Transcripts For BLOOMBERG Bloomberg Markets 20151119

The trading session. Julie hyman has the latest. He had this huge rally yesterday after the fed minutes. Starting tos are drift today. I want to start with commodities. Lets start with oil, because we are seeing Goldman Sachs make a call that the mild winter cause oilpact could to fall below cash cost of 20. Their forecast for brent remains at 50 a barrel. Citigroup says that commodities have not fully priced in the effect of the higher rate, a rate increase, which is contrary to the conventional wisdom with the plunge we have seen in commodities. Definitely some negative tone on commodities this morning. I found ather front, cool chart to look at on my bloomberg terminal. This looks at the average temperature at laguardia airport. What i have done is look at the last 10 years nec eight of the month this far have had above average temperatures. November, the average is 23 above the average of the past 10 years. When we talk anecdotally about the warmer weather, that puts it in real terms, at least here in the new york city area. Presumably one can extrapolate that to the northeast of the United States. Gold is seeing a little bit of a rebound, actually quite a bit of a rebound, up by 1 even though here to there is a lot of andimism being expressed potentially talk of gold falling below 1000. What could be helping gold prices this morning, lets take a look at the u. S. Dollar. Be seeing a positive in the rally we had been experiencing so the dollar today, taking a look at the chart, we are seeing the dollar index pullback by about half of 1 . That seems to be what is giving a leg up to those gold prices. Betty stocks are pretty much meant. What is the biggest drag . Julie i want to talk about. Ealth care United Health care is going to consider pulling out of obamacare. They are the nations Largest Health insurer. They said these plans have proved more costly than it had anticipated, and earlier had talked about expanding its exposure to the Affordable Care act, so quite a big step. And then there is pfizer and allergan which appeared to be getting closer than ever to a deal. There is the problem of inversions, because there is talk that congress, or the administration is close to imposing some rules restricting tax in version deals. Betty two big pieces of news in the health care world. Lets check in on bloomberg first word news. Vonnie quinn has more. Vonnie thank you so much. The suspected architects of last weeks attacks in paris are dead. This is according to the prince french prosecutor. Abdelhamid abaaoud was identified by his fingerprints after a swat team fired 5000 rounds into that apartment in saint denis where he was holed up with a group of associates. Belgium cracking down on suspected terrorists. Detentiontend police of certain terror suspects to 72 hours. It faced International Pressure after the three americans held hostage for two months in yemen are free with the help of oman. They had been captured by shiite rebels. The Largest Health insurer in the u. S. May pull out of the Obamacare Insurance Exchange market. United health cut its earnings estimates for the year and have been struggling to make profits. That is a look at our first word in news right now. More news on these and other stories at bloomberg. Com. I am vonnie quinn. Betty vonnie, thank you so much. This Unitedhealth Group story is big. They may depart from obamacare. What that means for the external andnsurance Exchange Market why they are deciding to do this, i want to bring in drew armstrong. Drew this is a huge deal. I cannot over emphasize this enough. United health care was not one ,f the biggest in the market but they are the biggest Health Insurer in the country. They just last month said they would expand to 11 new states in obamacare. Weeks later, they are reversing. They are saying they may exit in 2017 they also said on a call they have stopped putting Promotional Materials behind they are higher selling this year. They said these plans are not profitable, we cannot make this work, and this may not be a market we want to be in. The biggest Health Insurer and the market is saying that all of these people who were supposed to be covered, we do not think we can. This is a huge deal and everybody is looking at the other insurers. It could have a ripple effect. Drew i think this will be developing over the next days, weeks. And betty the stock is down about 4 . What exactly happened, how did they overestimate the impact on their bottom line . Drew i think one of the things we have got here is we created these new markets and said, we will give people subsidies, and the insurers would come in and try to capture this business. There are some Government Programs to help stabilize get ats so lets say, you bunch of new customers and they are sicker and cost more than you thought, there is a payment from the government designed to stabilize the market. Those have not necessarily paid out as much as insurers have expected. You have seen some insurers really underpricing plans and willing to take a lot of risk. United health was one of the more conservative and they are still saying, this does not work for us. Newhave basically a whole pool of millions of people and the deal they made, we will take these new customers, they are saying that maybe they cannot make this work financially and it is not worth them being in it. Betty it does not answer the question why just a month ago they were saying they were going to expand. Not think we know. It is really a shocking reversal. Betty something must have happened. Drew keep in mind, we do have the first two weeks of people signing up for plans so they have a little bit of an idea, but far from the full picture of what the market will look like next year. I think we are really still waiting to find out. I have beenc. Talking to are calling this an atom bomb in health care. Deals,speaking of master pfizer looks to be going at it with allergan. Drew this would be far and away the biggest deal in the Health Industry forever, one of the top mergers in corporate history ever. Betty and they all seem to be done in 2015. Drew i think we had 220 billion in deals last year and we are well positioned to eclipse that. Betty is this about pfizer wants to move overseas and not pay taxes . Drew a huge part of this is about taxes. They stash a lot of their profits overseas. Has a double tax domicile. Jerseyffices are in new and if pfizer was able to do this deal with allergan, it is going to save them a significant amount potentially on taxes. That amounts to billions of dollars a year. It allows them to take cash they have kept overseas out of the reach of u. S. Tax authorities and put that money to work. At a isnt this happening time when jack lew and the treasury department, arent they about to issue new guidelines on tax in version . Drew yes. Said they are going to issue some more guidance, make a couple of statements, but also emphasize the to stop the tax and version they do need legislation. There is a lot here and it is going to cause it out on investors of whether pfizer allergan gets done. This could be the Administration Just using a little bit of off fromo scare people these deals without necessarily getting into the legal fight to stop it. There still is some skepticism. The deal price could be significantly under where they are trading. Betty drew, thank you so much. Drew armstrong, our health care reporter. I just want to break the news, square, the firstrate has just opened at 11. 20. It is above that right now, a gain of about 34 . Makes you wonder whether they left a bit of money on the table at pricing this ipo at nine dollars a share. Muchraise 243 million, lower than what was talked about preceding this ipo and a lot lower than what it was privately valued at. We will have more on interview on square in an interview with dr. Dorsey jack dorsey. Betty good morning and welcome back to bloomberg markets. I want to show you again where square is trading. The opening trade just happened at 11. 20. It is trading higher than that as you can see, up already by about 33 with a gain of about three dollars. This, they looks at would say good for the stock or the company, what did they price the stock too low . The valuation much lower than what it privately was valued at. Lets go to the markets desk where julie hyman has a check. Urig Green Mountain is where im starting with that stock jumping. Even though earnings and revenue fell yearoveryear, they did not fall as much had been anticipating. The stock is down about three quarters of its value over the past 12 months. The has been a lot of concern about its valuation and the demand for its new system. All of those concerns appear to remain however the stock is getting a pop. Also on the winning side today is salesforce, and i love this quote from brett sale. He says they are the taylor swift of the industry right now, talking about the cloud industry. Salesforce is one of the earliest cloud companies. That is what it initially really specialized in. It saw gains in all of its Major Regions around the globe. In the opposite direction, best buy, we are seeing continuing signs of weak demand for electronics going into the holidays. We heard walmart and target talk about that. Best buy is saying their revenue is down 2. 4 and for the holiday quarter, the revenue will decline in the low single digit percentage rate. You, julie hyman. Square opened at 11. 20, priced at nine dollars. I want to head out to emily chang, who is on the floor of the stock exchange. The stock is trading much higher , up almost 30 , but was there some disappointment with evaluation . Emily we are going to ask that question to jack dorsey. 11. 20 a share is way better than nine dollars a share, which is what the Company Price that last night. Are looking at close to a 4 billion valuation at the high end of the range. Off from the 6 billion valuation they were looking at in the private market, and it goes to this question, is square a Technology Company or Payment Company . A lot of analysts say this is more of a Payments Company. Payments make up 90 of their business. That is their core business. Mark andreessen just tweeted the fate of square today will determine the fate of all Technology Companies in the arere. I think people looking at square as a potential of an over value of Tech Companies in the private market. Betty maybe he is digging into the hyperbole that he cares in the media. What happened where mutual funds, investors, with a less hot on this company . Emily you had people on both sides, people walking in saying they were not going to a vast and people saying they were going to invest. The revenue is growing but they are losing more money. The revenue is growing 57 . Square is targeting longterm 20enue growth at closer to to 25 . Betty amalie, what changes now . Emily, what changes now . Jack dorsey will become the ceo of twitter and is now with square. What happens now . Emily they just hired jackie reese from yahoo to head square capital. They are trying to figure out how to build some of these noncore businesses, like square cash. We might see them make interesting Strategic Decisions regarding a company they acquired earlier this year, caviar. Dorsey,g to ask jack what is going to change for you now that this is a Public Company . Betty thank you so much. I know you are going to be speaking with jack dorsey in a moment live from the floor of the new york stock exchange. We will be back. Betty welcome back to bloomberg markets, betty liu. Time for the Bloomberg Business flash. Carmakers from around the world are showcasing the best and latest at the l. A. Auto show, but for volkswagen of america ceo, it is yet another opportunity for a mea culpa over the emissions scandal. Have a remedywill for the over 5000 cars sold in the u. S. We apologize and we cannot stop apologizing because we need a remedy to our customers. We completely understand that apologies are not enough. Betty they must present a regulatory plan to california authorities by tomorrow. Americans said the economy is improving and 45 say it is saying the same. Staying the same. You can always get more Business News at bloomberg. Com. Lets turn to politics. Most americans want to stop admitting Syrian Refugees, with more than 50 of those surveyed saying we should not allow them in at all. The nation is also divided about sending troops to iraq and syria to fight the Islamic State. A pretty even split. I want to bring in margaret tallest with more on this. Like when it comes to admitting refugees in the United States, the republicans have a bit of an edge and are more in line with the public. For now, at least, this is absolutely true. You have hearings beginning in the house over the syrian refugee policy. You have discussions about to even threaten a government the republican governors and republican president ial candidates coming out at least in favor of previous programs. For president obama, and maybe more on point for Hillary Clinton and the democratic field , this is a political hot potato. Betty we are showing some live pictures of the house hearing that you referenced. How big of a hot potato is this going to be . We know the candidates want to two foes focus on other issues. Our syria and the rack going to dominate the debate . Margaret certainly. Foreign policy and National Security tend to become general election issues and lets go back to the stereotype, republicans like to paint. Emocrats week argument isamas notgreatest threat is through the refugee program, but the Public Opinion is at least one of hesitation. When you add everything together, the majority of americans say, we do not want to go forward until we know more about how this work. Betty there is another poll about the president ial candidates themselves. Trump wins on getting things done and carson wins on personality. Margaret these matchups are very interesting. You could spend an hour getting lost in the miraculous nests. One thing that we need a little time to settle, what the implications of the paris attacks and these new wave affairs about the Islamic State is going to have on the front runners, and the second wave candidates who have been more establishment and waiting in the republican field to argue that experience matters. Betty margaret, thank you for joining us. Much more ahead, including more discussion on this fed minutes. I just had a horrible nightmare. My companys entire network went down, and i was home in bed, unaware. But that would never happen. Comcast business monitors my Companys Network 24 hours a day and calls and emails me if something, like this scary storm, takes it offline. So i can rest easy. What. You dont have a desk bed . Dont be left in the dark. Get proactive alerts 24 7. Comcast business. Built for business. Betty way our live from bloomberg World Headquarters in midtown manhattan. The suspected ringleader of the paris attacks is dead and test confirm that he was one of the two people who died during a raid yesterday in a parisian suburb. Hans and goals is on the ground in paris and brings us the latest. Authorities have identified the body. It ringmasterpose of the terrorist attacks. He is a Belgian National who spent time in syria. He was killed on wednesday in that raid. It took a long time to positively identify his body because of the prosecutors saying his body was riddled with bullets, over 5000 rounds were fired. On thursday, you had police raids taking place in belgium, trying to sweep up neighborhoods to look for additional suspects. The french president wanted additional powers in the lower house to expand his Emergency Authority for three months and thats expected to pass in the upper house tomorrow. We do not know the whereabouts of one of the drivers who was in that sprayed several of the restaurants in paris with gunfire and he is still at large and no new information about his whereabouts. That was hans nichols reporting from paris. For more headlines, lets bring back vonnie quinn. Vonnie president obama will not veto any republican proposal to tighten screening processes on Syrian Refugees. The bill would block syrian and iraqi refugees from entering the country unless top Law Enforcement Tell Congress they are not a threat. The white house says that would not increase u. S. Security. Thebill would also pause president s plan to admit 10,000 Syrian Refugees into the country. The u. S. Has impaled a new counterintelligence strategy that had been a production before the paris terror attacks and identifies infiltrating and disrupting adversaries, protecting vital computer networks, and protecting insider threats. In manila, police battled protesters not far from where asianpacific leaders are meeting. Emonstrator shouted slogans against the aipac forum and criticize the philippines for ties with the u. S. Jerod fogel entered a guilty plea to sex pour and child born in sex crime charges in indianapolis courtroom a short time ago. Illicitled to engage in a legends Sexual Activity with a minor and prosecutors want 12 point years. As attorneys are looking for five years. Thats a look at our first word news and you can get more 24 hours a day at the new bloomberg. Com. Betty thank you. The latest on the fed and the markets the central bank seems to be getting its message across to bond traders loud and clear. Budgedies have barely since yesterday after the fed released its latest minutes saying a december rate hike may be appropriate. s liftoff already priced into the market . Nolte fromng inay sky bridge capital. That theteresting is equity markets have been more volatile to a rate hike in the bond markets. You saw that clearly in yesterdays reaction, why . You actually had a pricing and of some of the bonbons a couple of weeks ago. Back a bit, you had a significant move up and a flattening of the yield curve. So bonds of done a good job pricing and the tightening so i was not to surprise yesterday when you did not get the mode. Likewise, we have had another stealth rally in the dollar which seems to have priced in the price rise. Those have happened quietly in the background. People have been focused on equities. Betty do you believe equities have this priced in . The equitye that markets in last few days have priced in and yesterday was a followthrough. Betty its surprising that we closed at the high of the session. Where do we go from here . Like always, you usually bright by on the rumor and selling the facts of the market may be building up for a disappointment when we get a tightening which we should get in december. At this juncture, given amalie times they have almost gone, they are telegraphing that the ready to go this time and for them to pull away would either take a significant news item or they would lose credibility. Betty are we discounting the upcoming jobs report for november . Market iss like the basically saying we will get a good jobs number. 1 betty even if we get a good one, it will not be that bad . Correct, if you reverse the good number we had last month, you get a big disappointing number and that will throw a lot of issues that people will have to grapple with. Betty in the time we have had qe in the last six or seven years, we have seen professional Money Managers get hits and some of those Hedge Fund Managers have closed their funds and we saw the news from black rock and others. That at a time when the fed is finally going to go back to normalcy that they are closing their funds . I think that could be a very real sign that maybe the macro environment is about to get a lot better and it will be the return of the macro trend. Betty maybe a contrarian indicator. Absolutely, when you look at how bad macro has done over the last five or six years, postcrisis, its a very difficult thing for those managers to grapple with Central Banks interfering in markets. Throwing and the taliban at kvitova signal that things are about to turn at the same time sanction now they are throwing in the towel and that could be a sign that things are about to turn. Betty thank you so much. To the markets and the ipo markets. Opened at 11. 20 and is much higher right now. The ipo was priced at nine dollars per share. 13 dollarsrading at . 33 coming your the top end of the range. Lets go to emily chang it was on the floor of the nyse with the square founder, jack dorsey. Hey there, jack dorsey is with us. A 4 billionng at market cap is a Public Company. Yesterday you priced below the range but now its trading up. How do you think it will do today . Its a moment and im really excited. Its something that has been a long road and its a milestone. This is not something you go around. This is what can accelerate us as a business and can help us build the tools to serve the customers in the right way. Im excited to get back to work. You think square is a Technology Company or a Payment Company . I think its both, we build technology to make payments easy. Emily emily what do you think . We think its both. We tried to make it a National Brand and part of the reason we can do that is some of the technology they have in the square program. Emily a lot of people are looking at square is an example [indiscernible] im not an economist but we have an economist on her board. Emily what do you think about the idea that square could not live up to the evaluation . The expectation is around serving our sellers of this is a fundraising event and we have money to continue to build the business and make sure we are serving ourselves better. Emily where will you focus the money . We will focus energy on our new reader. We will see that on every side dish on the other side of every transaction. Everybody can accept different payments but they dont have to think about it. Flowers, my mom did that. We want to see that on the every side of every transaction because its easy. As you add more technology and security to the system, more of the fraud and risk potential goes down. We want to see this everywhere we think we have is amazing opportunity to represent the daily. These are the places you go to every day like the copy store and the lunch place in the food truck and if you see that everywhere, you can pay with your phone. Its amazing. We want to make sure that we have that logo representing. Emily we have been talking about your executive pensions and you fired and you hired back people. When you have to hire a president or a coo . We have a significant bands. I spread the position of coo to the entire leadership team. I am proud of our dynamic and proud of our team and our board. I we have one of the best boards in the world. We are focusing what we need to go forward. Larry summers, david veneer, mary, its a great team. Is there a Public Company ceo who inspired you . Ob iger from him every single day. , is not just a great ceo, hes a great leader. His one of the best leaders ive ever met. He runs a business that has multiple parts to it. The folks in that business feel empowered. Its diversified. Its a true ecosystem. They have really stuck to the purpose of how the company was founded. Everything that walt disney started with a still in the company today. It is something we can all learn from. To build a company that lives generation after generation, i think walt disney was the first Technology Company. It was the first ecosystem company. It focused on experiences and they are fantastic. You think about leadership deeply. What is your biggest challenge going to be as ceo Going Forward . Constantly Building Team andn the constantly recruiting and making sure we are building the right experience that the people of. Thats all that matters. If they love using the tools, we are good. Emily what markets are you focused on for International Growth . Where in japan, canada, the United States and that alone is 20s a 20 million Small Businesses that dont accept credit cards. We focus on the United States alone, that is massive. Emily any countries in particular . We have a pilot in australia that we are excited about them we will continue to look for the right market at the right time. Did you know its jack dorseys birthday today . I do. Emily did you give him a president . You have to have a birthday pie. Happy birthday again i am glad to be with you on this. Thank you. My mom would say its my birthday. Emily congratulations and happy birthday. Thank you. Betty thank you so much. You can see the stock is up almost 50 . It makes you wonder if they left a lot of money on the table. Lets turn back to politics. Democratic president ial candidate Hillary Clinton is speaking in new york and delivering remarks on the paris attacks to the council on foreign relations. She says it is our turn to stand in solidarity with france and allies and the u. S. Must break momentum of the Islamic State and defeat the terrorist group. You can follow these headlines and much more on bloomberg. Com. Like president obama, i do not believe that we should again have 100,000 american troops in combat in the middle east. That is just not. Betty lets go to europe and talk to mark barton on how european stocks are trading. A we are rising for the third and arrested and investors are bracing the idea to a rise from the federal reserve. Mining stocks of the bestperforming Industry Groups. Its rising for a third day as an Industry Group after falling three consecutive days, up 15 since september 28 but down 23 this year, the worst year and the last four years. Its not every day we talk about a 500yearold institution. Mail, theke royal u. K. Postal Delivery Services up by 4. 7 today. First half earnings beat and it accelerated top cuts in the u. K. The gls Parcel Delivery service saw more volume and its an interesting time for them. Essentially, we are not writing as many letters but rural mail is trying to fill parcel demand as more people buy online. The is rising for a second day against the dollar and we can call that dollar weakness. We had the account from the last ecb meeting. You call them minutes and some policymakers called for more stimulus amidst risk of deflation. I want to show you whats aftering to sterling rising to a threemonth high against the euro yesterday. Its falling today and we had weaker than forecast three kit retail sales data. Breather are taking a after they increase the previous month. Betty the holidays are coming up and i know you will be putting the battle of the charts trophy in the royal mail to me sometime soon. [laughter] only if i lose. Betty i will see you in the next hour for the european close. For a look at how the u. S. Markets are trading, i want to bring in Abigail Doolittle live from the news from the nasdaq. This stock is soaring on a strong thirdquarter earnings report. Shares are trading at a record high after the companys thirdquarter operating income was higher than expected. The Company Offered a fourthquarter revenue outlook that topped expectations. We have price targets being brought up across the board and it has been quite a ride for ctrip with shares up more than 130 . Eurig Green Mountain posted earnings that beat the companys own outlook and street estimates. The company made . 85 per share, one penny less than one year ago but much better than the 9 decline the street had been anticipating. The stock had been up more than 20 over the last week ahead of today on a bearish analyst call. After these strong results, the 2016,y gross outlook for we may see investors look at the stocks very attractive valuation. Betty thank you. Ahead, congress is it has a new plan to raise money without raising taxes. What does the plan had to do with oil and how it could wind up costing congress a whole lot of dough. Betty welcome back. Lawmakers are looking to raise funds without raising taxes. They are turning to the Strategic Petroleum reserve is a potential cash cap. Could tapping into the u. S. Emergency stockpile actually make the government lose money . P Phil Mattingly explains. Cash,n the hope for nuke the government may have set themselves up to get fleas. They have zeroed in an emergency reserve of millions of barrels of oil to finance new government spending. Fact, the latest budget deal requires the department of energy to sell 58 Million Barrels from the Strategic Petroleum reserve. That is over eight years. Congress is trying to make money and this will be the worst trait in the history of trades. Phil congressional price predictions is a problem. In order to raise 5 billion to pay for a visa the budget deal, oil needs to go from 45 today 2018, moren 70 by than 80 by 2019, and more than 95 by 2024. The ad and flow of the market is not the only potential problem. This is the least stealthy, least defensible way to sell oil into the market. If you do this for money, you will lose every time. Phil the specific sales timetable may leave the government at the mercy of oil traders who not only know what uncle sam is selling but when. Every scheduled sale is a sitting duck. All traders have to do is get on the other side of it. Sell into the sale and buyback afterwards and its a direct transfer out of the american taxpayers pocket and into the returns for commodity traders. Not all negative, it included billions of dollars to upgrade the reserve facility. The 695 Million Barrels in reserve is not not all negativet included billions like 50 millin barrels make a huge dent but lawmakers have clearly identified these barrels of oil as a potential pot of gold. That makes some lawmakers very uneasy. We are looking at this as nothing more than a cash machine at a time when we are looking for more money. I think this is wrong. I think this is irresponsible. Betty Phil Mattingly joins us from washington with more. Explain why congress is looking at the Strategic Petroleum reserves. Defense you hear from lawmakers is really twofold. America is not as reliant on foreign oils it used to be. The boom over the last couple of years is but the u. S. In a better position. With that in mind, the idea you have 695 Million Barrels in reserve, there is some debate within the department of energy and on capitol hill that you could reduce the reserves and it would be ok. Is isher major issue Pretty Simple its cash and is something thats available now. Lawmakers needed and it does not raise taxes. Because of that, they will focus on it and the budget deal is only one to pay for this. For other piece of legislation and try to tap into the spr and this will not go away anytime soon. Betty are we being overly confident about our own Energy Position . Phil i think thats the big concern. Thats Lisa Murkowskis general concern. It dont know where prices will go or how the u. S. Oil production is going to continue. The department of Energy Secretary said doing this is a slippery slope. How many bills will utilize this because you never know what will happen. The was drawns down becausepr the idea that you can plan out 10 years without having any sense what the market will do is whats raising as much concern if not more to some lawmakers than the idea that the u. S. Will recoup the amount of money they are planning at the moment. Thank you so mys. Thank you so much. Back to the other ip the price yesterday that just opened trade, it is the match group with the stock up over 9 right now. Lets get to julie hyman for more. ,ulie the stock is now open the secondbiggest ipo of the day. Its up about 6 of the moment. It raised 400 million in that ipo so it had been part of iac and now people can bet on it alone. It got into hot water because the head of tinder gave an interview. Tinder is the scandalous child of match. Exactly, not exactly the er many you think about the eharmony you think about. Square is losing a little bit of steam as well. But its up over 50 . Its still a big game for its first day. Betty both gainers for those ipos, thank you. Including aead conversation with Mike Bloomberg, the founder of ofomberg lp with the coceo Goldman Sachs international. Betty it is 11 00 a. M. In new york and midnight in hong kong. Welcome to bloomberg markets. From bloomberg rolled headquarters in new york, good morning. I am betty liu. A big disappointment in the ipo as a square and match both raise less than they wanted. Are trading higher, above their ipo price. We will look into what happened here. White Islamic State has no shortage of funds to carry out terror attacks around the world. White Islamic State has no shortage of funds. Why Islamic State has no shortage of funds. We are 90 minutes into the trading session. I want to head to the markets where julie hyman has the latest. We seem to be losing a bit of steam here. Julie really drifting here. The biggest rally we have seen in quite some time for the major averages. Now, taking a pause from that activity. Little changed today after the fed minutes yesterday. Take a look at my bloomberg terminal here for the imap and sectors on the move. Health care the biggest drag followed by energy, oil prices down, to analogy Consumer Staples helping keep things afloat. Technology and Consumer Staples. They are considering scaling to sellketing efforts through the Affordable Care act. This is creating a lot of repercussion throughout other stocks in the industry. United health saying costs related to his plans are higher than anticipated. Hospitalnes among owners and health care insurers. Companies like aetna and anthem and cigna taking a big hit. This seems like a big blow to the Affordable Care act. It is cataclysmic in the world. Consumer staple stocks getting a lift today. Julie Green Mountain coughing doing well. Coffee doing well. Bouncing back by 24 after what d been in underperformance this year. It is heavily shorted. We could be seeing some Short Covering today. Reassuring investors about some missteps. Also raised its dividend and cocacola is one of the big shareholders, their shirts are also recovering. Shares are also recovering. Jam smucker up 7. 4 . Helpedds and copy sales the earnings. Coffee sales. Betty invest in things you know and eat. Thank you, julie. I want to check in now on the first word news. Courtney has more from our news desk. We focus on france. He has been called the suspected organizer french Officials Say he is dead. Abdel died in yesterdays raid. He was belgian come of moroccan descent. France is on the verge of extending a state of emergency declared after the terror attack. The lower house of the French Parliament voted to let the government keep its Emergency Powers for three months. That lets the government ban public demonstrations and carry out searches without warrants. Obama will be to any republican proposal to tighten screenings of refugees from syria and abroad. The house will vote on a bill today. It will block syrian and risky iraqi refugees from entering unless Law Enforcement tells congress theyre not a threat. That is a look at our first word news right now. Veto theent obama will republican proposal. Betty thank you so much. Are the top story this morning. After jumping, 48 raising a third less than planned in its initial public offering. Bloomberg west anchor emily chang spoke to square founder and Ceo Jack Dorsey from the nyse. It has been a long road, it is a milestone. This is what can accelerate us as a business, this is what can help us build tools to serve our customers in the right way. Betty match group as well had 12 . They are up for more, i want to head back to where alex brink has been keeping her eye on both of those companies. They priced under what people thought they were going to and they raised less money. Now, the stock is up 50 . What does that mean . Did they leave a lot of money on the table here . For the company that filled the shares and priced at last night at that nine dollars did not get as much as they wanted because there was that for investors buying in today, shares trading around 13. 37 right now. Today or getting in who got in at the ipo, that is a good thing for them. They do get to see a bit of a return on their investment. Up. As settled around 45 emily asked jack dorsey come are you a tech company were Payments Company and he said we are both. They cant really be both. The ipo price last night, it looked more like they were getting valuations that a Payments Company might bring in. Maybe they had back some of that tech premium. We are a payments processor, we are tech enabled, thats what makes us special. The question will be looking forward. You heard the snippet from the interview earlier, this is a moment for that. Looking forward, can they define themselves as something more data can what a first do . They have done well in grabbing this market of the technology. Will the new offerings they are is that enough to continue growth here . Theyre looking at 25 growth over the long term. That will be the number one question. Can they continue growing . Is there big enough addressable base to continue selling their product to . Betty jack mentioned what they have in store. The new readers they will focus on. I want to play a piece of that conversation. Jack we will focus a lot of our energy on our new reader. We want to see that on the other side of every transaction. It enables anyone to accept a chip card or apple pay or enjoy pay or attempts and pay android pay or samsung pay. There is a push across the u. S. To move toward credit cards that have the chip in it. To capitalize on this movement to be able to use pay andds and the apple samsung pay and things like that. They are trying to get ahead of the curve here. If we are moving away from the , that is what square has been known for. So they are really trying to get ahead and say if everyone will have to go out and buy a new pointofsale system, we have this really small potentially less expensive offering that we can give you as a small merchants to get you up and running with the latest. Betty thank you so much. Much more ahead on bloomberg television. The next hour, dont miss in this hour, dont miss our conversation with Michael Bloomberg, the founder of bloomberg lp with the coceo of Goldman Sachs international. That conversation is moments away. Stay with us. Betty good morning and welcome back to bloomberg markets. It is Global Entrepreneurship week and that is a focus on innovation and leadership. I want to head over for a bloomberg interview. Francie labonte standing by at Goldman Sachss london headquarters with Mike Bloomberg and richard gnodde. Thank you so much, betty. We just had a great conversation about innovation and leadership and the challenges for Small Businesses in the u k and around the world. Delighted that we are joined by Michael Bloomberg and richard gnodde. What is the biggest challenge for businesses today . At aation is coming on piece with never seen before. Richard gnodde we are in his thed a place underlying drivers in the economy, unemployment figures have improved for some time. In the u. S. And europe. The underlying growth is healthy. Inare going into uncertainty the markets, centralbank policy looks set to diverge, rates going up in the u. S. And coming down further in europe. Asset markets are at elevated levels. You have to be more cautious. We have come a long way. From here, you have to be more cautious. Francine this mix it more difficult for a Business Leader to navigate the pitfalls ahead. Michael bloomberg theres always big challenges. In the past, it was easier that today there are advantages you have today. Do things lets you and your competitors do things. We have come a long ways. Everything has come commodities are at record lows. Someday they will turn around. Would you be better off buying stocks that have gone up 100 or commodities that have gone down 50 . Common says 50 one would be better. You make it killed while you wait for the eventual result. Francine when you look at the cycles and whether its commodity or volatility in china, will 2016 be in a different any different . 2015 was very binary. Will we be more sophisticated next year . Richard gnodde our conversation will be the same but about something slightly different. Lets say rates to rise in december. We spent 2015 debating the curve. The conversation will move on. You look at the rate of m a activity, 40 this year and last year. That says a lot about our confidence and how ceos are looking into the future, where they want to place their chips. A significant amount of that volume is large transactions, large strategic transactions. 5 billion plus. Francine it is not just cheap money . This is m a that make sense . Richard gnodde this is ceos trying to grow their businesses and adapt to a changing market. Some of that is Technology Driven and some is changing consumer tastes. Trying to position themselves in a globalizing world. Michael bloomberg the difference between 5 and 1 interest rates, if that is the difference in whether the deal is a good deal, you should not be doing the deal. You wanted to work out down the road. Tax rates are going to change. If you are at the margin to make the deal work, get a different deal. Francine you would focus on longerterm, right . You have to cut through the ins and outs of volatility. Michael bloomberg one of the problems today is executives have to focus on Quarterly Earnings or even shorter term than that. That does not leave me comfortable, i want the companies i invest in to build for the longterm. Do not worry about earnings this quarter but make sure there is lots of earnings in the future. They stave off competition and come up with the next big thing. Because of social media or , you Rush Television breathlessly earnings were up or down or sideways. Who cares . It is, what have they done for the last couple of years . The live expectancy of a ceo in america is probably four or five years. That is a very short time to come in, taken organization, tweak it and let it play out before you judge it again. Most ceos dont have that timeframe and that is not good for society and not good for industry. Francine apart from policy divergence, what are the three biggest risks you see in 2016 . Richard gnodde geopolitical risks. The tragedy in paris over the weekend highlights the risk on the geopolitical front. I think the focus by , getting behind the curve in terms of inflation and inflationary pressures, we dont see inflation right now. You will not see it until it is there. That is something we have to think about. And emerging markets, navigating what might be the final phase of this crisis. The u. S. Navigated first base, europe has gone through the issues around the euro and now the emerging markets have to do it in the same way. They have to be congratulated in terms of where they have gotten us to. We have a lot of decisions we have to make. Thats something we will have to focus on in 2016. Francine when we cast our minds paris, that tragedy in you met with the mayor friday and saturday morning. How do you focus or what kind of advice do you have for mayors to focus on security in these Uncertain Times . Michael bloomberg it tragedy does happen, you never put yourself in the shoes of somebody who lost somebody. You have to worry about those grieving and provide support for them. Then you have to instill confidence because the end of the world is not here, we will go on. ,e will forget these tragedies the families wont, but everyone else will, sadly. You have to get people havedence and you have policies and what will you do to prevent it from happening again. Theres no guarantees, a lot of bad people. You cannot block every opportunity somebody has to hurt you. If you take a look today, there is a picture of a can, a soda can come of the bomb put on that Russian Airliner is the size of the bomb put on that Russian Airliner. No matter how much france prepared france is one of the better prepared countries. A great police department, well led. Has somellande problems with the polls but i think he has done a very good job. Yet, they still suffered. It might have been a lot worse, it might have happened earlier. They just have to make sure that tomorrow they go and plug as many holes and access that they can but you will never have all of them plugged. World thative in a is dangerous and will probably get more dangerous. Francine apart from these further attacks, with easy as the big three risks for next year what do you see as the big three risks for next year . Michael bloomberg in europe, what you do with the wave of immigrants. You cannot let them drown, you cannot let them starve. A lot of people say i dont want so many immigrants that i will change the culture of my city, state or country. In america, we have some very bad immigration policies. We have cut ourselves off from all the innovation coming from around the world, not letting anybody in. In europe, they are letting everybody in. Neither is the right answer. You should do some security checks, but you cannot let yourself get isolated, so you have to constantly think one thing would be the immigration, number two is the terrorism thing and number three, you always have to worry about the economy. Theres a lot of people in weapon left out. They dont have the educational skills we are requiring or the work ethic or the gadgets at home as kids. Theres a lot of people who have been left out. How we get them integrated into society is one of the great challenges. You have to find some solution to that. Where do you see the best leadership or what kind of advice do you give to people who come to you seeking advice . Areard gnodde firstly, we concerned about the Economic Outlook Economic Growth sustained itself. It is focusing on this opportunity in front of them. We are living in a world that is globalizing, Technology Allows you to scale your business more quickly. Outweighed by the upside and the opportunities in front of people. Francine this is real growth followed by wage growth and increased productivity around the world. Richard gnodde labor markets are clearly tightening. Look at the unemployment numbers , employment has improved significantly. Thewill see some shipped to positive in terms of wage growth. Shift. The consumer will be better positioned than they have been for some time. Have these cycles gotten much shorter . The business cycles, boom and bust Michael Bloomberg it certainly has and that is because of the ,nternet or social Media Communications being much better than it was before. People can compete around the world. Your competitor can do what you can do. The publics tastes can change quickly. People can see what others have been decide whether they want that. It is a much more difficult job to run a government or run a company. Francine is emerging markets one of the biggest concerns for next year . Because of the volatility in china over the summer, a lot of companies trying to get their act in order. Richard gnodde commodities have come down a long way. The markets have retraced their steps significantly. The emerging market is close to the bottom time will tell. They are working through these issues. There is always a cycle to these things. It is very hard to predict exactly when and exactly by how much. They are working through their issues. They will get to the other side and we will see them growing again. ,or the longerterm perspective they still offer the greatest prospects of growth. Think of the percentage of Global Growth coming of china, 40 . That is a big number. That will continue. The advantages and opportunities are significant. Francine thank you so much. Around the world in 10 minutes. Back to you in new york. Betty thank you so much for bringing the interview for us. With mikeacqua bloomberg and richard gnodde. Bartonto bring in mark who will be joining me from london for the next half hour. A bit ofo be losing steam in europe. Two we were much higher hours into the trading session. Higher, but not as much as we were earlier. Still a third day of gains. It has been a central bank festival. The minutes from the fed, the ecb accounts of its last meeting we will settle that with simon smith he has written articlelly insightful asking why u. S. Efforts to cut off Islamic State funds have failed. He will be joining us. This better happened today. You better be sending that trophy back over the atlantic. Betty i havent even gotten yours. On that note, we definitely need to make sure that we do battle of the charts. Betty welcome back to bloomberg markets. The day in finishing london. Lets bring in mark barton to minutes. He next 30 european stocks set to close up for the third day. Embracing the idea of a gradual rise in u. S. Interest rates. The european close starts right now. Betty we will take you from new york to london in the next half hour. Tell us more about how the markets have finished. Gradualistdea of a we were at a threemonth high. We did not close quite that hype. We are on track for the best week lets show you whats happening in the bond market. Have fallenyields for nine consecutive days. The longesnn