>> from bloomberg world had gorgeous new york, a mark crumpton. this is "bottom line." we begin with breaking news. the u.s. federal reserve's reserve is releasing the minutes of its october meeting. peter cook is standing by with details. good afternoon. >> no major bombshells in these minutes. more insight into the debate around the table. issues janet yellen and her colleagues were grappling with. that was the meeting when the economy -- they can knowledge to

improvements in the economy and decided to end their bond buying program. the minutes reveal some did want to a limited the considerable period language. all but one member agreed the committee should reiterate the appropriate to maintain the current target range for the federal funds rate . the one member thought the committee should instead it tracks in -- strengthen the forward guidance. following inflation -- falling inflation was on the minds of the members in october. most expected it would move back to their 2% target but they needed to keep an eye on inflation going forward. said theicipants committee should remain attentive to every single possible downward shift in longer-term inflation expectations. it's such an outcome occurred,

it would be even more worrisome if growth faltered. policymakers discussed the gyration in the financial markets. they decided not to mention those worries and their statement. the same was true overseas. a couple members suggested including language indicating that recent foreign economic elements had increased uncertainty or boosted downside risk to the u.s. economic outlook. such wording would suggest greater pessimism about the economic outlook than they thought appropriate. they decided to leave that out of their statement. going todata is determine the future course of rates when it comes to interest rates. >> the big meeting will be next month. we will have that end of the year press conference from janet yellen as well. >> we will hear from janet yellen. the minutes made clear they are

still grappling with communication issues. it's going to be hard for them to communicate their way forward. that is what they are dealing with directly now. peter cook, thank you. it see if there is reaction the markets. >> good afternoon. there is reaction when you look at the benchmarks. the dow and s&p trailing those declines. .25%.ere off by about the dow in positive territory. we will take what we can get on this wednesday. up just fractionally. we are close to those high levels. the big benchmarks are trimming those declines. not seeing that much reaction compared to the fed.

we see the five-year in the two-year yield -- it is more sensitive compared to the 10 year. i will show you the picture for gold. little changed after the fed minutes are released. russia stepping in to buy more gold. you can see gold futures off by about .3%. the u.s. dollar did fall versus the yen. the yen whichto is already near a seven-year 73 in terms of the weakness of that currency versus the u.s. dollar. the dow still rising on the back of this news.

minutes.ses in the you did see the markets bounceback the moment these headlines hit. >> we will have more on the fed minutes coming up. will join us. what happened at the october meeting. that's coming up in 10 minutes. apple cofounder steve wozniak is taking a new job. cory johnson in san francisco with the details. >> interesting stuff as always from steve wozniak. joining a new company called primary data in san jose. good to see you. tell me about primary data. what problems are they turn to salt? -- trying to salt? e? trying to solv >> i love people were smart and

know how to think about products moving the world ahead. -- ifoduct is making it you are working in a company supplying data to hundreds of thousands of people and the demand changes over time, you have to sit down and say here's the sort of agreement we have to store the data on. move thecan simply data and it will transfer it to a faster server based on flash memory. as easy as you can say it. your business was about making things happen so much faster. how is this solution so different? our approach utilizes data -- it's similar to what -- we enable customers to move the

data where it is needed and when it's needed. >> what customers are we talking about? our focus really is on the enterprise customers. the entry is in a number of markets. media entertainment. anywhere where there is billions of files, thousands of clients and applications that are trying to run in parallel. it gives them the opportunity to use the wide spectrum of storage available to them, high-performance, online and in the cloud. give me the specific oil and gas sample here. -- example here. >> they're using large data sets. you have a lot of scientists

using data the capture, data they grab from the ground so they can figure out where the oil is and where to drill. they have a limited amount of time to figure out, do i want to leave this land or drill in this place? having these and scientists look at the data and run their applications against it geographically -- to get to this in real time is what makes the difference for them. you have been solving technology problems for a long time. i wonder if you can connect the one totween the apple this kind of evolution of technology and why this interests you. >> absolutely. something that did not exist before. this is very different -- what is it? we went through all that. it improves the world

economically, which improves our lives in a lot of ways. this technology is going to do the same thing. >> your role was interesting to me. i wonder what you did there and how that informed what you are doing here. to be doing the same sort of things. contribute input to engineering and some of the direction. giving my vision, my feelings. wayo you have a particular in a corporate setting where you try to share that information? no particular way. just how friends deal with friends. talk it out. think about it. i do a lot of thinking at night in bed. they can take me months to come up with an idea that is good. >> i feel like when i look at

what's going on in apple right now, we are beginning to see a big change in the way the company creates products. we will apple watch, see some products that are affordable and cheap and some that are super high-end. which approach do you think is better and why? >> i can't answer that specifically. is -- change comes quickly in this business. trying to plan for the change is difficult. that's where primary data is going to be helping apple in the future. >> is there a deal in place? >> nothing i can talk about. a tantalizing hint. companies like apple and facebook and google are creating their own custom data solutions.

what do you make of that develop? -- that development? >> your naming a few companies that came and we saved their lives on the fly. it's a mixture. mixing the do-it-yourself nest of google with the others. >> why don't you explain how they worked with fusion i/o? news.s old accelerating the performance of the servers so they can get to handle as many customers online trying to use series or look up directions to places. or look up directions to places. we have the same team. you elect?ne did

the apple six or six plus? >> both because i like to experiment. i love the larger phone. i can't say more than that. thank you very much. cory johnson in san francisco. thank you. coming up, crunching the fed opossum numbers. 's the fed numbers. "bloomberg west" continues in just a moment. ♪

>> will come back. this is "bottom line." more now on the fed minutes. i'm joined by meg mcclellan.

welcome back. it is good to see you again. how would you describe the overall tone of the october minutes? >> we are still just parsing through them. a lot of the questions we had coming in up to at been addressed. our primary questions were around inflation. the minutes are a big concern about inflation. lastabor markets -- the set of federal leases was much more hawkish around the labor markets and underutilization. this seems to reinforce that idea that labor markets are strong in the pet is confident in that. deal when youed have weakness in japan and additional weakness in europe? how does that filtered through to expectations in the u.s.? says things like

lower oil prices will help the consumer. inflation still remains below the fed's threshold of 2%. is that a cause for concern? >> great question. there is a couple of issues here. to get inflation, you need spending. because we have not seen wage inflation, it has been difficult to raise prices on wages that are fairly stagnant. we see the commodities complex continue to trade week. we will continue to see weak commodity prices. keep a damperto on this inflation expectation. we do not expect to see a sharp rise in inflation anytime soon. downplayingymakers

the language we have seen? as the guidance been too ambiguous? >> the guidance has changed from six months to 2-12 months. downplaying billing which is part of the policy. raising those short-term interest rates. the fed wants us to focus on the data dependent view of what it is they are doing. that is what we are focused on. inflation numbers coming employment numbers. >> the defensive view on the labor market situation -- are there cyclical factors? >> they are both. we have a couple things going on. demographic shift as people retire is going to shrink the potential pool of labor force. that is a structural change. are morecal changes

supply and demand driven as businesses look to staff. the new health care law and part-time workers as a result of that changed the makeup of the labor force. you continue to hear these stories about people working 30 hours a week. that is changing the shape of how labor looks in the united states. >> quantitative easing is done and complete. what does that mean for the fed's statement next month? >> it will be a lot cleaner because they won't have to talk about it anymore. they will go back to focusing on what the fed mandated. thinking about the timing of the short-term interest rate hikes. how do you get the markets prepared for that? volatility,ditional the fed is going to look at how markets react to expectations of higher interest rates. they are concerned about

market volatility. >> what does that mean for investors? how should they adjust or not adjust their portfolios? >> there's a couple ways to address portfolios for volatility. one is that precipitation. we don't know when higher rates are coming or get they are going to be in front of the curve very quickly. through to thew long end of the curve? we don't think so because retail demand is keeping them low. you have this global macro overhang which is keeping rates low. you are likely to see volatility in the credit markets and emerging markets. thattend to pull a route -- they tend to pull out of risk assets. you have a combination of defensive assets and an ability to reallocate into higher risk

assets when it gets too cheap. >> we have about 30 seconds. i have to ask about japan. what does this mean for u.s. companies that count on japan for sales? japan is a great example of why quantitative easing is not necessarily the be-all and end-all. it is a structural reform needed in japan. -- we haveople people on the ground in japan using local data who know that's not going to happen. we were positioned to have a bias -- werest rate had long rate positions in japan. it's important to have that global insight in those local places in order to provide that information. think global. >> to be continued.

mcclellan, thank you so much. another on the markets report as we focus on the post fed minutes landscape. >> the themes of this year our sustainability and safety. all i'm concerned about is the bling factor. there is a lot of it here in l.a. ♪

>> welcome back. we are approaching 26 minutes past the hour. bloomberg television is on the markets. how are the markets reacting after the fed minutes? >> you did see the big

trim some of their decline they have been in. bouncing back into the grid. now, down again. the s&p off by about .25%. perhaps investors a bit more cautious about there could be signs of decline. treasuries -- the five-year did pare losses as well. we are still at those higher levels. the movers and watching for you included jetblue because shares are trading at the highest price in more than seven years. announcing they will add a bag check fee for flyers buying the cheapest tickets. the last of the u.s. carriers to check -- charge for extra luggage.

we are also watching shares of paramount group. they are rising in their trading debut. the office landlord raised $2.3 billion in the largest ever ipo for a u.s. real estate investment trust. ♪

>> welcome back to the second half-hour of "bottom line line" on bloomberg television. thanks for staying with us. let's head to california where automakers are unveiling their concept cars at the l.a. autoshow. matt miller is standing by. here and let me ask you first of all, the concept car, ,ver there, the qad and ration

what is that supposed to broadcast? i i had a look at that and think you get a really clear indication about what the designs are to be for the future. he does important product launches. q 30, q 60. when you see those cars, you will see what you see in the design lines is through all of our products. what you see there is the infinity look. >> i feel like we are to got fairly new, because time moves andkly for me, fairly new you guys helped design this. q 70 l is behind me, a stunning vehicle. how are these two does vehicles doing as far as sales? >> really well. it is the first month we have had a full pipeline. early days. but we expect sales to triple over in a month by month basis.

very strong. the q 50, it is one of the core models for us -- forex infinity. it goes from strength to strength on a month-to-month basis. we are up 16% in sales. the q 50 is really the new design language of exciting. you can see similarities already. >> the old thought was that any kind of sustainability, any kind of green efforts, would go ahead youith performance, but have a hybrid version of this, which proves the new thinking is when you make a greener car, you can get a more powerful car. >> it is really interesting. all the emphasis on technology is finding solutions to problem's nobody ever had before. 360 horsepower. you have got to remember, when you put an electric motor in onething, maximum torque

demand. you have to look at the f1 cars now. you are getting the same kind of performance you get out of turbocharged engines. green technology, but you're getting delivery in ways people did not think about five years ago. >> let me ask you about sebastian. he was the unbeatable, reigning world champion. the season has not gone well. he will now go over and drive the italians cared what does that mean for you and the brand? >> and the brand? >> these days the same forever. he has been an incredible ambassador for the brand. premature, because nothing has formally been announced. ricardode, our friend has certainly stepped up to the podium. red bulls as strong as ever.

the relationship is as strong as ever. --goes to show you this is a an incredibly dynamic industry. he has earned his stripes. a four times world champion. you cannot beat that. things change. >> let's turn here and get a look at the q 70 l. you can see it is a much bigger car. there is a lot more room to stretch out in the back. that has to be driven by the chinese market. we all enjoy luxury. you're doing well there. >> it was driven by the u.s. market. but there is a q 50 l driven by the chinese market. this is a car very much built with the u.s. market in mind. it is right up there in terms of , but a very different

price point. a very nice niche. very much a u.s. car. >> it really has more of the u.s. rant. the presence in europe is not huge. but your sales overseas are the global line. >> it is a reality it has been a havecentric rant erin we been representing almost 70% of global sales. the good thing right now is are the global strategy, we are starting to see the fruits of that. sales doubling in china. unitsl get to plus 32,000 this year. that is important for the brand and the u.s. a bit of rant presence in this world. i really appreciate your time. >> back to you in the studio. >> thank you both so much. coming up, the bond market

battle of man versus machine is heating up. the latest efforts to bring the bond market into the modern era. stay with us. ♪

>> it is time now for today's latin america wrote word. resilient prices rose less than expected, 4/10 of 1%. it brings annual inflation back within the target range. pledging to fight above target inflation whilst emulating economic room and the labor market in the second term, which begins january 1. that is your latin america report for this wednesday. electronic trading is bringing the bond market into the 21st century. about a dozen firms are competing for the electronic form market. firms is london-based liquidity finance.

i'm joined right ahead of the liquidity outpost and lisa, who covers the market for bloomberg news. welcome. perspective, why are the bond markets broken? twice i think it is extreme to is much more in it difficult for clients to get trades done. that is for a variety of reasons. one is balance sheets. banks are submitting less bounce sheets. the second is the sheer size of the market has become large. there are a lot of issues. no bank could follow the names at one time. >> would you consider this a seismic shift in the way bonds are broken? >> i would not call it seismic. i would call it more gradual. >> some say, if the dealers were just here, they would offer price declines and step in here it realistically, with a step

under a falling knife in a real situation where the market was fudging? >> no. -- plunging? >> no. and you cannot ask them to. if a client comes in you know is a large holder of a particular bond and he asks you to bid say 10 million, you're going to be fairly defensive and how you behave in that scenario. the fact that the clients have become so much bigger than the banks means they have to behave defensively. >> does it potentially make it more volatile? >> i do not think so. to accomplishying is to increase connectivity. the clients are the ones who have most of the balance sheet two-putts use, they are upholding bigger positions. we want them to be able to trade with one another more efficiently and more tracks badly. thesecond is to decrease fragmentation of market. we have several different players. funds, investment

managers. we want to create a place where they could all common trait at the same time. tradingelectronic decrease that fragmentation? >> says what we hope for that is what we are betting on. we do not think you can exclusively have electronic trading. you still need to have relationships and talk on the phone with lines. they still want to hear another voice on the other end. but electronic trading could help. >> in two years or five years, do you think the human aspect of the bond market will be shrunken to a vestige of his past or do you think -- >> no, i think humans are here to stay, at least for the foreseeable future. like i said, there are so many issues. the volume issue, pretty low. when clients have big positions to move, they do not want to talk to a machine.

they want to talk to a person in most cases. computers can augment the process and help, but they probably we are not going to be used exclusively. >> atm's, thousand the advent of atm's. you would not have the face-to-face with a bank teller, but all will be done on an automatic machine. >> the treasury market, there is increasing volume. year,imate that next there will be 60% of all u.s. bond trading done on trading platforms. sector, emerging market there are thousands of different sets that make it difficult for people to find what they want, or so the logic goes in the market. >> speaking of esoteric, what is the main obstacle preventing electronic trading from taking more of a hold in the corporate

and emerging bond market? fax the primary issue is behavioral. people are used to transacting ,ver the phone or on computers texting in an old-fashioned way. it is hard to convince them to use an electronic platform. >> you could argue people were not used to going to the computer to order a book and now you have got amazon.com. you can make the argument the money would not be able to find a 100-year-old book anywhere because it was so esoteric, they could probably go to amazon or ebay and find it. arguably going forward, couldn't there be something similar in the bond world? >> absolutely. that is what we are betting on. overnight thing, but over time, investors will become more convinced that shading electronically will help. >> it is interesting. what comes to my mind is the word instructive, use a lot in tech.

where it is not necessarily a good thing. its fonts more type -- more -- its fonts more competition. is that healthy? >> anything that improves efficiency and liquidity has to be looked at as positive. i do not think it is disruptive. supplemental and not disruptive. >> do you think market will turn negative next year? >> it sort of swung back and the conventional wisdom will be that rates will be lower than ever at this point. >> a stretch where we can structure? leslie hope improving liquidity and the credit markets, electronically or otherwise, is good for other -- for everybody. >> this means the ability to

trade whenever you want to? >> absolutely. if you look at volumes in any the volumes have been going up. it is volume relative to the size of the market that has become very small. >> we leave it there. head of liquidity's u.s. outlooks. thank you both so much. coming up, more on what fed officials discussed in their last meeting when we continue in a moment. ♪

costs welcome back. let's take a look at the top stories we're following this hour. president obama plans to look at top immigrant -- for immigrants. it is part of an order that was shared new desks their nearly forming people from presentation -- deportation. thursday night at 8:00 p.m. washington time in a primetime television address. the weakness in october was largely driven by -- construction dropped 2.8%. in september, construction

jumped 7.8 percent. in the past four months. target posted third-quarter earnings that beat estimates. sales were better than the company expected. the money losing his pension into canada is showing signs of improvement. this result signals the company is rebounding under a former pepsico executive who took the reins of target in august. automakers demanding recall all cars made with the faulty airbags. that is called dangerous, saying it could slow distribution of platelets in the riskiest -- placements in the riskiest regions. for making the airbags malfunction. matt miller spoke earlier with joe at ford motor.

>> there are other suppliers, but as an industry, we will look at overall capacity and make sure we do the right thing. whong care of customers artie bought the vehicles is the first priority. make sure we also understand what is going on with the products to make sure we do not have any other issues. >> meanwhile, full slag and is recalling jet is in the -- and beatles to fix problems. is --overs 2011-2013 jet jettas and beatles. as we had to break, let's show you how the equity markets are doing following the release of fed minutes earlier today. the markets have gone lower. at two thousand 35. the dow jones industrial average is falling as well, down 30 points, and the nasdaq composite index at this hour is lower as at 46down half a percent

76. stay with us. another check is on the other side of the break. we continue in a moment. ♪

>> get the latest headlines at the top of the hour on bloomberg radio and streaming on your tablet and on bloomberg.com. that does it for this edition of "bottom line." i will see you tomorrow. >> it is 56 minutes past the hour. bloomberg television is on the markets. let's get you caught up with where stocks are trading. we did see some declines. you can see all the major benchmarks back to the level

they were before the minutes were released. by a quarter of 8%. down by 1/10 of 1% the treasury pick her -- they paired losses. they should essentially be on a look out for signs of decline in the public expectation for inflation. gold, as expected, it tumbled as well. the lowest level since 2010. gold is off by 2%. take a look at the drop that 2:00. you can see it fell and we are now at the lowest levels so far today. reactionon the market, in the fed minutes. when you look at the minutes, how would you describe the tone question mark >> the fairway, to use a golf analogy. expected.hat was

they talked a little bit about inflation, asymmetry between market the patients, what the fed is seeing, and they talk a little bit about foreign weekend -- foreign weakness. and they circled it all back to the labor market spirit i see nothing that makes me think differently about the marks today than i did a week -- weeks ago. -why did we see the markets decline in 10 minutes? what was going on there? let's looking at equities, equities are looking a little overbought right now. there is a natural weakness in equities right now. for a consolidation phase, looking for how the minutes affected that. i think there is a knee-jerk reaction, that the fed is maybe slightly still hawkish, and therefore, it is good news, good news, bad news, bad news. >> we are back to that? oh gosh. >> i do not think there.

the trading, very front and focused, -- >> are we playing a guessing game when we meet again? think more, we will focus on what we are seeing in inflation dynamics in the next couple of months. what will we really see in the breakeven's market? downen-year breakeven is 15% day-to-day. that tells us the market, even though that number is greatly affected by the price of oil -- >> it is usually effective. >> right. it has a different overall expectation in inflation. >> what is driving stocks higher in january of this year? what about january? request for the rest of the year, we think there is a little bit of performance chasing. a little bit in the consolidation phase. starting in 2015, we could see a

weakness where people are starting to really look at top lines versus bottom lines. we see a lot of expectations going down. if you look ahead a little bit, we will get a little bit more nervous about the revenue sales numbers. five for the very first time, you mentioned japan. japan is in a recession. we will see how that impacts the stock. >> yes. japanese equities and the and right now are one way, up or down. as oh is.ting stuff thank you for your reaction and all things federal reserve related. we will be back again at the top of the hour. ♪ >> welcome to the most important hour of the session. i am trish regan. investors are reacting to minutes ouof