Skip to main content

tv   Bloomberg Markets Americas  Bloomberg  November 1, 2016 12:00pm-3:31pm EDT

12:00 pm
i am vonnie quinn and this is the european close on bloomberg markets. mark: we are going to take you from washington to shanghai. we have a couple of stories out of new york, the u.k., and australia. .ere is what we are watching earnings confess win in europe, we will get the outlook on energy. bp disappoints and shell smashes estimates. andie: hillary clinton donald trump arming for a possible post election day battle, assembling a team of voter protection experts and lawyers in battleground states. we look to the federal reserve decision tomorrow. while none of the banks expect to move, three primary dealers said the central bank will hold off on december as well.
12:01 pm
our investors misguided? mark: have a look at where european equities are trading, under 30 minutes into -- until the end of the trading session. that is the longest losing stretch since february. takengs continuing to center stage, which brings me to standard chartered, the lender that makes most of its earnings in asia. shares falling as much as 4.7% today, the most since june 27. it reported first-quarter profits that missed estimates, revenue falling in all its main divisions. bill winters looking to show he is restoring the losses and that is what investors want. -- whichsharp drop in drove them to their first annual loss in 1989.
12:02 pm
in august they said they would probably miss the future profitability target because of an uncertainty in -- uncertain regulatory environment. bc, at standard and ages they did not fall as much and they have come back more due to their focus in asia. it is barclays, lloyds, and rbs who have been held -- hit the hardest. matthew beesley will be commenting on that chart in just a few seconds. our biggest inner is money shares jump 11% higher, the biggest increase in three years, reporting a 12% rise in third-quarter revenue. they say they are on track for a record year and have confidence in meeting their full-year expectations. insurance growth continues to accelerate boosted by investment in technology.
12:03 pm
its core market of credit cards assisting in growth. finishing off with the jewelry maker, the danish jewelry maker pandora. shares 5.8% lower. third-quarter earnings beat estimates. they sold more products in .urope the asian-pacific region, gold and silver prices have been declining. ebitda all went down to about 30% of sales rather than an earlier forecast of 38%. --y are adding more stars stores, 300 more planned opening than earlier. let's get to julie. we have been saying stocks deteriorating ever since the open of trading. if you look at the s&p 500 over the course of the day, you will see this deterioration, a few fits and starts but generally
12:04 pm
the trajectory is lower, and the s&p is at the lows of the day. it is a broad decline with all 10 industry groups lower. we are seeing a little bit of an uptick in nervousness surrounding the u.s. election. take a look at the bloomberg here. dollar-yenat two-week volatility and two-month volatility. two-week volatility is the white line and two month is the blue line. showing that with the election results coming, the election coming in the next week there is some concern, at least an increase in concern although less than it was back in september. back to today's session and some of the earnings lsappointments we are seeing, brands coming out with preliminary numbers for the third quarter as well as october preliminary comparable sales weaker.
12:05 pm
a 10 is cutting its forecast for seeing soft sales in the first quarter of 2017. in sayinges coming it's our earnings are going to be at the low end of its forecast for the full year. seeing some pressure as a result of what is going on in the bond market with the selling resuming. two-year yields are heading higher, 2.86%, that has been putting pressure on interest rates. as a result, the yield curve is widening a little bit out. to ae getting back up little bit of a widening of the 10,ad the between two and which in theory is good news, a good indicator for the u.s. economy although the yield curve has been some would say a little bit broken as an indicator. vonnie: it has been very flat and it does not look like we
12:06 pm
want to invert. julie hyman, thank you. let's check in with the bloomberg first word news. mark: a new nationwide poll has donald trump pulling into the lead over hillary clinton in the abc news washington post tracking survey of likely voters. 45%, the first time he has led since may. the survey has a margin of error of three percentage points. u.s. attorney general loretta lynch is said to still have confidence in fbi director james comey, who has, under fire for -- director comey and the attorney general are said to have met briefly on monday. six people dead and at least 10 others injured after a collision involving a commuter bus and school bus today in baltimore, maryland. no children were aboard the school bus. no word on what caused the crash
12:07 pm
. japan is demanding regular meetings with the british government over its strategy for leaving the european union. their ambassador to the u.k. call their company -- country a major stakeholder in the u.k. and the british government must improve communications and japanese investment is not at risk. global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. mark: thank you very much. standard chartered reporting third-quarter profit that missed analyst estimates, shares plunging the most since june. executives are saying the economic environment remains challenging in our next to guest says it is easy to see. matthew beesley is here. are we not at a turning point? matthew: let's look at value and growth and two different
12:08 pm
buckets. value is focused on oil stocks and material stocks. the recent earnings season across europe and the u.s. has shown generally a beat, financials and especially energy stocks. on the growth side, it is they are we see the weakness. you can see health care companies have disappointed. the yield curve picking up in most developed markets. investors will put those two things together and point out the disparity between value and growth, and ask is this the time to start buying value. and remainike europe more interested in europe and emerging markets relative to the u.s. and japan. i was just looking at our earnings analysis function, 62% of the companies on the stoxx 600 have beat estimates and according to jpmorgan that is
12:09 pm
.he best since 2014 the stoxx 600 down for seven consecutive days. we have had aew: reset of expectations post brexit, the earnings bar has been reset. some of the conventions of that universe has started to beat estimates. standard and hsbc, they will not hit us hard as they are domestic oriented. same thathey have the interest margin pressures that lenders are facing from increased qe and low rates in the u.k., and they are benefiting from this renaissance and emerging markets, or markets outside the developed world. vonnie: given your thesis relative to growth and stocks, are you changing anything to your portfolio or waiting for certain events to pass such as
12:10 pm
the next rate increase, the election, jobs day? matthew: we have been adding money to emerging markets and toward the eastern world consistently throughout this year. we have been very lowly weighted and emerging-market stocks. when we look at the valuation and growth trade-off, emerging markets have much better value with much better growth, and without the risk we see in the developed world. we are all talking about the u.s. election ahead of next week , but there is a big hefty election program in europe for us to deal with as investors in the next six to nine months. generally look at the past three years, emerging markets stocks have lagged and now trade at a deep discount. vonnie: are you buying a whole basket of emerging-market stocks or du look at specific countries? matthew: we have been looking heavily at rizzo or things are
12:11 pm
not good -- at brazil where things are not good but they are better, and toward korea is well. there is still some geographies we remain guarded against, china for one. mark: matthew beesley, head of global equities at handers. vonnie: lots more to talk about with matthews, but happening right now, donald trump and mike pence are campaigning in valley forge, pennsylvania. you can watch this on bloomberg as live go. more on politics ahead as both candidates seem to be preparing for a postelection battle. this is bloomberg. ♪
12:12 pm
12:13 pm
12:14 pm
mark: live from london and new york, counting you down to the european close, 17 minutes away. vonnie: you are mark barton and i am vonnie quinn in new york. becausemove to politics the hillary clinton and donald trump campaigns are gearing up for a close election battle, deploying volunteers and lawyers to monitor polls and possibly challenge election results across the country. trump is speaking live in pennsylvania. joining us is ben bodie of bloomberg politics. staff at there is every election to make sure things are going smoothly. are there many more being hired on each side this year? ben: there is some indication there is. a lot more funding has gone into the republican group. robert mercer has put about $500,000 in, which is one of its
12:15 pm
destinations in years. we know this is something they are gearing up for and we know they have also got the court. the democrats have taken the republicans to get -- to court on their poll tracking efforts between the rnc and trump campaign. good campaigns do this, it is how they get out the vote and make sure things go smoothly if there is even a rain delay. it is also something there making sure goes right as best they can. vonnie: given that these are part of, employees on both sides, is that mean we can expect more litigation or accusations and counter accusations then if these people were not hired? ben: it can be difficult to tell. sometimes the lawyers focus as another -- function as another set of monitors. you have the poll watchers and people running the polls, and
12:16 pm
sometimes the lawyers might provide a legal opinion in case one is requested. there might not be any conflict. certainly if there is any call for litigation by the campaigns, that can be a political or financial call, they will be there collecting evidence and giving their contrary opinion on a moment to moment races. mark: we are hearing that james comey, the fbi director has gained the confidence of -- has won the confidence of attorney general loretta lynch. that is some good news i suppose for james comey, but the attacks continue from hillary clinton's camp? ben: absolutely. they really feel that they have a limited number of days, seven at this point, to get through the two or three news cycles it takes to sort of return to the poll status quo, and bring us
12:17 pm
back into the polls after a negative story like the one that broke on friday when comey wrote his letter. they are coming out and going negative against him, and hoping they can return to that poll status quo or she has a two to four point lead as quickly as possible. brody, bloomberg politics. a week to go. pundits predicting how the u.s. presidential race will play out and markets. the stock market has a clear-cut view on which industries are at risk. bank stocks perform the best when donald trump is in the lead wellonsumer goods perform when clinton is in the lead. the industry groups that we tend to bring up, health care, financials, and energy, how will they be hit depending on who wins or loses? is just hillary
12:18 pm
clinton is a much more of a known quality. we all know about her and regulating prices, changing the exclusivity period for biologics. there is a democratic focus on clean energy and financials, she has talked about breaking up the banks and increasing tax breaks on interest for firms. volumeeased tax on high trading. matters havely changed things a little bit since friday. if trump wins, what reaction do we get in u.s. equities? that themy sense is market has been expecting a clinton victory. when you look at the writings of the street, strategists are talking about a clinton victory. if there is a trump victory it
12:19 pm
is a flight to quality. you are going to get a relief rally. vonnie: where will people be nts? will there be speculators going into this and will it be mostly through the currency channel? matthew: i think it will be in there will be people wearing outside the u.s. about a trump victory. japanese have been very vocal about what it might mean for their economy and security, and the yen will react accordingly. i think across europe, europe during a trump victory in during a risk off market, you would expect them to outperform u.s. equities. vonnie: we heard from the bank of japan today and they did not change anything.
12:20 pm
keep things as calm as possible until things are over, but what will we hear from the federal reserve, the same thing? matthew: i think that is why the analysts believe you will not see any changed interest rates and the federal reserve has been team -- teen to keep things quiet and contra -- noncontroversial until post election day. beyond that day there is a sense around the world of all central banks watching each other and seeing who will blink first when it comes to this easing experiment, and what will happen if a central bank does we -- blink. mark: i want to hear your view on this news, bloomberg has obtained this letter that he sent investors last week. them thatally said to stocks in the uk could fall as much as 80% due to recession.
12:21 pm
about 43fund has lost percent this year and he says shares will come under pressure because the ftse has climbed 30% over five years even as earnings fell 80%. he is probably doubling down or who knows what he is thinking. could he, 80%? this is where we have been since brexit. just to put that in perspective. matthew: 80% is a gigantic move even in the history of 2008 and 2000 where we have the technology crash. pointrse he does make a in a sideways manner, the market is hot since it's post-brexit lows. if you believe mark carney, the dark days of the u.k. economy will be coming in 2018 and perhaps as rates grow gradually, perhaps with a trump presidency, maybe there are some dark clouds
12:22 pm
for the u.k. economy. there is certainly room for disappointment and upset. .ark: matthew, great to see you matthew beesley, head of global equities at henderson global investors. vonnie: llama brands began -- yum brands began trading as a separate stock. this is bloomberg. ♪
12:23 pm
12:24 pm
mark: live from london, i am mark barton counting you down to the european close, six minutes away. vonnie: from bloomberg world headquarters in new york, i am vonnie quinn. it is time for a bloomberg business flash, a look at some of the biggest business stories. brands began trading as a
12:25 pm
separate company on the new york stock exchange. they plan to grow prospects for kfc, pizza hut, and taco bell. growthhere is a huge potential for all three brands in the 130 countries and which we operate. it is a real growth story, that is the story for the future. tradingyum china is under the symbol yumc. an area that is attracting the u.s. -- the attention of u.s. payers looking to control costs. they will announce their 2018 list of coverage drugs in august. efforts to cut cost and operate more efficiently after thailand's group lost control of the company.
12:26 pm
reverse a decline in consumer electronics sales. shares have doubled since all of this. that is your latest bloomberg business flash. mark: seven is the number today, take a look at where the european equity markets are trading as we had to the close. seven days of decline for the stoxx 600, the longest losing run since february. stocks have started november as they finished october. look at what is happening to currencies, the big data point today was u.k. manufacturing. sterling is down against the dollar, 1.2233. this is bloomberg. ♪
12:27 pm
12:28 pm
12:29 pm
mark: live from london and new york, i am mark barton with vonnie quinn.
12:30 pm
the tuesday session, down by 1%, the lowest point since july. decline.s of longest losing stretch since february. every single industry group is lower today and earnings are dictating the mood of investors. michelle with third-quarter profits beating estimates. acquisition of bg boost oil production and helped to counter the slumping prices. ep profit fell 49%. it was a beat. crude prices fell. production and division posting a loss, as well. this is a great chart, this is generally 20th, when oil and gas companies fell to the lowest level in 13 years. the car the majors compared. shell up by 17%, chevron up 34%, and exxon mobil up by 14%. all up but to varying degrees. i want to focus on this chart
12:31 pm
because the big data points here in the u.k. today with pmi, a slowdown in manufacturing growth in october and the headline factory gauge was at 54.3 last month, down for a tube year high -- two year high, which separates acceleration from the traction. it was drove at the robust pace. issues of input and output prices, this is what is interesting, surging to the highest in more than five years. the white line is manufacturing input prices. blue line is manufacturing output prices. look how they have risen, andifically since brexit sterling declined, so we have measures of input and output surging to the highest in more than five years, showing the double-edged impact of the pound weakening. the increase in purchasing costs was one of the steepest in pmi in nearly 25 year history. keep an eye on the level of sterling and how it impacts
12:32 pm
and put an output. the big data point in time today was the manufacturing at pmi, which rose to the highest level in two years. this chart is wonderful. this compares the chinese manufacturing pmi, the blue china,he space satellites manufacturing index. the official pmi is in blue and the wife is space -- the white is spaceno. like the more true to the actual number analysts say. china monitors over 6000 industrial facilities across china from face imagery and uses proprietary algorithms to measure levels of manufacturing activity using surface material classification. the white line has been below the blue line and it has been
12:33 pm
below 50, which tells us it is this in writing. what is interesting is that they are closing in on each other. not every day we speak about s china manufacturing index or satellites. there are still beauty of the bloomberg terminal. vonnie: i love that. poverty,doing up for too, where spots of poverty are particularly ingrained from space and there are many ways to do that. we'll keep our eye on that. i'm taking a look at something living in the u.s., the dollar index. it is down .6 of 1%, just below 98 so strong. the euro and yen are both stronger today. a little bit risk off from gold prices, nearly 1300 dollars at 1.5%. look at crude oil groping 46-40 -- 46.42, down 1% and that on
12:34 pm
the idea that we will not get that deal after all. 100 called one person's but we are back to show that and it is higher. the spread is higher. let's look at major averages, the dow down. primarily weighing on the s&p 500 and now that it is a new sector in the s&p, down .6 of 1% .52113 and the nasdaq down of 1%. mark crumpton has more from our first word news. thank you. house speaker paul ryan is voting for donald trump. he made his comments during an appearance on fox news. ryan: i stand where all summer and are devoted for nominate last week in early voting. we need to support our entire republican ticket. trump this campaigning
12:35 pm
today in ryan's home state of wisconsin but the speaker will not be joining him. hillary clinton and donald trump are tied in north carolina according to the latest poll from yvonne university. clinton has 42% and trump has 41.2%. 80 8.7% are undecided. support from gary johnson fell from 9% to 2.6% now. the pentagon is going back to congress for more money. the defense department will request about $6 billion more for the current fiscal year. it needs the money to pay for troop increases in iraq. a slower drawdown from troops from afghanistan and additional air operations. colombia's president received a ceremonial military welcome at the start of the state visit to britain. he was greeted by queen elizabeth and her husband in the heart of london. the three-day state visit is the first by a colombian leader.
12:36 pm
global news 24 hours a day powered by more than 2600 journalists and analysts in was in 120 countries. imr crumpton. mark barton, back to you in london. mark: thank you. the fed begins their today deliberation and there is consensus that omc will raise rates in december, but three of the feds are warning the central bank may hold off on rate hikes until next year. on our side of the pond, we are looking ahead to the boe decision after news that governor mark carney will stay on board. more to talk about this is force -- is boris. is this the ultimate compromise, mark carney staying on through june 2019? boris: you could say that baseball you is common any ticket for personal reasons in 2018, and he has four daughters, and the it going through the education system here, so by
12:37 pm
then, they will be looking at higher education. he is compromising and his personal affairs of not changed but he will take the economy through brexit and many us out of there. mark: brexit negotiations are ongoing, so are they thinking of a new governor? >> it is tricky. she is probably happy he stays until 2019 but as negotiations toch climax, she will have hunt for a successor for mark carney, one with relevant skills and confidence at a turkey time. and that person will have to inherit pretty much the plan with a deal that theresa may can strike and they will inherit the post brexit economy as mark exits himself. vonnie: i want to bring in boris from bloomberg in new york. talk about the federal reserve meetings because it is this week
12:38 pm
and no one is expecting anything this week but three of the primary dealers actually say they are not looking for anything in december. boris: that his rights. all 22 primary dealers say they will not be a rate hike. three of them are making consensus calls, saying that december is not going to be on the table for the fed either. they are saying that yellen and day that is not in favor of a rate hike. vonnie: i would say that is fewer than i would've anticipated looking at the market because the majority in the market looking for a hike, one quarter and we are talking about three out of 23. should it because bert are no hike in december? -- shouldn't more be calling for no hike in december? boris on: the fed board, they have been communicating for a
12:39 pm
while that they are getting anxious for a rate hike, so the data has been mixed, but the rhetoric is doing a good job from the market and the majority of economists at post brexit banks that the fed will raise before europe. julie: boris -- mark: the rate hike cycle will be the slowest and possibly the shallowest and fed. boris: that is right. it is almost irrelevant when they go. the bond market is pricing in with a handful of rate hikes within the next three years. whether they go in december january or may, the path is very clear for the bond market and for the majority of these primary dealers. it will be shallow and slow going and it will take a long time to normalize. vonnie: simon kennedy, as with the federal reserve does it come less relevant now to the boe given all of the problems at
12:40 pm
this point? simon: i think it is still an issue. the federal reserve is on hold and that is less likely that the pound will fall further against the dollar. all things considered. that is good for the bank of england. we were talking about inflation brewing in the u.k., so i think the bank of england will be happy the fed is not raising rates. tok: and 2019, coming back the theme of central banks, it will not just be mark carney. arerexit negotiations ongoing, maybe carney will push to stay longer. pushing that aside, draghi lee's the ecb, two central bankers leaving in six months. andn: i think october november for draghi and jim for mark carney. if you are a central bank are promotion, hold on until 2019 and polisher vb cap.
12:41 pm
certainly -- cb up. certainly, that shows the markets are wobbly. vonnie: what a primary dealers saying about the follow-up and what markets there might be? with fed interest-rate hikes last year, will he have another experience like that? forwards: no. -- boris: know. this has been very well telegraphed, even for emerging-market standards. they are very well prepared for this. there are a lot of outstanding dollar debts that could potentially raise interest rates for borrowers, but we are talking about 25 basis points and talking about slow and gradual path. it is unlikely that will send emerging markets into the tantrum level volatility we have seen. vonnie: boris corby covering -- simoncovering bond and
12:42 pm
kennedy in london, thank you. a reminder that at 2:00 a.m. new york time, 6:00 p.m. in london, special coverage of the federal reserve rate decision. tom keene, joe weisenthal and scarlet fu will provide analysis. cash that -- catch that on bloomberg tv and radio. up, bp disappointed the street when it reported earnings earlier. wasl hardly beat -- shell hard to beat. we will have a breakdown in the global business report. this is bloomberg. ♪
12:43 pm
12:44 pm
you are watching bloomberg.
12:45 pm
i am vonnie quinn. mark: i am mark barton with global business report. are watching european energy producers reporting third-quarter results, a stark contrast between shell and bp. you will give a full breakdown, ahead. vonnie: u.s. prosecutors are building a case against valeant. how top executives could face charges. polluting in the u.s. and a major campaign with the presidential election. the bloomberg team explains what can be done to bring down the debt. vonnie: bps third-quarter earnings plunged 49% but beat estimates. there were hurt by falling oil prices and shrinking refining margins. third-quarter profits rose 17% at royal dutch shell. the record boosted oil production and that helped offset that slumping prices.
12:46 pm
securities director futures puts the results into perspective. >> the story today with show is is a story of their acquisition of bp. i think production came on quicker than expected and they were able to turn it into profit quicker than expected in the united states. chevron was with the same lines. they were able to turn some spots around quickly and posted their first profit in the couple have chevronso you and shell posting profits at this corridor and exxon mobil and bp still riding multi-quarter declined. third-quarter profit missed estimates and revenue fell at all for the british bank divisions. bill winters once showed that he stemmed the bank losses and will restore the dividends last year and posted their first annual loss since 1989. u.s. prosecutors are both in a
12:47 pm
court case against valeant pharmaceuticals that could result within charges in weeks. according to people familiar with the matter, it focuses on former chief executive michael pearson and former cfo howard schiller. they're looking into valeant's hidden ties to specialty pharmacy that the company secretly controlled. gambling revenue has risen for third month in a row. up almost 9% in october and the growth reverts a slump that lasted almost two years. china's public holiday led to a big jump in businesses to macau casinos. vonnie: time for our bloomberg picked take with context and background on interest issues. american exceptionalism, student loan debt stands out. the country imposes the kind of only imposed in the else in the experts say the roughly $1.3
12:48 pm
trillion education debt in the u.s. is more than the rest of the world has combined. here is the situation. democratic presidential candidate hillary clinton would spend $350 billion over 10 years to reduce student debt and rain in the cost of college by lowering interest rates and making loans easier to repay. sender bernie sanders would make all public colleges and universities tuition free. president barack obama has called on congress to make community colleges free, a proposal republicans are projected. the biggest change was with no congressional action. administration drops programs were struggling ask students can make programs actually did based on income. when the u.s. loan program began in 1965, the goal was to get students reliable access the funds to help them get through college by deferring costs until they had an income. the biggest growth came in the past decade as student debt rose from $364 billion in 2004 21 $.2
12:49 pm
trillion 10 years later. this is according to new york data. is it all in the loans or the cost of college? criticism of proposals is that the do not ask -- address root problem of a book and pollution hikes, making it cheaper to borrow and it only makes it easier for schools to fees. president obama and post a system that could be tied to eligibility for federal aid and colleges hated the idea and it was dropped. you can read more about student debt and a quick takes. head to for more stories. ♪
12:50 pm
12:51 pm
ofk: take a look at shares weatherford. they confirm they remain within debt confidence, shares fall
12:52 pm
into the lowest in more than one decade in the oil and gas division, and trading was halted that shares fell. biggest tumble since may the fifth. weatherford has seen as a takeover target and it failed to generate enough cash to coverage over the last three quarters and it will face tight debt covenant, but weatherford confirms it does remain within its debt covenants. we will monitor that stock. check itonitor and out, battle of the charts, the most telling charts of the day and what they mean for investors. you can access the charts by using the function feature on the bottom of your screen. kicking things off today is dani burger. i am looking at market volatility and how that relates to the election.
12:53 pm
for a while, market volatility had been low. in the blue, i have bank of america's options pricing for how volatile investors think assets are going to be and this is a class equities, bonds, you name it. this has been pretty low and not moving with clinton's odds of moving and being elected. over here we have brexit. this risk indicator spikes up. i have the correlation of not much happening and editing back-and-forth, but look what has happened closer to the election. 's odds surging, a sure thing, markets like things that are not confusing and things to bet on, so market all to live the falls, the lowest since december 2014, but look what happens. rehab getting here closer to the election little bit of nerve kicking in. and e-mail scandal recently with clinton spikes in that.
12:54 pm
this is a five day increase, the most in market risk since brexit , so investors are getting more nervous right now pass to get closer to the election, and that is in the bloomberg chart library at btv 4691. mark: good stuff, vonnie, beat that. to,ie: i don't even want great shot. i stayed away from the election and the subjects we today and decided to have a look at china. we have not been talking too much about it but we know that and theyis weakening are trembling after the dollar. can see that there are investors thinking quite a lot about it. these are outflows out of china in red, investor outflows. they are pretty strong, let's put it that way, not record, but we saw more outflows in december than now, but we are about halfway to that point. these are inflows into emerging markets at the same time.
12:55 pm
emerging markets also do include china but countries in latin america and the middle east and so forth, so this will be a little bit higher if it were not for withdrawals out of china. i hope that was pretty fascinating, money moving around the universe. you can see that on the 46 79.rg at btv mark: so hard. one week to the election, china pmi data today, literally it is -- i know this goes against our roles, but i want to award a tie because i love this market risk index. it is one of my favorite indices, but that china outflow is so pertinent as the yuan positive and the dollar, pretty steady as her navigate. i am giving a tie. i am the boss. there ago. vonnie: let's call it a tie because the dani. mark: equal vectors. , 6:00 p.m. inyork
12:56 pm
london. we will have special coverage of the fed rate decision. scarlet fu, tom keene and joe weisenthal will provide the analysis review can watch it on bloomberg television and on bloomberg radio. just to recount what happened on the number toies, remember or forget, depending on your position because we have had seven consecutive days of losses for the european benchmark, stoxx 600 down by 1% today. we are at the lowest level since september, a in four-month high, and how things have changed in the space of the space of a month. longest losing run since bloom -- january. bloomberg continues. this is bloomberg. ♪
12:57 pm
12:58 pm
12:59 pm
york,is 1:00 p.m. in new 1:00 a.m. in hong kong. i didn't care and this is bloomberg markets. -- i am david gura and this is
1:00 pm
bloomberg markets. from bloomberg world headquarters, this is "bloomberg markets," covering stories added macau.nd hillary clinton is in that position with consumer goods companies. we'll have the latest on the federal reserve is to begin a two-day meeting in washington. hillary clinton and donald trump are prime for what could happen after election day. the organizing and appoint volunteers and lawyers across the country. at least some of what happens in las vegas this not stay in las vegas. macau is stealing a page from the playbook. julie hyman has a look at the latest worried julie: not looking -- latest. julie: now looking so good. stocks are falling to the lows. we have seen the losses building as the date progresses.
1:01 pm
the s&p and nasdaq down more than .6 of 1%. we have watched commodities closely because that has been part of the story today. gasoline is going higher after an explosion and fire at the largest pipeline. the pipeline explosion happened in alabama, causing the death of one and injuries of others and it has caused a spike in gasoline and some of the refiners have been a finding but not -- are benefiting but not all, bolero up by 1%. to so by .5 of 1%. there has been a conference in riyadh and they said on the one shouldlobal demand return by the end of the year, but we actually saw oil take a leg lower end off about two thirds of 1% and level of $47 a barrel, 46 point $54. natural gas according to the ceo
1:02 pm
of saudi aramco, they plan to nexte gas output over the decade, so he sought the sharp downturn in natural gas, off by .bout 4% to 91 at the moment with an and gas -- 2.91 at the moment. we have been watching weatherford. they initially fell after an analyst at wolf research said they might need to raise equity and cash -- raise cash by selling equity and the company said they were within their debt covenant. analysts are concerned about the ge baker hughes deal and implication for weatherford, so a lot of concerns. ishares down 16% on heavy volume. the green line on the bottom is the average fogging at the various times during the day. currently, we see about almost 90 million shares trading. the average at this time of day
1:03 pm
is typically about 13 point 5 million, so heavy volume and the red line extrapolates volume by the end of the day, so heavy selling and weatherford, even as the company remains within its debt covenant. david: julie hyman with an update. let's check in on first word news with mark crumpton area mark: thank you. a nationwide survey has donald trump pulling into the lead over hillary clinton. in the washington post tracking poll of likely voters, trump has 46%, clinton has 45%, the first time trump has led since may and it has a margin of error at three -- at 3%. clinton has assembled a voter protection program that includes to raise of lawyers volunteers in battleground states. the lawyers association plans to have 1000 attorneys ready to monitor polls and challenge
1:04 pm
election results across the country. a tough commute for thousands in philadelphia this morning and this afternoon will not be better. representing 4700 transit workers went on strike at midnight, shutting down buses, trolleys and subways that provide 900,000 rides a day. thousands of students use the system to get to and from school. iraqi troops have advanced into the outskirts of basel , --mmosul, where they are trying to remove iraqi state forces. the u.s. led coalition is taking part and the islamic state has l for more than two-year spirit global news powered by more than 2600 journalists in over 120 countries. i am mark crumpton. this is bloomberg. back to you. david: it will be a big week for central banks. we heard from the bank of japan. the boj advised inflation
1:05 pm
forecast once again. tomorrow, federal reserve wrap up the committee meeting and on thursday, our focus shifts to the bank of england. treasury yields are climbing and expect the federal raise rates this year. joining us is co-portfolio to haveand it is great you. appreciate it. if w -- ifay cash wirp is raising, what should we expect tomorrow? >> as long as financial conditions are loose in december, and they raise interest rates by .25 of 1% and you will be more optimistic about 2017, but nonetheless, this meeting that they are having is a set up for december rate hike. david: no news conference but the statement. but they looking for in that?
1:06 pm
are there things will be keeping and i out for? chad: they will talk about financial conditions, they will mention the unemployment rate and potentially be inflation rate, and they will say that it is transitory and moving back to 2%, which is a hint and a wink and a nod that december is on the table. as long as we do not see him in hinging of the financial system postelection, we are ago. david: you think it will happen? chad: absolutely. we are notaid, terribly hawkish believing the federal reserve will raise interest rates that aggressively and 2017. we believe they will go one more time and a terminal rates, which is that we think 1.5% is there terminal rates. david: what does it look like when they do that? how less is it to go back to that one and then rate hike more than one year ago? what does that teach about this time around?
1:07 pm
tells us the markets are not looking at the one rate hike but the outer year dot plot and where they go in 2017 and beyond. as they start to reduce that expectation on the fed rate hike in 2018, you saw that the dollar started to react a little bit less aggressive as it did back to previous years. hence, the recently believed the dollar will increase value but it will not be in an aggressive fashion like we did last year. it will go back there percent to 5% higher over the next 12 months to 18 months. david: when policymakers try to assess the health of the american figure, you have consumer spending cap more recently, and squaring all of that, how do they see the health of the consumer? chad: i think the federal reserve is looking at mortgage debt, seeing if it is expanding at the normalized rate, and we are still below recessionary
1:08 pm
trends. as well as they are looking the average population of people that are working in relationship to the overall population, where what they are seeing their is we are still well below where we we still have a lot of work to do and that is the reason they continue to hit will bes that they accommodated over the next 12 months to 18 months. they really do not want to unhinge the financial system but take a little bit of the speculative fervor off. david: you look at the fed and bank of japan and policies unchanged and there is a sense that after the term expires, that central banks are learning. that they are reflecting on what is happening, the data and making changes. is that a good thing for an investor to see a bank moving nimbly arguing to see the move with authority? chad: i want to see them moving
1:09 pm
in an old-fashioned based on several factors. creation, economic activity, and the federal reserve not only has to look inward at the u.s. but the whole global and financial economic system and they have to be somewhat more nimble from the perspective. they are faced with a tough situation. global growth accelerating and the main contributor to the creation will be pivoting and that investment extending from china will decelerate over the next 24 months and they are acutely aware that very tense, the reason they have to keep a careful eye in the united states and economic conditions, as well as within inflation trends but also what is happening across the world. does thew much risk election and the outcome pose to investors right now? the banks financials tend to go up when donald trump is ahead in the polls and consumer goes up
1:10 pm
when hillary clinton is ahead in the polls great what kind of reaction are you expecting on november the ninth? chad: if the financial system gets a shock based off of the election, then you can see the selloff, the reaction function within the treasury markets. with that said, over the course of the next 12 months, regardless of who gets in, we're huge stimulusa program, and that is why we are believers that the overall 2%nomy is going to go around to 1.7 5% and it will roughly be about 2% to 3%. we're not expecting this massive economic vitality, in part because of government intervention. thed: i was talking with ceo of that now last week and he the next president nine months to figure out what is wrong with the affordable care act to stop the spiral we are in right now. when you look at the health care sectors, how closly intertwined
1:11 pm
is that with -- how close intertwined is that what the affordable care act and how do we see it with growth? chad: the health care sector is in transition. we believe when we look at 24 orths out, more gdp revenue gdp dollars will go toward health care, regardless of how the affordable care act pans out . we believe that federal government spending will move more dollars into that program to rectify the situation, so this uncertainty within the markets will be in the election and based off of of the rhetoric and rethink it is a phenomenal time to go out there and start picking through the rubble and look at the portfolio. david: thank you. chad morganlander.
1:12 pm
with women to go until the election, donald trump is closing in on hillary clinton and they are preparing for overtime. this is bloomberg. ♪
1:13 pm
1:14 pm
this is bloomberg markets. i am david gura, time for the bloomberg says flash, a look at the biggest stories in the news right now. pfizer will discontinue development of an extreme mental cholesterol medication. the surprise announcement comes after the largest u.s. drugmakers profit fell short for the first time in three years. the drug was in late development and unexpected side effects of losing potency over time. forecasting the first annual operating profit in two years,
1:15 pm
cost-cutting efforts after taiwan to control over the company. they want to revamp business and settle losses in solar panel operations and consumer electronics sales. shares have doubled since august. harvard university raised a record $1.2 billion in annual donations that running a tight budget due to underperforming endowment and facing internal criticism over management. it is the largest fundraising in higher education and the biggest for harvard. that is your business flash update. with just one week to go until the u.s. presidential election, a new nationwide poll has donald trump leading in the abc-washington post tracking poll of likely voters per trump is ahead 45%. joining us is alex, bloomberg's white house editor, great to speak with you. help me with the utility of a poll like that this late in the game. what can i learn from
1:16 pm
state-by-state poll versus a national poll? is it more useful to be looking at north carolina or georgia rather than the headline number? alex: it is pretty to look at averages of state level polls in the battleground states, so look at averages of florida, north carolina, ohio, colorado, etc. david: what are undecided voters still doing today? hillary clinton is 42% and donald trump 41.2% to north carolina and an outstanding 8.7% of north carolinians undecided. power dating with undecided voters this late in the game? alex: we always go back undecided voters, how can anybody not have made up their mind in the election? for the campaigns are dealing with these people and the way they have historically done and they're beating the bushes, trying to convince folks to vote for them and trump is this
1:17 pm
crossing the midwest from pennsylvania to wisconsin to try to get these folks to make up their minds. some polling indicates that undecided are tending to break her trump, which is not surprising in an election after the two-term presidency. david: the piece on bloomberg about how they prepare for the day after the election, donald trump continues with rhetoric suggesting that could be not present at the polls on -- that could be malfeasance active election day polls. both of the campaigns are gearing up to fight if they need to a november the ninth. alex: that is not unusual. you want to be prepared in case of recounts. both campaigns are lori -- up.ering i tend to think there will not be civil unrest or donald trump refusing to concede defeat as clearly lose and if the margin
1:18 pm
is wide and they have lost the election. david: what to the closing statements look like now with go?week left to donald trump talking about the affordable care act and the prediction of premiums will go up about 25%. will he be hitting that hard until the election? alex: i'm sure. it is a pretty meaty target for him and i do not think many voters are aware that the premium increases really will not affect them. for example, where trump is today and what he ripped obamacare, premiums are going up about 30% for obama care customers. of people in the state are eligible to sign up for the affordable care act plans. if you get subsidies for your policy, he will not see the premium increase at all. 10% of thosethat people in pennsylvania eligible for the obamacare plan get the
1:19 pm
subsidy, so i think the value is trying to convince the larger public that the premium increases impact them, even though they did not. story last night, a big in "the new york times" about the arcane tax donald trump used in the 1990's. it took me about two at three times to get a sense of that is going on. does this up traction with voters and i've interested in that level of donald trump's taxes or do they just want to see the returns themselves? alex: i'm glad you did not ask me to explain that. [laughter] if so many voters said aside the fact that donald trump refused and areses tax returns willing to vote for him anyway, i cannot believe that this "new york times" story, which was fascinating and fairly astounding, once you understood what was going on, i cannot imagine it will have a lot of impact on voters who have decided the fact that this releases his taxes and
1:20 pm
whether it matters. you very much. our white house editor at bloomberg news. still ahead, a preview of electronic earnings after the bell today. this is bloomberg. ♪
1:21 pm
1:22 pm
this is bloomberg markets. i am david gura. analysts will be looking to see how the good deal maker has capitalized on ships digital sales and if it remained competitive with rivals. they are joined by cory johnson, inc. are also bloomberg markets on bloomberg radio with carol massar. let's start off with earnings. what is unusual about the way
1:23 pm
they are reporting? isey: that -- the sec cracking down on large and small companies, particularly companies that want to make things that better than they are. electronic arts want to make it look simple. they have a lot of deferred revenue so they will go to the top of press releases with non-gap revenue and earnings numbers but those are not the real earnings. when you look at earnings over the course of any given corridor, they can be bumpy because the change in deferred revenue doesn't always show up when you look at that topline number, so that revenues can be bumpy and the bottom line can be bumpy. leveling out that the company has done with non-gap reporting is done. they will leave it up to likests and knuckleheads me to figure it out and look for a change in revenues and figure out how the business performs. david: long ago, there was the pokemon go phenomenon, how is that trickled down to companies
1:24 pm
like ea? corey: i think the phenomena in of pokemon go was an amazing thing, but more than anything, it pointed to what was happening in mobile gaming and how big it is. most of the revenue that ea recognizes are from digital and a lot for mobile. only tens of millions of dollars be life game is successful, one of the most top-ranked in the itunes store and a big success so expect to have them focus a lot on that pokemon go notwithstanding. fifa stroking for the company. corey: ea is a big driver with the company but they have had and alsocess with fifa madden football. one of the best-selling games of all time. 's giant for them and their golf franchise has also done well over time but a lot of the focus will be on what is
1:25 pm
happening in the first-person shooter business. their tactical game is so important because they hire guys who were actors and call of duty to launch this project and it is not done as well and perhaps call duty has done so well lately, so we will look between the lines and see him talk about emphasizing and getting into the fourth quarter and calendar of the fourth quarter hugely important and how it stacks up the call of duty. david: it is interesting to hear you talk about how important partnership is, whether it is fifa or battlefront, compared to competition, is ea more to partnerships like that? historically, they have been the big daddy of sports games added silicon valley. right. activision has taken the partnerships and has developed franchises and with solid game making, but the partners helped
1:26 pm
a lot and you could see that happening with star wars, where it has floundered around this average game that was with fantastic characters and their taking those same characters and well-known stories to maxim -- to match them with terrific games. david: appreciated as always, cory johnson. you will have more on this in a 30 minute time for bloomberg markets on bloomberg radio. up next, the opening bells rang to open up and we will hear from the ceos again brent china, next. this is bloomberg. ♪
1:27 pm
1:28 pm
1:29 pm
david: live from bloomberg world headquarters in new york, this
1:30 pm
is bloomberg markets. let's check our bloomberg headlines. house speaker paul ryan has cast his vote for president, not saying the name of donald trump. he said he voted for our nominee. he said republicans need to support the entire gop ticket. he reiterated he is focused on saving a republican majority in the house. edin saidfor huma ab she has always cooperated for information. the fbi is examining whether her e-mails are pertinent to their dormant investigation of the hillary clinton private server. she has not been contacted by the fbi about this that she will continue to be forthcoming and cooperative. aftershocks continue in the region of italy worth thousands were left homeless by a massive tremor over the weekend. the aftershocks are coming at a rate of several power in the
1:31 pm
mountainous region north of rome. officials say 15,000 people are in need of housing. for the first time, china has stealth to the public as a performed at an air show in southern china. it closely resembles the lockheed martin f 22 raptor. american defense official says china wants to use stealth technology to turn its air force into one that can conduct defensive and offense of operations. global news, 24 hours a day, powered by more than 2600 journalists and analysts in over 120 countries. david: thanks very much. yum! brands completed the spinoff of its yum china division. it traded on the nyse. the company rang the bell.
1:32 pm
joined usrands's ceo after the start of trading today and said there is a huge growth attentional for the browns. brands across 135 countries. he was asked whether keith me ister offered him advice? supportive of the separation and the transformation strategy i am putting in place. it's nice to have the support and endorsement of the board as you go through such a large change in the organization. has been the most recent proposal? eith does not get involved in the operation of the business but has helped us. he said i will not tell you how to run the business. he said i think i can help you unlock share held -- shareholder value and i think he is demonstrating that.
1:33 pm
jonathan mark: have you seen change in consumer spending patterns post brexit question mark >> no, i think there was a little change around the vote or just after but our business is doing well in the u.k. right now. .e are happy -- just ones jot great taste and great value in it we continue to deliver that, they will come back more often. mark: are you thinking of changing your investment plan when it comes to the u.k.? has brexit changed anything when it comes to investing? >> no, we will franchise a lot of restaurants. we will own less than 1000. there is more re-franchising to
1:34 pm
do and that's worth about $2 billion and we will return that to shareholders. that's what we're working toward. back in the u.s., 85% of stores are company owned and only 15% are franchised. how long will it take to transition? >> we will have an equity presence but by the end of 2018, we will have re-franchised all the stores we want to. we've got the ownership right and we got our capital structure in place and that's where we are looking for delivering at least 7% sales growth. vonnie: what about new offerings? >> we've got exciting new ideas coming out. we've got the naked chicken chalupa at taco bell
1:35 pm
there is a lot happening on all three brands from a fruit -- from a food innovation perspective. mark: do you think that ring fencing the china unit will be a roadmap that may be other consumer brands adopt when it comes to china, the world's second-biggest economy? riskedhink we have de- yum! brands but by thinking that china is a chinese company reduces volatility and risk. ma owns kfc was the headline in china. this is not a u.s. brand anymore and it will be great or yum china and yum! brands. as for their growth in china, the ceo of yum china holdings discussed his
1:36 pm
strategies for reaching more consumers. >> next year is the 30th year in china. we have had an unbelievable there haverowth and been challenges along the way every couple of years but overall the opportunity far outweighs the challenges. our plan is pretty much what we have had for several years which is billed a lot of restaurants. we have built at least 600 new restaurants each year and the growth of cells in existing restaurants will give us a nice growth in business. mark: can you give us an idea of taco bell opening in china? >> the first one will open in shanghai in a spectacular location before the end of this year. takeyear, we expect to taco bell to several cities. reasons for the success of kfc and pizza hut in china is we have been able to localize the menu. we tested tocco bell and they loved the brand.
1:37 pm
they love some of the products but the others we are working to make others happen. by the end of the year, the store will be open for business and chinese new year next year and we will see what the response will be like. vonnie: how big of a deal is delivery and technology? how do you plan on expanding those areas of the business? >> both of them are significant. on technology, chinese consumers are probably the world's fastest at adapting to new technology. anyone who canat type in mandarin on a little screen can do pretty much anything. i am astonished the complexity of the apps here and the capability of consumers to locate stores to preorder menus and get deals. delivery is growing rapidly. cities, it seems like every 10th vehicle is someone with a backpack carrying food
1:38 pm
and our business is no exception. we did more than $700 million in delivery this year and that's our fastest-growing. vonnie: give us some numbers. how much do you anticipate it can grow in the future with hard numbers? started cashless payment with no credit card and scanning your cell phone. in less than one year, it has become about 20% of our run rate . that's $1.5 billion of cash we don't have to count anymore. the kfc loyalty program in less than when you're has exceeded 50 million members. we believe that's one of the largest loyalty programs in the world. it's 10% of transactions being scanned for loyalty program points. it gives you an idea of the
1:39 pm
scale involved here. we are able to reach 100 million consumers through digital marketing on social media which is beginning to rival television. i'm sure everyone is saying that benefit. -- isrketplaces extract changing extremely rapidly. david: that was from earlier today. month in august is a cut to interest rates in canada. this is bloomberg. ♪
1:40 pm
1:41 pm
1:42 pm
david: this is bloomberg markets. let's go over to julie hyman for her chart of the day. julie: i am looking at small caps which is a proxy for risk appetite in the market and it appears to be going down. is a lookof the day at the performance of the russell 2000 index versus the s&p 500 and the recent run we had of underperformance is the worst we have seen going back to january. we are seeing trepidation creep into the market about things like the election, for example, the federal reserve, etc. we are seeing that underperformance in those small
1:43 pm
cap stocks. and we look at the vix are seeing volatility go up. you can see the past five days and especially today the jump we have seen to nearly 20 in the vix. if you look at the russell 2000 year to date and its performance, it's up about 3.7%. years, ifast several there is any pattern at all, the russell 2000 sort of exaggerates or exacerbate the up and down side move of the s&p 500. if it's a good year for s&p 500 on the large caps, it's a better year for small caps. this is the annual performance, this relative performance we are talking about. in 2014-2015, small caps underperform but for the prior two years there was an outperformance.
1:44 pm
this is small caps as a proxy for risk and we are seeing people get more nervous when it comes to going long on stocks in small caps and large caps in this most recent environment. david: thank you very much. time for the bloomberg business flash with a look at some of the egg's business stories in the news. dobby -- abreu dobby -- the abu dhabi investors looking to buy softbank. they are also in talks with other investors. the severn wealth fund is also in talks to join the public area the publisher of u.s. state to buyas ended talks trunk to compete more aggressively with online news sites and advertisers. the bank set to find at the
1:45 pm
takeover had backed out of the deal. reuters is eliminating 2000 jobs worldwide. they want to reduce expenses that the company and they report recorder profits that beat estimates. the parent company competes in providing news and information. that is your bloomberg's newsflash update. grew at .02%.ate do they need fiscal stimulus? mark bunting joins us now from toronto. let's start with the strength of the report today, what stood out to you? but there was some strength and some weekend -- weakness. gdp was growing month over month and annually 1.3%. that the economy for
1:46 pm
the third quarters on track to grow at 3.2% which compares to a contraction the second quarter of 1.6% due to the terrible wildfires in alberta which hit the oil and gas sector. that sector has bounced back. 1.4%. grown by on we also saw some strength in canada and the most recent report in manufacturing, mining, construction and wholesale. salesakness on the retail were down by 0.2%. canada's consumers continue to be very leveraged. there are those who say that even if the bank of canada is considering a rate cut, consumers don't need any more incentives to spend. david: we've talked about the housing picture in canada. how does that factor into these
1:47 pm
numbers? >> it was quite weak. the real estate and brokers sector had the fastest drop in since january, 2015, down by 3.2% because of the 50% foreign homebuyers tax that was imposed in vancouver in early august. from june-august in the greater vancouver area, 13% of home buying was from foreign money. that was down to just 2%. billion tom $2.3 under $100 million so that is a huge impact and people are staying away from buying high rent homes. september sales in vancouver are down by 32%. some economists have said vancouver in the housing market was already cooling so this may not have been at the right time. david: let's get to the finance ministers comments that will come out later today.
1:48 pm
how is the bank of canada processing these numbers? does this fit into the conversation of a rate cut? >> in the last meeting, the bank of canada governor said it was discussed within the bank about the possibility of a rate cut. they decided not to do it and are hoping the economy will improve. this will play into the fact that although at a slow pace, but he is slowly improving. on the fiscal stimulus, we will hear the fiscal update from the finance minister at 4:00 p.m., 3:30 p.m. eastern time but the liberals ran on small deficits. fiscalid we will run a deficit of about $10 billion and now we hear they may want that to be above $30 billion because the economy is weaker than they thought. we had a growth counsel advising prime and mr. trudeau saying you
1:49 pm
should have an infrastructure bank of about $200 billion and much of that will be private money and $40 billion coming from the federal government. will we hear about more spending? it has been hinted that they will probably not add more spending. if the economy is weaker, they get less revenue coming in through taxes and if they start spending on top of that, maybe the deficit gets out of control or is not manageable. that's the key thing to watch for today. david: we will be watching that at 3:30 p.m. east coast time. allocationsasset will join the team later today on why cash has become king again at 4:00 p.m. eastern time. in vegas, what happens does not necessarily stay in vegas, that story is coming up next. this is bloomberg. ♪
1:50 pm
1:51 pm
1:52 pm
david: this is bloomberg markets. macauhighrollers are in so they are looking to las vegas for inspiration. >> if you remember las vegas in the 90's, steve win was knocking it out of the park with projects. we are now seeing a similar thing in macau. wheel builtrris into the side of a casino or replica of the eiffel tower or even synchronized fountains.
1:53 pm
basically, las vegas is being replicated in macau. you had a lot of wealthy chinese going there to play and then there was a corruption crackdown. what difference did that make after the crackdown? >> it was huge. a place for these high to spend that incredible amount of money on that karate -- on baccarat. those people disappeared. a place for thesethe whole citt to a new type of customer. they are trying to attract the middle market. they may bring in their family so instead of the gucci and product shopping, they've got 18m and are planning events for the kids and taking them to historical sites in macau so it's a different type of customer. a big change from what it was but is it working and drumming up revenue and bringing more tourists and revenue to macau? >> we still have to wait and
1:54 pm
see. the last two months, gambling has been up after more than a two-year slump. there seems to be more visitors coming but it's not a huge increase. this may be a slow build. david: you mentioned steve win, the american casino magnet and shall abelson is also involved. they are not new to the place. are they pioneering this transition? i can remember in 2002 when sheldon adelstein talked about macau and said we will build this strip they call the kotai strip that was reclaimed from the ocean. i thought it was crazy. he spent $12 billion building these properties. he has been way ahead of the curve on this. he's got a sheraton and a holiday in and is trying to
1:55 pm
appeal to the mass-market customer they think will come from all over asia, not just china. about talk to us government officials in china. chinese growth is enviable from most of the world but it is slowing. what role is the chinese government playing in this question mark >> it's a big role. if you look at las vegas, it happened over 40 years. it was organic growth because casinos were spreading around the u.s. and las vegas had to think of a new strategy. in macau, it's the opposite. the government is saying we want non-gambling tourists and you need to create more non-gambling amenities. they have limited the number of gambling tables quite a bit. as new casinos have as few 100 by corrupt tables -- back a rat tables. it's a real government mandate to diversify. david: you can read that story
1:56 pm
in the latest bloomberg business week. jews futures have surged 4.7% to close at a record -- orange juice futures have surged 4.7% to close at a record. up, suzanne duncan from state street on the best ways to improve investment outcomes. this is bloomberg. ♪
1:57 pm
1:58 pm
1:59 pm
scarlet: it is 2:00 p.m. in new york and 6:00 p.m. in london. welcome to "bloomberg markets."
2:00 pm
we are live in bloomberg world headquarters in new york. we will be covering stories out of washington, d.c. come on the line, u.k. and china. milan, u.k. and china. energy producers continue to report earnings and with oil trading below $50 a barrel, a stark contrast between british petroleum and royal dutch shell. we will break it down in today's commodities close. presidentiall the election, bringing an end to the most unconventional election cycle in recent memory. what there is still a battle to wage after november 8?
2:01 pm
markets close in just two hours. julie hyman joins us with the latest. julie: quite a bit of selling now come accelerating throughout the session. stocks are now at the lows of the day at the s&p and nasdaq are each down 1%. the dow off .75%. the s&p is down for a sixth straight session. it is at its lowest since july 7. also a broad-based selloff. all of theows that industry groups within the s&p 500 are trading lower. the interest rate sense that groups are doing the worst today -- utilities, telecom, cyclical groups like tech and consumer discretionary. that shows you the whole cell that wholesale selling. one of the potential reasons
2:02 pm
4691 -- the blue as we've seen hillary clinton's advantage over donald trump in the polls come lower and lower. more trepidation about the election. that's part of what is going on today. also seeing the selling resume within the bond market. yields come also has seen an increase in yields going back to the last fed meeting. a 16 basis point increase in the yield on the 10 year to 1.85%. you can also watch the u.s. dollar, another asset where we are seeing the risk aversion. the dollar is trading lower, benefiting the currencies like the yen.
2:03 pm
weatherford down by 12%. the company came out with a statement an hour ago saying it will meet its debt covenants -- there is still some concern about where weatherford stands in the wake of ge's deal with baker hughes. weatherford left to go it alone. get a check on the first word news this afternoon. mark: donald trump joined mike pence in valley forge, pennsylvania today and delivered what his campaign called a major speech about obamacare. congress tok convene a special session so we can repeal and replace -- it will be such an honor for me, or you and for everybody in this country. obamacare has to be replaced. we will do it and we will do it very much very quickly.
2:04 pm
it is a catastrophe. mark: the philadelphia suburbs are crucial to trump's hopes of winning democratic leaning pennsylvania. the clinton campaign had suspended its television it was taken as a sign of confidence that she had the state locked up. resumees campaign will does mr. trump's campaign will resume ads in colorado and new mexico. investigators had into baltimore, maryland to look into a crash involving a school bus and a commuter bus that killed six people and injured others. police say no children were aboard the school bus. the nelson mandela foundation says the concentration of power
2:05 pm
around a single leader could imperil south africa's democracy. the statement comes a day after business, religious and civil rights groups joined opposition parties in protest against jacob zuma's administration. there's a growing chorus of opposition to mr. zuma. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. -- and: forget alpha motivation and purpose matter just as much if not more to producing higher returns on investment. joining us now is suzanne duncan . state street now offers this quiz online to the financial community.
2:06 pm
this is a quiz -- some of the questions that state street focuses on are what motivates you to perform, why do you work in the investment management industry, d you consider your job a calling, a career? these are ways to determine or measure phi. , after 18or starters months of research, we have made a very important discovery on behalf of investment management industry and individual investors. we discovered a hidden variable of performance. we have quantified it and named it phi. phi is internalized purpose such that you would fully embody the purpose -- matt: how is this replacing a culturence driven
2:07 pm
for strategy? suzanne: we plastered in waves alpha, thetters -- common definition come outperforming a benchmark. adma with quantifying ded belly. ,e are ushering in phi quantifying an organization's culture. quantifying added value. that is every dimension that matters. i know all of you out there love the numbers -- let's get into that. for every one point increase in phi, thatzation's leads to 28% greater odds of excellent levels of long-term
2:08 pm
organizational performance. 55% greater odds of client satisfaction and 57% greater odds in excellent levels of employee engagement. phi matters an awful lot. it's never been quantified before. scarlet: i wonder how much of this is specific to current economic environments. we don't have robust gdp right now. there needs to be something more. suzanne: yes. when you look at the level of intervention can the level of intervention, central banks intervening, we've moved away from fundamental valuation. we need to be much more grounded in why are we here, who are we here to serve? guidepost that as our , to what end are we looking to outperform the markets? to what end are we investing? matt: i'm assuming phi delivers output. suzanne: it delivers alpha.
2:09 pm
you can think of help as related to the outperformance of a benchmark. we need a new definition of alpha. it should be defined as added value. thisadded value is organization having as it relates to its clientele? scarlet: where do you see evidence of phi? suzanne: there's a handful of organizations -- only 17% within the investment management industry that have a high degree of phi. over 50% have low or no phi. this is a huge opportunity for us to get our phi on. colleagueecently to a , it is difficult to find, but when you have it, it's a
2:10 pm
beautiful thing as it relates to performance. you can name some of the common examples, disney being one where it's all about the customer experience. if your child drops an ice cream , the workers there have an unlimited budget to replace the ice cream cone. matt: how can an organization encourage more phi? h isne: p is for purpose, for habits and i is for incentive. tove created a diagnostic -- thesh a b baseline that bar is quite low. feel bad if your scores are medium or low or none. second step is habits. we need to institutionalize
2:11 pm
habits around phi. that helps us illuminate the biases we all suffer from. if your guidepost's purpose and not the markets, you have that end in mind. you make less errors of judgment as a result. i is for incentives. we need to cultivate incentive structures to produce phi. scarlet: wells fargo wanted to sell credit cards to his bank deposit customers that would have produced better outcomes if it had incorporated phi better? suzanne: the results are statistically significant. in organizations that do have a higher degree of phi, they have better long-term performance. that is the key with that example. can makear term, you good profit, but what happens in the long-term? it will all become exposed. -- they are more the vib
2:12 pm
trusted than others. of customers believe it's in their best interest. up, and head of tomorrow's fed meeting, we are discussing the data points. yellin and company are being the most attention to. we will have special coverage of the fed decision tomorrow at 2:00 p.m. new york time. you can watch it on bloomberg tv, listen to it on bloomberg radio and see it on the web at this is bloomberg. ♪
2:13 pm
2:14 pm
scarlet: this is "bloomberg
2:15 pm
markets." matt: time for the bloomberg business flash. ryan air is laying down a challenge to lift anza, planning to start flights from frankfurt, making its debut in one of europe's top aviation hubs. -- challenge to loop anza -- lufthanza. sharp is forecasting its first annual operating profit since 2014 -- crediting efforts to cut costs and operate more efficiently after taiwan stock bought control of the company. sharp once to revamp its lcd business. shares have doubled since august. harvard university has raised a
2:16 pm
record $1.2 billion in annual donations but is warning of a tight budget due to its underperforming endowment which has faced internal criticism over management. the fundraising total is the second largest ever in higher education and the biggest 400 in history. harvard in history. scarlet: a 3% gdp in the u.s. gets the fed closed with inflation goal. that is the case at mgm partners keene asked why we all need 3% nominal gdp to get the fed to act on rates. david: productivity was not what it once was. the working age population is only growing at the same pace. growth potential is only around -- a 3% nominal gdp figure over time will get you close to the 2% target. tom: are we becoming like europe
2:17 pm
or japan? michael: yes, but it is not as severe. they have bigger headwinds, particularly on the demographic side. perhaps a low intensity version of what's going on in asia and europe. gdp is the new run rate, does your actuarial assumption come down you are expected -- david: we look at all kinds of factors. we look at what we believe that businesses in which we are invested can grow at. we have incorporate that macroeconomic forecast. that are so many factors go into earnings growth, that is just one of them. the big overlay, the gdp growth figure is just one of them. some companies could do far better, some companies need a bit of a tailwind and some cannot survive or do well or thrive in a low growth
2:18 pm
environment. that's what our job as analysts has to be. to determine what impacts the macro environment has on the bottom line. >> is there a common mistake that ceos in this part of the cycle or with all this cheap money are doing? are they investing too much or not enough? when we look at what ceos do, this is one of the key questions, what they do with their free cash that they generate. if they can get good returns on additional investment. by all means, invested. if not, perhaps making a position. if you're going to overpay, we don't want you doing that. they've been having trouble with a, b and c, they don't have a lot of debt, acquisitions are expensive, so what you've seen is they've given more back. it's not necessarily a bad
2:19 pm
thing. we want them to do that arithmetic. >> why have they not done it in the past? what happens when we start normalizing? david: you do have to normalized interest rates. you cannot assume we will have low or no interest rates. use we value businesses, we a normal discount rate for the price of equity, 10% for a big cap company. that might be a bit conservative, but this is what we believe that a company should be generating through the long haul. scarlet: that was david herro. , it: take a look at the vix is spiking up above 20 for the first time since november. 36, up 3.5 points.
2:20 pm
vix% jump to 20.36 on the as more and more people look to hedge the s&p. this is bloomberg. ♪
2:21 pm
2:22 pm
matt: this is "bloomberg markets ." scarlet: the u.s. presidential election is back up atop of currency traders list of worries. dollar volatility climbed to its highest level since september. we are talking about the two dollar-yen, moving about the two-month gauge, the blue line. fbi has reopened its investigation into hillary clinton's private server. joins us.gnarella
2:23 pm
when you look at something like volatility for two weeks versus two-month, this is not all that surprising. what is dollar-yen the best gauge for anxiety in the market? vincent: those are the two traits -- haven flows are going to yen, that raises the volatility of the currency. -- raising their coverage on bets with a potential trump victory. matt: when you talk to your colleagues trading fx, what are they saying? that donald is too much of an unknown quantity? it's risk premium, the uncertainty of what will come from a trump presidency.
2:24 pm
the belief is that a hillary clinton presidency will be same -- with a trump presidency with his outrageous claims and such, no one knows what is next. if you look at the dollar today, it is losing ground versus the euro, the pound. why with the dollar get hit on a day like today when the polls show that the gap is narrowing? vincent: you are seeing a selloff of dollar assets. you are seeing treasuries come off, u.s. equities come off. that's portfolio managers, asset managers dumping dollars as they don't dollar assets. -- dump dollar assets. scarlet: the dollar is gaining versus the mexican peso. vincent: that uncertainty translates into greater risk. which is very bad for emerging market currencies. matt: how much of this has to do
2:25 pm
with the divergence in monetary policy? we expect the fed to increase rates, the bank of japan did not change anything today. vincent: for the moment, that is off the burner. it will come back tomorrow with .he fomc you've got one central bank down, one more to go tomorrow. this conversation will come back into play tomorrow morning into tomorrow afternoon. right now, we are looking at the trump affect. how significant is the yuan strengthening against the dollar? --cent: both look good traders are speculating and is coming off of it. the concentration is in other currencies. people have stepped away from the u.s. for the moment.
2:26 pm
we have a certain number of assets to invest. and so much leverage you can take. you look for the biggest bang for the buck. ,carlet: vincent cignarella thank you so much. matt: great to have your experience out here. the risk off trade, it is accelerating today. we are looking at equities taking a bigger and bigger lost about the day. the s&p down more than 1%. if the s&p drops below 2100, it will be the first time since early july. we have seen it go that low intraday and the vix trading over 20. this is bloomberg. ♪
2:27 pm
2:28 pm
2:29 pm
scarlet: from bloomberg world headquarters in new york, this is "bloomberg markets." commodities markets closing in
2:30 pm
new york. gasoline jumping the most in eight years. that follows an explosion and fire in alabama that shut the largest fuel pipeline in the u.s. one person was killed in the blast. juice,look at orange that is up by better than 4%. plunging crops in brazil and florida reducing global juice stockpiles. gold climbing to the highest in almost a month. the dollar weakened and investors are waiting the -- awaiting the interest rate decision tomorrow. gold moving up by 1% in this risk off environment. we've got this chart on 4697, the g #btv spike in moves today, the pink bar indicating the intraday swing.
2:31 pm
the yellow bar is the difference between open and last price or the close. , huge swing earlier in the day the biggest since the start of august. it settled down as we got closer to the close of the session. certainly the impact was felt from that explosion and that blast and a premium of gasoline to crude oil jumped by 16% as well. matt: excellent chart. 's head ofblanch commodities research, says he's confident opec will eventually reach a production deal. he talked about the demand for commodities in china. francisco: china is going -- ifh a process now that it is cheaper to buy it then to make it, simply imported.
2:32 pm
that's what china is doing. they are shutting down a lot of capacity domestically. the economy is picking up evidence theme. -- a bit of steam. we are seeing commodities imports thing firm. the mystic supply is down. -- commodities imports staying firm. the mystic supply is down. domestic supply is down. alix: is the upside for the metals capped? francisco: the complex still has room to go. we've been in a five-year bear market now. we just are returning a few months back. investment has come down dramatically.
2:33 pm
the wounds we've carried for the last three or four years on the back of this reduction will be felt on the supply side. as long as the chinese economy keeps holding up, which seems to be, the metals have more room to grow. i don't think it's massive upside, but a little upside. with yesterday, i spoke the opec secretary-general on the phone and he reiterated his stance for a deal. >> significant progress has been made. we can have a month before the conference on -- we are on course. alix: goldman sachs says the sea low 40's. -- they see low 40's. francisco: i think a deal is going to be made. there's three parameters that drive this curtail.
2:34 pm
logic ofmic implementing a deal. entitled thepiece oil price war is over. economic logic to allowing mental barrels to come from outside the cartel. and bring inventories down and push oil into that -- the logic is impeccable. the second driver is saudi arabia. saudi arabia needs the money. they are in a tight spot financially. the want to increase the revenues and they need the money now. -- they want to increase the revenues and they need the money now. they are needing more revenues, for sure. the third thing is internal politics they're not questioning the economic logic or the need of saudi arabia. there questioning the internal politics within the cartel.
2:35 pm
coming in as well to provide a bit of a push. that will keep the cartel together, i think. we will see a deal on november 30. >> from the saudi arabia and scary that deal on their back -- can the saudi arabia ns cary that deal on their backs alone? francisco: a deal will allow inventories to decline structurally over the course of the next few quarters. if that happens, you will end up with a price that is meaningfully about the forward. i don't think she'll producers are going to get a better price. that's shale producers are going to get a better price. the cartel itself could realize a higher price if inventories do declined by 300 million barrels. the want to change
2:36 pm
structure from $45 to a $65 market with a $55 forward. you are still suppressing shale production but realizing a much higher spot price. there's also a potential reduction in refining spreads if the cartel manages to turn around the situation in crude oil. this also reduction in the outside risk. there's three benefits to changing the structure of the market. that requires low inventories and courtney did action. best coordinated action. scarlet: let's get a check on the headlines. markup and has more. -- mark crumpton has more. mark: the latest wikileaks the clintonse shows
2:37 pm
theaign looks to neutralize head of the dnc after the party's convention. she announced her resignation just before last summer's gathering. secretary clinton and donald trump are tied in north carolina. secretary clinton has 42% and mr. trump has 41.2%. it .7% of voters are undecided. support for gary johnson has fallen from 9% in early october to 2.6% now. the pentagon is going back to congress for more money. the defense department will request $6 billion more for the current fiscal year. it needs the money to pay for troop increases in iraq. cleveland, ohio is this close to becoming title town usa. the indians look to join the cavaliers as world champs
2:38 pm
tonight when they face the chicago cubs in game six of the world series. the wind is up three games to two -- cleveland is up three games to two. victory in front of their home fans would give the indians their first title since 1948. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. up, the clinton and trump campaigns preparing for the potential of the election going into overtime. how they might challenge the voting recites in key states. this is bloomberg. -- voting results in key states. this is bloomberg. ♪
2:39 pm
2:40 pm
2:41 pm
matt: this is "bloomberg markets ." to go untile week the u.s. presidential election, a new nationwide poll has donald trump pulling into the lead over hillary clinton. trump leads 46% to 45%, but the matter who wins, the odds may be increasing the losing candidate might mount a challenge. joining us is margaret talev. what kind of challenge are we talking about here? margaret: there are a couple of different scenarios. the clinton campaign amassing this volunteer list of thousands of lawyers going to battleground states to defensively prepare for her and trump actors preparing for legal challenges on the back end.
2:42 pm
far.s all we've seen so scarlet: what are the different scenarios m we might want to watch for? margaret: most of the laws that it be very close results, certainly for a recount, but even for a legal challenge. one is a blowout -- it's hard to make the case unless you can prove some massive, systemic thing. oneother scenarios are where there are not enough clear results to get the number 270 conclusively. and the third is one where it looks like there's an unofficial winner but there might be enough provisional or absentee ballots hanging to be worth the challenge. there is one twist. what's not yet clear is whether
2:43 pm
the fbi investigation into hillary clinton's e-mail has the potential to change the dynamics in terms of tightening the race or flipping the outcome of the winner. i was looking at your election challenge calendar and i was surprised to see you scheduled a date even before the election -- thearet: november 24, state to watch his new jersey. to dnc is asking a judge block the republican party from assisting donald trump's -- there's a great story on the bloomberg about it. the number fourth is the pre-election date to watch -- november 4 is the pre-election date to watch. matt: we know donald trump has been talking about the prospect of a rigged election. mike pence has clarified that when donald trump refers to
2:44 pm
rigged elections, he's talking about media bias. matt: donald trump challenges mike pence. he says he means actual voter fraud at the polls. margaret: for the clinton with a whole presumption all along is this debate about what happens if you concede or don't concede -- this would be donald trump not be oneing willing to concede. willing tobeing concede. leaders make that official and that reflects the results of election night. the issue here is not just be apparent loser refusing to give a concession speech. it's what legal challenges are pursued in next. the clinton campaign has
2:45 pm
set up until now is they are not convinced donald trump will go -- willwith his threats the result because enough that we are talking about whether trump concedes or not on election night? scarlet: it makes you rethink the whole thing about al gore in 2000, doesn't it? matt: still not as bad as the thomas jefferson election when he said if he lost, the middle states would form a militia and overthrow the government. margaret talev from our nonviolent washington bureau. scarlet: time for the bloomberg business flash. talks with pharmacy benefit manager express scripts over the pricing of -- an area attracting the attention of u.s. payers. the ceo says he is confident in of the portfolio of
2:46 pm
hemophilia products acquired from excel to earlier this year. instagram launching new shopping tools designed to avoid interfering with users browsing experience. they will allow 20 select brands to track products in their -- it's their first foray into a broader retail monetization strategy. that is the bloomberg business flash. matt: let's head over to julie hyman for today sector report. julie: the xrt, the worst performing sector etf of those we track. the retail etf, down 1.8% today. really tracking along with the market, although the drop is worst in percentage terms. we have disappointing earnings numbers that are to blame. a reading the steepest decline. is the steepest
2:47 pm
decline. the company's earnings coming in below estimates, even though sales be estimates. the company said it saw gross margins compress because it went into the fourth quarter with too much inventory. also cited the timing of some boat shows that moved from october to december. we've been talking about l brands today. that company out with preliminary earnings below estimates. also, october, sales that rose 1%. analysts had been predicting a gain of 2%. victoria's secret sales worse than estimated. automotive, and auto companiesthose earnings also missing estimates by a wide margin. the executive vice president of operations saying in a statement
2:48 pm
that a lot has to do with bmw brand's weakness. those shares are down by 6%. there are some broader concerns me talk about retail about consumer spending in the second half of the year. we are seeing stocks bounce a little bit off the lows of the session but still a pretty sharp selloff here as we approach the close. the real action we are watching today in equities and bonds as well. on theup, peter atwater market outlook and how consumer confidence is affecting the u.s. presidential election. this is bloomberg. ♪
2:49 pm
2:50 pm
scarlet: this is > "bloomberg markets." , we talk withy
2:51 pm
peter atwater, president of financial insight. we asked him what he sees as the key economic factors affecting the popularity of the candidates. peter: i'm seeing investor confidence and consumer confidence impacting how we interpret those events. you see a landslide enthusiasm towards hillary clinton right before the trump news breaks and then the video hits the screen and it's a bombshell to the side of the ship and everybody runs for the exits. mooda combination of leading events and the reaction to those events. how did this wings in confidence differ from what we've seen in the past -- the swings in confidence? peter: neither clinton nor trump is an especially good fit with where we are right now. we are in this no man's land between high and low confidence.
2:52 pm
clinton correlates with extremely high confidence. trump to very low confidence. thiswe are seeing in election is small changes in confidence. having a major impact in the popularity of one candidate versus another. matt: the market did not seem to react much at all on friday after the james comey bombshell which was like the biggest stories since 9/11 for political reporters but for the markets, barely moved the needle. peter: the same would be true for 10 consumer confidence -- four consumer confidence. confidence is rising slightly. investors and consumers are shaking at all. the not having the impact political wonks were expecting. the high degree of
2:53 pm
negativity towards both cap that's and the high degree of polarization -- there seem to be very few voters that are actually up for grabs this year. most people seem pretty locked into one or the other and they are fighting over the scraps. in such a sharply polarized country, what happens after the election? we do expect to see the mood of the losing side collapsed -- do we expect to see the mood of the losing side collapse dramatically? peter: what you've seen so far is a larger base of undecided than you have polarized. the truly polarized camps are small relative to the middle ground. polls votingto the
2:54 pm
in an environment where my enemy's enemy is my friend. they are not as polarized as you would expect. what i do think is going to happen is no matter who wins, the losing side will take this very badly. peter atwater yesterday on "what did you miss? scarlet:scarlet: we have some strong manufacturing numbers out of china today. joe: it has not gotten much attention because it's election, election, election all the time. the data on china has been really solid. solid, data was pretty the manufacturing and services numbers were solid. macau gaming revenue picking up. what of my favorite international indicators. of potentialrce
2:55 pm
strength out there for the global economy. scarlet: the chinese on shore yuan had its first back-to-back gain in weeks. joe: there are two factors there. is targeting the basket -- a lot of the declines against are mechanical declines by function of the fact that the dollar had been strengthening for a while against the same basket of currencies. it's also been more orderly than in the past. implied volatility is not like it was last august or february. matt: we will focus on the markets -- joe: a ho-hum trading day in equities and then we saw equities drop. the 10 year yield also coming
2:56 pm
down as people buy up bonds. earlier today, we had a simultaneous selloff in stocks and treasuries. we have higher yields and lower stocks. day isk of mood for the not that dramatic, but pervade everything, so people are buying ust's, sending yields lower. there is this shock absorber that eventually, the selloff overwhelms everything. scarlet: join us for "what do you miss?" today. this is bloomberg. ♪
2:57 pm
2:58 pm
are you on medicare? do you have the coverage you need? open enrollment ends december 7th. so now's the time to get on a path that could be right for you... with plans including aarp medicarecomplete insured through unitedhealthcare. call today or go online to enroll.
2:59 pm
these medicare advantage plans can combine your hospital and doctor coverage with prescription drug coverage, and extra benefits all in one complete plan for a low monthly premium, or in some areas no plan premium at all. other benefits can include: $0 co-pays for an annual physical and most immunizations, routine vision and hearing coverage, and you'll pay the plan's lowest prescription price, whether it's your co-pay or the pharmacy price. or pay zero dollars for a 90-day supply of tier 1 and tier 2 drugs, with home delivery. don't wait, call unitedhealthcare or go online to enroll in aarp medicarecomplete. matt: is 12:00 p.m. -- it is 3:00 p.m. in new york. i am matt miller. ♪
3:00 pm
>> we are live from bloomberg world headquarters. volatility returning to the financial markets as we head toward the close. , following all of the action final hour of trading. full slag and he will -- spins off china operations into on theate company transition and global demand. are one hour from the close of trading. julie hyman is here with the latest. at one point, they lost 200 point we came off of the lows. >> yes. still selling across the board. the s&p goes to the lowest since
3:01 pm
july 7. seems as though election related volatility had come back to the market. stocks, apple the is settling off by more than 2%. pfizer missed at that's going to development unexpectedly. facebook reports earnings this week off by 1%. a mixed bag of where the selling pressure is coming from. you just heard joe weisenthal talking about the reversal in bonds today. it is interesting what we see happen. it has been higher putting pressure on stocks. to -- through the session, you do not see stocks and bonds throughout the time,
3:02 pm
at some point seems like there was a rolling over of that phenomenon now buying within the 10 year as people are in for a little safety amidst what now feels look a big risk aversion in markets. well, you heard scarlet mention it. we have been watching that. trading just 520, a reflection of the trepidation in market. we have got the dollar almost 2% higher. big move downward. they tend to lose when the prospect for a donald trump victory go up. another way to look at this, and we have with at this already but it bears repeating, is gb tv 4691. is the bank of america market
3:03 pm
risk index. as thebeen higher clinton advantage over the trump and pulled has been taking lower. that is not the reason we're seeing selloffs in risk assets but it is one of the contributing factors and the -- what a lot of traders are taught about now. matt: excellent. looking forward to your continuing support today. mark: donald has extended his lead over hillary clinton in missouri according to the latest poll in monmouth university. that is up from a five point lead in october and a one point lead and honest -- in august. the campaign suspended its tv ads in july, taken as a confidence that she has the state locked up.
3:04 pm
mr. trump as his campaign will resume at theismann's as he tries to capture democratic leading states. the fbi released documents related to the clinton foundation, most of which are connected to the bureau's 2001 investigation and the fugitive marc rich here the material is said to be heavily redacted. the fbi said that is due to personal privacy protections and grand jury secrecy rules. was closed in 2005, eight years before his death and. getting ready for the launch of a ballistic missile, supposed to happen in the next 24-72 hours. that is according to fox news which sites two identified officials with knowledge of the matter. the nelson mandela foundation says concentration of power around a single leader could
3:05 pm
imperil south africa's democracy. today before business, religious, and civil rights groups plan to join opposition parties and protests against the president's administration. scandals is taking office in 2009. global news 24 hours a day powered by more than 2600 journals and analyst in more than 120 countries. this is bloomberg. back to you. >> thanks. jilted 2006. can cbs and the 500 is no longer's in neutral where it has mid-august. investors assessing rates. earnings season as well economic data. brian jacobson is chief portfolio strategist at wells fargo. you say as far as economic and
3:06 pm
civic, the is the reason to not hike. does that mean we cannot rule out a november move? fisa think it would be unlikely for the to move to hike rates in november. it would be a big price. that may be one of the reasons we do the markets often little bit. i think that would be a most deny reality but it could also be some just in case on the part of investors, just in case the said strikes a hawkish tone, why tablewe take risk off the . some of the recent movement we're seeing is just in case trading. people taking risk off table. >> what might the fed say to ago?the idea two summers >> i would like to see the fed
3:07 pm
read the the rule. if you remember in 212, the and how they would history low until the unemployment rate dropped 6.5% and projected inflation rose. in this environment, they might be inclined to adopt a similar rule for what projected inflation is. if you think about the manufacturing index in december when they hike 2006 in, it was about 48.8. it is clearly not at those levels. economic data justifies a rate hike. see the united states importing a little bit less deflation china. -- unless that happens that throw those plans
3:08 pm
to the wayside. >> the fed is ari person to the market now. you see oil falling down below $40 per barrel. why and what he do about it western mark -- why and what do you do about it? >> a level where we might find a little support if we's the a complete failure of the negotiations among the opec member nations. you think about the date that is critical, oil prices are moving up and down this upon projected outcome of whether or not they will have an agreement. a key sticking point is figuring .ut with agreements are they're are not exactly forthright with what they are producing went along to be honest about whether or not they are cutting production. that could temporarily push oil
3:09 pm
lower. i would be viewing it as a good buying opportunity. you have seen in the past a demand response as well as supply response as the price drops that low. scarlet: we look at the energy prices moving pass that basis. thing is everybody says we might have earnings growth because energy stocks will no longer be dragging. maybe that will persist a little longer. that is why investors sift invest, a broad approach in the market. you want to identify those parts where you have robust earnings for the markets.
3:10 pm
i think a lot of the cyclical down.s, stocks are maybe that is an interest in place to look for opportunities. theire a lot of knees in that are profitable despite the headwinds from the stronger dollar and the headwinds from the decline in oil prices. met: what do you think about valuations? they think equities and fix income are fully valued and they are looking for alternative asset. do you think assets are valued at 20 times earnings? valued todayetter than yesterday. as far as the decline in prices. i look at the next told month earnings. you do not buy the last at all. i do not think trailing are a good guide for investors. if you look at the next 12 months earnings, they are
3:11 pm
reasonably valued based on bloomberg consensus estimates. that is the historical average of the last 20 years or so. it is often times higher or lower. neutral forecome most of the stock right now. the pockets would be more the incredibly interest rate and the arts. we will see interest rates moving higher. think that will be a signal and headwind for utilities. scarlet: neutral but in terms of valuations, stuff there. brian, folio strategist. thank you so much. coveragess the special at 6:00 p.m. in london. the statement will be carefully congressional world.
3:12 pm
coming up, the parent of as welll and pete hutt as kfc, all three staples of my diet, carving out into a separate company. we will hear from this eeo's of the newly minted young china next. this is bloomberg. ♪
3:13 pm
3:14 pm
matt: it is time now for the boom -- bloomberg business flash, you look at some of the biggest stories in the news right now. the development in toss with japan about a potential mold billion dollar technology fund. softbank is also in talks with
3:15 pm
north american investors. --ereign pfizer will discontinue development of an experimental cholesterol medication. this president comes after largest u.s. drug profit estimate fell short for the first time in three years. the drug had unexpected side effects and was losing potent the overtime. affiliate deals announced today, and waltury fox disney. sports, nonfiction, as well as networks from abc and espn. hulu announced a similar deal with time warner this year.
3:16 pm
behind kfc, company pizza hut and taco bell completed a spinoff of china operations. why umc. --yumc. >> it is going rapidly. food for delivery. our business is no section. that is our fastest growing business. we expect to see significant role in the area in years to come. scarlet: he spoke about one of the most -- players.
3:17 pm
of of theupport transformations fed jam putting in place. have the ino support -- the support and endorsement. the great thing is he does not give all in the operations of the business. buriedheld us enormously he told me i will not tell you how to run a business. i can help you unlock shareholder value. mark: i did my research pay you in the u.k.,al predominantly pizza hut, predominantly kfc. have you seen any change post-brexit?
3:18 pm
changes a little bit of . it is doing well in the u.k. right now. we are happy. customers want a great experience. if you deliver that a value, they'll come back more often. mark: has brexit changed anything when it comes to investing in the u.k.? >> know. we will unless someone thousand restaurants. there is still more to do. that'll would turn to shareholders. we're working toward a high franchise model. let's 85 present are company-owned.
3:19 pm
>> 85% are company-owned. how long will it take? of 2018 -- d we have gotar where our capital structure in place. that is when we are looking for two delivery for all the other fact in place to >> what are you planning menu lives are likely have that exciting new ideas coming out. bell, the naked chicken children. that will come out. kfc, and amazingly southern is fired take. a lot is happening on all three brands from a food innovation perspective. mark: coming back to the china spinoff, do you think the china model roadmap for
3:20 pm
other consumer brands when it comes to china? >> people thinking china is also producing risk. sayse the headline here it this is a chinese brand, not a u.s. been anymore. scarlet: speaking earlier on bloomberg. matt: still ahead is options insight. they straight is facebook, one of the biggest rise on the s&p 500 today p are now an guest is feeling bullish on the stock heading into earnings. this is bloomberg. ♪
3:21 pm
3:22 pm
3:23 pm
matt: this is bloomberg markets. scarlet: time never options insight. julie: joining me is kevin kelly, chief investment off to every capital. it is a day where we a lot of volatility. the vix has ticked up. chart that was forwarded to me. volatilityng implied at a widespread to realize volatility of the white with elections. quick cc them even further, which was telling. you can see the biggest on my screen, and using the
3:24 pm
proceeds, vacancy a big spread out the election because there is a lot of now. you have people talk about what are normally -- swing states. get thef the candidates electoral college but not the positive -- popular votes. is to call the ratio of 2.3 right now, is already been hedging. in town sayrated little bit. doeshere other concerns or it really has to do with rising concern about election? the gdp number was not as good as everyone thought. soybean exports actually really push the number higher. i do not think that is sustainable going toward. it is a 10% rate.
3:25 pm
the biggest concern out of the gdp support was we saw a huge slowdown and that is worrisome because that is the market here. the is playing out from consumer discretionary sector. you see hedging. expense. people state through the holidays. simmer spending down does not look good. >> your trade-in, facebook. with earnings tomorrow. you are looking at the stock. earnings season is going on. >> yes. especially for those that people are rotating into. we had google last week. when you look at what is
3:26 pm
still consecutive growth. users of 500ing million. advertisers turning to flock there. better pricing than it is. you want to use the proceeds to , use the 132.sts click thank you so much. back to you guys. matt: what did you miss will be next year we will speak to the global head of snl asian and black rock. this is bloomberg. ♪
3:27 pm
3:28 pm
3:29 pm
mark: the renewed focus on
3:30 pm
hillary clinton buses e-mail may be rallying supporters. 11.3 million dollars online, the most since she became the nominee. the campaign manager says the race has tightened in the way we thought it would, but there is no indication the fbi'story had an impact. james comey said the bureau may have e-mails that may pertain to heather graham's impressive e-mails. clinton passes campaign sought to neutralize the chairwoman of the democratic national has far back as december. forcing debbie wasserman jeff -- erman schultz out of secretary clinton and donald trump are essentially tied in north carolina according to the latest poll which puts clinton at 42%


info Stream Only

Uploaded by TV Archive on