tv Bloomberg Markets Americas Bloomberg October 17, 2016 12:00pm-3:31pm EDT
david: from bloomberg world headquarters in new york, we are on this hour. we are watching bank of america reports third quarter warnings over 7% on bond trading and cost cuts. u.s. factory production rises for a third time in four months. the industry is recovering from past weaknesses. vice chairerve stanley fisher will address the economic club of new york. first, capping the trading day, abigail joins us. >> it has been the same all day and we have had the u.s. averages, the dow, s&p 500, and nasdaq, little changed from friday's close. we have had a little fluctuation from green and red. investors are
treading water into the heart of earnings season. it does follow the first back-to-back weekly decline for all three major averages. the longest losing weekly straight for the nasdaq since the brexit. as for one market that has a clear directional move, oil. we have oil down on the day, down 1% of the second day in a row. iran is basically indicating they are unlikely to join and opec supply cut deal. has is a possibility that helped oil on the yield now. if we take a look at some of the e&p companies including southwest energy, and oil and gastas oil falls, national is also down -- national gast is also down. hit,e energy complex gets all these stocks are up more than 20% on a year.
southwest energy up more than 60% on a year as the company both cut spending and delivers its balance sheet. we don't take a look at it all that often. aluminum is down over the last two weeks. its worst daily decline in three months. this is the prospect as more lifts exportonesia bans to stoke supply. #btv, 4333,k at g it suggests that this weakness in aluminum may be short-lived. we see a strong downtrend but we also see aluminum bouncing off the bottom of this trend in a near term uptrend. there could be a little bit of bumping as a head but overall, it appears aluminum may recover. finally, one of the big aluminum companies, the most well-known alcoa on the week, down sharply.
this is the worst weekly performance in earning reports since 2009. their third quarter last week, disappointing. we have alcoa down in sympathy with that poor third-quarter report. to first wordget news. erik johnson is in our london newsroom. >> a new study shows donald trump's tax plan would provide a short-term boost to the economy before costing more than 690,000 jobs over a decade. the waldenomes from school of business at the university of pennsylvania where trump, himself, once attended. plan wouldnton's cost jobs in the short term before growing the economy over a 10 year. -- tenure period. are investigating the firebombing of a local republican party office. spray-painted a slogan referring to nazi republicans.
reclaimre trying to isis's longest held stronghold in iraq. the us-led coalition is helping -- iraqis with their strike airstrikes, and advisers. as germany and the u.s. are considering new economic sanctions over the attacks on aleppo, the sanctions would target the syrian and russian governments. secretary of state john kerry and his british counterpart boris johnson have all but ruled out a military response to end the siege. for hours a fight day, powered by 2600 journalists and analysts in more than 20 -- 120 countries. this is bloomberg. vonnie: this morning, bank of america reported earnings had beaten on the top and bottom
lines. revenues from the fixed income trading was better than expected. charles peabody, managing director, talked about what kinds of strong quarters there were. >> the beads on the revenue side, they came in with 21.6 billion revenues versus 21 expectations. of that, 500 million. most was related to fixed income trading. .hen, there was another that added four sense to the beat. there was a provision versus expectations and ability. that added a penny a share to the beat. people are wondering, can you keep your provision that low? vonnie: can they keep the provisions low if they actually start lending more? can they keep the revenue this high? >> on the provisions front, a normalized provision is close to 47 billion. they are going to have a huge
credit wind if a normalized credit. side, theck trading fixed income side, i am seeing stresses that are starting to spill over to the commodity market. >> that is really interesting because we have been talking about what has been driving the story. you had brexit and a lot of issues in terms of volume. then you had this. the cfo said it is hard to pinpoint but over time, we are definitely seeing a pickup in wallet share. that could be related to what is going on at deutsche bank. is the pie getting bigger or are they just getting a bigger chunk of the same pie? >> i think it is both. in the third quarter, the pie did get bigger. we had good trading volume. the u.s. banks definitely took share from the european banks. but if you look at j.p. morgan and bank of america, most of their beat was in fixed income.
little in equity. david: bank of america is waiting for a wage rise that will affect their business more than other major banks. if it goes up a quarter of a point, what affect will it have? say 100 basis point parallel shifts in rates will create seven and a half billion dollars in as net interest income. most of that is tied to the long end. not as much to the short end. into the weedsng but they just changed their about twoit took point 5 billion of that foreign a half billion out of the equation. we had a beneficiary but not as big of a beneficiary anymore. they are going for stability. indid you see some weakness currencies, do you see a pivot for bank of america towards m&a? >>rading and
typically, after this surge in fixed income, the next cycle is more of an equity and m&a cycle. if we look at the ipo market in september, that does bode well. that is bank of america's strength. it is more the equity than the fixed income. >> so fixed income trading is great. the big question, what are they actually investing in? where is it? they are investing in wealth management. every bank is trying to build up wealth management because it is low capital intensive and fairly annuities type of revenues. they have mobile banking platforms on the consumer side, they are investing in merrill lynch for the capital markets. that has been the problem at bank of america. they have not been able to invest so revenue has been coming down year after year after year. this quarter, you saw some surprises and that was the encouraging part.
vonnie: that was charles peabody. -- s dig deeply david: david: let me pull a thread that they brought up there. fixed income is the story emerging from all these reports thus far. is there a sense of how long that could continue? certainlyuld hope>>, goldman sachs would hope that this party would continue. we know so far is this in the third quarter continued in the first two weeks. is the rebound people have been waiting for. vonnie: is the central bank shifting around their holdings? why the boom in fixed income trading? >> hedge funds have been sitting on their hands for a long time and third quarter, with brexit and disparity in terms of their view on central banks with the elections coming up, it gave you a reason to look.
about the role of brian moynihan at this company, he announced the last volley to cut $5 billion in savings. he has been successful. i was talking to chris whalen and he said he was surprised he was still on the job. of that criticism is he getting? is amazing that john stumpf, a guy wells fargo shoulders and has done really well by his ceo and brian moynihan has suffered in terms of the show. it is amazing if he has kept his job. however, this quarter has finally shown that all the actions started to pay off in terms of this tougher machine. vonnie: also, he is not under investigation. that we know of. out, and morgan stanley
as well. are we seeing similar trends or are there winners and losers? >> i suspect the winners are all american banks. three out of five tanks are 30% plus with fixed income. if goldman and lawrence family don't, it will be a huge surprise. america's strategy has been to cut costs, what is goldman's strategy? to lastn strategy is longer than their rivals, which they have done with deutsche. hold on to their market share and when the tides come back, that is what we hope will happen. david: we have been moved more new believe in terms of strategy. >> they have created this thing called marcus, which is a long club version of an online bank. and you never suspect goldman to be into it before and we see how
vonnie: we are awaiting a speech by fed vice chair stanley fisher at the neck and i -- the economic club of new york. as we wait, we are joined by economics editor michael mckee. given that the markets are abuzz about the economy running hot, even though we heard that before, janet yellen mentioned it friday. do you anticipate it affecting
markets? >> it could if he were to reinforce the idea that they knew what they were doing as eric rosen did. he will talk about low rates. we will have to see. stanley fischer is clearly enjoying the salad course here at the economic club of new york. we are getting headlines of what he intendto talk about at this speech. low rates may threaten financial stability. negative, there is no evidence to tighten financial instability risks. lower trend rates could be in deeper recessions. financial stability clearly on the mind of some members of the f rmc. they could lift national rates and expansionary policy could lift the national rates. stanley fischer is expected to deliver more in the economic club of new york. mike, this is the reaction.
>> i did have a chance to read through the speech and it is basically a reiteration of a lot of things other members of the fed have been saying. problems caused because they could be a sign of economic weakness although we don't see a lot of that right now. they leave the economy vulnerable to shocks. third, they are a threat to financial stability. fisher's view is that that is not what is happening. some members of the fed acknowledge it like mike rosenberg. he diagnoses why we have low rates. savings are higher because the population is aging. the economy has been week. business investment is a big concern because they have not been strong enough. also for a developments, yields are higher. so for all those reasons, rates are low and if those reasons were reversed, he gives a diagnosis of how you fix it. invest more, get global growth up and maybe some fiscal
spending and you will see rates rise. nothing about the implications for current monetary policy. vonnie: markets are not reacting particularly though we have seen yields over the last few days to various economic data. on fiscalntration policy, will it give anyone the opportunity to say the fed is motivated in any way? theyat he does suggest is have run simulations of the fence economic model. if we were to see a combination of tax cuts and federal spending, you could get a full percentage point of extra growth. that has been the position of both of the candidates that we should be spending more money. it does add to growth. as long as you don't make the stimulus unsustainable. in other words, drive the debt up. david: put the speech into context that janet yellen gave
on friday in boston. is there a continuum here? >> only in the sense that we are talking theoretically. they are looking at what has happened so far in trying to explain why that happened. neither one gave us a forecast of what was going to happen or what the economy is going to do. but markets read a lot into the speech. you could run the economy hot and that would raise potential growth. she didn't say she would do it but she was perhaps thinking it. david: now to the economic club of new york. stanley fisher taking the lectern now. >> this may be the third time i am doing it. a pleasure to be at the economic club of new york. the issues we face now are very serious. conference up in
boston this weekend, which has gotten a lot of publicity and the problem is, why is growth so slow? id a related problem, which am going to talk about today, is why our interest rates so low? and what can we do about that? if anything? so let me start. by thanking you for inviting me. by telling you that in talking about the low level of interest rates, i am talking about a topic not far from the minds of many in this audience. but also, many others in the united states and all over the world. in many partses of the world and a couple of them have written to me and said, just as plain to me why a
few people in a room -- what you people sitting in a room in d.c. matters more to us than what our guys sitting in their rooms, whether it is pretoria or london or whatever, due to us. very interesting question. it is not the question i am going to focus on mainly. i am going to focus on the fact that u.s. interest rates remain at an extraordinarily low level. and i will talk a little bit about policy rates at other central banks being lower still. even negative in some cases. even in countries like switzerland. famous for their conservative monetary policies. long-term interest rates are also remarkably low. suggesting that participants in financial markets expect policy rates to remain depressed for years to come, i will try and
present today a quantitative assessment of some possible factors behind low interest rates and also factors that could contribute to raising them in the future. i am sure about the reaction of any of you may being, if you and your fed colleagues dislike low interest rates, why not just raise them? you are the federal reserve, after all. we are, but we operate in a particular economy. one of the goals today is to convince you that it is not that simple and the changes and factors over which we have such asnfluence technological innovation and demographics are important factors contributing to both short-term and long-term interest rates being so low at present.
now, should this worry us? there are three reasons we should be concerned about such low interest rates. first, and most important, is the possibility that low long-term interest rates are a signal that the economy's growth prospects in the long run are dim. later, i will go into more detail about the link between economic growth and interest rates and one theme that will emerge is that depressed long-term growth prospects put ontained downturn pressure interest rates. to the extent that long-term interest rates tell us that the economic prospects for growth are poor, all of us should be very concerned. economic growth lies at the heart of our nation's and the world's future prosperity. a second concern is this low interest rate making the economy
more vulnerable to adverse shocks that could put it into recession. that is the problem of what used to be called the zero lower bound on interest rates. countriesf several operating in negative interest rates, we now refer not to the zero lower bound but to the effect of lower bound. that is a number close to zero but negative. operating close to the lower bound limits the routes of central banks to combat recession using conventional policy tools. that is by cutting the policy interest rate. while unconventional monetary policies, such as asset personages -- asset personages that asset purchases, can provide accommodation, they are
not perfect substitutes. monetaryation on policy imposed by low trend interest rates could lead to longer and deeper recessions when the economy is hit by negative shocks. that receivesern a great deal of attention from a market participant is that low interest rates may also threaten financial stability as some investors reach for yield and compress net interest margins to make it harder for financial institutions to build up capital. while this is a reason for concern, and there is continual monitoring, the evidence does not suggest a high level of financial instability. in the post -- post financial crisis united states stemming
from interest rates. a year ago, the fed did issue warnings, successful warnings about the dangers of excessive leverage lending and that concerns about financial spending are on the minds of some members of the federal open market committee that makes the interest rate decision. those are three powerful reasons to prefer interest rates higher than current rates. but we are keeping current rates very low at the moment. because of the need to maintain aggregate demand at levels that will support the obtainment of our 20 policy goals and maximum sustainable employment and price stability. personalice level of , which has expenses a target level of 2%, that is the actual federal funds rate,
to be so low for so long that for the fed to meet its objectives, suggests the equilibrium interest rates, the federal funds rate that will prevail in the longer run. one is cyclical and other factors have fallen. to my main focus, and assessment of why the equilibrium interest rate is so low. i am going to use a little bit , and i'mcal language going to use things in terms of technical language which was invented in the 1930's and has remained in use more or less until today. i will try not to exaggerate its use. so we need to think about the real interest rate as the price that it will rates the economies
supply of savings. we are looking for factors that boost saving, which tends to push the interest rates down and that depress investment, which reduces the demand for saving, or both. to those of you lucky enough remember the economics you learned, we are looking at a point on the i.s. curve. that is the investment equal .avings curve because we are considering the long run equilibrium interest rate, we are looking at the interest rate -- this is the definition -- the interest rate the -- equilibrates in the long run. that is what the interest rate would have to be to be in equilibrium and i will look at
four major forces that have affected the balance between saving and investment in recent years and they may go back before the great financial crisis. then, consider some that may be amenable to the economic policy. factor number one. the economy's growth prospects. among the factors affecting economic growth, two are predominant. gains and productivity and the growth of the labor force. we will come back to all these second. an increase in the average age of the population has likely pushed up household savings in the u.s. economy. third, investment has been weak in recent years. especially given the low levels of interest rates. fourth and finally, developments abroad, notably, are slowing for economic growth.
mainly affecting u.s. interest rates. importance of these factors in explaining low long run equilibrium interest rates, they rely heavily on simulations that the board has run with one of our main metric models, the u.s. model known .ffectionately as ferbus this is used at the fed and has plenty of advantages, including its term empirical grounding and the fact that it is large and detailed enough to make it possible to consider a wide range of factors within its structure. the forces i mentioned, slow growth and population aging, weak investment and slow foreign growth, i look first at the
effect of slower trend economic growth to encounter the decline in productivity growth as well as lower labor force growth. mainly on interest rates. productivity, gains in labor productivity have been meager. it is polite language in recent years. one broad measure has risen one and a quarter percent over the past 10 years and stunningly, only half percent on average over the past five by contrast, over the past 30 years from 1976 to 2005, productivity rose a bit more than 2% per year. sound like little like the late herb
stein, the difference between a growth rate of one percent and 2% is 100%. if you want income capital to develop over 100 years, the approximate age of a generation, you need to percent growth. want double that amount of time, you will manage with 1% fees are very vague changes. they are very confidential for the future. although the jury is still out on what is behind the latest
slowdown in productivity gains, prominent scholars such as suggests a smaller increase is a result of slowdown in innovation that will likely persist for some time and has persisted for some time. the attempt to discover what is going on is the major growth industry. growth is not the so high either. trend growth, and thus, lower output growth adjusts for savings through a c channels. there are few opportunities in which to invest.
lower productivity growth also reduces future prospects of households, lowering their consumption spending today and boosting their demand for savings. lower productivity growth implies both lower investment and higher savings. both of which tend to push down interest rates. in addition to a slower rate of innovation, t it is likely that demographic changes way as they have in the past. in particular, arising fraction of the population is entering retirement. it which are about a quarter of a percentage point in recent years. it does not sod like much, but remember the statement that i just gave you.
trend increases in productivity and floor growth imply lower overall growth in the years ahead. of you that is consistent with the most recent summary of economic predictions. that is what we all know fondly are not as the dot applies. median gdp in the longer run is just 1.75% compared with the rate from 1990 to 2005 of about 3%. we are projecting about one and three-quarter. very recently we had a very good decade of 3% growth. we do not see the prospects of that. we can use simulations to figure out the consequences of such a
slowdown and longer run gdp growth for the federal funds rate. those simulations suggest that pace ofdown to the 1.75 growth anticipated by members of will a vigil about 120 basis points from the longer run equilibriaum rate. that means the slowdown has a massive effect on long-term interest rates. now, let me move to the second major development on my list. in addition to its effect on , the increaseowth in the ranks of those approaching retirement in the u.s. and other advanced economies is growing. has highero
interest rates. it economist suggests that could be pushing down a longer funds rate relative to the level in the 1980's and a match of 75 basis points. that is two factors. in addition, the third factor is weak investment. that given suggests how low interest rates have been in years, ev investment should have been considerably higher in past years. investment is low, may be low for a number of reasons. one is greater perceived uncertainty could make funds more uncertain to invest. another possibility is the
economy is simply less capital intensive than it was in earlier decades. there is a very nice article in "the wall street journal" on the week in saying that breakthrough firms are simply not generating the amount of investment and employment that earlier breakthrough inventions generated. finally, on my list of developments are broad. many of the factors depressing the united states' interest rates have also been working to lower foreign rates. for example, many advanced foreign economies face of slowdown similar to or possibly what is happening in the united states. that affects their equilibrium interest rates.
model, there is an upward pressure on the exchange rate of the value and thus lower net exports. anther, it suggests equilibrium of about 30 basis points would be required to offset the effect of the reduction in foreign products. i made a mistake. bag, the clicker in my which is on the ground. this is technological progress. to bring thisr little device fro with you, you can do it seamlessly. for slide.
thesehows the effects of four factors. you can see, each factor is considered separately. i'm not trying to add them together. why? because there is some overlap between the factors i'm talking about at present. particularly the length of slower growth and the remaining three factors. slower growth reduces the rate of investment, for instance. at those numbers up. they are all parts of a complex mosaic. so, the cost of low interest on theincluding limits ability of monetary policy to respond to recessions is what we have covered. lowerat we know where interest rates may be coming from, i want to turn to the question of what may be
contributing to raising longer rates -- bria in equilibrium rates. this relates to a question that is very poplar which is the only game in town. that is the charge that the federal is the only game in town. it does not have to be the only game in town. there are other sources of .olicy those are connected to growth. is veryone that .ifficult to put one's hands on . will mention it keynes, as you know, wrote about animal spirits. animal spirits are what
optimistic investors have. there is something in the atmosphere, in their insights, in the equilibrium that suddenly has made them feel good about the economy. that is not the economy we are in today. that could change. those things do change. , the first bar in the second slide illustrates the effects on the longer run equilibria of anl funds rate investment equal to 1% of gdp. as you can see, such a rebound in investment would raise the .ate by 30 basis points in addition, higher investment would improve the longer run growth prospects of the u.s. economy. though the direct effects are
relatively small with gdp growth rising only about 10 basis points on the growth rate. the second set. you are watching stanley fischer talking at the economic club of new york. he is explaining some arcane things. one thing that jumped out at me is this idea that if we get 1%, it will take a generation to improve. if it is 2%, half a generation. the compounding effect. what he is talking about now is the growth rate. there is a copy of the slides he is showing. basically it shows you can raise the growth rate.
that is what the model has shown . he is going through the various ways that it be raised in the united states. the federal reserve is watching politicians. are they watching the federal reserve at all? michael: not at all. there is an election under way, you may have heard. they are very focused on them selves at this point. the question is are they listening once someone is elected. one of the candidates will not. one of them possibly would. there is one vacancy now and they will perhaps be a number coming up. there is an opportunity for a president to remake a number of the members of the board of presidents. david: it was also posited why so many businesses are spending so little capital. michael: it is uncertainty.
they're not sure why this is. events.been a number of what is happening now with the u.s. elections could be causing businesses to cut back on spending. also, the return spending is lower. the more you spend, you don't get the incremental increases. at this point, there are a number of reasons to be unsure about what is going on. vonnie: he is suggesting that rates are too low or that rates need to be this low for this long. this is another person suggesting this. at what point did they stop suggesting it and raise rates? michael: they do not feel the need to, at least the center of the fed. stanley fischer is not commenting on the direction of rates in this piece. they do believe that low rates are helping to absorb some
slack, put more people to work, and put upward pressure on interest rates. they want to see it moved to the 2% level. the only question is how high does it go before you have to slam on the brakes. that is where the dispute has risen in the recent weeks, saying, by the end of 2017, we could either. others say it could be a much slower process. fed managing the the move towards negative interest rates? fed does not like it at all. they think it distorts economic investments. they do not want to do negative interest rates. it would be the last thing in their toolbox if they ever needed to. one thing he is warning about is we do not have many tools left. they have cut rates by about
five percentage points to fight the recession. if you are at only 50 basis points, you would have to go into negative interest rates or do some massive qe. the fed would rather not do that. th,nie: a very shallow pa it seems. inust want to point out, .ecember, it is 69.5% in february, it is only 67.3. that does not make too much of a difference to you, those two months. what does that tell us? michael: it tells us that by be a ratehere will increase. it could happen in december, it could happen in february. that is all they are saying, it goes up at least once. the question is how many times in 2017. maybe that is a question someone
will ask him. vonnie: we were chatting earlier and said we have to be be very careful about worse. michael: it is mostly foreign ing that.itrag it is not very accurate until you get to a few days within a fed meeting. vonnie: sally fisher wrapping up his remarks. he is now taking questions. the chief economist from goldman sachs is the first question. a nominal interest rate is closer to the affect. my question is, whether you are confident the you would still be able to respond appropriately to economic downturns under the framework, for example, making interest rates negative, or whether you think you may framework,ge in the
such as, for example, slightly higher inflation target. lowlearly, having very interest rates makes economic policy and monetary policy more difficult. there's no question about that. produced, during the aftermath of the great financial crisis, innovative policies, particularly large-scale asset ,urchases and forward guidance which is the use of the interest rate actually, which helped to bring about recovery. as i mentioned, in the speech, i don't think those are perfect substitutes for the use of interest rates. some have suggested raising the rateibrium interest
target. i'm very concerned about that. now, i will tell you a secret. we are very close to our targets , the targets that we in the fed face. we have what is called maximum sustainable employment. at about 5% unemployment, we are very close to that number. the other is 2% inflation. ofe inflation at the moment the pce is 1.7%. 1.7% is very close to 2%. we are not in deep trouble at the moment. pessimism weree to hit the economy, we might find itself in deep trouble. we're not there. i would be very reluctant to raise the intere rate target, the inflation target, at this
moment. 2% so you are to raising the target to 3%. i reminds me of a statement heard from one of my m.i.t. colleagues. this was long ago. i was being asked what the salary was. he said it was $100,000, but we don't pay anyone that much. i said, in that case, you should make it $150,000. [laughter] it seems to be roughly the same 3%go from the 2% target to a target as a solution to the problem. i'm simplifying, but that is a problem. furthermore, changing the target when you are so close strikes me as undermining the whole framework under which you are working.
i think there is a very adjusting issue. that have auntries program to revisiting of the target. it, severals have others. that is something we might consider. we should not mess with the current framework at a time when it is so important. >> thank you. dr. fisher, thank you very much. definitely enjoyed your comments this afternoon. as you mentioned, around the world, many countries have zero interest rate or lower. some of these countries have not been able to create inflation. some on the committee have suggested that interest rates are too low and for a long time could actually create deflation rather than creating inflation,
to the extent which, as i mentioned earlier, you actually maintained excess capacity. colleague highlighted to me that many academic economists talk about the reversal rate, a level at which below growth actually becomes reactionary. what is your view on creating specific inflation in an environment of potentially way too much excess capacity? is the united states may be at that tipping point? >> i do not think that the united states is up to tipping point at present. the countries have reduced rates , moved to negative interest rates for a variety of reasons. the swiss case. it is not the only one. it is to keep foreign capital
from flooding the economy. we do not have that particular i think that there is a point at which if you keep cutting the interest rate, you .ould get a perverse effect as you cut the just rate, you are such a telling people, the rate of return -- you are being charged for the privilege of lending to the government. the more you are charged, the less income you have left to go out and spend. there is a belief, i think particularly in parts of europe, that you would flip the relationship at some point. i find that a plausible argument. i have not seen a." evidence, but it seems to be a plausible
viewpoint. it could happen. i do not think we are there now. i do think that operating at a zero rate or very close to a zero rate does raise concerns over what expectations people have for the future. if there is no rational basis to be optimistic, then, i guess you cannot go around telling people to be optimistic. if there is a rational basis to be optimistic, and it is not -- i do not want to go into if i was a politician i would be optimistic, but i can't say, i think it comes sort of from your personality. there are some people who are better at being optimistic and others who are less good at that. isdo not have anyone who being very good at being optimistic at the present. that is why put in the animal spirits part about what could be done. thank you.
>> one other question, or perhaps a follow-up to the earlier one. inadvisableay it is to change the inflation target, one might take the argument that make us want to be really sure that we reach 2% and do not fall short. that might lead into a discussion of overshooting full employment. i think you gave a speech a smallsaying overshooting of full employment could be helpful, but a large, persistent overshooting would be potentially risky. i'm curious whether your views on this issue are evolving in light of the discussion at the last meeting, according to the minutes released last week,
expressing perhaps more interest than exploring a big overshooting. also, in light of janet yellen's speech on friday where she said it may be possible to reverse some of the downturn on the aggregate supply by running a high-pressure economy, which, to me, sounds like an economy that overshoots for employment. i'm curious as to what you think the views on this issue are evolving? at evidence. looks if one were to look back at the cost when there has been overshooting, the common belief, and one were to substantiate this, the attempts at overshooting have not been that successful and have resulted in
subsequent inflation. so, one has to look at that possibility. if it turns out there is evidence in the other direction, that is fine. you, i washave quoted in a report from one of the investment banks -- [laughter] as having opposed overshooting. i think the qualification you may now is probably more accurate, going for big overshooting. -- if you gout by a the full employment couple of tenths of percentage points, i don't think there's any danger in that. goingaying we should keep until the inflation rate shows
us we are wrong, then you will change too late. i'm actually an optimist. nativegize for another question. it is why this current economic environment is so frustrating to me. i think we have so much potential. as you highlighted, the economy is anemic. as a result, it is very difficult for companies to make money. profits are struggling. profits, based on the broader data are in a declining trend. you highlighted, in the speech and in previous speeches about the weakness in capital spending. that is something i would probably agree, very, very frustrating. that is in part now because companies are seeing downward pressure on their profits. it is difficult to it engineer a capital spending cycle.
in any event, doesn't it also imply that if companies now have to focus on controlling cutting costs, maybe even employment is at risk going into 2017? >> profits are declining. they are declining from historically extremely high levels. . don't know at some point, that was bound to happen. they cannot read that we have got to have ever rising profits in order to justify this. it has to be a decent rate of return on investment but not an ever-increasing one. if it was true that rising profits would generate investment, rather than what has -- buybacks to a considerable extent during the
most recent period. that means it is the prospects in the economy that are out there, rather than a lack of theits that is holding investment bank. we have to put in place forces that will generate more rapid growth. >> one other question that you touched on very briefly in the discussion of productivity is the question of whether whether potentially productivity growth has been miss measured and perhaps ms. measured by more than in the past. and the question of whether that might be one partial explanation for the slowdown in measure of productivity. i know you have been interested
in that question in the past. i would be interested in an update of your views of this issue. >> there has been a lot of work on whether we have been mismanaging productivity growth. i used to say -- well, for people like me, or for everybody sitting at this table, productivity growth has been incredible. because you can now more or less to your own research by visiting -- excuse the advertisement -- visiting google and having a research -- rather than having a research and assistant looking for it for a week or so. it's much less applicable to the general public. i said this speech in new york and somebody said to me that as
they traveled on the subway they figured out it was the fastest way between up town and the fed. on thehave traveled subway. what do you see people doing? everybody's using their iphone. so, it isn't only us that is enjoying the benefits of information technology. it is widespread. then you come to the argument .hat it isn't measured in gdp that the excitement that you get for doing what you do on an iphone doesn't enter gdp. it depends on how far you take that. it's been taken very far. , it'sasures are so poor not worth the gdp so much as the
paper it's printed on or the money it is costing to produce. whatever you would like to dismiss it with. say --gher guys actually, it's always been the case that it's this measured. it's more miss measured today than it was in the past. there is another fact. let me go on a bit at length. one thinks -- well, if it were growing nicely, we would be feeling happier. we aren't. maybe we should look at polls and ask people how they feel about life and so forth. see if you can get anything there. there is one interesting feature , which is that people are more
optimistic about their own future than the economy's future. i'm ok, but the economy is a matter of concern. that could be consistent with productivity being miss measured. that's a possibility, but we don't have the evidence that it is being significantly more mis measured that was in the past. i give all of you former economic students some encouragement i referring to the that what youow learned was useful. the other thing that is frequently set in this context is that gdp does not measure consumer surplus. it measures production. surplus is a theoretical concept. it's how much better you feel
for how much more utility you feel -- you pay over the loss of utility for it is. gdpthe statement is always does not measure consumer surplus. it doesn't show up in the data. that's what marty feldstein basically asserts. that's a long way around saying that there is more to this miss measured argument than people have been able to find so far. >> last question, then. >> you mentioned core inflation running around 1.5%. with the economy prices no longer a tailwind, which i know the fed doesn't target, that will certainly make a difference to the consumer.
headline will be approaching 2%. wage inflation is only about 2.5%. effort to get inflation to accelerate, that doesn't complete, say, a risk to the extent that it will be attacked by purchasing power. assumes thatone the rate at which it goes up -- i don't think we would get that bump in inflation without seeing further growth in the rate of wage increase with further inflation being a negative for consumers and employees. certain that your empirical basis is correct, but we will find out in due course. cpi haseen running above 2%
for some time. if we had chosen a different rate, we would be there already. so, we are close. that's how close we are to our targets. once we are at the targets the issue will be growth, growth growth. what can we do to get growth going and productivity going? that's what's missing from this economy in the world economy at present. >> thank you. [applause] >> thank you, dr. fisher -- fischer. >> still with us is michael mckee. michael, those questions were interesting, perhaps more so than the rest of the speech. one of the things he is pressing
is that we are close to 2%. michael: close enough for the fed to think that they are going to get there. remember, we will see oil prices rising throughout the year. it should have an effect on overall inflation with wages rising a bit. there's reason to think that they will get there. the question that arose in this context was about overshooting and running the economy hot. that.k a middle ground on you could run it a little hot. by that he meant -- let the unemployment rate fall farther a 10th orxpected by two. he said that until you see inflation starting to rise, you have waited too long. he didn't endorse -- he didn't come against it, but said he had to be careful in how you think about that.
>> on the inflation side of things, perhaps an argument for changing the inflation target. something that he said he would be reluctant to do. whisperings that maybe that should be evaluated. michael: he pretty much gave the answer that a lot of people think. why 3% is not 2%? they are so close to the targets now, why would you necessarily want to raise it? we are close unemployment. we are getting closer on inflation. while we are not seeing his growth. he concluded his remarks by thatg that the problem is it is not something that monetary policy can address. increasesr spending in the context of not letting the budget get out of control. it strikes me that he said when they finally get to 2%, they can worry about growth. at that point would it not be an easier story about growth? the fed focuses on
growth in the context of its two measures. being fast enough, which it has been, but also raising the inflation rate, which it has not. there isn't much that they can do about the growth rate itself. giving them confident that they're are going to continue to see progress towards those target. all right, that is michael mckee. >> coming up, 75% of u.s. executives are planning on an m&a transaction in the nests -- next several months. this is bloomberg. ♪
markets fields report. every monday resume in on analysis for the big players behind the deals. today we are focusing on what ceos think about the m&a environment for the next 12 months. 75% of u.s. executives are likely to do a deal over the next 12 months. the executive editor of global m&a, jeff mccracken, spoke the chair of transaction services at .y, steve krouskos steve: that's correct. what you have to realize, jeff, is that everything has changed for ceos except expectations around high growth and high returns. the list of what has changed is pretty significant, you know? lightning speed technological change. uneven geographic growth that we couldn't have anticipated.
nationalism creating a lot of turmoil that would normally slow the markets, but in fact we see the opposite. 57% wanting to do an acquisition in the u.s.. jeff: they feel like they are going to get support from their shareholders whether they are institutional investors or even activist, right? >>n they pursue these deals? absolutely -- steve: absolutely. shareholders and activists are pushing for higher returns. jeff: when you and i were talking about this yesterday, you mentioned the unilever dollar shave club as a good example of a typical deal. what did you mean by that? that was a $1 billion deal. why did it get so squarely into the kinds of deals we are seeing in 20 team? >> i think that that particular deal is representative of what i
will call the technological change category. debate whether it's technological change, because it's still razor blades, but it's a direct consumer model that is a step in a different direction for a traditional shaving business. i think it signifies the technological change and the cross sector blurring we are seeing with a number of deals. jeff: we have noticed that a lot this year. where deal value, dollar values are down at the numbers are up. the raw numbers are up. as you said, that indicates a lot of interest in the 250 million dollar deals. we are also seeing a lot of non-tech companies -- good example might be gm doing a deal
with lift -- lyft. millionit was a $500 investment. companies doing deals into tech companies. steve: absolutely. whether it is that deal, the automation deal, or a number of different deals blurring into technology. to try to take advantage of ridesharing. to top -- try to take advantage of getting into the driverless car. one was just announced last week. it is taking those in finney on chipsinion semi conductor . trying to stay ahead of the competition. jeff: you been doing this survey for roughly seven years.
what's the single biggest development you have seen over the course of six or seven years? it's interesting. i would point to a couple. one is the absolute resilience of ceos and senior executives around doing deals recognizing that in organic growth is part of the toolkit. if you had had the kind of uncertainty that we had referenced earlier, five or six years ago, it would have stalled the market significantly. but today companies are maintaining confidence. and also looking at alternative types of transactions. so, that's a big change. the other one i would point to is the way that deals are being done. you see companies using analytics much more powerfully. much more of a customer in front office focus. a lot of change over the last seven years.
where are companies looking to invest? i saw a headline saying that the u.k. fell out of the top five. seems to me that the traditional ,laces, like the u.s. and china remain the most popular destinations. steve: u.s. is a very popular destination. china is more of an outbound trend in over 50 countries. continue as they continue to go for ip rich and go up the value chain. certainly the u.s. is an attractive destination. there was a nice deal announced in the u.k. today. the the cody acquisition of hair care products company. the u.k. continues to be an attractive market as well.
maybe out of the top five for this survey but i expect it to be back in the next six to 12 months. 7 the -- jeff: the executives that you surveyed still feel there is coming at the end of this year and into next year, absolutely.: u.s. executives, 76% are confident that we will see a stable or growing economy. that number is pretty close to the same in europe. just a hair below. pretty strong confidence overall. executives can see the medium to long term, as opposed to short-term. mccracken,t was jeff and steve krouskos. >> still ahead, 22 days left until the u.s. presidential election. donald trump is repeating his
vonnie: if you thought the u.s. presidential election rhetoric couldn't get hotter, you are wrong. mr. trump: instead of being held accountable, hillary is running for president in what looks like too many people a totally rigged election. is being rigged by corrupt media . vonnie: he's been contradicted by his running mate.
joining us now, steve, all of this back-and-forth, does it actually sway voters? don't they already believe it's rigged?'s steve: i think that voters here this and those who have the suspicion to begin with feeling fake they can talk about it more. i think that whether or not it sways voters, it does damage to next president of united states and whoever it will be. governing after this election, not just because of the rigged accusations, but the high intensity and animosity of voters right now, will be a challenge that no other president has seen before. fraud is not as high as a lot of republican say that it is. there are a lot out there who believe this and voters out there who believe this. to hear the republican nominee
go over and over, on and on. after florida with the hanging chads and all of that? once bush was elected? true, butt's entirely george w. bush had some other things that he was dealing with at the time. god forbid we have something like that, he was able to rally the country around. i don't know if we ever really got to see george bush push his agenda in this non-9/11 environment. also, he's not hillary clinton. she comes into the race with so much more animosity and any other presidential candidate before. there were people in the country who never liked her to begin with. the latest polling that tohave here, showing 51% 41%.
are you seeing him making inroads with the line of attack he's taken recently? these polls are really hard to read right now. polls,l polls and state they are saying different things. there were two of them out over the weekend. one showed hillary clinton with an 11 point lead. question is -- which one to believe? the one that we know is that he's not making progress among the voters he would need to overcome some of the obstacles that he has. remember, this is not a national election. not like brexit, where the majority wins. this is state-by-state thing. state also matter more. donald trump is up by four in ohio. havingblem is that he's are not having to drag on some of his state poll numbers. at least not as much as people
predicted. vonnie: the final debate is wednesday night. is crept any different this time around? steve: i think it definitely is from hillary clinton. we have seen this slow drip of more camee-mails area out over the weekend. the things we are seeing increasingly seemed to be more serious and problematic for her. before now her campaign was able to this this them and call it inside baseball and the voters of really care compared to donald trump's problems. that they were not that noticeable. now they are starting to. vonnie: thank you, steve yaccino . andd: talking about netflix ibm, next. this is bloomberg. ♪
world news now. erik johnson? hillary clinton is leading donald trump by a wider margin with a presidential election just three weeks away. secretary clinton is leading 38% amongst to likely u.s. voters. libertarian gary johnson has 510. gilles simon of the green party picked up 2%. f ei documents show -- fbi documents show that communication e-mails come from hillary -- given to the hillary clinton private server related to the benghazi attack be changed. in northern syria 23 people at least have been killed.
the attack was in the northern province of aleppo. more were killed when russian jets attacked the village. north korea wants britain to pull out of south korea, calling it a hostile act. sending and support claims in addition to participation in the exercises. global news, powered by twice its hundred journalists. david? abigail doolittle has a check on the markets. abigail: we often love those big days of up-and-down offered -- volatility, but u.s. stocks have been largely unchanged or of the day. taking a slightly lower this afternoon, the dow, s&p 500, nasdaq, all of it not much
of a large decline to write home about. you can see how small the decline is. it looks dramatic, but the entire rate for the day is nine points. the s&p was fluctuating between gains and losses but taking a leg lower now. turning slightly to the downside of this point. this could represent turning into the heart of the quarter season, taking a look at a very , 4338.ting chart this is the height of the revision over the year. earlier this year we saw that earnings were taken down quite a bit. confidence tors some degree, allowing the companies to meet or beat estimates or talk with stocks that went higher. revisions trending
higher more recently, putting investors on pause. out there as is, basically suggesting the cost-cutting party is over. amazon appears to be down as the company has announced they will be cutting their online grocery delivery charges by 10%. some investors fear that this could destroy or hinder the company profits in the name of growth. causing the stock to go lower, vonnie. vonnie: thanks for that, abigail. -- we will speak you again in a little bit here you hearing from ibm and netflix later today, to name a few. joining us now from san francisco, cory johnson is following all of the earnings.
you know that i want to talk about. but we are going to wait. [laughter] vonnie: ibm announcing after the close. cory: trying to prove that you can change a fan belt while the engine is running. trying to move from being a software service hardware business to be software as a service. computing onloud, that service. you will see worse sales but better earnings. but we have seen worse sales without better earnings. 17 quarters in a row we have seen declines in sales from ibm. showing declines on an annual basis. this business is rapidly
shrinking. every single quarter, every single year. look at those yearly declines, it's only expected to be 3% this year. it's really been a problem for the company. look at that net income number. it's a big problem for this business as it tries to transition into that new world. david: i'm going to take your change the fan belt metaphor while the engine is running. .ory: well, i stole it david: then i'm going to -- steal it -- stole it. david: well, i'm going to steal your stolen meta-or. they recently spent a lot of money in that area recently #has that paid off? cory: -- recently. has that paid off? cory: you have seen continued decline. imagine how bad it would be if they had done these
acquisitions. that and share buybacks have made ps look a little bit better. investing --not hitting investors that much. there's been a pullback, but as much as they want to give time? maybe, maybe not. there's a fundamental change in the world of computing. whether it was software or hardware to run it, fundamentally. whether it is selling them the hardware or software, ibm consultants themselves, that the sun going away. part of oracle, even cisco. them are nowhere near where they were on the glory days.
what are we seeing in terms of subscriber growth and what can we expect to see today? ofy: the initial edition international subscribers was a bringing in ax, lot of cash that went right out the door for more content. looking at the numbers who seen , only 1.5orders million subscriber additions .ith rice increases coming in they got to have the great content to make those numbers better. but -- and you know it's coming -- they do have rate content. when it comes to content, the get down. cory: the get down, your favorite show. love "the get down." it came at a huge expense. there was a time when they would
get low prices in the programming world, but now there is this competitive environment where they are spending over $150 million on things like "the get down." to you, and to me, a fantastic show, but nonetheless a much higher price area competing with showtime, certainly with amazon as a result of the work. we hope at least that they will make a second series before things change. you will be up to hear cory johnson on "bloomberg technology," 6 p.m. eastern, 3:00 p.m. san francisco time. david? david: investigative reporters uncovering what lawyers discuss in private at the biggest banks once per year. no one outside of their elite circle knows about it until now.
>> it's an exclusive club. top senior legal officers of the biggest banks. u.s., the u.k., and europe. it's informal and secret insofar that no one has known about it or. they once a year. it's a movable feast. they met outside of paris in versailles this year. on whoses., it depends turn it is to host. >> who is behind this? how much of an agenda is there? what do they try to do over the course of the weekend? greg: the founder has positioned it with a successful lawyer. he was the dirty -- the dean of the university of pennsylvania law school. figure with a lot of experience in government.
at one point he thought it would be a good idea for people like him at smith barney to have a small, informal, not social group, but group where people could discuss things of interest, topics of interest. how to deal with certain theoretical issues that might come up. it just so happens that this year front of mine for a number of these members was the class-action settlement that had room to be ever larger in recent years. >> we have had many over the past several years, including the financial rice is. what did they do in terms of coming together? greg: every time there is a major regulatory investigation by regulators, especially in an antitrust suit, all big banks
with libel rigging or fx rigging affecting them. into a joint defense agreement or the agreed to fight this. sued filed plaintiff parallel to the government actions, a joint defense agreement. if they hold firm they can sometimes win or get a motion to dismiss, get a case dismissed. more often, though, the lawyers have been very successful in identifying particular banks that really need to get this behind because the bank has more exposure in other issues and doesn't want to do with this. in the it's a benefit same place. whoever moves first gets to take it out.
because of the way the law works, it's dismissed quickly afterwards. weber's last usually winds up paying the heaviest price. there were more that led to those outcomes. >> how small of a world is this? you got to think these guys know each other. is this serving a social component? it's not as though the people of other jobs for 10 to ears. some of them last long time. others go from one bank to another. it allowed you to interact with counterparts you didn't see normally. if you felt like you could pick up the phone and call how you deal with this, that kind of thing. david: check out that story in
international gains being lifted. a big win for the renzi. financesd to shore up to abolish restrictions on ownership and voting rights. the ceo of the newly combined firm spoke about the potential. >> consolidation is needed in any case. otherwise we would be a bit more willing to encourage and so understand that we require the banks to be more profitable or a private bank to be more capitalized. it's very difficult right now. banks in north america cost by half before the brexit vote. share in thearket
first six months of the year. at the same time overall demand fell by almost half in the u.k.. quantum's in december, according to a poll of economists, mario draghi will prolong the qualifying program. rising with an economic recovery that the fragile. meanwhile, apple has drastically scale back ambitions take on detroit. apple has cut hundreds of jobs after finding that for now it no longer wants to build its own car. instead it has refocused on building an atomic driving system with existing carmakers are returning to it designing its own vehicles in the future. time for our bloomberg quick take. for decades the u.s. and other
were forced to rein in the nuclear program. major sanctions have been lifted , here's the situation. international sanctions were lifted in january after iran curtailed its program as promised. under the 2015 agreement with world powers, the country's president is courting global companies for direct investment this year, plus $15 billion. plus a sweeping u.s. ban on trade and investment triggered by concern over links to terrorism in iran keeping most u.s. companies on the sidelines. here's the background. the monarchies that will transformed -- ruled transformed a small agrarian economy. the major revolution shook the have never leaders quite settled on the appropriate rate of growth. in 2005 my mood ahmadinejad took a populist turn.
just as sanctions began to bite. promising to end economic isolation. here's the argument. international monetary fund expected to grow by four point 5% this year. the cost of producing crude makes it more attractive even in era of change prices. their opening two foreign investment rankled theocrat's who expected western capitalism for investors to find a violent nuclear deal causing sanctions to snap back. takes on all the quick the bloomberg. that is your business report. had to bloomberg.com for more stories. ♪
the last two years. online sales account for about 10% of the market. that's one reason that unilever purchased dollar shave club earlier this year. the young companies are growing fast. taking us from this week's small to big. felt like the big brands of shaving had forgotten about the customer. we had this vision for really changing the experience everywhere. we make our own products with exceptional qualities. creams, we deliver them to people with amazing value. harry's.com. harry's, theed first thing we realized we had to make was great with the blades. if you are, how hard could it be? metal, plastic, but together and you've got a blade. we couldn't have been more wrong.
we looked at how they were made, where they were made, and what the magic of a great blade is. .e factored in germany we launched into a partnership with them. one, we had ideas to innovate and make things better. secondly, we realized he would of these.ke more we put a vision together to buy the factory. created the only truly vertically integrated company in shaving. million to purchase the factory in germany. while really complicated, we .ount our lucky stars everyday making better products. when we were learning about harry's and shaving, we went and learn from barbers. we went to a barbershop in new york with only two chairs. small, intimate, we had amazing barbers there, some of the
world's most expert shavers and rumors. .- groomers we wanted to get to know our customers. in shaving their is one large company. it's gillette. essentially they control the entire market. we don't know if we are going to be the biggest shaving company in the market someday, but we are only a three-year-old company. we are still a baby and want to build a brand around there. whether it's a public company or a standalone private company, what we are committed to doing is finding a structure that helps us to achieve our vision in the long-term. that was the founder and ceo of harry's. bloombergme for the business flash with a look at the biggest stories in the news right now. more than $28 million to settle
a kick back, accusing the largest nursing home pharmacy in the country of seeking out bribes. using anti-seizure medication on doctors who treated older patients. hasbro snatched away the walt disney princess franchise away from mattel. paying off in its latest results. toys aimed at girls, 57% to $462 llion in the third order compared to the 2% increase in boys products. much of it came from disney princess and frozen. macy's has no plan to join other retailers this year. stores will open one hour at 2er, at 5 p.m., close p.m., and then open it 5 a.m. on friday. the department store has been open on thanksgiving evening
since 2013. elon musk has launched his latest move to take tesla motors to silver city. making fuller energy components. he wants them to merge so that consumers can purchase electric -- solarthe solar powered electricity that will power them. that is your bloomberg business flash up date. coming up? celebrating a 100 year anniversary, a company joins us with a look at what is down the road for the next 100 years. this is bloomberg. ♪
average. when the stock is above that average, it asked just -- suggests there is a strong my momentum, losing interest for thatrs who are picking up this is trending down, stocks are below the 50 day moving average. perhaps it will meet with the s&p 500 coming down. an interesting one to keep an eye on. atwo-year chart showing correlation over the last few years. the big internet stocks. talking about facebook, amazon, netflix. huge gains. when we look at financials, a huge story.
we have the exception of jp morgan. other stocks trading down. down 20% over the past two years . investors clearly rewarding shares. courtney collins is in the newsroom. a new high of just over 83%. increasing all ethnic groups as well as disabled students and low income families. speaking earlier today at highest will in washington. president obama: tens of billions of dollars were going to big ring serving as middlemen for student loans. we said let's cut out the banks so they can afford college. now what we're trying to do is to years of
community college free for every responsible's it all over the country. adopted a confident way of attracting students back in 2008. the guy trying to get shooting charges dismissed. the suspect accused of killing nine churchgoers. federal officials say they are failure foror any any background. dramatic images shows a vehicle ran into an iraqi tank index loaded. part of the widescale military operations to recapture muzzle from the islamic date. this left a large plume of black smoke is herbal. china has sent to astronauts into base for the longest mission yet.
they will spend more than a month ins raised, most of it in the orbiting space lab. global news 24 hours a day powered by more than 2600 journalists and analysts and wore them 120 countries. this is bloomberg. matt: now going back to the market. the bond market as treasuries have reversed. sending yields lower after mixed economic data. stephen major, head of research at hsbc says the policy -- meaning -- thing that rates are too slow. joining us now is lisa abramowicz. maybe it's a different story than the trend we have
been seeing over time. >> long-term u.s. treasuries have lost more than 3%. german long-term booms have lost more than 4%. long dated maturities have lost almost 5%. there has been a pretty big selloff so far this month. what is behind this? >> a lot of people saying this is people of thing the expectation for inflation opportunity. you can see inflation expectation increased quite significantly. ?att: what is that
43-40. on my terminal you can see no matter where you look like even rates are climbing and climbing. interesting considering the fact that university of michigan tatianrm inflation next -- expectation was at an all terms -- all time low. scarlet: they do not have a clear understanding of what drives and nation and dictations. is this all because of oil prices coming up a little bit? >> i honestly have the same question. isthe united kingdom there the risk of inflation. that is a different story. risen.ces have even though people have being an them as inaccurate range of inflation. issue, and it cannot
be overstated, the bank england -- the ecb is meeting to discuss how to perceive, how to carry forward with the monetary stimulus. there has been some speculation that ecb members have talked the stimulus. this would highlight central banks have run out of room to run. that might be the real drive -- reiber -- driver for the selloff. matt: highlight central banks have run out of room to run. that might be the real drive -- reiber can i show you the chart? we have it here, and we talk about the fact that this trend changed today. youou look at the chart, can see that we have been in the down trend for the treasury yields and uptrend for the
actual bond since 2013. since the beginning of the summer you have seen it yields turnaround. do i need to put a green trend up there. thinks it willnt stay low. ond something similar bloomberg radio. the 30-year treasuries have been selling off, but they will gain again. there was a story that i thought was compelling overnight talking about how much debt the biggest central bank now holds. almost one third of the global economy. this raises the question about velocity of money.
how can you see inflation it the accounts for one third of the global economy. >> that is staggering. thank you so much. matt: a great story. recommend everyone look at it. very interesting stuff. scarlet: for more commentary, check out the bloomberg. after reporting weak export data, the focus returned to china. ofwill hear from the cohead asian economic research. this is bloomberg. ♪
that -- scarlet: this is diemberg "markets." matt: fell reportedly the top contender for embattled airbag maker takata. diesell. they have teamed up with bain capital to bid for it. reportedly $2.5 billion. iran's national oil company has offered 50 gas yields to bidders, the first time since/year's landmark nuclear deal. they have said this will include 39 oil fields and 21 gas fields. they have until november 19 to submit applications. that is your bloomberg business update. scarlet: now to china where we saw us the selloff last week. the cohead of economic research
says it is partly due to pressure on the chinese yen. i caught up with him earlier york and asked him where they should go. the chinese yen has strengthened versus value on. >> we do not think it will move that much in the next two months. wiest the weakness coming in the next few months. the chinese are very aware of the risk of the capital outflow. they like to keep the currency more or less stable. that is what we are looking for, a stable currency. this is marginal from the levels where we are currently. >> are people paying too much attention versus the dollar? >> a little bit. there are concerns china may go
back to a deep appreciation mode or they want to regain competitive us. at this point in time, financial stability is the overall concern. ace table concerns -- a stable currency helps. scarlet: is it under more pressure than it was last august given the week trade data we are seen. >> from a trade perspective, yes. there is a notion that china has lost competitiveness. the problem is lack of global pricingot so much of point issue for them. this will not really fix the problem. you need to seek local demand strengthen to fix the export problem. how much weight do you get the chinese trade data that the ppi showed at least
the end of deflation for now. >> the numbers are quite telling. the broad trend is still weaker exports for china. chinese us a lot about , as well as global downside risk as well. most of the data on global orders, which is just -- logistics suggest no pickup. the problem for china is weak external demand. they need to invest in the economy to keep the floor under the economic growth. scarlet: is it the protectionist rhetoric we see out there cap go -- ais having a note material effect or is it still too early to tell? >> that certainly does not help. hoping it may be
passing a hail mary on capitol hill at the end of the year. outside of that, there is not much going on. now is the lack of. corporate's in the u.s. and europe are sitting on mountains of cash and not investing. a lot of that goes into and upgrading and so forth. case, and is the china is left to stimulate its kindconomy? is there any of policy uncertainty when it comes to chinese policy the way there is in the united states? is that same kind of handwringing over what china does next? >> there is a little bit. you saw a rebound of property
market this year. you saw infrastructure investment come back. in the past few weeks there are signs they are getting nervous over the property bubble and are trying to wind back the frothy property markets. there is uncertainty coming back. , theyy overplay the hand will deprave the main growth driver. next few be key in the weeks and how that plays out in terms of property demand. to got: are they going back to their old playbook? >> they are trying to micromanage. each city in china or a lot of cities are bringing in their own property tightening measures. history shows you cannot fine-tune it. either the market goes up or down. investors are also worried about chinese leverage. well this lead to financial
stress? >> i think in the u.s. a lot of investors are concerned. the 2008 crisis is in mind. the reality is that is unsustainable. it is hard to see financial .tress and flowed onto vix seen the reason is the government owns the major banks, capital controls in place. excess liquidity in the system. rising and that is sustainable over time, but it's hard to see a trigger in the near term. scarlet: what might surprise the government that they cannot control? >> one fact or is household debt. that is not that risky. it is controllable.
70% of new think lending was to households, not to corporate. the buildup has been very rapid in the past 18 months or so. we get of a bit of a more just crisis coming through. that could be something coming out of left field. that might surprise officials. what would you be looking for as the first sign of trouble gekko >> as long as people have jobs, they are going to serve it -- service mortgages . the problem is widespread layoffs. if the economy continues to weaken. as exports weekend, people might lose their jobs in the southern coast. it's a start to not be able to repay mortgages, that could lead to stress. i was my conversation with fred newman. apple is scaling back
scarlet: this is bloomberg "markets." i am scarlet fu. now to a bloomberg exclusive. apple is dramatically scaling back ambitions to take on detroit. broke the story and joins us from our san francisco's bureau. officially it had not been given a lot of details. >> in 2014 tim cook game a team -- gave a team of engineers permission to go after carmakers. now after struggles there has been a change of direction. apple has put on hold plans to build a car and focusing on a
self driving system that could potentially market to other carmakers. did you see the title i tweeted out for years for? titan fall. the unit was called titan. that was the secret name, and it seems like from reading the reporting, everything fell apart. a lack of leadership. they basically through in the bowl. >> that is right. a former order engineer in a previous life and then joined apple to work on the original ipod and such. apple team hired over 1000 this.ers to work on he left early in the year. then recently wanted to run
software. bob mansfield who led engineering on many ipods came back and analyze the progress and decided this self driving platform direction. inrlet: talent is clearly issue. there was supply chain issues that held them back as well. >> one of the issues is the polity of components. as well as striking the supply chain deals is pretty difficult. in the consumer elect tronic industry, apple is known to be one of the best. at the the best screen cheapest prices in mass amounts of volume. so that was a roadblock, one of many. excited originally
because i thought maybe they could do a deal with mclaren and put the self driving software into a 570. then you told me the book -- mclaren group is not really mclaren auto. did they work with ford? >> it is very possible. we reported on a story today according to people familiar with the matter, early next year apple will decide what to do. i think over the next few years we will see which carmakers apple is choosing to partner with if any. thank you so much. reporting from san francisco. >> oil trading below $50 her barrel. this is bloomberg. ♪
commodity markets are closing in new york, both -- so let's get you started with gold. the precious metal currently little changed. still stuck in the range. having said that, toronto dominion bank is a wish on gold. forecasting it will eventually go as high as 14.50 per ounce. oil, which is also declining today. opec members in libya and iran reiterating calls to boost output. the latest numbers show a seventh week of gains, the highest since february. aluminum down to more than the lowest in two weeks on concern more supply will come to market. one thing i wanted to highlight when it comes to oil, the golden cross for wti.
this is when the 50 day moving average moves above the long-term trend line, which is the blue line. this is a bullish sign furcal. is that will notice happened back in april. we saw oil rally to about $50 per barrel. so that could mean more gains for oil. >> did not turn into too much carnage. we will continue on the oil production hot topic. francine and -- francine lacqua talked with a roundtable of guest. and how the economy is diversifying beyond oil. >> everyone has been pouring
over the perspective. 220 pages long. there are interest in bits and pieces and it. they do not intend to impose a personal spending tax anytime soon. they provided estimates of how much oil they have in the ground. in terms of risk factors, it is very general as you might imagine. not a lot of talk about opec production freeze. that is not necessarily unusual, but it does mean the investors and representatives will have to weigh the risk for calculation. overis this like 47 times that is the>> question, is the dramatic search to yields going to be enough
lure investors into what is essentially a new debt offering? you could argue it is the first arabia has gone to international markets. on the other hand, you know that investors have never done this before. they will have to to do due diligence that could delay the price target. though far, people are expecting it sometime this week. arabia has gone to international marketsthis is a r pricing. , notll be closely watched just an indication about sentiment and saudi arabia, but clues to how pervasive the search for yield is. you see how tracy holds a punchline for the end of the interview gekko 130 basis points which is all we wanted to know. she waits and waits. that is how she does it. >> well done.
we're back with patrick armstrong. >> it islook at oil? amazing on the top of a possible freeze. >> it is very volatile. what is interesting is the swing even though we know saudi arabia and opec as a whole is pumped at record levels. interesting. they talk about the freeze including russia, and that is enough to get the price up. what is interesting to me is the long-term future for saudi they have toow have something way over $100 per barrel. are they going to cut cost sufficiently? no. so how will they ever balance the books? i just don't see how. >> it can influence the price.
clearly if they start to cut now, they can influence the price of the short-term. if i was thinking about buying the bonds, if you look at the fiscal spending check, i cannot imagine it would stay at aa minus. tom: can you belong on the emerging markets? >> you could. onyou are bullish commodities, you want to be long emerging markets. beker oil prices will negative. our view would be opposed to going long on emerging markets right now. >> patrick armstrong. our own tracy alloway added to buy an tom keene. >> a check of the headlines at this hour.
hillary clinton is leading donald trump by a wider margin. the presidential election just .ver three away a poll finds secretary clinton amongg trump 50% to 38% likely u.s. voters. that is a from a we three -- only three weeks ago. joe stein picked up 2%. hillary clinton is buying tv time in republican dominated tech this. the party hopes to tighten the presidential race in the largest state. this cap the endorsement of clinton the first time the newspaper back a democrat for president since 1940. texas has not voted democratic in jimmy carter in 1976. a suicide bomber hit a check point security forces on the outskirts of baghdad. at least four people killed and more than 30's -- 30 other
blended. takenup has responsibility for the attack. townsti, coastal devastated by hurricane matthew. the amount of medical supplies and food arriving to the areas hard-hit by matthew's hard-hit. they have been struggling with a surge of patients suffering from cholera. deadthan 500 confirmed from areas struck by hurricane matthew. global news 24 hours a day powered by more than 2600 journalists and analysts. i am courtney collins, this is bloomberg. revealing what it has planned for the next 100 years, at least for now. this is bloomberg. ♪
scarlet: this is bloomberg "markets." i am scarlet fu. matt: i am matt miller. now to politics were the latest polls show hillary clinton taking a commanding lead. poll,ing to a wall street hillary clinton leads donald trump by 10 points. this is conduct that entirely after the second presidential debate. when we look at key swing states like ohio -- ohio and north carolina, i'll pull shows clinton puddings based between herself and opponent. that clinton has in northhe lead
carolina and nevada but trail trump in one of the biggest elect oral rises on the map, and that is the great states of ohio. here to talk about the latest numbers in the horse race is ben brody. thank you for your time. i wonder, why do we even look at trail trump in one of the biggest elect oral rises on the map, and that is the great states of ohio. how come these big organizations even do them in that of doing them like it will be on the ballot echoplex a few things happening there. the dynamics of the race for a become verye will unpopular candidate. you get the sense of where the race is and who people prefer. the other thing that happens is
a lot of times people say they will vote third party in september. this vote ultimately coalesces. candidates dorty not nearly get the totals that you see in september and up over. it hopes to dynamic the measure ofthe race before that kind coalescing is happening. >> have we seen any kind of ship to or way from gary johnson or jill stein? >> in the past month or so we have seen them lose steam by about a third or half, depending on which poll or candidate you are looking at. said i guess i have to go one way or another. matt: do we see trends strengthening to a vote? >> if hillary is of five or 10% three , thoughead of the polls she then gain another 5% with only one week to go? >> voters
think she will win anyway? >> sometimes you want to go with a winner or they say we can go back to it or party. what we know is hillary clinton has been ahead by either small or medium rise margins for the past three months. her margins may change over the next three weeks, and we will shift, and what that may mean. ultimately we are expecting the dynamics day the way they are. >> trump saying the election is rick and academic say no way. that is not really a new development in this campaign. new,evelopment that is hillary clinton staffers work terrified to make their e-mails classified. any reaction from that? >> you
have the wikileaks e-mail. then we have a series of new notes from the fbi. is formerbi note aides of hillary clinton did feel pressure to not label e-mails that came out about the benghazi attacks to be classified. was foreign information or other types that could be things of that nature. redacted, so we do not know all of the details. so we do think these reflect what some of the people who are redacting the documents, the pressure they felt in this eighth apartment after her tenure. >> thank you for joining us, then brody. the politics reporter in washington.
you can watch with all due respect. special coverage ahead of the debate in las vegas wednesday. scarlet: getting you the bloomberg business flash. supervalu selling to canada from one point billion dollars in cash. they will use the proceeds to repay debt. st. louis they save a lot operates 1300 hard discount grocery stores. 65 million dollars in lj entertainment. the company backed by the founder of black entertainment television. they will provide money and look for, as well as ways that they can work together. that is your business update. its 100w celebrating year anniversary. a look ahead at the next 100
years of automotive innovation. io at the bmw centenary celebration in santa monica, california. he was asked about what the future looks like for bmw. the next 100. that is how we imagine the future to look like. the future in which we believe vehicles will become intelligent. , we doat intelligence not want to take anything away from the driver and want to make every driver the best driver matt:. matt:it is still possible to pilot this car yourself? >> this is a car that can drive only when week, but to.customer wants
you will see a steering will that can fold out depending on what mode the vehicle is in. the driver will be in control of all of that. matt: what is the difference between germ -- driving the car for a driver that is all about cardriver, and designing a that is just a luxury vehicle that can drive it self? >> it will always be about the driver. even in the future were weak imagine vehicles that will drive autonomously, we want the drivers to be in complete control. this can actually help them perform the task even better. next you are in charge of all of the vans -- of all the vehicles. we see a concept over there that is designed specifically to be for the computer. >> it is a totally different brand. they are used to being driven.
for the future roles for roy's, we imagine that the car will drive autonomously. you will be driven. help youe able to organize. >> is that only for a phantom echo i would love to drive the ghost. >> rolls-royce is of course different. that they love driving themselves. for the future we could imagine a lit their. we see the accuracy of the future. this is one of my favorites.
there are not going to be any autonomous motorcycles as soon as we see autonomous cars i presume. you have been cutting edge in a retro way. no one it actedthere are not goy autonomous motorcycles as soon as we see autonomous cars i presume. you have been cutting edge in a retro way. no one it acted this to come out and you did. is this a totally different animal? >> motorcycles is a very different business and very different products to design. it is something very emotional. we call riding a motorcycle even today almost the last great estate -- escape. they will not probably become autonomous, but they will become intelligent. we are showing what that could mean and how it can make your ride even more of an. . >> i was excited to see you are looking at the possibility of a carbon frame. i see the concept has a carbon sign going back. bmw has massed produced this. is there a difference as a designer working with the new
serial? do you look at it differently when you work with carbon fiber? >> for the vehicles we are always looking into the engineers. we are doing a lot with carbon fiber. our company is now well versed on how to use them. we can do very complex shapes or very simple. longer? when you look at this car there is still a place where typically an engine would be. though a place where typically a trunk would be. do you think we will have the traditional card designs? >> i think you are beginning to see it. the futuree imagined
of the sedan. we have six-cylinder engines. in the future, it will be electric. the engines are smaller and can be placed in different areas. more interior space. that was the bmw global head of design. scarlet: stanley fischer said he would be very reluctant to raise the inflation target, saying it would underline the framework. this is bloomberg. ♪
matt: we're live from bloomberg world headquarters in midtown manhattan. we covering stories out of silicon valley. washington, the u.k.. 500, 11 sectors there are lower, let down by consumer discretionary and energy stocks. republican presidential nominee donald trump is escalating his rhetoric of a great election, asserting large-scale voter ford is already underway november 8, as polls show that hillary clinton passes lead is widening it ross the board. is reporting third-quarter results after the polls today.
we break down what to look for and then at 4:00, when the earnings come out, we break down the numbers. doolittle with the latest. abigail: all about small moves for u.s. stocks. we are looking at very small nasdaq. for the we may have wait and see trading today, but this follows back to -- back-to-back weekly declines firstree major averages, back-to-back for several weeks, the longest since the brexit. a bit of volatility returning to stocks even if not today. among the four sectors trading higher in the s&p 500, we are looking at utilities, telecom, and the real estate sector. the reason for the strength in
dividend yielding sectors and stocks, you take a look at the 10 year yield on the day, we see it has dropped dramatically and now it is drifting down. its biggest one-day drop is in about three weeks, as empire manufacturing data is disappointed and also the fed ice chair did speak around noon, it has been training down since then and before as well. there is reason to think it could trade up. this chart suggests we could see a return to volatility. in white we have the s&p 500. convergence,ive trading higher and the vix lower, they tend to read converge. so we could see the s&p 500 dropped, something to keep an eye on. earnings, hasbro and
bank of america reported eating. netflix put up several messy quarters this year. we do see stocks trading down into that room or today. matt: thank you very much. let's go see what the headlines have in store for us. court is in the newsroom. courtney: documents show a senior state department staffers sought to change the rest nation e-mail from hillary clinton's private server. an e-mail related to the 2012 attack in benghazi, libya, the change. he saidwoul tt ensure that document be archived never to beach -- never to be seen again. they did not change the classification level. high school graduation rates have reached in -- a new high. for all ethnic groups as well as low income families. the president spoke earlier at a
high school in washington. president obama: we live in a global economy and when you graduate, you will no longer be competing just with someone here in bc or a great shop. you are competing with someone on the other side of the world in china or india because jobs want, wherever they because of the internet and because of technology. >> graduation rates have been steady since states drop -- back in 2008. six were injured in an explosion at a facility in southwestern germany. .he blast occurred today residents on both sides of the are being asked to stay indoors and keep their doors and windows closed.
the austrian government plans to demolish the house rate of filler was worn and a new billet -- a new building will be constructed. it is unclear whether the owner changed her mind if the government acted on plans to seize the property. in detroit, the museum is planning a $60 million expansion, including interactive theater, a performance and recording studios. acated in a house where cultural and commercial music empire was launched. scores of stars and hits were created before they left for california in 1972. global news 24 hours a day powered by 2600 journalists and sin more than 120 countries. this is bloomberg. scarlet: u.s. stocks now lower,
the seventh straight set -- seventh straight session, clearly in wait and see mode. joining us now is the equity and to evidence strategist. we were just talking about how the team today is about it nation, the idea that inflation is around the corner and expectations are picking up. is that going to be bad news for stocks? >> i think there are two types of inflation. we have been in this mindset for the entire cycle. runaway inflation, yes, that is bad. in a mildly reflation a have aon in which you petition back from equities and they, and also because would also likely tend to correspond with economic activity.
>> you came with a chart prepared. that is the white line. he also have excellent taste -- expectations climbing, the blue line. had seen it on the upswing earlier in the year ended came back down. >> a couple of things are important about the dynamic. actual core that inflation is likely to remain and above area. by the end of the year, we could see that rise all the way to 2%. what kind of reaction with the markets have? havesituation where we inflation coming in at that level or slightly higher, it is
almost completely priced out of the market and we see a situation where the market itself does not believe inflation will return until it is happening. i think across the street, analysts have had expectations because of these oil-based effects rolling out of equation, but nonetheless, the market is just darting to price this in. we have seen the market discount it at a middle -- minimal level. they prefer to look at the core but they also take expectations into a out more heavily weighed than they do past history. it's like oil is running the game right now. >> s inflation is in patient expectations. one thing that caught that by surprise is the decline.
loyal prices rise consumers actually see that prices are going up, that could lead to higher inflation expectations and bring about real effects. >> then you have got to look at the micro. tradings reported numbers that beat analyst estimates. are they completely divorced and fixed-income trading is a different story? >> that is a great question. if you look at the performance given the steepening of the yield curve, the sector almost underperformed on that basis. >> if the fed is point to raise rates, they get better interest income, plus a fixed jumping 40 or more percent. >> how sustainable is the higher
trading revenue or the banks? the market is saying it is a potentially one-off occurrence and if you look at expectations further down the line, expectations are somewhat high and toward the end of the year, those expectations tend to come down. if you think of what is going on, inflation is rising, participatingnot in the buyback program because we are in the blackout for most companies reporting. the market is holding up well. >> what does that mean after the december fed meeting? >> it is almost a done deal us far as what they are communicating. matt: assuming they go and indicate another two increases, what does the equity market look like?
>> last time, it was a negative revolving around you. looking at the interdependence of the emerging markets as far as bank loans between emerging markets either on our currency basis or intercountry, those have gone down as a share of gdp. between thefactor emerging markets and the fed has declined but they remain exposed. right now is a potentially good window for the fed. it is a situation where investors are reallocating and they may be able to withstand the shock. >> thank you so much. note, comingamming to bloomberg television in a primetime slot, the david rubenstein show. the renowned financier and philanthropist travels around the country talking to leaders touncover stories and paths
success here the first episode features bill gates, microsoft cofounder. >> your family say there is something wrong with the young to success here the first episode man because he wants to just do computers? >> they knew i was a test. i would skip athletics and leave the house when they would prefer i wouldn't go work on these things. it was kind of considered a little strange. with influential people in the business. a series debuts tonight 8:00 p.m. eastern. this is bloomberg. ♪
scarlet: when it comes to market reaction to the race to the white house, traders shut down the possibility of a donald trump win. after he declined in the polls, traders seem to be discounting the possibility of not only a clinton when but a demo attics the above congress. >> it is common in this election year, whether or not brexit or the u.s. election, a lot of surprises certainly as hillary clinton's numbers have improved, thinking about the composition of congress and that is important. most of the numbers i have seen said it would be difficult for a clean -- a clean sweep. that would have implications for different sectors in the market as well. classic view bring together a portfolio, what is a girl to do?
>> are different analyses of this. you say republicans with ryan maybeclinton presidency, the bill clinton presidency is a good model where there is compromise in the middle and inks can get done. a clean sweep, you have to think candidate clinton's agenda much of it get past in the law and that would have implications for infrastructure, health care, energy, because she has much different positions than republicans in congress. i will not go sector by sector here but there will be things that -- sectors that will benefit and be heard with a clean sweep. >> the rhetoric was you go along is that now- erased? is that what we are seeing >> i think markets historically tend to have a comfort level with the known
candidate and hillary have been well known for years. some might argue you might get a relief compared where we were a couple of weeks ago. it will move from that to the signals we would get from president-elect clinton issued talking about meeting in the middle with speaker ryan or is a clean sweep?t it is hard to drive out the implications right now. >> another possibility is there is a lot of cash on the sidelines and once we know what is really happening, the cash may move into the markets. >> there is definitely a case for that, certainly if you look at indicators of cash, they are higher now. a couple of reasons but uncertainty about the election to be one of them. equateontinually low-quality -- with complacency.
right now, 16? why is that i -- a complacent market? >> the apparent stability globally is very fragile. it is being supported by negative rate, massive quantitative easing, diminished returns, uncertainty about what is the next, what is chair yellen thinking, with all that in the background, and bond yields so low, there is not a lot of cushion in markets. they picked to be too complacent to us. >> the bottom panel, moving index, this shows what you are talking about. polls. is getting in the this is the vix going nowhere fast.
the move has not updated so we do not know where treasury volatility is so we assume is going fast. >> it will pick up and it will have to pick up. abouttimes, you talk quantitative easing. of negativeent rates in quantitative easing is the tendency to repress in the markets. give them the beach ball and they say look, dad, and it pops up, there is a risk now down the road in that we have had volatility suppression for five or six years. underlying tensions have not gone away. >> usually when it picks up, -- why will it be any different this time around? treasury yields spike and you go
back to treasuries. concern about higher inflation, stocks go down and bonds go down and it really depends. we're so used to having inflation low talking about deflation, it does change correlations in the market. bloombergs rich on daybreak americas. matt: still ahead is options insight. we will limit how investors can protect themselves from short-term volatility post earnings. this is bloomberg. ♪
scarlet: i have scarlet fu. abigail doolittle. abigail: thank you for joining us, jim. i appreciate it. again, thanks for joining us. after a summer of no volatility and a lot of quiet -- quiet trading, we have seen a return to volatility and weekly declines to major averages, we are at the peak of seasonal volatility. what can you tell us? >> we have been cautious for a while now anticipating a seasonal lift involuntarily. happening in september in terms of spiking just a tad, never got above 20. to us, it is not a shock at all. we are sitting on seasonally the peak of equity volatility for the entire year. andntend to be cautious
once we see a shock of reasonable magnitude, at least into the mid 20's, we will continue to have that view. >> what does it look like for the safe haven, the etf that focuses around the yield. election, energy prices come out in december, the forntial negative catalyst a shock as well. , 56% chance of the fed moving something to keep an eye on is u.s. treasury volatility. at thetake a look implied volatility, very near the lows of the last several years. when people say we think the rate hike is priced in, the counter is we do not think it is, keep an eye on implied volatility. we want to see a list before the
market -- expectations of a market. abigail: good stuff. reporting with today, after the close, netflix, a lot of volatility this year. netflix, not its hunt of time to capitalize on this. rob sanders is our analyst and likes it over the long-term, but we want to manage risk. stock goes down 13% last quarter. the risk is they do the same thing. grandfathered, rolling them to 999 a month and subscribers have left in that is the risk. to novembero out and sell 115 call, you turn around and buy 9585 foot spread, earlier today, you could do that for $.50 and it equates less
than half of 1%. commit to selling some of the stock you turn around and have the downside protected in the case of netflix acting as it did last quarter. we want to play intel on the long side. stock is near high back to thousand. 40 strike calls in december. >> great stuff. back to you. ahead, the company prepares for third quarter heart . watching carefully for slowing domestic growth. 60 million more subscribers are not grandfathered. this is bloomberg. ♪
secretary clinton leading from 60% to 38% among likely u.s. voters. a four-point lead three weeks ago. libertarian gary johnson is 5% and the green party's jill stein picks up 2%. hillary clinton is buying tv time in texas as her campaign hopes to tighten the presidential race in america's largest conservative state. the first time the dow's newspaper democrat for president and 1940's. voted democratic in. images from ac kurdish tv show you that the widescale military operation to recapture the northern will only the blast has called a large is you