document. the till it he recommended to be allowed to terminate the deal within 10 days for any breach in the company. the document shows those recommendations were ignored. authority expanded the deal, based in ryan -- hometown. to discusscaucus issues ranging from the tax bill to the dream act. the vice chair says the sexual harassment was also a topic and said she believes the recent that the company is at a turning point. >> the flood gates have been open. upcan learn how we tighten procedures to make it a fail profit for complaint since. many do not come forward because of a fear of reprisal and the fear of losing their job because of the economic impact of that. mark: complement sanchez says there has been social harassment in every workplace have ever been in. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton and this is bloomberg. abigail: i am in for julia chatterley. minutes from the close of trading. the s&p drops for the first time in four days. scarlet: click the headlines over the repeal of the obamacare individual mandate complicate republican efforts to reconcile at the house bill. attorney general jeff sessions playing defense on capitol hill and grilled on connections between the trump campaign and russia. mitchal spotlight is on mcconnell's plans to potentially appoint jeff sessions to his old senate seat as roy morris scandal grows. foreigncuss the use of debt forward guidance. plenty of news coming out of capitol hill today. mitch mcconnell told bloomberg that gop members are optimistic that including a repeal of the individual mandate in obamacare as part of the tax overhaul would be helpful. other republican leadership including jon corzine of texas echoed this, saying it is under consideration. sahil kapur is standing by. heard murmurs of the possibility that the repeal of obamacare and the individual mandate could be included somehow and tax reform. of this?ou make it seems to be really messy. >> we have heard rumors of this for a while. senator mcconnell suggested more strongly than he ever had before that this will be added to the senate bill. repeal the obama care individual requirement most americans by insurance will be added to the tax bill. billion.$338 republicans need other money they can get to be compliant with senate rules. mobilize.ing groups say it will cost millions of americans coverage and raise premiums and democrats have been more passive. -- withealth care pop that could change that. >> ever republicans give an indication of ok, they have got 300 billion more to work with in tax cuts. whose bills would be reduced? >> we do not know the answer to that but they are already deep in the red and the repeal was simply bring the bill closer to compliance with central spirit they do not have a lot to play with in the long run. senator rand paul of kentucky suggests he wanted to use that for middle-class tax cuts. to have a compromise on state and local deduction that meets demands. they are insisting they will not pass the bill with fold repeal, fearing it will cost them critical votes. the short answer is it is not decided so far. this repeal would offset the cost of tax cuts. what would senator corker have to say about this? they were against the tax bill because it would increase the deficit. the mandatehing for to be included? >> they voted for bills that include the individual mandate and they are in favor of the concept. the fact that it would raise money is probably a plus at least on the impact of it. three senators cast pivotal votes to kill obamacare in july. we caught up with john mccain on this issue. saidnson michalski both this would complicate the prospect of tax legislation. tax reform's competition enough without mixing and health care politics and senator collins said it would be a problem because of train them increases that would result and that would be another factor to take into consideration. senator mccain sounded open-minded about it. the senate finance committee has not confirmed what it plans to do but we expect a modified remark from chairman hatch later today. >> it sounds like the tax reform process got more competition. thank you. the house judiciary committee just wrapped up the hearing with jeff sessions. he was grilled on the trump campaign's connections to russia thehis own involvement with campaign any faced questions about his move to consider a special prosecutor to invest in dealings with the clintons. joining us now is the deputy managing energy for the u.s. government, kevin. to the bloomberg news story that summarizes what is the jeff sessions testimony. he forgot the russia trump connection but he did not lie. what else did we learn? >> he is basically saying i did not remember the meeting but now that my memory is refreshed, i shot down the idea that the had wrought upr of padding -- having a meeting between trump's -- the truck -- trump and russians. they were not all satisfied by what they were getting, that they felt sessions was trying to have it both ways. republicans did have their own line of questioning and they want to see a more aggressive approach by the justice department to look for a range of things. investigations to look into how handled inquiries into hillary clinton and her private the 2010er as well as uranium purchase deal, a separate thing. they are looking for a special prosecutor and a special counsel and sessions has basically indicated he is asking other officials to look into whether that would be necessary. he tried to not commit anything one way or the other in the hearing today, simply saying he will look into it and the idea that they -- it looks like there might be something there is not a high enough standard to appoint a special counsel. joe: the phrase "lock her up" was a defining thing we heard throughout the 2016 campaign. it was never clear how seriously that would be taken once the administration got into power. bes it feel like there might momentum for really examine that at theamining state department? >> in this case, a lot of it is more about trying to discredit jim comey, who plays a role in the trash or -- the trump russia as well as robert mueller himself, a special counsel appointed to investigate it. connected toially the 2010 uranium deal, which involves the purchase of uranium company. these things are mostly about trying to cast some doubt ultimately on the trump investigation. a little less targeted at hillary specifically but obviously that is part of the general or. sessions said he did not feel it was an approach -- inappropriate use of justice barman to go after a political opponent. he suggested he did not see a lot of energy to go after hillary clinton. these things are little different we have seen a special specialmueller and prosecutors at special counsel's before him as you start an investigation and you do not know where it will end up. >> exactly. i have to ask about mitch mcconnell, looking into the idea of appointing jeff sessions into his old senate seat, walk us through how it would work. is that something the attorney general wants? >> we have heard to p/e -- from people close to sessions that he is not interested in going back to the u.s. senate. that does not mean he will not. who knows what will happen if the idea took on more significance. as for now, the word is he is not that interested. he told the house judiciary committee that he has no reason not to believe the women. but he otherwise did not exactly address it. the idea that mcconnell seems to be talking about we have been told is either sessions could or,t a right in candidacy, if more -- if roy moore stays in the race and wins, they could expel him, requiring a two thirds vote of the senate. sessions could be real pointed to his job to fill the vacancy until another special election. it is not clear if any of that is remotely plausible. defines,moore remains tweeting in the past hour that he is still in the race, including a #, ditch mitch. >> thank you so much. coming up, delivering on campaign promises. , thatchael lewis transition -- why the transition process could be to blame next. this is bloomberg. ♪ scarlet: tax reform is not the only reform on the impasse. what he is learning on his examination into the trump transition to the white house. >> it will likely be a book and it is just riveting. we obama administration spent enormous resources preparing for the transition, by law and also by a sense of obligation. therepare every agency for next people coming in, because our government is strange. 2 million people are in it but for thousand people are politically appointed who run it. every fourked off years and you move in. the election into the department of the treasury and department of agriculture, they are stirred -- to roll in and get briefings. in many cases across the government after trump was elected, nobody showed. student who did not show up to the class. nobody shows up. i am taking the class, that is what is going on. i'm going from place to place and have the people who would have educated me to get a sense are that comeisks from not ideological opposition, because much of the government -- there is no ideological dispute. it is mismanagement and ignorance. >> it is like a book they hand out, and by the way this is foreign policy? yes. these are people you can rely on to do their jobs. in the department of agriculture, i would persuade vanity fair to put 13,000 words in the magazine because it is riveting. they are trying to deal with how we will go across in a different climate. a $3 billion a year science but it largely devoted -- there are people who know about the problem who will manage the budget. replacing a distinct agriculture scientist, trump rolls in a radio host with no signs background at all. >> his articles and vanity fair are so eliminating or it it is good to check. >> it is time for a look at some of the biggest business stories in the news right now. taken a stake a claim to people familiar. it requires to split -- disclosure to regulators. we will talk about our stock of the hour short -- shortly. calling little market volatility profoundly troubling. the cio expects return anticipating a range of 5% his average annual range is to -- 13.5%. shifting away to alternatives. bmw is dumping coal for cow pies. they plan to use only clean energy in 2020. a multimillion dollar push to electric vehicles. that is your bloomberg business flash. abigail just mentioned, shares rising on news that -- theer's management stock hitting a high not seen since october 2011. fill in the blanks. >> it is from reports from familiar -- people familiar with the matter. a number of exchanges at the company, which could include taking the company private. we understand it remains below the 5% threshold that would require him to disclose that to regulators. it has had an impact on the stock today, which was down over the course of the year. at the terminal, you can see there has been a huge amount of price action on the stock today. it is outperforming peers. people are following in the footsteps today. joe, -- joe: what is the opportunity, in theory, the value that could be unlocked? let's a lot of people think there could be opportunity. we know it might have had great real estate value but may not have done quite as well. this is a third this week to get investors. it is not aivists, good one. they are trying to get people into the store and dealing with consumers online. they're doing it pretty poorly. scarlet: another activist investor in this company as well. thank you. we have breaking news on tax reform. the center of south dakota telling reporters that the repeal of the obamacare original deduno vigil mandate will be in the tax reform bill. he is same era -- the individual mandate will be in the senate tax bill. , confirmation hear from john the number three republican senator from south dakota. information as we get it. this is bloomberg. ♪ scarlet: tech is by far the best -- this year. according to the former maryland strategist to now runs his own shop, tech has a dirty little secret, which is that it is a cyclical sector. the blue line tracks the earnings. the white jagged line is the reported etf of technology. tech is much more susceptible to earnings than a lot of people realize. look at 2008 and 2009. look at the early 2000's and early 2 -- 90's. and technologyloses momentum looks to be a superior grower only toward the peak of a cycle. they may now just to be at that point. helpe texts strength might to explain the chart and this is 6598 and we are looking at european industries on a weekly basis, with the stoxx 600 and yellow, and the isson this stands out to me, over at oppenheimer, who regularly does charting for us at the charting segment, he is always bullish and has then bullish for about two years now and is still bullish relative to the recent tiny pullback we have seen in stocks, he is saying by the dip. we have two weeks of the clients right across the board for these industries. the stoxx 50. there is a deteriorating number of stocks above the 200 a moving average versus the all world index. point for cautionary able on stocks, it is europe. he is talking about a 5% -- 5% lower. joe: what could break the momentum we have seen and markets overall. pricewe got producer inflation data and it is at its highest level in many years. you can see the final demand, the blue bars food and energy, you can see both rising to multiyear highs. tomorrow, we get a lot of data and personal income spending. and also, what people tend to haveore attention to, we seen the flattening of the curve, a big jump in short end rates. that could be an interesting data point to add to the mix. to figure, if two of them are moving up, maybe the others will. scarlet:-- start -- less informants to go before the close. monist pullback for the dow and the s&p and the nasdaq. this is bloomberg. ♪ ♪ scarlet: "what'd you miss?" slots dragged down into the red. for the thirdpped time in 4 -- the s&p 500 dropped for the third time in four days. i'm abigail doolittle in for julia. scarlet: i'm scarlet fu. joe: i am joe weisenthal. if you are tuning in live on twitter, we want to welcome you to our closing bell coverage every weekday from 4:00 to 5:00 p.m. eastern. scarlet: begin with our market minutes and we have the third decline in four days for the s&p 500. it is a modest pullback but a little bit of a risk off. joe: was going on? it is a little strange. scarlet: it is a little strange. one reason forcently to the decline in the dow. that is the worst two-day decline since march 3 of 2009. that was the last bear market of the financial crisis before the turn into the full market. that is how bearish investors are on ge and the prospect of the turnaround. the company slashed their dividends. scarlet, you made a good point on ge. the investor base is likely shifting because of the dividend going away from value companies or value investors. perhaps now technically not a -- stock. let's look at some of the big movers below the relatively benign surface. t.j. maxx down. this after the management's dimmer margin picture for 2018 cause concern for analysts. shares certainly lower. dick's lower 2.8%. in their third-quarter statement, they met numbers, but for 2019, earnings could decline on a year-over-year basis my as much as 20%. is a pretty disappointment if it happens that way. on the flip type of huge winners for the outside. advance auto parts, its best day ever since 2001. this after they cut costs to counter the sales the slump. per-share in the third quarter beating the highest analyst estimates. buffalo wild wings the best since 2009. we talked about this in the half hours yesterday. arby's,ate equity of carl's jr., and others is thought to have made a cash bid offer for buffalo wild wings. scarlet: good context. joe: let's take a look at the government bond market starting with two and tw10. today's action is indicative of the bigger story. to year yield up to 1.69%. 10 year yield down 2.38%. we have been talking about this flattening forever. the key thing is it is really all the action on the short end. you really see it here. here is the chart of the two-year yield. basically starting in early september, the bottom was around september 12 or something like that. two-year yields were about 1.28%. a straight line up to 1.69%. all of the flattening can be explained by what is happening at the short end of the curve. obviously.e shot up today's producer price index heading into tomorrow's cpi data come you see a substantial repricing of what is going on in the short and lately. definitely the area of the government bond market to watch. scarlet: absolutely. i will encourage you to listen to our conversation with peter earlier where he talked about with the ecb is doing is perhaps an influence on the flattening yield curve in the u.s. let's move onto the currency market because we see the dollar weaker as well. you can see the rollover in the bloomberg dollar index. the trend this month has been a gradual weakening. the big winner of the day was the euro. higher versus all of the major currencies. a fifth day against the dollar, or they against the yen. -- the fourth day against the yen. the biggest loser, crude oil declining. gdp and russia slowed more than expected. joe: finally onto commodities. a big loser today, oil. forecast down for a lot more supply coming out in 2018. really causing oil to be slammed, down 2.5%. oil has been on a big bull run, but the problem is the world is swimming in oil, shale. ultimately, just loving out everywhere. it keeps a lid on prices. we are seeing that today. gould not doing a lot, up just fractionally. those are today's market minutes. abigail: for more on a is happening with market from a we are joined by mike, who runs our markets live team at bloomberg news. we have the clients for the major -- declines for the major averages. earlier today, the three major averages about 6/10 1% or more, the worst days in september 5. are we starting to see signs of a shift? mike: it feels like it. we're still down less than 1% 500, but itord s&p is starting to feel a little scary. it has that feel to it that, ok, people are getting nervous. i came into work today and i saw this. i was dumbfounded about it. there are plenty of things to point to. the chinese data overnight came in a little week. at the same time, china's 10 year bond did poor. i put a blog post out asking people to tell us what is going on. one thing people pointed out was this bank of america fund manager survey. a pretty interesting survey because they put numbers to all of the things we have been talking about for a long time like a record number of fund managers believe the market is overvalued. record number. time, a record number is taking above average risks and cash balances are coming down. they have these charts showing it all. to me, the words that michael hartman chose to use caught people's attention. he called it irrational exuberance. scarlet: we know who else used those words. joe: i feel like this explains why this has been so anxiety producing fro for investors. in actuality, nobody likes the market's valuation. the only way to win is to be all in. mike: they talk about what the fefund managers considered to be the stocks. aen you put it all into quantify survey like that, it is what we have been talking about that everyone realizes. here we are. we close down 30 points on the dow. joe: not huge. got to keep putting that in perspective. these are minimal moves but they feel big by recent standards. junk bonds getting a lot of pressure to selloff there. idiosyncratic about a few sectors, or is this something about something big changing? mike: this continues to look like an idiosyncratic story. bonds,look at telecom that is where most of the spread widening is occurring. it is an interesting case because telephone stocks in the s&p 500 have been getting hammered all year. at&t, verizon, they are doing terribly, but they are such a minor part of the stock market. in the bond market, they are big weights in the indexes. scarlet: that is how the energy was a couple years ago. mike: if you look at the chart, you can see the huge widening. that is the last year. big widening occurred with the oil route. on the not look too bad far right where we are now, but you can see the white line is where the communication widening a card. the bottom line is all sectors. clearly, it is communications, frontier communications, so-called a lot of debt to buy some of verizon's wire business. joe: that is like the phones? mike: yes. joe: no wonder it is not doing right. [laughter] just the cord cutting phenomenon throughout the entire telecom business. it can spread. the contagion can spread. retail junk-bond are not doing well. the hospital junk-bond are not doing great. it looks like it is mainly the telecom. scarlet: there will always be demand for landmines. you know why? if you live in a to go and you need a burglary alarm, it is connected to your landline. joe: and when we do a podcast, we prefer land lines. scarlet: there will always be land lines. [laughter] scarlet: ok. mike regan, do you have a podcast, a home burglary alarm? there you go. thank you so much. coming up, the world's top central bank is gathered today to talk about the policy path forward. investors?g surprise how do you read their prognosis on for guidance? this is bloomberg. ♪ mark: i am mark come to an with first word news. authorities say a gunman killed four people and wounded others this morning at multiple locations in rural northern california before police shot him to death. one of those shootings on the run took place at an elementary was her where two students were hurt. phil johnston told the associated press "it was very clear at the onset and we had an individual was randomly picking targets." the house of representatives is taking a stand in the wake of numerous sexual-harassment allegations. speaker paul ryan says the chamber will now require anti-harassment and antidiscrimination training for lawmakers and staff. in a statement on twitter, ryan said the goal is not only to raise awareness, but to "make abundantly clear that harassment in any form has no place in this institution." mitchme, mcconnell has spoken to both president trump and vice president pence in recent days about the alabama senate race and the allegations against the gop candidate roy moore. this afternoon, leader mcconnell renewed his call for roy moore to drop out of the race. >> roy moore should step aside. the women who have come forward are entirely credible. he is obviously not fit to be in the u.s. senate. we have looked at all of the options to try to prevent that from happening. mark: moore insisted the allegations are in his words a witchhunt. the spanish prime minister says the catalan crisis shows the government has the tools to defend itself. because the government response a warning to pro-independence parties running in catalan elections next month. even if they win a majority, they know the state can limit their powers. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. scarlet: "what'd you miss?" the world's most powerful central bank is gathered in frankfurt today. we are talking janet yellen, mario draghi, mark carney, and kuroda. they discuss the future of monetary policy committee occasions. they were in general agreement on the use of forward guidance. >> we also formulated a framework where the various parts of this forward guidance, the interest rates on one side and the asset purchase on the other would interact in a synergy. >> for us, almost all guidance should be conditional and related to the outlook for the economy. >> to a much weaker instrument. formedre expectations not only by the forward-looking way, but also the backward looking way. >> but in the end, it is a bit of a round or relative. more than a bit of a round in error. you have to be able to get out. >> a matter of policy itself. scarlet: joining us now to discuss from washington, d.c., is bill lee. great to see you again. let's start off very basic first. define what forward guidance is. is a job opening, the use of certain words, or numbers, or both? >> credible guidance. allowse jawboning that us to know where the fed will be in the future. it is a very powerful tool mario draghi has been advocating. to go from forward guidance to immediate guidance. so many times they try to say we are going here but never get there. it is always something. remember 2015 when in the summer it was the shares in the chinese market and then it became not only a shares in december when i finally moved? so many excuses have been made for why they cannot fulfill guidance and now become less and less credible. that is a really powerful tool, especially now with financial markets so sophisticated and looking for guidance from the central banks to with a are going because the market cannot function unless they know where central banks are going and can predict it accurately. joe: so in theory, you can say we will do x conditional on y happening, whether that is hitting some inflation number or something like that. is the issue that they have not shown the commitment to do the x when y happens? for his this obvious they need to do to realize the full value of this tool? william: everyone knows policy will be dependent on incoming data and evolving events so no faultll follow them 0-- them if they do not get to where they say they will get because of the intervening reasons, but what is missing is how the policy is data dependent. was the framework, the thinking? how are you choosing to change the policy? that has never been stated. they have always been telling you for how long that the balance sheet will be reduced gradually. reduced to where? where is the target level of the balance sheet? they say, it is whatever we need to make monetary policy work effectively. does that mean it will gradually start to rise again. the markets will know how to read and central banks around the world will be shifting their policy when the situations change. there is a lot of transparency, but ultimately, you see nothing with just transparency. you have to have something that is opaque. you have to have something you can actually see. what is missing is the framework. a framework that guides the decision-making within the central bank. scarlet: ok. i get what you're saying. you need a known and well understood framework for investors to feel confident about the path central bank is taking. the problem is there was no framework for what we experienced in 2008 and 2009. they are putting out fires and making things up as they went along. this is what we got for better or worse. over the last seven to nine years, the agreement is not sufficiently understood. have people come to terms with some of its flaws and can figure out what the central bankers mean? william: when you have an event like 2008, everything goes out the window and you say we will play everything by ear, and try to get to some kind of good policy. everyone expects that. now 10 years later, usa normalized. that mean-- you are saying you l normalized. tell us how you formed that picture of normality and let us know the conditions under which that normal picture might change in the future. ofwe have another 2008, course you will abandon that and go for something else again, but at least in the transition period, as we get to what you are calling normal, let us know how you formulate that picture. that is something no central bank is done because they say it depends. that means we are doing everything in an ad hoc way that is not evil confidence. it evokes short-termism. markets haveentra ignored was central banks say. no one believes there will be that which inflation or the fed will really get the rights of their -- rates up there. within the next two years, there is some credibility the fed will start to raise rates. joe: it is obviously have seen a revolution in how the federal reserve at least communicate to the public at least now versus the precrisis era. we have the press conference, the dot, so many speeches these days. totally incomparable. is it worth it in the end? are we going to look back and say, maybe we should go to the old way where they moved the rate and sort of shut up? william: they used to put faith in fed watchers. now they still put a lot of faith in fed watchers because they will tell you how many different ways they can do without any sense of harmony, without any sense of direction based on that clear framework. so what all fed watchers have tried to do, including me, is to establish what could be a framework that they might be using and to see how well it actually turns out in the data and in the behavior of the various central banks. every central bank is different. the fed is driven by a dual mandate. the bank of england has financial stability on its docket. there are different goals and objectives, but to say that it is data dependent is nothing. tell me how you are data dependent to reach those objectives. that will be informative. abigail: thanks. great perspective from bill lee. thank you for joining us. william: think of for having me. abigail: coming up, it has been coming for years, but now that rating agencies are t declaring an umbrella in default, what is next? this is bloomberg. ♪ scarlet: "what'd you miss?" venezuela and its state oil companies are in default according to s&p movies and . while venezuela's creditors can demand and acceleration of payments, they may not do so. for more, let's bring in our bloomberg news reporter who has been covering the venezuela soap opera. the government and the state oil company are in default, but investors are happy to sit back and say we will wait, things will work out. >> not sure how happy they are, but it definitely seems to be what is going on for now. more in ais they are technical default right now because they are making these payments, but they are making a very delayed. there has been a couple already so far and the rating agencies made no moves, no declaration really. now recently, it has been enough is enough and they started with their statements. soon, we will see if they will weather venezuela can default. st here asajor gi everybody knows they are not making full payments right now. whether they come out and say this is default or not or a technical default has happened is kind of irrelevant to how the bonds are trading at the moment. katia: the bonds are trading with the idea that they are in default. they are already in the low 20's or low 30's kind of based on what the coupon structure is or the collateral. they are already very low. they took a huge dive after the government of venezuela said they would try to restructure their debt. the thing with bondholders is that they are still getting their payments. they are just getting them really delayed. i would say the meeting agencies provide a little bit of closure in this situation because it is kind of like, we can all ansider venezuela to be in default of some kind even though they are making their payments later. the question is that stretch of time. if they are a bit behind, 10 days behind, what if it starts getting to a month behind, two months behind? at what point do we say, this is not getting better. the end is here. the end is near right now, but what point does it get here? abigail: take a look at 4878. we will see this absolutely massive spike. is there a situation where if , the is a ruling that investors want them to pay out on which is not there whether that will happen right now -- that the investors want them to pay out on, which is not happening right now, it will be a truly situation at odds. katia: it is more of a contract. they pay or do not pay by a certain date. if they feel to be, you get your default insurance. that is the point of these contracts. italy they eventually end up paying, great for you. you get a two-fer. paymen.bo bond the court block the payment they triggeredake so cds even of the effort and the will to pay was there. abigail angelle and i say thank you. thank you so much. still ahead, another storm could be brewing for theresa may. she is facing a rebellion for members of parliament over her brexit date. from new york, this is bloomberg. ♪ hey xfinity! show me netflix. hey guys... youtube people getting scared. [screaming] but what about that one? [screaming] tv that's more than tv is awesome. get netflix, youtube and more. now on xfinity x1. xfinity. the future of awesome. mark: i'm mark crumpton was first word news. during testimony before the house judiciary committee, attorney general jeff sessions maintained that he was unaware of russian contact with donald trump's presidential campaign. yorky naylor of new pressed sessions on a report that he reprimanded the former campaign advisor george papadopoulos for suggesting a meeting between the trump team and russian president vladimir putin. >> he made some comment to that effect as i remember after having read it. >> the answer is yes or no. i don't have the time. there are reports you should george down when he proposed that meeting with putin. is this correct? >> yes. i pushed back. i will just say it that way. yes. attorney general sessions insists his story has never changed. senate majoroity leader mitch mcconnell says the chamber will take up the gop's tax reform bill after thanksgiving. meantime, congressional republicans today projected confidence about delivering an overhaul of the nation's tax code. of some for relatives new town school massacre victims has asked the connecticut supreme court to reinstate a lawsuit against the gun maker, remington arms, saying a rifle made by the company and used in the shooting was too dangerous to sell to the public. the decision is not expected for several months. 20 children and sex educators were killed in that 2012 shooting -- six educators were killed in the 2012 shooting. now that the fight against islamic state is nearly over, the media carry statement from the foreign ministry today saying the presence of the troops will not force a political solution to the conflict in syria. the u.s. secretary of defense said yesterday the u.s. will not withdraw before the u.n. back political process yields results. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. scarlet: let's get a recap of today's market action. a down day for u.s. stocks. in fact, a risk off field across the board. some disappointing data out of china. globally. we also have treasuries rising, the dollar weakening, oil a big decline or as well -- decliner as well. joe: in the grand scheme of things, still modest. abigail: about 1%. "what'd you miss?" the next five days are critical for brexit negotiations. withdrawal bill returns for a detailed examination and while no further talks between the u.k. and eu have been confirmed, officials say the last week of november is the best bet for another round before the eu leaders summit on december 14 and 15. secretary give you possibility of reaching a breakthrough by december. here with more insight from london is the associate director at hanbury strategy. great to have you wit here. what do you make of the december assessment? >> i think it is probably true because basically what will happen in december is the eu will decide if sufficient progress has been made to move the thoughts forward to the future trading relationship. this is something the u.k. has been very keen to do. far we are a year, into the process and all we are talking about is the items of the divorce, and has not been in a agreement between the eu and the u.k. to go beyond phase one of the divorce. unless basically the u.k. will have to capitulate entirely to what the eu's position is, otherwise the eu will refuse talks. becausethe crisis point this is the point where businesses are saying if we do not have clarity my december, this is when we are going to act on our contingency plans to move out of the u.k. very important. the deadline might not be met is significant. joe: even if they do get an agreement in december to move on beyond the divorce talks and get to actual trade talks, do people think that is enough time? it is complicated stuff, right? nina: it absolutely is not enough time because all we would be doing in the essence if we decided move the trade talks forward , theresa may asked for a transitionperiod, two year period after the u.k. leaves in , and if you understand how complicated the trade deal will be, there is no way the trade deal will be done by 2019. there was even a question about whether it can be done by 2021 when the transition if it comes to pass will end. u.k. will beis the involved in negotiations with the eu for many more years to come, even after it leaves. joe: for right now, they are just debating about when they are going to start talks that will lead to other transition periods and talks. on the divorce aspect specifically, what of the main things is proving to be the hardest point to get agreement on? nina: there are three items in the divorce than you to be was all. one is the issue about the eu citizen's rights and the u.k. citizens in the eu. there is movement there. the second contentious issue is the brexit bill that is a financial liability. the eu wants the u.k. to make sure that it is honoring far more commitments than it says it will do right now. the figure is about 60 billion. that is with the eu wants. the u.k. has committed to 20 billion. there will have to be more commitment from the u.k. there. the final issue is one that has has not beenn -- taking up much attention but it is important and that is a question of what happens at the northern irish border? how do you deal with the fact not northern ireland does want the hardware to return but if the u.k. leaving a single market, there is no solution there. ireland has been flexing its muscles on this in the past two days. it is not entirely clear what the solution to that will be. scarlet: a hypothetical question here. how what this process -- how would this process be different if theresa may had one more seat in the snap election she called? nina: will i think what other problems we see in negotiations is because theresa may is so weak, you see her coming under attack from both sides of her party. the hard brexit wing and those who want a softer brexit. thus far, the cabinet has not been able to give a clear direction as to where they want to go. as the eu was always saying you cannot negotiate with a partner if the partner does not know what it wants, and the eu was afraid that if theresa may is weak as she is that if she goes, there will be even more turmoil. they are afraid the hard brexit wing of the conservative party might take over and the negotiations actually come to even more of a standstill. theresa trying to pump may up and pushed the talks forward, but unless there is clear unity in the cabinet as we are going, thoug the negotiatios will be difficult. this is a face it we will see again coming to the floor when it comes to the actual trade deal, the future trading relationship which we have not reached yet. scarlet: you say the next crisis point will be at the european council summit in december. that is next month. what is the possibility of a grinding to a halt? nina: i think talks will not grind to a halt. the question is, will it go to phase two? it is increasingly looking like they might not go to phase two. think that it talks will come crashing to a halt because it is not in the eu's interest for that to happen either. i think i'm the eu side, they are genuinely trying to nudge but they haveard, things they will insist upon whether that is the brexit bill or the question of northern ireland. if you listen to politicians from germany and france, unless the u.k. agrees to the bill, we are giving them a huge bailout, and we do not want to do that. i do not thing think the talks will come crashing to a haul t. joe: is theresa may going to hang out? nina: i think theresa may will still hang on for a while. the conservative party is aware that if she goes and there is some kind of leadership contest that it will stall the brexit talks and the clock is ticking. every single opportunity, michelle likes to remind us of that. there is a question of the domestic landscape. if there is more turmoil and another election, conservatives are aware prime minister jeremy not out of a possibility. scarlet: painting a pretty grim picture of the brexit negotiations. think is a much. coming up, with all of ge's woes, opportunity in the once conglomerate. some investors loaded up on ge. from new york, this is bloomberg. ♪ scarlet: "what'd you miss?" pimco filed its 13 act with the sec and among the highlights are the firms positions of nike and amazon and exit from microsoft and an increase in ge by 82%. to go over that and the other data we found, let's bring in fivefabio. great to see you. you are going through the filings looking for common threads, but what do you think is behind this? we do not know is that a why they are doing it, but what might be some of the reasons? >> one of the things they may be doing is a form of simple value play. it has dropped a simple amount, and i would expect they are looking at some form of management change to help turn it around. with the spinoff of the finance division to form synergy, the overall has become much more of an industrial. when we look at what has been a common theme, you see a fair decent amount of flows from hedge funds and people into the industrial sector. maybe they feel that has run its course and they can actually come back. remember, these things are done with a lag. my guess is they bought early. scarlet: is there any chance the equity in ge has something to do with their current position? some sort of a complete asset allocation position? fabio: it can be. one of the things that is interesting, some of the credit scores on general electric are sinking extremely quickly. it is not a pretty credit picture. usually, usually you would be seeing them on the short side. if they had the critical you would short the equity against it. it will begin on way around the trade, but maybe the credit is so expensive relative to the equity. there is something going on that is not directly linked to just wanting to own ge. joe: let's talk about the signal we get overall from the 13. always interesting to see what they hedge funds move in and out of. hedge funds have not been doing all that great lately as a class, and this is by definition stale data so how you get value filings and use it to form how using about the market? fabio: share. -- sure. a couple of different things worth looking at is, where are you seeing varied opinions? what we have seen is apple actually was reduced. ok, that is kind of interesting. but there are occasionally some interesting stock positions where people are genuinely different from the market. thean is held by down biotech company, but it would take 10 days to cover the shorts on the rest of the street. an extremely well that is cars.com. substantial positive holdings. if you look at the total value, there is an daily volume around 1.14 million shares. that is 21 million shares short. 20 million shares short and only one million trading a day. somebody is right and somebody is really wrong. here are some prominent hedge fund managers going in the other direction. here are some names that are off the radar and conflicted.something will happen there . scarlet: something is always going to happen. i know you are eager to get a chart on and have replicated here. talk to us about how people want the best ideas of hedge funds and what this chart shows us. fabio: this is an etf. i generally come up with the hedge funds have not done so well. scarlet: yes. fabio: i thought i would maybe address that occasional question that comes up in the last decade. [laughter] reality, what you see in the top line is in etf greeted by goldman sachs that basically pulls together the biggest holdings of hedge funds. this, thehe 13f and vip list, they have outperformed about 24% versus the s&p is only up about 17%. that is pretty solid performance. it has done so with these of volatility. the names on it would not blow you away, macron and dell and other things like that. fleet corp. is one of the top 10 holdings. fleet corp. is a gasoline car company and one of the biggest holdings that was found on that thing. another one is a company that makes car seats. 75,000 people making car seats in 230 places around the world, and it is one of the most commonly held hedge fund stocks and most impactful to their position. you can look at that and go, ok, i had not thought of that. let me look at that as well. well spent.ell joe: and is rebalances. fabio: that is the idea. energy goes up a little bit. we talk about the conflicted stocks. a lot of the conflicted stocks reflect a big picture thing going on in the finance world if not the hedge fund world, which peopleoverall market, would say the last decade belonged to silicone. the next one will belong to customize medicine and biotech. we see the big names you are company, again, large hedge fund holders and simultaneously lots of individual shorts. you are starting to see people rotating also trying to get the biotechnology christian right. n right.ion. righ abigail: will have lots of movers tomorrow. that will certainly be in the news tomorrow. fabio: no surprise on apple because it is one of the biggest decliners in 13f so i am not surprised berkshire was one of those. abigail: great perspective. thank you so much. thank you so much for joining us and taking the time.coming up , the man behind the bill, congressman kevin brady, spoke to bloomberg about the new tax reform bill. highlights from that interview, next.this is bloomberg . ♪ abigail: "what'd you miss?" as the gop tax bill next its way through congress, chairman of the house and ways and means committee kevin brady spoke to bloomberg's david westin about whether or not there is room for compromise on the state and local property tax deduction. >> i made a commitment to our members in the house and we will restore the state amount to twice the average. especially important to these high tax states. i made the commitment that the final vote on the final bill coming back to the house will include the state and local property tax deduction. david: fair enough, but as you know, the senate has certain rules they have to comply with and one of the ways they are trying to come within the rules is to totally eliminate the so-called salt deduction. will you under any circumstances go along? what if you do not get tax reform at all if you do not accept this? rep. brady: i am confident the senate knows exactly the priorities of the house. i certainly do so that commitment to keep the state and local property tax deficit is in concrete i ful. i fully expect that to be the case. david: that is a redline you'll not cross? rep. brady: that is. david what are the things you would consider to come in what are: -- david: the things he would consider to come in the rules? rep. brady: are you appreciate what you starting out that this is not a final vote in the house. do.senate has their work to all of that helps improve this legislation. we are going very bold both in becoming competitive around the worl and how we simple private tax code. none of that is easy. the final conference we come together on a common ground really critical so i am not judging a lot of things at this point. only that we now, because we worked with the president and the houston earlier on one tax reform approach, we are both driving that direction. legislation to come through, there has to become was on both sides, but it sounds like the 20% number is not in concrete the way the salt deduction is. what about it becoming effective in 2018 versus 2019? rep. brady: on the 20%, that is where both the house and senate are focused. certainly the president is as well.here is why , we need to be competitive both you and home -- here at home and abroad. we are redesigning the whole international systems our companies can compete and win anywhere in the world, including here at home. the sooner we get those rates and redesigned into place, the better for our u.s. jobs. we're focused on as much growth early on, becoming competitive. david: let's talk about the so-called byrd rule. you do not have it on your side. rep. brady: thank the lord. >> it goes past the tenure part. yo-- 10 year part. are you willing to consider all the individual or corporate side the tax cuts stopping at some point during the 10 years? rep. brady: the senate obviously plays the lead role on the bird amendment, what happens in the second decade. they will be working through bring theder to bill out of the chamber so let's take a look at the approach they are taking and what that through on the conference i. from the house perspective, it is critical to take this momentum we got today, deliver a good strong vote at the end of the week, make sure the senate knows that when they pass that bill, we have to pass it to the president's desk. scarlet: that was cumbersome and kevin brady speaking with bloomberg earlier today. joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪ scarlet: "what'd you miss?" another down day in the u.s. stocks. stocks lower, dollar lower, oil lower, bonds higher. joe: not a massive newcomer but three out of the last four days down. still close to all-time highs. down 6% from the all-time high. scarlet: coming up, do not miss this. angela merkel and emmanuel macron will be attending talks on incrementing the paris agreement to combat climate change. joe: and i will be looking at retail sales and cpi out at 8:30 a.m. eastern. abigail: not miss this. target reports third-quarter earnings tomorrow before the. joe: they have been doing well lately so it will be interesting to see. abigail: you are right. scarlet: that does it for "what'd you miss?" abigail: "bloomberg technology" hiis next. joe: this is bloomberg. ♪ >> i'm in washington and you are watching "bloomberg technology." let's start with a check of your first word news. authorities say a gunman killed four people and wounded others tuesday morning at multiple locations in rural northern california before police shot and killed him. one of the shootings on the reserve took place at an elementary school where at least one person was hurt. >> it was very clear early onset that we had a subject that was randomly picking targets. >> the county's assistant sheriff told the ap that the death toll could rise. senate majority leader mitch mcconnell says the chamber will take up the gop tax reform bill after thanksgiving. meantime, congressional republicans today projected confidence about delivering on a tax overhaul. president is planning an in person appeal to lawmakers. house speaker paul ryan has become the latest republican lawmaker to call on roy moore to drop out of the alabama senate race in light of the recent accusations of sexual misconduct made against him. >> he should step aside. number one, the allegations are credible. number two, if he

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