Well speak to the candidate or Prime Minister this hour. Mark were heading for our first weekly loss. Global macro movement, equities are lower for the fifth consecutive day, and they havent done since the middle of september. Currencies, bonds, credit fault, its very much a focus on earnings thats moving investors today. Look at this decline. Since rtis, biggest fall 2002 because of pressures on price in the u. S. , which is its biggest market. It also trimmed its targets for this year for the second time. This reflects significantly more challenging environment in the u. S. , as pharmacy benefits managers in negotiating the aggressive discount on new and expensive diabetes treatments. Novo in recent months appointed a new chief executive, cut about 1,000 jobs to trim costs. Shares getting absolutely hammered today, dragging down the healthcare sector. A. B. Inbev down by 3. 75 . Earlier they were 6 lower. Biggest fall since january 2013. It reported a surprise drop in Third Quarter profit. It cut its profit, its revenue forecast, excuse me, on a slump in brazil. The results were completed, the acquisition of s. A. B. Miller. Brazil, by the way, is a. B. Inbevs second biggest market. It wrestles with the consumerled slump there. Inflation is rising in brazil. A. B. Inbev also announced a drop in s. A. B. Miller beer volume because of weakness in africa. Shares down by 3. 9 today. And stinking with the earnings theme, sanofi today, shares jumping earlier as much as 7 , the most since 2009. It raised its earnings forecast after soaring sales for its m. S. Pill, multiple sclerosis pill, helped offset the increase in price pressure that its diabetes business is facing in the united states. The chief executive is honing its portfolio of businesses to count on new therapying, such as the m. S. Pill to help replace revenue lost from its bestselling insulin, which lost patent protection last ear. Julie, what have you got . Julie all three major averages now in the green, ending weeks on an up note, because its not been a very strong week. If you take a look at the s p 500, this week it has been mostly down. Still off by. 10 , so the down has not been that sharp, but this is the only session of the week where at least at the moment worry looking at some gains. And even in todays session, theres quite a bit of push and pull on the down side, as we spoke about. Its amazon, some of the most pressure on the s p 500, with Third Quarter earnings missing estimates in that Fourth Quarter forecast, also likely to be disappointing. And chevron contributing the most to gain on an individual basis. Chevron, the big oil company, coming out with its first profit since 2015, as weve seen a rebound in oil prices. And elsewhere, were seeing a bit of push and pull as well. It is a down draft decidedly among the u. S. Drug distributors after mckesson said it was forced to respond to aggressive pricing competition, and as a result, cut its annual profit forecast. This was really surprising to analysts and investors, and you can see that the price was reflected in the price, down 23 . Its competitors are down as well. Mckesson the first drug distributors to report earnings, so theres concern this may affect others as well. Were also looking at 9 retailers, apparel manufacturers today. Columbia sports wear cutting earnings per share and Sales Forecasts. Those shares down 2 . Deckers, the maker of uggs, cutting the top end of its forecast. However, it does look like there were price increases in the quarter, and it said there were delayed ugg shipments in europe last quarter, so those sales pulled forward. Hanes brands on the rise. That companys Fourth QuarterSales Forecast is above estimates. Theres a push and pull in the interat the same time and leisure world. More people were going on cruises than staying home and subscribing to World Wrestling. Third quarter estimates at World Wrestling missing estimates. Royal caribbean better than forecast, and 2017 itineraries are booked ahead of last year in terms of rate and volume. So a lot of earnings to sift through. Wrestling cruise, vonnie. Vonnie you could watch wrestling on the cruise. Maybe thats the best place to watch wrestling. Lets check in on news. We get more from london. Eric thank you, vonnie. Hillary clinton enters the final days of the president ial campaign with a huge cash advantage. According to government filings, Democratic Candidates has 153 million as of october 19. Donald trump has 68 million on hand. Trump has repeatedly pledged he would spend 100 million or more of his own fortune on the election. So far hes put in more than half of that. In iraq, Islamic State militants are set to be using tens of thousands of civilians as human shields. Thats according to the united nations. The u. N. Says its taking place in and around the city of mosul, which is under siege by iraqi and u. S. Led polish forces. It says civilian hostages to make sure certain areas are not attacked. A judge in Northern Ireland has rejected two challenges to brexit. The judge said it would be premature to interfere with the Brexit Process at this time. He rejected challenges related to a vote by lawmakers on article 50, and the good friday peace accord in ireland. Three senior judges in london are looking at a similar challenge related to the article 50 vote. Both cases will probably be bundled into a single appeal that goes to the u. K. Supreme court later this year. An International Agreement will create the Worlds Largest marineprotected area in the ocean next to antarctica. 24 countries and the European Union agreed on the deal t. Covers the area in the rough sea about twice the size of texas. Commercial fishing will be anned. More news 24 hours a day, powered by more than 2600 journalists and analyst in more than 120 countries. Im eric johnson, and this is bloomberg. Mark lets turn to Economic News. Todays reading of u. S. G. D. P. Showing the economy accelerated in the Third Quarter, growing at an annual raised rate of. 9 . Bond markets joining us now, asset manager. James, great to see you. Love this chart. Bloomberg barclays global index showing that essentially bonds are on track for their worst month since 2013. Whats driving this selloff . James its quite a lot going on, to be honest. I certainly think theres a pretty major reassessment of the future of moan tar policy, and the extent to which thats going to go on giving with respect to bonds. So q. E. Rates lower forever is maybe becoming q. E. With an end date and rates that will probably stay flow most places. But maybe dont go any lower. Mark do investors get tempted by higher yields . Do they jump back in . James i think thats been happening, actually. If you speak to the street, you see the slowness going through, and theres been plenty of attempts to bite dip, because weve come from quite a long period where were used to dips being aggressive, and therefore, not really being so afraid of a bear market and bonds. That being said, for 30 years, bonds have been rallying at the back of every investors mind. Theres always been the notion that this will have to end at some point. It feels like we could nab period where we see high yields for longer than weve seen. Vonnie how much of it is due to the idea that Central Banks might be paring back, if not immediately, in the very short term . James yeah, exactly. I think the government can step in and fill the void for those economies that still needs it, but really, we dont have a huge amount of evidence of that just yet. Theres been small attempts in canada, in korea, to some but in china, mexico, were expecting something more in the u. K. , certainly less austerity. But certainly, in the ax of a direct handover, it does feel that the bank of japan, the e. C. B. Now have people within those committees that dont think that further into the rabbit hole is the right to go at this moment in time. Markets have to just pull forward the end game. And if we think theres no more stimulus, that possibly means we need to start pricing the end of that policy completely. Vonnie with yield curvesening, it looks like theyre managing their yield curve better as they have wanted to. Would you agree with that statement necessarily . James its difficult to say whether they want to. The b. O. J. Has certainly been explicit about policy shifting from quantitative easing, i. E. , how much money can we get into the system, to yield curve control, i. E. , we want to try to target a gin yield or a given level of curve. That suggests they definitely do want it. The e. C. B. Has been a lot less clear, and that probably reflects the fact that there is quite a big divergence in opinions on that committee. Youve got a lot of people on the committee with very different bends with respect to the whole spectrum. I think its fair to say, im not an investor, but i think its fair to say we have seen, over the last few years, the financial industry is starting to sag because the flatness of yield curves, and therefore, the lack of profitability and maturity transformation. Mark are we seeing the beginning of the end of inflationary pressures . Its showing up in all sorts of charts. James its showing up in inflation. Theres been a lot of inflation deniers, even in the u. S. , but c. P. O. Has been above 2 for months now. But what were actually seeing is a combination of all those global head winds, the effect dying down. P. P. I. In china has gone public. That was a negative. 9 , and weve started to impose this less volatile in terms of big moves. And obviously weve seen prices rise considerably and become more stable. So a lot of the transient influences were holding down inflation. Theyre starting to disappear, and in countries like the u. K. And u. S. , where weve got full employment for want of a better description, you would expect to see it. Mark it will probably spill over, should Central Banks be even should they be even targeting inflation . James to be honest, i dont think they should. I think the inflation is targeting an experiment, has proven to actually be a little less successful than maybe we hoped in the mid 1990s. We found, for example, the relationship, which is really at the heart of what Central Banks are trying to do, maybe that doesnt work in a global context. If youve got lowskilled workers that you can source globally, the fact that unemployment is low in the u. K. , for example, probably doesnt lead to wage pressure, it leads to you being able to fill the higher skilled workers from the global labor pool, and that really disconnects the relationships between unemployment and inflation. Actually, thats difficult to measure, measure compared to hat the theory says inflation. Vonnie youre saying pricing and higher yields, but not necessarily healthier growth. Because were not going to get price pressures from wages, and its only going to come from things like healthcare in the u. S. , oil going higher, some of these effects. Then, you know, what does that say about future growth of our economy . Degree think to some thats correct. I dont think yield cushes are higher because wee got pricing necessarily at a very different growth outlook. Certainly not in the major developed degree economies. But by the same token, the Central Banks have to spend the last seven years trying to create inflation. I think it would be a little hasty to start being terrified by the negative impact of higher prices, certainly on consumer demand, just because we see prices rising at 2 instead of 1. 5 . So i think we need to consider the bigger picture. And that is to say that, yes, there are some negative impacts of higher prices, but an economy thats running at full employment, there should still be some relationship between the availability of labor to fill vacancies and the wages that you have to pay in order to do so, and weve seen shortages reported in the u. K. And the u. S. Vonnie a couple of forecasts, if you would. 85, k. Deal, the u. S. At 60 basis points between them. People are looking for the next level in the u. S. What are you looking for at years end in both countries . James one, you can come up with all these technical levels, and i tend to be a bit lazy and look at big round numbers as well. Psychologically i do. Ill stick with something in that vicinity, but they certainly look doable. The market trades, you know, in the signal that the market is telling me, it wants to trade higher yields at the moment and its going to be quite difficult. And i think theyre probably underperforming in that environment. I think the move that we saw immediately after brexit, the response from the central bank, the data that weve seen, the likelihood of further easing mean that we can probably see high yields again in the u. K. , so, you know, 140, 150 is probably reasonable. Mark james, great to seeing you, investor market at Aberdeen Asset management. Vonnie thames, athey. Coming up, well hear about the pledge to continue aggressive cost cutting efforts at u. B. S. This is bloomberg. Vonnie from new york, im vonnie quinn, along with mark barton in london, counting down to the european close. Mark 12 minutes away. U. B. S. Pledging to continue its aggressive cost cutting efforts, this despite a 68 drop in its Wealth Management profit before tax in the Third Quarter. The chief executive says the strategy has been a fairly demanding task. It will continue in part in a negative rate environment. He also pointed to good inflows in the Third Quarter, in an interview with our manus cranny. If you look at our quarteronquarter, it was a very strong result. We have been able to do it on our capital position, on the leverage side. We got a 345, very close to our to t of 3. 5 that we need achieve in 2020. Good money, Good Progress on costs on our target. So im very pleased. The diversification of our business has proven to be a winning team. Winning and challenging environment. Can i ask about you the comments that you make, that you highlight negative rates are considerable head wind, unlikely to change for the foreseeable future . Youre obviously making progress on costs. Thats what you just said to me. Im curious, is this going to mean perhaps having to review front office in the Wealth Management business . Does it change your perspective at all in terms of the future outlook for the bank . Actually on the cost side, i think we have a very comprehensive and quite ambitious Cost Reduction target with a 2. 1 net cost, which, by the way, doesnt include any reduction of costs or benefits from other businesses, or any reduction of costs used to variable compensation that is driven by financial performance. So its a fairly demanding task in front of us. I think our Wealth Management businesses, both in the u. S. And also internationally, have been going through a comprehensive Cost Reduction program. You will see the benefits you start to see the benefits in Wealth Management as we speak. You look for the effect next year around bottom line benefits for Wealth Management. I think that we have to continue to execute on the ongoing plan. Mark as for the lingering brexit issue, just how difficult is it to devise longterm strategies when formal negotiations between the u. K. And the e. U. Have yet to occur . He says this is especially true with regards to the banks u. K. Staff and whether to relocate them in the near future. It seems possible to make decisions today about moving people or not moving people considering the funds we have in front of us. I think it would be a very risky decision to take such sets. So we are going to wait and see. We to hopefully, as time goes by, were going to get some clarity about, if not, the final outcome for sure, at least on the time necessary that will be allowed to implement whatever the final solution is going to be. It may well be that we are not moving anybody or may well be that we move people, but in essence of certainty, we want to make a decision. But actually, the real uncertainty, we talk about future, the future in terms of cost or opportunities, but the true cost of brexit is already materializing now. It was materializing in the Third Quarter. Pension fund the that we had, also the industry had in the u. K. , its the third major sign of the cost. Pension that we had, mark sergio ermotti. Vonnie . Vonnie still ahead shares plunging rtis are after they slash profit forecast. Well have the latest on the challenges the company is facing. This is bloomberg. Is mark this is the european close on bloomberg markets. Vonnie, six minutes until the end of the friday session. Vonnie absolutely. Live from new york, another few hours here in the u. S. Im vonnie quinn. Now a look at some of the biggest business stories in the news right now. Third quarter profits soared 21 at mastercard. That beat estimates. The second largest u. S. Payment system says consumer card spending increased. Master card has been signing partnerships with google and samsung, also been developing its own digital wallet. Shares of novo nordisk plunged by the most in 14 years. The worlds biggest maker of of insulin slashed its target growth by half. Novo nordisk c. E. O. Spoke with bloomberg tv. What we have been telling our investors is we expect approximately negative impact on our u. S. Sales next year from lower pricing, so you can say we are only getting into the storm now. We cant in any way that the worst is behind us. Vonnie pharmacy benefit managers in the u. S. Have been negotiating aggressively for a discount. And that is your business flash for this hour, mark. Mark breaking news. Can chinas 43 billion takeover of switzerland face a lengthy probe by e. U. Regulators . There are concerns the deal may raise prices or reduce choice for protection products sold to farmers. The European Commission is setting a march 15 deadline to review the transaction and hopes to kill any hopes of a quick approval. They delayed plans to complete the deal by the end of 2016. Breaking news, have a look at where europe an equities are faying. We are four minutes away from the end of the friday session, still falling for the fifth consecutive day, worst streak since mid september. This is bloomberg. Live from london and new york, i am mark barton with the vonnie quinn. End of aome to an trading week, five consecutive days of decline. It has been a week dominated by earnings, principally in recent days. Thirdquarter profits beat estimates, the company pledging to continue cost cuts. The security business was heard by a drop in earnings. By bnp perry paribas. Finishing off with the government owed lender. It felt a loss in the Third Quarter. It took a big charge for restructuring and litigation. Shares are up, ubs shares are down. Love this chart, in light of the stronger than expected gdp data we saw yesterday. This shows expectations of rate hike. The banka chart that of england will raise rates in the second half of next year. s probability of a rate cut, the blue line is the probability of a rate hike. Functionok at our work and theons inflation forecast is down to roughly 5 . 70 . Mists were forecasting some have changed that. I finished with what would be the chart of the week, the continued decline in fixed income assets. This is the aggregate total return index. The decline will be the biggest as we continue through monday. The speculation is Central Banks may be moving closer to scaling back measures. The speculation is Central Banks mayive got a better one, so get ready. Now i want to see this better one. I am looking at yields, who isnt obsessed with them. 185 in the 10 year. The end of the year. The two cent spread is the widest note in a long time, and futures have to keep it i the 49. 49. Lets take a look at voter averages. The s p 500 up 3 10 of a percent. Really it would be a lot higher if it wasnt from a drag. And the nasdaq is up more than 1 10 of a percent. Happening, what is we moved to abigail doolittle. Abigail two blackline ipos. Financial and Software Company having a successful trading day so far. We are looking at a weekly decline as investors consider earnings. Are one of the big winners. Alphabit put up a nice Third Quarter beat. 5 lead of consensus estimates. Point the core advertising business, mobile and video, Bloomberg Intelligence analysts say that he is fan that she is fascinated by the fact they have strengthlike all the could continue. We are looking at a five year charge of alphabet, a beautiful. Rend intact this is when it moves up to the 200 day moving average. We see big upsides. It appears a bullish future could be ahead. Biotech, we have the biotech index down 2 on the day. And weighing on the biotech they missed consensus by 7 . Yesterday it was higher on the year, now down on the year. Erik johnson has more from our and london newsroom. From our london newsroom. The caretaker loss leading confidence yesterday. That she give him a simple majority. He has been acting Prime Minister for 10 months. In belgium regional parliaments are expected to lift the last roadblocks in the trade deal between the European Union and canada. The rest will bring it back. They wouldnt go ahead until they received commitment on Public Services and arbitration. The households are feeling the squeeze by a vote by the brexit vote. Consumer confidence is falling. The falling pound is a factor. Stirling is down 18 against the dollar. Government investigators are looking into middlemen foreignexchange market. They want to know whether gave confidential information to others. Among the firms no one involved is commenting. And there is a report that Vice President joe biden is on the top of the list as secretary of state if Hillary Clinton is elected president. They are figuring out how to approach biden. Almostesidential talks acted against clinton in the primaries. Since then he has campaigned for her across the country. News 24 hours per day, more than 120 countries. This is bloomberg. Mark the u. K. Showed the economy grew more than 3 in the Third Quarter. Itositive sign the fx market is more swayed by the upcoming brexit actions. A very happy friday to you. Index, bloombergs pound index. Why didnt sterling rise on the back of yesterday stronger than forecast data . Guest we were talking about the pound having a risk of the first week. I think you are right to andlight political concerns the terms and what it means for the u. K. Economy as any sort of Economic News we have seen. I think that will continue to be the driving thing for investors. They dont know what the deal is going to look like. That plays in nicely to the meeting last week. A quarterly growth forecast. 2. 8 probability. Has that she deeply numbers guest it is the latest in a long line of data and inflation concerns that have taken the air out of the possibility of any chance of a cut next week. If you look at six months from now, a very flat curve. The middle of next year starts to price in the higher figures which are closely tied to the bank. Mark in the latter half of 2017, is much more likely we will get a height or cut . This was included in the short end of the u. K. Curve, there was a lot of crowded positioning playing for lower nate lower rate. I think that far out the curve it is difficult to say what is going to happen. The next move is more likely a cut than i hike. Beyond that i think there is a bit of confusion out there, a little bit of uncertainty. The trend is guest i think the 2 call on 10 year makes sense if the current trend continues. If you are to rewind one year ago today or to the end of last year, even those elevated deals are lower than what most people on wall street and london were calling. Much higher than the lowest we saw this year, but still lower than what everyone was expecting. Thinking emerging markets, i think im thinking other places. Guest it is tough to say how it is going to play out. There is no recent to think he became a lot more disorderly. I think there is enough nurses investors that something could lead us to the state of calm we have now. Busy week for Central Banks. Not much is expected to happen. Is inching upwards, isnt it . The yen is about 5 weaker than it was when it was trading below 100 versus the dollar. Slightly better stock prices in japan, in addition to the yield curve. Probably see them next. Jones, bloomberg first words. With theere speaking Prime Minister for the pirate party. This is bloomberg. Tomorrow i slant will hold its election. The potter it Party Running neck and neck with the independent party according to the latest university of iceland poll. Party Iceland Pirate Party candidate for Prime Minister. How with a party govern iceland . We want to make a lot of changes to the way the system works. The institution has been agreed upon by the previous government showed no interest. To tackle a lot of big corruption issues that have been taking the country. Especially around the way the system works. A lot of agencies have been underfunded and havent been able to do their jobs properly. Need to tackle problems in the financial market. Will you be resuming the responsibilities of the Prime Minister if the pirate party gets to the position where it is and theynors party are future to form a government and coalition . Guest it is quite unlikely. We have not named anyone specifically to be Prime Minister. If we do end up with the permission to form a government we will figure out the best person for the role and the best person for each role. Iceland is preparing to remove capital control. Will a new coalition with a pirate party in there, will they diverge from that or stick to the current funds for limiting capital controls is going quite well and theres no reason to move away. It has been plagued by volatility. There are options for moving away from the targeting of the inflation rates to maybe a mechanism with other currency, perhaps the euro. Mean for u. S. Hat funds that have been locked in because of capital control . Will the funds get access to their property if and when there is a pirate party . There is already a fairly compressed plan in place. It gives external creditors access to funds in due course. The main thing is we need to make sure there is no facility with the countrys economy as we release these controls. It wont be happening any faster at any slower but moving forward at a reasonable pace. Ruling partys right now, they have seen a turnaround in public finances. And an economic loon. The finance minister says you have the lowest unemployment in and they expect growth of 5 next year. Why arent people happy . Why are the people of iceland turning to a populist party . Guest i wouldnt call us populist in the traditional sense. In particular because we have a strong corruption and corruption has been a problem. Three were involved in the panama papers. I think the icelandic population is tired of having to constantly accept this level of instability in this system. Even though there is a certain financial boom, a lot of that has to do with the currency was quite low after the crash. We want longterm benefits we are going to have to do better than ride the wave of happy tourists visiting. You have an unusual mix of policy. You are going to aim for this currency, you want a universal basic income. Citizenship. Andic the decriminalization of drugs and a fair redistribution of dividends. How many of these policies are powertic if and when the if and when the party comes to power . I think some are realistic. We try to investigate it is becoming more and more urgent that we consider comprehensive as technological changes are happening. It may seem a little bit. Onfusing we dont fit well into the system. We are to liberalize politics and a great way. Beingliberties are encroached around here in the moment. We need to think of things in terms of whole solutions and making up quick fixes for way too long. Thank you for joining us. Partyeland pirate captain. It is time for our battle of the charts where we give you all the information you need to know and you can look it up on your bloomberg chart library. We are going to kick it off with our stoxx reporter. A big question is whether tech stocks are overvalued. The nasdaq,r primary made up of tech stocks a couple of days ago was at its highest against the s p 500. Look when we had the worst smp start in history. The nasdaq actually declined more than the smp because it was partially if not mostly responsible for the huge decline. You do see a ton of influence. It is something investors keep an eye on. Our people worried . They are really not. The red dotted line is the 100. Ge for the nasdaq elevated valuations, we are seeing an average level of worry. You can see the chart on the terminal. Rally . The ftse the top percentage trading above their 20 day moving average. The bottom panel is percentage of members with a fourweek tie. The red bar is percentage of companies with a new fourweek low. Increasing essentially. Investors no longer focusing on the weak currency. I love that chart. We dont give enough time in the program. Welcome to bloomberg markets. From bloomberg World Headquarters in midmanhattan we are covering stories from seattle to washington dc. U. S. Economic growth rebound in the thirdquarter big time. We look ahead to the fed decision. Amazon fails to deliver after earnings and holiday revenue forecast missed evan missed estimates. Ceo of imhe what is next for the ultra luxury timepieces. Trading day. The we have an upper bias to the end of the week. Sort of a tight range