it might get going forward. that would be a catalyst for dollar weakness. if anything, what we have seen is the 10 year risk neutral julia: on the close, a slight reprieve. off by .25%. energy lower. the dollar playing into that. scarlet: it is a down day for the s&p 500, the first decline this week. it has only fallen twice in the past eight sessions. the nasdaq moving the most under pressure. important to put that into context, that we have most of yesterday's gains. belowt: the dow is 23% the daily average. julia: we will see how tomorrow

goes. what are you watching? wo of the largest etf's tracking junk bonds. we saw heavy trading volume for inflows,well as record $1.2 billion for both of those funds. when we dive deeper, we see that buying activity stems from one investor. the portfolio managers i spoke with said investors are looking to take on risk as they search for yield, especially following the midterm election. if we look at the bloomberg barclays u.s. corporate bond index, it is up 1.5% for the year. sound like a lot, but is one of two key benchmark

still in the green for 2018. >> interesting work. .'m looking at the technicals this is the nasdaq composite, six-month chart. the nasdaq was wrestling with its 200 day moving average because of that small reprieve, so the nasdaq finished above it. the fact you have the index around it tells you that there is lots of uncertainty, not a lot of conviction, but perhaps more so with the sellers. nasdaqcently for the , suggesting we could see a death cross. is important to watch what happens within the context of the rebound rally. of the reason volatility should be kept in mind. scarlet: thank you so much.

still with us is our guest at goldman sachs asset management and our reporter. following the midterms, following the fed, volume is not seem likees they are getting back into equities. what are you hearing? the midterms represented uncertainty. we are through that. people were hopeful for a dovish message from the fed today. the way we work with our clients is longer-term. if you step back and say what are institutions doing. they are looking at the last decade and saying equities have had a phenomenal run, rates on a 30-year bull market, so what can i do today to achieve the same and diversifyrn away from these asset classes. joe: what is the answer? >> a lot of different answers.

putting money in hedge funds directly. a lot of people are looking for alpha strategies. those that want to be tactical around the markets. at the end of september and bought i can in october, you could have made a lot of money. a lot of people are looking at private equity. there has been alpha there. you always worry there is too much money chasing it. people have been saying that for 20 years. you have seen a shift where people are moving more into private equity. julia: institutional clients want correlation. what about the correlations you have been seeing? >> those have come down nicely. from theoved away crisis theme. facebook helped us break the spell.

we got a better response to earnings that have been fairly positive. joe: i want to go back to the fed. there was not much to talk about , but there were interesting comments. scarlet: disney reporting results. fourth quarter eps adjusted $1.48, beating $1.34. revenue for the fourth quarter, $14.31 billion, analysts were looking for over $13 billion. this is a beat on the bottom and top line. the stock moving higher. julia: exactly. digesting this as we go. it is strong. we want to see how the forecasts come out. that dictates future guidance. dropbox coming out. $360-quarter revenue

million ahead of losses. cent loss per-- share versus six since estimated. this company making a mega-acquisition. thateverybody waiting for netflix killer or competitor. in the meantime, the market reacting positively, not massively, but a solid report. thelet: looking through different divisions, media networks has revenue of $5.96 million. one of theesorts bigger parts of the business, $501 billion. studio entertainment at $2.15 billion. analysts were looking for $1.8 billion. consumer products and interactive media, $1.12 billion

, analysts were looking for $1.16 million. to's bring in paul sweeney give us some added perspective here. as you look through the numbers, this is a beat on the bottom and top line. share to getiger investors excited about the stock, details on the streaming business? does. this quarter gives him a good backdrop to say our existing businesses are performing across the board. investors are focused on the future. some key issues management will need to address, the closing of the 21st century fox deal. when is that going to close? what kind of cost synergies? what kind of revenue opportunities? so we need more detail around the combined company. does thely, what

streaming business look like in 2019 has they launch their direct to consumer streaming business. were looking for color on content, pricing, some people trying to get a sense of the over economics of that streaming business for the combined company. media networks revenue up 9% year over year, park and 9%.orts up are they firing on all cylinders? >> the business is diversified. a steadym business is approach because they have all the great franchises. the theme park has always been a consistent high single digit, low double-digit profit growth. the issue -- profit grower. as peopleis espn

continue to cut the cord in the united states and that impacts their businesses, particularly espn in terms of advertising and subscription revenue. they have to find a way to make money as people migrate to typect to consumer app- businesses like ne netflix. that's where we seek bob iger launching the direct to consumer app. paul sweeney, thank you so much. julia: activision blizzard coming out with numbers. like it's not looking pretty. fourth-quarter adjusted earnings-per-share estimate was $1.27. the market had been looking for $1.31, so a miss.

third quarter ahead of expectations, $.52 eps, estimate $.49. forecast coming down goes who are stock. that is what we are seeing. aftert: down goes yelp third-quarter numbers, topline or bottom line, missing estimates. for$.17, analysts looking already seven cents. $241 million revenue, analysts were looking for $245.5 million, so not getting it done when it comes to what analysts were looking for, tumbling 23%. julia: that is really ugly. joe: i know it is not that insightful. you see some of these smaller tech companies, some on a run. u and others, some nasty

stuff happening. julia: how much do earnings matter? how much is all about the forecast? >> in this environment where thele are skittish about turn from fast growth to slower growth, those companies falling short are punished. those it beat by a little bit are not rewarded. scarlet: it is an asymmetric reaction. >> it is playing out that way. scarlet: thank you for sitting through the earnings with us. we appreciate it. that does it for the closing bell. "what'd you miss?" is next, where we will hear from bob iger on the latest numbers. this is bloomberg. ♪ is bloomberg. ♪

♪ julia: live from new york. joe: i am joe weisenthal. "what'd you miss?" julia: it was a mix today. energy drags us lower. the fomc leaving rates unchanged . the market bets on a december hike. crude fuels the bears as the oversupply threatens opec. the house of mouse, beating estimates, bob eiger joins us this hour. joins us this hour. the fed it stays put.

the fomc voted unanimously to leave it in a range of 2% to 2.5%. we ask analyst at what point does the squeeze influence that policy. >> you need to have more pain occurring globally and in the united states for them to change. be, aderal reserve will turkey is just turkey, argentina is just argentina. it doesn't really matter. you need more pain. within six to nine months, you will get it. >> yes, it matters, but not yet. if we get next year, this continued upward drift in dollar funding pressures, if it looks like the fed is struggling to keep the funds rate within its target band, we will have a discussion about quantitative tightening, and at what point does it end. notoday is straightforward,

changes anticipated. all focus will be on what the fed says and where the comments will be. we think it will be neutral and continue pointing towards rising rates. julia: for more let's bring in a man who worked at the fed for 20 years, the chief economist an investment strategist from boston. inre is a piecing the fed is denial, how a $4 trillion dilemma could get ugly. and is about wall street the fed unwind. how much do think that should be an issue for the fed at the moment? >> it was the central issue over the last two days. we know from the comments they were going to talk about implementation issues. you can put it in terms of rates or quantities. the actual fed funds rate is close to the upper band of their

target range. also, they have to set the pace of their balance sheet runoff. those two things are related. joe: let's talk about the fed assessment of the economy. one thing they noted is corporate investment is not that stillnot accelerating, fine, i guess, but not picking up. why is that in your view? what does that say about the efficacy of the tax cuts doing what they were intended to do? >> do note they said they were slowing from a pretty rapid clip , so they were saying spending was well-maintained earlier in the year and is coming off. a lot of that is housing-related. think they were letting you know they actually did look at the data rather than identifying

a source of concern. theor the efficacy of corporate tax cut, there are two parts. one is the repatriation of cash and the lower corporate rate. the lower corporate rate is what will get traction over time, but quarter to quarter, it will not drive investment. julia: where do you think we will see the fed going in terms of whether the market is pricing in three or four rate hikes? we did see a mighty selloff on concerns the economy is slowing. jay powell all, probably has a higher pain tolerance than his two immediate predecessors. our forecast is they will tighten four more times, once each quarter. what are his two favorite phrases? i will stay in my own lane and

let's keep it simple, people. he has inherited communication strategy from janet yellen, act every quarter and signal well in advance of what you will do. it is working for him. he is going to keep raising the funds rate gradually to the neighborhood of the neutral funds rate. he also hopes that once he is in that neighborhood that it will become more obvious. that sums i 3% to 3.25%. to 3% to 3.25%. joe: does that create volatility in the pace of expected rate hikes? ok, maybe we could have six more easily just because it is not a bigger leap to have them more than one a quarter. >> that is right.

the one thing you immediately notice is the slippage in communication policy. when the fomc issued a statement on february 4, 1994, it was two sentences and they thought it was the only time they would do it. for every action, then they had to start issuing it every time. press conferences -- next thing you know press conferences create orphan meetings. it creates an optionality. obvious that there is a distinction between a meeting that is dead because you can explain in a press conference to one that is live. they probably want that optionality. actionll strongly signal at the march meeting to set up the pattern of every other meeting. julia: we did not get any real signals today in terms of news.

still the dollar rallied significantly. how much of a headwind can the dollar become on the real economy? >> yes, the answer to the question "what'd you miss?" is not much. dollar matters. we think the dollar in particular represents a tightening of financial conditions come much tighter financial conditions, but that is probably temporary. right now the fed is out of sync in the community of central bankers. year, they will be completely focused on the new president of the ecb, and whoever it is, that person will be more hawkish than mario draghi. once the ecb is in play, we think the dollar appreciation turns into deep appreciation. does it matter for the fed?

yes, it matters for financial conditions and financial conditions matter for the economic outlook. julia: we thank you for your outlook breaking down the fed. one applek down supplier. eps seems to have missed the terms oftimate in first quarter adjusted earnings-per-share forecast. , the estimate was to dollar eight cents. so estimate was higher, guiding the market low where it anticipated. fourth quarter at a slight beat, but this shows that when it comes to earnings, you have to be on forecast. joe: markets are about discounting future cash flows. that is what it is all about. up, fourth-quarter earnings beat at the house of

the mouse. joins us ahead with all the details. this is bloomberg. ♪ this is bloomberg. ♪

>> we go right to the west coast of bob iger of the walt disney company. thank you for joining us. we want to talk about the money, but we have to spend a moment on thousand oaks. you are always concerned about the communities in which you act. are your colleagues safe? >> yes. as far as i know, how colleagues are safe. because this happen in our own backyard, a lot of people who were there were known to people who work for our company,

related to people who work for our company, and some had some really bad news. it has been a very difficult morning. >> it is a tragedy that keeps getting repeated across the country. let's go back to earnings. congratulations. you beat expectations. eps and revenue were terrific. how much of that was the studio and theme parks? >> studio and the theme parks had record years and record quarters, so clearly a big part of the success we had in the fourth quarter. that is true for the year. we had good results in our inting, particularly broadcasting, so a great quarter for the company across the board. >> it is nice to have tailwinds into this big merger. timing.a sense of the when do you expect it to close? >> sure, we are still going through the regulatory progress.

a lot of progress has been made there. , agained approval in the eu big deal for us. some markets, some countries where we are waiting for approval and are in the middle of that process. in june, we said it could take 12 months to close. now we are more optimistic it will occur before that, but we are not saying specifically win. as we wait for -- when. we have focused on innovation. we made some announcements, particularly the television group and studio. we are talking mostly about integration planning am a not implementation him and even though we have made announcements about people and structure. nothing can be put into place or operated against until the deal is closed. we have gotten a lot done. go ahead. >> you are a planner. i worked for you. you thought this through.

how are you going to justify that price? how much of that is cost savings and how much is revenue? >> these are great assets we are buying that are doing well today and can do incredibly well in the combined entity as we move and the direction of direct to consumer businesses where intellectual property will become critical, and brands will become critical, as the talent required to make the kind of product we will need. it is all very important. there is a substantial justification for the price when it comes to strategy, revenue growth, and bottom-line growth. there are opportunities for cost savings. we made the deal because of some of the overlap, but this will be largely driven by the combined entity having the ability to operate more successfully going

forward. when you think about the transformation in the media kind ofe, having this scale, brands, and people is fido to the success of this company and ability to grow long-term. >> might we see further realignment of assets? could we see other realignment, , buying the hulu rest of hulu? , i will not say anything a&e and lifetime? >> that's right. comment aboutll that. not comment about that. hulu,we acquired 60% of

if the other owners are interested in the vesting their shares, we would be willing to step up and buy their pieces. >> last questions. is this it for bob iger and his tenure ? >> unequivocally, yes. we are very excited about that. after weis deal announced our strategy to go into the direct to consumer business. it will be considerable and its impact on our ability to succeed in that venture. >> thank you very much. joe? great interview. david westin there. let's get first word news. >> the suspect in last night's

deadly shooting in california was a former marine corps gunner dressed in black and wearing a hood. he used a smoke bomb to enter a country music are during college night. including aed, veteran sheriff's deputy nearing retirement. the gunman apparently took his own life. -- ofurn county sheriff a county sheriff was asked about the decision. how weshooting, approached active shooter's change completely after columbine. immediately engage and try to stop the killing. that is what happened here. >> president trump praised the officers for what he called their "great bravery during last night's violence." says his time serving as u.s. attorney general "goes beyond anything i ever

could have thought possible." sent the message to justice department workers at day after he resigned at president trump's request. undocumented immigrants known as dreamers prevailed to date in the first u.s. appeals court showdown over the trump administration move to do away with the program. it upholds one of four lower court rulings that barred the government from ending the daca program, which allows 700,000 people to legally live, study, and work in the u.s., and protect them from deportation. there is late word the u.s. is proposing prohibiting asylum for it illegal immigrants. asylum would be restricted in certain places. the proposed rule was published on the government's federal register site. campaign will

fight to get all the votes counted in the georgia governors and won't accept brian kemp's declaration of victory. the campaign's chairwoman demands the secretary of state's office "release all the data, all the numbers, and they need to count every single vote." >> what this campaign has done is go out and asked georgians across the state, throughout the state, to register to vote, to vote, to show up, to stand in line, to do what is required to ensure their voices were heard, and they did it. kemp says 20,000 ballots remain unaccounted. he says if abrams got one and percent, we still win. he announced he was stepping down as secretary of state this morning. an interim secretariat will oversee the rest of the vote count. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700

journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. joe: oil today falling into a pressure on adding opec and its allies to cut production. our with insight is bloomberg managing editor for energy and commodities. i'm still trying to wrap my head around this. how has the world of oil changed since a few weeks ago? >> at this point it is mostly sentiment. there is no positive news to trade off. r goingas a lot of fea into the iran sanctions. when we got information that there would be waivers on some of the biggest buyers of iranian the market calmed down. if we have one more day of

declines in wti, it will be the longest streak ever. how much does this impact what is going on with the u.s. dollar now? >> people are focused on u.s. stockpiles. they are coming back. there is concern we are going into the season where we see stock piles draw down. we have not seen that. still people calling for $100 oil saying when these refineries are working at full capacity that there is a chance going forward. joe: we mentioned the opec meeting. what do they have on their plate? >> these are technical meetings. meet andechnocrats decide whether people are adhering to their quotas. on sunday, the ministers arrive. there is a conference that takes up the rest of the week. decision, butfull we will hear sentiment from the

ministers what we are waiting to hear is whether this group that has formed and then working quarterly for a while will exist beyond the end of this year. >> many still potentially betting on $100 oil, but how much would trump allow that, and how much do you think opec and russia listen? >> yesterday, you heard trump take credit for oil not reaching $100. he said i did that. that is debatable. u.s. oil production has stepped into the fray. that has helped. we have added a mexico in the space of the year in terms of oil output, which is remarkable. even opec and the oil producers who benefit from higher oil are getting afraid when the handle is above seven, $80 brent.

where they have to keep a close eye on electric vehicles and what that does to long-term demand. joe: a disappointing forecast from d.r. horton sent home-building stocks to their lows. we bring in our next guest. ,dam, a rough year for housing homebuilder companies having a of theime, most nationally-collected data looking unimpressive, some of the worst in multiple years. you are fundamentally a housing bull, so what are the tailwinds that remain in place that the housing pessimists are missing? itthe way i would look at is took us a long time, a decade since the recession started, and it is just now the labor market is starting to look like it is

approaching healthy. any surprise the housing market is taking a long time to turn around as well? just like people ruled out a strong labor market recovery and did not think unemployment would get this low, i think they are ruling out a recovery. i would look at the fundamentals. joe: what are those? >> home ownership is the most important. it is easy to get lost in the month-to-month fluctuations in housing permits, housing sales. those data are volatile. if you look at the deeper behavioral factors like homeownership, we are starting to see a turnaround. home ownership over the last year has picked up for most householders, including young householders like millennials.

those first-time homebuyers are just starting to take a look at housing again. >> how big of a lag are you expecting? , longer will it take for housing to follow? -- how much longer will it take for housing to follow? >> now we are in the right direction. you get an idea of how big that lag was. home ownership bottom in q2 2016 and has been moving up steadily since then. that gives you an idea of how long the lag is. the bubble started bursting in 2006 to 2008, and did not bottom until 2016, so about a decade. joe: one of the concerns has to do with general affordability. house prices have come up faster than wages come and rising interest rates among which exacerbates any underlying affordability issues. these? of a concern are

what role do we think the fed has played in the softness in the data this year? >> in terms of the near-term softness we have seen in 2018, i think rising interest rates are part of the story. another part is you have some mismatch in housing markets where builders are used to building certain kinds of homes, towards the luxury end, and now demand is coming around for first time home buying and there is a mismatch. it is some mix of those two things driving the near-term weakness. i don't think rates will go that much higher. i think markets have adjusted to the biggest change, the 1% increase over the last year. we will see mortgage rates go up a little more, but markets will not have the run-up in rates

going forward. >> we thank you for your insights on the house builders. brussels inome and the battle over italy's budget. that is next. this is bloomberg. ♪

euthe italian government and are in disagreement over rome's budget, citing different figures to make their case. the commission is forecasting growth will slow and the deficit to gdp ratio will reach the 3% limit by 2020. the of tie-ins say their policies will foster growth. our bloomberg opinion columnist is with us on the phone.

us about how these numbers are out of sync. the finance minister was being confident with the european commission. >> yes, he was. he was questioning the technical analysis of the commission. he said while they continue to want to engage in dialogue with the commission, the trouble is ,ost independent forecasters and today we had the imf, coming out with numbers related to growth for next year similar to the ones produced in brussels. figuresompare the imf with the commission figures, the commission figures look optimistic. and beingis defiant quite aggressive towards brussels, most observers are siding with the commission on this one. joe: what actually happens here?

?ow does this end where does it go? what enforcement mechanism does the commission happy if there is a stalemate? >> the first phase will go fast. this is the first time the eu has rejected a budget since the creation of the euro, so it is a new mechanism. all the member states except for italy are united in saying this is not acceptable. has benefited from a lot of budget flexibility, and this is too much. brussels has asked for a new budget from italy, which should be submitted by next week. italy is unlikely to produce anything different from what they have done. then the commission will have and say to assess it

this is a breach of its rules. that italy will procedure, a deficit which is to say they are flouting the rules, but then the mechanism slows down quite a bit. in principle, there is a but that willion, take some time to kick in because the commission will give some conditions to italy. italy will need to show whether it is fulfilling them. then we can get to mid next year. that is when the new european elections happen. there will be a new european parliament, possibly commission, so while we can bet there will be a disagreement that this will showdown, the timing of the sanctions will be late, and we don't know what will happen anyway. >> we thank you for your time.

thank you. it is time for smart charts, where we dig into timely topics. >> thank you. thank you for taking the time. an interesting time to be looking at charts. we were talking about the mixed signals in the s&p 500. earlier this year, we had that huge whipsaw. take it away. >> we have had a nice strong move off the low. what is interesting is the 200 day moving average is turning lower. we rallied through there and hit a level where we closed and made a high again today that was in line with the high in march and this cluster here in the midsummer. retracement a 61.8% of the move from the high in

september to the low last monday. it is happening just below a declining 50 day moving average. this is a logical spot to stop and pause. if we look at the bottom of the screen, what we can see is earlier this year we made the initial low, then came down to retest it, but that indicator left us with a positive divergence. we have not seen that with this initial draw down in the markets. i would not be surprised to see a pullback in retest of the 200 day moving average before reassessing what is going on, but it has been volatile and there are a lot of mixed signals. you don't want to chase this run off of last monday's low. like it willlooks be an inverse head and shoulders pattern. those are bottoming patterns. it almost looks like a head fake pattern. >> it could be.

someuld have to pull down levels, then begin a rally higher and look for a breakout to complete the pattern. it is something to keep an eye on. >> let's look at a sector that is clearly rolling over. >> year we have to semiconductors relative to the broader market. every day because there tends to be a high correlation relative to the s&p 500 and the general direction the s&p 500 takes. this ratio topped out late november, early december. it has been in this choppy pattern. we have rolled over and broken below the 200 day moving average and taken out support. for us come of the semiconductors are avoiding. what gives this confirmation is this bearish trend developing seems to be confirmed by the rsi indicator, making a series of

lower highs and is now shifting into bearish ranges after becoming oversold, so a rally has failed without even reaching the broken support comes so we want to avoid semiconductors. worked on the sales side, when the stock started to roll over, that was when you wanted to be nervous about the broader markets. you do have a bright spot. >> we do. chart's health care relative to the s&p 500. it has been in outperform or come up broke above the 200 day moving average, beginning to crawl higher. now testing the highs from 2017. it looks like a slight consolidation that will result to the upside. being overweight health care is a good way to position portfolios. on the bottom of the screen, this is health care on an absolute basis. it retested the 200 day moving

average and never broke. now it is moving higher, so we like health care as an overweight. >> good work there. bullish on health care. stay away from tech. choppy markets overall. thank you for joining caroline: smart charts. caroline:we thank you -- joining smart charts. caroline: thank you. coming up, game over. china clamps down on gaming. that is ahead. this is bloomberg. ♪ is bloomberg. ♪

joe: tencent cutting the marketing budget of its gaming suffers as the business regulatory disruptions and a slowdown in the chinese economy. our with more is correspondent. games in china have to be approved by a central regulator. they are not approving more these days. >> they have this testing

system, the green channel, where some try to get those games to market, maybe not at the level of full approval, but even that is being shut down. memoe are seeing this saying tencent is cutting the marketing budget of its gaming division. tencent has been trying to get on the good side of authorities. we heard about plans to expand age verification systems given that authorities are cracking down because of this game addiction. caroline: slower advertising revenue. there are plenty of headwinds. is at the same across the chinese tech sector. top of the market cap they already loss, $250 billion. let me bring up this chart that shows revenue growth at tencent. bloomberg, youhe can find in your terminals.

the revenue growth has been slowing. that is a blue bar, as compared to alibaba, which is expected to see revenue growth topping 60%. tencent comes out with third-quarter earnings next week , analysts expecting a 24% rise in revenue for the third quarter. joe: alibaba not decelerating. they have a big day coming up. >> singles' day, right. rebranded, the 1111 global shopping. selley were trying to these chocolate sticks. 1111, so alibaba making it their own singles' day. last year, they earn $25 billion.

for getting people to shop. caroline: great perspective. in "daybreak:e asia." that trade balance coming out tomorrow. joe: more economic data. at 8:30,prices consumer sentiment at 10:30. caroline: that is all for now. joe: have a great evening. this is bloomberg. ♪ [ phone rings ] what?!

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♪ emily: i am emily chang. this is "bloomberg technology." coming up, is that the new era for tesla? the company picks an insider to replaced elon musk as chair. is she right for the job? thele's employees demanding company clean up its act when it comes to sexual harassment. now, google is reshaping how it handles complaints.