>> from bloomberg world headquarters in new york, i am mark crumpton. this is "bottom line." to our viewers here in the united states and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines on this thursday. willem marx looks at the big money at play in this weekend's brazilian presidential runoff election. peter cook has an update on where the terrorist group isil

is getting its money. tracking wall street. first this afternoon, the latest developments in one of today's terror attacks in downtown -- and yesterday's terror attack in downtown ottawa. identified as a nativeborn canadian with a history of drug and robbery charges. he shot and killed a soldier at the city's war memorial and then headed to the parliament building up ross the street where he was killed by building security. today, canadian lawmakers honor the security official who fatally shot the victim. he was greeted with a standing ovation when today's session began.

the 58-year-old grandfather has been on the job since 2006. he is a former member of the royal canadian mounted police. greg, what is the latest with the police investigation? >> as you mentioned, the chief of ottawa police have said there was just one shooter, the one that was killed yesterday. they aren't looking for other suspects at this point. the royal canadian mounted police will give a brief in 90 minutes and may give more details. the police in the area have taken away much of the security perimeter that was set up late into last night as they start winding down their investigation. but there is still a lot of security in downtown ottawa compared to the past, especially

on parliament hill. >> you were on parliament hill today. what was the mood? our tension still high? are they tried to return to a sense of normalcy at this point? clear lawmakers made a point that they want parliament to open at 10:00 a.m. as it normally does on a weekday. an opposition lawmaker made a point of walking to work to show that it is business as usual. but when you look around, on the front lawn of our limit where people normally throw a frisbee around or just look at the flowers, today, there are heavily armed police on scene, extra guards, and they sealed off all the gate except for one or two. that is how i got up to the hill today. >> i noticed a sense of unity today in parliament. it is usually a combative atmosphere. but the -- the stephen harper made a point of crossing the aisle and reading the opposition leader. >> right.

combativeosed to be but today, all the leaders were looking at each other and say we are all canadians and had to show unity and the country has to be resilient against threats such as we saw yesterday. getting a sense that the prime minister and the other leaders in government believe that this attack yesterday and the attack a couple of days prior when another police official was run over by a they believe this is an offshoot of the prime minister's decision to allow canada to line with western allies in the fight against isil? >> i have interviewed a few security experts and they said we don't quite he no enough yet to say definitively -- quite know enough yet to say definitively. said when heically

authorized airstrikes that the isil group was a threat to canadians in this country. >> bloomberg's greg quinn joining us on the phone from ottawa. thank you so much. let's get you to the other top stories. ae u.s. secret service says 23-year-old maryland man who climbed over the white house fence last night has been charged with felony for assaulting a police dog and making threats. the man was swiftly apprehended on the north lawn by uniformed secret service agents and their dogs. he was reportedly unarmed when he was arrested. president obama was at the white house at the time of that incident. the number of people applying for u.s. unemployment benefits rose last week. applications rose 17,000 to a seasonally adjusted 83,000. it had dropped to a 14-year low the previous week. along with jobs, and other topic of concern is income inequality. earlier, mohamed el-erian told betty liu it has become clear

who is getting the benefits. income gains in recent years have all gone to the rich. the gains in wealth have all gone to the rich. >> that is indisputable. >> that is indisputable. it is not just in the u.s.. it is in many countries. while income inequality between countries have gone down, income inequality within countries have gone up. >> he said congress can't run it in what he called low gear. caterpillar shares climb to the most in eight months after topping prompt -- topping profit estimates for the third quarter. caterpillar said 2015 sales will be flat to slightly up. it sees potential for higher investment in infrastructure in the u.s., india, and turkey. general motors said third-quarter profits be estimates as expenses declined and customers bought the cups and sport utility vehicles. gm's recall expenses are

substantially behind us. >> since we started this recall and moved through it, the sales results would indicate that our new products continue to resonate with customers. we continue through our dealers and the efforts that we are taking to see improved sales. so on the strength of our new products, we have not seen a material impact on our sales thus far. exceeded analyst estimates in the dash in six of the last nine quarters. treasuries falling after better than forecast or print earnings. let's show you how the equity markets are doing at this hour. the s&p 500 is up 1.6%. the dow jones industrial average is now up 1.6% as well. and the nasdaq composite index on the rise as well, up nearly 2% at 4466.

stocks right now at the highs of today's session. that is a look at the top stories we are following on this thursday. there was much focus on the selloff in stocks. it could be the sign of a greater risk. no details. lisa, the sudden surge in volatility in bonds, what does that say about what people are holding? >> people are concerned that there is a one-way that where the bull are all positioned in the same ways. and possibly for different reasons. there is a complete russian to treasuries last week. people think there were a lot of hedge funds that had leveraged positions that they had to unwind quickly. but one reason why they have so many short positions on aresuries is because they offsetting the rate risk on a growing volume of less liquid that, whether it is mortgage dread, corporate bonds, that they can sell as easily in a downturn.

>> did regulators expect this or dated catch them by surprise? >> there is a sense they did not expect this degree of volatility . a trigger was uncertain at best. sure, oil prices were dropping. yes, there was concern about the global slowdown. yes, there is possibly ebola concerns although there is no indication how that would trickle into the economy. but there was no one thing that should have triggered this mess swing. >> your story on bloomberg.com, you spoke to somebody a blackrock you said get used to this. >> people are saying, look, the fed is normalizing. they are backing away or preparing to anyway -- they are slowing their bond purchases. expect volatility going forward. and is what it used to be there are still a lot of people who are positioned in the same one-way that -- one-way bet.

as shortiskier assets on rates. >> is this what people can expect from now till the end of the year? i think that the question is will there be some kind of more clear directionality with economic data coming out of the u.s., either being more consistently positive or some titlist setting people back to safe haven assets. >> europe's economic news has not been good. >> absolutely. the question is how much will that actually trickle into the u.s. economy? concerned withy oil prices declining that it would really affect the u.s. economy because of the increase in oil and energy companies. what the question then -- role, if any, do banks have with this? can you attribute some of this to what the banks are doing? can you attribute this to

dodd-frank in the vocal role -- -- the folklore rule volcker rule? cycles, banks could use their own money to absorb a bad sale, not trickle buffer somemarket, of the outflows that we saw from some of the funds. people who are you -- who are holding a mutual fund, they are not looking at their holding say, oh, my gosh, it just lunch. i better take my money out. the concerned is that, if people see the mass decline or a significant to drop in the value of their holdings, they will be prodded to take out more. the question is could this spur a cycle. they are not holding as many treasuries. dealers held treasuries to offset holdings of are scared at. even if treasuries don't --'s of riskier debt. on the other side, people are

saying there is too much liquidity. >> i was just going to say, if banks are doing what seems to be the right thing and reducing the get of the balance sheet, things together or there may be more regulation than you think is possible right now -- they are doing the right thing but it is causing all this craziness? >> they may be reducing riskier assets, which is a positive, but perhaps there is not a system in place to replace them. it is a question of -- is there a gap that hasn't been filled yet? lisa, thanks so much. coming up, a drop in u.s. jobless claims in the past month. we will look at what is driving a strengthening job market and the impact that is having in the overall u.s. economy. ♪

americans are filing for unemployment benefits.

the labor department shows that jobless claims dropped to a 14-month low. lindsay, welcome back to "bottom line." you pointed out that jobless claims have clawed back 80% of last week's drop. why have claims been so volatile? >> they are naturally volatile. >> to this degree? >> yes. earlier in the year, we saw this kind of decline and then going back the following week. it is much easier to look at the four-week moving average which itself trended down since the start of the year. >> if the labor market is showing strength, why are american consumers still under so much pressure? thee cannot extrapolate fact that the overall market is doing better because the is -- because those were currently

employed are concerned about losing their jobs. because the vast majority of employment has been centered around part-time and low-wage hiring, we are not seeing the upward momentum in wages and that is where we see the downward pressure and consumer'' willingness and ability to go to the marketplace and spend on goods and services. >> we have had various economists talking about the fundamentals. the fundamentals in the u.s. are showing strength but not so much overseas. europe continues to have problems. our you concerned that could find its way over here? >> certainly. when we look at our reliance on international consumers demand for u.s.-made goods, if international demand is slowing, that the pressure on u.s. exports. we continue to see a further loss of momentum to the end of the year.

>> there is nothing we can do about what is going on over there. how can the u.s. is a late itself? >> we are insulated. we minimally rely on it sports. it is a minimal contributor to growth. when the global economy is expanding, we don't necessarily benefit as much. on the flipside, in today's world, as the global economy seems to be contracting, we are somewhat insulated already. >> the biggest threat to the u.s. economy, is it the performance of the housing economy? >> it is the inability to create jobs and get the consumer out -- have an increased ability to spend on goods and services. right now, the investment cycle is very much a stunted. at this point in the recovery with interest rates at record lows, typically businesses take those extra funds, grow their businesses, a crease hiring, draw down the pool of available see a slowwe pressure. but we have not seen that cycle take old. >> -- take old.

>> you are not talking about people on the minimum wage or see ar people should bump up in the minimum wage. or people off of public assistance because they are earning a winning -- a living wage. >> we're talking about high-paying construction jobs, high-paying technology jobs. the we have created from end of the recession have been part-time. 16% have been temporary. 45% have been low-wage. this is not indicative of that highways career development recover you expect in the labor market so that we can talk about in spending power and consumption. >> the statistics you just gave give us pause. now with the an appointment rate below 6%, the question should not see -- the question should be what kind of jobs are we creating.

are talking about, yes, we see that 5.9 percent, but there is the underemployment rate as well and there is that legion of people out there who want full-time work but can't find it. >> that is exactly right. a set of just looking at the quantity of jobs, first of all we have to look at the quality of jobs. we see that unemployment is down 6%, we have to count those workers who are part-time for economic reasons. those who would want full-time employment. also discouraged workers. it is hard to get the unemployment rate down to zero if nobody is looking for a job. we have about 8 million americans who say conditions are so bad right now i am not quick to bother looking for work. if we include them in the statistic, we are talking about a 12% unemployment rate. >> the fed meets next week. wall street wants to get an indication on how long policymakers will keep interest rates near zero. will continued improvement in

the job market forced the fed's hand? >> yes, but we are not there yet. next week is very likely to be an exciting meeting given their reasons -- given the volatility of the market. >> back in september, the fed indicated that quantitative easing would end this month in october. do you see anything that would prompt the fed to alter its course? >> i do not. of communityumber members who have lost faith. they are increasingly concerned that it will create burdens and barriers. on the flipside, when it is time policy,e accommodative i do see the fed ending the program and october. >> -- ending the program in october. >> lindsay, it is good to see

you. up next, the latest on the rally in the markets. us. with ♪

on 26are coming up minutes past the hour. that means bloomberg television is "on the markets."

let's give you a sense of what is happening right now. stocks are hovering near the highs of the session. the s&p is up three quarters of 1%. the dow jones adding close to 300 points. the nasdaq up a little over 2%. spot which is1961 a fraction shy of the 1961 high of the session. having its best week since january 4, 2013. we are also watching other stocks as well. they include what is happening in the world of yelp. yelp stock currently off by about extreme percent. shares are plunging after the quarter forecast sales fell short of estimates. an increase from a

year ago. stay right there. "bottom-line" will be back in a few minutes.

♪ the secondback to half-hour of "bottom line" on bloomberg television. thank you for staying with us. in the fight against the islamic state, the obama administration has its eyes on another target, a terror group. peter cook has more details on where the effort stands. is any progress being made this morning? obama's administration says some progress is being made targeting finances, but you can

see isil passes revenue streams are unique and diverse and it is the best funded nonstate terrorist the u.s. has ever had to run. he spoke today in a speech in washington. where isil is getting the cash right now and the steps being taken to hit the revenue streams. $1 billion at -- $1 million a day for oil production. another $20 million from kidnapping ransoms this year. other criminal activity like extortion. isil is still getting some money from wealthy donors outside. targeting airstrikes on isil oil facilities have taken some toll on oil refineries. crisis am point, there is someone in that chain of involved in the

legitimate economy. they have a bank account. their trucks are insured. they may have licensing on their facilities. toolsis someone who our can influence. .> it is still earning money it will take time. there is no silver bullet. it will take patience on the part of a lot of folks out there who engage in the fight. >> what are some other steps the government is taking to hit isil? >> others to stop paying those ransoms for kidnapping. we have had are not -- a lot of other countries not so ironclad in their opposition. another could be designated as the terrorist finance chief in targeting them for some sort of limitation of finances. he also talks about trying to limit the access to banks as well. still getting access to banks in

this territory. >> all right. peter cook, thank you. countdown to the november fourth midterm elections in the united states is underway. the biggest question will be whether or not republicans will be able to gain control of the senate. at a globallyst political research and consulting firm joins me from washington. welcome and thank you for your time. before we get into specifics, the group instituted a no tossup role in its election coverage in this cycle. why? clients aed to offer potential map of how democrats could retain control of the senate, which is a quite clearly counter consensus call. the map we laid out is not necessarily that which will happen. i could layout two or three other possible scenarios. these will all be so tight in simply saying it is a tossup, i

do not know how much value that adds. seeave decided to stand and how much races follow the other. >> republicans will make gains that will narrow the democrat majority. which will tilt the scales? let's clearly, democrats will lose seats. that is a no-brainer from the get-go. our eye on 11 seats. eight are democrat held. three are republican held. we think democrats will lose alaska. a tough campaign out there to seek a second term against a candidate.blican the point we raise for our clients often is as long as the republican seats on a lot -- no longer looking so safe, the polls are statistically tied more or less in kansas. greg is running a really good campaign and a good chalice pat roberts.bent

mitch mcconnell is the senate republican leader at having heck .f a fight the democrats are losing seats but republicans may as well. >> what are we talking about? 51 -- 48 -- 51-48? >> perhaps even 50-50. the best scenario for democrats is 52-48. louisiana is still listed as a tossup. let me explain why. we think almost certainly the race will go to a runoff in december if it seems louisiana race forhe determinant control. both parties will throw millions upon lanes of dollars in that race and every political .perative and the country it is tough to see how that will turn out. if, a win is eat out in the

first battle, then of course, she will take it. from our perspective, that is the only one of the races we are weary of making a first call on at this point. >> most polls have republicans maintaining control of the house of representatives. a one-word answer, gerrymandering. after the last, districts around the country were redrawn to benefit most -- both parties, but specifically republicans who had done so well at the state controlled arefore lot of the redistricting process. >> we continue to see the -- to receive data showing a strengthening u.s. economy. will voters cast ballots with pocketbooks in mind and will democrats receive credit for improving economic richard? >> an interesting question. additionally, the incumbent in the white house as earth a lot of credit and they get a lot of benefit from an improving economy. two thoughts. this president is deeply unpopular. he is not a present force on the campaign trails.

he is raising money behind the scenes but there are not a lot of races he is actively competing. because he is not there to take credit for the economy, and incumbent democrats do so i do not think has the same impact. >> a senior analyst joining us from our washington bureau. thank you for the time, we appreciate it. next, the latin america report. the presidential runoff and a focus on campaign contributions and the desperate need for infrastructure improvements. we will continue in just a moment. ♪

today's latinfor america report. this week, more than 100 million resilience will elect a president who will preside over the 2016 olympics. in the state has

created a cash bonanza for big construction firms. campaign finance firms allow those companies to fund the campaigns of politicians who will award them the most lucrative contracts. >> winning the bid for the 2016 olympics -- that is something all brazilian's celebrate. but winning the construction bid to build the infrastructure is proving profitable for just a small number of resilient construction companies. from a verying complicated phase. >> mario lopez is the man was fossil for enormous u.s. village. less a lot of pressure. >> our company is in a lot of pressure. >> that company is latin america's to get builder and has partnered with a local developer

to finance these several giant dominions. several thousand workers are on site today. during the olympic games, 18,000 athletes will stay here. intended later, is they sell these to wealthy's -- wealthy families as much as $800,000 each. >> we have a lot of people buying these. privatessible to make a business here. the privately owned relies on public money, everything from ports to roads, oil platforms to sports arenas. -- >> the semis behind me, they cost $1 billion to renovate. to the that money went contractor, but a company that is generating around $40 billion in annual revenues, these high profile projects may be more about generating positive er then they are about profit.

town, the city's new subway line. it is exactly the kind of complex infrastructure project that, with financing, has pushed up rocket. >> government contracts my comes to construction and infrastructure, very important. >> they're mainly the builders for the states, for different levels of the state. >> firms like the brazilian state have become a highly contractor. a valuable business tool. a 2014 study found for every brazilian construction firms spent, they won up to 39 in government contracts when candidates succeeded. cycle,the 2010 election 21 -- $2.5 million were taught. the most recent figures, now almost seven weeks out of date,

subsidiaries have donated to both residential candidates 3.3 million u.s. dollars in total. of these candidates win the election, they will continue to invest in infrastructure. with the builders will not be different. >> soaring public costs and spending sparked protests last year before the recession. since economic growth will hardly get faster, higher, stronger here anytime soon, this weekend's winning presidential candidate might ponder more privately financed projects in the hope they prevail it more popular. -- they prove a bit more popular. brazil become in aware of the issue? any affect on the issue? >> we have seen protests and

people are now aware of this. the subject of comedy pieces on tv. really, it has been something they have been hit over the head with them -- repeatedly. her opponent is really going after her and her administration for some of these contracts that many people's they -- >> let's have more. trish regan joins me here in studio. you have been to brazil. you know what the polls is down there. wall street wants nevis? >> they would like to see him. new.ed something clearly, the policies have not been working. it is tragic in some ways. i have been reporting on brazil for a time. it seems as though for a while i was going down there every year and the story was consistently one of hope and promise, that

this was to be the emerging market, that it could be the china of the western hemisphere. all this potential. unfortunately, it could never seem to get out of its own way. in ave really seen that very clear way. about was talking to us the structure. how important is that for the future? >> it is huge. think about the traffic alone. you would have to budget several hours to get to the airport, even if there were no traffic, you could get there in 20 minutes. traffic is a huge problem. getting from one place to another in brazil, basic stuff, huge problem. they do not have the roads. they just do not have the infrastructure in place. a lot of brazilians look at all the money going into the olympics or the world cup, and they say themselves, wait a

second. couldn't that be sent on roads to help us with our own economics question mark can that help in terms of school to educate our population? she is, as a result, taking a lot of heat for that. >> where does brazil feel that is falling short? >> economically. if you think of the road they were on, >> a tough act to follow. >> i think wall street was shocked at how good he was for brazil. and hes this union guy came in and the expectation was, this will be awful for brazil's economy. in fact, he did a lot of good things. in a lot of good policies and had very much the capitalist mentality, as much as you could have for the country -- for the country going through this transition. -- in in a lot of places place a lot of the policies.

it stopped short of getting to where it needed to be and we saw that. duncan, chairman and ceo. >> that means we will have some doughnuts. the dunkin' brands chairman. >> we get the doughnuts from domino's. >> we eat well around here and that is what you're saying. a lot of questions about something done -- dunkin' donuts and whether or not it can compete throughout the day. you go there in the morning, what are they doing to bring in the customer base at other times of the day? we will talk about it. ♪

>> be sure to check out the latest edition of bloomberg the coverek featuring story on president obama. it hits newsstands and your tablet today. he is known for such hollywood

legends as a few good men. west wing. he is now working on his next big project on steve jobs. sources reveal that christian bale will play the role of the app it -- the apple icon in an upcoming movie. >> a scene he is not in, and there is a tremendous amount of language. so it is an extremely difficult art. it.he will crush >> you can see more of emily's interview on studio 1.0, airing in early november. be sure to watch tonight for emily's conversation with scooter braun, manager of pop stars including justin bieber and ariana grant. stay with us. another check of market movers is behind the break. we continue in just a moment.

♪

>> i will see you tomorrow. it is 56 minutes past the

hour. bloomberg television is on the markets. let's get used -- you caught up on where stocks are currently. the s&p is up about one and a quarter percent. in the past couple of minutes ago, we have seen the benchmark give back a little bit. in the past half hour, we have seen a benchmark climb for half of 1%. the dow was up about 240 points. at one point, it was close to 300 points. the nasdaq is up about 1.7%. we are watching airlines today. united american southwest as well as alaska air, reported earnings this morning. all essentially beating analyst estimates thanks to a couple of things. strong travel demand and perhaps a drop in jet fuel. with the rising concerns of ebola, will the airlines continue to outperform? that is a question we are

putting toward our analyst, aviation consulting firm president, who joins me via skype. good day to you. let's talk about these earnings. looking pretty good for jetblue. >> yes. they are in transition. a solid airline but really good news for the industry. great news for the consumer. runningt have any loons airlines. the businesses are being run that way area >> got it. thatoil, it almost seems oil should be helping the airlines even more so. the fact that oil is down so low, only a 10% drop from the prior three-month time, that is not really helping. 90 285.ow is down from that is still high as far as airlines go. airlines your fine today, not a single one was at a time when we were going down $40 per barrel. there is still expensive oil as

far as the airline is concerned. >> got it. is curious what your take unable appeared a lot of reaction up front that this would be detrimental to the airline industry. it seems that will not be the case. what do you think? is not an issue. a media issue and not an airline issue. trip, call the a cdc, they said to go ahead and five. she came down with ebola. that is it. we haven't sent people in every coach cabin. the average person out there, this is a nonevent. >> got it. what will be an event is thanksgiving coming up shortly. people are booking holiday travel. what are you seeing and what kind of capacity are we seeing from these airlines? on the monday to monday surrounding thanksgiving, capacity drops. it will be down 12% lower than the normal monday to monday time

during this year, the airline industry will be about 1% down in terms of departures from where it was a year ago. keep in mind we do not see much of a jump anymore. what we see are a lot of vacation travelers who do not know -- know how to go through in a report like the rest of us. >> i guess you just have to get through to an airport earlier. we appreciate your time today. those airlines using heard earlier today. stay right there. "street smart" is next. ♪

>> stronger economies in europe and in china. we are counting down here to earnings out of microsoft on amazon, and pandora. i will walk you through the close. street smart starts now. ♪ ok. here are the stories we are watching at of the c.