Lets not reregulate the banks and great barriers to the free flow of capital. Consumers are spending and we feel good about the u. S. Weve see plenty of opportunity organically to consolidate. Its all straight ahead on bloomberg best. Hello and welcome. This is bloomberg best, your weekly review of the most important Business News and analysis from around the world. Several investment banks released earnings this week and with the sector coming off a string of lackluster quarters, investors watched anxiously as bank of america reported on monday. Bank of america in the spotlight reporting earnings that beat estimates. Profit rising over 7 . Revenue from their fixed income trading business was also better than expected, up by 39 year on year. You saw them post betterthanexpected bond trading revenue, similar to what you saw at jpm and citi, i think it is a good news story given that they are not as big , in the macro products which were such a hit in the corner, this was may be a surprise to the upside given the results. Is it turned around for banks . We are seeing a pattern. We thought they were out of the business and they seem to be surging back. I think we will need to get another quarter of data. We have had a couple head fakes in the past couple years. It has been good for one or two months. Certainly, this is more than that. This is the best it has been in a while, but i think investors will want to see a couple quarters of sustainability on this front. Alix Goldman Sachs reporting a 47 rise in profit from bond trading. Net income rose to 2. 9 billion. 49 he bank supported a increase from their fixed trading unit. Put into context how important fixed income is to goldman. It has been known for a long time as a bond trading shop. They have a lot of money they take from equities as well. It is something where they really need that kind of revenue, and you really cannot discount anything where they have a bad quarter for bond trading and a bad quarter overall. This quarter, we saw an amazing rise in fixedincome trading of 49 , which is huge for them. Better than analysts expected better than competitors. , what you saw a glimpse of this quarter was a little more client activity, people positioning around their views on rates, credit, and you had better quarter on mortgage, better quarter on credit, better quarter on rates. That could go a long way for goldman. Alix chinas economy remains stable in the Third Quarter, putting the fullyear gdp target well within reach and paving the way for policies which could reign in excess credit. That 6. 7 matching up over the First Quarter and the second quarter, in line with the forecast. Bank in the middle of the target range. The number gives policymakers a bit of wiggle room, space to tackle those debt problems and reign in some of the credit that has been pumped into the system over the last few months from the end of last year and back to shore up growth. Chinas policymakers have a little bit of time in which they can start making some of the painful changes which are needed to prop up stability in the Financial Sector and to rebalance the economy away from the state and enterprises and towards a larger role for the private sector. The question headed into the Fourth Quarter is how much progress they will be able to make on those needed painful reforms. Morgan stanley reporting thirdquarter earnings that beat estimates, reporting a 57 rise in profit as fixed income trading revenue almost tripled. Morgan stanley as a look across the board, great things all around. Except for maybe expenses. Fixed trading, equities trading, everything to do with revenue. All the things looking really good. Investment banking, too, which is a really important business as well as Wealth Management which is a good beat overall, but if you delve into numbers a little bit further, i was looking earlier in the bank is not at the target it wants to be in return on equity. 9 to 11 as the target, and they came in at 8. 7 . A little bit better than last quarter but still something they need to do better on. As we await this rate decision, the immediate estimate is for rates to remain unchanged and they come through right now unchanged. The deposit rate stays at 40. A marginal lending state at 0. 25 . No big surprise. The summary is as follows no change on interest rates. No change to qe. Scheduled to go to march 2017 or in the word of president draghi, beyond. They did not discuss the qe horizon at all. They did not discuss tapering of quantitative easing and the market wondering what they actually did discuss. I think they discuss where we are, progress, a couple of interesting points growth, you still see downside risk. I think thats what they discussed. And inflation, as a reminder to put the tapering discussion or qe discussion into context. What did they say . Inflation picking up because of the content from energy prices. Theres no convincing evidence that underlying inflation is on an upswing. That is the bottom line. Go back to the mission. My main take away is nothing at this stage will wait for the forecast, for the projections. December is when we are going to have to discuss. The eu summit is wrapping in brussels, divisions clearly taking shape among eu leaders. Canadian trade minister said it looked like the trade agreement with the eu has collapsed, calling it impossible. Lets start with canada. What is going on . This is a small vision of belgium. Less than 1 of the eu population, 3. 5 million people, smaller event new jersey, and that is blocking the canadian trade deal with the eu. A few minutes ago, we learned the canadian trade minister has decided to walk out, calling the trade deal impossible, saying that it is clear that the eu at the moment is not capable of negotiating agreement with a country that actually has European Values such as canada. What about brexit and theresa may . Did she sound optimistic that a deal could get done . Obviously, the sale of the canadian trade deal at the moment is a bit of a warning for theresa may because that puts a question mark on what kind of trade deal she will be able to negotiate. I am optimistic that we can achieve a trade deal. I think a deal that is right for the u. K. Could also be right for the European Union. Alix later in the show, we will run through more of the weeks earnings reports for a number of key Tech Companies in the spotlight. We also sat down this week with two of the worlds most powerful ceos. Bank of americas Brian Moynihan and tech titan michael dell. Straight ahead, we have more top business headlines, including a bloomberg scoop. Apple is putting the brakes on its project to develop a self driving car. This is bloomberg. Alix this is bloomberg best. Im alix steel. Lets continue our global tour of the weeks top business stories. In italy, banks have been calling for consolidation and on monday, a longawaited merger finally went through. Shareholders and italian lenders have backed the merger. The deal marks the nations biggest in almost a decade and lands a big win for the prime minister, matteo renzi. It was the first merger in almost a decade. If the deal had not gone through, it would not have been a vote of confidence in italys Banking Industry, which is already suffering under the weight of more than 300 billion euros of bad loans. I think it was the bare minimum needed to restore some confidence in this industry right now. How frail are italys banks . And if we do not have resolution for the other banks, do you think the share price will suffer as a result of investors also discounting you guys . Yes, i think our approval last saturday was very important, not only for our banks, but for our shareholders, to show a signal to Foreign Investors that it is possible to have consolidation and growth in italy, also without having resolution, soldiers opened the so let us open the transaction will go ahead with a bit more confidence, and if this can be sold in the next few months, im sure investors will come back to italy and try to invest in a sector which now has really a tangible book value which is very, very low. Russias biggest listed refinery expanding into india. They are buying sro oil for 13 billion. 13 billion is the contraction that russias largest listed oil producer along with a consortium of investors is investing in. It is a big one for them. They are exiting the company, but more importantly they are deleveraging their books. India is, of course, emerging as an Important Oil producer and consumer in this region. It is expected to surpass japan as the Third Largest oil producer in the region. India fromrtant for a book standpoint. Alix now to a bloomberg exclusive. Apple is dramatically scaling back its ambitions to take on detroit. The apple ceo gave the team of engineers permission to build a car, going straight after detroit and tesla and other electric carmakers. After some struggles internally, there has been a change of direction. Apple has put on hold plans to build a car and is focusing on an underlying self driving system that it could potentially market to other producers. Where do you think they would put this technology . Could they work with ford, for example . It is possible. According to two people familiar with the matter, at the end of next year around fall 2017, apple is going to decide what to do, evaluate the progress of the self driving platform, and i think over the next few years, we will see which carmakers apple is choosing to partner with, if any. U. K. Inflation came in for the month of september delivering an upside surprise, surging to the highest level in almost two years and fueled by a , plunging pound. Does it change the calculus for the bank of england . I dont think it should. You have seen two chunks here. You have seen feel prices falling. This is just a base effect from lower oil costs, but you have also seen a pickup in clothing closing costs. That is a temporary timing effect. We have had some weird weather, so theres not an enormous amount of news for the bank of england. Inflation set to rise and the Sterling Exchange rate is likely to push up on that for months to come. Saudi arabia is going on a sales spree. The kingdom planning to raise 17. 5 billion as it tries to shore up its battered finances. This is according to people with knowledge of the offering. Saudi arabia receiving bids for as much as 67 billion, beating 16. 5s 16. 5 billion sale in april. I think important to know that during the roadshow phase of this sale, saudi arabia went to the u. S. And london. It did not actually go to asia. Not because it doesnt want asian mark asian money, but because that is how confident the kingdom was when securing a sizable backstop for this issue in the asian market. Here is what a saudi arabia, qatar and abu dhabi had to play pay above the benchmarks. Abu dhabi only issue 10year, the saudi arabia for 30 years, 235 basis points over benchmark. This bond issuance is very much like an ipo because the economy itself is based on oil. This is a first step in a very aggressive step into diversifying outside of the oil space, and bonds themselves are really just sort of a feint for the ipo that the saudis will ultimately go to to increase their capitalization or recapitalization of their oil assets. We are getting yahoo earnings right now popping across the bloomberg here. Thirdquarter adjusted eps was . 20. We were looking for . 14. It looks like the eps number, the bottom line figure beating analyst estimates. This is all very interesting, yahoo earnings, but do not really matter that much. The only thing that matters is if yahoo still wants to pay for is if verizon still wants to pay for the companys web access. They recently came out with a bombshell that 500 million customers databases were hacked or a database was hacked with 500 million customers information. I think verizon still wants to buy, but they want to know what they are buying. The question is is this hacking a material adverse change to the company such that it would require them to walk away from the deal or give them the option to renegotiate the terms of the deal. Lawyers are hashing it out. Does the hacking incident provide verizon with a pretext to walk away . The real question when the lawyers get together, is this hacking issue and the disclosure of it a material adverse change to the business such that it would affect the value of the transaction . Elon musk is on the road to autonomy, at least he says he is. He announced last night he plans to equip all new tesla cars with the hardware needed for full self driving capacity, so he will put a lot of cameras in these cars, as i understand it. Thats right, going from one camera per car facing out to now eight of them. Including three facing forward and 360 degree view. He says basically every car is going to have a supercomputer on board able to make whatever it is 40 trillion decisions is second. He is adding all this cost, all this hardware and software and Development Expense into these cars that you cannot use. Most of us are not allowed to let our car do the driving for us in most of america or most of the world. How does he pay for that . Does he raise prices on the cars he is trying to cut prices on . Well see. When he says they might not need more capital this quarter, presumably he already knew that he was undertaking this and adding these expenses, so again, possibly a positive sign. Bloomberg news is reporting that Senior Executives at at t and time warner have in meeting have been meeting in recent weeks discussing various strategies including a possible merger. This is according to people familiar with the matter who declined to be named. How far along are we in these talks . Pretty early. No banks have been hired yet. Chalk this up to Senior Executives figuring out the art of the possible here. A full acquisition would be a very large deal, although for at t standards, certainly not something that would be seen as too large. They bought directv not too long ago and this is in the same general ballpark, but i think they are thinking through options, and one of them is a full on acquisition. What type of valuations are these assets getting . Six times ebitda, 10, 12 . Alix welcome back to bloomberg best. 3 billion u. S. Shaving industry has undergone plenty of disruption in the past few years. Gillette still dominates in retail sales, but online sales now account for about 10 of the market. Thats one reason unilever bought Dollar Shave Club for 1 billion a few months ago. Other Young Companies are growing fast as the landscape shifts. One of them is the subject of this week cost small to big. We felt like the big brand shaving had forgotten about the customer. We had this vision around really changing the experience of shaving for guys everywhere. We make our own product, razors, razor blades, shave gel, and we deliver them to people at amazing value. When we started harrys, the first thing we realized was we had to make amazing razor blades. How hard could it be . We could not have been more wrong, so we spent the next six months trying to figure out everything about razors, how they are made, where they are made and what the magic is in a great blade. Weve got a factory in germany that made some of the best blades in the world, and we launched in a partnership and right after we launched, we realized two things one is we had ideas to make them even better, and secondly, we were going to have to make even more. At that point, we put together a vision to buy the factory. We are now the only Truly Vertically Integrated Company in shaving. We raised over 100 million to buy this factory in germany. While it has been really complicated, we count our lucky stars every day that we get to be a company that takes feedback and drives it into making better products for them. When we were learning everything about shaving, we went and learned from barbers, so we launched a barbershop in new york. It is only two chairs, small, intimate, and we have amazing barbers. We believe we should innovate the way that our customers want. You get to know somebody really well when they are sitting in your barber chair for 30 minutes and you are talking to them. In shaving, theres one large company. It is gillette. They essentially control the entire market. We do not know if we are going to be the biggest shaving company in the market someday or not. We are only a threeyearold company. We are still a baby. We want to build a brand that is around for a long time. If that is a Standalone Public Company or private company, we do not know. What we are committed to doing is find a structure that helps us achieve our vision for the longterm. Alix still to come, companies around the world reporting earnings this week. We sort through the numbers and dig into what they mean for the market. Next, some of the weeks best interviews, featuring exclusive conversations with Brian Moynahan and michael dell. Your time horizon is very different. This is bloomberg. Lets talk about brexit. Are you hopeful that banks like yourself will have access to the eu market . The g20 recognized it needed to reregulate the Banking Industry globally, and it has done a lot of that, and it has been a heavy lift by everyone since the financial crisis, but the other important thing they said was lets not reregulate the banks and create barriers to the free flow of capital, if its the flow of capital from singapore to china or paris to london or vice versa. I think the European Union, the u. K. , and the rest of the Major Financial Centers will stay connected to this lets let capital flow freely and not put protectionist barriers. There will be some changes that we will have to adapt to, but the fundamental Global Financial market including the u. K. And the European Union i think will be preserved. Speaking of the u. K. Economy, we saw inflation double last month. What do you expect the bank of england to do in the coming months and into 2017 . Our credit card and debit card picks up about 50 to 60 of payment flows during the day. What we saw in september and august was actua