The president pointed out a few hours ago he signed a 3. 8 billion deal with boeing. He talked about the diplomatic relationships and 2018 and the military relationship the u. S. Enjoyed with singapore. This is bloomberg. Scarlet this is Bloomberg Markets. I am scarlet fu. Julia im julia chatterly. Washington on tax reform. The senate has adopted a present resolution. The house kinship into tax overhaul mode. Kevin cirilli joins us now from capitol hill. Great to have you on. Senate budget revolution resolution included lastminute changes and tweaks the house could tweaks, and the house could bypass it. Spoke to a senior aid who says we are anticipating this will be voted on thursday. They are bypassing a lot of Political Drama and they are trying to get this done this week. We might even see it wednesday night. Most folks are saying thursday is in the budget will be done. It will totally be finished and in the taxwriting committee and the house and senate will get to work. That is where it is going to get a little interesting. Aarlet it is going to get little and. Theres a lot of confusion over what kind of changes will be included. There was talk of no longer making deductions available for contributions to your 401 k . Kevi yesn, President Trump tweeting out earlier today that is not going to be the case in there will be no change to your 401 k . This has was been a popular middleclass tax break that works and it stays. That is good news is your blackrock. Behind theso working scenes against that. The white house is depending the state and local tax deductions. I got my hands on the talking point from the white house earlier today, and they write, we also want the tax code to be fair. Of eliminating state and local tax reduction, why should someone in wyoming pay less of the federal tax than in new york . It is just not there. Both republicans are against eliminating this. They think it would be unfair to them. Privately behind the scenes, there is some potential wiggle room. I think we could see the number of tax brackets that the president wants to reduce from seven to three, maybe at the end of the day going to about four. Give a majorl address on this in washington tomorrow. President trump will likely be on president capitol hill tomorrow. Scarlet a full press effort here from the white house. Of course, one of the Big Questions that everyone is still wondering about including investors is what qualifies as a passthrough . It is down from the current 39. 6 . It is not clear that we figure out what would be a passthrough, what would it be a pastor. Passthrough. Kevin we will not know until he gets the public hearings. Public hearings like it was for health care. I think that is where all of this will go. Last week, i was talking with the Financial Services sources that represent the big Financial Institutions and washington, d. C. And they are all in on this and working very much as taxwriting committees are trying to get some type of definition that would appease them. I think youll hear be hearing a lot more about that. The bottom line, i can tell you this budget gets passed from the it is stillrsday, on the timetable to getting this done by the end of the year. Scarlet well see how it all develops. Thank you so much. I didnt get to my obamacare question as well but we will get to it over the next few hours. Turning to the race for the next fed chair, President Trump says he is very, very close to announcing his fed nominee. I emphasized it. On sunday, trump told fox business networking is considering john taylor and Jerome Powell for the top jobs. He indicated janet yellen remains in the race. Are very, very close not sure that we have any further news, but give us a sense of what i would mean if we do see this tie up of jay powell. J howell is for similar in terms of his Monetary Policy and philosophy to what chair yellen does. I do not think well have a big deviation. Obviously, and other is a camp out there that is arguing that john taylor is not hawkish or might hawkish as they suggest. Nonetheless, he was a vocal critic of qe and he argued for an earlier start in interestrate normalization as well as a more aggressive p ath. When we look back over the past eight years and see 2 gdp growth, i hardly believe we can make a strong argument for the should have been e aggressive. Pretty untroubled vision as a result. Trumpish as a result. At jackson hole, yellen made it clear that she believed in most of the regulation put in crisis. The financial she drew the line in the sand but she is not willing to tolerate it will sell rollback, not to say jay powell is either but it shows the line in the sands maybe a little softer than where chair yellen drew it. Is an ambition economic agenda. If you want to run for reelection he will have to carry bluecollar workers. If you put them on it will take away the punch bowl too soon as the economy is trying to gin up bee pressures, that will negative development for trump. You want to put an infrastructure plan in place and he doesnt want the fed to his mother that when he does enact it. Julia that is the perfect way to talk about ray dalios comments. Talking about the fed meeting this in the bottom 60 of the economy. It masks what is going on. There is the quote as you can see. What you make of ray dalios comments. . The yellen fed a particular has done this, where she has been more focused on lower andme demographics statistics in the economy. She is looking to broaden measures of the Unemployment Rate. She highlighted the Unemployment Rate and various demographic segments. Africanamerican, hispanic, asian, etc. She is looking at this broader pool and saying things like you cannot necessarily trust the official Unemployment Rate because it is not capturing a lot of this life that may still be in the economy. Chair yellen is very much aligned with this i have to sink maybe mr. Dalio comments are an endorsement of sorts. The timing is important. Scarlet if you go back to the ray dalio comment, what he says is if i were running fed policy, i would want to the economy does my question. Should someone like rate dalia kobe in the ray dalio be in the running for venture . Fed chair. Is a smart guy. It is either an endorsement of yellen or sign his hat in the ring, himself. I do not really think it is the latter. Julia do think he is a possible candidate . I do not know with a personal relationship is but i know that is one of the key details. He wants to have a good working relationship with them. Scarlet going back to the idea of a twoseater economy, he identifies the top percent and bottom 62 , which i thought was top 40 andng bottom 60 . It depends if youre looking at home prices in average earnings. If youre looking as 1 as extreme, when you are widening the band to the top 20 versus the remainder, you still see a huge divergence between the two but maybe it puts it more in terms that people can understand. When youre talking about 1 , you are talking about a rarefied segment of society. Julia and he broke it down in terms of those who can benefit from the market rally and a proportion that doesnt. That inequality gap we have even among those two proportions will only increase over the next five to 10 years. Scarlet do you think when it comes to fed chair, there is a different person in the lead every day . Are we talking about the same for candidates and it is that someone is talking about one candidate over the other . I think there are broader surveys in the finance sector. Muchld not place too credence in this betting sites. Sites have a very narrow segment of the population. From a few tweets and public comments, i think we have reshaped our expectations to some degree. I do not think this is a horserace in the final stretch in every day it is a different candidate in the lead. I think he has really been consistently moving in one direction, and i think the front runners we are looking at now, yellen, powell, and john taylor, i think they have largely been the front runners along. We do have a see we do see a few candidates dropping by the wayside but there are plenty of vacant these at the fed of vacancies at the fed. Chief u. S. Economist for bloomberg intelligence. Thank you so much. Lets get your check on the bloomberg first word news with mark crumpton. Mark Rex Tillerson made an afterunced trip to iran returning from a surprise visit to afghanistan. He went with the president and said there is a place for moderate elements of the taliban in afghanistans government. He also said americas commitment to afghanistan is not unlimited. Consider the Current Situation in afghanistan, we were talking about this a few minutes ago, and you look a few years in the past to what the circumstances were, afghanistan has come quite a distance already in terms of creating a population,brant much more vibrant government. Secretary tillerson added there are opportunities to create what he calls a prosperous afghanistan society. President trump will meet with on hislippine president trip to asia. The president has been criticized for a muddy crackdown on drug dealers. He threatene to crack downd when the ambassadors complaint. The top lawyers for 19 states will urge a federal judge to force the drug and Trump Administration to pay subsidies the president cut off this month. Theyttorney general says are required under law and something that will harm consumers. The opposition says there are no authorization. Theresaheresa may may is optimistic the brexit negotiation will have traction before the end of the year. We havent reached a final agreement, but it is going to happen. I have a degree of confidence. I have a degree of confidence that we can get to the point of sufficient progress by december. After the current speech, the current speech was a step forward. Mark may faces a new challenge to them brexit bill. The Opposition Labour Party may join within rebels within her own party. In california, 5000 firefighters are still battling 10 active wildfires from one of the deadliest places in the states history. They began on october 8 and totaled more than two dozen large blazes at its peak. The death toll stands at 42. The California Department of force. Of fireevention prevention warned that there is still a chance of fires due to gusty winds and low humidity. Global news 24 hours a day. Powered by more than 2,700 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. Scarlet coming up, general elections post earnings slump continues. From new york, this is bloomberg. Loomberg this is b markets. Hello pressure is seeking a market valuation of up to 1. 8 billion of the kicks off its ipo this week. Shares are expected to start trading in frankfurt november 2. Investors appetite. Paper has been value drop since june. 1. 9 billion. It provides Cloud Communication Services to businesses in about 80 countries. Halliburton boosted profits in north America Thanks to fracking operations. It has rising orders for fracking work. Experts have been in favor of operating wells that have drove but do not fret. Has 238 proposals for cities and regions across the United States, mexico and canada hoping to become the next home of the companys second headquarters. Bringnnounced promises to thousands of jobs. The proposals came from 43 u. S. States as well as washington, d. C. And puerto rico, three mexican states, and six canadian provinces. That is your is the flash update. Good luck, mexico. Can you imagine if donald trump response to that . Scarlet second the hours of programming right there. Let us take a look at General Electric and another hit to the stock. A disappointing thirdquarter response. This prompted multiple downgrades with most analysts ning of an attendant impending dividend cut. And analysts told us friday that the debate over the dividend is irrelevant. Here is why. Priced int be already. Even more importantly, if this is something that should have a 15 million of year, it shouldnt be a problem. Theyre underperforming to the tune of generating half the cash they should be generating. Scarlet brooks sutherland, a columnist for bloomberg, joins us now. Ke has a new column saying they need to settle in. This is part of the acceptance process, right . Even though it didnt recover on friday. Brooke it did. I think it is partly because they had a very good earnings performance. He is very frank about the challenges ge is facing and with a candom attitude. We will work through this, we will tackle everything, which is great. Afterk that is refreshing the predecessor was very defensive when people question him about his cash flow challenges and these struggles businesses. I think this is good change of a new start to look at the actual numbers and you realize, this is not going to be the type of thing that will work itself out next quarter. You are in for a long, tough walk. Julia people are coming out in going we need to rethink our price target on that one and a lot of analysts are saying there is a problem here and it is accurate and you heard scott david saying that is already in the price era of 20 to 30 cut in the dividend. Would you agree with that . If you go back to before friday where the stock was trading at, i do not think it fair to say the price has the dividend cut because there were people before fridays numbers of saying the dividend will be fine and i think we saw a meaningful tone shift there. I think you have to take into account a lot of the Shareholder Base is Retail Investors who on this for the dividend. I still get a mills about people about people who get angry when they had to cut the dividend there. I do not think you can underestimate the reaction of the type of investors in the cut does happen. Julia Free Cash Flow though. If you get a map and you look at the reduction in the amount of you kind of have to question whether something has got to give. Do think people were assuming they can do whatever it takes income with come up with some miracle . I think that missed the lowest expectations. I think that shows what the whole problem is there. They are island that the dividend sorry, the share buybacks, but they also said they will postpone the ge capital dividend because they have to work out some issues with insurance there. That is a source of cash that is no longer coming in. When you start about all of this up and you have to pay for capital expenditures, pensions, i think it is a little tight. I think that is what people are looking at. Ge has gotten rid of a lot of businesses over the past couple of years but it kept its dividend at the same level. As less cash flow just by nature of getting smaller but it is dealt the same sort of dividend, which doesnt make sense. Scarlet sticky of getting smaller, John Flannery will be presenting on november 13. That is really show me time for him. When are we thinking in terms of the spinoff possibilities . Brooke we talked about 20 billion in assets invested shares. That is not a lot of company as biggest ge. Cap. Its market people are pointing to is larry divisions like Energy Connection the lighting business maybe transportation, the locomotive production. I do not think we will see anything massive and he alluded options on the table but he came from health care, which is the one that everyone sort of wasting. Option. Ge breakup he talked about Growth Opportunities there andhow it fits with the companys digital and how it fits with the companys digital strategy. Scarlet you can read brookes commentary on the bloomberg. Coming up is an inclusive interview with danny greece. From new york, this is bloomberg. From bloomberg World Headquarters in midtown manhattan. I am scarlet fu. Members are not cheating on their output cut deal, investors are convinced. Oil has been held above that 50 level for the past two weeks. Union cut its deal by 1. 1 for the year. , climbing on supply concerns. The biggest gain since september. One inch of rain over the weekend. The wedding the harvest. Delaying the harvest. Let us look at the bloomberg. Erased their have 2017 losses, circled in yellow. The rebound hasnt fully hit prices yet. Average Retail Prices for chocolate were down 7 from the prior period. 2. 7cans will spend billion on helping treats this season on halloween treats this season. Think about the dental care they will spend on in the following month. Risen morees have than 60 . Their are expanding online reach and introducing apparel categories. It has been a fun time. We have built this company for the future. Celebrating the 60th anniversary this year. We are Opening Stores this year. In chicago. Lots of really new products. This has been part of your strategy . Stores, reflection your flagship new york store. Can you give us an update on your store strategy . Wholesale entirely a brand three years ago. We continue to grow. Gone from zero to 28. 5 of the sales being directed at the consumer. Companies are looking to ecommerce, changing the way they shop. You are planning a few more. How are they progressing . Strongly. Marrying apps with partners,tores and who remained extremely important to us. That combination has worked. Bricks and mixing mortar and ecommerce been a response to Department Stores struggling as consumers change the way they shop . We started out with the direct to consumer strategy. Happenedegy itself before this narrative existed. Brand, we are a global we help drive traffic into these stores. That benefits them for partnering with us. Looking down the barrel of the Holiday Season in the United States, this quarter is very important. Are you able to give us any hence on sales any hints on s sales . This quarter has always been the most important. We look at this on an annual basis. We are feeling really good. Growing for the last few years. I expect that to continue. The winter jackets you introduced knit