scarlet: good afternoon. here is what we are watching this hour. our consumers still willing to spend in the face of global weakness? scarlet: exclusive insight from paul tudor jones, cofounder of robin hood foundation. his thoughts on markets and commodities. alix: glenn core recovering almost all of its losses since last monday's 29% plunge. the company is not having an t."hman moment your c scarlet: julie hyman has been tracking movements. at that rally we saw friday has extended into this week. julie: five straight days for the s&p 500 we have seen an

increase. the best -- the longest string of rallies we have seen this year. on friday we had disappointing givereport that seemed to credence to the idea that the fed is going to push interest rate increase out even further. we have more evidence this morning with the isam services report coming in below analyst estimates. there are some estimate that there are some analysts who say stock has fallen to bano far. take a look to see which industry groups are doing the best and worst. energy, telecom and materials are doing the past. health care remains a fly in the ointment. it has been an underperformer. if you look at big drugmakers and some of the biotech stocks we continue to see a selloff. there had been somewhat of a recovery last week. allergan taking a hit.

france is now going to limit an increase in health care spending to 1.75% in part by cutting drug prices. that is a big concern for a lot of the industry. alix: we also started to see a lot of analysts putting estimates for the s&p, it seems like they are playing catch-up. deutsche bank cut their jobs report on friday. julie: 12 of the 21 major wall street strategists have been cutting forecasts. michael purvis at weed and, he 23 50 on theg for s&p 500. david cost and cutting it to 2000. toathan golub cutting it 2325. the average forecast is still 2147, a decrease of nearly 4% since august 10. it is still about 10% where we are now on the s&p 500. they are less optimistic but we

still would have a ways to go to reach that. alix: still -- julie: purvis, still long-term positive on the stock market. scarlet: they are getting there with help today. after hitting a 10 year highs in july and august the ice am nonmanufacturing index shows continued expansion. the bigger 56.9 was trailing economist average estimates and was down from 59 in august. alix: how does a report like this play into janet yellen's decision on raising interest rates? as bill gross said on bloomberg radio this morning, uncertainty can be bad for economies as well as investors. >> the fed is the world central banker. there are hints that they may raise rates or when there are hints that they may not come a tremendous amounts of

dollar-denominated liabilities and assets flushed back and forth creating this liability situation which ultimately not only affects the financial markets but damages real economies alix:. here to help us make sense of the numbers is kpmg chief economist constance hunter. if you take a look at the numbers we got today, can we say for certainty that the week this we have seen in manufacturing is bleeding over into services? constance: we have had two major shocks, the week commodity prices in oil in particular. and the strong dollar. it was inevitable that that would lead into services at some point. how far does that bleeding go? is this going to cause us to set back and have a recession or is this a slight setback and we will stabilize from here? my view is our economy is strong enough to withstand the shock of

week commodity prices and the strong dollar and we will recover from this and continue seeing relatively strong ism numbers. scarlet: it makes our products less competitive abroad but how does a strong dollar hurt the service sector in the u.s. which is domestically focused? constance: if you think about coming out of the recession and we had the oil and gas boom and there were so many jobs being created that were relatively high-paying and every time somebody gets employed in a job like that a start to contract a lot of services in their life, violin lessons for their kids, hairdressing services, restaurant services. people spend money on services when they feel they have a good job. we see that feed over affect when we are losing some of those jobs, it is inevitably impacting the services economy. alix: in a services ism report from today, the employment

indicator moved up even though business and new orders all declined. does that mean friday's was an outlier? constance: while this feels like a real-time number because we get it instantly, they are talking about either what they were doing last month or what they will do in subsequent months so it is not an exact match to real-time what is happening in the economy. we don't have enough information to know if the job report last week was an outlier. i would wait another number to see if there are revisions to that report and to see what we get in october for the september jobs numbers. scarlet: we know in the past couple weeks a lot of companies have been announcing mass layoffs. david wu points out that the challenger job cuts analysis shows we are approaching the highest since 2011. perhaps september, there you have the general ledger -- the challenger jobs numbers. constance: we have another indicator, the diffusion index,

which tells you how many entities are hiring versus laying people off. if you look at manufacturing we are below the 50 midline. on the overall economy we are at 52. there are some softness happening. it is impacting the whole economy. we were in the icu after the crisis. we moved to a regular hospital that. now we need to be having physical therapy. .lix: good analogy we did have the boston fed president saying the u.s. economy needs to grow 2% in the back half of the year for the fed to raise rates. do you think that is the right call? are we going to be able to do it? constance: i think it is the right call. the fed wants to see above trend growth to raise rates and we need to percent to keep the year above trend. that makes a lot of sense. i think there is a good chance we can do it. i put it at about 75%. if you hit fed ago we

have a snapshot of everything related to the federal reserve. , you of speakers coming up can see it in this middle part. you mentioned eric rosengren, john williams, all scheduled to speak in this time when we are basically in no man's land. is this helpful, all these conversations? constance: i don't think -- i would ask a different question. they are going to speak. they are fed officials. they probably had these on their calendar before we got the most recent data. i think of someone like esther george who is more hawkish and rotating onto the voting membership next january, you want to pay attention to what she is saying. williams has been very thoughtful. i was at a meeting with him in the summer and he was saying we have to mind the lag and think about the lag between policy

action and the impact on the economy as we start to get data in globally in august and start to see the questionable data in the u.s. what he says is going to be very interesting in light of the recent data we have had. i think it is important to pay attention to what they are saying. alix: thank you, constance. we want to take a look at bloomberg's first word today. mark crumpton has more. the united states and 11 other pacific rim nations have agreed on that landmark free trade deal. ford is calling on congress to reject it. the automaker says the deal fails to address currency manipulation. board says the obama administration should renegotiate the trade deal. twitter has made it official. jack dorsey has been named twitter's permanent chief executive.

dorsey will remain ceo of squared. dorsey will need to fix twitter's big problems. growth and user engagement have slowed down. he says the company's employees are not singing the blues yet. >> morale at twitter is strong and we do not believe this will affect attrition negatively. we think this is a pretty good positive. it adds a lot of clarity. great teams want to ship products people want to use on a daily basis. mark: dorsey also said he wants to make twitter easier for users and that the current products makes -- the current product makes people do a lot of work to realize its value. the u.s. coast guard says the search for survivors will continue. contact with the el faro was lost five days ago during hurricane joaquin. ships and planes discovered a debris field about 90 miles from the bahamas. one body was found. a crew of 33 included 28 americans.

american apparel has filed for chapter 11 bankruptcy protection . in chain is reorganizing liability that exceeds assets by more than 60%. american apparel has been in turmoil since last december when founder doug charney was fired for alleged misconduct. former fed chairman ben bernanke says some wall street executives should've gone to jail for their roles in the financial crisis. he tells usa today and was not enough for banks to be fined billions of dollars. individuals should have been held accountable. he is promoting his new book which is published today. that is a look at our first word news. you can always find the latest on bloomberg.com. scarlet: coming up in the next 20 minutes, small biotech firms are not the only boosting drug prices. we look to you about price increases by pfizer and merck.

alix: the s&p 500 is headed for its longest rally this year. we will show you why it happened. scarlet: we will hear from paul tudor jones. what is behind his latest investing insight? stay with us for his exclusive remarks. ♪

alix: welcome back. will head over to the markets where julie hyman as a check on movers. a lot of gainers to talk about.

julie: i am looking at the best performers in the s&p 500. there are not necessarily fundamentals that are driving them higher. micron, this stock is up by 10%. it came out with profit and sales late last week that drove the stock higher on friday. that rally continues today. the magnitude is larger than it was on friday. joy global, we are watching that maker of mining equipment go higher but not seeing any sort of fundamental news and driving it that way up 7.5%. united rentals, another equipment company, up by 8%. , upgraded to hold over deutsche bank largely on valuation. what all of these have in common is that they are some of the very worst performers this year within the s&p 500.

this ranks all of the stocks in their year-to-date performance. consol energy is the worst performer this year in the s&p down 69%. joy global's number two at 65%. united rentals is down nearly 40% year to date. we appear to be saying -- to be seeing a rotation. investors looking at these beaten-down stocks and judging them perhaps worthy of buying. something else to mention when it comes to joy global. we learned it would be exiting the s&p 500. that is effective after the close of trading on wednesday. joy global shares initially fell on that news. now they are recovering. alix: consol energy, i was looking at short interest, high short interest. we have perhaps potentially some short recovery happening. generally miners have been decimated this year.

scarlet: julie hyman with the latest on the markets. -- touringription pharmaceuticals raised the price of an anti-parasitic drug by 1000% in a single day. >> drug development is expensive . a new drug can cost $1 billion to develop. it is only fair we make profit and take that money and put it back into the patient's hands. scarlet: ubs out with a report that shows hundreds of drugs have gone up in price. isning us for insight cynthia koons. how common is it for companies to jack up prices? this is common practice in the industry and has been for years among the largest pharmaceutical companies and biotech's as well. they will take price increases every six months or every quarter in push up the price is of drugs by as much as 10%, 15%

or 20% or more. there is no clear way to see when prices are going up so we have to rely on other analysis to look at drug prices. they are pushing through these prices all the time. alix: part of a touring was saying, we need to make a lot of money because r&d is expensive and we have to make a lot of money to develop new drugs but not every company winds up doing that. the new york times had an article on valiant. 3% of actual profit goes to r&d. does not doley and r&d and they make no secret of that. they spend a couple hundred million dollars on rnd. bigger sales figures and $50 billion in revenue from pfizer or something close to that for merck and the revenue numbers and and flow.

they have had tough years recently but they are consistently making money on price increases. pfizer for example would make something like $1 billion in quarterly revenue just from price increases they pass on. that practice is bringing in revenue. scarlet: do we assume drug makers are trying to squeeze more out of existing drugs because their pipelines are running dry? theyia: to some extent commonly raise prices of drugs when they get close to the end of the patent to get as much of the drug as they can. some of those drugs stay high-priced and people stay on them. pfizer is developing new drugs. they are looking for their next blockbusters to fill the pipeline. the question is, what do they do in the meantime with so many drugs that are widely prescribed in the portfolio. alix: drugs like lipitor, you can see a price increase. some of the most popular drugs

out there that pfizer makes. for us, how does that wind up impacting us? is it the drugs we use all the time that have smaller increases or is it the drugs that only a few people wind up using? cynthia: the bigger impact is the more commonly prescribed drugs going up by smaller increments because they are more widely distributed and they are the health care cost we pay into when we pay for insurance and sharing the risk per se. there are impacts from the 3000% drug price hikes and those tend -- the hospitals tend to be hurt by those. we pay for those as well through paying more insurance premiums. i think the larger impact is the health care system. this analysis is being done all the time but on more commonly prescribed drugs. scarlet: hillary clinton made headlines when she tweeted out that she would look into drugmakers' pricing. is it likely that the government might intervene? cynthia: honestly, those

investing in the industry to not see that as an imminent threat. they see that as further down the line if at all. because so many attempts to rein in drug pricing have gone and fallen flat, it does not seem like this is a huge concern , at least not one that will happen anytime soon. alix: there is time. scarlet: that would suggest that the reason why health care shares sold off, that was more the catalyst. alix: 117% in the last five years. thank you so much, cynthia koons. scarlet: still ahead, a dismal third-quarter for many investors . what can we expect from the fourth quarter as markets rally? alix: we will have school charts -- we will have cool charts. ♪

alix: welcome back. scarlet: there is lots happening after the markets open this morning. the s&p 500 headed for its longest rally this year. it did so in spite of this god awful jobs report on friday. trying to figure out why the stock market turned around and is extending gains right now. michael o'rourke of jones trading offered thoughts. he said it was a combination of bearish positions and asset allocator is capitalizing on the .ond rally at he says the s&p 500 swung 3%. if you come inside the bloomberg terminal, another thing he cites

is that the only plausible wason for buying last week the markets retested the august low. the red line indicates the bottom line where he reached eight -- august 24. last week we got to as low as 1871. s&p equal weighted -- a technical rebound from there. where do we go from here? take a look at this chart. it takes a look at the earnings revisions over the last four weeks for the third quarter. they are going down. the blue line is for september -- thens and the yellow yellow is for september and the blue is what we saw back in august. if you take a look at the total s&p revisions are down by one and a quarter percent.

financials have seen the biggest revision downward out of all the sectors. it is not just energy and materials we are seeing a difficult time and might have a rough third-quarter earnings report. isrlet: a lot of that probably because capital trading results are not looking great. citigroup, one of many banks that says trading will be down. alix: if the fed will not raise rates you will not have net interest margins expand. scarlet: we have more coverage on bloomberg market day. paul tudor jones speaking with bloomberg this morning. alix: we have details on his new initiative as well as what he thinks about the thanks monetary policy. -- about the fed's monetary policy. ♪

alix: from bloomberg world headquarters in new york, welcome back to the bloomberg

market day. with thewe begin headlines on first word with mark crumpton. an amtrak train headed from vermont to washington, d.c. has derailed in central vermont. hand-check says there does not agree to be any life-threatening injuries. it struck some rocks on the ails near roxbury. general electric is selling part of its financing unit. global jet capital is buying the unit for about $2.5 billion. ge has been shrinking the size itits financial business as returns to manufacturing. there is a huge civil claim resulting from the 2010 bp oil disaster. the settlement finalizes a deal announced in july. speaking with bloomberg radio, bill gross says it is time for

the federal reserve to raise interest rates. the former pimco cofounder says capitalism simply cannot survive with rate at zero. >> it's obvious monetary policy is exhausted. we have been at 0% for five years, quantitative spending in the trillions. mark: he says the fed is now effectively the world agile banks because global markets seesaw with its every move. vice president biden is apparently nearing a decision on his white house run. he will decide whether to challenge hillary clinton as soon as next weekend. beef is disappearing from dinner tables in the u.s. demand on a per person basis is at its lowest level in 40 years. -- opting forhing cheaper options like pork or

chicken. at our first word news right now. you can find the latest news on bloomberg.com. back to you. alix: thank you. paul tudor jones is taking on a new initiative called and just capital. he is seeking to define a more inclusive form of capitalism. scarlet: earlier today, he was on bloomberg go, and spoke about just capital and its mission. capital's larger mission is to find the right balance between the various stakeholders and how we do business in the country today. which weshareholders, talk about all the time, you certainly talk about on , we also have employees, customers, community, environment. our mission, the just mission in

bring dialogueto and balance among all those competing interests. , we have sorobably much of a focus on profits and , sometimes interest to the detriment of the other important stakeholders. this is really an effort to give everyone a voice. you have been pretty stark in your terms, that we are losing the humanity in capitalism. problem?ow that is the paul: clearly, the topic of the day is income inequality. that is probably the biggest social challenge we have. something that can really harm this country if we don't deal with it. the question is, how do you deal with that? there are public sector solutions and private sector solutions. when the idea of just capital

first surfaced, three years ago, really, with a student in deep deepak chopra's we began to talk about it and it became clear this was a good idea. of thehave been ahead income inequality crisis. talk for a moment what the fed has done. they stepped him because the markets needed it. now here we are with the fed keeping rates where they have an zero, what is that doing to people at the bottom of the scale we do not have this high-class problem? what has this done to the american people? paul: what the fed is doing and why they want to raise rates

now, is acknowledging to me a much larger macro issue. if you think about the last 50, 60 years, there is a perfect negative correlation between the interest income paid by the federal government and interest rates. gdp, ifer the share of paid in interest income by the ,ederal government, typically that correlates with high interest rates also. what the fed is doing is recognizing the tail risk with low interest rates, taylor risk with zero, perpetual deficits. i think they are starting to recognize this tail risk. at some point in time, we are creating a huge denominator of debt, and this will have huge consequences whenever inflation returns. >> this is what people wanted to ask you.

do you think yellen will raise rates this year, or issue more likely to introduce qe 4? think they are concerned about the expanding global debt to gdp, probably trying to insert back into the equation the fact that interest rates can rise, and people need to manage their balance sheets accordingly. stephanie: is it telling that they have not raised rates already? paul: i think they have their opportunity in the spring and missed it. all you have to do is think about, at zero rates, it encourages this nonstop borrowing from federal governments. interest income as a percentage of gdp is at one of the lowest levels in the past 30 years. it encourages bad behavior by a variety of different stakeholders, not the least of which is our federal government. ,lix: that was paul tudor jones

founder of just capital. stier, will be on at 7:00 a.m. scarlet: there is a whole lot of incredible guest. do not miss it. coming up, tech stocks are surging higher today. itsle officially changed name in the market, it is now felt about. the lab report from the nasdaq. -- alphabet. after years of losses and feuding in the boardroom, american apparel files for bankruptcy protection. whether the retailer can actually rebuild. ♪

scarlet: welcome back to the bloomberg market day. alix: a little bit of blue in new york city, finally. from hong kong to london to the nasdaq, this is your global market check. let's start with the nasdaq and matt miller. matt: a lot of interesting news down here at the nasdaq. citigroup says they are concerned about apple's september quarter iphone sales. they have lowered their forecast to 47 million from 48 million, which is consensus, because of more sales being pushed into the next quarter due to the release of the new iphone. as a result, they expect

9.06 compared to their previous estimation of $9.14. blizzard-activision, another stock that analysts are chiming in on. the videogame maker is set to do e-sports, andm that is something that many have not considered. i want to mention spark, a .iotech drugmaker they have a drug that is making -- that could cure certain kinds of blindness, retinal dystrophy could featured with a vaccine or virus that they inject into the eyeball, which carries good gene

which do notcells have those genes, helping people to see again. advanced clinical trials proved it is working. now the drug will move the u.s. regulators to fda testing next year. finally, you will notice behind .e, alphabet google is officially called alphabet. we knew the name change was coming. google also in the news for another reason. changes says the reduces its tax risk by going through countries with smaller tax rates. the oecd has put out rules to try to curb this. they say companies like google and starbucks and amazon all wash away $240 billion in revenue by going through companies -- countries like the

netherlands or ireland. scarlet: thank you. alphabet still traded under the goog figure. the nikkei, hang saying, and other indexes are closing down half a percent. is glencore. after a week of historic volatility, the commodity giant is facing a dramatic rebound in hong kong. shares are up 72%. reports that glencore is in talks with possible buyers for its agriculture business sent shares surging in hong kong. it's all the heaviest volume among hong kong listed shares. hoping to pare debt amid market concerns about profitability in a time of lower

commodity prices. possible bidders include the singapore will find and a japanese company. it generated $26 billion in revenue last year. scarlet: glencore also on the move in european markets. here is a look from london with mark barton. mark: stocks started the week as they finished last week, with again. -- a gain. miners and oil companies were the big two gaining industry groups following commodities. on the data front, not so encouraging. the eurozone risk faltering after growth eased in september. that is the message from today's data on manufacturing and services, which slowed in september. u.k. services expanded at the slowest pace in two years, indicating the damage from the chinese slowdown, emerging

markets slowdown is slipping from manufacturing to services here in the u.k. have a look at some of the day, moving stocks. s, the german fertilizer, sinking 25%. the biggest drop his 1999 after potash withdrew a proposal to buy the company. lloyds up by 1%. u.k. government could sell 2.5 billion shares to institutional investors, alongside 2 billion pounds to retail investors, as they try to get rid of the stake . glencore, look at that, of by almost 20%, after rising 72% in hong kong. lots of swaying factors

surrounding glencore on this monday's session. a report saying the company was open to an offer but did not think it would get a fair price in this market. it is in talks about selling a stake in its agricultural business. concerns about the company solvency. the company has clawed back all of last monday's record. 29% loss. back to you. joining us now with the latest on glencore's rocky week is our chief energy correspondent heavier blahs. thank you for joining us. blas.ier you could perhaps credit the movement to the article related to the selloff. in reality, would that ever happened? i think this is an indication of the long-standing position on glencore. they have said if someone was to

offer at any time a good price for the company, he would be happy to sell the company. as an example, i bought a flat in london. i have no intention to sell, but if you come with $2 billion, i would be happy to sell to you. the market in hong kong overreacted but the rally has continued in london, more than 20%. there are traitors that believe there is some value in glencore. seeing awe are reversion to the mean when it comes to the stock rice. -- price. not much has changed since last week. how is that leverage showing up in markets now? one of the big concerns as we were dealing with another lehman brothers situation. passed, thehave markets are getting a better view of the importance of glencore to the global financial

system, are less concerned about the system, and also, the bank providing liquidity to glencore are sending a message that they trust the company and continue to make business. i think we are beginning to see some buying activity in the markets. alix: we have seen a report out that says that glencore does not need to go to the markets until 2016. that is how they can continue to finance their operations, or of their free cash flow. what part of this is not understood yet by the markets? javier: the biggest part that is not understood by the markets is the support of the lender and the banks, and the arrival of glencore. i have been speaking with the rivals of glencore and what is their view of glencore?

the message is we do not see a particular problem. we see the equity market going down. but business activity, day to day, we continue to believe in glencore. alix: on the upside or downside, glencore is thinly traded all over the world. what part of this is just reactionary and the inability to create and of stability in the markets? javier: the problem with the trading in hong kong, as we see, a good day, we see may be million shares changing hands. in london, 300 million shares. that difference between hong kong and london is what explains the rally in hong kong this morning. very silly trading activity. scarlet: thank you for joining

us. alix: coming up, american fallout and fashion. what is coming up next after the retailer files for bankruptcy. ♪

alix: welcome back to the bloomberg market day. scarlet: we are keeping our eye on the markets right now. turned around on friday and has continued to build on that advance. if you take a look inside my bloomberg terminal, you can see

the intraday new movement -- movement of all three indices. all three are getting by at least 1%. alix: at the top of the show, you brought up, is this a technical bounce or fundamental? in my terminal, you have the s&p equal weighted index. apple and exxon do not happen outside weight in the market. you can see the august 24 low that the s&p has not yet breached. here you see that it is lower. low at the end of september and then bounced above that, so is this a technical trading range? also keep in mind we had the beginning of the fourth quarter. after a terrible third quarter in which fund managers were taken out to the wood shed -- your favorite phrase -- you

wonder if they had to react only to the fourth quarter were they had to put to work. traditionally, the fourth quarter tends to be a good one, particularly when you have a quarter where you really selloff. you are seeing earnings revisions slowly come down. deutsche bank lower their forecast of the s&p this year to 2050, saying buyback not be enough to prop up the market. you have the strong dollar, weaker oil prices, and that is waiting on markets as well. i want to show you the percentage of stocks in the new york stock exchange trading above their 200-day moving average as of friday. yes, we have rallied off of the lows of the last year. 22% are now closing above that long-term average. but we are still well below the peak we saw in april, or back in december. we are still pretty low.

finitely a low, weaker breadth rally. scarlet: if you look at materials, i have a chart on my terminal right now. this is the relative strength of the index of raw materials. as that line goes up, it shows that the group is outperforming the broader market. the s&p has been climbing for five days. in that time, the materials index has done better. beaten-down sectors like materials and energy, are leading the turnaround. is that a sign of strength or people just coming in buying up beaten up stocks? something else that is a question in the market, the high yield index, what is going on in terms of yield.

if you look in my terminal, you can see the destruction done in a high-yield market. the yield is now over 8.5%. scarlet: and it keeps coming with the rise in the stock market. alix: you can blame energy and materials, but there are other issues in the high-yield market as well. how much is that spreading to investment grade? investment grade has also been moving up. scarlet: shameless plug, this is something that we are talking about on "would you miss?" dorsey is named a permanent ceo of twitter, but will he remain ceo as square -- square? ♪

>> it is 1:00 in new york. >> welcome to the bloomberg market day. ♪

from the headquarters, good afternoon. alix: here is what we are stocksg at this hour, posting again today, we will take an in-depth look at the data that is fueling the rally. scarlet: and then earning season. -- wegs may be sweeter will take a look at why pepsi may have -- alix: stephen schwarzman does not see a hard landing in china, we will talk to the equity ceos stock -- thoughts on asia. first, who -- we want to check in with julie hyman for a look at how stocks are faring. >> what has been interesting is over the past several weeks, where stocks open is no guarantee of where they will be

half from then, an hour from there, at the end of the day. today it has been remarkably stable for the major averages. the fifth straight gain we have seen. we have had this sort of steadiness and i want to look at where that -- what that means relative to this deep drop we had in august. here is the s&p 500 and the losses we have seen through today and it's about 7% at the depth of the decline, that was a drop of more than 12%. we are traced about half of that, but getting close to those levels and there have been a number of different things that contributed to this most recent rally, including the perception that the fed is not going to be raising rates until next year because of the week economic data. far,s maybe just felt too given the outlook for fundamentals right now. we are earning season kicking

off this week and i was mentioning earlier that earnings continue to go lower, just -- not just in energy but in financials as well. >> an interesting story points out the crosscurrents and could put the ideas about where earnings are going to be going. there is a measure that the fed has with the latest commentary. it has a very complicated name, bottom line, it's a measure of corporate profits and this is the biggest quarterly gain since 2012 for the past quarter. and had a close correlation to actual profits going back to 1982. this would appear to be one of the more positive indicators and yet, as alex pointed out, this looks to be -- we have seen them come down and down in terms of the contraction that we might see. the biggest quarterly contraction since 2009. there is still some conflicting push and pull and of course, as

you point out, and a lot of it has to do with what your definition is. a looking up financial's energy, are you including those numbers? a lot of people slice and dice them differently. >> you could just keep them. >> that's very true. rather than invest elsewhere. >> thank you so much for the latest on the markets. >> one of wall street's biggest stocks has came into recent volatility. -- is keeping hisst target of 2311, at least for now. oppenheimer joins us now with more. what is your interpretation of the data we saw last week and why you would still keep it in your forecast for the s&p 500? 2311 seems enthusiastic and we will likely have curb our

enthusiasm at some point. >> a forecast cut is in the works. >> it's not in the works but it is under consideration. renowned forket is moving up very sharply when some of it turns in favor of equities. that goes historically back to march 9 of 2009. last week's data, what was good about it and gave the market some relief, the market was -- a beloved the mix last week, a dropped from a higher -- a high -- 27 to 72 about 21 about 21. it just confirmed the manufacturing was not carrying the baton and it's clearly the consumer. even the nonmanufacturing data that came out today. relatively much stronger than the manufacturing data was.

we would have to think that it's a sigh of relief. the economy is likely not strong enough for the fed to raise rates now. october is that about 10% chance. >> when you think about the forecast from 2311, what data point would you be watching? continue data points moving forward here, related to employment layoffs. we saw a huge amount of layoffs. it eluded look at the challenger, christmas gray, it was up 92%. prior was up 2%. >> we are basically at the levels of 2011, now. >> a lot of it has to do with consolidation and industries that can be the result of mergers, also what has happened in the oil patch. friday, remarkably good, when we heard the bad

number, it fell sharply and then all of a sudden, the market looked around and consider what was happening. it was like stocks were singing don't give up us -- don't give up on us. all of a sudden, we took off again and i can't help but think that there was much to do about not nothing, but it was comparedbly overdone to the chinese delay way she and the currency, the market, relationships over there. the chinese consumer is doing remarkably well. are they following in with the u.s.? we forget that we are 70% driven by the consumer and at manufacturing is only about 11% of the economy. >> they cast a pretty large shadow on our economy. as you look it equities, which class you see leading the way for the market? is a commodities, high yield, credit? >> i think it's the effect of someollar in addition to

civilization beginning to coming into account --, into commodities. technology,.y what we're looking at is the fact that the way technology has racked oil prices, similarly, endangered done is commodity prices and put the lower and will keep the lower for longer. >> thank you so much for joining us, chief marketing strategist at oppenheimer. we want to get to the breaking -- the -- >> authorities at amtrak saying the train headed from washington, d.c. to vermont has derailed. amtrak says there don't appear to be in life-threatening industry -- injuries. the train derailed after hitting a rockslide on the tracks near rocks. berry.r rocks

pharaoh -- the l and planesips discovered a debris field about 90 miles from the bahamas. one body was found and the crew of 33 included 28 americans. the top u.s. general in afghanistan confirmed that an american gunship carried out the aerial assault that destroyed a hospital in the city of come dues -- kunduz. ofwas the acceptance response ability for what the general called a serious and tragic event that killed 22 people. u.s. secretary of treasury said the u.s. partnership was a good deal for american businesses and workers. is aiators say it successful and of a long process -- end of a long process. >> we have come to an agreement

that will support drops, -- jobs and promote innovation across the asian-pacific region. most importantly, the agreement achieves the goal we set forward of an ambitious, comprehensive and balanced agreement that will benefit our nations citizens. >> congress has 90 days to study the deal before taking it up or down vote. that miami dolphins fired their head coach just four games into the season. the era ended after 24 wins and 24 losses. his fate was sealed after a loss to the new york jets during sunday's game in london. the tight end coach is excited to be promoted -- is expected to be promoted. as a look at the first word headlines. you can always find the latest news on bloomberg.com. >> coming up next 20 minutes, it's been almost two decades

after yum! brands were spun off. jack dorsey not giving up his ceo status at square as he becomes the new ceo of twitter. from dean be hearing short span who gives us his thoughts on everything from the economy to china to volkswagen. ♪

>> welcome back to the bloomberg market day. scarlet: we will check in with julie hyman with a look at some company news.

and you will start with a big new investor for ge. >> it's interesting that we have try on capital here getting involved in such a large company in the form of general electric, buying two $.5 billion in his stake in ge, making it the largest that's the ninth largest shareholder. in a statement, they called it undervalued and underappreciated by the market. wigglingw, ge has been down its business, spending off -- spinning off its capital, selling the home appliance saidess and analysts today the involvement mainly to it to promote other assets, maybe industrial units and large-scale spinoff or sales of some of its health care assets. we will see what this all brings. investors like the news, shares are up 4%. you can see it in the chart, take a look at my terminal because ge has been stuck in a range here since the beginning

of 2013, between 54 and $28 a $24 and $28 aen share. be a substantial breakout from where it is right now. i'm watching another company, a much smaller one that has significant and interesting ownership. talking about sun edison, the renewable energy company. it's up 7% after talking about some restructuring and laying off of the 10% of its workforce answerable by its business structure. the stock has been battered this year. the company has made acquisitions this year and there were questions about its business model. down more than 70% since its seven-year high in june. it is heavily hedge fund owned. davidight capital, einhorn's firm, is the top holder of this company with nearly 8% stake.

management,ital pine capital, a lot of hedge funds have gotten involved in they have not done well this year. i mentioned the drop from the high, send more than 50% for the year. >> a veritable who's who of hedge fund managers. >> not so hot this year, at least this is one of the reasons why. may bei shareholders wishing the young spinoff in 1997 never happened. ever since that split off, yum shares have trashed pepsi shares. reportererg news leslie patton joins us from chicago with a preview. let's take a stroll down memory lane and talk about pepsico's original spin off of its restaurant chain which took place in 1987. what was the motivation? >> they are two totally different businesses.

restaurants are more cyclical and prone to economic swings than making soda and chips which is pretty inelastic. >> it also speaks of their business model. young with aggressive, expanding overseas, especially in china. pepsi took a different approach. yum was on a first restaurant brands to really recognize the opportunity overseas, especially in china. pepsi does not have the infrastructure, the bottling facilities that it's larger counterpart, coca-cola has. its playing catch up there, trying to expand overseas. facing troubles in the u.s. here with people drinking less soda. >> that has been a big issue for pepsi and coca-cola. let's stick with yum. the company's reliance on china has been a hindrance of late.

an investigation into its local suppliers hurting sales, hurting profitability. is the worst over? in terms of forecast, what you see? >> that's what we will find out tomorrow when the company reports earnings. analysts are spending and increase which is a huge improvement from the prior quarter, but we just don't know by how much. that is what we are waiting in looking for tomorrow afternoon. >> what you looking for in terms of yum in the rustic market? >> taco bell is the story for yum lately. they are growing with their breakfast program and they are now opening units that sell out the hall, wine and beer. they open the first one here in chicago not too long ago and will did -- and will be doing another one in san francisco. >> they've been doing really well.

as you mentioned, you cover the restaurant interest -- industry. into a real estate investment trust. is yum facing any kind of calls like that? >> they haven't been and it's not --y because most, if i think probably at least 90% of the restaurants are franchised so they already kind of tap into that. they don't own too much real estate, so that's maybe why they are not facing the pressure that some of the other chains are. >> so it's just leverage to their operational -- they're operating activities for the different branches. thank you so much for joining us. leslie patent covers the restaurant industry for us. ahead, jack dorsey stays on as ceo of twitter and square. we will look at his balancing act as the top and he plans to go public. -- as the company plans to go public.

♪

>> welcome back. official, twitter has named jack dorsey its permanent ceo while he remains the ceo of square. they are expected to soon file for an ipo. alix: he will be the ceo of two major public companies, joining the likes of steve jobs. or more perspective, we are joining someone who knows what it's like to lead multiple -- ultimate companies simultaneously, scott kurnit, founder and ceo of keep holding. scott: you have two jobs. it?ow do you do

scott: it depends on the person and the companies, but one of the things i think we miss and we talk about jobs and month, but people that run conglomerates are running multiple companies so convicted about it, disney has parts and movies or time warner. yet to have great people in place and let them run with the ball. the fact that adam is going to be there, but your for these two guys is for jack to say whatever adam says goes and brad to say i'm not sure, i better get on the phone or send him a tweet that says should i buy this? what we've heard from a lot of people is it's about letting managers manage and not being too nitpicky. we all kind of feel -- fill the time it's available. if we have no time available, you will do the most important things and it may even be

better. >> you said earlier that someone like bob iger runs basically different companies, he runs parks, the tv business and the franchising business and licensing business. how much overlap is there between a company like square, which is getting ready for an ipo, versus a company like twitter which is in the midst of convincing skeptical investors that it's on track? scott: twitter is actually the one he knows better. it's the one that is worth more money and going to be worth more. i would be more concerned is -- as a square investor because it could be have as much fun, not as visible. twitter is in his bones and you have to look and say, can a guy run to companies -- two companies. when jack says we will break from 140 characters, the team will go, we buy that. if a new ceo came in and said would get though they

lipservice, one thing about these big companies is in a sense, you only run them with vision and story. you are not writing the code. i have seen too many places. yahoo! in their worst years when management said we will do x y and z, and it never happened because the engineers did not like it. jack and get people to buy into it because he was there. he did not succeed and that is more important because investors, i for one, love guys were really good a really smart and have something to prove. >> who does he need to prove to? twitter has not recovered from a levels since they fell. is not anor community agreement in that he can really help turn things around. scott: you have separate investors from the product and the business. investors look at these businesses day today, quarter to quarter. it's the job of the ceo to look over several years. you have the stock price matters. makehe first has to do is

some big and tough decisions. the fact is, he has to change the tires on a bus moving 60 miles an hour. the good news is he knows how those tires are attached. someone else would come in and say they have to figure out what the kuna do. twitter has serious issues. >> that the advantage of being a founder as opposed to being a hired gun. throughhas already gone massive turmoil, three product main -- managers. scott: he needs to make any changes he needs to. he's been around the board and he knows the players. one of the mistakes i made a my career was going to a company that a just been through a mckinseying. what happened was this at here are your new direct reports, they are the new guys,.

the mistake i made was i should not taken them all out and said let me take the second person in that department, who is probably as good as the first and could manage the -- they should be able to replace you. i think the fact that he is coming in and everyone -- big expectations. he has really cut his teeth on the square job which is a success. i think we will see some change but he knows the players who are there. >> scott kurnit, thank you so much. ceotill ahead, blackstone says the economy says the economy that the -- says the economy is slowing down. ♪

. . the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20.

it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. alix: from bloomberg world

headquarters, welcome back to bloomberg market day. i'm alix steel. and i'm scarlet fu. let's check in with mark crumpton. mark: we begin with bill gross who says monetary policy with a 0% interest rate is distractive to the real economy. the bond king and cofounder of pimco called the current monetary policy exhausted and he discussed the effects of ongoing speculation about a fed rate hike and how it would impact world markets. bill: the fed is in effect the world's central banker and there are hints they may raise rates for may not. of dollar amounts denominated liabilities, trillions of dollars/back and forth, creating a liability situation which not only affects financial markets but damages economies. mark: he made it clear that

investors should adopt a risk off policy. vice president biden is reportedly nearing a decision on a white house run. will decidesident whether to challenge hillary clinton clinton as soon as next weekend. he tends tondicate be leaning toward a run. the senate is expected to vote on a bill that could affect military benefits for more than a million people. it would provide a 401(k) type retirement plan for those with fewer of 20 years military service. those individuals currently have no plan. veterans would contribute their own money with the federal government matching a portion of the contribution. the nobel prize committee says the work of this years winners could help eliminate diseases for 3.5 million people. the world health organization says the therapies cut that's from malaria -- cut deaths from

malaria by 50% in last year. a weakening hurricane joaquin is headed out to the atlantic. it is now a category one storm packing winds of 85 miles an hour. big swells are effecting much of the eastern u.s., including south carolina. cc sabathia is checking into an alcohol reef -- alcohol rehab facility and will miss the entire postseason. he says he's making the move to receive the professional care and assistance needed. the yankees play host to the houston astros in tomorrow's wild-card game. the washington have fired their manager. team was expected to repeat as national league east champs and favorites to make the world

series but they failed to make the postseason and had major problems and an off the field. that is a look at our top headlines. you can find the latest news on bloomberg.com. scarlet: thank you. cc sabathia has checked himself into rehab before the postseason -- that is huge. it is blowing up on twitter. something really bad had to have wanted this at this point. founderackstone group and ceo stephen schwarzman says the economy is slowing down. he said it shouldn't be a surprise to anyone. >> the u.s. economy has hit a little bit of a slowdown. we can see it in some of our businesses. at the beginning of the year, but that should not

be a surprise given all the things that have happened over the last few months with dramatic changes in currency values and it's harder for americans to export all kinds of other issues that we are facing, with china and commodities generally. it is all truncated into a narrow window. thingst that these happen over six or eight weeks is more than anyone could absorb. >> is a rate hike off the table? stephen: you have to ask janet yellen. i don't care. it doesn't make much of a difference. interest rate hikes of 25% of people have been talking about for two and half years -- if you haven't discounted a lot of this

stuff, they've got the issue that raising interest rates is probably a good thing. however, there problem is because u.s. currencies appreciated against almost everyone in the world, we've had the impact of an interest rate increase already through the slowing of the economy. >> more globally, do you expect the global economy is growing at this point at a healthy rate, or do you think it has all slow down? clearly the economy is growing on a global basis. in the u.s., we are probably somewhere in the twos and europe is growing around one and a half. together, that's about 45% of the worlds gdp. that is a good, solid amount of growth. ofphanie: what do you think the commodities market? >> about 50% went to china.

not every commodity, but on balance. it has build a lot with real estate and other things, so they are consuming less. that is impacting countries around the world. >> doesn't account for quick retrenchment on the supply side? areheir development cycles five to 10 years. when the supply comes on, it just crashes the price. demand is going to be soft and there's more supply, you don't have to be a rocket science -- rocket scientist to figure out that they call it the super cycle is over. for people in that business, it's a harsh reality.

you have to trim your overall cost and hope the world starts growing enough to make your life much more interesting. stephanie: you don't have to be a rocket scientist, but glencore and that team have been considered the smartest guys in the room. how do you view them today? smart andvan is very they have assembled a huge business. they may have gone one deal too far and everybody is hurting. stephanie: does that mean you could want to buy some of their assets? stephen: that means their debt is higher than other companies and that is what is creating this kind of whirlwind directed against them. in the internet world, you can communicate instantaneously

everywhere. and that hears it creates adverse movements. and they clever people are not going down. congratulations on the launch of your show. a lot of guests on your program said they don't care about a hike from the fed. david: that was a consistent theme. pretty much everyone is saying we don't care much one way or the other, although they had some differing views about what would happening -- what would happen. intot to put this perspective --stephen schwarzman says the economy is slowing down because of these events that

happened in a short time. what were you most surprised by? i know you have a great tradition of getting a lot out of your guests during the commercial break. david: there are quite a few things i learned. have invested in a lot of shopping markets in china and he had a somewhat if review of what is going on in china than what we have heard. he thinks it has in reported to the negative side too much. the middle class in china continues buying pretty robustly. it could be better than what some of the macro indicators might he. alix: digg below some of the numbers and china is not as bad as you think. what the have coming up tomorrow? david: we have tom stier. he's been very successful and is

well known for ready -- four really getting involved in politics. are delighted to have him on and welcome to bloomberg. scarlet: and get his thoughts on what he thinks on the different races. david: politics will be a big subject. scarlet: david westin -- you can watch his program from 7:00 until 10:00 on bloomberg television. alix: don't miss it tomorrow. tom stier is going to be a great interview. scarlet: coming up, after weeks freescussions, the largest trade agreement and generations is reached. how will it affects the combat how will it affect the economy? alix: and the ceo of air france says he will see his own employees after protests turned violent. scarlet: and many colleges are

building huge financial -- huge athletic stadiums. how does it pay off? ♪

alix: welcome back to the bloomberg market day. up int: we are five days a row for the s&p 500, so we need to check in with julie hyman for the latest. we're not losing any steam. julie: we are at near session highs. i have to remark on this -- over the past several weeks i the unexpectedness of the move --

rising to the highs of the session across the board and up for the fifth straight day. young these five days, if look at what is going on, you can see it mirrors what is going on. energy is the best performing group and that is what i want to zero in on. and lookd the numbers in theenergy stocks energy index on the s&p 500 at all of them are up. chesapeake energy, apache, marathon oil, some are the worst performing stocks. only one stock in the whole index is down over five days, so it has been interesting. if you look at where oil prices are trending today, we a certain resilience because oil is up nearly 2% after saudi arabia said it was cutting prices.

continuatione a from what we had see on friday after we learned the rig count had fallen again. that brings the correlation we have seen between stocks and oil. is this something fundamental moving this both or is it i am short and -- and i'm going to cover? here is the correlation between oil and stocks. if it were at one, that would be an even correlation. itcdotally, it feels like and we have had a big increase in the correlation between oil and stocks. the five year, it is interesting. the correlation has come down substantially. theou know, we watch markets day in and day out.

the numbers are showing it is the highest has in in year but is considerably lower than when the market was booming. that correlation on the right side is striking. past twoat is over the months we've seen the correlation. scarlet: thank you very much. this morning, the u.s. and a dozen nations agreed of the largest free trade deal in a generation. alix: it has taken more than five years to hammer out the transpacific partnership. transpacific partnership. we want to bring in our bloomberg white house correspondent, phil mattingly. there was blood sweat and tears on this negotiation. what did they sign off on and what are the trouble spots? phil: 30 chapters and working up

to the last moment, still technical details to be worked out. first, it opens agricultural markets in places like china and japan. most arduous of negotiations. it titans intellectual property rules which will benefit the tech industry and drug industry. one of the things the obama administration has been focused on is what it means in the region. regions tight block of that have free trade with one another. another thing to keep in mind in general in this region -- it's something the hong kong finance minister noted earlier today. news andade is welcome something that has been discussed for a long time.

milestone,successful it is really good news. as far as hong kong is concerned, anytime nations become more free, it must be good for us. if that is the case, we can increase the volume of trade around the world and that will certainly be good for china as well. phil: there's nothing thing china will eventually join the tpp going forward, but that is years away if it happens at all. scarlet: certainly not in the original plan. what does the president need to do to get this deal through congress? phil: it is not over. what the white house was able to accomplish is to make the process easier going through capitol hill. now there will be 90 days to look over the agreement.

but the president has work to do. the senate finance chairman, orrin hatch, says it fell woefully short of his expectations. they will have to work hard. 2016an't forget about the elections. by the time lawmakers are voting on this, we will be in the heart of binary season, so you have to factor that as well. without china, does it the kind of financial integration and sway one might hope? if you talk to u.s. officials, they think yes. there primary rationale as they think it's necessary to bring the countries together into one significant block, not necessarily to counter china but to add a counterweight to china. that has been their strategy. scarlet: phil mattingly, joining

us from washington. alix: coming up, colleges are taking a field of dreams approach, but many are striking out. ♪

alix: welcome back to the bloomberg market day. scarlet: if you build it, they will come, that's what many small colleges and universities are hoping. in an effort to attract more students and endowment money,'s , colleges are building big sports facilities. but it usuallyx: ends up being a losing deal. guest: what you see is a large national trend of students and families question what the value

of the four-year institution is. necessarily anot guarantee after you graduate and after you spend $200,000 on tuition in some cases. you see some declining enrollment. one school announced the closure earlier this year. so colleges are strapped for cash and starting to think outside the box. scarlet: do they have a track notrd where schools with many investors? kate: the research shows the opposite, yet schools are attracted to this idea. sports have that alert. the coach comes in and it's on tv. people like the idea but there are few examples of actually working. i can only think of two. the first is the university of ablecticut and they were

to parlay that into their basketball program very well. they won the national and in that in 2009 same time, they were able to raise their ratings from 39 nationally in 2001 and last year, they were rated 19. i think they doubled their enrollment, so a big success there. the only story i have seen. alix: what do they do differently? is it the management? professional sports obviously make a killing. kate: what they are doing right is when they build the new facility, it's not through public finance debt. they use it for enrollment dollars or endowment dollars that alumni want to see. schools fall into trouble is when they start to use public financing to build

new stadiums. if you are -- if you're alumni bases not giving you the dollars, you probably we don't have program to make it work to begin with. that's the commonality i'm seeing. it's not only college administrators in love with this idea. you could argue me into full officials do that. there are lots of sweetheart deals to build stadiums on the taxpayer's dime. kate: what you see on colleges is mimicking a national trend. -- they are hosting the super bowl this year and they are running into a lot of problems with all of the bonds they took out to build that huge the szilagyi for not only football. but they are hosting a hockey team. great, but maybe not

in arizona. scarlet: thank you so much. coming up in the next hour, we will hear from nick learns of the kennedy school of government and former ambassador to nato. we will get his take on the latest information out of syria as well as russia. not good right now. ♪

>> welcome to the bloomberg market day.

from bloomberg headquarters in new york, i'm david guerra and here is that we are watching this hour. shares of one core rallied after the company is south -- company is solvent. how should the west react to rush' strike in syria? and apple pay has failed to catch on with consumers one year after it was introduced. marketset's head to the were julie hyman has the latest. julie: we are watching a rally that has remained intact. andee stocks on the rise they are gaining steam as we had throughout the day. the continuation of the rally from friday when we got worse than estimated jobs data followed by worse than