In the u. S. After all three major averages reached records yesterday. The focus is more on individual Companies Reported earnings, and we are heating up in that department. A lot of Companies Reporting today and over the next couple of weeks. We are closer to a milestone. It is not the universe not the anniversary of black monday, although that is approaching as well, but we are going to match the longest streak ever without a 3 decline in the s p 500. If you look at the bloomberg, the last time we had that kind of streak from january 1995 to january of 1996, that was 247 trading days. As long as we dont see a few percent pullback this week 3 pullback this week, we will match that or exceed it. The blue line is this week back into the mid1990s. Health care shares of the bestperforming stock today, and that is led by united health, the nations Largest Health insurer, came out with its earnings. The medical loss ratio is lower than it had anticipated. Its medical spending by its customers fill in the third quarter. Analysts say it bodes well for the other insurers, although not for things like hospitals. They are a victim of the lower spending. Many insurers are going to beat reporting in the next week or so. We are also watching netflix today. For this i want you to take a look at the bloomberg. Afterhourst the session into today. After earnings came out last night, shares rose. Netflix reported big subscriber growth nearly 4. 5 million 850,000 addedad, in the u. S. Shares fell today. Over the past 12 hours, we are seeing this decline here. The company will spend 18 billion on programming, a third more than in 2017. That is giving investors pause. Last but not least, the banks today. We have a next picture. Morgan stanley shares gaining as the Wealth Management unit outperforms. Goldman sachs, even know it performed well on its own investments, trading revenue decline. The shares are under pressure. Up just have to percent after a small script investors pushing for a breakup of the bank. Mark . Mark yes, julie, while a big investor disagrees with everything that the small investors are saying give Credit Suisse time is when he is saying we will get to that later. Highest since june 19. Banks among the bestperforming industry groups. Utilities and auto among the other top performers. Earnings season well underway. Getting a bit of a boost from rising birthrates in china. Sales growth accelerated to the fastest pace in two years and the third, because of a rebound in demand in china for baby food and bottled water. Three. In china the rebound in china boosted the chief executive as he tries to resuscitate the largest business can yogurt and fresh gary cohn which has not had shipment growth yogurt and fresh da would justir not had shipment growth in years. Y, secondquarter revenue beat estimates, including ramy martin cognac sales in asia. Isand for its cognacs improving in china after it opened a retail store in beijing , the most louis xiii expensive cognac, which sells for 3000 a bottle. It cited strength in singapore and japan. Shares have been at or near a record high lately on the growing demand for cognac in the United States from which accounts for 40 of the companys revenue. And spain is cutting its Economic Growth forecast for the next year, acknowledging the impact of the escalating political crisis that led the National Court in madrid to jail catalan separatists. They are sending the impact of the political standoff in catalonia from which accounts output. T 1 5 of the Spanish State turning up the pressure on separatist leaders as Prime Minister rajoy tries to persuade the catalonian president to drop his push for independence. Spread,ermany, yield purple line. You can see the yield spread for spain and germany is lower than italygermany. Vonnie great stuff, mark. 2 for wall street giants posting thirdquarter results today. Goldman sachs has continued weakness in the fixed income trading units, 26 decline. It was better than estimates, though. Wasan stanley, meanwhile, shielded from the same bond trading slump that affected its rivals. Joining us is gerard cassidy, managing director of Equity Research at rbc Capital Markets. He has outperformed on morgan and sector perform on goldman. Are you considering changing now . We are analyzing the data right now. The numbers came out this morning and we had a large equity gain get goldman did not beat expectations. They, like the others, you identify this, the trading area for the group is the weak spot, on average come when you look at the five Large Capital market players. On a yearoveryear basis, itigan down the most and c down the least. Vonnie what about the idea that Wealth Management is helping of these banks . To dependent on the economy . Interesting is about Wealth Management, it is one of the areas doing well, and it can be partially attribute it to the strength of the Global Equity markets, particularly here in the United States. Due to the rising values. Else have youwhat taken away from the big five . Take away fromhe the big five, from your perspective . Gerard regarding the outcome it is going to be interesting, because the volatility in the fixed income and equity markets has been very low. With the fed will with the going into ave land that will pick up momentum in 2018, there is increased probability that volatility will pick up, which is what the trading houses need. In terms of the other businesses advisory, the m a activity, very strong for Goldman Sachs this morning, that business was quite strong. Equity Capital Markets were acquainted debt Capital Markets were better than the equity Capital Markets, led by a lot of the strong credit quality issues that were issues. Mark how closely are you keeping an eye on who could well be debated to be the next fed chair . John taylor seems to be top of the plow come his start in the ascendancy. When it comes to the chair and view onsons deregulation, how are you waiting things waiting things and the potential impact on banks . Gerard i think you put your finger on something, because of janet yellen is replaced him and i think the consensus is that she will be replaced, whether it or another one identified as a potential replacement, these gentlemen are more hawkish than janet yellen. They also are bigger believers in less regulation. If one of these players comes in to replace her and it will lead to greater volatility on top of the online, but also, less regulation. We have already seen it with the treasury white paper that came out in october, that the treasury is pointing to less regulation in Capital Markets. The new vicechairman of safety and soundness for the Federal Reserve, he has been identified as somebody who supports less regulation. This is all positive for this group as we go into 2018. Vonnie in some ways, it feels like the Net Interest Income is not even the most important part of earnings on the Balance Sheets right now. Orhe were to tighten faster the fomc, it would not make that much of a difference to the banks bottom line. Gerard depending on the bank. For Goldman Sachs and morgan stanley, you are spot on. But for bank of america, which owns merrill lynch, it would be very important, as it would be for j. P. Morgan chase and the regional banks. Interest rates would be very important depending on the bank. But for the pure Capital Market players, you are right, it is not as important. Vonnie i have to ask you about the 2. 2 billion Share Buyback for Goldman Sachs. Are you surprised . What does this mean for investors in a gs and the other banks . Gerard gerard this is a critical component of why investors should own the banking group. It is an overcapitalize group. It will continue to give back excess capital through chair repurchases, like you describe for Goldman Sachs this morning. They came out and give the total number of 800 billion there will be stunning on return of capital today, a new number for them. What i would suggest is this is very important to why somebody would want to own a bank stock. You will see the dividend payout ratios can we believe, get 40 of earnings, and the total combined payout ratios, by back and dividend, exceeding 100 of earnings for some of these banks over the next two years. Mark 10 return on capital, one of your big themes, gerard, why you should own certain times of bank stocks. ,alk us through the other 2 included in those subsections. Gerard i think the riskon valuation pieces of the Investment Team fit perfectly for bank of america and citigroup. You have seenw evaluations improve for these companies. They are not at valuation levels of their peers, but that will come in time if they improve their profitability. As the economies around the world continue to grow, you can take more risk, we believe come with equities, and therefore, bank of america and citigroup is the riskier investment, or are the riskier investments, versus u. S. Bancorp, one of the regional banks that is the highest quality, or even j. P. Morgan chase, for that matter. Vonnie gerard cassidy, thank you for joining us this morning. Lets check in on the first word news. Here is taylor riggs. Trumpspresident nomination for drugs are has withdrawn his nomination. There were reports that he made it harder to fight the opioid crisis. Ramping few latest round of nafta talks with a bombshell proposal, this is the administration wants to eliminate tariffs on supply manage contacts. Candidate uses the system of tariffs and quotas for Dairy Products that they say guarantee stable pricing and production. Canada has dismissed the proposal and we will have more on this at the bottom of the hour. Despite a plea from President Trump, former white house strategist steve bannon will not abandon his war against republican congressional incumbents. People keep asking insurgent candidates to pledge just mitch mcconnell. He will keep asking insurgent candidates to pledge to oust mitch mcconnell. Qa has leftor raq thousands of civilians and fighters dead. Much of the city is in ruins. Global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. I am taylor riggs. This is bloomberg. Vonnie taylor, thank you. Around 52 ag barrel now, as tensions in iraq ignite even further. We will be discussing. Next hour, will the future of automobiles be one without gasoline . The latest on electric vehicles and Autonomous Vehicles with the president of general motors. He joins us in an exclusive interview. This is bloomberg. Mark live from london, i am mark barton. Vonnie from new york, i am vonnie quinn. This is Bloomberg Markets. Time for futures and focus. Gold is extending its drop from a threeweek high. Joining us from the cme is the president of the epstein division of the linen associates. Lets talk a little bit about oil. How much are traders closely watching the conflicts in iraq and the kurdish areas . Will that dictate the price in the coming months . Well, it is important because those are supply factors we watch. Obviously, lets assume that first the president decides to put more sanctions on iran. As long as he stays away from the national guard, the revolutionary army, lets call it, not being a terrorist organization, i think he can get away with those. If he puts too many sanctions on, the question is, do our allies join in, and what does i ran do about it . That is a supply issue. In the current area of iraq and we have heard that the iraqi army has taken it back and production is back to normal. Much of that is fluff or reality. We have to see that. Iraqis say time, the they want to increase production of up to one Million Barrels a day in that region and build the refinery. Those are things in the future. Vonnie, i think the big issue for crude is why he is short going into the Chinese Party conference, which begins tomorrow. We dont know how long it will last. We know that china has grander ideas about oil. They are a big user. Buy part ofng to sarpy aramco. These are all questions up in the air and none of that is bearish for crude at this point. Vonnie what in the China Party Congress have more of an impact on Something Like gold, for example, ira . Ira it depends. What if they say they want to grow the economy even more . It would be more about what they want to do to grow themselves. Copper has taken off in price because Infrastructure Spending is so grand there. If they keep doing that, dont they need oil and other products . Saudi aramco they are going public and may sell to a chinese investor. Who knows if it is not the Chinese Government . Vonnie i rest in, we will be talking later on and hope you can tune in. That was futures in focus. Mark time for the Bloomberg Business flash, the biggest business stories in the news right now. Johnson johnson reported earnings that beat estimates. It raised its outlook for the full year. It held off competition despite losing patent protection. The u. S. Department of justice scamoking into the data and the company says it will cooperate after prosecutors asked for documents. Its ownlds said investigation kobe stilts has its own investigation will show that faking data has gone on for more than a decade. The sec has abandoned scanner corporation over the Nuclear Power project in south carolina. Scanner says it will cooperate. It is already that target of federal and state investigations over its handling of the reactors. The company could be blocked from collecting billions in barely finished projects. Toys r us is exploring options for its growing asia business, including an ipo, according to people familiar with the matter. As 2al could be as much billion. Toys r us file for bankruptcy in north america. Its issue unit is a joint venture with Billionaire Fund brothers. That is Bloomberg Business flash that is your latest Bloomberg Business flash. Vonnie chinas most important political event kicks off tomorrow. Elitel see as the ruling gathers in beijing for the 19th Party Congress. This is bloomberg. Mark this is Bloomberg Markets. I am mark barton in london. Vonnie and from new york, i am vonnie quinn get Chinas Communist Party is about to assemble for the First National congress in five years. The on last week long event brings together rulers and the elite to discuss priorities and to replace top party leaders. Tom mackenzie explains the path to power in china. There are four steps to the chinese leadership pyramid. First you have the Party Congress made up of about 2270 delegates. These are state leaders commit military generals, top executives. From there, the leadership pool is surprisingly small for our country representing almost 1 5 of the global population. The Central Committee has roughly 200 members. Only 5 are women. The Central Committee officially has the power to elect the general secretary and members of other top committees. To advance beyond the Central Committee, you must meet certain criteria. Age is a factor. 2002cedent was set in requiring Standing Committee members 68 or older to retire. Aspiring state leaders need to reach each level at a young enough age to ensure their climb to the top. Joined the Central Committee before his 45th birthday, and under current law can stay on until 2022. Beyond age leaders hoping to advance beyond the Central Committee must have experience in high ministries, military units, and provinces. And a claimant to a top list in shanghai, hometown of former president shaanxi men, has been the most reliable springboard to state power in the last century. After the Central Committee, the next level is the politburo. This 25member committee comprised of prodigies of regions and the officers of the military commission. This committee is a decisionmaking body. At the very top of this power pyramid is the Standing Committee. This elite body is always comprised of members from top state posts president , premier, and chairman of the Standing Committee. The remaining seats are occupied by leaders of Central Party agencies and omissions commissions. And that is chinas narrow path to political power. Elite as chinas ruling gathers in beijing for the 19th Party Congress, Bloomberg T