tv Bloomberg Markets Bloomberg November 18, 2015 10:00am-11:31am EST
good morning. i'm betty liu. here is what we're watching at this hour. targeting a terrorist, police raid a paris suburb in the hunt for the organizer of last week's attack. meanwhile, some politicians want to close the policy -- a closed-door policy. a closer look at what is the for those coming to the country. and pricing the ipo after the bell. place in thefind a exclusive unicorn club? a blow to black rock, the world's largest act -- asset manager, losses and redemption.
we are a half-hour to the trading day. julie hyman has the latest. we are seeing stocks up about a half percent here if you look at the s&p 500. other averages rising about the same amount. optimism going into the minutes. if anyone is looking for more direction from the minutes, that might be wishful thinking. one thing driving the gains is energy. energy is the best performing here as we get out the gate. only telecom stocks are lower but very slightly now. energy has been volatile. we have got oil prices on the rise. the american petroleum institute according to someone familiar says it survey showed we saw oil inventory fall last week.
in about anumbers half-hour and we will see if that held true. oil is higher for the moment by about 1%. betty: it is a busy deal day. >> and a lot of it has to with 70 -- semiconductors. is $20 per share in cash. was firste deal reported earlier in october, a 41% premium to where the stock closed. down significantly by 7%. also intensifying the bidding war, skywards has an existing bed. micro has increased its bid per share.
raising the cash portion of its bid. shares are little bit down. we have talked about this a lot that it has been a busy time. the green lines are the number of deals. the announced deals have been 91 billion dollars. it is not just limited to semiconductors. canadian pacific has made a bid but it is not getting details. it has come out and said that it .s too low looks like there will be negotiating here potentially. betty: it sounds like it.
thank you. now vonnie quinn has the latest headlines. vonnie: we start with paris. the fate of the man suspected of planning the attacks in paris is not known. seven suspects were arrested but officials are not saying if ab doll is among them. two were killed. a broad coalition is needed to stop the militants. cameronprime minister the britain needs to target head of the snake and bomb the targets at the syrian base. bywants to hold a vote christmas. islamic state leaders are .leeing the group in syria
france and russia have stepped up their airstrikes in the city, which has become these linux k's de facto capital. onboard twoof bombs flights. both were diverted after anonymous threats. one is now on its way to france. the other flight from washington landed on the east coast. bonds that killed at least 32 people in nigeria. 80 people were wounded and 20,000 people have died in uprising from militants. that is a look at the news now. and other breaking stories at bloomberg.com. much. thank you so
staying on the islamic state and a fight against the terrorists, more on the arrests in connection to the deadly terror attacks just mentioned. brendan greeley is there live with the latest. brendan, tell us first the latest play after these arrests. brendan: we do not know whether abaaoud washamid arrested. if you press conference this morning right after the raid, saying we are at war, foreign and domestic. they see this as a war at home as well. the interior minister also went on tv and said there will be more rates but this is not the end of it and 118 people are now
under house arrest in addition to the seven detained for questioning. it is still a state of emergency in france and very much something the administration considers a war. he: -- betty: tell us about the area and where the raids took place. brendan: it is a suburb within walking distance of the stadium where the suicide -- where the suicide bombing took place on friday. it is 23% of the people who live here born outside the eu, very much mixed, north african and sub-saharan african. the crime rate here is 50% more than the average city. it is not a desperately poor place, not 400% more.
i spoke with several residents who said they were surprised to see this and they do not expect it. one told me early this morning that this was a tough place but he did not see this coming. i spoke with several residents who said the youth have an uneasy relationship with police not likely to get any better anytime soon. this is not in the sense we think of it as high rises and nothing else. betty: before we go, you mentioned resident france while ollanta --nce president francois hollande. mean for this president hollande? brendan: we should be a little single -- cynical about what is going on. he was monitoring all night what
happened here. he has elections coming up in december. part of what he is doing is to show himself to be a wartime president abroad and at home. i think we will get a better sense. 83 percentttacks, said they would trade for greater security. --gives you a sense of might of what might change. asked parliament for a new state of emergency that would require that the constitution be changed. inre are great changes ahead the french society and i believe the country has been changed permanently. betty: thank you for your reporting. much more is ahead in the next half hour of bloomberg
television. carmakersl.a. where are unveiling the latest in design and technology. the first look at the redesigned lincoln. and it is a big week for ipos. will investors pay a premium for square and match? both are listing. plus, bloomberg politics takes a deep dive into the vetting process of accepting refugees into the u.s. ♪
, it will include brands like and pfm, chef boyardee, chang's. there will be more consolidation in the semiconductor industry. by fairchild the price tag is $2.4 billion in cash. the deal creates a leader in the power semiconductor market, a , abined revenue combined revenue of $5 billion. lowe's followed its larger rival of home depot. sales beat estimates in the second largest home improvement retailer. it kept shoppers buying do-it-yourself products to spruce up their homes. you can always get more business news at bloomberg.com. per the l.a.gines auto show is under way and with it, the 2016 season. ford is turning his head light
on the lincoln which looks to boost the lagging brand. a first on bloomberg and of course, no car conversation would be complete without the car guru matt miller joining in as well. let's start with the rollout. it is no secret that sales have -- it isd there is troubling to see how ford is not able to get the log -- the luxury market paired what will be different? >> the mkv is an important product for us and an important segment in the luxury industry. sales have been doing quite well. 2014 was a great year for us. luxury industry grew about 7%. lincoln grew 14% or we outpaced
the industry to-one. ups year, our sales are 7.5%. it is an important product for us. the portfolio is doing quite well. matt: the sales growth has mostly been due to the navigator. declined about 13% for sedan. obviously, this new look should stem the decline. wheelu need to add real -- rearwheel platform. >> i knew you're going to ask that. cars toesigning our meet our customer's needs. wetever the needs are, observe those carefully and then design the platforms or the technology or the features to deliver those needs. if certain cars in certain --ments require the rearview
rear wheel drive, we will look at that. matt: you sold 100,000 of your lincoln's two years ago. by 2020.cell 300,000 the secret is in china. that is where the brand is a huge hit at much stronger than most americans can appreciate. i you designing cars specifically for the market? >> we are taking input from all markets. the china market has some unique is but for the most part, the cars are fundamentally the same. customers like different fabrics and interiors. we take it all into account in the design process. china is very important to us. 20 stores open in china and plan to open a new store in china every 10 days here.
betty: i want to go back to the rear wheel drive transmission and why you have not come out with that. if as matt rightly says, that is a key part of eating in the luxury market, why have you not decided to roll out a version of that? >> we are looking at the entire design philosophy differently. what kind of experience to we want the customers to have as they drive the vehicles? you understand what is important to them in the rearwheel drive does a couple of things. it is unique for certain driving dynamics and to provide certain kinds of proportions to the vehicle. as we study those needs, if necessary, we will do it but for now, with our great suv coverage and portfolio, and the continental con -- coming, we
feel we have the right products for the target customers. betty: i am told the plan in is pre-much running at capacity and you cannot produce any more now. are you going to be taking that out of the plan to manufacture it somewhere else? >> are correct our kentucky plan, where we build a lincoln, is running at full capacity, which is fantastic for us. we regularly manage how to use our capacity most optimally. we have now made no decision on input change for either one of these vehicles. matt: we were all excited to see the new continental. i cannot wait to get behind the wheel and drive it. but the suv has really in leading your growth. are we going to have an all new link -- all new lincoln navigator?
it could be taking a lot more of that market. >> absolutely we're working on the entire product portfolio. stay tuned. more new products are coming have announced two new incremental products by the end of the decade. a lot of great products are coming to our portfolio. betty: thank you so much, joining us from the l.a. auto show. matt, thank you as well. much more is ahead coming up from the l.a. auto show. the north american ceo will be joining us at 12:30 p.m. eastern time only on bloomberg television. ♪
betty: julie hyman has a check on the big-company movers. julie: apple is what we're talking about this morning. over goldman sachs, an interesting call on the company. -- a pricehe stock of 160 dollars -- shares are moving up by 3% this morning. thesays it is time for thinking about apple to shift from being a hardware company to a services company, sparked by apple's new efforts to provide an installment plan. she says eventually, it will migrate people to tv services and other types of services and maybe a bundle will also include its mood -- it's music service, for example. services now are a small proportion of the company's revenue. it is this yellow bar as opposed to iphones, by far the company's biggest revenue. services are less than 10% of the revenue. this would represent quite a big
shift. look at you take a revenue here, saying right now, if you did interpret the company's model and say, ok, it is already services, the revenue per user would be $42 and she says this could climb as high as $153, potentially, which would mean a huge increase in revenue for the company. you.: thank match group, the company behind online dating sites including match.com, tinder, okcupid, as they're pricing their ipos after the bell. a rocky year as you know for the ipo market. do these companies have what it takes to turn around the sentiment? .oining me is emily chang much has been made about the evaluation, particularly square. emily: it is interesting. apple andnies like
google, we talked to an analyst yesterday who said, this is not a tech company, but a payments company. paypal.looking at those are square competitors. something else raised recently is if you look at the fully diluted shares, the valuation public and private really are not drastically different. it gives square evaluation closer to $5.7 billion. we know if they were looking at a $6 billion valuation in the private markets -- i sat down with reid hoffman yesterday, the cofounder of linkedin, venture capitalist, and i asked him about the difference we're seeing between private and public market valuation. is there a bubble and what is he saying? take a listen. >> what happens is, and this is why i think there is a quasi-bubble, public -- public see othereople can people buying and selling and things, and they can kind of stabilize. private tents to be the player
that puts the biggest check forward. it is easy to get an evaluation because someone jumps in at a higher valuation, believes the upward trajectory of the market, but that does not actually affect things like the internet bubble did, pension funds and everything else, because it is a very focused and small position. it is not a general public markets position. see more of them because i think people are trying to figure out, what are ,he next airbnb's, uber's they're trying to figure it out. it matters to them economically. you guess wrong. betty: i think it is interesting because square was valued on a tech basis privately so we can get more money, and now it is like, no, we're just a payments company. emily: i think square is strong. $24,000 valuation.
and i said, do you worry and they said no, no they don't. it is very subjective but i think the point is public to private valuations are not necessarily apples to apples. betty: no, they're not. you have got a lot more ahead. emily: yes, a quirky guy and a oft talker on the board tesla and spacex. very close to elon musk, who i know you know very well, but a fascinating guy. the world's's largest private space collection. thinking a lot about artificial intelligence and health driving cars. right, thank you ♪. we will be back. ♪ ♪
expecting to cross at any moment, as we have seen a last several weeks. the stockpile has continued to grow and that puts pressure on oil prices. i want to head to julie hyman. we see again that commodities that than hit today. julie: yes, once again, oil prices have been volatile at the very least. we have these numbers coming out now. a built like there is in inventories. much smaller than estimated. .50,000 barrels this would appear to be good news for oil trading today. gasoline inventories up one .0 one million barrels, where a drawdown was expected. news.le bit of split down 790 thousand barrels. that is about twice the drawdown estimated. you little bit of a mixed picture on the refined products
but overall, we are seeing them build much smaller than had been estimated. inhas been a rough month oil terms of anyone bullish on it. we have only seen the price of oil rise for about four days, four sessions the entire month. there has been a negative tone to oil trading. if you look at what is going on with oil, we are seeing a little bit of a leg down in oil prices on the back of these numbers but still positive by about .9%. you tend to see some volatility in the oil prices as traders try to figure out what to make of the numbers. betty: thank you. we will keep an eye on how the oil rises trade throughout on the inventory numbers to i want to continue with the bloomberg first alert news is money. money and has more from the news desk. theie: president obama says attack on the russian jetliner in egypt may change russia's is roach to be islamic state.
together to destroy islamic terrorists. the u.s. and allies complained russia's focus in syria has in protecting aside. president obama says the u.s. will wait to see if russia devotes more airstrikes. nigerians insurgents are the world's's deadliest insurgents group. deaths attributed to boko haram have increased 6644. that compares to 6073 deaths blamed on islamic state, the group to which it is a elliott -- affiliated. the islamic state group says it killed a norwegian and a chinese hostage after demanding them for their delays two months ago. the deaths were really -- renounced in the latest issue of the group's english language magazine. it is not clear when or where the two were captured. a top senate democrat is joining republicans who requested plans
to resettle syrian refugees in the u.s. chuck schumer of new york says a poll in the resettlement plans may be needed. the house will vote on a republican plan to keep syrian refugees from coming to the u.s. we will have more on this issue very shortly. bold stepsbama says need to be taken to lower tensions in the south china's the. backing these efforts to settle its territorial dispute with china. china claims more than 80% -- that claim is disputed by vietnam and other countries. that is a look at the first word news right now. can get more on these and other breaking stories 20 hours a day at the new bloomberg.com. i am vonnie quinn. at the news you desk. let's turn back to the syrian refugee crisis in the philippines today. president obama had strong words for the more than 30 governors who want to block syrian refugees from settling into the united states.
mr. obama: apparently, they are scared of widows and orphans coming into the united dates of america as part of our tradition of compassion. first, they were worried about the press being too tough on them during debates, now they're worried about three-year-old orphans. does not sound very tough to me. the safety concerns raised by lawmakers in both parties have created real problems for the president and the white house. that appears to be missing from the discussion are the details on the vetting process that refugees actually face if they want to settle here in the united states. phil mattingly has been on the phone with administration officials on this. give us a clear picture of what the process is for syrian refugee to settle in the united states. the process exists and it is very extensive and from a refugee program really started
in the 1970's, used in earnest with vietnamese refugees in the vietnam war ended as we did in 2007 with the iraq war and iraqi refugees or it the actual process that goes into a syrian refugee trying to resettle in the united states, worst, the agency sets and uses its security process before even referring it to the states. once referred, then they started screening process. first is biometric screening. fingerprints, retina scans. this is run primarily by the department of homeland security as well as the ei. and in person interview with the , the department of homeland security, and then you have a biographic review. crosschecked are between multiple agencies including the national counterterrorism center, fbi, department of defense, and department of homeland carry. at that point, the process could start resettlement. house hasthe white been trying to make and the frustration from administration officials is there is not only a
process that exists, but it is extensive. a lot of what is being tossed around right now is rhetoric ignoring the at that it is not easy to get over here to matter where you are only. betty: john halpern got to ask one of the presidential candidates, jeb bush, his stance on the refugees. i want you to listen to what he said. bush: we have systems in place. if there is any kind of concerned, we should not allow people in here and i do not think we should eliminate our support for refugees. it has been a noble tradition in our country. >> including muslim refugees? you do not want to ban them? mr. bush: i don't the answer is not to ban people from coming. the answer is to lead to resolve the problem in syria. that is the ultimate focus. betty: how big of a political issue will this be?
what you heard was a rather measured response to compare that to some of the candidates including ted cruz, rand paul, two senators who not only opposed resettlement entirely, but rand paul today's introducing a bill in the u.s. senate to cut off government assistance for refugees already in the country. can look atnd you what is going on in louisiana, a governor said -- governors race runoff, where an advertisement has already been put out saying obama let thousands of syrian , thises into the country is an issue politicians clearly identified holds well. people are scared. they are scared after paris and they have a lot of mistrust as to whether the government can run a vetting process that works. a key element officials keep allowng out, they would 10,000 to settle in the country. only 1800 have been let in. of that, only 2% are single
, the vast majority are the elderly and children. a little perspective should be added to this and unfortunately, when the politics get involved, sometimes that can be pushed aside. you for clarifying the issue for us in the u.s. tonight,ming note another republican presidential joins them to this time it is lindsey graham joining the conversation tonight beginning at 5:00 p.m. eastern time. ♪
let's head to europe where mark barton sees european stocks retreating after the strongest rally in six weeks. i look at the map behind you and .here is a lot of red mark: investors are awaiting the meetingof the latest from the fed. the chinese markets set the tone today after the president in china a knowledge downside risk to growing property data, underscored the slowdown. investors shying away from riskier as is today. that police raid in a paris deathswhich led to the of two extremists and seven arrests, that is prima setting the tone. -- pretty much setting the tone. the ditty -- the biggest decline 7.7rance, airbnb is down by percent. after the close yesterday, -- for $7.3y billion.
sharean called the $143 a expensive. have a look at glencore shares. before today, glencore shares had fallen for nine consecutive days. the losing run seemingly has come to an end, up by 5% shares, sunk by 70% this year. i want to show you shares. we were talking about china, interested in the world's biggest pesticide maker. now we have got monsanto with the close yesterday saying we are considering another bid for syngenta. sending shares higher. i want to show the euro rising against the dollar for the first time in four days. interesting to note from ubs, it says any further losses are set to be limited, even if the ecb and the fed act next month, the euro could go to parody but
within a year, probably will rise to one dollar. we shall see. betty: maybe parity is the bottom for the euro. thank you, mark barton in london . for a look at what is happening in the u.s. markets, abigail doolittle has the latest live from the nasdaq. we are coming off the highs of the session. abigail: stocks are still higher , up about .5%. one stock trading significantly higher is a semiconductor after -- said it would buy the company for two point $4 billion in cash. this represent a 12% premium to yesterday's close and it creates a leader. for them asrd year these companies come together to fight soaring prices and shrinking customers. a great three months for fairchild semiconductor. the shares are up about 37% over
that time. turn into a stock moving in the ther direction or down, company does see earnings coming in for fiscal year 16 higher than what was estimated. arecompany also said they 1000 jobs in spinning out the go to business. at least one analyst is positive on this and partners says the operating plan improved strategic focus and operational efficiencies. it slid through its 100 moving selling activity and is down 13% alone. betty: let's talk about another .tock moving, target the retailer moving a bigger than expected increase in profits. brian is speaking now in the company's earnings call about a slowdown in online sales. aps who covers retails for us
joins us for more. stock is down to what is going on? asked they are getting hammered the numbers looked all right. they met expectations and raised guidance a little bit. i think part of it was expectations were really high and the company has been positive. people were expecting target to blow it out of the water. when you dig down, growth markets work great -- want great. online sales growth was good. 20%. target was expecting more in the range of 30%. now people are starting to wonder, is there a strategy on course, is something happening where we see a slowdown? betty cohen the turnaround is not as deep as they thought it would be? >> potentially. we have seen other retailers say there growth has gone down as well.
10% online growth, that is really good. sales growth in the 1% range. and ifple wanted more you look a year ago at walmart, a 20% online growth and a year ago, 30% online growth. spending save you are all that money, the better see the returns. betty: amazon revealed their plan. everyone moving their plans up. black friday to this friday, not next friday. does any of this ode poorly for amazon? not evenmonday, i do know anymore. i'm not totally clear. analysts i talked to were not totally clear how much was happening because of amazon or if it is just shifting patterns for the consumer. it is hard to know at this point where they are going but amazon
is the dominant force and it is almost like they're one step ahead of everyone else. offert said they will online sales pace giving morning. amazon comes out that we will offer them even sooner. you know, walmart and target all pushing for today and three day shipping. amazon, same day, one hour. they are a step ahead. betty: that shopping is very important. is everyone across the board going to offer free shipping? >> target is and that brings a cost. walmart said you have to bring at least $50 to bring online shipping to your home or you can pick up at the store. .here is a cost equation they say they are not held by the same profit standards as target and walmart are and do not have the same overhead costs. a different cost calculation when you look at
amazon in their free shipping. betty: target already down 6%. thank you. is ahead on bloomberg markets. we look at what headwinds are downng black rock to shut the giant macro hedge fund. we learned that this morning. j's fes minutes -- the fed minutes in a few minutes. hoping to get clues on when the central bank plans to increase rates next month. plus, kicking off in a big way and l.a., jaguar is looking to really millennials with hot new cost. coming at a cheaper those stories and much more coming up on bloomberg television. ♪
look at some of the biggest business stories in the news right now. catch-up with starbucks when it comes to technology and service. duncan is testing an on the go ordering and delivery service in some u.s. cities. customers will be able to order ahead of time. they are also trying out the delivery service. barclays preparing to settle an investigation into currencies rigging. barclays is expected to pay at to new yorkillion banking regulator, it has to do with the bank of like -- the currency program. barclays paid $34 billion for a variety of regulators in the case. you can always get more business news at bloomberg.com. alternative investments are facing increasing headwinds. it will bennouncing closing its macro hedge fund, one of many who have done so this year. also a giant debt offering meant to find the purchase of veritas,
set to be on hold. bloomberg at fly columnist lisa abramowicz. the new fax commentary section on the boomer terminal. ok. i want to start with you because the news just broke. >> they have not been making much money for several years. you are not getting paid performance fees. it is hard to maintain the business and does not make a ton of business sense. down 9.4% this year. thenlost money in 2011 and made more than 4%. they were $4.6 billion under management a few years ago and now less than one. certainly quite a few there.
betty: there is a connection between the troubles and what you are seeing in the credit market, greater bifurcation between the haves and the have-nots, between the companies getting money from lenders and those just not seeing the banks , which aed just stuck promise to see come to fruition. funding with debts. they are now stuck there. why aren't investors buying this stuff? because they are being selected to you cannot as easily come up big linning seen that will get you that perfect performance. betty: explain what happened here. backvestors are pushing and saying this is a $5.5 billion deal. given the terms you offered us, we are not taking it to try again some other times.
basically, that is what you are seeing more and more. a lot more pushback from investors saying, unless we're seeing some protection, we come the faultnt where rate is increasing and we have an incredible borrowing binge for years and years on the heels of the red stimulus. the chicken will come home to roost and we will take the time to have an upper hand. frankly, we are seeing more people move away from the macro that and more to the security selection. >> certainly investors do not want the money locked up for a long time right now. they would rather be in more liquid stuff. >> everybody is going to the very liquid stuff. it is very difficult to come up with how it will all shake out.
interesting, they are closing down at a time when the fed is just about to raise interest rates. back to ainally get normal rate cycle. macro funds? >> they have been asking for this for so long. in spurts andg cannot handle it and are missing the opportunity. human money managers have had this year. >> i love that. it is just too boring out there and then it takes up and it is the wrong kind of on -- it will be a continued challenge. betty: will that change the outlook? >> you are talking about 25 basis points. this will not be a make it or break it.
the said, talking about pace of increases, but also, what are other central banks doing? ecb cutting to positive rates further into negative territory, it means rates effectively are not going up in the u.s. versus europe. what does that do from a borrowing standpoint? there are a lot of question marks. betty: thank you. much more is ahead in the next hour of bloomberg television. do not miss an interview with ceo of the london stock exchange at 11:30. ♪
betty: good morning, i'm betty liu, here is what we're watching it is our. the french president faust to annihilate the islamic state. a predawn raid, france targeting the second meter of the attack in paris. this be a liftoff to take off? today segment may highlight whether they plan to raise interest rates next month. , willndon stock exchange they try again? we will talk to the exchange's ceo. we are 90 minutes into the trading session and i want to head to the markets desk, where julie hyman has the latest on the markets. a few moments ago we saw that we were coming down off eyes. -- off the highs. julie: we are still holding onto the gains.
taking a look at where they are trading, off half of 1%. in terms of what's performing the best it is actually energy stocks, if you look at my bloomberg terminal, and materials as well. energy as a group, up better than 1%. nonetheless other than that it's a relatively broad-based rally. a look at oil prices, as we told you happen hour ago oil inventories have seen a smaller last week.ted build still seeing a little bit of volatility in the wake of that, but oil is holding on to gains. as we mentioned, this is only the fourth session this month that oil prices have risen. it is helping oil stocks as well. some of the individual movers we are watching include consol energy, notable because the coal miner's trading higher on those oil prices, even as we had an international decision to restrict subsidies for coal-fired power plants.
ensco and chevron, trading higher along with those oil prices. the fed is going to release those minutes, we are all watching and waiting. aree: ahead of that we hearing from members of the federal reserve, officials are speaking at a meeting today talking on a panel at the clearinghouse annual conference here in new york. the atlanta fed president, dennis lockhart, said he was uncomfortable moving off zero with condition on no market deterioration in the economic condition. this is notable because again it sort of emphasizes what we have our hearing already, as economics editor, michael mckee says, at this point it is a case of them needing to be convinced not to raise at the december meeting. if anything derails them. still being priced in is a chance that we will see a raise in the december meeting. it really has been bouncing above and below 70 and a tight
range ever since we got the jobs report. if you look at the treasury market as well, you are seeing the yields moving higher, which is one of the reasons we are seeing utilities and telecom stocks underperforming today. betty: thank you so much, julie hyman. let's check in on the bloomberg first world news from courtney donohoe. courtney: questions are main after a police assault aimed at finding the organizers of the attacks. two people were killed, including a woman who blew herself up with a suicide vest. the fate of the alleged leader is not known. it took place in the suburb of saint-denis. the french president says that war with the islamic state. he says he wants a large coral -- coalition to take on the group.
the islamic state says they have killed to captives after demanding ransom for their release for two months. the otherom norway, from china. no word on when they were captured. the terror group was also displaying pictures of what they said is the bomb that took down the russian jetliner in egypt. over 200 people were killed when the plane went down last month. a new front in the fight against islamic states. that's cyberspace. havemous says they accessed and taken down more than 5500 social media accounts associated with the militant group. the activist hackers declared war on the islamic state after friday's terror attacks. a look at our first world news right now. you can get more on this and other breaking stories 24 hours per day at the new bloomberg.com . i'm courtney donohoe. betty: thank you so much. we are just a few hours away from getting an inside look at
the federal reserve's outlook for monetary policy in those fed minutes. the expectation is that the fed is going to raise rates in december. are we ready? what exactly did they say? will dudley says that we are ready to raise rates. mr. dudley: this is probably the most well advertise, discussed, mused over prospect of the giving a normalization of monetary policies in history. i think that when we do begin it won't be a huge surprise. i'm not looking for a big reaction. who knows, right? i want to bring in a former fed governor who is now a professor at the university of chicago school of business. dudley, saying we are ghana do it. we had advertised that we are going to do it. why would the markets react violently to it? do you think he is right?
>> i'm hopeful that he's right. i think that this will be a bit like what happened a few years ago with the taper tantrum, when there was a suspicion that they would reduce the pace of increase, the markets became volatile, but then nothing happened. this is uncharted territory. betty: what has got you. -- doubting it? >> the challenge will be the communication around it. 25 basis points plus or minus a few months, the world cannot possibly rest on that. if the world collapses because of that, there is nothing the fed can do. what will really -- happen next? what is the path going forward? that will be the difficult communication challenge and where the opportunity for this comes in. betty: how high will they go, exactly.
fed minutes themselves, what will you be looking for parsing those minutes? they had two main criteria for liftoff off. one, the labor market is sustained with a sustainable recovery. i think we much everyone agrees that we are close enough to move. be reasonablyo confident that inflation can reach the 2% goal. that.of questions about charlie evans recently said that he thought that inflation was quite low, expectations have been moving down. there has been a lot of discussion and i will be interested to see how they talk about that in the minutes. we have had low rates for six or seven years now. opinion thate we've done all beef could? did we get everything we wanted out of qe? is the fed the only game in town? it's not. it is a necessary condition for economic growth to prevent you
played in doing that. but there are fiscal policy uncertainties, regulatory uncertainties, and obviously global uncertainties that can slow things down. but i think we are in a position where the fed can begin to move ahead. as long as it describes the path forward as a gentle one. dennis lockhart talked about the timing of this. you talked about the journey, the path, but dennis also talked about the timing. i want you to listen to what he said. before thet: breakout of heightened financial market volatility in august, i was ready to support lift off at the september meeting. but i supported the decision to hold off. i thought that the decision -- i thought that it was prudent to monitor global developments for a while. i also support the decision at the october meeting to keep the
policy rate unchanged. because not enough information, new information, had accumulated regarding the drivers of the august volatility. are you an agreement with dennis there? did we miss and away the timing? no, no, i don't think he said be missed the timing. there was uncertainty, a lot of volatility in the markets in the fed was not quite sure what the source of the volatility was. i think the fed is a very cautious institution. they decided that since they are not really sure, will plus or minus three months make an and or miss the economy? probably not, especially since we haven't seen inflation pressure yet. my point is -- are we any more sure than we were in september? they did say that they felt the fed missed the window when it felt like the economy was on stronger footing. mr. kroszner: as the most recent
employment report suggests, the economy is still on a reasonably strong footing. gangbusters? no. reasonable, solid, moderate growth? sure. should it be able to withstand the first step in a moment -- modernization process? i would think so. certainly we don't know that for sure, but i think that's reasonable and given the volatility in september if things had gotten more volatile, the fed would have gotten the blame and if they had had to move back, that would have hurt their credibility. giving a clear foundation for what they are going to do and talking about what's coming next helps to build the credibility. before we go, charting where the rates are headed, some economists said that we would probably see one rate rise for order for the next year. if you look at the dot plot, that chart shows you that by 2018 we will be near 4% in
interest rates. does that sound right to you? at least i think the way the fed is thinking about it now, that's probably a little bit aggressive. for quite some time they have said that even if the conditions get back to more normal conditions, they will probably be slow to raise rates, leave them below where they would be in the long run. also, if you look at where those intimate -- infamous plots are headed, the endpoint used to before and is moved down to three and a half and my guess is that when we get them at the next meeting we will see them even lower. i think the endpoint is probably going to be closer to 3, 3 and a half, and they get there in a very gentle way. betty: randy, always great to talk to you. universitygovernor, of chicago professor. much more coming up, two big toerviews you don't want miss. congressman frank pallone of new jersey, leading the charge
falling almost 5% in september. blackrock shutting down its hedge fund because of investor retention. down more than 9% this year from 2013, the assets had fallen 4.6 million dollars to under just a billion. blackrock is the world's largest asset manager. joining the ranks of other hedge funds. for the second year in a row upper fifth avenue is the most expensive place to leave retail space. up almost 4% this year to $3500 per square foot. higher than the world second priciest shopping district. that is causing problems in hong kong. can always get more business news at bloomberg.com. we want to head to the market desk, where julie hyman has a check on some of the company movers, what shoppers are buying, and certainly a look at apple products. right? julie: not only apple products,
but apple services. we tested a thesis from jankowski, who said it was time to stop inking of the company is a hardware company and think of it more as a services company. it offers a new installment plan with its newest iphone. 3%, she has a price target of $163 over the next 12 months. what is also interesting is that she said if apple starts to offer more and more services, say a tv subscription or a bundle that includes apple music, the revenue per user to $150 --$42 currently to $153, the maximum revenue it could reach under this revenue. that means that revenue could reach $553 billion. take a look at the bloomberg terminal for some perspective. withis the apple revenue $233 billion. analysts project over the next couple of years $268 billion.
far below $553 billion. she is seeing a lot of potential hilts into this stock -- built into this stock. i want to talk about some other technology shares as well. qualcomm is one of them. the trade commission is accusing the company of violating local competition laws in a way that licenses technologies to customers. they have fought a number of legal battles around the globe. this is the latest but it is obviously sparking concern among shareholders and traders. as you can see, shares are down 8%. this licensing of technology is the main way that qualcomm makes its revenue. looking at citrix, the company says they are set to cut 1000 jobs and spinning off their go to business. they have been under pressure from elliott management and there have been talk of them selling the go to business. there appears to be disappointment among analysts
who were disappointed that they could not sell go to and were instead spinning it off, slating for reorganization and restructuring of the company perhaps falling short of expectations. finally, go pro is down as well. piper jeffrey analyst aaron murphy is cutting the price target to the lowest on the street, $15, saying that there is further price pressure if you look at amazon and flash sale sites you are seeing, apparently, go pro products at discount. not necessarily a good sign. flag there, thank you so much, julie hyman at the markets desk. let's look at investing in developing markets. in a month hasly faded. martin gilbert, ceo and cofounder of aberdeen asset management joined stephanie ruhle this morning. one fourth of their billions in assets are invested in emerging markets.
it's been a tough two years. we have seen outflows from the fund or the last two years. we have seen sovereign wealth funds selling big-time equities. we have seen a couple of tough years for aberdeen. we have seen a slight change in sentiment, with quite a bit of interest from u.s. institutions in emerging markets. this is the first we have seen of that in two years. we haven't seen any retail interest yet, or even european interest, really. the institution stuck with the asset class and they are investing a bit more. certain winners and losers? i think you are long in india. what about china? >> we have nothing in china, mostly because of the corporate governance issues, but that didn't help, when the melt down in chinese equities came, we were hit across the board. we were probably too heavy in
malaysia on political issues, but india has been fantastic, mexico has been good. what we have actually seen as some big corporations taking a chance to buy subsidiaries. big hole in the sab miller tobacco company in brazil , taking over. we have seen that as a triumph. >> right now we are seeing hedge funds get hurt day in and day out. you have a larger structure than they do. in hedge fund investment. are you seeing money coming out of funds and being put into funds like yours? i wish we were. >> i just sold it right there for you. [laughter] >> the flow to separately managed accounts and allocators come primarily from the dealers side to the investment advisory side. not so much from the hedge fund university advisors. >> clearly it makes sense to be in the s&p during the bull market run, they are always
going to perform hedge funds. those are supposed to protect us on the downside. whether they do or not, obviously the long short is going to underperform like this. >> show us funds in the last quarter. right now i'm coming in from someone who just referred the themselves as the next macro master and he's crushing it. he may be but i think that when you tell you -- call yourself a master it's kind of the kiss of death. at hl ds, thisg is aberdeen here and we can see his holdings. ,hese are some of the changes right? they have done them in the last quarter? a reduction in energy holdings is probably very smart. a little bit of a reduction in financials. a big increase in i.t. holdings. i noticed that, by the way, similar to what we see if i look , i wonder whatre you are doing differently than,
say, black rock? if i pull up their chart, you don't see any changes in the energy holding. you see a bigger, massive reduction in their financials. the blackrock theme fund is being wound down. obviously they are not doing something right that you are doing differently. that we like in emerging markets are definitely consumer led. we like countries like india and mexico, especially ones that benefit from the lower energy prices. matt: strong holdings in yum! brands, pepsico, for example. and in india we like hdf see. we like the banks in india, the nonstate owned banks. india has really been a star performer for us, but it is quite expensive at the moment. we have been quite fortunate, or otherwise, getting to big
holdings taken over. the problem we have got is finding the investments to replace them. it is hard to find another sab miller or tobacco company in brazil. betty: again, that was the ceo of aberdeen with david westin and stephanie ruhle. we have much more coming up, including the ceo of the london stock exchange to will join us later in this hour. you are watching "bloomberg markets." ♪
viewers. for our viewers today. erik schatzker will be grilling some of them very shortly. and we will be hearing from the chief executive of gnocchi of as they look to complete a takeover . something has been troubling me since friday. you're awarding of the trophy, the battle of the charts trophy to joe on friday. betty, it's been troubling me. [laughter] 4 i know, -- betty: i know, you missed it, market, so we are bringing a back. back.: we are bringing it in about 20 minutes time look forward to it. i will be asking what's happening to japanese expectation. european close is next. ♪
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we are going to wrap up those trades over the next 30 minutes with martin. investors are counting down the seconds to those fed minutes. the european close starts right now. ♪ betty: we are going to take you from new york to london in the next half hour. things off on the markets, as you said, we are waiting for those fed minutes, mark? market: they are twiddling their thumbs after the release of those minutes. risk year after that predawn paris raid in a suburb of leading to the deaths of two extremists. don't forget that yesterday the stock 600 rose the most in six weeks,