tv Bloomberg Markets Americas Bloomberg October 26, 2016 12:00pm-3:31pm EDT
welcome to bloomberg markets. we are covering stories from washington to geneva to riyadh. james gorman spoke and we would hear what he is -- what he has to say. tesla earnings out today, how they are expending -- extending beyond on is to become a clean energy company. donald trump has a two-point lead over hillary clinton in the swing state of florida. let's go to julie hyman. julie: things have looked up a little bit from this morning. we are seeing the dow up 53 points, the s&p little changed, and the nasdaq lower by one quarter of 1%. andnasdaq more tech heavy apple is helping to drag it down with its disappointing forecast. take a look at the sep -- s&p 500 over the course of the day.
we are also seeing an interesting split today among a couple of groups. if you take a look at the biotech and transportation indexes, they are examples of what we are seeing. we are seeing this continuing rangers talks during this earnings season even before it is in the wake of the u.k. vote to exit the eu. since the s&p 500 closed at a record on august 18 we have been in that range. let's look at the two groups that are diverging, biotech and transportation. slightly.h index up transportation is up. on the biotech side, we are watching biogen and vertex.
sales jump had been seen in inventory buildup for a new ms drug. they are looking for a ceo. vertex is rising after they said two are advancing experimental treatments for cystic fibrosis into mid-stage trials. still getting a bit of a bump up. side, transportation southwest airlines has been plunging, down 11% after revenues will be downs much as 5% in the last quarter. it fell 4% last quarter. the shares are getting hit i got. norfolk southern, the railroad company, beating estimates. railway operating expenses fell but it looks like it's revenue came in just about in line to slightly light of what analysts had been anticipating. vonnie: let's check in on the
bloomberg first word news with our crumpton. mark: a new bloomberg poll shows donald trump has a narrow lead in a state that is a must win for him, florida. toleads hillary clinton 49% 43% in a race where third-party candidates are included. trump is getting support from independent voters and his showing is stronger than other recent polls in the state. if trump wins all the states mitt romney one and also florida , he would need 35 more electoral college votes to win the election. secretary ash carter is ordering the pentagon to stop seeking the repayment of enlistment onus is from california national guard members who served overseas. his decision comes in the wake of an angry reaction from congress and the white house. president obama said congress is
trying to nickel and dime them. the united states is expected to sustain -- abstain from the would pitions -- it the obama administration and you -- theinst -- you and general assembly vote is scheduled for today. the second game of the world series is being played in cleveland tonight, weather permitting. the forecast calls for rain so major league baseball decided to move up the start time by one hour. the indians beat the chicago cubs 6-0 in the opening game last night. batters in out eight the first inning and roberto perez hit a pair of home runs. global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries.
i am mark crumpton. this is bloomberg. years it has been eight since the financial crisis erupted and since then the global economy has seen anemic growth. there has been a backlash against globalization and our next guest says we may be seeing a new low growth. michael spence joins us now. said aboutwhat was the prospects for global growth at 3.1%. you hear similarly bleak positions from the oecd and other groups. how do you process that and how long will this continue? michael: unfortunately, you mentioned i wrote about it. i think it is going to last for quite a long time unless there is a fairly significant change in the policy regimes.
that would include europe getting itself organized and passed the brexit. in america it probably is less dependent on fixation on monetary policy and a little broader. you are as good as i am whether that will actually happen. of maximumeriod uncertainty because we do not know what will happen in the house and senate. japan has a struggle that is hard to understand. then you have a range of emerging economies that are improving somewhat. i am cautiously optimistic that china will pull through some of its challenges and continue the middle income transition, but the bottom line is there is lots of downside risk and it is very hard to see in the developed countries a likely scenario that puts us on a different track. vonnie: do you see any place where this might be a begin? -- be can?
do you see any electorate that is about to elect a regime that will improve that situation? michael: not really. the citizens of the u.k. decided to leave the european union, and i think probably that is going to be a fairly costly decision. i hear that major financial and tuitions are basically planning to leave the city of london, which is pretty important. it is hard. challenge, renzi is being challenged on his constitutional reform. it is very hard to find something that looks like it is really on the fly. vonnie: central banks can only combat some of this and they have done as much as they possibly can. how do you combat what you are talking about, income inequality, slack in labor
forces, youth unemployment that is ridiculously high? michael: you cannot do it overnight, for sure. the first thing you have to do is get people's expectations in line. you have a problem that has been neglected and you just cannot reverse it. assuming you can get past the sort of populist and nationalist politics and actually do something, i think you would have some element of redistribution of income and a whole lot of investment that is designed to accelerate the transition of the economy to a service-based economy that makes good use of the technology and so on, the things that michael bloomberg talked about yesterday. nobody, i think with any humility, will say there is a kind of plan and we know it is work and what the time horizon is. you can get a lot of people on both sides of the aisle to agree, i think, the first few steps are fairly obvious. let me give one example.
in denmark, this comes from colleagues at the council on spent 2%elations, they of gdp reach raining people for an economy that is shifting around. we are at about .1%. a time when it is not a good idea to underinvested in anything. david: you mentioned monetary policy and it seems that we have legislative policy makers criticizing the federal reserve for doing too much and overstepping its bounds. now you have certainly policymakers from the federal reserve and other central banks criticizing legislators for not doing enough on the side of fiscal policy. how does that get sorted out? there is reasonable chance it will not get sorted out. mario draghi is the one who has gotten in trouble because he has
been absolutely there is reasone chance it will not get sorted trouble because he has been absolutely explicit -- ben bernanke was too. we have a set of tools, it is not a complete toolset, and everybody has to do their job is the way mario draghi says it. when he says that he gets told to mind his own business because he is head of the central bank. as long as we approach it that basically going to have a reasonable chance of continuing on the same path. unless we have a crisis of some kind. things do change in a crisis and if we have a crisis that is economic or financial and it interacts with some kind of political upheaval, then i think we could change. it does not necessarily always turn out well but it looks an awful lot like things have to get worse before they get better. vonnie: janet yellen has said there is still slack in the labor force and she is not the only one. if you take in broader numbers of unemployment there is plenty of it. at one point do companies invest in services?
at one point does the service economy become a place where you can be middle-class? michael: the thing that scares people the most is the forward-looking version of this because of the sheer power of the digital technology. it is already taken quite a lot out of the economy. we do not have as many bank tellers. it is a long list. i can remember when the general ledger of a company was kept by people who wrote things on a page. a friend of mine says, when we were young academics every you -- every pair of us had a secretary. a friend of minewe did not knowe needed help. now our department will have one or two administrators and everybody else is doing something else. when you take the forward-looking version of that, even if he sort of overestimate the speed with which it all happens, there is a real
challenge in kind of figuring out how we are going to evolve, distribute income, and employ people and have more leisure. i think that is the best guest -- guess as to where we are going. david: what will be the legacy of the return of populism to the u.s.? you mentioned brexit and italy. how damaging is that going to be or how beneficial? michael: it is different in europe that america. in america, even though people fuss away about it, i think with a very long lag in dealing with basically inequality of the growth patterns we have been experiencing, the fact that it surfaced and has become salient politically does not guarantee a good thing. there is a solid core of people who are frustrated, angry, disappointed, and it is a lot better than suppressing it. on balance, even though it puts a slightly in uncharted
territory, i think is a good thing. in europe where there is structural reforms the system required, it makes it much more difficult. the rise of populism, nationalism, and other things in that context may actually pushed in the direction of partially dismantling that system because they have not made it work. it is a partial union. somebody described it as a stool with one and a half legs, hamed el-erian. that is a pretty good analogy. david: thank you very much, professor michael spence at nyu. august,coming out in tesla ceo elon musk says it will be there last chance to show they can be cash flow wise and profitable. will they deliver? this is bloomberg. ♪
david: this is bloomberg markets, i am david gura. vonnie: i am vonnie quinn. tesla shares moving between gains and losses ahead of their quarterly earnings. elon musk is under growing pressure to show investors profitability as analysts slash their estimates. joining bloomberg news is dana hull in san francisco. it seems he does not have a time limit when it comes to investors. he has been the golden boy up to now. why should that change? tesla has growing ambitions to move beyond clean transportation to clean energy and they have a lot on their
.late they are building the giga factory in nevada and trying to acquire solar city so all of that undoubtedly requires a fair amount of capital, but musk says they are not going to need to raise money this quarter. david: i think back to the letter you got your hands on the elon musk wrote to his staff telling them to essentially move mountains before the model three hits production. what has been the ramifications and how will that filter into the earnings report? dana: today's earnings report is going to be a little different. tesla is changing the way they report non-gap revenue. clear whateally consensus is because people are still updating. it is probably going to be a more challenging report for investors to digest off the bat. the e-mail that bloomberg from late august said, we have got to sell every card that we can, and frankly they did.
they had a record third quarter and sold 24,500 cars. it is not clear what their and operating expenses have been, and analysts will be looking at cash on hand. vonnie: we will be hearing about solar city i imagine. dana: the timeline is interesting. tesla reports earnings today and on friday night they will unveil a new solar roof rot act in los angeles -- roof product in los angeles. in november they will reveal more details about the proposed merger. shareholders vote on november 17. there are a lot of events between now and the 17th that could encourage investors to vote yay on the deal or convince naysayers they are right. david: we focused on the model three and getting that out on time. what is the status of the nevada
battery factory and the model x, the suv that has not sold as well as he would have wished? journalists that were invited to the giga factory , it was about 15% complete so the next milestone will be battery cell production was his exposed -- which is supposed to begin next month. we are all expecting cell production to be the next catalyst. on the model x, that vehicle is selling at the have recently been lost a favor with consumer reports for the problems that have been experienced by owners with seals on the door and the way the doors operate. vonnie: dana hull in san francisco, thank you for joining us. david: hillary is rallying in lake worth, florida. both presidential campaigns are blanketing the swing state in a full on sprint to election day.
vonnie: you are watching bloomberg markets, i am vonnie quinn. david: i am david gura. a bloomberg politics poll shows donald trump has a narrow lead in a key swing state in florida, 45% to 43%. margaret talev is joining us from washington to talk about how important the sunshine state is to his chances of winning the white house. how much is he banking on florida? how important is it to him? margaret: florida is a must win state for donald trump. even if he wins florida it does not mean he gets to 270. he is still shy a handful of votes that both campaigns have
predicted. a group to look at will be the independent vote in florida and the hispanic vote, which is two sort of components, the cuban-american hispanic vote around the miami area and the non-cuban hispanic vote in other areas like orlando and tampa that could be crucial to clinton's efforts to push him back. vonnie: why is he ribbon-cutting today and not campaigning? different than any other campaign you can imagine. we are within the two-week threshold and donald trump is an washington, d.c. at the formal opening of the trump hotel. you could say why is he taking his eye off the ball? he should be in florida. as antrying to use this example of what is unleashing
america's greatest -- greatness, and it is the hottest property in town. his self-declared consolation prize. he is hoping to show that his opening acumen in hotels and running golf courses is an attribute that should give voters confidence in his ability to lead the country. be thethis has got to third event at that pesylvania avenue hotel. i have to ask you about a line saying that this is going to hinge on the independent vote. is that something that is specific to florida or is donald trump increasingly banking on independent votes? margaret: the independent vote is crucial in any state where it has the potential to be a close vote. president obama did really well with independent voters, hillary not doing as well, but turnout is crucial. they independent voters
because they are truly independent or dialed back from the process and not committed to choose a party? it depends what an independent voter is and whether they can turnout. in florida you can say it is good for donald trump because he is ahead of clinton. on the other hand, this is a must win state for donald trump. you do not want to be two weeks out and within the margin of error. vonnie: is there a surprise still too, and what would be the exact day for it to come? margaret: what day is the october surprise coming? wikileaks seems to be the most fertile area for the surprises that what we have seen in recent days is these revelations that could have been damaging or hillary clinton during the primary season or in the ear weeks of the general election. trump has managed to step on many of these messages and distract from them himself. it is not only what will emerge
with the bloomberg first word news. mark: donald trump has the largest number of small donors in the history of the republican party. according to reports, he raised nearly $80 billion from donors that gave $200 or less. that is more than mitt romney in 2012 any 65.5 million by john mccain in 2008. a new gallup poll found that -- largehat 60 -- in percentage of the lgbtq community favors hillary clinton. that is a good sign she will get heavy favored from them on election day. according to the un's refugee agency, at least 3800 people have around while trying to travel from libya to america on the north africa coast -- from libya to italy on the north
africa coast. gap willr pay cap -- not be closed for another 170 years if reforms continue to not happen. hasrently, the pay gap returned where was in 2008. the u.s. ranks 45th on the list. global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. i and mark crumpton. u.s. industries are starting to come a little bit with the dow of .25%. points right now. the s&p 500 is back. it had been dragging earlier. nasdaq is up .25%. to get more on the nasdaq here
is abigail doolittle. down at the nasdaq is this time. it is off the lows, but it is also off of the ties. it was trying to flip positive as the dow and s&p 500 had done earlier. let's focus on the stocks that are trying to boost the nasdaq into a higher territory. lea -- mondelez. they boosted their year earnings outlook by 25% growth which is up shortly. it is a -- up sharply. that is double-digit growth. biogen, istech, showing good growth. they beat the consensus estimate. it looks like the company's top-selling drug is behind this strength.
it appears that investors really see a turnaround for this company. at one point this year, it have been down 25% on the year. now, it is just down modestly. lastly, akamai is up 15% today. this is the longest winning streak for them since the march of 2010. it seems like investors were betting on what would happen last night. they beat the quarters offering by 11%. suntrust says they see a turning point here for akamai. they also see more upside the head for the shares of akamai. vonnie abigail doolittle, thank you. >> david: the bloomberg said -- we brought to a host of notable names. we sit down with morgan stanley ceo and michael bloomberg. the parent of bloomberg news.
we asked gorman if he sees other global banks challenging the supremacy of american banks. >> post financial crisis, the united states had quarterbacks were stronger than they were -- corner banks were stronger than they were precrisis. the thing with global is that you have to have a lot of capital and liquidity. ,ll the risk control compliance, audit functions, and every country, it is all very expensive. it works great when the markets are hot. it difficult times, it is very expensive. a lot of universal banks have expanded from traditional corporate and retail banking into investment banking, sales, and trading. they have found that they've had to restructure their balance sheet different from the market get. -- for the market. part, u.s.large
banks are now stronger than when they went in to the crisis. in the early going, there was 90 -- therend the was the polson guiding to get the banks back on the top which was a brilliant move. we all changed our business models when it was difficult to do eight years ago. as a result, we have prepared and positioned to take advantage of global growth. cite ranks asn the one that should think more long-term. you are in a position where you can make long-term positions. >> i do not see any reason why public companies cannot make long-term decisions. they just have to have a ceo that has the courage to stand up with a board that will support that person and whether he or she is right or wrong -- they have credibility and they have built up goodwill, then they can withstand it. there are still great companies
that make long-term investments. not everyone is worried about quarterly earnings and saying that they cannot do something because they will not be around when the results come in. good companies have the courage to do that. they have the management to do that. i would argue that whether it is government or in the private sector, the ceo or whatever the title is -- i have always believed that they should combine the rules. i did not know what anyone would buy a company if they could not get that. it is an advantage. if you have a vision, you can take the risk. can bes your vision, it hard to get people on board, but if you say you are going to do it then you can be a hero if it turns out right. if it does not, then you get turned out. the life expectancy of ceos keeps going down. it is down not to about four or five years with pending on how you measure it. >> i am over my two days, only cap.
due days. holy cow. -- they willrs are reward long-term performance. >> if you were talking about the year ahead, where is the place in finance if you were young and starting -- where would you push your money now? >> on the long-term, i see it as a critical discussion. separate long-term decisions from long-term reporting. that you decisions have to as a ceo or chairman of an organization, you have to think about not just what is in the optimal position for shareholders but also how you create shareholder value over time. -- after our stockade
and low, we did the largest acquisition in combining 42,000 employees. that was another round of long-term decisions. the board is what got us through that. they said that they understood the long-term strategy. it is very complicated in a little counterintuitive, but the long-term reporting -- i think quarterly reporting can be asinine. the quotas come around with alarming frequency. they've been trying to get this thing to stop. at least this is one thing that the brits have figured out with the six months reporting. we just announced our earnings last week. we are three in a half weeks into the next quarter. why with all that power and , themation and energy company should be focused on what they are doing right for their clients. >> what would bloomberg report about?
whether about the fed will make raising 25 basis points a meaningless thing? every story is about that though. so we keep going. >> it really is defeating my morale to hear what you say -- to hear you say that what we do is meaningless. >> i digress. >> on brexit, you have all the ramifications for next year. a lot of people are saying that it would gain a lot from london falling in the financial world. recently -- onat bloomberg tv, it was in between the pointless stuff. [laughter] >> from our perspective, just narrowly from the financial sector and our institution, there is nothing good about brexit. we love the rule of law in england.
ecosystem, thee eco-structure, the pipes in the plumbing, everything. we are going to half to have our headquarters in europe in addition. have ouring to have to legal entities with more capital and liquidity trap in them. we will have to move families from london to elsewhere. we are trying to minimize the absolute minimum number that we do that too. we hope that we can transition well. the other thing i would say that is that it causes global firms to look out and say -- you have trading businesses, you have to have those trading businesses in london, record, paris, or new york? or hong kong? or tokyo? i think it will open that door of people looking at why they are geographically placed where they are placed. >> which places you think they will -- which places do you
think will gain from that? >> based on time zone, new york is one with an infrastructure time zone -- if there is a movement out of your it will head towards the u.s.. i'm not going to say this is large-scale. will not see a large-scale deterioration of our operations in the u.k., but the ascension that everything would move to the -- to a new european company -- country is not the case. gorman that was james with michael bloomberg. up, the summer is over but we can tell you about all he must have here for winter next. this is bloomberg. ♪
♪ vonnie: you are watching bloomberg. i am vonnie quinn. mark: and i am mark barton. we would hear from morgan stanley chief executive on how the bank is preparing. david: mercedes is -- vonnie: mercedes is taking on uncharted territory it a truck. the latest on that -- uncharted territory. a pickup truck. the latest on that coming up. --k:
london property prices are set to fall next year. with concern over brexit, the european union weighs in on the u.k. housing market. will be thet london most affected with prices dropping 5.6% next year. morgan stanley ceos says that they will move some employees out of london as a result of the brexit vote. yearoke at the bloomberg ahead summit in new york. >> there is nothing good about exit. we love the rule of law -- brexit. we love the rule of law in england. we have all the and for structure, the pipes, the plumbing, the firms, everything. we going to have to have our headquarters in europe in addition. legall have to have our entities with more capital and liquidity trap in them. none of these are good things.
you will move families out of london. mark: they posted their third-quarter profits and there was little changed. there was an increase in fees. they are counting on business in torging -- emerging markets help them where they have a large presence. pokemon go was not enough for nintendo. the popularity of the blockbuster did not affect sliding sales of the 3gs and we you games. -- 3ds and wii u games. their first iphone game will debut in november. the german automaker is betting that there class of vehicles will attract sailboat owners in the same way that as -- off-road suvs used to. the city says that the pickup trucks will be competitively priced.
time now for our bloomberg quick take. we provide context and background on an issue of interest. saudi arabia has removed barriers to foreign investors in the stock market. they want to sell shares in a massive state-run oil company. the economic realities are forcing change. the question is how much. here is the situation. the gas in the price of oil is creating financial strain in the weekend -- in the region. the kingdom burned through currency reserves at a record pace. as part of a goal to earn more investment in oil, the country plans to sell shares in their saudi are bronco company. they want to create pressure though own to -- the public offering is potentially the world biggest and will double the size of the stock market.
largest it became the oil exporter in the 1970's. when democracy movements were stirred in the middle east in 2007, the government unleashed a spending drive to head off potential unrest and create jobs. beenonds have at times strained between rulers. the thne of saudi arabia is one of the last minor keys. -- monarchies. here is the argument. with the world biggest the trolley and guilt and large amounts of money in foreign reserves, saudi arabia can continue to rely on it oil money for some time. the question is whether it can restructure the economy before the -- before it runs out. its puritanical religious life will create a challenge for reforms. you can learn more about saudi arabia and all of our quick takes on the bloomberg. that is your global business
this is a brand that is so closely associated with the south of france. why get into ski gear? >> because we want to market to family vacations. during the summertime, they go into the water. in the winter, they go into the mountains. it was very natural for us to move into the ski resort collection. andave winter patterns, then we build the whole collection around that with the t-shirt and the jacket. that is for holidays. david: why do this now? why make the move now? >> we are 45 years old. many say that life begins at 40. we believe we are mature enough to go in new directions. we started a woman collection for mothers and daughters a year ago.
now, we have the ski collection. david: are you thinking about branching out into other areas of the fashion space? what is the global expansion looking like for you? >> we like sunglasses and watches, true. vacation and is elegance. combine the fun of vacation with elegance. inside this, we can go everywhere. david: how do you see yourself competing against the established ski brands? there are a lot of performance ski brands out there. how do you plan to differentiate yourself? >> we have the strength of the patterns. we have the colors. we also have the french touch. that is a good basis. we will go at it with the right
rhythm. david: what is your outlook probably for the luxury space in 2017? where are the areas of growth in luxury fashion? >> we have many projects ongoing. we have the women collection and the ski collection. we have the sunglasses and watches, too. for us, that is fine. right now, digital is going into luxury very strongly. so, we have to reinvent the whole distribution and how we work and communicate digitally. how would combine digital with the retail stores. that is a big challenge for luxury. have you compete against fast fashion? there is an impulse now to buy a lot of close that are less
expensive and perhaps more cheaply made. >> i do not propose the same product. we have perhaps the best quality of swimwear in the world. i am obsessed with quality. we are always working on improving the quality. we want to create swimwear that you will want to wear your whole lifetime that you will own and take pride in. we are for a whole life. not just for one season. david: who is buying your clothing? >> you? david: well, you said families on vacation. in europe or more broadly? >> everywhere. the recently opened in china and indonesia. -- we will open in japan andna very soon. we have opened in singapore, which is doing very well.
we have several territories we can go into. we are very strong in europe for sure. also in the unites states and letting in -- and in latin america. those are our more stronger areas. david: they do so much for coming in. pursuits,n bloomberg you can get more on find travel and items. that is on the bloomberg. coming up, we will hear about the latest perspective on the market as the s&p 500 turns negative. this is bloomberg. ♪
♪ from bloomberg world headquarters in new york, we are covering stories from san francisco to london and tokyo at this hour. first, we would hear what doug ramsey has to to say about stocks being overvalued. our apple's party days le's party days over? another round of disappointment for investors. we are halfway into the trading day in the u.s. session. julie hyman has been watching it tick by tech. tics have been going progressively higher today to some degree. , limit better on the
s&p 500 in a little lower on the nasdaq. the biggest of these has to be apple. the apple shares are down 2.5%. the nasdaq is weighing a little more on the s&p 500 from this, as well. and for investment to be successful, is because we want to raise wages for middle income americans. conservative is not because of the 1%, or the corporate office. the reason i am an american is from all the people in this country recognizing that if a business is thriving and growing, it will create more jobs, raise wages for people, allow us to care for seniors, and allow us to have the kind of military around the world.
i love the country. i love what we represent and what we are. no other nation has the strength and capacity and hard to to do what we have done it i know wiest -- we face extraordinary challenges. making this progress against the challenges as we should in washington. states figured it out. governors and legislators, republican and democrat, are getting it done time and again. salute tom and your team, lisa, those of you here today, those of you fighting, republican or democrat, fight to take on the real challenges and and get these things resolved so the energy and passion of the american people can create the businesses and grow the enterprises that will hire more people and make
stay as the governor of the bank of england. >> her comments on monetary policy >> bloomberg news, london. the ruling party of japan wants to change the rules so that prime minister shinzo abe can stay in office for a third year term. if the move is successful, they would be in power until after the 2020 election game.
japan's main opposition party has offered in a credible alternative. global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. vonnie, back to you. vonnie: a disappointing performance from apple. the s&p 500 has declined for two consecutive days for the most five weeks. the index is not been able to gain momentum during an earning season. you can see that on my bloomberg chart. joining us now for his take is doug ramsey chief investment officer at capital management. he joins us from minneapolis.
>> i think investors are waiting to see third-quarter results. we have just been sort of attacking sideways here for a number of months. we are expecting a breakout here over the next number of months. we are bullish mainly because of the internals of the market. a lot of market breath measures made high as much of a -- as much as a month ago -- a month ago. we'll talk about many months ahead of time. just because you had this broad action in the new highs in august and september, it does well for the market over the next several months. we do not have a lot of visibility behind that the on that time horizon. largely because of where valuations are. we still view them as quite high. we still think the market will get more expensive before it tops out in late b-17 or into 2018. david: so we are 4/5 of the way through the third quarter earnings season. what is the catalyst going to be here?
can, what far as you you see as the potential catalyst to break out of this range? >> i think you will see better results out of the commodity oriented groups, energy, and materials. you put in a good solid low for commodity prices in the first quarter. they are up significantly. prices of the next several months, those results are a significant piece of what swings s&p earnings. it should have an impact. that and, i think we will continue to have just a sort of muddled through rate of economic growth. companies will deliver on the growth. vonnie: you are still saying about 2% which is high and in terms of investing in equities. why not keep more power -- powder dry? >> we are in an environment which i call "flyby instrument."
we do not have a lot of conviction about the upside based on where valuations are. you look on other things beyond valuations such as investor sentiment, which i think right now is for the restraint -- but right now i think is pretty restrained. look at the economic environment. we think the rate environment will continue to be tamped down of the next several months. i think you will see a rate hike from the fed over the next nine months. not enough to really put pressure on equities. also, there is the action of the market itself. groups,e some cyclical and not all of them are dissipating. that leadership iturning to --place this defensive economically defensive leadership that has been dominating for several months ase electric and utilities
well as consumer staples. some of those pompous surrogates have underperformed in the last three months. i think that is a positive for the market going forward. david: there are seasons to the earning season. away when youake look at the health and financials in particular? >> it is a tough environment with rates where they are. i think there are reasonable odds that you will see a steepening of the yield curve in 2017. maybe the 10 year bond yield toe from a dollar $.75 today $2.25 today or $2.50. i think that is what the financials are looking for in 2017. there is no doubt that the results right now are rather tough it investors are looking -- or rather tough. investors are looking forward to next year. david: -- vonnie: you seem to be waiting for something and what are you waiting for?
>> it is a quantitative call. we have had almost a doubling of oil prices back in january. i am surprised we do a lot of work normalizing the earnings on that group. i suspect it is just that we have not quite seen the capital spending reduction that matches up with the whiteout we have had with oil prices. it was only three years ago that they were running at $105 $110. it is a bit of a mystery, because we like valuations, but we do for our client -- defer to our quantitative work. it has not turned up yet on energy. maybe in the next few months i do not know. david: apple is down on its earnings again this week. what does it tell us about the health of the markets when they report broadly speaking? >> what we have found in our analysis -- what is looking good right now is some things that chs away from the mainline te
that make the news. what we are seeing is quantitative strength in and market strength in -- market action strength is in market services, data processing, semi conductors. not a silly the big hardware and peripheral manufacturers. david: -- vonnie: doug ramsey, inc. you for joining us. david: -- thank you for joining us. david: coming up, we will compare the galaxy phone with the iphone 7 and the new google phone. this is bloomberg. ♪
"bloomberg markets." i'm david gura. vonnie: and i am vonnie quinn. time for your bloomberg business flash. microsoft wants to add virtual reality tools to new software. they say that -- virtual augmented reality tools to new software. it would incorporate the use of your smartphone coming in the spring. in moret to bring revenues by advertising video games and security software. rican national group is lifting property claims tied -- it comes as plans offered more protection in larger cities. the previous limit was $200 million. the protection can be purchased a loan or part of -- or as part of a larger policy that covers a broader array of risk. warning that the
software giant is maybe facing a million dollars in letdown because of five unprofitable is this is he inherited. -- business is he inherited. he was roughly removed from his role on monday. that is your latest bloomberg business flash. apple is looking -- is expected to take advantage of samsung's weakness in the market after the galaxy note 7 recall. mark joins us now from san francisco with more. mark, what happened here? i know samsung was pending such high hopes on this phone but now those are down completely -- those have been dashed completely. more --t apple s capitalize more? mark: the biggest issues that they still do not have enough supply of the iphone 7 plus which is really the main rival to the galaxy note.
apple issaid that certain they will be in supply demand balance for the seven plus for the end of this calendar year. that is a main driver. people will not buy a galaxy note, but they might not be able to find in iphone 7. the competition between these two companies, i wonder how apple has viewed the competition between them. as apple learned anything from the way this has played out with samsung? mark: they are likely taking it as a textbook example of what happens when you rush to market too fast. apple is known for not doing that. on a phoneply that call the other day on a different topic not related to samsung. apple want to find out what went wrong with samsung so they never faced a problem like this. of course, there were the in
tenant issues, but this was nowhere in line with the samsung explosions. it was a completely different playing field. i would say that apple has done a good job of avoiding catastrophes. vonnie: i'm traced to see if you have heard anything about other what we may know already about a mac swell? be a macre will focused event. they said that they had some exciting news on thursday for both current and future mac owners. thely, that will be about new accessories, the new monitors, the new collaboration they have with lg monitors out of south korea. i could before current customers. there's also a new macbook pro, and macbook air in the works. editingre in a video
software, in a button pops up to slice the clip -- vonnie: it reminds me a little bit of what those numbered buttons do. david: mark, you have heard about the new google pixel phone. is this something that apple is worried about? is very interesting, because when the google pixel was announced, everyone knew it was google phone. that's it was -- it was google's fphone. we published a story earlier this week saying that the google , at least the entry-level models, are with in a few dollars or percentage points of apple's margins. that is very intriguing. it will be interesting to see if the new google and apple rival will move from hardware to software in the next five years. david: mark, quickly before we
let you go. you mentioned -- you have been working on a piece of apple working on cars. what is your sense of what they in theng their -- doing car space? starting in 2014, tim cook allowed for apple engineers to work on a project to build a full-fledged vehicle to combat tesla motors and other electric car companies. months or so,six under new leadership, the car project has turned away from making a full-fledged car you would see on the street to more so in underlying life form that integrates with hardware and software to allow cars to have self driving features. in canada, apple is working on one component of that. it is the operating system that would power the self driving algorithms they are working on elsewhere. canada is home to blackberry. one of their main businesses is q and ask. -- qnx.
they are industry leader in automotive software. so, apple's engineers are working in the me office park as qnx. it is a very interesting story about poaching between the bunnies. he will how that plays out over the next four or five years as they show off more of their car in missions. david: mark gurman come from san francisco, thank you. -- mark gurman, from san francisco, thank you. you can get more of his stories on bloomberg.com. ofnie: coming up, hundreds -- we will look into the new strategy next. this is bloomberg. ♪
i am david gura. vonnie: and i am vonnie quinn. our bloomberg is correspondent that covers goldman sachs. he's male is the way they are doing this, but there are many reasons behind us. company morale comes into it. perhaps they do not know where they should go? >> before we wrote this story, we went to goldman and we asked them to comment on the strategy. they would not tell us. have done is that i have gone back and look at what some executives have said. it gives us a little bit of insight on why they have chose this. last november, the cfo said for them to not just said for us to not look for them to make big headline announcements on job cuts.
they believe it is part of the business. when revenue is down, it will make some cuts. when revenue is up, then maybe they will hire some people. that was some insight. heard that they like to keep some option now the in the business. they do not want to make cuts that are too big so that they do not have anyone on a trading desk, but they also do not want to take the headcount out if there is no revenue there. it kind of shows how their strategy has changed during the year. the first quarter, as we remember, was a terrible quarter. it got everyone really worried about the results for the year. to say that they needed to cut more than they thought going into the year. that sort of continued. david: explain about how you went about reporting this piece. it is fascinating. been layoffs have categorized as planned layoffs lrsus mass layoffs -- mass
ayoffs. tell us how you got this data. >> basically, there were reports filed with the department of labor that gives employees the heads up that they are going to be terminated. it gives the labor department aware that makes the labor department aware of them, and so they can be carried out. usually, they are posted at a lack of a few days. we have gotten into a practice of following those. when they are about things, we pay attention. i have seen more and more cannot goldman. out on goldman. we had to get more context on their strategy. it would be about 5.4% of their workforce, which is about what is in line for what they do every year.
it is not a drop in revenue behind us. >> good question. it is a bit of an incomplete picture. these are just employees in new york could we know that goldman has many employees in seoul lake city, for example. they have many in london. it is not exactly clear to us. we can't just take 433 and divided by the workforce and say that is 5% and a bit more than their 5% call. it is likely going to be more than that. vonnie: thank you for joining us. david: coming up, we would hear about white more boutique investment firms are making more m&a deals. this is bloomberg. ♪
markets." mark crumpton has more from our newsroom. politicsew bloomberg poll shows donald trump with a narrow lead in the battleground state of florida. trump leads hillary clinton 45-43. he is picking up support in florida from independents. if trump wins all the states mitt romney won in 2012 and also wins in florida, he also needs 35 more electoral college votes to win the election. ash carter is ordering the pentagon to stop seeking the repayment of enlistment bonuses from california national guard members who served overseas. wakeecision comes in the of angry reactions from congress and the white house. obama warned the defense department not to "nickel and dime service members who were victims of fraud by overzealous recruiters."
a murder suspect in oklahoma may --planning to target people authorities are searching for michael vance. he allegedly killed to relatives and injured two police officers during a shooting rampage on sunday. he referenced some potential targets during videos he posted live on facebook. the london housing market will feel the impacts of brexit next year. london home prices in 2017 wolf 5.6%..6% -- will fall nervousness and uncertainty are starting to show. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. shares of evercore partners and around today as the investment bank reported earnings.
banking was up 30% year-over-year as the company vie for clients with them in a heating up. underwriting fees were also up while commissions were down on the were trading volume. ralph schlosstein joined bloomberg markets. he was asked whether his firm has replaced major investment banks in advisory roles. ralph: one of the exciting things to us is that clients increasingly are embracing the independent pure advisory model. on our earnings call this morning, we will be either number six, number seven or number eight globally in advisory fees. vonnie: you did more than citigroup? citigroup, ubs, credit suisse, deutsche bank, barclays. vonnie: what does that say about the megabanks globally? are they done? ralph: not even close. some of them are still doing well.
there's always going to be a very significant role for large .inancing banks appropriately, they insist upon being an advisory banker whenever the extender balance sheet. bothyou are seeing is large and smaller transactions that the independent firms are that a a more in order more and more important role. a sole advisor usually has a large code advisor. co-'s code advisor -- has a advisor with a large bank. what are the potential postelection headwinds for m&a? ralph: we haven't seen any real effect pre-election on m&a activity. roger altman this morning on our
earnings call said in all the discussions he's been in, the election has not been mentioned once. in the context of the transaction. lots of people discuss it as a matter of interest. we don't expect there will be much affect after the election, either. mark: you are also big in research. you been a tough year -- are seeking to be the elite research firm. can you tell us why it is still a good business? how has research helped you? ralph: i would argue that both of our businesses, the advisory business and the research-based equities business are great businesses if you are a plus or a. we hire a great thinker, they will be very productive.
a minus or b plus, chances are they will not do much revenue because you compete solely on the business of your idea come your intellectual capital in your relationships. if those are not strong, you will not get in the door with the most important clients. the sameis way. the top analysts will always be listened to by the largest institutional investors. those institutional investors, whether it is under the current two will be increasingly focused on paying for the best research. you don't use your balance sheet to land. corporations are going on a borrowing binge. we just saw the at&t deal cross yesterday. a $25 billion loan. what is the future when it comes to the fed raising rates? wilbanks be able to do that?
ralph: the fed will go quite slowly and credit conditions obviously, rates are extraordinarily low. credit is highly available. changing veryhat dramatically over the next couple of years. one of the reasons we pretty positive on the outlook for the overall m&a markets is that the m&aral condition for good has been in place and are in place today. reasonably strong equity markets , relatively low interest costs and strong credit availability. and reasonably good visibility about the direction of the economy. togetheree things lead to reasonably strong ceo confidence, which is ultimately the cherry on the sunday you need to drive m&a activity. vonnie: is this all happening
because of the idea of the fed tightening looming ever larger and you can still par with that attty much zero -- borrow pretty much zero? why are companies doing this? in a slow-growing economy, an economy where real growth is debt at 2% ors less and nominal growth is only a scrooge about that -- real growth is at 2% or less and nominal growth is only a scooch aove that, diversifying is pretty strong motivation in a slow nominal growth environment.
measure of volatility here is the bank of america merrill lynch gfs i market risk index. this is at its lowest going back to tony 14. this is a measure of future price swings. that's going back to 2014. equities, interest rates, currencies and commodities. before today, it had been down for five straight sessions. we have not seen a streak like that since may. really seeing suppressed levels of volatility. that others are saying there aren't that many reasons to be concerned right now. a couple of these components what you were looking at a jpmorgan index of volatility and currencies. in the merrill lynch index that tracks volatility. this is implied or estimated volatility in the bond world. both of these are coming down.
all of these different measures of volatility. finally, i want to look at the vix curve. when you are looking at the curve, you are looking at vix futures to figure out what market participants expectations of volatility going forward. i'm looking at current futures curve, that is the yellow line. one week ago in orange and one month ago in blue. you can see the volatility has been coming steadily lower. out, the expectation is the vix will be right around a slightly -- or slightly above 15. expectation for a spike in volatility, even around and after the election. two months outcome easy it go up a bit to around 16 and the curve gets more normalized.
it's interesting that even around an event like the election, even around the potential rate increase, the expectation of the volatility will still be somewhat suppressed. david: time for the bloomberg business flash. south africa will increase taxes and limit spending as it attempts to send off a junk credit rating. raise $3.1taxes will billion over the next two years. the governments expenditures dealing will be slimmed. wider fiscal deficits. mcdonald's has capitalized on the popularity of its breast guest -- of its breakfast menu. facing its fourth straight year of u.s. traffic decline. progresss has made
since the ceo took over but the company says there is still more work to do. bill ackman maybe close to directors elected corporate boards. the plan to let shareholders more freely vote for directors ackmaned by investors has long argued for such a change. two top european officials have signaled their justin trudeau -- for more, let's bring in mark bunting from toronto. suddenly come it seems they are giving in and there may be a massive trade deal. mark: this is a confidence of economic and trade agreement between canada and the european union that is being negotiated.
it appears to be in trouble for a few days. we may have a breakthrough coming soon. wallonia in the southern part of belgium, this is the only region and belgium is the only country blocking it so far. they want protections in various areas. we could see a breakthrough -- the european commission president says he trusts today something will get done and the says he union president think something will get finalized soon. if that does happen sometime , we could see the canadian prime minister jet over tomorrow for meetings to put the finishing touches on this deal. david: what would be the significance of an agreement here? mark: there would be the elimination of all terrorist
scum industrial and otherwise between canada and the european union. arrifs,t industrial and otherwise between canada and the european union. canada says it could increase its output by about 25%. the eu would like to think it has some economic weight, some have to strike deals like this. if they cannot get it done with canada, that will take a lot of steam -- they want to strike deals with japan and other countries. it could hurt the credibility of the european union. the prime minister of holland said all this indecision is really putting is in danger of being a relevant. -- beingelevant irrelevant. vonnie: that is pretty sizable. how long have these talks been going on?
this is not very encouraging pre-brexit negotiations. negotiations. mark: brexit overhangs a lot of this as well. these talks have been going on for about five years. the eu president said today it we cannot get a deal with canada done, this is the country that is the most european outside of , ifeuropean union,, an ally we cannot get this done, there will be obvious consequences. the trade minister walked out of the meeting last week. what has she said about the prospects for a deal? mark: she was very upset. the last we've heard from her is the ball is in europe's court. we've got the vast majority of european capitals agreeing this trade deal.
brick-and-mortar stores, retailers are counting on demographic to fuel their growth. how the strategy may play out in 2017 -- i asked why there is such a big focus on getting millennials to spend. >> we cannot stop talking about millennials because there's so many of them. they really command so much power. they are very health conscious, they make choices as we see and hear all the time about eating healthier, being more active. all these trends we see, people lives inheir yoga wear and sneakers. .here is a social awareness they want to buy things they feel good about. organic products, natural products, responsible products. say these don't carry over into other groups, but this is a big factor.
the biggest of many characteristics with the millennials is just the approval. they will not make a decision about something to buy whether it is an item of clothing or a place to go and you do they have not checked with friends, check out the reviews online and then they will make a decision. there's not a lot of individualism going on. david: we always talk about millennials and housing. does that trend continue still ? >> goldman sachs is pointing to the huge potential that is there. they are starting to age. they are now into their early 30's. that is something they are starting to think about. there will be a lot of potential there. at the moment, it is still whether they are renting or whether some are still at home with mom and dad were living a way that is much more of this sharing economy ethos that
permeates everything they do. that will change. there's a lot of stock that marketers and others are putting in what will open up when. when they have more money and they can make these choices. gen xers care a lot about housing. they are working on their homes. they straddle these moments in time that are interesting. technology is something they are comfortable with. but they are also the mall rats. timeare spending a lot of both of these ways, shopping and it's very much about who they are caring for right now. a lot of them are caring for aging parents or helping aging parents while raising their teens or children.
about a choice they are making for themselves, it is typically going into the home. that's what we are seeing with them. they are still very individualistic. another group you profile , dinks. >> dinks across all these lines. there are some dual income no kids millennials. as we learned and discovered, they were an offshoot of the yuppies in the 1980's. we are talking about people who have more disposable income for themselves. they are spending it in ways that are not so surprising. their trips are more lavish or involved because it doesn't have to factor in children and keeping them busy. active travel is a big thing with thinks.
-- dinks. their cars might be more expensive. they might be giving more to philanthropy. board, spa services, personal grooming, very big with the dinks. then nos they are longer dinks because even when they are a little older, they decide to have kids. when we are thinking about what we picture when we see a think , that middle-age couple that is out there skiing at that great resort in aspen or flyfishing out in wyoming somewhere. and enjoying their lives. a lot of them come it by choice and they are doing things they love to do. issue the year ahead
we are live from bloomberg world headquarters in new york, covering stories out of san francisco, chicago, rome, cairo and saudi arabia. u.s. stocks are in flux this afternoon. there is one big standout. apple dragging down the broader markets on a disappointing end of the year outlook. grubhub beat on its latest results. thaney metric was lower analysts anticipated. his company's stock falls 20%. isnew bloomberg poll revealing some surprising numbers from the battleground state of florida where donald trump is ahead. julie hyman joins us with the latest. julie: things have gone south once again.
we had the dow higher committee s&p 500 briefly higher. worst ofq taking the it today because of apple and the draghi creates here. -- the drag it creates here. people are focusing on earnings. if you look at oil, it took a big leg up going back to unchanged after we got the weekly inventory data that showed an unexpected drop in inventories. much of that drop was centered on the west coast. that's an area that many oil traders considered to be somewhat isolated from the rest of the oil markets in the u.s., particularly the refining reons inhe sth. you see oil make a round-trip now. 500ou look again at the s&p and its trajectory throughout the day, it is pretty much mirroring what we've seen in oil, coming up unchanged and then back down along with those oil prices. the groups we are watching, the ripple effects, something we'd
seen throughout the earnings season, one of the big components reports and it affects the rest of the industry. boeing coming out reporting profit that beat estimates. me tax have a one ti gain. the company's profit did fall that the shares holding up well now come up four present. 4%.p we are looking at the auto parts markkers as well. delphi is higher, american axle as well. ford will be out with its numbers tomorrow. these guys are big suppliers for the big automakers. scarlet: let's get a check on the first word news this afternoon. mark: a magnitude 5.4 earthquake has shaken rome. there were no immediate reports of damage but the quake did
rattleenturies old -- a centuries old city center. more than 7 million americans have already voted. democrats have improved their positions in north carolina, nevada and arizona compared to 2012. republicans have improved their positions in iowa and ohio compared to four years ago. donald trump has the largest network of small donors in the history of the republican party. trump has raised nearly $80 million from donors who gave $200 or less. that's more than the nearly $50 million raised by mitt romney in 2012 and $65.5 million raised by john mccain in 2008. 35% of the lgbt community do
hillary clinton favorably -- view hillary clinton favorably. clinton will get more support on election day. u.s. abstained from a human resolution criticizing america's economic embargo against cuba. the move pits the obama administration and the u.n. against the republican that congress. congress.ublican led global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. let's get back to the markets because earlier this week, goldman sachs issued a dire outlook. cutting estimates for the next couple of years but maintaining its price target.
u.s. equityief strategist was asked to reconcile these two calls. >> cutting is a modest reduction. raising $116 next year and $122 in 2018. that is your progression of earnings. the one increase next year, part of that is that energy companies will go from a loss to a slight gain. you are looking at core earnings growth of around 6%. that is modest earnings growth and the valuation on the market still around the low 80 percentile. modest upside for 12 months. even where crude is at and where it was last year, how is the market story for the broader index from here? david: it's one of the key issues for 2016. margins have peak.
margins have been flat for the better part of five years. the key reason for margins increasing the last five years has been technology and apple in particular. it's been responsible for one third of the margin increase in u.s. equity market. tremendous growth in sales and tremendous growth in margins. through theing rearview mirror. looking forward, margins will likely come down. they will peak this year into next year. we are at a high level of margins and profitability and that will likely slow. your trajectory of profit growth as you look out over the next several years will be modest. environment is what drives were sales and you have modest margins commit meeting you have modest growth in earnings.
david: how do you separate it from organic growth? topline growth, selling more stuff and making more money as opposed to friends of janet yellen, giving a lot of money for really cheap prices and buying back your stock. the way we think about is how to invest and tackle a market that is at this level of valuation and modest growth. the future is a barbell strategy. on the one hand, we are looking at income. not yield, but growth in the dividends. growth in dividends as a strategy. in the other stream, you want to look at topline growth. those are the strategies for outperforming the market that is difficult. with low volatility. on the dividend growth side, the market has totally mispriced dividend growth. , thethe last 50 years
growth in dividends over a ten-year. has never -- over a 10 year --iod has never been below dividend growth is mispriced in the market. dividend growth will be about 4% on average over the next 10 years. it is mispriced in the market and there are some companies that we have a bloomberg basket that we trade that has a long track record about performance. better growth in the dividends is a key aspect. where are you getting your best topline revenue growth? you go from your one to your year one toee -- year two to year three. revenue growth
and the other is sales growth. not giving you a lot of risk reward. growth the dividend story, a lot of people ask, how does the rate story and form -- inform my view of the bond proxies? we are is the dividend growth story being underestimated? want to go long dividend growth and short the market. have that as no basis risk. you can find it in every sector. hdig -- you have 6% growth in the next year. 2% over the next decade. these stocks have 12% dividend growth. that is what you want in a yield start market.
-- starved market. matt: that was david kostin speaking earlier on bloomberg television. coming up, online food delivery service grubhub posting third-quarter results that beat wall street estimates. so, why is the stock tumbling? its worst day in one year. we will be speaking to matt maloney, next. this is bloomberg. ♪
falling big-time today, having their worst day in a year. the plunge comes despite the online food delivery service beating third-quarter earnings and revenue estimates. is facing increasing competition from the likes of post may come of uber and -- mate, over and amazon -- uber and amazon. why are the shares taking such a big hit today? matt: i have no idea. we had a great quarter, we crushed it. it's a great year, a great quarter. i heard something about people -- 65% yearpointed on year, that is pretty good. 44% year-over-year growth nearly -- wear-over-year asset
are reenergizing the business and we are really looking forward to driving the sum next year. matt: some people told us they thought the daily average grub did drop quarter on quarter. dining out or ordering in doesn't have seasonal trends, to what you attribute the decline? matt: there are tremendous seasonal fluctuations in your. our second and third quarter are always lower. the third-quarter growth is usually dramatically less than a second quarter growth. we had some much acceleration this quarter that we were up in terms of orders. it was about 3%, pretty unprecedented in our industry. matt: what you think about the
competition that is entering? some people could be looking at a service like over and thinking it doesn't make a huge difference, not everybody's got nothing of how it works. -- got the hang of how it works. do you feel the pressure? matt: it's an over $100 billion market. we are more than an order of magnitude larger than anyone and and will double orders magnitude -- last corner, we posted our best quarter in over 12 months. this quarter, posting our best quarter in over 12 months. all of our competitors have been in the market for over a year. they're clearly not slowing our growth. this industry could be big enough for a bunch of players. we are crushing it. we are very excited and inspired by the vast data we have access
to and we are channeling that right back into our product to make sure we always have the best run x in the market. -- products in the market. crushing itock is come even with today's drop, still 60% year to date. investors are rewarding you for that growth. you say there is a large addressable market. you own almost every name i've already used. where is your growth going to come from in this market? is there anyone for you to buy? or is it all organic? matt: there's m&a opportunities out there -- there's inflated market expectations for a lot of the competition. part of it is our fault for doing so well. the majority of our growth will be homegrown.
optimization of our product, building the most relevant sorting and presentation of restaurants so when you go, you can take into count all of your order history on our platforms, take the order history of the people in your neighborhood and present exactly what you want to order from. data thataging that will make our platform incredibly powerful and we will continue to grow your after year after year. matt: we talked to patrick doyle -- scarlet: we talked to patrick doyle last week. his stock has performed incredibly well. domino's is now a tech company. can text an order, tweet and order, go through facebook messenger, go through your ford sync system. anywhere is the platform, allowing people, whichever screen near using, whichever social media they are on, we want them to be able to get less.
we are not able to compare grubhub to domino's. you do have this portfolio of brands. why hold onto these individual brands rather than combining it under the grubhub brand? each brand means something specific ports niners -- for its diners. seamless is an institution in new york. i'm very proud of that. in l.a., we just acquired l.a. bite, it's have to market in terms of delivery. half the market in terms of delivery. if that is their preferred will let them. matt: thank you for joining us. scarlet: time for the bloomberg
business flash. electric is advancing plans to buy a german 3-d printing company after failing to receive support from shareholders including paul singer. his hedge fund holds 30% of the slm solutions. -- doesn't plan to negotiate ibm's artificial intelligence technology on track to be used by one billion people by the end of next year. the company's new deal with general motors noted as an example of watson's growing reach. receive these bands is building luxury pickups. betting its x class vehicles will attract high end adventurers. they will people in spain and argentina.
matt: this is "bloomberg markets ." scarlet: time for options insight with julie hyman. julie: joining me for today's options insight is dan deming. we've now had stocks sort of on a downward trajectory over the last week but still remaining in this very tight range we have seen. the vix still remains depressed. is this what we should expect to see from the balance of the earnings season perhaps? dan: perhaps. the gdp number on friday could
influence the structure. market gyrating around, it cannot escape that gravitational pull around the xp 2140. seeing somee are new volatility but it does feel like there's some anxiety building under the surface. we saw the vix up this afternoon. entire than it was when the market hit its loans earlier this morning. julie: you've been watching apple as well. a lot of options activity following its earnings report what stood out to you about apple? dan: significant activity when you look at this week's options. the most active options i've seen in a weekly sector since they been listed. you are seeing tremendous
volume, 36,000 on the 115 call. you are seeing some repricing here. some hedging going on now that we've seen apple giving up this trend for the short term. julie: one of the large cap tech companies we will be hearing from in the next week or so. you got amazon and alphabet on thursday. facebook reports next wednesday. ree, looking at a relatively tight range targeted range for facebook. how exactly does that work? dan: we talked about call spreads on here numerous times. i'm looking at the short-term trade in november, looking at bolling the -- buying the 134 calls and telling the 140 call about that. buying the call spread and impliedit that
volatility is jacked going into this earnings announcement next wednesday. implied volatility around 31. can put it down for a small credit and it allows me to participate in a nice range to the upside historically. it limits my downside exposure. shows betweenart 135 and 145 is the range you are talking about and where you think -- that's where you optimize your profit, right? dan: yes. between 134 and 143 -- we've seen facebook pop closed earnings and then find a range and trend in that range for a month or two. this is the november call, selling the high cycle. 134-140 is a nice area here to if their stockum
pushes higher. it limits my downside because i have seen such surprises, some of these names get hurt pretty badly. deming of kkm financial. facebook earnings next week. facebook shares near a record. still ahead, the commodities close, oil having iraqi session, spiking higher and then lower and now giving up those gains. -- a rocky session. ♪
new york. let's look at the movers. crude oil is a big one. wti on a bit of a roller coaster ride today. it spiked after a report that showed u.s. stockpiles postdates a price drop last week but then supplies gained elsewhere. natural gas is falling today as well. for abovecalling normal temperatures in the central u.s. for the first 10 days of november. colder weather expected to be confined to new england and upstate new york areas. to agriculture where soybean meal is rising. there's rising demand from china helping to push prices of soybean meal higher. one more agricultural chart showing just how big the surge and avocado prices has been -- in avocado prices has been. a farmers strike in ne
mexico is to blame for the shortage. i'm willing to pay more, so is the market. avocados at their highest level on record. scarlet: let's get a check on the headlines. mark crumpton has more from the newsroom. mark: a 5.4 magnitude earthquake rattled central italy today, downing power lines and sending panicked residents into the streets. a comes to months after powerful quake toppled nearby villages, killing some 300 people. there are standard reports of pieces of buildings falling, but no immediate reports of injuries. forquake was felt from rubio to the capital of rome to the central italian town of aquila. new poll shows donald trump has a narrow lead in a state that is a must win for him, florida.
to hillary clinton's 43%. if trump wins all the states mitt romney won in 2012 and also wins florida, he still needs 35 more electoral votes to win the election. syrian activists say airstrikes outside a school in the rebel held province have killed 17 people, including children. a new report finds if current trends continue, global gender pay gap will not be closed for another 170 years. the annual study by the world economic forum also finds the pay gap has reverted to where it
was in 2008 after peaking in 2013. the u.s. >> 45th on that list. -- ranks 45th on that list. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. matt: let's get to apple, shares on pace for their biggest decline in six months after the company reported quarterly earnings while revenue in europe was up, revenue fell in the americas and in china. iphone sales also felt for a third straight quarter. piper jaffray's gene munster is not terribly concerned. jean: the iphone franchise will return to growth and should stay in growth mode for about the next seven quarters. as long as you can see in a tech company. ubs analystg us is steven milunovich.
joining us.r what do you think is behind investor disappointment? is of the revenue issue or the outlook? steven: the stock is up quite a bit over the last month or two. in terms of the fundamentals, the units -- the revenue guidance is above expected for december, but the units are you sign. the second thing is the gross margins. gross margins came in a bit lighter. the cost of the seven to build is more expensive,urrency is an issue. it's a goldilocks quarter. you don't want the iphone to do too cold because people will question underlying demand and if it's too hot, people will be 8 next yeare iphone won't be the super cycle that people expect. looking through the
analyst notes, i noticed that by side estimates were higher than sell side estimates. how did the buy side see apple versus the sell side? steven: not to do similarly. ly.not too dissimilar it looks like the 7 will be growing. the stock tends to discount as much as 12 months out. from january, we are already looking at the iphone i. -- the iphone 8. expectations for december might be like. roughly things are on track. matt: everyone was pretty disappointed with the iphone 7. iphone 6s plus.
when you look at the composite of what the announced in terms of waterproofing, better battery life, stereo, dual camera, it's a pretty good upgrade, i think. will incense some upgrades. you have the carriers upgrading in the short term. i've got a bloomberg screen up. if you want to look at historically at how a company does relative to earnings. every time apple releases revenue that mrs., the shares es, the that miss shares fall. give somewhat weaker forecasts or outlooks to make it easy for them to become
quarter end. do you believe that is a pattern as well? steven: historically, apple would sandbag -- not true under the new ceo. apple got burned last year. they have a lot of inventory they had to work off. there is some conservatism in the approach going forward. really does do well in terms of discounting outperformance relative to expectations. we have a pretty good cycle here. behind it. i expect the stock will grind higher over time. matt: apple will be hosting an event tomorrow in cupertino. a refresh on the mac. does the mac move the needle for apple is much? steven: no. it is not unimportant, but it's about 10% of revenue, but when
you look at the services business, growth profits are roughly equal to the combination of the ipad, the mac and the other products, which includes the watch. 10%services are growing at that is much more important than the new macs. matt: thank you for your time, steven milunovich. scarlet: coming up, sunshine state slugfest. donald trump with a slim lead in florida. is this the start of a trump come back? this is bloomberg. ♪
matt: this is "bloomberg markets ." with the rise of islamic state and terror attacks in paris, brussels and nice, fears are rising in the west, prompting aig to quadruple the property claims -- clients in large cities are asking for greater protection. sonali basakw is . that is the most you can possibly get if you are the victim of a terrorist attack. : around the world, only three companies offer this much. one being warren buffett. it took them a while to get to this point. scarlet: why $1 billion as opposed to $250 million?
sonali: the cheap investor has hired over 600 engineers. they can engineer better, they can help clients prepare for a major disaster and built buildings better in response. they are doing a lot of proactive preparation. they are buying a lot of reassurances. shifting a lot of risk to other insurance companies to protect themselves. matt: i wonder what you have to do to prove its terrorism. under other policies, they could claim a higher amount in damages. due to say this is terrorism or something else? sonali: the government does have to say it is a terrorist attack. the government provides a backstop that has never been triggered. they can absolutely say that. on top of that, what is really covered here?
one of the gray areas was cyber insurance. matt: sony was hacked by north koreans. are they terrorists or just kids having fun? sonali: if this is a terror attack, the government has to say it is. you have to make sure you are negotiating well in advance that this is part of the attack. you might want to buy another cyber insurance policy. do we know what percentage of companies are now buying this terrorism insurance? is it mainstream? is it now the default move to make? sonali: 50% of companies in the u.s. more than half come but the takeover has been fairly stagnant. people want bigger limits. more people might take it up. walmart, coca-cola are all saying what happens to our operations abroad. they're really worried about their operations offshore. matt: great story, sonali basak
covering aig for us. a quick let's get snapshot of some polls. in florida, there is a new bloomberg politics poll that puts donald trump on top of hillary clinton int by two points in a four-way race. voters aged 18-29 are overwhelmingly backing clinton. third-party candidates faring better among younger voters. joining us now is ben brody. other polls showed clinton was in the lead. is this an outlier? ben: it's difficult to know exactly what is an outlier until the voting comes down. certainly this suggests a trump lead we have not seen in other polls. our poll screens work on likely voters and how we determine who
is likely and who is not. it's different from what others do. we've seen more voters saying they will turn out as a look some other polling companies. this certainly underscores the path to a trump victory which is a narrow and quickly narrowing one. that goes through florida. it's a little unclear whether or not it will bear out or if the race could shift in the next 13 days. matt: don't you see trends in the ways things happen leading up to an election? that is the kind of thing that can drive supporters out. if you can go to your supporters and say, look, this is a close ball. oll. a close p if you look at the preponderance of polls at this point, you
would still conclude that hillary clinton has a small edge. we had heard two points behind the poll average -- clinton is trailing donald trump by two points in a four-way race. is that the way it will appear on the ballot in florida? ben: yes. we will be seeing a four-way race. we are seeing a two-way race even in a two-person race. those things are both two-point races. is it hillary clinton's birthday today? ,ssue out there telling people look, you've got to get out and vote for me, you cannot just sit back because you think nationwide we are going to win. each state is important. ben: exactly. she is hitting the battleground
states, she is in florida right now. she will be speaking very soon. she's moving the celebrities that support her out this is the closing argument and they are throwing absolutely everything they can into making sure the voters are either going out on election day or are requesting this absentee ballots. as those absentee ballots. anothern i ask about outlet story? washington post saying donald trump -- his campaign is trying to deny that. ben: they've been telling us that they will be hosting a fundraising event, some with a trump children. they are continuing to solicit small dollar which has driven huge amounts of they really impressive fundraising over the last couple of months or so.
nothing of the case that it may confusion about when you hold your last event. they are saying they are all in an full steam ahead. poll showsother millennials are now backing hillary clinton. is that a result of her surrogates going out and campaigning on her behalf? ben: it's hard to know exactly needle on these things. a lot of them remained uncommitted for a lot longer than some other groups. it's possible that they are just coming home. certainly young people are a key part of the obama coalition. he appeals to young people. he is social media savvy, considered by a lot of people to be cool. when he goes out, it certainly does help to bring people along.
especially if they were duringing bernie sanders the primary and were not sure if they wanted to come on board with hillary clinton. what people thought might be the collapse of the obama coalition that she wasn't bringing on those young people may be reasserting itself. matt: thank you for joining us, ben brody. world's biggest soft drink company's third-quarter was helped by sales of smaller, more profitable package sizes. this is bloomberg. ♪
coca-cola's president and ceo james quincey joined bloomberg daybreak earlier today and talk about how the company is trying to shake up parts of a strategy. james: we are undergoing this huge transformation and ray franchising. the company of the future continues to pose a strong inanic revenues were growing sparkling and other categories and across the world. david: you mentioned three franchising. -- the re-franchising. look at euro are your comparisons, you are actually off. is that because it is not apples to apples? james: exactly. the biggest factor is the structural adjustment because we are selling bottling operations in germany and the u.s. with our track accelerated refranchising to create a company more focused on building brands, more focused on helping create customer value and more focused on higher
margin and growth into the future. david: exactly. it will do wonderful things for the customer and for coca-cola, meaning less capital investment and higher capital margins. james: it's about galvanizing the system. if we focus on what we do best, building brands and building customer value and leaving a franchise system, we can create faster topline growth for the whole system. david: let's talk about that topline growth. where are you looking for topline growth right now? let's talk about overseas -- you had some headwinds in china, argentina. where are using the best opportunities for growth -- you seeing the best opportunities for growth? james: the places that are doing u.s., posting strong organic growth in the north american operation, good growth across the developed
markets. the emerging markets are more of a mixed bag. we struggled in china in the first half. we focused and took some action. it is paying off result in this third quarter. we are seeing china improve. other macro countries like brazil, argentina, venezuela continue to be tough operating averments. we focus on affordability. we think we will do better. the macros are weighing a bit more on those countries, yes. david: where are you in china? do you expect the full year to be flat? james: we tackle the problems head on, we went in with we've taken some action, leveraging e-commerce, launching new premium brands. also going for affordability where the disposable income was under pressure and sorting out
the display chain that supply chain. we are cautious on the outlook. we are taking actions we think are the right ones to set us up for the future. david: how does a strong dollar affect your business? james: that weight on the topline revenue. got a strong dollar, we most of our revenue and earnings overseas. in the end, that will be ups and the organic we grow business, gain share, establish stronger brands and a stronger system in each and every country and that will deliver value over the long-term. matt: that was james quincey with our david westin. scarlet: time for the bloomberg business flash. carlyle group plans to embark on a global fundraising tour to replenish its coffers with $100 billion.
their assets have slid 17% since june of 2014. the firm expects to be marketing its next buyout fund by the end of next year. 's david rubenstein is the host of the david rubenstein show on bloomberg television. snapple in talk to buy a maker of antioxidant drinks. dr pepper snapple is one of several companies they are talking to. that is your business flash .pdate we are discussing the major market themes this past year. 2017 withhead to katie koch of goldman sachs. ♪
♪ we are live from bloomberg world headquarters in new york. here's what we are watching. u.s. stocks bouncing around, apple dragging down the nasdaq while boeing offsetting those losses in apple in the dow industrial. microsoft inducing a new surface -- introducing a new surface pc as long with a ambitious outlook on how consumers will use that product. hollywood, paramount was once a hot media property that has floundered or in recent years. the redstone's are now focused on turning the studio around. can it be done? we are one hour away from the close of trading and julie hyman is here with the latest. mixed reads on stocks. julie: it looks like the dow is
looking up once again. we are seeing the s&p 500 traded lower as well as the nasdaq great apple part of the reason why we are seeing a drag there. let's look at the biggest earnings declines we are watching today. the stock selling off from the company's outlook for the holidays, some concern it is disappointing, even though technically it was above estimates, on concerns it should haveeaten estimates by more, especially because of samsung's trouble. edwards life sciences sales missing forecasts for the first time in 2 years. topotle also continuing struggle. it's comparable sales fell nearly 22% less order, and southwest airlines out with unit revenue or passenger revenue for available miles. southwest predicting it is going to fall about 5%. at what isa look rising today on earnings, from the earnings winners. we have boeing whose earnings beat estimates,.
another defense contractoranothe numbers beat estimates. biogenic the biotech industry coming out with numbers that were better in part because of medicine sales rising 10%. mondo leaves as well rising in part because of cutting costs. costs and selling more diversified offerings. all of these are trading higher. this costs and illustrates the d picture we are seeing. then you throw oil into the mix as well. oil had been giving a lift to earlier after we got the weekly inventories report showing an unexpected drawdown. and oil came back down again. the drawdown came mostly on the west coast of the u.s. and that is not necessarily a true representation of what is going on. also, been watching yields today. we have seen a climb in the two year, up eight basis points in that period of time.
at the same time, we have been seeing expectations for the federal reserve. rate increases continue to be ratcheted higher. >matt: thanks very much. scarlet: we are going to stay on the market to get a read on the themes that have been driving prices and how they will play out in 2017. our next guest is a double-header of portfolio management at goldman sachs, which oversees more than $100 billion in global equities. great to see you. how is the search for yield in 2017? that be different from what we have seen the last two years? >> i want to start with the fact that we think investors should maintain positioning in equities . one of the reasons is absolutely to get some yield. at goldman sachs we are pretty concerned that we are seeing retail investors retract $65
billion out of equity as an asset class. this is a problem because investors want to reach their long-term investment goals. equity has to be a robust part of their allocation. a 65-year-old elementary school teacher and i helped her plan for retirement. already made a lot of money in equities and she wants to get out. you need to stay the course. there are a couple of reasons to feel pretty good about equities. the first is you have been walking through the earnings the last couple of days. earnings suggest as well as economic data that things are pretty good from a topline perspective that when the late stages of a cyclical recovery, that is good for equities. valuations are pretty attractive. be the third point would that we are shifting into a post monetary world, where we expect more fiscal health. that should be good for growth and inflation, which should be good for growth or equities. very attractive part
of equities and something we are focused on in our portfolios. to the: when you get fiscal stimulus part of the case, i wonder if investors are too optimistic when pricing in this fiscal boost. it could be a battle royale, particularly if we get a clinton presidency and republican-controlled congress. >> there is no doubt that this will take some time to play out. however, i think constituents around the world are saying to their governments, not just in u.s. but in other parts of the world as well, monetary policy is reached its limits. we want better growth. the fiscal expansion story and infrastructure spent in particular is the real story, and we are invested in the beneficiaries of that story within our portfolios. as an example, there's a couple of reasons to believe it will happen. first, we have a world of low rates. that helps with the financing. if we are in a low rate world, one that thinks there has to be
a lot lot of long-term projects that can generate profitability, and in addition to that it should be good for job creation. and in addition to that it should be good for job creation. if we increase infrastructure spending by 1%, we can create over one million jobs. you can create a lot of good political buy-in for that type of solution. the second point i would make from a u.s. active in particular is that we do need infrastructure. if you were to look at infrastructure around the u.s. estimated spend could be $3 trillion to deal with the existing stock of infrastructure. scarlet: a lot of crumbling roads in the tri-state area. you mentioned the earnings report. banks had a fairly decent earnings period. they are trading below book value. what do you see from the third result that would suggest or convince you that these improved trends are sustainable? around theke banks
world, developed as well as emerging. one place in particular that we have a non-consensus would be in europe. it is one of the biggest underweight positions for money managers and we are more constructive. what do we see when we look at the european bank sector? there are a lot of challenges. this is important because selectivity in this environment is so critical. not everything will work and european banks are a good example of that. those banks have business model problems. they are complex investment banks and they will need to restructure in the face of low rates and regulatory hurdles. other banks are keeping balance sheet problems, some of the italian banks. however, what we like in europe is we can identify domestically oriented banks. two, they are well capitalized. point i would make
about those banks is they are operating in an environment where there are not a lot of competitors. even though we have low rates, they can generate positive net interest margins. we can sit there and wait for rates tog o up. in the interim, they are making money. we can collect a very healthy dividend on some of these banks. , double digits, yields of 5% to 6%. scarlet: i want to move on to the emerging markets as well. move to include chinese shares as early as this year. china makes something around the neighborhood of 22% of the emerging market index. what index compilers do does kind of set the tone. what is a risky thing that chinese equities wl account for too much of the emerging asset class? eight shares comprised, as
used just, 22% of the index. index providers are looking to add the local shares. we think it will be quite gradual. be very goodwill improving the investment universe because a lot of those companies are the more domestically oriented, consumer linked names we like. improving the investment universe because a lot of those we have been very constructive on that at the beginning of the year. markets rallied 18%. a lot of people asking, has it run too far, should we stay invested. we are constructive on the forward return potential of emerging markets. most of this rally has actually been led by the commodity part of emerging markets. we are much more constructive on some of the consumer part of the market, and we expect those companies to lead the way going forward to read -- forward. we would caution people against buying the index. the index is full of a lot of companies.
we don't allocate capital. are particularly concerned about corporate governance issues around the state owned enterprises. we invest 50% outside of it, particularly in consumer companies. scarlet: so be very discerning. we have seen a lot of tranquility across asset classes. global fx. is this a reflection of complacency or nervousness? us, if yousay for look a volatility it has been more muted and i think that investors have been complacent. rateisk returns in a low world have been attractive. however, i think that we are starting to see people being nervous about the transition winds coming up, whether political or policy. and we are looking at investors
actually managing our portfolio more and making decisions beneficial to us, seeking to do more in the management space. scarlet: ok. thank you so much. , with goldman sachs. >> and going to mark crumpton in the newsroom. mark: a strong earthquake has shaken central italy paid officials say that the epicenter was closer to perugia and was felt in rome. power lines were not down, but -- knocked down, but no immediate reports of injuries. place inarthquake took -- leaving 300 people dead. and looking at a united nations resolution, criticizing the embargo against cuba. the move put the u.n. against
the republican-led congress. it supports the 55-year-old embargo, despite washington's diplomatic relations with cuba. hillary clinton leading donald trump in the latest national polls. hillary clinton with 47% and a 36% and amp with survey today. gary johnson has 4% and the green party just 2%. over half of the polls said they were concerned about the possibility of violence on a election day or afterward. 6-0the cleveland indians victory in the world series opener drew the largest audience 2009. the broadcast delivered a 12.6 rating, meaning almost 13% of u.s. households were tuned in. that is according to preliminary data released by the fox network, which televised the
game. game two is tonight in cleveland. global news, twitter four hours a day, powered by more than 2600 journalists and analysts in over 120 countries. matt, should i ask who you are rooting for? matt: i think it is clear i would root for the indians, but the cubs are such a great story and i feel sorry for them because they will get crushed. remember to bloom -- tune in to bloomberg television later today. chang sitting down for an interview at 6:00 p.m. new york time, do not miss the conversation from the watson rometty.e with ginni -- loomberg ♪
♪ is "bloomberg markets." i'm matt miller. scarlet: and i'm scarlet fu. looking at the end -- annual windows event and at the surface studio that could be any to take on the imac. microsoft also announcing a new computer and an update to windows 10 that focuses on creative features. more from our colleagues. guys? carol? they are court needing with our bloomberg -- coordinating with
our bloomberg affiliates. in the meantime, when we look at what is coming up, the conversation that will be interesting is with david steiner. matt: that will be one of the interesting conversations. scarlet: you are looking forward to it. matt: yes and oliver renick is coming on. he has been trouncing the s&p 500 and the sub index. scarlet: something to look forward to. and our colleagues are ready. carol: thank you so much. we are here with the corporate vice president of windows. in the new york studio, good to have you with us. a bunch of announcements today. walk us through them. >> today we shared a vision with microsoft to unlock a new wave of creativity for all of us. on the back of two things, including the major update for windows 10 and some new devices,
including surface studio, a new surface book and a surface dial. so starting with windows. three things we wanted to do, enable everyone to capture and create in 3-d. the same way you can take a picture with a digital camera, if you scan something we want you to be able to put it into 3-d. windows 10, this is microsoft paint used by one million people every month. if i want to, i could actually sketch something into this in 3-d with a pen. it is one of the easiest things you can do. this is a huge change. carol: we have our computer now, the camera at the laptop. show us what you are doing. yusef: if i wanted to create something in 3-d, i coultake a picture with my camera or literally draw a picture and convert it into a 3-d object like that.
carol: it is very creative. we were thinking about this, a lot of people thinking, man -- it sounds like they are going after apple's market. is that what it is all about? i know the president was talking about the company for makers and creators, is this a big change for you guys and are you going after apple's market? yusef: it is a bigger theme. going back to 10 years ago, it was about information. it then next big challenge is to from consumers to creators. this is a goal for the company across everything we do, the software, devices, windows and office. this is the right time. part of it is because we are going into virtual reality and a mixed reality were the 3-d objects in learning can become possible. carol: is that a yes or a no? yusef: it is not about apple.
it is about helping other people. when i grew up it was 2-d on paper. today i go see kids and they are in 3-d worlds that would blow your mind. and they do not think twice about it. it is how they do it. carol: how they are growingp. corey: do you look forward and to see a market with people growing up with a world of minecraft where they create 3-d, is the current addressable market bigger than it was five years ago and it is now a better market? yusef: two things, there is a core set of professionals in we are going after that with the new surface studio device that we announced today. the other point you made, we want to make everybody a creator. the notion today is it that there could be if you. her's that everybody -- creators that makes what you watch, but
we want everybody to be a creator. cory: my nine-year-old does minecraft and it is mind blowing and it is this immersive thing. but from a, that is what i was doing with -- for me, that is what i was doing with legos, using building blocks to create something amazing. yusef: another thing that will blow your mind. take your computer and design something in 3-d. take that and say you will turn into a hologram and drop it into the real world. we put it into a hologram so we can see it in 3-d. then i will print it in 3-d and put it into the physical world. so you can do that now where you can actually take a photo, edit it and bring it back into the real world. that is the world we live in. it will be possible because of windows 10. carol: how quickly do you see people ramping up to this world? it is out there but not everybody is on it.
yusef: you are right. we were excited about the announcement today, we are going to put this example into the hands of 4 million people this spring. it will be that easy. you will be able to scan with the windows 10 device and put it into any object. or just pulled it up and edit and create in 3-d. amazing stuff. and to have the computing power to do it on the front and where you do not have it before. yusef: right. the biggest new device is the surface studio. it is a couple of things. number one, it is the device you can turn your desktop into a creative studio. megapixels, that is 62% more than your tv. and you can fold it down and then with two hands you can create. we have a surface dial mechanism. carol: we have to run.
interesting and thank you for letting us know how things are going. i will send it back to scarlet and matt. scarlet: thank you. and of course, you can catch more of those interviews on bloomberg radio. and on the radio plus app. matt: i listen to that when i am on my motorcycle. not distracting at all. tune into bloomberg television in primetime for the latest episodes with david rubenstein, the peer-to-peer conversations, tonight at 8:00 p.m. his guest, from goldman and sex. take a quick listen -- goldman and sachs. take a quick listen. >> how did you monitor the mistakes? >> good training for the job i am in now. i spent 99% of my time worried about the 1% of things that
could go wrong. so, a leveraged to things that are normally not a virtue. it leveraged my add and my paranoia. matt: renowned financier and third -- deliberate this talks to leaders to uncover their paths to success. catch the second part of the six part series in a full interview tonight at 8:00 p.m. eastern. we will have a conversation with david steiner, the ceo of waste management and we will sit down with him on what he do miss -- what you miss -- awhat'd you miss? that is coming up later. this is a bloomberg. ♪
powers that -- samantha powers says that for years america has isolated itself from cuba. >> this does not mean the united states agrees with all of the practices of the cuban government. we do not. we are profoundly concerned by the serious human rights violations that the cuban government continues to commit. mark: the move pits the obama administration and u.n. against the republican led congress, that supports the embargo despite the full diplomatic relations of washington with humana. and a donald trump took a break from campaigning to formally open his new hotel in washington dc. he addressed his critics. >> i built one of the great hotels of the world. i am taking one hour off, i am going to north carin