this is the european close. ♪ nejra: here are the talk stories we are covering from the bloomberg and around the world. the ecb meeting is underway and there is caution among traders with the euro slipping. all the central bank given clues about the wind down of its stimulus measures? high-ranking u.s. and chinese officials are holding talks in washington today aimed at increasing cooperation between the superpowers. which industries make it a boost. news, u.s. cable company scripts has two major suitors. discovery and viacom both targeting the owner of hdtv. willie deal get done -- will a deal get done? the nasdaq and the s&p

500 hitting new record highs today. northern trust is also out with its annual five-year outlook for the market. is bob us to discuss brown. chief investment officer at northern trust. thank you for joining us here. ask you about what has been going on with politics. we have seen stocks continue to shrug off the events in d.c. is the earnings growth we are seeing enough to continue to sustain stock gains? it is.hink clearly a good policy coming out of d.c. would be helpful. that is certainly the catalyst for the rally after trump was initially elect did. he caught the tail end of good economic data not just in the u.s. but around the world. the synchronized growth story really took the handoff from the

political optimism to economic optimism. in order for the rally to be more sustained with more confidence clearly help from d.c. would be very welcome. julie: this five-year outlook that you have, one of the themes is entrenched growth. what does that mean? what kind of pace of growth are you looking for? >> to some degree of more of the same. we feel very confident that sustained but modest growth is on the horizon for the next five years. tight channel we think there's hope for a breakout above 3% very unlikely. just as importantly we assign a very low probability to a recession and here we are eight years into economic expansion. one but we a long think we can easily go another three if not the full five years

of our cma horizon with very little risk of a recession. on the other hand the risk will be modest. that keeps rates low in support of capital market returns overall. i was struck in your outlook by the fact that you say or return to traditional monetary behaviors may never occur. i find that very interesting. what does it mean for the bond market? to beexpect rates relatively low by any historical standard. even over the five-year horizon we expect them to edge higher. specifically we're talking about the theme, that waiting for go dot, you spend the entire drama waiting for the main character to show up and he never does. the markets as well as the central bank sense of what normalized policy is, we don't expect that to happen. , it maymay raise rates

back off of quantitative easing, it's not going to go to a pre-2008 version of the financial world. the balance sheet of the fed as well as the ecb and boj will remain very large and rates will remain low. for the next year we still think the ten-year price currently is too low and is likely to head to 275 to 3%. there not in the camp that long-term normal for a 10 year bond yield is 4.5% or 5%. a think that's going to be long way if that's the expectation for bond investors. nejra: you talk about stock flechette could house that different to stagflation? is to some degree the opposite. stagflation is high inflation with low economic growth. we are talking about low and higher inh

the emerging world. despite eight years of economic expansion and low unemployment we just don't see inflation being an issue on the challenge. once in a while you get a cyclical uptick. the substitution of labor by capital, advances in productivity that are coming from automation which may not always reveal itself in the headline numbers. think without doubt keeping inflation low. we think the central banks will be surprised if not challenged by their inability to hit their 2% targets on a sustained basis. it in au will see quarter or two. not on an annual basis. we think that will be a misplaced forecast on their part. julie: the picture you are painting seems to be where it's tough to really achieve stellar returns. you're going to see things limp along.

where do you allocate in this kind of environment? >> you remain fully invested. markets, let's say the range overall is 5% to 8% and bond yields will act as a cap on the expected returns. if you are running global portfolios which is always our nation on the equity side, even with rates going higher on the short and there are not going to be that high and in japan and europe they're going to be near zero for multiple years. the of liquidity remains high. the overall return you're going to get in a global balanced portfolio pretax is going to be between 4% and 6% depending on your risk. you have to be fully invested with a long-term orientation to capture relatively modest returns. the good news is inflation is lower.

people who wake up every day thinking the long-term equity muchn should be 8% or 9%, of that return historically was compensation for inflation. inflation since 1970 on average is 4%. we will be a lot lower going forward. a 6% return on equities and a 2% inflation environment is not that bad. when you are looking around the globe there and a lot of talk about emerging-market equities. they have been performing very strongly this year. do you think that's going to be threatened if the fed and other central banks are slow to act? you think that will allow emerging markets to keep running? increased emerging-market equity allocation yet again. i hope not. we are confident in the sector. it has underperformed the u.s. market by basically 1000 points a year for the last five years

or so. actually longer than that. the opportunity for there to be a normalization of emerging-market returns relative to the u.s. is quite high. you are starting off of the better starting port for evaluation. continuation of low rates as well as a weaker dollar or going to be beneficial. taking profits too quickly on the emerging markets will be a decision that investors regret. we think there's an opportunity here to be really balanced in capturing global risk premium. not being too cute on the home bias in the u.s. which has been well rewarded. --be overly consecrated concentrated in one market. we think there's an environment that is good for all markets. i think we are at 27th

record high this year. are you not concerned by valuations? >> we have taken a little bit of money off the table. we are overweight equities. we continue to feel that the earnings momentum will grow into the valuations. without doubt they are a little stretched. one of our key themes is that the structure of the markets as well as the low rates and modest growth environment with little recession risk is going to be supportive of u.s. equities as well as other markets where people might think by historical standards valuation is a little bit punchy. the historical standard and have low rates. and have a relatively benign economic cycle. not a lot of peaks. very little troughs. there are changes in market structure. higher growth companies are making a larger proportion of the market cap today than 20 years ago. to some degree you are betting that the somewhat monopolistic

business models continue to dominate and we think that's a fair assumption. bobby brown at northern trust, joining us from chicago. let's check in on the bloomberg first word news. >> president trump hasn't given up on repealing obamacare. he's having lunch at the white house with republican senators. saying they must keep their promise to america. there doesn't appear to be enough votes to pass a repeal. there's a report the trump administration is easing off its original plan for a big cut in -- taxporate tracks rate. now discussing cutting the tax rate to 25%. trump look for a 15% tax rate for businesses. testance, the first major of emmanuel macron. the head of the french military has quit over a dispute in defense spending. he openly criticized proposed

cut tax. at a reception he said, i am your chief. the european union has threatened to stop poland with sanctions. it is recommending: phase a procedure that could pave the way for the country to lose its voting rights. the overhaul would force the supreme court judges and president into immediate retirement. i'm courtney donohoe. this is bloomberg. coming up, we will talk with u.s. senator ben cardin in today's conference of economic dialogue between the u.s. and china caps off to a rocky start. what it could mean for the future of trade between the world's largest economies. this is bloomberg. ♪

julie: i'm julie hyman. nejra: i'm nejra cehic. counting you down to the european close. we are about 15 minutes away. u.s.: the debate over trade policy with the u.s. trying a comprehensive economic dialogue off to a rocky start in washington. wilbur ross criticizing china over the trade imbalance and both the u.s. and china have canceled closing press conferences. michael mckee has been covering the story and he is joining us senator whoey happens to be a longtime senator from my home state. >> ben cardin from maryland is with us. he is ranking member on the foreign relations committee.

president trump came to office threatening a trade war with china. instead you got the chinese at the treasury department now negotiating on trade. can we give the administration some credit? >> i think it's important to engage china. we are very much concerned with currency manipulation and a lot of their trade policies. i think engaging china is the right thing. we have a relationship where both countries can benefit. we want to improve that trade relationship but we wanted to be on a level playing field. if the president is tough and we get to deal with currency the lip election and some of -- currency manipulation all the better. hanging over all of these talks, north korea. should there be some sort of quid pro quo? >> i don't think the trade issue should be coupled with north korea. it is a national security threat not just to the united states

and our allies in the region but to china itself. we need to have a united position because of what north korea is doing and it's not related to whether they get a trade concession or not. it clear that china's national security is just as much at risk as the united states. the potential for steel and aluminum sanctions. as a member of the foreign relations committee should the president use national security as excuse for imposing sanctions? as a maryland center who has seen steel mills go away. clearly the nerd states has been victimized by unfair trade practices in steel. just look at maryland and you of see the consequences those faulty trade policies and the failure to have a level playing field. with the administration looking from a national security point of view, do we have the supply chain we need in the event of an

emergency of national security. that's a narrow window to take a look at the steel issue. i would hope we have a broader review to make sure countries such as china better overproducing and lakes to the dumping and other types of unfair trade practices whether we have a real plan to make sure there is stability and steel manufacturing including here in the united states. yesterday the president had a second meeting with vladimir putin at a g20 dinner. only a russian translator president. president manley -- the president madly tweeting there's nothing wrong with that. >> there is been reports the meeting lasted as long as an hour. no other american was in that discussion. know whether the president made concessions to russia or not during those meetings. we know how he conducts his conversations and it's unpredictable what he's done. when you conduct a major

foreign-policy exchange we should do it under a discipline system and not having a meeting that isn't even reported on. >> health care is dead. republicans already moving on to the budget. is there any scenario you can see senate democrats voting to approve anything like the house budget committee is voted on today with big increases in defense spending? >> there is no way we would support that. our principles are solid. be parity between defense and nondefense spending because that is all important to our national security. we don't want to see any of the writers trying to put extreme policy on to the budget document through the appropriation process. that is something else we really cannot deal with. we want to make sure it's fiscally responsible. >> you said health is dead.

i hope it's not dead. and republicans working together. we understand the affordable care act made a lot of progress. how can we make it better. i think democrats and republicans have a responsibility and a desire to come together to improve it. >> by september 30 the u.s. needs a budget in place. our democrats going to be doing anything to work with republicans on that or is it there baby right now? baby.s is congress's this is something we all need to work together. we not only have an october 1 deadline on appropriations to keep government open we also have a debt ceiling crisis that needs to be dealt with. i am one who always believed we should deal with the debt ceiling in isolation. we shouldn't make it hostage to policy. we need the majority of the republicans willing to work with us on a debt ceiling and appropriation.

use the fy 17 model. we got it done very late. we got bounced appropriations done for the american people. the appropriate committees, democrats and republicans and we got results. that's what we need to do down. >> senator ben cardin from maryland, thank you. he says he still has hope for the orioles. julie: those hopes are looking pretty grim these days. thank you, michael mckee on capitol hill and senator ben cardin. let's have a look at where european equities are trading right now. ,ith close just minutes away the stoxx 600 rebounding after losing more than 1% in yesterday's session. tech stocks outperforming 1.9%. to. lied most industry groups gaining as you can see from the imap. seeing a bit of a weaker euro today.

that inverse relationship between eurozone stocks and the euro is back for the first time since early may. that 60 day correlation turning negative again. what will the stronger euro mean for europe's exporters? what will it mean for mario draghi if he says anything about it at all at the ecb's decision tomorrow? this is the bloomberg euro index. highesteally at the since about august 2015. there is a cross we normally don't look at. we have been talking about u.s. and china trade. what about european and chinese trade? to europe have increased. when will europe push back? julie: we're looking at games and records for the major averages.

records for both the s&p 500 and the nasdaq. look at the dow transports. not so much. on pace for its worst day since june 20. let's take a look at a few stocks. a few key earnings reports coming in a bit disappointing. csx down about 7% after the railroad company beat on the top and bottom line. not so bad but it is the first full quarter under ceo hunter harrison. the bloomberg intelligence analysts says the expectations were very high. actually beenave a beat by a nickel but a miss by a penny and there was a 500 million dollar buyback not put into the guidance. that seems to be dragging on those shares. united continental down about 4%.

the guidance was a bit disappointing between a decline of 1% and a gain of 1%. those shares are lower. we do have a bit of relief for the banks. andan stanley reading top bottom line estimates. they also beat trading revenue estimates. that's a bit of a positive for the second quarter in a row. goldman sachs probably not happy about that. that seems to be giving bank of america a lift on a somewhat disappointing quarter. northern trust down 7%. on pace for its worst day since june of last year. little bit of weakness for that investment company. talk: still ahead, we will with dartmouth professor any balance lower. what a hawkish announcement could mean for the markets. this is bloomberg. ♪

nejra: time for the bloomberg business flash. starts in the u.s. rose in june. residential starts increased at a rate of 1.2 million ending a three-month slide. elders were less of the because of higher costs for construction materials. ceoer barclays syria oh -- warns the threat comes from new financial technology companies. he told bloomberg tv the banking industry is already being transformed by smartphones. ♪

♪ live from london and new york, this is the "european close." equities are finishing up the day in european trading, take --

let's take you through the market action. it looks like we are closing higher here, broad-based gains for european equities. we have seen gains on the ftse 100 as well. the stoxx 600 rebounding after falling more than 1% in yesterday's session. haveng at the fx space, we seen a recovery in the dollar after it hit and 11-month low yesterday. it has been trading near low. we are seeing euro weakness ahead of the ecb decision tomorrow. euro off by .3%. this after it hit the highest since may 2016 in yesterday's session. we are also seeing sterling unchanged. we are pretty steady on cable. yields generally lower. in the core and at the periphery. brent crude at 1.4% holding above fort -- $49 a barrel. into industry groups on the stoxx 600, they were closing up about .4 percent.

certainly not the record highs we are seeing, but still rebounding from yesterday. tech stocks up outperforming. they were the laggard yesterday, but most industry groups are gaining here at the close. energy up .4%. then this is looking at european stocks. am a 12 month0 estimated showing the european stocks are cheaper now than when ecb qe started. what are traders thinking of the draghi hook? says does notghi just impact to the euro and the bond markets, but also what do.pean equity investors finally, speaking of bond market, i have been keeping a close eye on the treasury bond spread. we saw this tighten up yesterday. it is near the lowest since november. julie? julie: the ecb policy decision is out tomorrow.

officialsto euro area , the ecb staff is now examining stimulus plans to consider in december. while members have not yet held formal discussions on the end of bond purchases, investors are expecting hawkish guidance tomorrow. danny blanchflower is joining us with his perspective on the central bank. great to see you as always. great. julie: what do you think we will hear from the ecb? some of the recent communication has been a little bit more delicate given the market reaction. what do you think will happen this time? danny: i think they've got to be a little delicate and a little bit concerned about where the data are going. not least the inflation data. i was just looking at it ticked down from 1.9 in april to 1.4 in may and one point three in june. inflation headed below target, reasonable amounts of growth.

let's get real, the european economy is -- an unemployment rate of over 9%. italy is at 11 -- 11% and france's in the 9%. rbc they have to because schists and there seems to be evidence of the stimulus has been working, but i think it is too early to say the gain is up -- the game is up and it is time to pull back. i think there will be caution and we will hear disagreement, but i don't think we will see much change in what they say tomorrow. isra: it is a rough -- it .ejra in london d think this caution will come because of the fundamentals you talked about or will mario draghi try to avoid a repeat of what happened in the markets after sintra? danny: you would have thought so. i always used to think the central banker speaks and you try to say absolutely nothing and a really successful meeting

is if you have not said anything in the markets haven't moved. it seems unlikely that he is trying to care for action that is coming, given the disagreements that are up. if i were in his position, i would be trying to because this id say -- be cautious and think that is where i would go. i think the crucial thing is that falling inflation number to 1.3. think about in a sense if it was .7 above two, there would be others thinking about acting. inflation is low and headed in the other direction and there will always be clear issues of the fundamentals, especially in france and italy. nejra: given those fundamentals and that inflation is so low, that ecb had the single mandate versus the mandate of the fed. why do we keep talking about these hawkish expectations from the ecb?

why are we talking about them at all? when inflation is that low? people.here are hawkish i think they have basic ideology about what rates should do. think of the people who want to adopt rule-based monetary policy. of that is part of the debate -- that is part of the debate that is going on. we saw three votes for a rate increase of the latest meeting of the npc. i think you are hearing one side of the argument, people who kind of say we know what we have to do and we know we have to pull stimulus out and others like me that's a monetary policy these days is fundamentally different. the world has changed and we have to watch the data. in the end, the data guys have been winning. hence why rates are so low. even in some countries with very

low unemployment rate. julie: at the same time, one of the key component of inflation has been really lagging has been weighed inflation. stubbornly has been lagging. what is the outlook for that? when you look across -- not just in the e.u., but across -- actually, i am going to ask us to pause and we will listen to president trump speaking at an election integrity meeting. president trump: new hampshire secretary of state bill gardner. thank you. maine secretary of state matthew dunlop, former ohio secretary of state ken blackwell. election assistance commission or, christie mccormick. thank you. former arkansas state representative david dunn. thank you, david. wood county west virginia clerk mark rhodes.

heritage foundation senior legal fellow and manager of the election law reform initiative, a real expert. hans, president and general counsel of the public interest legal foundation. great group. j christian adams and jefferson .ounty alabama judge alan king thank you. thank you very much. each of you has been entrusted with is a great responsibility of helping to advance the cause of fair, honest, and lawful elections. your work will help protect our democracy. this will be a very transparent process. it is going to be very open for everybody to see. you will approach this important task with a very open mind and with no conclusions already drawn.

you will fairly and objectively follow the facts wherever they may lead. i look forward to the findings and recommendations your report will produce and i share your report as soon as i can and as soon as possible with the american people so the full truth will be known and exposed, if necessary, in the light of day. we call on every state to give its full support and total cooperation in this effort. most of them have really done brilliantly and we appreciate it and the rest of all that information will be forthcoming. thank you very much, mr. vice president. and chris, thank you. panel, thank you, we appreciate it. you do a great job. thank you very much. [applause] that was president trump speaking at an election integrity commission thanking some of the various states for their efforts on that front.

i want to get back to danny blanchflower, dartmouth economics professor. thank you for sticking with us. about wageing to ask growth and i am curious what your outlook is whether we are talking about the e.u. or the u.s. or the u.k. for that matter. if we are going to start see that ramp up at all. danny: the first thing to say is basically the story is the same everywhere. nominal wage growth has remained benign. central banks especially the fed wagehe npc have expected inflation, particularly after unemployment went below 6% or so, expected nominal wage growth to get to 4%. for 10 years i have been saying there is so much slack in the labor market. it is not effectively measured by the unemployment rate. on slack is pushing down wage growth and wage growth is not really going anywhere. saw 2%ong time period we

wage growth with the economy continuing to grow in the u.k. and the u.s. and in europe, we have seen a little bit of a pickup. nominal weight growth is really going nowhere. it's not driving price inflation and what we are seeing in many countries, particularly in the u.k., prices have risen since brexit. real raises -- wages are starting to grow. wage growth is the dog that has not started to bark anytime soon. globalization has pushed down on their bargaining power, as has technology. this is one of the fundamental areas the central bankers have made believing there is going to be massive wage inflation and there has been none. essentially, the problem is they continue to believe that that is not the case and continue to expect it to come and now look totally full it. julie: you wrote a piece wrote a --nejra: you piece recently criticizing the

fed and its policy based on that. i am wondering, has the fed's experience already resolved some an exitnknowns for strategy for the ecb or has actually complicated an exit strategy for the ecb or has actually complicated it? danny: i don't know that it has complicated it. i just think people represent -- misrepresent how much knowledge there is about the process of removing the stimulus, slowing slowing thele or purchases. i was in the room in 2008 when the npc decided to start to do quantitative easing. the discussion went on between the european central bank, the bank of england, and the fed about what to do. we didn't really have a plan of what to buy and what the impact would be. there was no real plan on the way in and there is no plan. let me reassure you. it may not be a good thing to hear, there is no fundamental plan. we don't know the economics of

withdrawing stimulus. how do you do it? what are the effects? what is the speed by which you do it? we really don't know. central bankers are just going to have to watch and see. if we notice, the fed has not started to sell off qe. the bank of england has not started to sell off its assets and neither has the ecb. we are simply talking about slowing the rate of increase. this is tiptoeing into the unknown. i don't think it has resolved yet.ing i think you just have to tread very carefully, which will take us back to what draghi is going to do, tread very carefully. nejra: tread very carefully. we will see if mario draghi does that tomorrow. thank you so much to danny blanchflower, dartmouth economics professor. tune in tomorrow when we will bring you live coverage of the ecb decision and of president mario draghi's news conference following the announcement of that decision. julie. julie: will animal planet be

joining hd tv? scripps networks gets wooed by discovery communications at viacom. how likely are these deals to succeed and which one will succeed? more details next. this is bloomberg. ♪

♪ live from london and new york, i am nejra cehic. julie: can i am julie hyman. this is the "european close" on bloomberg markets. discovery communications and viacom are in several talks to combine with the $8.7 million scripps network interactive. as the pressure builds for cable companies and a challenging fast changing industry, will this be the deal for success and which one will be the deal for success? let's bring in tim nollen for more. tim, you have all these suitors going after scripps.

do either of these companies and make sense? do both make sense? and which one do you think is more likely? tim: i am surprised we haven't seen such a deal yet. we have had consolidation in -- in other areas of the media industry for years, but not on the cable network side. with discovery and scripps, you have companies that focus on lifestyle. there may be some cost saving potential. you've got consolidation on the did to beat her side for paid tv and lots more -- on the viewership side for paid tv. any -- they would be looking to combine. i think that is the backdrop for this and companies like discovery and scripps may well be able to achieve production and distribution synergies. julie: the buzzword right now is

the skinny bundle. the smaller cable offering for subscribers. as one analyst put it today, if you have this combination, you just have more channels people just don't necessarily want. how do they navigate that? can mean a bundles couple of things. you have thinner offerings from distributors, so not the whole basket of every single all or nothing and then you have virtual bundles on things like youtube tv and hulu live coming on stream now and these are smaller packages distributed over the top, not through a traditional tv relationship. one of the things that may make sense for the industry as a whole and consolidation like this may bring about is you may be able to get rid of some of these longer networks that people are not watching as much anymore. if people are watching youtube and -- and there is less of an audience to be watching some longer tail networks. i think it makes sense for the industry as a whole or it i am not thinking on any particular industry, but it makes sense as

a whole for them to reduce the number of offerings in a paid tv bundle service and by combining the stronger networks, let's say discovery and scripps, you could go to market with a combination of five or six or 8 strong networks. that to me, makes more sense. nejra: when we look at this sector more broadly, we were talking about netflix yesterday and looking at how much the share price has been out arming outperforming its peers in media. how much room does it have to go? difficult ton is assess on netflix, but they are certainly winning the battle in terms of gaining subscribers. they have 52 or so million subscribers both in the u.s. and put together internationally now , they have a ton of content that people are willing to pay for and so it is very difficult to stop the netflix train. some of that viewership is coming away from traditional networks onto netflix and amazon and other types of paid services

that are new and have interesting interfaces and mobile capabilities and so forth. they are just simpler solutions and that is what consumers find attractive. i still view these as complementry services to traditional paid tv. there is an important role for studios now. amazon and netflix have their own studio, but the traditional studios from tv network groups are still very productive and taking advantage of a lot of the distribution capabilities now. as a couple it mentoring service, but certainly netflix is winning the battle right now in terms of eyeballs and paid subscribers. julie: when we talk about this potential combinations, most of these media companies, the three we are talking about include scripps, discovery, and viacom, are controlled by families. so they would have to prevent any deal. how much of an obstacle is that going to potentially be? tim: you would think that would be an obstacle, for sure. it seems like the scripts family family may be more

interested in selling than they were in the past. that has been the sentiment amongst investors. it seems like a more likely solution now from them. on the discovery side, you have a very important shareholders clearly the dealmaker. perspective, it is more the dealmaker than the seller. malone is involved in many, many other media and tv operations. i would say maybe in the case of it is maybet now less of an obstacle than it used to be. on the viacom side, the redstone inily is clearly strong viacom and cbs controls both of those. flexibility ined their approach to viacom when they wanted viacom and cbs to merge and not trying to force it through. i think they are still very interested owners and i think this is maybe where the viacom-s

cripps angle may be coming from. julie: tim nollen, thank you so much for coming in. nejra: time now for the bloomberg business flash, a look at some of the biggest business stories in the news right now. morgan stanley has become the latest global bank to choose frankfurt for its post-brexit european trading base according to people briefed on the decision. morgan stanley will move its european broker-dealer business to frankfurt from london. the asset management operations will move to dublin. written may now be able to -- britain may now be able to take back control of its favorite dish. we are talking about north sea cod, the staple in green -- ingredient in traditional fish and chips. stewardship council said cod can be sold with a sustainability certificate. ♪

i don't know how popular fish and chips -- julie: this has been a big source of controversy over there in the u.k. that people were getting enough, in their fishing -- enough cod in their fishing chips? nejra: i am wondering if this is happened because of the substitution because you don't just get cod in fish and chips. guess peopleut, i have been going for other options. i don't how much you guys like fish and chips in the u.s., but it is a cardinal sin here. i don't like the batter, so i take it all off and eat the fish. julie: i don't know what the point is then. of course fish and chips is popular. ofra: coming up is battle the charts. netflix versus the broader markets. this is bloomberg. ♪

julie: let's check in on bloomberg first word news.

u.s. commerce secretary wilbur ross said it's time for the u.s. and china to rebalance their trade relationship. ross spoke at the beginning of trade talks in washington. secretary ross: we continue to hope we can find ways to further expand our work together and advance each of our country's interest, especially with regard to reducing the u.s. trade deficit. vice premier said the two countries are better off avoiding confrontation. republicans pressing ahead with a budget plan designed to help the party deliver on the tax code overhaul. the plan before the house budget committee promises to cut more than $5 trillion from the budget over the coming decade. conservative republicans want more spending cuts and moderates are concerned cuts to programs such as food stamps could go too far. iran is warning it will retaliate for any new u.s.

sanctions that violate the terms of the nuclear deal. the iranian president spoke a day after the u.s. imposed sanctions. he says president trump is trying to provoke iran. in the u.k., you will have to work longer before you can claim your state pension. the government will raise the pensionable age from 66 to 68 over a two-year. od starting at 67. global news 24 hours a day, powered by more 2700 journalists and analysts in more than 120 countries. that is what we are seeing in the broader world. what are we seeing in markets? nejra: let's take a look at what we see in european markets. we saw the stoxx 600 close just about 25 minutes ago and it did close higher, up some .8%, rebounding from a loss of more session.n yesterday's if we take a look at industry groups at how they performed on

the stoxx 600, tech docs leading the gains up 1.8% followed by telecoms. pretty much every industry group closed higher on the stoxx 600. so come equities closing higher across what we have seen in u.s. equities is them grind higher to yet another record. i believe it the -- it is the 27th this year. tune in tomorrow and we will bring you live coverage of the ecb decision and president mario draghi news conference following the announcement of that decision starting at evan: 40 5 a.m. eastern. this is bloomberg. ♪

♪a julie: it is noon in new york, i amp.m. in london -- julie hyman welcome to "bloomberg markets." ♪

from bloomberg world headquarters in new york, here are the top stories on the bloomberg and around the world that we are following. president donald trump invites the gop senators to lunch at the white house. we will bring you the latest details on the republican effort to advance and obamacare appeal. scripps network has not won, but two major suitors. at discovery and viacom are both targeting the u.s. cable network owner. will we see a deal and with who? trade talks between the u.s. and china got off to a rocky start as the americans canceled their closing news conference. we will discuss with gary locke, former u.s. ambassador to china. we are halfway through the trading dale. abigail doolittle joins us with the latest on the rally we are seeing. abigail: we do have a rally. we have the nasdaq amazingly on pace for the ninth day higher in a row, the longest streak