Streak in a year. The euro is gaining. The danish krone is gaining and the Swedish Krona and the norwegian krone are declining. The yields are falling in the third column. Today. F data gdp, germany, powering ahead in the Third Quarter, underpinning the recovery and the wider eurozone with gdp up. 8 in the estimate was. 6 . That equates to 2. 8 year on year. That is the blue bar confirming the but despite prediction the German Economy carried its strong growth performance in the second half putting it on course for its best year since 2011. Said, theng, as i european economies performance with gdp in the eurozone up. 6 in the quarter, in line with the earlier estimate. 2. 5 year in year, chugging along, the german and the euro zone economy. Gdp data out of italygdp accelerating in the Third Quarter. Grew,ual basis, economy the most since the First Quarter of 2011. And that underpinning the attractiveness of italian debt. This is the difference between germany and italy, the 10 year down to the lowest. Since march levels. We want to bring you a corporate story from the u. K. Today. Antitrust regulators provisionally approving tescos 3. 7 billion pound of Data Acquisition of a wholesaler and operator, confounding expectations it would need to offer concessions to secure the deal. Chairs and tesco rising today. Thats in tesco rising today. 90 minutes into the trading day, how is it looking . The pullback that started in asia and extended here is now here in the u. S. Declines in the u. S. For the map major averages with dow and nasdaq down one quarter of 1 . Well off the lows. Earlier, the dow and s p 500 on pace for their worst day since september 5, all major averages at the lows, down 6 10 of 1 . Or more. A little bit of a recovery. Uncertainty around the possibility of tax reform could be a part of it. David believes tax reform is not what is driving the rally, earnings strength and he believes we will be looking at doubledigit Earnings Growth in 2018 and he thinks the bull market we have been in for nine years will extend into 2018. Perhaps people back today is a buying opportunity. Lets look at sector wise, the imap in the bloomberg, a great way to see what is happening sector wide. Read comment broadbased selloff, that here on yields fall, making the high dividend yielding stocks look more attractive. Energy at the bottom. Oil is trading sharply lower. 2. 6 and on pace for its worst day in more than a month. On a report the International Energy agency cut its 2018 demand. There is not a floor established, 60 a barrel. This could influence upcoming opec discussions. Oil sharply lower. Also sharply lower, unbelievable , look at this today chart of an electric down 12. 6 and on pace for its worst today slide since march 3, 2009. That was before the beginning of the current bull market and that is how bearish the shares are. dividend 50 yesterday they find a new Investor Base with new investors probably attracted by that idend but now investors the Investor Base could be taking a shakeup on the shares of ge. And unbelievable slide. Mark the world most powerful central bankers gathered in frankfurt. Meeting to discuss the future of Monetary Policy committee occasion. The officials an agreement and general on the use of Forward Guidance. Formulated a framework where the various parts of this Forward Guidance, Interest Rates on one side, and the asset purchase on the other, would interact and a synergy. For us, almost all guidance should be conditional and related to the outlook for the economy. To a much richer instrument. Expectations are formed, not only by forwardlooking, but by backward looking way. In the end, it is relative a rounding error relative to households to businesses and you have to get out. It is a matter of policy itself. Mark joining us run our Frankfurt Bureau is our western European CentralBank Team Leader from bloomberg news. Why are central bankers getting so worked up about Forward Guidance . Become aially, it has policy instrument which was stated by mario draghi. Not that long ago, you can remember central bankers reduce an Interest Rate increase or cut out of nowhere. 20 years ago the bank of england was not even entirely their decision. The workings of the process were mysterious which is no longer the case. Central banks are much more transparent. They have found that if they want to avoid rocking markets, they need to have a consistent signal of what they will do and Forward Guidance has become the tool. Mark we have heard their view on Forward Guidance and what does it mean for the future, what does it tell us about future policy from these big centralbank heads . It means everyone is looking very closely. The wording of the central bankers, when they give their policy statements and when they give their press conferences. Goldman sachs did a study and found that these matters a lot. The policy statements or the policy remarks matter more than the outlook of the economy, because the policy or markers are something the central bankers can control. At the fed at the ecb, it was Mario Draghis press conference that mattered most. From now on, we will have to look closely for the signals the central bankers give, because they are entering a tricky time as they tried to get out of their extraordinary Monetary Policy measures. Julie was there any acknowledgment of that . That they have a tricky road and that with all of the transparency and with more Forward Guidance, there are pitfalls . There are pitfalls. Mark carney has falling into a couple of them. He was the one who kept signaling rate hikes and did not deliver until finally he did so at the last meeting. And the label unreliable boyfriend from one lawmaker over that. He tends this Forward GuidanceRate Decision to unemployment. Unemployment had fell below the level before he acted. The ecb has linked its Forward Guidance to net asset purchases, the path of inflation. It was more vague which is a key thing you see coming into guidance. It is we will do this, if such and such happens, assuming other factors. A little bit of vagueness central bankers have found to be a good thing. Gordon, an interesting headline, the white house is said to consider Mohamed Elerian as the Federal Reserve vice chair. Stanley fischer is stepping down , the position open in the central bank with Mohamed Elerian currently at allianz, the Parent Company of pimco where he was the ceo and co cio and is a columnist at bloomberg view. Said to be considered as a nominee for the Federal Reserve vice chair according to dow jones. We will keep you posted on this story and further developments. A new name potentially into the ring for the fed. Lets get the first word news with Courtney Donohoe there Jeff Sessions denied that he lied or misled congress about contracts between russia and the trump campaign. He is testifying before the House Judiciary Committee and democrats are focusing their questions on revelations by special Counsel Robert Mueller that appeared to undercut Jeff Sessions sworn testimony at his senate confirmation. President trump will soon be back on u. S. Soil. Therefore if one will refuel in hawaii as the president comes back from asia. He left manila after two days of meetings with leaders from Southeast Asian nations and he said that trade rules have now been changed at all countries know that the u. S. Must be treated fairly. In the u. K. , a warning from russia from theresa may who told Vladimir Putin that britain will retaliate against economic meddling in the election. She said we know what you were doing and you will not succeed. S p has declared venezuela and default, their president s government owed investors about 200 million in interest on a debt and failed to make payments by the end of the 30 day grace period. Venezuela has struggled in payments because of u. S. Economic sanctions and part. Global news 24 hours a day, powered by more than 2700 journalist and analysts in more than 120 countries. This is bloomberg. Flagshipresa mays brexit bill in parliament, looking at day one of the Committee Stage were lawmakers are scrutinizing the 66 page bill and its 100 188 pages of amendments. The latest next. This is bloomberg. That it is led red tape. Live from bloomberg World Headquarters in new york, i am julie hyman. Mark live from london, i am mark barton. Critical weeks for brexit as the eu withdraw bill returns to the house of commons and tomorrow for details examination. Further talks between the u. K. Furtheronfirms no talks between the eu and u. K. Had been confirmed. Brexit secretary david davis sees a 50 probability of reaching a breakthrough by december. Joining us is our exit editor brexit editor. Explain this brexit bill, as in the debate, process, how long it will last come a days, but when are they taking place . Theresa may has a slim majority in parliament and brexit does not run along party lines. More than a handful of tory rebels who want closer ties with the eu and want to maintain the guys, and want to make brexit a smoother process. Eu on at to leave the certain date. We are told that we will not expect everybody in today. Mark there could be fireworks. There is the former chancellor. There could be fireworks . There willbe be a lively debate and plenty of tory lawmakers are furious at the governments proposals. One is set in stone to set in stone a date in which the u. K. Will leave the eu and Dominic Greene has been critical of this. They say, why would you tie your hands and why not leave it open, if there is no progress in talks . You can ask for an extension. David davis would say it is difficult to get an extension because you need unity from the eu. We think theyre doing this because it is a gift to the most enthusiastic credit brexit people in the party. There could be a rebellion iphone not look at four theresa may but the government controls the timetable of the debates and they pushed back Julie David Davis says avoiding fragmentation is a prize for the eu and the city of london is a key european asset. We got the news that the bank of america will initially move about 200 sales and trading step to paris and frank for as fra nkfurt. Are we seeing developments that will keep more financial staff fleeing london . David davis would love london to remain the financial capital. If you wante to remain inside a single market, a single european market, you have to accept freedom of movement and e. U. Has made clear, if you do not accept unlimited immigration from the eu, you cannot have a zynga market but the eu wants to get Free Trade Agreement that includes Financial Services and they point to germany who was very much like london to remain a financial have. Financial hub. They say we have not gotten to that phase and they are still looking at the divorce elements of the talks, not started to talk about what the future trade agreement would look like when it comes to services. Most agreements do not include services. Mark thank you for joining us with a good update on brexit. Julie time for the Bloomberg Business flash. Hsbc will pay more than 350 million to settle a french investigation into allegations it helps clients evade taxes. The bank agreed there had been wrong doing by the Private Banking unit in switzerland and eight financial settlement can resolve criminal claims. Citigroup and ubs among the banks managing the largest share of asset for wealthy saudis, some are among those caught up in the anticorruption investigation. According to people familiar with the matter, j. P. Morgan chase and Credit Suisse manage billions of asset for rich saudis and not clear how the approach will affect the banks. Chinas recent announcement to lift curbs on Foreign Investment in the Financial Sector has been met with muted response from muted response and the aig deals, halfwayhe done before i got there and the Insurance Financial industries saw a listening by requirements in china. Which will be very good. It takes place over a time. I am pleased about that. Julie he said President Trumps asia trip repaired several relationships and affected change for several chinese companies. That is a Bloomberg Business flash. An update on Jeff Sessions who is giving testimony before the House Judiciary Committee and says he is no reason to doubt roy moores roy moores accusers and facing questions about his knowledge of the trunk Campaign Knowledge with russia Donald Trump Campaigns dealings with russia. Let me say this. Him mark lets look at oil. Iea sayingith the demand growth will slow into next year and egypt plans to dive deeper into natural gas production. Egypts oil minister spoke about his nations plan with us. It means a lot of things. Filling that good gas the gap . The gap between consumption and production. That this isortant a big discovery. This means that we are now getting through new horizons and new potential discovery of debt structures. We may find another source. Iocs anding to all multinationals that we can do extremely well. When we talk about giant discovers. To be developed and to come into stream and a short time. In a short time. What are you seeing from International Oil companies . It seems some are cutting back a little bit at a time of low prices, including four gas. What we have seen lately and i will have to take when we the development of the field we have been joined by bp which meant potential newcomers. For the first time in the oil and gas industry in egypt which shows there are international desire to come. We have already our main and important strategic buyers in egypt. Also make acomers success for the egyptian oil and gas industry and demonstrates the confidence we have seen in the system. Any potential newcomers we do not know about yet . Who are you talking to . No, but we are not stopping from trying to attract more newcomers. Ocs. Ew i we want our plate full of important players. We consider it, a game changer and have had dynamics happening, not only in the offshore of egypt but in the eastern mediterranean. Area and qualify the egypt to have potential new comers. Mark the egyptian oil minister. Lets look at what is having to markets as we head to the close of the day with the longest losing streak since november 2, 2016. Mark live from london and new york, this is the are being close. I am mark barton this is the european close and i mark barton with julie hyman. Stoxx 600 down, the worst street in a year, similar in the u. S. Vodafone a mover with shares up 5. 5 , almost doubling its forecast of Earnings Growth with rising revenue. Most markets with secondquarter results that beat expectations and the numbers may help satisfy investor appetite for signs of improved performance in europe i the carrier which generates more than 70 of its revenue. Progress in overhauling its moneylosing business in india. It has been quite a day for shares. Maker which is planning to merge its rail operations with those of a german rival reporting a drop in orders after contracts in canada and vietnam failed to make up for previous larger ones in the u. S. And by. Dubai the Rail Equipment maker expects a deal to close next year as it seeks approval from european antitrust authorities. To china, its moderation in growth the last month comes at the right time for the global economy, benefiting from the pickup in europe. The u. S. s strength as well. The slowing of credit growth in china, industrial output, retail validatesestment help the investment activity will moderate now that the Party Congress is all but wrapped up. The thinking is that president lessnping can now place emphasis on arbitrary growth targets and take stronger action to rein in risky lending. This is Industrial Production and retail sales. They trend as evidence by the data today is a downward one but nothing to worry about. How is it looking . Julie looking a little muddled in terms of the s p 500 going lower which was down twice this amount earlier in the session. Down a third of 1 . One of the things weighing on stocks is oil. Not exactly clear why oil took a sharp leg lower. Now off to. 25 and below 56 per barrel. Is also lower. Year, buying. The yield going down along with the dollar by three basis points, 2. 3 . 2. 38 . Energy is weighing on the s p group,e worst performing down more than 1 with Telecom Stocks lower, materials and industrials, General Electrics second day moving downward having an effect on the industrials. The group doing best is utilities and were the standout yesterday, a repeat of their performance today. Mark President Trump returning to washington to face more congressional hearings into his administrations ties to russia. Attorney general Jeff Sessions currently testified by the House Judiciary Committee. He lied or misled congress about contacts with russia by people involved in the president ial campaign. And the ongoing battle over tax reform with the senate taxwriting committee continues to hammer out the details of its tax overhaul. The house may vote on a bill as soon as thursday. Our capitol Hill Reporter for Bloomberg Tax joins us. Tell us about the bird room and why it could be a potential death rule and why it could be a potential byrd rule and why could be a potential hurdle . They just need 50 in the senate, they cannot affect the deficit after the tenyear budget window and have to look at what everything is costing in the 10 year decade and after that. If anything adds to the deficit, they have to offset it or they cannot do the tax cut. That is the math the Senate Finance committee is doing and any change they have to make they have to see what it will do in a decade and fix it from there, which is tricky. The house follows these rules but not be strict limits the senate does. That is a tough thing to do in the next several days, which they are attempting to make happen. Julie the chairman of the Senate Finance committee, orrin hatch, did not know how they would arrive there. What are some of the more likely proposals that are floating around . There are a lot of different the popular things we hear about things like mortgage interest that the senate cap at the 1 million cap. To house bill cut it down 5,000 and they can play with that and maybe meet in the middle. There is the state and local Tax Deduction that the house there will be pressure when the two bills come together to at least keep some of that because it probably cannot get through the house without it. They may have to get rid of other things. They have delayed the corporate rate one year and it would be unpopular to do it a second year but there are sorts of things you can dial up or down to make everything fit. Julie on the house side, republicans there say they expect to bring a vote to the floor as soon as thursday. How likely is that to happen . Republican leaders seem very exuberant and optimistic about their chances. Donald trump will come to speak to republican members on thursday. They are crossing their fingers and hoping the president does not say anything off script, like do not pass. Even the conservative Freedom Caucus which has been fickle on issues rigorously say that it does not have everything but most members will support it. That is the sentiment across the house. I couple do not like certain aspects but it looks like it will pass. Julie our capitol Hill Reporter with Bloomberg Tax, thank you for keeping us posted. House ways and Means Committee chairman evan brady will join us at 1 00 p. M. Eastern to talk about the bill. Lets check in on the first word news. Attorney general Jeff Sessions rejected accusations that he lied to congress about the Donald Trump Campaign context with the russians. He says that he did not initially remember he had a meeting with the Campaign Aide who pleaded guilty to lying to the fbi but now says he remembers telling him that he was not authorized to contact the russians on behalf of the campaign. The u. S. Government sues to block at ts takeover of time warner, do not expect the Telecom Giant to back down. According to people from a with the matter, they will dig into whether the white house influence the justice departments review of the deal and speculation President Trump wants to block the takeover. He is a relentless critic of time warnercnn. These thing Prime Minister says the cattle on christ these thing Prime Minister can long the spain Prime Minister says they can long , even if they win a majority, they know that the state can limit their power. The city of london has the most elusive and cutting migration from the European Union according to a study from pricewaterhousecoopers. The say that london has highest proportion of workers from the European Economic area and he sectors must rely on european workers is construction, hotels, and restaurants. Global news 24 hours a day, powered by more than 2700 journalist and analysts in more than 120 countries. I am Courtney Donohoe. This is bloomberg. Julie coming up, watching General Electric with their stock plunge extending and deepening today. Even after they outlined in overhaul plan why are investors not into john flannerys strategy . Mark live from london and new york, i am mark barton. Julie i am julie hyman. Time for the stock of the hour with shares of luck so oncology falling in morning trading after it announced a deal to develop cancer drugs with the pharmaceutical giant bayer. Analysts are saying the deal means an acquisition is off the table for now 20 biotech company. Is taylor riggs. What is going on . Why is it not going up . There was some speculation there would be an m a deal and perhaps now a partnership to develop cancer drugs, that may be tabled. A mixed reaction. First the stock was up and now down. Investors are concerned about a few things, the deal value which they have to split, u. S. Sales are responsible for half of the Development Cost and they have to get u. S. Regulatory approval. Other analysts were positive and said that bayer can build a bigger platform, especially outside the u. S. Then loxo can. They have upfront payments that are generous to loxo and buyers can target specific oncologists. Them. Ms pretty good for they are focused on monsanto merger and this follows their strategy of some of these licensing agreements. So they can pursue this. And not be completely distracted. Does financials for loxo, not have revenue yet, just developing these cancer drugs and has not succeeded in developing any as of yet. A lot in the pipeline. Julie not uncommon in the Biotech Sector. Speaking of the Biotech Sector, a surprisingly good year, considering all of the talk about regulatory restrictions on pricing, etc. It is not been fantastic but not terrible. Taylor there is an analyst from oppenheimerds who is talking about this and says the Biotech Sector should stabilize in november, pretty well and outperforms in january the march and august through october is a tough season for the Biotech Sector. November onward it stabilizes and maybe outperforms in the beginning of the year with no reason to think this november should be different from historical points of view. Julie you tend to get movement around the various meetings of oncologists and study results. Thank you, taylor riggs walking us through loxo oncology. Mark time for the Bloomberg Business flash, the biggest business stories in the news. Hedge funds investing could be in the decline over the next three years according to a survey, 50 of investors expect to trim their allocations to hedge funds, an increase of 13 from last year. 11 of Fund Managers plan to put more money into hedge funds, down from 18 in 2016. Credit suisse will pay 135 million to settle in new york investigation into breaking the foreignexchange market. Regulators say some banking executives urged traders to front run client orders in an effort to manipulate prices. This was agreed to hire outside consultants to review practices on its foreignexchange desk. Airbnb to get about 1 billion in net revenue in the Third Quarter according to people familiar with the home and apartment rental company. Airbnb has had steady profit before interest, taxes, and amortization for at least 17 months. That is the latest Bloomberg Business flash. Julie listening in on the Jeff Sessions hearing as they discussed the at t time warner merger and the department of justice jurisdiction over it. At ttime warner acquisition. I do not sessions accept and cannot accept the accuracy of that news report. We have a professional your department has not told at twarner that and that they must shed turner broadcasting . Secretary sessions our work is professional they do not meet is that false or true . Secretary sessions i am not able to accept as accurate a news report. Let me ask you this question, on october 18, testifying before the Senate Judiciary committee, senators asked asked you if the department had taken adequate action to prevent election meddling in the future and you said there was no review underway at the cybersecurity vulnerabilities. Had he requested a review of what laws need to be updated to protect our elections have you requested a review of what laws need to be updated to protect our elections . We have discussed them but no completion. Our team is looking at that. Thatbi has real skills and area and i think we are not anywhere near where i would like us to be. What individual with your department is leading the inquiry . Sec. Session we would be working with our Voting Rights section. Our criminal section. Julie Jeff Sessions not giving departmentsn his looking into the time warnerat t deal but apply the news reports that at t had been asked to get rid of turner broadcasting as a part of the deal happening, he said they were not accurate. Not really any stock reaction in at t or time warner. A stock reaction today in general General Electric with big changes but wall street is saying too little, too late as shares today major hit yesterday and still falling today. After a bearish Conference Call from their cfo and ceo. Joining us is our Bloomberg Intelligence industrials analyst. Thank you for coming in. What did they say on the call causing shares to continue to fall today . We waited six months for a big meeting on how they would change ge and get them back on the path. 20 billion in assets sales, very little for a company that big and selling only one real business, a couple of small ones, and potentially, down the road. Not enough. Today, they are speaking of a Goldman Sachs conference, the cfo not allaying fears. People wanted more. It will also take longer to see results. Next year will be a reset your with no Earnings Growth. Reset year with no Earnings Growth, more of the same. That frustrated people. Julie the twoday decline is the biggest going back to 2009 for the stock. What could they be doing, especially they announced a plan yesterday, shortly investors did not think they would then change it and announce it today. It is curious that there is still much more disappointment that was not priced into the stock yesterday. It is curious to me as well. Has very strong businesses and if the value of those businesses are very high end and of themselves. I am surprised there is not a floor that the assets can support. Arrow space is a Good Business and health care is a Good Business. Our is troubled but they are a market leader. It will take multiyears. They have smaller businesses they should get out of. Instead, they folded two of them into power. They did not simplify. They may get rid of baker hughes and they will get rid of locomotive. It is not a simplification, or not enough. Is a it full scale fullscale breakout possible down the line or off the guards now that yesterday is out of the way . Anything is possible but i put a low probability on that. None of the businesses are related. They are separate, health care, power, aviation have nothing there are systems they can share, digital capabilities they can share but there is nothing that could not stop them from being separated. I just think that would be a ways away. Mark how big a deal where the expenses . Some were underwhelmed i do plan to reduce expenses. They announced another 1 billion in cost cuts, largely in power. That is 130 billion in sales, not enough. Some of it will be in corporate and people and plants. Again, not enough. Julie is there anything that the executives could have said today, even given this plan to reassure investors . Clearly, if we find that this is not material enough we are ready to take bigger action. This is phase one. I called it phase one but it does i called it phase one because it cannot be the full phase. Tell people this is our first swipe and there could be more. Tell people, we are not done. Julie a willingness for more action. Thank you, you track industrials for us. , can crucialxt jobs data take on President Trumps trade report card . Mark time for the global level of the chart for the look of some of the most telling and compelling chart of the day and what they mean for investors. Access them on the bloomberg. Kicking things off is christine. As President Trump wraps up his asia trip, lets look at one of the themes, trade. The president was clear that the u. S. Is being taken advantage of with unfair trade deals and blamed it on his predecessors for letting the u. S. Trade deficit grow. My chart looks at the overall u. S. Trade balance and sees how it fares under the three president s before donald trump. The u. S. Had a trade deficit for all three president s. Comparing the quarterly fluctuations, we see bill clinton era saw 10 quarters of quarterly narrowing in the deficit and 20 two quarters of decline. Not so great. George w. Bushs was slightly better with 14 quarters of improvement but president obama had 16 quarters of narrowing in the deficit and 16 quarters with decline. A 50 batting average. President trump has only presided over three quarters and to saw improvements in the two saw improvements in the trade deficit and if you want to see the rest of his term, check out my chart. Mark love the chart. Julie . Julie an important one and it has to do with the yield curve, which has been getting a lot of attention recently. On the top, the 10 year yield in yellow and the twoyear yield in white. Here is the expectation that the fed will raise rates once again before the end of the year and perhaps a couple of times here with a twoyear yield rising. The outlook for Economic Growth is somewhat muted. We are not seeing the 10 year with the same kind of rise, narrowing the curve and flattening the curve. You see the spread between the two. And 35 minutes, we speak with lacy hunt, a bond market veteran and a longtime bond market will. Bull he will talk about how we may see an inversion of the yield curve, which would be unprecedented in the United States but we have seen it around the globe. Looking for especially in weakness in consumer spending, potentially. Would an inversion portend . By the smallest of margins, christina is the victor. President trump speaking on air force one a few moments ago on his asia trip. Maybe the most important strategic location in the area. We had a great time. I hope youre all ok. You all look well, go to sleep for a little while and we will talk to you later. Julie it is noon in new york at 5 00 p. M. In london. I am julie hyman in for vonnie quinn. Welcome to bloomberg markets. Julie from new york, here are the top stories on the bloomberg and around the world. U. S. Attorney general Jeff Sessions says he is never lied about contacts with russia by people involved in the donald trump president ial campaign and we will bring you the latest details from his testimony before the House Judiciary Committee the donald trump returns to washington to face the ongoing battle over tax reform as the senate taxwriting committee enters day to of its market. The house may vote on its bill by the end of the week. We got to capitol hill for an update. A bond bill lacy had joins us and says why we are in the worst economic recovery in postwar time and why we will see an inverted yield curve as soon as a year from now. Lets get a market update. We are happily into the trading