In its worst sales slump in a decade. Sales have fallen for more than 2 last year, falling for five straight quarters. He will be replaced by a brit. He previously ran the chain of restaurants in the u. K. Fourthquarter profit Beat Estimates at europes biggest lender, deutsche bank. Legal expenses dropped. Fourthquarter profit fell at ford battered by losses in europe and south america. They restricted production of its f150 pickup while rolling out a new aluminum body version. Facebook sales up in the fourth quarter. Expenses rose, too. Here is the ceo from last night. 2014 was also a year of Big Investments in our future. This year we made big bet on the next generation of communication and computing platforms. We focused on serving our community better. Improving our search and video product and improving the performance and efficiency of our mobile apps. It seems investors are pretty ok with the sales growth. The shares are little changed in premarket trades right now. Ali baba reporting quarterly profit that missed analyst estimates. They pay higher taxes and financing fees. Its that much more on developing apps. Spent much more on developing apps. Scarlet fu is joining me. This is the second Earnings Report after the company had their mega ipo. Falling to as low as 90 a share in the free market dish premarket. Revenue did increase by 49 but not high enough. We do want to point out that ali baba lifted the stock is still up some 45 as of yesterday. It will still be higher than it was when it lifted. The dispute with a chinese Regulatory Agency is overshadowing the results. The executive Vice President of ali baba is making some comments saying the Chinese Government report saying it was allowing shady merchants and counterfeit goods. The company has a credibility crisis that comment is unfair. It did announce earlier this week that it is going to spin off he is saying ali baba is prepared to file an official complaint over those allegations. Fraud allegations. We will have joe tsai with us in an hour. Lets get back to the shakeup at mcdonalds or did the ceo of the Worlds Largest restaurant chain quitting in the midst of his companys worst u. S. Sales slump in more than a decade. It was an uphill battle from the start when he took the reins back in 2012. Steve easterbrook he owns 1. 3 million shares of mcdonalds. Also joining us is an analyst who covers mcdonalds. Lets start with you on this. Is there any ceo who is going to be able to turn around mcdonalds given the trend the macro trends we have seen in this country . The trends have been tough. You look at the lowend, there have been a lot of deep value players like burger king going after that lowend customer. They have been getting squeezed at the higher end by fast casual. Think about their competitive it advantages mcdonalds has a great platform. I dont think this is an installable formula on a solvable formula. There are a lot of financial levers that can pull at the same time to get the stock higher. It is a great opportunity here. What do you mean refranchising and financial levers . It is 81 franchise. I would like to see them go to 95 franchise. That would stabilize your Free Cash Flow. It allows you to return much more cash to shareholders. As far as that their one debt they could buy back 1520 of the shares outstanding. If they go to a higher percentage, they will be at 5. 5 times. Chris, as a mcdonalds in shareholder, would that satisfy you to stay with mcdonalds for the longterm . There is some true benefit on moving into the franchising end of it. It is coming down to the core of rebranding. Mcdonalds is up against some stiff competition with the makes of chipotle panera and even red robin gourmet burgers. I think they really have to have rebranding they have 36,000 restaurants. Lets step back europe it. Here a bit. They sell billions of burgers. They have created this huge enterprise on a Business Model that works. How do they rebrand themselves . It is a bit of a finetuning of the brand. Maybe a play on that. Getting a better quality approach to the burgers. That is what is drawing a lot of millennials that go into this segment of the market. Theyre looking for that fresh quality. Mcdonalds has always stepped away from that. They are great execution on price and speed and delivery. There is a slight disadvantage in the product. You have talked about shrinking the menu a bit to be more efficient. They have lost a lot of market share within the breakfast segment. They owned the breakfast segment a decade ago. We have new players like subway and chickfila eating away at it. Part of the problem is mcdonalds tried to be all things to everybody. We mentioned the mcwrap that became the big flop. The mighty wings was another flop. You mentioned something interesting, the Better Burger phenomenon. There is no other company in the news right now that underlines this or underscores this then shake shack a gourmet restaurant chain started in new york. It bloomberg reporter is on the story today because shake shack is pricing its ipo. They are raising more than expected they have already raised the price range of the ipo. Yesterday, they came out and did that. They are targeting 100 million. Evaluation of 700 million. They are absolutely antimcdonalds. This morning i was curious, how much does a big mac cost . A big mac costs four dollars 80 cents. A double shack burger cost 7. 10. If you are an affluent urban consumer, you will spend a bit more. This is part of the problem. The mcdonalds products are so wide ranging, you have the dollar menu and a five dollar burger there has not been a clear idea of who exactly is the mcdonalds consumer. Who will pay a dollar for a burger and instead spend five dollars for a big mac . This has been a double cheeseburger type of place. Something you can identify with. And a breakfast company. They have pushed toward premium coffee. They have to get back to what they are good at in terms of valuebased products. Look at what sonic has done and what wendys has done. Both putting up nice, positive sales. There is a place for salad and healthier items. There needs to be more innovation from the dollar to two dollar range. Thank you so much. Tune in tomorrow because i will be speaking with the shake shack founder and the companys ceo. They will be ringing the bell for their ipo. Thats take a look at our world news headlines. The japanese government in a race against time. Putting its trust in jordan to help gain the release of a journalist held by islamic state. Militants want a prisoner set free for the journalist. Theyre promising to kill a Jordanian Air force pilot also held by the group. The disappearance of malaysian flight mh 370 last year was an accident. The jet disappeared on a routine flight from wall of poor no trace of it has ever been found. The recovery operation will continue but all 239 people on board are presumed to have died. They will proceed with compensation payments for relatives of the victims. Greek bank stocks rebounded this morning. This after tumbling after pledges made by the antiausterity cabinet. The intended to increase the minimum wage. The initial comments were due to an experienced that is the latest world news. Back here in the u. S. , been officials boosted the assessment of the economy despite turmoil in other markets. The vote of confidence may come as a surprise. With the dollar any 12 year high against the euro, the worlds wealthiest investors are bracing and booming u. S. Economy. Joining us now with more on this , the chief Investment Officer for ultrahigh Network Individuals and ubs. Banking one into billionaires worldwide. One in two billionaires worldwide. You said there is 34 2015. Top of the list is theres diversification. Many have put their money in oil. It is broader. It tends to be large concentration exposing yourself to disproportionate risks based on a concentrated holding. Clients often want help in terms of what to do in that situation. It is about diversification. Many clients dont want to sell their core holdings. Its about adjusting the rest of the portfolio. What are they concentrated in right now . Concentrated stock positions. Businesses they have built up and they still maintain controlling they cant get out of them . They dont want to get out of them. What are you recommending . Where clients can start to diversify is beneficial. Secondly, just the remainder of the portfolio to take account of factors. It is not just concentrated holdings. It is also cash. They have high cash balances. How much in cash . In the order of 30 on average. A third in cash . Often. With zero Interest Rates and negative real rates is not a great investment outcome. It is hard for people to start to put their cash in equity markets. They have missed out on a lot of returns. I imagine they are putting a lot of their money the money outside of cash in u. S. Dollar assets. Over the last two quarters definitely. The most common view. The west dollar will continue to appreciate. Allocation towards u. S. Assets is high on the agenda. Also come alternatives. More interest in alternatives. Longerterm private equity exposures or investments which make no financial return but have a positive social impact. Is that starting to wane . Bill gross came out with another letter. I want to read what he said about u. S. Growth. Even with the west growing at an acceptable rate for now its recovery over the last five years has been anemic compared to historic norms and other developed economies are faring much worse. Might it be that even the last place on earth you can put your money is going to be no place on her anymore . A very negative outcome. The plane might be running on one engine but the u. S. Economy sufficiently strong to get us through. The ecb is trying its best to generate inflation. With its back up against the wall to some degree. Look at the slowdown in the emerging markets. The west does remain the cleanest house on the street. We can argue what the street is like, but its the best house. Low Interest Rates have not have people putting their money to work. Look across europe, we are in a world where banks are borrowing money at the u. S. Tenure is at 1. 7 . Yet get that Interest Rates will go up this year are influencing peoples views. What it means for fixed income interest rises starting to come through. Thank you so much. Speaking of where the worlds billionaires are putting their money, we will speak to the finance minister of qatar. Good morning. Here is a look at our Bloomberg Top company news. The bestselling smartphone in china is not chinese. It is the apple iphone. Tied with samsung for Global Leadership of smart phone sales. Both have 20 of the market in china. Quarterly earnings past matched estimates at viacom. Growth in advertising slowdown. Jetblues fourthquarter earnings Beat Estimates and airlines have been flying high because of cheaper fuel and rising demand for travel. Back on ali baba, shares sliding in the free market premarket after the comely missed estimates. Dropping over 5 as revenue missed estimates and they spent more on developing apps. Things are heating up inside the ecommerce company. Employee perks include free food housing, even getting married. When you enter ali babas headquarters, is a lot like stepping into any tech campus in Silicon Valley. There a starbucks to fuel all nighters, look at classes yoga classes and three cafeterias. The perks dont stop there. Alibaba takes it one step further, helping employees find love, marriage and even starting families. It may look like any other tech company, but the culture here is unique. Employees refer to each other as ali people. Many assume nicknames. One of the big influences on jack mas life was an author who was a martial arts novelist. People took on nicknames of different characters in these martial arts novels. That fighting spirit has attracted young people to work at alibaba. The average employee is 30 years old and has a starting salary of nearly 33,000 a year. They attract Young Chinese in the top of their field because its an exciting Corporate Culture. They can do new, innovative things in their work life. Jack ma is unlike any other tech company founder. Serenading employees to playing matchmaker. A heartshaped getting bored between the gym in the cafeteria filled with photos and phone numbers of single employees looking to find their match right on campus. He is so revered within the Corporate Culture that every year he marries dozens if not hundreds of employees. They put photos on the wall of babies born to employees. Those new families also can get an interestfree loan or down payment on their home. Ali baba has also given birth to a whole new generation of chinese internet companies. Former employees have helped start more than 145 businesses. The attractive people who believed they could do something different. Individuals were dreamers and thought they could change the chinese economy. This culture has been a critical part of their identity keeping it all in the family has helped the company grow into a global powerhouse with over 24,000 employees. That is more than facebook and yahoo combined. I want to bring in they have clearly dominated the chinese market. Do they have a chance in the u. S. . I think they do. They clearly have global ambitions. One of the reasons they decide to go public in new york. They want to come out and look at some global ambitions. They made acquisitions and put up an investment arm in Silicon Valley. Most investors look at the alibaba story and say the runway for growth over the next 10 plus years is in china. Here in the u. S. Market, it is so much more competitive. Hang on for a moment. I want to get to scarlet fu. Jobless claims numbers just came in. Good news for the jobs market. Bigger than expected decline in the number of people filing for an up limit benefits. Unemployment benefits. Below the 300,000 level. The consensus was for 300,000 even. The amount is negligible here. 2. 38 5 million claims filed. Before the number came out claims should continue to recover from their spike at the start of the year because there was a massive swing and seasonal hiring. The decline to tone and 65,000 is encouraging 265,000 is encouraging. Scarlet fu at the breaking news desk. Lets talk about what has happened the last few days. This bizarre fight between ali baba and chinese regulators. Joe tsai is explaining a bit about these allegations against it for encouraging fraud and not rooting it out enough. We believe the flaw in the report and the tactic of releasing a socalled white paper targeting us was so unfair , we felt compelled to take the step of preparing a formal complaint. Im just going to ask, do you think the folks at albaba are even more worried about fraud . Americans have a tainted view of the chinese companies. They believe many of them are corrupt. Do you think that is why they came out so strongly against this regulator . I think so. It is quite unusual for a Chinese Company to be responding as aggressively to a government entity. It clearly indicates that fraud or the perception of fraud on their marketplace is a big issue for them. They hit it head on. Its a key issue for them and for trust amongst other merchants. They want to know that the goods and services are legitimate. As are the cases for amazon and ebay. For investors outside of china this is a key issue for them. Something the company disclosed in their respecters risk factors. Did they do enough . Did they do enough to warn investors . This is a risk here. I think they did. The issue that surprised investors was how aggressively they responded to the government. They have to work hand in glove with the government. Staying in the good graces of the government. Clearly, they feel very much they have a good position and do monitor for fraud and issues on their site. Someone who wants to be a friend of china is mark zuckerberg. Mr. I just learned chinese. The facebook results are quite good. This is a company that continues to put up some very strong numbers. The number one metric for investors has been and continues to be the growth of their mobile business. Mobile revenue is 69 . On the flip side, they are spending a lot of money across the board. They warned last quarter that in 2015, it will be a big spending your. Expenses up 70 . They got a jump on that in the fourth quarter. Revenue growth is there. Putting 15 will be a big year for topline growth and Expense Growth 2015 will be a big year. Stay tuned. We will be speaking with joe tsai. He will explain more about the companys backlash against the chinese regulators. The fed signaling its on track to raise Interest Rates this year. One bond manager nervous about that. A little under 16 minutes away from the opening bell. Scarlet fu is looking at the big premarket movers. Plenty to choose from. Lets start with carmakers and speeding ahead. Ford set to a race yesterdays decline. Europe losses will improve from 2014. We want to mention fiat, one of the best performing auto stocks in europe. Royal caribbean a disappointment here, dropping more than 5. 5 . Qualcomm cutting its 2015 outlook because of lost orders from samsung and increased competition from china. Coach, the Handbag Company turned lifestyle purveyor of the more than 5. 5 . Profit in december topped analyst estimates. Julie hyman will be on to speak about coaches efforts. I dont see any coach purses around anymore. I had a coach backpack. A hot thing 10 years ago. May be a bit longer, but lets not go there. I want to get back to one of todays top stories. The Group Confirms a solid turnaround and strongs creation, avoiding any talk about investors cannot rule out rate hikes this year. Making one big bond investor pretty nervous. We are joined by lisa brummel its we saw brummel i did come back. I dont know why. The head of double i f said hes worried about the fed cutting rates this year for philosophical reasons. Double i capital. They will raise Interest Rates this year even though there is no fundamental reason to do so. And then we will have to double back and drop them again when the ecb economy is slowing. The rationale behind his view is two things heard the dollar strengthening and oil prices. At one expects them to rebound. Everyone expects them to rebound. The strengthening dollar is eating into the profits of pfizer and procter gamble. Oil prices creates fundamental risk. Where is the inflation . The flip argument is loyalwer oil prices tend to be good for the economy. The flipside to this is the shale boom has provided a lot of highpaying jobs. These companies have issued billions and billions of dollars in debt. Capital spending programs, how will they be able to keep going with this spending and expansion . What are the investors saying to you in florida . There seems to be a consensus that the u. S. Dollar will continue to strengthen significantly. We are seeing the beginning of this bull market for the dollar. The second consensus is a flattening of the yield curve. Even though the front ends will rise, longerterm rates will continue to drop. Piercing 30 your we are seeing 30 year yields lowest on record. Over a longer about of time people will say whatever the fed does, given the backdrop of whats going on in europe and singapore and canada in reality, it wont matter. Exactly. Why bother listening to the fed . The markets really are saying something very different. A tiny gulf nation with big ambitions. Qatar investing billions of dollars in america. The finance minister joins us for exclusive interview, next. Shell is lashing billions in spending as oil prices crash. Lets look at the world headlines. Israel and has below have signaled they want an end to border clashes. Israel and hezbollah. Israels defense minister sending the key message inflation rates turned negative in january, signaling that europes largest economy is succumbing to the deflationary crisis. Economists had predicted a drop of. 2 . Shell says it will cut spending by 15 billion after the company missed fourthquarter profit forecasts. They were not immune to the crash in oil prices. Of course, we are not immune to low oil prices. We see pressure on our investment program. We see it as an opportunity to work hard to reduce our capital costs per project given by the opportunities that we currently see as well. Staying on the International Beat and oil, and a story centers around qatar. Best known as the richest country in the world, qatar is flexing its financial muscle, planning to invest billions of dollars on our shores. Joining us for an exclusive interview is the man who has spent years managing qatars finances. Welcome ali shareef alemadi. He will be ringing the opening bell in just under one hour. Thank you so much for joining us this morning. Thank you. We are planning to invest 30 billion in the next five years. This comes as our Investment Strategy to diversify our Global Portfolio our focus will be different sectors especially the hightech, health care, real estate and structural projects. How are you going to go about putting the 30 billion to work . What will it look like over the next five years . In the next few months, we are going to open our office of common investment in new york city. That will really give us a platform of understanding and connecting with the business community. From there, we will take it on. You will increase staff here. My question is more about in what shape are you looking at doing joint ventures or investing in stocks or buildings and properties . I think we will do it in multiple ways. The city Center Project in d. C. Developing projects in the united states. Getting equity stakes. Some American Companies that are listed. We will diversify the portfolio in the u. S. Has the oil plunge changed the way you look at investing . Was any of this prompted by the fall in oil prices . We have been enjoying surpluses for the last 15 years. We were able to accumulate our wealth fund. We are budgeting at 65 we are another three months away from our fiscal year budget. We will run a surplus even at these low prices. Clearly you have been able to amass budget surpluses because oil prices have stayed relatively high. Up to 100 a barrel. If prices and stay this low will that start to cause him problems some problems . We put a very ambitious Infrastructure Project on course. That is all for the preparation of the world cup. Despite what we see in oil prices, we are committed to not change this policy and we will go ahead with these projects. In terms of what we are going to do in qatar there will be no change. What about a change in production . You are a member of opec. Could we see a cut in production if prices stay the slow . We are one of the smallest opec members. It is all to do with opec members and the producers outside opec. Opec cannot do the whole thing by itself and we need common understanding between the producers and other countries. Like investing in shale here . We have a project with exxon mobil that we are working on. Were working with the American Government getting permission to start this idea. Thank you so much. His excellency, ali shareef alemadi qatars minister of finance. Stocks will open higher in just about half an hour. We will be back. Coming up fresh of earnings, we hear from joe tsai. Staging a retail revival. What coach can learn from its peers. You are watching in the loop. Welcome back to in the loop. Heres a look at our top stories. Futures indicate stocks will open higher at the open. There is another sign the labor market is getting stronger. The fed has upgraded an assessment of the economy. Policymakers now call the expansion solid. They also repeated their pledge to be patient on raising Interest Rates. All that suggests the spread is to to its plan to raise rates this year. Investors are pummeling allie palma allie popout allie baba. In a few moments we will talk with joe tsai. Legal expenses drop. Deutsche bank has been trying to expand its debt trading business while competitors scale back. Shares of ford are up more than 2 . Ford is predicting that profits this year may rise as much as 51 . Due in part to the aluminum bodied f1 50 pickup. We are under 30 minutes away from start of trade. Top headlines hitting our radar before the bell. Olivia sterns and phil mattingly, visiting us in new york this morning. Lets start with number four. We have time with just a few. Don thompson mcdonalds ceo is going to be stepping down. Chief rant officer, Steve Easterbrook is stepping in. The Company Announced last night after its 2014 sales. The first year that it sales decline in over a decade. Some of that, not Don Thompsons doing. Some of it is. How does mcdonalds turn around . Easterbrook has had some success. Donald is a company that likes to tap lifers. Mcdonalds is a company that likes to tap lifers. He had this little time away at pizza express. Lets see what he can do. The deck is stacked against them. The tide has turned to more healthy food and that is not what mcdonalds i was deeply offended that they would install in nonamerican ceo of the golden arches. What does he know about american burgers . He has experience on the digital side. He is recognized that mcdonalds has critics. Mcdonalds needs a better digital strategy. There are a lot of hurdles. I think they feel like this is the way to go. When this news broke, you didnt speak to board members. You had been speaking to board members. The board meets to look as though they are doing something about this. Lets change the ceo and see what Steve Easterbrook can do about this. Mark zuckerberg, faster to chase opportunities in messaging and mobile advertising as sales growth slows. The company says spending will jump 55 to 70 35 to 75 in 2015. Facebook reported its income rose to seven and 701 million per quarter. Alibaba, were going to talk to them, also spending lots to get that growth. That seems to be the name of the game. I cannot believe the user base. 1. 4 billion people. That is wild. There is a playbook to the strategy. What i thought was the most fascinating part of the call was , street not super thrilled. Wiser goal to expand the internet to places where it has not been why is it your goal to expand the internet to place where it has not been . Zuckerbergs response was investors would care. You are that big that you can say, really care about certain investors. Alibaba wants to come here to the u. S. They will spend the money to do that. Oil is now trading at sixyear lows forcing companies to slash billions from their budget. Tens of thousands of workers. You all the looking for interesting angles on oils. Engineers, or graduating from college, are finding that maybe it is not a great idea to go into the oil industry. L6 figure paychecks those six picture six figure paychecks are not lasting. I think that was a temporary blip. It is interesting what this dutch to what this does to wage growth. Conical phillips came out with their earnings. Were going to see jobs layouts across the industry. I think 30,000 job cuts is what we have seen. I did not know it was possible to make six figures coming out of school as a journalist. We are used to four figures. [laughter] it goes along with this. How does this impact the economy of cities like houston . Matt phillips at business week did a story on this. There are a lot of things to follow. My take on this is, College Grads cannot go to wall street anymore because everyone hates bankers. They cannot go to the oil industry, that just means Silicon Valley is going to get more inflated. I want to get more on oil now. Many Oil Companies are going to be reporting earnings in the next few days. Exxon, chevron are also going to be reporting. Alix steel, joining us with a rundown of these Oil Companies. It is going to be brutal for these guys. We have heard shell and conical phillips first losses since 2008. Lubricant intelligence is looking for 30 drop in earnings for these guys. Cash flow is king. You cannot escape the fact that you need a lot of money to drill a lot of oil to sell it. That is the overall issue. For every 10 decline in a barrel of oil, exxon loses about 2. 84 billion from its cash flow. What about hedging out production . That is the thing, everyone gets really comfortable with 90 90 to 100 oil. Come next year, we will look at 16 of the big producers. You cannot hedge now at 50. The price ones of going higher than you of lock yourself in. If it goes lower, you lose even more money done the road. Is there a Silver Lining . One potential one is lowering their own cost. It costs a lot of money to drill a well. Youre looking upwards of 13000,004 a share 13 million for a share a shale oil well. You are going to have a lot of production shutins. A lot more power to go to the drillers and say, i do not want to pay 1 million for this rig. Youre going to see those costs coming down which means more Free Cash Flow to help dividends. Perhaps help acquisitions. Some analysts are saying this could be a way for the big guys to buy. They have to protect their dividends. When prices start to pick up the costs will not come up at the same time. Acquisitions only one of making sense if you think oil will get more than 50 per barrel. A lot of projects are not economical right now. We think youll be 80 in five years. Integrators are in this for the long term. This happens a lot. The cycle of commodities. This is a cycle of commodities. The psychology of commodities. Alix steel, thank you. Much more ahead, a reaction to alibaba earnings. We will be speaking to the chinese ecommerce companys vicechairman, joe tsai. We will be back. We are moments away from the open bell. Scarlet fu was looking at some of the names that are going to move it in todays trade. Some of the names on the first floor of your favorite mall. Lets start with kate spade. Course and coach. You hang out there all the time betty. How do you know. . Revenue beat analyst estimates. Michael kors does not report until next month. It is higher in sympathy by almost 3 . Coach came out with results. Higher priced items were in the holiday season. Comparable sales above analyst estimates. There is also a couple of movers in the transportation phase. Scarlet, thank you so much. She is going to go over transportation stocks as well. 25 billion ipo last september seen so long ago. Alibaba disappointed investors with a quarterly profit that missed wall street estimates. Investors taking shares down. You can see over 8 . On top of that, a new controversy brewing between alibaba and chinese regulators. That is clouding the companys outlook. Joining us from hong kong is vicechairman and cofounder of alibaba, joe tsai. Glad to be here. Lets start with the numbers first. Are you spending too much to get that growth . Is that eating too much into your profit . We had a good quarter. If you look at the growth and metrics that we focus on, it is the g and the g. M. The an active buyers. We now have 334 million active buyers on our platform. These are consumers that are coming to our platform a in and out to buy things day in and day out to buy things online. On a net ad basis, we added 27 million new active buyers. A lot of that is driven by the User Engagement and activity on the mobile platform. Lets talk about mobile. I know it is cool these days for companies to talk about what they are doing on mobile. There is a lot of growth there. The fact is your ad rates on mobile are lower than they are on desktop. Is it a great move for growth for alibaba to encourage their shoppers to go mobile . This shift to mobile obviously there are two cites the coin. On the monetization rate, we reported 1. 96 miss 1. 96 monetization. The one thing to member about mobile is we have 255 million monthly active users that are coming to our mobile at to buy things. That is a good result especially in light of the net app. We added 48 million active users in this quarter. We believe that as long as you continue to attract users on the mobile to buy things and engage on your platform at some point monetization will follow. One thing i would like everyone to remember, in the fourth quarter, alibaba generated one billion u. S. Dollars in mobile revenue. We broke that 1 billion mark this quarter. On other developments, yahoo saw some good mobile ad Revenue Growth in their quarter a day ago. Mercer Mayer Marissa mayer has spun out her alibaba shares. Would you have any interest in buying all or part of spin co . We do not anticipate entering into an agreement with yahoo or spin co. This is something that is the right of yahoo to do. Their board has decided to do the spinoff. From our perspective, operating the business day today, today we have a 50 shareholder in us that is yahoo . After the spinoff, we will have another 15 shareholder. It does not change anything from our perspective. I would like to take this opportunity to thank mercer Mayer Marissa mayer. Joe, i know that you are a great deal maker and your made lots of deals for alibaba. His yahoo on your radar . Is yahoo on your radar . We are focused on our business in china. If you look at the deals we do in terms of investments over 90 of them are focused on how we grow our user base, how we increase User Engagement, and how we expand our categories in china. With the limited activity that we do outside of china it is focused on the crossborder trade. Always with one leg in china. How to enhance our ability to serve Small Businesses to sell chinese businesses to sell to over business consume overseas consumers. How to help Small Businesses from around the world, including u. S. To sell into chinese consumers. Our platform was 334 million active chinese consumers. I mentioned earlier about the fight you have had in recent days. The fight you have had with the chinese regulators over alleged fraud at alibaba. The fact is, that is one of the race risk factors of buying into your company. What are you doing to combat fraud on your Online Marketplaces . The underlying issue is an issue that we take seriously. Alibaba runs retail platforms that trade 370 billion a year. That is a lot of transactions. In a way, we reflect significant part of the retail economy in china. The issue of fake products, counterfeit products, are a matter for all the participants in the economy to solve. They involve online efforts and offline efforts. Let me say, for us, there is nothing that is more important than the trust consumers have in our platform. That means they should feel comfortable to come to our platform to buy things and trust that our vendors are selling them highquality goods. We take a draconian approach toward counterfeits. We spend a lot of resources and money to combat this problem. Weve worked with Law Enforcement agencies to shut down factories and warehouses that make counterfeit products and put people in jail. We are doing as much as we can on this issue. Thank you for joining us. I know it is late there in hong kong. Joe tsai, vice chairman and cofounder of alibaba group. We will be back in two minutes. A look at the european stock markets. European shares have erased earlier losses. They are down a little now. Germanys inflation turn negative for the first time in five years. A look at currencies. The dollar drops against all the 16 major counterparts. Turkeys lira fell to a record low. The euro is just up a touch. A quick check of where futures have settled. Futures have settled slightly higher. Our top story in the opening bell is next. Welcome back to in the loop. Olivia sterns and phil mattingly, joining me. Number one is the fed. The Federal Reserve boosting its investment in the economy. Raising Interest Rates. Also substituted strong for solid in its evaluation of job gains after the meeting on wednesday. It seems like the fed has rose colored glasses on when it comes the economy. We thought this was going to be a boring report. Huge move in the third year. We had ellen setzer on earlier and she is way ahead of consensus estimates. She does not think the fed is going to hike until march of 2000 team. March of 2016. Keeping and i on international developments. It is tough to read what that means. How big of an impact that has on the decisionmaking over the next couple of meetings is going to be an important point. Have a reached that point of no return . The markets are so expecting that rates will rise sometime this year. They cannot walk it back. If they had gotten rid of patient and changed it, that would be changing their tune. Theres plenty of room to push us back. Stocks are getting ready to start trading. Joining us he thinks stocks will fall between 25 and 30 . Uggla ramsey doug ramsey. Youre calling for a bear market sometime this year, prompted by what . We talk a lot about the prospect for rate rises. I do not think we will see a rate rise this year. But the excuses plenty of excuses for the fed not to increase rates. What i would focus on is the tightening that has been put in place. By that, i refer to the multiple papering moves last year. 13 months ago that the fed was buying bonds to the tune of it he billion dollars per month. That went to zero last october. The fed Balance Sheet is not shrinking but it has changed in a margin that the market is sensitive to. When you look at the performance of some groups that are sensitive to fed tightening, consumer distress discretionary. All of them have underperformed badly. What were seeing now in terms of some of the deflationary wind the consensus does not appreciate what is there. If you do not think that the fed is going to raise Interest Rates until next year i would you still think that stocks will go down this year why would you still think that stocks will go down this year . We look at things in a different fashion in the sense that what caused some of these deflationary pleasures that we are seeing pressures that we are seeing, the fact that the fed and other mobile Central Banks have been too loose. It aided and abetted the buildup in commodity overcapacity. In our mind, it is a downturn that will have more of a deflationary tinge. Just as you could argue in 2007, the fed started loosening in august of 2007, before the market topped. It was not a bear market that was brought on by fed tightening, neither was the 2002. They were bear markets that were led by oversupply. Less cycle was housing. This time around theres been mount in Commodity Production globally. The last gdp reading we got was 5 . Unemployment rate is at 5. 6 . We have not been creating jobs for this fast for this long in over a decade. Consumer confidence is high. The president said this is good news. How can the fed look at that and not think ultralow rates is not too loose too long . I think they should look at it that way. There was a window. Second half of 2013, all of last year, in addition to the tapering moves. You could have had a 25 75 basis point. That window has been missed. It is a situation where we are starting to see we have are going the market is overvalued. It can go on for a while. Sentiment is inflated. Now, youre starting to see internal breakdowns within the market. Financials are behaving poorly. Cyclical groups are lagging. Stock Market Action will be something that will keep the fed at bay throughout 2015. Ive seen you attribute a piece of your perspective to how bullish investor notes have been. How much of an effect does that have on the market . Sentiment is a much better timing tool that market lows that it is at market highs. We track about 35 different Investor Sentiment measures. Last year, their most extreme on average readings throughout the year. It is not just were sentiment is today, it is the fact that it is been inflated. Confidence has been in place. Typically following a year like that, we would expect a week return year we are expecting in 2013 2015. It is not a pinpoint timing tool. We are waiting to see the internal breakdown within the stock market itself. Thank you so much. The ramsey doug ramsey. Still to come coach profit topped estimates. The stock is down almost 24 over the past year. Does the brand need a turnaround . We will keep you updated on what stocks are moving most this morning. A few moments into the session. We will be back. Quarterly earning reports continue to roll in. Womens fashion and accessory brands kate spade and coach. Coach has its work cut out for it. Stock is down almost 24 while profits last quarter topped estimates. North american sales, dropping 20 . With me to look at these results and what it takes to turn around coach is stephen newman, former ceo of lomans. Also with us is julie hyman. I think any woman who has been consuming over the last decade or so thought coach was a luxe brand in the beginning. Now, i do not see anyone caring coach. Coach has been a victim of several phenomenon. First of all, it has not been innovating in the same way. It has not been on top of fashion in the same way that it was. Second of all, it exploded its outlet presence. Too many critics of the brand, theyve said that that has be valued it for the higher end customers. There is a lot more competition in the markets now. Yet michael cores, kate spade, not only that, you have a lot of other companies, the Ralph Laurens of the world. Vince camus does of the world who are seen the handbag market. Theyre getting into it more aggressively. All of that has combined to be in big problem for coach. The question is, whether it will be able to turn around. It is trying to implement a new strategy. As you see even though the numbers were not as bad as had been estimated, the trajectory is not good. North american sales drop 22 . Nothing to write home or be excited about. I agree with julie. Im have to also add they were the only player. Today of course the business was great. Today, how coach at tried to fix that was lets put out a more expensive line. Their core customer may not be able to afford 300 more for that handbag. A walkway from their core customer. Everyone says they want to be a lifestyle brand. It is a little bit of everything to everybody. If your business is basically handbags and it is suffering, the focus should be on tried to fix that business before you have all of the shows around the world for clothing. My suggestion would be, focus on what you do well. In the meantime, others have filled that hole. Michael kors, kate spade. Is it too late for coach . You go back in retail history and there will Everyone Wants to follow the leader. What you cannot lose sight of is your core brand and how do you if all you keep sight of your core customer . Even when competition comes long, you have to be nimble. You have to say what is wrong and adjusted. It is an evolution not a revolution. Smart retailers do not wait until 25 comes. Who is mcdonaldss core consumer . Who is coach coachs ideal woman . I do not work for them but i would say their core customer is probably 25 to 35 who is aspirational and they looked at coach as being the Louis Vuitton of the masses. It felt good when you carried around coach handbag. Today, im not sure if that is who they had alienated or lost in the kept the more mature woman as their customer. It is not as cool anymore. Ive tried to look at other brands that have successfully turned around. Coach turned around in the late 1990s. Lou flag furred lou frank for runin ahead designer. They got it in the hands of cool people. Sex in the city was one of the things that make coach. That made coach. Ironically, the guy who is now at coach was at mulberry at one time and helped it to do well. Msl was the designer the kicked it up to the next level. Of course, there is j. Crew. We have seen examples of this. It has not been easy to do. It has not always been sustained. Even if they have had the comeback, they do not stay on top. Speaking about cool, did you know that 1 5 of handbags now sold today are sold to men . The merce is now the big trend. Coach sells a murse. They are not all a womans purse for men. A lot of the time, they are more professional. A brand that had gone away and come back with their handbag. So happy that you said that. The interesting thing is, i would never go to them to get my murse. A terrible word. It has become a part of a guys wardrobe today. They always show the bags. They talk about the bags today. It is a natural, every day, what my going to use . It is what it is. It is the elevation of americas taste. Even men are conscious of what they are carrying anyone something nicer looking. Always been jealous because women can throw everything in their bag and men have to stick to their pockets. I have always been jealous the other way. [laughter] you could just walk around free. Thank you guys. Steve newman and julie hyman. We are about 10 minutes into the trading day. Scarlet fu has more. Crews operators, Royal Canadian royal caribbean. Worst day in 2. 5 years. Carnival is falling in sympathy. It is at a onemonth low. We should mention, Harley Davidson up by 1. 7 after profits after revenue missed. Greek banks are making a recovery. Yesterday, banks lost 11 billion of their market value. The greek government, in damage control mode saying that comments made by the new cabinet was due to inexperience. Lets leave you with some energy names. Conoco phillips, cutting its Spending Outlook for this year. First quarterly loss since 2008. We should mention bolero bolero, valero. Profits from sales and gas have tripled because of the drop in oil. Will be back in two minutes. We will be back in two minutes. If youre always wanted to invest in a new york city property, nows your chance. For 5,000, anyone can own a piece almost anyone can own a piece of three World Trade Center. It is being offered through the company fund rise which sells worldclass properties to accredited investors. His new way to own property has received backlash, especially among big banks. Joining us to discuss this is dan miller, cofounder and president of fund rise. This peak my interest because this is an iconic new york city skyscraper that is being built. There is been so much controversy around the World Trade Center. Why help fund it this way . We wanted to give people the chance to invest in the highest quality assets in the world. Deals like this are traditionally limited to people with 100 million of network net worth. What does it entail . Tell me how the process works. I cannot comments pick civic lee on the transaction specifically on the transaction. People do not think it would be the highest quality real estate deals in the world. We want everyone to be able to invest in the World Trade Center. Go back and tell me about some of the other properties you done this with. We find an operator. We put it up on the site and we let anybody invest. What we have used is new laws to make it possible for anyone to invest in these deals. Previously, the banks only allowed Institutional Investors in a few people to do this. We have allowed technology to distribute the investment. Are you screening these investors . Who is going to be allowed to buy into three World Trade Center . We underwrite the deal, we fund our own Balance Sheet. It is limited to accredited investors for this deal. This deal is abetted this deal is available for 5,000. What are the assets that these ons are being backed by . Senior secured debt instruments on three World Trade Center. It is a 1 billion debt instrument. 40 loan for the cost of the project. Where do they stand . What if something goes awry . Another property goes under. Where do these bondholders stand . We stand behind the investors. We have the rights to step in and deal with the transaction. There are there are always at least we see as our duty to protect investors and make sure they are treated well in the deals. Dan miller, fund rise cofounder and president. Mcdonalds, a surprise change. It is pushing shares higher this morning. Up over 3 . What the new ceo meets the due to turn around the business. Back to our big story. Out with the old and in with the new at mcdonalds. Don thompson is out. His successor, Steve Easterbrook , will be tasked with engineering this turnaround which he did help do in the u. K. Joining us is john sculley the ceo who served as the president of pepsico. He sits on the board of the Fast Casual Restaurant Franchise Company in florida. Bring up the stock chart of mcdonalds compared to schiphol lay. Chipotle. One chart sums up the problem of the last several years. Other Companies Like chipotle eight the mcdonalds star. You are right. It will be a case history of a company that did not see that consumers were changing in terms of their preferences. Heres what is ironic, a fast casual, which is the growth driver of so much of food service today, said mcdonalds was largest shareholder of chipotle into the six. Sold or interests because they wanted to focus on mcdonalds. Chipotle is now a 22 billion company. It is cutting into the growth of mcdonalds. They missed the pit it. Not dissimilar from what happened to kodak when kodak on film processing and consumer printing as the world was moving into digital photography and everybody wanted to take photos on their digital phones on their mobile phones. The irony goes even further. This has all happened as americas love affair with the burger has only grown. Look at shake shack. They will be pricing their ipo later tonight. They are raising more than what we had expected because americans love eating burgers. It seems like they do not want to eat the burger at the donalds. Theres something going on there. You are right. What it is about something we learned years ago at pepsi. You want to market the experience, not just the product. The experience means, you walk into a mcdonalds and it is not a great food experience it looks at a time warp to the 1970s. You look at the menu, it takes forever for people to get through the queue. Were seeing that not only shake shack, but five guys, several other companies are going into the highend experience burger market. People like chipotle are going to the healthy casual market. It is a harder quickly, what does easterbrook need to do . First of all, he looks like a confident executive. He is respected i the company. He has operating experience out of the u. K. This is much bigger than brand positioning. Have to change the menu, change what stores are like in the instore experience. This is a heavy lifting job. A new ceo has more latitude to make restructuring changes than a ceo who is been there for several years. Thanksgiving so much. John sculley, former apple ceo. That does it for today on in the loop. As the fed remains patient, we will get inside the Central Banks latest assessment. President jim bollard, tomorrow and not 00 a. M. At 9 00 a. M. Live from bloomberg headquarters in new york. This is Market Makers. Alibaba gets battered. Investors are punishing the commish giant after revenues fall short. Jack mine is spending more money to attract shoppers. Why the rest of the world loves america. Our economy is the least we will talk to a food evangelist who wants to make sure what you eat saves you. Good morning everybody. Welcome to Market Makers yuriko