threaten their effort to pass legislation before thanksgiving. a tale of two cities for big tech. record highs on wall street, and a grilling in d.c. it's day two on the hill for facebook, twitter, and google. and one fed decision due today, another tomorrow. economists see no change to policy. investors wait for the president's fed chair pick. good morning, good morning. this is bloomberg daybreak. i'm jonathan farrow, alongside david westin. alix steele is out today. lisa is stepping in. let's begin this wednesday by getting you up to speed on some of the action, shall we? we close out october for a seventh straight month of gains on the s&p 500. we begin november with futures positive, up 10 or 11 points. in the f.x. market, you're euro-dollar stable as we count down to the fed nondecision later. and to payrolls on friday. treasury yields grinding just a little bit higher by a basis point to 2.39 on the u.s. 10-year. david: as jonathan said, we're not going to get the tax bill we've been promised today.

word overnight the republicans will take another day to work on their plan. they're explain what's holding them subpoena our chief washington correspondent, kevin cirilli. you're our washington reporter extraordinaire. take us inside the caucus. is this just tweaking details, or do they have real problems? kevin: they have real problems, particularly how to pay for it. there's been division for quite some time on 401-k's, as well as state and local tax deduction eliminations, and now phasing lowering the corporate rate. that is really going to be at potential risk. that said, the chairman of the house ways and means committee released a statement last night saying that while they are delaying the release of this legislation, legislative proposal until tomorrow, it is not going to hold up the markup, or the committee hearing that is going to be public next week. so all systems still a go for the markup. where this poses potential problems in terms of the tameline by passing this at the

end of the year, and what we'll be watching, if this gets held up in a committee hearing. that is where the countdown to the end of the year and their ability to get this done really starts to be at significant risk. disappoint they have a big cheerleader in the house. the president tweeting the republican house members are working a hard and late, as he said, toward the massive tax cuts that they know you deserve. these will be the biggest ever, the president said. at this point, is the white house playing a substantial role in this, or is this really all up in the house of representatives? kevin: the administration would argue they are playing a substantial role, particularly people like treasury secretary steven minimum children -- steven mnuchin. we should note several advisers are cutting their trip short in asia in order to work on tax reform. that said, my sources on capitol hill within the republican party would argue that the crux of this legislation is being crafted by folks on the committee, as well as in congress, and significant push is coming from republican

leadership. david: what should we be focusing on, kevin? things like, as you said, state and local taxes, things like phasing in. are they getting nervous about this deficit? they already said 1.5, now they're talking about five trillion if you take the cuts. kevin: they're trying to make the case that economic growth will offset the cost of legislation. if we should be nervous, i think the reporting that i've done and the folks that i'm talking with on this, especially even late last week, are really making the case that, at the end of the day, this is a lot of wheeling and dealing that is typical of washington. but the republican party knows that if they want to hold on to the majority in 2018, they have to get something done, who these republicans up on capitol hill, like senator flake and corker, like president, doesn't really matter. to some extent they're not even going to be in office. but even the republicans who are more critical of his who are running for re-election, they understand that if they want to keep the majority, they have to get something done. david: thanks so much. we'll check back in with you

throughout the program. jonathan: here to discuss the market fallout, the director of policy research, joining us from washington, here in new york, the brian. isaac, i want to begin with you, on the state and local tax deduction side of things, and then on the other side, the phasing in of the corporate tax cuts. those two things, how is this going to pan out once they actually go into the stpwhill how do you expect the bill to come out the other side, isaac? isaac: sure, i think it's important to note how much difficulty we're having even at this stage, because the next stage, once we actually have the legislative tax, is going to be even more difficult. then once we get to the senate, it will be even more difficult. each step from here continues to become more difficult for these lawmakers. so it's important to keep in mind that this phase, even with the delay, is really just the beginning. so if we run through some of the most important paid fors,

like you were discussing brrk the state and local tax deduction i believe can be handled. they'll simply stwoich a property tax credit. i think that there is general agreement around that. and then we have a number of issues still on the table, even though they're moving away, such as the phase-in on the corporate rate, 401-k's are the main two where the president has actually influenced the debate on the hill. jonathan: more broadly for the market, we played this game a couple of times in 2017, need to pass the house bill. if they don't, markets will tank. then it was they need to do tax cuts reform by august. if they don't, markets will tank. now i feel like we're playing it again. markets aren't going tank, are they, or are they? brian: good morning. [laughter] only one shame on you. fool me twice, shame on me. cue the commodores, once, twice, three times a lady. come on. markets run because of earnings is financed mental. this year is the perfect case

study to prove that politics have nothing to do with the performance of the stock market. it can either enhance or detract the current trend. what's the current trend of fundamentals? positive, right? well, what about the trump trade? come on. if you go around and talk to investors, there remains a tremendous amount of skepticism with respect to anything getting done, right? everyone is so negative, negative, negative. we default to the negative news story, one more day, it's delayed one day. come on, ok? this has been a process, as we like say in canada. those people say, oh, we're buying stocks because of tax cuts, it's bunk, so to speak. people are buying stocks on an institutional basis because they want to continue to defend their job and keep pace with the market. nobody believes that they're basing their entire investment strat joy tax cuts. lisa: perhaps not, right, but there has been an expectation of some sort of fiscal stimulus

to push the u.s. economy up a notch, kick things up out of this sort of slow growth gear. and yet this kind of kerfuffle in washington makes it seem like that's looking less and less plausible. do you think that's a problem? brian: kerfuffle and washington are correlated. that's basic what will they do. the republicans have had seven years to get something done. they haven't gotten anything done. why would you be surprised about one more day or have other issues, number one. number two, this has been the slowest, grindiest g.d.p. recovery and earnings recovery in the history of recoveries. we've already started to see some fiscal reform begin to take shape. we don't really talk about it, but from a fundamental perspective, less regulation is a huge deal. it helps margins with respect to corporate america. you have less regulations in the s.e.c., the e.p.a., the f.d.a., and the f.f.t.c., you're starting to see companies begin to react because of that going forward. earnings are going to be better.

david: let's talk about what's at stake for the congressmen dealing with this issue right now f. they don't get a tax bill through, is it really a plausible possibility that the republicans could lose the house next year? isaac: yeah, i think that is absolutely on the table. if you talk to republican staffers in particular, i think one of the rallying cries for moving forward here is the fear that they have of what speaker pelosi would do to the legislative prospects for the trump administration, which could even impact what brian is talking about there in terms of some of the administrative rollbacks that the market is still betting on at the regulatory agencies. jonathan: we just had the lowest monthly average on the v.i.x. ever. it's not going to induce a selloff. could it induce volatility, what's happening down in d.c.? brian: sure, it could. we've wean -- we, meaning wall street -- have been waiting for this mythical pullback for a

while, and we've gone the longest stretch in this bull market that did not have a 5%, 8% correction. it's a refresh, not the key thing, not the start of a bear market or massive recession. markets have run because the people had to be invested. so we do need a refresh at some point, and the v.i.x. will spike. it's not going to be going down forever. david: great to have you with us. jonathan: great to have you with us. lisa? lisa: let's get a check on what is making headlines outside of the business world. emma chandra is here with "first word news." emma? emma: thanks, lisa. president trump has ordered tougher screening of immigrants following the terrorist attack in new york. police say a man from uzbekistan drove a truck down a bike line in manhattan, killing eight people and injuring almost a dozen more. a police officer shot and arrested the suspect, according to the "new york times." notes found near the truck indicated the suspect's allegiance to islamic state. five of those who died were from argentina. the former trump advisor who pleaded guilty to lying to the

f.b.i. made a significant claim during the campaign. in an email, george pap done husband said that top trump officials had agreed to a meeting before the election with representatives of russian president vladimir putin. flyers indication the meeting took place, and it's unclear whether papadopoulos was simply boasting. the ousted president of catalonia has to choose between a possible prison term or life in exile. a spanish court has summoned the leader to appear tomorrow to face charges of is he decision. he bled to brussels after spain seized control of his government. his lawyer says he won't go to madrid, at least in the next few weeks. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm emma chandra, this is bloomberg. jonathan: someone making a joke about prison in spain, or life in brussels. [laughter] jonathan: they can discuss that on commercial break, i'm sure. coming up -- representative diane black, republican from

tennessee, and house budget committee chair will talk about what's holding up the tax bill. we are about two hours, 20 minutes away from kicking off november for equities here in new york city. futures very much on the front foot, positive. we're up by about .4%. ♪

emma: this is "bloomberg daybreak." this is your business flash. chairs of u.s. steel are soaring. the second largest steel maker in the country reported earnings and sales that beat estimates. u.s. steel also said it will upgrade aging facilities by its target date. shares of charter ready lower today. they posted operating income that missed estimates. profit also came up short.

the crew very in the third year of trying to rebuild standard chartered reputation and balance sheet. and shares of sonny haven't been this high since 2008. the japanese electronics company rose 11% in tokyo after posting record profit last quarter. sony also boosted its forecast. demand for its camera chips and high-end tv's offset slower growth in the playstation business. and that's your bloomberg business flash. lisa? lisa: thank you so much, emma. tech executives faced tough questions on capitol hill yesterday. lawyers from google, facebook, and twitter testified on russian efforts to influence the 2016 presidential election. another round of hearings are scheduled for later today. joining us now from our washington bureau is bloomberg tech reporter sarah. sarah, what was the tone yesterday? can you give us an overcap of what we learned? sarah: the senators started by praising the companies for building what they did, and then it quickly became combative.

there were a lot of questions about why they weren't able to find this russian interference in their own systems. you know, companies are able to find so many other things about their users, why weren't they able to find this? beyond that, can they really say that they can prevent this from happening in the future? the companies also said they don't currently have the technology to do that, but that they're working on it. that wasn't quite enough. david: you watched it. were the senators satisfied with this? it struck me that they said we're not sure how big the problem is, and by the way, we're not exactly sure what to do. we're going to add people, but we really don't have an answer. are the senators satisfied? sarah: i don't think that they are. they also didn't seem to have a coherent plan for what they wanted the companies to be doing. i mean, they were very quick at driving home the points that these companies were not prepared for this threat, and maybe never will be. at the same time, they didn't make it clear whether they were

worried more about the russian ad interference or whether they were worried more about fake news or the whole campaign in terms of posts, and, you know, the companies tried their best to stay on message, but the senators quickly would jump on them if they tried to not directly answer a question. david: sarah, thanks so much. the real question is, are we going to get regulation for the big social media giants? brian belski still with us in new york, and isaac in washington. isaac, down there in washington, is this going to lead to regulation? isaac: yeah, look, congress is in some ways like a dog on a walk. it will see a squirrel and run after the squirrel, but it will quickly lose interest once it realizes that it doesn't really know what it will do once it gets the squirrel. and i think that's where we are with this particular issue, which is we will see a number of hearings.

we will see a number of press events. we will hear senators and congress people pounding the table for more regulation. but at most you can expect a modicum of disclosures. i don't see anything more sweeping than that as likely. jonathan: the dogs are so offended right now. david: my dog doesn't chase squirrels. jonathan: they're smarter than congress as well. you'll like this, he sent his own questions over, that is very much like you, i'm sure. and isaac, he basically said there's a difference between what you can do and what's profitable. and are they going to draw a distinction between the two in those hearings today? they haven't so far. the tech companies are saying they can't ensure these things will happen, won't happen again. but if basically they could, it would just take a lot of money to stop it from happening. when are they really going to press them on that point? isaac: yeah, i think the hearing yesterday was telling because there was clear and undeniable frustration among

senators, and i would say skepticism regarding the company's promise to throw scommone people at this problem. and so i think that in reality, there is a possibility over time that we see a change, but i don't see how washington is going to be the one to force it, because i don't think they have a core enough understanding of the issues at hand or the speed at which some of these dynamics move. lisa: brian, i want to get your sense. what isaac is saying is that washington may not move, but there's been a lot of talk about self-regulation, and that means a lot more money getting thrown at this internally. could that affect the earnings of the facebooks and the googles? brian: the facebook machine and google machine, both of them have a lot of cash. again, i think the perspective is lots of headlines, lots of banter. it's not going to cost them any money. and so what's going to cost them more money, though, is to employ more people, right? they've already said, many of these big tech companies said

they're going to crank autopsy lot of their employment anyway, which talks about the whole tax side of things, too. you employ more people, more people are paying taxes. it's just coming back and forth, but most of this is just noise, we would say. jonathan: we talked about the performance and what happens in d.c. a lot of people would use the tax story to explain the divergence there. i guess where tech goes, the market goes. maybe this is the story here, brian a. lot of people are talking about it over the last couple of weeks as well. but because tech has such a much bigger weighting on the s&p 500 and a much smaller weighting on the russell, that kind of explains the divergence so far this year. brian: it does, but also remember, in the fourth quarter last year, we had a massive rerating on the upside small cap stocks because people were trying to get ahead of the supposed tax cuts, right? so what happened was, all the sudden you're looking at your small cap portfolio in the first quarter of 2017, you're like, whoa, whoa, whoa, these stocks are expensive, they're

not growing like they should be, and then you had a re-rating on the down side of earnings, and now the stocks have corrected. 2018 cob a very good time for small caps, but probably after we get more visibility and certainty with respect to what happens with tech, and then what that means for potential cap ex. cap ex will have a big, big consequence on the positive side for small cap and mid cap stocks. david: isaac and brian will both stay with us. coming up, we're going to talk with representative diane black, frep tennessee, the house budget committee chairman. we'll talk with her about why that tax bill is delayed and if anyone should know, it will be diane black. ♪

jonathan: fed chair drama. the federal open market committee is expected to hold interest rates unchange when had it makes its announcement at 2:00 p.m. eastern time. however, the focus this week hasn't been on policy, but on who will lead the central bank.

president trump is expected to announce his pick tomorrow before leaving for asia on friday. still with us, brian belski, and isaac of compass point. isaac, what are you hearing in d.c. as far as the announcement tomorrow is going to be? isaac: first and foremost, this is actually going to happen from the sounds of it. so we will get the fed announcement tomorrow despite the timeline on taxes pushing. so d.c. can walk and chew gum in certain instances. i think it's going to be jerome powell. i think that he will be viewed as just ever so slightly more hawkish than chair yellen. he will be introduced as supportive of the vice chair's push for bank deregulation. and then the focus can turn to what's the president going to be with the other open seats on the board, which could be far more contentious than mr. powell's likely nomination. david: brian, pick occupy that. as the reporting seems to

indicate it's going to be powell, does that tls anything about the other seats and where the president may be heading overall with the fed? brian: i think that's actually the key point. many of my brothers and sisters at the b.m.o. talk about powell, but what happens if the voting members change, if he anoints different voters and what that looks like in terms of the other seats, number one. number two, it's really interesting on how this is becoming less and less and less hawkish and more and more and more dovish, which from a common sense and analytical perspective, makes all the sense in the world with respect to what's happening in terms of the world and growth and earnings and the like. so continuation is the key thing. but change is really important with respect to how they manage in terms of rising interest rates from herement don't be surprised if powell or yellen. david: that would be news. lisa: that would be news. brian, there was a story on the bloomberg overnight about matthew hornback from morgan stanley saying whatever the

reaction is in the bond market, fade it. go against it. to the fed nominee announcement, because it's not going to be clear what the reaction is in the longer term, and you can't predict that far out. do you agree? brian: well, in investing, we're so fire-arm ready, we're right away. that's probably pretty good advice. the bond people have all the money anyway, so they're going to try to chase this thing right away in the direction that you probably shouldn't go. but again, just like tax cuts and fundamentals, it's going to be midway through 2018 to see really kind of what the impact of this is. but the key thing is that how they direct this, directional change with respect to the fed and how they communicate that. i don't think communication is going to change very much, and we've become data dependent and everybody knows what's going to happen before it happens, so i think that's the continuation and the consistency of communication is going to be the key thing. jonathan: the president has been very respect i feel of this institution over the last several months in a way that i

don't think many people anticipate. david: very good point. lisa: hold on a second. there was just a column saying that the reality television show hasn't been -- jonathan: to be honest, that was totally ridiculous. nomination of the fed chair may have been contentious. that might have been like a reality show. but given how he behaved on the campaign trail, the attitude toward yellen, toward the federal reserve, that has been absolutely absent since he walked into the white house. david: the candidates are all very credible. there's nobody off the map. lisa: that's for sure. jonathan: but what's he complaining about? isaac, brian, thank you very much for joining us. from new york, this is bloomberg daybreak. ♪ who knew that phones would start doing everything?

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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: two hours away from the opening bell. we kickoff november trade with the futures positive. stronger. dow futures are positive around 130 odd points.

in europe, the ftse is getting a 14% -- .2%. the biggest gaming industry group this wednesday. the bond market, counting you down to the adp report. payroll is coming up this friday. euro is just a little weaker. the pound is a little stronger. 1.3298. potentially the first rate hike in over a decade for the bank of england. that is the story across assets. here is emma chandra. unity through the streets of new york today after a man drove a truck down a hike past, injuring almost a dozen and killing eight people. police officers shot the man and

then arrested him. according to the new york times, notes found near the truck suggest his allegiance to the islamic state. hill, republicans have delayed the scheduled release of the tax bill by a day as there are unresolved questions about the timing of a corporate tax rate cut and other proposals. republicans also disagree over whether to appeal federal and state taxes with tax breaks. this is the second-largest gift in the school's history. money will provide financial aid to students and it will expand faculty resources and research. global news, 24 hours a day. powered by our more than 2700 journalists and analysts, in more than 120 countries. i am emma chandra. this is bloomberg. >> brexit negotiations are expected to continue in

brussels. the brexit secretary yesterday noted a compromise over money. saying it will probably be better for the remaining eu countries instead of britain. can you give us background on what these hints were about such a compromise and how unified the u.k. is in this sort of proposition? >> yes. yesterday, the brexit secretary did use those words to the u.k. lawmakers that the deal that version gets is going to be worse. those are the first hints of a compromise. brexit talks have been deadlocked for weeks. it has been weeks since the chief eu negotiator describes the deadlock as disturbing as

the council summit. to side or the other needs give ground. and this is significant. because he was saying yes, britain will pay more than they said they would. this compromise we hope will be enough to move talks forward. the next eu summit is in december which is when britain needs that european leaders to agree to move the talks on to trade. so we are starting to see the first sign of the compromises coming forward and we will be looking for more in the coming weeks. the next talks have been scheduled between the negotiating teams in brussels so we will be following those closely. -- from goldman sachs says he enjoyed brussels and will be spending more time there. this could be indicative of banks being incredibly patient about their next move and there is reason for that.

but how much longer will they be this patient when a lot of at runninglooking out of patience with these negotiations? wrecks we are hearing lots of different signals from the banks. frankfurtabout created a bit of a storm. ubs recently came out and said well, the amount of people moving out isn't going to be as many as a lot of people feared but the key point here is about the ongoing uncertainty. the talks remain deadlocked and there is no progress and talks don't move on to trade, no one knows what to expect. the point of the transition deal is that it is a dwindling asset. the longer it takes to work it out, the least value it will be. that is doubly important they move ahead with these talks as soon as possible. jonathan: that was david married in london.

george, the bank of england seemingly set to raise interest rates for the first time in over a decade tomorrow. what are they doing? thinking about a rate hike now? george: i think it makes a lot of sense. we have waited a decade and this suggests that things are improving. when you go back through the at the averageok rate of gdp growth at which the bank of england has raised interest rates, it has been double. 0.8 so whyally been should they raise rates now? well, the rate of potential growth is probably a lot lower now. so it doesn't require that much in the way of gdp growth for adding to inflationary refresh and -- inflationary repression.

so if they continue going over the way they have for the last year and a half, we see domestically generated inflation picking up. jonathan: so the pendulum has come down. there is still a narrative out there with the bank of england that he will be one and done. is your message that it is the beginning of a journey? and the reasonh for that is because we think they can afford to raise interest rates during what is likely to be tricky deliberations and negotiations with exit. one of the reasons is because brexit could bring even weaker wage growth. so it is still consistent with the inflation target. look at what they will publish tomorrow. it will probably tell us that

inflation will be overshooting the target i the end of the forecast horizon, even with the rate hike and markets expecting more in terms of rate hikes than they were doing at the time. so there are lots of reasons why the bank needs to suggest that further rate hikes after this one might be necessary. they -- david: they have an inflation issue due to the evaluation of the pound. the .4% is not that high. does it make sense for them to raise now and do they have a choice? >> i don't think they have a choice given what mr. carney has already said. they have to back that up. it probably does make sense that we will see a more dovish after this and we will wait and see what happens with the gdp growth as it develops over the next several quarters. jonathan thinks

whatever happens in the u.k. -- affect the entire world >> the empire is alive. [laughter] i'm just wondering, in the scheme of things, how important is the u.k. decision with respect to global monetary policy and market? becauset is important the u.k. was the first bastion of showing populism and then you saw that happened and now we are fighting about brexit. it can it happen and will happen and what happens with respect to overall gdp and the effect on europe. what does this mean? this is kind of the first step. you don't jump in the middle of the pool. we are jumping in the side of the pool and that is the most positive thing we could be

doing. brian belski, and thank you for joining us. to diane, we talked lane black. this is bloomberg. ♪

emma: this is bloomberg daybreak. coming up in the next hour, senator rob portman and. a member of the senate finance committee. this is bloomberg. ♪ house republicans were working well into the night to work out the details of the tax

reform package but in the end they had to delay the release and till tomorrow. representative diane lynn black is one of the key players and we hear from her now from capitol hill. before we get into the substance, let's talk about the process. how widely circulated is the basic language of the bill? does everybody have a view of the language at this point? diane: they don't because the language hasn't been completed. that is what we were doing overnight. there are changes that have been made. there are examples of things that we thought might be better this way or that way. so getting the final language together, that will be released tomorrow morning at 9:00 a.m. everybody, be ready. we have been working really hard over the last seven years to be able to give the following to the american people that we know will get the economy moving. black, why didve

you decide to do they -- to do the process this way, to keep it secret have and not release the language more broadly? is a: as you know, this big project. if we were to put something out there at this point in time, before we have a finished product, people will have a chance to weigh in once we do. but if you put something out there too soon and there are too many people having a voice in that, it makes it messy. it is a big project to deal with so we wanted to make sure we had something that we thought was going to address all the issues that we are hearing from colleagues and is this is and people back in the district. it takes a lot of time to put that together but everybody will see that product tomorrow at 9:00 a.m. david let's turn to the substance. side, they would

incur it is much as one point $5 trillion of deficit in the hopes of growing the economy but if you put together all of the wish list, it adds up to more than $1.5 trillion. what are the principal areas where you think you can pay for some of the tax cuts? black: when you bring down the marginal rate then you have to say, where do we fill the hole? there is something called a reconciliation that is on the in thethat we passed house and senate that gives instructions. it must come in at no less than .he $1.5 trillion deficit so we are all working towards that goal. and we want to make sure we stay within that realm so that when you dial one area, you dial another area. time, i want to

keep emphasizing that our goal is to get the economy moving. to get those in the middle income the most tax relief we can give them. >> i am struck by the timeline. right now, congress has 10 days toore the thanksgiving break rewrite the entire economic engine of the united states and a lot of people are writing off congress's ability to get this done this year. what gives you hope that you will be able to do that? black: we have a working on this for a long time. people say we haven't seen the product that actually we have seen the product. two years ago. we put something out as a blueprint and we got a ton of feedback from individuals and corporations and small businesses. so there has been a product out there from which we have been working. we made that up to a point where we put a bill out so people could see it. and i'm fairy encouraged and the

whole conference is optimistic for what we can do for the american people because it is a once in a lifetime opportunity. opportunity goal here has been growth. they will pay for the cuts through dynamic scoring. does it make sense to delay the corporate tax cuts? if the corporate tax cuts will be what it gets going, the longer you put it off then the slower the growth. the unexpected delay with that? black: growth is a big piece of that. it is by growing the economy. so wages go up. by cutting taxes. so that will be one of the goals. you will see what we put the tax plan out tomorrow, i think corporations and small businesses and individuals will find that there is growth in

this plan. that mean there is no delay? representative black: i would be in trouble if i told you what my plan had. the box will be open to tomorrow and you will see what we do have planned for the american people. david: we will watch closely. thank you for joining us. they spoke is set to report third-quarter earnings after the bell today. we will have what to watch after the break. this is bloomberg. ♪

emma: this is bloomberg daybreak with the bloomberg business flash. cisco is looking for someone to buy the video software unit. according to people familiar business. they bought the company in 2012. genericstology

business -- the swiss company wants to shed some of the less profitable treatment and focus on growth areas such as cancer. mostly based in the u.s. and could be valued at $1.5 billion and with -- and warren buffett's winning streak in the insurance business may be coming to an end. they have been underwriting profit since 2002. they're likely to report big claims costs in the third quarter due to natural disasters and hurricanes. the top five liters on the bloomberg commodity index are metals and that is good news for minors who are seeing big gains today. let's turn to abigail doolittle. abigail: we do have a nice rally for some of the world's biggest miner's. for a bigace

increases july. not surprised behind it is that we do have a rally behind it with base metals. copper up with aluminum up. index are onetal pace for the highest level since 2013. very impressive. .et's turn to nickel up 10%. pretty amazing. that explains why the miners are trading higher. dollar story.weak the dollar just came off the best month of the year. this is an inventory story. look, thise a represents a majority for the various base metals that the british metal exchange. the biggest one, where we had inventories was aluminum surging.

thedavid, look at inventories simply coming lower. the lower inventory is helping the price of the base metals and the miners. david: a good time to be in the metals business. is it time to be inditex business? these book will report or quarter earnings after the bell today. investors will be focused on user growth and things like that. but will they also look to washington as the company's lawyers face another day of grilling in congress? joining us now is paul sweeney. what will investors be looking at today? paul: they will be looking at the earnings and it is looking fore another strong quarter revenue. the top line is the user growth story. that continues to be a positive story for facebook. but of course, it is becoming as they give an issue with

investors -- what is the regulatory oversight? we said at the top of the show that this is a tale of two cities. all-time highs in wall street and new york that the grilling in d.c.. at the same time the administration says they care about the market. if you care about the market then you care about tech. how conscious are they of that? paul: the consumer facing internet companies, you really have to be ahead of the curve. with washington. what you do not want is a heavy-handed regulatory response coming from washing -- from washington. it will be incumbent for the tech companies to be aggressive and out in front of this and try to put up policies that are straight and clear for the users that preserves the open internet. what they don't want is regulation that they have to be sensitive to some of the issues that are emanating there. him -- there was a story

yesterday that facebook will toble their security staff double. i'm wondering how that will intor into your -- factor what we hear after the bell today. are expected to grow 40%-50% this year. i suspect they will have to shift some expenditures into the regulatory issues that may require either more headcount or rmb to provide technical solutions. jonathan: what can i understand -- as lisa and i were discussing yesterday, they were having some trouble. to whatt any read as this means for facebook and others? they have brought down the growth forecast. customers are cutting back on the fees they are paying to the

ad agencies. so it continues to be a low, single-digit growth business globally. what we see is a huge shift from what we spend on traditional media. we saw numbers out of google couple of days ago. and now we will see them out of facebook. so internet advertising continues to be a high teen, low whengrowth story in a time it is single digits. david: more important than what is going on with social media is the percentage of new mobile lives going to google and facebook. something like 70% which leaves nothing for the rest of the world. is not a good structure, in my opinion. advertiser, you don't like the way this business is developing. twitter is there, snap isn't there. it is facebook and google.

my bloomberg, at the number has been declining year over year. interesting. jonathan: much more on that later in the story. portman senator rob from ohio. discussing how the gop plans to iron out the differences to get a tax bill out before the holiday. open. down to the one hour and 24 minutes away. futures are positive across the board. 130 on the dow. this is bloomberg. ♪

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jonathan: you will have to wait another day for the tax bill. if the -- disputes among republicans to pass legislation before thanksgiving. record highs on wall street and a grilling on d.c.. facebook, twitter, and google. one today and another tomorrow. public convinces in no change in policy. good morning, good morning. this is bloomberg daybreak. we are very happy to say -- some of the market share, the longest monthly winning streak. about one third of 1% on the s&p 500. payrolls on friday, our fed decision denomination coming this week.

about exterior on the dollar. on the market this wednesday. let's get headlines. here is emma chandra. >> the suspect in the new york terror attack entered the country through the diversity league -- fisa lottery program. he referred to senator chuck schumer'support for the program. a police officer shot and arrested the man. on capitol hill, republicans delayed release of the tax bill by a day. there are still unresolved .uestions republicans also disagree on whether to repeal tax breaks.

the ousted president of catalonia has to choose between a prison term or a life of exile. to facer tomorrow charges. theyher brussels after seized control of his government. his lawyers say he will not go to madrid in the next few weeks. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. lisa: day two of tech executives on capitol hill. sara, i want you to hone in on for heticular exchange was accosting the tech company. why couldn't you put two and two together. what is the response?

>> they say we should have known that was a signal to look at. i am talking about illegal activity here. a disconnect between how tech companies disconnect the problems in terms of big data is figuring out what that versus how clown -- congress thinks about it. if it is not unlawful, it should be. >> today, what will be the focus? >> yesterday's hearing is about the broader action of the intelligence threat here and the platforms potential to have manipulation from foreign governments. we have done intelligence committees in the house and the senate.

dive into the russian manipulation of particular, and the tech companies, they will ask the key questions, which is how do they get this data to know the target in the campaigns, which the company may or may not be able to answer. david: i thought the most important question was who showed up from the tech -- tech companies. why did this and the general counsel and the lawyers and? >> one theory is today's facebook's earnings report and the executives are just busy. the other theory is that they did not really ask for top executives and were not specifically invited. they mostly wanted to talk to someone with technical expertise.

thank you for joining us. jonathan: -- lisa: it is perhaps that the ceo's's were not equipped to answer in the language. david: my hunch. hill, raising questions about whether there will be regulation now. , chief u.s.ow economist, and michael mckee, chief economic economist. cut to the bottom line. you know washington well. will we ever see regulation along these lines? >> it is a possibility. there is a larger issue of fake news, fake tweets and fake news on social media site. they have not come to grips with how to deal with it yet.

everybody agrees there is an issue. the companies argue, we can deal and lawmakersves on the democratic side say no, we need legislation. until theye a while get to something they can actually agree on. there is a democratic bill that would require reporting for payments of political ads. political ads are not as much a problem as the fake news. started arguing we have voluntarily reporting the information. david: let's pull back. tech is a big factor in the markets including google and facebook. is there a prospect that regulation could slow them down, on this or something else? >> i do not think regulation will slow them down. it is just an added expense they have to go through like all of us have to go through at compliance.

ad compliance. how do you do this without violating the first amendment? that is a tricky question. can you go through antitrust in terms of breaking up these large, massive internet related products, whether it be amazon or facebook or related to google, to see whether or not you create a different with more activity in these kinds of things. something this large, it just wants to sit there and say leave me alone. >> you mentioned a democratic bill. is it a democrat story or a cross party effort that these need to worry about? >> it is a democrat story for now. politicalf reporting paid ads is not a new one. broadcasters have to do it.

as steve said, the ultimate would be antitrust investigation into the size of the companies. washington has not focused on who is damaged by the size of the companies. it will not happen in this administration but maybe down the road. >> if you broaden out, i wonder how much is this sense that the -- tech giants are eliminating a lot of jobs. amazon keeping inflation down and getting rid of jobs here at how much is in the backdrop of these congressional hearings? >> i think a lot of that is going on. the previous spot before you talk to the advertising industry, clearly they are going after multiple industries. these are delivering damage to multiple industries. there is evidence of what they are doing. there is a potential of the antitrust to become a motivating factor.

i think the question is whether or not donald trump would do this in the first term unless he is convinced it will only be his term, or whether he waits until the second term to do it. issues that need to be a dressed with regard to these products and the impact they are having on a regular domestic economy and whether they are stifling competition. david: it is a fascinating question. a basic tenet of antitrust law is we don't compact -- detect competitors. it is for the benefit of the consumer to get prices down. these companies may be baked, but it has a deflationary effect. prices have gone down, advertising or buying or whatever. >> that is the question. what could be done if you break up these companies? google and facebook are basically free.

adding additional competition will not change the financial picture. it is hard to make the case. amazon is a totally different subject. you have to wonder how you would figure something like that out. the youngerout generation gets tired of facebook and that solve the whole problem. .e will have to see >> i think it is the older generation that latched onto it than the younger generation. grandma and grandpa wants to look at the kids and they get more involved in that and they tend to get homebound. it is an outlet on social media for a homebound person. striven the generation away. jonathan: michael mckee, thank you. this hour,n

cofounder and ceo in a conversation you do not want to miss with tech on the hill. , he senttern professor in a couple of questions for congress to ask of the tech companies. please raise your right hand and tell me if you are a media company. don't miss that conversation a little later this hour. this is bloomberg. ♪

jonathan: here are the scores for you. futures up further. the euro on the back foot of

today policy session. as these, the report appetizer for the big one on friday. payroll is friday, a couple of days away. we get a fed decision with the chair nomination coming up. all of that in mind, treasuries up about one basis point on the u.s. 10 year. difficult at this point. 161 is your yield on the u.s. two-year. joining us now, we wait for the adp report. see a fairly healthy adp report, probably on lines of 200,000. jonathan: where is the noise we are waiting for? >> you did not see it as badly in the payroll number.

jonathan: the previous month was 135,000. we are about 10 seconds away from the number. i expected to come in at 310,000. the previous number is -33 k. looking for 200 k, the previous numbers 235. you see the initial reaction on yields. two basis points higher. yield, we are up one basis point. punching a little bit higher on the two-year as well. up by 1/10index just of 1%. no real drama here. futures are positive and about an hour and 15 away. that is where we stayed. it is a decent number.

is there any kind of read across for payrolls on friday? >> know they were much more seriously distorted as we saw with the numbers. we will see the difference on friday. i think you have to average the two of them. when you do, we are going right where we are running. these are in the backdrop relative to the fomc decision that will take place this afternoon and what that can foer rates. i am surprised by the discussion here. i am convinced the curve will flatten from the front and as we go forward. the market is not appropriately pricing in the rate hikes the fed is anticipating or telling us for next year. that is the big adjustment in the curve, lift up from the front end. >> in fairness, the market is not even pricing half of that. about tax lead story reform. it is promised for tomorrow and

we are getting a better understanding of the issues congress is grappling with. he understands the ins and outs of budget better than just about anyone. before he was senator, he was budget director for george w. bush. welcome back to the program, senator. good to have you here. a lot of the action at the moment is on the house side. you understand this well. you know from inside the republican caucus, a big issue is how you will pay for the various cuts proposed. where are we from your point of view? sete are on track here we up a process where there will be a 1.5 join dollar tax cut over the next five years, out of about 43 chilean dollars of revenue coming in. it means you would need about 8.4% increase in the gdp, the growth of the company, during that time.

within that framework, i think we are on track. it means we will have to make tough decisions. we are lowering rates for individuals, middle-class tax very important to her we are lowering rates for small businesses to 25% from whatever the individual rate is now. we are also lowering the rate which we have to do to make more competitive. we are on track to make these tough choices. david: a keyword you used was the net effect. i wonder if you see numbers, if you took up the total number of cuts talked about, you could have approached the level of $5 trillion, a 3.5 join dollar gap. are those numbers realistic? >> i think they are. we are spending hours on this making sure we are doing this in a smart way. to end up making changes in the tax code to lower the rate that are not positive the terms of economic growth and

would actually hurt american workers. in some proposals in the past, there has been a reduction in the depreciation schedule. harder to write something off when you buy new plant or equipment. we are not going that way. the kindsking more at of offsets that would not affect economic growth so you both have a lower rate and progrowth aspects to what you are doing. the alternative is to do something that keeps the economy flat. it is not the idea here. we want to give the economy a shot in the arm. specifically with regard to the biggest challenge we face in my view, to get wages back up again. as yout to get growth have seen but that has been the big issue. not just in the last few years but in the last few decades. >> one of the key decisions house republicans appear to have made is to keep the tax rate for individual income, individual homes that make more than $1 million at 39.6%.

this could meet resistance from conservative republicans who want to see a tax cut across the board. where do you stand on that? >> i stand with where the framework is, to say there will not be a reduction in the share of taxes that people at the top and pay. is what we have to keep two. want to do things that are anti-growth. we want things that are progrowth. but you willfer see the share of taxation, the top 10% share 70% of the taxes. the top 1% pays him was 40% of the taxes. you will see that continue and you will see the share continua not be reduced. jonathan: the president put you all in the room and for your handout for who you like. who did you put your hand up for? it reported that he

did that. i was in the room but i must've missed it. a few very good choices. i like john taylor a lot. there are very good people out there. we talked earlier in the program about uncertainty with monetary policy. it is a difficult job. you have to balance a lot of different factors globally. i'm sure he will get someone with a lot of experience, and someone who is willing to be innovative. as things change, you have to show flexibly. jonathan: if he gave chair yellen a second term, would you support that? senator portman: i would support that if they laid out reasons why in a way that is compelling. i think she has done a good job, frankly, trying to guide the fed through tumultuous times. jonathan: great to have you on the program to talk about fiscal

and monetary policy. conveniently did not remember whether that happened or not. you remember whether that has happened or not. >> there are a number of good people the president is considering who clearly have the resumes for potential fed chair, whether that be john taylor or jay powell. >> you were saying the market is not pricing in at all the three rate hikes. it is barely pricing and one. in the past, the market has been right and the fed has caved. what will change this time? you look at what the market has priced in, month ago, they were pricing for no hike in december and now for a hike in december. i think these things can change and that is likely to happen in this case as well. the market is probably underpricing the number of hikes

but the fed is probably over hiking realistically what they could do. market pricing one hike, the fed says three, and two might be the answer we ultimately come to. >> thank you so much. .nd our thanks to steve both of you are staying with us. coming up, the deutsche bank chief global strategist joins us and we will discuss the impact of tax reform on small caps, tax, and bitcoin. from new york, this is bloomberg. ♪

jonathan: a ringing endorsement for it -- from a big financial institution p or jamie dimon calls it a fraud.

some future contracts on this as are we -- after we climb to another milestone, $100 billion of value. is that 800% over a year? your thoughts? the coin? -- bitcoin? classic will not go down until i buy some. that is how it works. i will probably buy some today to see what happens. jonathan: it will roll over. you will be the indicator. wolff,iss michael cofounder and ceo. a professor weighing in on tech in the hill. a market check without bitcoin. one hour and four minutes away from the opening bell. futures positive as we kick in in november. ♪ is this a phone?

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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: 60 minutes and some change away from the opening bell. the s&p 500, seven straight months and futures looking solid. .4% on the s&p 500.

if you take the stoxx 600, and he break it down from sector to sector, basic resources that really outperform off the back of a massive rally, that we are seeing in the commodity market and metal more specifically. creeping a little higher by two basis points. get a the 10 year as we really strong adp report ahead of payrolls on friday. the treasury refunding announcement is coming out here we go through the headlines and break that down for you in just a moment. in the fx market, i.e. euro a little weaker. some headlines outside the business world with emma chandra. >> thank you. following a terrorist attack on the world trade center tuesday, police say a man jova truck on a

bike path killing eight people and injuring almost a dozen more. a police officer shot the man and then arrested him. he is an immigrant from -- allegiance tod an the islamic state p or five of those killed were from argentina. american companies added more workers than expected last month according to the adp resurgence institute. reached 235oyers thousand, well above the median estimate. the come -- come up with october jobs report friday. tough talk on the european union from trade secretary fox. he accused the eu of acting like a gang and told her dish lawmakers that some people want to punish the u.k. for leaving the eu brexit negotiations next week. 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: president trump is said

-- has said that tomorrow is the day we will get his nomination for the next fed chair. here with the latest is kevin cirilli. is,ard talk about who it anything we know, will it be in the morning, afternoon, by tweet? how do we find this out? -- the reality of washington today. we will hear the announcement early tomorrow afternoon i think. it looks like there will not be any surprises. we have been reporting under the front runner is. as well as kevin to a lesser extent. -- -- janet yellen. david: to what extent is capitol hill sentiment play into the president houses decision?

in ohio, he went out of his way to say he really likes john taylor and her good things about powell. it seems that a lot of people on the hill really like taylor. will that influence the president? >> what is interesting about john taylor is he has had the bridge between the conservative rink -- conservative wing and the moderate wing. the chairman has announced his retirement yesterday. that said, let's look at the process. when the president makes the announcement, the committee that has to approve or van's the senate banking committee chaired republican ine, a a republican-controlled committee. several folks on the senate banking committee actually voted powell.mr. i have spoken in the past couple

of weeks in couple of days with senior aides to republicans on the senate ranking committee who tell me whether it is mr. taylor or mr. powell, they would have no problem getting out of committee. in which case, it would go to the floor of the senate for a confirmation vote. i am told this will also have no problem getting confirmed if it is one of those choices. the bottom line is this will not be a very contentious approval confirmation process. despite what you are certainly going to hear from democrats. people like elizabeth warren as well as senator brown. should the president renominate fed chair yellen? she would garner democratic support. jonathan: great to catch up with you and great reporting. put out the instagram video friday about the fed, i can tell you a lot of people

twitched. they thought this was it. the processs on around selecting the fed share nomination? he has gone through the process the way you have to. there are a lot of people pushing for taylor. i do not think taylor would be the most appropriate person. it will fit with my scenario of pushing short rates higher. the mathematical rule for help monetary policy should be set, a 4% plus funds rate. but even he has backed away from that. i think hal is probably the better choice between the two. to get to regulatory aspects of it. that is the key thing. backederal reserve has away over its regulatory role and used more interest rate dynamics and the monetary policy toes outside of regulation. we have got to get back to -- back to using regulation in crafting regulation that stimulates growth. jonathan: here is the issue. a lot of people talk about the

continuity candidate for monetary policy. on regulation, i do not recall him being outspoken and being outspoken about deregulation in any way, shape, or form. not think anyone recalls jay powell being outspoken about anything during his whole tenure on the fomc. >> made a speech not long ago that said regulation should little bit changed a because we might have gone too far. that is when you read between the lines. >> dan says that. quite an janet yellen said the same thing at jackson hole as well. an idea that we might have overreacted. i think the reason the president might lean toward jay palance set of john taylor is the

president wants someone more dovish than john taylor. he wants a dovish person willing to tweak regulatory aspects at the margin. that description more than janet yellen at this point. >> i'm sorry to say but john, you are right on. it pains me to say it but it raises the question of, will he be that strong? previous fed chairs have been leaders. could it mean the appointments of other fed members would be much more important than in the past? trump no doubt president will get the ability to re-crafted the fomc and i personally hope you moves away from the academic community. communitye academic has completely screwed up monetary policy. i think it is one of the reasons we got into the financial mess. they advocated the responsibility looking at the regulatory side.

you all knew the mistakes taking place in the market market -- mortgage market and the attitude was we could deal with it through interest rates and monetary policy and you can't. to get we therefore need away from academics totally on that committee. we need to get real business people in, real banking people, people who understand exactly how the markets work and don't solve problems like academics. >> you are right, plenty of blame to pass around for the crisis. this probably needs to be a mix of academics, business people and more people on the consumer side. one member of the fed has to be someone from community banking. you haveke that where a lot of voices on the table would be a positive thing.

david: bloomberg surveillance allbe heard in new york across united states on sirius xm radio. live from new york, this is bloomberg. ♪

>> coming up in the next hour, formal federal -- former federal election -- officials. this is bloomberg. now to your bloomberg business flash. shares of sony haven't been this high since 2008. the japanese electronics company rose 11% after posting record

profit last quarter. they also boosted the forecast, demand for high and tv's offset slower growth in the playstation business. teslant of truth for reporting earnings after the bell today. cars critical to tesla's success. last month come it report it was well behind model three production goals for the third quarter. of standard chartered are lower today. the british bank posted -- that missed estimates. profits also came up short. villagers in the 30 are trying to rebuild standard chartered's reputation and balance sheet. that is the bloomberg is this flash. lisa: nickel rocketed to a two-year high as investors bet on a long-term boost to the demand from the rise of electric cars. $12,880, arly 5% to

metric ton on the london exchange. it is the highest since june 2015. joining is now in princeton is urging -- energy minor -- mining senior analyst, andrew. can we just it started on why nickel is benefiting so much from the rise, the interest for electric vehicles, perhaps not the sale of them? andrew: thanks for having me. most of, one of the biggest nickel percentages, it does not really suffer from but you'll probably see down the road where they can use less cobalt, a very strong performer. nickel content will stay the same. and the fervor this week, it is only adding more fuel to the fire. >> is this justified? we hear a lot of interest in

electric vehicles. we don't hear a lot of profitability about electric vehicles being produced by every carmaker out there. why now. d see this being overblown? >> yes. in the interim, other factors play into the nickel market. pig are in production is a big portion of total nickel supply. that happened in the early part of september. we are probably overbought, we are at a substantial resistance level now and you still have elevated stockpiles and soinless steel production yes, we have maybe gotten a little ahead at the moment. i slid is the key thing to watch as far as demand goes? is there a particular company that is the biggest buyer of the commodity? >> and most important thing to watch in the interim is mainly stainless steel production and that goes into a lot of consumer driven products.

autos, appliances, machinery, and things of that nature. it will not kick into high gear until the early 2020's. that is really the main thing. in january, we have a big thing coming from the philippine government which will impact whether we get a new wave of supply and if it does happen, it would be a bearish development as you look out over the next couple of months. andrew, thank you for joining us. david: from nickel to media i'm sure there is a connection i cannot quite figure out. michael wolff has been at the forefront of media's tech revolution versus the president and ceo of mtv and a yahoo! board member. michael now runs activate, working with companies at the intersection of technology, media, and entertainment. he oversees the annual activate outlook report giving the lay of the land from media and tech. we welcome him back to the program now. i want to talk about the outlook report which you can get on your

website. it is sort of a bible and almost as long as the bible. one chart in particular, you talk about the transformation into streaming video that everyone has to make here. you have a particular grid up we put the various media companies, i put it up to give you a sense of the level of confusion you can see. where they are all moving to. gete look forward to, we disney earnings, how will we see thoseart reflected in earnings? >> a couple of things are happening. we are in a transition. everyone wants to get into everyone else's business. a number of these companies have the ability to do that. some of them don't. in the case of disney, it has a great opportunity. the as well as

entertainment package. they have incredible franchises. the other on and family entertainment. cbs has their own package now with cbs now. they lost it with star trek but are also likely to succeed. the biggest issue for the companies is what will happen with distribution in the home. everyone is watching cable cord cutting and the operators are losing video subscribers but at the same time are adding broadband subscribers. they are likely going to add more video. >> people were critical of bob for being too late. was he too late or right on time? >> no. he waited and let everyone else, the old line of pioneers getting arrows in their backs. he is now into it and will know what to do. >> mica staying with us. we will talk facebook. that is coming next.

this is bloomberg. ♪

david: tech executives tried to expand their dealings with the russians. >> people are buying ads on your platform with rubles. they are political ads. you put billions of data points together all the time. that is what i hear that these platforms do your they're the most sophisticated things invested by man, ever. google has all knowledge man has ever developed. you can put together rubles with , political ad and go like hm those two data points spell out something bad?

>> senator, it is a signal we should have been alert to and in hindsight, it is one we missed. david: joining us now is got galloway and michael wolff still with us. .ou look at this how plausible is that the deniability that we didn't know what was going on? better business model if you are a member of the beach club is to not have lifeguards. but there are risks there. as the senator accurately points out, it is literally and figuratively a red flag. there is no excuse. what they failed to do so far is to commit to never letting it happen again. a series of nondenial denials saying the new denial and technology as this one phrase. we need to do better. that is saying, we don't know if we will do better.

a listn: you sent over of questions you would have asked these individuals and you claim it is impossible to ensure no weaponization of your platform, don't you mean unprofitable to ensure that? where is this going? he was not just picked out the problem. some of the work you have done in the past couple of months, you have said fundamentally, this could drop to the bottom of the line and have a real market impact. can and will it? >> it is not the crisis. it is the way you respond to it. for any of the companies to say it is impossible is like mick donalds serves one million hamburgers a day saying we are so profitable, and we do so much business, we don't have the ability to check food quality. we are not talking about the realm of the possible we are talking about the realm of the profitable. if the new york times can protect us from weaponization of their platform with $90 a year in free cash flow, facebook and do it with scope in dollars.

the term impossible and big tech is latin for it would reduce our profitability. . , they can do this. really well.hese what is going on here? everyone seems behind the curve. is it just not that important to them? is very now, it important to them because it has seen the light of day. the issue is not just the advertising with the money we spend on advertising. not about fake news. it is about fake friends to all of these people, whether bots or individuals, who are harder to identify who are out there posting fake news and to reallyn leading societal unrest, not just is notal outcomes, it likely those platforms will be able to address it on their own. in a lot of ways, they will need their own users and their own people to identify what is fake, who is a fake friend, and highlighted for the platforms. can should not say they

address it. they can address it themselves or get their own users to a dress it. >> it is such a fuzzy issue and we do not know exactly what we are talking about. underpinning a lot of this has bigo with a fear of the four tech companies. you wrote your first book, the hidden dna as amazon, apple, facebook, and google. each company appeals to a basic human instinct. amazon, the need to hunt and gather, apple, the need to procreate, which i would like you to explain, facebook, the need to love, and google our need for an all-knowing loving god. apple, the need to approach -- procreate question mark >> luxury items, we are used to going to places of or ship, we associated with being in the company of god, more attractive, more powerful, more elegant, and a better mate to other people. that is why we are willing to pay $280 for a ferrari that goes to hundred miles an hour.

new signal that you're wealthy and educated in what make a better mate. it is saying i have good genes, similar to having a blackberry, saying i have bad genes, don't mate with me. it says i am a worthy meet -- mate. it is the way to appeal to the most rational instinct, to procreate. margins to two other firms. jonathan: evolutionary psychology. the essence of your book is the only competition now is each other. who is doing the best job now at protecting themselves from what could come in the future? sequele were to write a -- i will ask you, who do you think it is? capstone it is amazon. that 44% share in 2015, it is now 55.

it is up against apple and voice, 70% share in the home. up against apple and the media, number seven. percentages share during prime time, it is now number three. it is literally kicking the but of syria and everyone. $1 trillionr first market company. jonathan: i want to hear more from him. bloomberg radio. thank you very much. we continue to count you down to the opening bell about 34 minutes away. the deutsche bank chief global strategy as we begin with .utures on the front the s&p 500 positive. this is bloomberg. ♪

jonathan: you'll have to wait another day for the tax bill.

disputes among republicans threaten their efforts to pass legislation before thanksgiving. it's a tale of two cities for the tech. -- big tech. one fed decision do today. another tomorrow. economists see no change in policy. waiting for the fed chair pick. from new york city, this is bloomberg daybreak. i'm jonathan ferro alongside david westin. we are still 30 minutes away from the opening bell and county you down to the action. this november we kick things off with futures positive. binky chadha joining us around the table in a moment. the treasury market yields are higher by about a basis point. on the back showing some strength as the adp comes in strong as we count you down to the payrolls report. let's get you some movers.

the freef movers in market. plunging more than 20%. a terrible third quarter. they missed revenues by 6%. there was a double downgrade over bank of america merrill lynch to underperform. not everybody is unhappy about this. there is a 26% bear short interest. of course the fall has been pretty remarkable since the 2014 highs down about 90%. take a look at the stocks trading higher. u.s. steel and ak steel holding's. 31%.beat earnings by revenues by 6%. $3.3 billion. their forecast for profits beat the consensus estimate. it looks like they are reaffirming their 2020

improvement goal. shares rebounding from a fall yesterday after ak steel actually put up a bad quarter. healthlook at envision care. another stock plunging 22%. the health care services company put up a terrible third quarter price target/to $30. this is another one where we have a pretty high bear short interest. not everybody unhappy by a stock plunging. envision health care being one such stock this morning. taxd: we were promised a bill today. now we are told we will get one tomorrow. is this just the republicans doing last-minute tweaks or are they having trouble getting their team together behind the plan? let's go to kevin cirilli. which is it? >> i'm hearing this is essentially a delay because of divisions within the party such as elimination of the state and local tax-deductible and even

phasing in some of these deductions and lowering of rates we have been discussing. that said, the house ways and means committee chairman kevin brady releasing a statement that the committee markup for next week is still on. for those outside of washington carefully watching this trying to see if this is going to delay the timetable of getting a tax package done by the end of the year the big thing is that if this committee markup the meaty wearing -- meeting where they are going to go for a vote, if that starts to get delayed that pose a significant risk, significant trouble for advancing something on the president's desk by the end of the year. the chairman is saying that is not the case as of now despite the delay. david: for those of us not as steeped in the intricacies of capitol hill as you are explain why they need to get these

things hashed out. what are they getting done before they release it? >> you don't even have to be that stupid in washington to know that's a really good question. in washington to know that's a really good question. the administration has tried to correct course of the mistakes they made during the health care debacle and in particular by not getting everyone and building consensus and agreement on a host of these very divisive issues such as elimination of the state and local tax-deductible. as a result they have been meeting privately to try and build that consensus and move quickly through the markup because as we all know the house of representatives particularly amongst republicans is pretty divided. it's the time of month where we get u.s. auto sales. october u.s. auto

sales falling 13%. the estimate was down 12%. down 13%. is these are october numbers. the previous numbers pretty good with the hurricane impact as well. joining us to take us through the market action is binky chadha, deutsche bank chief global strategist. i have to give you serious credit. almost a year ago you put your target out there. year-end 2017 2600. what are your thoughts now? >> we probably go through our target. about it want to think target as a fixed point that we get to and hang on for dear life. we trade around 2600. i fully expect that we will go through and the last couple of weeks we pull back a little bit. it's important to keep in mind this has been the second longest

rally in the s&p 500 without a 3% pullback since world war ii on november 24. it will be the longest rally since world war ii. i don't think that really changes anything from the medium-term point of view. >> there was a chief strategist at allianz global investors who says he expects no prospective returns for u.s. stocks over the next decade based on where valuations are today. you agree? >> i wouldn't agree. i would argue that returns over timeort of long period of are really driven by earnings. i would argue this has actually been a much more normal recovery than many people suggest. earnings for the s&p 500 are about 6.5%. add a little bit of dividend and you are talking about a global

return. there's no reason to think it would be different than the 120 year average of 11%. >> a year for the next decade? >> in terms of total return. we will have a recession at some point and they always change the average depending on what sort of rolling window you use. from a longer-term point of view the 120 years that we have data for the s&p 500 very clearly says there is basically a trend channel with an average return of about 11%. many people argue we are in a lower return world. the average return in this cycle byluding 2009 which was only the numbers the other way is 14%. i wouldn't make too much of the fact that 14 is bigger than 11. the point is it's not going lower. we can talk about valuation separately and whether or not it's really a good predictor. david: earnings seem to be holding up. be holdingeems to

up. there is always a downside risk. if there is something we could stumble over is it the labor market? >> i'm not too worried about the labor market. a big pickup that or strengthening in the labor market has been one of the things that has been missing. if you think about the u.s. in the middle of 2014 gdp growth running between 4% and 5%, payrolls are strong. we got hit by this massive shock which has thrown a lot of people off because it has impact with a very long lags. earnings went into recession. everything has turned around. we have seen a reasonably solid labor market but we haven't seen a big strengthening. i would argue that is still very possible. if you looked at the adp numbers relative to the -- we are getting a little technical here. adp numbers first half of the

year said that we added 500 or 600 more thousand jobs than the actual payroll numbers did. i'm worried about next year. we have tightly trending markets . positioning becomes an issue. jonathan: there's an argument that we are looking at opposing signals from the equity market. from the bond market for treasuries looking at the spread on my bloomberg right now. since 2007.arrowest what's the signal you take from that? a lot of people say it means absolutely nothing. equities keep heading north. your point? >> i think we have had this discussion a couple of times before. my view has not really changed. i would argue it means nothing really for equities. if rates go higher it would be much better a sickly for equities. i would say rates are where they

are because of a narrative. because of various myths about low growth in this recovery. slow inflation. i would argue that the three main central banks have bought into this and perpetuated these myths big-time. , he'san: binky chadha getting bored of this conversation. minutes away, 20 from the opening bell. futures are positive as we kick off november. we are up about .3% on the s&p 500. dow futures positive .5%. this is bloomberg tv. ♪

david: the text giants are having two days -- tech giants

are having two days of grilling on capitol hill. joining us now is paul sweeney. chadha of binky deutsche bank is still with us. infranken said, they paid rubles. it was political advertising. couldn't you figure that out? we will see earnings out of facebook tonight. here's a company that's going to have $10 billion of revenue this quarter. that'll be 40% above where it was last year. 40% growth in earnings expected this quarter. to perform continues extremely well as consumers spend more and more time online and more ad dollars follow them online. been a lot of growth already built into the share prices. you have to wonder at these valuations they might be controlling large industries but are they worth it at this point? >> i would argue if you look at

the 10 or 11 sectors in the s&p 500 and you think about valuations as driven by relative earnings growth, relative payouts in terms of dividends and buybacks, textile you a look just fine. i think it's important to think about where they came from a couple of years ago. in our metrics tech was actually chief -- cheap. both of those things have kicked into higher gear. i don't think there's an issue with tech fundamentals or tech .aluation i would essentially be neutral because i would have a concern about positioning. about d.c. yesterday and today and going into the longer-term view, it's very difficult not to think about the

fact that whenever any sector in the s&p 500 got very big, it got regulated. we can go all the way back to utilities and telecom and health care and of course the financials. i would argue bigger picture one of the takeaways is you want to be neutral despite the earnings someh because there is risk that they are going to follow the path that everybody else is following. jonathan: here's the chart for you. it just goes to show that the weighting of technology to the , 24%00 and to the russell of the index now is technology stocks. is size a problem? have they gotten too big? can they get bigger from here? >> looking at the fangs plus apple, all of those names --

facebook, apple, google, netflix will have very strong secular industry drivers whether it is consumer behavior spending more time online, advertising dollars shifting from traditional media onto digital media. a lot of secular wins behind the sales of some of these companies. they have really created in many of these markets monopolies or ofpoly's in the case internet advertising. the biggest risk for these companies long-term is regulatory risk. it's always concern about competition. now a whole new level of regulatory risk. jonathan: paul sweeney, great to have you with us. let's get you more on those numbers coming out for the month of october. u.s. light vehicle sales coming in. up 6.4%. the estimate of 1.4%. the number, up 6.4%. it's an upside surprise for

ford. a little bit of traction. david westin, you caught up with them. david: one of the stories maybe the hurricanes. particularly ford who is strong in trucks. is speculations may be helped by the hurricane. jonathan: the data points have been not so noisy. david: it may show up. there were a lot of vehicles damaged and a lot of insurance payments made. up 6.4% for the month of october. the estimate positive 1.4 percent. much more on that in a moment. we are 13 minutes away from the to kick off november with futures positive. from new york, it's a positive story. this is bloomberg tv. ♪

jonathan: from new york city, 10 mins away from the opening bell. futures are positive as we count you down to the cache open. we are up about .3% on the s&p 500. .6 on the dow. yesterday a suspected terrorist plowed a trucked down a bicycle path in lower manhattan, killing eight and seriously wounding several. financial markets, we will pause for a minute silence for those events.

jonathan: that was a minute of silence on the new york stock exchange floor in new york after a suspected terrorist yesterday plowed down a bicycle path in lower manhattan, killing eight and seriously wounding several more. lisa. the resilience in new york city is strong. fed chair drama in the meantime overshadows the fomc's policy announcement. the federal open market committee is expected to hold interest rates unchanged. the focus this week has not been theolicy but who will lead central bank. president trump is expected to announce his pick tomorrow before leaving for asia on friday. still with us, binky chadha of

deutsche bank. the most awkward fomc meeting ever. >> a little awkward. i think it is important to keep in mind the c in fomc. it is a committee and we will be changing possibly the chair. the rest of the committee so to speak will still be there. david: to what extent does his appointment affects the other openings? it's not just the chair being appointed. there are several openings. >> there are. i think it is really hard to tell exactly how one impacts the other. there is the potential that you would want the next chair to have some sort of say in the matter. we really don't know at this stage is the way i would put it. morning,lier this steve rizzuto was saying it would be good to get fewer economists on the fed committee. do you agree? >> i wouldn't disagree.

my own views suggest that we are getting a little bit carried away with the scientific method in economics and it is used basically at the central banks. are equities expensive or cheap, it's a debate. spend dollars around a debate when you are not sure what the answer is, if you think about you sixn, i could give reasons for why inflation is actually high. i could give you six reasons why inflation is low. it has been between 1% and 2% for the last 20 years. it is probably neither high nor low. weme it is very unclear that should be making such a big deal out of it. which is what we are currently doing. they get what they

want. they get inflation and they don't know what to do. >> exactly. you need to think about inflation sort of, i would argue inflation is not low. we are sort of spending trillions of dollars fighting a ghost. it really doesn't make sense. i think it miss communicates sort of the false precision of economics in the state-of-the-art today. i think it has all kinds of unintended impacts. my personal published view is actually that low interest rates are not stimulus. low interest rates are a tax. maybe one of the reasons we have low recovery is monetary policy. i do believe low rates matter. if rates normalize that should be very positive for growth. jonathan: do you think there is not just correlation but causation between higher

interest rates and acceleration in growth in the united states? >> absolutely. jonathan: what do you think is happening beneath the surface? is a general belief that lower interest rates in the u.s. with so much debt. if you think about it really big picture a sector at a time, everybody talks about the fact that u.s. households have 14 trillion in debt. u.s. gdp is only 18 or 19 trillion. 80% debt to gdp ratio if you lower interest rates, there's massive stimulus. egregious be the most case of looking at one side of the balance sheet and not the other. there is $105 trillion in assets on the other side. in cash12 trillion alone. i don't know about your cash. the fed is essentially deciding to take that away. you are telling me that i'm going to spend more just for

some of my income? jonathan: my cash doesn't have a t after it. lisa: thousand. speaking binky chadha with us on bloomberg daybreak. futures are positive. a decent month once again. seven straight months of gains on the s&p 500. it's the longest monthly winning streak since 2013. that's the story of the equity market. the story of the bond market a little like this with yields going nowhere. a lot of risk on the agenda as well. payrolls, a fed chair pick and the fed decision a little bit later as well. from new york, this is bloomberg. ♪

jonathan: struggling to find a reason to sell in this market at the moment. futures are positive after the adp report in the united states. a surprise of 235,000. the appetizer for the main

course which comes on friday. payrolls friday as we continue to count you down to a series of risk events. the fed chair pick, the fed decision, payrolls friday and a lot more. that's the picture for equities in the united states. it's very much a positive one. here's the scene in the bond market. treasury yields go nowhere at 238 on the u.s. 10 year. it's the dollar that find strength. up about .3% and just below a 95 handle. that gives you a cross asset picture of what's happening in the market today. here's abigail doolittle. we are at gains for the major average here. on pace forrds record closes relative to the dow. the s&p 500 putting in an all-time high and the nasdaq also at an all-time high. in bulls are certainly charge after yesterday's gains

as well. investors looking past the fact that the tax reform bill has been delayed for a day. plus we have big tech testifying on capitol hill. of theake a look at some automaker stock. we have october numbers out and the gm number just crossed. shares are down at october sales down 2.2%. worse than the estimate for a 1.5 estimate decline. their shares are lower. analysts saying margin improvement is unlikely. take a look at ford and fiat chrysler. they beat their light vehicle sales of six point 4% versus the estimate of 1.4%. fiat chrysler actually missed. they were down versus the estimate of 12%. they might be getting a hurricane pass. from a market cap perspective something interesting that happened earlier this year.

in blue we have tesla. at the beginning of the year tesla market cap was below gm and white and below forward in purple. dashboard -- ford in purple. more recently tesla has started to fall back on concerns around that new model three. investors getting the company a bit of a boost around electric vehicles. interestingly, tesla reports today after the bell. we will certainly be watching to see what kind of numbers they put up at that time. jonathan: some more breaking numbers. fiat was a miss. gm was a miss. through the estimate down 5.7. this is the son group october u.s. sales. very mixed as far as the auto sales are concerned. binky chadha is with us.

the melt up. i want to try and understand whether the melt up has started and whether friday was a data point in a long process that could be around the corner and has begun. i presume you mean the melt up in equities. is this rallyrgue we have had in equities definitely has some unusual features the historical standards. number one, the one that i mentioned that is closely related to the issue of low a 3%ility, we have had pullback. as i mentioned earlier by late november, by november 24 this will be the longest rally since world war ii without 3% pullback. that definitely is something that should give you pause. i i also mentioned earlier think there's various aspects of this rally that are completely normal. 500ou think about the s&p

since the low on march 9 we have been in a very clear channel that was defined by events that happened in 2010 and 11. he just extend that to today. a 13% price appreciation rate. we are exactly within that channel. i would argue there is no real melt up. and magnitude of the rally is actually very normal. the pullbacks are a little bit abnormal. jonathan: why is that the case yet so why have we not had a 5% correction for so long? one is the -- if you're moving along in a channel you fall out, you're going to do a little bit that are if you get back in which is essentially what happened late last year around the election. we had basically a pullback that took us below. we caught back up.

it is just a little bit above the average in the channel. i would argue from a technical point of view or in terms of describing the pattern it looks very normal relative to what we have had for the last seven or eight years. the second is, why is that happening a fundamental level. it really suggests that basically there was a significant under allocation to equities. keep in mind that this rally we have had for a year and half now comes on the heels of a range bound s&p 500 with a couple of big corrections. because of the u.s. dollar in oil shock. it is partly for catch up reasons. that i think is going to stop at some point. i was talking with a big money manager yesterday and he said he was getting increasingly nervous. people on the record are all saying, we love u.s. stocks. this is the consensus. we can't not invest in them.

have you heard from anyone they are betting against them at this point? >> you never really hear that. i think the nervousness makes sense. you talk to everyone and of course they are all basically -- have made a lot of money if they have been in stocks. i think it stresses them out that there's only one play. if you have been overweight tech and financials especially tech, you have done fantastically well. if your strategy has been anything else for any period of time, if you ever thought maybe value is going to work out now or this is the time for rotation or something, you have done badly. you tried to be too smart. i think the anxiety comes from the fact that there seems to be one play and one play only and there is no way to outsmart this market. turn off your brain a little bit and go with the flow. that's not a comfortable situation for people especially if you are paid to be a selective manager. david: there are cycles to these

things. where are we in the business cycle? how will we know? >> i would argue that a very simple and probably the best way to sort of index the u.s. business cycle is really the u.s. unemployment rate. we all know we have a recession. it goes way up. tothe last one we went up 10%, 11%. it steadily comes down. very important magic number you need to keep in mind which economists tell us is the natural rate. the way i would describe the is thesiness cycle left-hand side where unemployment is falling. unemployment is always falling. there's still plenty of slack and then you have the right hand side of the cycle where unemployment is still falling but we are on the other side of the cycle. we are currently on the other side of the cycle starting sort of december, january. unemployment is now below most people's estimates of the u.s.

natural rate. in first point i would make terms of where we are in the cycle is that if you think about this phase of the cycle and you compare it again to basically the last two or three cycles it will tell you that the phase tends to last two to four years. sort of three quarters of a year into this phase i would argue it still got one to three years to go. and that is just sort of a statistical way of thinking about the possibilities. it really depends on the fundamental drivers of where we are in the cycle and what will determine how short or how long it is. i come out on the side that likely to be longer rather than shorter. i would be close to another three years. david: i want to touch on bitcoin. it's a cycle, but it has been going straight up. >> obviously the news yesterday

was huge about the cme saying they are going to launch bitcoin futures which really opens the theory forin institutional money to come into the space. you can surmise that a lot of people in finance where of this our front running their own institutions. if all of the big institutions are going to arrive in 12 months than we might as well buy today. i think it's pretty wild because the entire point of bitcoin i have been reiterating is its to enable you to do the transactions that banks and the government don't want you to be able to do. so the idea that all of these institutions are going to rush into it and provide liquidity to the space is kind of like a really wild thing to me and maybe i wonder if people really thought of the implications that they are going to be funding this. this could be the first bubble that wall street is the last of the party. think of things

originating on wall street. by the time they get to main street it's all over. withfeels like it started random people in their basement and by the time wall street gets to it, that will be the peak. lisa: at least they won't be blamed. jonathan: they will be blamed. binky chadha will be sticking with us. , all-timef november highs again. more intraday records across the board of the united states including the dow and the s&p 500. from new york, this is bloomberg. ♪

>> this is bloomberg daybreak. i'm emma chandra in the hewlett-packard enterprise greenroom.

.oming up, bill ackman this is bloomberg. lisa: u.s. automakers are out with october sales numbers. sales fell 13%. light vehicle sales were up beating the 4% estimate and gm was a miss. to discuss is david welch, bloomberg's detroit bureau chief. kind of a mixed picture here. how much does it depend on which automaker was most dominant in texas and florida which were the most hit areas in the hurricane. a it is shaping up to be pretty solid month. general maters may have sold the entire industry. that is an annual rate of 18 million vehicles. even if they are wrong and it is 17.5, that is still a really

solid month. even the fiat chrysler missed and they were down, a very good month for pickup truck sales. that is what really powers the profits. i think the hurricane recovery is helping pickup sales in general. that got some deals on there as well and that is where they make their money. you touched on product mix and incentives. incentives can be bad because they lose money. what do we know about profitability as opposed to vehicle sales numbers? >> profitability should be pretty strong because of the deals we are seeing. as we get to the end of the year you will see year-end sales. you will see more incentives and that starts to shave off some of the big money they are making on these trucks and suvs. we will see how it comes in the end of the year. that takes its toll.

david: thank you for joining us. to help us understand what it means for the auto sector, we have think each other of deutsche bank. i want to ask you what car you drive. we have a very traditional business here. they need to manage that business and make money and sell vehicles. at the same time they are going through their own transformation with electric vehicles and autonomous driving. what do you make of the sector overall? >> i would argue today is the day of u.s. auto sales. probably the most important thing and the biggest surprise of the year to many people has been the pickup in global growth we have had this year. argue all cyclical businesses including the auto sector but especially the industrial sector and really investment spending has really good upside and that's because for the first time in six years we are having more synchronized global growth than we have had in a long time. i would argue there's a lot of coming from that

synchronization that is hugely underappreciated. people say we are having global synchronized growth, look at the global pmi. at the global pmi's, i see 54. when's the last time we had global synchronized growth? 54 would be low for the last recovery. lisa: your optimism is really refreshing. i focus on the debt side of things usually. people are looking at him and currencies rising especially after the hurricanes. people unable to make their payments as they try to recover. has the credit side this been what fuels the sales and it fuels a lot of the growth and consumers are getting overleveraged. what do you make of that? >> i wouldn't disagree with that. i would say subprime autos. is well known, this is well telegraphed. hopefully it's in the price.

it does appear to be in the price. it's a really well known issue. i think it doesn't necessarily have macro consequences. david: it does raise the question of the state of the consumer overall. indication that there is a weakening of the household respect to credit awareness? >> the savings rate always comes down when the equity market goes up. definitely as the previous discussion we were having about where we are in the cycle the consumer looks reasonably well advanced. for the consumer to really pick up, you need productivity growth which i would argue is also pretty normal and is in line with history. it's underappreciated at 1.5% or so. you need the tightness in the labor market to kickstart

productivity growth some more with additional spending. you can't find labor, you're going to have to do it as a corporate more capex productivity. i think all that happens. lisa: does anything were you right now? is there anything that gives you a little bit of pause? >> in terms of priorities there's plenty of things that worry me. top of the list is the same thing it has been for the last three years which is the central banks are two dovish. the longer you continue to be dovish the longer you extend you take it then off at exactly the wrong time when the economy is actually picking up. jonathan: i am worried about dovish central banks. i have never -- lisa: nuclear war. in 2014.appened

you are advising donald trump today, he wants 3% growth. what do you want the interest rate to be to get there? if you want to get to 3% gdp growth what with the interest rate be? >> one of the interests for my optimism is there are all of these completely public secrets. number one is u.s. gdp growth has been 2.1 percent. statistics that we all know. take out the government. private sector gdp growth already 3%. jonathan: thank you very much for joining us around the table. if you have a bloomberg terminal be sure to check out gdp go. interact with us directly.

on yourdo that bloomberg terminal. from new york, this is bloomberg. ♪

lisa: day two of the tech hearings on capitol hill. you are just looking at the hearings with the senate select committee on intelligence. we will get you those as they come. joining us from our san francisco bureau is ann ravel. thank you so much for joining us. an op-edtly wrote where you called for an honest ads act that could potentially prevent what we have seen happen with facebook and google leading up to the election. can you explain what that means? >> yes. congress of course has already introduced the honest ads act. disclosuregive more of who is behind the ads and any

other communications that appear to be ads but maybe aren't paid for as ads. they pay for other ways of promulgating them that are political. david: we are used to political ads that people pay for. that aret the problems not paid for ads, which appears to have been fairly prevalent this presidential election. how do you deal with that? >> that is the difficult question. there is law that relates to posts that aren't paid is political ads but instead they pay to have them spread to lots of people through bots. they have paid facebook in to micro target particular groups so they can send it out for example to swing states as opposed to other places in the country.

that's paying for ads as well. it's hard, no question to distinguish between what the general public is involved in -- spending time, giving their views on facebook or other platforms versus ads. you said in a position where you had a vantage point. what influenced elections and what didn't. do you have any gauge with respect to the presidential election last year the extent to which these russian associated hosts and ads on facebook and other social media may have actually affected votes? >> i understand that in elections for many years there has been some foreign that have been paid for that we know of. we have seen them. nothing to the extent of the undermining of our democratic process that we saw in the 2016

election where there was pervasive misinformation and propaganda done specifically for the purpose of influencing the vote. do you think there actually is a feasible regulatory response to this? we have been hearing from everyone that the problem is too big and multifaceted to deal with from the regulatory standpoint. >> right. it is a complicated problem. there is no denying that. for the very important government to have a regulatory response because as we have seen the platforms expressed concern all ofhat happened, their recommendations about what they might do are different. the public has a right to have full disclosure of who is behind messages that are intended to

influence their vote and that's the law. even though there might be ways to get around it, even though there might the slaves in the information, it's important for the government to express the concern. ann ravel, thank you. former chair of the fec. here onsn't for bloomberg. 26 minutes into the session. new intraday record highs in the united states across the major benchmarks. the dow up by .6%. the s&p 500 up .5%. the coverage continues right here on bloomberg tv. from new york city, this is bloomberg. ♪ retail.

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welcome to bloomberg markets. we are waiting breaking news on the manufacturing index. u.s. averages are trading at record highs today. >> we're looking at a small miss for that index for the month of october. expectations had been for 59.5. a small miss for the month of october, down from september. this could reflect some disruption from the hurricane. the influence, not much. we were looking at big gains ahead of that, that was a small miss. we are still looking at modest gains for the s&p and nasdaq. we are also looking at record highs for stocks,