from bloomberg world have perez good afternoon. i'm betty liu. -- from bloomberg world headquarters, good afternoon. does the data back her up? congress launches an investigation into pricing by valeant, turing and others. facebook faces high expectations as it reports quarterly earnings right at the closing bell. the social network has consistently delivered surprises to the upside. about one hour away from the closing bell. let's head straight to the market desk where julie hyman had the latest.

>> janet yellen and the comments she made before congress, it did not have that much of an effect on stock. green.daq briefly turned utilities turned higher today. technology stocks also trading higher. the technology higher for energy stocks, really the big drag throughout the session. front, ichnology wanted to point out a few key moves today. microsoft in the last hour or so, the firm saying it is third quarter that it had taken a stake in microsoft. those shares higher. our that an amazon trading at records today. worth noting.nly facebook, i also want to check in on that stock.

rivaled by little better than 1%. brendan: media shares are tumbling. julie: yes. it was like disney day that we had a few months ago when disney came out with earnings and it sent media stocks down sharply. it looks like time warner is to blame. up by 5%.e was a comfy's outlook for next year was below estimates. blaming it partially on currency and partially on investments into programming. there has been a lot of pressure on the media companies for content, quality content, to draw those eyeballs with so many court cutters. you are not assuming they will automatically be there. , viacom and fox disney being pulled down, disney out with his earnings after

trading tomorrow. cbs has been a standout today, down more than 1% even after third-quarter profits beat analyst estimates. thank you, julie. now let's get a check of the headlines. remy has more from the news desk. good afternoon. ramy: thanks. we begin with the latest on the russian passenger plane. recorderockpit voice from the airline, serious damage, information from the flight was successfully copied and headed out to investigators. it was serious mechanical damage . the british government said evidence may have been brought down by a bomb. its from mount sinai in lead precaution. experts are traveling to the area to check security before any reddish flight can be allowed in the eu. with little more than a year,

signing the first primary, new hampshire's first primary hearing began today and martin o'malley was among the first in line. filed in thealso granite state. candidates needed to improve eligibility and pay $1000. the projected primary date is the ninth. a daunting task ahead for virginia. the top priority in the last two ears of his term could run into a road block. tuesday's alexion to maintain a firm grip. fellow democrats had focused on seizing the state senate. they are holding onto a slim 21-19 majority. shooting violence this time in san diego. police say a man was firing sporadically inside an apartment complex in an upscale neighborhood but no one was reported hurt. people are being asked to sit day inside.

we are learning new details about the attack at a small college in california. five students were stabbed and the suspect was shot and killed by police at the university of california. all five are being treated. that is a look at our news right now. you can find the latest news on bloomberg.com. betty, back to you. thank you. janet yellen delivered her testimony before the house delivery committee today and said the december lift off is a live possibility. committee is expecting the economy will continue to grow at a pace sufficient to generate further improvements in the labor market and to return inflation to the 2% target over the medium term.

if the income information supports that expectation, our statement indicates december would be a possibility. it would make no decision about it. moments ago, new york fed president bill dudley said the same words. is aid a december lift off live possibility. joining us now with more is the bloomberg economics editor mike mckee. possibility, does that drive home the point to market participants that we will see a writ -- a rate hike? mike: there is a possibility there is a chance of it. you better be leaning that way. what we see in the markets today, the reaction to it. basically one sentence saying i agree with janet yellen. we will see what the data tell us. that is the key point. we have to see what the data tell us. friday, the jobs report.

a decent jobs number with some pressure on the in a plant rate and wage is going up. it looks at this point from both of their comments like the fed wants to be talked out of a rate increase rather than talked into it. i am looking at feds on futures and their point to a 58% chance we will see a december lift off. 52% yesterday. mike: the probability estimation is a flawed measure in terms of the actual number but it tells you how far we have come since the fed meeting. before the fed meeting, we were about 32%. thele are taking seriously idea the fed could move in december. they seem to want to get it started. talking about that again emphasizing the sooner they slower and shallower they can be in raising rates. betty: you saw it in treasuries.

yellen in her testimony referred to treasury deals and talked about whether they may go into negatives if the economy is secure. setnt to listen to what she at this point. quite if circumstances were tonged, if it were materially -- deteriorate in a significant way so we thought we needed to provide more support to the economy, potentially anything including negative interest rates would be on the table. mica: they are not worried at all about the economy deteriorating, and i have talked to a number of them. there,s a debate out even zero interest rate providing some lift to the economy anymore. inget a rate increase

december, only 25 basis points. if something happened overseas that sent markets and the economy lower, they do not have a lot to react so what else could they do? negative interest rates are a possibility. we have seen it in europe. mostly to keep flows of money from going too quickly. there are a lot of problems with it. it would be very difficult for money market funds to operate under those circumstances. there is no guarantee banks could not just absorb the charges rather than pull the money out of the bank. it is not clear they would not work well that yellen said they would have to study whether it would work in the united states but anything is possible. are we ignoring warning signs here in the economy? i get that we are looking at the jobs report and things seem to be going in the right direction, but what about earnings. we have got one of the worst so far in years. isn't that a warning sign to the

fed? mike: earnings are better than forecast when we started. a much smaller decline. they have been sandbagging us and telling us things would be terrible. a lot of people are saying maybe this is a pause. it that would drive us into the recession? in arma's inventory overhang or usually what happens is the fed raises interest rates too high and that chokes off growth. that does not happen. why would we have a recession is the question people are asking. they do not have an answer. betty: thank you so much, mike mckee, our bloomberg expert of economics. is tesla getting more conservative in the annual sales forecast? shares are zooming anyway. taking a ride with the electric carmaker.

valeant and other drugmakers, the senate launched prices it will it cause stock rises to plummet even further? ,urning a phone company around vaunted she is here to tell us how you focus on business customers is resulting in the company's's quarterly revenue in five years. ♪

betty: good afternoon. i am betty liu. $200, resolve u.s. sanction violations. banks mostsay german $11 million in transfers come almost 10 global banks resolved claims they violated u.s. sanction laws against iran and other nations. two new infrastructure funds. if completed, the schools would be the largest amount ever raised -- billion, beating its $5 million charge. by 9% this year. earn --gers will still

even as the funds lost 2% on average through the end of october. 2 trillion dollars globally to $2.9 trillion in the third quarter. investors and regulators put -- meanwhile,s volkswagen relied on discounts that were $1000 higher than the industry average. in october.ain since cw admitted to cheating. you can always get more business news. came out swinging against drugmakers today. why the companies raised the requiring them.

on the scathing review of industry numbers, joining me covers health care for us, ok. let's talk about sasha and how the stocks are reacting to this. investigatesking to . down 15%. italian to is down 5%. this is not good news and subsequently, we saw basically the drug task force. saying look, we need to publicly put this out there because valeant has this huge price hike downasically, valeant went -- obviously, people are saying they will not pay much attention and that this particular congress will not particularly pay that much attention to this.

one of them was a republican so there is a little concern here. betty: are they going up the ?rong alley here they opportunistically sought this out because they knew they were getting a monopoly and they could do with a want with it. let's put that aside. conference, ats least when the astros were launching, innovative jokes, they did something other drugs in the market did not do. a cure for hepatitis c. one of the qualms i had with the arguments made today is that they were looking for drugs on their list price.

there is a big element that needs to be taken into account, the rebate. a net adjustment. you take that into account and we did our own calculations and those specific drugs they paying somewhat similar levels to it they would in europe. what you have got to do. you go and buy something. politicians today, all on the list. it is naive, i think. betty: they're are not looking at the details then. you have got the turing's of the world. they should not be lumping the two together. >> exactly. even with hillary clinton's tweet. i think that is unfair. betty: d think investors will

parse that out, what is a value in what is not? they are -- i think they already started out. investors have started to take a sharp look at this. the only concern is he could be a smart investor but going into the elections, you start to think, they keep making the case that congress will not vote this in. the rebate situation all has to be factored in but the democrats are basically saying, this is an expensive drug and how are the patients going to afford it without actually discussing that .here are rebates here is there any sort of relief for the drug companies in the sense that, can they offer anything that could ameliorate the public? downhey bring those prices

without hurting their bottom line? what can they do? >> we discussed this, biotech. they could deftly do a better .ob with pr that silence makes it for politicians and people who want to direct attention at this and not other issues that could be focused on. part d is only 60%. part d is for prescription drugs. there are other issues like the cost of health care. betty: thank you so much. covering the biotech industry for us and also, thank you for joining us, sasha who covers health care. much more ahead, tesla, shares up even though they reported a bigger than expected loss. we will be back. ♪

betty: tesla shares are zooming today. the lawmaker posted third-quarter loss. the automaker skyrocketed today. calling to talk about the company. the stock and a target price of 190 on tesla why is that? >> the guidance for q4 deliveries is what investors should focus on and it was better than expected and better than consensus and we have concerns we would be able to deliver that guidance but that is what is getting investors excited to looking at near-term trajectory and looking at the way the stock is pricing in. imply aboutce would a 55% quarter on quarter

delivery. that is challenging for most companies. it sounds like launch is taking some time. it would be a little more credible if you saw the volumes being a little more meaningful so far in the quarter. aggressive so we so think it is a data point going forward. betty: what about competition? colin: we are seeing an enormous amount of competition in the of bmw, from the likes and itercedes, porsche, is intensifying. there is still a lot of chatter about apple entering the space, which would be another threat from the outside industry. it is a tough road ahead. betty: you cannot help but see so much of positive reports out on tesla and some of their features like the autopilot

features they rolled out just a few weeks ago. we had an editor on who was saying that is probably the by far the best autopilot software among birth -- mercedes and bmw and others. there are a lot of risks to throwing that out and i think that is why a lot of other come knees have held back. they describe it almost in a data mode. they are taking a bit of a risk by putting it out earlier than everyone else. it is also a $100,000 car. technology make the affordable. clearly, stocks pricing and beyond, you need a viable model three that is also cost competitive and profitable. betty: maybe some of this, because there is so much enthusiasm, sometime in the spring of next year, have to say, there is a chart we have

that kind of supports your argument. can you bring this chart? you will not be able to see this but it shows the cash has gotten increasingly bigger and bigger so they have burned 60% of their cash in the last quarters. is that a warning sign for you as well? >> clearly, it is not a sustainable trend. it is concerning, the level of cash burn. betty: thank you, colin. still ahead, call it a turnaround, vonta leach is now focusing on business customers and the move is starting to pay off even in the age of smart phones. the ceos next. ♪

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just watching the headlines, ramy inocencio has more. new headlines on that fatal russian jet crash from saturday. jet wasian passenger most likely caused by a bomb is cnn cites a u.s. official familiar with the matter. this comes in the wake of the british government saying there is evidence the jet may have been brought down by a bomb. the u.n. suspended flights as a precaution. voiceconfirmed the recorder of that russian plane is damaged. information from the data recorder was successfully copied and handed over to investigators but there was serious mechanical damage to the voice recorder itself. switching gears, a year to go before the presidential election. the filing time started today and martin o'malley was among the first in line and republican donald trump also filed in the

granite state. kansas needed to prove their eligibility or pay $1000. the projected primary date is february 9. in germany, federal police are carrying out raids throughout the country in an effort to crack down on international human trafficking network. security officials say 200 human trafficking networks have been dismantled since the beginning of the year. comedy central says the daily show host trevor noah underwent an emergency appendectomy this morning. he is expected back on the show tomorrow. daily show inhe september, succeeding jon stewart, who stepped down in august after 16 years. you can always find the latest news on bloomberg.com. back to you. betty: thank you. markets close, let's head to julie hyman. we had some themes going on. retail related earnings,

retailers clothing, and shoe manufacturers. annelid numbers missed -- analyst estimates. there are concerns about its performance. on the flipside, doing well after that company's results beat analyst estimates. it has been opening new store locations outside the united states and the strategy has been paying off well. down 20% after that company posted an unexpected third-quarter loss. hurt by the strong dollar and a new tax in brazil. also seeing a lot of movement today. u.s. steel in particular after that, a wider than estimated loss. closened more plants may if imports continue to flood the market. the united states came out on a bunch of various countries from which we import steel. a particular note is china's import tariff that the u.s. will

impose 236%. stocksot producing these during the session. a number of internet related earnings as well. groupon in particular suffering after glue -- worse than expected earnings. you can see zynga doing a little better. ofen on your screen in terms internet stocks, that is commonly earnings are beating estimates. shares are rising even though the cfo is stepping down and delaying gains. growth is slowing down. the latest report, and zillow's forecast below estimates. my producer said to me today, it is mover's christmas. a lot of stocks are on the move today. >> i like that. thank you, julie hyman at the markets desk.

shares are surging today. the internet phone provider reported third-quarter earnings in line with estimates along with 4% gain. been working to focus more on business customers as consumers shun land lines. also focused on vonage, one year on the job. the ceo alan joins us now. on with us early when you first took the job. great to see you again. how youtalking about view on and google's culture. how is it going so far? >> really well. the organization has a better spring in its step. we have an initiative we call employee first. the culmination of which is we want vonage to be a place to bek and it seems to happening quickly. in the years since i have been there, the organization has a better spring in its step to we

completed the record quarter for us. 23 million of revenue in the quarter, raised our value on earnings revenue. the business side, it is well underway. 130% year-over-year revenue growth in the business segment. quarter, business will now be about 30% of total revenues. before we get to the business part of it, are you spending more these days to acquire customers? >> the lifetime value is much higher. in a traditional consumer space, where we have been very effective is to manage the spend down, basically making the efficiency -- >> the consumer has been your core. >> correct. von h 15 years ago, the challenge has been in that market to bring your acquisition cost down while lifetime value

extends. that is precisely what we have done it we recorded 27% reduction in acquisition costs while at the same time extending the life of our customers by five and a month. the ratios are much better in line in that business is very healthy. it throws off a tremendous amount of cash flow used to fund the pivot to business. betty: how much longer is the lifetime of a customer versus the lifetime of a business customer for you? >> it depends on the size of the customer. the consumer customer generally has a 45 to 55 life. customers have longer lifespan shorter ones because smaller customers, you of small whole nature businesses, they frequently go out of business and things like that. small businesses or large, the economics for us are very attractive and we have gotten

economics on the consumer side for more in the balance and that is very attractive as well and that is why we posted record earnings. how much of your business do you want to be business? how much do you want the enterprise to be a part of the business? >> we go where the turns rp or from a subscriber economic perspective, the terms in business are better. we are aggressively growing vonage business. from zero less than two years ago p we continue to deploy capital as much as we could productively employ and also very aggressive -- very aggressively with acquisition. we have done four acquisitions in the last year in jumpstarting growth in the vonage business. business sector could take more investments, we will go after it. meanwhile, the consumer space, we are being more effective. and that is getting more

attractive as well. betty: therefore acquisition costs are coming down on that front. i know consumers will be part of your business, but is this pivot cousin of the rise of the smartphone and people cutting their landline spirit some people do not even have land lines anymore. this is what is driving this? it is mostly around the attraction to business. the phone system is moving in the cloud. buttore our data and music nonetheless, the phone system sits in the closet. that is now changing and moving to the cloud you have a market expected to be $10 billion by 2020, only 15%. that is the opportunity we are chasing after and it is growing incredibly quickly p we just announced fun at business had a 36% organic growth rate, excluding acquisitions, which is the fastest in the industry.

we are putting together the largest company with the most profitable growing the fastest. that is a compelling place to be, we believe. betty: what about the cutting of the land lines affecting your business? alan: there is a trend. declining and mobile is increasing. we are changing our product so that we provide both landline and mobile in concert with one another. at its simplest, i went to people all the time and said, raise your hand if you have a home phone. half of people would and then raise your hand if you have a cell phone, everybody raises their hand. wouldrs ago, the response have been in the inverse to we have to track to mobile because that is where the growth is going and that is exactly what we're doing. betty: thanks for the update. much more ahead in the next 20 minutes of bloomberg market day one of the hottest companies in tech. groupon is getting closer to becoming a penny stock.

the companies which is ceo's is again. a massive change in strategy. liking facebook in a big way with shares recently falling through the $100 mark. can the momentum keep going? the social network reporting earnings just after the bell. former apple executive says steve jobs considered building an apple car way back in 2008. find out more when he sits down with emily chang tonight at 9:00 p.m. eastern. ♪

betty: it is time for the bloomberg business flash. kraft heinz says it will close at seven factories in the u.s.

and canada over the next two years that will eliminate 2600 -- chipotle mexican grill has hired food safety chipotle firms in an effort to defuse the health scare. the company closed 43 restaurants over the weekend after e. coli break. peoplehs but at least 12 have been hospitalized. health officials have not yet found a cause of the outbreak. avon posted a -- an unexpected loss hurt by the strong dollar and brazil. the company is struggling with changing tastes and the waning effectiveness of the door to door sales model. avon says free cash flow this year will be positive but the figure will be less than previously forecast, at $100 million. you can always get more business news at bloomberg.com. it get any gloomier for groupon? the stock dropped over 30% after the company announced weaker

than expected earnings and replaced its ceo again. given up may long have on groupon anyway since its ipo shares are down 90%. what went so wrong for the online coupon company? here with more insight, is it just that it is a fad and no one was grouponing anymore? >> groupon has been trying hard to move away from that. betty: what they have -- what have they been trying to do outside of that? move through e-commerce, third-party sales. they are moving into restaurant deals and other ways a good tell. they are now streamlining back and cutting operations where they are not competitive. betty: give us a sense of the size of the company? we are talking about it in a penny stock that it is still a big company. i think google offered them $6 billion. they are at one third of that.

betty: how many employees do they have? jing: thousands. they are cutting another, they said they would cut that in september. there may be more cuts coming in the future. betty: but they still have how many users? jing: somewhere in the tens of millions. about 30 million. it is unclear how active they are. betty: exactly. i'm a member but i am not that active on groupon. so the stock is going to zero? jing: not yet but some analysts have been cutting from buy to hold. some analysts say, cutting to sell, and more than two analysts say to downgrade it. betty: what will the new ceo do that will be different? jing: it does not seem a he is doing anything different. he has been at groupon for four or five years now. it seems like he's going along the same path, increasing marketing investment,

streamlining the international operations, and trying to push more toward third-party sales that we are talking about. betty: the $12 billion ipo has become the biggest of the year, a decade-long effort to privatize the japanese service. he says these companies have staying power. >> we will be adding all three companies to our portfolio. with the perspective of keeping the names over the next three to four years. buying all the perspective alongside alibaba and facebook, europe, and so forth. diversified basket of

ipos and spinoffs. ipo sale sinces 2007. more is ahead on bloomberg markets p are we are heading toward the close of trade in the u.s. and as we had to the break, the markets in europe performed today. ♪

betty: welcome back. it will be a busy earnings close. julie hyman has more at the markets desk. julie: let's look at the session. i want to do asset classed for p are we heard from janet yellen today. she was testifying before congress and she once again theerated december is on table. she called this a live possibility in terms of an interest rate increase depending on data. we are seeing stocks closed near

the lows of the session but not a declines across the board. we see the expectations for the rate increase in december go up. look at my bloomberg terminal. probability. 58% chance of being priced into the futures of an increase in the december meeting. we can see the trajectory, the dip and then they increase following the fed statement last week and that her commentary today. this morning, the probability was at 52%. picking up by six percentage points. we see significant movement in the bond markets today. the biggest yield since 2011, .81% today. sheng a clear uptick as made those comments. similar movement in the 10-year note. huge movement but enough to put 3%, the highest and seven weeks time. the dollar also gaining on the day, along with rates touching their highest since april 15.

not a huge gain, but enough to continue the uptrend. with the dollar going up and the great expectations moving forward, gold has been tumbling, the fifth straight day. then we see oil not necessarily reacting to yellen but the oil industry's report that shows that six weekly gains in inventories for oil, down 3%. somewhatt yellen has of an effect on the stock market, but really, it was oil here. the biggest drag on the session today. one stock that is tumbling is valiant. no surprise. said it sold its stake in the pharmaceutical company. it established itself in the fourth quarter of 2015, 1.3 million shares at the end of this past june. aey join investors, including

once highflying stock that now lost more than 60% of its value since early august, now under fire for its connection to the specialty pharmacy. raised questions about whether valiant is using that pharmacy to inflate their own sales. valiant has since severed its ties with the pharmacy at that does not stop anybody from selling the stock. moments from now, we will get another wave, as we have been talking about, of course early earnings and are investors may not want to hold their breath. theing at what could be worst earnings season since 2009. so far, three quarters of the s&p have reported results and profits on a share weighted basis are down more than 3%, the most since the aftermath, the second straight quarter of profit declines. one of the companies that will be reporting after the bell. can it buck the trend?

joining us now is joe weisenthal, cohost of "what did you miss." it seems like everything is going great in the economy but then you look at the earnings season and maybe that is a warning sign here? joe: one has to keep in mind the outside role of energy in absolutely clobbering. outcannot keep stripping things too much just to get the number that you want, but it is important to note that energy, it is not as dire looking. betty: tech has actually been a bright spot. joe: yes. some have had great earnings. google and amazon. we had the big selloff in august and september and there was a lot of talk about selling off facebook, amazon, netflix, google. , the bigrn on those tech names also. see if it can continue that run. fory: what are we looking

with facebook? joe: earnings of 52%. they have been doing so good, obviously. people will be looking at mobile , and they have been crushing it on that. they have been looking for things like videos and see how that is monetizing and also in graham, another massive home run . they have not monetized it that aggressively yet but definitely have been cranking it up more. people will see how that is done. betty: exactly. there is the question of instagram being a smart investment but we're not quite sure how you make money on this. joe: when they bought it, everyone was like, is this a new bubble? now you have to figure if instagram were so low, it would be one of these make a unicorns they would be talking about, a five million dollar market cap, almost certainly, it is such a behemoth, it clobbered twitter in terms of growth amongst young people and photos.

it is huge. it will pay off. the question is the speed and how profitable can it really be. i do not think anyone doubts it was an awkward -- awesome acquisition. kind off there were any weakness to look for here in facebook, what would it be? do not know. they did make big acquisitions, there is the whatsapp acquisition much bigger than instagram. some may be curious about that. mobile ads, obviously, you're never really sure. i am not really sure what the perceived downside is at the moment. people are really bullish on facebook. betty: it is hard to find a bear case here. eventually, people will be like, oh it was right there in plain sight. betty: are they growing their revenue per user as well? not only growing users but revenue. is reallyideo thing important. there is so much interest in

video advertising. they get this right and they get people excited about advertising. so muchok stream is video now. they can really turn on the monetization. just looking at numbers, how much of the content is coming from facebook? 50%? joe: an increasing amount is right on facebook, part of their gobbled world approach. betty: thank you very much. cohost of "what did you miss" which is coming up here. awaiting earnings from qualcomm to whole foods, net life, and much more to it also, former clinton adviser james will be joining us at 5:00 p.m. today to break down the latest from both republican and democratic residential races. ♪

>> we are moments away from the closing bell.

i am joe weisenthal. "what'd you miss?" u.s. stocks closing lower. the dollar strengthens. joe: the question is "what'd you miss?" an improving economy put the december rape increase back on the table. rate back on the table. we begin with the markets. she said december is still a live possibility. it december raid