Four governors in the central bank of mexico. It is his first meeting as head of the central bank. In the event of a tie he was expected to be the tiebreaker. It looks like that is what ended up happening. We are not seeing much of a reaction. The dollar versus the mexican peso. We are seeing the dollar higher by a quarter of a percentage point versus the mexican currency. On the bond side as well. Heres the mexico 10 year yield year to date. We have seen a little bit of an increase over the course of the year. 7. 38 at this point in time. Thats what we are seeing markets wise in terms of reaction. Julia . 5 basis points expected and. 5 basis points we got. Joining us with more is carlos rodriguez, bloombergs Mexico Bureau chief. Obviously julie mentioned the personality changes. Are also fighting higherthanexpected inflation and of course they are chasing the Federal Reserve who also chose to raise rates this week. Exactly. It was suspected that the hiking was going to be for 25 basis points. Many economists were projecting no more changes in mexicos interest rates. They were expecting they were going to remain at 7 . People started to believe that inflation was easing enough in order to not have to worry so much about inflation especially once the calendar effect in january which show a big them makers got worried a couple weeks ago when we saw the numbers from the inflation from the second half of november and now we see the results. Having even one more member asking for an increase of 50 basis points. That creates a challenge for the Central Bank Going forward. In novembernt announced a 10 minimum wage increase for 2018. We should expect to see that feedthrough quitting pretty quickly into inflation. Inthis is because last year january mexico liberalized partially the fuel prices. That creates a big impact on inflation. Once we start the new year economists are expecting the calendar effect is going to be gone because we are not getting higher prices from the imports from the state nor from domestic production. All the pricesnd are impacted by Energy Factors in mexico and we shall see a new trend of inflation going forward. The projection of 3. 8 by the end of next year. Julia this only being echoed by the central bank. Talking about the inflation outlook being more complex. A challenge to keep the cpi outlook anchored in the midand longterm. Talk to me about the currency as well. We have seen quite significant underperformance particularly in the last month. Thats a contribute infective as well when we talk about the inflation outlook. Weve got other concerns. Nafta in particular and those ongoing negotiations. A lot of uncertainty for investors. When you start discussing all the factors that can have an impact on the currency in the next few months most of them is for a weaker peso. Nafta negotiations are ongoing. Nobody suspected the outcome is going to be very favorable for mexico and it may take time before we have certainty on whats going to be of the nafta 2. 0 if there is a nafta 2. 0. Which is expected to be a close race between a couple candidates that are probusiness. Candidate that is from was called the hard left. Scarlet talk more about the income outcome of the election. We see this tightening bias by the central bank who does that favor . Its going to be tricky. If the u. S. Economy is doing fine the mexico economy is doing fine. Then again for a lot of the industry, the people that dont have to use dollars. Seeing that Exchange Rate of the dollar going for a weaker and weaker peso raises to memory a lot of the big prices that mexico experienced in the previous decades. I think thats going to be on the minds of a lot of people and that may affect the way they are voting next july. Scarlet carlos rodriguez, bloombergs Mexico Bureau chief. Thank you. We will be hearing from the new governor of mexicos central bank directly. He will be joining us on bloomberg next week. Weve gote u. S. Markets closing in just under two hours time. Lets return to julie hyman. Julie we have seen stocks trade in a pretty tight range today. They were higher and now they are lower. Not much change overall. We do see them following back after the s p and the dow touched record highs earlier in the session. Got materials that are a drag today as well as health care shares. I want to take a look at some of the Health Care Stocks we are seeing in todays session. Gilead is helping lead the decline. Talking about a breakthrough treatment that gilead developed to treat a deadly form of blood cancer that was supposed to be a relatively robust burner for the company is having trouble getting reimbursed from medicare and medicaid. The company says its confident its going to be covered but analysts are questioning the drugs estimates. That stock is down. Bristolmyers cancer drugs. Trading lower as well. A competitor of them announced it received fda clearance to begin its first Clinical Study spinal Muscular Atrophy trial. Also wanted to look at some of the auto parts retailers. Data for the sales u. S. That came in that are than estimated. A lot of subsectors came in with increases. One of the sectors that sign increase was auto and auto parts so we are seeing those retailers fall today. Lets get a check on the bloomberg first word news. Heres Mark Crumpton. Secretarygeneral says brexit will have little bearing on the uks commitment to the alliance. As eu leadersoke attended a Security Summit in brussels. Change britains relationship to the European Union. Thebrexit will not change uks relationship to nato. The u. K. Has again and again underlined of course that they will stay. And the u. K. Is very important for nato because next to the United States the United Kingdom has the biggest Defense Budget and is providing capabilities to nato and european security. Stoltenberg says todays summit provides an initiative to strengthen the European Defense system, increase defense spending and improve burden sharing. Vice president pence plans to delay his weekend departure for the middle east as congress nears completion of a tax overhaul. Thats according to white house officials who spoke to the associated press. Officials say the Vice President plans to leave for egypt on tuesday so he can reside over the senate during a vote on the tax package. President trump and republican lawmakers are hoping for a vote early next week. It was five years ago today that a gunman shot and killed 20 children and six adults at Sandy Hook Elementary School in newtown, connecticut. Residents say they are observing the day mostly in private reflection. Governor Dannel Malloy ordered flags statewide to fly at half staff. Throughout the years relatives of the victims have dedicated themselves to charity and other activism in an effort to prevent gun violence. Many areas of italys Northeastern Region are underwater and thousands of residents have fled for their lives following extensive flooding. Authorities say the flooding was caused when two rivers overran earthen dikes. Firefighters are using helicopters to conduct rescue operations. Global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Scarlet coming up, we had live to d. C. Sarah Huckabee Sanders says reports of House Speaker paul ryans retirement are inaccurate. She also mentioned the president has congratulated Rupert Murdoch on 21st century foxs deal to sell some assets to disney. Apparently the president told him the deal would be great for jobs. Julia from new york, this is bloomberg. Julia this is bloomberg markets. Im julia chatterley. Im scarlet fu. It looks like the tax overhaul may be in jeopardy once again. Susan collins and marco rubio have criticized plans to cut taxes for the countrys top burners and their opposition could kill the bill. Senator rubio has said he will vote no unless the tax credit for children is expanded. Joining us now from washington with the latest is lori davidson. Before we get to marco rubio i wanted to pick up on what sarah Huckabee Sanders had mentioned with regard to reports that paul ryan would not be retiring. That those reports are inaccurate. How does that relate to tax reform . Hisax reform is really crowning achievement. What he has wanted to do since he came to washington. He was chairman of the ways and Means Committee before reluctantly his crowning becoming speaker. Andmake a lot of enemies not so many friends. Its a very natural time that paul ryan would say im going to step down and take my career elsewhere. Julia i cant help but feel a bit sorry for senator rubio. Before the senate bill was signed he was saying can we not please extend the tax credits for children for working then be in order to offset by less than 1 rise in the Corporate Tax rate . Today he is sitting there and suddenly sees a lower top rate by ax financed could argue 1 rise in the Corporate Tax rate to offset state and local tax deductions. I dont blame him for going hang on a second here. Yes. He has been very upset in recent days. Going into Mitch Mcconnells office complaining to reporters saying this is totally not what the bargain was. They shot down my idea and did something that worse for low income families. Hes very concerned about this. Said hesf utah undecided. You got other folks. Susan collins of maine saying she wants to see the whole package. Said hes of arizona not going to say one way or the other until he sees the bill which could come out late tomorrow night. Scarlet mike pence has delayed east in to the middle the event that he has to be around to break a tie. What specific conditions did Susan Collins give and say she needs filled in order to give her support to the final tax bill . She gave her support to the building allowed it to move to conference at this time around what she waiting for . See the medical expense to see the medical expense deduction retained. That looks like that will be in there. She wanted to see the state and local deduction made a little bit sweeter. The one thing we are still waiting on is the Alexander MurrayHealth Care Stabilization plan. This was her condition for saying you can repeal the individual mandate but i want there to be some sort of fixed to obamacare the next couple years. That would be in the spending bill set to come up next week. It would fund the government for several more weeks and its not clear if alexander three murray will be in there. Folks are not very happy with that plan. Julia what about the senator that actually voted no, senator bob corker . He was concerned about the deficit. I dont see anything in the details to give him a greater degree of calm. The leadership has sort of written him off. Its just assumed hes going to be a no. They havent done anything to address his concerns and with some of the changes the bill is more expensive and they are having to look for other offsets. Nothing nearly as great as corker would want. Julia thank you, laura davidson. Still ahead, disneys fox hunt comes to an end with a 52 billion deal. Scott galloway joins us coming up to survey the everchanging media landscape. This is bloomberg. Julia this is bloomberg markets. Im julia chatterley. Scarlet im scarlet fu. Julia a massive merger that could shake up the media landscape for decades to come. Disney is buying most of foxs assets for 52 billion. Bob iger spoke to Jonathan Ferro from burbank, california. A year ago i didnt see this one coming either nor did i see it coming six months ago. Rupert and i have known each other for a long time. We have a lot of respect for one another. Occasionally get together to muse about the business and in a get together this summer when we were talking about the Disruptive Forces we were seeing and the relative position of our companies i left thinking there might be an opportunity for us to do something with him. I thought about it for a few weeks. Called him thereafter and suggested maybe we should get together and talk about it and we did. Spend some time analyzing whether there was something to be done and what the Value Proposition might be for shareholders of both companies and ultimately rolled our sleeves up and got into a negotiation and here we are today. I think what we are doing is creating not only a Great Company but a great global opportunity for consumers to not only consume great content made by both entities but to consume it under circumstances that are andvative and compelling much more userfriendly and thats what the consumer of today demands. We learned more about your future now. Stepping down in 2021 versus 2019. Whats the future for James Murdoch . We have talked a lot about a potential role for him. He will be integral to helping us plan the integration process and we will continue to talk about where theres a role for him at this company. We have had a Good Relationship and he has been extremely helpful in this process and i look forward to talking to him more about it. A lot of people are thinking about a Succession Plan and maybe James Murdoch could be part of that. Is that something you can see happening . I am now extended through 2021 and the board of the company will have ample time to consider its options in terms of my succession and to reengage in a planning process for that. Its premature to speculate. It would be a board decision. Theres a pretty hefty breakup fee on this deal. You must be pretty convinced that the era of at t time warner , this deal that looks a lot more horizontal than that one can actually close. What gives you the confidence . We wont comment about the merger although we will say this is different. We think this will get a lot of scrutiny from regulatory authorities worldwide. It will take some time. We think the proposition is very proconsumer. Do ishis combination will going to give the consumer opportunities not only to consume far greater amounts of high Quality Content but to do so under extremely innovative modern circumstances. And we think at least from regulatory perspective if they focus just on the consumer that thats actually quite a positive thing. Julia that was Jonathan Ferro speaking to bob iger earlier today. We are joined by Scott Galloway, a marketing professor at nyu. Entrepreneur and author. Great to have you with us. You have said that disney has the opportunity to commend the space they are in. What do you make of this deal and is this part of that commanding focus . Everyone is bulking up. Netflix, the 60 stock rise. The fact that its becoming the operating system for our television and they are trying to get in early and be a viable competitor. Disney really is the only ,ompany that has the leadership the credibility and the have to be an effective competitor to netflix. The other one kind of waiting in the wings in the celebrity death match of 2019 is not only going to be netflix versus disney but amazon. As they come into it. Scarlet we will certainly look ahead to that. I want to stick with disney for now because the fox assets that disney is buying is tied to the cable bundle. It will help with negotiations with distributors in the short term. It will give it some pricing power. It doesnt really address the Court Cutting phenomenon. Its not that people are cutting cords. Its that they are cutting espn. Theyre deciding they no longer want the food network 2 or espn 4. What disney might have the power to do especially with marvel and star wars and even their resort parks and cruise lines is to pull of the ultimate gangster move and put all of this behind a wall and say all of you have to enter into a prime like or netflix like recurring revenue relationship with something offered by disney where you pay a certain amount per month in exchange for all of these things including content that only we have more access to our parks. Way thathats the disney triples or quintupled its market cap in the next five to 10 years. Scarlet content plus the disney experience for a price that is closed off from everyone else. Julia is it closed off or is it just cheaper to buy the great handle . Bundle . Its about access at a price. Thats the hybrid model. Theres no doubt about it that at some point they would have to stop distribute in this content to other bidders including netflix. Julia thats what they are going to do. Adobe said we are going to people 29 ag month instead of 1200. The most Successful Company in the last decade figured out a way to offer a bunch of things behind the curtain and charge 99 a year. Under the auspices of prime. Disney right now is the First Company with us combined tieups that offers the possibility of a prime like relationship with households across content. Scarlet we will see how that plays out. I want to get your take on twitter. We have seen shares climbed today and there is that theres increased odds of m a. Lloyd blankfein had tweeted a picture of himself with jack dorsey as well. What do you make of twitters prospects . Twitter is one of the right fist companies for activist intervention in some time. The ceo can manage a company that has 90 of his net worth is negligent. Had thehas never performance to realize the promise. As twitter becomes a bigger part of our vernacular theres opportunity there. This is an activist dream. Scarlet thank you, Scott Galloway. Bloomberg news is among twitters video partners. Istt galloway of nyu sticking with us. We will talk about amazon and whats in store for techs four horsemen. Plus, bitcoin. This is bloomberg. From bloomberg World Headquarters in midtown manhattan, this is bloomberg markets. Im julia chatterly. Commodity markets are closing in new york. Crude oil has had a choppy trading session opening higher and losing gains then coming back. Traders have been assessing the latest forecast. Prime maker is faster than demand next year. We are higher by 0. 7 . Let us get a check on precious metals. Gold trading higher today after the fed indicated three rate hikes for the next year. Many traders have expected a more aggressive fed rate hike. This is pretty similar to gold as well, with oil. Percent. Silver features are also trading higher, although they lost a big chunk of the gain as the day wore on. Scarlet let us get you a check on the headlines with Mark Crumpton. Mark thank you. The u. S. Ambassador to the United Nations today unveiled recently declassified information about a rainy and missile parts Iranian Missile parts. Ambassador haley spoke at a hangar in a military base in washington while displaying the parts. The United States and our partners went to Great Lengths eo support th investigations by declassified evidence so the world could better be informed of the extent of iranaligned activities. As you know, we do not often declassify this type of military equipment recovered from these attacks, but today we are taking an extraordinary step of presenting it here and an open setting. This hour, we go live to President Trump speaking about deregulation just hours after the fcc ruling on Net Neutrality. It has changed rapidly. You have seen what has happened. We begun the most farreaching Regulatory Reform in american history. We have approved long stalled projects at the keystone xl and the Dakota Access pipelines. We are cutting years of wasted time and money out of the permitting process for vital infrastructure projects. Doing scraping and really a job in getting rid of the jobkilling regulations that threatens our auto workers and devastated their jobs over the years, but they are all moving back. They are moving back into our country. The companies are coming back and they are coming back fast. We lifting restrictions on american energy, and we have ended the war on coal. We have clean, beautiful coal. One of the very first actions of my administration was to impose federal1 rule on new regulations. We ordered that for every one new regulation, two old regulations must be eliminated. The people in the media heard me say that during the campaign many, many times. As a result, the neverending growth of red tape in america has come to a sudden, screeching and beautiful halt. Earlier this year, we set a target of adding zero new regulatory costs onto the american economy. Today, i am proud to announce that we beat our goal by a lot. As sod of adding costs, many others have done in other countries. Decades,irst time in. E achieved regulatory savings it has not happens in many decades. We blew our target out of the water. Within our first 11 months, we canceled or delayed over 1500 plans regulatory actions, more than any previous president by far. And you see the results when you look at the stock market, when you look at the results of companies, and when you see companies coming back into our country. Instead of eliminating two old regulations for everyone, we have eliminated 22. That is a big difference. We aim for 2for1, and in 2017, we hit 22for1. By the way, those regulations that are in place to the job better than all of the other regulations, and they allow us to build and create jobs and do what we have to do. Reducing the size, scope, and cost of federal regulations for the first time in decades, and we are already seeing the incredible results. Because of our regulatory and other reforms, the stock market is soaring to new record levels. 85, not including today hopefully we will set another one today 85 since election day, creating 5 trillion of new wealth. Of about three weeks ago, so i assume we probably hit 6 trillion. Unemployment is at a 17year low. Wages are rising. Economic growth has topped 3 . Two quarters in a row we have had that. Except for the hurricanes, we would have almost hit 4 . Your member how bad we were doing when i first took over. The was a big difference and we were going down. This country was going economically down. Small Business Optimism is at its highest point in 34 years. We are just getting started. We have decades of excess regulation to remove to launch the next phase of growth, prosperity, and freedom. I am challenging my cabinet to find and remove every single outdated, unlawful, and excessive regulation in the books. Secretary,y cabinet, agency head, and federal worker to push even harder to cut more regulations in 2018, and that should just about do it. I do not know if we will have any left to cut, but we will always find them. We must liberate our economy from years of federal overreach and intrusion so that we can compete and win on the world stage. When you look at the start market and what is happening the stock market what is happening, much of that is what we have done with regulation. For example, the current process for permitting infrastructure is unacceptably long. Chart,art i love this i showed this chart two months ago. Hold that up. Chris is not tall enough for this chart and neither is anybody else. This is the process you had to permits for aget highway or a roadway. You had to go through this process. And it would take many years. Many, many years. Right, chris . You had to go through nine different agencies, make 16 different decisions under 29 different laws. It would take from 10 to 20 years. And some cases, longer than that. By the time you are finished, you probably gave up. This chart and hold it up three months ago and i said bring out that chart. Does a lastminute decision. A really that was lastminute decision but it really explains what a disaster it is. We want to take that process down to maybe one year. We have it down to two. By the way, if the highway or roadway is not good, we will reject it. We will not approve everything. But for the most part, generally speaking, it is a good thing not a bad thing. Cutting through this maze is critical to restoring our nations competitiveness. Under myhy administration, a highway and were looking at the numbers and try to average them out. People have no idea. They think the number is over 20 years. Were bringing that way down. Beside this, you can see another really vivid illustration. Were 20,000 pages federalode of regulations. Today, there are over 185,000 pages. You take a look at that, and i assume this is today. This is 1960. Will cut the ribbon because were getting below the 1960 level and we will be there fairly quickly. We know some of the rules contained in these pages have been beneficial to our nation so we will keep them. We want to protect our workers, safety, health. We want to protect our water, air, and our countrys natural breed in our countrys natural beauty. Every unnecessary page represents hidden tax and harmful burdens to American Workers and to american businesses. In many cases it means projects never get off the ground. According to a survey by the National Small business association, the average small spends 83,000 to comply with a single regulation and its first year of existence. Small Business Manufacturers also bear an enormous ongoing burden, spending an average of nearly 35,000 per employee each year. Incredible. This regulation does not just turn our economy, it threatens our entire constitutional system. And it does nothing other than delay and cost more. Abandoned much of its responsibility to legislate and instead has given unelected regulators extraordinary power to control the lives of others. This powerhave let grab go almost completely unchecked and have almost always ruled in favor of big government, with billions of dollars wasted. Regulation is a stealth taxation. So many of these burdens imposed on our citizens with no vote, no debate, and no accountability. Now, there is accountability. By ending excessive regulation, we are defending democracy and draining the swamp. Unchecked regulation undermines our freedoms and saps our national spirit, destroys her company. We of so Many Companies that are destroyed by regulation and destroys obviously jobs. Todays call to action is about regaining our independence, reclaiming our heritage, and can vering the weeken recovering what we can. Achieve when americans are ree to thrive, there is no tasks to large and goal reach. Our were a nation of explorers and pioneers and innovators and inventors and regulations have been hurting that an hurting about the. We are a nation of people who big, and neverm give up. We are americans in the future blogs to us. Redther, let us cut the tape. Let us set free our dreams and again. Make America Great one of the ways were going to do that is by getting rid of a lot of unnecessary regulation. Thank you very much. Thank you. [applause] come on over here. Why dont we all gather around . Come on. So this is what we have now. 1960. S where we were in and when we are finished, we will be less than where we were in 1960 and will have a great regulatory climate. Ok . Are you okay . ll cutting the ribbon, such as speak. He is talking about getting rid of regulation. Pages and pages of Regulatory Oversight by the government in showing that the Administration Needs a pullback on that effort. Julia that is quite illuminating. 1960s. Le pile is the the world has changed since then, but that the pile was the amount of regulation and documentation we have got today. He was just said for every new regulations they added, they reduced by 22 the number of items they have got. Certainly, deregulation for this administration has been very much at the forefront, whether or not that was obama related to regulations because we know he scarlet in terms of rolling julia unwinding. Scarlet just a challenge to his cabinet to remove out lawful regulations to push harder into 2018. We will give you more headlines as they come. But those President Trump speaking about deregulation and talking about how because of the direct military move, the stockmarket is soaring, the economy is growing. This is a form of tax that and taxation. Tion he is making comments talking about taxes, saying he thinks marco rubio, the senator from florida, will be there. He says he does not appreciate the Child Tax Credit not being expanded. Julia he tried. He tried to get an increase in the Corporation Tax to offset the expansion of the Child Tax Credit. He still did vote yes on that day. The sentient being you will do it again. Scarlet he told the Washington Post he is a know if he does not get his way. A little challenge there. Well, still with us right now is Scott Galloway. We just heard the president talking about regulation, deregulation. Had you think regulators should approach the four horsemen of tech . Scott i think with god to the point where we are experiencing market failure in these four companies. Amazon, were heading to the singularity were stuck straight on three things. Environment, and what amazon is or is not doing in the environment. I think we have one player that is now too powerful. I think facebook, 80 of your phone time in at, our own by facebook and they are putting at aour and putting it business. I think the way you stay out of regulation is to bust trust. I would argue it is time to break these guys up. I think they could become too powerful than markets are feeling. Julia what about the response they have got . We have seen Congress Step up this year and light of the u. S. Election. Facebook is the one that came out with their earnings. I think the general perception was it was too little too late. With the number of elections we look at around the world, they had a dramatic influence and whoever i mean venezuela is a classic example. 98 of people on the internet are on facebook. Up, orbout breaking them is it about controlling the power that they have . Scott again, controlling them is regulation. I think would be cleaner to break facebook but. Up. If Bloomberg Television can keep taken by badbeing actors, facebook can figure it out with 14 billion in cash flow. The fact that bad actors are able to weaponize these platforms was a straw that broke the camels back. Will see either regulation or perhaps even a discussion of breaking these guys up. It will not come from washington. It will come from a woulred stay or brussels. Scarlet interesting. How forthcoming do think a facebook or google or amazon would be to Something Like that . They fight it with all their might. There every resource at their disposal. Scott everything from the Washington Post the the fulltime regulators to the perception they created that if you will speak against big tex, like like tech, it is wearing mom jeans that makes you older and less school. They make it seem like if youre going after them you are going after america. If kraft heinz was producing was increasing levels of depression and suicide, there were be so many warning levels. Where are the warning labels on instagram . If bloomberg had a 90 share of googlest television as had, people would be saying bloomberg is too powerful. They play by a different set of rules. They are doing with they are supposed to be doing. The people who fail are us who failed to elect leaders who hold them to the same standards. Julia i like the point you make about the fear these guys make. The european stock have any problem there. I get your point on that. The question is, are the social Media Company or they social Media Companies or on a Media Companies in the truest sense of the word . We have to the likes of the regulators tackling at t and time warner. Theyre kind of going after old media rather what we can call new media. Scott there has never been a company in history that is more of a Media Company than facebook. Scarlet it does not claim to be one, though, right . Scott there are allergic to the responsibilities. They are trying to have their cake and eat it too. When they want to restrain the merger of at t and time warner, that strikes me as ridiculous. 130 million at t contracts, and distribution of 160 million, and then time warner content. Lets look at google. The mostwatched Video Company in the world is you do. They have an installed Distribution Base of 2 billion devices apple, 1 billion in content. Videos. On sell to cartoon network. Either the calls to break them up our insane or we should have broken up apple, amazon, facebook, and google 10 years ago. Julia great points. Staying with us. Ourlet it is time for report. Julie hyman is here with us. 11 think they would be higher today, but that is not the case. They have been rising recently and the fcc decision was probably expected. It appears that is why we are now seeing this fall back. If you look at the spider etf that tracks telecom, it is not just telecom, it is much more broad than that. It is down 1. 2 some of the Larger Companies are trading off not by that much. At t, verizon, and sprint to give three examples are trading a little lower. We should mention telecoms have underperformed this year. If you look at the s p 500, the telecom index, which assessed the big one, it is down about 7 on the year. If you look at this etf, which has more components, including smaller companies, it is often just about 1. 25 . Aside from all of the large companies, it is actually some of the landline operators that are doing the work today. There is not that specific of a catalyst. Take Frontier Communications is one example, the worst performer in the etf on the day. It is that Something Like 10 on the session. It went ex dividend, that is the only news headline i can find on frontier, but it is one of those in lin landline operators to have a bit of debt. Julia thanks so much. Do not move a muscle because we will be back very shortly with Scott Galloway of nyu. From new york this is bloomberg. Julia unclear Net Neutrality rules. His confession big changes in how americans internet still with us is Scott Galloway of nyu school of business. They are saying, trust us, do not worry. How concerned are you . Scott this is one of the worst things for a long time. The problem with this environment of chaos where we are living in where we tend to focus on the crazy elections on alabama is we cannot focus on what really can impact our lives great Net Neutrality goes away, you can see Small Companies not being able to compete park have access the people have access to other things that bigger types have. The fact that we do not have legal access to what has become the mothers milk of innovation into our lives and phone, this could be probably one of the biggest errors in one of the slowest moving train wrecks we have seen in a while. The threats that undermines Net Neutrality is the most underreported news story of our day right now. Scarlet this could be a big Inflection Point we will not know until years later. Speaking of Inflection Point, i have to ask you about bitcoin. There is a certain appeal of it and everyone acknowledges it is in a bubble but we do not know where it goes from here. What does it represent during this surge . Scott i think it is a mistrust index. A lot of people have lost faith in our institution and the institutions that oversee the central banks. If you like an idea of an investment and you saw your baby boomer parents get rich off stocks, the idea of a currency that is not dependent on any of these irresponsible entities we call government is really appealing. The lastminute intrinsic measure around earnings are multiple expansion you need to wait to creates the perfect vehicle that can skyrocket. Amazon shed one of those gravitylike multiples when it no longer became dependent on profitability. It is only measured on growth. Is the ultimate antigravity currency and we do not know how to measure it. There are no intrinsic measures. Time doug jones was going to win to when he was announced the winner, it went down 800. Scarlet 50,000 or a crash . Scott galloway of nyus school of business. Us on Bloomberg Technology today at 5 00 p. M. New york time. They will be discussing those events with the Trump Administration rolling back Net Neutrality. From new york, this is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Or a little internet machine . [ phone rings ] it makes you wonder. Shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. Choose by the gig or unlimited. And ask how to get a 200 prepaid card when you buy any new samsung device with Xfinity Mobile. A new kind of network designed to save you money. Click, call or visit today. Julia it is through club p. M. In new york. I am julia chatterly. Scarlet and i am scarlet fu. Welcome to bloomberg markets. Julia were live and bloomberg World Headquarters in new york over the next hour. Here are the top stories we are covering on the bloomberg and around the world. Fight to the finish. Exodus stockpicking index investing is in celebrating is accelerating. Plenty on politics. We speak with the former minnesota governor about tax reforms, state senate shakeup, and more. Plus, Net Neutrality. Nullified we discussed the end of the obamaera rule with the ceo of the internet association. We are one hour from the close of trading. Let us get a check on markets with julie hyman. Julie soft at the lows of the day. Soft is a good word for abuse we were not sing a plunge. Then at theg a bottom of the range we are seeing them today and a pretty tight range. If you look at the bloomberg and the groups that are on the move, we have several groups that have gotten more deeply into the red. Big laggard,s the down almost 1 . Materials almost chasing that decline. Telephone stocks are off as well as we were discussing. Some of the Large Telecom companies down even after that fcc division. Only two groups in the green. Discretionary and technology. I want to dig into health care a little further. The worstperforming stock in the group is foparago. They are preparing an offer for marks k. G. Eight, the german december 15d of a deadline. Shares down nearly 4 . Divina health care resolving a ta health caredavi resolving a settlement of prescription drugs that were not ships. Having that settlement here, it looks like those shares are down 3 . Intuitive surgical is taking a hit. They say company is expected a whiter than usual range and intuitive 2018 procedure gross forecasts. A lot of different specific reasons here. Biogen falling as a competing company talked about a trial for a new drug that competes with one tha bio jent one that biogen is developing. He quick check on media in the wake of the 21st century fox disney deal. Interesting because disney was trading lower in the session. Now it is up 3 as 21st century fox prices by nearly 6 . Finally, as we talk about deals, there to be one in the snack business. , the pretzel maker, is spiking after the company hired have astment make to takeover offer from campbells soup. They have been looking for other sources of revenue. Looking to expand snacking looking to expand in snacking. Shares of 13 . Scarlet soup and pretzels. Sampling our lunch, julia. [laughter] scarlet let us get a check on the headlines. Mark so sad. I will get you lunch. The white house says President Trump and paul ryan has spoken by phone about reports that ryan has not taken Congress Passed 2018. The president did speak to the speaker not too long ago and made sure the speaker new very quick knew very clearly. And if the news yesterday was very unhappy. The speaker assure the president that those were not accurate reports and they look forward to working together for a long time to come. Mark ryans spokeswoman called the report pure speculation. Heads of state and government in of the European Union countries in brussels say there has been sufficient progress for trade. Mandatoryer the Refugee Program should be continued. Attendees also are expected to officially endorse a new system of defense cooperation, bringing order to the way nations cooperate on security matters. Vladimir putin sa Vladimir Putin says that accusations that President Trump colluded with russia hurt the political system. He says the claims against President Trump have been spread by political opponents to undermine mr. Trumps legitimacy. Meanwhile, mr. Putin says he is on a first name basis with mr. Trump. A new report says American Teens are losing interest in cigarettes. So much so that marijuana and bathing have now. Surpassed it the federal government of drugnal institute abuse says 23 of High School Seniors claim they have used marijuana in the past month. A little less than 17 say they have used a bathing device. Only 9 said they smoke cigarettes. The study also found that consumption of most substances was at a twodecade low. Global news 24 hours a day. Powered by more than 2,700 journalists and analysts in more than 120 countries. Crumpton, this is bloomberg. Scarlet . Julia we will hold you to that. [laughter] julia the most expensive restaurants in new york. Scarlet anytime. Just pick a date. Mark im here. Walked mark just watche off the set. Luster to 2019. Projections show more money will be in passive investments than active ones. They show no signs of stopping. For more on the future of investing, let us bring in the editor of bloombergs u. S. Investing coverage. This is incredible. All the talk that we devote to passive, eating active lunch, we are still not at a point where passive has overtaken active. We are still on our way there. Exactly. What you have seen is passive racing, but it has never gone over. Part of that is because people activehink stock funds, stock funds, are Good Investments to some extent. You still have your brokers. Now, we seeing a real big acceleration were predicting in two years it will jump over. Julia assuming you hold everything study. A lot of the excuses these guys give is the conditions have been bad, suppressed volatility. Alan right. We take a positive outlook on the rest of the market. Dont you guys . Julia always. [laughter] alan when of the things to think about here is this is basically a big trends that has to do with cost and performance. If you were a Fund Investor right now, one thing you are looking for is lower costs. And so if you look at the front, they are really lowcost. If you look at the performance of active managers, the last couple of years, active managers have failed to meet their benchmarks 80 of the time. They are bragging about better performance and say they now only fail 60 percent of the time. That is not something you want to brag about. Need toinvestors make up their minds and trying to figure out, where should i put my money . Should i pay a lot more for bad performance or should i pay less and hopefully. Eep the index going julia this is more potent scarlet this is mark bowden equity funds. You have something in the story that says you suffered outflows every month this year through october. That is not necessarily the case with fixed income, were you still have active. Alan fixed income is a different picture. I think you have both active and passive playing a key role in peoples portfolios. I think if you go completely passive and bonds, youre missing a lot of opportunities. An active, it is very hard for an active manager to say if you do not go with me, you are missing a lot of opportunities, especially with the s p up good scarlet scarlet exactly. Scarlet julia so you are saying 2019 in terms of equitybased funds. What happens if you add in six income products fixed income products . What happens to the 2019 date . Alan it will take a couple more years. 2023. That is not as far off as we would like to think. I think we would see when and if this happens is there will be a big change in the way people think about mutual funds. Right now, you think about maybe i should have some active in my portfolio, some passive, but now, people will be thinking passive is the first stop. Why should i go to active . Julia you assume the economy, and Monetary Policy will be drastically different at that point. It will be fascinating scarlet to see. We have all been waiting for that point for so long. U. S. R of bloombergs investing coverage. Thank you so much. This has been a great series of the future of investing. I could you are to check it out on bloomberg. Com. You will want to tune in to bloomberg etf iq every wednesday at 12 30 p. M. New york time. We talk about passive aggressive all the time. Julia we speak with the minnesota government about his state senate shakeup. From new york, this is bloomberg. Scarlet this is bloomberg markets. Julia it is now time to talk tax reform. The gop has holdouts against the and, including marco rubio Susan Collins. Kevin cirilli is in bureau with a special guest. Kevin we are here with the ceo financialan of the services roundtable. A former governor of minnesota, a state that has been in the news. Will you run for senator frankens seats. I am politically retired but if i change my mind, you will be one of the first to know. Kevin i do not think youre retired by any means. Let me ask you a question. Should you decide to run, would you want Steve Bannons endorsement . Minnesota is a different kind of place. There are a lot of ticket splitters. I do not know the steve bannon and have never met him. He is involved in a bunch of stuff on behalf of the trump perspective. Im not sure he would endorse me. About himnow enough to know if i would want his endorsement are not. It would not matter. It is not the type of state were that endorsement would be a factor. Kevin it looks like we would get a vote early next week. Do you think we will be there . Within the last hour, senator marco rubio, according to the Washington Post, saying he is not there yet and he is a no vote because of the family tax credit. Tim i think we will get there if you are a republican and promised tax reform for over a decade. Telling their supporters of we get to be in charge, we will do tax reform and they dont do it and miss the opportunity, there will be an egg on a lot of peoples faces. To senator rubios point, he is genuinely concerned about this not doing enough so he wants the Child Tax Credit increased a little in the bill but not as much as he wanted. I think in the end, he will vote for it. Kevin 21 good enough . Tim yes. President trump started at 15 and cover must to 21 . It allows them to make other adjustments in the bill. Kevin you talked about an egg on the face of a lot of folks. You know this as well as anybody. The democrats are going to hammer, theyre already doing it, saying that it only helps rich people. Senator rubio is trying to make the case and give a little more for the middle class. Have you respond to that criticism . Tim i was a a few quick things. One, the core of this bill, whether they like it or not, if business tax relief. To make american businesses more competitive so they can hopefully add more jobs. Not only for people who are working, but increase their wages. If that does not happen, you will have takes off people ti cked off people. One thing is maybe coincidence or bad timing. Since world war ii, there has been a recession every seven years. The longest it has ever been between recessions is nine years. We are in year eight of this recovery. If we tumble into a recession, notwithstanding the tax bill, the timing of that is going to look like this growth that you promised me did not happen. Some of it will be lost kevin in kevin that is really interesting about the growth argument. President trump predicting that he wants to get the 4 gdp growth. Bit, like alittle lot of companies have, on the hurricanes. Janet yellen saying otherwise. Back to back, they made the comments. A republicans going to lose a folks the leather taxes over the next couple of months and they do not see that tax cut . Tim this bill does a number of good things for average taxpayers. Standard ofouble exemptions. They can put the returns on one page. And that the dutch and if you do not itemize is doubled. The average family will save depending on which study want to look at. They will say somewhere between family. 1500 a that is something and that is meaningful, i think, to working americans. Goal here is trying to get the economy moving faster and higher and to get wage growth going. That is where the banana gets field. If it does not happen and it better, otherwise republicans should say we missed. That is the theory and the hope and the plan. A better happen. Kevin stand local tax reduction. There is still a lot of backandforth happening. When i interviewed folks from states, like new york and california, republicans, your party, they have a lot of concerns about this. My question is, let us say this does get through but republicans in those states actually end up getting a tax hike, and yes, 401 k s are growing, i hear the argument, that ultimately be another reason why folks vote democrat in the midterms . There are a lot of implications here. Tim the big bets is this will grow the economy. They say this will grow the 0. 8 my summer the between between 0. 4 and zero point 8 . That is better than the anemic growth we have experienced 0. 8 . If they do not, it will boomerang. The year next year will be tough anyhow, even before you factor in tax reform. It is not to say everything would have been great with or without. It is a tough year anyhow. Kevin Community Banking relief. Yes or no . Tim yes. Kevin how so . The house has a copper has a plan. The Senate BankingCommittee Chairman did not have as much of a comprehensive plan. Tim they put together a bipartisan coalitions past reasonable bank regulations, particularly for Community Banks in the senate. Be convinced and not overreach and get something passed. I think that is why it will happen. Kevin fsr represents a host of financial institutions. Withou guys on board keeping it just focused on Community Banking regulations . Tim this bill is a little more than Just Community bank early. It includes raising not to get too technical they raise it for some regional banks, as well. It is not earth shattering, but it is helpful. No one in the smaller midsized or regional banks will systemically take down the whole system. Therefore, you can be a little kevin relaxed or constructive when it comes to regulation. The onesizefitsall regulation from doddfrank has proven that ultimately, the big banks got bigger while the Smaller Banks are missing out. Tim it is a form of tailoring. You need to have something that is right for Community Banks, for midsize banks, different for regional, different for the socalled globals or institutions. Getting in the weeds with us here on bloomberg. I love this stuff. Thank you for coming on. I appreciate it as always. The chairman ceo the top guy. We appreciate it. Back to you, julia in new york. Much. Thank you so great interview. We do have some breaking news. To be stepping down with his term ends in 2019 according to people familiar with the plans. The head of the companys Helicopter Team is said to be replacing him. This follows Airbus Holding a Board Meeting earlier today. The future direction of the European Group following ongoing french corruption investigations. They say the ceo will step down scarlet term ends in 2019. And its time for the Bloomberg Business flash, a look at some of the biggest business stories in the news right now. Unilever is buying snitch naturals as part of its ecofriendly push. They make natural bar soap, toothpaste, and deodorant. The giant had its seventh generation and this year it added who got herbs. The terms of the deal not disclosed. Pier 1 hitting a threeyear low. The retailer announced a ing earnings. It was her by the hurricanes in texas and florida. In one of threeyear plan early next year. And that is your business flash update. Still ahead, disneys deal for fox assets has trained our ion eye on acids today. This is bloomberg. Julia this is bloomberg markets. Scarlet it is time for options insight with julie hyman. Julie joining me today is the chief options strategist at interactive brokers. Great to see you as always. We have a little bit of a breaking of the trend today. Recently, we have seen stocks drifting higher. Today, they seem to be drifting lower. Is there any bigger take away from the selling we are seeing today . I think it is refreshing to see that stocks can go down once in a while in a while. People get lulled into this mentality of always we are going up and up and up. How dare we go down seven or eight points. Realistically, this is normal and healthy. Major expiration week and some of it could be contributed to going down on some of the larger contracts. Think of all the news we have had in the last week. The fact that the markets are suggesting some of it and going down a little bit, i will not read too much into it. It is probably a fairly healthy thing. Julie here we are in december. T are the other in usual one of the other unusual things going on is a lot of m a. The trade today is cbs. Media has gotten a lot of attention as of late. What is the trade and structure you are looking at here . Steve this is a very simple trade structure. I was taking a look at some of the other media properties, and during the market has been having this relentless sector rotation, figuring if there is m a and the media sector, they will be looking at the sector, it is medias term. Cbs, i do not know if we have a chart handy, but it is forming a little bit of a base. Today, it was performing a little better in the afternoon than i expected. I see the stock having the potential to pop up and tried to test into the 60 range. If it gets momentum behind it, breakthrough it. The trade is basically a way to trade on that one. Buying some calls. Plain old speculation. We are buying the 59 calls, expiring the fifth of january. That is basically part of the play there is figuring it Something Like this happens, if the sector moves, it will probably move by year end. January 5 gives you a little bit of time on that one. The 59 call is a little bit above where the stock is trading right now. It gives you room because of it stops at 50 im sorry, if it 60, that is the break even. If it breaks out, you make some money. It is limited to the amount you spend three to the gets to 60 and stop there, it is kind of a breakeven trade. It wouldnt be terrible. Julie thank you so much. Chief options strategist at interactive brokers. Julia think you so much. Still ahead, the sec reversal will discuss the end of Net Neutrality and what it means for american consumers. From new york, this is bloomberg. Mark im Mark Crumpton with first word news. On this day five years ago, a gunman walked into Sandy Hook Elementary School in newtown, connecticut. It left 26 schoolchildren and adults dead. At a news conference, nancy pelosi remembered newtown. In their name, and the name of the 90 americans lose their lives to the nonviolence everyday. And the 120,000 americans who have been killed by guns since newtown. We will never stop fighting for common sense, gun violence prevention. Mark connect governor dan malloy ordered flags in the state be lowered to half staff. British Prime Minister theresa may joined other European Union leaders in brussels at a summit on security. Her visit came one day after members of the parliament, including some from her own party, voted to change her planned legislation so it guarantees parliament will get a vote on a final deal on brexit. The withdrawal bill is making good progress. We are on course to deliver