tv Bloomberg Go Bloomberg October 27, 2015 7:00am-10:01am EDT
a tale of two companies, will apple keep up the momentum and will twitter get on the right track? we find a later today -- we find out later today. ♪ welcome the bloomberg , i am david westin -- >> we have a slew of earnings this morning, alibaba and .omcast are reporting helping to us -- helping us to kick it off this morning tells us he is a cofounder of the investment firm and also the chairman of -- and the owner of the nba -- seems place adjacent for role
in the psyche of the community and baltimore is a city on the come back and they love their team and they are struggling right now, but they have such great ownership, i think the greatest will come back. stephanie: we have to break down these numbers. tom: i have the myths on ford coming out at -- i share versus the estimates, missing by two cents this morning and we are seeing revenue that actually beat $35.8 billion. we may hear more from ford as far as able year outlook. they did not hold her analyst meeting this fall so we may see more on outlooks from ford. comcast, i am seeing an in-line post of $.80 a share. revenue actually beat $18.7 billion, comcast in-line on earnings.
ford is a miss and we have other earnings out this morning. merck was a beat. pfizer was a big beat. it also raised its full-year outlook. a slew of earnings out, today. we have mostly beats with the exception of ford with his -- which is a mess. vonnie: the white house and congress averaged a deal aimed a debt default and government shutdown. it also raises spending caps for two years, but does impose some cuts on medicare. outgoing house speaker john baker will need democratic support to pass the bill. republican hardliners are opposed. the house has moved forward with a bill to revise the export import bank -- and bipartisan efforts bypassed conservatives efforts to end corporate welfare.
along the border of afghanistan, rescue crews are searching for survivors of that killer earthquake. authorities now say more than 300 people were killed. hundreds more were injured. 7.5 and struckas in a remote mountainous region. stephanie: alibaba earnings are also out. the company reported a 32% increase in revenue after attracting more advertisers to spend on its platform and the stock is reacting well. the cofounder of revolution growth is with us are out the hours and jim is here to break this down. >> the positive sides are the mobile revenue. if you look at mobile making up about 62% right now total revenue and that is great for alibaba because that is what would they have trying to been do that that is what they are been trying to do -- that is
what they have been trying to do. cloud revenue doubled year-over-year, they are trying to become the china version of but and they are growing, there is still -- they are still a very small player in the overall cloud computing market. you want to look at alibaba and see what they are going to do, going forward. david: how much of it inside to be get into the chinese economy, itself? did the rise, both chinese people buying things? 87 3 -- 83% of alibaba's revenue comes from china. david: it's a fairly good story. >> i would say so. it is hard to tell because consumer spending is just one aspect of chinese economy. you have to consider manufacturing and the fact that
china tries to move away from traditional manufacturing, and they're looking at moving into other sectors, including technology. stephanie: this is a big turnaround we are seeing. sobaba hit an all-time low, as far as you look at equities and earnings right now, do you think we will see a shift or this it one-off? >> what you are seeing last week with amazon and google and apple have strong numbers. at scale play and the bigger getting bigger and the smaller getting marginalized. a very aggressive company and i like what they are doing in the states with their play. they are making lost -- lots of investments in e-commerce companies. comcast had good numbers today, that is a good move, they also put their cfo and had him create new investment arms. you will see these companies be very aggressive and trying to
consolidate the commerce business. stephanie: when you say the bigger getting bigger, and makes me think uber-lyft. -- that's not necessarily the case that the bigger are going to get bigger and the smaller are going to get marginalized. >> there it -- that is not the case with the internet, there seem to be some cases of zero gain -- zero some companies. we will see if twitter can get into that group but facebook and google, and google separated itself from yahoo! back in the day. i would say alibaba is the main player and amazon is the main player. you see amazon would so much momentum and you see up -- the opposite happen with walmart. i think it has flipped now that the new media has become the traditional kind of how everyone
will be transacting and doing their work. stephanie: do you see yahoo! as relevant anymore? , airing positive news nfl games, but is it too late? it's too late,k i think it is a difficult transition for them. it is hard to monetize when you're so dispersed around the globe. they need to generate other revenue streams, that is where they struggle. they don't have a subtraction kind of business and they are struggling on the e-commerce business so they all may have one revenue stream which is advertising and the market does not all you advertising kinds of doenues as well as they e-commerce. david: you mentioned new liberty media in reference to alibaba. alibaba making an amazon kind of move from e-commerce into a content company? >> yes, rocket 10 has done that
in japan, they launch their own kind of prime service. you are a marketplace bringing buyers and sellers together and you feel that you have open field running to go after those opportunities. stephanie: do you merely look to say there is such a massive amount of humans there? human capital, the consumer in china -- would you be discouraged by the fact that we are seeing a slowdown in the overall economy? >> you get that big position quickly, then they are doing a good job. i would be buying l obama right now -- i would be buying alibaba right now. >> one of the cool things about alibaba is you can look at its numbers elegant were the chinese economy is doing based on its numbers. this is green, china consumer confidence and white, alibaba
share price. they are rising and falling at the same path. 84% of their revenue from the chinese consumers, it is clear that investors know that and count on china to drive alibaba's economy. maybe we can take from this chart that -- that the last month has been great for consumer confidence in china. david: we can only hope. stephanie: groupon is near dear g. they have had a few missteps. >> there are hundreds of competitors and local, social, mobile, e-commerce, groupon is kind of a loan and it has become a company headed has a couple million customers. it's on a $5 billion trajectory and run rate. it does not have scale yet around the world.
they do business in about 70 different countries -- companies so we continue to build that out. i think that local e-commerce, you see that -- you know that about 80% of your purchasing is done within 20 miles of your home, so local and social and mobile is a trend that people will start to understand. think about what you do and where you spend your time. you will go outside and go to a restaurant, you get your hair done, you go shopping, most of it is within a three or four block radius, especially metro areas. david: let's talk about someone that is big that would like to get bigger, comcast. you have a deal with them with your teams done in washington. it sounds like they have done all right, they met expectations. where do you see them going, particularly with cord cutting? not cord cutting they should be worried about, it is
students that go to college and develop muscle memory of getting connected the a wireless. they don't have a television, they have an ipad and move into an apartment, which they are renting, and it never signed up to cable. up -- signer signed up to cable. that is the community that we are all trying to reach. we just made an investment in a company called sports radar with it -- which is a big did a company that informs people on how they should be doing fantasy upes, what they can package through a comcast so they can make a two screen environment. we have challenged comcast on how to reach this new generation in a world where they are not going to subscribe to cable, they will get skinny bundles and get their information over the top. stephanie: directv is testing forinternet only bundles
millennials, so what do you think about that? >> comcast announced last week that they will do lots of work in the wireless area and they will be very aggressive, as are nso's.tual companyis still a great , $18 billion for the quarter for revenue and the this infrastructure to be able to do high-speed, real-time communication. data business is strong, it is the video bundle that's coming under attack. will see lots of next-generation companies like in amazon, you saw yahoo! streaming a football game yesterday which was a harbinger of what to do in the future, because they have a global footprint, comcast is a domestic
print. stephanie: is it too late for comcast seeing that there are so many others pushing forward and that fan base you are talking about, those millennials are disconnected from comcast. how are you interacting with them? perspective, -- what do they need to do? >> there are three parts of comcast. first is the cable conductivity, the triple play, subtraction dollars and selling you a but -- subscription dollars and selling you a bunch of -- the second is packager, they come out and bring you paper , and theyy-per-view do these bundles, and it's the bundles -- are people going to pay $50, $100 or more we know that it's really sports and movies that consumers place volume one and that they pay for
-- lace value on and that they pay for -- place value on and that they pay for. large audiences, you watch the ravens game last night, you can't watch it -- you want to be there live and there is this communal feeling about coming to an arena, coming to an event and so it activates commerce. .t's a very social business we are starting to see lots of applications you can see in the gaming industry and fantasy industry. at bloomberg, you basically created a data real-time business for traders for people on wall street. that is what is starting to be developed. information based on every play, based on every
movement of every player on the field. it's an exciting time and you will see data start to become content. you will see streaming over the top. it's a great time to be in the sports business. stephanie: we will talk more about that, but we have to take a quick rake. us.leonsis is staying with before we take a break, we have to check out this picture. ted, that haircut. it is amazing. class of 1973. we will continue our conversation. you are watching bloomberg . ♪
stephanie: welcome back to bloomberg go -- bloomberg . natural gas has fallen below the tube -- the two dollar mark in the united states. -- increase blocking and drilling, unusually warm weather has held down demand. -- from as you take a new look earnings were hurt by a stronger dollar and weakness in agriculture and oil and gas industry. jpmorgan is challenging apple they are creating something called chase pay which will allow you to collect reward points and cut down transaction fees for retailers. jpmorgan will roll it out next year. david: we are joined now by
leonsis.ince -- i ted you're in the process of making a strategic investment. ted: we just made an investment in mark cuban and michael jordan has joined us. join this advisory board to help the company to come from europe to hear in north america. they have a lot of momentum, they have done a big deal with the nfl, nhl, nascar. it is at this convergence of where data and streaming and allowing real-time information for media companies and fans who have this sensational -- insatiable appetite for their teams, their fantasy teams. players that they have picked, so it is a beautiful platform,
and one that scales and they built the business in europe and now they are coming here. david: take me into this business because a year or so, ago, stats for the game in time. game for are the ton. where is your competitive advantage? ted: we are turning to see, because there are 4 billion people online around the world, we traditionally see us-based companies going outside to grow through europe and asia. now we start to see european countries or alibaba coming to the united states to grow. sport radar built a lot of scale. they work with about 60 leagues and different teams. they grew up in the gaming business, being able to do raw detection and connecting leagues and teams and casinos and
betting parlors to make sure that nothing unsavory was going on. stephanie: and you walk us through the due diligence process? we see tons of ethics issues were in the last few weeks -- how can you be sure that data is not being taken and used in terms of your legal betting? ted: 60 million people who are playing fantasy games and that's the first step forward toward a more regulated -- what's happened in europe were people will be able to bet. regulating gambling is something that will happen here in the united states. i think the states want the tax revenue and i think you get the unsavory part of the industry know where theou money is going and you will be able to do a lot better servicing other customers. sport radar is not in that business, they are in the data and information business.
what we are starting to see in this next generation web world is that data is content. think of the google page, you think of what you do in your data streams, it is just axes and owes and it becomes -- it is just x's and o's. ted: do you need those can't -- david: do you need those contracts to get access to the data? ted: it's a big mode once you have these deals with the leagues, but you also want to have deals with the media companies that have the rights to the leagues and you want to be able to take those licenses and create new products. i think we will see a gamification of data in a big way in real time. you'll be watching the game last night and a quarterback will come up in the second to nine and you will be able, in a
real-time way, say what is -- what this joe flacco do want second and long throughout his career? what are the odds, i think he will throw a pass. one day you will be able to game around that and one day you will be able to bet. david: that is a short step to a press that. stephanie: football game 60 many games take so -- many hours as it is. is $88 billion in an unregulated way, on sports. stephanie: is that why you have been in agreement that you would like to see betting in the nba, because it's happening, anyway? ted: i think we had to get in front of it and i think shining a light on the industry is the right thing to do in getting the state new revenue streams and
having the federal government have some kind of involvement. we need it because you saw what happened, it was a bad thing that happened in fantasy and congress got involved. although it has not affected the business, what i've heard is ath fanduel and draftkings their best week ever after. stephanie: maybe we don't need so many commercials for them. matter. you do have to know where you are going, whether it's a game plan and basketball, or it's a product innovation concept in business. number two, david talked about it, you have to be tenacious. get up off the floor, you will take hits, in sports in business, you have to keep going. god for steve ballmer, he is a great man and i think he will be known as the
person who took a look at these sports business and applied a software services valuation on it. a crop and a business where you had reoccurring revenues from big customers. -- he grew up in a business where you had reoccurring revenues from big customers. we have five year suite license deals. regular season tickets are annual andrea do it -- we renew it like 90%. thanks so much for being with us. when we come back, gary vaynerchuk.
we are joined now for the hour by gary vaynerchuk. welcome. gary: thank you. >> just before midnight, congress and the white house reached a deal on spending and the debt ceiling. if both houses go along, it would keep the government from defaulting on its debts next. it would increase borrowing authority to march of 2017. outgoing house speaker john boehner will need democratic votes to pass the bill. hardline republicans are opposed. sylvania's foreign minister says the country will adopt all measures to ensure the safety of
its citizens if the situation gets worse. more than 80,000 migrants have crossed into solvent -- slovenia . according to the journal, major climate change, heat and humidity in parts of the gulf could be so bad that part that being outside for several hours could be life-threatening. tom: i saw this a couple of days ago, and bonnie brought this to my attention. -- and funny brought this to my attention -- jimmy carter is quite ill, writing -- writing on syria and when you dovetail the kissinger op-ed in the wall street journal with what we get from president carter and the new york times, mr. assad will not end the war by excepting contentions -- west,sions imposed by the
but is likely to do so if urged by his allies. the need concessions are not needed -- are not the combatants in syria, but from the crowd nations that claim to want peace but refused to cooperate with one another. it is a sharp essay by someone nearing the end of his life, and i think it's really alluding back to another time. has dealt with russia and iran, so people he believed to be brought to the table. it is quintessential jimmy carter. i applaud the fact that somebody is coming forward with something like a plan. i wonder how realistic it is. tom: i've gotten a lot of response from doing this a bit ago on surveillance. the basic idea of jimmy carter writing about the romance of another time and the successful negotiations between israel and egypt for the assassination of differentis radically
from the cards being dealt to president obama and others. stephanie: what you think about this, gary? gary: it is tough to say he dealt with russia and iran, there is no russia and iran, it's the leader of the moment and putin is a different kind of character. contextgh to impose the of a different generation. it's no different than business or any other facet of life. there is the current moment of time and it's a lot more complicated. tom: one of the things that has been of huge value is the reality of death we look as ugly americans at so many other nations as an amorphous blob and its been hugely valuable for people to understand that g -- steve jobs was of syria and dissent-- was of syrian -- sdescent.
you message -- you mentioned kissinger. he was a master of figuring out when he had to go to china when he needed to. cannot getthat we there without some involvement of russia, iran, turkey, the other countries. stephanie: you were born in what is now hillary's -- belarus. gary: if you look at the way food and coming from that part of the world, i think we as americans look at ourselves the way we look at it but other people from outside the world look at it a different way. the context of what we accept -- that what we do, versus what other nations are allowed to do is very different. i'm the biggest fan of this country. i think we grossly underestimate ourselves, but the fact that somebody like me could go on tv that remind people that
immigrants are important to the american way is scary at the highest level. david: that was a great morning must-read. and hearake a big turn from two tech bellringer's later. we have our own alex with us to anticipate what we might be hearing from apple and twitter. >> for apple, the big thing is not going to be what happened last quarter but what they think is coming next quarter because that is apple's holiday quarter. they're estimating sales of up only 2%illion, from the year-earlier which is a big pullback from the growth we saw in 2014. for apple, all eyes will be on the iphone. the company is turning into a one trick pony, it's all about the iphone and whether or not consumers here and in china are buying the new iphone sixes. hear more on this
ability as to how they think the next holiday season is going to go. think?ie: what do you gary: i think they make a tremendous progress -- product. i think the defendant -- if they had different leadership and innovated more, they need to be less reliant on the singler product. stephanie: so tim cook is not the right ceo? gary: i like tim cook but they have stopped innovating. the fact that they are not in the smart refrigerator or smart tv space is surprising. david: a wise man in holland -- thatllywood told me picking your predecessor is important and it seems that tim cook had a difficult time with steve jobs who was larger-than-life. tom: what i will be looking for is use of cash.
this is a perfect moment for them to reestablish that they are the new chip stock. gary: i wanted to bring up the fact that their innovation really peaked with the ipod. if you take a look at revenue and that product releases, this is one the ipod came out, back in 2000. look at the climate revenue. -- look at the climb in revenue. know they getnd i the monstrous lion share of their sales from phones, but is not the kind of growth that was spurred by -- those of us who are over 15 years old remember that when the ipod first came out, it was so amazing that this little device could do all this. stephanie: steve ballmer was telling us last week when the new service product comes out, the line will be around the block, that will not be the case.
i think the new co has has beenod job, but he pontificating about microsoft subject -- success for a decade, using steve's reaction. i read about the iphone as well, we also had a recognizable is going on in the macroeconomic aspects of the world that allow that to happen. i remember the first time i got a real smartphone. david: right before the recession, a great point. gary: what's that, 2007? that's a long time. stephanie: i still love the iphone. gary: i'm not debating that, they can ride that all the way home until you can't, that becomes the question. if they can continue to stay on the offense and their only moving products lightly, they become vulnerable to the reality of time. david: that is interesting because we aren't spending all
of our time talking about apple, but we are not talking about twitter. >> it's another company with questions whether or not management is doing the right thing. jack dorsey is on the block as the permanent ceo. you remember the almost disastrous reality check he brought to investors last time the stock pulled off. he said the company is not there yet. since then, he has laid off to hundredgiven back million dollars of his stock and actually apologized to developers, saying he is sorry for how he treated them. basically, investors are waiting to see what he is going to do. there have been a lot of questions around the new product they rolled out that you can see twitter feeds where they populate your feet with the most interesting news. where is the strategy going for twitter? that is still the question that needs to be answered. stephanie: we have two twitter's
superstars sitting with us. i think the fact that wall street has the judge him on every 90 day period. he's been with them for 46 -- for 43 seconds, what turnaround? david: he's also been acting ceo for a while. will they drive away traditional -- their core constituency? gary: they are barely holding on. tom: to the accelerate the risk of losing? gary: the people that are still on twitter love the product because they have given no reason to stay on it. tom: it's just garbage. me?d you explain moments to gary: it's a proxy to show that they are moving the needle. stephanie: wow, moments, not a real product. david: thanks very much for being with us.
let's take a quick look at futures before we had to break. major averages are little changed before the fed begins a two day monetary policy meeting. speaking of earnings, take a look at alibaba and ford, heading in opposite directions. alibaba has jumped 30% this month, on pace for the biggest monthly gain on record. big blue's got the blues, two blues, ibm has 14 straight quarters of drinking sales, canada reinvent itself while saying a public company? -- while staying a public company? stephanie: the new studio city casino opening. it opens today with a few big names, leo dicaprio, marty scorsese and robert de niro. back.l be
stephanie: welcome back. this is your bloomberg business flash. ford came up short in the third quarter. they posted earnings that missed estimates. shares of alibaba are up 11% in premarket trading. it -- china's biggest online shopping company beat estimates. the company is called convoy and just made $2.5 million in early financing. it focuses on one-day trucking trips before companies --
between companies. stephanie: ibm has been under quite a bit of pressure. the company has seen 14 straight quarters of shrieking sales. also with us -- arms crossed, so you know what, i need you to open your heart and your mind. go second -- we will let you go second. most analysts are pretty positive. >> i think the concerns remain of reporting the company. ,he three issues that come out first of the public cloud, it's a negative for many of the traditional enterprise companies. i.t. spending is not growing and
increment a dollar --. ibm is just so far behind the public cloud and has taken many years to catch up. they are very attached to hardware which has been tricking. they are paying the consequences the cost of everything else and that's resulted in the company to be underinvested and is -- has week employee stock. multi-three to five-year transition. stephanie: gary you are trolling, why -- drooling, why? gary: because he's 100% right. you have everybody choate -- chipping away at them, the media search is amazon, amazon,
amazon, these service products, the software space is being innovated at a speed we are just too slow and they are not a reality to major businesses in the war. , with to declare ibm dead all respect, the majority of analysts go the other way and have a buy in right now. oren butler is doubling down and refuses to give up on it. they do think they have a plan. what is the plan they think they have? stephanie: we talked about yesterday -- >> it's difficult to do these maps for companies like ibm. you should be looking at trying to invest in new technologies. from where he is going is right from a three to five year horizon. they have made a lot of investment since then in terms of acquisition, but it will take a long time so i think that is the big problem, a disconnect
between the public and private markets. buffett thinks 10 years, so it's very much possible that over the next 10 years, they can some of this stuff and be on their way. the problem is going to be it's a very painful three to five years. we are seeing sales for 14 straight quarters, their numbers are poor and their sales are down. they made a number of acquisitions in the last five years, how are they paying for it? >> they have a lot of free cash coming in. that is something we will see because of the leaders -- a really cool ocean on the bloomberg to do hts on any equity, you can see who the biggest owners of that company are, and i just clicked on the breaker hathaway historically, you can see this chart goes back to 98 for starting about five years ago, he started buying ibm and david mention he double down.
he bought millions of shares as it ran up and he increased his stakes and now holds about 80 million shares of ibm and has doubled down on the stock. david: you mentioned the cloud, specifically with the challenges they have. they have three parts to the strategy, the of cloud, analytics and engagement, what about analytics? >> they don't report them. the issue is, they don't add up together. from an perspective, we don't get visibility on that. the other issue that i have is, ibm and the revenue line, it includes the clout and analytics and their social and mobile strategy. our concern is the revenue that is contracting consistently at the rate of eight to 10 per -- 8% to 10% per year.
even if it does work, the earliest when which revenue would stabilize would be 2017, and that is too long for investors to be worried. stephanie: go talk to any cpl or cio under the age of 35 that will be making these and rise decisions that scale, and the consideration for ibm is they didn't -- they are not sure it even exists. you talked to hundreds of these decision makers, when they get to that five-year window, and when the consideration rate of signing these contracts, it is not going to happen. stephanie: you're saying you do not have an ibm, do you have that in their competitors? maybe this is practice in the industry. the entire i.t. hardware and vendor challenge, the thing you look at this now, 2011, every single traditional enterprise company has seen this already growth. growthseen celebrating -- has seen decelerating growth.
the cloud is very real for these companies right now. of all of them, cisco has moorman opportunity to transition as they have so much cash. has more opportunity to transition as they have so much cash. it's not going to be the traditional ones to which we are used. stephanie: as a public company, can they make the changes they need to make? currentey can do this strategy, the other issue is, even if it works, -- it is negative for the stock. they could go out there and buy cloud era service, spend lever up,f dollars -- stop paying back -- buying back stock and maybe even lower dividends. maybe, in three years time, you have a business.
that of the scenarios -- the former chairman of ibm talking about how they need a turnaround. has prescription does not seem to be what they are doing right now. david: by the same point, you are right. i'm not sure what analysts would have said about ibm then. both for being with us. more with gary vaynerchuk next. >> you can join the conversation --
it is killing it when it comes to mobile sales. channel.the sports ♪ ♪ ♪ we are in new york city on this sunny tuesday morning and you're watching the second hour of quote bloomberg go. david: we have a big day for sports and earnings. stephanie: who better to join us in a guy who loves his sports, the man who will one day on the new york jets. david: we have to get the first word. vonnie: republican leaders and congress have agreed on an extension on the debt ceiling. can they deliver the votes?
the deal with the white house would had off a debt crisis and avert a government shutdown but republican hardliners may not go for it. that means john boehner would have to rely on democratic votes for the agreement to pass. mainxport import bank happy dead yet. the house is trying to revive it. a bipartisan effort past conservatives to consider it part of corporate welfare. a final vote is scheduled for today in the bill can have a rough time in the senate where majority leader mitch mcconnell is opposed. china says it will take all necessary measures to defend its territory. this is after a u.s. navy warship sailed through chinese waters bring it past near 12 nautical miles of chinese islands. -- u.s. does not recommend recognize that the man-made islands are china's under international law. matt: take a look at futures. it's kind of a mixed trade as we close the day makes yesterday
and starting off that way today. in the commodities, i thought time keene was going to explode this morning when natural gas fell below two dollars for the first time since april, 2012. apparently, it is warmer weather that is the reason for this and a glut of supply. that is pushing it below two dollars. inflatedd the 30 year -- inflation-adjusted chart which i thought was interesting. ups came out with better earnings than the street had estimated. ups beat on earnings-per-share and did miss and revenue. that's why you see shares falling down a bit. revenue missed because of currency reasons and different fuel surcharges. rvell, not the maker of comic
books, but the maker of chips, down 16% in the premarket. september, it was looking into its accounting internally. today it says price waterhouse coopers, its accountant, has resigned and recommended it get some of the else to look deeper into its finances because of the way it accounts for sales. possible problems there. david: i don't think that's a good thing when your accountant quit. s. about alliealking baba. slowingok up the theomy and sales jumped in latest quarter. the news give a boost to shares in the premarket including yahoo! the allie baba stock has been under some pressure. they needed this report. after the ipo, the highest iq ever, they took a plunge.
they have been clawing their way back. went fromber, alibaba 58 or so and are now back up in the 70's. it is higher as a result of the earnings report. because int september, they lowered the expectations. they said they will probably not be as high. a game of that's such dancing with analyst estimates. fundamentally, is the company making a turnaround? >> all of this wall street jargon -- they are a dominant player in the biggest market in the world with all of the behavior around mobile and commerce in the right direction. if you want to debate a 90 day window, i have no idea. are they headed in the right direction? what turnaround? they have massive growth ahead of them and they have not started playing outside of that
market. i think they will be ok. stephanie: a marketing guy callingbs on jargon? >> you decided to call me a marketing guy but i think i'm a business guy. david: let's keep the temperature down. we have been following china to figure out what is going on with the chinese economy. i wonder whether the services business is taking over from the manufacturing. ali baba is dominant, the largest market in the world. it seems to be fighting against what we thought might have been a trend with the slowing economy. >> if you look at the ali baba sales, it's per some -- it's predominantly still in china and of you look at mobile especially, it jumped 100% or something. if you look at mobile -- david: you said earlier it's at 62%. it might have tripled. >> i think you are right. stephanie: let's go to the terminal. matt: this is a proprietary
index. you mean all this other stuff is not cool? matt: this is an index that looks at all the stuff alibaba cells and averages out the price. ppi.ite, you see chinese no one believes chinese numbers but maybe it's the trend that matters. all i can say is that ali baba sells so much stuff that it may indicate where chinese inflation is going. a that's the case, you see big jump in the price of the goods that alibaba cells. they sell everything. david: i think you are right, that is cool. the big vertical greenline says the stuff they are selling is more expensive? matt: that's right, all of the stuff they sell gets more expensive. that's got to be good news as for his inflation expectations. stephanie: gary, what is your thought?
we are trying to look at china in terms of this slowdown. you are such an optimist. you are always wrapped in the american flag. how many companies do you see get a year, 200? do you see a slowdown? >> in china? i'm not educated enough to answer that question. as a company, alibaba is positioned well. amazon was not a bad bet when the u.s. economy was slowing down unless you are playing in a 16, 18 month window. everything they were doing for the future was headed in the right direction. for the people who are daytrading or making bets on 30 and 60 day windows but you look at where the companies going with trans, is going in the absolute right direction. that is the answer. stephanie: earlier, we were talking about twitter. i could not believe you said that while they are still relevant. twitter is massive. do you not believe in the
direction they are headed? >> is no direction yet. i think that's being laid out now. you are coming at me because you know how impactful twitter was for me as an early investor. i built my brand on it. the only thing i really care about is attention. attention is a value proposition. you can talk about many metrics but what i know as a practitioner, somebody who use the product every day since 2007, is that the content that goes out by me and others have less attention than it had in the past. david: there is a reason for that. i go on it every single day several times a day. but i find it harder to get to the people i am because i have to go through more and more tweets that appeared to be sponsored. 10-15 to go through entries before i get to what i
was interested in. >> you see that and other platforms. i don't think that's the issue. there is a lot of people you still follow that you don't care about anymore. it's not necessarily our behavior. we don't unsubscribe, we delete. twitter has a fire hose problem. they need to limit the things being said or the amount of people. if you engage with one single thing from a person in a year, you need to see everything they say. they are not paying the attention arbitrage. if there is a person that you have not clicked through on their tweet for like six months, it should be automatically or it should be prompted to deleted. >> you mean the way facebook handles it? they have certain algorithms that people have been playing with. >> that's your opinion versus what the data shows. stephanie: what does the data show? >> users are staying longer and
engaging more. on aare running massive scale. that's why they have what they have which is the best advertising product in the world. stephanie: there you go. the best advertising platform in the world. thank you for coming back. gary has more to say. what can we ask him? tweet us your questions. plus, brendan greeley joins us with his big idea of the day and we will talk inflation and how best to measure it. ♪
size and not just wait. ford did worse than expected in third quarter. it posted earnings that missed estimates but net income more than doubled from one year ago and the f series pickup line had its best third quarter in nine years. don't plan on doing any black friday shopping at rei. they will be closed after launching a campaign to spend time outside. it has 143 stores in the united states. you don't like rei? >> it's an interesting tactic. they must really not do super well on that day. i don't know if they think they are going to get a days worth of press to return that investment. it's a statement. it's interesting. westinie: i know david bought a tense there this summer. david: that's true. stephanie: brendan greeley is
here with us with his big idea. this is a wild one, you're talking inflation and how big data could change how we measure it. brendan: the data that we have inflation we get it from the u.s. government. s to calculate their cpi numbers, they send out economic assistance to record prices and go into stores and make calls. they are tracking 80,000 items with hundreds of people it takes all month. there is the billion price project at m.i.t. and they've been doing this for a while. data off of webpages. it is imperfect because many things are not sold online. they are pulling this data down and they are looking at it and they get a different inflation measure. let's look at argentina where the trend is obvious. if you look at the official argentinian numbers, not that dramatic but if you look at the the billiona from
price is project at m.i.t., there is a clear discrepancy. david: it's like twice as high. brendan: the economist is not publish official argentina statistics, they publish the billion price project. to be more accuracy. there is a difference in the u.s. it's not quite the outlier. bl iss lyingf the about inflation but we get a different result. we look at this online index which is in yellow. where much farther in deflation than the official bls numbers would have us believe. we've got gary here. i pulled this because you are coming on. i think u.s. government data and bls. >> what you're saying is a ton of data versus a couple of
hundred people running around and documenting prices. brendan: yes. >> i will go with the data. brendan: there is an active conversation about this. liveraditionalist >> forever in 100 people documenting on a yellow pad wants to hold on to that world because that their ecosystem. do those couple of hundred people work for the government? >> yes. stephanie: can they are taking a lunch break. brendan: more data, more accurate, more options, often better economics but one issue is that we need these to go back far. we cannot do that with the online scraping but we can do that with the bls data. perfectnot a substitution but it's a new proxy. we cannot go backwards. we have to let it lay out that at some level, common sense needs to become a bigger part of the conversation in the world. when you have that much data, that's what evolution is.
i'm sure cavemen plated differently. stephanie: it's very difficult for mature businesses to make that shift. >> yes, that's why big business goes out of business. brendan: one companies using satellites, big data, to track factory orders in china. we can get the official purchasing managers index in china or look at trucks coming in and trucks going out whether they are loaded up or not. david: i will be the neanderthal. think this is great and big data is terrific. i think there is some value in the government actually taking a look at the data and making sure they are right. i don't know the methodology they are using. data is pretty complicated. >> you can make it say what you want. david: there are some value of the government having a say so it'seting brendan: possible in the next five years we could have a hybrid.
we have this long time series but we are learning things about economics. country joinsn a a currency union, prices should already be perfect. what we know from scraping data is the second that new countries joined the euro, their online prices suddenly become or even. stephanie: maybe they need a new term, scraping data? only on bloomberg can we get excited about inflation data? thank you very much. will share his secret for success in social media. ♪
the best advertising platform in the world. >> that's right. david: there is a survey that says instagram is the most important social media platform. facebook comes in fourth. this is 14's. for teens. does facebook have to worry about the competition? snapshotried to buy for $3 billion. twitter has an interesting moment in time. i don't think facebook has to worry. instagram is a dominant player. when they first came out with ipo, they had doubts about facebook. they thought they would never be able to crack that not and yet they owned mobile advertising. how did they do that? that's the holy grail. stephanie: they already have it. david: we just didn't recognize
it? >> yes, these are people who are not practitioners. these are people who don't employ a second chess move. this is people who went on air and made fun of buying instagram for instagram because it was only 500 days old. and they don't understand that if you hold your breath for 12 months, 18 months. it does not take that long to get there. that is the bottom line. stephanie: help us understand how ads work in social media advertising. vice. there is a rush to companies you work with directly, how do they use snapshot and instagram? and it ownsok instagram, you buy a platform and target 34-year-old females with two children that live in the bronx that are fans of the we have nevera
seen the make a picture or video or some written words that try to compel them to do something like watch this program or by wine. that's how that works. big data let us know that you bought their product ? . >> it can. i run an ad and i see the funnel. if you are selling so, you've got to run data against it or you need to contain a test to an area to see if it's working. stephanie: why do brands spend so much money on tv advertising? >> they have a vested interest to the media buying agencies. they don't want to spend the time to plan facebook properly. they want to go to a tv upfront performed soye they can get two tickets to the super bowl. stephanie: here is a twitter question -- one quick twitter
question -- how important for a ceo of a company to have a personal brand presence? >> if you are charismatic and good-looking and you have got the chops, you should have one. if you are an introvert and you hate people, maybe you should not be on it. stephanie: we are interviewing john letter from t-mobile. ere.ohnleg >> it comes down to the person. i can handle it. stephanie: thank you so much for being with us today. coming up, the ceo of the tennis channel. ♪
can rain tomorrow. as long as it clears out for halloween. david: welcome back to "bloomberg go." i want to welcome ken solomon, the ceo of the tennis channel. welcome. >> good to be here in your first month. david: exactly, we are getting going in a strong way. let's go to matt miller on u.s. economic numbers. matt: we are looking at durable goods orders and the headline number, it is less than expected or not as bad as the estimate of economists. 1.2% of the drop in durable goods order which compares to a survey of 1.5%. if you take out the planes,tation, the trains, and automobiles which have been hot, you see a drop of 4/10 of 1% which is worse than the estimate for breakeven. the headline number is a little bit better than economists estimated in the x transport
number is a little worse. futures are down across the board. we have a mixed trade this morning and we have had a lot of positive earnings but you had a few misse that have disappointed the street. sit will be interesting to see what happens of the open. let's go to first word news. rescue teams in afghanistan and pakistan are trying to reach remote areas struck by the killer earthquake. more than 300 people were killed on the death toll is likely to rise. a 9.5 earthquake. slovenia says it will fence off if an agreement is not implemented with the u.n.. more than 80,000 migrants have crossed over in the last 10 days. the eu will send 400 police officers to slovenia and provide emergency housing for migrants. bookd trump is calling his
the best seller. it is a blueprint for the issues in his republican presidential campaign. david: thanks very much. 300,000 americans did pay tv last quarter, cutting the cord. netflix said it signed up more than 800,000 new domestic subscribers. can pay tv survive? can solomon joins us and we are joined by our sports columnist. august whenk to there was a disney earnings call and our mutual friend bob eiger made a remark about the possibility of espn growth being slowed down. it really rock your world. >> it was probably bigger than the earthquake you are talking about. you saw a massive selloff in the media business. people scratch their heads and we knew there was a bit of a softening. this was not really news but when bob speaks like that or
sneezes, people get a cold particularly when it comes to espn. david: they are the 800 pound gorilla. >> they are dominant and people look at them as a bellwether. david: how real is it? are people moving away from a did -- traditional cable? >> is real in that there are more choices than before. either at news that's challenge or an opportunity depending where you sit. there is a reordering for some of the larger companies that are going to have to look at what may be some legacy businesses and have a been leveraged look at how these adoption rates are driving new services. all of that growth you alluded to is not at the expense of pay tv. i think there is a balance going on. we certainly believe that. stephanie: it's sort of a blessing and a curse for your business.
tennis fans know exactly where to go. tennis like golf has been losing some steam especially mens tennis in terms of the amount of fans in the u.s. how do you keep momentum going in your world when the overall spore has gone flat? >> will think the sport has gone flat. every number we see for the tennis channel in terms of our national viewership, we are up 25%-30% for the year and that has been consistent. we look at it differently. we are still in the glory days with many other great young men who are just waiting to step into the sport. we see a lot of opportunity. i'm not sure the comparison with golf is exactly true. there are ebbs and flows and everything. what we are doing is to bring the sport of tennis two people
on a consistent basis. david: these media companies have an existing is this that is profitable and i'd of want to walk away but they have to move into a new business. making that transition is very difficult. as you look at it, who is doing that well and who may be stumbling question mark >? >> certain networks are doing a good job of integrating live streaming capabilities. tennis channels doing this as well. that's where the future is to be able to have the benefits of what we can get on the internet with what people want in traditional cable. david: does that ultimately pose a threat to espn and fox? the nfl channel is established and when does that cut into the packages over the air or the cable people get? i would be interested to hear your thoughts. the nfl seems to have an endless ability to move across platforms
and raise the fortune. stephanie: are we overstating this? yahoo! has 50 million viewers. traditional, at sunday night football averages 24 million viewers. are we overstating this online thing? all, it's an apples to apples comparison. what we want to know is that 50 million people went to yahoo!. that is a platform driver. needose numbers clarification because 15 million people was not the average. david: that's an important point because that's a number of streams during the game. hear 24 million people at any given time, the average number of people watching, 15 million is during the course of the game and 15 million people started. the audience was closer to 2.4 million.
>> in any case, that is a big difference, we are talking about the ability to create a mass audience which is something that has become very elusive. it's much harder to get a lot of people in one place to do whatever you want to do. yahoo! had something specific in mind when they tried to do that that had little to do with selling the ads. stephanie: this underscores that content is everything. we have seen yahoo! venture into taking on communities and original programming and it did not work. if you have the right content, people will go to it. >> will you go on the road with me? stephanie: absolutely. matt: to look at traditional u.s. media stocks and the battering they have taken over the last 12 months, this is where disney cut its cable tv profit forecast. sanfordwhere the
bernstein of disney and time warner came. they have recovered a little bit. if you put a circle here and put yahoo! at 15 million people to stream a game, even if they only stream for a few minutes, that is a massive number of people. i think it harkens a change. if i can stream an nfl football game, then i don't have to find cbs or espn isl because i don't know because i don't watch cable for anything other than sports. david: from the consumer's point of view, you've got advertisers aboard. you don't have to pay anything if you click on it at yahoo! to end up causing the consumer more money for sports in the long run? >> that's entirely possible. personalized subscriptions allows you to opt in that you
will pay more to get more of what you want. we think this is not an either or proposition. the key is that there is the basic channel. that is not going away. frankly, people want a curated experience when it comes to this. if we threw up all of the matches that are going on into a generic bundle and said pick what you want, that's probably not a good your proposition. if you're watching very closely and you say i just saw that and you want to see more of that, i want to have the ability if i pay more to follow all of her matches. we think the combination of that linear hub pushing through a spoke to personalize is the way to go and sports are one of the few places. thing,ink this is a good that most sports fans might be willing to pay a little extra to keep their sports.
your average cable viewer who does not care about sports is still being forced kind of to pay premium to get espn and these channels they don't watch. it might end up being more fair. stephanie: when everyone was panicked because of the espn layoffs, was it really that this foolproof sports broadcasting, had an issue? maybe the company's cleaning up its act? david is like, i know the answer. espn is a great partner and is not for me to comment. this is a large company with many different things going on. they are reportedly in the film business. there is a lot going on there. there is a lot we think we know that we don't and we should not necessarily presume that the cause is related to the effect we have seen. espn is in terrific shape. it's a little reactionary to
attribute this to court cutting. when you look at when the major layoffs happen, it's a year before the subscribers come back and the nba is coming up in 2017. they have a lot of money that is now going to be set to go into sports rights and libor -- broadcasting deals. i would attribute it more to that than court cutting. it's becoming a relatively mature business. you cannot keep growing up that kind of rate forever. into a mature business come you pay attention to costs. >> in terms of the expansion of the audience, what we see now a little bit with sports is there were sports that did not get the oxygen. when there were three or four networks come even tennis, you only saw the middle weekend and the finals for a major now we do that 24/seven.
the more we show, the more people want. there are great challenges and contest going on all over the world that are being open to people for the first time for the diversity and personalization of the media. this is an exciting moment, going from aol to the internet and conductivity we know today as a metaphor in the sports world. the biggest stuff is getting played out but there is more to calm. stephanie: it works for you because tennis season never ends. >> that's right, tell me about it. stephanie: thank you so much for joining us. he's staying with us. back, we: when we get will get your take on politics. you are watching "bloomberg go." david: here is an image of president obama in the oval office and the picture was posted on instagram. stephanie: that's a beautiful picture. ♪
stephanievonnie: welcome back. theral gas is falling below two dollar mark for the first time in three years. stockpiles are on track to reach a record this month. unusually warm weather has held down demand. t-mobile is paying the high price of user growth. the wireless carrier posted third-quarter earnings tha estimates. t missed they got one million new subscribers. that put pressure on the bottom line. jpmorgan is challenging apple pay. the bank unveiled its digital wallet called chase pay which will allow you to correct -- collect reward points. it will roll it out next year. stephanie: thank you.
with the talk politics tennis channel ceo ken solomon. the vice chair of the dnc finance committee. he knows what's going on. , your standpoint, talk to us about this race. bernie sanders, hillary clinton. >> it's exciting but i'm not sure anyone knows what is going on. i am definitely invested in this. my position is to make sure we have another democrat in the white house at the end of the cycle. it's pretty exciting. it was a great debate in las vegas. two of the candidates have stepped down leaving three. martin o'malley is exciting but cannot get as much left but is a respectable candidate and you have bernie and hillary. stephanie: what will the dnc role be? obama put them in second place during his campaign. >> our job is to support the
policies of the president while he is in office because he does not have a fund-raising arm when he is president. there is a lot of stuff that has to happen to ensure those policies get put into place like with the gridlock we have seen over the last couple of years. once the candidate is chosen, we need to make sure the democratic candidate wins. are the republicans better at this than the democrats, raising money? is that a fair perception? you hear big numbers for jeb bush. >> it's a challenge and the reality is that they are good and having a few people with a lot of money. all of that money comes from hours, on their side, came from 158 families. david: we saw." the new york times piece." >> there is the money and there is only so many ads you can run.
they have to buy top of market for the ads and they cannot work with a campaign. that does not give you an infrastructure to be able to work with on the ground. having a $48 million check is nice and we wish we had more of them. stephanie: two we need campaign finance reform? the amount of money that will get raised between hillary clinton and jeb bush is grotesque. >> i would love to put myself out of this business of supporting my party. i would love to see campaign-finance reform. agreedlmost universally that that is important behind some form of gun legislation. yet it has been really tough. you see citizens united and the impact in this country, we feel like something has to happen. the rules are the rules so we will be on the field and we will challenge and make sure we do everything we can to put a democrat in the white house. david: any quick thoughts? matt: take a look at at those
who have not raise that much money, donald trump and ben carson. it's interesting to see that ben carson has overtaken donald trump. this is the amount of stories publish in the media -- 498 and ben carson and less than 300 for donald trump. they have not raised more money than jeb bush. >> free media. on both sides of the equation, this is unusual. you don't have to create awareness for these candidates. that comes naturally on both sides. that's good for the country. david: we should be engaged. thank you very much for being with us today. morgan stanley is bullish on the market. the bank says keep the faith and the morning meeting is next on "bloomberg go." ♪
david: welcome back, it's time for the morning meeting. morgan stanley cross asset strategist joins us now. slowdown in emerging markets lead to an asian crisis shock? >> thank you, we don't think so. for couple of reasons. primarily, it's because we think data in china is already starting to stabilize and will continue in the fourth quarter. we have seen some nice m-2 growth and encouraging bottoming in car sales in the property market is looking somewhat that are even before the most recent rate cut out of china. in our view, that will improve some of the sentiment aroundem dragging dm into recession. david: when will that show up in the market? >> i think we are already starting to see it come through in the growth data.
there is still a lot of skepticism in the market that you will see any real stabilization in china or theem growth backdrop. that is still a story that is further to play out as you move through the fourth quarter. skepticism around the idea is high for good reason. em has been a challenging place since late 2011. david: looking at the outcome of what particular assets do you look to -- do you look to own? >> i think there are couple of places where looking at the look attractive. something like the mexican peso which was sold heavily in the most recent bout of volatility is something people could use as a portfolio hedge despite the fact that mexico has better fundamentals across the e universe. mevaluation of the mexican peso becomes asked ream and the exchange rate is back down to levels we've really only sought in 2008-2009.
cheapething fundamentally in our view and is reasonable fundamentals and could rebound as some of the sentiment shifts to margin. with think the peso looks attractive. we also like u.s. high yield as something we think prices in an excessive risk of u.s. recession. it has been unduly sold on fears the credit cycle is turning and could get some relief if you start to see more stability in dollar and the oil prices. david: thank you very much. come, we: still to will speak with the cofounder of kls. they've got $3 billion. they know what they are doing. ♪
erik schatzker is in vegas. but guess who joins us now? brendan greeley. that why am here? because he is in vegas? stephanie: no, no. we want you to be here. is the: also here legendary -- of kls, jeffrey crown thought -- jeff kronthal. time you joined us we were in vegas. we were not in vegas together. david: too much information. brendan: vonnie quinn? vonnie: the house could vote as soon as tomorrow on a landmark legend -- landmark budget plan. raise the debt ceiling
deadline. it would ask band standing -- spending for the next two years. john boehner will need democrats to push it through. rescuers today are trying to reach survivors from the earthquake. the death toll is more than 300 so far. rescuers fear more people are dead in regions of afghanistan and pakistan. donald trump is revealing a book he hasthe website says written more than a dozen books. the gop's will debate again tomorrow night. matt: let me tell you that we are getting the s&p case schiller numbers out for homes. we see an increase of 5.09% in the month of august. it is backward looking data. on,re going to have later
robert shiller. he will talk about this. we are getting a slew of earnings out today. one of them is coach, the maker shoes, $0.41.d its competitors are doing so well. cummins, the maker of the diesel engines, they missed estimates and it forecast revenue going out down 2% where it had looked for increase of up to 4%. it is cutting its forecast. cummins,ke a look at the ticker is cmi. you can see where it cut jobs in
the past. every little circle here indicates job cuts. another circle here because they are looking to cut another 2000 jobs due to the decrease outlook -- the decrease outlook. that really is your favorite terminal function. you are a merchant of two. portfolio -- i have a number of other -- we are moving on to the five stories that matter. one, the u.s. is planning to raise cash and it will sell about 8% of its strategic petroleum reserve. 2025.l end on can we not legislate anymore? it feels like an accounting trick. the reason we happened is
because if we get to a war, they are worried that we won't have enough energy. but now the world is sufficient. it makes sense. jeffrey: it is such a small part of what we produce on a daily basis. oil priceske with where they are, it is not clear that we should be selling them here. wire reselling them now? brendan: i wonder about that too. if it makes sense, sure. let's have a separate strategic petroleum reserve where we figure out what you want to do with it. this is one of those things that gets stuffed into what is not even an omnibus bill. it helps us stagger forward to years.
they needed to sweeten the deal for republicans so they weren't increasing the deficit. they are increasing the deficit. ford.eaking of gasoline, a came up short in the third quarter. they posted earnings that missed estimates. the pickup line had its best third quarter in years. that was offset by higher taxes. that is the whole story from forward -- from ford. had warned analysts said they were going to have a tax increase, it was a little bit better than what they had warned. that is way earnings came in at $.56 per share. stephanie is falling asleep
right now. [laughter] to the chiefking they are officer, but saying it is purely the tax. ofid: if this is a matter 32%-30 3%, that has nothing to do with his this. the question is, are they selling trucks or cars? stephanie: if ford f1 50's picked me up when i called for a uber i would care a lot more. [laughter] a man picked me up on a snow day in a rapture last year. my father is still driving his 1995 ford f 150. stephanie: what color is it? brendan: green. comcast is also
reporting earnings this morning, profit fell in line with analyst estimates and the company only lost 3000 cable subscribers. the best showing in nine years. worlds and jurassic helped push up sales in the film division. shares are trading up in the premarket. this may or may not be a name talk aboutt let's analyst estimates and being in line with them. from your perspective, how much does that matter? we love to joke that it is just a game. fundamental investing, do you look at those numbers? jeffrey: there is a short term versus the long term. you want to see major shifts in expectations for things like subscribers, i think whether it is cable or others, there is a
fundamental value to a lot of the cable companies. there is a lot of value there. so we think as long as he aren't getting hit too hard, we think the analyst overlook the short-term movements and focus on the long-term values. brendan: you won't often hear me say nice things about comcast, but i think they are doing something smart, introducing a wireless calling service that will allow you to jump from comcast hotspot to comcast hotspot. it turns out they have a network of wi-fi everywhere. they are exercising an option that they have and it is a smart move. it is a creeping cell phone service. the fourth story is in the cable area.
bc partners are buying a 30% stake in cablevision for about $1 billion. this is something that i know you know about, debt. how you finance it. this is a large transaction and when it came out, there was a question about how much they could borrow in the market. how does this strike you? jeffrey: i think the debt markets have expanded dramatically at the amount of capital that is available there for companies at the right level . they did pay a pretty significant price. came on the market, it moved the whole sector of telecom. it widened it dramatically. the timing wasn't great. multiple m&a transactions.
but the market does have the ability to fund most things that are fair priced. stephanie: really? it seems like the last few weeks there have been companies that have come to market at 6% have backed up beyond 10%. -- isf them have tried to it really easy to get a deal done today? jeffrey: no, it's not easy but the capital is there. when we were sitting together in -- vegas stephanie: sitting, sitting. jeffrey: we talked about the fact that high-yield markets are too aggressive. i would say that today they are gotten to cheap. there are still liquidity issues around apf. but now you have things like all
and otheraltice companies. when they need capital, they can get it, but it is at a price. brendan: i am fascinated with the story with the amount of french capital moving into the american cable market. it has been difficult for operators to own in different markets because you don't have -- there is much more competition. it is an interesting move for them to come over here. malone has done at the other way, rupert murdoch done at the other way. the u.s. natural gas traded just below two dollars this morning. that is the first time since april 2012. what is causing prices to fall? warm weather and high demand. but there is also a -- an
increased supply. i think we have seen technology and other things move the energy complex dramatically lower. demand is reasonable. but it is a supply story. gas, a have both natural lot of geopolitics that are affecting oil supply, so it is all oversupply. brendan: as the price remains low, we will see the demand profile change. we will see more natural gas from power plants. that will change the profile. yes, with natural gas. you don't have the same arc as oil. natural gas is much more of a front market. you are dealing with the supply and demand of today.
previously forecast. we command oversees is hurting the u.s. company. a dramatic drop today in the cost of natural gas. it traded under two dollars for the first time in years. natural gas inventories are nearing record labels -- record levels. that is the latest business/. -- latest business flash. i'm sorry, i stepped on you a little bit. bristol-myers squibb is coming out with better than expected earnings. revenue was also better than estimated at $4.1 billion. you can see this moving higher in the premarket. pfizer also beat estimates. it also raised the full-year estimate. there says they are
splitting the company. the shares are moving up 3%. there is value in it and it needs to be unlocked. is coming out with a big myths. million diners. it has a miss on earnings and revenue. alibaba, speaking of online retailers, is going the other direction. china's economic slowdown. we will talk about that more when we come back on "bloomberg ." ♪
from mobile devices almost tripled. this news is reassuring investors as shares are up almost 8% in premarket. it is heading for the best month since it went public last year. let's bring in paul sweeney, joining us from princeton. nice sweater, first of all. paul: thank you. stephanie: this is huge. paul: it is. this is the first solid beat since the ipo. when you are trading at this valuation, and we see it with these egg companies, you have to beat numbers. this is a good set of numbers in the face of the chinese economy. that has been worrying investors. what are we looking out for their transition to mobile? that had been a concerned the last time we looked at earnings. mobile is probably the
number one issue that investors look at across the board, whether it is google or facebook or whatever. at alibaba, they are mobile revenue has tripled. but with a look at is the percentage of revenue from mobile and that was 62%. that shows good growth. of reference, facebook is a high number out there with close to 80%. so when we think about chinese e-commerce, the growth comes from mobile broadband. so it is incumbent upon alibaba to show that they can make money off of a growing global user base. hear these positive numbers, i wonder whether the chinese economy really could be in bad bad of shape? some people are saying it is in not as bad of shape. paul: you have to look at -- jeffrey: you have to look at
china. it was aill tell you, you what the consumer is doing. something thatee gives a sense that the consumer is spending money. that will offset some of the sites of the manufacturing industry. we think china is probably ok. they have room to do lots of things with reserve requirements, it is a slow-moving process but they are probably ok. question, there was something that sack out of me further down in the numbers and that is that they are still selling only a percent outside of china, that is lower than last year. can they move out of that market? paul: the international growth -- the cofounder of alibaba, jack ma, eventually says they want 50% of their growth to come
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david: welcome back to "bloomberg ," jeff kronthal is still here with us. we have talked a lot about liquidity. there has been a report under the new york fed about where they have taken a look at treasuries and they have said that there isn't a liquidity issue. is there a problem or isn't there? jeffrey: i think there is a problem. i think that what you really see is the fact that the actual volumes in the market are fine. i think the question is, what is the depth of the market? that is where the issue is. is ability to liquidate
becoming much more problematic. etf,anie: that takes us to they are so massive and the amount of underlying is massive is thedebt -- if debt issue, what is going to matter when liquidity is really tested? jeffrey: you will see gaps. we have seen them before and we will see them again. you start to see gaps in the market. you have seen some of it when seeny hits, and you have some of it historically when the retail consumer and investor gets worried about fed moves. brendan: what is the solution? do we need a structural change? need a: yes, i think you structural change in the way debt is traded. you are seeing some of us.
we do have more electronic trading. but in the end, you have taken what i would say is more capital out of the market. and if anything, you should get concerned with the high-yield market but also bond markets where credit is coming out of a non-dollar sovereign market. do we need market makers to get back into this business? i certainly think it would be helpful but it is not going to happen. regulators are not going to change. david: banks are not going to do it. it's not clear to me that you would have capital that has enough information -- certainly you see hedge funds and other managers who will step into and take advantage of those liquidity gaps but they certainly aren't there to take the position every day. whenanie: six months ago
we talked, you said quantitative central bank intervention has distorted the market. fast forward, the only thing we have got is more. where do you stand more -- stand now? jeffrey: you do see, to some degree, distortions in the market. the market at times likes qe. we just saw it. japan is now talking about more qe. china is in the midst of easing and all of the markets to get happening -- get happy again. --hink the couple of things it will change the way that you have to think about the diversity portfolio. concentrated risks are hard. if you think the depth of the market is a problem, you can't be too concentrated. was --ceptual framework where you should be.
what if you think about that, for large managers, i don't know that you could do that anymore. this pointfind interesting, that you are trading differently. often we hear people talk, worried about liquidity and i worry -- i suspect it is a way to start changing the capital requirements. but if you are putting your money where your mouth is, it is a more compelling argument. jeffrey: yes, i think you have to be more diversified than where you were before. it is more important to understand who is in the trade with the -- with you. in an investment oftor where the maturity players are people like you, you have to be worried. they would liquidate with you. look at what has happened in some of the stocks lately, like valiant. say you talk about qe
leading to distortions in the market. let's play that out a little bit. does that mean the capital is being miss allocated? on people spending money things they shouldn't be spending on? how does that play out in the real world? jeffrey: it has taken volatility out of the market so it has made people more confident than ever to take more of a risk because they think the central banks will be there to protect them from the downside. canthat is something that create bubbles and problems. stephanie: you mentioned valiant , are you invested in valiant? jeffrey: no. stephanie: when we looked the way hedge funds are invested you are a hedge fund but you should invest differently than your peers? jeffrey: well, i think you always have to ask yourself about the technicals in the market.
you are in a that security or a sector where the dynamics can move at the same time with you, you do want to be careful. me understand, where do you invest? what is your strategy right now that is different from your peers? jeffrey: we generally have the ability to move capital around to different sectors. so we try to take advantage of the technicals so that when you , like at the up same time frontier bought from verizon, you want to take advantage of the liquidity gap. you have to be very careful about your positioning and take advantage of these liquidity gaps as a way to create value. stephanie: turning everyone to traders and not investors. brendan: i want to go back.
let's take the united states, what should the rate of interest be right now? to give us an idea of how bad the distortion is? jeffrey: i think that would you have done is you created a lower isatility, the question whether the risk premium is right. the market has now started to a debt to some of adaptthings -- started to to some of these things. that is that the economies of the world are very correlated and relatively slow. is not right, by how much is it not right? therey: i might argue that curve is too steep. not the other way around. curvethe front end of the
where you have set the volatility. so one might argue that actually cheap year is reasonably versus the front end of the curve. and the front end of the curb is where the distortion is. stephanie: you run separate accounts. offer clientso liquid opportunities. how do you do that in this environment? well, again, i think of aave to -- you are more trading shop then an investment shop. that is part of the different style. you will take advantage of the acquitted tea in the market when it is there. you have to take advantage of gaps in market and be able to move capital relatively quickly and not be concentrated. wephanie: just to clarify, have many people here who tell
as long-term investing is the way to go. and you are telling us the opposite, because you need to be a trading shop? because of the lack of liquidity in the markets and the cost of liquidity, you had to advantage of liquidity when it is there. take advantage when securities get liquid, you need to take advantage of those apps. investments and fixed income are not necessarily duringsy to get out of various market environments. so when liquidity is there, take advantage of it. inphanie: welcome to trading 2015. let's look at where stocks have opened for trading. matt, markets have been open for about eight minutes. take a look at the index here. down across the board. we have a mixed trade at the
open. we are settling lower and lower into the session. s&p 500 is down nine points. dow jones is down 70. take a look at my terminal. this breaks down the industrial segments of the s&p 500, and you can see that almost everything is trading in the red. the only thing in the green is health care. if you click into that you can see that it is really pfizer that is holding up the one industry sector that is a winner right now. , want to look at commodities or one commodity that rocked the world this morning. natural gas. right now, it is that $2.06. the lowest below point since april 2012. we are having unseasonably warm weather. the movers are
concerned, on earnings, forward d. trading down -- for it is trading down. 14.2 billion dollars was what they had posted, and alibaba has revenue up 30%. the shares month to date are up also about 30%. than 30%.even more they have had the best month on record. and now i want to head over to the nasdaq. abigail doolittle is taking a look at two of the biggest movers. abigail: it is an exciting morning here at the nasdaq. first day of trading for t-mobile. otherwise, somewhat muted trading. stocks andthose
picking up on the alibaba theme, yahoo!, the shares are up nicely. -- doors do valley that value that. considering the fact that china has been week, this is a relief. yahoo! is now on pace for the best month since september 2013. those shares are up more than 4% right now. earnings, eps was up 140% year over year. revenue is up 10% year over year. a strong performance there. that does show in the stock chart. is the longest win streak ever for them. when we compare to the composite
jpmorgan is challenging apple pay. the bank will offer a mobile payment called chase pay next year. it lets users claim rewards points. and some outside the box thinking at rei. the chain will close on black friday. they are launching a campaign urging people to spend time outside. that is the latest bloomberg business flash. a portfolio run by david einhorn lost --, that is the third straight quarter of losses. that is a thing that happens in investment. taking greeneen lights premier and and and putting them to use. this is a conjugated story but it is a very important one. we have with us sonali basak.
so we have traditional major reinsert hours -- reinsurers. then you have a whole different class of people. there are a lot of money managers entering the space now. you have returns that aren't correlated with the market because it is volatile area it is related to weather. so we have third point entering and what is happening is that you have third point that is taking massive losses. so third point as well as green light. so they have a completely different investment strategy? you can also take private equity bets if you wanted to, it is very different from the traditional treasury bets. stephanie: what's your take on this? jeffrey: i think that is right. i think whether it is warren
buffett, but now you are taking it to the next degree. you have concentrated portfolios and equity and all of a sudden you have a lot more volatility and a lot more capital changes. brendan: all the capital chases insurance is -- for all of the people holding lower risk insurance portfolios. there are two different ways to think about risk. if you think about it like an insurer, it is on the road. you take in premiums, look at the possibility of a hurricane, and you think up to five years. as an investor, you have a different way of thinking about gains. so you can have a mix of these two strategies. sonali: einhorn took losses on the investment portfolio and the reinvestment portfolio. $1 billion to reinvest and now if your
insurance business is also not doing that well, then that is less money. it was supposed to be permanent capital. brendan: matt, you have something? looking at something that was caused by hurricane patricia. and it is not doing well right now. there is concern that mexican bonds may have to pay off if hurricane patricia goes below 920 millibars in the atmosphere. i don't know very much about this, but fortunately we have someone on site who does. there is also now more ways to invest. -- can invest in one of the that is trading publicly. there are traditional
-- who are getting out because the premiums have gone down so far that the returns aren't enough to cover the weather-related losses. stephanie: how hard is it to get out? to reverse and get out, can they? have insurance contracts. i don't know what it would take to get out of those. [laughter] yeah, this is not the type of investment that they are used to. always the was theory, there was always a long-term amount of capital they could invest. it reminds me a little bit of the banks, because they take deposits and then they go through trading and take on higher risk things. a little bit of that, the risky behavior. sonali: speaking of berkshire, they made a lot of money on insurance and they are now making a big focus on industrial. peakedie: maybe it has
because warren buffett went so big for so long and exaggerated it and overextended it. so maybe the failures of the problems in that market are because of what warren buffett did that. sonali: there is another interesting millionaire, john l can, because he believes the money can last him a long way. [laughter] brendan: we will see what happens when there is a natural catastrophe. david: we will hope that doesn't happen. thank you very much sonali bostic. next, we will take a look at our favorite moments through the day. ♪
david: welcome back to "bloomberg ." we will take a look now at some of the highlights. >> and new media has become the , how everyone will be transacting and doing their work. so you basically created a real-time business for traders and people on wall street. that is what is now being developed in the sports and entertainment industry. you will see streaming over the top, it is a great time to be in sports. sports that didn't get the oxygen because they didn't get the shelf space. battles andeat challenges going on all of the world that are being open to people or the first time through the diverse -- of media. facebook, the way
they handle it? ors isn't an opinion of one two, they are running at a massive scale and yes, it is working. that is why they have what they have, the best advertising product in the world. cook, but they have stopped innovating new products. the fact that -- is surprising to me. stephanie: now we will have final thoughts with jeff kronthal. we have to ask you, the hedge fund industry, is it going to fundamentally change? there is $2.9 trillion allocated to hedge funds. after a brutal october and a terrible third quarter, what is going to happen? i think we are starting to see the industry shrink to some degree and it is not necessarily outflows, there is just so much capital in the world. but it is a problem in returns. so you are seeing a lot more
volatility in returns and you are continuously seeing people struggle to create value in that space. so do i think the industry will shrink, yes. i think the number of players will shrink. i think the amount of capital is probably not going to change to medically. but the number of players will. stephanie: thank you so much. jeff kronthal. that does it for all of us on tomorrow, weo>," talked to the target ceo. thank you for watching. we will you at 7:00. ♪ buddy- nice place, nice car what happened?
from bloomberg world headquarters in new york, i am betty liu. here is what we are watching right now. shares of alibaba are searching the most in five months. the company has to find a slowdown in china's economy. shares have climbed by over 30%. closeors are playing attention to the sales of the new iphone, they will get a preview of what to expect. and behind-the-scenes drama has led to a budget deal in washington last night. a lot happening this morning. we also have breaking news out of moments ago on how american consumers are feeling. i want to head to the markets desk where julie hyman has more. julie: we're