mark: prime it -- theresa may said she wanted her cabinet's backing for the european union. she said it was a collective agreement but didn't say whether the deal received unanimous backing. documents were the result of thousands of hours at the heart of negotiations with u.k. officials, many meetings held with our eu counterparts. for the cabinet to decide mark: finalize the deal

ahead. thatieve it is a decision is firmly in the national interest. chuck schumer says he is lying about voter fraud in florida and a recount of the nelson scott senate race. he said he is confident the incumbent democrat ill nelson inernor rick scott says florida, he said there is no fraud. defense secretary and homeland security secretary kierstin nielsen are inspecting troops at .he border in texan -- in texas defending the use of active duty troops on the border saying in

some ways, it provides good training for war. in addition to the 58 hundred acting troops, 2100 natural death guard troops up in border support since april. union border agency says 2018 is likely to see the lowest number of unauthorized migrant arrivals in five years. illegalcy says crossings are down 30% from a year ago. -- entries are declining, the number of people reaching up across the western mediterranean sea, mostly via spain for debt from rocco, continues to rise. global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪

scarlet: this is bloomberg markets, the close. romaine: caroline hyde is off today. scarlet: you are looking at a selloff continuing in equities. higher.es might be surging up 8%. that doesn't trade is volatile. >> getting ready to break out his canada jacket for tomorrow's snow third. the philadelphia index, a lot of the stocks in the index rising. doesn't really seem to be in a

new spirit than bitcoin is below $6,000. time for a look at the big movers on the back of analyst recommendation. applet guggenheim. prices no longer enough to boost growth. kellogg's downgraded from neutral to overweight and removed from the focus list at jpmorgan, analysts are saying tuesday investor day didn't provide much comfort that a bottom line turnaround will be swift. the price target cut to $66 down from 73. finally, maintaining its by on home depot, cut its price target to $200 and analysts lowered comparable sales estimates heading to 2019. those are some of our top calls. scarlet: remaining fairly new -- muted despite wages.

just short of the 2.2% median estimate. for more, let's bring in bloomberg businessweek economics editor peter coy caret tilde it was a mixed read overall. on the year-over-year basis, it was slower than expected. the takeover price month over month basis in october. >> people say it will suffer the unexpected and a reason for that was it wasn't one third of the increase in the core. cpi came from used-car prices. itt was a fluke because covered some of that. it is not the kind of thing that will be defeated. gasoline prices cut gasoline came down a lot in october and thein november because of decline in crude oil prices. another reason why is anything, inflation remains muted. --are there any pocket pockets within the report that show any sort of lasting or persistent increase in prices? look and probably

find pockets here and there. prices were soft. service prices, which tend to be trending a little higher, moderate. as scarlet said in the opening, the surprise remains that afterion is so muted strong economic growth and strong job growth. >> goldilocks indeed. the fedlk about whether will incorporate this into its commentary or jay powell will be speaking tonight and discuss the economy at 6:00 p.m. eastern time. is he going to give us an update in early october when he said interest rates are below the neutral rate? some argue that is what sparked the us over selloff. words aref all, his probably over interpreted to be more hawkish than he intended. swing from one side

to the other. probably gett will into that a lot global perspective spirit what we will really get is some talk about, how does the federal reserve interest-rate including the year ahead, a plug ,or bloomberg businessweek those countries are harmed when u.s. growth is strong and interest rates are rising here >> we will get retail sales tomorrow and a lot of people are focused on whether or not the consumer will hold up, particularly heading into the holiday season. what are we expecting? >> the beginning of the year was strong because of tax cuts. lately, we have had, september was week because of hurricane florence. bounce backget a from that people expect

bloomberg's survey, half of 1% increase month over month. retail sales. a bit stronger if you take out gasoline. consumer confidence is extremely strong. for retail sales heading into the holiday season. >> a boost to consumer spending. president trump says he things prices should be lower. he says a lot of things but our loyal -- lower oil prices good for corporate earnings and the u.s. economy or bad for earnings or the economy? thatr decades, it was true low oil prices were good for the u.s. economy p less good now that the u.s. has become a major oil producer. together, everything it is still a slight positive when oil prices fall but the timing is important. if oil prices fall, capital

spending for output overweight. short-term bad, long-term -- >> thank you for the much needed economy. coming up, investor expectations for retail perhaps overhyped. what is sending these chairs down for the day despite the company beating on third-quarter results question mark we look into that next. this is bloomberg. ♪

scarlet: a quick check of the latest headlines at citigroup taking on less risk these days. it now works with about 13,000 clients. it is down more than twice that six years ago p.m. many of those companies -- here in new york.

we tend to operate with fairly large companies, u.s., global, multinational companies. i would argue their balance sheets are in good shape to i think what you have seen is some of that move out of the formal system and you have seen more leverage going into the non-bank sector around leverage transactions. i wouldn't describe that in the u.s. as being in the system. there is likely to be some pain on that. a lot of emphasis on hedge funds and mutual funds and they are willing to lend in different ways than we are today. maker even for the weather went cold this year. it beat earnings and estimates in the second quarter. --y also boosted for your guidance. copy switched to selling close directed to the consumers paid off with direct sales doubling. that is your business flash update. clearly, investors and customers are trying to beat the rush.

for canadarking goose but maybe not anyone else spear we will cpi we will stick with retail. macy's reported results that it has a lot of momentum heading into the holiday season. our next guest says to hold the applause. sarah is joining us now from washington. i looked at the earnings report and i see same-store sales growth still relatively strong but then i'm looking at a stock price down 70% today and what is going on? is it is a case where investors got ahead of themselves. up 44% andmacy's compared to last november, they are up 80%. showingey have been signs of improvement, a better online assortment, backstage off-price getting traction with consumers, at the end of the day, they are still a department store. i think investors got that reality check today. >> you say that like it is a bad word. last holiday season was a

turning point and they seemed to have turned the tide. what do they need to do to keep customers coming in? >> they need to be sure they are having a rich in-store experience. market at macy's, where essentially, it is a fast-moving pop-up shop from week to week, upstart vendors, that should be helpful to them. expanded theiry online assortment. a lot more selection this year. they can get to people quickly, promise speedy today and same day shipping and that should be helpful for them. >> walmart will report earnings soon. are you seeing same issues plaguing macy's also plaguing walmart? slightlyk they have different customers pier 1 walmart has more value oriented and i expect what we will see from walmart is more of the same, they will have continued improved traffic to the stores

and people are filling up their baskets with more stuff. if the trend continues, it bodes well for walmart going into the all-important holiday season. >> nordstrom is more like macy's than walmart. what happened to the company's est tosell itself -- qu sell itself? quite it leaves them trying to figure out their two-pronged business. the department store they are trying to enrich with a concept where they have these small outposts where you can do things like get a manicure, work with a stylist, brought in the ecosystem with ways you can engage in the branch. other investors will be watching tomorrow nordstrom rack. we know the off-price sector has been hot and retail for some -- for some time now. some of the best-performing companies in the sector. they have struggled a little to get a piece of the action so investors will look tomorrow to get a better investment quarter.

scarlet: all right. now we have the s&p 500 in the red along with the dow and the nasdaq. the fifth straight day lower for the s&p. apple is a big reason why. romaine: apple is down 2.5% today. ♪ 5% today. ♪

scarlet: this is "countdown to the close." we are obviously watching commodity prices. romaine: specifically natural gas. how often do you pay attention? onare close to five dollars natural gas, something we hadn't seen since 2013. when you think about where we had been, the averages less than four dollars come usually around $3.5.

last week we had a report saying for this warm winter. we had these new protections that measure the ridges up in greenland and alaska. now saying we are in for an incredibly cold winter that is contributing to part of it. around 18% for the day. if you look at how the industry groups are performing, it is mixed. up by .5%. services,ot telecom media and entertainment, chipmakers. on the flipside or the downside, you have tech hardware and that includes apple, financial bank insurers. of them are doing badly as well and we looking at a down market as mentioned. he did get a little bit here about 30 minutes ago.

>> i am not right there. alix: scarlet: let's take -- scarlet: let's take a deeper dive. we will begin with mike regan. mike: as you mentioned, banks were again on the leadership for the downside on the equity market today. especially the regional bank -- regional banks. lenders down today. it looks like it is stabilizing next week, tapping a nine day gain. weakness, maxine waters told the house financial services committee that the days of the committee loosening regulations is over but there is more play besides just that. the mortgage application data this morning was pretty bleak. the mortgage bankers association saying applications dropped for the lowest since 2014.

oil prices also getting on bank investors raters again. prices in theng mid-60's for west texas atermediate not necessarily huge problem since banks have reduced a lot of their exposure to the energy patch. but if it starts bleeding down to the mid 40's, they will become a problem for banks lending books again, especially the energy exposed banks, smaller banks in texas. a lot is going on with banks. it looks like they're rolling back over after a solid week last week. romaine: i am taking a look at apple. down for a sixth straight day, a lot of it has to do with analysts being cautious. a lot of commentary initially seemed to focus around iphone sales specifically. now you are starting to get downgrade from guggenheim, taking a crack at average selling prices site -- thanks so much of the growth we have seen in average selling prices is back ended into the first part of the year. thismeans you have

digestion that means apple may not get the same benefit going for that it has gotten in the past. this was a stock just on october 3 that reached an all-time high of $232, back below $200 per share on monday, the first time we have went down there since july. suppliers, the bloomberg analysis of apple suppliers showed they are all trading at 65% of the 52 week highs. abigail: let's look at cisco systems. the companies reporting after bell, a four-day chart down for days in a row, the longest losing streak in more than a week or a month, down 8.3% over that time. session lows into the report, bell, a four-day chart down forthat is a sign of nervousnesn the part of investors looking for $.72 in adjusted earnings and $12.9 billion in revenue. that is impressive year-over-year growth for the

top line of 60% in the bond might of nearly 18%. we have strong reports out of nokia and ericsson, better than expected, that could be a solid sign for the service provider order growth. if you take a look at the chart, it is a five-year chart and overall, we see a nice uptrend including the volatility back in 2015 and 2016, but right now these chairs are doing a lot of what stocks are not doing. hugging that 200 day moving average. if it holds, we could see the stock go back toward this year's highs. perhaps more likely down toward the 41 dollars per share. maybe it consolidates back down to the five-year uptrend. scarlet: as soon as the numbers break, we bring them to you. thank you. oil is snapping a record long losing streak 12 days of decline. we see oil higher. energy stocks little changed now

on the day with a little bit of a rollover in the last few minutes. lou joins us now. this is interesting. withy stocks had fallen oil prices. but not as much. now that oil is recovering, they are also failing to catch up as well. >> i think that is the case. banke that it links into weaknesses and a lot of major oil producers hedge around fit -- $60. the break below their hurts whomever was selling those, maybe the rebound doesn't quite help them as much. maybe what we are seeing here also, as you pointed out, the catch up with the lack of in the drop for oil. romaine: how much does the energy stocks impact have on the broader market? so much nice that it is smaller than it wasn't 2014. essentially we have got a 90% drop in the earnings of the s&p 500 for the energy sector.

,ecause of that, capitalization ,e have the ability to move the it isn't as big as anything pet outside the big effect is tobably should getting deflationary lack of growth environment. i want to sort of keep on about fluctuation? headwind is an important part of the market, but it could be a tailwind in the sense that low -- lower oil prices could reduce inflation fears and that could be a positive for market. >> as we are getting toward the holiday shopping season, we might contribute to consumers

doing a little better and more willing to spend. consumer spending and confidence is held up so far. look at volatility of the markets, equity prices, oil prices, how come that is not denting confidence in the least? far, the actual economic conditions are still quite good. they are seeing more jobs being that is what think is holding consumer confidence, not despite of the markets. >> when you look at the revenue growth for the company in this most recent quarter, it held up pretty well with 90.4%. but that is still about one percentage point less than -- is there enough concern here that we are decelerating on the revenue side? >> i do not think there is any doubt we are decelerating on revenue especially on profits. theooks to us as though global economy is slowing modestly from its recent pace, same thing for the u.s. economy. that is enough to have sales

growth be a bit lower. it is really in the bottom line of what happens next year after the big tax cut that will be the key concern for the market. >> absolutely. paying attention to the movement in equity indexes as well, we saw the make a bit of a comeback after is a make him out and set her cabinet was backing her draft brexit deal but now they are rolling over a little bit here and heading into the close on the downside. i want to bring the conversation back as well here. when we look at the tax cut being mentioned, do we still see the impact of the tax cut in any of the numbers we track, whether it is earnings were economic data, whether it is sentiment? luke: we're still seeing it in earnings. we're up for another earnings season that will continue to boost the bottom line figure for a while. it is contributed to the diverge in the profit growth of u.s. companies relative to the rest of the world. marcketsow he was

decouple. what tom at rbc brought up the other day is that because we now have a democratic house, the historically wide gap between democratic and republicans will further boost the confidence. scarlet: there is the closing bell and another down day for u.s. stocks. the s&p has the fifth straight decline and for the dow, i believe that is the fourth. you get the picture. a lot of red. groups, we industry have financials in the tech companies leading the way. financials off by one point 4% and technology off by 1.3%. of the: you had some chip stocks rally today. when you have the heavyweights like apple and netflix waited so heavily you are not going to get much traction. scarlet: the nasdaq is the worst performer off by 9/10 of 1%. let's take a deeper dive into today's action with our market reporters. romaine: i'm taking look at credit today is we know the

a great deal rose of confidence and we are starting to see some of the confidence in the market wayne a little bit. when we look at spreads, a lot of that they widened because of concerns around general electric but also other investment grade issuers as well. we also saw a little bit of weakening on the junk rate side. junk rated debt had outperformed for most of the year, but energy minute but huge part of some of these indexes and that is knocking it down quite a bit. confidence is winning when you look at some of the etf's. the closest proxies to the high-yield like the j and k and hyg, they saw the biggest drop in four weeks. today they extended the losing streak to five days. two of the three biggest indexes there of all etf's out there, not just the credits but inequities had the biggest daily outflows yesterday that we have

seen since early october. maybe that you do a little bit of where sentiment lies. credit is a good read on how investors are banking. abigail: we have stocks down for a fifth day in the row and the s&p 500 is tumbling once again. is after october's bearish month. let's take a look at a simple technical chart. chart the one-year slightly upward slope, but for the most part, this is a sideways trend battle between the bulls and bears. more recently, the s&p 500 wrestling with the 200 and moving average. on the five-day slide, back below the 200 and moving average. can this area congestion starting from about mid-october -- is a bullish reversal pattern .r a head fake take us to

significantly lower levels potentially. this is not shaping up well for the pattern. the sellers are really strengthening here with today's low by seeing lower than the earlier low so it will be interesting to see how this plays out. the bears a really tried to take control, mike. >> i have been looking at breakeven inflation rates today. falling in most cases to the year and we were near the lowest of the year. breakeven rates are basically the difference in yield, nominal yields of treasuries. you'll done treasury inflation take to securities. the difference is often considered a rough proxy for investors. expectations for inflation. as you see on the chart, many are hitting their lowest since the beginning of the year or close to it. two year maturities at about 1.4%. there are a couple of things going on. the risk off a drug today's trading with stocks down quite a bit and treasuries catching a

bid to send a nominal yields down is part of it. as a berkeley strategist wrote, they pointed out today's inflation data while it was in line with expectations in most cases, there was a bit of speculation that they would be hotter than expected this month. especially considered with the tariffs moving to the system. every month we go without seeing an impact on tariffs from inflation rates, it will be disappointing for people expecting inflation to pick up because of the trade war. it is showing in the data today with these breakeven rates near their lowest of the year. scarlet? scarlet: thank you so much mike and the entire team. luke, you monitor the economic data coming in. did you get a take away from the cpi numbers? it was a mixed read. luke: italy thing i got is that

core inflation is not accelerating. we had three bank straight months deceleration in the core year-over-year print so there is a bit of a disconnect between the inflation outlook with oil and the rise in the u.s. seller ont we have already had headline inflation going forward and then you have the felix -- phillips curve between low unemployment and rising wage kicking and. during this tightening cycle and others, has put more weight on the wage curve than the data right in front of them or the outlook or interest rates in the sectors. e:here does today's report bring the fed? >> i think it's very important because i think inflation is dropping. core inflation, they have already peaked in the cycle for now. if core inflation goes down to the extent the fed is driven, the market's biggest fear is the fed going to bang far -- too far.

today's report, although the headline number was not that impressive, it indicates the core inflation might be trending down. if you look at the components, health care costs are not rising any faster. shelter casts -- costs are not rising. it looks to me like we might get relief from the inflation front despite higher wages and that might be very good news for investors and the fed. romaine: i want to break news here because cisco system's reporting earnings right now. their first quarter adjusted eps coming in at $.75 per share, above analyst estimates. q2 revenue wasr looking for about 5% to 7% gain for second-quarter revenue. that is above the estimates for about 5.5%. when you are looking at some of the earnings results we have gotten, particularly out of a real critical sector for leadership in this market, are you encouraged by what you are

seeing in this past month? ed: the numbers remain terrific. it's a question of the outlook of the future. there, not just in tech but other sectors, the tone is quieter. we have expectations for next year fallen about on percent growth but those numbers usually start high and come down. i would not be surprised if we saw growth next year be in low single digits. concernthe overall about the fed and growth rates comes down to how will it affect earnings growth. earnings growth next year is up much everywhere look at it will be sharp. scarlet: so we are making an adjustment when it comes to earnings growth and entering a new regime. it will take a while to play out. what happens in the meantime when u.s. stocks are down for a fifth straight day? the s&p 500 is the longest losing streak in three weeks. [laughter] scarlet: last sunday s&p fell

for five straight days. scarlet:well will stop the slowdown or this loss? today for instance, we opened higher but could not hold on to gains. ed: the big benefit of the huge earnings growth has been the valuations to the s&p 500. they have gotten reasonable. i don't think valuations are a problem. it comes down to if the fed is going to offer soothing words or we get such good news on inflation that the fed will pause next year as opposed to driving retire. romaine: when you look in some of the other areas of the market particularly with small caps, are we seeing any issues? we had this run-up in the russell earlier with 17 to 18% as the first belly up a beginner but it has fallen since then. luke: on the close, we have a cross to russell's and it's moving below the 200 day. generally considered a technical bearish side. one of the things benefiting the russell was the idea that it is a haven from trade war.

know if the trade story has necessarily improved so efficiently. the russell has deteriorated. two reasons why is one, a lot of the companies don't make money. around 30-40%. they're much more sensitive to short-term interim rates. they tend to be voting a much higher share. we see it really kicking up so that is another thing that drags small caps. scarlet: what about trade? the straight matter? -- does trade matter? how are you factoring in trade into equities? ed: we are watching closely like everybody else. it is not look like the trade issues have had a big impact in the u.s.. maybe a bigger impact outside of the united states. it has contributed to a stronger dollar, but so far, the direct impact of the trade war in the u.s. has been modest.

unless you get acceleration of trade tensions, we will probably be ok. romaine: what happens if we get to the 25% tariffs in january? ed: that will probably drop gdp and put upward pressure on inflation. that would be bad things as far as the situations concerned. scarlet: ed, thank you very much and luke kawa. uber technology coming out with numbers here. $1.7 billion over is not profitable. -- $2.95 billion which is up 38% year-over-year. the important thing is that it is almost half of what the growth rate was six months ago when it were was negotiating an investment led by softbank. romaine: not the best setup if they go public. some investors don't seem to care too much. scarlet: losses are 20% compared

to the previous quarter. uber is still private but it does provide numbers we can look through. that does it for the closing bell. on "what'd you miss?" we will be looking at why junk bonds may have an oil problem. this is bloomberg. ♪ this is bloomberg. ♪

scarlet: live from bloomberg's world headquarters in your, i'm scarlet fu. romaine: i'm romaine bostick and caroline and joe are off today. scarlet: let's take a look at how stocks closed for the day. the s&p down for a fifth straight day. for a fourthlling

time in five days. the dow lower for a fourth straight day. the selloff continues. romaine: the question is, "what'd you miss?" scarlet: brexit breakthrough. theresa may gets the support of her cabinet allowing the cabinet to remain -- allowing her to remain in the european union for now. wti rebounds for a 12th day slump as opec and allies consider production cuts as early as next year. a fall from the highs. foredy's revenue falling the first time in three years after canada legalized recreational marijuana. pricesent plunge in oil may be a problem for companies that have leveraged themselves to the hilt. as many of these companies are relying on junk bonds. here is more insight into the oil collapse in the impact on high-yield bonds is bloomberg's john and eric.

this is something you have been writing about which is these overleveraged oils companies -- oil companies. we could see problems with oil prices collapsing. john: that's the first question that should appear in anyone's mind. was latetime oil tank 14 early 2015 the response was real tariffs are among the energy sectors on the high-yield bond market. spreads,ok at the their credit compares to other bonds. it balloons out spectacularly. because therese is a lot of relatively small companies on the share revolution in the last few years. many did indeed leverage themselves to the hill to dive into the area. you have seen a sharp increase in that spread, but you have also seen a lot of

interest in volumes and churn in high-yield bonds. nothing asked her medic as we saw back in 2014 and 2015 because there is a general belief the sector has its house in order. we may not be as bad as 2014 and 2015, but the bonds we saw today were so little jarring, right? >> i was look to volume on etf's. today traded 3.2 billion which is a lot for leaving down a little. there was a lot of activity of a trade of $150 million worth. big fish are hitting it and they are figuring out what is going on. for people wondering about the energy exposure and the high-yield etf's, using the vix classification, hyg has 14% energy. in 2014, this happened people were asking me which junk-bond etf as the most energy. people want to come in and buy up this stuff way to down with

energy. hasou're a daredevil, i hyg 24% energy exposure which is a value-oriented high-yield. 23.l has some of the alternative junk-bond etf's go further into energy. scarlet: so it is really buy the dip. eric: it has worked in the past and who knows if it'll work again, but i know when i talk to people, there is definitely people waiting. they say they are waiting for junk bonds and etf's to selloff. john: i don't think the dip is deep enough for it to be a compelling risk benefit. scarlet: it's got a get worse? john: i would say so. i don't say this is enough of a dip. romaine: i'm so confused. i thought energy companies as a whole had been posting some of the best free cash flow we have seen in a while. why are we concerned now about credit risk and death risk when

they are making money hand over fist? john: you have probably been looking at the oil majors which have different economics. the other point is oil prices tanked and that has a huge effect on revenues. certainly for the energy sector as a whole, revenues are fantastic partly because the oil price until recently compared to the year before. scarlet: eric, when you look it how people are playing the oil selloff, certainly you could look at high-yield bonds because if we remember what happened in 2014 and 2015. another way to do it is uso which tracks crude futures but doesn't necessarily -- it is a funny way applying oil trade. eric: an etf cannot hold physical oil like gold. you have to use the futures. u.s. old holds that.

the good news is that -- uso holds that. oil futures do a horrible job of tracking crude over the long time. if you look at the 2016 rebound when crude went up 45%, the spots was up 45% and uso was only up 6%. i know for a fact a lot of retail investors came in. i got text from college friends asking about how to play the oil dip and they think uso was the way to do it. you are going to get burned. you have the call right but the product is wrong. you also have the oil majors up about 25%. you can see the difference there. scarlet: spot oil is the blue line. eric: this is 25% this year. then, you get the stock market issues. xlp, we talked about this company more closer to the ground, smaller capped, that was up 30%. xo p has his goldilocks of being very volatile to give you kick

but it does not have any weird action with the derivatives or corrosion you get from uso. scarlet: you have to go under the hood for those etf's. eric and john, think you so much. -- thank you so much. you aboutlling the losses uber suffered. $1.1 billion. revenue growth was 30% in the third quarter, but almost half of what the growth weight -- growth rate was six month earlier. bring in our next guest in san francisco. mark, give us context to the numbers. uber is a privately held company and not publicly traded. they still disclose these numbers nonetheless. who do they disclose them for? mark: they are disclosing them for the eventual public investors. privately expressing interesting going public the

first have of next year so they are making themselves seem more like an open transparent. public company they are larger than most of the companies in the fortune 500. they are trying to be transparent which is unusual for a private company so we get these numbers a recorder and their astronomical as you can see. 1.1 billion and a quarterly loss. romaine: the transparency is great, but one thing when we have ipo's is everyone thinks uber is on that path, the growth investors usually are looking for out of an ipo seem to have already occurred in uber. it is touch -- such a late stage company. if they come to the public market, what kind of growth is left in this company? mark: that of the story they are trying to break into with of these numbers. you look at the main overhead numbers, revenue slowing

substantially, losses still increasing. they are saying we are losing more because we are investing in all of these amazing new businesses beyond ride-hailing. for the first time, they opened up some numbers to us on their food delivery operations which they outline represent around 70% of their gross booking, so ecoming a substantial part of their business. then they have very nascent operations in scooter represent rentals andoter autonomous cars is probably something they have invested billions of dollars into. those are the stories you will probably be hearing more from them as they prepare to go on to the road for ipo next year. scarlet: maybe changing the narrative a little bit from the core business that is losing quite a bit of money. mark milian, thank you so much.

coming up, and eventful day over the u.k. and the european union has a draft deal. what about parliament? that is the big question, we have the view from london, next. this is bloomberg. ♪

romaine: theresa may announced her cabinet supports the draft brexit agreement that the u.k. and eu have made. they defend the deal outside 10 downing. >> this deal delivering on a vote of the referendum which brings back control of our money and free movement, protects job security, and our deal orr leave with no

no brexit at all. romaine: theresa may there. the struggle to get the deal through, parliament begins and emma ross thomas drums us -- joins us from london. it appears some of the main sticking points were resolved at least with the cabinet. how hard will it be to get this thing through the parliament echo emma: it will be very hard to get to parliament -- parliament? emma: it will be very hard to .et through to parliament she has made it clear compromises have been made with a very impassioned discussion in her cabinet. there's lots of color seeping out about how people got cross about the concessions she has made. she said, i think the most telling line is that this deal all. deal or no brexit at

i think that is a lie we will hear time and time again as she tries to convince parliament to back her brexit, people who wana clean break from the block, they will say are you going to run the risk of no brexit at all? to the people every, they say it is this deal or no deal and no deal means chaos. brexiteers have many reason to be disgruntled not only in the interim. -- interim period will the u.k. abide by all eu rules, that period can be extended longer. thatis the period brexiteers called a slavery because the u.k. will be abiding by eu rules while having no say in making those rules. even new rules but you can make once the u.k. has left. be extendedcannot further and if you look at the future relationship, what are

the ties that are going to exist in the eu and u.k. for those long-term future. they are setting out on a very close bond in the brexiteers will not like that's much either. she talks about a free trade area with regulatory cooperation. scarlet: lots of charge rhetoric, but things will stay the same for a while. in terms of what businesses were anticipating, investors pretty much got what they heard with the pound barely up 1/10 of 1%. what about businesses and banks for instance. -- instance? emma: the pound has only slightly changed because the pound gingers are waiting for change in parliament. -- changers are waiting for a change in parliament. it has been a long time that the u.k. government has been fighting to maintain the status quo of london so the banks, for

a long time, have been setting moving people to continental europe in anticipation of that. what businesses and finance have now -- if it goes through parliament, then they at least have this transition period to prepare and at least the finance industry knows that it will work on the bases of equivalents which is the same set up the eu offers the united states or japan for example. the details want to be hashed out for a long time to come. scarlet: that's critical there, especially with the details. is a statementw before parliament. , think you fors staying up late for us. but get you to first word news. mark: european union brexit negotiator michel barnier says the draft deal accepted by britain is a decisive step in the talks and signaling eu

leaders can convene a summit soon to endorse it. she said "this accord represents step to a negotiation." this comes up to theresa may announced she and her had meant had reached an agreement on the brexit deal with the eu. >> this vote that delivers on a vote of the referendum and brings back control of our money, laws, and borders and borders, and -- three movements, and protects job security and our union. or leave with no deal or no brexit at all. may: as color mentioned, still needs the backing a britain's parliament which she will address tomorrow. u.s. senators judgment -- senators chose mitch mcconnell for another term today. >> we are to fight hard to clean the swamp.

the trump administration is the most athletically challenged in history from the president to his cabinet and congressional people have back of the swamp. >> we are confident we will have 53 republican senators who set the agenda next year to continue with our top priority which is the confirmation of my tebow comments -- lifetime appointments to the judiciary. mark: mitch mcconnell will speak with nancy pelosi. push forsenators will action on a bipartisan measure that would protect the mueller investigation. and blake who is retiring chris coons are expected to take to the senate floor at this hour to answer colleagues to allow a vote. earlier today, a kansas republican spoke with bloomberg. >> i've indicated i would be

supportive of legislative -- legislation. i don't know if it is necessary but that is what we will be paying attention to. mark: mueller is investigating allegations of russian meddling in the 2016 election and whether there was any collusion with russia on the part of the trump campaign. the president has repeatedly dismissed the probe as a witchhunt. 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. four cannabis companies reporting earnings this week doing this probably our best look we have had into financials of this growing industry. for more, we talk to andrew koestner, and analyst at william o'neill and company. he joins us by phone. today we got canopy's earnings. one thing different from tell ray and some of the others --

tilray in some of the others is that it showed an average increase in selling price. why is this seeing success as others are not? andrew: one thing to remember with all of these earnings is that they really reflect the medical cannabis market only. 30 quarter ended september and recreational sales started on october 17. really the orders for recreational sales, which were , you know the provincial distribution authorities, they orders fromose major producers like canopy a couple of weeks in advance. if you look at the sales, they reflect medical market. sales are topy's germany. you can get higher prices there. it's just a matter of the next there but i would not -- mix there but i would not read into it. scarlet: that's an interesting

point that it is mainly the medical cannabis market. do these companies have more pressing power when it is to the medical market or recreational use market? andrew: medical market for sure. today, they have been selling direct to consumer day -- to date they have been selling directly to consumer there. you have the potential distribution authorities who need to take a cut and as a retail level -- at the retail level, the retail people are taking a cut. these companies will be selling at a wholesale level, companies like canopy, for around five dollars per gram. whereas when they sell direct to consumers, it is a few dollars higher than that. theine: when you model out future for a lot of these individual companies, what specifically are you looking at when you're trying to separate which companies are going to come out on top and which ones will lose? when you are putting together a model, that's a

little more difficult because we really need to see what the ramp is going to be in terms of the canadian market which is seen notable delays in the retail rollout and availability. as well as on the supply side. when you are really looking at it in a broader sense, we want to see companies that can clearly demonstrate brand loyalty, margin chairing canada, which we think will translate to other markets as they expand globally, but most of all, we want to see they have the capital to be able to do what they want to. hast now, canopy growth about 10 times as much money in the bank as their closest competitor so we think they are in the best position to act on the global growth plan. scarlet: it feels a this summer, everyone was talking about how they wanted to invest in a startup cannabis company in one

sort or another at different points of the cycle. i wonder how many more entries will come into the space. what is the supply going to look like in terms of cannabis companies that will enter the publicly traded market and provide more options for investors? andrew: in canada, i do not think you will see a lot more publiclys far as traded names. we already are looking at an oversupply the environment among if you just look among the production, among the big companies there. what has been interesting to us is the development of the u.s. market. you have a lot of companies that are raising a substantial amount axisney and rolling out across states. they are buying licenses to grow and licenses for dispensaries. they are rolling these up and raising money privately and then going public on the canadian exchange.

in the past couple of weeks, we have seen three companies raise its combined billion dollars. one is going public tomorrow called acreage holdings. raised $300 billion in will start tomorrow. that is where all of the new investable names are coming on. scarlet: andrew kessner, thank you so much joining us by phone. coming up, the latest readings from filings revealing how hedge funds position themselves in the fourth quarter -- third quarter. we have all the analysis ahead. this is bloomberg. ♪ is bloomberg. ♪

scarlet: now for a brief on some of the stories trending across

bloomberg platforms. terminal users are reading about pg&e down as california investigates whether the equipment caused the camp fire. bloomberg.com has a look into how u.s. sanctions are strongly that country's art galleries. sticking with arts, tictoc on twitter is reporting an auction of chop suing for $9.9 billion. that is the highest some ever for an american work. a 13f filing season is underway and we are getting a peek on how hedge funds work at the end of last quarter. in our bloomberg reporter who has been covering what is going on with these filings. i assume tech has been one of the big holdings, right? >> absolutely. thanks for having me on. as you mentioned, october was

quite interesting month for tech stocks. we're looking at today snapshot a snapchat -- of september 30. it is kind of interesting to see who it may have been exposed or not been exposed, but it is still quite unclear. romaine: what type of names are you seeing? krista: facebook is one of the big ones we are seeing that a handful of hedge funds exiting completely or cut their stake in. stake was when i cut it cotu was one that cut it stake. scarlet: what about ge? their shares have been really hammered over the past month or o. have you seen any hedge funds that may have been exposed to that? krista: viking is kind of the big-name we have seen today so far. had 1.5ptember 30, they

billion, a position worth about that much. it almost doubled it stake in the third-quarter. we certainly coming through and working through them now. ge is one of the names we are looking for. scarlet: especially since we have seen a couple of those big long trades on ge. krista, thank you so much for joining us. but get you to smart charts with abigail doolittle where we dig into timely topics with the top technicians. abigail: joining me today is the founder of fairleads strategy. thank you for taking the time. what an interesting time. are your clients asking the most that you are allowed to share? >> they're asking whether we will have a re-tasked of october low -- retest of october low. my answer is no. chart of thebar s&p 500, we have what could be

forming an inverse head and shoulders that we had with the lower low and potentially a higher low into some of the resistance around 2812 to 2017. a breakout above -- 2817. a breakout above that would be impressive. that would be a short-term target not an intermediate term target. a lot of people are watching that interim resistance level. .ou can see this down here it was impressive not to minimize the fact that we saw pullback. -- i usuallyould think of those patterns as being a bottoming pattern and perhaps closer to the top than the bottom that is not even shown on this going out of the election. does that give you pause? katie: the head and shoulders i'm looking at here is where the red line is. a very short-term, bullish reversal pattern because it is inverse of their usual head and

shoulder we talk about. to me, it is a short-term upside reversal within the context of the broader uptrends. it still has the uptrend intact based on where there is support. there was a meaningful loss of momentum in october we are keeping and i on. abigail: let's take a look at -- an eye on. abigail: let's take a look at your other chart. katie: we have had underperformance from the faang stocks from large-cap technology and you see here on a weekly bar chart, this is, not just for the nasdaq 100 but the s&p 500 and other major indices, that the uptrend is intact still based on this cloud model. the cloud model is the trend falling gauge and it shows where there is potential support on the chart. the nasdaq 100 has come right into it. that is where we had an intermediate reversal condition registered in that is compelling to me. the last time we saw that was in 2014. abigail: does it bother you we

have the series of lower highs? on a weekly basis, i do not see the inverse head and shoulders pattern as well, at least for the nasdaq 100. katie: well it is still in a corrective state right now. we have not seen meaningful improvement in momentum or relative strength for large-cap technology or triple qs against the s&p 500. it is a matter of really only weaker twos that we see based on the proximity of support and the fact that we have countertrend signals arising on a short-term basis. abigail: let's take a look at a true long-term chart. your s&p 500 monthly chart. katie: this is what i referred to when i talk about the loss of long-term momentum. in the bottom window, we have the monthly indicator crossed over which is a sell signal. we don't often see the sell signals. these are false sell signals. we had one in september 2011 and the committee -- and i can make

similarities to that. of a didn't see more relief rally this month and next month, i would take issue with that being indicative of a trading range environment. abigail: so the end of the year trading or trading to the end of the year will be make or break for the major indices. katie: it will. at positive seasonal input year-end. abigail: thank you so much katie for joining smartcards. great conversation. sounds like we are at a pivotal moment for u.s. indexes. coming up, a sigh of relief as investors -- relief for investors as tencent beat estimates. that is ahead. this is bloomberg. ♪ ♪

scarlet: i want to bring the latest from cornell tech at bloomberg. the focus was the future of the airline industries. specifically how jetblue is

leveraging technology to improve customer service and efficient these. i spoke with the venture's president on how the airline is investing in integrating startups into its core business. we have an investing side and an operating side. the whole idea is that we invest and yes we want to invest for returns, but it is much more about strategic values in jetblue. how can we increase our use, enhance safety, and prove customer service -- and improve customer service. that's how our portfolio works out. right now, it's easy for startups to get money. harder for startups to get access to a company like jetblue. we give them money and access and that is the magic sauce. scarlet: you mentioned strategic couple of times, how much of this motivation is financial? >> clearly we want to make investments that are wise

investments. we will not invest in the company unless we think they will succeed and make money. we're not looking necessarily for the 10 ask or 100 x -- 10x or the 100x. in return onhe 10x as opposed to when they exit. when i go into a room and i'm with other vcs, they are focusing on one thing, return. ande looking at the return strategic value. the strategic value is far more important than a financial return. i would say 70-30. scarlet: do the portfolio companies need to be ones that could potentially partner with jetblue or folded into what you do, or do they have to be connected to transportation anywhere? or could it be a really cool idea you like? bonny: that's a good question.

we are here to support jetblue now. about 40% of our investments are for deployment at jetblue in the next year or two. 60% of what jetblue might be. skate notky says we where the pockets but where the puck might be in the future. one of the startups we worked with her leon, they had six people coming out of them and they had really cool weather sensing products but did not quite know what to do with it. we partner with them. they are already on their series b and deploying a cost insurance , and outdoores sports. a real accurate prediction in the team -- and the team has quadrupled since then. --is unbelievable accurate

unbelievably accurate because they use cell towers. think of radar, it is not that accurate because it is broad. think of how many cell towers there are. it turns out there are the smart m.i.t. phd's that figured out the sell signals attenuate differently depending on the intensity of whether. they can tell you whether it is or rightn new york here versus one block away. very localized. it's important when you think about the boston red sox using it to determine if it will have a random game were not. scarlet: talk about cybersecurity because you are investing in that too in your currently a customer that. cyber is new for all of us and when you look at the sort of things you are talking about now at the board and what you are doing on how much time

is now spent on cyber, it .eminds me the origins of this industry are in aviation safety. the u.s. airline industry had such a fantastic safety record but that is not her accident, it is through decades of hard work and process an understanding what was driving accidents and changing it. in the early stages of fiber, there was a very significant and you have a duty to keep your network and customer data safe and secure. another example being investment for shape when it came to bonny it is really an innovation in cyber that will help our -- just like aviation safety has a series of defenses. scarlet: that was my jetbluetion with the president and the ceo last

night. let's move on to asia ahead. asian trading begins shortly. tencent beat earnings expectations thanks to ads and one-time gain. if i some time to find an answer for the core gaining business -- gaming business. shery ahn, let's talk about the stock. will it recover with these results? shery: it could be because we saw in the last session falling and it was before tencent earnings came out. given we are seen so many other tech names like alibaba and baidu miss estimates, we're not too confident on what could be coming up. we already saw tencent lose billions of dollars of market value. if you take a look at the chart isthe gtv library, the stock at the cheapest level in five years. given theee a bump valuation right now.

arever, some analysts saying if you go below the headline numbers, you have to figure out the gaming business is still under a lot of stress. romaine: i'm looking at the chart on the screen about gross margins. i thought the companies did well in terms of the revenue, but margins are still being squeezed. shery: the lowest on record. around 44%. that's going really down. they have been trying to diversify away from the mobile and online gaming industry that is under pressure because of authorities not processing or giving licenses to new games. they have been trying to diversify and that is where we have seen some of the payoff. at the same time, it squeezed margins. jumped 47% inads the third quarter which was a huge beat. the cloud business is still small, but they are really investing a lot in it and that is already -- that has already doubled the revenue in this quarter as well. the signs are there.

that is the chart i was referring to where you can see valuations come down. analysts recommendations are still strong because we could see -- so we could see a rebound in the stock. however, until you get progress in the on lending sector, it is hard to say. scarlet: and that is out of their control. shery: it is up to the authorities. tencent has to portray an image and deal with a game addiction, a right now there is no signal. scarlet: sherry, thank you so much -- shery, thank you so much. don't miss this, mexico announces its rate decision at 2 p.m. eastern time tomorrow. romaine: and u.s. retail sales for october are out at 8:30 a.m. eastern. scarlet: that does it for "what'd you miss?" and "bloomberg technology" is up next. romaine: have a great evening. this is bloomberg. ♪ ♪

emily: the sed -- sec and doj subpoenaed snap. did they mislead investors ahead of their ipo? rewardd lyft launches programs for riders. will it be enough to keep customers coming back? facebook and freedom of expression.

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