joining me now is bloomberg gadfly columnist michael regan.t the s&p 500, we're basically unchanged for the day. since the low in august, it has come up 12%. quite a rebound from the volatility in august, and still looking like a flat year, less than a 2% gain right now. it is any testing time of year because now is when the forecast for next year -- scarlet: brave souls with the predictions. michael: you have to love them. it is hard enough to predict what the market will do in the next hour or the next day. i love reading the forecast. i love the mental exercise. it is also interesting what a disparity there is in forecasts. scarlet: it is wide? michael: we only have a few and. one notable one is jonathan dollop at rbc. he is looking at a 25% gain in the s&p 500. he likes health care, new tax, new consumer names -- newtech -- new tech, new consumer names. optimistic. scarlet: rising adjust rates is a good sign? michael: more or less. there are ways to play that. to contest -- contrast him, david at goldman sachs predicting another flat year.

betty: thank you oliver renick and michael regan. thank you for joining us on the markets.uch more ahead in the next half hour. a point and they are calling for a breakup now. and how a few losses stacked up multibillion win. citizens financial on its own. can it stand on its own as a regional inc. -- regional bank in the u.s.? ♪ betty: good morning. welcome back to "bloomberg market." time for bloomberg business flash. eight years after their breakup, visa and visa europe getting back together. these are great so by its european subsidiaries for $23 billion. visa is the world's largest payment system. its earnings from europe had been seen as a weakness. another big transaction in biotech. the irish drugmaker shire will buy dyaks for at least five point billion -- i billion dollars in cash. dyax makes a promising treatment for a rare decided -- a rare genetic disorder. it willun research says not release new allegations against valeant. , did after citroen accused the company of recording fake sales. you can always get more business news at bloomberg.com. to our markets de

joining us now is michael regan who was at the speech today. how was it received?t interesting thing i thought he said was in the question and answer period or someone asked him why not wait until you have reached the inflation target and if you need to be aggressive, you could go 50 basis points at that time. he said he doesn't believe in that route. he said i don't believe in waiting to see the inflation. betty: unlike larry summers. right.: fed policy has a lagging effects of a want to get ahead of it even if they are not quite at that 2%. that was kind of striking and really hammers home the notion that december is likely now. he did talk a bit about how financial market volatility like we see today could be one of the things we are watching. it could be one of the things that delays. looking at the markets today, the stock market is down significantly. treasure yields coming down a little bit but not a ton. the fed fund futures trading is pretty much where it was. if anything, it was just reinforcing the fed is going to raise rates in december. michael: absolu

let's bring in lisa abramowicz and michael regan. section on the bloomberg terminal with so many data points, it was hard to keep up with it. the bondooked at market reaction, looking at how are people positioning going into the holiday weekend. after a slower december month. the overall takeaway is the fed hike rates because there's not enough economic data to justify not. that will slow inflation over the long-term. and slow the potential pace of growth. you are seeing that yield flattening curve trade going on right now. day.: it is a quiet it has been astonishing considering all the news flow we've had this week. >> the bad news is not being sold like you would think. study drumbeat of negative news -- there is a certain amount of disconnect that happens in fourth quarter in the stock market. it is traditionally the best quarter to be in the market. an average gain of 4% of war -- or more. year towardsof the the new year tends to be a bullish time. ,eople get year-end bonuses fund managers are chasing performance. the question is

bringfor more, i want to in michael regan of bloomberg news. we have been talking about the malaise in the market today. in your reporting and talking to experts, what has been priced in? mike: what really struck me about today, and joe mentioned it before, we had this really , and i think it is the haover from the summer volatility that is going to be with us for a while. when you have a down day like market at you had the the close, 20-some point up to read it's good to see, -- 20-some points up. it's not back with a vengeance. this is a market that is vulnerable to shifts in momentum quickly. there's a possibility it rebounded a little too hard. but at least we are not seeing those wild swings like we saw. maybe it kind of eases the worries a little bit from yesterday. out, itscarlet pointed is the end of earnings season, but there are retailers reporting later in the week. what is the big take away from earning season? what do they tell us? mike: i think not great. obviously what power the rally was real workhouses -- workhorses of stocks.

for more on how the day fits into the fed puzzle, we are joined by carl riccadonna, and michael regan. carl, let me start with you. the headlines there -- dig deeper -- what did we learn their. story, we saw the big decline in energy prices. now we're starting see a base effect as we are competing cheap energy prices against cheap energy prices from a year ago. gains are harder to come by. we see this gradual drift higher which i think will persist through the end of the year and through the first half of next year. the real story in the cpi is we have had this ongoing divergence between goods prices declining due to the strong dollar and import prices, and service pressures, which have been driven by the rent story. that story continues today, and asked me widened a bit further, but the underlying details within services is what is relevant -- is what is relevant here. you say, rent was dominating prices. now we see rent is still strong, but other service categories -- you highlighted medical services, transportation services, a whole array of services now starting to show increasing

michael regan anteater -- and peter. let's go to the headline numbers. of all of the estimates that economist gave before this number, none was as high as this. what do we learn? >> the number really is a strong number. i want to put into a bit of context which is if you combine it with the august and september number to get a three month moving average, it is not that strong. it's actually below the rate of growth that we saw the first half of 2015. even further below what we saw during 2014. these summers do fluctuate quite a bit from month to month. i think three months is a better. -- period. yes, we have job growth but to say it is white hot, no. as for 5%, a good number. a nice strong number and it is good to the 4.9% that the fed takes as its measure of full employment. beenfter having underemployed for so long the american workforce has lost some of its strength. there could be an argument for giving below the full employment number for a while to try to pull some of those people back into the labor force. david: mike, what say you? i do taking t

warning trades -- i want to bring in michael regan and vincent. thank you so much for joining me.today, but near a record. >> we've had quite a rally. the big question is, what has changed with the market from now and earlier this year? we were stuck in that trading range for most of the year through august. the 2130ish level was the lid on the jar. as we powerback from the volatility in the summer, it's not surprising -- it will take a lot to get through that top of the range we saw. i don't think it's an impossible outcome this year. just from the occam's razor perspective, people get in a bullish mood in the fourth quarter. the holidays come everyone is happy, you get a year end bonus. we've seen such a good flurry of m&a deals coming up to wonder what is in the pipeline. we didd not surprise me poke through to a new record. it's not something that will just happen with a natural trend up in the market. betty: there might be a headwind, the stronger dollar. the dollar bulls might say maybe we've seen a top here -- others are saying no. out.ruskin as a chart they are saying it's

so we are bringing michael regan from bloomberg news to explain this because i am a little baffled. on friday, the markets to not move much at all. then yesterday, they fell off the cliff. stephanie: this is a matt miller special. david: they all are. stephanie: we did great positive news. some of the market feels like, well, the fed is going to remove the safety net. that is insane. michael: what is funny is how there is this delayed reaction. fridays the markets were not bad. then we come in on monday, and i think in the u.s., the company's and investors are pretty much ok with the idea of a rate increase. it is overseas that i think is freaky people out, especially if you have been ecb loosening further and potentially the people's bank of china loosening. so, all which could potentially upt cause the dollar to go higher. treasury yields to go up higher. you wake up on monday and you see that the oecd had cut his global growth forecast to below 3%. it looks like brazil and russia are going to be in a deeper of a recession than we thought previously. so, in the u.s., there is not