Transcripts For BLOOMBERG Bloomberg Best 20171104

Anything to alter the nature of freedom on their platforms. Julie wall street heavyweights weigh in on the markets with Lloyd Blankfein on this weeks top interviews. I cant see that this is the moment you want the most fiscal stimulus in the market. The things that can be fixed, but you cant do them by making light suggestions. Julie plus a slew of earnings to sort through with insight from top executives. A good pipeline. By all accounts, good. The challenge is coming from search and social. Julie its all straight ahead on bloomberg best. Julie hello and welcome. Im julie hyman. This is bloomberg best, your weekly review of the most important Business News, analysis, and interviews from Bloomberg Television around the world. The week begin with a bombshell as the first charges were revealed in special counsel Robert Muellers investigation of russian interference in the 2016 president ial election. Vonnie President Trumps former Campaign Manager Paul Manafort and his onetime Business Partner rick gates charged in the investigation into russian meddling with the u. S. Election. Manafort and gates face money, money laundering, conspiracy, and tax charges in a 12 count indictment. Kevin 12 counts is what theyve been charged with. Conspiracy against the united states, as well as failing to disclose who they are representing, the foreign agents registration office. These were all reported events that took place before the campaign and do not involve his work as campaign chairman. But then again, it does suddenly become a real thing for this white house to have to deal with. They also obtained a guilty plea of a former Foreign Policy advisor George Papadopoulos who was a 30yearold unpaid advisor who admitted earlier this month in charges unsealed today, a series of overtures by russian officials to the trump campaign. And that is going to be a problem Going Forward for the Trump Officials to deal with. They have manafort in the system now, and mueller can apply leverage to him and tell him that if he wants to make a deal, if he wants to get out of jail free or a reduced sentence, he better provide information about somebody close to trump or trump himself. This is the way it operates. It is called the domino theory of prosecution. The bank of japan has left its massive monetary Stimulus Program unchanged as it changes inflation forecast from global peers. The decision was expected, so is the big focus here the inflation forecast . What is important here is that governor kuroda defended every aspect of their monetary stimulus, their super stimulus policies, and made it clear that hes sticking with all of them. He says he sees no signs of japanese stocks overheating. He notes that relative to other markets around the world, they looked appropriately valued. And beyond that, again, etf purchases and yield curve control, which involves buying bonds to keep that 10year yield at zero are part of a policy that is aimed at boosting inflation. Each part is necessary, and all of those parts are going to be in place as long as it takes to reach 2 . We know the boj has shown some flexibility as stocks have risen. In october, they pulled back on their etf purchases. The program remains, and kuroda made it clear. He has no sense that it is going to change yet. The fed stands pat and fed funds remain in the range of of 1 to 1. 25 . No hand of what is going to come. What changes there are made to the statement are minimal. The fed vice chair for supervision casting his first vote and joins in a unanimous decision. Now it is all about who donald trump taps to be the new fed chair. There is lots of stuff you would expect with the normalizations after the hurricanes. The real meaningful changes here, the fed dismisses the payroll swoon in september and they also upgraded their growth characterization to solid from moderate, which means they are buying into the three handle we have seen on gdp the last couple of quarters. It weighs in the federal rate increase and signals their conviction about rate hikes in 2018. Mark the bank of england raising rates today for the first time in just over a decade. With unemployment at a 42 year low, inflation running above target, and growth just above its new lower speed limit, the time has come to ease our foot a little off the accelerator. The boe and mark carney seem to be selling this as a movement as a removal of stimulus. As a removal of stimulus. Even though this is the first hike in a decade, it is really just reversing the cuts that came after brexit. 72 was the vote we got from the mpc. That was slightly more conviction than the consensus was thinking. They thought it was going to be 63, but you can see from the market reaction, pound sliding. Also repricing in terms of expectation of further hikes. The market is interpreting this as a dovish hike. A couple of reasons for that is that one key thing off the statement was something mark carney has said before. Markets are underpricing the future rate hike path. That was not in the statement today, and also they highlighted the risk from brexit. Two signs there that although we got a hike today, it is firmly dovish. A day late but a done deal, House Republicans unveiled their longawaited tax reform plan. With this plan, the typical family of four will save 1182 a year on their taxes. This is it, america. This is our opportunity to make tax reform a reality and deliver the most transformational tax cut in a generation. The entire battle will be fought on the idea of individual tax cuts rather than Corporate Tax cuts. Behindthescenes, lobbyists are all working for the corporations, but the taxpayers are the voters. They are the People Congress will respond to. Democrats will claim a tax giveaway to the rich and republicans will claim this is all for main street. There is a lot of political will, especially in the house of representatives, to get something done. There are potential headwinds in the house, from a lobbying perspective. The Small Business trade association came out against the bill. That could be very key. Watch if they end up changing that to a more supportive view. Also the senate, the vote in the senate could be very close. President trump it is my pleasure and my honor to announce my nomination of Jerome Powell to be the next chairman of the federal reserve. Congratulations. [applause] i think at the beginning, he will be close to where janet was because he has supported the Monetary Policy actions that janet had undertaken. The gradualist approach is one that is very natural to him. Im committed to making decisions with objectivity based on the best Available Evidence in the longstanding tradition of Monetary Policy independence. I think it would be a mistake to try to push jay powell around. He is pretty solid. Hes been working hard to study. Remember, hes been around Financial Markets and policies since the early 1990s. And he was, in part, hired for the job because he represents continuity. He will bets to me his own person. President trump emphasized this, he also alluded to his private sector experience. His business acumen. The real world perspective. He is going to have a very unique perspective on Financial Stability concerns, which seems to be a mounting focus of the fed. With each new high in the stock market. Clearly, he will be his own kind of fed chair. His business background will be something the most recent chairs have not had. I couldnt be more pleased with this nomination. I think jay powell is going to be an outstanding fed chair. Julie apple out with quarterly earnings, the Company Forecasting holiday sales that exceeded analyst estimates, suggesting Strong Demand and few supply issues for the iphone x. Shares hit records and continue to rise in late trading. Every quarter, people say theres no way apple can beat expectations. Here we are again. Of 2017,eady the end and they are doing it again for five straight years. The numbers up yearoveryear, reporting revenues of 52. 6 billion. Iphone sales of 46. 5 Million Units, one Million Units more than this time a year ago. Strong ipad sales. 5. 2 million macs. Strong other Product Sales that means an influx of purchases of the new 4k apple tv. The most important number is their guidance. The q1, holiday quarter, the first full launch quarter of the iphone x and the iphone 8 and 8 plus. That is the most important quarter every year, but this year is especially important. They are forecasting revenues for that quarter, and we will find out if this is true at the end of january between 84 billion and 87 billion should be an alltime quarterly record for the technology company. Jonathan the jobs number, 313 is the estimate, the previous number 33,000. We can now cross over to our International Economics and policy correspondent. Michael Mother Nature taketh away, but she doesnt give back much. 260,000nd 60,000 jobs created in october. Much less than consensus. Unemployment. The good news, unemployment falls to 4. 1 . That is the lowest since december of 2000. The reason for it, 764,000 people out of the workforce. None of that helped to average hourly earnings. They were unchanged on the month. That brings the annual average down to 2. 4 from 2. 9 . The job number is noisy. Still pretty good numbers in there. We are down to 4. 1 unemployment. When you look at the u6 number, down 1. 5 for the year, we are bringing a lot of people back into the workforce. That is what President Trump said he would do and we are excited. We are not seeing wage growth in the job numbers and thats why we need tax reform. Julie still ahead as we review the week on bloomberg best, an exclusive conversation with Lloyd Blankfein. Plus, all the big beats and misses in a whirlwind of earnings reports with spin from the csuite. Up next, more of the weeks top business headlines. Bitcoin trading moves towards the mainstream. On a regulated platform overseen by the commodities trading commission. Julie this is bloomberg. Julie this is bloomberg best. Im julie hyman. Lets continue our global tour of the weeks top business stories in washington. Representatives of some of the Worlds Largest Tech Companies were grilled on capitol hill. Big tech under the microscope today. At this moment, lawyers from facebook, twitter, and google are facing questions about russias use of their networks to meddle in the 2016 election. Companys testimony they prepared was meant to show they were completely on top of this and ready to deal with the next threat. The senatorss questions seem to be poking holes in that. Showing they really have very far to go. First of all, before we know the full scope of what is happened, and second of all, before they are prepared to handle future threats. These companies dont want to do anything to alter the nature of freedom on their platforms. They say they are going to be proactive and have better tech to look into this. They are going to be cooperating a lot more with the Intelligence Community in the future. So far, we havent gotten down to the specifics. China came out with its latest factory gauge, falling from a fiveyear high. The bar was set quite high and not quite in line with what we thought it would be. 52, a little bit below that. What was behind this drop . Three things jumped out. Number one, we saw the drop is really around the mediumsized businesses. They break it down between large, medium, and small. The biggest drop was the mediumsized industries. The big guys still feeling pretty good. Slight slippage there. Relation storyhe reflation story has really been the most intense. The other thing that jumped out was where the declines came with new orders. China bears might latch onto that. And also, a bit of a pullback in some of the yearonyear events from the big reflation stories. Input prices and output prices moderated. It is partly because this reflation story started a year ago. Those big increases on the base effect are going to start to look a little bit more moderate. Softbanks talks to merge sprint, which it owns, with hits a serious snag. This deal feels like its been on and off for years, almost. Why is it offagain . It seems like they had a gut check moment that this deal was almost about to cross the finish line. And from Deutsche Telekoms perspective, there is concern about valuation. Some concern about the state of sprints business that has been losing money for years and burning through a lot of cash. And from softbanks side, we wont have control over this anymore. Theyve been saying all along that they were willing to give up control. They were willing to do a stock swap at no premium. Now, they seem to be having cold feet and second thoughts about giving up control of this sprint asset. The Catalan Independence movement is losing steam. Carles puigdemont, the formal cattle and catalan president and separatist leader went to brussels where he spoke to reporters. This government in relation to politicians true to the government need to guarantee there will be no conflict, no violence. The republic of all cant be built on violence. Initially, the idea was that he was going to seek asylum. Belgium is one of the few countries where eu citizens are allowed to seek political asylum. They put that to rest immediately. He wants to make his case for an independent catalonia. He seems to be preparing the scene for his party to run in the december 21 elections. Mylan was down as much as 8 . It is just off the lows of the session right now. The drug companys president and executive director has become the target of a drug pricing collusion probe. State attorneys general say they are seeking to sue reggie malik as part of an expanded complaint. We have a group of 45 states that have basically said they had this earlier probe of a number of drug makers. They are expanding and going after the number two executive at mylan. This is different than a lot of the cases we see in the drug industry where maybe a group of Sales Representatives or retail managers do something they shouldnt in promoting a drug. This is a Senior Executive at one of the worlds biggest drug manufacturers. They are alleging widespread collusion among more than a dozen drugmakers and more than a dozen drugs. This is something they are saying is seriously hurting American Consumers and it is a very big deal. The cme getting in on a bitcoin action. In a change of policy, they announced they will introduce Bitcoin Futures by the yearend. Cryptocurrency jumped to more than 6,400. It will be a regulated platform overseen by the trading commission. It will be under risk controls we have in place. So we have our margin rules are in place. We will have functionality with our Electronic Systems in place. Those are all things that are completely different than the way the cryptos are traded today. People are seeing this move by the cme as an indication that Institutional Investors will come into the sector. They have been largely staying on the sidelines because of the but of going into bitcoin, with derivatives able to hedge a little bit of volatility, we might see the etf get approval by the sec. Eight people have been killed in a suspected terrorist attack in new york city. Andk governor andrew, rew como said the attack mirrored berlin and nice, to name a couple of examples. President trump responded by ordering the deferments of Homeland Security to start vetting immigrants. How is this going to impact the immigration debate . How will this impact the funding story around that debate as well . There is an important deadline coming up for congress, december 8. It is the date to which the government is currently funded. Ahead of that, barely a month out, there will need to be a significant debate about how to prevent a shutdown. Trump and some republicans have said they want to have money to crackdown on illegal immigration and build the boardwalk included in that in border wall included in that legislation. That was already going to be a fight. Yesterdays events added pressure and a degree of urgency. Yet another reason why that could be a real showdown in a couple of weeks. Julie you are watching bloomberg best. Im julie hyman. Goldman sachs ceo Lloyd Blankfein made news with his tweet on monday revealing that the firm might be feeling somewhat anxious about londons future as a financial hub. Brexit. On thursday, blankfein sat down with david westin for an exclusive interview. Mr. Blankfein we have to remove that extra stimulus, reduce the balance sheet, raise rates, and the big test will be to do it in a way that doesnt shock us into a bad position. This is a little bit like moving an unstable, dangerous chemical. You want to treat it carefully. Everybody knows it has to be done. Everybody is doing it. Transparency, again, is part of the implementation remedy to make sure Everybody Knows what is happening. So there is no sudden, quick, jerky move with respect to it, but it will take a deft touch to do this, all the while bracing for the fact that there may be some bubbles that pop in places. Money has been cheap for a long time. Maybe its gone someplace it shouldnt have. David at the same time you are reducing the stimulus, we have a president and republican portion of congress who seems bent on increasing fiscal stimulus. We have today the details of the republican tax plan. What does a good tax reform package look like . What does a bad one look like . Mr. Blankfein i have been involved in this conference, so i have not seen what has come out. Going in, i knew there would be stimulus elements to it. I cant say this is the moment when you want the most fiscal stimulus in the market when we are kind of mostly full employment, gdp is registered at 3 . I dont know that this is the moment you provide the biggest stimulus, but a lot of people and the president think the economy can grow really fast. Im not taking the other side of it. The economy can grow faster. I now there are things out there impeding the growth. Maybe we could get higher than 3 . Or if we sat at 3 and it was not just momentary that would be fine. A good plan would be something that look. The freest kind of stimulation you could provide to the economy is confidence, peeling away redundant or bad regulation, to be frank. If you repeal all regulation, that would be no good. You need a lot of it. You dont need redundant regulation and regulation where the costbenefit is out of whack. Where it restricts activity in the name of safety and takes away a lot of Growth Potential of the extra safety of the economy. And doing that kind of adjustment is kind of free. Youre not spending money to achieve it. You are not widening the deficit to achieve it. Same thing with confidence and business confidence. Those are the things that you really want to see. On the actual expenditure of money, taking in less taxes, some more of it we could afford to have, but not so much of it that we make inflation inevitable down the road. Julie coming up on bloomberg best, we will plow through a mountain of earnings reports that came out this week including european banks. And we will revisit the most compelling conversations on Bloomberg Television. Bill ackman talked about a proxy battle hes been waging with adp. This is a great company, but that is really looking backwards. Julie this is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Julie welcome back to bloomberg best. Im julie hyman. Another week of political noise around the world, and markets continue to keep it mostly in the background, with major indices once again hitting record highs. On Bloomberg Television, investors are looking at the larger picture. Lets look back at some of the weeks most interesting interviews, starting with erik schatzkers conversation with Citadel Securities global head of fixed income currencies and commodities paul hamill. They discussed the impact of impending eu banking rules known as mifid ii. It will bring more trading to electronic venues, it will bring more robustness to the market. Clearing is a fundamental pillar that allows customers access to new sources of liquidity. Moving away from the old lateral documentation structure. They can instead focus on who has the best price, where can i see the best execution for me and my investors . I would like to know what youre hearing from clients. Do they understand the timeline on which they will be rolled out and how they will be affected . And how they will be affected . I dont think is a level of understanding that people would like to have. I think that stems from the challenge that we face. Some of the rules are still not clear. We have two months to go. When you and i last spoke we have seen enormous progress this summer, in particular areas such as the trading mandate and the requirement to provide impartial access. But there are a couple of critical areas that people are watching closely because they have to be resolved before year end. Erik and those are . And this is almost ironic. Transparency is a core pillar. And yet, we have seen, almost by accident, some sort of flawed calculation under the european rules that would term most swaps illiquid and they are not subject to any kind of transparency or reporting issue. It is the opposite of what we have seen in the u. S. We are aware that is a challenge and we are working closely to try to resolve it. But it is critical that it gets resolved because investors are paying for this. One of the biggest complaints is the cost that these implementations bring. If you get the cost of transparency without the benefits, it will be a long time before it gets fixed. It can be a very bad outcome for investors. Erik what is the Business Case for hedge funds, given the disappointing returns that some hedge funds have delivered in recent years . A growing number of Institutional Investors seem to have for hedge funds. The case i would make for hedge funds starts with risk. Clients who have been able to build thoughtfully diversified will portfolios of hedge funds can end up with a portfolio that looks like fixed income levels of risk, but different risk. I think the case for hedge funds will be stronger in retrospect after we go through a period of rising rates and get to a place where rates are higher. In a place like this where we have seen low rates, shrinking rates, low dispersion within equities, its been a challenge. That having been said, i think the fee model for many in hedge funds is broken. And i think the hedge funds in the future, there will be just as much unconstrained investing or less constrained investing than traditional. It will be done in a fashion where fees are more balanced between investors and clients. That is a good thing. Erik what is the right fee model for hedge funds . Its not 2 and 20. Mr. Walker people that do hedge funds as an asset class in my mind, its a skill class. There are people of radically different skill levels competing in the notion that they all should get paid the same fees from clients is absurd. Erik should it be more outcome driven . Mr. Walker i think that would be a constructive place to be. There have been a number of folks that have been leaders on this for, the folks the texas teachers have been some of the most aggressive. The one or 30 model is an interesting one. Theres no right or wrong answer. Anything that generates closer alignment between our folks fundamentally delivering for their clients and are they being compensated at realistic levels . Not at the levels that have happened historically, is a good thing. If you look at the indices, the emerging markets index, the u. S. Index tech is bigger in emerging markets than even the u. S. And japan, which is quite remarkable. This is because of the incredible impact of the smartphones being sold around the world. 70 of those sales are in emerging markets. Thats in part because people can afford to buy them. Mr. Mobius you have a phone being lent for 25. Its a loan you can pay off. Its quite remarkable. Looking at fx markets and you have gone offshore on e. M. Look at how e. M. Has performed this year. I am sure you get frustrated if we talk about blanket emerging markets, but if you can break it down regionally, we have this terrific outperformance in emergingmarket europe. In just behind that, the story of asia and was been happening in latam. Which region, which group of currencies of those three do you want to get exposure to . Mr. Mobius i would probably look at latin america. I think you have seen tremendous change taking place in argentina, brazil, of course. Of course, the brazilian real has reacted, but they still have a long way to go. Do you have blind faith in politicians to actually deliver on what they said they are going to deliver . Mr. Mobius given what has happened in brazil, if they can do 10 of what they intend to do, it would be a big revolution. Julie adp will hold a Shareholder Meeting on tuesday, and the companys proxy battle with Pershing Square capitals bill ackman will finally reach the resolution. Pershing square is seeking three seats on adps board. In an interview this week, ackman insisted that getting even one seat would be a huge win. Im not seeking to be ceo of the company. We are seeking to add one to three directors to the board of the company. It will change a minority of the board. It will bring operational experience, things that are not present on the board of directors. Vonnie why not take a position of casually suggest potential changes as opposed to going all out and waging war . Mr. Ackman we are not waging war. We have stayed away from ad hominem attacks and accusations of the company that they have made against us. We have focused on the core issues. This is a great company. But that is really looking backwards. The company has fallen behind competitors. Its lost major market share in the enterprise market. This is for companies with 1000 or more employees. Other companies have taken away a lot of share from the company. For a company with as much Financial Resources and strong market position adp has had, to allow this to take away customers that have been with you for a decade or more, its not a good thing. The second component is the company has about 20 margins. They could be 60 higher than what they are now. Just basic reorganizing the structure. This is a company that operates with a very oldfashioned organizational structure. Too many layers of management, 130 offices around the country, inefficient procurement. Anything from buying Office Supplies to dealing with suppliers. These are the things that can be fixed. You cannot do them by making light suggestions. The culture of this company is very ingrained. Our goal was to meet with the board. They forced us into a proxy contest and that is why we are where we are. Julie this is bloomberg best. Im julie hyman. It has been another busy week for corporate earnings reports. Lets get right to our roundup of results, starting in Silicon Valley with facebook. Facebook reporting another quarter of record sales, despite a tough week on capitol hill. Revenue rose 47 to more than 10 billion, far above the top range of analysts expectations. Mark zuckerberg said facebook is serious about blocking abuse. They are investing so much in security that it will impact our profitability. Protecting our community is more important than maximizing our profits. If you look at the earnings, they had a flawless quarter. Expectation was to grow 40 revenue. They came in at 47 . Every metric, they beat. Plus, monetization avenues for instagram looking stronger for next year. And market demand pretty strong. Earnings is not the problem. The problem was the expense guidance in the light of the hearing, in light of the fake news issues they are dealing with and security, they are bolstering expenses aggressively next year. That is were the Profit Growth slowdown concern is what you see in the market. Alibaba was the success story, if you will, capping this years 250 billion stock rally. Just going through some of these numbers, the September Quarter revenue grew 61 , beating projections of 50 . It was that extraordinary. It exceeded in the last two quarters by even larger beats against estimates. It is a case of alibaba managing expectations very well. Alibaba increased its outcome for the year. In fact, it was really more of an accounting thing where they are now consolidating the Logistics Business into their earnings, which means the top line at the sales level, it will be plunging at the sales level on the p l. That really is it. There is nothing really organic about this increase in the outlook for alibaba. There is slowness, a bit of weakness in the other businesses. Specifically the entertainment business, the innovation business. They are not growing that strongly right now for the last two quarters. There are a few areas where its a little bit cagey. Samsung electronics, a lot of noise out there. But it has been giving back to investors. Quarterly reporting in earnings on chips. The worlds biggest chipmaker planning to double its dividends next year. Profits going gang busters despite all the headaches, if you will, in the executive who needs management . Who needs management . It was estimated at 10. 8 trillion won. That is about 12. 8 billion u. S. Dollars. Sales of 62 trillion won. The dividend up 20 from 2016, and they are going to double that again in 2018. Also, they are going to more than double or nearly double that. They are going to double that this year. Hsbcs 100 million bet on asia seems to be paying off. The bank is hosting its largest revenue in asia. This just months before ceo Stuart Gulliver hands over the reins to john flynn in february of next year. The focus of our asian businesses is continuing to deliver that strong offering of services and products. Improving the overall capabilities for the business, the ability of our customers to access mobile apps. And that investment getting to reflect in the numbers this morning. Will that be the trajectory from here . Less europe and more asia . It certainly looks that way. I think they get three quarters of their revenue from the asia region now. That is up 6 from the same period last year. The are pumping capital, investment, and a new headcount into china and elsewhere. It seems like the central focus will be resolutely in asia for a long time to come. We were looking at what comes next with the buybacks. Is that something the next ceo picks up and runs with . Theyre leaving it for the next ceo, john flynn. He is coming in in february. A few things to sort out. Broadly, for all the european banks, hes probably in the best position of any ceo. It is quite enviable when you look at the other positions. Frances biggest bank, bnp paribas, rose 8. 3 to 2. 04 billion euros. That beat analyst estimates. However, income from trading bonds fell 26 . I think in the past quarter, there was uncertainty related to the uncertainty in the market. That is why so many corporates waited to see what was unfolding. And now we have see how it goes forward. Its not impossible with the clarification the ecb has given that it tapers off. And we will find some more normal evolutions. You are relieved at the ecb decision and announcement last week . As you know, we anticipate we see the european economy is doing well. We anticipate there will be more revolutions in the end of 2018 on the interest rate. So we will have to see how it unfolds. Credit suisses pivot to Wealth Management has propelled assets under management to a record high. Profits also accelerated, the news coming as the ceo began shifting the bank from trading to focus on the asia pac asset management. He told me he is a little bit cautious about the future, but overall, he was pretty pleased with his performance. It is a tricky situation. Theres no good pipeline. The problem is what constraints will win this. A lot of good conversations, but you dont want to pull the trigger because of the uncertainty with the questions they are asking themselves, with the fed, the central banks, and north korea. We are cautious. Reporting thirdquarter results that show 50. 2 drop in net income. Revenues from fixed income at frances secondbiggest bank fell by 28 while equities and prime Services Revenues dropped by 19 . Our business has been more impacted by the equities side. Because on the fixed income, we are in line with global economies. In equities, we have been more impacted due to our business links. [indiscernible] we have low revenue, 19 in the addition of these two businesses. The Current Situation of the negotiation between the u. K. And the European Union is that it is concerning for us. And if there is no more precise direction on the beginning of next year, i would say the Banking Industry peers will have to make early decisions in the worst case scenario. Tesla shares plunging 5 in a market, the company reporting a record quarterly loss and a massive cash burn. Ceo elon musk said production is still held. If it is one quarter and they get this back on track and start to sell these cars, which means they bring cash as they deliver them, it would be ok. Remember, they have 3. 5 billion of cash on hand. Its not like they are in danger of missing a payment or anything like that. But its really the longterm or the mediumterm view on this. On one hand, you want to say this is a one quarter delay, not a big deal. On the other hand, he did compare their production to dantes Divine Comedy and talking about different players of hell. It might make the investors breathe a little more easy. The biggest Advertiser Company has cut its Sales Forecast for a second time in three months. Wtp says Revenue Growth is expected to be broadly flat this year. Are the challenges coming from search and social . Broadly, no. Are the challenges coming from Digital Consultants . No, broadly, no. Are the challenges coming from a focus on cost, particularly fmcg . The answer is yes. Whether it is folks working on a contingency basis to cut cost or activist investors forcing companies that they are investing in or that they are potentially threatening with takeovers. Whether they are forcing them to look at costs. We have seen that pressure in 2017 to a degree that we havent witnessed really since the recession of 2009. Europes Largest Company has reported a 47 rise in thirdquarter earnings. And for the year as a whole. It is on track to surpass its u. S. Rival on cash flow measure. That hasnt happened in around 20 years. Solid numbers, yes . Very solid numbers. 40 increase on adjusted net income. Cash flow generation on the quarter, 10 billion. 10 billion is enough to cover the capex, not to cover the dividend. It has been a very Strong Quarter for the big five companies. They were able to generate enough cash to lead. Now with oil, it could look very well for big oil. Have a look at where we are here in the equity markets. It shows you the monthly performance of asian equities for the last 30 years. Astounding, isnt it . The top row that you see right there, not a single red month, if you will. That is the first time on record this deep into a calendar year that we have not been humbled by a marked decline in equities. 2017 has been weirdly fun for global investors. There are about 30,000 functions on the bloomberg and we always enjoy showing you our favorites on Bloomberg Television. Maybe they will become your favorites. Here is another function you might find useful, quic. That will take you to our quick takes, where you can get fast insight into timely topics. Here is a quick take from this week. It used to be when a colleague emailed you to say they are working from home, you may not have envisioned the most productive day. Maybe he was doing personal chores. Maybe he had a bit too much to drink. Maybe he was just slacking off. What is your dads job again . But telecommuting is legit. Currently, over 60 of u. S. Companies provide the option. It is often promoted as an extra perk to attract talent and allows companies to consider candidates in different cities or countries. But are Remote Workers productive workers . Here is the situation. Even if telecommuting rapidly expands as an option offered by u. S. Businesses, a number of early adopters are beginning to secondguess the concept. When discussions on to looking meeting began in the 1970s, the focus was less on productivity than it was on pollution. An amendment to the Clean Air Act required companies with over 100 people in polluted areas to limit vehicular commutes. It did not take off until the internet. Especially when companies noticed an important ancillary benefits, dwindling real estate costs. Between 1995 and 2009, ibm reduced its physical space by 78 million square feet. Which created at least 200 million in annual savings. But as more and more companies offered employees telecommuting benefits, some of the earliest pioneers have become skeptical. After 20 consecutive quarters of falling revenue, ibm calculated that its Remote Workers would perform better in close proximity to their colleagues. In 2017, thousands of remote ibm employees received an ultimatum. A move near an ibm office or lose your job. Best buy, once lauded for its approach to flex scheduling, scaled back in 2013, as did yahoo. Why the change of heart . Here is the argument. The survey said that only 38 of companies in the world Group Employees by job types. The growing trend is to Group Employees with various functions into teams. Critics of remote work argue this structure requires a level of collaboration that simply cannot be obtained without facetoface interactions. Some losses also suspect that Workers Abuse remote work benefits to goof off. On the other hand, studies show employees who telecommute are happier. They are also more productive. That might be true for only certain types of workers. The most widely cited study looked at Call Center Employees whose jobs requires little teamwork. Telecommuting could narrow the gender pay gap by allowing mothers to balance childcare with work duties. One study found a spouse working from home is given more chores. While certain aspects of telecommuting can be attractive to workers and businesses, just like anything else in life, everything in moderation. A review of studies concluded that the most successful arrangements include at least some face time in an office. Julie that was just one of the many quick takes you can find on the bloomberg. You can also find them at bloomberg. Com, along with all the latest Business News and analysis 24 hours a day. That will be all for bloomberg best this week. Thanks for watching. Im julie hyman. This is bloomberg. Who knew that phones would start doing everything . Entertaining us, getting us back on track, and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit or go to xfinitymobile. Com. David you have had to follow bill gates and steve ballmer, two legendary figures. Satya look, clear message was dont try to be like us. David did steve say if you do this well, we will be happy . Satya if you do a good job, maybe you will have another job. If not, you wont. [laughter] david has having empathy made you a better ceo . Satya my pursuit is the growing sense of empathy for people around me. Satya did david did you get a standing ovation for what you have done . Satya i have a lot of people saying, hey, come home and fix my computer. [laughter] would you fix your tie, please . David well, people wouldnt recognize me if my tie was fixed, but ok. Just leave it this way. Alright