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tv   Whatd You Miss  Bloomberg  November 1, 2017 3:30pm-5:00pm EDT

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been planning the attack for weeks. at least eight people were killed and 11 others injured. its five is mourning citizens killed in the attack. the victims were a group of eight friends celebrating the 30th anniversary of their high school graduation. secretary of state rex tillerson today expressed condolences while welcoming belgium's deputy prime minister to washington. >> we really stand incomplete solidarity with belgium, argentina and all other countries against these acts of terrorism. once again we have seen the evil face of terror in our own borders. this knows no borders. other countries have had to deal with his evil that confronts us from time to time. iran, vladimir putin was in the country, and he strongly --
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putin said moscow opposes any unilateral change to the agreement. president trump has refused to recertify the deal. france, germany and the year be in union have also urged president trump to adhere to the agreement. u.s. navy leaders are recommending a sweeping list of changes in sailor training, requirements and safety procedures. the ap learned a report scheduled to be released tomorrow seeks to address systemic problems across the pacific fleet that led to two deadly collisions earlier this year leaving 17 sailors dead. news 24 hours a day powered morning -- i am mark crumpton. this is bloomberg. ♪
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>> live from bloomberg's world headquarters in new york. we're 30 minutes from the close of trading. u.s. stocks mixed as the fed keeps on track for the debt rate hike and we await news for the next fed chair. can add tax reform to the list of tax agenda items facing a delay on capitol hill. house republicans plan to rewrite -- unveil the plan tomorrow morning. gears up to phase investors after facing lawmakers on capitol hill for a second days hearing. advertising sales expected to take center stage in third-quarter results coming up after the bell. also reporting results, tesla. it could be the moment of truth for the model three at the heart of teslas bet for mainstream success. ♪ the tax reform bill is
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released tomorrow, gop leaders will have just 10 official legislative days before the holiday to do nothing short of rewiring the u.s. economic engine. here to talk about what is feasible is congressman chris collins come a republican representing new york. he joins us now from capitol hill. chris: good afternoon. are reports you have managed to find some kind of compromise with congressional leaders that will allow deductions for state and local taxes to remain in some form. is that true? we're it does look like going to have a continuation of the deductibility of property at aboutbe cap $10,000. toyour property taxes of up $10,000 you can deduct. if they are over 10,000 you would be limited to 10 plus your mortgage interest deduction. i do think what it still means
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is 85% of americans will take a new standard deduction of $24,000. even though we are putting in as a compromise up to $10,000 of property tax to be itemized, it is only if you are going to itemize with over $24,000. i think it is still going to be most folks taking a standard deduction under the new plan. joe: obviously governor cuomo not happy with the idea that state and local taxes that people still pay in your home state of new york are still fairly high and people would take a hit on that. what is your response on that come as you have laid it out, that deduction would go away. chris: as i have said, king andrew has certainly levied the highest taxes in the nation on his subjects and i am fighting for the upper middle in crumb -- income new yorkers.
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he is fighting for the billionaires on wall street and hedge fund guys making millions and living and mansions. our tax plan is not about living -- looking after the top 2%. it is about the middle and upper middle earners. they are going to save money under this plan and it is quite the juxtaposition we have. as a conservative republican everyday for the middle encumbers and andrew cuomo and senator schumer are fighting for the billionaires on wall street. joe: do you believe the elimination of the state and local tax deduction would put put juston albany to changes fiscal approach going forward? chris: i think it should. the millionaire's tax, which king andrew is trying to protect, the millionaires tax is what they are talking about which is one of the highest in the nation.
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i would hope with losing the deductibility of that for those millionaires and billionaires they should take a hard look at it. in drew cuomo made sure he did not some set because he has never seen a taxi didn't like or want to hike and this was one of them. we had been saddled with the 8.9% it was supposed to subset a few years ago and king injured wants to continue it. he's going to come on -- come under a lot of pressure that he deserves. i just want you to listen to what he had to say about the tax reform plan and the way they are going to approach this. >> the speaker told me the concept was so new and so bold that any timeframe that we have the rank-and-file members of the house could not wrap their heads around it and understand it. thes something i think members can understand and we're
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going to keep pushing and see if we can get existing reasserted. if not we are going to oppose this bill tooth and nail. julia: what is your message to jerry howard here in light of his decision to fight tooth and nail against this program if he does not get what he wants? disappointed in jerry because what he is opposed to is the doubling of the standard deduction to $24,000. today, a large percentage of americans are itemizing, taking their income tax deduction, mortgage interest deduction, because standard deduction is $12,000. by taking it to $24,000, 90% of americans will have a simplified postcard tax return taking the standard deduction. their contention is if they get the standard deduction there's no incentive to own a home. they are somehow saying if you do not have a tax incentive to buy a house they were not buy a house, and that is ridiculous. in canada they do not get
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reductions and have higher ownership in america. people are buying house because they wanted ticket fence and a yard. they want a swing set. the thought that the only reason people buy a house is because of the mortgage deduction is just crazy, it is wrong. they also forget we are eliminating the alternative minimum tax. people were buying houses before and only getting a portion of their deduction and the like because the alternative minimum tax came in on top of it. i am disappointed that he does not understand that a growing economy is going to put more pay into people's wallets, more people are going to have the income to buy a house, they will be more demand for housing. it is very self-serving, very narrowminded and i can tell you, their disappointing. julia: are you expecting more trade association heads to come out against this tax reform plan? chris: i don't. you have already seen chamber of commerce, most of them with the
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exception of the homebuilders -- again, they are not thinking about what is best for america. isy are overplaying -- known good to buy a house because they will not the benefit of itemizing the deduction. they areind ourselves, opposed to doubling the standard which is ao $24,000, huge boost income for 90% of americans. they are just looking out for themselves and i am disappointed in that. scarlet: our thanks to chris collins of new york. julia: we have breaking news. regina -- has has resigned as the u.k. defense secretary according to the bbc. this comes following accusations he acted inappropriately with a journalist. in his resignation he admitted his behavior. this has ramped up pressure on the prime minister theresa may
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to take some action in relation to the growing uproar about this sexual-harassment claim. it was apparently a dinner 15 and he apparently had apologized for placing his hand repeatedly on her knee. he has not received as u.k. defense secretary. this -- he has now resigned as u.k. defense secretary according to the bbc. it continues. scarlet: let's turn now to washington. today marks day two of tech hearings on capitol hill where legal reason this for google, twitter and facebook are testifying at this moment. earlier we had top democrats berating the tech giants for their lethargic response to russian interference in u.s. politics. joining us now is our correspondent kevin. at the end of the day they want --see zuckerberg there, this
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the google ceo of their. kevin: -- ceo up there. odd to only have your legal counsel. the demand from lawmakers to have the top folks representing these companies, holding them accountable. it was odd and met with the criticism, not only from democrats but also republicans. we are noticing this afternoon that facebook is releasing some lly the senatea intelligence committee is releasing some of the ads facebook have not disclose that we use during the election. source whoh one works frequently with silicon valley who told me essentially that the day of no more regulations and the day of the tech companies being able to, arrogantly,
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avoiding oversight is over. especially as we head into the 2018 and 2020 elections and really deal with the fallout of the robert mueller probe, silicon valley is very much wrapped up in this. marks very striking that zuckerberg was not on capitol hill questioning and answering on behalf of these american questions. days prior, saying what they were -- kevin: not publicly. scarlet: talk about the legislation that has been introduced or is in the works to really limit some of the influence some of these big tech companies have. kevin: these tech companies are saying they are self-regulating themselves. i asked democrats and republicans if they think that is enough and they are rolling their eyes. --dsey graham, john mccain republicans and democrats alike
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have introduced legislation that essentially says if you have an ad paid for by a four government, you have to -- paid foreign government, you have to disclose it. ads, why isn't it the same case on social media? social media companies argue it is free speech. the response from lawmakers is we have to know who is making the free speech. scarlet: thank you so much for joining us. julia: know your customer. scarlet: user experience, i think they brought up. paying in north korean yuan or russian ruble's? coming up, george magnus joins us next about what to expect. this is bloomberg. ♪
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♪ pressure rising ahead of president trump's 11 day trip to asia. china called the u.s. commerce department's refuse to -- this comes on the heels of heightened tensions with north korea, a problem in which president trump will need xi jinping's support. we're joined by george magnus associate at the oxford university china center. great to have you on, thank you so much. when it comes to the president's trip to china what will he want to achieve versus what is he likely to achieve? george: i think what he wants to two main items on the agenda. -- onely is north korea
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obviously is north korea and the other is trade. the whole america first rhetoric backump changed the rules into america's favor rather than china's favor. what will we be able to achieve? i'm not optimistic he will be able to achieve much. he will certainly want to keep china onside as an intermediary to keep pressure on north korea. and i think he will want to try to make sure that the chinese hear what he says about fair trade. nke chinese, though, i thi they know how to flatter the president. and i think they believe the president is very susceptible to being flattered, which basically means that he can be played, from the chinese point of view. so that is kind of what worries me about whether there is any
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real business going to get done. joe: he sort of anticipated my next question. what do you see as the way chinese leadership places from their perspective -- leadership plays this from their perspective? what will they be going for and how you expect them to do with this? what are their goals? joe, onspecifically, trade, for example, as we saw when xi jinping went to see the president in mar-a-lago earlier this year, i do not think the chinese are just going to show him a closed-door. there are certain things in terms of trading standards or rules of trade, treatment of american companies in china, that i think the chinese can be prevented to give. -- there are small very small, relatively minor concessions but they know it might be enough for the
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president to parade -- tweet about them, we had a fantastic meeting, and so on. with north korea it is a bit more difficult because i think the chinese, while they are in a way happy to be an intermediary, they do not want to do the united states any great favors. they do not want to see the north korean government collapse, either. you know, i think they will try to make sure that some sort of dialogue can be achieved maybe one day between the united states and north korea. julia: china has also just come off the back of a very important party congress. what we have seen is a consolidation of power from xi jinping. how do you believe he is now going to use that? crackdownen internet -- how does that fit with the idea that china is now going to open,e reformist, more
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more globalized than it has ever been before? because to be there seems to be a conflict. george: that is the 64 trillion yuan question. a lot of people think having spent the first five years in office basically gaining control and complete command over the army and the party, that the inner reformer in xi jinping is just waiting to jump out. the form of what he has done and his behavior do not lend themselves easily to that conclusion. if this man has been so successful as he has been in getting control over some of the most difficult and complex organs of the state, it is really hard to believe that he junior able to instruct
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carters and officials in local and provision governments to carry out the economic reforms which were paraded with great fanfare in 2013. so i do not think that xi jinping wants to -- i think there are certainly changes he wants to make in the congress was quite clear that quote -- that social policy and environmental policies will get a big prioritization. but the idea that china is addenly going to discover thoughtful reform and liberal openness is not going to happen, in my opinion. joe: a big macro story that people are telling about u.s. in trading from global leadership, china expanding his leadership on trade and influence. and perhaps well the most clear examples of this outward vision -- one of the most clear examples of this outward vision -- what do you think about the prospects there? will this become a meaningful avenue for the world economy?
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george: it is a big deal, joe. i think the western commentators and the media are quite focused on it. i am not sure western politicians are sufficiently focused on it yet. so, the congress was also remarkable for other things, basically getting rid of this kind of notion that has been around in china for the best part of 30 years that it would be modest and bite it's time and it would not -- and b ide its time. i think the chinese have recognized now they are so big and their influence and economy are so big in the world that they cannot have a -- they can not leave a bigger footprint in the world. there is no question they are very serious about it. it might not make a lot of commercial sense in different countries.
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a lot of countries doing big deals in china have very weak government systems and very poor get capacity. but there is a struggle for eurasia going on and it is going to involve not just the indians in the japanese and the russians, but of course the united states as well. we need to think about how to cooperate with the chinese. julia: speaking of cooperation caught china has i believe 17 land neighbors who are clearly going to be wary of that move away from more modesty in the chinese republic. russia, india. how are they going to respond to this? junctureell, at this -- in 10 years time things can change a lot. at this juncture, for russia, much's not too tension or problems because the countries are cooperating.
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i think india is a diddle -- is a different kettle of fish. the chinese are building ports around india are they call it the string of pearls -- around india --they call it the string of pearls. and the indians did not like it and it not like the way the chinese are cozying up to pakistan, which they have always done, but it is now becoming a little bit more intense with the china, pakistan economic court or. coridoor. they feel it makes them very vulnerable. india has its own wish for its own influence in asia and south asia, in particular. we have already seeing a few tensions between the indians and the chinese in the mountains in
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the north of the country. julia: always fascinating to speak with you. we have to take a break but we will get you back. george magnus, thank you for joining us. this is bloomberg. ♪
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♪ [applause] ♪ the dow and s&p rising, the
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dollar erasing slight gains after the fed says it's a solid economic growth. scarlet: i am scarlet fu. joe: i am joe weisenthal. "what'd you miss?" we want to welcome you to our closing bell coverage. as we await earnings out of facebook and tesla, let's get a check of market minutes. u.s. stocks rising. the nasdaq a laggard. toixed read when it comes equities, but indexes at or near record highs. underperformance of the nasdaq, but the story remains the same. scarlet: and the fed had a meeting. joe: and no one cared congress delay today on taxes. scarlet: estee lauder at a
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record high, up 9%. profitg sales and forecast for the year following better than expected its fiscal first quarter. down point software 12.5%. cognizant technology off by almost 3%, a fourth quarter forecasts not of to snuff. ision missed estimates, but guidance points to a big sequential decline. that has raised questions about the company's fundamental outlook. joe: let's look at the government bond market. not a ton of action in either direction. you would not know there is an fomc decision. much more excitement about the trump fed decision tomorrow.
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two-year yields up a little bit, 10 year yields down my hair. the greek 10 year yield, some optimism about the country successfully completing its next bailout review. >> concurrency, you can see the currency,her -- in you can see the dollar higher. a pretty choppy session. that adpr higher after report, then the manufacturing number came in. a quick look at sterling. we got that report the u.k. defense secretary has resigned. that is headline-grabbing for the u.k. we did see sterling under pressure earlier in the session, and that continues into the boe tomorrow, expected to hike rates. hethe question is what does say about future hikes and what does this mean for policy? frexit negotiations resuming next week to keep your focus.
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-- brexit negotiations resuming next week to keep you in focus. joe: oil not doing a lot. gold a little higher, but not huge. nickel up over 4%. the story of the day is nicole. if we look at a one near chart -- is nickel. if we look at a one year, that is on a massive tear, a huge surge in nickel in the last few days. keep an eye on that. if you're looking for volatility and markets desk joe: we talk about this all the day. that is where the action is. scarlet: certainly not equities. go to metals. "what'd you miss?" we are waiting for facebook's third-quarter results. we have david kirkpatrick and paul sweeney to join us now.
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paul, let me get your take when it comes to facebook. the reason for google should be positive. we should see a pretty good quarter, right? >> the topline fundamentals for google and facebook should be very good. take a look at the numbers for facebook. 40% growth is revenue consensus. this is a company that reports about $10 billion in revenue, so just amazing. they continue to put up good cost controls. comethe facebook numbers against the backdrop of these hearings. some investors don't care at all. think if regulation does come, it will not affect the business in any way. the stock is at record highs. could you envision this becomes a real concern for investors, or is it still to minor and to premature? >> it is clear investors have
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shown absolutely no interest. the stock did not do anything because of the hearings today. worthering the company is $500 billion, it is a massively over the last few years. the reality today is earnings will be good. that makes a big difference. scarlet: we just got earnings. arnings per share of $1.59 on gap faces. the consensus is $1.28. billion,s $10.33 consensus was $9.8 billion. monthly active users 2.0 7 billion users, the consensus was 2.0 4 billion. billiontive users 1.3 7 , analyst looking for 1.3 5 billion.
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the question is how much the company will be spending. hearingstalk about the and the fake ads, facebook has to pony up for human fact checkers and people to vet these ads. that is the? . >> the company said on the last call that they expect 40% to 50% of the next couple of quarters, so much like google and amazon. investors like these fast-growing topline companies that continue to reinvest in the business. in the case to facebook, it is talent for engineers. they may need to allocate more investment to what might be some quality control issues and they can make that investment. stock that is up 7% this week alone and still it appears if we're going on those initial traits that they still beat expectations, the stock of 2%. as much is that google number
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and other tech numbers fueled optimism and cause people to revise estimates, the stock is still higher. scarlet: i'm looking at the statement that has come from the company. , "we areat the top serious about preventing abuse on our platform and are investing so much insecurity that it will impact profitability. protecting our community is more important than maximizing profit." scarlet: these are strong words. you wonder whether people will turn away from facebook because of crimes being committed on facebook live and fake ads in news in newsfeeds. >> that is telling. he is determined to do the right thing. it is shockingly disturbing to him to think his company is being perceived the way it was
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perceived today in the senate and the house. he has to do something about that, and it will cost money, but the money continues to roll in. that is the reality. >> in terms of the advertising revenue, that equates to a 49% year over year increase in revenue in the advertising space. joe, you were talking about this shift towards digital in the big tech names. they may be reaching full penetration in terms of users, but in terms of the quality of engagement, it is clearly improving. topline revenue growth story for facebook, they said they would pare back the number of ads they put into your feeds. they have instagram, messenger, and whatsapp, and they are in the early innings of monetizing those. each of those is one billion each.
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so there are a lot of 1 revenue lovers. joe: the company says they have over 800 million users. view of the investor community, this is still an under monetized asset. >> core facebook is approaching saturation, although still growing the platform, but the big thing is messenger, whatsapp, and instagram, three revenue levers that are yet to be cold. inningse in the early in terms of monetizing, but what more do they need to do? steadily onworking it. they don't want to antagonize users by over advertising, but they will make a lot of money from each of these products in time over the question. whatsapp and would
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pay for a monthly subscription so i don't get ads on that platform. how do you feel? joe: this is the gap between people who live internationally. scarlet: i don't care about the ads. sweeney and david kirk on trick us as we dissect these facebook results. wire,results crossing the shares down 14% in after-hours trade after fourth-quarter earnings per share and revenue outlook both trailing estimates. the stock is come back a little bit and is only off 11%. this is the action camera maker, really a hardware company, but had ambitions of being a media company. the outlook is significant because this will be for the , so gopro off by 11.5%. st's first
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provinces since 2015, but missed estimates. this is bloomberg. ♪
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scarlet: yelp reporting results. it is not pretty. shopshares down 13%. outlook missed estimates. down 13.5%. this quarter of 211-to $16 million. analysts were looking for $233 million. it is a local search website. i use it to look for restaurants. joe: i use it when i know the
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restaurant and want to link to send to somebody else. scarlet: let's head to mark crumpton for first word headlines. >> in the wake of yesterday's attack in new york city, president trump tweeted chuck schumer is "helping to import co-europe's problems are -- problems are co--- problems are co- >> i don't think they were factual. i think they tended to point fingers and politicize the situation. >> both governor cuomo and bill de blasio said the president had yet to reach out personally. the president is also calling for tougher immigration measures based on skills and other merit rather than lottery. the british government has
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announced the defense michael fallon has resigned. his to parch or comes in the wake of a growing sex scandal that has reached a prime minister theresa may's inner circle. admitted to inappropriately touching journalists at a dinner 15 years ago. they claim they put the incident behind them. the united states has voted against an annual united nations resolution condemning the embargoing cuba. wasresolution overwhelmingly approved in the general assembly today by a vote of 191-2. israel joined the u.s. and voting no. the vote was the first on the embarq us as president trump took office. testimony is resuming and a criminal case against michigan's health director who is accused of helping keep the public in the dark about legionnaires disease during the flat water crisis. he is charged with involuntary
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manslaughter and misconduct in office. a judge must decide whether there is enough evidence to send him to trial. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. scarlet: "what'd you miss?" more insight into facebook's third-quarter results. david kurt hat trick -- david kirkpatrick and paul sweeney. as julia was pointing out, when you look at the release facebook published today, before you get to the financial highlights, there is a statement from mark zuckerberg here at "we are investing so much insecurity that it will impact profitability. protecting our community is more important than maximizing profits. what you think of this? >> they are making more money so they can spend more money on these problems. big picture reaction
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from the standpoint of if i were an investor, which i am not. these companies, facebook, google, and amazon, are achieving a scale unacceptable in society given the power they have and governments will respond to that very negatively. the only thing these companies can do is to be much more cooperative with governments should you saw an inkling of that today, but not nearly enough here it at some point there will be a clash bring with government for these companies. that is inevitable. scarlet: a stock of 59% this year. it is up 7% this week. this is not priced in in the shares anywhere. all. is not most tech investors will look back and say a lot of the companies have had to do with regulatory oversight that has u.s. techt on companies starting with microsoft a generation ago, and the companies have generally
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learned how to deal with it. this is different when you are talking about consumer-facing social networks, internet connections. industryn fact that recognize this is an issue and i think you will see a lot more lip service by the tech industry and response to congressional regulatory oversight. will see ceos come to d.c. as opposed to spokespeople in front of congress over the past couple of days. julie: we're just getting teslas third-quarter numbers and information coming out. $2.92ed loss of share of here the estimate was $2.27, so teslas financials were already weaker. two dollars $.98 third-quarter revenue, so a touch better on third-quarter revenue. about thes worried numbers. it is more of what we get in terms of that production ramp up for the model three. where are they in terms of
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pacing? x exxones model s and pays. tesla planning to produce 10% x cars in theand fourth quarter versus the third quarter. production volume 10% less in in thef model s and x fourth quarter versus the third quarter. they are reallocating some of the workforce towards model three. what we want to know is what is causing the bottlenecks we have been hearing about and can they flush out any more information. david, you are nodding as i'm asking the question. is theyroblem tesla has are taking too long to get to be a mass carmaker at the exact time mass carmakers are getting really good at building electric cars and putting a very aggressive timetable on their own projects.
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today was investors very negative talking about there will be 100 companies 200 plus mile electric vehicles within five years. that is bad news for tesla and less they can become a big mass maker really fast. scarlet: i wonder if tesla has a credibility problem, whereas general motors doesn't. tesla and elon musk promises a lot of things, but does not necessarily follow through, and investors forgive him for it. here, it's onen thing to be a technology company. it is an entirely different thing to be an auto manufacturer. we have seen that as the company deals with production issues, the autoues, so companies themselves are not standing still. the real value for tesla argue
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really in addition to technology and brand is the fact they were first to market and had that first brand in the market and have the excitement much like netflix in terms of online video. brand identity, first to market, but production issues continuing , so the concern is the auto companies can step up their side of the business. scarlet: the loss per share was higher and larger than what analysts had been looking for. 1.4 billionn dollars bigger than what analysts were looking for. they estimated $1.2 billion. burn, earningssh worsen expectations. company that headquarters like this in the past where all the numbers that and yet investors don't seem to care. in on thisocus point. is the difference now that
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people may negative them as much time because the footsteps are creeping up behind them? >> the stock is not off on what is amiss. the story for tesla is the 5-10 years down the road and where will we be in driverless cars and driverless vehicles. on that case,ull much like e-commerce and amazon as your plate, if you are a long-term bull on driverless car's, then tesla is the play, the brand, first to market, and you haven't seen much out of the big manufacturers cannot that they can't and won't ramp it up quickly. julie: demand for model three is not going to be a constraint. i love that. nevermind supply, demand. joe: a problem that other companies would like to have. julie: the global net reservations continue to grow significantly. third quarter, 223 model three
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vehicles were delivered. carssaid they had made 260 , but the forecast was 1500. i don't see anything adjusting for that at this stage. at least they're big enough to come out and save we messed up. we need to explain what= is going on. makingue promised to be -- elon musk promised to be ining 5000 a week, and now eight weeks, that is not fly. joe: he has to walk it back. scarlet: he has not done that yet. maybe he will bring that up in the news conference. julie: great to have you on. having lots of fun here. kirkpatrick david
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-- with david kirkpatrick and paul sweeney. more ahead. this is bloomberg. ♪
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scarlet: we have shares of qualcomm trading in after hours. it looks to be staying pretty isong right now, even as it in the middle of this distracting legal dispute with apple. shares of .2%. revenue $5.5 billion to $6.3 billion. $.95.85 to analysts were looking for $.91.
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revenuellion was the number that analysts were looking for. it is all about what the ceo will be saying when it comes to the legal dispute with apple. julie: the suspended payments as well and whether or not the ongoing legal battle will be resolved at some point, the qualcomm tax as apple calls it. scarlet: phone demand in china was strong in the quarter. chinese consumers are more expensive phones. i suppose that bodes well for apple. joe: it is a good sign. scarlet: coming up, we will talk about tesla and facebook. we will be looking at elon musk's comments. about he has been talking the production forecast for the model three. we were talking about when they would ramp up production. he believes it will hit 5000 cards a week for model three by
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late 2018. from new york, this is bloomberg. ♪
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♪ i am mark crumpton. first word news. president trump calling the suspect in yesterday's new york city attack an animal. the president said he will ask congress to immediately begin work to terminate the diversity immigrant visa program, which he says was used by the alleged attackers. officials have not yet said that was the case. the president also tweeted he spoke with bill de blasio and andrew cuomo to let them know the federal government fully supports any and all of their efforts with respect to the attack. congressional democrats are considering the threat of a government shutdown next month
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has leveraged protect so-called dreamers from deportation. senator kamalas harris when not vote for a helping plan that doesn't children of undocumented immigrants brought into the u.s. as minors. government funding runs out the summer eight. major social media companies are facing continued questions from two congressional committees about my they have not been more to combat russian interference on their platforms. the senate intelligence committee pressed representatives from twitter, google, and facebook on why they did not act more quickly and thoroughly as a became evident the russians used to their sites to try to influence the 2016 election. >> does the trouble you it took this committee to get you to look at the authentic nature of the users and the content? grateful for the committee's investigation and the attention to this issue. we think it is very important.
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we do believe it is a larger issue than anyone company. >> the top democrat on the panel mark warner said his russians about the interference were by the companies -- blown off by the companies until the summer. prime minister shinzo abe they once pressure applied to north korea to begin talks on ending its nuclear and ballistic whistles programs. electedbe was prime minister today and supported all options including military ones on the table. president trump arrives in japan saturday, the first stop on his presidential tour of asia. it is winner takes all in the final game of the world series between the dodgers and the astros. the dodgers last won the championship in 1988. , it would give houston its first ever world series title. global news 24 hours a day powered by more than 2700
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journalists and analysts in more than 120 countries. this is bloomberg. i am mark crumpton. it feels like we have been waiting forever for this news, and we are still waiting, but reports that donald trump and jerome powell spoke this morning. allegedly trump has picked jerome powell as fed chair. these have been the rumors and where the expectations are. if you look at the broker markets predictions, 80% to 90% certainty that jerome powell will be the next fed president here a donald trum said he will le us know tomorrow afternoon what his decisio -- what his decision is. scarlet: we are not seeing that much reaction in markets. joe: i miniscule tick down in
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rates with that taylor risk coming off the table. i'm a little less optimistic about janet yellen's chances. julie: the chances always there. let's move on. i'm being told to shut up now. "what'd you miss?" let's dive into tesla's third-quarter results. let's bring in numerous senior analyst and david welch. great to have you with us. what elon a look at musk has been saying and the expectation he can't ramp up to 5000 a week by the first quarter of next year. do you buy it? >> we will have to see. they missed their original targets for q3 by a significant margin. they had originally targeted byducing 5000 model threes
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the end of the year. they have push that target out three months. it is hard to believe they would disappoint us to quarters in a row, but the jury is out. scarlet: the jury is out. the loss is bigger than expected. we are looking at delays, but it's not moving by that much. the cash burn is continuing as well. were seeing a cash balance of $3.5 billion entering the quarter and a cash earn of $1.4 billion, which exceeds analysts estimates. his tesla going to have to tap the debt market again? >> it is possible. they have not had an issue raising capital on the debt or equity markets. the company said they are going and thection hell impact to margins and cash flow is magnified, but if they are able to get to 5000 cars per and ramp from there, the
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cash flow and the pound sheets concerns will go away quickly. inie: they raised 1.8 a dollars in that bond sale in august. david, your take on these numbers and the information so far? that they thing is pushed out production of the model three. they were not get to five thousand a week until the end of the first quarter. and because elon musk often misses deadlines, can you rely on them? did talk about some other bottlenecks, the battery plant they are having a difficult time with, getting enough batteries out. different parts of the assembly line or 500 are week, others are 1000, so everything is not flowing smoothly together just yet. they have been working on it for the past quarter or more. that really says it will be a lot of fits and starts before they get to the numbers they
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need to get the cash flow they been talking about. they also didn't really say when they would get to the 10,000. maybe by the end of next year, and maybe that will get pushed back. i think that is what has given investors pause and we are seeing shares down a bit weird scarlet: thank you so much. -- down a bit. scarlet: thank you so much. let's recap the headlines when it comes to the federal reserve. the wall street journal , not coming from the white house, that the president is said to have acted jerome powell as his fed chair. they had a full conversation this morning apparently. julie: who knows. joe: bloomberg economist with us for north america. isomberg reporting that it looking likely it will be jerome powell. now that it appears real, what are you looking for next? >> it will be interesting to see
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his first step after conference. a different topic, the replacement for libor. joe: i wonder if his mind will be elsewhere. >> it said announcement comes out officially, that would potentially be some to watch for. be watching for mostly is just confirmation that he is still very much of the same ilk as janet yellen. julie: what time is he speaking tomorrow? >> i have to pull that up. julie: i will let you inconspicuously do that. >> 8:30 tomorrow morning. julie: a preannouncement likely in the afternoon tomorrow. scarlet: the question is whether he will make it a two-for. does he also announces vice chair? >> we have plenty of vacancies
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on the fomc. scarlet: there's going to be another derby? >> the derby will be less exciting for the number two spot. barely seen the markets react, .2% in terms of the dollar moves. it is so well telegraphed. fridaysu remember two ago, there were rumors of jerome powell in the market, and that is when he was not a front runner and you saw some reaction in the dollar, treasury yields, and equity markets. this time it is so broadly expected -- joe: we talk about jerome powell as a continuation pick. youe the argument here was like janet yellen's performance and like her for the stock market, and you want to put your own mark on it and get a republican for a liberalization of reforms, jerome powell is your guy. is it that simple though? >> that is a fairer assessment
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of jerome powell and how he will be as fed chair. mindseth of the same has janet yellen when he spoke at the jackson hole conference earlier this year in late august. he was reiterating the notion that the fed can afford to move gradually given the low-inflation environment. more of that mindset now given the backsliding we have seen. whether janet yellen or jerome powell, the fed will look very much the same. joe: something we discussed thinkr this week, i jerome powell unlike recent fed chairs does not have a phd in economics and is not an economist by training. how significant is that? >> i think he has solid economic credentials. the fedhe has been at in the aftermath of the financial crisis. that is a better education than you can get anywhere else. also as a will
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product of the institution be declined to defer to the forecasts at the board of 200 phd's so you have at your disposal. not having a phd and economics will not be a hindrance to him. like paulhat people volcker also did not have a phd. marketin terms of reaction, the announcement of a vice chair at the federal reserve could move that in any way if we get someone more or less hawkish? does it matter at this stage? >> it could the if you see the president setting up for a contentious environment at the fed. we have had a collegial fed under greenspan, bernanke, and janet yellen's term. setting up with someone significantly hawkish on monetary policy, then you are
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setting up for some discord at the fed. i don't think financial markets would like that. financial markets like predictability and stability. scarlet: when president trump makes this announcement, what happens at the december fed meeting? does janet yellen start to hand over the duties to jerome powell? out her termerve and be there in january as well. ,ou can call her a lame-duck but she will fulfill her term. i don't think she will be a lame-duck in that regard, especially as jerome powell is a continuation. she may provide coaching and insights and those sorts of things to the incoming chair. joe: you mentioned that jerome powell has a solid grounding in economics and there have then fed chairs in the past two were not trained academic economists. that being said, in a crisis, if it helped that--
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ben bernanke was a student of the depression -- have the credibility to do what he needed to do in 2009-2010 taking the fed and directions no one had seen the fed going before, could that be an issue for jerome powell? that he could take us into uncharted territory if necessary? some i think jerome powell would be willing to reengage in quantitative easing if that was necessary. , there wasly someone no better person to be at the head of the fed then ben bernanke whose academic career had been devoted to studying the causes and factors around the great depression and what helped us out of it and what made it worse. that added to his credibility. being a fed chair during peace time is a lot easier in some regards. scarlet: does jerome powell have
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a specialty? ben bernanke was the depression. what is jerome powell's specialty? >> he is a product of the private sector. group, sothe carlyle he understands how the private sector operates, which is as important at the fed is understanding economic theory. julie: you can argue in a crisis situation or turbulent market situation, that that market experience is what comes to the fore versus academic. >> that's right. that's why i would not try to spin the story that he would be less equipped for the job. i think he will be a successful fed chair. jerome powellhat will be the next fed chair, but we still have to await the decision. thank you. coming up, emerging markets bring strong returns for investors, but what risks could
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derail their exceptional year. we will be speaking with ubs asset management. this is bloomberg. ♪
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♪ scarlet: "what'd you miss?" the wall street journal reporting president trump has victor jerome powell as his next that she. we are awaiting the official announcement tomorrow. what does this mean for emerging markets and emerging-market debt? asset now joined by ubs management. jerome powell has 10 rumored to be the pick, but what does the forection mean the emerging market world? >> not that mr. taylor is not a
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great economist, but the fear was he would be to hawkish and rates would go up. julie: why are you making the assumption it will be a continuation? >> in terms of mr. taylor? julie: yes. should bey policy tighter than what it is, and now in europe as well. he likes rules rather than discretion, which is something markets had forgotten about you joe has the relationship bet monetary policy -- has the relationship changed over the years. in the past, they were dependent on dollar funding and the cost of dollars had a bigger impact. has that diminished somewhat? >> it has in some sense. the country has a lot more domestic debt, but monetary
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policy in the u.s. fixes everything, so most of the bts we trade is denominated in dollars. , rates comes to rates going up 30-50 basis points affecting the long-term premium in the u.s. and emerging markets, and you have seen a selloff in rates and fx because euro.llar-yea julie: the flows into emerging markets have been so strong. do you just assumed terminal rates will be that much lower than previous cycles and we don't have to worry about emerging markets of what the fed is anticipating for rate rises going forward is what actually is achieved? >> there are two inputs and economics. you have a price affect and income effect. the price affect happens on impact. you have rates going up.
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rates might suffer and fx might weaken. on the longer term, the income effect picks up. going world economy is faster, then emerging markets will perform. powell-led a jerome federal reserve, which markets do want to be in for the foreseeable future? rates in argentina, brazil, mexico, turkey, russia, and south africa. russia, we like it. high-yield there's with structural reforms going on. julie: do you believe a jerome powell fed will be cautious enough on monetary policy that it will only raise rates when growth requires it and therefore emerging markets can continue to rally? >> it is more likely to be a continuation from janet yellen. if that is the case, we have a backstop. beneficial for
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riskier asset classes and emerging markets. julie: great to chat to you. thank you for joining us. reports that jerome powell has been tapped to be the next fed chair, coming up. this is bloomberg. ♪
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♪ scarlet: "what'd you miss?" to have true is said big jerome powell as his next fed chair. moreover, let me start with you. jerome powell is supposed to speak tomorrow. if he does become we will watch
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what he says very carefully. >> absolutely, although the speech will be focused on what replaces libor, a new reference rate for consumer loans and , so he can stick to the topic at hand and egg nor fed chair monetary policy. of talk about jerome powell as a continuity pick. what would be the changes though? >> probably subtle. change without disruption is the key. trump says he likes low interest rates. he get someone who has bought into the current trajectory who is a republican who can say he is his own person and a former businessman. let's not forget about carlisle. julie: are you talking about the politicization of the feds. >> there is no political process there whatsoever. julie: talk about the change.
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what do you mean? maybe thesident said desire to put your own stamp council little bit against janet yellen. greathas not shown a preparedness to key personnel selected by his predecessor. broken with a bipartisan tradition as far is the fed chairmanship is concerned. it is a change perhaps of style and appearance. it is not yet a change of substance. scarlet: the president likes to put his own stamp on things in break from tradition. do we have any condition jerome powell would want to shape the fed in his own way, maybe break from what janet yellen has done so far? >> i think he looks back at chair yellen's track record, which has been successful. timeas been dovish at a when it has been controversial and the fed should be normalizing rates more rapidly are moving quickly to normalize the balance sheet, and that
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growth did not pick up come inflation remains cool, and the economy has operated just fine under the current policy prescription. if we had had a more hawkish chair, i think that would have been a mistake. furtherowell once to that, not change course. when itbe more relaxed comes to post-financial crisis regulation in the banking sector , which could be called for. janet yellen has agreed that may be indeed necessary. so i don't think he is looking for a sharp break or reshaping the fed in his image, but continuing a very successful trend. julie: we are just showing his cv. background play into monetary policy in the way he looks at the economy if we get tax reform done? and would republican be more inclined to the supply
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side notion of tax reform and tax cuts pain for themselves with economic growth and whatnot. if that is the case, the tax reform is actually increasing the speed limit of the economy, then the fed will feel less need to get in front of that by tightening policy. just a footnote, i think that was a key litmus test of everyone running for fed chair, and that may have impeded the chances of the more hawkish folks like john taylor. julie: being go. fed process is always politicize, but we have not seen trump slam the attorney general on twitter. >> that has been a surprise to us. the other thing he has not done is tweet economic data. scarlet: we're applauding him for not breaking economic data? ok. just wanted to make that clear. joe: do think the fed has
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capacity to withstand it? fed is not just one person or the board of governors. there is a professional and powerful staff at the division of monetary affairs, and there are a dozen district banks. the president's get a vote every couple of years. a complicated shift. it is not just one guy. julie: we have to wrap it up. thank you for that. thank you for joining us. scarlet: that does it for "what'd you miss?" joe: have a great evening. this is bloomberg. ♪
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♪ president trump going for a tougher immigration measure following tuesday's deadly terror attack.
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wascials say the attackers from quebec a stand and came to the united states legally and 2010. >> we want a merit based programmer people come to our country based on merit. we went to get rid of chain migration. officials had not said whether the suspect was admitted through the diversity immigrant visa program which covers immigrants from countries with low rates of immigration. france has lifted their state of emergency officially for the first time in nearly two years. speaking and paris today the prime minister trying to assure the country will enjoy a good level of security thanks to their new cover security laws. in iran vladimir was therefore a one-day trip. president clinton said moscow


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