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tv   Bloomberg Markets  Bloomberg  October 5, 2015 10:00am-12:01pm EDT

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from bloomberg world headquarters in new york, good morning. i am betty liu. twitter makes it official. cofounder jack dorsey is taking over as ceo, and he gets to keep his job as chief executive at square. the u.s. historic trade agreement with 11 pacific rim nations on everything from cars to crates. reaction from the hong kong finance minister. the s&p rising for a straight day. investors looking ahead to the start of earnings season. yes, it starts this week. some breaking news right now on the service sector out just now. i want to get straight to the markets desk. julie: we will see if we can hold on to the rally.
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nonmanufacturing index. the measure of disturbance -- the service economy. .6.9 is the reading that is a decrease from 59 in august. also lower from the 57.5 analysts had been anticipating. the western was whether the sharp weakness in manufacturing data last week was going to bleed into nonmanufacturing. thus far we are seeing stocks take a leg higher, perhaps yet more evidence in a munitions the fed is when to remain steady in terms of not raising rates just yet. chart that comes to us from bloomberg intelligence. this compares the nonmanufacturing index with manufacturing. the red ours are the recessionary. the white lines, the manufacturing measure has been going down. we will see if services, even
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though they take down can maintain the relative strength of manufacturing, even given what we saw today. a look at all three major averages, a pretty solid rally with gain of almost 1% on the nasdaq and s&p each gaining more than 1%. the rally seems to be intact. betty: it does. the rally seems to be intact, but what about the august correction. where do we stand on that? julie: i will call up another bloomberg graphic to take a look at the question. it has to do with the s&p 500, where we are, where we have been. the fifth straight day we've seen it higher. usre does that place relative to the highs of the year? .t now means we are down 7.3% at the depth of the corruption
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we were down by 12.25%. we have not retraced even 50% of it at this point in time, but we are getting closer and closer to the measure. one other thing is the 10-year note. notably we saw it break below 2% . we are slightly above that. we are seeing buying in stocks and a little bit of selling in treasuries. still close to 2%. expectations the fed will remain limited. julie hyman, thank you so much. getting a look at what is making news on the bloomberg terminal. bonnie when has more from the news desk. -- quinn. jack dorsey has been named twitter ceo. he will also remain ceo of where . he will need to fix twitter's
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big problems, growth and user engagement. he says employees are not singing the blues just yet. but twitter is really strong. we do not take it will affect more attrition. goodink it is a pretty positive and adds a lot of clarity. >> he also said he once to make twitter easier for users and the current product makes people do a lot of the work to realize its value. on gunne new proposals control in the wake of the community college shooting in oregon, the democratic runner will call for tougher background checks. she also wants to repeal legislation that protects gun makers, distributors and dealers from most liability suit. seven deaths in flames on the floods in south carolina. hundreds have been rescued from what are being called his stork
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floodwaters. days of heavy rain has slumped homes andhed and do businesses. nato is urging russia to help all the syrian or in that of complicating it. the secretary-general says russia should coordinate with the other forces fighting islamic state. they are flying missions targeting the militants. one is complaining they violated the airspace. negotiators in atlanta have agreed on the largest free-trade deal in a generation. the u.s., japan and 10 other nations worked out the details of the transpacific ownership that deals with everything from reductions to intellectual property rights. the year agreement will be subject to a straight up or down vote in congress. at the topook headlines right now. you can always i'm the latest news at betty: thank you so much. a historic day in trade.
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it may be the largest free-trade deal the u.s. has negotiated since nafta, the united states, japan reaching an agreement. here now to talk about the impact of international commerce is the hong kong finance minister. thank you so much, secretary, for joining us. the big outlier as you know is china. they are not a part of the trade agreement. something that could hurt the chinese economy. are you worried about that, given the trade deal. this was certainly welcome news. something that has been discussed for quite a long time. is a successful milestone really good news. as far as hong kong is concerned, any time the nations become more free, it will be good for us.
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betty: even if it may come at the expense of chinese growth or even marginalizing? >> it is not intended to be exclusive. to make it more free in the multilateral sense. betty: trade as part of the hong kong economy, but you are also a finance center. people look to hong kong and see it as one of the rear finance centers around the world, but one thing people know is you are closely tied to the u.s. economy with the currency, the investment that you have in hong .ong here in the u.s. we may not see the fed raise interest rates as early as we thought. are you worried about a fed rate hike? >> we are concerned about a rate
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hike. i think the business and would like to have a certain degree of certainty. .oing up or not going up let's be clear about that. the businessman can look at the decision for how they want to manage the business situation. we look forward to a decision at some stage. betty: would you like more clarity out of the federal reserve? >> definitely. it more clarity would be better for the businessman to make the commercial decision. betty: everyone wants more clarity. the fact is having what they say is clarity but never seems to be enough. you say it is so world impact on hong kong. you say this could cause interest rates to spike, and that could mean property rate could fault 30%. the property market has been going up in quite a big way for some time.
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i think a rate hike is going to send a different message initially. it is quite small. i don't think the impact will be huge. in the long-term people take that into consideration and not to assume the rate will stay as zero forever. betty: what do you worry about then? >> the biggest worry now is the demand. in terms of demand for goods in the world. the whole of europe is in recession. japan is not growing much. the u.s. is growing, albeit slowly. without more demand in the world , i think a lot of the emerging economies will suffer. if they suffer, the whole world is going to get into a bad situation. what we look for is to get over the recession home, and then the
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whole world will go back into global growth. betty: do you believe will get worse before it gets better? crack i am more optimistic. i am more optimistic. hopefully in europe they have seen the worst. betty: hopefully, right. there are signs of growth in europe. what about china and? people are worried about a hard landing in china. think there will be a hard landing. people are worried about growth 6.9 or less. for a lot of the countries in europe they will be very happy to get half of that. 7% is not peanuts. i think for the second largest economy the world to grow it 7% is pretty good. betty: the other thing about hong kong, and i lived there for
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several years is how closely tied you are to the markets. i know hong kong and shanghai last november you launched the home should -- the hong kong shanghai connect, the conduit between investment from the mainland overseas and overseas investors going into the mainland. the reports are, it is not as robust as officials had hoped it would be. why do you think that is? >> i think it is starting. in terms of the chinese stock market, it is going through a down cycle to some extent. the platform is operating wealth. in an orderlyg fashion, and that is what we hope for. the market sentiment changes, it will change. betty: before we go, how do you investors comfortable about
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the regulatory, legal environment in hong kong, that they know it will be status low or stay the same? >> that is something we are very proud of in hong kong that the entire regulatory system is international standard. it dovetails with other people in the world and the businessman that know exactly this is the place where it should trade. betty: thank you for stopping by our new set. hong kong financial secretary. coming up next 20 minutes, ben bernanke doing his victory lap, giving the central bank credit for saving the u.s. economy, including himself. now he says it is up to washington to carry the ball. one option for the fed, adding more stimulus. mark lazarus says it would be the worst thing in the world. find out why he thinks so. twitter makes it official,
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naming jack dorsey as permanent ceo. the tech investor joins us for her take on a new study that says it will take a century before women he will men at the top. all that and much more on the bloomberg "market day." ♪
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betty: good morning, and welcome back to the bloomberg "market day." going straight to the markets desk were julie hyman has a move -- check on the company movers. julie: starting with general a love -- general electric, nelson helps is company taking a big stake in ge. it will be the ninth largest shareholder. for an bit unusual
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activist to take on a company of the size of general electric. chairs are benefiting, up about 4.2%. give a boost to ongoing plans to wendell down the business. it has been exiting financial stakes and other types of companies. shares good reason -- reach $45. take a look at the bloomberg terminal. here are the shares going back five years. they had a couple of good years and then they have been stuck in a range. a four dollar range between 24 and $28. then i went to look at another company that has heavy hedge fund ownership. the renewable energy company that has just been incredibly volatile.
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right now the shares are up by about 12%. in the words of the statement it will move duplicates activities as a result of mergers and acquisitions. apparently cutting about 10% of the workforce. shares have done dismally this year. down more than 70% since they reached a seven-year high june 23. who does this affect? for the top holders, you can look at this. greenlight capital, david einhorn sperm. words, an incredibly high number of hedge funds. see all these companies listed on the less -- left. these are the companies that have been clobbered as we have seen. the company shares go down sharply.
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betty: julie hyman at the bloomberg markets desk. stocks and commodities rallying around the world. -- mightsee the fed not see the fed raise rates anytime soon. the courage to act this week is already taking a victory lap, saying the fed saved the economy. bernanke said quote with full employment insight, further economic growth will have to come from the supply side, primarily from increases in productivity. much more about the market and the chief global strategist david calley. kind of funny. ben bernanke saying i did my job, i did a good job. i think ben bernanke did a very good job around the financial crisis. i think as an emergency room doctor, you did very well. courageous.s words,
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>> i think the federal reserve stepped in as a vendor of last resort in many ways and help to deal with the financial crisis. i think using quantitative easing to try to stimulate the economy has not really worked. betty: no it hasn't. what is -- what he is saying is we have exhausted all we have been able to do, and that is it, so let's start raising rates. >> one of the interesting things is the first three rate hikes to me like the economy. they discourage borrowing for a lot of statistical reasons. the first to rate hikes and help the economy grow. the supply side is getting productivity going. betty: where do you stand on a rate hike come later this month
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or december? jobsthink the friday report kills it for this month. if things come down global financial markets, maybe december. they certainly should. if they allow themselves to be captive to every crisis in the financial market or problem in the global economy, they will never raise rates. we do not give investors are confidence to build a capital stop. betty: does the data tell you so? i know we should, but does the data tell you that? >> what we are going to right now is a big data inventory correction and trade correction. itdamentally the u.s. consumers doing very well. think it can grow by 3.8% by
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the third quarter. that is the really important core of the u.s. economy doing very well that does justify a rate hike. betty: we will see the evidence when earnings are released this week. hang on. coming up, back with david kelly of jp morgan funds. still ahead, mark lazarus beats with bloomberg go about the fed and why he thinks more stimulus would be the worst thing in the world. stay with bloomberg. ♪
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betty: welcome back to the bloomberg "market day." we are still here with david kelly. before we get to the earnings dealmaking, m&a has been a huge trend over the past several years. we have a chart here that shows even though we had the summer correction, it did not stop dealmaking. in the third quarter of 20% in
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m&a activity. what is that? see someld still impact hitting fourth-quarter numbers. i think it is because they are relatively cheap of financing is very cheap. companies want to find a way to growth. -- find a way to grow. betty: does that mean once we see interest rate start to rise, it could put a damper on that? .> it could eventually do that initially it increases confidence and tells them rates will rise even more down the road so everyone scrambles to get the deal done. it is one of the many ways in which the first few rate hikes could accelerate this. betty: turning season. what do you ask you go >> i think we could be a year-over-year. analysts are saying we will get
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some profits from energy companies weary the last few quarters have been negative. we are going to see a good earning season until next year. we think operating earnings will be down 3% year-over-year. next year they could be of triple digits. betty: based on what? drag.ically the oil if oil prices gradually move up in the dollar moves down, we will get one year for profit in 2016. betty: you think we will and higher this year? >> i think we probably will. the big thing that hurt us is not doing what the fed will do or why. the fed needs to clarify that. if they do clarify a think we could see a rally at the end of the year. betty: great to see you. i know you are running half a marathon or something.
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david kelly, thank you so much. it is time for the fed to raise rates, right? " theyr on bloomberg "go weighed in on the fed's next move. back in just a moment. ♪ ♪
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(the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store. betty: life from bloomberg world headquarters in midtown, manhattan. you are watching the bloomberg "market day." i am betty liu. quinn with more.
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>> american apparel tiles -- files for chapter 11. apparel has been in turmoil since last december when the founder was fired as ceo for elected misconduct. the nobel prize committee says the work of this year's winners could help eliminate diseases affecting 3.5 billion people. the shares of nobel and medicine for the parasite finding treatment. the world health organization says that there be caught best from the weather -- malaria down 15%. one of the favorites to win the nobel peace prize this week, on july merkel. a 3-1 favorite over a second choice, pope francis. the reason? leadership in
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responding to the refugee crisis. the winner will be announced friday. magazine 50 top the most influential people magazine. seconds on the list, china's leader. that is a look at the top headlines right now. you can always find the latest news on betty: thank you. now to our top tech stories of the day, shares of twitter rising after the social media company officially appointed jack dorsey as permanent ceo. what took them so long? just before 8:00 a.m. eastern time, he pointed out we are working to change the board and i will serve as ceo of twitter and square. half an hour later he hops on a
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conference call to state his mission. >> we do not believe this will affect attrition negatively. we actually think this is a pretty good positive. it adds a lot of clarity. great teams want to do one thing, ship products people use on a daily basis. betty: for more on the news issues, aother tech former abc executive now vice chair of online retailer guilt inventorsretailer of who invests in women-led companies. kind of like the worst kept secret. we all thought dorsey was going to be the ceo. think they had to demonstrate they were going through a process. seeing what the best possible outcome could be for the company. believe they did look at
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other candidates, but the end of the day, there was a history. i think she is perceived as knowing the product incredibly well. that is key in getting someone in there who knows the product. he is really iterated incredibly well. staying very true to the core product while adding new on a consistent basis. i think that is what are -- what they're hoping with jack now in place. the founder-led companies, do they eventually do better than others. you mentioned elon musk. that is another one. steve jobs. people saying is he making a steve jobs type entry?
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what do you think he has to do with the core product. how does he make it more appealing to the user? >> for those of us on twitter, we adore it. but i think for someone who has never used it before, they don't make it easy to get started. i think that will be key to getting more people onto the platforms. twittering them using every single day. that is what you ultimately want syria not just to sign up but there on a consistent basis. doty: the first thing they when they wake up in the morning. people check facebook or go on instagram. on another note, your work has been promoting and investing in women entrepreneurs. there was a great study from mackenzie and li na and.
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incredible. they said it would take a century before women would equal men at the very top. >> right. a startling headline. ofhink the study has a lot the data and it. when you look at something like that, i think the negative is you think well, why even try. fact, i think that is just looking at a few straight line from here, this is how long it will take to get women to parity. what they got into that i think was more interesting are the things that continue to be blocked. betty: i will review some other numbers. 42% of the women who were surveyed said they were denied a promotion or raise.
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they said stress is the number one career optical for them. 15% of tech companies have sees weak executives who are women. 15. 15%. that is entry-level. where do they go when they advance? only 12% of men say there is a bias against women in the tech world. some of turmoil you think already, and others are pretty startling. >> the companies making real progress are the companies who have made this a priority. something is going to happen because someone in the ceo chair or the board says we have to fix this. and we have to be a lot more thoughtful. we have to be more thoughtful for the way we recruit, promote people, retain them. betty: metrics for advancement.
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>> not just advancement, but what kind of support systems can we put in place that are going to make this a more friendly work environment for women? betty: like what? is it beyond extending maternity leave? >> i think there are a lot of is making sure women don't feel like they are alone. what you see over and over again is there is one female in a group or on a team, that is not great. one thing i think is interesting is getting together where the female engineers on a regular basis, and they are doing one next month, and making sure they see themselves as a posse as well as individuals. but there are definitely morenies that are doing
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thoughtful programs in order to keep women engaged. to keep them feeling like this is a culture that will support them. as well as making sure there are more objective -- objective metrics applied for promotion and cool jobs. susan, great to see you. susan lyne, founder of bbt adventures. europe stocks getting a boost from commodity producers. at the big picture of the market. a disappointing jobs report friday has business leaders looking at the economy. we will hear from steve schwarzman and his take on what lies ahead. hillary clinton takes aim at gun laws. what the front runner on the democratic side has flied out -- laid out in her proposal.
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we will be right back. ♪
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betty: welcome back. just over an hour into the bloomberg "market day." hong kong to london to the nasdaq, this is your global market check. the hang seng up more than one point 5% following friday's disappointing jobs report. mainland chinese markets are closed for public holiday until thursday. one big story, glencore. shares of the commodity giant staged a dramatic rebound in hong kong. shares of beds much as 72%.
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the shares up as much as 72%. was urging monday and hong kong. the global trading and mining heavyweights jumped the most on record. shopping assets to pare debt amid market concerns about profitability in a time of the work commodity prices. sources told bloomberg possible bidders include the singapore job in -- sovereign will find. the agriculture unit seen especially attractive. generating $26 billion in revenue last year. betty: that was zeb eckert in hong kong. the chairman of bloomberg lp, the parents of bloomberg news is a senior from nonexecutive director at glencore. now we go to europe or mark barton has the latest from london.
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biggest two-day gain for european stocks in over a month, since the end of august following the u.s. stock to report friday. weaker than forecast data and the eurozone. data on manufacturing and services show a slowdown in both industries. still about 50 but not as good as expected. it tells us the risk recovering after bolstering in september. aboutnot stop going on it. rose as much as 20% earlier. what a day in hong kong, of by 72%. you have the telegraph reports saying the company is open to kids, but does not think it will get a fair price. burns teen stated concerns about the solvency unjustified. the comp and he reportedly in talks about the sale of the agricultural business. what we can tell you it has gained back all of the losses from last monday.
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want to talk about one of the few currencies that are falling against the u.s. dollar. the pound are down marginally. u.k. services data showing expansion at the slowest pace in two years, indicating the damage from china lowdown, a slowdown in emerging markets writing for asufacturing to services well. have a look at the bond market, proving there is an appetite for risk. no need for safety for bonds across the eurozone. pro austerity parties won the election over the weekend. league --ity won the election over the weekend. coalition winning the majority of the votes. they do not have a majority in congress. this tells us they will need help from the opposition to pass key economic legislation.
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since when is pro austerity news resulted in a rally? that is what we have today. thank you. we will check back with him in an hour. take a look at ge shares. the activists firm cofounded i nelson felt has acquired a $2.5 billion a in ge as it backs the companies ran to focus on industrial businesses. what does this mean for the debt and the company at large? i want to bring in a senior analyst at bloomberg intelligence on ge. the target seems to be getting bigger and bigger. dupont and now ge. what does he want? >> cannot really get much bigger after ge, right? pretty much the same. improve the operation, get more sales growth, but more leverage
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on the balance sheet and get the cash flow back to the shareholders. i think that is the basic playbook with ge today. the idea is they were spending too much money. there were areas where they could cut cost and add to shareholder value. >> that is exactly right. with ge they arty have a target to reduce operating spending down 12% per year starting in 2017. in the they are similar idea of making sure the execution works out right just write for the investors. what has not worked is it has been a black box. too many companies finance businesses that really does not belong as part of an industrial company. i think he is given a bold move
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to separate the unit back in april. i think they're doing the right things. i think it is more a question of timing and accelerating the execution. betty: basil the real estate portfolio, to. >> that is right. -- they sold the real estate portfolio, too. best thingy not the for debt holders that are nice, warm welcome for the equity side. betty: we show the stock is up on the back of this news. how do you think management will respond? how will jump in the respond? is in lockstep. i do not think the playbook is that different. i think having an activist their hold their feet to the fire a little bit more. a highy execute at level, which i am sure ge one.
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seeing that play out. there willtholders be some credit downgrades that will happen. much like ge has signaled going back to last may, that will have an impact on the bond and cbs. there may be negative events there. in the industrial world where activists get involved. -- were shoulders get involved, shareholders have been largely rewarded for it. you so much. great to see you. back on the markets, i want to go to matt miller with the latest live from the nasdaq. came down here to take a look at the tech stocks moving today. twitter obviously one of them saying they will keep jack dorsey on as a full-time ceo, even as he remains eeo of square. a salaryot be getting
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but does own a substantial stake in the business. apple also a mover. down at the open after the city foryst cut his expectations the september quarter ordering down. sellso said they will only 47 million iphones in the quarter, down from 48. heaping sales will be moved to the next quarter. activision analyst said the company will do much better from eastport and people imagine. other analysts have chimed in. interestingery story. spark a biotech company. once. that company has a therapy for a certain type of retinal dystrophy. into thect viruses
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eyeball. they carry a gene and replace it that have been missing it and that has proven successful in late stage clinical trials. if it is approved by u.s. regulators, it would be the first gene therapy approved for use. betty: that sounds painful. : it sounds painful but you get to see so i guess it is worth it. betty: thank you. matt miller at the nasdaq. still ahead, we will hear from -- bond due rue bill growth bill gross about what he thinks next. ♪
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betty: welcome back to the i amberg "market day."
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betty liu. slower than expected u.s. employment growth is fueling dictation the fed could delay increasing the near zero interest rates. that is not what bill gross wants to hear. he said the fed needs to get off the rope. he spoke with tom keene earlier today. ultimately monetary policy with 0% interest rates is destructive because capitalism cannot survive. nowy: tom keene joins me with more. more on bill gross. tom: a great conversation. really deep on macro economic, and the dynamic within the economic structure into finance and investment. are worriediewers about the challenges of the past seven years and the idea of where we're headed forward.
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still worried about financial repression? tom: he is worried about financial repression for one double reason, janet yellen is oxygen to the corner. there is inflation. here that shows tensions that is out there with how long we have been at zero bound. we come down there in 2009 we stay at the rogue. that forces janet yellen to be central banker to the world. are at the rink bill gross words to you about janet yellen being the central banker to the world. let's play a little bit of the conversation. but the fed is for now the world central banker. when there are hints they will raise rates or may not, tremendous amount of dollars liabilities and assets, trillions of dollars back and
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forth creating this liability situation, which ultimately not only affects financial markets but damages real economy. betty: we have the hong kong financial secretary on earlier you said i once more clarity from the fed. there is so much uncertainty. tom: the other message from bill gross and dominic coster and, we have exhausted monetary policy toolbox, toolkit we have. .o this, do this both bill gross and dominic koster and are looking for a fiscal courage to provide demand strength through the budget process. the book with that. that is about as good as san francisco 49ers fielding a good football team. it is down to that. how is bill gross doing in his fund? tom: i think he is having a lot
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a smallerking on platform. he is having as much fun as any bond manager out there given the volatility. .etty: tom keene don't miss michael spence of nyu tomorrow morning on tom's show, 6:00 bloomberg radio. but first, don't miss smock -- mark bober. more on what you missed today. bloomberg market day will be back in a moment. ♪
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betty: it is 11:00 a.m. in new york, 4:00 p.m. in london, and 11:00 p.m. in hong kong. welcome to the "bloomberg market day."
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betty: from bloomberg world headquarters in new york, good morning. here is what we are watching this hour. for a fifthigher straight section following a volatile third quarter. a summer we would like to forget. after jeffrising schwartz is made permanent ceo of twitter. and a heated debate over gun control after last week upon mass shooting in oregon. what donald trump and hillary clinton are saying. we are 90 minutes into the training session. i want to head to the markets desk, ray julie dimon -- were julie hyman has the greatest. -- were julie hyman has the latest.
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julie: there are no bets in terms of where stocks will be a half hour later, but this has remained steady here this morning. the fifth straight day we have seen the s&p 500 higher. it is the longest rally we have had all year. of it is a combination factors supporting the rally. some investors may the saying that the bad news is priced in after big slump -- after the big slump we had. the jobs report on friday came in disappointing, and this morning i is some services -- i worse than coming in analysts anticipated. this is the imap print and broad-based rally. industrials, energy, helping to lead the pack, but all of the groups in the s&p are higher. in terms of individual names, we have general electric, try on .aking a stake microsoft, one of the best performers, and at&t, better
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than 2%. one notable stock not participating in the rally is the largest in the s&p. i am talking about apple, down for a couple of reasons, not taking a big hit but the biggest drag on what is otherwise in a day. -- otherwise an up day. apple are shifting their iphone estimates because of some quarterly timing issues. saying that the demand may be pushed into the fourth quarter. latesthone sales of this iteration are 10% to 15% lower than the last version of the iphone. do you have yours yet? betty: not the new one. i did upgrade to an iphone 6 recently. i am a late, late adopter. by the way, from stocks to oil, oil is rising.
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julie: you would think that would put a change in the rally we have seen in oil prices, but they are up for the second straight day. it seems as though it is a continuation of friday's trend. we heard friday that riggs had if we for the first -- had seen a lower number of rigs, are we finally going to see the supply start to be worked down? that does not seem to be the terror lesson, but there is optimism. oil rising. and the movement in the dollar as well. we tend to see the inverse relationship between the dollar and commodities. the dollar had been taking a hit , recovering somewhat, now little changed. we had this big switch in as aest rates expectation result of the recent economic data. that has been putting pressure on the dollar. betty: thanks so much, julie hyman, at our bloomberg markets desk. lacerate, --ark mark lazarus a --
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he waited on the fed's next move. mark: i think the fed has been more preemptive than row active -- than proactive. if you have a proactive said -- at the end of the day, we had rates extremely low the last four or five years. it is time -- everybody knows rates are going to move up. the question is when and how quickly. a perfect lead-in to the number three story. the minnesota fed president told bloomberg radio the fed could have added stimulus at the september 17 meeting. >> given the inflation outlook, where it is expected to be, taking more of an economy native stance that of an accommodative stance would have been justified. >> i think that would be the worst thing in the world. right now we have been living off these low interest rates, and having more stimulus is not
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what we need. what you actually need is to get back to a little bit of normalcy and understand that the fed cannot keep on pumping more and more stimulus into our economy. our economy is fine. let it grow and let it do what it needs to do. >> sooner or later, they will have to come up from zero. there is almost a moral risk. >> there has to be a justification to get off zero other than you'd have just got to do it. you need to see signs of inflation expectations, that they are rising, and there are none. marc: everybody is focused on how quickly the economy is going. -- how can you be economy is growing. everyone gets nowhere -- everyone gets nervous if it is up 1% or 2%. maybe the normal is us growing at what we should -- at 1% or
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2%. that is where this is huge, this disconnect. stephanie: what do you think about europe? isn't doing well -- is it doing well? c: the u.s. economy is doing great compared to the rest of the world. europe,ant to invest in the u.s., china, emerging markets? at the end of the day, the best place to invest is the u.s. if i was going to be an equity investor, i would be an investor in the u.s. for us, where we see opportunities is in europe, in asia, in areas that are having problems. sryty: that was marc la speaking from "bloomberg go" this morning. here is what is interesting to me. stephanie: when he is saying that it is growing, it is growing and by leaps and bounds
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when you talk to someone like thatthey are not private she can ride out the volatility. when he talkedar about the amount of funds, especially in the credit market, who lost a ton of money. he said he would not want to be a startup fund that has to offer quarterly, monthly come a daily liquidity. in order to truly invest in these markets, we have to be able to rise through these times. listen, if you are a private equity investor and you have money for 10 years, talk about having an inch. it is hard these days when it seems like short-termism rules the day. we have seen several hedge funds close down. and the party has just started. he went on to talk about china. all you have to be was a momentum player in the last few years. simply go along -- simply go long on equities, go long on china.
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everything in china one up. a firm like blackstone has better data then we are getting. they own in an enormous amount of mid-level shopping malls in china, so that middle income consumer -- they know what they are doing. take a look. >> china has some things that are going quite well in its consumer economy. it has some things, like in steel and certain of its manufacturing and exports, which are not going well. so it is more of a mixed economy. it is a mixed economy because it is going from the export oriented to being consumer oriented, and of course there are going to be problems. they say, speaking about long-term, they say china is a good long-term play. stephanie: of course there will be problems, but we could have said that for the past six years from the crisis. but with quantitative easing and totral banks serving up this
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the market, you did not have to know what the fundamental problem was because the market was going in one direction. my take away from sitting down today with marc lasry and steve schwarzman, bigger is better. these guys can sit back and truly look at these markets and do not have to sweat over the -- these guys have great track records, but we talked about energy space and what a great buy it is. we have seen the same thing out of franklin templeton. they bought a ton of paper in the 70's and wrote it down to the 20's, and now they are facing major outflows. you want to be big, sophisticated, and have investors? betty: where the money goes, you still have the cushion there. tomorrow tom stiers with us. stephanie: and tomorrow, tom
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stiers as with us. and my boss for eight years at the bank will be with us. john micklethwait. to spend time with him. but i think he knows better. i love your new set. betty: i love yours. stephanie: thank you. betty: we will look at what else is making news on the bloomberg terminal. phonic when more from the news desk. vonnie: nations have agreed on the landmark free-trade deal. and already, ford is calling on congress to reject it. the automaker says the deal fails to address currency manipulations. ford says the obama administration should renegotiate. twitter has made it official.
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jack dorsey has been named twitter's interim chief executive. he thinks the announcement will be welcome news. >> morale at twitter is really strong and we do not believe this will affect morale or attrition negatively. we actually think this is a pretty good positive. it adds a lot of clarity. great teams want to do one thing, which is shipped products that people want to use on a daily basis. vonnie: dorsey needs to fix twitter's bigger problems, slow user engagement. investment -- the ge investment is a largest, one of -- for pelts. one of ge's 10 top shareholders. do moreeltz wants ge to
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cutting. them to repurchase shares. in south carolina, they are calling the flooding unprecedented and historic. hundreds of people have had to be rescued after days of torrential rains turned neighborhoods intellects. one area of north carolina received 18 inches of rain, and it was still raining and parts of the state this morning. and baseball's antitrust exemption has devised a challenge in the supreme court. they rejected an appeal over and attempts to move the san jose -- the athletics to san jose. you can always find the latest on betty: thank you so much. vonnie quinn with all the top news. coming up in the next 20 minutes, after years of losses, american apparel files for bankruptcy or it is this what the company needed to finally
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turn itself around? what a long-running saga there. and a new gun law proposal. what is taking aim in her new plan. and jack dorsey's back. twitter names its cofounder as its new permanent ceo, just like apple did with steve jobs. is dorsey the next steve jobs? ♪
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betty: good morning and welcome back to the "bloomberg market ."y julie hyman has a check on some of the company movers. julie: we have a big canceled acquisition. potash of saskatchewan, a maker of components that go into
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fertilizer, has canceled its acquisition of cayenne s. spurred by the company. finally today it says they are not going to do it anymore. &s is taking a steep tumble. if you look at some of caught peers, some speculation on where it may turn next. also try to hire today, shares of amazon -- also trading higher today, shares of amazon. it may unveil -- it may help businesses analyze their data. nearly 2% onup that -- shares are up nearly 2% on that. stores, particularly
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macy's and norm strums, there is commentary coming out of that it hassearch been cut to neutral on difficult sales trends as there are lower traffic and tourism rates. i took a quick look at my bloomberg terminal at macy's, versus its peers. this compares it with the closest 25 peers by revenue, on the x axis, we have sales growth. maces with the blue dot on the far left of your screen, is trailing. even's -- macy's, with the blue dot, on the far left of your screen, is trailing. analysts are estimated that macy's sales and earnings per share's growth is going to be lackluster. betty: a little bit lighter than forecast. julie hyman at our bloomberg market desk. continues foraga american apparel. the clothing chain -- the
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dramatic sag continues for american apparel. they have finally -- the dramatic saga continues for american apparel. matt townsend joins us now for more on american apparel's next chapter. this will make- a movie, what has gone on with american apparel. >> they are going to try to restructure the company's debt. they are willing to take on some equity in the company in exchange for debt. so the big thought is here, the company always headway too much debt for the most part to be sustainable, so you cut the debt in half and the interest payments and have, and that gives it a fighting chance to continue on to try to make it. betty: to make a turnaround. so what has happened? why have they posted -- i know they had this big two-do with the founder, and we will get to
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that any moment. matt: someone explained to me that they were always moving from crisis to crisis, so for a while things would go well and then something would happen. like the distribution center would be disrupted. they would have to spend millions fixing that. they had to replace hundreds of workers in a factory in l.a. heavy of that, they had a debt load. that was always taking out of the bottom line. betty: and then of course the fight with its founder not helping either. hasn't he sued the company? matt: the latest thing is that the company's board decided to fire charney. he did not just walk away. he sued the company several times. this has disrupted the company in several ways. legal fees, consulting fees.
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he is still very adamant about coming back to the company. it is kind of hard to see. he wants to pull a jack dorsey and go back to the company found it. matt: that is a long shot, but he does want to come back to the company that he found it. betty: thank you so much. filing for bankruptcy now. matt townsend of bloomberg news. so ahead, weighing in on the gun debate. we will have to watch an update donaldary clinton and trump, vastly different views on gun control. ♪
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betty: welcome back to the "bloomberg market day." the u.s. reaches and historic trade agreement with japan. a major victory for president obama, despite five contentious
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years of negotiations. it is not yet finalized just yet. opponents are saying it could hurt u.s. workers and it has to go through congress. a policy bring in expert, live from washington. what were the final sticking points and how did they get through them? --12 countries welcoming representing 40% of the economy, there were some issues. down in atlanta, trade ministers were meeting for this final meeting. the announcement to let everybody know the deal was done was pushed back for multiple hours. it was supposed to happen yesterday and it happened today at 9:00 a.m. three primary issues -- the first was on product harris. this goes on the united states was on product harris -- product tariffs. it was how quickly generic drug market companies could get --
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all of those issues, according to the trade ministers, have been wrapped up. a 30-chapter final agreement is done and heading to washington, , and congress still needs to ratify this and move it forward. some steps are remaining, but the bulk of the work is done. betty: thing goodness we finally got it done. so what is congress going to do? are they going to destroy it or what? phil: it is going to be a tough road. earlier this year they allowed for a simple up or down vote on whatever the trade ministers agreed to. it cannot be mandated or filibustered, so help -- so that helps the administration. congress has 90 days to look at this come 60 days of when it has to be published in its entirety. orrin hatch noted there were certain concerns that have been raised about the deal. he was a strong supporter of this at the time that it started to be drafted. unfortunately, i'm afraid this
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deal falls woefully short. that was an administration ally, let alone the labor groups and areunion groups that against this. the administration has a lot of work to do, but they have time to do that work. the biggest problem here, when the deal will have the congressional vote will be in 2016, a presidential election year. politicals a lot of elements to this that the administration did not count on. betty: speaking about politics, we have our presidential candidates focusing on another issue, gun control. let's play with donald trump said about that. the police did a great job. they got their quickly and were able to kill him. but i could make the case that if there were guns in that room other than his, fewer people would have been died or -- would have died or been horribly injured. betty: is this going to be a major factor for voters, whatever trouble says, hillary
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clinton will say later? phil: not in the general election, but in the primaries this is important. donald trump is near the republican line on this. it is mental health being the target. hillary clinton and martin o'malley are calling for major new gun restrictions, gun control restrictions, on background checks and another key element that hillary clinton is announcing. she will target gun manufacturers, producing a proposal that would eliminate their unity. that is in the elements of this. much, philk you so mattingly, live in washington. still ahead on the "bloomberg market day." jack dorsey on twitter. we will talk about that. ♪
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betty: live from bloomberg world headquarters in midtown manhattan, you're watching the "bloomberg market day." vonnie quinn has more from our news desk.
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vonnie: we start with a new development in the 2010 gulf oil spill. there has been a huge settlement in civil claims stemming from that disaster. bp has agreed to paystatesit a . bp has settled with people and businesses harmed by the bill. -- by the spill. readings in at decade. services cover 80 wide range of businesses. a slowdown may be a sign that consumers are taking demand down to a more sustainable level. the coast guard now says the ship missing in the atlantic since last week sank. coast guard ships and planes searched waters near the bahamas. the body of a crew member has been found. the ship was battered by hurricane walking it lost contact. they were 33 people on board, 28
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of them americans. fed chair janet yellen tops the list of bloomberg market magazine's 50 most influential people. the magazine says she holds the power in her hand of monetary policy. you can always find the latest news on betty: that is some list. thank you so much, vonnie quinn, without top news. after a month-long process, twitter has finally named its ceo. it is jack dorsey. dorsey will also be keeping his job running square. he is allowed to do that. here is what he had to say on a conference call about the user'' experience on twitter. there is a lot of initiative aimed at making sure that people can immediately get value out of twitter.
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and get a lot of power from it as well. to bring int michael wolff, the managing director and cofounder and a former board member at yahoo!. so dorsey finally has been named ceo, and he mentioned that he has to make the user experience. how? he has come back to the company, but he is a product guy. he is a technologist. this is inevitable, because what the company needs to do is focus on its core user experience. some of the things he will beginning with is whether or not they should limit to 140 characters. is there going to be more advertising or will they take advantage of the buy button. and how much are they going to be able to bring together other feeds? this comes back to something that you have to keep checking multiple times a day. betty: you do.
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i hear you on the 140-character limit very do you think they should get rid of that? michael: i do. it has been replaced by messaging. messaging has become in a lot of ways the dominant paradigm on the web now. think about it. billions of people have messaging. twitter, it has to be about a better news shore's -- news source and sharing more information. betty: it is also hard to use. people anecdotally say i cannot get my mother and my grandmother to use it. to useet my mother instagram and facebook but not twitter. michael: part of the user experience -- that should be the easiest. it is not hard to go there and just scroll through. it may be a little more difficult to tweet, but that is not really what it is set up for. it is set up more for you to be able to follow and follow people that have opinions or are suggesting news stories rather than the theme -- rather than
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being a personal communication. betty: it is more than just news stories, it is whatever anyone is talking about. michael: people are thinking around events. it is about those conversations, but they are relevant to a broader set of people. facebook is more about what i am doing personally. twitter is more about what i think about the world. betty: and instagram is about how fabulous my life is. jack dorsey, though -- i roll my eyes a little bit when i saw these articles this morning. is jack dorsey making a steve jobs entrance here? he was kicked out of his company and now he is back as the hero. comparisons are inevitable. there were some big differences. apple was really in trouble. twitter is more about finding its way. were bothrity is they
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product people, both people focused on the user. why was this inevitable for jack dorsey? partly because it is hard to find people that are product people who will want to run these companies. so they could have searched all over the place and they would not have been able to find a business person who was as qualified. if they had hired a business person, one thing would have been sure. they were not have lasted long. betty: maybe it's based to the fact that tech companies -- maybe you need a product person to run a check company. -- to run a check -- to run a company. michael: twitter has a great technology team, but it needs something like jack dorsey to inspire them to keep them there. -- they havepay
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the one-month anniversary of using this, and i finally downloaded apple pay myself, and i have to say there is a distinct lack of places that use apple pay. i am not impressed, and neither are a lot of people. michael: it is not part of people's established behavior. everyone has a phone in their pocket, but there is not necessarily a rationale to use it. the latest in your story today says the reason is because if you are using your card it has to stay in the register with the new chip during the entire transaction. so it slows it down. you put it in as the beginning and take it out at the end. the bigger issue is it is just not something people are thinking about naturally. it will be better suited to places where it really is quick serve so that you can understand why it is going to be in fast food restaurants and places where you want to get in and get out quickly.
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it is going to take a long time to build in the behavior, and we will see a lot of these other country -- a lot of these other companies -- android, samsung -- pay. betty: is that what it needs? it needs more companies going into the fray and get more people involved? it is not clear. likely to grow slower. it is about getting people to at this expectation point to be a way that they pay, even -- either with their phone or other apple watch. betty: have you been impressed lately with apple products? weikel co -- michael: i am looking forward to the ipad pro, the initial reactions on the phone. betty: the initial reactions on the phone or not that great. they are not blowing records. michael: there is not
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necessarily a rationale for why i have to hand in my current phone. there will always be a segment of the population that wants to have the newest and greatest. this is going to come down in terms of as people's contracts expire and there is more refreshment. movies over at the the weekend and i saw the steve jobs trailer. have you seen it yet go michael: i have seen the steve jobs trailer. betty: yet another film on steve jobs. michael: the differences this one provides a more balanced view, rather than him being the superstar who can do no wrong. this film is much more about the reality of the man. look: it kind of makes him like a villain, from the scenes that i saw. michael: anybody who will run a technology company has to be uncompromising about user experience, and that was the most important part of steve jobs. betty: michael, thank you for
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stopping by. michael wolf. much more in the next 20 minutes. amazon is disrupting the tech industry with its web services division. a live report from amazon's annual conference, and the high cost of getting sick. what is behind the astronomical rise in prescription drugs? we will investigate. ♪
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betty: welcome back to the "bloomberg market day." markets are closing for the day in europe. let's go to london where mark barton is standing by with a look at the action. as you were noting, we have seen a big rally across the board.
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week --ey ended the they started the week where the end of last week with again. -- with a gain. minors and oil companies were the biggest gaining industry groups. on the data front, it was not so encouraging. recovery risks faltering after growth momentum eased in september. that is from today's pmi data on manufacturing and services, which slowed in september. u.k. services expanded at the slowest pace in two years, indicating the damage from the emerging markets slowdown is slipping from manufacturing to the services industry in the u.k. let's look at the big new -- the big moving stocks on this monday session. s sank 20% today -- sank 25% today. potash withdrew a 7.80 5
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.illion euro proposal lloyd's is up by 1% today. the u.k. government may sell 2.5 billion pounds of shares to institutional investors, alongside 2 billion pounds worth of shares to retail investors as they try and get rid of the belt out banks that it bought a big stake in in 2008. glencore up most 20% after rising in hong kong. lots of swaying factors surrounding glencore on this monday session. a telegraph report said the -- it is inopen to talks with suitors about selling a stake in its agricultural business. bernstein says concerns about the company's solvency are justified. has clawed back
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all of last monday's records, the 29% loss. betty: a really descriptive look at how the markets are trading, how they are closing in europe. from london to new york, i want to head to the nasdaq, where matt miller is standing by with more. matt: i am losing more terms irish, space needle, and double dutch. these are not jump rope term. double irish and dutch sandwich is what it should be called. these are tax evasion terms that are used for things like companies like google, starbucks, and others are doing. they are trying to discourage these. the oecd has introduced new regulations that will stop companies like google from avoiding paying taxes to their home country. there -- the oac d says is a loss of revenue because of this. you see some of those companies
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-- google, i cannot get used to calling alphabetic, but that is the new name. also you see biotech stocks moving around today, or they were pre-market because of concern that france is going to join the fight to lower the prices. rise in drug so for companies like valeant, we can see movement there. we could see endo moving as well. space needle comes from something that cory johnson will talk to you about in a little bit. this is the amazon web services group that will help businesses do a better job. it is selling their goods or servicing their customers. the codename is space needle, but the financial times reports that amazon is getting together with companies like general electric or samsung, makers of washing machines, to help move buttons into the
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goods that those companies are selling. so if you are running out of time, you can push the button and automatically amazon will send you more tied. i don't use the -- -- i don't use the dash button, but i do use tide. -- i do notervices to steal all of cory's thunder here. responsible for the decline of hp. the annual conference just kicking off in las vegas. cory johnson has more. cory? cory: i have been through a few d-out tech conferences, but there is nothing like this. it is such a high level. inple are really involved the infrastructure of technology
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for all kinds of companies and they gather at this massive event because amazon web services is arguably the most disruptive business. started a be when you technology business or any kind of business, you had to build up infrastructure, including an i.t. infrastructure. it would include not just servers and big computers but also the software that would run on it. the customer resource management software. now such an -- now so much of that happens on the amazon cloud, it is disrupting all kinds of businesses across the world. as matt mentioned, the space needle that looms over seattle, alternate looming over the announcement today from the conference, where they are talking about new ways to use software at the amazon web services site to understand all the information other companies are loading onto it. betty: what are we likely to hear?
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cory: another price cut. amazon has cut prices well over 50 times. they are putting pressure on their competitors. as the business grows faster, sequential growth in the last quarter -- sequential growth, with 16%. compared that to the overall business and you can see how rapidly this business is growing within amazon, such that amazon is so secretive by nature and had to disclose those financials to show what amazon was doing. not only was a growing fast, but it was profitable, as we saw in the last financial report from the company. they also unleash all kinds of services. they will likely announce dozens of new things so that the customers -- think about this. netflix streams their videos through the services of amazon, arguably one of their biggest competitors. ibm is there. really a massive business
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changing technology. there are other services. you mentioned services for businesses analyze their data. why is that supremely important? cory: the anil's asian of the day his own -- the anil's nalysis is a really one of the most important areas in all computing right now. artificial intelligence, its ability to take all that data, gathering everything from your jawbone to your apple watch, entering it into your computer as a user computer -- finding all that stuff is so important. betty: thank you so much, cory atnson, editor at large bloomberg in san francisco. still ahead, deepak show oprah
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-- you doshow oprah not want to miss that conversation. ♪ deepak
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betty: good morning and welcome back to the "bloomberg market day." it is time for today's options insight with julie hyman. julie: let's look at what is going on in stocks before we get to options. we are seeing this big rally going on today, and it is remarkably stable compared to what we have seen in recent days. it is the fifth straight day we have seen the s&p 500 higher, its longest rally in a year. jim is the derivatives strategist at mk holdings. thank you for being here. vix -- are we seeing
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volatility tailing off? it looks like it might dip below 20. jim: it was exactly six weeks ago, august way for, that the vix spiked above 40. a couple things to think about it -- it has been an impressive 5% bounce in the s&p 500 in the last few days. on the positive side we are just above that six-week mark. historically, the low and the high for the price of volatility is usually contained in that show. that is getting fairly long in the tooth. on the other side, consider that the most volatile toe of the year historically is immediately ahead of it, in the second or third week of october that we see the vix on average make its high for the year. this still has been a relatively low magnitude event.
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,here remains a risk overhang as we see it, even though we want to get incrementally more bullish on those stocks. julie: what would be the volatility catalyst over the next few weeks if we were going to see an uptick again yeah cap jim: -- an uptick again. jim: we are never quite sure what that trigger is. our color reports this week reportsnally -- alcoa this week traditionally. to be clear, we're not so sure we will see funds came back up into the other 2 -- into the upper 20's. we still think stocks do not see their july highs until january or february. been onee of them has of their real underperformance, and that is alibaba, that i know
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you're looking at today. why alibaba, especially at a time when china looks to be so vulnerable? volatility almost hit 90 several weeks ago and is now back into the 20's. -- ourf that volatility internet analyst thinks it is a name that needs to be owned over the long term. so just a winner within e-commerce. it went public last october, ran up to 120 and is down almost 50% . we think this is a good example where you have historic volatility surface, and you can take advantage of that to get long directionally. betty: in other words, beaten down to lower than the fundamentals would see it beaten down. where will you go along directionally? jim: we want to take advantage of the skew, which is steep. also term structure, which is
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steeply downward sloping. volatility high in the near term. the sale downside puts in november, they vet earnings. a 15ake advantage of volatility pointspread. between those two contracts, you pay a dollar so you can win both perspectiveility and a directional perspective with volatility higher. julie: we will see what happens with holly baba going into earnings season. thank you, jim -- with alibaba going into earnings season. thank you, jim. much more on the "bloomberg market day." ♪
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>> it is noon in new york. >> welcome to the bloomberg market day.
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scarlet: good afternoon. here is what we are watching this hour. our consumers still willing to spend in the face of global weakness? scarlet: exclusive insight from paul tudor jones, cofounder of robin hood foundation. his thoughts on markets and commodities. alix: glenn core recovering almost all of its losses since last monday's 29% plunge. the company is not having an t."hman moment your c scarlet: julie hyman has been tracking movements. at that rally we saw friday has extended into this week. julie:


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