1. 25 . Still a mixed picture here as we continue to see these swing back and forth from the major averages. Look at the s p 500 on an intraday basis, and stocks open lower, and of rising to the highs of the session around 11 15 or so, and have been shopping around for the rest of the day. Some of it it appears where the equity markets were getting this were from the bond markets to some degree, particularly around 1 00 p. M. That is when we got the results of the latest bond auction in the u. S. A 10 year option, 24 billion worth. The weakest result we have seen in five months time. After the auction, we saw yields go to the highs of the session. That is not to say that every move and take in this equity and rally has been pushed around by the bond market, but investors are watching what is going on in bonds to some degree. Also, we are watching what is happening with oil. We see a for data klein in oil prices that amounts to the worst that we have seen in more than six months. You see this 5 rout over the past week or so. Sharp day when the numbers came out, and we saw a build in gasoline and distillate inventories as highest on record in the u. S. , 10 and a quarter Million Barrels of oil being produced in the u. S. On a daily basis. When you look at these various asset classes, how does the volatility look versus what we have seen and stocks . Still relatively low. If you look at the so called me score, which is a measure of volatility for equities, rates, currencies as well as oil, equities stand alone. Some investors are taking comfort from this and saying this is a good sign that you are ,ot seeing that cross contagion but other times, over the past several years, the spikes in volatility have appeared together. This is just a stock driven event. Most of it ties back to the short volatility etn we have been talking so much about over the past several days. Thank you, julie. Lets get a check on the first word news with Mark Crumpton. Mark Senate Majority leader Mitch Mcconnell today announced a twoyear budget agreement that 300 billione nearly dollars in additional funding. Mcconnell called the plan a significant agreement that gives both parties what they want. The compromise that we have reached will ensure that for the first time in years, our armed forces will have more of the resources they need to keep america safe. It will help us serve the veterans who bravely served us. And it will ensure funding for important efforts, such as disaster relief, infrastructure, to building on our work fight opioid abuse and drug addiction. Like the separate plan passed by the house last night, government funding would continue through march 23. While lawmakers fill in the details on longerterm spending. However, one complication is House Minority leader nancy pelosi, who is part of the negotiations on the agreement. She said earlier that House Democrats will not back the plan without a commitment from Speaker Paul Ryan to allow an open debate on immigration legislation. Vice president pence is in japan, where he is threatening north korea with the toughest economic sanctions yet. The Vice President spoke after meeting with japans prime abe. Ter shinzo meanwhile, kim jongun has named his sister to represent north korea at the Winter Olympics in south korea. She will be the kim dynastys First Official representative to set foot in the south. Retired Pope Benedict has commemorated the First Anniversary of his historic decision to step down by assuring that while his physical strength is waning, he is on a pilgrimage home. An italianletter to newspaper today after readers inquired about his health. Anniversary of his announcement is february 11. Prime minister Justin Trudeau is embarking on a fourday u. S. Tour. His first stop is in chicago to can out how Public Service contribute a Stronger Economic and political ties between the two nations. He is also expected to meet with chicago mayor rahm emanuel. Hours a day,24 powered by more than 2700 journalists and analysts in over 120 countries. Isark crumpton, this bloomberg. Softbankeaking news, is in talks to buy over a third of , according to the wall street journal. This could be up to 10 billion or more, that recording to the report. And we actually heard from masayoshi son, saying the company had all sorts of tract to invest 20 billion in tech overnight. The acquisition trail of softbank continues potentially. Scarlet and just a bit of color. We heard that swiss repo the management has travel to tokyo to meet with muggier she some masayoshi son. Meanwhile, bill dudley weighing in on the selloff that an event in new york this morning. He said that big downturn is not a story for central bankers, and is not impact the economy much either. Of the stock market were to go down precipitously and stay down, that would feed into the economic outlook. That would affect my view in terms of the applications for monetary policy. This is the big story in the press, a big story for Financial Market participants. I do not think it is a big story at all at this point for central bankers. Kaplan meantime, robert also addressing the selloff at an event in frankfurt earlier today. He said corrections are healthy, as people know the u. S. And Global Markets have gone for an extended run without a 3 correction in low volatility. We are joined now by victoria fernandez. Rita speak with you. We are two days past the selloff thatnday, and the turmoil we saw last week as well. What lessons have we learned from it . Is it safe to say that there is some sense or semblance of normality that has returned here . I think so. When you look at the last year we have had, 2017 was not what we would consider a normal year. A lot of the tailwind we had all of last year that were feeding into the market are starting to decline. I think we can expect to have more volatility. If you look at central bank support, obviously over 16 trillion on their Balance Sheet they own over 33 of all sovereign bonds, there is a lot of support that has been built in over the years, and we are just tarting to see that come off her at home and also the ecb is looking to finish their Bond Buying Program either in september or december. Interest rates are moving higher. We have had inflation come in from the wage numbers we saw on friday, and we also have record inflows. Last month, if you look, 102 billion in mutual funds and etfs. As that starts to come back, expect more volatility. Julia one of the anomalies earlier would be this squeeze in short volatility product that are out there. Where are we as far as that section of the market is concerned, and do we have to expect the same kind of dramatic blow to an volatility as things like that market and the leverage in that market play into the themes here . Victoria i think you are exactly right when you say it is the leverage. That component of all of those product and having to uncover all of the trade, change those positioning than the marketplace when they saw that move in the mix. Write as move was pretty much based on fundamentals. You had rates moving higher, the 10 year with getting closer to that neutral 3 rate, but it was not surprising to see some moves there. Then you had that vix move, and there were a lot of these etfs,. Tns that were short the vix the small components of the market, but they had to make a lot of trades to try and cover their conditioning. That is what led to that. I do not think we will see quite as much going forward, but we will still have the volatility there. What are you hearing from your clients . Are they getting nervous or are they comfortable with the fact that we saw a muchneeded correction and are comfortable with the narrative that is now changing . Have actually been speaking with our clients for a while. A correction would actually be a welcome event for us. If ive percent pullback is not something we needed to be a freight of, because they were expecting when that happens, we were prepared for that. We are actually a lot of our clients are using our covered call strategy, where volatility is a good thing for that product. It has been outperforming over the past week. , weour fixed income clients have been short duration and reduced Interest Rate risk for those clients. So they were prepared for this to common and we just keep reminding them to step back, look at your positioning, see where you are and be ready for the moves in the market. Julia one of the interesting things we have seen over the past few weeks and days of choppiness is how well the credit market formed here. Is that where we need to look at is moreer, if something sustained in terms of a pullback taking place . Does credit still lead in this market . Absolutely. There are so many times when the equity market in the bond market tell you different stories, and you have to peel back the layers. F the onion to see with all the volatility in the equity markets, look at the spread. Spreads, Investment Grade spreads were pretty much contained. You did see movement in high yield etfs, but that is a different kind of animal. You have other things in play with liquidation, but the spreads themselves were pretty well contained. You can even see it in the 10 year. We went down to a 264 and trading overnight on monday. That is one basis point above the high last year, to 63. It hit that limit, and today we are right back in the low to 80s. I think the bond market is saying yes, there is volatility, but there is not a reason to be concerned that the fundamental at this point. Got it. Fundamentals intact, but volatility, a new wrinkle there. Victoria fernandez, thank you. Be sure to turn in tomorrow for exclusive interviews with dallas fed president Robert Kaplan at 5 00 p. M. Eastern and his new york counterpart 12 30. Scarlet this is bloomberg markets. Im scarlet fu. Julia im julia chatterley. Senate leader is announcing a bipartisan twoyear deal on the budget this afternoon. Howlett fair in the house . Lets go to the house, where Kevin Cirilli is joined by a central democrat whose vote will be crucial during this process. Here on busy afternoon capitol hill. Are joined by congressman the congressman from california. Will you support this twoyear agreement . I do not know what it is yet. I like the cap, the military, the domestic programs also being funded. There are other issues in the house. The senate has an agreement to take up the immigration issue and vote on the floor. No such agreement in the house yet. I think we should get forward and get this done. Kevin increasing opioid addiction programs, Disaster Fund relief, and extending the limit through 2019. House Minority Leader Nancy Pelosi says she is concerned about immigration. Do you think enough democrats will support it . You were one of 17 democrats who supported this last night. We are looking for this at the same agreement and the leadership level at the house that exist in the senate. That means that will come to the floor of the house, as it is in the senate, a debate and a vote on the immigration bill that includes daca and possibly him other immigration issues. I have had agricultural communities coming in saying where is the Agricultural Labor bill . Kevin some folks in the Republican Party are concerned about too much government spending. It is unknown right now about whether house leaders will get on board with this. Of should even a dozen or so them not get on board with this, you are constituency, your block of democrats in the house of representatives is so crucial. To keepld you be doing this governmt rt is bring to thf the senate a debate and a bill on immigration. They do the same thing in the house, deal done. I do not know what those details would be. It would probably be daca, border security, all of that to be determined. We have never vote in the house of representatives on an immigration bill. This is a festering problem across the nation. The other piece of it is all that we are talking about here, all of this spending creates a huge deficit. Trilliona dollars, one . 5 trillion added to the existing deficit. It will be over 800 billion this year. The deficit hawks disappeared in december when the tax bill came through. They will come back when the market warms up, and they will come back with a vengeance. That might be the thing that the rails all of this. Leader mcconnell is saying this is a rare moment of bipartisanship. Senator schumer cannot help himself, and said that President Trump played little to no role in these negotiations at all. From your perspective, who is really calling the shots on these types of agreements . The white house or leadership . Goes back and forth. I will tell you this. If the thing goes down, everyone will be looking for someone else to blame. If it happens, everyone will be claiming credit for it. The fact of the matter, it is our job to find a solution to keep the government running and i believe we will. But im interested in what the president tends to do. He tweeted yesterday that we ought to shut down government unless he gets his wall. At the moment, i do not see a wall in this deal, so im curious what the president of view be. Esident of the would he veto this . Kevin in the less than 30 seconds we have left, north korea, opening games how concerned are you with north korea sending a delegation to the south korea olympics . Open negotiations between the two countries and the United States in the neighborhood is necessary and important. Congressman garamendi, democrat from california. Scarlet thank you, kevins a really. Up next, smart beta etfs are designed to perform and very volatile markets. We will also get the details on what goes into org, the etf for organic foods. Scarlet this is bloomberg markets. It is time for our smart beta etf report. Across markets. Especially in equities and especially to do with low volatility etfs. What tends to do well smart beta wise in these volatile times . Here to discuss his is etf analyst eric balchunas. Lets start with what you call pure factor etfs. What does that mean . I am a big fan of these. Is, but they go through the stocks that have the lowest pe and short stocks at the highest pe. That is what you are supposed to do to capture the value factor. That is what academic journals tell you to do. The cost of shorting is a lot, and nobody wants to short when the market is doing well. But if you look there, the white , the markets chep neutral value. The other is the qval, pretty hardcore in the long side. The yellow is vanguard. This happens all the time. These products, because of the short position that is legit, they do better in these selloffs. If you expect a rough time going forward, these alternatives and factor etfs that do it with a short position are going to outperform. But over the past several years, this thing has lacked a lot. If you point out, there are so many levels of the pure factor you are getting in the factory etfs. Factor, and then you get all the way to vanguard, which is less. You do not want to go too far out. Eric yes. What makes a good Factor Investing strategy and what else are two different things. [laughter] scarlet that might account for the lack of assets as well. Then you have downside hedged etfs, which could be problematic in biology market biology markets . Markets . Lets all the s p 500, but we are going to sprinkle in some vix futures depending on signals. Up a lot, was actually 4 . It did very well. Scarlet that is a white line there. Yes, that little bit of vix was powerful. So much, you got a big kick. When you take the phdg out 105 versusit is up the s p is 115. The cost is so dramatic it will down, but if we go up or or down, people will flock to it because it will outperform. Argue foro that might holding it for the shortterm rather than the long term. Lets talk about one of the thematic etfs, a smart beta etf we like to focus on. It is the focus on organics companies, or company that it is organic food, drinks, and other products. Lets take a look at org. The organics etf goes by the ticker org. It looks to take advantage of the booming market of food, drinks, and other products made chemicals and pesticides. Americans spent 150 billion on organic products in 2015. Returning more than 40 over the past year, there is good exposure in small and midcap. Makes up a fifth of the etf. Oregon has lower trading volume, has lower trading volume. Is cheaper than most the mattock funds. Scarlet and this is an easy one for people to get their head around as well. Eric this is pretty obvious. Organic food, it is popular. What is interesting about this one, up 40 . I did not think it was doing that great. This is from janice, right . This is better than all of their active funds. You have the right number theme thematic etfom that is doing well. I think it will slowly start to compete against actives, because this is what you throw in your portfolio to give it a little spice, and that is what activist trying to be used for. Scarlet not a standalone, but an additive. Eric balchunas, thank you so much. Be sure to join eric and myself every wednesday for bloomberg etf iq, the first show fully focused on etfs. At 12 30 new it york time every wednesday, right here on bloomberg. From new york, this is bloomberg. Scarlet that is some of our reportingscarlet . This is bloomberg markets. Im scarlet fu. Lets get you a check of the headlines with Mark Crumpton. Art senate Senate Majority mark Senate Majority made little schumer mention of what is not coming with the new budget agreement, a plan to protect the dreamer immigrants. Its been a painstaking and monthlong process, months long process. It has required concessions, sometimes painful, by both sides. But by the end of the day, i believe we have reached a budget deal that neither side loves but both sides can be proud of. Mark senator schumer says he hopes paul ryan will do what Mitch Mcconnell has promised to do and hold a fair and open process to debate a measure to protect the dreamers. Support is growing for an investigation into how the u. S. Olympic committee and usa. Ymnastics handle sexual abuse cases lawmakers have. Signed on to legislation to assign a special committee to handle the program. To threeen sentenced life sentences. Railroad executives are now saying positive train control, ptc, will likely not be in place 2020. The National Transportation safety board says the technology could have prevented a collision between an amtrak train and an out of Service Freight train sunday in South Carolina and the derailment of an amtrak train in december near polar beer, washington. Olympia, washington. Russian cyber spies pursuing sensitive u. S. Defense technology tricked key contract workers to exposing their email to theft. Bearackers known as fancy went after dozens of people who worked at Small Companies and defensive giants, like lockheed martin, raytheon, boeing, and airbus. Global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. We also have Commodity Markets closing in new york. Lets get you an update. Oil seeing its biggest decline since december. American wells cant doubt 10 Million Barrels american wells honked out pumped out 10 Million Barrels a day last year. At apiles are declining slower rate than average. Wheat rising by almost 3. 5 , now 3. 2 . John conditions are expected in the southern great plains in the next two weeks. In russia. , a blizzard has covered the wheat crop with snow, which will protect it from the cold. In metals, the dollar surge is painting the field read with lead, copper, and zinc down by at least 2 . Julia sticking in this space, we have rio tinto shares rallying today. Is reported profits at a threeyear high. Im very proud of what rio tinto has achieved. We kept our promises. Billion, including 5. 2 dividends, the highest in the industry and in the history of the company. Today is a good day. We have a strong Balance Sheet. We have the momentum. We have the growth options. Our severeitted to cash return longterm. Weve got the momentum. We just keep pushing. Francine talk about your growth options. You have three options. You to do a three at once. You either give more back to capex,rs, you invest in or you invest in marc anthonys. In more companies. Capitallieve in the business. It is about rewarding our shareholders with cash return. And its about investing in the longterm. We have three drivers in terms of investment in the longterm. When we say growth, it is growth in cash flows. It is not volume or market share. We are not interested in being the largest. Its about being the most profitable. We havegrowth options, plenty of options. Inare building a mine australia and mongolia. The second lever we have is about productivity. We have 50 billion of investor capital. Theres a lot of capacity so we can do more. We are committed to a 5 billion market in the next five years. And the last is about a mende m a. We are looking at them. It isl pursue m a only if good for shareholders. Francine you say you are not largest. D in being the let me show you the chart of your shares since you took over in rio tinto in july 2016. That is an impressive increase in the share price. Superiore talk about cash return for shareholders, it is not just about share price. It is about dividends and buybacks, let we demonstrated today. The past, i cant change it. We are looking forward very positive. We have the momentum. We have growth options. And we are committed to bringing sapir cash return to our shareholders. The congratulations on performance. You have done on extra ordinary task over the last 24 or even 36 months. I want to cut to the chase. You have a joint venture in resolution copper. Copper is what you own personally out in arizona. How will you not be like bhp billiton . What is the religion so you dont buy it to be bigger . As i said, for us, it is about in the most profitable. We are clear that, to be profitable, we have to run better. We have committed 5 billion in the next five years within each group. We are going through the permitting process. In the u. S. , it is complicated and slow. We are progressing slowly. I am confident. Is rio tinto ceo speaking with bloomberg today. Tesla is set to return report earnings after the bell. Elon musk had a pretty good day with the launch of the rocket. A legendary day. This is bloomberg. This is bloomberg markets. Julia its time to look at stocks. Weight watchers shares are among the best performance in the russell 2000. Apologize for laughing. Julie i think you have the right idea. Huge growth. You are talking about maybe they need to change their name. A kind of sounds antiquated. Pachulia, your idea but, julia, your idea. The revenue goal is not surprising. Oprah did speak at the event. Lets hop into the bloomberg. This is really extraordinary. I am not so familiar with the Weight Watchers story. But from a stocks standpoint, look at this. This is the alltime by back in 2012. Down nearly 96 into 2015. Now up almost 2000 . This is when oprah joined the board and saved the company. That is the oprah factor. Pretty impressive. One thing is lots of competition out there. They are trying to reach men. They did sign on dj khaled. Standpoint, take a look at the financial analysis. They are expected to post annual Revenue Growth for the first time. But 50 , literally off the charts. I believe opera can probably do whatever she wants to. Julia they should probably change the name to have opera i n there. Much. You so scarlet millions of viewers watched on television and online musksex launched elon very own cherry roadster. But now its back to earth. Questions about the crucial model elite cars. Cory, will we get more delays when it comes to the model 3 . Holdction has not taken the way elon musk has promised. I dont get the sense that investors are that impatient. Cory they are saying we dont believe elon musk anymore, projections on how much they will make and how much they will sell. Analysts dont believe it, whether shortsellers are even long. Who,you have stockholders in many cases, they dont care what the actual results are. They think the thing is cool. Look, it can fly out or space outer space. I think maybe that is the point. Tremendously has Ambitious Goals and consistently fails to meet production targets. Scarlet and in and asked not space it as well. Cory its just a spacesuit. And a crash test dummy. Julia they made all sorts of promises about a not want to auto and a taunus an nymous trip. At what point do we start to question . Cory as you look at the way wall street doesnt leave elon musks targets, they demand the gm, bmw, daimlerchrysler, ford do meet their production targets. And as theloser delays for tesla creep up on tesla, it doesnt exist alone. Germany,t and in production targets are often met, more often than not. So teslas pushing closer and closer to launch dates. I think the competitive picture will look very different in 2019, in 2020, than it does today. Every production delay pushes him against it. Chart shows us which different cars they produce. In the orange are the model s. Y green come ecb x ou see the x. Some of the reviews of the model 3 have been ugly, to say the least. Car geeks went to the car and took it apart and said i could rarely fit anything through this side of the truck. This car door handle doesnt work too well if you can grab it right or if the electricity goes out. Real concerns about the way the car is engineered. Builtnteresting they have a fantastic brand message around what tesla is with a 100,000 car. Anyone will look at the 35,000 car might look at it if they compare to another 35,000 car. They might be pleased without extras. But compared to the 100,000 car that built the reputation, one would imagine that it pales by comparison. Julia thats a great point. Some reallife perspective on tesla. Scarlet nevertheless, people continue to love tesla cars. They put down these big deposits, not knowing when they will actually get delivery of these vehicles. That helps tesla out. They are burning a lot of cash right now. Julia its time now for the Bloomberg Business flash. Set america is canadas mortgage market. It would be backed by home loans not guaranteed by the government. A spokesperson declined comment. Airlines planning a jet order. The carrier plans to order 50 new jetliners in the next few weeks. Agean has doubled its fleet since 2013. Dunkin donuts is trying to. Iminish its footprint the company says it will phase out styrofoam cups by 2020. Scarlet coming up, a new chapter for essence magazine. The publication is once again fully black owned and run by a woman. This is bloomberg. This is bloomberg markets. Almost twost time in decades, as sense magazine is 100 percent black owned again 100 nce magazine is blackowned once again. It will keep its current executive team, which consists entirely of black women, including michelle ebanks, the magazines president. I sat down with michelle to talk about the magazines new chapter. Michelle this is such a moment in history. It is a time of empowerment for women and women of color. To the extent that there is clear ownership, clear identity, it just reinforces what is on the minds of women. You know, how are we more in control of our own destiny . Scarlet your Management Team is not only all black, but allfemale, and they have an equity stake in the magazine. Everyone has some money in the game. It seems like a significant pivot. What areas might you focus on as you get started . Michelle thats a wonderful question. Being under times ownership, we timing,e conforming to strategy and their growth agenda. Now we have the opportunity to really be essence. Of course, we are in the content business. Narrative fromr her point of view, her aspirations, her challenges, her love some of her desires, her joy. So we will be content, of course, but also a fears connection to community. We are the community we serve and that matters in our culture. This is an opportunity for us to be even more deeply rooted, grounded in that sense of community. Today, the technology, commerce is more closely integrated into community and content. Now we will be able to bring those three things together under the umbrella of essence communications. Scarlet what are you hearing from your community of women . Is there a greater demand for a specific kind of content . Is the audience more engaged or engaged in a different way following the election of President Trump . Michelle there is drive, focus, on the confidence and the ability to create change, whether it is voting in elections, whether it is electing mayors of cities. We have more black women who are now mayors, mayor elects than ever before. Whether it is changing the course of congressional races, moving up in the wrecks of corporations or owning your business, that Economic Empowerment is of critical importance to this community of women who are also the ceos of their household. Scarlet advertising in the print magazine industry has been in deterioration. This will not change even with a laser focus on your community. What are you doing to mitigate the impact of that trend . Even though your audience is very loyal and they are getting topics a want to see from you, it is still discouraging. Michelle it is discouraging. Never let a crisis go to waste. We are optimistic. We have our independent snap. Now. A independence it is a critical change. We are able to work more closely with our advertising partners. Advertisers, corporations, they see themselves as a part of strengthening our social and economic communities. As an independent company, they see us more as a partner. Scarlet the annual essencescarlet festival is held every year in new orleans. It was more profitable than the magazine itself. Talk about the distention of this festival. Had you put it together . What are the priorities . What informs the lineup . Michelle we work with our editorial team, our marketing team. They are talking about who they want to hear, the music they are loving now that is motivating them, that is making them happy. That is who we reach out to. That is who we want to see on the stage. We are her. It is very much that meritocracy, that where everyone has input. How do we make it exciting . How do we make it special . Women plan all year to be a part of this essence festival. We want to make it truly a memorable experience. Scarlet that was michelle ebanks, president of essence communications. This is bloomberg. Julia im julia chasse sleep. Scarlet im scarlet fu. Welcome to bloomberg markets. Julia we are live in bloomberg world headquarters. Here are the top stories were covering. The path to recovery. U. S. Stocks continue to fluctuate as officials played down worries of the recent turmoil. Wynnthe chairman and ceo of the steps down. Also, we will look at twists with softbank. They are in talks on an investment. We brought you those headlines. Any further headlines, we will bring you. Lets get an update on the broader markets. Julie we are seeing more bumping this. We still have the dow hanging onto gains. Earlier it rose as much as one and a quarter percent. The s p and nasdaq now in the red as we continue to see larger than typical price swings. Stocks are going back towards their loans as we see the 10 year yield rise. Yield now up 2. 84 as we see some selling occur. , there has been a lot of conversation about whether the fed would be changing its trajectory. Will it still be three increases. We will see an increase in march at the very least, we will not see the fed pullback from that. This is the probability as it is priced in. We saw it go to a 90 chance. It dipped down but still at 86 chance, only went as low as 80. Market participants think it will go ahead with that first rate hike in march. Elsewhere in terms of what we are watching, we have been watching the industrials gain as we get closer to a budget deal in congress that could include military spending. A lot of the defense contractors are on the rise. Lockheed martin, l3 communications all rising. Industrials are among the best performers today. In terms of the individual best , steve when exits. There is some optimism about its future. They will discuss that more. Hasbro fell after its earnings, now on the rise as the company talks about some of the things that negatively affected it last quarter may be dissipating. Still suffering from week traffic. Microchip technology, Semiconductor Maker having changes. E a couple of things, twitter reports tomorrow. They are saying and a norm a anonymoushe an surge. What is important, snap is a heavily shorted stock. Some of the gain you are seeing today is exacerbated a short coverage. Steve when has quit as the ceo of wynn resorts. He will he said he could not be effective in his current role. We are joined now by bloombergs Los Angeles Bloomberg chief. Even as the company has let go of steve when steve wynn, it is facing a lot of pressure. Massachusetts regulators are win. Nuing to probe into this is significant news about nevada. Would continue. Massachusetts said they will be taking a look at his first personal stock holdings. He may be gone as chairman and ceo, he is still the largest ceo that. N exercise and thathave to sell would further the company in a position where it would be vulnerable to a takeover. Scarlet what about nevada . The same allegations. They were not as specific. Massachusetts has public hearings. What dide a look at the board what did the company no, why was an action taken earlier . Julia we were just showing the a fifth of, it lost its value in light of these allegations, rallying after steve wynn steps down. The divergent direction analysts are going on the impact of him stepping away from the business. Upgrading. Others saying it is going to take years to recoup. That is one of the things we have been looking at. We are not seeing any evidence of massive cancellations or anything like that. But there is no doubt he was a visionary and a gutsy businessperson. He built a lot of projects a professional manager would not pursue as aggressively. Talk to us about the president shifting now to the ceo spot. What do we know about him . How much of a visionary as he . He is got the experience. He started at the founding of the company in 2002. Wellliked by the financial community. Has experience running casinos. You always saw him around handinhand with steve when. For 16 years side and no doubt learned a lot. Of, now thatking steve when has resigned, where . Oes that leave her lawsuit she signed over that to steve when . This was the crux of their dispute. Are chasing now. That case is supposed to go to trial in april. One of the major arguments to maintain control was that he was the ceo and chairman and needed to have that. Now that is wiped away. Theyuld be most ironic, bought back shares of the japanese businessmen after he was accused of bribery overseas. If steve when had that fate, he would have to give up that share. Julia is this going to appease the regulators . Same issues their investigations are continuing. Certainly people think that this is the thing that needed to be taken to get things moving forward. Were going to looking for cues on what the investigation in these jurisdictions where it takes them. Julia plenty of angles in the story. Lets get to the bloomberg first word news. Mark Senate Leaders announced a bipartisan budget agreement that would provide 300 billion in additional funding, to avert a friday Government Shutdown and end an impasse on spending priorities. No one would suggest it is perfect. We worked hard to find Common Ground and stay focused on serving the American People. This bipartisan agreement will unwind the sequestration cards that have hamstrung our armed forces and jeopardized our national security. It doesnt have everything republicans want, but it has a great deal of what the American People want. Nancy pelosi was part of the negotiations and said earlier that House Democrats wont back the plan without a commitment rum paul ryan to allow an open debate on immigration legislation similar to the promise made by Mitch Mcconnell. The white house staff secretary Rob Pittenger will resign after a british tabloid reported he emotionally and physically abused his exwives. He called the allegations outrageous and falls. The white house chief of staff defended him in a statement calling him a man of true integrity and honor. He is considered one of President Trumps more favored aides. Officials have opened its border with the gaza strip for the first time this year. Operatesing point would for three days by humanitarian basis. Thousands of residents are on travel lists. Most are medical patients and holders of residency permits other countries. Egypt has kept of the border mostly closed since hamas took over. Vladimir putin has released his net worth ahead of president ial elections. The Russian Election commission 680,000 earned dollars. He also reportedly owns apartments in moscow and st. Petersburg and two old cars. It was required to give asset details to become eligible to run. He completed his registration tuesday. Global news 24 hours a day powered by 2700 journalists and analysts in 120 countries. This is bloomberg. Why does theng up, bank billionaire take this is bloomberg. Julia this is bloomberg markets. Scarlet time now for the business flash. Vos brothers are not giving up on cryptocurrency despite bitcoin plunging to the lowest since the november midnovember. Sit there and watch the price day today. We are in this for the long haul. Wasemember when bitcoin eight dollars. It is all gravy from here. Scarlet they are early bitcoin investors. Isrease regulation they say good for the Digital Currency space. A recent survey might report suggests the me too movement has made some men afraid to participate in activities with women. A bloomberg in television interview. Whites do i think it would be a better place question mark absolutely. Every industry would be a better place if there were more women running more companies and more women in government. Scarlet that is your update. Julia time for the deals report. We zero in on the m a space. Talk when resorts wynn resorts. Who are the potential options . . Gm in gm the most natural fit here. In terms of the type of casinos, they are similar. As we know whenever a company is in trouble, its rivals circle like sharks. Caesars would have a good look at them. Steveal issue, as long as when controls what he does control, it is difficult to see anyone acquiring it unless he wants to sell. And you have to look at what the regulators are doing. They are still investigating the company. They may ultimately forced him to divest which would then create a different proposition. Depending on that point you could see someone negotiate a less hostile more friendly transaction. The company may not need to sell at all at that point. We have seen the company take some steps to get ahead of this potential outflow. Obviously, they have named katie ceo. Named a new ceo. They are doing some stuff to stem the bleeding here. If he leaves, if he sells his shares that does open up the prospect somewhat could come in to buy it. You could see one of the rivals tried to acquire specific assets. This is an interesting one. This feels like it has gone on forever. We had this whole saga. Trunk has gone from one thing to another. Trunk is selling the l. A. Times to one of its existing investors. They will use the protest profits. Deal in thelatest print media space. It is fascinating when you look at these new owners coming into this, they are independent billionaires from very different Media Industries and they have this vision they can run these things, they can weather the it is seen as a great boon to the industry. Bezos is classic for that. Withet you come to terms the fact that you work for a billionaire. Think of the media companies, including present company. Either work for a billion or or you work for a company fastgrowing going out of business. Preliminaryin discussions with softbank. Talk tell us about the strategy here . There is little detail on this so far. They were in talks to acquire a minority investment which we had said that is correct. It is highly preliminary. No other terms have been decided. Softbank acquired a ton of stuff. They are usually intact. Withve seen them do stuff uber. They have spread to other things. This is swift reinsurance. It seems as low risk as you get. This would be a classic softbank thing. They would own a third of the company. Insurance m a was really dead for a long time. We have seen one big insurance deal. If this goes through this would be a 10 billion transaction. Scarlet big numbers involved here. Thank you. A quick reminder you can catch our interviews on the bloomberg with the function tv. Here is Kevin Cirilli speaking on the budget deal that hopefully will get through congress. Julia the house passed some challenges. From new york, this is bloomberg. Bloomberg markets, im julia chesley. Scarlet and im scarlet fu. Us, the equity derivatives strategist, i know you talk to him yesterday. We wanted to bring him back to talk about what has occurred in the market over the past week. You reminded me last june you laid out the mechanics of what happened monday would look like. If we saw a spike in volatility exacerbated by a blowup. What happens now . This has effectively blown up. They will continue to trade. They dont matter as much now as they used to. A significant source of instability, in the volatility complex has been wiped out. They will exist as a shadow of their former self. There is less instability in the system now. We are no longer going to see as much demand for volatility and they are not going to be as exacerbated. If we look at selloffs, there is always a sacrificial lamb. It was people invested in energy credits. There is always a sacrificial lamb that has to pitcher late. Did,u look at what the vix the decks had the biggest overreaction. This tells me given that nothing has fundamentally changed, this was mostly an idiosyncratic move driven by volatility. Julia the vix is still in a relatively elevated level of around 24 today. Theell to record lows on vix. Are we back to a more normal volatility regime where, the longterm average is 19 and a half, 20. Do we go back to that . Equities are selling off before this blowoff blowup happened. Now we are back to that situation. It is exacerbated the selloff . I do think they did. I dont think they were the only reason why. They dealt a shock to the system. In my opinion i dont think this is the first domino of several things. Weve suffered a flash but the system suffered a shock and is mostly intact. Now, if you were of the view volatility is going to come back down, you dont necessarily have as many options to short volatility. What would you do if you were of the view volatility is going to come back down . We think volatility is elevated at these levels. I think the takeaway is not that it is always bad. You have to do it in a risk limited fashion. Leverage is key. Like risk limited ways of shorting volatility or you only have your premium at risk. It is the etf that tracks the vix. It goes up. What would your spread look like . We like buying march spreads. This is applying for a normalization of volatility over the next month. Thank you. Was prescient like so many of our options guests were about what happened monday and how it might play out. Julia still ahead from a great week for elon musk with the falcon heavy launch. Can he continue the trend after the bell . We will discuss next. 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. Im Mark Crumpton was first word news. With todays announcement of a bipartisan spending deal there is hope a second Government Shutdown this year can be averted. The defense secretary jim mattis explained how critical the twoyear budget deal is for the armed forces. Quite shutting down the government would be damaging to the military for all the reasons i decided about a continuing resolution. I have been aggravated by the sendown itself where we home nonuniformed personnel except those in critical areas. It analyzes everything that we do. Once Congress Must come to terms on a spending bill by midnight to avoid another stoppage. Search and rescue teams are working to free people trapped in the rubble from twostate earthquakes. Six people were killed. 250 others injured. Military