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tv   Whatd You Miss  Bloomberg  November 22, 2019 4:00pm-5:00pm EST

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cyclical in two years. at least the past two weeks, it seems the nerves will be tested. >> we managed to close in the s&p 500 up. >> for a week, all three indexes are lower by a quarter of 1%. for most, it is the first weekly decline since mid-october. >> it puts it into perspective. let's dive into the action. to take a look at the put and call options within the s&p 500. we heard from the bridwater there was a report saying they took out $1 billion in the stock market, adding the stock market would decline. then bridgewater said no, that is wrong, we have no bets on the market.
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i want to look in my terminal here. there has been a baritone going tone going on. either hedging or protecting against some of that downside as you get to puts for every call. some defensiveness creeping back into the market. >> that is an interesting chart. when he put into perspective of this s&p 500 chart, it suggests those arising puts to call, it is more of a hedge than a bearish bets. the s&p 500 up until not long ago has been stuck in a range. earlier this year, broke out of the range then truly did so in october, even with the first down week in seven weeks, we are above that range. we have a rising 40 week moving average.
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we have a rising 200 week moving average. this is a bullish chart. it suggests more gains are ahead. >> i want to look at another list chart, biotech start. they have been unable. index rose for the first time in six days, 5% in that time. it is broken up today to a new 52 week high. there is a ton of action under the surface, with drugmakers getting wins and losses. therapy has gains. biogen,see, it is vertex pharmaceuticals, there is a lot of gains in the biotech space. about 140 of the stocks in the nasdaq biotech index rising today.
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today was one president trump said he will release a plan to let florida and other states import prescription drugs that are cheaper than what we have now. home of novel drug therapies that don't necessarily have a lot of foreign competition. today, it looks like investors might be betting biotech will dodge a bullet when it comes to regulation scrutiny. >> great breakdown. we heard from sarah about cyclical selloffs this week. another thing we keep hearing, next year u.s. will outperform and it will be europe or asia. when you look at the data, did you stand by that? do you think it will be a year of u.s. underperformance? >> we stand behind that.
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on a relative basis, the rest of the world outperforms the u.s. investors are under positioned in the u.k. and europe. if you look at a date at where flows are, there have been huge outflows in the u.k. for three years. in europe, since the repo crisis, there was huge outflows as well. if there is any cyclical turn at all, those other markets, which are more undervalued than the u.s. market should outperform. we think the dollar has a softer bias for next year. that would support of the story of investors looking to other markets. >> are you hearing similar sentiments from investors you talk to? >> i am. it is a relative performance play. you willuick trade think, europe or asia will
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outperform the u.s. then we will switch back. this is something people are looking at in a long term. the way i think about it and compare to something else, it is like value and growth. value has been underperforming growth for so long, you need to see a reversion. it is the same thing with the u.s. and the rest of the world. the s&p has annualized 13% annually. you see this large divergence, underperformance of the rest of the world. at some point, it is going to snap back. >> you have to be positioned for it. when you get that rotation, if you are not positioned, you have to move. you have to be early to that. we are positive on other markets. in addition to statistics, emerging markets returned for percent annually over the last 10 years.
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the u.s. 13%. some might say, there is a reason. there is. it is easy. if things get better on the margin and the derivative goes positive, you should see outperformance. >> it is europe as well. christine lagarde gave a speech today. did you hear anything and what she said that maybe justifies optimism for europe? >> investors are waiting for pressure for fiscal stimulus from europe. that would change sentiment remarkably. i was in europe for the last two week. the investor community is waiting for a change. negative rates have been a difficult for many investors there who cannot invest in equities. so that impetus from the central bank to push forward on fiscal stimulus would be positive. your thoughts,t
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if you are not on the right side of the trade you have to move quickly. what about hedging? comingtraordinary things today about whether or not one side of the trade with stocks or not. our people hedge? >> that is not the case. they are not betting on a big drop. if you look at the chart, we saw a big spike in the put to call ratio. people snapping up these bearish put options as opposed to bullish call options. -- might have some foam oh fomo. we joke about it. but people do want to be invested in this market. there is a fear he will feel run up and you don't want to miss out. the way to protect against that
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is hedge against losses. we are seeing hedging and the options market. >> what about hedging diversification, exposure to bonds? we have seen the comeback or sovereign bonds, 10 year summer in the 1/7. it is that the way to do it? maintain exposure to safe haven assets? fixed need exposure to income, particularly for the hedging component. do have to position at have duration. i am not sure long duration is the way to go. we like the belly of the curve. also, other assets. or non-us investors, gold looks interesting. you don't have hedging costs. gold is an interesting way to hedge your higher risk assets. we like that. another way of looking at it is
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the copper-gold ratio, how that is performing. i suggest looking at that. >> how much our clients worried about what is going on in washington, politically? there is more concern we will get a president elizabeth moran, president elizabeth moran, who has been upfront with higher taxes. >> that is a great question. we tend to have conversations about washington almost as an afterthought. thattors are not asking question, what if bernie sanders or elizabeth warren is the nominee? they are not asking the question about, if these candidates want to repeal the tax cut and we implement the 35% corporate tax tax hightax wealth and income individuals, no one is asking. i think the market is pricing in
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-- think about it. we are at all-time highs. the market is pricing in a market friendly outcome. a midrangeng in democrat, a joe biden or bloomberg, or pricing in more of the same, which is donald trump. one of those outcomes of the three would be good enough to stabilize the market. anything else, it is not priced in. thank you so much. we have breaking news on south africa. the ratings company has cut the outlook to negative two stable. south africa's credit rating outlook has been reduced to negative from stable. could be aat downgrade. note movement when it comes to dollar brand. it is friday after the market closed, you will not see at
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k-smoove at that hour. >> many had been anticipating this. some is tied up with utilities. we had been waiting to see when the credit rating company would weigh in. >> we are talking about politics. owner of is a majority bloomberg news. he said he is considering a run. that does it for the closing bell. looking atll be u.s.-china trade as the countries grapple for a deal. how does that play into discussions? this is bloomberg. ♪
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>> we are live from new york. snapshot of how we rallied on friday. a down week for u.s. stocks. trade, who wants 84? president trump says we are close to a deal. merely because and just as china. to aacturing lose -- moves high, but a different story in europe. stepping into the gambling arena. ♪ >> let's get into trade. china's president emphasizing equality as a guiding principle of the phase one agreement. donald trump says he does not like the word.
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josh, i feel like we are getting closer to a trade deal but it is never quite seems to hit the line. where do things stand now? are we getting closer? will he signs one, what you sign into season 24? he needs to keep people coming back. they are not that -- there yet. they announced with the oval office, we have this phase i deal, we just need to put it on paper. easier that -- easier said than done. the equality thing is important. donald trump will hold up his hand like this, this is how he views china-u.s. trade. he wants to catch up with china. he wants a lopsided deal so he can close the gap. when president xi talks about
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inequality, that is what to talk about. he does not want a lopsided deal to close what trump use as a gap. win and wants people to declare it as a win. trump said, i don't like that a quality word. he said, china is starting from the ceiling and we are starting from the floor. he wants to meet in the middle. >> you brought up intellectual property issues. none of those things were in phase one. we will get soybeans, agricultural products going to china. i am not sure what china get in return. does this set us up to deal with bigger issues in phase two, in the endfore we get to of this administration? >> there are camps pushing trump to take action on china that say, no it doesn't.
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they want him to push for this all at once. whatnotlook at and remains unclear. we had reporting saying this is a sticking point. the u.s. is saying, how are you going to get this in agricultural purchases? rollbacks, tariff terrace applied since may -- tariffs applied since may. is going torump bring down tariffs is unclear. phase one.ing about fundamentally, what trump wants is go into 2020 and sell the agriculture purchases saying, we are not going to commit to that unless you commit on the tariffs. now, here in new york, let's turn on this conversation about how trade is when you the economy.
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we want to bring in a dana peterson. we have seen the effects of the trade war. there has not been a massive economic effect. >> i disagree. >> that is why you are here. >> when you look at business investment, it has gone from 7% growth in the second quarter of last year to just 1.5%. when we look at trade, at a net import, we are looking at -1%. >> what about the december tariffs? are you anticipating them? >> our expectation is if there is a phase i deal, we will see a postponement of those tariffs. if they do come in place, it will weigh on consumption.
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most of the goods below focus on consumer goods. >> if there is a deal, and a rollback of tariffs, the best case scenario, what you expect to see a pickup in business investment or are we in a world where, because of uncertainty, it would be a long time? there is going to be reticence on the part of executives to invest? >> you still won't know what those contours of a greater deal with china. this is a long-term prospect. we are addressing intellectual property, unfair trade. it does not look like we will see a big solution anytime soon. this theory been in that there are businesses that have the capacity to boost capex, to expand have a way they have been constrained because of
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uncertainty. if you remove uncertainty, even if we don't go back to where we were, does that not give companies a green light to move ahead? >> i have to agree. there is a demand for investment. when we look at the composition of growth the u.s., it has been is in manufacturing. non-manufacturing has been ok. >> dana peterson will stick with us. this is bloomberg. ♪
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♪ >> investors got a slew of data today with the outlook for the
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euro suggesting growth will continue. delivering herde first major speech since taking over at the president of the european central bank. she called for a policy to make sure the economy will thrive. >> the first is monetary policy. ,t is my area of responsibility which will undergo a strategic review due to bacon in the near future. -- due to begin in the near future. want to continue and expand on the conversation we were having before. we were talking about trade and eight -- at it being a contributor to weakness. chinese credit tightening has an impact. is it possible, when we look at , that the weakness
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we have seen globally is too easy to lay it all on trade? >> absolutely. when we look at europe, they had three external shocks. brexit, the slowdown in china, and the globe light trade wars. we are seeing some stabilization. we had good news out of the german and french pmi's. they were not as bad. still negative, but less negative. , we we look at german gdp just missed having a recession. -- publicestment consumption is still strong. pmi's, therean seem to be people popping the champagne corks. the idea we have averted recession -- is the worst behind europe? or is it too soon to make that
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determination given the data we have gotten is still compact? >> the data is still weak. we are probably reaching a bottom. looking at germany, the force of a lot of the weakness, we think businesses are signed to slow down inventory issue and that will see stronger growth in the second half of next year. , the gdpof the issue number. people coming from the german government said, we don't need to stimulate, we don't need to add fiscal stimulus. this is what steen lagarde is trying to call from. do you have anticipation that the pursestrings will start to open up? the persons will have to open. we need to prepare to become more resilient by investing in
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infrastructure. we can stimulate and make the domestic economies for these regions more healthy. >> how big is brexit and terms of the impact on the economy? >> it goes back to uncertainty. it seems like a never ending story. inhave a big election december. it is not clear what the outcome will be. it seems like the conservatives negotiated a hard brexit. it is not as hard as it could have been. the u.k. could potentially leave , unless the labour party wins and they make a union with the liberals. europe. of focus on can we talk about latin america and how that factors in?
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the economies there individually don't matter as much. we have been seeing a lot of shifts in a south america and mexico. we expect there will be austerity in latin america. our view is, weakness is probably going to lighten up. you still have concerns about the political upheaval we are seeing across the regions. >> always great to have dana peterson. we thank you. up, discussing hong kong's next flashpoint. the city heads to the polls for the first time since the protest began. will carrie lam allow the elections to continue as normal will there be further protests? this is bloomberg. ♪
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developed an internal show recognition application between 2015 and 2016. business insider reports the software allowed employees to identify people by pointing phone cameras at them. the app relying on information from the social network's collection of user uploaded extras and data. a facebook post denied it could identify strangers who didn't work at the company. boeing has settled 63 cases related to the crash of the 737 max jet flown by indonesian lion air. the spokesman says that represents about half of the
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lawsuits filed in federal court over the incident. many of them blame boeing for not giving pilot advance notice about a new flight control system. no settlement terms have been disclosed. hong kong's new police chief says there is no deadline for dealing with protesters barricaded inside polytechnic university. authorities urge the remaining demonstrators to surrender without violence. to end thingsike by peaceful means. withinasking the people to come out. when they come out, we will deal with them impartially. >> the standoff with police entered its sixth day today.
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protesters took to the streets in lebanon today to mark independence day. the unprecedented wave of protests leading to the resignation of the prime minister on october 29. protesters waving lebanese flags packed central beirut's martyrs square. deeply divided politicians have yet to agree on a new government. global news, 24 hours a day, on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. caroline: we work is outlining a new five-year turnaround plan. the executive chairman unveiled it during a meeting with employees today. he explained how the company would stand losses and named a new executive team. say, the executives caught my attention.
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upably, one who used to head one of the biggest ad agencies. they must be paying him a lot. head ofinterim chief communications and marketing. it is interesting. he's 77. moved in twolly guys from softbank, as well as promoting a guy from goldman sachs. to: do they have enough cash execute this plan? in terms of investment needed, do they believe the amount of money they currently have will get them there? >> all guns are blazing. the company seems to be in fine financial shape. we reported 2400 staff are being let go globally. forward, i guess we will
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see what happens. we reported yesterday that there in softbank about an offer that is meant to becoming any time now. jillian, what is the exit plan? this is a five-year plan, which means a pretty long runway for a company. what do the executives have in mind? >> today the executive chairman talked about trying to be positive by 2021. that is a big clarification. i think they can look to going public again. the fact is, the bond
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was severely under pressure. how much is the market buying that they can make the turnaround work and continue with what is a pretty painful firing situation? bondholders, the bonds are trading about $.70 on the dollar at the moment. very much distressed territory. they have not given any sense of confidence. the company reported earnings 1.2 5 billion in losses in the third quarter alone. the recovery in the fourth bump in bondsee a prices, but it takes time to put plans into action. thank, gillian tan. slowdown of a shale reaching a fever pitch this year. investors demand spending discipline. yet another blow to an industry
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structuring -- struggling with low oil prices. here to discuss is renita grouped up as well as molly smith, who covers finance and credit markets. ?hat is this process it happens once or twice a year. the banks reassess credit worthiness of oil players. >> it is a bit of a mouthful. aboute: we were talking isotopes earlier. we can handle it. means,ranslate what that these are semiannual conversations. they are going to banks, regional banks, texas capital for example, and saying, we need money for whatever expenses we need, and the banks are saying, all right. let's see how we can make this happen.
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consider if the conversation you are having with your bank about your credit card. world, inn the debt the energy world, there are some companies that are still able to borrow at pretty favorable rates. then you see somebody like diamondback that is still able to borrow at below 4%. abouts really just certain big boys are going to make out here? >> i think it is a great microcosm for the broader high-yield market and credit in general. diamondback, able to get a deal done earlier this week. diamondback energy, that is. and we are seeing the lowest part of high-yield is where a lot of the stress is. over 1000 basis
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points this week. that is the highest since the energy crisis. some of the stock market readers are now saying, should we be worrying? you talk about how you are getting your credit card limit when you go to these banks. largely they are being downed. what are the ramifications? >> this is such a big story. we are looking at companies that are really having no other option left. the bond market is too expensive. the stocks are already crumbling. this is their last choice. what they are trying to push decrease,o is, don't at least keep it the same, and that process, we can almost see it get pushed into january
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because these negotiations are going back and forth. we still need these funds. i'm looking at that spread. it is nothing like what it was thatrly 2016 when we had heartrending drop in energy prices. look high, but it doesn't all out. at in the are looking credit markets right now is the tier just below investment grade has been really popular this year. they have lagged. that is really amazing to see, especially in a year when high-yield is performing so well . romaine: what is the end story here? at 57, 58 inare
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the u.s., so all this goes back up to 100, all is forgiven. i think it will take a little bit of time to get to that champagne popping to be honest. but it is a process. you are seeing this on a global scale as well. saudi aramco pushing that limit. that competition between the u.s. shale market and opec. thisne: just to be clear, is the process by which we get higher prices because lower credit means less activity. so this is kind of the way the market drives up prices and makes it more sustainable. >> absolutely. in theory, that is what should happen. overese bankers take first, that is where you have that problem.
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can these companies sustain themselves long enough? that would make these companies more -- caroline: unless you are a consumer. >> you definitely don't want them going back to partying. good stuff. molly smith, bloomberg news, thanks for joining us. coming up, hong kong prepares for local elections. what is at stake and how will the results affect the pro-democracy campaign? this is bloomberg. ♪
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caroline: time now for a look at what stories are trending.
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latest fromrs, the citadel to start his hedge fund with a bang. [inaudible] bloomberg.com has a story on tesla's new cyber truck and after ceo elon musk discussed the new pickup, he had his designer smashed the truck with a sledgehammer, but when he smashed the windows, they unintentionally shattered. tesla's product launches are usually scripted and rehearsed, the windows where the big surprise. tictoc on twitter has reported that berkeley is being sued after it became the first u.s. city to prohibit gas stoves in new buildings.
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a dozen other cities are considering natural gas bands to help curb global warming emissions. you can follow all of the stories on your terminal on bloomberg.com and on tictoc on twitter. romaine: thanks, caroline. the next flashpoint in hong kong may be coming sunday. the city will vote for the first time since those protests began in june. chief executive carrie lam's --ernment has threatened to a move that would risk further inflaming those protests. here's a look. ♪ at stake are 18 district councils across hong kong with 452 constituency members. the candidates are split between pro establishment parties and pro-democracy ones. there's also a lot of
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independents, where some candidates avoid the party tank. at the moment, the electoral map of hong kong looks heavily pro establishment. but embolden by antigovernment protests, they have been campaigning harder than ever, building a record number of candidates, working to combine resources. it is not just local and symbolic influence at stake. they can also ensure they get around 10% of the seats on an exclusive committee who selects the hong kong chief executive. get backing from that committee before being appointed. while it is not an automatic game changer, that small slice could still be a big deal for pro-democracy parties. turnout and interest for these elections isn't great, but it is growing with an increasing
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number of people registered to vote and a big student population that has probably never been more politicized. this time, the district council elections will matter more than ever. closely: we will be watching those elections in hong kong. interesting that hong kong court has had to reinstate the mask ban that originally they said was unconstitutional, but apparently hong kong government has said, we will have to see how the protests go. romaine: you really just wonder what the way out of this is for hong kong. whether it is going to be a unified city under its own control for the next couple of decades or whether you get some intervention. joe: you think about missed offerings. imagine if they had pulled the extradition bill early on, which seems like it could have been plausible. it seems like it has this air of
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inevitability. but who knows how many missed opportunities there were to avoid this situation? caroline: a quick check now of the latest business flash headlines. footlocker posted record earnings that beat estimates. sales rose almost 6%. footlocker could benefit from nike's decision to stop selling directly on amazon. ending its fresh food delivery service in new york city. bloomberg has learned that since its launch, it struggled. the company has resorted to raising prices in the nation's biggest city. in london, a high end art dealer accused of deporting an investor in a painting by jean michel brzeski at. he was charged with inflating the price of the painting by about $6 million. the judge has ordered his assets frozen.
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that is your business flash. up, trading meets sports gambling. how the two industries overlap and what wall street can provide to the growing industry. this is bloomberg. ♪
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romaine: the line between trading and gambling has always been a little hazy, but after that supreme court ruling, it is natural to wonder if wall street is getting in on that action. for more on the connection and in what ways the industry could overlap, we want to bring in any matter. you wrote a story about this.
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anybody who has hung out with wall street traders knows there a pretty thin line between trading and gambling. but some firms are taking this seriously. >> exactly. a few have taken the plunge and decided to get involved in some way. one that we highlight is susquehanna, the market firm. they are active on exchanges in the u.k. like the ones operated by matchbook. joe: in addition to sort of the obvious inclination of people who like to trade, to gamble, there's a lot of technology that is fairly similar in terms of providing the platform to execute a derivative trade. >> another way that wall street firms are getting involved in sports betting is through the technology. nasdaq sells its technology to other exchanges. that has extended into sports betting.
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racecluded horse betting exchanges and a u.k. based platform that does betting based on soccer players. is, what the thing they are not doing is research it isalysis as to whether going to be -- romaine: they will never win. caroline: but where are they actually making the money? >> one thing to keep in mind, it is not a highly liquid market. estimates how they could grow in the u.s. are all over the place. but around $17 billion is what we see. upll, it is a place to pick a bit of extra money on the side. romaine: with the example of
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susquehanna, if they are not betting on the actual outcomes, but rather on the differentials between different booking houses , i'm confused. ifs this sort of set up -- everyone is betting against everyone, it becomes kind of circular, doesn't it? >> the way it works on the exchanges they are on, instead of betting against a bookie or the house, you are on a platform. these aren't in the u.s. so much. but you are betting against other traders. when they see opportunities, they will get in. joe: when can i buy like a sports betting etf or a fund? is that in the works anywhere? >> i'm not sure when something like that would come to market. caroline: where is carlo when
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you need her? >> she is in the u.s. it is legal and operational in about 13 states. you still have a long way to go. caroline: td ameritrade, they are eyeing it, right? >> td ameritrade has said they are exploring what they might be able to do in the space. base that theyr could potentially leverage that could potentially be interested. caroline: i've got a friend who is currently working for a bank, considering giving it all up to bet on sports and work on these -- romaine: godspeed there. our thanks, annie, bringing us that update there. remember to subscribe to our weekly podcast on itunes. you are going to find all of our best content each friday and you could spend your entire weekend listening to it. caroline: why wouldn't you? that is all.
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romaine: bloomberg technology is next in the u.s. joe: have a great weekend. this is bloomberg. ♪
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taylor: knology. coming up, teslas cyber truck debut. demos don't go exactly as planned, but the specs are sharp. we get the opinions. once estimates be analyst predictions.

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