we stay focused on executing on our current strategy and that's very important for us. manus: my favorite subject and one that you get talk to about is that you brought it up in america so i will bring it back to you. we are almost there. actually we are there. capital buffers are at 13.7%. that's up and nice.

do we get a buyback from ubs in 2018? we talk about our capital return policy, but i mentioned in the past that we reached the capital levels that are needed for regulatory requirements for 2020. we are looking to continue to implement our progressive policy on our cash dividend. eventually couple amended with capital returns, but it's too early to talk about it. jonathan: let's bring in manus cranny. a little bit of weakness of the stock today. what's the story? manus: nobody escapes. there's nobody who can escape this. it's a low volatility world. the stock was bid on the open

and he talked about dangling that caret again about the revaluation. ubs is ahead in this game no doubt about it. nobody escapes the low volatility. what kind of volatility will be get going into 2018? i still think capital is a key to the story, but that's against the regulatory backstop. you need to know what the regulators want before you can turn on the spread it -- it's big it of a share buyback. i think the market has had a good run, but we still don't have a date from him yet in terms of that payout. it certainly was a solid set of numbers. he is not facing the battering that john cryan took yesterday. jonathan: i think the reason for that is something you touched on for people not familiar with the ubs journey. many years ago, that he scaled the investment bank as you point out. i'm going to ask you question whether this is still the octomom business mix so to speak

with the way this bank is set up. i will quote you back to what jay staley said yesterday. you cannot cut yourself to glory. there comes a point in time -- i'm sure there's more meat on the bone that you can hear about any business. of course, there is. at some juncture you have got to say, a bigger question is has the advancement banking landscape fundamentally changed? it's called old-fashioned investment banking. i don't want to frighteningly but it, but old-fashioned investment banking is what helped the investment bank. don't forget that this is a wealth manager. he said in new york a couple weeks ago that i'm the most expensive investment bank and i'm one of the chie cheapest asset managers. why do you want to own the stock? do you believe they have arrived or more traveling to do?

there is more cost to be taken out of the business, but you need the flow. i would put the proposition on the table as this -- the germans are in a reflective soul-searching moment. the french are snapping at every bit. that leaves you with a ubs that has the capital rate ready to go to get the regulatory landscape theect and get basel out of way and you could be looking at a much more momentum cash dividend stock. jonathan: manus cranny says he has to go get a plane. i'm sure he will go to a hotel lunch.eye switc nice swiss manus pointed out the swiss situation. we sit new york and asked the question long european banks or long u.s. lenders? can you give a more specific breakdown of what you don't like and what you like? >> there's been a lot of interest in hedge funds being long. it's the reflation story and the fact that there cleaning up the balance sheet and a rather aggressive manner.

most of that was hatched with a larger banks in germany in particular the view is not that they are terrible. as manus said, there's just no growth. where's the growth going to come from? they lose the market share from u.s. competitors. if you're going to say what would you want to be long banks, it will more likely be the u.s. and more focused on regionals. back to your point directly, there is still some length and italy. there is still hope that the greek banks get revalued somewhere close to half time value. there is general depression when it comes to the future prospects for the too big to fail banks. jonathan: if you do not want to be long greek penny stocks, i wonder how long you want to be long italy. troy: a lot of that risk has been taken off, but there are still more growth potential in italy and still more balance most cleanup to go that

think leads to 10 to 15% upside. david: if you're looking for growth, why is it in wealth management? there's more money that people need to put away as we age. critically ubs, they made a lot of strides and china particularly. troy: ubs is an interesting case. it's more likely morgan stanley of europe that they transition their business more to wealth management as your colleagues said before. it's more between a bank and wealth management. for them, there is a clear path to growth just like there is for morgan stanley. if the world grows wealthier, there should be better prospects for them instead of the other two big to fail banks. jonathan: try, always great to catch up with you. david: coming up, we have compass point policy analyst isaac to discuss tax reform. live from new york, this is bloomberg. ♪

emma: this is "bloomberg daybreak." i'm emma chandra with the bloomberg business flash. waiting times for the iphone x are rising. is making in five weeks for the u.s. as a sign that supplies will remain tight when the iphone x goes on sale. nissan has been conducting its unauthorized inspection checks. sinceappened in japan 1979 according to a person familiar with the matter. the government ruled those inspections are faulty and that led to the recall of 1.2 million cars and temperate shutdown of factories in japan for local sales. the parent of british airways is projecting an 18% jump in operating profit this year. iag says the third quarter profit was boosted by higher fares on u.s. and asian groups plus short-haul operations improved with several european rivals driven into insolvency.

that is your bloomberg business flash. david: private equity is on the march with record inflows to funds and stephen schwarzman saying this play left to go. have internal , plans, aspirations to basically double where we are, which would take us to about $800 billion in five years. it's what we are looking at. we are not finish our plans so we will see if we can accomplish that, but that would be a very substantial increase in terms of what we are doing. david: joining us now is eric hirsch. welcome to the program. give us a sense of where private equity is and where it sits in the constellation. we hear a lot of stories about a lot of money flowing into these funds. eric: all that is true, but the results continue to be excellent. the investor base is recognizing

they want diversification away from the listed equity market and they are turning to where they are picking up a lot of growth, which is the private side. allocations going up and more funds being raised and funds getting bigger and money continuing to flow in. david: is it basically the search for yield and private equity offers that? but: as some of that, investors are trading it liquidity for higher performance. we've not seen that shift so much. people have been focused on liquidity and you are seeing a tilting around them saying i'm a sovereign wealth fund or a pension fund. i'm happy to lock that money up for a couple decades to get better performance. david: are they willing to actually pay more? one of the issues we have seen in hedge funds is the ruling models under siege. private equity can get good returns, but you have to leave a lot of money. erik: it's expensive. the hedge fund issue is that they were charging really great fees and not really getting great performance.

the fees are staying steady. fundraising has been exuberant and those fees are staying at those levels because the performance is there to back it up. david: is there a challenge though as you get more money to have to put it to work? are there that many opportunities that give you the results that you want to turn over to shareholders? erik: what's amazing is you see market cap on the list inside just growing. basically the last five or six years of 40%, but the number of public companies around the globe are essentially flat. in the u.s., it's down. look on the private market side. it's growing following the economy, but the investable universe is up 180% over the last five or six years. upon that we are all fishing in is getting bigger exponentially. you are companies want to be public and more companies want to stay private and have the growth capital behind them. david: everybody in business is focused on tax reform in washington. one of the issues is possibly cutting back on the interested duction for corporations.

it is said that particular could hit private equity. are you concerned about that? erik: we are. if that actually comes through with nothing to counterbalance it, because if we get that but substantially lower corporate tax rates, that might balance out. our numbers say it could be a net positive. if we safely get the interested duction cut but we do not see the lowering of corporate tax rates, that's going to be a challenge. to thein gets passed solar businesses and you'll see prices go down. david: can it affect fundraising? i generally don't know. if you curtailed 401(k)s because you cut back, does that trickle down at the private equity and there's not much money coming in to us? erik: we don't see that being an impacte. the vast majority of the capital is predominantly coming from the institutional sovereign wealth fund side and not the 401(k) market yet. david: sovereign wealth is a big factor in your business? erik: a huge factor. it as being the

biggest investors around the globe and you some what's happening in riyadh. it's getting much bigger. david: thank you so much for being with us. coming up next, a chief investment strategist live from new york. this is bloomberg. ♪ retail.

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valuations. to $1000 a share and alphabet hits an all-time high. it's a whether impaired gdp report. .eaker consumer spending shrugging off political chaos in catalonia. mario draghi stimulus package insulates european markets from drama and spain. good morning. i'm jonathan ferro alongside david westin. alix steel is off today. let's get you up to speed on some of the action. we are trimming some of the losses through the week after six straight weeks of gains. up a quarterirmer of 1% off the back of really decent tech earnings in the last hours. 24 the dollar index heading for its biggest two-day slide of the year so far and a raising one of the biggest annual game since 2007. twins are stabilized at 0.42%. david: let's get an update on

what is making headlines outside the business world with emma chandra. emma: and spain, events are moving quickly in the battle over the catalan separatist movement. the president as a parliament where lawmakers may vote on a declaration of independence. he wants to hold snap elections instead, but according to documents seed by bloomsburg -- seized by bloomberg, that could be on hold. the prime minister and spain is trying to get the power to the catalonia leadership. north korea has been accused of building nuclear weapons to threaten other countries. wantssays president trump to avoid nuclear war if possible and threatens north korea to disarm. stanford professor jon taylor argues that faster growth is possible if policymakers focus

on changes that encourage investment and hiring. taylor says text refunds could bring back high levels of growth and he says there maybe too much micromanaging a banks. global news 24 hours a day powered by 2700 journalists and analysts in 120 countries, i'm emma chandra. this is bloomberg. jonathan: exxon mobil i would numbers today and it's up in the premarket by 1.4 percentage points. that $.93 includes a four cent cut from hurricane harvey. the estimate was $.87. speaking of for the third billion. $4.99 ballistic a bid for exxon, including a four cent cut from hurricane harvey. $.87 and thewas stock is up by almost 14% in the premarket. big tech dominating with some

big beats. amazon, alphabet, microsoft, and intel reporting earnings after the close and topping wall street estimates. joining us now is paul sweeney and jim paulsen. we also joined on the phone as well. let's start with amazon. they just keep delivering. thisto me what's driving growth quarter after quarter after quarter. >> the amazon numbers were outstanding last night and we are seeing that in the stock prices morning. you had strength pretty much across the board. most amazon investors look at the top line. core retail e-commerce business continues to do extraordinary well. paul: investors were looking at the whole foods acquisition and the contribution that it may make to this company going forward. core e-commerce business continues to be extraordinarily strong across most of the metrics that investors look at. we are also seeing continued

investments across the board in your immediate business and their cloud business. the cloud business continues to be very strong both on the top line basis, but it's quite profitable. that's what investors like about the cloud business -- that it does deliver profits much higher than the core business. jonathan: talk about the efforts and their success driving to the high-margin business./ just paint the picture for u . they are across the board in consumer products. they are dominant online retailer. the grocery business has been the hardest nut to crack for them. they had in amazon fresh business that did not work. they are taking another crack at it now. a much more built-up fulfillment and distribution network now but i did several years ago. they think they can make a go of it in this $80 billion business. whole foods is going to be a very interesting place for investors to focus on going

forward. david: tell us what this means if anything for further expansion plans for this talks of them delivering drugs. what other industries will the disrupt on the way? ivan: they will touch almost every industry and the disrupt almost everything they touch. they are an expert in fulfillment and distribution. is there any downside at all to what we are seeing right now at of the amazon numbers, either? ? ivan: no, they will have a strong holiday season and the momentum is with them. i think the integration of whole foods has already shown to be successful so they can expand their brick-and-mortar presence. their opening bookstores and a lot of major malls. they are selling the amazon echoes and whole foods. they are signing up more amazon members and whole foods. they continue to succeed on almost every front. jonathan: looking at the

situation coming into these numbers, the big question was whether these companies could validate the multiples applied to them. have they done that and a significant -- in a significant way for you? james: they certainly have. even before yesterday, certainly now. i think the underlying trend here is we are seeing evidence reported yesterday with capital good orders of cap spending really picking up. we had some of the best growth in capital spending numbers here in the third quarter come through and i think technology really has been performing or outperforming since some of those capital good orders picked up in 2016. as they have accelerated, so has the performance of these stocks . i think that's the underlying trend. ceos are looking around the

world and seeing all the markets wherever they look around the globe are doing better. they're starting to commit some of the excess cash flow and i think that's going to help the stocks more than the rest of the market. jonathan: just the final word to you on alphabet, back to an all-time high. we will be talking about stocks that trade at $1000 a share. your thoughts on what the company has done and what they continue to do over the next few quarters as well? paul: that for the numbers last night were once again very strong. the core search business remains look acrossas we the metrics as the company continues to migrate from the desktop to the mobile environment. they are doing extraordinarily well in terms of numbers of clerks growing north of 40%. what we saw last night was them scaling back on the expenses and the capital they are allocating to their other business. they scale that back pretty saidficantly and the cfo they are redeploying some of that spending back into the core

search business, whether it's artificial intelligence or some of their other efforts. strong arbors there and i think investors like the top line. they like that there is more scrutiny on the cost side and the net result of strong profits coming out of google. google and facebook and two to be the major players and online advertising. jonathan: paul sweeney, always good to catch up. ivan, thank you very much. jim will be sticking with us. isaac joins us to discuss tax reform as we round up the week. we are in our and 20 minutes away -- an hour and 20 minutes away from the opening bell. we were heading toward a marginal week of losses. will be a race that toward the opening -- we erase that toward the opening bell? you are watching bloomberg tv. ♪

david: congress has gotten past the hurdle of the budget resolution and now it's time for the main event. next week we are promised an actual tax bill with hearings in a whole lot of lobbying yet to come. we welcome back to the program to uspaul penske coming from washington. for quebec to the program. -- welcome back to the program. what comes next? what are the hurdles? isaac: we have had solid progress. these budget proposals being each chamber is meaningful, but we are going to enter a new phase on november 1 because that's the first time we are going to get a look at the actual legislative language. it's going to be about a thousand pages of so from what we're hearing.

from that point, the dynamics of the hill is going to change. we will go with for the platitudes of the last nine months to specific policy battles, consequential cbo scores, and bellowing lobbyists as they all fight to save their own tax treatments. david: take us into the strategy of the republicans here. a very small number of people have come up with this language and they will spring it even on their own caucus as opposed to really working it through. why do they do it that way and is that the smart way? isaac: yes, it's hard to hit something that's not really there. it's hard to attack my pages, which is the most recent outline we have seen. that is something that is important for investors to be cognizant of. most of the entrenched interests have not become is publicly agitated as i think they will 1come beginning on november

he cousin they have not had legislative language to sink the cboeth into nor has had actual legislative language to score and look at the impact of average americans. david: the one thing we heard a fair amount about is the state local tax deduction. that is the big issue. how big a sticking point to that the? could that be? isaac: yesterday wasn't struck up in the house because the gop cleared the budget proposal, but they had 20 of their own members vote against it. 11 of those 20 are from high-tech states like new york and new jersey. they are finding and they will continue to fight on the state and local tax to reduction issue. my sense is we are going to move that deduction into a tax credit and we are going to more narrowly tailor it. int has a knock on effect that previous estimates were that the elimination of the state local text adduction could raise $1.8 trillion or so. if you convert that into credit

and narrow it to folks who make under $400,000, you will only raise 400 billion to $500 billion. we revert back to the previous issue of how are we going to pay for? david: what are they going to get this done? given what you said and all the lobbyists coming in, is it realistic to think we will get this done by december 31? isaac: we have a thousand page bill coming. we have 9500 registered lobbyists and d.c. and we have a takin ticking clock in the background. my senses we will get a bill on november 1 and it will start a markup the following week. that markup in the house will continue until december. at the earliest, the house will clear the bill in december interview. which we could get actual package at the beginning of the second quarter next you. now begins the hard part. david: it sure sounds like it.

it is 95 lobbyist per page. jonathan: that's phenomenal t l. tax reform in the fed have sent the dollar to a three-month high. we're back up to a 95 handle on the dxy. joining us around the table to discuss tax reform and where the markets might go is michael mckee and still with us from minneapolis is jim paulsen. let's begin with you. do you want to fight momentum building up in the u.s. dollar over the last week? jim: i think a lot of that has to do with mario draghi coming out with a dovish tone as far as how fast he is going to curtail easing. to the extent where the federal reserve is looking a plot ahead with tightening and mario draghi dragging the seat in that direction is really going to change the relationship of the

euro-dollar for sure. we are still going to see if inflation pressures pick up here in the united states, for example next friday if wages go over 3%, think we will see pressure on the dollar and i would not be surprised if it to 2018 we go to even lower lows. this is a great short-term revival, but i think longer-term, there's going to be pressure downward still on the u.s. dollar. jonathan: we talked to people about what it would take to form that bullish case on the u.s. dollar. everyone saying you need something to happen on the fiscal side to really erase anything of what we have done so far in 2017. your thoughts? michael: i hate to disagree with jim, but i want. a little bit about the speculation of who is going to be fed chair. if you want to get any

long-lasting rally, you're going to want to have some sort of physical activity, which is going to translate into tax cuts that would attract additional capital into united states. working against that would be the big deficits this will create. we have further deficits coming because you have the additional spending out there for mandatory social programs. then you have congress wanting to increase defense spending a lot. you have a lot of crosscurrents and jim is probably right. we could see some real pressure on the dollar next year. jonathan: speaking to tom keene and david are about the risks that could be in the bond market, he painted a pretty pitiful picture of the various things moving parts and d.c. is one of them. michael: d.c. is a risk. of the movechart index of the morgan stanley volatility index and we are close to the lows of the. year. we have come up a bit as this treasury said issue has come to the fore. year to date there's

not a lot of volatility and a lot going on. people just kind of watching what's going on. there are risks out there that we could see changes. don't forget that we have december 8 where the government runs out of money and they have to refund that. morecould cause much volatility depending on suspending levels they set. somewhere out there is the debt ceiling. david: jim, let's bring you back on the question of specifically who will be running the fed next. we caught up with his endorsement basically a professor taylor. >> i'm supportive of john. that's not to say the other candidates cannot do a good job, but given my criteria about what i think is needed, a kind of leads -- it kind of leads among the set to picking job. onid: people are focused taylor being the author of the taylor rule. on the other hand, he is a supply sider. is that something that could

express its way through the economy? think the fed question is very interesting because you have got a lot of market participants that worry if we get a hawk that it means higher rates and that's that for bonds and stocks. i'm on the other side of this. if we get a dove with full employment and the spectacle of additional fiscal stimulus coming at 4.2% unemployment rate , i think we might need a more hawkish approach at the federal reserve here to dampened down overheat inflation pressures that i think we are moving in towards. it's a very odd time to bring fiscal stimulus at full employment on an economy already sort of facing overheat pressures and a situation where the fed is already starting to tighten. dove might lead to a faster end to this recovery

that somebody who may be gets the over he pressures under control sooner. i lean more towards a taylor like person. i think there is some fear in the bond market that if you get a heart that rates would go up faster. it's an interesting situation have the financial markets react to it. they might react better to a dove short-term but worst longer-term. david: jim paulsen will be staying with us. mike mckee, thinks a lot for being here. coming up, we are discussing tech earnings with james. and brent so, jeffries managing director. live from new york, this is bloomberg. ♪

jonathan: the stoxx 600 climb into a four-month high and the euro falling to its weakest level in 14 weeks following yesterday's dovish ecb statement. still with us is jim paulsen.

let's talk about mario draghi yesterday. has he basically made monetary policy for the ecb boring for the next 12 months? jim: [laughter] well, i don't think it's quite boring. i really think the ecb and mario draghi are going to probably dragged their feet to move towards tightening. yesterday's statement sort of suggests that. their economy in some respects is doing as well as the united states, but they are suggesting a very moderate or slow exit approach. i will think that's any different from what the u.s. did. they ignored the been for many ease- the ben bernanke early in this recovery and adopted fiscal austerity, which put the eurozone back into the recession and now the rest of the world has gotten around to adopting the quantitative easing approach of the united states and it's working. states, ithe united

think they will take a long time to get away from that. we are dragging our feet with this, too, and the eurozone will do the same sort of approach. talks that they are going to curtail, but act keeping conditions quite expensive. i think that is what we are going to get from mario draghi going forward. jonathan: a chart the caught my eye is the bone treasury spread that blown out to 237 basis points. since thewidest 1990's and it really captures the ecb federal reserve story . how much wider cannot get the federal? dashcam that get if at all -- how much wider cannot get if at all? jim: one of the problems the ecb will have in the plummeting that approach is that the yields in the world and particularly the united states will move higher. i think will drag appeared in yields as well almost regardless of what the ecb tries to do to

keep them down. i don't think you can get a lot wider. i think inflation pressures are building globally and certainly within the united states. it's interesting to look at core inflation around the globe. core inflation has accelerated in the u.k., the eurozone, japan, and china. really more so than it has accelerated here in the united states. i think there's going to be an upward tilt to yields even if you are practicing quantitative easing in the eurozone. jonathan: two interesting because we know this and it has been happening for about a year now. the sentiment numbers are great. out of germany it's a record high. the inflation numbers are about back at target, but there bubbling away. the ten-year bund is around 40 basis points. do we need more new information for that to change or do we wake up and realize things are not where they are meant to be? jim: i fear more of the latter. 3% inflation number in

the united states is very critical. historically the financial markets have responded very differently when you're under 3% inflation and over it. pe numbers go up historically even though inflation is rising, but once you get over 3% inflation, it will start to contract. same thing with bond yields. when you are below 3% inflation, the 10 year yield goes up 88 basis points for everyone percent move in the inflation rate. when you get over 3%, goes up pretty fast. jonathan: jim paulsen, we've got to leave it there. u.s. gdp up next. from new york, this is bloomberg. ♪

♪ away.an: u.s. gdp seconds futures positive off the back of solid tech earnings, up .2 on the s&p 500. in the bond market, treasuries

and buns lower by about one basis point to 2.45% in the dollar showing real strength for a second straight day against the euro. down .3. the data in the united states drops now and it is big. u.s. gdp for the third quarter at 3% to four percentage points. the print is the percent. the estimate was 2.6%, previous number 3.1%. 2.4% for personal consumption. quarter wass expected to flow from the -- slow from the previous one but we have dropped from 3.1% to 3% for the third quarter of u.s. gdp. it could change but it is strong. in the fx market, it means a stronger dollar story.

we stay there and push higher, up by .5. you can check out the bond market, yields have been pushing higher with about one basis point after being lower by one going into the numbers, so it is basis point move. futures about one hour away from the open are positive and strong, up .2 on the s&p 500. to discuss the numbers come up from princeton, ira jersey for bloomberg intelligence, and still with us, jim paulsen and michael mckee, bloomberg's international economic correspondent. it is gdp and it has a three in front of it. >> and it would be higher if not for hurricanes. looks like this played out as expected with consumer spending dropping a little bit, primarily or services because people were not able to go out to restaurants, etc. so you have

that problem. nonresidential structure investment falls 5.2%. a lot of damage to buildings and shutdowns of the oil industry during that time. as expected.t government consumption down .1, although the federal government made up a lot of that with the drop. that spending should come back. inventories higher than we thought and we saw that reflected in the monthly numbers of dealer lots cleared out the cars, so wholesalers bringing in more. and net exports is a little bit lower than we thought it was, so more of a contribution from trade than expected. a number like this, while it is just the first printed and likely to change over the next two months, but it sets us up well for the next quarter. jonathan: two straight quarters of gdp growth it looks like. jim paulsen? jim: my thoughts, we have not

had a lot of back to back 3% quarters in this recovery, and we certainly have not had that when we are back at full employment. just take the data coming out of late and it is almost getting too good. i hate to say it. i get the sense that i wonder if the news, which has been -- it good news, which is good news for stocks, the bond and economy, good news will start to be considered may be bad news as people focus less on growth getting better and more on pressures on rates, costs and inflation getting worse. i think we are getting closer to that point. jonathan: i do not want to talk about the good news and bad news dynamic. i want to talk about the treasury. what strikes me is that a decent data point in the united states and treasuries are not moving much off the back. what are your thoughts?

ira: the 10 year treasury is not moving much now but i think the previous speaker made a great point to a good news can become bad news for some markets and for the bond market, that is probably the case. i think people are thinking, what if the fed hikes in december and it they hike more aggressively next year, then the market is pricing, 10-year rates might not move much because you wind up with an environment where ford inflation expectations come down. i looked at the gdp price index, so that was much higher than expected. almost half a percent higher at 2.2%. that is a decent indicator you can have trend underlying inflation higher than we are thinking about. that could put a floor underneath interest rates, so this level in 10 year yields could be something we see for a while. david: jim, i want to remake and expand on the point, why is 1.2e an arguments we need a

-- $1.2 trillion tax cut with these numbers? jim: i have had trouble with that. i am all for making our tax code in this country more competitive globally. i certainly agree with that. i think it is an extraordinarily time to bring a fiscal stimulus. we could have done this three years ago, five years ago, we could have done it early on instead of cash for clunkers and it would have made a lot of sense. when you are pushing to 4% unemployment, wages are threatening to go to three, we are posting 3% gdp numbers more regularly, i think we are ndreatening to prematurely e this recovery because we already add to the pressures and force a quicker exit approach by the fed and greater panic i bondage lenders -- on lenders.

jonathan: let's say we did not have an administration talking about introducing stimulus, what would that mean? do you really think we would have gdp numbers at 3%? jim: i still do. i cannot prove that or anything, do.i still i think this has been more fundamentally driven than it has been on the idea that we are going to get tax reform. certainly lower regulations has helped. but i think the biggest thing in theroom has been this is first time in the last 18 months that you look around the globe and we have a synchronized global boom with great participation by all parts of the world, and this recovery has reached main street america would real median incomes going to a record highs. i think this has more to do with broader and more healthy

participation in global recovery than it does with tax reform or politics. we starting to see that translate into hard data improvements? michael: it is always hard to make the connection but it seems to be happening. we had surveys very strong for quite a while and every fed president i talked to says that is what they say but not doing it. now they are starting to do it. intellectual and equipment property had about doubled, so companies are starting to spend money. whether it is because demand is out there in the economy and they have to meet it, we cannot prove either way. david: what do strong gdp numbers potential been for rates? does it mean janet yellen and her fed might be closer to the markets right now with what happens with rates next year? do think these numbers put a floor under the 10 year yield, where limply difficult to

think about -- where it would be difficult to think about the 2% level if you continue with data like this. for the fed, i think it means they are more likely to hike. as they hike, you wind up with more curve flattening. it is not necessarily the 10 year that winds up unhinged, it is probably the two-year notes that needs to move higher. jonathan: is the resume looking better over the last two quarters? and theresa may will be remembered well because she is leaving with growth picking up finally and inflation still low, pretty much a recipe for exactly what you want to do. they're are closer to hitting their mandate card -- targets than any fed has been. jonathan: if we get a fed chair who is not janet yellen, is a born out of policy preferences? >> i think it is out of politics, but i do not know --

critical.t isn't i think the federal chair will be forced fed that they have to do. if it is hot, they have to tighten. if it is cold, they will have to ease. i think most decisions are made for them. one thing interesting about these gdp numbers as i wonder how much we will find out if productivity has increased. mike mentioned we see capital spending pickup incorporations. if that sparks something that has been absent in this recovery, productivity, that could really change the dynamics. then we could handle pretty hot growth admit productivity dampen down cost pressures and rising productivity would allow profits and wages to rise simultaneously. i think that is a wildcard, will productivity remain a no-show or anl it show up, creating

environment in the latter part of the economy. jonathan: jim paulsen, thank you. michael mckee, thank you and the number is 3%. it is a solid upside surprise in the united states. david: you can tune into our colleague tom keene and david gura on the radio. bloomberg surveillance can be heard it new york, austin, the bay area-- boston, the and all over on sirius radio. live from new york, this is bloomberg. ♪

emma: this is bloomberg daybreak. coming up, steven corwin, discussing the president's announcement on opioids.

♪ bloomberg business flash. waiting time for the iphone x is rising. apple has accepted earlier orders and shipping time could lengthen to five weeks in the u.s. as supplies remain tight when it goes on sale november 3. she was of alphabet beat third-quarter sales and profit estimates. googles had searching surged. alphabet is warning that distribution partners will continue to rise. volkswagen raised its forecast for the year. they reported strong demand for suvs and other vehicles. at the same time, they say rising costs over the emissions scandal hurt their overall profit. david: thanks. president trump appeared at the white house yesterday to make

fighting the opioid epidemic atop objective. earlier this month, we sat down with eric schneiderman and he described the things new york is already doing to address it. >> we also recognize you cannot prosecute your way out of a drug epidemic. we have been using a multilayer approach. we have also been instrumental in setting up what i think is mechanismrug tracking in the country. these is a good solution to the problem of dr. shopping. since we set up the program, dr. shopping has gone down 90%. there is a uniform view amongst most people in law enforcement, at least in our state, that this is a public health crisis and we had to with it. there are different states experimenting with other prescription monitoring programs. i definitely think the one we use is the best.

it has been highly praised. if we had a national program, that would be fantastic and everyone consults a database before writing or filling a prescription. bysaw doctor shopping fall 90%, and that would the great if we saw that nationally. this is something that should not be a bipartisan issue. cynthiae now welcome to kunz. had saiddent prosecution alone is not enough but it is part of it. tell us about your story. >> this is an interesting case. a person has been charged with racketeering, conspiracy to commit fraud and the issues are the the brought against them are that he and top executives of his company bribed doctors to

write disruptions for opioids with ways they could use the system of paying doctors to get them to prescribe what is a powerful opioid, fentanyl, and toically prescribing it i patients who did not necessarily needed. -- need it. while schneiderman said we cannot prosecute our way out of it, it seems this will be the tactic. perhaps it is backward looking, but it is one way to may be in force some standards, i guess, and it is rattling the market. you are seeing other companies are shaken and shares are moving in any company that is an opioid producer. david: he does want to persecute but that -- to prosecute but that in itself is not enough. does this go beyond this specific instance? cynthia: i think that will play

out in the next couple months. there is the case against perdue on whether that is criminal behavior that the drugs were more addictive or did not last as long, so as those cases are built, it will lay the groundwork to what charges can be brought to companies who are caught up in the litigation and that could continue to play out with cases around the country. prosecution is not the only way but it is definitely one markets are paying attention to because some of the things in executive order in trump's might allow for more funding of counselors, etc., they're not huge market movers and they are just going to be potential solutions but it was not nearly as much as the funding push some people were worried about. david: one thing the president talked about is a green day would limit first time

prescription to seven days -- is they would limit first time prescription to seven days. one of the issues is people get so many pills. it has: it is amazing taken this long to get to this point. people have realized this problem long ago, but that was also part of the fundamental shift with the opioid usage in america. it started from being something tentativers had a approach to. they thought it was highly addictive. when the thinking changed it could be used for chronic pain, suddenly got long-term prescriptions. dining that back to shorter-term , tracking the doctors prescribing it, these are all meaningful steps for the in game. david: unlike some substance abuse, by and large, the people who become addicted started out legally. and it expands out. it is different from other drugs.

cynthia: i think it is what makes it a hard issue to tackle because you are talking about kids who may get hooked on opioids from an injury, where really formidable populations are ending up on opioids, and people who are not necessarily going to fall into a group of potential drug addicts in any other way, so i think that is why this idea it is a crisis and needs national attention is rising as it hits so many communities. david: that is cynthia koons. jonathan: coming up, we discuss energy and the latest results. shares have grown for exxon mobil. this is bloomberg. ♪

david: big oil is that with third-quarter earnings.

exxon mobil edging higher, while chevron posted a miss and cut their guidance. their shares are lower. president is mercbloc dan dicker. what surprised you? dan: most of the majors are cutting, jettisoning all of the nonperforming assets. they are trying to turn back to giving shareholders value by delivering profitability and not at any price of crude, no matter what. the one that went away from that is exxon. they killed it on numbers but also increasing, which is against the trend. david: and those capital investments by exxon were more than estimated, like $6 billion. dan: indeed, they are zigging when everybody else' is

zagging. that is inside their culture. all of the ceos are talking about energy prices being lower for longer. i think there will be a major turnaround in prices and they want to be in front of the train as it moves out of the station apple speed. jonathan: think of the business they are running. they had a downstream presence a couple years ago, what is the optimal business you want to be invested in now? dan: downstream has done well for these guys. we are still at a low price for crude oil. they are banking on this rebalancing that continues in the marketplace. upstream is where you make money. that is the bottom line. reduction is what you make big dollars. downstream is where you will save yourself in terms of quarterly losses but it will not they'll you out or make the growth he want from an oil company or what shareholders

want. jonathan: are you at the mercy of opec or is that story dead?dan: not at all dead. when we hear rumors about going it ise or being slashed, nonsense. the saudi's are moving forward with what they hope to be a 2 trillion evaluation and they are committed before the meeting in november, how everyone is on board to extending cuts through 2018, i think with the capex cuts that have come in, you will not get that big increase in production date eia is looking for and you will get a faster rebalancing of the global marketplace and a big spike in oil prices. david: as you look forward to oil prices next year, which is more important, extension of the opec deal of curtailing of capital investment in the u.s.? deal ishink the opec probably more important but both are going to add fuel to a fire of an oil price that has been

low. i think it will spike above $75 in 2018 and maybe to $100. david: what stops of from crashing back in? dan: you cannot really turn that aircraft carrier around so fast, so pretty and investment back in, even in shale, will take 12 months to 18 months. i think they will do that once oil prices expect, but the rest that has been lost, that is not so easy to put back and turned into new production. jonathan: you are bullish. what is formidable? what isat isn: -- formidable? dan: i think the pipelines have a problem as less buying will come through in the growth potential is limited. that is where you do not want to be. jonathan: dan dicker of mercbloc, thank you. sorry alix is not here.

dan: i like you, too. jonathan: i can never tell. coming up, u.s. gdp front and center after an upside surprise. growth in the united states at the three handle, a positive 3%. futures up by .2 on the s&p 500. .1 on the dow. the equity stories a strong earnings season for the tech players, which make up the biggest sector on the s&p 500. treasuries look like this, unchanged on the tenure, but the dollar bid sticks. this is bloomberg. ♪

♪ jonathan: weathering the storm, the u.s. economy expanded

earnings, growing at a 3% annualized rate. big tech delivers. lofty valuations. alphabet hits an all-time high. and strike to knock the political chaos in catalonia. the plans for 2018 to insulate european architecture drama in spain. good morning, good morning. this is bloomberg daybreak. i am jonathan ferro, alongside david. solid numbers on the gdp and corporate side, driving futures higher. the story in the bond market is yields push higher on bunds after yesterday's bid. in fx market, gdp reaches adding more fuel to that long dollar trade. low 116lar back to the and let's -- 1.16.

here is abigail doolittle. abigail: happy friday. on this friday, awful that up more than 4% -- alphabet up 4%, plus said to add to its market. we are up 47% and even the "best silo of revenue" grew 50%, so everything moving along for alphabet and investors awarding shares with an all-time high at the open. amazon up 9%. they put up another huge quarter, crushing it across the board. the cloud up 42%. prime subscription up 49%. " looking -- everyone looking for the whole foods contribution and we are back on the world's wealthiest person watch on the open, likely jeff bezos will overtake microsoft bill gates. we will watch that.

though,el, down 14%, quite frankly, off the low. they put up a terrible quarter and missed earnings by 84%, sales fight 11%, and for that reason, they suspended the dividend. there is a 21% bear shortage on the stock. not everyone is surprised. similar to hasbro. some people might be happy about that. jonathan: thank you. the exception to the role because tax reform -- rule because tax reform and the fed boosting the dollar, along with better than expected u.s. gdp numbers. the dollar index is up 1.5%. mckee and is michael --ey next -- casey nixon

katie nixon. some stellar gdp figures out of the united states, what is driving it when we thought it would be soft compared to the last quarter? michael: business investment is picking up, especially in equipment and intellectual property. double about where they were when year ago, and businesses are finally starting to contribute to the expansion, and the other not as big, likely hurricane related, not likely to be repeated, so it remains strong. if business spending stays strong, we should be in good shape into the fourth quarter. jonathan: does northern trust have a few points to add? >> we confirmed the narrative, which is we have a strong economy, global growth, and that adds to the story that the topic of business investment is important because we have been waiting for this handout from the consumer bearing the brunt

of the burden for economic recovery to business and we are starting to see it. analogy well-known where we go to extra innings, here. jonathan: we have talked about whether it will translate into games, things like gdp, your interpretation, are we seeing the shift across? katie: absolutely, we see that the soft data was right. consumer sentiment data was right, we see it in the gdp and macro figures and you have been reporting on incredible corporate earnings, affirming we are in a sweet spot. david: we had strong sought data at the beginning -- soft data at the beginning of the year, is that normal? is there a lag or is there something that has happened that made ceos say i better start investing? michael: i think we will have to

wait a while to know, but there is an impact of the possibility of fiscal changes, deregulation starting to take effect and the possibility of tax cuts. we know a lot of ceos were telling people, we were optimistic that we want to wait and see what happens. they will not do away with obamacare, their moving to tax reform, so maybe companies are investing in the hope it comes through. david: make a prediction, if there is this is this investment, where we see an uptick in productivity? katie: we hope so. we have been struggling for some time with this. perhaps, productivity is not being measured correctly and the notrules -- old rules do apply, but we will be looking for productivity because that will be important to allow the growth to continue, inflation to tick up, and still be ok for

corporate margins and investors. jonathan: we have 10 year treasuries on the screen. have you had everything confirmed for you that you would like? year, if it of the said we will get back to the percent gdp growth, would you have said we would still be at 2.46 on the tenure? katie: we do see it taking up closer to the percent but not quite the first -- ticking up closer to 3% but not quite at the percent. we see rates falling in europe, so there are still that favorable trade for u.s. rates and the action in today's numbers probably more manifested in the short end of the curve. jonathan: guests said earlier maybe the good news comes the bad news for the market in the sense that the curve has to flatten more because people bring down inflation expectations. do you see a similar phenomenon

playing out? katie: not now, but it is a risk. if we can get positive productivity numbers, i think we will be in the clear. if growth runs too hot for the fed and they decide to go faster, that is not priced in to the market now and that would be a negative surprise. jonathan: we got we would have whether impaired points, -- weather impaired points, where is the noise? michael: we have seen it briefly go through, which is assigned natural disasters affect a small part of the economy and do not show up the national data. we did see a decline in residential investment. we saw a decline in structure business investment, so that is where you see it. everything happening will not really impact the data. jonathan: always great to catch up. katie nixon will stick with us. coming up, the ceo of new york

presbyterian joins us to discuss the opioid epidemic later in the program. we are about 22 minutes away from the opening bell in new york. positive story in markets. way,delivers in the big making up almost 24% of the s&p 500. and a positive story on the macro side, u.s. gdp looking solid. bonds go nowhere. treasury yields pretty stable at 2.46, but it is a dollar strength story that dominates fx. to 1.16.ar back this is bloomberg. ♪

jonathan: tech giants crushing wall street estimates. alphabet, amazon and intel beating estimates. joining us now is katie nixon of northern trust and james cakmak. let's begin with amazon, what is your target price? the real story for you, and we will start here and people will go, really? to think the company can get $1 trillion and double its market cap? how long will it take and what do you think they do to achieve that? james: every opportunity they go after this between i've hundred billion dollars and $1 trillion. -- the train five hundred billion dollars -- between $500 billion in $1 trillion, something the company can replicate. they can operate at a 0% margin in a deflationary environment

and the one risk i think lingering over them is regulatory. that, with the rubberstamping of the deal with whole foods, i think this company is much more revelatory favored than any other tech companies, so full steam ahead. jonathan: is that enough to get you to one trillion? james: the relative market caps versus google is still lower than that. jonathan: apple is a cash machine. james: apple has basically already captured the biggest opportunity, which was the iphone. the next big opportunities for amazon have yet to be captured. when you look at relative and attrition of e-commerce, it is low. -- penetration of e-commerce, it is low. the advertising market when you look at traditional media assets, as you see those brands shift away, that will facilitate

more attention to amazon with pad dollars and you have new categories like pharmaceutical. i do not know how you stop this. as long as the regulatory environment remains favorable, like i said yesterday, -- jonathan: he will get into whether it remains favorable, but it james gave me the call and said we are going to one trillion, what would you say? katie: i think it is bold but i understand the logic. there is a broader story as you reflect and that is the broad deflationary trend we see driven by companies like amazon, who are in this mode of expanding their span into different areas. and we happen even talked about health care, another key driver of inflation. to control that would be possibly important for the economy. david: take that deflationary and put it together in regulatory in this sense, when the sherman act was passed, it

has been about concentration on higher prices. you have a company now getting more concentrated and lowering prices. are they immune because they are deflationary? james: unfortunately, yes. unfortunately because i did cite it as a risk. when you look at the bigger macro landscape, i think massive deflation is not necessarily a good thing because you have the potential for job losses, revenue goes down, however, it appears the fec -- fcc does not want to throughout the old rule books in. it was a one sentence response about coal foods, which says this new thinking with internet was bound not happen. when you get to one trillion, scrutiny will escalate. david: you have this at the same time the trump administration is really wedded to the chicago school of economics and as long

as prices do not go up, they would say to be as big as you want. katie: i agree that the regulatory landscape is favorable, which will probably prompt amazon to go faster over the near-term with some plans. bezos andjames, jeff his next move, what is it? james: i think food. food hillary. i think they need to increase the touch points with the consumer. i think what you will see, the successes they have had with fulfillment by amazon in warehouses, i think they will extend that in local arenas, where food delivery is every single day and increase the punch points and use local merchants as warehouses because everybody is fighting the cold war. how do i get free two day shipping? that is the past. the new war is same our and i think that is -- same hour. we are getting increasingly

impatient. we need to get whatever it is and that is what pharmaceutical comes in, within the same hour. jonathan: we will have to get you back and talk about that. james: what a difference in quarter. jonathan: james cakmak, great to have you with this. david: we will turn to health care. cvs plunged yesterday, but they rebounded in the top they will acquire aetna. this comes after aetna's unsuccessful attempt to buy humana. we welcome on the group to -- we welcome ana gupte and still with this is katie nixon of northern trust. sort this out, what is this merger at base and is it defensive or offensive? cvs, defensive.

we had that no and and them -- aetna and and them coming in with their own -- and anthem coming in with their own products, and united has already done it. so get the past to -- aetna has to do it. if it had been something with cvs but a merger had always been in the cards between them. you have been speculation that the last six months. they have been vocal. david: if this deal went forward, who would be the winners and losers? ana: cvs is defensive, so positive. aetna has challenges. with humana, the deal with the horizontal integration, this is a vertical one, i do not think it is a slamdunk. we still have to deal with etna andwith cvs and a

the trump administration has said they would scrutinize all health-care deals. much more than the past. i would not just say, it is the republican administration, it will happen, but it will likely. aetna has growth challenges, not doing so well in medicaid and medicare. they are in a better place, speaking total lower cost to repurpose the retail stores toward her agent care, diagnostics, vision care, and that will maybe help them grow shirt over time. david: what do you make of the health care industry? we are positive. it is a demand story for us. we have always been positive the last years in general. i do think the deal is interesting and under the trump administration, it feels like anything that lowers the price, passing those deficiencies to the consumer will be thought of very well.

david: if this were to go forward, is this the first in a series of consolidations in the industry? ana: i think they have to do something. alternatives are they partner with amazon. i'm not sure amazon wants that. walgreens and humana are other options. humana has a strong medicare book and standalone pbm and that is one option. david: will it bring down health care costs? ana: i think overall the hospital costs. i do not think it on pharmaceutical side because the endgame is to reduce total cost, which may mean more use of drugs. i do not think we will see much benefit from this because they were outsourcing their business anyway. i do not think the negotiating leverage gets that much better. david: thank you for being with us. katie nixon will stay with us. coming up, brent thill joins us

to discuss tech earnings. from new york, this is bloomberg. ♪

♪ david: this is bloomberg. i am david westin. chevron hoisted -- posted earnings that trampled -- no, chevron did not, exxon did. chevron fell short. exxon is way up and chevron way down. we are joined by katie nixon of northern trust. what do you make in general about the energy sector? is it back? katie: it is a supply and demand story. we had incredible demand. it cannot be underestimated. it is pushing demand for energy and we have supply constraints. opec as double down -- has doubled down its intent to keep supply well in check and we have had disruptions in energy supply in the u.s.

we had a lot of capex taken off the market the past years, so we think it can be sustained at this high level a while but do not disregard that supply will come back to the market and u.s. shale producers are flexible and willing to come in at these prices. david: how dependent is this on the oil price? how interested in you on energy if we do not have a leg up on oil? sector?n energy as a david: yes. value it is a relative where we look at financials, but we see the increase in oil prices will be reflected in some stocks. we are neutral, which does not mean negative, on the energy sector. jonathan: what do you make of the commodity complex? in the conversation we had about strong u.s. gdp numbers, though europe in there, people are more

constructive on china, what are your thoughts now? katie: i think it is positive. the macro perspective for energy is positive. recognize many economies are less dependent on energy, so there is less of an energy beta then in the past, but the energy demand will benefit from this global growth. as i said, i think supply will catch up and we have flexible supply. with china, the energy story will be strong. i think the other commodity story might not be. jonathan: do you think that is something people are missing? you touched on commodity intensive miss and out -- intensity as changed and maybe they don't get as much as they should? katie: i do think so. traditional area into -- trendional data into the -- transmission mechanism is

lower. jonathan: will china change radically, as well? katie: perhaps over time but they're much more energy dependent. jonathan: how to construct of you around inflation? growth is good but could mean less the commodity and inflation in general, is that read? katie: that is one of our themes, we do not think inflation will pierce the veil and become untethered or an anchored. list -- or unachored. jonathan: what is the best way of expressing that in the market? katie: low inflation? risk assets because it allows it to be slow, patient and cautious. we have a bed on a patient path towards normalization, and this is supportive of risk assets. jonathan: great to have you with us around the table. she is sticking with us. the story continues on the bloomberg daybreak. the opening bell around the

corner. futures are positive, up about .25 on the s&p 500 and points one on the dow. let's look at treasuries quickly. yields come in about one basis point. the story the fx market is a really strong dollar off the back of a solid u.s. gdp read. gdp has a 3% handle in the united states for a second straight quarter. we will keep you up to speed on what is happening in the opening bell around the corner. you are watching bloomberg. ♪ who knew that phones would start doing everything?

entertaining us, getting us back on track, and finding us dates. phones really have changed. so why hasn't the way we pay for them? introducing xfinity mobile. you only pay for data and can easily switch between pay per gig and unlimited. no one else lets you do that.

see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit or go to xfinitymobile.com. jonathan: live pictures from the n parliament -- catalan parliament, they voted to implement and independence from spain. what isn't clear is whether the president will declare

independence from spain. another thing not clear is whether the boat is binding -- the vote is binding. the catalan parliament has voted to implement an independent state. we do not know of it is binding an president will declare independence or spain cop the back of the vote. it passed with 70. on the seek celebrations streets at the pro-independence rally. you have voted to implement an independent state from spain. things we do not know because it is unprecedented at the moment and it is whether it is binding and the president of catalonia will declare independence them spain up the back of it. euro-dollar has been weaker off the back of the european central bank's decision and it continued

through today. on the screen now at session $1.16.bout around on yields are pushing higher, up about five basis points. i will say, not much drama here. of thethe brunt punishment around the story, a political fracture in spain, down by about 1.83% for the ibex. follow this like everyone else. you have to try to understand it. when i read those headlines, how do you make sense of what is happening in europe? katie: i think populism is back on the front burner. we have seen green shoots of this after a long period of quiet, so i think this highlights the fact that political risk isn't off the table and geopolitical risk is something investors have to

integrate into their thinking. i think it is interesting you reference the market reaction. you would think yields would have had a much deeper reaction than they did. investors are looking through this, obviously, and assuming that eventually what ends up happening is not going to be nearly as taccone and as the headline -- draconian as the headline you read. jonathan: the spanish government are not backing away from the battle. is this going to get worse before it gets better? katie: most likely. i do not think they can back away the coast it is a canary in a big coal mine. it could get uglier before gets resolved. jonathan: let's bring up the markets board. you have a spanish 10 year yield widening against bunds. how would you be thinking about investments in europe as we describe the political pitch in

spain? katie: our premise is it will get worked out, however ugly the process over the intermediate term, and at the same time, investors are looking at strong fundamentals. if this were happening one year ago or two years ago when the situation from fundamental perspective is not as strong, you might have a different reaction. now, fundamentals overwhelmed the negative political environment and support equity prices. whipthan: let me through the headline, the catalonian government has voted to be independent of spain. that theen tweeted state will reestablish and catalonia, and there are celebrations in the parliament, as well. there is not a big reaction in the fx market in terms of euro

crosses. you do see the 10 year spanish yield pushing a little higher your session low. i grab with this because the ecb is insulated us from paying -- has insulated us from pain, is that complacency on the screen or just the reality of the ecb that will have a strong presence in the market for a long time? tie: i think it is the reality they will support the market and investors, the latter. these are chronic crises that will continue to pop-up. when this is resolved, it will not be the end of these populist crises that come up, but i think investors are looking through them into a stronger fundamental backdrop that is supportive. jonathan: katie nixon will stick with us. we will stay on top of the story. we are four minutes into the session. we open higher on the s&p 500,

the nasdaq up by over one full percentage point and there is a y, tech stocks surging this morning. with amazon's earnings beat, jeff bezos has suppressed bill bill -- has surpassed gates as richest man in the world. brent thill joins us now. we are calling it the race for the $1 trillion company in the united states and in the world of tech. who is winning the race? now, google and amazon are leading. we think they sparkle have good earnings. i think googleis a good proxy for facebook's advertising business. -- i think google is a good facebook's advertising business. they had terrific earnings. google has the highest revenue growth than five years and

highest margin within the last 1.5 years. amazon read the number by two $2 billion. cazon produced close to 50 above the bottom lineents -- cents above the bottom line. they continue to take more share away from traditional vendors and retail and media. if you get your consumption of your own behavior and delicate mind, you continue to shift more and more of your time and allocation to these companies. say how muchl here?oom can we go from i look at it and continue to believe there was incredible opportunity for them to expand the new markets they are not in. google's search business is doing fantastic but they are pushing into economists vehicles, hardware, competing

against microsoft and amazon, so we think there are a lot of call options. for amazon it has been a top line story, not bottom line. the top line with 30% plus growth is hard to argue with at the moment with the momentum there. many markets are pushing towards health care and other areas, where what they did in books, which was a difficult process to when, they arek doing not for prescription drugs, music, video, and we continue to think there is a lot of innovation left among the top three internet stories. david: you have drawn parallels the between google and off the bed and amazon. is there a difference? is it hard to see a rival for amazon has it disrupts vendors around the country and world? on the other hand, with google and alphabets, you have the

facebook of the world, is it likely they could curtail growth in the out years? brent: i think for amazon there is plenty of competition in traditional retail. has hadis obviously many initiatives and walmart and google have try to team up to disruptive technology leadership amazon has established. that will be difficult when you look at the homes we go through and 70% of market share for alexa devices -- they are in every one of my kid's room at home and they can order school supplies about touching the computer. that is difficult to disrupt. we think there are opportunities for them to get disrupted. right now, they are staying ahead. for google, their next push is going to be in areas like economist driving, hardware, which we think over time, apple will be a bigger competitor.

we think five years from now, apple's biggest draft will probably -- direct will be google with their push of devices they are launching for the holiday. they both have a list of competitors. i think they are changing. i did not think amazon would compete against drug companies and that is starting to happen now. you look at what is happening in the m&a market and some say, the bids for these transactions are driven because amazon is coming into our market. you never would have couple of years ago. i think the landscape is changing -- you never would have thought that a couple years ago. i think the landscape is changing and they both have a tremendous amount of innovation and they do not fear anyone coming into their market. david: if we looking at limiting factors, let's talk about regulation and governments. at what point do these companies

get to have so much power there is a push back from the government, whether with united states or brussels? brent: i think you are seeing that now. there are talks about taxes for amazon, google, and i think the good news for both is their cloud-based solutions. recovered microsoft for years and -- we covered microsoft or years and they had these issues. they had to shift and in the cloud world, they can make changes, appeal to regulators and consumers and you will see them be proactive in making the changes. if you look at the concerns of google and europe, it has not shown up in the fundamental numbers. google's revenue accelerated sequentially this quarter and for the last two, so we look at google's results specifically in europe and there really has been no impact to the fundamentals.

so more headline concern rather than fundamental concern. i think both companies are grown-up and they understand that if there are concerns, they will address them. jonathan: brent thill of jeffries, and katie nixon, tijuana. it is a decent session. equities firmer off the back of decent earnings in tech. the world of politics in focus. up next, the catalan parliament has voted to implement an independent state. from new york, this is bloomberg. ♪

♪ emma: this is bloomberg daybreak. i am emma chandra. joins us, expedia ceo to discuss the company's earnings. this is bloomberg. breaking news out of spain, the catalan parliament has loaded to implement an independent -- has loaded to implement an independent -- has voted to implement an independent state. joining us on the ground is our bloomberg reporter. the headline is that the catalan parliament has voted to implement an independent state. was the vote finding and have they declared independence from spain? that is a good question. you said it bailey, they voted

-- you said it clearly, there was not a declaration but i have to say the past hour has been chaotic. we saw members of parliament asked to vote in a secret ballot. they did not want to make it public. this will carry repercussions for everyone who voted in favor and top of the catalan parliament decided to work it out and say, we will not participate. the question on whether this is vote, they will type it is not. session toajority declare imminent action. the prime minister has said, let's stay calm. the question is, is this binding? the catalan government multiunit it is but courts will tell you otherwise -- government will tell you it is, but the courts

will tell you otherwise. jonathan: they have symbolically voted for independence, but it is a strange situation that this the spanish but governmental clamp down hard on this. aren't they? >> that is a great observation. it pretty much sums up what we see, a symbolic move for a majority. there was a lot of pressure to do this. we could say it is a 10 minute victory but what is to come is the senate no doubt will approve and there will be powers over the region, starting with the catalan government. the question is what response will we get from the people here? their protesters outside happy about this but the question is, what kind of backlash over get over article 155?

looking at the market reaction and the euro-dollar is near session lows and the euro has been weaker off of the back of the ecb and strong numbers in the united states. spanish equity benchmark is down and i am point 7% looking at spanish bond yields higher across the curve. we have not had a big market reaction to this, primarily because of the ecb insulating the rest of the european markets from spanish policy. i wonder if this will get worse before it gets better. the primext for minister and his relationship with the people of catalonia? how can he repair that over the next few years if he gets a chance? is a safe that assessment. a lot had to do with the ecb but keep in mind the european union has sided with spain, even after that violent crackdown on the

illegal referendum that started this. the constitution is essentially the people are what matters most and the catalonian government has to find a solution. it did not materialize into anything and that has played a part. marketstion is, is the complacent? what matters is the independence, per se, if you look at the law, it is unlikely it will take place. the question is who will recognize? the republic -- recognize the republic? secondly, what we need to watch for is the implementation of article 155. it gives madrid a lot of power. this has never been done before. key a crucial point, how is the prime minister -- you make a crucial point, how is the prime minister going to be in the situation? jonathan: for those of us not

intimate with spanish politics, what is the guide as we go through to the weekend? the senate is going to approve the bill and the time is yet to be confirmed. what we expect is a cabinet essentiallyadrid saying this is our next session. article 155 gives plenty of powers. you have to watch out for the first action of what madrid will do. the first action would be to get the prime minister out and the rest of his regional governments. it is something madrid has kept an eye on. i guess they would also like to take over essentially keep strict controls on the catalan budget and in barcelona. jonathan: great work. we will be on top of the latest out of spain on bloomberg. we will turn from spain to the united states and the

opioid crisis. he was president trump speaking at the white house yesterday and a top prioritye for his administration. president a top priority for his administration. president trump: my administration is officially declaring the opioid crisis a national public health emergency under federal law, and why i am directing all executive -- directed agencies to fight the opioid crisis. this marks a critical step in confronting the extraordinary challenge that we face. david: joining us is dr. steven ceo -- the presbyterian hospital ceo. you are at ceo of a large hospital but before that a physician. explain as a position, how did we get here? >> through a series of a lot of mistakes, overprescribing of the opioids, oxycontin, things of painnature, creating

alleviation as a top priority of hospitals so we were prescribing a lot of these things. and then getting to the point where we were using them for purposes they were never meant to be used for. chronic pain and cancer is one thing, having your wisdom teeth taken out is another. that has capitulated itself. it has taken 20 years to get here and we have a long recovery road. david: let's talk about practical things. eric schneiderman, the attorney general of new york state, he said what has worked out is limiting the number of pills prescribed the first time. something the president referred to as being done. do you have that experience? >> absolutely. we are monitoring now prescribing habits of every position, so we can predict where someone is overprescribing and needs to be trained, so that is one thing.

we also have a lot of programs in place to say it's someone comes into the emergency room with an overdose, we can get them the help they need and not just the reverse the overdose. david: other things people are talking about is monitoring how they are prescribed in keeping track of how many pills people are getting. this is what eric schneiderman had to say. >> i think that there are different states experimenting now with other perception monitoring programs. i think the one we use is the best. it has been highly praised. if we had a national program, that would be fantastic and every doctor could consult a database before writing or for filling the prescription. -- before writing or feeling a prescription. filling a prescription. i think there's room for federal action. this is something that should

not be a partisan issue. david: what about that, a national way of monitoring how many times these are prescribed? >> i think this is a terrific idea but i wasn't to stress that not prescribing these prevents future addiction. we have a major addiction problem in the country now. 50,000 americans each year of losing their lives. we have an influx of fentanyl and heroine, so if you don't get opioids, you can get the synthetic version. we have a lot of things to do on the treatment and prevention side. david: how often do you see this as a practical matter? in emergencyon rooms and that is why what happens in new york city at this point in time, you can go into a pharmacy as a person or family member and ask for the reversing antagonist if you think your family member is that a potential for an overdose. we can reverse those in the emergency room but then you have

to get someone in for treatment. medically assisted treatment is a good option as a country and we have to push that. david: either things we have done through health insurers so we are either not prescribing as much opioids or something less addictive? >> yes. we should be promoting as a provider community nonsteroidal anti-inflammatory medicines and saying to people, these things are potentially externally addictive and addiction science is not at the point yet we can see you will get addicted and he will not. we have to focus on that. david: there was a report yesterday thatcvs -- there was a report yesterday that cvs might merge with aetna. how will this affect your business? >> you are seeing consolidation and i think aetna had to merge to compete with united.

i do not think it will put pressure on pharmaceutical prices. david: the drug price will not go down? >> i do not think so. david: what will curve the cost? >> i think it will put pressure to take cost out of structure for providers but we have to be careful not to go really consolidate. that would have the reverse effect. david: as you look at the drama in washington, where are you on the proposal for obamacare funding? >> i think alexander murray is a good bipartisan bill. it gets a partisan talk going -- gets bipartisan top going and we like that. david: is it long-term or short-term? >> it is short-term until a long-term solution. david: is there a long-term solution you have seen proposed out there? >> i think you allowed the medicaid expansion to take place

in stabilize insurance markets to get universal coverage, and i think alexander murray starts us on the process. david: thank you. jonathan: that does it for us. 26 minutes into the session. in america, the united states, positive. gdp looking solid. s&p 500 up by .4. in europe, the political story negative. madrid and that ibex down. a weaker euro and spanish bond yields climb as the catalan parliament voted to implement independence from spain. , full coverage. this is bloomberg tv. ♪ -- up next, full coverage. this is bloomberg tv. ♪ is this a phone?

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vonnie: much to cover today, including catalunya's parliament voting for independence moments ago. we will cover that in a second. first, breaking economic data. here is abigail doolittle. looking at the university of michigan sentiment. it is an even match. the final survey called for a reading of 100.7. that is where the survey came in for the final reading for the month of october. we are not seem much of an influence on stocks. a little mark -- a little bit of a mixed picture. take a look at the nasdaq right now, on pace for a record closing high. putting in a all-time high. the of tech winners hoping nasdaq. we will dig into some of those in a moment. he