tv Bloomberg Markets Americas Bloomberg October 20, 2016 12:00pm-2:52pm EDT
>> from bloomberg's world headquarters in new york we are covering stories from new york to brussels. hillary clinton and donald trump doubled down on their strategy in the final presidential debate. exclusive interview with tom steyer and the activist for environmental changes and we sit down with bank of america ceo brian moynahan. trading day,e julie hyman joins us with an update on where things stand. julie: they bounced off off lows in the session, still in the red across the board. we have a lot to focus on today. let's start with earnings. we see the laggards weighing on the major averages. a verizon coming out with profit that beat estimates, but subscriber growth trailed by a
wide margin and the cfo says the company is evaluating the extent of the damage from the breach at yahoo! and the effect on the deal. microsoft will be reporting after the kos -- close of trading. even though it is not a lot of percentage terms because of the weight, it is a drag on the s&p 500. union pacific railroad profit falling short of estimates and demand continues to lag and they are having trouble raising prices. then you have oil which helped to oyster the market -- helped to bolster the market yesterday, pulling back from a 15 month high as investors look at the potential for an opec deal and the effect on the market. those prices down today. the ecb, mario draghi saying there was not discussion of an end to quantitative easing. he said there will be a taper.
we can look at the effect in different ways. the 30 year here in the united states we are seeing a lower yield off to basis point -- two basis points. the euro is also trading lower versus the u.s. dollar. not a huge decline, but a dramatic move as he was making his comments. as a follow that were not enough, we have the debate to consider as well and there we are not necessarily seeing the effect on the u.s. equity markets, but the pay so which has been -- peso which has become the proxy for the election. this is the peso versus the dollar, you have it climbing and poll standingsmp going down and these yellow dotted lines are the various debates. the effect we have seen is essentially the peso gained ground since the first debate am
a bottomed after the first debate and began going up as we see donald trump's poll standings piquant come down. if you are a bloomberg client it 8, a good want to monitor as we head into the home stretch of the election. vonnie: thank you. let's check in with bloomberg first word news and mark crumpton has more. mark: the latest bloomberg politics poll asked who should be the face of the republican party nationally in the event of a hillary clinton victory. picked by's presidential nominee mike pence a donald trump got 24% ahead of texas paulor ted cruz at 19% and ryan at 15% and john kasich at 10%. if donald trump wins, clinton has the support of 32%, bernie sanders 31%, elizabeth warren at 23% followed by tim kaine and martin o'malley.
tonight mrs. clinton and mr. trump wilson -- will try something new, civility. they are attending a charity dinner named after the first catholic presidential candidate. they will sit just one seat apart for the evening with new york's cardinal timothy dolan asking as the only buffer. the philippines president made the strongest comments signaling a split with the united states. the president is in beijing with meetings with the chinese president. he said he wants to break away from the u.s. and shift toward china and russia and the u.s. is the philippines against military ally. flood, drought, frost, and hail cut into worldwide production this year across europe and south america. italy remains the top producer for the second straight year according to figures released by the international organization of vine and wine.
france was hit hard by spring flood and summer drought and spain. u.s. winemaking grew 2%. global news 24 hours a day, powered by more 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. david: hillary clinton and donald trump faced off in their third and final presidential debate in las vegas last night and possibly the most talked about moment came when donald trump declined to say he would honor the results of their election saying "i will keep you in suspense." i stop -- i sat down with tom steyer come a clinton supporter and a cofounder of next generation every have an exclusive interview. he weighed in on what he thought of the debates we have seen this season. all three general debates between mr. trump and secretary clinton energy and climate really only came up when
mrs. clinton forced it to come up and last night it really didn't come up at all. we feel as if that is a big missed opportunity for america, but the debates are overcome we pushed all year long to elevate and topic in american minds i think that has happened, but for some reason it never made it onto the general debate stage. david: you put millions of dollars behind this effort to make climate something voters care about. how do you make it something caret -- voters care about? tom: voters do care, you just have to break down the electorate. the first thing i would say is voters have moved on this regardless of political party or demographic. if you ask republican voters in ohio, do you want the government to accelerate the move to clean energy? yes, republican voters in ohio and every one else goes up from there toward 100. all of the voters regardless of
how you ask the question have moved dramatically over the last two years. the issue is where do you prioritize it? how urgent do they see that we make this move? if you look at people under the age of 30 this is really their number one issue. david: you are targeting young people and funding get out the vote efforts. for the longtime this was the purview of the parties and now you have groups like yours doing it amidst this conversation about the future of the public parties, what happens to the parties? what do you see the future parties being? will it be as supportive? tom: dealing with people under the age of 35 is that their party identification is lower .han previous generations i think democrats are doing much better than republicans, but in general that age group is much more likely to care and to be
passionate about issues and ideas than they are about that we arei think trying to do the traditional american political job of encouraging people to talk to each other about the issues they care the most about. if that is the future of american politics, the american -- that the american citizenry engages with each other, that seems to me to be incredibly encouraging and positive and we are extremely proud to be part of it. david: you spent million dollars -- millions of dollars of this, what is the metric by which you judge whether that money is being set -- spent effectively? along the way are you taking stock of what is going on? tom: when we think about november 8, there will be an awful lot of things out of our control. whatever mr. trump did or did not do offstage in 1995 will have a big impact on election results.
what we try to do is measure what it is we are encouraging what the results are directly of what we do so we can figure out is it important, does it do better? we will see how many people we are going to turn out millions of people. we will have signed up hundreds of thousands or a million people to register and vote. we will have metrics we'll be able to see after the fact who will vote it, we will not be able to see how, but we will see who voted and how many people we have touched and what difference we made and how we can do it better. from our standpoint we are metric driven and we can see the traditional american behavior of talking to each other is more powerful than television ads, more powerful than anything else, just a big organizational task to get people to knock on doors and talk to each other and actually organize human beings to make that conversation possible. david: i listen to the rhetoric on get out the vote efforts,
what democrats are saying versus republicans and i am surprised it is such a bipartisan issue. are you surprised you have republicans sounding the alarm about the prospect of voter fraud so loudly? tom: i consider it to be preposterous. i think everyone is focused on the word offensive and i think that word is ok, but i think the idea that somehow -- it is preposterous and it shows a desperation statement. when you look at 140 million have, i do not help -- no many truckloads of pieces of paper he thinks are being stolen, that is a preposterous and ignorant claim and one that everyone gives talking about, this could be destabilized, i think it is ridiculous and it makes him look ridiculous. about the me ask you degree to which your money is an anti-trump bet. you got into political giving in earnest in the previous campaign
in 2014. how does donald trump change your calculus when it comes to political giving? look athave tried to this campaign in terms of what was going to be close that we cared about and obviously the presidency is the most important position in the american politics by far, especially this time when the supreme court is so much in play. i think mr. trump at this point is most important in terms of how much does he infect his whole party and that is a question to which no one really has an answer. the fact of the matter is what we have been doing is away from mr. trump and almost away from secretary clinton. what we have been trying to do is engage voters in california and outside on the issues and have them have a conversation with as much information as possible and do it in person repeatedly so when the time comes we have the broadest, best informed electorate because we
believe that is how we get the best answer. really we have not been so focused -- of course we care about the races, but by and large we are proud to be a part of the traditional american process, issue driven, very passionate, but with a broader agenda than even just the most important. david: my exclusive interview with thom stier, cofounder of next generation -- hints that president the bond purchases could be extended. what does that mean for the eurozone? this is bloomberg. ♪
vonnie: this is "bloomberg markets." i am vonnie quinn. david: we are looking at the biggest business stories in the news. shares of american express surging the most in seven years after they posted third-quarter profit that beat estimates and they are raising to profit forecast and the 2017 is unchanged -- prediction is unchanged. spending bow to trim $1 million in expenses by the end of next year. hedge fund investors pulled 21.2 billion -- $21.2 million. outflow -- the net representing just under 1% of the industry, the largest since the second quarter of 2009. investors gained $51.9 billion in the first month of the year overndustry assets rose to $2 trillion. nintendo is raising the curtain on the switch from a tablet like
console that allows gamers to play at home and on the go. until now they had not disclosed much information and they plan to put it on sale in march, a price has not been disclosed. that is the bloomberg business flash. vonnie: ecb president mario draghi signals of the central bank will not stop the quantitative easing program without tapering bond prices first and that means stimulus will likely past -- run past march up 2017. -- about how the central bank should approach central changes to the plan. >> a couple of interesting points, growth, you can still see downtime risks -- downside risks. inflation is a reminder to put context.tension into they said despite hedge fund
inflation picking up because of the contribution to energy prices, there is no convincing evidence that underlying inflation is on an upswing. that is the bottom line and it goes back to the mission. the main take away is nothing at this stage will wait for the projections, december is where we are going to discuss. jonathan: the news conference finished 15 minutes early and the president wants to get to december. let's take what he did say as the basis for the conversation. let's think about whether it will be necessary. they said the forecast of humorless stimulus remains in place. we get to december and they extend and it is how they extend. what they discussed the issue of scarcity. it is the issue for them when they get to december how do they get around that? >> when they get to december they might tweak the parameters around the asset purchases and
move away from capital. you might do capital index germany or that market sizing and we know that would favor -- one has to wonder if there is a signal of the extension here and whether the next leg of political support will be gradually moving away from asset purchases and emphasizing more the credit channel, maybe more news on the tltro or on the corporate side. one has to think creatively. we learned from japan and we know there is scarcity which we can address on a quarterly basis, that is not a permanent fix. alix: is it still an issue when it comes to the corporate market? draghi talking about issuance being up, but high-yield has not kept pace. is that it issue in the corporate world? >> certainly and i think that is
where -- maybe he is not signaling anything precisely because they are really trying -- they generally do not know and maybe they are really open to think about new policy options. while we are talking about december in the option we are talking about, we know that it can buy you 3-6 months more. i think they might be at a point where they want to reassess the broader impact of policy. what they suggested is that policy is working and they mentioned how long growth and like theibution private sector, household, corporate sector, these rates are working fine and the transition is happening more effectively. i think you keep doing what you are doing and try to come up with new options to sustain and not going to the quarterly issues of both -- bumping against the wall. vonnie: that was the portfolio manager at oppenheimer.
♪ vonnie: you are watching "bloomberg markets." i am vonnie quinn. david: and i am david gura. donald trump asked if he would respect the outcome of the election, he saying in effect to chris wallace the moderator of saying in other words that he would not respect the results of the election. "disliked the outcome of the 2008 race, but had the duty to concede adding that americans should be confident in the integrity of elections." what
would a contested election mean for the united states? let's ask bloomberg's ben brody. this had any credible fallout, this one line from the debate. leading up to it, there has been concern about whether or not donald trump would respect. what is the latest today. ben: that the you talked about was a powerful one. if john mccain obviously the 2008 nominee come a popular figure within the party and he talked about american exceptionalism and talked about the vote being a respect for the will of the american people. it is very powerful. the latest is donald trump is continuing to talk about rigged elections and he accused hillary clinton of having received the questions of forehand. that was unclear if he was talking about the town hall in march where it seemed like she might have gotten a heads up on what was going on. he was scheduled to make his
first event after the debate in a few minutes you will be in ohio, the key battleground and we will see what his message in. so far he is not backing away from the rigged election stance and that he may or may not be going along with the results, especially if we do not favor him. vonnie: it is great that senator mccain came out and said this. will donald trump come out and have a clear message on this or will he continue to fudge the issue and will there be desertions from his staff? ben: it is unclear right now. certainly last time there was a round of trump scandals, things he said were beyond the pale we had a few republican deflections in a few days later they came back. it is unclear if down ballot republicans want to go out and come back. what we have heard are his staff and surrogates trying to moderate the message.
either they are saying flat-out contradicting him that he will absolutely except -- accept the result of the election or trying to moderator more that he will as long ascept them they are certified and he makes sure there is not fraud. whether or not he will have a clear message, it is donald trump and from day-to-day he could hit the same theme over on over or change completely. it is very difficult to predict what he may do. it is a message that amplifies and motivates his supporters and a maybe one he continues to hit, especially if whole numbers continue to not look great for november 8. david: put into context this moment on the campaign timeline. we have now had three presidential debates and the vice presidential debate and what will the candidates push for in the next 19 days? ben: what it basically is from that is a scramble from state to state. you have to hit the battlegrounds over and over and over again.
this is the time trail supporters visit three or four states even in a day. you need to make sure you are organizing your supporters down to the precinct level and determining who will come out to vote and who could come out to vote and who requested an absentee and hasn't returned it yet. you need to be doing all of those things and coordinating closely with state parties. david: ben brody joining us from washington, d.c. up, the single day in 2016 was the single largest shopping day in history. we asked the companies copresident how to -- how they follow that up. you are watching bloomberg. ♪
vonnie: and i am vonnie quinn. s are some republican recoiling at donald trump's proposal that he would accept the results of the election if he loses. senator lindsey graham says donald trump is doing the country a "great disservice by selection the election is rigged." twitter says that mr. trump was the subject of nearly 60% of the tweets said about the candidates . the social media platforms as the top tweeted moment was when donald trump and hillary clinton's discussion about the treatment of women, the second-most tweeted was donald trump's refusal to say if he will accept the results of the election should he lose. iraqi special forces has joined the battle to retake mosul from the islamic state. were aided by air strikes
and artillery from the us-led coalition. the attack is now in day number four. a scientist at the european space agency are downplaying the likely lost of its mars lander. they say a wealth of data sent back by the experimental promo help them prepare for a future mission to the red planet. the lander was designed mainly to test technology for european robotic mission to mars in 2020. data shows and enter the atmosphere as planned, but the signal was lost shortly before the expected touchdown. global news 24 hours a day, powered by more 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. vonnie: a quick check on the u.s. stocks. we are now not down as much as we were, not a huge day for movement overall. .he tap -- the dow is flat the s&p 500 is off the low of
the day, the only sector in the green at the moment is health care. crude oil producers are rebounding a little bit after the world bank said there would be higher prices here. s&p down two points in the nasdaq down about eight points, less than .2%. we have abigail doolittle in midtown manhattan. abigail: we have the nasdaq largely unchanged, down just about .2% and this follows mild intraday volatility. it has been down .6% earlier all in the middle of earnings season. we have investors somewhat nervous or jittery as to what is going on and what could be ahead . as for what is helping the nasdaq, the top move is walgreens boost alliance, on pace for the best day since june 29 after walgreens beat fiscal fourth-quarter earnings despite a small revenue miss. they gave a fiscal year 2017 earnings outlook that nicely encompassed the consensus
estimate suggesting potential upside is possible. the company said the right aid deal is likely to close in the first quarter of next year providing perhaps some relief for investors wanting that deal to close. as for companies reporting today after the close, one of the big , this isanies microsoft, this is microsoft shares are lower although well off the lows. the second biggest drag on the nasdaq today. investors are looking for adjusted earnings of $.58 per share of revenues of -- important will be what the cloud services or the azurew revenue comes in. the legacy business has been bumpy for microsoft over the next several quarters and considering that a couple of days ago intel guided down for the first quarter citing weakness in the enterprise demand and around pc's it will be interesting to see whether this is reflected in microsoft's december outlook and investors
will be looking for that on that call after the close. vonnie: we will get the latest from you after that. thank you for that. david: bank of america chairman and ceo brian moynihan should sits down with erik schatzker to discuss earnings and a surge in fixed income trading throughout the u.s. banking sector. this is bloomberg. ♪
led to a drop in clothing sales. offset by an increase in sales of household goods. a strong july helped make it the best quarter for british retail sales in almost two years. swiss drugmaker roche says third quarter revenue rose more than 4% thanks to sales of two new breast cancer therapies. the other largest maker of cancer treatments. sales came in just short of estimates and they do not report third-quarter earnings. shares of lufthansa jumped 10% after the german airline reversed a three-month-old profit warning. in july they cut the forecast saying profit would fall because of terrorism and political uncertainty. the airline raised the forecast and reported an increase in reservations for premium seats. that is the latest bloomberg business flash. vonnie: you are watching "bloomberg markets." we have more in a moment. this is bloomberg.
♪ vonnie: alibaba's single day sale is fast approaching, it takes place november 11 has -- and has become an e-commerce phenomenon. they want to take it global this year teaming up with cosco and macy's. bloomberg technology's emily chang is at the summit in san francisco with mike evans -- alibaba's copresident. emily: thank you so much. mike evans has been traveling the world opening global offices for alibaba everywhere. he is in san francisco about to get on a plane back to india. vonnie was speaking about singles day coming up in another month. you have an event happening now in china to kick off what is to come. what are you expecting for
single day this year versus last year? mike: it is the biggest shopping day of the year in china. we kicked it off last night in china with the announcement that david hill, who has organized super bowl's and done the oscars will be directing it and katy perry will be the global ambassador and we have thousands of merchants and entertainment and it will be a wonderful event that all of china and many different parts of the world will participate in. emily: i was there last year and you processed $14 billion of merchandise in a single day. kind of numbers do you expect to this year? mike: $14.3 billion last year actually. it is not about the numbers, they will be big and bigger than last year, but what makes it a success is a large amount of product that changes hands .etween merchants and consumers it is a social experience -- it is a great event for all people
that participate and we really -- if it isn't then we haven't achieved what we want. it brings people together in a way that they live their life now, which is online buying things, chat rooms, all sorts of experiences that they have not had historically. singles day and the global shopping festival is all about the total experience, not just p.m. at of gnb on the day. emily: there was a letter sent to shareholders that rattled investors about how alibaba needs to transform, not just enough to be an e-commerce company. what is that mean for your job? mike: a means we have to think about the way retail build change in the future. people may have misconstrued his letter, it is not that e-commerce is not important, it is that e-commerce is -- that aspect of retail needs to continue to adapt so one of the things he is focused on is what will happen to the off-line
sector of the market in many economies that is not growing and declining. we believe offline will be a critical component of online growth entity to reinforce. it is the change in the morphing of the retail model in the future that he is referring to, not that e-commerce will not be important. emily: apologies for the background noise. mike: i hear it at home all the time. emily: part of the reason you are here is to dispel some of the untruths and misconceptions about china and some people do not even really understand what alibaba does. it is not just the amazon of china, it is something more, but it is hard for u.s. consumers to understand because there isn't quite an equivalent. what is alibaba? mike: particularly for a u.s. consumer, alibaba is a combination of facebook, google, amazon. what do i mean by that? we have a social component to
our commerce program. we have a search component in everything that we do, we have an innovation and a cloud component which reflects the totality of businesses you see in those three companies worried we do that all in one place. if you look at what our businesses are today we have a core commerce platform and a big digital and media entertainment platform and a services and integration side of the business which is very important. everything from travel to ride sharing to involvement in food and food delivery and health and d vr and all these technologies of the features of those are enabled by our businesses. emily: we had two investors on stage, jim and kyle who said it
china is in a massive collapse ahead of us and the banks have four times as many toxic assets. there is really in's and billions of real estate not being used. is china in a bubble? can the economy continue at the pace it is? mike: china is not in a bubble. he economy is flowing, but not slow, and the combination -- the components of the economy are changing rapidly from industrial and manufacturing to services and consumption. there are too many points that were raised yesterday when i was not here to discuss them and , bute them in isolation what i would love to do is to get both jim and kyle to come to our campus to sit down and we can help them understand some of the things they do not understand. emily: gdp is flat or dropping consumers areat
still spending money. where is the disconnect? mike: the disconnect is not understanding that when the economy slows not all of the economy is slowing. as part -- hearts of the economy but the are slowing, services and consumption components of the economy are growing very rapidly. 60%business grew almost over the last quarter year on year because more people were consuming. the chinese consumer population is 423 million people with $4.3 trillion of assets, deposits in their bank accounts that are on levered that they want to consume what. i think the mismatch is understanding which parts of the economy are slowing and which parts are growing and why they are growing. we have the data and analytics to support both what we see and what we believe.
emily: you have a plane to catch. mike evans, vice president of alibaba. i will send it back to you. vonnie: that is bloomberg technology's emily chang. at the summit in san francisco. david: breaking news from a rally donald trump is holding in delaware, ohio just north of columbus. here it -- he is clarifying a bit what he said last night. he says he will accept the election result november 8, the caveat being if i win. he also said hillary clinton is "capable of anything." and under that put voter fraud. you can watch on the bloomberg .ve , bloomberg's erik
schatzker is standing by with an exclusive guest, the chairman and ceo of bank of america. i am here in midtown manhattan at bank of america's local headquarters on 42nd street. it is great to see you him a thank you for spending time. this is the equity trading floor. let's start with a 30,000 foot perspective. i do not need to tell you what is been going on in banking, revenue has been dropping and regulation has been increasing. the only way really to boost profit has been by slashing cost. where are we now? have we bottomed or is there further to drop? brian: if you think about it as coming off the highs of the revenue basis in the activities before the crisis, you probably bottom. this year i talked to this time and our revenue grew 3% and cost went down, it is steady as you
go and driving incremental revenue growth. you can only grow so fast and really managing cost carefully. the way we manage cost now is more strict tragic -- is more strategic. isn't -- the $20 billion a year we took out was really driven by the need to move the cost structure. now it is incremental in driving it through. erik: the economy remains a question. client behavior and loan demand can be a leading indicator. what is it telling you about the economic outlook right now? brian: you think about the u.s. economy and what is it driven by, it is driven by consumers. and our customer base are spending 5% more than
they spend this year versus last year. erik: does that tell you this one and 1.5% growth environment we have been stuck in will accelerate? brian: i think you get to the other question of what is going on in companies. firm -- last year it was higher and they are slower this year of their estimates are pretty much on par to how we are growing now. we do not see a lot of disruption to that, but you do not see the catalyst yet that will grow up the growth rate. importantly, as the stimulus comes out and the economy is more on sound footing it will take time. the economy is growing and consumers are spending and we feel good about the u.s. ofk: the fed expects growth 2% for the next two years and 1.8% in 2019 and at the same time the fed anticipates raising is that rates by 2% --
a scenario that makes sense to you? slow growth but relative to where we are now dramatically higher short-term rates? brian: relative to where we are now that would be dramatically higher, but if you take all the days in which the fund rate was below 3% a basically happened over the last six years or so with a very short timeframe and in other very difficult time. abnormal are in a very position back to a normal position. the rate structure is very low and constructive for economic growth and very accommodating. long-term financing costs, very low for companies and that is why we see pretty good activity on that side although we are going to be conscious unless final demand is there. they are borrowing money to do things and demand has been relatively strong and there is a worry this court or will slow down and we think it is more due to the uncertain environment and there are lots of particles and thoughts around that. it is more due to people to just
wanted to make sure the demand they see is fundamentally based and that is what they are looking at. erik: what kind of a operating environment would it be for a bank like you that has sub 2% growth? that sounds a good rest before a flat yield curve. --an: a flat yield curve let's go back, if we finished the quarter and disclosed 100 basis point parallel rise from 50 to 150 and 50 on the 10 year at the time to 250, that would be a flat yield curve. we are not any better or worse, it is because the fundamental dynamics of what drives p&l is your deposit funding structure. if you think about our company, 500 billion dollars of on interest-bearing that are core a cart -- core accounts this company runs his household on, that is non-interest-bearing and his environment does not need as
much as the environment you are projecting and those numbers are .ery strong a lot of people have a belief that the banks are short loan, that is not what happens, we borrow short and lead short, a lot of the borrowing short has no interest cost and that drives p&l. erik: you talked about third quarter, they surprise for your firm and the industry as a whole was fixed income trading. it does not surprise you that there are lots of doubts about the sustainability of those kinds of results. what is a reasonable expectation for next year? brian: in the end you have to give me what the market will be light and the market is plugging along like it is and we expect to get in a fairly narrow band. if you go back and look five or six years the trading revenues probably have a low of $2 billion-$3 billion up to $4 billion-five billion dollars and the way you set it up is to basically make money in any reasonable environment.
this money we made money -- this year we made money in every quarter. we took a lot of the cost structure and a lot of the capital requirement for stuff that was not that important and narrowed the business, five years ago. we made money fairly consistent somewhere between $600 million and $700 million and $1 billion after tax. erik: where are the best opportunities in that business in trading, fixed income and equities for this bank and where should we expect to see you pull back further because it does not make economic sense? brian: we will not be changing the nature of the business except for what is ebbing and flowing in the market. it is just at the edge of the market. we have never had a big commodities business, we do not see where those things are going. that we havesaid to keep the business relative to the size of bank of america about a third and so it runs a
third of the total balance sheet and it makes $1 billion or so. we are very comfortable with it. erik: did you make a conscious dishes in -- brian: i believe last year of the year before people cannot see it and what is happening now is able see that sticking with a straightforward strategy and a simplified strategy that plays up the benefits of the issues allergy to have more -- allows you to have more occurring of it. it is more recurring. we get up in the morning of a make a lot of money and markets because we have a big issue and space in fixed income. erik: we are here in the equity trading floor. did you make a conscious dishes and to make -- to get smaller inequity -- in equity? brian: on the equities is this it has been interesting. i was say that the heritage of the company was a cash-based
equity business and it had to move to more electronic-based and derivatives based. they have done a great job of repositioning and we are down significant numbers of people and revenue has been flat and we are making some money. whenever he is worried about fixed income, the revenue businesses what we work hardest on. erik: does he still need to make cuts? brian: he is expanding in areas for the clients and coverage every have the client list where we want it. these businesses are dynamic come in my great -- it might be macro type of activity order might be stocks company by company and everything in between. they are always moving the business. erik: i would like to get specifics from you on the role european banks are playing in the u.s. market. we know a number of the most recently deutsche bank have pulled back or are considering a
pullback. where is the most notable to you and who do you think is most vulnerable? brian: each competitor will have their saying i know what they are doing and i know with the objective measurement is. if you look at the revenue base of the top 10 participants in sales and trading and look at year-over-year i think basically our firm has gained 100 basis points in market share. the big universal banks have gained. i think it is coming out of people fine-tuning their business models and coming toward people who already fined tuned their business models. what deutsche bank and others are contemplating is more of a fine-tuning and in some cases you have seen wholesale withdrawal of some of the european banks from some -- brian: i will not reflect on there's. those banks are stable and drive. erik: what i am adjusted in is
where you see opportunity. what can you take it vantage of? brian: the opportunity for all of our business is the same. we take the clients we have today and provide more capabilities. if we have a fixed income investing client should we do equities with them? we are striving with that. those opportunities might change in a moment by what is going on in the markets, ipo's or no ipo's, leverage finance or no leverage finance. you have a set of clients that are major investors and we have a research team that drives it and we have to deliver to them. erik: but there are other clients served by other institutions and those clients might become, by virtue of sure to do changes come available to you. brian: and we will take care of them when they become available. erik: that is why i am adjusted and where you see the opportunity to grow. brian: i am sure they have sales
people in other opportunities and they are fine-tuning all the time. erik: how much of an impact he think brexit will have on your industry? brian: i think it will have an impact because he used to be able to do things on a unified basis and now you will have to do it two different ways, a u.k. way and they eu way. they will have extreme similarities and everyone we talked to on both sides of the channel are interested in trying , the acree severity meadow cost will go up and cause all of us to look at that and ask if it makes sense. not knowill -- we do the rules of the game and there is a range of outcomes. erik: what is the base case based on what you hear from theresa may and the eu? does it seem like a hard brexit is the base case? brian: we are preparing for all cases and how it will play out
will be different over time and the people talking about it will be different over time. think about the amount of elections and the differences in negotiation's. i think there is a lot of water to go under the dam before you have a definitive answer. erik: erik: you've noticed that the fundamentals are getting incrementally better f. not by much. we all know, of course, that trees don't grow to the sky. how much longer until this cycle turns? brian: it's interesting. at our company, we have the principle of responsible growth. so when you think about that is that we've got to grow and win in the market, we've got to do it the right way and we've got to do it on a sustainable basis. it's why we balance the company. we spend a lot of time talking about the markets business. a billion out of five billion in earnings. we've got other businesses. so our job is to keep it balanced. we take the same approach. stay the prime sector and consumer, keep a balance
between commercial and consumer. understand what you do and what you don't. you can always grow because there's always activity that sets those parameters. commercial real estate, there will be a bull pac. we erik: are you pulling back now? brian: we've kept it relatively flat, grew it a little bit and we're talking about where we can grow. it's a client by client, building by building decision, not a -- not a decision saying we like commercial real estate or we don't, it's really client selection. so there's a basic percentage, and after that it's really down to each client in each building and each project. erik: fet has sounded the alarm over commercial real estate. how ugly is that going to get? brian: a lot of the stuff that went on in the past, you can't go by all the rules and things like that. look, commercial real estate will ebb and flow. you have the issues.
and so we compare ourselves to others. erik: i would like to know what you think the regulatory fallout from the wells fargo scandal is going to be. brian: as you know, the regulators have now examines, they'll go through all of that. it will be constant work to make sure that the consumers of america know that we're in it for them. erik: what if the internal review i'm sure you've conducted -- brian: we have to establish that. erik: you're satisfied, i take it, that your own practices, what goes on inside this institution, a, not only meets your standards, but b, would pass a congressional smell test? brian: we run our company on responsible growth, so we basically emphasize the core customer banking account. and that's what we've been doing so, we feel comfortable. erik: you do know, of course, that we heard all the same things from wells fargo. i'm not suggesting that anything similar went on here,
i just want to make sure that what happened there ain't happening here. brian: think about how we run the business for a number of years. we have focused on having a stair what we call step. we emphasize the relationship. we emphasize how we do it. we want the core checking account. we want the credit card that gets used. we want the home equity loan that gets used. and so that's what we do and we think we'll be fine. erik: what's the right way to persuade customers that all of those relationships should be with one institution? quotas is not the right way to go about it. brian: reward systems. if you do more with us, you get higher rates on your -- erik: you intend to buy the customer, not the salesperson? brian: think about the reposition in credit card over the last seven, eight years. it's a huge repositioning which got away from the affinity business, which -- to in the
broadest context, this core set of customers that we do a great job with, and then took the rest of the energy and really developed our own customers. travel rewards, these are programs which give the customer the rewards. and we've been doing that. if you have your bank account and balances of x, you get free eck whiching. if you do more, you get a better auto loan rate or mortgage rate. that's what's in it for the customer. erik: you and i both know what the pre-election polls are showing. tell me this, what would a clinton landslide and a potential shift in the balance of power in congress back to the democrats mean for this industry, your institution in terms of the operating environment and regulation? brian: well, we don't know and we'll see what the election -- the great news is it's october 20 and we only have a few weeks to wait. so we'll find out. erik: what do you anticipate? brian: i don't. if you think about it, the key
in our world is the regulatory environment and that's'going to change a lot. the rules that we have to live with, what's going on will continue to be the same. so we have to get resolution planning, we're finishing that up. capital, you've heard the announcements about the next set of changes on stress testing. these things aren't going to change. erik: in spite of what hillary clinton says about getting tough on wall street, you don't think that's going to result in anything meaningful or material? brian: we've been hard at work, so it's been swg so far. erik: did you watch the debate? brian: caught the end. i was out for dinner. erik: what did you think? brian: i caught the aftermath. erik: will you respect the election results? brian: if people will speak. erik: we have been doing this interview thing for seven years, since 2010. bank of america, it must be said, has made a ton of progress since then, right? no bank has cost as much in terms of dollars or percentage terms. yours is the best of the stocks
over the past five years, and i know you're proud of that. here's what i'd like to know. it's been eight years since the financial crisis, and eight years is a long time. and still, all the progress that you've made as c.e.o. still lags behind rivals in a number of categories that matter, revenue growth, return on equity, loan growth, deposit growth, efficiency ratio. why, after all this time, are you not in a leading position in those categories? brian: i think we are in a leading position. our revenue growth is 3% year over year. i don't think many people can match that. our expense decline was 3%. i put it against anybody. we finally have gotten past all the stuff that was holding us back. people talk about the mortgage issues and stuff like that. it was the operational cost, getting the brand restored and all that's fine. we keep driving that. our credit costs are better than the industry.
there's always room to improve tremendously, but we are now in a position, we're on the other side of that improvement cycle. you've seen long growth. our deposit growth was $60 billion. $60 billion. it was four quarters we've grown by $50 billion or more. our costs to deposit have gone down each quarter. other people's are rising. so we're very proud of what we've done. the team's done a fantastic job. we'll get it done. erik: how long do you think it's going to take before you and i are having a conversation and i'm saying, wow, bank of america, number one in r.e.o.? bank of america number one with the lowest efficiency ratio. how long might it take? brian: last year you asked me that same series of questions -- erik: no, i acknowledged the progress. and i'm not trying to be hard on you in an unfair way. i just know that this is -- brian: last year we talked 66% ratio, to 64%. we just earned $5 billion after
tax last quarter. return on equity 10 1/2 to 11%. we're fine. can we continue to improve? yes. there are fundamental reasons in this environment that our business model won't earn what it will earn in a different environment, largely driven autopsy the nominal rate structure. and as that rises, we'll make more money. we have $1 trillion in deposits. that will then earn a lot more. we won't be any smarter or dumber. we'll just earn more money. and that's part of the business model's structure to do that. we drive that. that's $50 billion, you know, year over year growth, four or five quarters in a row. those are fantastic things that's holding steady. that's what we're after. responsible growth is it. you got to grow the right way. we don't reach on credit. our credit came down again this quarter. people say it can't get any
better. we're 40 basis points. think about that. erik: i love the fact that not only do you push back, but you talk about the future of this company in terms of hundreds of years. it's great seeing you. thank you very much. that is brian moynihan, the chairman and the chief executive officer of bank of america. we're here on 42nd street. back to you. vonnie: wonderful interview, erik. >> talking with ambassador to iraq. he joins us here in studio. this is bloomberg. ♪
city and this week president obama said it will be a "difficult fight." a victory would be strategic and symbolic significance. joining us now is someone who knows the region now, the former u.s. ambassador to iraq. a real treat to have you here in studio in new york. so we're four days in here. why is this fight so important and why is it taking so long for us to wage? mosul fell about two years ago? >> mosul is a big place, probably the second largest city. they've got a couple of problems. one is just the military issue of retaking it. and that looks like they can do that. but the real problem, of course, is the politics of it. because it's in a largely sunni rea in northwest iraq. and their kurds, who have an interest in part of it. and then you have the shia who want to see it independent grated with overall iraq. so you can imagine there's been a lot of horse trading or camel
trading going on before that. and let's hope that they do a better job of this sort of thing than the predecessor, because he's kind of bet his whole government on this. so it's a high-stakes game here. think ow long do you lit take to play out? and how much difference could it make if the islamic state were to leave? >> you know, i think the military thing will go well. i think everyone's being appropriately cautious because they've run into problems before and some of the other places in anbar province. but i think militarily it will go well. but when you say play out, i think we're talking months in terms of sort of seeing what mosul is going to look like in terms of its governance. now remember it was a key part of the empire, and some of the sunni arabs were actually, their forefathers were sunni arabs who were handling it for ottomans. and the turk investigate a real interest in it. and by the way, we talk about sunni arabs and shia arabs, but
there are all kinds of different people there. but it's going to take a while to sort out. and let's see how good they are, the prime minister, in terms of managing all this. david: we've been looking at the footage coming out of aleppo there. it's the humanitarian pause now, a break of 11 hours a day for four days. what kind of a difference can that make conceivably and if the reason behind that is for people to leave the city, those who could be bombed to leave the city. what sort of infrastructure is in place to make that happen? >> to get people out? well, in the case of mosul, they're trying to leave a corridor for civilians. you have to understand russian military doctrine is basically, you know, soviet military doctrine, which is you just pummel a place with artillery and then you kind of deal with the humanitarian aspects of it later. so i think aleppo is really an
example of that. i think the whole problem in syria, of course s. there's no con senate sensuous going forward. is it going to be one country? is it going to be a sunni stand with a shia stand? there's no consensus. i think one of the wise moves in mosul is who hold off and try to sort out what the politics will look like. so we may have two very conflicting models going on, being tried at the same time. david: when you look at secretary of state john kerry, see how much he's invested in this issue, and you see what's happened here, you must have some sympathy for him. what's the diplomatic next step here given what's happened with the relationship with russia? >> well, i do have a lot of sympathy for him because when you're at the table and trying to get something done and you got a lot of people kind of criticizing you, it's not easy. but i think one thing that secretary kerry has understood better than some other people is that we also have a russia relationship at stake with respect to syria.
and i mean, he understands yes, syria is important. yes, the humanitarian issue is horrific. but we also have a russian relationship. and he'd like to see that relationship get better as a result of what he's doing rather than get worse. and so far it's proving very difficult because the russians just are not playing ball with us, as they used to in the 1990's. so he has a really tough job ahead. and, of course, any time he talks to the russians, he gets a lot of criticism, how can you talk to those people? they're part of the problem, not part of the solution. so really tough job for the guy. david: given the rhetoric that we heard last night at the presidential debate, that we've heard on the campaign trail over these last many months about russia, what do you see that relationship looking like between the u.s. and russia, whether there's a trump presidency or a clinton presidency? as you say, it's not en vogue to be friendly with or diplomatic with russia at this point. >> it sure isn't. and we really ought to pull back from some of those emotions and try to kind of see this clearly.
now, i understand it would be tough for her to, you know, hit the reset button again. i'm not sure that will pass the laugh test. so i think nonetheless, i think we have to review this relationship. putin has proved to be a pretty horrendous character to deal with, but might do well if we kind of stop the attacks and figure out where our interests are and try to see if we can kind of calmly move ahead. i think john kerry is trying to do that. i hope this is investments that the next administration will appreciate him for having made. david: last question here, you have the president of the philippines meeting with the president of china right now talking about the diminished role of the u.s. in international relations. you see the fervor against the t.p.p. what's the status of that pivot to asia? how concerning is the rhetoric you're hearing out of china? >> i think the pivot to asia had a lot of unintended consequences. we made the middle east look like chopped liver.
didn't care. the europeans were concerned we didn't care about the transatlantic relationship. as we focused more on arab yarks it looked like we were vilifying china and turning into into a china containment strategy. so a lot of unintended consequences went with that. i think we do have a problem there. but i would not want to change our set of problems for the problems the chinese are dealing w the chinese started this whole dance in the south china see. we're seeing signs they're going to try to get out of it the old fashioned way. i don't think they are going to be able to do that, or whatever the aid is that they're talking about, i don't think that's really going to be the end of it. so i think the chinese started that dance and they're going to have to figure out how to stop it. usually when you see a country like china, big country misbehaving bir nationally, you can bet there's some internal problems in china. so i don't think this spells the end of u.s. leadership. i think what we're seeing is the u.s. is going to have to be more involved in these issues than ever before.
david: thank you very much. appreciate it. former u.s. ambassador to iraq, now dean of the school of international studies at the university of denver. vonnie: wonderful interview. hillary clinton and donnell trum inspect vegas last night. we head to washington, d.c. where the head of washington policy research gives us analysis of last night's debate. this is bloomberg. ♪
beans. we're joined by the tv canada anchor. when did canada become jutch a big exporter of lentils? i had no idea. >> who knew? i know. we're going to talk a little soft commodities. canada has become the largest exporter of lentils. and so we often refer to it as the pulse market. canada is set to see lentil production jump by 36% this year, estimated by the government. and they're expecting to see pea outputs, different type of lentil, up by 44%. so all-time highs there. all of this seeing some of the prices come down. so one of the top quality lentils that we've seen prices of those tumble since april, by 34%, according to market analysts. and the wholesale prices in india also fell 5.4% last month.
that's the most in six years. remember, demand for them globally is growing, so the fact that the prices are actually coming down just shows you how big the bumper crop has been over the course of the last -- this growing season. david: prices i gather were at really low levels about two years ago. catch us up to speed here. what's happened over the last two years? >> you look at the cycle, david, in 2014, there were a lot of rain damage to crops being harvested here in canada. it was a weak monsoon season so that cut back on the domestic output. a real rally in prices and that led north america to plant more. in fact, the u.s. department of agriculture said that u.s. growers expanded the other that was planted with pulses by 89% this year. and that land was traditionally used to grow wheat. so a big change in what consumers are demanding. and this year's monsoon season
in india actually was fairly perfect conditions, so they have a large harvest there as well. less need for canada's large crop. but again, this global demand story is interesting. turkey now becoming a much bigger demand on lentils and pulses. and china, in fact, importing many of them to then extract the fibers of certain proteins to then use in their own food production. so that's a huge market also a place of major growth. vonnie: will they look to renegotiate contracts? are these contracts decided six months, a year in advance? >> well, this is the question, and probably is the answer that the food distributors will ask for lower prices and ask to renegotiate. their contracts. general mills has been adding over the course of the last several years, to cereals, energy bars, salty snacks,
sometimes you get those salted dried peace. india, almost every day a quarter of the supply for that market is, in fact, imported. so that is a place where we could see food companies start to renegotiate contracts as well. a lot of money in selling grain in the way that there once was. lots of land being used for this type of development and growth. vonnie: they are delicious. thank you very much. david: a look at some of the biggest business stories in the news right now. starting with deutsche bank's largest investors pushing the german lender to shrink its securities business and eliminate more jobs to help lower costs. one investor wants the bank to educe its work force by 20%. another investor said they could focus on its larger fixed income business. the world's luxury goods market stopped growing this year, according to a forecast which
says a slowdown in china is weighing heavily on the industry. sales of personal luxury goods are projected to linger at about $273 billion this year. that is the weakest performance since 2009 and a constant exchange rate. and metlife is phasing out the use of snoopy and the peanuts gang in its marketing campaign. the company also built a new tag line, metlife, navigating life together. the most significant change to its brand in three decades. it is also rolling out a new logo. and that's bloomberg business flash. ♪
when you're on hold, your business is on hold. that's why comcast business doesn't leave you there. when you call, a small business expert will answer you in about 30 seconds. no annoying hold music. just a real person, real fast. whenever you need them. great, that's what i said. so your business can get back to business. sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. david: live from bloomberg's world headquarters in midtown manhattan. vonnie: and this is bloomberg markets. let's head over to check on the
markets. >> so we're seeing stocks not much changed at the moment after fluctuating up and down today. now almost flatlining as it looks like investors' attention is turning away from the e.c.b., away from some of the economic data we got this morning, even away from oil prices and back to earnings. so what we're seeing is really a ripple effect. that's kind of the theme of what we're talking about at the moment. because what you see is coming as companies that come out with earnings are not just affecting their stocks but also the stocks of competitors. the railroad coming out with third quarter profits that missed estimates and have seen weak freight demand and is having trouble raising prices. so it's pulling down others. then can you also look ack the packageing industry. packaging corporation of america and crown holdings, both of them disappointing in the case of crown holdings, it was revenue. in the pace of padging, it was
the outlook. and they're always pushing others down. the up side as well. if you look at american express, for example, that company's earnings beating estimates, even after the loss f its biggest partner costco which has been affecting it for a couple of quarters now. still did not fall as much as analysts had been anticipating because it's cutting costs. so its shares are up 10 1/2%. capital one up not nearly as much, but getting caught in the updraft in this particular case. it's also true of the toy makers today. mattel coming out with sales that topped estimates, in particular sales of bashy strong, up 16%, american girl dolls up 14%, and this reflects the resurgence that not only it but also hasbro has reported a resurgence in girl toys. nintendo higher, by the way, not directly linked to the others, but it unveiled some new details of a new game
console today that's going to be coming out in march. and finally we're even seeing sort of an rising tide kind of situation, although in this case, lowering tide, affecting the commodities. so we've got some inventory issues, supply issues taking sugar. n the case of coco, it appears the supply conditions are going to be improving, so it's down a bit. sugar and cotton also pushing down today. vonnie: thank you for that. david: headlines now, mark crumpton has those. mark: donald trump is mocking his much criticized remark at last night's third and final presidential debate, that he might not accept the results of the election. at the start of a rally in ohio, trump, in an apparent joke, had this to say. donald: i would like to promise and pledge to all of my voters and supporters, and to all of the people of the united states
that i will totally accept the results of this great and storic presidential election -- if i win! mark: trump also said, "i would accept a clear election result, but i would also reserve my right to contest or file a legal challenge in the case of a questionable result." mccain, a senator john who last week withdrew his support for trump, released a statement today, "a concession isn't just an exercise in graciousness. it is an act of respect for the will of the american people, a respect that is every american leader's first responsibility." president obama is praising hillary clinton's debate performance. the president tweeted, outstanding, 3-3 debate sweep for at hillary clinton. nobody has ever been more prepared to be at potus. the white house is also
contrasting donald trump's refusal to commit to accepting the election results with the president's promise to follow tradition and escort the winner to the capitol for the inauguration, regardless of who wins. a senior iraqi military commander says special forces have driven islamic state militants out of a town east of mosul. the predawn offensive marked the entry of the special forces into the mosul operation. the force is expected to lead the way into the city in the coming days or weeks. big u.s. airlines often taught efforts to curb delays, but most of the monthly stats the large carriers report don't include regional operations, almost half of u.s. dough memorandumic air routes. that changes next year. the u.s. will require performance data on flights operated by a half dozen regional airlines. the aim is to make major carriers reflect how well their regional operations perform.
global news, 24 hours a day, powered by more than 2,600 journalists and analysts, i'm mark crumpton. this is bloomberg. vonnie: mark, thanks. as we just reported, the presidential candidates drew their battle lines with just 19 days left of campaigning. a poll of debate watchers gave clinton as the winner. let's bring in the former u.s. treasury assistant secretary for legislative affairs, he's also head of washington's research. you just heard it there, donald trump is not at all shocked by the shock that met his statement last night that he perhaps wouldn't respect or that he'd leave us in suspense about a result. he's saying that he's respected a result if he wins. but you say that he might have some mysterious goals here, that it's not just who wins, he actually wants to put an end to paul ryan's speakership. >> i'm not sure it's that nefarious.
it's his intention, of course, to capitalize on what he's earned inside the republican party the last five quarters, and his campaign has made it clear in the last two or three months that they would like to see speaker ryan step aside no later than spring. those are their words, not mine. david: describe the difficulty here of the path that paul ryan is taking at this point. he's telling his caucus here that he's not going to weigh in on donald trump. they need to focus on their own elections. he's going to focus on retaining the republican majority as well. how hard is it in their election year to focus on congress exclusive of the campaign for the white house? kim: i would imagine that speaker ryan has got the most difficult job in u.s. politics right now. as you allude, david, he's not only managing outcomes for this election, he's looking forward to 2018 and possibly even 2020. but more importantly, he's attempting to figure out a way to keep the g.o.p. together as a political party and a national force. all of those are competing interests right now in an unusual way.
vonnie: what most stood out to you about last night's debate, kim? kim: you know, i think that secretary clinton was buoyed by recent polls, some of which she built on her own, some of which were due to other slips. and she went on at tack for the first time of the debates. and it worked relatively well. i'm not sure that mr. trump was caught off guard by it, but he, too, had to walk a limited line and try to regain some footing. having said all that, i'm fairly sure that mr. trump has plans to be active in politics nationally and regionally, whether or not he wins the election. david: the election is november 8. you have a short lame duck session and then a new president, whoever it will be. and that person will have to work with congress to get anything done. there's been such glacial movement in washington over these last few years. are you optimistic at all that that's going to change? and when you look at hillary clinton's ability to work with
congress, maybe from her experience as a member of the senate, does that -- do you think she'd be good at? do you think trump would be able to bring congress and the white house together? kim: i agree with much of what you said. to the degree i'm constructive about the possibility that washington may work at little bit at least next year comes from the pressures, both from the campaign and from the economy. as we come out of the g-20, china's presidency of the g-20, fairly clear that most leaders of the large economies believe that monetary policy has been effective, and that efficacy is beginning to run up against the wall. the cries for fiscal authorities and for structural reform policies to come forward are now four or five continents wide. my sense is that the next president will have pressure and probably some desire to focus on an economic program early in his or her admission. -- administration. vonnie: you said you believe trump has national political sort of aspirations, whether,
you know, if he loses the election which is looking more and more certain to be the case. what kind of national political goals could he achieve at that point? kim: well, he can certainly be a leader of thought within a faction or factions of the g.o.p. he certainly views himself as a kingmaker in the way that he's handled candidates up and down the ticket this year. and my sense is that that's only going to grow, given his stature inside the party for the last six, eight months. david: help me understand here how the markets are processing what's going on on the campaign trail and what's going or not going on in washington, d.c. i'm struck as we talk to analysts and strategists how many of them say the election is priced in, they're not worried about it yet. they're not as worried about it as they might have been worried about brexit. what are you seeing here as the relationship between washington and the financial markets? kim: the polling numbers, to the extent we can accept them as accurate, certainly the trends over the last three
weeks have reduced uncertainty that many traders and other market participants had perceived going into the election. so that's a little bit of a relief for them. the focus, of course, will come next in 2017, which is why i believe that the inaugural address of the next president will probably be as important as any one we've had since 2008 in the depth of the financial crisis leading into the recession. vonnie: and do you see that person being hillary, kim? kim: the numbers indicate that relatively strongly, yes. both in absolute numbers and the trends. vonnie: head of washington policy research, thanks for joining us. david: coming up, verizon suffered its worst quarter of subscriber growth in six years. we'll dig into those numbers next. this is bloomberg. ♪
david: this is bloomberg markets. the european union is being urged to take a close look at microsoft's $26 billion takeover the linked in. the company says the combination threatens the future of innovation and competition. let's dig in let's dig in to the numbers. linked in is the largest purchase ever and it's expensive. the deal has the highest earnings multiple of any takeover valued at over $5 billion this year. it's more than 84 times earnings before interest, taxes, depreciation. all part of the strategy to bolster its cloud offerings. microsoft has been growing its
loud platform by 108%. it comes as traditional software sales shrink. can you see here an overall return to revenue and growth, which may be an early sign that transition is starting to pay off. nonetheless, the legacy business is still delivering the rebound in the last quarter in windows. the orange bars here, they turned positive for the first time in seven quarters and consumer growth, the yellow bars, jumped 27%. that growth may not last as intel signaled this week that year-end p.c. demand would be lackluster. we'll turn to the balance sheet now. microsoft issued more than $19 billion of bonds to fund its linked in purchase. and microsoft is swimming in cash, well over $100 billion rtsdz of it. the bulk of the cash is held overseas, which means it may incur a huge tax bill.
microsoft's board signed off on $40 billion worth of stock. microsoft released its earning after the bell today. back to you. vonnie: david, thanks. for more on microsoft, we're joined now by the bloomberg editor at large from san francisco. you just heard the key numbers for microsoft, which i'm sure have come out of your models. will today be the say if we find out the turnaround plan is actually taking hold? >> yeah, i think david's point about the rise in sales and how this really turned around is really kind of the crucial thing. of course, microsoft is much more focused on a different business than they have been historically. that's the desk top business of selling operation systems and selling office on top of those operating systems. that business is no longer the central focus and the central engine of growth at microsoft. much more focused on the cloud, much more focused on selling the things that will get them into the cloud, whether it's
their other software offerings revolve around cloud base operations. david: remind us what microsoft and linked in is. how easy a complement is linked in to what microsoft is doing right now? >> microsoft has a long history of really bad acquisitions and real expensive ones. and so the plan seems to be is just to let linked in be linked in. let them continue to operate on its own, but maybe look for integrations in other microsoft products. those integrations are easier to do with a cloud-based offering. i've talked to executives who worked on syncing linked in offerings with microsoft's office, so you could actually have your outlook calendar show you the resumes of the people you're about to walk into a meeting with. and that that took two product cycles, which is essentially two years to get them integrated even though it was ready in terms of six weeks in terms of programming.
now with cloud-based updates, the integration of anything is easier and certainly integrating with linked in across all of the offerings can also be easier. vonnie: speaking of cloud-based offerings, how is microsoft doing in comparison with others and dell as well, they have great ambitions when it comes to the cloud as well. >> yeah, it's real interesting to watch. this business is growing fantastic. the last quarter it was up 103%. so it was growing a little bit faster than amazon. but it pales in size to amazon. amazon's business is at least four times larger and growing still. amazon continues to have more offerings and more price cuts. it also seems to have a greater awareness of small business. small business in particular looked to amazon. i think we might see going forward microsoft has got to focus on big business and the corporate customer turn to microsoft for their cloud-based
compute. amazon has much more of a focus on newer startups and smaller business. google might have more of a focus on companies using compute. david: a big day for earnings today. verizon released its third quarter earnings, and a big disappointment here for investors. they signed up 442,000 new subscribers, the expectation was 875,000. that's the worst performance in six years' time. how do they recover from that? >> well, you know, for all of my acumen in financial analysis, i think it was outdone today by the c.e.o. of t-mobile. he described their quarter using emojis. so phones down. cash down. their video service is a joke. they're running in the wrong direction. i can't even get to his last one. but it's -- i've been doing this for a long time and he beats me again.
o there you have it. t-mobile and others are offering unlimited data plans. verizon has said we would rather have fewer subscribers. the result is new subscribers are going elsewhere. david: how much weight is there on verizon for this yahoo deal which hangs in limbo. yahoo disclosing this data breach. after this deal was announced, that's a real x factor here. >> well, it is indeed. and there's certainly some sabre rattling going around when we get comments from unnamed services saying they're reevaluating the deal, they're upset about their level of disclosure. i'll give you two data points. one is we talked to tim armstrong a few weeks ago and he said both about the great price they got and how many users they got when they acquire yahoo. so they want this deal so badly, i think that it's going to happen in the end. that's just my reading of the
tea leaves. and on the conference call today, they talked about dates for the closing of the acquisition. the chief financial officer talking about when the deal is going to close. it seems that deal is moving ahead. certainly verizon would like to pay less, but i think the indication seems to be they're still moving ahead. vonnie: financial acumen and e morgey interpretation, thank you. >> i have an emoji coach so, that helps. well, you're getting your money's worth. vonnie: today we will get the results after the close. and you can hear corey every day on bloomberg radio and am in boston m. and washington 99.1 f.m. coming up, the costume company which says it can predict who will win presidential elections most of the time. this is bloomberg. ♪
david: this is bloomberg markets. if you've ever dressed up as a movie or television character for halloween, the costume you bought was probably made by rubies. we profile that company, the largest costume manufacturer in the world.e, h youngest son, is the person who has done all the licensing deals and sweet talked all the studios into making it possible for to you go as batman. >> you went and visited, right, their operations in queens. what's it like? >> it's fascinating. so they -- they're a global company, and in the u.s. specifically they have two factories in south carolina, one in arizona. but they still have one small factory in queens that has about 100 workers who just churn out costumes year round. and it's behind this enormous retail store that you can go in and buy pretty much anything that you can think of. >> what's the relationship like between this company and the major studios? how closely do they work together? how much does the costume
company know about what these studios are producing? >> they know a lot. they kind of have two. they start planning the costumes two years in advance, and they get all of the basic sketches and character description from studios, and so they know ahead of time, they can tell you what happens in "star wars" that comes out next year. >> but they won't. >> they won't. i tried. so yeah, they work very closely and the studios i talk to all speak very highly of them, which i have to say as a business reporter, it's rare to hear two companies talk so nicely about each other. >> it's a family-run business. and the guy who's now running it, howie beige, one of the sons, one of the kids, in election years, he can kind of tell who's going to win, right, based on which costume is selling the most of the presidential candidates? >> yeah, this is one of my favorite facts. they do a lot of masks, obviously presidential masks. and they've been around for decades. they've gone through a lot of election cycles. and usually the candidate who wins is the candidate whose mask sold the best, which makes
sense. you want to, you know, support the person that you are going to vote for. this is the first year that that's probably not going to happen. the donald trump mask is winning in a slobably because some people are dressing up to support him. a lot of people are dressing up to make fun of him. and also hillary's mask, women traditionally don't wear masks on halloween. so you know, they'll do face paint or something. so there aren't that many men who are going to dress up as hillary either. >> how much of a gamble is this for the company to figure out what it thinks is going to be popular? >> well, i think they've got it down to a science now, but they have had some missteps in the past. howie told me this very funny story about trying to plan for episode one "star wars" in 1999. and they thought that darth mall was going to be this huge breakout character. unfortunately, they didn't know that he gets killed in the film. so they planned him to be about
half of their assortment of "star wars" cosssumes and he ended up selling only about a quarter. >> you going to wear a costume? >> i am. dorothy from "the wizard of oz." >> that story in the latest issue of bloomberg business week on news stands now. vonnie: coming up, domino's c.e.o. joins next hour. this is bloomberg. ♪
scarlet: 2:00 p.m. in new york, some :00 p.m. in london. i am scarlet fu. matt: i am matt miller. welcome to "bloomberg markets." we are likely from bloomberg world headquarters in new york. over the next hour we will be covering stories out of san francisco, michigan, washington, d.c., and frankfurt.
stocks in flux after the ecb decision this morning left rates unchanged. traders are looking to december for a change in policy after mario draghi said the central bank is not discussed tapering the qb program. domino's has been serving pizza for 50 years but is now using cutting-edge digital technology to reach its young customer base. we will talk to ceo patrick doyle in a few moments about how they are crushing it as far as sales and market share our concern. the final presidential debate is behind us and we are in the home stretch of the 2016 campaign. one big question has come into focus -- will donald trump contest the results of the election if they are not in his favor? speaking this afternoon at a rally he once again brought up the results. i would like to promise and pledge to all of my voters and supporters and to all
of the people of the united states that i will totally great the results of this and historic presidential election, if i win. matt: markets close in just two hours time. julie hyman has the latest. right hours across the board but not huge drops for the major indexes. julie: no, and a pretty tight range for them. there was ao even change so they have been flex rating up and down. andhappened earlier today other macro factors. but really focused on earnings at this juncture. with the declines today, it has been a negative month for the a quarter of 1%.
it could be the worst months since january with about a week left in trading for the month of october. when i talk about that range, let's look at bloomberg and the chart of the daily trading range in the s&p 500. here is what we saw through the end of the summer with a very tight trading range. small fluctuation.then we had a surge going into september. remains somewhat elevated. it has come back down in the past week. today only a little over 13 points. another tight one as people focus on individual names. let's get to the individual names and the biggest companies. the biggest companies specifically out with earnings today. american express beat estimates even though year-over-year it fell. weather-related costs and drops in investment income.
verizon subscriber growth much lower than estimated. the company is looking at the effects of the breach of yahoo! and what that will mean for verizon acquisition of the company. and microsoft reports today. we have not heard yet but the shares are declining into that it looking at the other assets, the dollar is gaining as we saw the euro declined in the wake of the mario draghi comments. crude oil coming back from the 15-month high yesterday, and natural gas continuing its recent plunge. another company reporting walgreens. originally we saw the shares languishing a bit, or there were parts of the report disappointing analysts. there were also reports it would see a closure of the right data acquisition. there were questions about ftc approval. it looks like right investors in particular are reassured by the commentary. scarlet: good stuff.
thank you, julie hyman let's check in on " first word" news with mark crumpton. mark: donald trump is mocking the comments of last nights's debate that he might not accept the results of the presidential election. at a rally in ohio, trump said he would "like to pledge to my supporters and all the people of the united states that i will totally accept the results of this great and presidential election," but he added, "if i win." mr. trump: i would accept a clear election result but i reserve my right to contest and file a legal challenge in a case of a questionable result. mark: despite evidence of nationwide -- nationwide lack of evidence of voter fraud, trump continues to call into question the integrity of the election. lorettaorney general
lynch expressed confidence in the american election system, telling reporters in rome that investigators will look into allegations of interference but this point i "at don't think it is helpful to speculate about what is not occurred and we don't see is an actual threat." twitter says donald trump with the subject of nearly 60% of the tweets sent about the candidates. the social media platform said the top tweeted moment of last night's debate was mr. trump and secretary clinton's discussion about treatment of women. philippine president rodrigo duterte has made his strongest comments cap signaling a split with the united states. president dutra tight -- duterte is in beijing meeting with chinese president she should think it he says he wants to -- chinese president xi jinping. he said he wanted to shift away from the united states. the cleveland indians are 4 wins
away from giving fans their second title in four months. cleveland wrecking roger toronto 4-1 in the market -- cleveland beat toronto 4-1 yesterday. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. matt: mark, thanks very much. now to a pizza chain that is delivering strong sales for the restaurant industry. domino's reported third-quarter sales up 13%. forally, little bit more company-owned stores, 14%. that far outpaces rival pizza hut and in the other big pizza chain. common is --domino's has cap revenues growing partly on the strength of its online ordering
system and customer loyalty program. joining us is ceo patrick doyle. thanks for coming on the program. one of the charts that wowed everybody recently is when we total return's compared to google, or alphabet's total return. domino's in white, alphabet in blue. you are even beating the silicon valley darling. it is all due to the way you offer customers ordering? that is certainly helped. that has been a big part of what is driving our results. but if you look back over the last few years, we had all the right ingredients for growth. it has been about food, getting our stores looking right, it has been about consistent service and value. and then you overlay digital on top of that and make it easy for customers to order wherever they
are in whatever platform they are on. i think it has been the combination of those things that has driven results. scarlet: of course, when we talk about technology, we are talking pizzasrdering domino's over smartphones and digital channels. bank of america-merrill lynch digital orders were 20% for the entire industry. can you confirm that? patrick: we are over 50% digital. we are not giving out the exact number but we are kind of officially an e-commerce pizza company. that is a big part of what is driving it. we are making it easy for people. matt: obviously, you can do it over the internet and on an app that i noticed today that i can order it from my facebook account. how many people are taking advantage of social media ordering? a.l. you can also -- i know you can also tweak an order.
order,: you can text and tweet and order. we talk about anywhere is kind of the platform of allowing people whichever screen they are using, whatever social media they are on. we want them to be able to get to us. it is a combination of all those. some have more volume, some of less volume. but i think the message to our customers is wherever you are, you're going to be able to order and we will make it simple and easy for you. it is the accumulated effect of all of those. long is it going to be, patrick, until you overtake pizza hut? your store growth is almost double digits. same-store sales growth is double digits. meanwhile, pizza hut is checking on both of those metrics. if i looked using bloomberg intelligence data, i can write down a pie chart -- i think appropriately -- and yum! brands
continues to shrink. 30%. you have 22% of the market share in north america. well, i can only control what part of that equation. i'm only one piece of the pie, to keep your analogy going . we are focused on keeping our growth curve going, what pizza hut is going to do, how they are going to grow, we can't control that. but certainly we want to take a big piece of market share. we want to continue to grow. that is our focus. we can't control what they are doing and their growth rate. big organization, a lot of resources. they will get this figured out over time. but in the meantime we are pushing hard. scarlet: right, and the decision for domino's -- distinction for domino's is that growth. some analysts are valuing domino's as a tech company. tell us a little bit about your target for cash flow and your target for return of cash to
shareholders. will it all the power back into buybacks and dividends? yeah, that is really where it has been going the first priority is to generate growth in the business. but once we have done all of the activities that we think are going to generate a great return for our shareholders there, then we look at all the options. in the past we have paid special dividends, regular dividends, share buybacks. we have paid down debt. it really is a function of where the market is at that time and how we think we are going to best generate strong returns for the shareholders. but the priority is always the reinvestment in the business, first where we think there is a good return. matt: do you think it is little bit rich? i was looking at the s&p 500.
there are only free five other companies on the s&p that have such a rich valuation. can your trajectory live up to that? rick: the good news is all i have to worry about is how to sell more pizza. i will let the street figure out what the right multiple is, right price is for the growth. stay focused on the long-term, where the stock is in the near-term, i don't control that. we are just going to try to keep growth going. matt: thanks so much for your time, appreciate it. patrick doyle, ceo of domino's. scarlet: the possible challenges for the tech stalwarts in "numbers don't lie." this is bloomberg. ♪
scarlet: this is "bloomberg markets." i am scarlet fu. matt: i am matt miller. time for the biggest business stories in the news right now. sales of previously owned homes rose more than expected last month. existing home sales were 3.2% in september. the annual rate, almost 5.5 million, according to the national association of realtors. in the last year, the median sales price in the u.s. rose almost 6% to $234,000. american airlines posted better-than-expected earnings in the third quarter. the airline fuel costs dropped and domestic fares rose. american didn't add as many seats as planned. that helped it avoid discounting. and that is your business flash update. scarlet: the european union is
being urged to take a close look at microsoft's takeover of linkedin. the salesforce ceo is driving that effort. his company says the emanation threatens the future of innovation and competition. let's dig in in today's "the numbers don't lie." linkedin is microsoft's biggest purchase ever and it is a pretty high bar to prove it is worth it. microsoft values linkedin at more than 84 times even the -- e bitda. it is part of microsoft strategy to bolster cloud offerings. growth helped microsoft never it's cap with amazon. ceo socgen adele is effort to reorient the business comes after traditional software sales shrank.
this may be an early sign that the transition is starting to pay off. nonetheless, the legacy business in microsoft is still delivering good commercial pc-related products rose, turning positive for the first time in seven quarters while consumer growth, the yellow bars, jumped 27% in the most recent quarter. however, that growth may not last as intel pointed out that year-end pc demand could be lackluster. microsoft issued more than $19 million of bonds to fund the linkedin purchase. microsoft swimming -- with well over $1 billion worth. alphabet,le and the bulk of catches held overseas, meaning it is unlikely to be a repeat treated without incurring a huge tax bill. it makes it easier for the microsoft board to sign off on the buyback come helping to boost earnings per share. microsoft will release earnings after today's closing bell. much more coming up.
matt: on monday, bank of america reported third-quarter results that beat analyst estimates. erik schatzker sat down with the bank of america and jenna and see -- bank of america chairman and ceo brian moynihan for an exclusive interview. brian: if you look at it year-over-year i think basically our firm has gained 100 basis points or more of market share. erik: is that at the expense of european banks? outn: i think it is coming theirple just fine-tuning business models and coming towards the people already fine-tuning business models. you have some that have not been fined at june for a long time. wouldwell, let's be fair,
deutsche bank is kind of planning is fine-tuning. some of the european banks in equity and fixed income -- brian: not going to reflect -- the business that comes for the specs is stable and driving. erik: what i'm most interested in is where you see the opportunity. what can you take advantage of? alln: the opportunity for our businesses is the same. if we have fixed income client we do business with -- every of equities, do we do prime brokerage for them? those opportunities change in the moment by what is going on -- ipo, no ipo, leverage finance, no leverage finance. research teams and we have to deliver it to them. erik: on a bigger picture level, how much impact will brexit have on your industry? brian: i think will have an impact just because you do it on
unified basis on a cross-unified economy and now you have to do it 2 ways, u.k. way and eu way. while everybody we talked to on both sides of the channel are very interested in trying to preserve stability, it is different. think metal costs will go -- the increment or costs will go up. --incremental costs will go up. we don't know the rules of the game. we play with the scenarios -- erik: what is the base case based on what you hear from theresa may and the eu? does it seem to be a hard-core exit? brian: i think we are preparing for all cases. people talking about it will be different over time. elections are coming up, the differences in the negotiations. there is a lot of water to go dam before we know how
this is going to operate. erik: brian, you noted that quarter after quarter the credit cycles continue to surprise you. the fundamentals are becoming incrementally better, not by much. we know that trees don't grow out of the sky. how much longer until the cycle turns? brian: our company we have responsible growth. we have got to do it the right way, we have got to do it on a sustainable basis. we spent a lot of time talking about the markets. $1 billion, $5 billion in earnings. do we want to be successful? absolutely. keep a balance between commercial and consumer, understand when you underwrite and what you don't. with that, there is always activity on the parameters. what goes away is the stuff of the edges. commercial real estate will pull back.
we haven't pushed out. when you don't push out -- erik: are you pulling back now, though? brian: we have kept it relatively flat. we're talking about where we can grow. it is client by client, building by building decision. not a decisionthough? saying we like commercial the state or we don't. there's the basic of how much we do with exposure to the company and after that it is down to each client and holding.-- building. erik: the fed has sounded the alarm over commercial real estate. how ugly is that going to get? brian: a lot of stuff that has gone on in the past -- look commercial real estate, the economy contracts, less office-based demand, and then you have issues. we prepare ourselves to watch it carefully. erik: i would like to know what you think the regulatory fallout from the wells fargo
scandal is going to be. brian: it will be constant work to make sure consumers in america know that we are in it for them. erik: the internal review i presume -- what has the internal review i presume you have conducted revealed about practices? ticket --tisfied my satisfied, i take it, with your own practices a, not only meets your standards but b, would pass a congressional smell test? brian: we run our company on response will growth and we feel comparable. that's comfortable. erik: you do know that we heard all the same things from wells fargo. i'm not suggesting anything similar went on here i'm just want to note you are satisfied that what happened there isn't happening here. brian: we have focused on having -- we want the court checking
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also cattle futures are rising for the fourth time in five days. that is thanks to strong beef shipments. eight down about .4%, straight decline. signs of oversupply in the market. i want to turn back to the energy complex. let's look at this chart. what it shows is natural gas stockpiles, the blue bars, vs. the price of net gas, the white line. it goes all the way back to late april. prices have been rising and of course they just started to turn down a little bit towards the funny joke of the chart there. above normal temperatures -- towards the funny to -- end of the chart there. it could be pointing to weaker demand. matt: let's get more insight on commodities moving. caroline abramo joins us,
commodity specialist. yesterday i noticed natural gas was right up at the top because it had fallen so significantly. inventories were up so high. we are at a point in the cycle now where, as scarlet mentioned, we could have warmer weather, which will obviously impact prices for natural gas, which have been coming down. as we see from inventories their five-year average highs, which generally you are in a stockpile situation . we are a bit oversupply. matt: here we are looking at a chart of natural gas inventories. what do you make of what we are seeing? caroline: we have been producing more -- matt: the purple line is 2011 to 2015. caroline: the middle line is the average.
the five-year average. matt: and the white line is going along the five-year high. caroline: exactly. we have a high and a low. and then we have the average. you can see we are high levels of inventory. periodwe go into this and it is warm and we cannot -- we are not using a lot of gas it exacerbates the situation. matt: i want to -- scarlet: i want to go back to opec because there continues to be skepticism over whether countries can follow through with what they had planned originally. how has the conversation shifted? is there more conviction one way or the other? caroline: i actually think the deal is real and there is conviction amongst opec. i was talking earlier in the week about the change in the armor. we look at other countries that could potentially produce more, libya and nigeria, they have
been falling down. the middle east is still politically sensitive area. we are still looking at -- outsidenting production in that outside in that region. matt: we don't talk about very often demand. i've been trying to bring it up recently because demand is still rising that is not rising as quickly as it has in the past. the velocity is slow. caroline: exactly, and if you still look at china, for a lot of the demand, we have seen the numbers that had been tapering off and come back a little bit. good., it's been it is not, i think, as bad as people are thinking out there. matt: we have to remember, that is the other side of the equation. , cancan cut production increase production, but the demand side still plays into the price. caroline: exactly. matt: what effect is it going to have? caroline: we don't see demand
coming off as much. we see a nice consolidation and production. i pick a lot of analysts out there were calling for third quarter, fourth quarter this year for the balances to clean up your you can see by the price action that the market is very withand moving in line supply and demand balancing of the market. scarlet: let's talk about gold before you leave. you look at the lines, the charts, for instance. there is discussion about inflation and whether it is truly percolating. has that factored into the price action or the back and forth on next? e fed does caroline: i'm glad you brought up gold because it is almost as if we have forgotten about it. precious metals was the best performing sector in the commodities index and this year it still is -- scarlet: because of earlier this year. caroline: obviously, with the
brexit peers, it has annihilated with the gold price. tore's probably more risk the upside than there is to the downside. i think we have factored in a rate hike of sorts. once that happens, if it does, you will really see where the market goes from there. gold is think that important in people's portfolio at this point. matt: i'm looking at the core cpi compared with gold over the last five years. gold has come down substantially. i wonder how closely these two are really related. gold seems to be in reaction, at least back in 2011, to what a lot of people deemed as experimental qe policies. caroline: agreed. usually it does track pretty well. this time around we have other things we are looking at. we have the dollar strength. normally that is inversely correlated with commodities. we have seen commodities strengthening. to me that is an interesting
signal. in terms of inflation, there is potentially latent inflation in the system. i think gold is reacting on that in terms of support, because with the brexit and the move down in gold can we still have -- people are still holding a lot of gold. matt: very interesting stuff. thanks for joining us, carolina bronco, commodity specialist. scarlet: let's get a check of the headlines with mark crumpton. mark: former republican presidential nominee john mccain is criticizing donald trump's assertions that next month's election results could be rigged . that a mccain writes concession is "not just the next size in graciousness but an act of respect for the will of the american people, a respect that is the mayor -- every american leaders first responsibility." mccain withdrew support for cap
after the tape of trump making vulgar comments about women. each nominee has 45%. was leading, trump 42-39%. libertarian gary johnson draws 2% in the new poll, down from 4% in september. jill stein gets 1% which is unchanged. the u.s. military says an american soldier has died of wounds sustained in a bombing in northern iraq. central command says it was in and provides explosive device, or roadside bomb. a massive iraqi operation was launched earlier this week to drive the islamic state from the northern city of mosul. more than 100 u.s. soldiers are embedded with iraqi forces. british prime minister theresa may is telling european union leaders there will be no turning back from brexit. the prime minister says there will be no second referendum on leaving the eu.
: the uk's leaving the eu, but we will continue to play a full role until we leave. it is in the interest of the u.k. and the eu that we continue to work closely together, clint at the summit. attending her first eu summit as british prime minister. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. scarlet: we have much more on politics coming up dollar top now saying he will accept a clear election result also that he reserves the right to file a legal challenge. we will also be hearing from billionaire tom steyer, a clinton supporter and the cofounder of a nonprofit. this is bloomberg. ♪
matt: this is "bloomberg markets ." i am matt miller. i am scarlet fu. hillary clinton and donald trump face-off in the third and final debate in las vegas last night with the biggest moment saying saying "i will keep you in suspense." donald trump just held a rally. what did he say on this? how did he clarify the situation the following day? >> 2 things. the main thing he did is he said he would abide by a clear result. he reserves the right to file a legal challenge. this is the al gore school of politicking, as his campaign has
been putting it all day. but he would abide clear result, he said. the other thing he did is he joked. he said he was going to make an announcement. he wanted to tell something to the american people and his supporters. he would abide the election results if you want. he is kind of having it both ways. he is having fun with it, saying to his supporters, i'm still the guy, but he'sy moderating his position a little bit and saying that he is probably going to be abiding by what happens. scarlet: house speaker ryan said anything? what are the main -- have the main leaders of the party event any indication of what their response is? ben: john mccain came out with that statement where he really condemned the trump, about 20 clarifiedfore trump his position.
senator mccain hasn't set anymore but he really condemned , saying it is against our best traditions of america. that is something he said and senator lindsey graham of south carolina has likewise condemned trump. but by and large republicans have been quite. pauline has been quiet, mitch mcconnell -- paul quiet, mitch mcconnell -- paul ryan has been quiet, mitch mcconnell hasn't said anything. they have benefited from a lot of people flying home from las vegas or otherwise covering the aftermath of the debate, and also it is convenient for them right now. matt: so many have been saying it would be unprecedented to contest an election, but we remember bush v. gore. happened inus what 2000 that would somehow make it different than civilly contesting the results of a nationwide election. ben: sure, absolutely. if you talk to some republicans, they say there is fundamentally no difference. al gore basically -- there was no outcome from the electoral
college, neither had the majority. it came down to the outcome of florida, which came down to a race that was too close to call and they went into court about whether or not there could be a recount and how exactly they would count all those votes. you famously remember hanging chads. that is what happened in 2000. to speak to a lot of republicans, they say this is what trump would do if he hypothetically came that close any and -- close in the electoral college. to speak to some democrats, they said there are other things that happened. gore wasn't going out beforehand and making unsubstantiated claims of voter rigging and he was not trying to undermine the process before and neither was then-texas governor george w. bush. they say this is phenomenally different and trump has gone beyond the pale once again. matt: i mean, i'm assuming it were a close race in trump's
favor hillary clinton would want to reserve the right to contest it legally as well. ben: i possibly. there have been times in the history of the nation went evil thought the race was close -- people thought the race was close. thought hehard nixon could gotten something from legal terms and he decided to go with a handover of power. hillary clinton has not spoken about her plan. the numbers are in her favor so she is not under pressure to talk about that. scarlet: chris wallace didn't pose that question to her, either. ben brody joining us from washington. matt: on politics, david gura spoke to tom steyer, clinton supporter and cofounder of the nonprofit next-generation. question on to a whether philanthropic and political contributions can overlap. tom: everything we do, everything i do in politics, is
100% values-driven. we are trying to push what we think of as traditional american values. the ones you grew up hearing about in third grade, hearing at home on your dinner table, and that i grew up hearing at home at the dinner table. we are trying as hard as we can to stand up what we think of as broad, fear, common sense american values. if you listened to the debate last night, you heard an awful lot of stuff that was not that pit we feel extremely proud to be part of an american process with american citizens talking to each other in a very high-minded way. -- io do i consider that consider to be part of a 240-year-old process of democracy in which we should be extremely proud and zealous about protecting and participating. david: what happens to you on november 9? you build of this apparatus
. your talk of running for governor. running for governor of telephone you? --governor of california? tom: i don't know. we have been full throttle, pedal to the metal, try to be part of this process in at least three major ways. we don't know what will happen november 8. it has changed a lot over the last two weeks even good until we know where we stand, it is impossible to know the best way to participate. i am passionate about energy, climate, justice. david: you have been talking to a lot of people. some say you are laying the groundwork. thing i get toun do is get out of the office and talk to people who are not wearing beautiful suits and blue ties, and listen to what they have to say. not talk, but actually listen. i was in the cleveland airport two weeks ago, and i was buying
a book in a magazine stand and the young lady behind the counter was ringing me up and i said what do you think about the election? she said, "well we are an oligarchy now." 23-year-old woman selling gum and magazines. i asked, do you think we can take back our democracy? sure."t i said, i think it is important we try. if you get outside the bubble and meet the millions of a very smart, well-intentioned, well-informed americans, it is refreshing. founderat was farallon and cofounder of next-generation tom steyer. scarlet: it's just an hour to go before the close of u.s. targets, let's check in with julie hyman. julie: i'm looking at home builders today. home-building etf, it
is down even after we got existing home sales data that beat estimates. the economists at bloomberg intelligence say that the rebound could be too late and too small. the average level of existing home sales from the third quarter is 2.2% below that of the second quarter. and then there is the individual homebuilders to contend with as well. numbers.e out with shares are down, the most in six months. labor costs are rising and land costs as well. it is now pretty much used of that land and is having to buy more expensive land. nvr came out with its numbers. earnings-per-share beat estimates -- or i should say miss estimates.
revenue came in ahead of estimates. revenue came in ahead of estimates. those shares under pressure. getting caught in the downdraft as well. one thing we are watching is median home prices. that was part of the overall number today. those are up. we see that rebound from the housing and financial crisis. what is interesting is that inventories may put a lid on the increase in prices, increase in sales numbers, more importantly. if you look at bloomberg, we have a chart showing inventories versus sales. existing home sales in yellow. you can see here inventories relatively low. something that is good for prices. sales keep going up. at some point you will have an issue. not going to have enough houses for sale. that could potentially limit that existing home sales growth number. scarlet: they will continue to look for that, the inflection point coming up. matt: tesla is making a big bet on the future of self driving cars.