We did see a little bit lower. Julie i think the black screen behind you was reflective of the mood. That is what they are trying to convey after the headlines regarding the Corporate Tax rate cut. Already, there was some riskof sentimentsf risk off sentiments today and that sent stocks to the lows of the session. As welle of the majors as the russell 2000 now at the lows following the headlines. There has been a lot going on overnight. There were some gerbils and the japanese market, european stocks fell, there were some jiggles europeanpanese market, stocks fell. The u. S. Dollar also a late lower after we get the headlines. They came back up and then dipping again, down about. 25 . That have been something to watch. , we haveof trustees the bloomberg showing other proxies of the tax cut right here. The russell 2000, which we just showed, which has been sideways, lower over the last month or so, then we have the s p 500 in yellow, which has been mostly distant until today, and then finally an index of companies who have a higher tax rate than the average. That has been trending lower over the past several sessions and taking another leg lower today. So a lot of different ways to slice it. We should also mention, the nasdaq underperforming today. Technology stocks are under pressure in pretty decided fashion. One of the subsectors that is down is semiconductors. Intel announcing it is starting a new graphics chip business. It has hired an executive who previously headed a unit advanced microdevices muscle analysts microdevices, so analysts are commenting. Y, vonnie. Vonnie thank you for the update. Shery it is crunch time on capitol hill. The final day of markups, gop leaders still working to bring down the estimated 1. 6 trillion cost. The senate just a few their own version of tax reform, which members have been hinting could look quite different. Lets go to capitol hill with Kevin Cirilli. What we have heard from the House Speaker saying the committee will work on a house tax bill later today, but we are already finding out that the Senate Tax Bill will look quite different. What else do we know right now . Kevin details are still trickling in, shery, but there are differences between the house proposal in the senate proposal. First and foremost, the Senate Version of the bill, according to headlines crossing the terminal as we speak, would keep seven tax brackets. You will remember that the administration had originally proposed limiting the number of tax brackets to seven, as it is now, to three. The house version of ego keeps it at four. The senate wants to keep it at seven. Another major difference is when the lowering of the Corporate Tax rates would actually going to affect. Now, the house version of the bill would implement that lower Corporate Tax rate them a deduction from 35 to 20 next year, but the Senate Version of the bill would not implement that lower Corporate Tax rate until 2019. Now, they are doing that as a way to raise revenue to pay for this plan. As we all know, these are major differences that have since emerged from the house version of the bill to the Senate Version of the bill. Publicly, treasury secretary Steve Mnuchin telling our very own Michael Mckee early this week in a bloomberg exclusive interview that they would be ok, suggesting that would be ok, these, with some of differences being proposed in the Senate Version, but whether or not we can get to a point of reconciliation by the end of the year or early calendar next remains to be seen. Heard thathave also the senate will keep seven tax brackets, as well, kevin. We are also hearing the obama individual mandate is being considered. They are waiting for the joint committee on taxation to delhi house ways and Means Committee to tell the house ways and Means Committee. So we may find out today what is included in these bills and what is excluded. Kevin i spoke to several sources in the past week who health, vonnie, should care get entangled in a tax, you could almost make a certain that that that would prevent certain democrats for being able to participate or get on board with the version of the bill. I spoke with steve bannon, now outside of the white house, part of a conservative advocacy group, who said he is on board in, sohe threeyear phase to speak, of the carried interest role. A lot of Hedge Fund Managers are against it. We do not know if the Senate Version would have it in it. Shery kevin, thank you so much. Kevin cirilli joining us from capitol hill. We will talk to senator mark warner in just a little bit, and kevin will be carrying out that interview. Vonnie President Trump wrapping up his visit in beijing. He tried a new approach flattery. Pres. Trump both the United States and china will have a more prosperous future if we can achieve a level economic playing field. Right now, unfortunately, it is a very onesided and unfair one, but i do not blame china. Vonnie the president departed beijing for vietnam about 9 00 a. M. Eastern this morning. Will his change in tone change any outcomes . Lets bring in our National Security editor. Phil, did china yield anything . We did not see the yuan move. Phil right, and we have not seen any concrete deliverables on this trip so far. There have been some memorandums of understanding, some more vague agreements, 250 billion in deals, but it is not clear how much of that will really take place or follow much more longterm agreements. One of the big issues of Trumps Campaign in his early presidency, narrowing the trade deficit with china, it is not clear if he got closer to making that happen on this trip. Shery of course north korea was the big issue here as well. President trump repeatedly during history of has urged president xi jinping to do more and cut of kim jongun financially. You can actually see chinese imports from north korea are falling slightly here but not ly, at least not recently. How much can we actually say that china is doing on this front . Bill i think china would mention they have started to implement a lot of these United Nations sanctions. I think President Trump is trying to encourage them to keep the momentum up on that. He came to china with contradictory goals in the sense that he wanted to be harder on the traits i wanted to broker some deal trade side and wanted to broker some deals for the u. S. , but he also wanted to get on top of the north korea missile situation, which is an existential threat if north korea can develop its weapons to hit the u. S. I think he has faced some progress on one front and maybe taking a pass on the other. Given the length of his time in asia and given the focus he made china and trade with china a central part of his campaign, it is easy to say that maybe he has not quite gotten everything he wanted before he started out. Shery bill ferry, thank you, editor for bloombergs National Security team from washington. Lets check in on the bloomberg first word news. Mark crumpton joins us. Mark thank you. President trump is Maralago Club has received issuance from the federal government to temporarily higher 70 housekeepers, waiters, and cooks to fill out a staff. The club of the managers say there are not enough employees willing and able to do the work. He was criticized by opponents during the 2015 campaign after he criticized some companies for moving jobs out of the u. S. And criticize others for hiring immigrants who were in the country illegally. The british Prime Minister theresa may is trying to end a crisis with a cabinet opponent. The new International Development secretary replaces someone who quit after revelations she held secret talks with the Israeli Government without premise or mays without Prime Minister mays knowledge. Growth forecast from 1. 7 to 2. 2 . Vice president of the European Central bank tells bloomberg that recent economic figures are promising. It would be a very personal encouragednk we are by the way the economy continues to grow. Far the ventures indicate it could be stronger, and that would not surprise me. Mark meanwhile, the ec cutting its forecast for the u. K. Ingrowth will pull 1. 1 2019. Tightening a blockade on wartorn yemen could bring in millions of people closer to starvation and death. The Saudi Led Coalition closed ports. Rebels fired a Ballistic Missile over the weekend. Of yanis population rely on imported food and vaccine, which could run out. Global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. Vonnie . Vonnie mark, we do have some breaking news at this point. I think you know what we are referring to. We want to congratulate you here at bloomberg. It is your 25th anniversary at bloomberg. The silver anniversary, no doubt. [laughter] silver rights the there. Thank you. I thought it was green, but you have to wait five years. Mark thank you. Coming up on the show, the dow, right now it is down more than 200 point. We are seeing a bit of a selloff across u. S. Markets. We will talk about this with our guests next. This is bloomberg. Shery welcome back. This is Bloomberg Markets. I am shery ahn. Vonnie i am vonnie quinn. 500, the nasdaq falling over the last hour. Falcon w is michael mike balkin. Is a fear of tax differences between the house and senate bills that my end up prolonging the discussions . I am sure. Markets have continued to rise here over the last several years , and this is part of it. As we need to take a breather now and then, and we are in the middle of earnings season, too. Vonnie i want to point out that the performance of small caps right . En extraordinary, you will see recently the smallcap index has rolled over and is now through the s p 500. If it is a sustaining trend, willis continue . Mike i think it is a great time to own small caps. You have a strong fiscal policy. Monetary policy is stimulative are now. You have earnings accelerating, smallcap, the weaker dollar tends to be good, and if we get a tax cut, that will be good for smallcap stock. Shery when it comes to value or assessing the smallcap, what are the metrics that are good here . Are you taking a look at corporate earnings, earning yields, cash flow in this case . Lot ofe look at a different metrics. In most traditional one is people look at pricetoearnings, but we look at cash flow, sales on some companies, what type of Free Cash Flow they generate, but it is kind of a mosaic that you are building. Vonnie back to the original point about smallcap turning over, have a turned over now . Invested . Ully mike certainly smallcap stocks are not cheap right now, but it is still one of the best places i am a small cap manager, i have to say. On the other hand, i think this is a really good time to be in small caps, because Earnings Growth is better for small companies. If Interest Rates start to rise a little bit, but its good for Pricing Power for small companies. This is a good time to be in small caps. They tend to do well at the end of the year and into the middle of the following year. If youre going to own small caps, this is a good time to be in the. Shery it depends on the sector. Valuations,to see say in utility small caps, but when you look at the chart, you see bargaining going on with small tech stocks, the spread between the s p 500 rather than the s p smallcap Information Tech industry has been actually widening this year. When you take a look at the small caps, what sectors are you liking . , and where are you investing bottom up,e a fundamentally driven shop, so we are trying to put opportunities across all the different sectors. Technology stocks have had a really good run, but there are are still good opportunities in the technology area. That is where a lot of the growth technology, health care obviously, people have been less excited about the consumer side and energy. Vonnie when you go to my bloomberg, you can see the top holdings, very small cap growth funds. Like sixee things flags, hamilton, the top holdings. Is that going to continue . What if we dont get any tax reform . T if they pick up because does the smallcap case hold . Mike if something goes wrong with the economy, you have a recession, anything you just mentioned, that is not before the market, and it will not be good for small caps. Small caps tend to do well when we have the economy starting to read accelerate and starting to grow. That is usually the time you want to be in small caps, but all thats are off if all of a sudden the economy were to roll over. A Straight Line from the right. Thank you. Mike thank you. Shery still ahead on the program, investors are waiting for President Trump to deliver on his promise of Corporate Tax cuts. As we have been talking about the waiting game, it has not slowed down the rally in stocks at least today little bit. When you take a look be larger and longer context of things, check out that interview with the cofounder and cochairman of Oaktree Capital. This is bloomberg. Shery welcome back. Election,rs since his President Trump has taken credit for the rally in u. S. Stocks. And he made the promise of Corporate Tax cuts. Howard marks spoke exclusively to bloomberg about the impact on the investment cycle. Thatd i want to point out there has not been a down month since the president was elected, and the only thing routinely was the market, so i just enforces my belief that we cannot know what the future holds and we do not know how the market will react to it. I think there was great enthusiasm among Market Participants that he would fix Corporate Taxes, tax reform, infrastructure, deregulation. That was, i am sure, the original in business for the markets move. Guess what almost none of that has happened, and still the market is moving positively. Clearly the case is less like be to happen than was thought to be, but that has not deterred the market. People have said at least he has reinvigorated the animal spirit we see in business, and investments. When you talk about deregulation, tax reform, infrastructure, are you in the look att you take a the yield curve that continues to flatten and think otherwise . Howard the idea that he will be probusiness is legitimate. It is unclear how much he will get done, but he will be probusiness. That is just one of the elements. In our business, everybody says focus on one element at a time. This will happen, and the market should go down. But there is a lot that will happen, and President Trump is just one of them. The market has behaved very positively. The Economic Outlook is very positive. The president s pro Business Aspect is a positive. On the other hand, things are very expensive, and the prospective returns are likely the lowest they have ever been. So how much should they go up . And the thing that i harp on is you are in a low return world, and in order to get a high return in a low return world, people engage in what i call pro risk behavior. Theyre risky behavior makes the market risky for us. That should temper our enthusiasm, and that is the point i have tried to make. Having reached the point of what is healthy exuberance versus what is irrational, have we reached that . Howard i do not think the behavior is irrational. Response to aal riskfree rate of zero. Riskfree rate is zero, naturally, people try to get a positive return. That is what is happening. It is not nonsensical. It does involve an increase in risk, and that has taken place, and that has applications for all of us. If you take a look at this yield curve, looking at 115 basis points right now, howard, you look ahead maybe 3, 4 years from now in the future, is this something you will say hey, this may have been a missed opportunity for us . Nowrd i think that the euro spread between shortterm and longterm is saying that the narrow spread between shortterm and longterm is saying that the participants they do not put up a sign but that growth will be lackluster in inflation will be mild. The interesting question is whether the market is acting as if Economic Growth in the stock market is acting as if the Economic Growth will be lackluster. Bond market is right that it will be and the stock market is ignoring it, then that is one more factor, in my opinion, calling for some caution at this juncture. Shery howard marks, Oaktree Capital cofounder and cochair, speaking exclusively to bloomberg. Vonnie coming up, we will be bringing you an exclusive conversation with the ceo of vimeo. Where the video platform stands next. Lowere stocks down a leg on major averages. This is bloomberg. From bloomberg World Headquarters in new york, i am vonnie quinn. Shery i am shery ahn. This is Bloomberg Markets. A quick check of the major averages we are seeing u. S. Stocks selling off a little bit, but the dow down more than 430 points. That is not a little bit. It is a big selloff given the rally we have seen recently coming down from those record highs. The s p 500 also falling as much. The tech stocks are leading the decline, down 1. 3 . Nearing a also 12 at the moment. Vonnie lets get to bloombergs first word news with mark crumpton. Mark according to bill cassidy, the tax plan that the senate plans to reveal today will delay the corporate rate cut until the start of 2019. The move will defy President Trumps insistence that the rate immediately be cut from its current 35 level 220 . The government down to 20 . The government says people signed up for the Affordable Care and in the open enrollment season, and nearly eight in 10 were those in rolling in recurring coverage. About 22 were new customers. Open enrollment ins much earlier this year, on december 13. More allies provided in support of the troops in the war in afghanistan. They will provide about 90 of the u. S. Military requirements. Aboutary jim mattis spoke the contribution to the war effort. Two dozen nations have stated that they intend to raise the numbers on the ground that they have right now, including some very small nations for whom this is the Largest Overseas deployment they have been engaged in. Mark secretary mattis speaking at nato headquarters in brussels. U. S. Military leaders say they are encouraged by continuing discussions of several nations, despite falling short of the original request. The Bloomberg Consumer comfort index is little changed from the week before. It is increased by optimism about the buying economy and the economy. Bloomberg index stayed in a range close 16year high. Global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. Vonnie . Vonnie mark, thank you. Iac down a couple of percents today, but up to 24 in the last 12 months. Sales were up 8 , and one of the businesses under the iac umbrella is vimeo. Subscribers of vimeo up 40 yearoveryear, and gross bookings were up 24 . Erik schatzker is at iac headquarters in new york. Erik . Kevin vonnie, thank you very much. I was on anjali sud of vimeo. I challenge anyone who does not vimeo. You have great name recognition with your product. V,eo started off as a beta sort of, then went down the subscription, videoondemand road, where we find netflix, hulu, and amazon. Now it is back in the b2b world. Where does it want to be when it grows up . Wants to be the platform to allow creators to tell their story. Platformd as a b2b because that is what people needed. They want beautiful to post videos and collaborate and share them with the world. We did go down the path of subscription videoondemand business, but we ultimately decided that we were not really solving a problem that needed to be solved because so many others were solving the problem. Erik ah, but you might be able to solve it better. Of it is truly a matter being priced out because content is so expensive now . Anjali it was certainly notali factor, but it was the main reason. Main reason was the opportunity to solve a bigger problem, which is the liens of dollars for creators to have more isortunity to tell billions of dollars for creators to have more opportunity to tell their story, an independent home for them. If you think of the way other platforms are going, they are all focused on becoming platform companies, keeping audiences on the platform because of their adbased model. Vimeo is not an adbased model. We wanted to provide tools to get distribution everywhere. Erik you are absolutely right all of the exciting stuff that is taking place at the creation stage, but it gets sold for an incredibly high price, as we discussed. How does vimeo capture more of those economics . Anjali one of the trends we are seeing is creators going directly to consumers themselves, either selling their directly or creating their own subscriptions. We are providing the technology to do that. We are investing in the technologies to allow others to succeed. Erik i am not arguing with the strategy. That is no place for me. But one thing that strikes me about this change in direction is that you are in not as much in a position now to capture, if you will, the network of fact acs otheres i businesses the way you might have been in video on demand in a sense that, netflix, every time somebody comes to the network, it fulfills the mission of improving, in some way, shape, or form, in some way for everybody. Does it work that way in b2b . Anjali it absolutely does. We build tools that creators can create quick content, that creates audiences, and that makes the platform or sticky. Uploadingf people their videos to vimeo, we have hundreds of thousands of paid subscribers, and they are staying with us for years, and it is because of the network effect. I will add there is another network effect, which is we see a lot of film makers and business professionals working with brands on the platform to get projects made. Erik is it vimeos role to drive traffic . Usually when i go to vimeo, and i believe most peoples experience is similar, is because somebody told me to go there or i searched and found something kind of by accident. To rely ono used Search Engine optimization, but not anymore. That is the question for me. Anjali our focus is not to drive traffic onto vimeo. That is not an objective of hours because, again, we are not an adbased model. What we are interested in is relping creators get thei models out there, and if we can make optimization on the search site or to how the videos are embedded on the website so ddons onn get more a their website, that is where we are offering. Erik why is optimizing not a part of the strategy . If you look at so many businesses on the internet, they are tiered services. Adbased, you get it for free, you pay something, you dont have to do with the ads. Anjali we are not an adbased model because we do not have to be, and it is not what creators are asking for. One of the reasons people use vimeo instead of youtube is it is an adfree environment. Erik trust me, i love it. Anjali that is one of the reasons we have a b2b model, one of the reasons creators paid to use our tools. It is a core part of our value proposition. Erik why is life such a big deal for video now . It is not like we are talking about espn. Anjali Live Streaming is number one across the video creator community. Live is not just something that people are just able to do on their phones. It is not just for a professional tv studio, like bloomberg. What we are seeing is everybody from the open studio to a church to a school to a startup wants to be able to connect to their audience in realtime without having to be in the same location. Escape of a professional, live event is where we are seeing growth in, and it is a huge market. You mentioned global to global is a huge consideration for anybody on a Network Platform right now. What kind of challenges are you encountering to make it as much as we mobile as you can . As can . Natively mobile as you anjali one of the things our team has been working on the last few months is bringing all of the capabilities that we have on the desktop tools, bringing thats mobile. That to mobile. Erik iac has an amazing track record of promoting people from within. Did you ever think you would be in this position . Where are you going from here . Anjali i hope to be in this position. I did not think it would be sitting here today, erik, but i think it is a real testament to how iac thinks about leadership and how they think about grooming who hold their value and promoting from within, i think obviously i am a beneficiary of that. I think it is a really good topic, and it is one i intend to use from for my own team. I am thrilled to be here and am glad iac gave me the opportunity. Erik it has honestly been a pleasure. Anjali thank you. Erik vonnie, speaking with anjali sud of vimeo. That does it for us here in manhattan. Vonnie erik, thank you for bringing us that. Shery lets get a quick check on the major u. S. Averages the s p 500 and the nasdaq both on pace for the worst day since august. We are seeing the dow now losing 220 points. The s p 500 down almost close to 1 . It is the dows worst day since september 5. Almost all of the s p 500 roots are lower. Tech and industrials are the big decliners on the s p 500. The nasdaq is now down 1. 4 . Vonnie i want to bring you a couple of headlines to do with tax reform. Markup,e final day of but we are hearing now from gop senator roger wicker from an immediatehat Corporation Tax cut is also still possible in the final bill. The reason this is important is because we heard earlier from bill cassidy of louisiana who said that the senate was looking at including a 2019 provision. So beginning in 2019, the Corporation Tax cut would be taking place, but according to wicker, it is not out yet. We should get a version of the bill from the Senate Earlier today. Up, senator mark warner joins. Do stay tuned for that. This is bloomberg. Shery welcome back. This is Bloomberg Markets. I am shery ahn. Vonnie i am vonnie quinn. Shery the tax light turns to the senate. Senator bill cassidy just previewed their own legislation. Hill where capitol Kevin Cirilli come our chief washington correspondent, is standing by with a special guest. Kevin thank you, shery. We are here with senator mark warren. We have details from Senate Republicans about what will be in the senate bill. Did they consult democrats at all . Sen. Warner we have heard nothing. This has been so frustrating. I was part of the gang of six, the Simpson Bowles plan. I have had a career in business, get we have had no consultation. This plan has been written totally in the dark in a secret room. I think many by Senate Finance members do not know. It right now as we speak, but this is not the way we should rework our countrys tax code. Kevin some democrats met with the white house earlier this week. Senator joe manchin meeting with mark short of the white house. Some republicans are saying they want to get democrats. What you make of that argument . Sen. Warner as somebody who spent a career in business, longer than i have in politics, i feel like there is a bit of a scam going on here. Of have got a whole premise lets add literally trillions of dollars to the debt. At this point, as somebody who is very concerned about our aggregate debt, that is over 20 trillion, i worry that they are of tricks with baselines, to make the Corporate Tax permanent, the personal help to middleclass leaks in five years. That is not the right way to do that. Alan greenspan, who i have a lot of respect for, today pointed out when you are close to full employment, doing a tax cut with borrowed money is really not verypolicy, so i have been disappointed. Kevin on the issue of lowering the Corporate Tax rate, several democrats in the past, senators, have suggested that is something they could get on board with. According to the framework released by the Senate Republicans, they would delay the implementation until 2019. The lowering of the Corporate Tax rate from 35 to 20 . Could is that something you could get on board with . Sen. Warner the lowering of the Corporate Tax rate i am for. You just have to make sure they are paid for. One thing i am concerned, when they talk about offshore money, maybe in taxing, there is no requirement for any of these companies to reinvest in america. There is no requirement for any of these companies to add additional training requirements. Are a patriot, maybe some of the companies hurt by trade on to get some of those jobs, instead, what we have heard both publicly and privately is a lot corporations have talked about using these dollars for stock buyback, additional dividends. That is not going to help you grow the economy. Kevin you made an interesting point about requiring a lot of these repatriated funds to be utilized and put back in the company. Is that when infrastructure gets tied into this . Sen. Warner there is no linkage at this point. What is remarkable about the bill, at least in the house, the one we have taken a look at, they did not take on carried interest. I have benefited from carried interest. Let me be clear. But they do take on the adoption tax credit. Expenses,on medical eliminated the ability for students to deduct debt loan. And what is really crazy is they took away the abilities for businesses to use pretax dollars send their and employees back, for example, get that additional degree that might increase your earning power. To me, that is antigrowth and. Nti kevin they would be able to qualify for Capital Gains. Is that something you would be able to be on board for . Sen. Warner i think something that looks at Capital Gains kevin how long . Sen. Warner longerterm on Capital Gains does not really help the carried issue, that is a totally separate issue, but i am concerned that for sure to shortterm pressure on the m, i speak to too many ceos who feel like they do not deliver longterm value because they feel like they have to deliver next quarter profit. We actually get our markets to look at longerterm hold, i am in favor of. Kevin Steve Mnuchin delivering a big economic address, saying when the final bill is written, billionaires will have to pay more taxes. It looks like you do not believe it. Sen. Warner there has been plenty of analysis that shows the tax plan that has been released are for key folks at the top. Kevin what would be a real effort you want sen. Warner what would be kevin what would be a real effort . Sen. Warner what would be a real effort is not have this dark room agenda, hold hearings, start a bipartisan process. I think it is easier to get 70 votes in the senate on a bipartisan bill than it is to get 50. I would like to see the way the senate was supposed to work on tax reform. If there is one thing we have learned, when the democrats try to Pass Health Care with only one team or did pass it with only one team doddfrank with only one team, there was no permanency. When was the same thing republicans try to repeal obamacare with only one team. Kevin virginia had a big election earlier this week. A lot of political folks trying to analyze what exactly that means for the future. From your perspective, heading into the 2018 at midterms, is it smart for democrats who are up for tough reelection fights to go for this tax bill, or should they stay as far away from it as possible . Sen. Warner one of the reasons they are trying to rush this through is they do not want americans to realize what is in it. I do not think most folks realize the adoption tax cut is disappearing. The student interested option disappears. The medical expenses deduction disappears. Many businesses to invest in workers kevin it sounds like it is a nonstarter. Sen. Warner i mean, if this is a great product, lets have a hearing on it. Experts come in and talk about it. Lets look at the growth projections, because i have seen projections that say whatever the minimus growth, because we are at full improvement, would be outweighed. Quickly, to more questions, first of all, are you satisfied with the direction of the dnc . There has been a lot of back and forth. Sen. Warner the reason we won in virginia, and we had a primary and a more moderate candidate ron, is we kept our eye on the ball, which is how you win elections. You talk about job, you talk about Financial Health care, you talk about education. Those folks who want to relitigate 2016 have at it . In virginia, i think we have a template that says here is how democrats can win, not just in statereas, we picked up house candidate in larue southwest virginia in rural southwest virginia. We were named, best state in the business under my tenure. That kind of focus on kind of down the middle, bread and butter Economic Issues is where the Democratic Party ought to focus. Kevin senator mark warner, thank you for covering all of the topics. Shery, back to you. Shery kevin, thank you. That was a great conversation, Kevin Cirilli, our bloomberg chief washington correspondent, with senator mark warner. Vonnie disneys Fourth Quarter earnings will report. Investors will be looking for answers about espn after disney announced plans to launch streaming service after last quarter. They talk about parts of their entertainment unit. For more, lets bring in paul sweeney of bloomberg intelligence. What is the major question you have in your mind right now, paul . Paul there are a lot of questions with disney. What can a comment about their business in some or all of it . That was a bombshell piece of news, two Major Companies thinking about combining. What is disneys strategy if they are interested . Beyond that, when you look at the core operations, i think investors really want to get as iteat on the bone relates to more direct to consumer apps or services that call,er introduced last and espn app and disney contin at. What kind disney content app. What will be the price point for those services . Investors are looking for more data there. In the absence of hard data, people are not getting it much credence at all at this point. I think investors are looking for more information. Shery and also more information about the environment. What sort of cord cutting environment are we seeing . Paul exactly. That continues to be the number one issue for the media sector, which is causing the media sector to underperform over the last two and a half years. Company the walt disney is the most at risk of the Big Media Companies for cord cutting. Again, it kind of goes to the question of how at risk is the core business, and what kind of upside, if any, can be offered by these direct to consumer ot fs . Frome we have also heard the dish ceo about the at t and time warner deal, which is by no means bad. There is a lot going on me that route as well. On in the background as well. Paul there is a lot that needs to be done from the regulatory perspective. There are a lot of moving pieces in the media sector, primarily driven by the fact that the is not growing anymore. You have a big business with very high costs and seeing topline pressures. What happens in this type of environment . Be start to see people looking him in seeing that a. Can we reposition our assets and try to get more Pricing Power to try to drive what is not really a growing business . Shery it does not help, probably, that the hurricanes had an impact on those same parks. Paul exactly. A hit. Me parks did take they bounce back quickly. For the walt disney company, a strong business is the theme parks in your film studio, which just crossed after two weeks, another hit coming out of the film studio. You have 2 3 of the Company Performing very well. Shery paul sweeney, thank you so much, of bloomberg intelligence. Vonnie you can get all of our interviews on the bloomberg. Type in the function tv. It will let you go back in time a little bit if you would like to. You can look at the charts and functionality. Stay tuned. This is bloomberg. David its 1 00 in washington. Im david gura. Shery im shery ahn. Welcome to Bloomberg Markets balance of power with a focus on the intersection of politics and the economy. The top stories we are watching. Crunch time for republican tax writers today. The ways and Means Committee in its final day of hammering out legislation while the senate is revealing its own version. We will speak with a House Freedom caucus member from arizona. Donald trump is china is taking advantage of American Workers and companies with unfair trade practices. He blames past u. S. Leaders rather than china for allowing to widen. Rade deficit an unexpected fight is exploding over cnn. We dig into why at t isnt willing to see the network go into battles with the Justice Department over its acquisition of time warner. Breakws