coming up, why sell gene -- why celgene is buying wellcare.loomberg. ♪ ♪ guy: live from westminster in london, i've gone johnson. vonnie: from new york -- i'm guy johnson. vonnie: from new york, i'm vonnie quinn. this is "bloomberg markets." celgene has agreed to buy wellcare. for more, let's welcome bloomberg columnist max. reporter: this combines two companies intensely focused on government run health care programs at a time when those businesses are kind of influx. you have president trump proposing to get rid of the affordable care act via a lawsuit, and then you have democrats proposing medicare for all. this is sort of a defensive move that combines these two companies, makes it a bit more diversified, and gives them a growth potential if these new initiatives either don't happen or take a while to go into effect, which, based on the history of health care reform in the united states, seems like a decent bet. so, if you are a shareholder in these companies, you would be quite curious to know what is going to happen. in terms of the timi

wellcare was up 12%. centene fell nearly 5%. it is important to note that both centene and we have a number of things in common, including significant business around government h programs. and that could prove to be either a risk or a reward. bertha coombs h the details. >> reporter: centene has grown its medicaid business tenfold over the lastade in part through regional acquisitions. the $17.3 billion deal touy wellcare will be its biggest transaction yet. >> these are two good companies in my opinion. you're putting the, togeth they're high growth industries. they have complementary products that work well together. we've had the objective to build our medicare product. they have a strong medicare product. we have a technology platfor they need for their work. would e combid company become the nation's fourth largest health insurer, cementing the safety net programs and the affordable care exchange marke the combined company a million medicare advantage members and 4 million medicare part drug plans across all 50 states. wha

centene buying wellcare health in a deal worth more than $15 billion.he day. doj reigniting its challenge to the affordable care act will we be seeing more consolidation in this space mike, either way there's been a lot of consolidation already do we expect that to continue? and do you think it can get rushed through >> seems like the players have been maneuvering for a couple of things the payment chain of health care services and drug delivery services this idea of vertically integrating, having the insurance company, so yes, i think two things are happening that will probably continue to happen, which is try to figure out how you would get scale to partner up and also stocks are going to trade on legal and policy headlines in a way that they did before when there was suspense about obamacare. >> we do have lulu lemon earnings just out. seema mody has that. seema? >> earnings of $1.85 adjusted much higher than $1.74 estimated. $1.67 billion xwebeating consen of $1.15 billion on the back of strong holiday sales. the company announcing a $500 million bu

there is shareholders at wellcare, 29% roughly if i remember, of the combined company.nd stock. >> centene is a really good company and it has been a horse for a long time. they bought fidelus in new york state. that was a religious managed care, they have done remarkable with that. that just happened i think this market likes to forgive and my forgiveness stock of the day is dollar general >> okay. >> this stock is back to where it was when it so-called severely disappointed. what does that tell you? the market wants growth. dollar general is growth so i -- these are positive signs, measured against oncoming supply >> market seems to be quite forgiving in many cases. >> look at boeing. >> look at boeing. you pointed out, still up 17% over the last three months >> that's incredible it really is incredible. if carnival comes back, that would be something that was a disappointment versus norwegian which i had the week before >> ronald donald was on yesterday. >> there are big companies that blow up. arnold donald has missed the last few quarters. an excellent interview it

wellcare has some exposure. eports late e tonight that centene and wellcare are in takeovks. >>> congress went back to work in washington today and there are a number of policy issues that need to be worke out, as usual. ylan mui is following that story for us. what's on the agenda now that the mller investigation is over. >> reporter: there are two big issues that dominated the discussion on capitol hill today. the first one was health care. as you mentioned, democrats came out with new legislation today that they said will protect people with pre-existing conditio. it willlso lower the cost of premiums. but president trump was on capitol hill meeting with senate republicans today and he said that republicans should be the party of health care, so that is one issue that we n expect to see a lot more fus on in the woex a and month ahead. also today the senate took a vote on the green new deal, the sweeping proposal to climate change. it didn't advance in the senate, but democrats are determined to continue t tal

centene is buying smaller rival wellcare health plans.ill get $120 in cash and 3.38 centene shares for every share they now own. both those companies rely heavily on membership for obamacare which president trump is making another move to get rid of democrats have started using this push by the president as a rally cry for the upcoming election as you saw with share prices, news of this potential deal did start to get out yesterday there were reports surrounding that wellcare shares had been up in the aftermarket yesterday. you see now it's indicated up by 12.5%. centene down by almost 8%. and again, the two issues that have been moving this centene and wellcare since they both rely so heavily on the affordable care act had both been under pressure on news of the trump administration pushing to overturn the affordable care act. >>> tesla shares defending elon musk's tweeting habit. that musk uses twitter wisely and that it's part of everyday business for many ceos this comes off several high profile tweets have gotten him in trouble wheth

guys, anybody got a view or position on wellcare. >> quickly the stock has been under extreme pressure a lot of the managed health care stocks have been getting bludgeoned on everything bertha just said. you look at wcg, probably 19% earnings growth, trades at 14 times numbers. those numbers have been pretty steady it's all the noise around these stocks that have knocked them down you pretty much have a double bottom of 225. you can trade against that i think despite this move in the after market this is a stock you can own. >> plus you have head winds. you have the democrats with medicare for all you have trump with ending obamacare. and both sides agree on lowering drug prices and having health care affordability so you might see a little bit of this m & a activity trying to survive through it, but i think there are still headwinds that will exist from both parties in d.c. >> good discussion there. >>> now, though, to our call of the day. check out shares of nvidia they are getting a boost this after piper jaffray initiated the chip maker with an overweight rating. they cite two big

that is a 30% premium to where wellcare was trading before reports started to emerge.er the past year, this is coming in at a pretty big discount to where it was trading just in october. this is reflective of how much uncertainty there is in government paid health care plans and what exactly these programs are going to look like five or 10 years down the road. ofs is coming on the heels the trumpet administration decision to try to repeal most of the affordable care act. it will be interesting to see how that fight plays out in the context of this deal. lisa: presumably this was long in place before president trump's move there. what is the case for pushing these two companies together? guest: the uncertainty -- reporter: the uncertainty around the affordable care act is nothing new, but there's always safety in numbers. , andave more policy wellcare does have a significant medicare advantage business. that has been a big growth driver for the health insurance industry, one the u.s. government has said they want to increase funding for. those are medicare plans run by

bay -- by wellcare. the goal is to expand in the market for government-sponsored health care.oc is laying out a strategy to ensure the 5g network is safe from cyberattacks. this over concerns the tech giant could be forced to spy for beijing, an accusation they deny. that is the bloomberg business flash. francine: we are getting news withgermany has sold bunds negative yields for the first time since 2016. financial repression that we talk about quite often, is alive and well after a decade of monetary stimulus. investors shopping for investment grade debt are being greeted with below zero yields in 1/5 of the market. tom: stay on that chart, that chart is exceptional. that is the german 10 year yield is the important number -0.06. to get there is truly an extraordinary moment, talking about the finance of the global economy. sankey.oined by paul i cannot say enough about his acuity and -- in analysis. let me go to a chart, adjusted for inflation and rising western world incomes. 86, wery is after opec are back to the 1970's. all of this centers around the cliche of it is a fi

looks like they were going to have a new blueprint how you put pharmacy and health care together the wellcare deal directly competes and it's a contract that actually probably could not get renewed for cvs. i don't think it's that big of a deal i think it's a low margins contract for them. i think people have priced a lot of bad news in there and this is a company that has a lot of cost savings and they're going after the assisted care business which is probably the place a lot of these guys want to be. i kind of want to own this one here, trade it. >> because it's so bad, it's good maybe there could be a bounce. i'm just so afraid of the pbm business maybe it bounces, it's cheap, it's a well run company but i really don't want to have that exposure to pbms. >> didn't i. >> it's been grim death since the summer of 2015 it's been -- right if you look, it's been straight down i don't know what's going to change but if tim wants to trade it, by the rules, be my guest he's not going to trade my biogen i'm not going to trade his cvs. there. >> it was the tie comment, wasn't it. >>> this one is for

wellcare's management business through caremark.xpected to go in-house. $20 billionost cvs in pharmacy spending. shery: you have a special guest tonight. kevin: donald trump, jr.. this is bloomberg. ♪ ♪ vonnie: there are 30 minutes left in the trading day in europe. from new york, i'm vonnie quinn. guy johnson is with me in london. this is the european close on bloomberg markets. guy: a big brexit moment is happening right now. let's talk about what is going on. we are watching the scenes unfold in the house of commons. this is parliament trying to take control of the brexit process, at least temporarily. it is preparing to vote on a set of rival plans to theresa may's deal, the aim to find an agreement that could get a majority, something the prime minister has not been able to do. we will get the indicative votes. how will they work? vonnie: mp's will put forward their alternative proposals. it will be up to the speaker of the house of commons to decide which are voted upon.

there's jim talking to the centene ceo ouabt their wellcare acquisition. there's more "fast" after this what do you look for when you trade? i want free access to research. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪ it's a revolution in sleep. the sleep number 360 smart bed, from $999... senses your movement and automatically adjusts on each side to keep you both comfortable. and snoring? how smart is that? smarter sleep. so you can come out swinging, maintain your inner focus, and wake up rested and ready for anything. only at a sleep number store, save $500 on select sleep number 360 smart beds. plus, 48-month financing on all smart

wellcare getting acquired. up 10% it's a cash and stock deal that centene will pay that's the reason those shares down 7%. those are our stocks of the day. >> dom, thanks >>> welcome to "the exchange." i'm kelly evans. overnight in china, industrial profits shrunk by the most since late 2011. then germany had its first auction of ten-year debt with a negative yield since 2016. and the u.s. ten-year yield dropped to 2.35% that's helping housing weekly mortgage applications up 9% refis jumped 12% and the trade deficit narrowed in january. let's drill down more on the sell-off and how markets are digesting this with bob pisani at the new york stock exchange >> hello the bond yields are smacking around the stock market. it's a problem stocks began to weaken midmorning as bond yields began moving down. semiconductors, energy stocks, emerging market stocks they're all trading lower. banks had a one-day rally. they've resumed their downward trajectory fractionically. for stocks to resume the breakout, bond yield need

quickly move on to the health insurance company that's buying wellcare. they are paying about $15 billion for it. wellcare up $27, 11%. >>> boeing, 737 max jet made an emergency landing in florida, engine problems, apparently. boeing is going to update its pilots on a fix today tofor the max jet problem. what do you think, is that thing going to bounce back, if and when? a lot of people buy crisis stocks. nasty crisis hits a company, the stock goes down, people buy. >> this is not an example of a golden opportunity in boeing shares. will the stock bounce back, yes, of course, over time, because this market is a duopoly and we don't have a better way to travel long distance than these plans. but this is the biggest safety disaster i think in this company's history. i've got people, my sister, she's not a frequent flyer, she has a flight planned to florida. i'm talking to her, she says it's okay, i checked on the plane, it's not the boeing -- you know, boeing had things like this in the 1980s but people can check the model on their -- stuart: boeing's high

care sector the most recent yesterday's deal between -- that's why i took it -- insurance rival wellcaret the ceo of santine said last night on "mad money. >> they have a strong medicare product. we have a technology platform they need for work geographic expands our footwork in all 50 states short term i don't think about it we have a lot of time and patience for long-term investors. >> so is more consolidation coming and what about the deal that was just announced? joining us with their picks in the health care sector, anna gupta, senior analyst at svb partners when the deal was announced initially, what'd you think of it and after listening to some of the explanations i think you like it more, there's some fears that were allayed. can you go into your thinking on this, before and after you looked into it more deeply >> definitely. it's creating a $100 billion government powerhouse. no ones athat, end to end, medicare advantage, medicare part d and medicare and exchanges. the scale, as the ceo says, they're in 50 states i think the street has been and partly i have been, too, a little