steps toward a truce. stocks rose on that news. president obama is in estonia where the u.s. will build up coalition to degrade and destroy the islamic state after they killed another american journalist. lvmh has agreed to give up its 23% stake in its rival. it will do struggle -- it will .istribute hermes president obama took the podium addressing concerns about russia and ukraine writing and the islamic states push in iraq. for more, we are joined by peter cook. there seems to be some progress in ukraine but a bit of confusion. >> at 4:00 this morning, we heard of a permanent cease-fire which was the statement from the president of ukraine. after that, we heard from the russians that maybe it's not a full cease-fire. now it seems like there is something in between. and ifoward a cease-fire this is true, this is good news. president obama said the same and press conference in estonia this morning. voice thear in his skepticism and the question about whether russia will deliver here. the timing of this comes as the nato member countries are meeting at their summit in wales area could this be an effort to undermine that summit or raise some doubts about where this is headed? this is what president obama had to say -- >> if, in fact, russia is financing, stop arming, training, in many cases joining with russian troops, activities in ukraine and is serious about applico settlement, the -- that is something we all hope for. i have said consistently our is a strong, productive cooperative russia. estonia ist to meeting with the leaders of three baltic states which is a symbolic show of unity with them the president is sending a message to russia that says we will defend the nato member countries. also talked about the messages he has been sending on fighting the islamic state. he got a lot of criticism last week about no strategy or no clear strategy, what did he say about that? that the u.s.irm government has authenticated the video of the death of the american journalist who was killed by isys militants. feels it's authentic. in terms of the strategy, he responded to the criticism and said we have a strategy. it may not involve the use of military force right now in terms of boots on the ground but there is a plan in place. >> our objective is clear -- that is to degrade and destroy isisl so is no longer a threat not just to iraq but the region and to the united states. in order for us to accomplish that, the first phase has been to make sure we got an iraqi government in place and we are blunting the momentum that isil was carrying out and the airstrikes and on that. >> he says the airstrikes have been effective but he is stopping short of making the commitment that republicans in congress and some democrats he needs to make to do at this growing threat of the islamic state. >> thank you so much. in new york city, samsung executives are unveiling their the products in the next hour. the latest strike in their ongoing battle with apple. cory johnson is at the event in downtown new york. galaxy notes is what we expect to see? >> maybe, we don't know. there are some expectations and reporting that they will release some sort of wearable device, the next phase of a watch-like device. it lets you control your phone. it could be a phone you where on the risk dick tracy-style. there may be other products as well as we will find out in about an hour. the context is in terms of what's happening in the industry. it's the context of an apple announcement next week of some sort of wearable device in addition to the new i on. that will be announced next week. front? about the watch samsung has been out with their own smart watches for over a year and they have not gained any traction. apple might be unveiling theiriwatch. is samsung doing anything on that front? the speculation is today and the announcement should happen in an hour and we will get details what happens. this is going to be a regular thing where i show up in new york and we are here in the west village and they rented an expensive space and invite the journalists to show up to look at the device. you cannot do that with consumers or convince them to spend their money on this stuff and that is the big question is if the next big thing will be a big inc. or a device that has been forgotten. we will see if this is any different. >> thanks so much. cory johnson, our " lumbered west" editor at large. the last few days and weeks of them rife with security breaches. bloomberg has brought to life at hack attack at banks like jpmorgan and celebrities inicloud saw photos really -- leaked online and home depot is investigating a breach of its customer data which underlies the increasing need for both corporations and people like us, individuals, to tighten up their own security practices. let me ring and patrick mcbride of isight partners who analyzes the global threat ecosystem and i want to bring in the olivia sterns because she has been taking a closer look at the apple case in particular and apple had come out with comments yesterday saying it was not their cloud services that was attacked. >> yes, they are finessing this. they say the icloud encryption was not reached. what happened was that the individuals, the celebrities, had their accounts attacked by very targeted individual attacks. i spoke to a lot of security experts and they say it's very likely that the celebrities collect deliberately on the link on aphishing e-mail. they individually clicked on something and gave over personal information. it's an important distinction when you think whether we should trust apple with personal information. >> is that supposed to make me feel any better? >> i don't know, it certainly a stark reminder that we are all part of the security fabric we are living in a highly connected world and we do our personal business online and our business certainly online. the weakestoften link in the security chain, individuals themselves so it is a reminder to do many things people of talked about like choose strong passwords and don't use them -- the same one. it's also a wake-up call to corporations explaining that they need to understand that the people are the weak link and they need to be trained as well. what more could they be doing? >> they are doing a lot already. as we heard with some of these breaches, organizations are spending tens and hundreds of millions of dollars working on their security controls. what they are dealing with is really arising tied in the threat landscape. they are dealing with hacker groups of all kinds of different motivations whether it is to embarrass an organization or cyber espionage or stealing cases,r in the latest cyber criminals who will get their hands on anything they can monetize whether that is bank accounts to move money or personal information they can use to buy credit cards. basically anything they can monetize. they just have to be more aware of what threats. we are in football season so a good football analogy may be appropriate. you have to start -- no team would go into any kind of game on the weekend without having scouted their opponent. that is really what we are starting to see the advance organizations under due to understand these avatar is -- adversaries better. >> they are so disparate. >> they need to organize their defense is about what they will see next week and next month and not just looking at last month. >> this is what bothers me -- and perhapsloud it's more of blame the victim then blame the company but on the home depot front, this is a very basichack. it's essentially what we saw happen at target or other retailers. >> there is a similarity. our password systems overall are antiquated. we are still using password technology from the 1980's. was in the bridge cloud was through user in venice -- user identification. card iset of a credit actual information on the card where in europe and the rest of the work -- the rest of the world, it is the pin and chip. there is a similarity. our systems are behind we should look at next-generation encryption. experts think that apple encryption is adequate. >> on the credit card front, i'm thinking about this or any of us who go shopping think about this -- is there something we could change or that companies could change on credit cards or the way we now manufacture credit changehat could perhaps so that it could deter future attacks? and pin the chuip technology was just discussed and that is something that could raise the level of protection for credit cards. you have to remember that hackers will go after the weakest link in the chain. today, that maybe the magnetic strip on the back of a credit card or the way the data is handled. tomorrow, that may end up being another part of the ecosystem. these multinational organizations and retailers and banks have huge ecosystems. what attackers will do is go after the weakest point, the easy link in the chain. there are things companies can do to up the difficulty level but keeping tabs on what the attackers will do in the future ends up being hugely important. >> i see this story will continue, sadly. thank you so much, patrick mcbride. and olivia sterns as well. moving and shaking this hour, the $100 million man -- andrew john hall and some of his peers have called and the god of trading, he made $98 million in 2008 at citigroup and he was in line for a $100 million payday the next year until regulators block to that. he has not seen the bonuses for a while but the new issue of a book bloomberg markets magazine" says he has racked up losses to have the last three years. the problem is he has been betting that oil prices would keep rising. in the meantime, the shale oil revolution has boosted u.s. output and kept prices stable since 2011. he was on the wrong side of the trade. coming up, aol is betting big on tech startups led by women. we will hear from a longtime media executive who has been tapped with meeting -- leading the new venture fund in a few moments. ♪ >> i have breaking news on auto sales -- chrysler sales for august can map higher than estimated with an increase of 20%. the average adjustment was for a gain of 12%. this is driven in large part by jeep sales which were up by 49%. forecasting industrywide sales for the month that are above analyst estimates as well, pace of 17.4 million. this is the 53rd straight month of sales increases for chrysler. >> thank you. we will keep getting those auto sales numbers throughout the morning. longtime media executive susan lyne is stepping down from her role as ceo of the aol brand to run the companies new venture digital that women-led startups tentatively called the bills fund which will have 10-12,000,000 dollars to invest in early-stage women led companies in the areas of e-commerce. and media which is her wheelhouse. for look at the future of venture landscaper women, susan lyne joins me this morning. great to see you. say, you hinted to me that this was coming down the pipe and i should have followed up on this. bad on me. it makes perfect sense. what exactly are you going to be looking too good -- to do in this fund? >> we are looking for talent and great tech ideas. when you are a big company, sometimes it's hard to start businesses internally but this allows us to invest in great and makem young women sure they have a chance to really compete in the marketplace. the really interesting thing for me and one of the reasons i went down this path is that women are increasingly the driver of hybrid sites on the internet whether it is facebook or twitter or snapchat or instagram , even zynga. between 58%-80% of the total audience and yet women only get seven percent of venture funding for startups. that to us look like a big opportunity. >> what kind of content do you think you will find? are you going to integrate that into aol? >> it's not just about digital content. any is really looking for startup up ideas that will disrupt the market. largely, consumer facing companies and areas i think we would focus on was certainly be digital media but also services or commerce. >> how are you going to bring the experience from the aol brand into this? >> one of the things i have learned being part of aol brands is how important a premium brand is. it can have a huge impact on all of our businesses. >> that's when you charge or advertisers. >> there is that but it also becomes almost the cherry on top of a much broader network of content that allows us to attract customers and allows us to get premium rates. so is are important and really unique content. something like makers or drive uniquetually content experience. are hugely important. >> thank you so much for joining us. the head of the new venture fund that is part of aol in the outgoing ceo of aol brand group. coming up, competition for the chicken wings, big-screen tvs, they may keep fans out of the stadium which is bad news for the owners in the nfl. plus, pressuring the fast food industry for a pay raise and we will talk to one of the organizers of the fast food forward campaign launching protests tomorrow. ♪ >> you are watching "in the loop," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com and now available on apple tv and amazon fire. good morning, i'm betty liu. cvs will stop selling tobacco products in all of its stores today, a month earlier than previously announced. leaves about $2 billion in annual revenue on the table and announced a corporate name change to cvs help in retail stores will still be called cvs pharmacy and want to focus on being healthier. a third u.s. missionary tested positive for ebola. the american dr. was infected well treating patients in my. . the u.s. and u.n. health experts say the epidemic is rising across africa and has second more than 3000 people and killed more than 1500 altogether. the russian ruble is searching this morning after russian president vladimir putin and his ukrainian counterpart agreed on steps toward a cease-fire. vladimir putin said the final agreement may be reached friday. the russian currency had finished its lowest level since 2003 yesterday. meantime, it is 26 menace pass the error which means bloomberg television is "on the markets." the news out of russia is helping stocks around the world including here in the u.s. of oneures are up 4/10 percent and we are awaiting the beige book by the fed to tell us how economic conditions are here in the u.s. and we are "on the markets" again 30 minutes. across the u.s., fast food workers are taking their push for higher wages to the streets again. employees of some of the biggest names in fast food and other minimum wage earners are expected to protest in 150 u.s. cities starting tomorrow. they want what they have wanted for a while -- $15 per hour to be the new minimum wage according to an association -- but according to an association of restaurants, 75% of workers see a path of upward mobility at their current job contrasting some of the complaints of the workers who will be protesting. lswant to bring in kenzel fel the organizing director of the movement. >> thanks for having us. >> this was an interesting survey. rest -- a survey by the the national restaurant association educational foundation. they released this report and said 75% of people believe they have upward mobility when it comes to working in restaurants. how does that compare to what you're protesting? >> when you look at the facts on the ground, no matter what city you're talking about across the country or would round -- or what brown, you see it work fast -- you see a work is mostly women and most of them have children and they live in poverty and a lot of them live in homeless shelters and then make the minimum wage and a lot of them are making $7.25 per hour which they cannot survive a 200 they work for billion dollar industry, one of the fastest-growing industries in the country. >> and the survey, they point to the fact that workers who start off entry level in the restaurant association within six months get a pay raise. >> that is true they are supposed to get a pay raise but what actually happens is that you have workers who have been working at the same store for up to seven years and they have not received a raise until they joined this movement and started striking in their city and being involved in the movement and standing with clergy and community and other fast food workers. amazingly enough, as people start standing up in the cities, they start seeing raises and more hours and start seeing their supervisors respect them more. is that see over all fast food workers have successfully changed the dynamic. >> how do you know you are speaking for the majority? >> the last round of strikes we had here in the u.s. was 150 cities across the u.s. ideal of all the cities across the u.s. we also have a national organizing committee. >> what about the numbers for joining the movement? do they represent a majority of the fast food industry? >> when we talk about conversations with workers about what they are dealing with here -- this movement started with 200 workers in new york city in 2012 and now we are in 150 cities in the last strike was on six continents around the world. i don't think these workers are going on strike to get out of poverty unless they are living in poverty. some are living in homeless shelters and cannot feed their children. what thes international franchise association says about this movement and about raising the minimum wage -- they are talking about the fight in seattle. look at the decision that the general counsel made a they are weeks ago, from the national labor relations board and they said mcdonald's is on the hook for what happens inside their stores. these workers understand that franchise owners don't have enough money to pay them $15 per hour. however, the fast food industry is $200 billion and they are paying one of the lowest wages in the country. there is plenty of money and plenty of power to go around and that's what these workers are fighting for. >> thank u so much for joining us. the organizer of fast food forward. we will hear from the other side of the minimum wage debate coming up, the ceo of buffalo wild wings joins me next and how her business is doing. ♪ bigou want to watch two interviews tomorrow. the co-owner of the nba milwaukee hawks -- milwaukee bucks and the co-owner of the boston celtics. that is happening at the bloomberg sports business summit. chicken wings go together but another big issue for the fast food industry is the massive minimum wage protest. we just talked about a moment ago and that is set to begin tomorrow in 150 cities across the u.s.. the ceo of buffalo wild wings, sally smith, joins us now with more not just in her business but also the response that the restaurant industry has had to these minimum wage protests. when you hear someone like herell fells who was just saying that fast food workers need more opportunity and higher wages, what is your response? >> i think the minimum wage topic that isa certainly an trusting and something we need to discuss. joys that biggest accompany or a ceo has is to be able to provide opportunities to team members. buffalo wild wings has over 30,000 team members across the country. the interesting thing about the restaurant industry -- i like to think we train america's workers. it's often your first job. i was looking at some of the statistics -- over 40% of our age 21mbers are under and could be going to school. it's a great opportunity for them to get that first job and understand what it means to come to work and dress and be able to interact with guests and customers in restaurants. >> i often hear from franchisors and am wondering if you have any thoughts -- they say is a great entry-level position and a great way to move up in the organization. do you have stats on what percentage of your workers admit your senior levels started off of your company? >> i've got some great stories. and one i like to share that we honored at the convention this year was the head of our international operations now started off as a server in one of our restaurants 15 years ago. i was going to college and think that is one of the great stories and it's true -- you can have a career in the restaurant industry. it is sometimes your first job and you are going through school and you might move onto another industry that there is huge opportunity especially because it is a growth industry. >> it is growing but also facing some challenges. let's talk about the challenges like much more competition and particularly in the fast, casual area which is a place you play in. i know you are experimenting t inacos and these and other concepts. how are you trying to break out and make sure you are competing. >> you are right, competition is fierce if you are in fine dining or fast food. we made an investment last week taco, fast casual routee invested in pizza which is to craft your own pizza and older long-term strategies as we think about the growth of the company. i think aboutwings, tacos and pizza, america's favorite foods. >> especially on game day. that's what they want to eat. some analysts have questioned if you are investing in a rusty taco or pizza, does that take away from your core which is the wings brand? >> no, we still have significant growth for buffalo wild wings. we're just over 1000 units in the united states and canada. we will add about 100 restaurants this year and continue on that pace. our investment in emerging brands has a different leadership team that oversees that. to core business continues innovate around food and we're excited about football starting on thursday. our restaurants will be packed and some of the innovation we are doing at buffalo wild wings provides a really great growth vehicle for us into the future. >> you mean game break, for instance? >> yes, that launched this week. there are three different games and one is exclusive in the restaurants where you can answer live trivia questions during the game. note, you are obviously pushing to send your restaurants overseas. i notice you sign some agreements in the middle east. any of the tensions going on there make you rethink your plans? >> no, we really don't. i have had the opportunity to visit that area and they really like american brands. there is a tremendous amount of growth and opportunity there. we have a very strong partner in globalperience business as well as restaurants in particular. >> sally, thank you so much for joining us. i'm getting hungry. coming up, is nine the new 18? we will ask the ceo if the game of golf needs to be shortened to attract younger players? do they? have the attentionfor 18 rounds of golf stay "in the loop." ♪ >> it being online is the future of business, what future does the business have it cannot get online? that is in the state of maine or internet service is among the worst in the country. did you know that? michael mckee went to maine to look for some answers. >> welcome back to the 20th century. and this ever more digital world where every megabit counts hama and the need for speed, beautiful bucolic maine is slow. internet service here is among the slowest in the nation with low speeds just 40% of what's available in other cities. jamesferraga is trying to build a state-of-the-art dental practice. a high-speed internet line right that runs outside his office but it would cost them tens of thousands to connect. >> rural areas are always left out in the cold. we are kind of used to that. the fact is, it's a place to grow and we cannot grow without, activity. >> if you want to download this story, and new york with download spilled -- speeds higher come you can have the video lesson eight seconds. in maine, download speeds are closer to nine megabits per second. if you're watching in maine, go ahead and wait for it to load i will catch up. readily available broadband is more than issue of convenience. studies directly linked to business growth to faster internet speeds. it comes as no surprise that maine's economy ranks among the nation's lowest. forbes magazine rated maine the worst in the nation to do business for the past four consecutive years. the big problem there is a small dispersed rural population and the lack of investment from the private sector. big providers like verizon and google who are expanding nationally have not made it to maine. high-speed internet exists in the state with local providers not making it available because it cost too much to construct the so-called last mile fiber connections to homes and businesses. >> it's not that right at finance has not gone into rural maine to build high-speed networks because they have some nefarious hidden motive. not only can you not make a lot of money doing it, you cannot make any money. >> main business leaders say government federal or local has to step up. examples like chattanooga, tennessee where the municipally funded high-speed network built in 2010 helped attract new tech firms, entrepreneurs, and investors. the town of rockport, maine, wants to try something similar. rockport partnered with local to goer gwi and the state the one gigabit service to businesses and residents. will also tapowns local tax dollars in state coffers to build connections on their own and lease them back to service providers. >> we would hope that the marketplace would do it if they could do it or it they likely will not do it on our own. they will not take that risk and yet is as essential to the growth and development of the state. >> these are small-scale efforts but the hope is that as broadband efforts expand, so will maine's economy. mckee isght, michael back here on how the service providers -- you experience this -- how are they reacting to this? wi is partnering with some of these towns. cable and fairpoint communications say that it's a slippery slope. they want to do what they can but they cannot make any money and that the government gets involved, it distorts the incentive to the private sector area if there is no other way, that's ok but they don't want to see become a statewide initiative. >> aren't there lawmakers trying to do something about this? >> there are and is a federal pot of money that helps rural areas. so far in may, they have spent that money on old-fashioned technology like dsl. i talked to the governor and he says it's partly because the cable companies give so much in campaign contributions to the lawmakers that they don't want to upset the apple cart. >> all right, thank you so much for joining us on this. interesting story. coming up, big changes for the drugstore chain once known as remart, a new name and no tobacco. it's one pricey pepper, we've got a look at the humanoid robot expected to be available in u.s. stores next summer. stay "in the loop." ♪ >> the big number this morning is $1900 which is the cost of a humanoid robot that softbank will start selling in the u.s. next year. they call the robot pepper and it's four feet tall and dances and estimates human emotions based on expressions. softbank has developed an operating system for the robot much like the android operating software which runs on smartphones. maybe you will have one of those in your home. sports theme here this morning. september is the 40th anniversary of the ryder cup matches and u.s. captain tom watson just announced yesterday members of this year's team. keegan bradley, hunter mahan, and others will join rickie fowler and phil mickelson on the 2014 cup team. the popularity of golf in general is slipping among younger athletes. how do they make golf more attractive to the youth? whitney is the man who oversees all of professional golf in the pga ofhe ceo of the america, the professional golfers association in the u.s. great to see you this morning. >> great to see you, to betty. >> what did you think of the picks yesterday by tom watson? tiger woods did them a big favor by taking a break, right? >> we are certainly in good hands with captain watson. when you look at his track record as a player and captain of the ryder cup team, we are in good hands so we knew he would pick the right people. certainly they were his choices and we feel good about the team. he had nine players and rounded it out last night. we feel good about it and we think we have a strong team going over to gleneagles in 23 days a we are ready to go. tiger who hask to largely defined golf in the last decade, the fact that he is taking a break and the doubts of whether he will win another major tournament, does that make you worry that he was such a dominant force in golf that golf might go into a slump without him? >> no, i would not say we are worried. he hass a superstar and done great things for the game and golf is eager to get him back. i think he is doing what's best for him and his future right now , taking the time to heal so he can come back next year hopefully as strong as ever. what golf is shown of the course of the past two years as we are an unbelievably resilient sport. a few weeks ago if you look at the pga championship, that was the major one at valhalla, we had the best ratings we have had in years. when you talk about rory mcilroy and rickie fowler and phil mickelson and henrik stenson coming down the stretch and making a prime time viewing spectacle, we feel good about the game. we feel good about viewership and i think we are headed in a solid direction. certainly, golf is a challenges but it's a resilient game. >> viewership is skewing older than other sports. how do you get younger people to get attracted to golf and watch the game and play the game? >> certainly for us, art of our mission is to grow the game and want to serve our members and grow the game. bringing kids into the game is of paramount importance. the development issues we are proud of and bullish about is our pga junior lee golf. this is a team-based approach to bring boys and girls club to the game 13 years and younger. we just named rory mcilroy as our global ambassador of this program. it's in its early stages but the growth from year to year has been enormous. to see the boys and girls around the country get involved in golf and have young superstars like rickie fowler and rory mcilroy, golf is a great game and its special and the sport of a lifetime. we think we are taking the proper steps to bring markets into the game. who does not play but wants to learn and is trying, i can tell you it's a very complicated game or it can be. i read this comment from rudy giuliani this morning where he told the magazine -- he's an advisor to pga -- why don't we make golf simpler? why don't read reduce the number of holes? what about that? >> i would recommend for you to take advantage of one of our get golf ready programs which is a great way to get into the game with five lessons for $99. golf does not need to be 18 holes. that you cangly is have a 30 minute golf experience or a 60 minute golf experience or a 90 minute golf experience. it's great to go out with three friends and play 18 holes on a beautiful golf course but it's also great to go out and take a lesson or play three holes after work with your family or friends. we have to be defined by 18 holes. people are up against time constraints and golf does take some time. and errorrongly 28,000 pga professionals feel that there are different ways to enjoy the game based on the amount of time you have available. >> thank you so much. i have work to do ahead of me and golf. -- in golf. it is 56 minutes past the eritreans bloomberg television is "on the markets." equity futures are higher after steps toward an accord between russia and ukraine. as of the futures are up almost half a percent and we are "on the markets" again 30 minutes. next hour,in the samsung is making its move on unveiling a whole new line of mobile products today here in new york and across the world. ♪ >> we are 30 minutes away from the opening bell, you are "in the loop." i'm betty liu. futures indicate possible open higher. a change in the c suite at amazon. he will be replaced by the vice president of finance for amazon global consumer business. , big month for chrysler sales sort 1% last month, led by a big gain in jeep. i want to get more on those changes as i mentioned at the top about amazon. managing news' editor is with me. normally we do not get excited about a cfo change. this is amazon, so what is significant here? one of the big four horsemen of the tech industry. amazon is very important, particularly at the top. this is a company going through a huge transition. they are moving into new businesses, figuring out how much of that cash to reinvest in new businesses. will they turn a profit? they are very much in growth mode, acting like a startup. in the coming years, you will see them make hard choices about cash management. interestingly, i was looking at the bloomberg on the way here. the cash balance has grown from 4 billion in 2008 to $13 billion. huge advances in how much cash they have. still nowhere near where apple and google are in terms of the amount of cash they have, but increasingly, you will have to look at what they do with the cash. at what point do we start to look at returning the two shareholders and facing pressure from investors to do more of that? facingon has been financial pressure not to lose money just to gain market share. now making that transition where -- wait a minute, maybe we need to end that strategy and look at making money again. thet what point does investor base become impatient, and what role will the cfo play in the process? a lot of questions they will have to answer. >> any significance to the timing of this cfo change? >> it looks pretty orderly based on what we have seen so far. they will have a very long transition, almost a year long. it looks like the kind of thing -- not sudden. he has been in place for 12 years. amazon is very much at crossroads. as it goes deeper into cloud computing, for example, they are going into new things. just an e-commerce company anymore, but a seller of hardware and consumer electronics, looking more like apple. >> tom giles, thank you. our bloomberg editor for technology. moving and shaking this hour, supermodel gisele bunch and has a new client, under armour, who wants to appeal more to women. now the company has expanded to make shoes, yoga wear, and even bags. under armour generates $500 million from its women's business. that is 20% of its total revenue. nchen is no stranger to its products. they also have a deal with her husband tom brady. coming up later, we will speak to the under armour ceo kevin plank at 2:00 p.m. speaking about branding, national pharmacy chain cvs caremark is renaming itself cvs ending the sale of all tobacco products in its stores. for more on the revamp, we have olivia sterns and erik schatzker , who will be talking about the issue on his program. olivia, they were supposed to do this october 1 but now they are doing it now. >> it was a long time coming. cvs does not want you to think of them as a retail pharmacy but as a health care provider. that is why we have seen the rollout health clinics, nurse practitioners, health consultations. they realize selling cigarettes puts them fundamentally at odds of the mission statement of being a health-care provider. a lot of other pharmacy chains have been doing this. and san francisco have been pushing for tobacco-free pharmacies. they got out ahead of it and got the pr bump for. >> and they are sacrificing about $2 billion for it. >> $150 million of that from direct cigarette sales, 500 million from the incremental foot traffic from those people going into by cigarettes, but they could be getting into more higher-margin businesses. they are rolling out this new smoking cessation program, and those problems are more profitable. perhaps they could use that shelf space for groceries, or some analysts told me for diabetes medicine. perhaps getting into something that is, sadly, a growth market. sets itselfhere cvs apart from, say, walgreens. they have become more of a distributor where cvs has been trying to position itself further upmarket, closer to the benefits business, insurance. they are a pharmacy benefits manager takes to the acquisition of caremark in 2006. the ceo who runs the show, larry merlo, will be on with me and stephanie ruhle at 10:00. he came out of the old cvs but it is really pharmacy benefits and caremark business that is driving them forward, and that raises questions about what kind of other business opportunities transitions it sell to more of a quote health-care company. >> from what i hear about cbs and the management is that they have always been very measured and steady, and some would criticize them, slow, in the changes they have made, but when they do, they stick to them. it took them a while to transition to online, but once they did it, they did it with success against their competitors. cvs is is right, differentiating itself by moving more of middle market. in terms of reputational benefits, this was an obvious move. everyone thought they should not be selling cigarettes if they are a health-care provider, except for smokers, and they got the pr bump. it increases their brand credibility as a health-care provider. >> what are your burning questions for the ceo? cvse want to find out what wants to be when it grows up. walgreens has gone international . it decided not to become a tax in version, which disappointed investors and activists. the stock has been crushed. does cvs want to build an international business? the bigger you get, the more power you have the go shooting with drug companies. they are in brazil, puerto rico, but nowhere else. also, what is their capital strategy? of free cash a lot and investors are interested to know how aggressive they will be with their dividends and stock back. -- by back. -- buyback. >> erik schatzker, olivia sterns, thank you. facebook's advertising strategy putting small businesses at a severe disadvantage. of all speak with the ceo company working to level the playing field for small business. and samsung unveiling its latest phone and smart watch. will it be enough to help the company compete? we are live from the companies about to take a look at the products. ♪ you hear about this all the time. social media advertising is supposed to be huge. straws are also running rampant online. companies paying for digital ads but a large portion of the traffic is fake. 36% of it is fake. so they are paying for clicks created by code, not human beings. as a result, an estimated $6 million was stolen from advertisers last year according to a web security firm. just another thing for companies to be concerned about. we are joined by the ceo of a company that helps small businesses advertise on facebook and other social media platforms. rob, great to have you this morning. how are businesses able to leverage social media to market and sell their products? stolen from advertisers. that has to deter some of the small businesses. >> that is always something that small businesses are worried about. the big guys,s google and facebook, have huge team dedicated to preventing that. we have not actually heard of that much fraud happening on facebook advertising. >> lately, what has facebook been doing to cater to small businesses, small and medium businesses? how are they generating more traffic from them? >> they are focused on making their ad products work. they are refining their ad units, the types of ads that appear on facebook. we are finding they have come up with a formula that allows any business, even small businesses, to advertise on facebook possibly. that is really what we see as a big area of entry for especially small businesses. there are so many routes to take on facebook. they do not really know how to, on and take a profitable advertising strategy out of the gate. >> what is profitable, and what are some benchmarks? >> if you get the right advertising formula -- and that is the formula that we built into our software. we are seeing on average, our clients have what we call a return on ad spend around 5x. they spendrst $200 on advertising, about $1000 in sales generated from it. >> with the help of companies like yours, i'm sure. facebook, in the latest --rterly report, mentioned talking about their platform for small and medium-sized mentioned the advertising inventory is getting tighter and tighter and that means prices have gone up over the last quarter by over 120%, i believe. it is getting more and more expensive to do that. in the meantime, ad impressions are coming down. so why do you pay more if you are getting less? advertisingrue, the rates in facebook are trending up, because more and more businesses are advertising, because it's working and response rates are really going up. that there is a different reason most small and medium businesses are sitting on the sidelines. it is mainly because facebook advertising can be complex. a lot of businesses have tried to go at it alone, taken the wrong strategy, and have not been able to measure the results from their investment. their only other option is to go higher and agency or an in-house that canad expert, and be prohibitively expensive for a small business. $10,000 a month is a lot in advertising. >> what about some of these new social media platforms, what about snapchat, or others? are they providing any kind of opportunity here for companies? >> not yet. just like facebook in the early days, they are just very focused -- companies like snapchat -- on growing their user base and have not even started down the road of advertising. instagram, which has been around for years, just starting its advertising program. four years fore a company to mature to the point where they start to focus on advertising products. >> rob, thank you very much, founder and ceo of sprucemail. now, president obama is delivering remarks at a concert hall in estonia. address concerns over russia and ukraine saying of europe is being threatened by russia. we will give you the updates of what he says. netflix may have another hit on its hands. this is one the company acquired from warner bros.. we will be right back. ♪ >> here is a look at our top 10 tech stories. apple says it's a cloud service was not breached by hackers who stole nude photos of celebrities. they say the accounts were hacked individually. they targeted usernames and passwords and security questions. netflix has won the exclusive rights to screen warner bros. new series "gotham." this monthremieres on fox, about gotham city in the days before the arrival of batman. catch all the latest in tech and west."on bloomberg " the top 10 stocks right after the break. keep it here on "in the loop." ♪ >> welcome back, you are "in the loop." i'm betty liu. it is tournament -- 26 minutes past the hour which means bloomberg is on the markets. s&p futures slightly higher. looks like we are headed for a rally today. the beige book from the fed is coming out this afternoon. on the markets again in 30 minutes. these are the only trade you need to know about today. julie hyman and matt miller is with me for the top 10. number 10, lumber a date or. there were upgraded to outperform from neutral. they say the worst of their competitive issues is behind it. it is fun to say that. number nine is jpmorgan and bank of america. securities downgraded bank of america from neutral. number eight is helen of troy, the maker of my favorite hair dryers and curling irons, cut their profit forecast for the year. they cited weakness across segments but said it identified strategies it feels will improve on long-term results. >> because your hair does look so great. >> maybe the problem is more and more gentlemen have my hairstyle. that is not good. if more men are balding, that is bad for helen of troy. seven, three of the largest u.s. wireless carriers, at&t, verizon, and t-mobile. they are all backing a new mobile wallet. the company announced it is changing the name of the app to softcard. number six, concur technologies. the company is exploring a sale. they approached sap and oracle about buying it. surging, continuing to go up this morning. number five, amazon.com, announcing its cfo will retire in june next year. the vice president of finance and former ge executive will take over. he will work together with the current cfo for the next 10 months. >> everything we have seen with amazon has always been under the microscope. whenever you have something like this in the c suite you pay attention. g.ca-cola and keuri expanded to offer onest tea available in k cup bags. they will be featured in their upcoming cold system. >> julie and i have had our discussion about how this will work, how the carbonated beverage system will work. >> but they still have not come out with it. >> the question is -- some people assume it will come with a co2 canister. it will work by itself without extra carbonation . >> i smell another segment. brothers, the homebuilder posted third-quarter results above wall street estimates. there is the bell. they benefited from higher home prices which fueled a 50% jump in sales. >> whenever i'm involved, we missed the bell. navistar posted a much smaller than estimated quarterly loss. they say it was helped by a rebounding commercial market demand and expects 2014 truck deliveries to come in at the upper end of its previous forecast. also boosting its forecast for full-year sales because of medium and large duty trucks. number one, samsung electronics. executives in new york unveiling their latest line of products. shares are currently trailing apple by the most in two decades. we are also getting auto sales numbers. vehicle sales, up 0.4%, the estimate was ordered to be down 1.2%. results.ut with their u.s. car sales, down 1.2%. the estimate was for lower by 1.1%. >> chrysler was up 20%, only looking for a 12% gain. they sold more jeeps in the month of august then any month ever. had 53 consecutive quarterly gains in sales. 50 three quarters in a row. sorry, monthly gains in a row. .n amazing run they are forecasting 17.4 million sales in the u.s. this year. that will be the first time the eclipse 17 million, if they are right, since 2001. even those numbers are super impressive, car numbers in general are on a roll. >> that leads us to our next guest who had a bearish view on economy. maybe if you are in the auto industry, you are doing well, but overall, he thinks the economy is on a less than stellar path. jim biondo is joining us from beyond the research. nco is joining us from bianco research. you do not believe the fed will ever high cut rates? some point they will. i'm tired of wall street saying that they will hike them in six months and then in six months they will say another six months. wall street has been saying that for years. tongue in cheek i have been saying they will never raise rates, and i will advise that to a date in the future. they are well up in the future when they will raise rates. not in the first half of next year, maybe not even the second half. i am not holding my breath, not worried about it. >> janet yellen herself said it would be six months after they are done buying bonds. that would be six months after sometime in the first quarter if she sticks to her schedule, which puts her in the third quarter of 2016. >> she said that in the press conference and then spent weeks trying to take it back. she did not mean it. most people have now dismissed that as being one of the gaffs of her early residency. >> you see pretty slow growth. read yourto say, i note this morning, last night, and it was refreshing, like a handful of cold aftershave. it was great to hear somebody be such a realist, but if i were to take the devil's advocates position, we have had 5% nominal growth of quarter, adding 200,000-plus jobs a month for more than six months. you heard me talking about chrysler, selling 17.4 million cars industrywide in the u.s. everything seems to be going our way as far as the economy is concerned. even credit, which has been cheap for a long time, is finally being opened and usable. m&a is on fire. why doesn't all of the boat well for the economy going forward? >> let's correct a couple of those things, 5% nominal growth for one quarter. i guess we forgot the first quarter was a disaster at -2.1% that really an anomaly number was barely above zero. 200,000 payroll? had 200,000 payroll since early 2011. what we have going on now is nothing unusual, but the difference now is it is less volatile. it used to be 100,000, 300,000, averaging 200,000. it is not unusual. car sales, you are right, moving along. lead inthe oldest history, there is a replacement cycle going on. is thedit availability easiest it has ever been, even more than the credit bubble in 2006. easier to get a car loan now than before. when you add it all up, you have just described the same set of circumstances that gave us subpar growth through 2011 and 2012, 2013. >> even if the economy is not that bright, that does not mean stocks are going down or that the rally will continue. u.s. assetshearing, are the only game in town when it comes to finding any returns. talkingis right, i am about economy being subpar, not making the case for a recession. the economists will be disappointed in growth and the escape loss in the they are talking about will not materialize. that said, that will keep the fed easy, which is why i keep saying they will not raise rates forever. that will be supported for the market. when you add the two together, supportive fed, weak economy, i have been arguing returns for the year will be roughly near zero. i think if we get a 5% correction in the market, i will be right in that forecast of basically no gains for the year on the stock market. >> at the same time, a lot of strategists we speak to say the driver of the market will change from what we have seen happen in terms of p/e expansion and switchboard to profit growth. we are looking at profit growth this year, as you point out, 4% to 6%. wouldn't that support an increase in stocks? isn't profit growth going to be enough to continue to propel stock gains? >> you are right, if you look at got,/e expansion's we have we have gone as far as we can. profit growth at 4% to 6% seems to be the consensus. take two out for inflation. game.is your stockmarket that is what we are talking about. i have argued we would have zero. that is not that far away from 2% to 4%. erare not in a 15% profit like we were prior to 2008. it does not look like me will be in that -- have not been for the last couple of years -- and i do not see it materializing in the next couple of quarters. bianco, thank you. sunust got word about sam and the galaxy note. a wraparound screen. -- sam sun and the galaxy note. >> i will have to see that. >> they just unveiled it at their event. >> as in foldable? >> know, the screen goes down the side. >> i am waiting for cory johnson. >> he is here for that. >> cory johnson will be with us after the break on samsung. >> i will tune in. ♪ >> it seems like bigger is better when it comes to your phone's screen. samsung unveiling its galaxy note. as i mentioned, it wraps around the sides, so a screen that believes off the side pvr trying to get you pictures which are now being unveiled here in new york and overseas as well. cory johnson is at the event. you got to take a look at the phone. they announced two phones and not announce ad watch, as we thought they might. phones, the galaxy note and then the one they are calling the edge. bend the edge,ey so that there is the potential program anmers to alarm clock or a stock ticker along the side. it is exciting to see samsung trying to stay ahead of apple, announcing products that are not even yet available. from engadgetman is with us as well. what do you make of this new development? we saw a prototype device with the same kind of screen last year at ces, so i can't say it is a terrible shock that they have made the device. skepticaltle bit about the rounded edge of the screen. i have talked to a couple of my editors that got their hands on it phone and they said that is basically an extra row of icons that you would not otherwise have when you are holding it in your hand and actually creates a sharper edge that some are compared for. so you get more functionality. when the phone is laying flat, you can see part of the screen, so you can provide a clock or a stock ticker to provide small amounts of information, but other than that, i'm not sure what samsung has planned. >> so to you, it sounds like a small return on investment? >> it sounds like that to me. it sounds like a niche product. >> is the race for a bigger screen on? samsung executive talking about the race to make things bigger and brighter. i was imagining -- i thought that there were going to have a samsung sun and would have a nuclear power device that would blind you. there is a limit on how big a screen can be. it all comes down to functionality. they have spent $40 billion in r&d over the last few years. devices have dramatic that people want. i think accidentally, one of their guys announced during the presentation, he put a nail in it saying, there is a lot to be amazed by but nothing to be surprised by. that really sums up the next big thing around here. to put it, amazed but not surprised. by the way, we showed video of this new galaxy note. you and i talked about this earlier, cory. one of the things i wanted to talk about, watches. what has apple learned from samsung's experience in smart watches that we might see on september 9? >> having this press announcement before they have a product ready may backfire. we are hearing, if there is an iwatch release, we are hearing it will not be released until next year. that could be a problem or opportunity for apple. any company announcing a product before it ships, they want to feel the market, wait for the customer to hold out for the product. fitbit has been very profitable. there are heart rate monitors .rom companies the market is already starting to stake out the potential there. samsung may make the announcement, but no product today. >> michael, you get the last word on apple. do you feel, on september 9, that we will see an apple that has found its voice? >> yes, i think we will. we are looking at apple, doing things that a lot of people thought they might not ever do. that has been tim cook's deal. bigger we will see a iphone next week, so sort of succumbing to customer demand, which is a good thing. apple has always dictated tased to their customers, and while that has resulted in good hardware, it is nice to see that they are receptive to what people really want, given how much media they consume on their phones. a lot of people just want a bigger screen. that is a good thing. we will see some new initiatives, should we see an iwatch next week. rumors about a mobile payment scheme. they have announced homekit and healthkit, making your iphone the hub of your connected home, monitoring your health. that's an interesting direction, something that we have seen other companies try to do. if apple can execute in the way they have in the past, they will be in good shape. >> michael gorman, thank you. and cory johnson, where samsung just unveiled the galaxy note. we are back in a few seconds. ♪ >> time now for the global outlook. and auction will be held today to settle more than $800 million of argentina's default. like some things in argentina, this auction of cds is a little different. why is it different? aboutt is unusual argentina is the bonds, after default, have been held at high prices. some are trading in the 80's, some in the 50's. that is unusual because after a default, usually everything, all bonds fall today recovery value and it falls may be to $.30 on the dollar. what is unusual if you -- is you have some bonds trading really high and others really low, only because of a particularity on the contract. a really long coupon or lung maturity. process, you have to see where recovery ends up being and how much credit default swap owners actually make. >> tomorrow, the argentine government will vote and whether they will pay bondholders locally. is that going to pass? >> it seems like it will, that is what most are expecting. the government announced a plan to others in the congress, saying if you do not vote for the plan, you are kind of against us. there is pressure there to go along and vote for this plan, but just because they vote for it does not mean it will be implemented. you need investors willing to go and get paid in argentina and it does not seem like many investors want to do that. >> thank you so much. tomorrow, we have the ceo of e.w. scripps. ♪ >> it is 56 past the hour which means bloomberg television is on the markets. i'm julie hyman. we are watching the banks today. the fedllen and governors will vote on final rules for bank liquidity and swap argent requirements. we will bring you those headlines let me get them. and we get the fed's beige book at 2:00 p.m. let's get a check on stocks ahead of all of that. bit of a rallye today, recouping from yesterday's losses. the s&p up .2%. the nasdaq is little changed. given what we have seen with two days of september not quite september ist, historically the worst month of the year for stock markets. so what will we see this year? mike reagan is with us for a look at what history tells us. far and away the worst month. >> depending on far back -- how far back you go. this is one of those stock trader almanac items that everyone talks about. howard silverblatt at s&p look back to 1928 and found on average the s&p in september is down 1.2%, which makes it the worst month. when you go to 1950, the average decline dropped down to about 0.5%. but the phenomenon seems to have tapered off in the last decade. the last 10 years, it has been up eight of the 10 septembers, average gain of 0.9%. as far as the time that it has been up, that ties for second best. sort of a phenomenon that has faded away. into the dig down groups within the market, anything that we can take away from that? >> according to the almanac, stocks start out strong in the beginning of the month. the scary time is -- september is one of the triple witching months. expire,al stock options index options and futures expire. >> so a lot of volatility. >> right. the week following the third friday tends to be volatile. it has been down about three times as much as it has been up, where you have the triple witching. the late part of the month is when it should get interesting. >> in terms of people you are talking to, most strategists will not tell you there one-month forecast, but generally, what kind of sentiment are we getting? saw,e one thing we oppenheimer came up with a note and said these been september is typically occur during an established downtrend. he looked at the 200-day moving average and found it the s&p is above, as it is going into this month, the average gain is about 0.4%. down trend,lished a the average loss is about 2.7% in the month. from that perspective, it is reason to think that maybe the trend will not hold true this year. >> when we look at these historical perspectives, how much do strategists use these when they are making decisions? >> i think it is more a talking point for them. especially all of those clichés, so everyoneing bad, expects people to address it. nuanced,r you get more and it is interesting to see from an analytical perspective what is going on with these trends. -- a few daysago to go. thank you. back on the markets in 30 minutes. "our kingmakers" is next. makers" is next. ♪ >> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> a new prescription for success at cvs changing their name and stops selling tobacco a month of head of schedule. >> getting the jump on apple -- samsung rolls out a smart watch and a tablet days before the new iphone is officially unveiled. >> the company that asks why should guys have all the fun? it's targeting women with its video games. makers," good morning. >>

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