mark: welcome bloomberg audiences. i'm mark crumpton with first word news. the u.s. supreme court has expanded its planned its showdown over president biden's student relief program. they want to consider arguments from two borrowers who contend they are being unfairly excluded from the program. court is already set to hear arguments next week on a challenge led by six republican led states. there is a sign that china and the united states are taking steps to ease tensions. aging describe its meeting with u.s. diplomats that included talks on taiwan as "in-depth and

constructive." the two sides met outside the chinese capitol. that was a follow-up to the meeting last month in indonesia between president biden and president xi jinping. it has led to cooperation on several issues. bloomberg has learned that japan and the netherlands have agreed to join the u.s. and tightening chipmaking exports in china. that is a potentially debilitating bloke to beijing's technology ambitions. the two countries are likely to announce soon that they will announce -- that they will adopt some of the measures the u.s. rolled out in october. an investigation into alleged bribery involving european parliament lawmakers is growing. four people, one of them a lawmaker, was charged with corruption and money laundering. police seized close to $800,000. two countries have -- were cited in some of the legal documents.

global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. ♪ jon: welcome to bloomberg markets pet step right into the markets. kriti: federal reserve decision coming on wednesday. that means light volume when it comes to the stock market. check out the s&p 500, up only 0.6%. even though you have some m&a action there, we will dive into it, but higher volume. a lot to digest in terms of market dynamics. 10-year yield at 3.61. they spent most of the session in the red. this is simply a game changer

because it comes after the 10-year auction tailed. you are seeing a selloff in bonds that we did not see earlier. the dollar follows stronger, up 0.3%. interesting to see brent crude not really affected by the stronger dollar, trading at about $78 per barrel. jon: you talked about the lag for the nasdaq. within the s&p, notable weakness for tesla shares right now. they are down 5%. investors are concerned about what the tesla brand is ultimately impacted by the musk twitter story, which we continue to track. you also talk about this busy m&a monday. some private deals, including some software surging, and webber, after a very short stint on public markets. then, the horizon deal we have been tracking all day of. that massive acquisition and horizon shares, up about 15%. kriti: a crucial story with

broad consequences. let's get more on the deal. we are looking at over $28 billion in deal value. one of the largest in 2020 and one of the largest for amgen as well. talk about why they're interested in horizon. >> i think it comes down to bringing a near torn -- a near-term source of revenue. this is the largest biotech company in the u.s., arguably globally, with 25 billion dollars in revenue. but i think it has been widely acknowledged that they don't have a real clear view into where that next leg of topline growth is going to come from. they are rolling out a couple of new drugs for asthma and lung cancer, but those have not exactly been taking off out of

the gate. amgen has also earlier in the year laid out some fairly ambitious, i don't want to call it guidance, but some goals for 2030. sort of their expectation for single-digit revenue growth from 2022 to 2030. if you run those numbers, we were left looking at 10 billion dollars to $11 billion delta from where they are today. i think what we have seen when they bring in horizon, a company that has some fairly interesting products on the market, and an interesting pipeline, certainly if you look at bloomberg consensus view, 2030 revenue for horizon is about $7 billion. that gives amgen -- gets amgen not quite all the way there, but it alleviates some of the

near-term handwringing about revenue growth for amgen. jon: there was obviously a lot of coverage for the tire kicking we saw for others who might have done a deal. in the end, just based on what you are saying, was this business more valuable to amgen than some rivals? marc: potentially. i think amgen, unfortunately, is not alone in facing pending competition and pricing pressure erosion for some of its core commercial franchises. that's a theme that is true across large cap biotech and certainly in pharma. it seems as if, from what we have been hearing, as i am sure our viewers have been hearing as well, maybe it came down to how

much of the table were willing to pay. amgen clearly prevailed here. jon: good to get your perspective. joining us from the bloomberg intelligence team on the big deal involving amgen. it's not the only deal. we just mentioned the cuba software transaction as well. an equity value of $6.2 billion. that's bring in bloomberg's wall street reporter, sally bassett -- should ali -- sonali. sonali: we have heard, and i had a conversation earlier with vista's president, that told us that they were looking at public companies. that valuation drop you saw,

remember that the company itself was $164 just in january. the high was re-hundred $69. you are seeing another company really winning the deal to buy this company for $81 per share. this is after a string of deals. you are seeing traditional software and technology investors really rushing to the market to capitalize at a time when valuations have come down. i will say something interesting about this is not just the deal itself. remember, the software companies are in high demand this year, especially from the likes of these companies, who were also in talks to buy this company. there are also private creditors interested in financing these deals in a tough market. why? it is because they do these credit deals on the back of recurring revenue. these sticky clients, these

recurring revenue deals have become very popular lately, definitely out in the market winning the hearts and minds of lenders. kriti: you covered all the deal spirit you traditionally see a big m&a boost in investments like this in cycles. you talked about financing a little bit. what is pe doing broadly? we have about one minute. sonali: remember, this is software. you see revenue really growing steadily. you also see that net loss over the number of years, generally through the end of last year. when they are financing these deals, it is on the back of that recurring revenue. they are sustaining losses, but you are seeing the topline growing. software, the idea is that these are not as highflying businesses as you have seen in the tech industry. but software deals, especially

with thoma bravo, it is what you expect. it is the little brother of vista. vista is an older firm, historic in this neighborhood. watching thoma bravo step up to the plate, it will be interesting to see what they are paying today. we member the valuation drop off in public markets is what we are watching, if you're looking for a trend. kriti: and this is why she is part of television and our chief wall street correspondent. we are going to talk about hedging demand ahead of this week's cpi release and the fed decision is a lot for markets to digest we are going to talk to a pro. this is bloomberg. ♪

>> the story of pretty much

every outlook out there is a tough first half of the year. you find a bottom, you rally to the end of the year. i think that is very possible, but i think very rarely have strategists ever as a consensus gotten it right. the question you have to exit yourself is whether they can be wrong. i think maybe where they could be wrong is timing. maybe the down leg lower is more of a grind. i think if you look at the last two bear markets, they certainly lasted a lot longer than what we have seen so far. you could get this, particularly when the starting point is more of a bubble. it could take a wild for that washout to happen. kriti: this is bloomberg "markets. or just listening to dances suu kyi of richard bernstein advisors from earlier today. -- dan suzuki of richard bernstein advisors from earlier today.

joining us now to break all this down is just minton. let's talk specifically about this more arguably tradable event than the fed. 3% on cpi data. not necessarily something we have seen on fed day. walk us through the numbers. >> typically, if you look at the last couple of months, usually the s&p 500 is going to swing 3% in either direction. if anything, we should expect there to be more volatility tomorrow, once we get those cpi numbers. sometimes, typically the way futures react once those numbers hit at 8:30, usually they go in the way you would expect to say it comes in hotter or cooler than expected. but by the time market closes, it's not necessarily the way you think like october, posting a gain of more than 4%. if you look back at november,

the s&p 500 actually rallied and posted its best cpi day on record according to data from bloomberg intelligence, tracking that for about the past two decades. if anything, we should expect there to be more turbulence and volatility tomorrow, especially ahead of the federal reserve decision on wednesday. jon: no doubt. that is really helpful context for game day on cpi. but as we alluded to, you have also been watching more general trends. can you shed a little bit more light on that lack of conviction we have been seeing in the options market? jess: there definitely has been a lack of conviction, especially when you see what the vix has been doing. even coming into this week, over the past month, when you have been breaking down the vix data, it looked like, as far as the options market was concerned, because we had gotten past the midterm elections, the federal reserve decision last month, most corporate earnings were already off the calendar.

coming into this month, the two big catalysts were not until this week, with cpi and the federal reserve decision. to them, it made since there weren't exactly all these big swings because people were betting on what will potentially happen over the next two days. even after the federal reserve decision, we will have the decision from the ecb and bank of england, and a host of other big central banks. it will be a big week on the global central bank front. jon: thank you so much, jess. we do want to get to some breaking news. bloomberg now reporting that goldman sachs is aiming to cut at least a few hundred more jobs , as it is restructuring its consumer business. dealing with the uncertain road ahead for the economy, the bank is drafting plans that could eliminate at least 400 positions from its loss. that is according to people familiar with the matter. we know the ceo has talked about

dialing back the firm's ambitions in consumer banking front. some of these latest moves showing the firm is moving beyond the annual exercise of weeding out underperforming staff, which was the focus just months ago. we will continue to watch those headlines on goldman sachs. again, bloomberg reporting the firm is planning to cut hundreds more jobs. we will track that development. we also watch the market story. getting back to what jess was just talking about, the volatility, especially on cpi days, let's bring in chris murphy, of susquehanna financial group. give us a sense on how you are preparing for this very busy week, arguably the busiest before we get to the end of the year. chris: you make a good point. definitely the biggest to the end of the year. the fed and the cpi, you also have expiration on friday. this might be the last liquidity week of the year, for people to

move their positions around. cpi is the first big one. we looked at the s&p options. they are pricing about a 2.3% move by the end of the day tomorrow. you can compare that to the average 3% move that was just mentioned. it's interesting to note that these s&p options have consistently been a little bit light ahead of these macro events. investors are expecting this to finally come in line and not have a big reaction, but his been very consistent. the move has been bigger than what options have priced going in. kriti: let's take it one day further, when off course to the fomc decision on wednesday. the qt pace continues as is. then you look at terminal rates and hikes. what is the options market telling you about that? chris: first off, in terms of the move being priced in at

about 2.9%, a little bit more for the extra day. a lot is going to matter on what is actually said. when you have a 90% chance of a 50 basis point cut, maybe that is going to move the market in little bit. then, that outlier, 10% of that 75 basis point hike, which will obviously depend on what happens tomorrow, that will be much more of an outsized move. really, if we get a cpi that comes in somewhere around what we are expecting both of those tuesday and wednesday priced moves are going to come in because we're going to get close to 100% for 50 basis points. jon: quickly just getting back to what jess was talking about with the broader lack of conviction we have seen within some of the options market, that idea of the markets moving to a potentially new low in the new year, is there anything you can tell us about what we are seeing

in positioning right now within the derivatives market? chris: absolutely. definitely an uptick in hedging for the first quarter of next year, heading out to the second quarter. it definitely seems like consensus is that we are going to retest the lows in the first half, reading everything out there and talking to clients, things like that. if everyone thinks the same thing, it's hard for me to imagine that's definitely what's going to happen. but at the same time, we are seeing an uptick in hedging, with the expectation of growth in earnings repriced in the first half of next year. jon: chris, great stuff. nice to see you. chris murphy, head of strategy at susquehanna financial group. we will have more details on more job cuts at goldman sachs. stay with us. this is bloomberg. ♪

jon: this is "bloomberg markets." we want to get back to the news on goldman sachs that bloomberg just broke, the fact that the bank is drafting plans that could eliminate at least 400 positions from its lossmaking retail banking operations. on this specific business, which you have it reported pretty specifically on, what can you tell us about the motivation behind this move? >> there has obviously been a lot of scrutiny on their retail banking. it may differ rate into that space, where it hasn't quite gone to plan. there have been mounting losses in that division, accelerating even beyond early projections. that has first -- that has forced them to do a lot of

rethinking and restructuring of the business. it was effectively an acknowledgment that it is cutting back ambitions for consumer banking. now, in the weeks since that announcement, we see some of the effects on that. one of the early effects is clearly that they will be cutting a few hundred jobs in that business as they try to figure out where else they need to put their operations, as respect -- as with respect to their dealings. kriti: we have seen this in the text space, for example. the logic is that this follows a two-year boom that they are now hearing back. would you say this is not just for goldman, but banking broadly? sridhar: we have to acknowledge there have also been operational missteps that have led them to this spot where they are now. having said that, we also know that goldman sachs has said there has to be more pruning and job cuts that will possibly have to take place as they brace for an uncertain economy ahead.

that will resonate across banks. that won't just be goldman, but morgan stanley and broader consuming picking operations like bank of america and citigroup. you will see that folder across the space. jon: just to be clear here, there is the benefit of having that brand out there in the form of high-yield savings accounts. that is something goldman is still committed to? sridhar: that is one part of the business that has been profitable. it makes sense. goldman wants to lower the cost of funding. this is one way to do it. as long as they continue to grow that, that will have a very definite and defined benefit for the firm. it can stick with that until that makes sense. kriti: something we are keeping an eye on you broke this story first. thank you very much. goldman sachs shares peering a little bit of earlier gains, still up about 0.3%, but

certainly off their session highs. looking at the broader market, the s&p 500 is still warming up about 0.6%. does it keep that momentum going into cpi tomorrow and fed day on wednesday? something we will keep an eye on. stick with us. this is bloomberg. ♪

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mark: keeping you up-to-date with news from around the world, this is first word. president biden in janet yellen who reaffirmed u.s. support for ukraine. cbs asked the secretary yelena how long american support can carry on. she replied, quote, as long as it takes. meantime, president biden told president zelenskyy the u.s. is committed to aiding ukraine and holding brush accountable for the war. a group of seven leaders launched a plan to coordinate a destined for ukraine.