david. david will brief them on case negotiations with the european union. according to a person familiar with the matter, they are speaking -- davis is talking about compromise and talks could move to trade. in the u.s., a gradual phase and for the corporate tax cuts being discussed. they have looked at the schedule 35% to 20% bysh 2022. the tax bill is set to be released tomorrow. home price gains have accelerated in august according and prices rose 5.9% over the past 12 months, higher than before and matched estimates. buyers are competing for available homes, driving up prices. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. sherry: t y -- thank you. investors are waiting from cues from washington. the dollar searching for direction ahead of the unveiling of the tax reform bill expected tomorrow. we will have the details, next. this is bloomberg. ♪ ♪ this is bloomberg markets. i am vonnie quinn. sherry: i am shery ahn. vonnie: it is time for futures in focus. first headed for its back-to-back monthly gain since last year. despite opec and analyze trying to clear a glut progressing. joining us to discuss this from the cme is dan deming of financials. let's start with oil. you see a nice balance and you anticipate it will continue and maybe push higher than $54 a barrel. dan: i think there is a chance for that. you are seeing a tailwind in the oil complex and you continue to see the russians and saudi's with a nice concerted effort to keep them moving forward. i think you'll get a little push back from shale providers, but overall, it deals like the trend is higher short-term. vonnie: what about the u.s. dollar? strengthening seems to be stalling out, what do we need to continue for it to strengthen? some kind of open proposal on tax reform, which we are supposed to get this week? dan: sure. you have a fed announcement tomorrow that could provide a further strengthen the dollar, and appointment of the fed chair moving forward but that could certainly impact the dollar. coupled with the fact that u.s. economic activity continues to look strong. all of those provide a tailwind for the dollar and you see this further strength because of it. vonnie: are you anticipating friday's job report, expected to be a blow away report would give back, will they be major moves she we get a 350,000 figure? dan: i think you see that being priced in. overall, the trend has been higher in interest-rate and that helps to support the dollar. it feels that it could essentially support that number would economy. withe: tliv to dan deming kkm financial -- thank you to dan deming. sherry: still on the show, how our markets pricing in the possibility of the tax reform and the new leadership of the fed. we will look at that with merrill lynch, next. this is bloomberg. ♪ ♪ this is bloomberg markets. i am vonnie quinn. sherry: i am shery ahn. unchanged at the moment. the nasdaq higher by .2. investors eyes are pinned on washington this week. republicans are set to unveil their long-awaited tax reform bill. who will take the reins as the next fed chair? how our markets pricing it in? we are joined by the head of u.s. equity and quantitative research at bank of america merrill lynch from london, savita subramanian. we know we will have an overhaul plan, the consensus seems to be that as soon as we get tax reform, there will be a boost for the markets. my question would be how sustainable the boosts be in the long run? great question. from an earnings standpoint, it is a positive. if we get a cut from 35% to something lower in the corporate tax rate, that would be accretive to earnings. the question is how much companies retain the benefit? that is ready you need to look at companies with pricing power. what typically happens when there is a policy driven earnings windfall like tax reform, companies are more competitive with less pricing power and had the benefit over to their end-user to lower prices. math is acut -- our cut in the corporate tax rate of 35% to 25% could add as much as 10% earnings growth to s&p earnings but we estimate half of that benefit will be handed over to consumers or passed along to lower prices, etc. it is a good in but maybe not as great as it is slated to be. vonnie: it might take a while for that to happen. the other things that might happen is to get this phased in tax relief the culprits, which he reported -- for corporate's, which means we would not get a full tax break until 2022. if that is the case, what does that do to the present earnings? savita: exactly. that is the big question, the timing and magnitude. there are has and have-nots under the scenario, so you want to look for companies that would get the repatriation act, cash overseas they could use to increase dividends, buy back stock. be would also probably willing to pay for companies that are paying a higher domestic tax. the example, companies with more domestic sales would benefit more from a tax cut, even a small one it there close to paying a 35% tax rate. i look at the market and i think that the benefit is probably going to be more likely from a psychological rather than fundamental basis, if that makes sense. sherry: after the tax bill, the senate passed the passive. it needs 50 votes. there will be holdouts. if there isn't a tax reform this year or early next year, what could be the negative impact on the stock markets? will we see a reaction as expectations faded reform? -- made of reform? -- fade of reform? savita: let's look at what the market is pricing and today in terms of a tax reform bill, and we found the market is discounting exactly what it discounted prior to the trump win. we found the market is not really anticipating anything. is kind ofthink interesting. we're back to the pre-election expectations of no change to the status quo. rates and to the next fed chair, we had this scenario, where nobody is expecting a break and trend or the market is discounting a dovish fed chairperson, and what that basically this is anything that makes the status quo would be perceived as a big surprise to the markets. --nie: servetus of iranian so be distant remy and -- savita subramanian, thank you for joining us. emerson electric has offered to buy rockwell automation. rockwell shares her story on the of $24th a market value billion at yesterday's close. if emerson is successful, it would become one of the biggest dividers to make factories more efficient. drugmakerso, the raised its earnings forecast for the year and pfizer says it will decide what to do with its consumer health care business next year. they are considering a thin off. archer daniels midland came up short in the third quarter, one of the world's biggest processors posted weaker than expected profit and sales. they are struggling but the circus of corn and soybeans in ae u.s. -- struggling with surplus of corn and soybeans in the u.s. vonnie: breaking news now, bitcoin surging. futureshas announced contracts now. i went to give you data as we head towards the one-hour mark in the session. stocks are unchanged with the exception of the nasdaq at .25. the vix trading just above 10. the dollar index unchanged but still well above 94, on its way to 95. peso athave the mexican 19.2. sherry: breaking news out of rockwell automation, confirming they rejected the proposal from emerson. we have heard emerson electric had offered some -- to buy the company, but rockwell automation now saying that it has rejected the proposal from emerson. the company, of course, rockwell had a surged, and they value of 24 billion at yesterday's close. vonnie: still ahead, a sitdown interview with erik schatzker from the floor. ♪ is this a phone? or a little internet machine? it makes you wonder: shouldn't we get our phones and internet from the same company? that's why xfinity mobile comes with your internet. you get up to 5 lines of talk and text at no extra cost. so all you pay for is data. see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. ♪ sherry: welcome back. this is bloomberg markets. i am shery ahn. vonnie: i am vonnie quinn. sherry: let's get a check with emma chandra. seems to be mueller building a case that the trump campaign manager in touch with russian officials who wanted to defeat hillary clinton. combine a fort has pleaded guilty to lying to the fbi about contact with russian operatives. george papadopoulos is cooperating. george papadopoulos pleaded guilty to lying to the fbi about contact with russian operatives and is cooperating. executives from facebook, google and twitter will testify in capitol hill today. according to testimony, facebook will say that about millions of people had ads from kremlin to the newsfeed. a deal allows advisors to expect competitors without fear of eating sued by former employers. morgan stanley says the agreement will replete opportunity for gamesmanship. in the, the sexual harassment allegations -- in the u k, the sexual harassment allegations has reached the center of theresa may's governments. the woman has downplayed the incident. globaglobal news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. vonnie: thank you. erik schatzker is live from the city go security -- the citadel security trading with an exclusive interview. erik: thanks. i am here with paul hamill, who runs the fixed income currencies and commodities business versus goodell securities -- four city dell securities. -- citadel securities. mifid is roiling the financial industry, how do you see it? paul: this stems from the commitment the g20 made to reform financial markets, and make them more robust and resilient. it is largeently -- and impactful and everyone is focused on it. erik: how will it affect your business? paul: we are in the market of -- erik: providing liquidity. are: we have been active several years in europe, preparing for the swaths. it will impact us because it will bring more trading to electronic venues, more robustness to the market in the form of clearing and clearing is a fundamental pillar, which to move oil from the old bilaterals documentation structure. then they can focus on new has the best price and where i can see the best execution. erik: it sounds like you think or expect it is going to be good for your business. how good? paul: i think it will be good for everyone in the way the model is set up. what tends to be good for the us.et is good for if you build your business around where you want markets to be fair and more transparent, we can thrive in that competitive situation and we expect it to begin for us. andstors who benefit most something we have seen in u.s. with dodd-frank, they benefit most because you have more transparency and it needs to better execution and we have seen it leads to tiger prices for investors. that is something we have -- tighter prices for investors. i like that idea i like that ie reality is it is not good for everybody. not always good for the service providers or vendors. who is most vulnerable? paul: i do not know who was most vulnerable. i think if you are well positioned and preparation is done -- the most important thing about the reform is to be ready. fairview to plan and prepare -- pay of your to plan -- failure to plan is what leads to problems. i think our clients are at different stages of venues and that will play over the course of the next year. erik: i would like to know what you are hearing from clients. do they understand what these rules and timelines are and how they will be affected? paul: i do not think there is the level people would like to have of understanding and i think that stems of the challenge that some rules are still not clear. we have two months to go. still notules were clear on we have seen progress in areas like trading mandate and requirement to provide impartial access, but there are a couple of critical areas everyone is watching closely because they had be resolved before year's end. erik: and those are? all: -- transparency. and we have seen some flawed calculation part of the european rule, which would turn much not subject and that is the complete opposite of the u.s. as we are aware that is a challenge, we are working to resolve it. because investors are paying. one of the biggest complaints is the cost required. if you get all the cost of transparency with the benefits, it will be a long time before it is fixed and that could be a bad outcome for investors. regulatorsif mifid succeed in sorting out these lingering issues by january 1, it will not be perfect. what in the european market will still need work? paul: i think preparation. we are two months out, so if we change at this point, which we think would be the right thing to do it transparency requirements, the venue requirements are still not even clear who needs to trade which products on which platforms. the fact is there are two months to go and it is unrealistic to expect everyone will be ready on january 3. i do think we will see the setting in as people react to this final details that will come out the next months. erik: what if these transparency and the new issues either do not get sorted out -- the venue issues do not get sorted out or not though you would like to see them sorted out? from havingansition some reporting and public about transparency and price are two of the biggest potential benefits to investors and two of the biggest costs. outhey do not get sorted the way i think the market would expect them to, we expect it could take up 12 months to 18 months to see the changes implemented to fix them. we will see a lot more of that negative sentiment around the in regulation itself and people are required to pay for it. erik: so it will be that much quicker to embrace it if it is fixed? paul: yeah, and we have seen that in u.s., a lot of reports that highlight the widespread support in the markets for reforms. in the u.s., there was a big test remission in the market but they came together at roughly -- there was a transformation in the market. erik: you are referring to the treasury from earlier this month. how do you expect citadel to fair under the changes church or he proposes? paul: the expect they are -- well, because what was potentially discuss at one point with the introduction of uncertainty and moving backwards in terms of robustness and instability, and we see a powerful reform that outlines the desire to lock in gains with small but important changes to make the market stronger and safer. we are pleased to see, for example, an appetite to change rules that make clearing more accessible. that has been something people have been concerned about, providing clearing services, and that looks like it will get resolved. we are pleased and will continue to go on and invest in our business. erik: how important is regulatory change as a factor in deciding where to invest and how aggressively you do it? hall: i think having a certain path and the products we transact in is desirable. erik: for everybody. paul: if you look at our european business, we are confident the commercial by of the proposition we have is one of the top market makers and equity, we price treasuries differently, and it delivers a different experience to clients. what kind of reforms, like dodd-frank, do, is they make it easier to get it to the clients, so it is on a value versus over the phone and we have a better shot of showing how better our prices. it does not mean we need those changes. they act as a tailwind to our business. erik: i want to ask about uts, .he focus -- etf's the focus has mostly been on credit, but more people are beginning to talk about the impact they have on the treasury market. what do you see? we see an increase in volumes in our business related to the etf market making from some of our clients involved in that. trendlly, it reflects the , the growth trend, we have seen towards passive investing. that is linked to volatility in the market we are in. in this path, you would expect it to grow. of course, there is a different conversation on what it will look like in 2018 and the impact it would have on investing. erik: is that a business you feel you have to build, more etf capability? paul: etf is growing in our business. erik: you are huge on equity side. -- largest in u.s. paul: largest in the u.s., but accurate -- active liquid benchmarks is surely somewhere we will invest. erik: you have been building a swaps business aggressively. migrating out of the vanilla products you started with. where do you stand? also, what is next? paul: we have some good news. we are thrilled to higher a new leader who joined us a few weeks ago so we are formulating how we will engage clients. the work we have done throughout the course of the year, and that work is to move beyond the liquid benchmark products and the of the universe of swaps, which are more complex and package driven, about 60% of the market. we have been doing that in anticipation of our new leader arriving and to help build up over the 18 months. business, itsury is predicated on expanding the client base. that is something we are focused on in europe and asia next year. erik: great seeing you. thanks for having us. paul: pleasure. erik: it is paul hamill from the citadel securities, for now, back to you. sherry: great interview. coming up on the show, he turned the small french code maker into a global -- coat maker into a global brand. we will analyze every -- burberry, next. vonnie: we will be speaking with headed executive services at citadel in the next hour on the number television. this is bloomberg. ♪ ♪ sherry: welcome back. this is bloomberg markets. i am shery ahn. vonnie: i am vonnie quinn. time for our stock of the hour, shares of under armour plunging. it is their worst day in nine months. abigail doolittle is here to tell us how bad earnings are. abigail: they missed sales and actually,stimates -- they missed sales and not earnings but the real story is they posted a decline in sales growth for the first time as a public company. we have a good to menstruation if we look at -- we have a good 2007.f we look at you can see the growth the company has put out a sales wise, growth year retail story and down 4% in this quarter, quite a ding and they slashed sales and revenues with profits by 50%, huge after already lowering. there are a few reasons. the story is ugly. the company talked about competition from nike. toe is allowing retailers discount their peril, so there is inventory to compete with under armour apparel. they the likes of dick's, went bankrupt, and they lost channels of distribution. they have been trying to replace those through the likes of dsw l's but they are in a downdraft, down 50% of the year on the stock. sherry: they were talking about stores closing, the combination of factors, but i saw their sneakers were supposed to help. abigail: everybody thought they would, the footwear, the curry four that has been delayed, and it is a big piece of their business. about 21% relative to apparel at 67%. the fact that the growth isn't hitting for that chunk that was supposed to hit numbers and an issue.really we have a look at the growth declining. in the bloomberg, this is bloomberg intelligence breakout of the footwear business and we has been declining, going against expectations for gross year segment of their this risk, so under armour is in pain. apparel isn't working, especially in the u.s., footwear is not working, so it will be interesting to see what they do to turn the ship around. vonnie: coming up -- sherry: bitcoin getting a boost from the cme. the world's biggest exchange operator planning to introduce a more serious look for bitcoin. details, next. this is bloomberg. ♪ ♪ sherry: welcome back. this is bloomberg markets. i am shery ahn. vonnie: and i am vonnie quinn. christopher bailey is out of the trenches. urry'srries chief -- burb 17 you run said he -- created chief in his 17 you run says he will leave. here to talk about what is next for him and why it could be what that fly.eeds is at a time when we see creative directors stay one year or 18 months, if lucky, this man has with burberry for generations. >> he has, indeed. he is part of the team that turned around burberry. but that time has come for another reinvention and that needs a fresh creative director. sherry: of course, we had seen him take on more roles, not only the creative director but ceo, so how stretched was it when he came to his position in the company? andrea: he gave up the role of ceo announced a two months ago with a new chief executive that took over in july, so he had already gone back to be the creative your but it is -- creative director but it is difficult to step back from ceo to taking a backseat, as much as he says that is what he wanted to do. vonnie: you say it is time for another reinvention, but why? they brought in an in-house retail store designer recently and it seems to be doing well with the younger generation. why change if it isn't broken? andrea: it has struggled with sales growth over the last couple of years. it was reliant on asia, the chinese market, and it has been trying to reinvent itself by drinking back the burberry check. that is what it needs to appeal to millennials, but it needs to do more. vonnie: any names in the mix? andrea: the main one is of celine, because the new ceo worked there before he came to burberry. the idea is that they could come over and she could work her magic. she would be a good fit. her aesthetic fits well with burberry values with clean lines, strong tailoring, star wear and she has had successful bags with celine, which burberry lacks. sherry: tliv for joining us. andrea felsted of gadfly. bitcoin surging to a new record. right now, look at that. a boost of about 5%. that could be the biggest exchange operator as they plan to introduce bitcoin futures. it could help professional traders and investors get serious about currency. joining us to discuss his coming over so -- camila. they have laid the groundwork and they have started a bitcoin index last year. andhey started the index the derivatives will be based on the index rise. ais is not the first time major firm comes into the sector. ceo eisaid the earlier that they are exploring bitcoin derivatives and there has been platform approvals to trade bitcoin derivatives, but it adds to this end it can solid -- and it consolidates it. vonnie: it has been it good time for bitcoin, up today on the stock price, so a nice balance. , even an etfe contract? camila: bitcoin is surging so much now because people are seeing this move by the cme as an indication that investors will come into the sector. they have been largely staying on the sidelines because of the risk of going into bitcoin, that with derivatives, they will be able to hedge volatility, and, yes, we might see an etf that approval from the sec because the lack of a derivatives market was one of the main reasons given for rejecting earlier proposals for an etf. chief: our own editor in spoke to the chairman and addressed getting into cryptocurrencies. have a listen. >> we are taking a methodical look and will make. that decision when the time is right i am not prepared -- make that decision when the time is right. i am not prepared to tell you now yes or vonnie: no. if regulators have approved it, is this risky for cme? such a i think this is big asset class that everyone is careful in making statements, but i think more and more people are realizing they cannot ignore it. after this 500% search this year, businesses are looking for ways in getting into this. we see them responding to that. vonnie: t y for joining us on bitcoin. coming up, -- thank you for joining us on bit coin. coming up, as a decision for the new fed chair is about to come out, what will it mean for military? and tomorrow we will be speaking with pershing square's bill ackman on the fight with adp. you do not want to miss that interview. this is bloomberg. ♪ vonnie: it is 11:00 in hong kong. mark: i'm mark barton, welcome to bloomberg markets. vonnie: these the top stories we're covering from the bloomberg and around the world. facebook, google, and twitter are under the microscope today. they will testify in the senate on russian influence on social media. could this set the stage for more regulation on big tech? the leader is painting himself as a leader in exile after fleeing to brussels. on he wants to make cattle independence the european union's problem. this is the 800 pound drill it in equities trading, bitcoin head of executive services. we are 90 minutes into the trading day. julie: the company's second ranking executive who is the executive director and the president is the target of a civil investigation by dozens of state that have been conducting the probe into generic drugs and the legend price collusion among the makers of those drugs. this individual is being targeted specifically. the state's attorney general's are suing mylan. this is part of an expanded complaint against pharmaceutical companies that involves 45 states and the district of columbia. this is according to the connecticut attorney general. -- thethe first from mylan shares are down 5% at this point and falling on these headlines in we will keep you posted on any other headlines from the probe. it looks like prosecutors are looking to widen this to other drug acres as well. we will keep an eye on the headlines very let's take a look at what going on overall in stocks. we have some very slight rallies going on across the board with the nasdaq outperforming the other two. two thirds ofut 1%. we've been talking about small caps. this is an interesting chart i wanted to show you. we took a look at this issue. the tech rating in the s&p, we talk about how it does to the stock market and the nasdaq. of the s&por 24% 500. tech stocks are only 14%. when we look at the gains this year, it is interesting the tech is not as large a part. of course, we are watching the companies that will go -- be on capitol hill and we will see general counsel testified about the role of fake news or russian propaganda outlets on various social media site. their shares are declining just a bit in today's session going into that hearing this afternoon which we will be covering. we went to touch on the chipmakers after apple says it is no longer going to be using qualcomm chips in its next-generation of phones and ipads. intel may be the alternative. micron shares of also been soaring. mark: stocks are up for the fourth they. that's the best run since over third. let's get to earnings. they could not avoid the trading slump. fromates and tepid demand clients. commodities fell by 26%. bnp did increase stocks. this is the lowest quarterly sales and almost two years. they missed analyst earnings last order you it did eat estimates. to the world3.1% they got company cut its sales forecast and reduced our clean spending. that continues to weigh on revenue. wpp is having the worst year since the financial crisis. unilever is scaling back the advertising budget. it is troubled industry, not just troubled. they are a big gainer in the eurozone in putting elation data. economy underline why the ecb kept it from monetary stimulus. below 1% forlling the first time in five months. vonnie: now to washington as investors assess the fallout from robert dollars investigation. the conversation about russia's meddling in the u.s. election will continue. tech giants had to capitol hill. with grassley spoke kevin's really about the congressional probes into russia. >> they are not interested in who runnings these countries. they want to discourage confidence in the democratic process. they are autocratic and they don't like democracy because it might sneak into russia. it might challenge vladimir putin. that's what they are fighting. vonnie: kevin joins us now from capitol hill, our chief washington course on the. it's impressive -- correspondent. talk inhis is all the washington right now. let's start with the indictment yesterday. what's next for paul manafort? kevin: this moves to the courts. there is a strong feeling within the trump sources that more indictments are on the way. this is ricocheting through washington dc, is ashley with george papadopoulos. thatindictments could, and really this is just the beginning of what's going to be an aggressive probe. vonnie: how much of it will be public? presumably, these initial court appearances will be short. kevin: there will be that quarter parents tomorrow. yesterday, we saw how -- paul manafort at the courthouse. i spoke with susan collins remain worried she said the notion this is going to be wrapped up in the end of the year is far-fetched. this is going to be wrapped up next year at the earliest. >> the russian currency, that should have been a huge red flag that a foreign government or a foreign national was inappropriately and illegally under current law it's illegal trying to give something of value to an american candidate. about the is talking other big thing in the room, silicon valley's role in this and if they were tipped off regarding the russian effort to influence the election. the general counsel is set to testify in a series of hearings. the first is this afternoon and we will be covering that. vonnie: where you anticipating they will say? some companies of made public their defenses. kevin: they are on a collision course with the mueller pro. -- probe. that they were somehow not able to figure out the extent of the russian meddling, particularly when they were paid in rubles, this is it fake news. this is russian propaganda. there is bipartisan legislation looking to address that in put forth that a republican and democrat chairing the committee that will be later on this afternoon. the notion again facebook is evolving, it's evolvement of their disclosure and. they will say that 126 million people got that added. vonnie: that's a lot of the voting population. thank you for that. stay tuned for live coverage of the big tech testimony on russia at 2:30 p.m. new york time. mark: he is briefing government on brexit contingency plans and taste negotiation -- in case negotiations break off. payis insisting the u.k. $70 billion for obligations. the u.k. wants to move on to trade talks. let's bring in david. let's come out of this meeting. david: it was about brexit. the only thing they talked about was the details of these extra things that are happening. how to help with the process of brexit. there are going to be 5000 people helping with the text implications. it's to show something is happening. the real talks are still in deadlock as was announced. mark: there aren't actual talks taking place. they want them to be more regular. david: the chief negotiator has agreed to the request for accelerated talks. we don't know what that means, how many times they will meet. they have agreed. the pound did take a leg up. people are taking this as an optimistic sign the will see more negotiations. mark: compromise, will we see a compromise? david: that is crucial. when she said the talks were deadlocked last month, they said by the next summit both sides are going to shift the position. we have not heard any sign of that. it comes down to money, which site is going to blink. mark: is there a m