Transcripts For BLOOMBERG Whatd You Miss 20161102

Voters heard all that noise and wonder if they should be worried about secretary clintons behavior. Said he has absolute confidence in her. Officials in italy are trying to iner decide the cost areas hit by earthquakes in the past two months. John reports. The Prime Minister promised to reveal the area affected by the quake. More than that if necessary. That may that. That may evaporate. Bloomberg news, a senior russian diplomat urging the next president to end a fight against terrorism. What is being called the humanitarian pause in aleppo. Offer. S latest news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries that im mark crumpton. This is bloomberg. Scarlet live from bloomberg World Headquarters in new york, im scarlet fu. And oilcks are falling is tumbling. Joe the question is, what did you miss . Matt the Federal Reserve reads leaves trades unchanged. That is a possible december move. Plus, facebook earnings out on a bill today. We will see Mark Zuckerbergs a public making it First Company coming to fruition. Hillary clinton beats donald trump with independence in a new bloomberg poll. We dig in how important independence will be in this election. Scarlet as we head toward the close, you have the s p and the dow and the nasdaq all over right now. 500, this is the seventh straight day of declines. Lets go live now to the nasdaq were Abigail Doolittle has more. Abigail it has been another volatile day for the nasdaq. The index is up ever so slightly this morning. The fact that the low is down 1 closer to the lows right now and similar to the s p 500 on pace for its seventh decline in a row, the longest losing streak since april 2011. For most of the day, dragging some of the big stocks. Report after the close. This is the last of the reports for the earnings season. Looking for adjusted earnings on since 1 billion of revenue and Bloomberg Intelligence analyst says one of the upsides here is the fact that histogram is ahead of schedule. On the other side, a possible downside is the fact that some metrics are worsening. Investors expect this to be 85 of revenue. Were looking at huge growth. When you go into bloomberg can look at 4735, this is right out of the ipo in white. Then we have the companys sales and in purple, we have earnings. Year over court yearoveryear growth for earnings and sales. 213 for earnings. Concern fore some some investors. As long as the uptrends belong intact, and suggest there could be more upside. Scarlet clearly an upside. That really indicates how far it has come. Thing investors will look for is that participation. Will they put up big numbers for the mobile . We spoke to a chart yesterday that is interesting. 4701, the uptrend has been tested perfectly today. We we see the stock is right down to it suggesting maybe it has found support and the buyers have really stepped up and supported it. It is not clear. This could break. The chart might suggest all of the metrics they are looking for will be hit. The company has put up monster quarter after monster quarter. The chart may suggest another Strong Quarter is ahead. The up trendays for facebook. Joe the Federal Reserve left Interest Rates unchanged by while reinforcing hikes next month. Lets get more insight into that. Richard also worked as an assistant u. S. Treasury secretary. What is the big take away for you from todays fed announcement . They did not want to make any waves six days before the election and they did not. I do not think they changed our view that the rate hike is likely. Instead of having three dissents, there were two. Choose not to say they were considering a hike at the next meeting. They gave enough other hints in the statement. Scarlet do you think politics is the only reason why the fed did not move today . I think there are a couple of meetings reasons. They say every meeting is live. I do not believe that. They should have a press conference every meeting. They do not. Though in theory, they could without a press conference, i think that was really the issue. The election was also a factor. Matt the Bank Financial in montreal said pfsweb see said the case for a rate hike has continued strength in. They think the use of the word some is a little dovish. Readber of people i thought it was a little dovish. There is not a lock for a september hike, is there . You do not want to say a lock. Something could happen next tuesday. That is a key. If there is a shock to the system, that would stop the rate hike. What a trump win on the stock . I would not speculate on that. I think rate hike is in the cards. Not a slamdunk. This is a committee that expects it will be hiking in december. It has been a year. If the Committee Goes an entire calendar year without hiking, the crowd will have a good argument that these were folks who cannot get a zero. I think there will be a lot of agreement. Year, we got a hike and we went into the year where off the mark. And, not even a sure thing with another hike next year if we do get a hike in december. It is possible. What do you think . Do you think one hike next year . I think the committee a mistake to signal a more hawkish liftoff than anyone expected. The committee has consistently been more hawkish than the Market Pricing. To committee has conversed the dots and they have converged to markets, maybe vice versa. My expectation is next year the impetus will be like this year. Get to hikes this year. Obviously, those are totally off the mark. Existence of the one that forces them into december even if they did not want to do it. Do they add anything in your view . They could be improved. I do think they provide useful information. Tool. Re a useful two years ago, the fed say it is and it has been health to ratify this will be a gradual liftoff. That someone told pimm fox this shows the fed is on a fantastic job communicating exactly what the plan is. Allt a good thing that we think we have a better grasp on what the fed wants to do, that there is a transparency there that we have these on the bloomberg . I think the feds problem is for the last couple of years and certainly this year, markets have tended to do well and stocks are high. Have tended to do well. Bike morning and not listening to the fed. Disconnectthink the is a problem. The fact that the Market Pricing is here is something that overtime creates a problem for the fed. But it no harm no foul is not a good notion when markets do well by ignoring the fed. Scarlet there were three dissents in september and two today. In december, if they go ahead with a rate increase, do you expect that to be unanimous and does it matter . That is a great question. Know, my you never sense is that it will be unanimous. I think the chair will have to do a lot of persuading as governor. Iny have been very public their doubts about the wisdom of hiking to the other hand, it is very unusual for president ially appointed Federal Reserve governors to oppose a chair. In the last 20 plus years, it would be rare for that to happen. I think janet yellen will to bring on board. All right. Thank you very much. Letters behind, the lethargic and where will Global Growth go. Steve eiseman, you probably know him from the big short. Next, this is bloomberg. Scarlet it is time for a look at some of the biggest business stories in the news right now. The European Unions battle over londons Financial Services atricure dragon an unexpected player in the u. S. It could happen as jimmy lee to try to pry away the 533 trillion cleared by London Stock Exchange groups annually. Talks are underway within the eu to limited the clearing outside the the jurisdiction. That could also impact the u. S. The department of justice is going after at t and directv in a lawsuit alleging they colluded to gain leverage in negotiating for rights to televise Los Angeles Dodgers game. During negotiations with time warner cable, they exchanged information with thoughts nations charter and a you see about their plans to carry the dodgers channel. Ibm scored a major tax victory in india which says the companyss high court has ordered a reassessment of a hundred 14 million unpaid tax claim against big lou. Taxreport says unidentified officials, this is another step in the efforts to end tax disputes with foreign companies. Some closure today in the invasion of privacy lawsuit that drove online media site gawker into bankruptcy. Hoganmpany will pay hulk 31 million plus pros to proceeds according to papers filed today in federal court. Hulk hogan originally won a 400 30 million verdict against gawker and then shut down its website and sold to univision. That is your update. Matt our markets losing confidence in quantitative easing and will we see a rollback of doddfrank . Those questions among others were lobbied at citigroup and Portfolio Manager Steve Eiseman. You probably know him from the big short. That was on bloomberg surveillance. Why have the markets going up over the last several years . It is a combination of two things. Number one, corporate profits, number two, quantitative easing. Lastrate profits for the year and a half have been puckish. People are beginning to lose confidence in quantitative easing. We saw leverage in the runup to the big short. The wonderful mark pittman built up on this. Do you see a buildup and leverages now floral . Leverages. Athlete a very good job with leveraging. Leveraging 101. Inthere is a stark contrast the clearing of europe versus america. You were about this years ago. Yes, it is much less levered than it used to be. The law of leverage outside the banking sector. Aboutd not be too relaxed Financial Stability in the u. S. Sector,the financial the corporate sector and all of leveragesink worryingly high. In europe, they never cleaned up the banks. This is a process of not doing and year after year pertaining to do a lot. To pretend is not really a forget to attach getting to where it is going. What effect would doddfrank have in the United States on the the sector . On i said would be a disaster, a mistake. Ofy did a very good job deleveraging the system. It is not perfect but it has created a system that has improved the Financial System enormously. I can say honestly for the first street career, i am not worried about the Financial System. I was worried about it my entire life. People who advocate rolling back doddfrank do not know what they are talking about. Thee just hear it from republican candidate to me ask you the same question. What effect would it have . Rolling back doddfrank would create a mild case of panic. Notd doddfrank is unnecessarily complex, going back to the doddfrank situation, is just asking for another big financial that, when youn look of the Financial Regulation that donald trump is talking about and changing the nature of Financial Regulation, how do you think that would actually happen . Financials and stocks have been performing. I wonder if that is down to what is happening in the yield curve or what trump or of trumps chances looking little better . It has to dohink with candidate trump at all. Thinkthe fact that people rates will grow up, maybe the says will raise rates. The idea of lower for longer. A lot of economists, academics on wall street, are taking out on the x axis, they are going out even in 2000. 1. Do you have a belief in that and what does that mean for wall street . Are right to stay low for a long time. The biggest risks in the market is that the markets lose confidence in quantitative easing. The question i get all the time is when do i think that will happen. I am the last person in the world to ask that question to. Being wayulations on. Ut front this years growth is likely to be finally lower than last years growth. Does it take 2. 9 this quarter and take out exports and inventories and get down below 2 . For the u. S. . Predicted we Something Like what came out, yes. It is clearly a statistical blip down q2 and up q3, average it out. Two plus next year. That was Steve Eiseman talking to tom keene and guy johnson. A winning hand. The casino gaming revenue increases. We will break it down in the chart chat next. This is bloomberg. Thelet i am looking at casino revenue. It was a detail in the world of emerging markets. It is the orange line and it shows a huge move up, the biggest monthly increase since may of 2014. This could all be very telling for wind resorts. The blue bars show that the quarterly revenue has dropped off the last couple of quarters, but it is starting to make a comeback. It is down substantially from 71 in 2012, still about 60 of revenue overall. The white line is the stock price. You can see the gap between the orange and white line in the blue bars. They looking for that gap to close a little bit here and resorts reporting after the close. Joe this morning, we got earnings out of alibaba. Stocks off a little bit. That stock is done well lately and one reason why is the cloud revenue growth. The cloud growth of people are into these days, whether it is amazon, microsoft, or alibaba, it has decelerated a little bit from the end of 2016, but it is still well over 100 yearoveryear growth in this business segment. This is turning into a monster business for a bunch of folks. Hedge funds love any of these companies right now that are showing growth there. Obviously still huge and decelerating, but this is obviously one of the key stories with alibaba right now. Matt i wonder whatever jeff bezos does, jack ma does that. Scarlet he has a bitter obviously one of the key stories with alibaba right now. Matt ibigger market to do it i. Matt true. It is not a then move if you can do it. I wish i had done the exact same thing. Here is another thing i wish i had done. Facebook, talk about a big market. 1. 4 billion users right now. 1. 7, sorry. 2 share of the entire u. S. Mobile advertising market. A massive share. We surveyed 35 analysts and came to the average growth estimate for facebook of above 50 . They will, with earnings after the bell and we expect facebook, once again, a more than 50 gain in sales. Joe the knock on facebook was they did not have a mobile strategy. Close isthe market next. Take a look at major indexes with less than four minutes to go before close, you have down arrows across the board off by 66 points. For ap 500 is down seventh straight day. This is bloomberg. Scarlet we are moments away from the closing bell. Whatd you miss . Sinceg to its lowest july. I am scarlet fu. Matt i am matt miller. We want to welcome our viewers who are tuning in live on twitter. I am too old to know how to do that. Scarlet you are a millennial heart. We began with our market minutes. The s p 500 extending its losing streak. It is at its lowest level since july. It is below 2100 as well. Big it was one of those levels. Today its said decision briefly resulting in a bit of a rally, but that did not last long. Below 2100. Imaplet us check out the and see which Industry Groups are moving in which directions. I correcteady, no myself. We are allred. Quiteer staples not doing as poorly as the rest of the batch. Gone, oddly enough, those are very defensive. Thesefront to click into pieces and see who is doing the best of the bunch as far as the Health Care Providers are concerned. That looks like the most green. Take a look at some of the other stocks that are moving. I have a few. There were so many movers in todays market. Facebook down 2 ahead of earnings, which are going to come out any second now. Some guys note said, there is no amount of botox that can hide these wrinkles. Saying if it does not improve its business with the Affordable Health care act, it will start pulling out as well of obamacare. As all that was very interesting. There were a lot of stocks moving today. Matt let us look at the Government Bond market in the wake of that said decision. Not dramatic on the short end and more significant below 1. 8 on the long end. T is interesting that implies the fed decision was perceived more on the dovish side. That did not do anything further equities. Overseas, let us look at greece. Yields on the 10 year below 8 . Matteralways say it is a of time before we are back to the negotiating table, but for now, it looks like some optimism that things are proceeding smoothly on the bailout front in greece. Scarlet we have got to go back to the dollar when it comes to currencies. Under pressure compared to the euro, japanese yen, or swiss franc. Polls have tightened around all time and Hillary Clinton. We had use our thermometer of trump which is the mexican peso. It is weakening versus the dollar by 1 now for a second day. The polls showing trump is doing a better than compared to a week ago. I wanted to make quick mention of the South African rand. It rallied after a Court Ordered a release on the report of president zuma. There are thousands of people protesting in pretoria to march against corruption. It is all speculation that zuma might be close to leaving office. A look atus take commodities. Crude oil continuing to slide. Around 50 earlier and there is hope opec would get it together, but now, pessimism on that. Closer to 45 in west texas. The concerns about the election in, some bidding going on in gold. We have one more thing we are looking at. Milk. Milk has been on an absolute over the year. That has been really great news in new zealand, which is a milk driven economy. The kiwi has been a real winner. Well. Of stocks doing yesterday, we talked about oranges. Matt is this. Milk or skim . Scarlet whole milk. Yesterday, scarlet, he brought up that there were six losing days in a row for the s p 500 . Today, seven days, the longest losing streak in terms of days in a row we have seen since 2011. Scarlet nice job there. We have breaking news. Qualcomm reporting results. The chip maker for mobile phones reporting profit eating analyst estimates. Revenue also higher than what was anticipated, 6. 2 5 billion dollars versus the consensus of 5. 9 billion. Facebook has just come out. Heres the numbers. Third quarter monthly active users, 1. 7 9 billion, better than what was expected. The estimate was for 1. 7 6 billion. Overall, seven 6 billion. 7. 6 billion. Doubledigit percentages have really not tapered off. It is better than my highest analyst estimate we have compiled. Daily active users, 1. 1 8 billion. This,re looking through i do not see a number that is trailing analyst estimates. Matt i see one. Eight mobile ads as a percent as a percent of ad revenue. Ecb stops selling off. This is not dramatic perhaps. People are looking for a bit more of a beat. It looks like solid beats across the board. It looks like they did not destroy estimates. It is a beat, they did not destroy the number maybe investors wanted to see a bit more lights out. Obviously, it is still a company firing on all cylinders. Joe the stock has been doing very well. It was up 8 in a threemonth period. Facebook is up 20 year to date and more than that over the last 12 months. Part of this could be taken money off the table. If you have a lot invested in facebook, there is no reason, some people might be thinking there is no reason not to take a little bit off the table. A 40 stock two years ago. It has been on a huge tear and is a little bit off the alltime highs here. It may be people got a little bit ahead of themselves. The numbers speak to how well this company is operating. Scarlet a comment from Mark Zuckerberg he says we had another good corridor, so underplaying it a little bit here. We are making progress, executing our 10 Year Technology roadmap. Sweeney, company, paul that has made video first its platform. Its platform. Matt the stock is up over 20 yeartodate. Joe certainly a very good quarter here. The issue for this company is they continue to put up extraordinary topline growth. I think there is still, the balls on the single will still stand back and say, listen, i have got two or three years of growth year. Paul theres a lot of monetization to be done, but on whatsapp, instagram, messenger. All of these things are exceeding one billion users in and of themselves, which make them really attractive to advertisers. Something that investors really want to see specifically, like whether it is video, international growth, like what is the number that is sort of out there, that the test for the company is . Paul the next leg for the company is to say we are really starting to monetize some of our big assets like whatsapp. They spent 22 billion for whatsapp a couple years ago with the stated notion that they were not going to monetize the focus on subscribers. At some point, people are going to want to see the Company Start breaking out some data on that, on those businesses, platforms, much like google begrudgingly does with you too. Scarlet the fact with youtube. Scarlet the fact that it does not break out that data, do you think whatsapp makes money at this point right now . Paul i think they are destined to monetize these businesses. This is a company that grew its revenue over 50 . Google had a growth rate of 20 . The increment of growth we are thing from facebook reflect the overall superior growth of the facebook platform, still growing user base dramatically, and starting to monetize instagram, messenger, whatsapp. By their own admissions, they have not been very aggressive doing that yet. Scarlet you mentioned facebook is the owner of these different messaging apps. It is like a portfolio here. At what point might instagram cannibalize message or or Whatsapp Messenger or whatsapp . Paul they appeal to different demographics. Instagram and messenger, to a facebookemo, versus traditionally. We are not seeing any cannibalization yet. Advertisers are looking at other platforms to where they can put their money. Right now it really is a duopoly between facebook and google. At least there is other demos they can target with some of these platforms. I think the bowls on this story say there is a lot bull on the story say theres a lot more topline growth. The mobile advertising revenue is 84 of all advertising revenue. They were looking for 85 mobile. Anchor is that good or bad . If all of their revenue is from mobile, does that mean they are not doing as well as they could be in other or would he be happy to see them doing literally everything on mobile . Paul we are essentially there. Their mobile revenue equates to their mobile usage and right now mobile usage is almost 90 , maybe a little bit north of 90 if you think about some of the apps. That is a mobiletype platform. As his Company Starts to monetize its assets, you will see that number to even higher. They have done a good job of the last few years turning around that mobile strategy, which is the ipo, which is a concern. Matt is want to give a shout makes the function that our job as reporter so much easier. It will make your job as an investor a lot easier as well if you are using the bloomberg. For any major event like this just gives so much instant insight that it is unbelievable. Gherminsn mark comments are coming three years. Andys comments coming through. Im going to go to cory johnson who relies on this as a clutch once in a while. What you think, no . The operating margin reached an alltime record. It is not like amazon. Mark zuckerberg is building up a huge cash flow and not spending like crazy on moon shots. Joe it has made a few big bets. Just not like they are going to blow the money on sort of one huge thing after another. Paul you are right. This is the beauty of the internet model, which is what everybody has been chasing which is that a business can scale so quickly. You can scale a user base and Mark Zuckerberg said that he thinks scale starts at one billion users and that was really one of, i think, a little bit of a barb towards twitter, not meaning to do so, but suggested that 300 million users, twitter does not have that scale. Clearly facebook has the scale, instagram, whatsapp, at or near that kind of scale. Scarlet you can see facebook paring some of their losses. Paul still down, solidly down. Anchor theres that accorded johnson. Let us go to cory johnson. There may be a lack of enthusiasm on the part of afterhours traders. Is a look toward monetization around instagram and what that might mean is that ramps up and help the mobile ad number. To addk at their ability on to higher and higher revenues for every user they have got an they continue to add users. You look at the competitor, twitter, they are unable to add users in any meaningful way. Cory they are monetizing so much better without the given quarter. The momentum is clearly at their backs still. Who knows i much further they have to grow. Knows how much further they have to go . Aboutre gathering data the users and helping to target the ads more and more. And and more targeted data, marketers are willing to pay a lot more on this platform to reach those users, whether it is because the data is so targeted or the users are so engaged or the fact that most, as you can see, most users of facebook are on it every single day. That is sort of a targeted focused usage as apt marketers with facebook feeds peppered with odds and do not seem to mind it. Ads and do not seem to mind it. Johnson, do you do you think this is the internet of things or is this Something Like apple making headway and encroaching on some of the early movers . Cory it is neither, really. I thought pretty Significant Growth for fitbit in terms of yearoveryear progress. The macro theory on fitbit, so much competition out there for these stupid fitness trackers, and the morons who wear them, like me, that we will go to cheaper and cheaper prices or go upscale to the apple watch, but in fact, fitbit is seeing tremendously rising sales compared to the apple watch where they have seen contraction on a yearoveryear basis. You thought if please go up for you saw asps go up. They are pushing users toward their blaze watch and charge2 devices. Cases, expectations getting ahead of what is actually happening at the company. Matt these are expectations that have been pulled down. To . 18, they were looking at . 75. After taking down the estimates, not more than 1 billion off the market cap. Cutting their guidance Going Forward as well certainly does not help. Scarlet we want to thank cory johnson and paul sweeney. Anchor coming up, the Federal Reserve leaves the Interest Rate on hold. Oesler will join us. This is bloomberg. Scarlet breaking news. Aigs results crossing the bloomberg. For 1. 20. Re looking the company boosting its share buybacks by 3 billion worth of share buybacks. That is another authorization of plan. Epurchase apparently, contracts with accident victims was one reason why aig posted profit that fell short of analyst estimates. Afterof course we have the bell, facebook and fitbit earnings are out. Facebook out just modestly after beating across the board, beating out revenues and earnings, but not dramatically. It has actually turned positive now. Matt possibly more interesting is fitbit. drop. That 28 fo the company came out with an outlook that really disappointed. Fourthquarter adjusted eps, fitbit saying it will be as much as . 18. Mystery was looking for as much as . 75 after bringing down at that dictation. Bringing down its expectations. Matt coming up, we break down fed decision. This is bloomberg. Anchor let us get to the big story of the afternoon. Joe Federal Reserve held rates steady. Boesler covers the gains on the outs for bloomberg news. He joins us now. It did not seem like they caught the market by surprise in much of a dramatic way. Not much reaction. What it out to you . Guest not at all. There was no market reaction, basically. Everything went right according to plan. We have seen another example of where the fed came in a step the landing really nicely. There was a little volatility after Janet Yellens decision. Sense thatnly makes whatever adjustment needed to occur today would have happened well before and that is exactly what we have seen happen, t so. Not how come eric rosen did dissent . What changed . , and itnted last time seems like everything is the same from a month ago. Guest he was interviewed a few weeks ago before this meeting and he was asked, would you dissent in november as well . Said,u basically kind of you know, it does not matter of this meeting were that meeting, if we are talking about this quarter were that quarter, maybe it matters little more. He did not need to do it again. Wasor i had a chart i supposed to bring up for you but i accidentally took off my terminal so i do not have it. Anchor i am sure i have it. Matt the year ahead outlook. Guest we know markets are primed for a rate hike in december and this shows the expected amount of fed tightening over the next year in basis points, and so it is about s 30 now. The point is, markets definitely see hike in december. This is something we have talked about a lot and nothing after that. This is very little chance of tightening next year. It goes to show you that this really should not be that big of a market event because it is kind of my priced in. Matt going into this year, we assuming there is a hike in december with fresh dots, what is a realistic number of dots we can expect from the fed . Guest basically the median participant sought to bring hikes in 2017, so he defied that by four so if you divide that by four, that is where we are on the market right now. About let us talk eurodollar butterflies. What are they and what do they have to do with the fed funds target . Anchor this is our deconstructing jargon segment. Guest it adds another dimension to what we are looking at which is the slope of the yield curve. This shows you the curvature of curve. This is the amount of tightening priced in between one and two years ahead and between two and three years ahead. This indicates that basically, traders do not really of any few on whether theres going to be more or less tightening between two and three years from now as they do between one and two years from now. I have circled where we are in this chart. There was no view. Basically what this means is that there was no risk premium in market right now, no sense that the fed is going to have to tighten faster later on because inflation is going to get out of control, anything like that. Very benign outlook in markets. Anchor thank you very much are breaking that all down, matt those low. Matt boesler. Scarlet we speak with shahab jalinoos. This is bloomberg. Anchor i am mark crumpton. Time now for first word news. Police say a man suspected in the killings of two officers in des moines, iowa surrendered to a state employee. Scott green reportedly find it down a man in rule dallas in rural dallas county. Guest he did complain of a flareup related to an existing medical condition so he has been taken to the hospital as a precaution. There were no injuries of any officers or mr. Greene during the arrest. Anchor authority say the officers were sitting in the separate squad cars when they were shot and killed, ambush style. Twoe incidents to place hours and 20 minutes apart. Hillary clinton has a narrow edge among independent voters. In a race involving thirdparty candidates, clinton leads donald trump 30 to 27 . Terry johnson gets 19 . Green party still stein is at 8 . Stein ispartys jill at 8 . More than half of those surveyed say they expect clinton to be the next president. President obama says its secretary clinton made what he calls an honest mistake, by using private email and it is now being a blown up into just some crazy thing. Firstesident offered his Public Comments on revelations the fbi is reviewing more emails. Obama la president there is the norm that we do not operate on innuendo or incomplete informations. We operate based on concrete decisions that are made. Anchor the president of new if they should be worried about secretary clintons behavior, but he has absolute confidence in her. The pentagon says the u. S. Air strike in syria last month killed a senior al qaeda leader who once had ties to osama bin laden. Ae target is identified as man who reportedly oversaw attacks against western targets outside of turkey, outside of syria, including turkey. Mark the most expensive u. S. Weapons system ever is about to cost even more. The pentagon will need up to another 500 Million Dollars to finish the Development Phase for Lockheed Martin f 35 fighter. This after the pentagons chief weapons tester warned the plane is far from being ready for combat. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Matt, back to you. Ont that is get a recap todays market action. The dow losing 77 points. The s p 500 falling below 2100, and as it was the seventh day in a row for the s p to post a drop, at the klein, that is the longest daily losing streak we decline, that is the longest daily losing streak we have seen. Anchor notable earnings after the bell. The biggest one being facebook, which premeds beat expectations across the board whether you are looking at revenue, earnings which pretty much beat expectations across the board whether you are looking at revenue earnings. Joe it has been on a huge care. Another one, fitbit. Terrible result out of fitbit. Terrible outlook as well. Joe that was a 50 talk last year and now below nine dollars a share. Matt pretty ugly. That is amazing. A look ahead at tomorrows earnings, scarlet fu has a little more for you. Scarlet cbs on the verge of a big identity change. They want the two companies to merge. It is all me hope that they can resuscitate the flagging tv businesses. Let us look at the numbers dont lie. Viacom on aerformed normalized basis by quite a bit. Cbs higherave pushed since the announcement of this potential merger. Cbs is not just the mostwatched tv network. Ad sales are crucial to cbs and make up for 85 of its revenue. The second quarter, ad sales slips are mostly the same. Bloomberg intelligence is looking for a pickup, estimating that tv station adds rose in the third quarter, offsetting weakness. Unlike others, it has not seen or weakness from donald of advertising spending. Any slowdown in network at growth should be balanced by this chart shows her retransmission fees, which are in orange are becoming a bigger slice of the revenue pie for networks. Cbs secondquarter revenue benefited from a 44 jump in retransmission revenue. A potential weak spot for cbs is the nfl, falling television eatings for life games liv games may hurt cbs more than others. It could cost cbs up to six cents a share in the fourth quarter. Was concerned about the shrinking audiences for live television, cbs has focused on licensing and online subscriber revenue. We are talking about all access as well as showtime, have amassed more than 2 million subscribers between them. Well will be breaking and following cbs earnings after the closing bell. Matt. Whatduld you miss you miss . The dollar remained lower and weaker. Traders looking for clearer sign that the central bank is determined to hike next month. We are left disappointed. Joining us now is shahab jalinoos. Thank you so much for joining us. Let me ask what traders thought of this . I saw a lot of investors the market saying they thought the statements were more dovish than they would have expected. Shahab the thing to take account of his the dollar has been falling anyway because growing worries of potential trump when in the president a potential trump win in the president ial election. They had been slightly hawkish. There has been a small reinterpretation. If anything, that has stalled the dollar for the time being. Politics is having a much bigger effect on dollar trading than what the red curve is. Joe why does the dollar not seem to improve the prospects of if trump wins . Shahab in the short run, it is the uncertainty aspect. You have a new president was very different ideas about how economy should work to what we have seen in the past. If that leads to market volatility, at the very least, the market may try and push back the first fed hike, for example. That is dollar negative. In the longer run, the market may wonder whether the u. S. Would stick to the strong dollar policies that have been officially the view. Anchor does anyone believe in a strong dollar policy . Shahab obviously, it has not been strong in the last 20 years. Still, officially moving away from that policy is still a new development. Foreign Central Banks on hundreds of billions of dollars of u. S. Treasuries. What they necessarily want to keep an overweight position in the u. S. Dollar in an environment with a new president with a much more potentially radical views on World Affairs and what we have seen in the past . There is a few factors to think about. It definitely affect any nafta country, not just the u. S. Scarlet it seems like the u. S. Is more sensitive to any sense at the macro environment has changed. Fixed income and equity is due move, but they are stuck in this range they have been in in the last couple of months if not years. Currencies on any given day could have massive moves. Are the sharecies price of a country in a way. They are the cleanest way of expressing Political Risk in relative terms between different countries, so i think, whether you are talking about the uk with brexit or the u. S. With a potential trump victory, usually, effects is the fastest to see that type of risk pricing. Scarlet metta talk about south africa and the random because it has been driven by all the that the minister was going to be arrested and now you have protest against president zuma as well and speculation he might leave office. What is your prognostication for how this plays out . Shahab this is not an easy one to call. The markets views on who will be running south africa changed on is on a daytoday basis. Almost on a daytoday basis. As long as Political Tension persists, it is difficult for d to maintain the type of gains it has seen. There is no clarity in terms of the long run yet, so we are looking at any opportunities in terms of rand strength nearterm to save them from the longerterm prospectus. Anchor we are used to discussing the fortunes of a country has its rest in the currency, and we have been doing that in the u k and the u. S. Scarlet i think this has been going on for some time. Shahab many emerging market currencies have structurally g 10 volatility than currencies, particularly asian currencies, so i think things have changed. As long as there is Political Risk out there, it currently needs to reflect that. These days, it seems to be more common in g 10 currencies and before. Thankt shahab jalinoos, you so much. Anchor have you ever wondered what contango means . How about Iron Butterfly or near shoring . We are going to demystify those terms starting this friday. We are going to deconstructed some of the jargon for you. You can see that i have tweeted it out. Feel free to tweet sometimes back at me that you find intriguing or confusing. You can also to meet at joe or scarlet fu. Coming up, a look at how Hillary Clinton is doing in the voting. It we will take you through the battleground rates. This is through the battleground states. This is bloomberg. Anchor it is time to the Bloomberg Business flash. A look at some of the biggest stories in the news right now. That is according to a report and the wall street journal. The assets could go for as much as two point 5 billion. Valium is divesting assets. The drugmaker has also helped with cicada vomited a call about the sale of its drug business that could go for as much as 10 billion according to the journal. Marist still has not hired any bankers to navigate the historic split of its conglomerate structure according to the ceo. Officials say management intends to rely on internal resources. Part of the group may be singled out for separate listings or mergers. Valeant pharmaceuticals is being accused, wait, we just talked about valeant. It is being accused of doubling the marketing of a female libido drug. Google m is the Sprout Pharmaceuticals investors are suing. The former shareholders say they are being shortchanged on millions of dollars in royalty payments. Valeant acquired sprout for 1 billion last year. 21st century fox is charging more than 500 500,000 for a 32nd ad during tonights world series finale. Doubled. Ice has intense interest in the matchup between the chicago cubs and cleveland indians. The two teams have the largest title drought in history. That is your Bloomberg Business flash. Joe . Joe whatd you miss . Early voting is underway in the u. S. Battleground states. The numbers are telling different sorts about Hillary Clintons campaign strategies. For more, let us bring in so ahil. Of people on twitter who also a very confident things one way or another. Democrats really underperforming, hillary doing great, what is your interpretation. Is there a clear message we can take away from the early voting figures . Sahil it is true. Everyone has a hot take 60 days before the election on twitter. In president ial election years, they tend to be somewhat more predictive of the outcomes than they are in off your site 2010 where they were way off. As of yesterday, 26 million americans have already voted early. We are seeing some good news and bad news for Hillary Clinton. The bad news is that africanamerican turnout seems to be down. This is a crucial constituency for democrats that powered president obama to two victories. She is doing better than the person did in 2012 with hispanic voters which bodes well for states like nevada, colorado, and florida. It is a mixed bag right now. I would not discern to much from it. That is what we are seeing in nearly vote up tomorrow. Scarlet how much Historical Data do we have on early voting . Can we draw many conclusions from it . I might be behind the times, but i have never gone to vote early. It might be because we live in new york state. Was it an option . Too muchwould not read into this because the laws are always changing. Pennsylvania devonte have early voting right now. A number of states cut back on early voting. Things are constantly changing and in flux. Every change brings with it certain switches that could play out differently in the early vote. I would not read too much into it right now. We have six more days. Matt you can just wait until the day and go to your local Elementary School in the basement and, do your voting, get a picture, glass of milk or something when you do it. It is always a lot of fun. What about people switching early votes . Is that possible . I heard donald trump saying you could go back and change votes if you want to. Shahab each state sahil each they can make their own laws on this stuff. Im not sure it is legal everywhere. This is not something that comes up that i have heard much of at all. Switchinging of the though question. What do we know about the type of people that vote early . People say these polls are meaningful because so many people have voted, but of the people who voted early, are they y the type of people who would change their mind in the first place . Early voters seem to be more entrenched. Whether with democrats or republicans. Democrats tend to have a higher portion of their base voting early than republicans do and republicans tend to make it back on election day in the case of 2010. The interesting thing is that the single biggest reason that people who are eligible to vote but do not vote give, the single biggest reason they give for not voting is that they are too busy, taking hours out of their day on election day would be too much of a burden for them either they get paid by the hour. The single biggest reason they vote early is time. Anchor or the choices are to abysmal. Too abysmal. All right, Sahil Kapur Bloomberg politics. Scarlet this is bloomberg. Joe whatd you miss . The death of austerity. Blanchflowerdanny hopes to see. That is a really good question. I think i would pull you to looking at the u. K. Where the new government came into place after the brexit vote. One of the first things they did was to say austerity is over and we are going to move to fiscal stuff. Over the last week, there was a big attack on mark carney and eventually the markets that, you cannot do that and eventually, he was reappointed. We are going to go on to the brexiters and the people turningng austerity and their fire onto chancellor hammond in the u. K. Because the sense is that austerity is dead. The speed at which it is replaces really the question. I think i was right with talking about the opposite to austerity and i have been, as you know, the biggest opponents of the thing. Very bad into a situation. It meant the Central Banks could not raise rates or reduce their balance sheets, stuck us at the zero lower bound and i think we are in the position of starting the move away from there. Danny as i said, slowly. This will take time and we had no idea in the u. S. Until we know the outcome of the president ial election, who controls the congress, the senate, and what economic plans are going to be put in place. I think it is uncertain. Hopefully, we can declare the death of austerity. Anchor how significant was the signal out of mark carney that he is going to stay through the article 50 negotiations . Danny i want a column this week i wrote a column this week before the decision was made. I think what was really important was the attacks on him became very strong, very , actually. I think he was the only adult in the room. They are not going to have to cut rates because they did it before. I think the big signal was that the government realized that they needed him to stay for his full eight year term and he said, ok, i will stay for a year. They are in trouble because they tried to undermine the independence of the central bank. Our goods did not like it, i did not like it, all of the other economists did not like it so eventually the politicians had to backtrack. I think this move, carney said he would stay on for a wild. That was danny blanchflower, economics professor at dartmouth college. Anchor coming up, what you need to know to gear up for tomorrows trading day. This is bloomberg. Scarlet whatd you miss . The fed did exactly what it expected to do, nothing. And stocks did what they had been doing, continue falling. Saw that,st time we during the eurozone financial crisis. Scarlet tomorrow, credit earnings, 2 00 a. M. Eastern time. Anchor that is tomorrow. Scarlet it feels like tonight. Anchor if you go to the bars and come back, well, so dont miss this. That will decide whether theresa may can go ahead herself without asking permission from parliament, and file article 50. At 8 30 a. M. , i will be looking at u. S. Initial jobless claims. It has been solid and we will see if it continues that way. Scarlet another lead on the labor market before the big jobs report. Joe well see you back here tomorrow. Matt looks like the democrats think they have this one in the bag. John on a day when the New York Times delivers thrilling details, we strike a musical theme on the show tonight. But first, the polls pick up tempo. Can barely keep up with the onslaught of surveys from key that flooded our inboxes today. With less than a week before