30 minutes into the trading day on this monday. Taylor we look to be a bit directionless. Taylor a little bit of red on the dow, but green for the s p and nasdaq. The rustle up more than 3 10 of 1 . This,f the things driving farm and biotech industry. Gilead is in the s p. Perhaps shum of some of the major averages being pushed up by merger monday. The russell 2000, when we talk about that, it is all about the small caps making a comeback. You can see a little bit of correlation here and in quite a bit of divergence with the s p 500 in blue and the russell 2000 and white. The small caps posted their best weekly gains since june last week, gaining about 1. 4 . Perhaps trying to close that gap. Maybe tax reform is back on the table after we get through the debt ceiling fight. Mergeronday, it is monday so lets talk about a few of those deals we are looking at. Kite andtakeover of the expedia ceo leaving for uber. Gilead has some hepatitis c drugs. Tight is interesting in the Cancer Therapy. , a boom forhis line gilead. Expedia, we talked about this. The ceo leaving for uber. In the shortterm we are seeing a bit of pressure on that expedia stock. Perhaps they have some other executives they can pull up into that ceo position. The longterm maybe not so negative is the short term. Amazon this morning, the rollout of their prices once they took over whole foods. Prices being cut by 43 . You are seeing amazon higher and then some of the competitors lower. Up withwe will wrap apple. There were some reports earlier just crossing of Apple Holding a new event on september 12. We are waiting for the release of the iphone 8. Mark we are down for a second day, a quiet day in london. Bank holiday here. The u. K. Markets closed and the is 77 belowlume the 100 day average. That gives you an idea of what today is like. A couple of Industry Groups higher. Since euro, highest level january 2015. The stoxx 600 alternating between gains. Bautista plans to buy back a billion euros worth of stock while looking for potential acquisition targets. They will buy a and b shares on amsterdam exchange. The buyback reflects the confidence of its targets. Altice is targeting u. S. Cable carrier Charter Communications going to people familiar. They are up by 1. 3 . This is the british pound index which is a little bit higher today. Brexit talks resuming. Round three of talks. Prime minister may is on under pressure on two fronts. European negotiations pushing her to reveal her fan plan hand. Yesterday staying in the eu Single Market and the custom union front of four years after it leaves the block. The pound index, we will talk about that later. Pound index hovering above last weeks wednesday closure. That was the lowest since january 16. Dont be mistaken by sterling. Index, this is a gauge of wellbeing. It is showing you positive wellbeing, but we barely budged from the last month or so. Wake ofup a bit in the the beginning of round three of the brexit negotiations. Vonnie perhaps not surprising of all that has to get done. Checking and now on first word news. Emma chandra has more. It isbe called being called a tragedy of epic proportions. Tropical storm harvey hits texas with records amount of rain. Floodwaters continue to rise in parts of houston. Authorities of told residents in the city it is safer to stay in place when the storm hits. Now those are asking thousands are being asked to be rescued. The storm has halted about one fourth of oil and natural Gas Production in the gulf of mexico and more than 10 of the country s refining capacity. The houston area produces 40 of the u. S. Gas supply. They will restart production once floodwater received. Harvey has turned into an Economic Disaster for texas. Damages are likely to rise to tens of billions of dollars. Eon said less than 1 6 of the homes in the houston area have Flood Coverage would leave more than one million homes unprotected. The federal emergency to be in the houston area for years. The fema administrator said there are about 5000 government onsite in texas and louisiana. There is pressure on congress to act quickly. Relief project is likely to fall short of what is needed. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Chandra, this is bloomberg. Vonnie thank you. Joining us on the phone is our Houston Bureau chief, joe carol. How are things so far and what is planned for next 24 to 48 hours . It isan it is joe raining quite hard in houston. More and more people are losing power. Thousands of people are waiting for rescue by boat. The next 24 hours given the Weather Forecast will be more of mark the same. Its all bad news. Mark what kind of relief effort is underway . Joe purely a rescue effort. The part of public safety, the coast guard, police, fire and hundreds of civilians are out just trying to save people from the floodwaters. The water is still rising it is expected to for several more days. Any ideas about recovery or rebuilding are very premature. Vonnie at what point are we looking at passing the relief effort and getting into reconstruction effort . Is that a long way off . Joe a very long way off. The main point to get across is that it is still getting worse here. Joe carol, Houston Bureau chief, thank you. , thema reported earlier damage costs may stretch into the tens of billions of dollars. One firm has given a parliamentary estimate of 30 billion for the total cost. About 8 billion covered by insurance. Nali basik. In samal how will this end of comparing to other storms . An Insurance Broker said this is abnormally large. Katrina for example about 50 of losses were insured compared to this, we are seeing less than a third of the losses are likely to be insured. Vonnie several different companies. They each have about 10 and 4 market share. A lot of those wont be on the hook for things like homeowners, Flood Insurance and so forth. They might be for commercial injury. Sonali absolutely. Part of that estimate. A lot of this is infrastructure cost which we dont know which we picked up how much by the government. The thing is the Business Interruption costs are a big deal, whats not covered in that is what going to happen in the Energy Industry. To the refineries , we dont know how that will play to the bottom line and ultimately what insurers will play pay out for that. Mark im guessing that businesses are better cover than individuals. Sonali a lot of people were saying they were very aware they are in the high flooding zone. The reason the estimate is cheaper in the first place is because in 2001 we had another large storm with lighting. Hurricane allison was about 12 billion in losses. People did prepare quite a bit on the corporate side. Individuals, only about 12 to 14 of individuals have bought Flood Insurance for their home. Uninsureds are very against these types of events. Mark what about the federal government . The federal program already struggling under 25 billion of debt and the program will expire soon. How is that going to be used . Sonali they are in debt are ready so it is unclear how much they may at to that because it is up for a newell, this is likely to be something that different parties will use as an example of how people should see moving forward. Vonnie how is this going to impact earnings for reinsurers . Sonali this might be a bigger deal for the reinsurers. The stoxx, allstate and progressive are down. They are among the biggest decliners. A lot of the risk is reinsured. Allstate has millions of dollars to cover against these events. They are likely to impact the insurers. It may impact the catastrophe and bond market. They are ensuring the losses against these events. The catastrophe bond index was only down the most since the beginning of the year. How theye dont know are trading this weekend. Thank you. Sonali basakck with bloomberg news. Dozens of shelters are up and running but they expect the crisis to grow x pennell exponentially and thousands will be relying on the red cross. Your donations will help. Readcross. Org for all the details. Mark coming up, more Tropical Storm harvey. This event cripples the core of death. Of this of the industry. This is bloomberg. Mark live from london, im mark barton. Vonnie this is bloomberg markets. Gasoline surging while oil declines. Joining us from the cme is brian battle. After previous hurricanes and outages, we saw gasoline spike. Within two to four weeks it was back where it has been. Do you anticipate that to be the case this time . Brian we dont know yet. There are three parts to the industry. The first is drilling in the gulf and oil and gas. The substitution there around the world. Oil is at 47. 5 even though it changed. The does go other things are very u. S. Specific. U. S. Gas is refined in houston. Some of the refineries are open, some are closed. There is a lag time in opening and closing refineries. Once it isne is refined, they have to get it out of houston. There is a pipeline from houston to the east coast. A distribution infrastructure is at risk and we dont know how long it will be open or closed. The fourth we havent talked about is human capital. You cant run a refinery and you cant open the ship channel without people. If those people are flooded or not at home, it is going to be a real long time for that unwind to get function to get production online. Vonnie trade activity watching for the next development, is of the state of louisiana and whether refineries get hit their . Gasoline will be futures as you can see from expectations that there will be an interruption. There is a lot of storage onsite. Theredistilling and is still things in tanks that can be used. I think the concern is there will be landfall again. It is really a concern for infrastructure. There will be a lot of rebuilding in houston and it. Ill be record problems it will seem like its going to be twice as big. I think the concern of how long this will last, we dont know. The people of houston say it is still raining. Oil prices have probably no effect, gasoline and other prices will keep going higher because we dont know the end of the event yet. Vonnie brian battle with futures in focus. President eland fed heads the u. S. Inflation debate. She says sticking to gradual rate hikes despite weak inflation. This is bloomberg. Mark im mark barton in london. Vonnie in new york, im vonnie quinn. Last weeks gathering in jackson hole, investors are looking at economic events later this week including inflation and payroll data that will be key to determining the feds next new next move. Cleveland president loretta said to stick to a pattern of gradual rate hikes. Inflation is not yet at 2 . We have tolearned is move policy a little bit before we get to the goal or else we will be behind. Vonnie joining us from his office in florida, scott brown, chief economist at raymond james. You take anything away from the various speeches at the fed symposium . Scott investors came into the meeting thinking we will hear something about Monetary Policy and what the fed might do in the months ahead, but i think given the nature of the topic, the Financial Stability it was really not that unusual. Monetary policy will still be data dependent. se take away from yellen speech was the push back against what we are seeing in terms of the legislative rollback or the attempt to roll back the regulations put in place during the financial crisis. I think she strongly resists those efforts. It wasnt really directed at the president or his policy, but the effort we are seeing in congress are to really dampen down a lot of the regulations. They were put in place to prevent a repeat of the crisis we had. In terms of Interest Rate probability, the idea it moved again in december has gone down to 34 . I know today maybe lighter, but not that much lighter and they are pricing out a little bit. What is your base case changing . Looking for the fed to raise rates at the mid december meeting. I think they will make way for the beginning of the Balance Sheet unwinding. The fed wants to see how the markets handle that initially. And if the economy continues to improve as we anticipate, it is a tighter job market, maybe a bit of a pickup of inflation. That paves the way for them to continue this gradual hike. I think as you look out, we will see the pace slowing down compared to what weve seen over the last nine months. Maybe a rate hike every half a year rather than every quarter. It could be a bit slower. Whys a bit of a mystery wage growth hasnt picked up, but i think they expect wages to really start to accelerate. In terms of the economy we are in a good shape. We are seeing some types of softness at consumer levels. Restaurant levels have been soft. We its retail Sales Numbers in recent months. We have had continued strong job growth. The wage growth should pick up. We may get a little popping gasoline prices. I think the consumer is still in relatively good shape at this point. Mark given the eyes of the world are on texas and houston in particular, is it too early to except whether this is a localized event economically or whether there might be spillover nationwide. Scott there may be some. There are going to be some parallels to what we saw with katrina. Some disruptions to trade and activity. In particular one thing we know is that the oil tank is underway here, so the price of oil is a bit lower. Once the refineries open and start producing gasoline, the gasoline prices will come back down. I think we have seen some efforts from a lot of the refineries because they learned a thing or two over the last decade and in terms of things like having their own Electricity Generation so the pumps will still be working. , buty not be as disruptive there has been an awful lot of rain. The infrastructure and local economy is likely to be affected for quite some time. Mark coming back to jackson hole. The venture ultimately ignored Monetary Policy and spoke about the Regulatory Environment which poses the question given that the fed will have oversight over an actual regulation, it was the focus more on President Trump doesnt it and the potential nominees going forward. Remember during the crisis, the one big issue was there was no systemic regulator. The Federal Reserve now have that role. They have a much bigger regulatory responsibility now than they did before the crisis and that means that the first personnel choices of fed chair and governors will be more political in nature. Economists are in agreement there is wide agreement that the independent fed is absolutely critical to Monetary Policy and we might say the same thing about regulatory policy as well. This is a real concern. I think the best thing to do would be to probably renominate chair yellen. That would be the simplest and best thing for the financial market. Having a new fed chair, the markets may be uncertain, especially if the new chair is seen as being less inclined to propose these new regulations. Still ahead, uber has a new ceo. We look ahead for the embattled ridesharing company. This is bloomberg. Live from bloomberg headquarters in new york and london, im vonnie quinn. Mark im mark barton. Lets check in on first word news. Emma chandra has more from new york. And a houston has never seen a storm like this and it may get worse. Tropical storm harvey continues to pound southeastern texas. Some areas make it more than four feet of rain before the downpour ends later this week. It has crippled houstons Energy Industry which refines 40 of the Nations Capital in. Officials will be in the region for years to come. President trump is renewing his pledge to make mexico pay for the border wall. That comes after threatening to shut down the u. S. Government if congress is not come up with the money to build a barrier. Mexico is repeated its longstanding pledge saying it wont pay for the wall in any way. The bodies of all 10 sailors missing from the u. S. Uss john mccain have been recovered. Remains were found inside the destroyer which collided with an oil tanker off singapore last week. British Prime Minister theresa may is under pressure on two fronts as brexit talks resume. Eu negotiators want made to reveal her hand and the Opposition Party is trying to or critics. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Im emma chandra, this is bloomberg. Executivedia chief Dara Khosrowshahi said to be ubers new chief executive. They are turning it he is the job of turning into a profitable company. With the details, emily chang from san francisco. Why was he chosen over who some might deem bigger hitters like meg whitman . Emily this was an incredible surprise. Dara khosrowshahi was the dark horse candidate. Hear his name even service in any discussions about the ceo position. The way this all unfolded, apparently was very dramatic. Reportingrk times that they presented to the board on friday and that meg whitman spoke with him on friday and saturday. The jeff pulled out on sunday morning. He tweeted he was not pursuing the job anymore and did not have enough support of the board and on sunday morning is very much appeared that meg whitman was going to get this job. What it came down to reportedly is that they cannot come to an agreement on what her relationship with Travis Kalanick would be and how much power he would have while still on the board would wield and ultimately they cannot come to terms and that led the board to ultimately decide to give them the job to Dara Khosrowshahi. A candidate nobody knew was even in the running for this job. He is adjusting background. He worked very early on as a banker at allen and company. He had a job at iac. He has some deep financial experience, which is very interesting given that some investors very much wanted uber to hire a cfo. They have not yet. As the company gets bigger, they need someone who can crunch the numbers. Went ona khosrowshahi to become the ceo of expedia. He is done some interesting deals. He bought orbitz. A not for he is not newer, but he seems to have an entrepreneurial approach to doing things and hes got the huge challenges ahead in terms of fixing uber and taking it down the road to ipo. Vonnie what about his outspokenness against the president . He hasnt been shy about criticizing President Trump. Could that lead to problems for the company . Emily i think they want someone who is an outspoken sort of firebrand. Someone who can really lead the company forward, rally the troops and he has shown he is willing to step up and speak out when he believes in something strongly. He is an iranian immigrant. He came to the u. S. With his family from iran during the iranian revolution. You spoke out forcefully about President Trumps travel been and that is what Travis Kalanick got a lot of flack for when he was still on the Business Council for President Trump. He tried to defend his position on the council and ultimately he decided to step down. Dara khosrowshahi has spoken out in the wake of what happened in charlottesville and said the president has repeatedly failed to live up to the expectations of the office. Is that they were very attracted to that. It felt like a cultural fit for the company that really needs a strong leader. Mark we are hearing Product Launch event next month. What could we expect . Emily our very own mark berman has been reporting the details. What we do expect the event. Apple unveiled three new iphones. Two updates to the iphone 7. As well is what may be called the iphone eight. A new brandnew iphone with a big design overhaul. We are expecting facial recognition, technology, a big Design Update where the screen wraps around. Also expecting a new watch to be announced. This is going to be the 10th anniversary of the iphone. A very important event. A design overhaul we have seen in the past couple of years. Mark emily chang of bloomberg technology. Vonnie whole foods just got a whole lot cheaper. Amazon completed its purchase of whole foods today. Dozens of items from fish to produce a seen their prices slashed. Jenny kaplan is outside of whole foods in manhattan. We mightve speculated this would become the case. But did amazon make any kind of announcement or whether advertisements in the store . Amazon announced on thursday that today, the first day of their officially owning whole foods that they would reduce prices. They did not previously forecast what those reductions would be, but we have since learned they are down as much as 43 for certain items around the store. They particularly marked down produce, certain items like avocados and apples. Certain types of organic apples, bananas, things like that. It is pretty phenomenal price cut. I imagine its not on every single product. When you walk around whole foods, do you see more customer traffic because of it . I know we should wait for a few days, but any other kinds of change amazon is now the owner . One major change is right when you walk in the door. There is a whole span of amazon echoes. They are selling it inside this whole foods on in manhattan. When you walk around the store, the different items, it is just certain things they marked down. There are signs that say amazon plus whole foods, we are growing something good. It says the old price and the new price. At the bottom it says more to come. I think we can expect more things to be marked down. I spoke with shoppers in there now. Many people are just doing their normal shop, but there was one shopper who said he came in because he heard about the lower prices and that these lower prices will convince them to come here more often. To the supermarket sector on the both sides of the atlantic. This is an industry that has artie been set by fiercely Competitive Price war. War ini think the price the grocery industry on both sides of the atlantic, it has been really serious and impacting Big Companies like kroger. This will take that a step further. These have been largely in the regular part of the grocery store, not necessarily organic and grocers have been relying on charging more for organic. This is a huge step in bringing that price war into the organic aisle. Vonnie our thanks to jenny kaplan there outside whole foods. Coming up, will the devastating storm in texas have a Silver Lining . We will have some analysis on that. Mark also ahead, our stock mover, gilead has been under pressure. Apparently how this deal could shake up the tech industry. This is bloomberg. London, im mark barton. Vonnie this is bloomberg markets. Pharmas plan to buy kite in one of the biggest deals ever. To gain Cancer Therapy from kite. Joining us with more is taylor riggs. Share and a 29 premium to last fridays closing price. Gilead has been struggling with declining sales and their hepatitis c drugs. They are purchasing kite for growth, hope to cancer drugs will give it a boost. A look at the declining sales of hepatitis c, you can see over the last few years, it has been losing. That comes even as the total market for have drugs has been declining at a much lower rate. Youve had increased competition. Is seeing their entire fleet of hepatitis c drugs, under pressure. If you look at kites revenue estimate, that looks to be pretty good. They are forecasting higher revenue going out through fiscal year 2020. Our analysts said the revenue estimates are half of what they were a year ago, but dont be concerned just yet. Perhaps they are delaying the timeline on some of these Cancer Therapy drugs coming to market. Overall, a very good picture for kite. Vonnie how does that premium compare to others . Taylor it seems expensive and if we look back at gilead and year, kitesck one massive outperformance here. Im not hearing too many concerns about paying that for the deal. Its most expensive, but its waiting for a new cancer cell therapy to calm online. If that does and it gets approval, the high price will pay for itself. Thise fascinating deals monday. Taylor, thank you. Mark time for the Bloomberg Business flash. Pharma under the trump administration, the fda warning saying protection for consumers has fallen to a nine year low. Warnednuary to july they of a serious violations. The fda oversees 20 cents of every dollar that americans spend. Hassouth korean vice chair appealed his bribery charge. It was part of a bigger Corruption Scandal that brought down the south korean president. Companies investing 7 million in flash memory chips. The investment will go towards its plant. Is set tomemory chip become more profitable than apple in its recent quarter. That is your latest Bloomberg Business flash. Vonnie floodwater is overwhelming houston as Tropical Storm harvey continues to hit south texas. It poses an immediate test for the white house and congress and lawmakers are feeling pressure to approve billions in recovery funds even of a have a degree done much else. It comes in a time when President Trump begins is ever to sell tax reform to the american public. The latest from Kevin Cirilli in washington dc right now. What is the contest consensus on how politicized harvey is becoming . Kevin not too much politics surrounding it right now. The president facing a lot of pressure to handle the situation which is really pummeled houston as well as the floodings. An estimated 30,000 people need shelter and an additional 15 to 25 inches could fall. Inches of rain could fall. The president and first lady are expected to travel to houston earlier this week as early as tomorrow we are being told. The president actually arriving from camp david back to washington last night. This morning we are expected to hear from President Trump later this afternoon at a press conference where he will no doubt faced questions about the impact of Tropical Storm harvey, but also about the hurricane paio andon of joe ar transgender military ban. Mark a big sale President Trump. He will try to get americans fired up about rewriting the tax code. A lot of questions with the tax code remain and a lot of the questions are main unanswered. Are absolutely right. This is a huge policy brewing battle coming just over a little more than a week when lawmakers are set to return from congressional recess. We want to get the tax reform. The ideological differences between more conservative members in the house of representatives and more display ons on full two other hurdles before they get to tax reform. Of course talking about raising the debt limit and passing a partial government funding bill in order to avoid a government shutdown. President trump wants to include funding for the u. S. Mexico border wall in that budget battle, which would lose all democrats and then really raise the stakes in order of their potentially being a government shutdown. The president will later travel this week taking his campaign sales pitch on the road as he tries to rally support and momentum to see what he is hoping to be Political Capital to conduct accomplish this. Vonnie do you anticipate the senate imager Senate Majority leader being able to continue business as usual with the administration . Top folks in President Trumps political orbit are trying to organize a grassroots of the conservative party to pressure not only the majority leader, but also House Speaker paul ryan. They feel they have not worked with him closely enough to help them and on the flip side of talk to capitol hill sources who argue that essentially the president has been disengaged. The type of tension when you of oneparty rule in all three branches of government that is frankly unprecedented. Kevin cirilli, bloombergs chief washington correspondent. Mark if Global Growth is strong, why isnt inflation following suit . This is bloomberg. Live from new york and london, im vonnie quinn. Mark this is bloomberg markets. All three major central play Central Banks are missing their inflation targets. Kathleen hays brought that question to the bank of America Governor haruhiko kuroda. In the u. S. And europe, inflation rate actually close to the target. The inflation rate in japan is still far away from our target. Between some difference u. S. And europe and japan. Rates are not rising so fast, prices are notut rising. Here, there is some kind of deflation mindset. Leaders. Ong they tend to be cautious in gauging prices. Investingare heavily andr, savings and so on also they are changing the as to reduce labor costs. ,espite some wage increase labor rates have not been rising so they are not wired to raise the prices. But they are doing well. That hasnt happened in japan in years. They are succeeding on growth and maybe something is changed. Does inflation matter so much . 4 growth is good, but i dont think it can be a thing. Growth can bed 2 obtained this fiscal year. Even in the next fiscal year, close to that. 4 growth is somewhat unusual. Im quite sure about this 1. 5 to 2 growth in the coming year. The second point, prices if we are satisfied with lower , the economytion may be faced with. To havemost impossible the situation with Traditional Market reducing shortterm interests. If the inflation rate is low, Interest Rates low. It is a necessity to have some for the Monetary Policy. They could reduce shortterm Interest Rates by about 2 . Japanese shortterm Interest Rates was zero. There is no way to address the situation by Traditional Market policy. Result to huge quantitative easing as part of the program. Mark coming up, it is the european close. We are following stocks 35 minutes until the end of the session. It is a bank holiday here in london. It is a quiet one at bloomberg in london. On the day bywn roughly 78 on the 100 day average. I will leave you with the currency board. All eyes on the euro today. Level in day against the dollar since january 2015. This is bloomberg. Mark it is 11 00 in new york, there are 30 minutes left in the trading day in europe. From london, i am mark barton. Vonnie and i am vonnie quinn. This is the european close on bloomberg markets. Mark here other top stories we are following from the bloomberg and around the world. Tropical storm harvey is pounding houston, texas with massive rain. Damage totals could rise could run as high as how are Value Investors finding opportunity . We speak with john rogers, chairman and chief executive of our Real Investments ariel investments. Theresa may is facing new pressure. The opposition Labor Department labour party demanding Great Britain stay in the Single Market for up to four years. Will she give in to their demands . We arenu