the edges. -- we had thening snowflake ipo. some people are into those gains, maybe that is a harbinger of bad things to come for the investora lot of enthusiasm, at least for the short term. >> in the last few days or so, have been heading into some correction territory here. there is a 10% drop in weakness on the week that will make you want to put some cash to work, or you get nervous when you see these ipos like snow. and that's more indicative of frothing this that we see. dennis: i think that thinking about the s&p makes me want to put it to work because those large names are so powerful that

they will offset anything that ipos youpen from the mentioned. --did the work today and power of the top 10 stocks is phenomenal. that translates into the broader index. when you take those cash return yields and compare those, you can make some basic assumptions about the cycles going forward, economic growth, drawing in classic recovery. 3200, 3250. i want to be buying stocks hand over fist. romaine: you have some great research year, breaking down these evaluations. curious, once you get beyond those big cash generators at the top of the market here, we saw this week and lastly, a lot of people buying what would

be at the bottom of the market. a lot of those fallen names in the industrial space on the general idea that those valuations were too low and if you are a believer in this recovery, then why shouldn't you be in a fedex for packaging corps. dennis: i would ticket a step further. of the fed has made it clear that they want real rates to be negative. on an applied basis, if you take 10 year yields and expectations, you're looking at roughly -120 basis points. why do we care about that? hard assets become more attractive. tech is still attractive, but materials, industrials, they become more attractive as long as you have a negative real rate backdrop. i think it is important for people to understand, despite what is going on right now, it

is important to see those sectors outperforming right in line with what you would expect. caroline: we have just saw the market close. major benchmarks up about 6% versus the usual 20 day average. that of a rush as we see hammering and terms of volume. the smallested in caps versus the large caps. even though we ended on the downside, it did outperform. will that continue? i dos: i'm pretty bullish, not want to get over my skis and say it is an outperformance versus large-cap. frameworkvery bullish for the next five plus years of the housing cycle. -- with 2002, i am not made to

-- i'm not making an exact comparison. it is very good for u.s. consumption. that is good for small caps, bottom line. that is going to keep real rates negative. we are a buyer of small caps, but i'm sure they're going to trounce large caps. that they see the bond market, in a week when you have triple c's outperforming worryings and perhaps less about balance sheets, is that confirming what you see within the equity market? dennis: absolutely. we were talking about key technical levels. one area of the market that is not below the average's finances. industrials.

what is going on beneath the surface in other areas, particularly credit, seems consistent with the internals of the market. equities reigned well ahead of other areas market -- ran well ahead of other areas in the market. maybe a little bit of normalization. romaine: you just brought up financials in one breath. i'm curious to get your thoughts on that baking sector -- banking sector. aven the economic backdrop, lot of these names really got battered around here. i'm curious if you see any value in these names given that some of these banks arch trading -- ennis: i am reluctant to jump on this grenade because financials tend to lose their

careers over the past for years. with that being said, in an and airman where -- environment where it is clear that knock on wood, doctrine progresses over the next year in a positive fashion, loan-loss reserves will come down. the fed is doing every thing to stimulate the economy, there is a potential for fiscal policy. that should normalize a little higher. decline, the risks money center bags in particular look pretty attractive to us. i think there is a lot of value there. do i think it will outperform apple? i think that is very difficult. relative to the s&p, yeah. i am excited about banks and financials. --almost sounds like [laughter] yes, they do look attractive in

our view. romaine: i'm glad you stuck your neck out there. usappreciate you giving irrational response. you always have great insights. leader ofusschere, the portfolio strategy research team over at ever core isi. theline: what it meant to volume and how it lines us up for monday trading. this is bloomberg. ♪

♪ caroline: let's get you a check on the close. we saw the fall of more than a

percentage point and over the course of the week, the s&p 500 similar to the nasdaq. some of the big cap names. apple, the biggest longing -- losing streak since april. a percent of its market cap. taylor, you have been looking at the technicals, some of the focus on the derivatives and how we move on. taylor: it is our favorite third friday of every month. it happens every quarter. the quadruple switching day. at this time around, it was lower than the last two quarters so we were thinking with only 500,000 -- 500,000 contracts out, it would be less volatility than a million contracts. caroline: talk us through it. my old i stole it from boss, but i will gladly take

credit for it. the spikes highlighting some of the previous volatility that we got in the options in the contracts outstanding. , she did notews waste her breath because as you point out caroline, we do see a little bit of volatility into the close. let's have katie weigh in. waste.words not going to atie: we certainly did. it lives up to the hype and think it is it dude -- it did. the expectation heading into today was mixed because you did see a lower number expiring today than what was the case with june switching, but that could be because see so many retail traders coming into the market. they tend to open positions and close on the same day when they are trading these options, which would not be captured in the

open interest. still, with that lower number, you did see s&p 500 volume double at the start of trading and it ended at about 70% higher than its 20 day average. the nasdaq 100 briefly touched its lowest level since july. still, with that lower number, there is plenty of trade to be seen. romaine: you talk about the retail investors here. a little earlier, taylor cancel halloween for all the kids out there. i am curious when you look forward for the next switching at the end of the year, and all of the single stock option activity that we have seen this time around, whether you start to see a rotation of that and maybe that hymns down volume. will be interesting to see how they digest the auction drama over the past few weeks. you saw plenty of people holding these short calls on tesla,

apple, the big cap popular tech names. a lot of those calls ended up expiring worthless with the nasdaq 100 falling into that correction. as the election comes around and weekly options start to open up that you can use to wager on the election, it is going to be important to watch whether you see the same rush into those options as you can -- as the election comes. today, you see people diving back into options. when you look at the most active options, for the first time in a on apple.is in those contracts. in the past month at least, you have mostly been seeing calls atop the leaderboard. romaine: wow, apple. it is like shorting her grandmother.- your

betting on barstool this whole time. have a great weekend. breaking down what is going on there. let's go over to mark with the bloomberg first word news. says hissident trump administration expects to be able to vaccinate every american against the coronavirus by april. the president says there will be at least 100 million vaccine doses manufactured by the end of the year. this is trump's timetable. it matches an optimistic forecast. but it is more ambitious than those of drug industry executives and other health officials, including dr. anthony fauci and cdc director robert redfield, who said that most americans should expect a shot before mid 2021. the trump administration will appeal to the supreme court in its attempt to exclude

undocumented immigrants from the census count. advocacy groups and states including new york sued the president, saying he was trying to deprive democrat areas of congressional seats. ruled thatge panel congress did not give the president the authority. seasonantic's hurricane got an unusual change today. forecasts have run out of traditional names and have begun to use the greek alphabet. subtropical storm alpha has formed in the eastern atlantic ocean. forecasters say that it may strengthen into a hurricane and the closing on texas just a week after hurricane sally unleashes floods across the golf game -- across the gulf coast. puerto rico is getting much of

the money it needs to rebuild its power grid three years after is wiped out by hurricane maria. released $13 billion for reconstruction of the grid and to help rebuild schools damaged by the storm. puerto rico's governor announced the funding in a series of tweets, thinking president trump -- thanking president trump. global news 24 hours a day on air and on quicktake by bloomberg. powered by more than 2700 journalists and analysts in over 120 countries. mark krumpton. this is bloomberg. ♪

♪ house speaker nancy pelosi saying that the funding

measures still undecided, but hopes to have the government funding bill by today so that it can get a floor vote early next week. we spoke exclusively with bloomberg's david westin. set for a while that we will keep government open. the secretary of the treasury has made a similar statement. we are working out the details. we hope to have it today so that we can bring it to the floor early next week and then go to the senate, which usually takes a bit longer in terms of their process. by the end of the fiscal year, september 30, there will be no question that the government will be open. david: how long will it be extended? >> that is a question that we are still negotiating. david: i tried. of bank of america said earlier that we need or stimulus. we need it for the people that

are hurting right now. where are we on that deal? you can down to 2.2. now we have a $1.5 trillion, is. where are you? rep. pelosi: i am at 2.2. senate democrats and house democrats agree on the $3.4 trillion. the heroes act. why the know republicans did not think that the american people were not worthy of that investment. taking some of the time off of it, not changing priorities, but shortening the time, we came a trillion dollars. we met them halfway at 2.2. as your show has demonstrated, there are other issues that have emerged because the

fornistration has contempt science. not done with the scientists testing, in terms of tracing, distancing, sanitation, mask wearing and the rest. we have not improved our situation from a health standpoint. whether it is airlines or restaurants or small businesses, there are additional needs. we say to point to is our figure 2.2 isave to -- we say our figure if we have to negotiate. if that is what the traffic will bear. we negotiate with the administration. the other point is that with all of this, the chairman of the fed has said we need his monetary policy, our fiscal policy. elected officials have the power to tax.

it is important we have a substantial package. he often said that the state and in theirernments fiscal stability is important to our economy. he has also said if they do not get rid of the virus, we will not solve our economic problems. that is what our bill does. many of the things that help state and local governments try to crush the virus, and also does so in a way that helps people put money in their pockets. the american people. -- consumer confidence is important. listening toare how speaker pelosi speaking on bloomberg. we will turn our attention to college sports in the u.s. and the ncaa, which regulates all the college sports in the united states. the question is whether players should be paid, particularly now

that they are being urged to play despite the covid outbreak. joining us is janet, who spoke with chris murphy about this particular issue. thanks for being here. the issue of paying collegiate athletes has been out there for quite some time. chris murphy and a few others have been banging the drum on this but now they are saying, if you are forcing these kids to go back onto the field despite the covid crisis and testing protocols that are not clear, maybe the issue of compensation should be pushed harder right now. yes, as you know, these athletes are unpaid. that comeand women from areas ravaged by coronavirus. the decision-makers are often white, the players are often black. this is an issue of social justice and has been for a while. it has been highlighted by the

pandemic. to allow compensation, health care coverage for the players, how much backing does he have? janet: the republicans simply do not like it. there is more support among democratic senators, especially cory booker who plays football -- we played football for stanford. caroline: what is not to like? what is the feeling of republicans against it? anet: how do you figure out fair compensation structure? how do you figure out differences between divisions, states, men and women? some people think that congress has no business in the issue generally. does theoes -- and how ncaa come up with a consensus? it is controversial. if you are a music major and

giving piano lessons, you can get paid for that. if you are a college athlete and want to get paid for schools making lots of money of your successes, it does not exist. the pandemic really highlights this issue because these players are not being forced to come back. they're not saying that their scholarships will be pulled, but there is pressure. want to go into the nfl echo you to be a professional athlete? you have to play. taylor: i wonder if getting a free ride -- is that not an argument? janet: the scholarships can simply be taken away if you are injured. educationtting their -- that is one thing that senator murphy has highlighted. in some schools, kids are learning virtually, at the

football team is playing in real-time. romaine: what is the likelihood that any legislation forgetting these athletes paid, or getting money on the side in their own images, is there any sense that it will make progress given the current climate? janet: no, but we will see. it has been successful in states. there is a push to try to get some national consensus. you have state leading the charge in payments can be inconsistent. caroline: i'm interested in -- we have many players. have seen professional player , theing out about it golden state warriors, for example. what do we hear from the actual student body who are having to go back and take on the health risks?

are they doing it willingly? are they nervous? janet: students want to play. they want to show what they can do. there is a lot of pressure. coaches want to play. if there fellow teammates want to play, and as you saw the big ten reversed this year and they will be playing next month. we are waiting to see what happens with the pac-12. there is peer pressure out there and the fans want to see games. we will see what happens. and there are a lot of campuses experiencing higher rates of infection. we have to wait and see. caroline: great to get your perspective. thank you for your time, janet lorin. taylor: that does it for our coverage. i am going home, but do not go home yet. you guys stay there.

"what'd you miss?" is up next. this is bloomberg. ♪

give you my world ♪ ♪ how can i, when you won't take it from me ♪ ♪ you can go your own way ♪

♪ go your own way your wireless. your rules. only with xfinity mobile. ♪ caroline: i'm caroline hyde. romaine: markets a little bit uninspired. pushing stocks to a six-week low. you have failed to miss energy put into the future of tiktok, but you might be feeling to see the bigger picture here. war?it mean for tech cold

creates fresh tension with beijing and what remains of the reelection campaign. u.s. officials say there is -- as used by the chinese government. it is not just tiktok in the u.s.. .t is like ice, tencent with gaming companies. china is emphasizing its right to improve -- approved operations. joe, this cold war is just getting started and we need to first and foremost breakdown this deal with tiktok. joe: there are so many lawyers to this as it is about the future of the internet, a deal story, so in theory we do not know what is going to happen.

that -- maybe 50% in an u.s. isaisal in the occurred provision. that will go through november 12. we do not know where this is headed, but this is the proposal and after today, there is more time to work it out and approvals, or have a shutdown. romaine: one of the agencies that has to create that approval we will talk about in a moment. but it still has to go to president trump. he spoke about earlier today. . trump: microsoft has been called in we will see if they will continue. walmart is great company -- a great company. have some great options.

presidenthat was the saying this deal can be done quickly. as to what the deal is and why we even need it. joe: so many questions, hopefully we will dive into them. but first, let's talk to paul halpern. paul, thank you for joining us. we look forward to getting your perspective. for those of you who don't know, what other questions that cfius is answering in terms of signing off on this deal or not? number 1, 1 of the ,ulnerabilities of the assets or in this case in some sense divested. if inat are the threats this case they are not divested. that's what's involved.

you talked earlier about the geopolitical war just warming up. for a technology war, this has been going on for years between the u.s. and china. it has expanded beyond technology and critical infrastructure, and the other big three which is proximity of by in thehe chinese sense of military facilities. there are several types of this information. cfiuslly speaking, what is increasingly concerned about are things that either chinese with their mega databases assisted by artificial intelligence could find, which eing ablereasons for bwein to blackmail somebody or

discover that they are anti-american emcee that they thatvailable -- and see they are available to be recruited as spies. a second concern is in the case of social media. the censoring of information to put the u.s. in a bad light and that has to do with the kinds of monitoring that our own social media has found itself in the crosshairs about what do you allow to go out? into the public space? the effectit's both chinese perhaps having an

u.s. isn how the perceived and china is perceived, and protecting information that would make someone vulnerable, and that includes military workers were not allowed to put mobile their military phones. yet that there is anything that they cannot sneak around and put it on their individual cell phones if they have them in have to give away where they are located in what they are being trained to do. caroline: this is where nervousness comes in. alls very hard to peel away the levels of the onion we are seeing at the moment in terms of what this oracle deal really looks like. who is involved. from what you have read, do you think the data is being protected enough?

do you think that this will ease cfius's concerns? paul: i do not think that what we read clarifies even the evolution of the deal so far fo goes far enough. the statement that the deal has evolved from oracle being a strategic minority partner to a megadeal in which the 40% interest of american investors over a pointnced interest tou.s. oracle, walmart, others, -- that even that in and of itself -- and i think of location operations and a third party handling the u.s. operations would be sufficient. i do not think that sify us will

find it sufficient. itre is -- cfius will find sufficient. there is doubt that oracle would get access through source code data totok as well -- make sure it does not go to any place it should not go to. those are all interesting things, but if bytedance, given china, given that the government could lean on any company. if david's has even -- if bytedance has even a minority case and is on the board of involved in any way that does not absolutely firewall it from having access for influence over the data,

than it does not go far in. cfius could be overruled, i suspect that because i know how my colleagues operate and how into the details they get, the devil is in the details. i am happy to hear that the counter draft that sify us -- sign.rand, it is a good the big question is what are the memes that are being taken -- means that are being taken to take the chinese out of any influence. there is an informal board, if they are going to have to create an artificial board and the question is, what access are bytedance representatives going to have on that board?

not just things that monitor the data. has in fear that cfius we're notse deals is concerned with touching china after the fact. if it is sensitive stuff, whether it is critical technology or other stuff, you want to catch them before they steal it number not after. it, note they steal after. withne: the decision rests the president as we are going to find out soon. paul halpern, former director at the department of defense. coming up, we are going to talk about this cold war that might be growing here and how tencent and some of its properties are caught up in this mess. this is bloomberg. ♪ ♪

♪ today, we are focused on the cold war in technology between the u.s. and china that appears to be developing. joe, if you are wondering why we -- it is not just tiktok in caught. apparently, tencent also. joe: it is not the only deal. tiktok is the big one. but we also heard that there will be restrictions potentially populart, which is a way that chinese people here in this country communicate people back at home. there a lot of business. humans conducted -- payments conducted. bers who have the app still

able to use it, but no new downloads potentially. players: starbucks, big on how they will be able to continue to receive payments if this is limited to the u.s.. it is not just limited to , but alsod wechat kids point fortnite. fortnite. now is david,s leading lawyer in foreign and domestic companies. where -- of era international deals or participation of a chinese company in a u.s. market from time to time gaining scrutiny. of acceleration

in your eyes? on.d: thanks for having me i think the answer is yes. starting about four years ago, c fius starts with investments in chinese entities. enacteds ago, congress legislation that modernized jurisdiction of sify is -- cfius. it also beefed up the resources us hasrsonnel that cfi at its disposal. there were only four people at , and these days, thanks are upwardson, we of 50. the pentagon, the justice department, homeland security have also beefed up their teams.

this means, practice speaking, is that there are people whose full-time jobs are in fact scouring the landscape and looking for transactions involving chinese entities that toe -- that go to cfius review. romaine: i'm curious about the evolution. when we used to talk about cfius and the deals they were making, it was pretty straightforward. that whole issue when some chinese company wanted to build a wind farm next to enable base. now you're talking about data. it goes back and forth across the world. i am wondering whether cfius can consider away where you can effectively wall off that data within our own country and a way to do that where it is affected. is looking at innovative ways to address these concerns. usually, they are agreed to

between the government and transaction parties. era, this is the future of money transactions. the challenge with some of these deals today is that the data in some cases is very much intertwined with what is going on within the company. can be up certain files technically challenging in terms of walling off that data and bringing in outside companies. but it is something that they strive to do. a lot of agencies of cfius are joined to find ways to establish these deals, not walling them off. -- blowing them up. suddenly, being able to play fortnite, they will not be able to. how often do we see presidents way in -- weigh in?

into thep wading u.s.-china relationships, has this happened before? typically, the process works in diverse -- reverse when trying to come up with a rigorous strategy that underlies these transactions. then, the agencies that are part of cfius reach a consensus and make a recommendation as a team to the white house. the white house does not typically get involved, especially in such a public way. for example, the tiktok situation was virtually unprecedented. it is very uncommon for presidents to be engaged so publicly. and what he thinks should happen. it is a very unique thing that

we are seeing today. joe: thank you very much. more next. this is bloomberg. ♪

♪

♪ we are focused today on the technology cold war between china and the u.s.. joe, it is interesting that and i -- dan ives has been speaking on this. yes, he says that if a deal is not reached around source code access and majority --ership, this shutdown move with retaliation on the horizon, that is it pretty dramatic language about this deal hanging in the balance. romaine: a significant comment that hits the point that people

have been talking about for the last year or so. we saw the trump administration escalate this issue. it raises the larger issue on how you deal with data. something that is not confined to a border, whether you wanted to or not. joe: there is a lot of talk about this tech cold war. two internets. the wall between them. what are we really talking about here? what is the central tension and why emerging this way -- why is it emerging this way? is ais is an app that the trumppp that administration has gone after .efore, like wally -- huawei this is a totally different kind of ballgame here. trying to do, is

he is trying to kick out these operations and render them eventually useless for consumers. romaine: do you get a sense that something like this can be pulled off? it seems likely live in a different time the way that things are shared and the way that technology is built. if the u.s. and china do escalate this and it becomes the start of something, tech war between the two, how do we operate and how do other countries out there still be participants? china has been doing this for many years and people have been making this reciprocity argument about how u.s. apps are blocked in china, so how come we can't do it in the u.s.? that is what trump is trying to do right now. it is a little different in the sense that the commerce department did fall short from saying that they would block these from providers.

they said that they will not actually block the website or blocked consumers from getting them. what we will do is go after the app stories and not let them hold these apps. they said, we know that people will find workarounds. they will change the regions in their phones. to them, it is not about the individual users. it is about stopping this flow of data and over the years, reducing the amount of data from american users to chinese companies. caroline: when i spoke to investors, one of the key tencent, itesla, and asked whether he worries about this tension. from his perspective, he says that tencent will owe china. how much do you think it will be in any way a restraint on growth?

google, apple, so vast cannot get a foothold in china. a huge i think it is restraint because you are seeing startups not want to be here in the u.s. chinese engineers and phd students not wanting to come out to the u.s. if you think about tiktok, it was a chinese app. you would not have tiktok today. it would not exist. for many, it is a silly app that people waste time on on videos, but the heart of it and its in thet is a lot of jobs u.s. economy. multiply that by many years of suppressed investment, and it will have long-term impact. joe: the big u.s. digital

services are not really in is this in china. do you think that china will retaliate in some way? what would that look like potentially? y: to retaliate from a tech perspective, it has apple. not only does china make up a huge amount of your business in apple, but also their factories or their, or most of the -- oftories are there, or most them. china has a myriad of ways of responding. is not necessarily going to go after a u.s. tech company. this might manifest in all sorts of different ways. caroline: great to hear your insight on a global perspective on what is a micro event of a deal. you can subscribe to our weekly podcast to find our best content

each friday to enjoy at your leisure. bloomberg technology is up next. romaine: happy halloween. this is bloomberg. ♪ ♪ you can go your own way

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>> welcome to "bloomberg " a six week low this week. nasdaqhose dragging the blower, oracle trending down after the u.s. government made a dramatic move to expel chinese thed tiktok and wechat from apple