with a former of -- >> the u.s. stock rally settled on mixed results, the s&p little change. >> the question is "what'd you miss?". >> earnings favor, yahoo! and certainlyte -- looking to make their announcement. >> three markets where you can find opportunity. >> from london, the demographic debate. a conversation with morgan stanley about the trend that could change everything. markets, a with the

ho-hum day. morgan, theym j.p. point out short interest hasn't changed. all the talk about short coverage may just be talk. >> it was a great note. there was $90 billion of short covering that would happen. which could be a huge bullish signal for stocks. cracks the number you have to keep in mind is that short interest is 3% of shares outstanding. . not of thought that. i was looking at technicals today with the 100 day moving average, we are close to this away, and i points brought this up because once you break through those long-term moving averages, you can see a

lot of follow-through buying. let's head over to london. joe: thanks. i want to dive inside my bloomberg terminal to look at the canadian dollar versus oil. we have the canadian election results last night. the liberal one big. they're worried he will spend more than the conservative government, definite rise -- a deficit will rise. the canadian dollar is totally fine today. it did not weaken on the news. oil is driving the canadian dollar. the canadian dollar versus the it isollar versus wti, not hard to see what drives it. maybe he could change things at the margin with the budget and that could affect the currency, but a large part of canada's fortune is now likely to be a

function of oil. >> it is all about crude oil. i will follow on your lead and take a deep dive into my terminal and show you canadian household debt. wasbackdrop for the victory the gdp contraction and rising debt. this is the canadian household debt as percentage of gdp. --has been marching fire higher and now i do record high. during this time was 85%. a lot of people saying that this raising concerns that a u.s.-style housing crash may be around the corner. >> interesting. when you talk about the election , i want to talk about the markets today in the u.s.. take a look at tesla. the yellow line is general

motors. what did we hear from tesla? basically consumer reports said that model s fell from its recommended list because of the low average reliability. that's when you saw a steep slide in tesla. they both hit this level at around 1:30 p.m., but jim had a nice bounce. they diverged for a wild. tesla bottomed out there. while. diverted for a off thed think tesla is recommended this is a good thing for competitors, but not necessarily. you can see all the charts much more on twitter. a cofounder and chief investment officer of cambria investment management is with us today from

los angeles. good to have you. always fun to get your take. you were saying in the mid it is time to go to cash. you made thathy call and what your charts are telling you now. >> looking at the u.s., the yields aty for bond 2%, u.s. stocks overvalued on any metric great they are not terrible. -- any metric. they are not terrible. there is no way you're going to get to the returns of a pension fund or what ever is looking for that return. on top of that, u.s. markets have been in a down trend. you have to look elsewhere for those big he returns, which is one of the reasons we are positive on foreign equity markets. i want to ask you about some of the structural things in the market. people are talking about how their is more and more money

that's going into quantitative markets, when the paper bush. when they're down, people sell. you follow trends a lot. inyou think the interest this area exacerbates the moves and that's why we get huge volatility spikes like makeup -- late august or september. >> i think it can. if your trading cotton or something, but when you're talking but u.s. equities, bonds , currencies, it is a drop in the bucket. when you look at how much is just sitting there in the trillions of dollars compared to the relatively little in buying, it is a minor influence. i think it helps in a lot of the markets where you're looking for price discovery, but a merry -- a very minor influence. >> yahoo! earnings are crossing.

it looks like it's in line. >> it looks like it is in line but light. the consensus estimate was $.15, so lighter than anticipated, but a huge drop off from the third quarter last year when it was $.52. revenue, when you -- revenue was coming in at $1 billion, slightly lighter than anticipated. announcements,er yahoo! says it has cut spending, workforce, and discretionary costs, but note number of affiliated with that. it looks like there will be more expense adjustments by yahoo!. >> it says it's top priority is the plan to spin off of its alibaba holdings. it is the one thing that

investors need to hear from this company. grow, butor, hard to what you going to do about alibaba? yahoo! has been seen as a tracker stock for alibaba, but operationally not doing as well as it could of been. what happens to alibaba? >> which brings up valuation questions. to look at a lot of ratios get an idea of how expensive stocks are. when you take a look at the ratio for the s&p, what you see and what is it tell you where it's going to go? 25.round historically markets around 16 or 17. the u.s. is expensive. it's not horrific, but it does set the stage for weaker returns going forward. if you look at the rest of the

world, the broad form developed sitting around 15. 16, emerging. even drilling into individual countries, much more opportunity in just the united states, which is a big influence because the united states is around half of the world's market cap. moving away from that benchmark is a smart thing to do. >> you use a 10 month moving average, why that over other time frames? does it work better for equities? >> it doesn't matter. the big decision is to either use trend or not. the same thing with valuation. those two are very complement tree indicators. most investors find themselves on one or the other, trend followers, buy and hold, or value guys. the intersection of the two can have a much more complete and positive performance come as a something like the 10 month

moving average it doesn't matter. thing is the decision to use it in the first place, and again we stress this a lot, it is not a magic indicator, but across markets it reduces your volatility, reduces your catastrophic drawdown, which doesn't necessarily happen that much, big is you a smoother equity curve and exist to trade another day. can have a much smoother equity curve. >> we do have some more numbers from chipotle. kind of the same thing, in line, but a little light. >> if you look at comparable sales for retailers and restaurant companies, third quarter up slightly higher than what analysts had expected. the other numbers are pretty much in line and light. -- isl revenue misses

right in line with consensus of $1.22 billion. $4.59 adjusted price per share, which is like. they were looking for $4.62. the range was fairly wide from --29 to 480 five cents $4.85. it is increasing restaurant openings in 2015. when an analyst looks at what makes a restaurant growth stock, it is how many restaurants you're opening a year and a quarter. >> same-store sales number. >> we want to update you on some information out of yahoo! from its quarter. yahoo!s as if google and are in a services pact, and

google will provide yahoo! with search advertisements, reaffirming the link with these companies. >> and it's going to be paying google fees for image searches as well. this is something we are keeping an eye on. .own 5.6%, chipotle yahoo! up. next, we will talk about the three global stock markets that he is thinking are attractive for investors right now. ♪

alix: i am alix steel. "what'd you miss?" >> the hard work begins. fresh off his

party's stunning victory must lead a nation that voted for a draft of change from the conservative leadership of stephen harper. at the top, infrastructure improvement, financed with three years of deficit spending. mr. trudeau has proposed raising taxes on the wealthiest canadians to pay for a tax cut for the middle class. jim webb is dropping out of the democratic presidential race, but does that mean he's done entirely? and wille is undecided weigh his options in the coming weeks. his campaign said he was considering an independent bid. paul ryan may have had a change of heart. he is said to be open to the idea of becoming speaker of the house, but there is a caveat. he wants assurances from republican hardliners that he will have their full support. says he believes ryan

"would be reasonable as speaker." the american cancer society issuing revised guidelines on mammograms to cut down on false loans -- alarms. they should now start getting them at age 45, instead of 40. they recommend that women get screened every other year beginning at age 55. medical experts caution that women should speak with their doctors and it is not a blanket recommendation. that is your your news. -- your news. >> we are back with cambria investment management chief officer. you are telling us earlier that you are taking a look at valuations being quite high and nominal returns headed to zero. how much longer will stocks fall. ? >> you never know with bear markets. you have the relatively painful

ones at 50%. you have almost every equity market in the world to climbing by two thirds. you never know. that is the stage for secular bull markets. if you look at where the returns have been in the united states, sub are reprints -- returns since 1999. it takes a while to work off those bubbles. returns,later, subpar but not near a secular low for the start of a bull market again. we've had a pretty strong six-year run, but we are back into expensive territory. >> you talk about how u.s. stocks are expensive and how the bear market could have a longer run, but we seen a real nice bounce the last couple of weeks. what would need to happen for equitiesy that u.s. have momentum on their site and are in a real uptrend, by the

way should aside? momentum over foreign markets over the last six years. it is 50-50 which outperforms. the u.s. has dominated almost all equity markets for the past 10 years. if they continue to go back up, i will not say that we should be out of this market. .e will start to get back in i have no problem with that. in general, the valuation side -- they hit mid 40's in the u.s. in the late 1990's. hit 40,her markets have 50, 60, and japan as high as 90 in the 1980's. were not in a bubble. it is not horrific. they are expensive. if the trend continues, we will get out of the way. >> we have a track now of japan, a major stock market that took years to hit the bottom. japan isn't some backwater.

it is one of the world's largest economies in terms of gdp right now. it is a fundamental, instructional example of a bubble. twice as big as ours in the 1990's. and people talk about the demographics, why japan has had or returns for 20 years, but it takes that long to work off a really expensive evaluation. it's going to take a while to japan are the time it finally got it cheap, nobody cared. stockswanted japanese because they had been dead money for 20 years. what happened? they had a monster run. -- what'spportunity happening in south america, brazil, europe, eastern

emerging, where the really cheap countries are if you're looking for big returns, but certainly not the u.s. next questionthe right out of my mouth. you like brazil and russia. very few people like right now. how cheap is brazil? how could you lose on brazil? could it still go lower? you find that valuations correlate with how much of a market has already declined, so by the time you are buying these markets like brazil and the like another four or five other countries, eastern europe, czech republic, usually they have declined by 50%, 60%, 70%, 80%. look at greece. you are buying markets that no one wants. i gave talks in columbia and

mexico when they were in bubble this is whyd said this is really expensive in a bubble. no one wanted to hear that. everyone gave 100 reasons why that is not the case. the same thing happened on the flip side. i was given a talk and austria and said the markets are really cheap. this is wonderful. nobody cared. it had already declined so much. same thing in brazil. why notfind 100 reasons to invest, but historical violations are better ways to invest in market cap and a much better idea than investing in expensive countries. this is particularly important as the u.s. is one of the most expensive countries in the world. you can pick up a basket of these cheap countries for a p/e ratio of around 10, less than half the u.s. >> cofounder and chief

investment officer of cambria investment management. >> more on yahoo! and google. usy johnson will be joining to tell us the significance of this agreement and what it means for yahoo!. ♪

alix: i am alix steel. "what'd you miss?" google will now provide yahoo! with search advertisements. cory johnson joins us now from san francisco. what is that mean? >> we shall see. google apparently is going to be doing a lot of the work that yahoo! does, both in providing searches for yahoo! search queries.

may bethat would show up served by google. google would then pay for a certain amount of traffic and take a cut of what ever they get paid by advertisers. anyou think about google as advertising sales vehicle, the google ad salespeople will be working to put ads on yahoo! as they do for other sites across the internet. you might look at it as a capitulation or yahoo! relying on google to do a lot of work they used to do. this could be potentially such a big deal that within the filing there is a special clause saying there will be an accelerated antitrust review of the justice department that google will make itself available to. almost all of the search will be done only by google, if yahoo! is now farming out results to google. more headlines, it's

revenue for the fourth quarter excluding partner sites will be lower than what analysts had anticipated, 906 million versus the consensus -- >> that is a significant drop for this company. we will start to look at this business as a stand-alone business after the alibaba spin off. the results are getting worse and worse. worse and worse results, a lower forecast, a deal with google. you would think that they would be in bed with microsoft. does the google-yahoo! packed take center focus here? >> within the fine print there is a line that says the deal can be abandoned if there is a change of control, that is someone takes over google or yahoo!

yahoo! is a shadow of what it was. yahoo! has spent billions of dollars in acquisitions to try bigger, but yahoo! is getting smaller. we know there is some cost-cutting here, but they will buy companies just to get the engineering talent at one moment. here we are turning over operational business to google at the same time they are seeing revenue fall from mashed expenses to that small revenue picture. -- left ofs less yahoo! if the search is done by google. what is yahoo!? it isn't all of the search. it is some of the search. it is destinations, male, homepage, sports, finance.

>> cory johnson. thank you so much. >> with the best check in the world. ♪

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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. >> i am scarlet fu. "what'd you miss?" biden'spresident presidential ambitions may be up in the air, but the stump speech is taking shape. at an event honoring walter mondale, mr. biden the trade himself in the central player of president obama's administration, from working with congressional republicans to the killing of osama bin laden. he said excepting the offer to become vice president was the best move of his political career. bloomberg news says the vice president is expected to announce his plans by the end of

the week. says the united states and russia have reached an agreement that minimizes the risk of incidents in syrian airspace. it does spokesman says not include zones of cooperation or sharing of target information. russia began flying bombing cooperation with the syrian government earlier this month. the u.s. leads an international coalition conducting airstrikes against islamic state targets in syria. in israel, a month-long wave of violence shows no sign of easing. authorities there say a palestinian man rammed his car into a group of israelis today, injuring a soldier and a civilian. the assailant jumped out of his car and began stabbing people before he was shot and killed. u.n. secretary ban ki-moon is in region, appealing for, and a cessation of bloodshed. a warning for israel opposition leader, if palestinians don't

receive a state of their own. brazil's political crisis opposition members prepare impeachment procedures. they say she manipulated physical accounts, even after the fact it was censored. the shrinking economy and haveng corruption scandal crushed the approval rating. that is your first news. >> thank you so much. let's recap the headlines from market close. the regular section -- session was a snoozer. yahoo!, third quarter earnings-per-share missing estimates. revenue was in line. the company reducing full-year forecast. the huge news here is not so much the alibaba stake. the fact that it has entered a service is packed with google. this is interesting. google will be providing yahoo!

with search advertisements through adsense. i'm not sure if this is the growth investors are looking for. they are literally having to pay for the growth. the other side moving in after anders -- after hours is chipotle, a third-quarter profit miss. wages risingf across the board when it comes to retailers, and now from chipotle, higher labor costs squeezing the margins. we did see from them that they are going to open 215-225 year, on thehis high end, 235 in 2016, the lifeblood of helping chipotle

reach there, sales goals. >> they are reaffirming their sales you, which is good news for investors. labor costs increase. >> painful. belowgdp growth falling 7% for the first time since the financial crisis. some say it is a disappointing number while other argue that it reflects our country rebalancing. strategy atglobal eurasia group, thank you for being here. beijing is inhink this transition? >> i would say about a third of the way through. they have short-term advantage, and also a much longer transformation they need to make.

that number suggests that the number is -- it is not so bad that it reflects, suggesting a need for the authorities to fling a bunch of stimulus of the problem. they claimed there would be 7% growth. they can take a slight miss on the growth target but unwilling to compromise on the structural reform agenda. >> it's more on the consumer side and lest on the investment side. in 2015,e fastest pace well-off the 2014 average. vindication for beijing that says it is transitioning to a domestic-demand driven economy. >> it is. that part of the economy is doing fine. one of the issues has to do less with china and actually what the prize numbers are telling us. createsentially inc. --

international spillovers. ,ou had the real growth numbers 6.9%, the nominal number was 6.2%. what you need to keep in mind is that this is an economy growing in 2012.0% nominal in 2012.minal what that means for the rest of the world is something we are waiting to see play out. joe: you recently wrote a note in which you talked about some of the imbalances in the world, specifically that emerging markets are financially exposed to the u.s., but economically explodes to china. one way to re-synchronize growth is to come out of commodity exporters to source a larger -- whenof their funding

you mean specifically? >> i mean for a company like bh , it might make more sense to borrow in remember the -- rem minbi. what happens to the price of your exports, your stock, will depend to a significant degree on what china growth is doing. i think it makes sense under those circumstances to try to cap the remminbi market. that's one the reasons why they find them in the predicaments they do now. what do you think the prospects are for a full liberalization of the remminbi

or massive devaluation in the coming years. how negative with that be for global markets, particularly risk markets? -- theyliberalization have already set out their goals, which are going to be to allow more outflows through accepted channels, which makes sense, because it is an economy twoe investors now have options, domestic real estate, and domestic stock. so what that means is that you need to allow the chinese people more access to offshore investment opportunities, but do so that it does not conceal capital flight. >> is that what we have been seeing? the treasury estimates capital outflows to be around $280 billion in july and august, so your opinion is that there is something else going on? >> what we are seeing from the

data is that essentially chinese corporations and banks are running a very large offshore trade. if you look at overseas corporate barring, both -- borrowing, both banks -- one of the important things we are trying to gauge is to what extent the capital outflows represent asset liability matching, and to what extent the represent money just leaving for political reasons, anticorruption campaign and stuff like that. the anecdotal suggests a lot of capital flight, but the hard numbers to the extent we see them suggests it is liability matching. >> interesting. what is different about this round of upcoming fiscal spending that the government will embark on versus the last allocation of capital following the financial crisis. how is it going to be different? >> it is not going to be as much.

the scale is going to be very different. conscious that you have had a huge credit expansion , significant overcapacity, which contributes to deflationary pressures. there is very little willingness to do something like that on a very large scale. this,re talking about things like raising the social safety net, which reduces the need for cautionary savings. some targeted stuff in terms of the environment, maybe a little bit of infrastructure. time. bang like last they can't afford it. >> thank you so much. up, a conversation on demographics. that is next. ♪

>> i am scarlet fu. "what'd you miss?" a big pothole for tesla. consumer reports ending its designation because of below average reliability. owners reported complicated melodies. -- maladies. >> bloomberg news has learned that while espn is planning to lay off 350 people, the cuts could be announced tomorrow. the network has been hurt by subscriber losses. disney announced that earnings at cable networks would not meet forecast. that is your bloomberg

business/. let's toss it over to joe and london. the boe monetary policy committee, good heart. joe: i spoke with charles goodhart. i asked him about his there he if inflation and interest rates may be coming to an end. let's take a listen. >> it is basically about demographics, population trends. we have had the world's biggest , a hugeitive supply increase in the availability of labor. that came as a result of demographic changes. women started have far fewer babies. populations in most countries, 30% under the age of 60. that has fallen way down.

having fewer and fewer babies. it is below the rates at which population reproduces itself in many countries. that meant that the ratio of workers to people who are dependent on the workers improved and the sense there were far more workers. it wasn't until relatively recently that you got a lot more of the older people coming along as longevity increase and standard ages. china ande arrival of the ending of the soviet union, and the arrival of eastern europe. all the workers there became available. -- a huge hugely increase in supply relative to demand. so this huge boom in labor basically in your view diminished labor bargaining ,ower and decreased wages

depressed inflation everywhere, and now you see that turning around. >> yes. the ratio of the old to workers is increasing. the age of death is being continually pushed off. live, yourhat you expectation of life increases i six hours, which i think is a bit extreme, but nevertheless the ratio of those over 65 to those between the ages of 20-65 is going to increase absolutely dramatically. joe: in addition to the new supply of labor we have seen in recent decades. we have seen other things, policies designed to weaken unions in the united states and u.k. have policynt decisions diminished labor bargaining power rather than demographics? >> only very slightly. what really menaced labor's the abilityower was

to say that if you will continually demand increases of wages, i will ship the production operations to china or poland or wherever. that threat was real. that meant that labor lost its power. joe: when will we know if you are right? two years? five years? at what point can we say this is clearly what's going on or the thesis is not bearing out? >> probably not for about 10 years. in the short run, all these long-run trends get overtaken by short-term factors. slowdown,ment, china decline commodity prices, the effect of that on the emerging markets. so there is a lot of stuff that will determine what happens to

the world economy in the next 3-4 years. it will be 10 year before these demographic trends are clear. think we will you see another explosion of labor supply out of india and africa? >> we could. there could be a huge number of growth in africa and india. the problem is that well they could in principle become the china of the coming age, you need quite a lot of conditions to make that happen. you've got to have quite effective government, a working population with pretty good skills, basic mathematical skills, the ability to write and read and all the rest of it, and you got to have decent infrastructure, and a country where the administration works effectively.

all that was available in asia. it is dubious whether it will be available -- ,> it's not just about supply there have to be other conditions in place. joe: much more on my conversation with charles goodhart after the break. ♪

joe: i'm joe weisenthal. "what'd you miss?" my conversation with charles goodhart, morgan stanley senior consultant. in the background paper we produced, we were very clear that we don't have anything useful to say about technology, and there are stories from people like robert gordon that

all the easy to achieve technological advances have been ,ade and that technology technological growth, will slow down from here on in. there are others who have talked about artificial intelligence that say that will lead to an explosion. in: a ton of attention recent years for focusing so much on inequality, but if it is as do in large part to this demographic story, do you think he will be proving desperate and wrong? few thatone of the bought his book and read it through the in. joe: what did you think? >> the data on inequality is extremely good. in fact, i don't know of anyone who has done the data better. joe: what did he get wrong? >> his claim is that there is

some inherent law whereby the return to capital is always greater than the great of growth. that is just not so. the return to capital has been so high in recent decades because when labor becomes superabundant suddenly, it's price goes down and b comes relatively scarce and you get a higher rated returned, so it has been a wonderful 30 years for capitalists, senior managers, because of the availabilities. joe: i want to change gears. paper in a fantastic the late 1990's that spelled out all the trouble the eurozone would have in identifying the way government power and the ability to create money were being divorced by the eurozone. looking at it now, are we going to have a eurozone in 10 years? 2025her be a year old in euro and 225?

>> i don't know. thing, the rise of china that i've been talking about benefited germany and enormously , because the things the germans produced are what china wanted to buy. wasstuff the china produced italying with what normally produces, shoes, textiles. germany and a fitted and italy lost out by the rise of china. if china is slowing down, it may reverse again. inherent pressures in the eurozone may become less of the next five years. keep itthey want to together, is there a specific policy measure that could help

to fix some of the structural flaws they have? >> it is a horrible combination of politics and economics. the germans argued that if you are going to have a single fiscal system which provides you with stabilization, you have to have political union before hand, and they want political union and are prepared to be part of a political union. the problem is that many of the other important countries such as france would like to have some degree of fiscal centralization, but they don't want a political union. there is a standoff. not very much is being done. joe: we will be right back with what you need to know to gear up for tomorrow's trading day. ♪

>> i am scarlet fu. "what'd you miss?" sandisk inmorrow, advanced talks to sell itself to western digital. a deal could be announced this week. ferreri just pricing its ipo and $52 a share, the high-end of its range. 17.8 one million shares, raising $893 million. there is a lot of demand going into this. we will see tomorrow. >> the ticker is race, pretty cool. joe: there's been a lot of noise in this on this data. a huge research. then there was a big drop. out tomorrow.pps someully we will see

normalization on that front and get a sense of where buyers are. >> awesome stuff. that is all for "what'd you miss?". thank you for watching. >> we will be back here tomorrow. joe:

>> jim webb, and man with a simple dream. all he wanted was to be heard. now he is doing the only thing he can. >> i am withdrawing from consideration for being the democratic nominee for the presidency. >> tonight, we bid farewell to a democrat. jim webb. he has been waiting for 10 minutes. ♪