from bloomberg world headquarters in new york, i'm betty liu and here's what we are watching this hour. stocks bouncing between gains and losses as a prospect of a december fed rate hike -- are the glory days of the iphone behind it? new warnings about softening demand. playboy says its business is all about being sexy and smart. the companies ceo joins us to tell us why he is remaking playboy's image. we are about an hour away from the closing bell on this tuesday, kind of a gloomy tuesday. julie hyman has the latest on the slight gain we are seeing. a little less gloomy,

announcing a mixed picture for the averages. still a mixed picture when you look at the internals here. there is a sort of up and down movement within the sector, little mixed and more green than red but consumer discretionary's are the best performing right now even as materials and tack are slumping. health care participating in the rally. the homebuilders are helping matters after d.r. horton, the largest u.s. homebuilder came out with earnings that beat estimates. earnings up 44% and sales up as well. that is helping to pull up the other homebuilders as well. speaking of real estate, remember darden restaurants said it was spinning off some of its holdings into a real estate investment trust. up 6% even as darden itself falls.

side, we havee materials stocks at a couple of different things waiting on them. inflation data renewing concerns about growth there weighing on minors like freeport-mcmoran, copper, and gold. usda today,m the noting a thing of -- noting a continuing club of things like corn and soybeans. finally, owings illinois, the maker of class, a neutral rating at the quarry. researchher piece of is weighing on the biggest stock today -- apple is down after credit squeeze said because of asia's channel checks, there are concerns about demand for the iphone 6. did keep andthey outperform rating.

talk to thell analyst who wrote that report on apple, so we will get that. let's get a check of the headlines and bloomberg news. mark crumpton has more from the news desk. mark: good afternoon. the white house says president obama will sign a $607 billion passed bylicy bill congress. it bands moving one time obey detainees to the united states, something mr. obama has been trying to do since he was sworn in as president. the white house press secretary says mr. obama plus decision to sign the bill does not change his position about wanting to close the prison. the administration will ask the supreme court to weigh in on the president's plan to shield as many as 5 million illegal immigrants from deportation. the move comes after a federal appeals court refused to let the program began while 26 states

are trying to stop it. the university of missouri has interims first ever vice chancellor for inclusion and diversity after the school's president resigned. students were angry over the handling of racial issues. starting in january, the school will offer diversity training to all new students, faculty and staff. rush upon dan on flights to egypt will last several months. that's the word today from vladimir putin is of staff. of acomes after the crash russian jetliner in the sinai desert last month. russia is insisting on improvements to the system on increasing speculation that a mom brought down the jet. a new study suggests half the from half of the 2010 gulf of mexico oil spill may be still

on the floor. the study suggests chemicals did not help in the cleanup. $20 billion in fines. you can get these and other breaking news stories at the new bloomberg.com. from the first word desk, i'm mark crumpton. you so much. as julie mentioned, apple shares are falling today. investors are selling after this report from credit suisse says the iphone maker has reduced component orders for the iphone by as much as 10%, probably because of weaker demand. does this signal long-term trouble for apple? joining us is the author of that report. tell us what your tech team found when they talked to suppliers. supplywe have a vast chain in asia and we had heard about all the components going

down toes, orders cut 10% or 15%. quite a drop in the first quarter. build -- theobably build looks somewhere between 45 million and 50 million units. that is how we reduced our forecast by about 20 million units. there were component checks across their vast supply chain. steep that is a pretty drop. what is the reason? guest: the major reason is the , when it wasnd six introduced this time last year, that was very successful and had an effect on the replacement rate. this next cycle are somewhat

more incremental product and the replacement rate slows. reason, we think the iphone business in the first part of next year could shrink. we do think it will grow long-term, but we have to have this adjustment. as apple corroborated your numbers? guest: apple only gives their resorts -- their results once per quarter. have andu still outperform rating on apple? guest: yes. fundamentally, the iphone business is mature. i think over time it will grow gradually and the positive drivers now, the number of active users is growing. it is probably headed toward 600

million and that will be good for sales going forward. you mentioned in your iphone, oneaper with a four inch screen. what is that from? guest: one of the things we have isn hearing about his apple considering introducing a four inch device. i would envision this as a lower and iphone, priced somewhere between $400 and $500. we are hearing that it could potentially go into production next year. i would say that would be incremental and take apple to a couldice tier but they expand the market and that should be good for iphone units over time and it is good for the ecosystem as well as a mid tier iphone for the smartphone market. what price point do you

think that would be out at? guest: the ideal price point with an somewhere average selling price of $400 and $550. we will see if that chatter continues to roll louder. thank you very much. staying with technology, tomorrow marks single day in china, the largest online shopping day. we have black friday and they have single day. how are chinese companies preparing for the blitz? for barra is the vp smartphone maker xiaomi and he's poked to bloomberg in an exclusive interview. hugo: single day is one of the biggest days of the year for e-commerce and china. e-commerce company, we

have to be ready. 2 millionepared about smartphones so that we can sell them in one single day. emily chang is in beijing and will have an interview with jack ma and with michael evans tomorrow morning. much more ahead in the next 20 minutes of bloomberg markets. billiards,to brunswick is a consumer conglomerate moving deeper into technology. in the ceo is here to explain their growth strategy. the holiday season may not be so merry for mary's. why some other stores may suffer this holiday. the playboy ceo joins us to discuss the company's decision to stop publishing nude photos and the company's big vision for china. ♪

andy: good afternoon welcome back to bloomberg markets. it's time for a look at some of the biggest stories in the news according to people familiar with the matter, anadarko approached apache yesterday for a proposed deal that would create and explore that pumps more crude out of ecuador. it is unclear whether talks will resume. may emerge but anadarko could walk away. the pulley is reopening a restaurant after an e. coli

outbreak. tests have come back negative for the bacteria. health officials have not found a cause but say there's no ongoing risk of contracting the illness. at least 40 people became sick after eating at chipotle restaurants in washington and oregon. holiday -- holiday themed red cups at starbucks are drawing criticism because they don't have any christmas logos. it reached a new level when republican candidate donald truck -- donald trump weighed in. mr. trump: i have one of the most successful starbucks and trump towers. maybe we should boycott starbucks. seriously. i don't care. ofthe way, that's the end that lease, but who cares. this yearrbucks says design and invites customers to be creative and doodle on the blank cups. you can get more business news at bloomberg.com.

has been corporation making acquisitions as it tries to grow its business. the conglomerate makes everything from boats do boat engine to billiard tables to fitness equipment and is expanding its fitness division to include workplace wellness items. the news comes after brunswick reported solid earnings, gaining 9% in the last month alone. joining us is the chairman and ceo of brunswick corporation. i know you have unveiled your initiative for the next three years. you are seeing tremendous revenue growth and investor outlook westmark >> we have targeted 7.9% topline growth. if you look at this year, we be -- we are pushing hard. high areu have a big,

to meet. how are you going to do it? dusty: we will get 3% to 5% growth that will just come from market growth in the marine business and fitness business. we think 3% will come from new products taking market share and then we think we are going to be making acquisitions and expanding into adjacent seas that sit next to our business. about let's talk acquisitions. are you going to expand into new areas? are going to stick with what we know. we have a big part in the accessory business and we have said we would like to grow that $350 billionbout over three years. with product companies and distribution companies, we are not going -- we're not growing far from what we know. betty: you mentioned currency

risk -- a third of your sales are overseas. how are you factoring that in? it looks like the euro will continue to go lower and the dollar is going to continue to rise. dusty: nothing is going to get any better whatsoever. $18 billion or $20 will have towe overcome. we are going to grow at about 7% this year. without the impact of currency, we would have grown at the top line of 11% to stop our earnings are impacted by about $30 million -- $30 billion in 2015. the fed is likely to raise rates sometime next quarter and that's going to underpin this strong dollar. is that going to be an -- is

that going to be a headwind for you? dusty: that is certainly a possibility. betty: how does fitness equipment, billiards and boats all fit together? dusty: we don't pretend that they have synergies. betty: unless you have the same consumer buying all three. dusty: perhaps. there are a couple of things that are the same between all of them. they are a consumer product and we go through distribution, we don't sell direct to consumers. this portfolio question is when we get a lot and our answer is if we think we could grow the business owning it better than it can on a standalone basis, we want to own the business. we used to be in the bowling business and we couldn't grow it thenter owning

standalone, so he sold the business. as we look at our fitness is this, our fitness is this has doubled since the recession and we have become the largest fitness manufacturer in the world. we think it fits well in our portfolio and it is something we are able to manage. fitness equipment is in gyms across the country. >> we are in gyms, the military, hotels, apartment buildings and a rod range of commercial activities. ticket purchases -- we know they are buying cars like crazy, but what about boats? dusty: we are seeing boats bifurcate into two groups -- small boats that are practical, that can be trailered and used for fishing or pontoon boats have been growing significantly. then we go to the large yachts, above 40 or 50 feet, above a million and a half dollars, these are also growing

significantly. over the past 12 months, saltwater fishing boats which are used around the coast from maine to beaumont texas have been growing in double digits. but they are fishing boats. people who fish are back into boating in a big way. betty: thank you so much for joining us. the ceo of rentrak corporation. --ll ahead, broader starks broader stocks are having a mixed day. up next, we will look at how options are trading in this mixed market. ♪

betty: welcome back to bloomberg markets. time for a look at the options market with julie hyman. julie: joining me today is the chief investment officer at

recon capital partners. the markets sort of a drift here. you are looking out toward the end of the year, trying to figure out what we are going to in the next month and a half or so. what kind of catalyst are you looking for question mark we got the jobs report, is it all about the fed from here on out? the fed is an overhang, so the market had a reaction to that data because the fed has no other way to go but raise rates. we've seen inflation, especially on the core side coming in at 1.9%. we saw wage inflation at the highest rate over six years, so the fed doesn't have an excuse to do it because they have been data dependent. data that has come out of earnings season has been lower revenues. we've seen a decline in the energy space and what we have

seen also is that 43% of companies that have reported did not beat on the top line. andave seen some talk chatter come out of it yesterday, but you want to hedge yourself because volatility is below historical norms and we are seeing that drift. folio,2% of your report you can hedge yourself down 5% going into the rate. julie: your trade is on the more bearish side, but it is just a hedge. this is not a scenario you think is likely that we are going to fall? kevin: if we thought there were going to be a precipitous decline, -- this is just to hedge your work folio because we've seen the price action stabilize and we don't see a it

happening deeper than 8%. most hedges are closest to at the money right now. put,an take the s&p 500 diet, sell a lower strike aboutt it and it costs $25. it has a 4.5% payout ratio, so for the market does it, you are going to get paid 4.5 times the outlay you paid for that. julie: and if it doesn't, you are out $25? kevin that's a cheap insurance policy because the market can move 1.5%, especially when it's dependent on the fed. julie: let's talk about the fed. we seem to have this digestion process which we have had how

many times over the past several years to the idea that the fed is going to raise rates. foris it still so hard investors to accept rates are going to go higher? : it's been hard to accept because we are on a risk on environment. correlationssector run at 95% and now we are starting to see it diverge. no one knows how that's going to play out. people are trying to figure out how they can invest in a slow growth world. julie: kevin kelly, thank you very much. bloomberg markets will be right back. ♪

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with first word news, mark crumpton has more from the news desk. mark: the white house says president obama will signed -- will sign a defense policy bill signed by congress. it bans moving guantanamo detainees to the midwest. the president has tried to get them into the u.s. since he took office. the white house press the decision to sign the bill does not change his position about wanting to close the prison. russia says its ban on flights to egypt will last at least several months. that word today from vladimir putin's chief of staff. flights afterd the crash in the egyptian desert last not. changes race on the concern a bomb right down the airbus. the crash killed all 224 people on board. violence flared again today in

israel. authorities say to palestinian boys on a train stabbed and wounded an israeli guard who shot and wounded one of the alleged attackers. been relatively called of late with attacks on israelis shifting to the west bank. fast food workers in nearly 300 cities are marching in what organizers call their biggest protest yet. they are demanding hourly pay of at least $15, early double the federal minimum wage. political organizing is also helping support the increase. mcdonald says it will not create a real estate investment trust. the company gave the idea serious consideration, but is instead focused on reducing costs. the ceo's turnaround plan got a turnaround when mcdonald's announced again in u.s. sales following the seven straight quarters of declines.

you can get more on these and other raking stories 24 hours a day at the new bloomberg.com. back to you. betty: thank you so much, mark crumpton, at the news desk. markets, ir look at want to bring in abigail doolittle. about apple talking all session long as one of the laggards. abigail: we have been watching apple all day after credit suisse came out this morning saying iphone supply chain checks were showing weakness. one analyst says apple seems to have lowered its component orders by as much as 10%. in the near term, he's as this will weigh on shares that it could be a positive as it may show a high retention rate. ,gain, weighing on apple again shares down nearly 4% and making

a bit of a recovery, down slightly less than 3%. ons note is also weighing apple plus iphone suppliers. down andese stocks are hit particularly hard is serous logic. -- investors are concerned with those shares off nearly 9%. betty: thank you very much. off retailicking earnings when it reports before the bell tomorrow morning. optimistic, not fearing that company is dealing with low traffic and high competition. guest downgraded macy's to a target price of $52 a share. good to have you with us. we got a glimpse of this at the

selloff, so what is going on with macy's? is it because torres a mystic lining? factor butt's one there's also the weather and there are no must-have items. the consumers should have more money because of lower gas prices, however we are seeing consumers spend on experiences as well as restaurants and also save on that money. betty: they are spending it on dining out or maybe the movies. is that taking money away from retailers? oliver: we have that and then we have consumers who love what ever you can instagram. even handbags are starting to see a softer trend. why is macy's having the biggest trouble question mark you mention they have no must-have items.

:liver if you contrast macy's against nordstrom, which we like, macy's is 10% online and macy's does not really have an off price concept. cosco,think about tj or think about nordstrom, they have a great off price and that's what consumers are gravitating toward. everyone is looking for value, especially getting great brand at a markdown price. the internet is lending itself to a lot of price transparency. consumers have more power and get to choose what they want and shop how they want. betty: they absolutely do and they love the free shipping. you mentioned nordstrom. you are saying because they offer the variety of forms, that's why they are eating up

oliver: 20% of the business being online and the nordstrom rack, that introduces people to the nordstrom ecosystem and nordstrom does not have as much tourism exposure, which is a negative. nordstrom is a higher income customer. the higher household income has been a healthier demographic. are they taking market share away from macy's at all? oliver: i think they are. going for a pie and nate -- and macy's is slightly negative. betty: you just saw this story of mcdonald rejecting spinning off real estate. is this a way to add value to the earnings?

oliver: there are billions of dollars in value in macy's real estate. ist happens with real estate you add leverage, but it is leverage you live with for a long time. macy's management is top-notch. they will look at different options. there's a lot of complexity. but we are not talking about a tipping point. thank you so much. analyst on retail. much more and next 20 minutes -- we will take you to the bloomberg year ahead summit where we will talk to scott flanders, the ceo of playboy. that's one conversation you don't want to miss. add one analyst says the current economic boom in the u.s. has a good chance of hitting the 10 year mark. ceo john leisure joins the

crew of "what'd you miss?" ♪

betty: good afternoon and welcome back to bloomberg markets. time for the bloomberg business flash, a look at some of the biggest stories in the news. scheduled for 930 flights after efforts failed to halt the strike by flight attendants. the cancellations will affect 100,000 travelers. the cancellations were announced as efforts to halt the strike continue. shares of scientific games are down today for the following -- falling the most since 2009. this is after billionaire ron

perlman posted results that missed estimates. the company is digesting too big purchases. they purchased bally w and fgies and industries in 2013. fidelity, one of snapchat's biggest backers has written down its stake in the company by 25% according to morningstar. it's the latest sign that some startups may be overvalued. you can always get more business news at bloomberg.com. monroe'safter marilyn -- marilyn monroe post on the first issue, "playboy" is putting its clothes back on. they dropped the bombshell saying they would abandon nudity and now they are focusing on a younger, online audience with the launch of a new shopping site.

earlier today, stephanie ruhle caught up with the ceo, scott flanders at the bloomberg year ahead summit. he explained why digital is so important to the brand. 45 millionave monthly visitors to playboy.com compared to just a couple of million in terms of readership of the print magazine. aligning our print product with the digital experience we have. stephanie: colloquially, people say half the reason the internet exists is for pornography. they were the first to stream, sell products, it has been a massive business. why go away from their? scott: it's really not the playboy brand. playboy is a mainstream lifestyle brand and we are a global company. our media business drives the brand that it is not how we make our money.

stephanie: larry flynt said you are crazy. scott: he should be happy. he has that top rack on these day and to himself. is to go frome the top rack to the mainline rack and we been in a poly bag and we have finally been let out of the polybag. stephanie: china is a massive market but we know the chinese market loves american culture. what does it say about playboy and what are you selling to the market? you walk into a playboy boutique, you'll see suits come a ties, luggage and shoes -- every kind of product you would see in a boutique on fifth avenue you would see in china. stephanie: the playboy shop is not adult products? scott: absolutely not. it's kraft made products. we have a brass ear opener made

in a family-owned foundry in toledo, ohio. we have pillows that say "i read it for the articles" that are handstitched in brooklyn. stephanie: when you think about what you need to sell, you have to sell the articles, which you always said you did, you are not going to come across a steve jobs article every day. this is a super competitive space. how are you going to find a real edge all the time? scott: when hugh hefner launched "playboy" magazine, there were fewer distribution choices. everyone wants to be interviewed by our 20 questions or the playboy interview, it is iconic. it's when jimmy carter said he had last in his heart and john mayer said jessica simpson was sexual napalm.

we break news. stephanie: you do it in conjunction with unbelievable images. how are you going to do it without the images? scott: we will still have sexy women in our magazine, they will just have clothes on. stephanie: does this change the equation? is your customer change? scott: when we took nudity off playboy.com, we went from 47 years to 30 years. timesdience through four larger when we went from nude to non-nude. stephanie: you want to be edgy and have the best articles, how are you going to do it every single month? scott: we have phenomenal, award-winning content now and it's a bit of scared from the noise of the nudity. nudity has become almost a distraction from the high quality editorial we have.

when we showed them, do you like this or do you like that, they say i would be more comfortable an airplane,on having it on my coffee table if it had this imagery versus that imagery. stephanie: if you want sexy and not sex, are you targeting women? scott: not women to be subscribers, but we want women voices. the girls look like they are shot professionally with a cast of characters around them. the new playboy will look like an instagram shot. it will look more natural. stephanie: how much is hef involved? remained tricky because he has editorial control and he has a defined point of view.

he still picks the playmates every month. stephanie: he does? scott: he absolutely does. it helps us get a higher caliber of playmate. .hey want to be selected by hef stephanie: what does he look for? scott: even in the six years i have been here, i have seen it evolved. we call it "god-given gorgeous." no obvious artificial enhancement. you can see it over the 60 years of the company how his tastes have evolved. that was scott flanders and stephanie ruhle live from the year ahead summit. momentset closes just away as we had to break. here's a look at how the major averages in europe did today. ♪

betty: welcome back to bloomberg markets. markets are closing in just about 10 minutes. julie hyman has a market check for us. we are back from our gains a little bit. julie: i wanted to check on some of these stocks -- mcdonald's is holding an investor meeting today, rejecting a proposal for some investors that it has been off its real estate trust. shares took a spike on the news and have since come back down again. mcdonald's also says it's going to return more cash to shareholders, $10 million above its prior land. all that not really helping the shares. we will see how steve easterbrook does as things do progress.

also wanted to check on apache and anadarko petroleum. was anadarko that approached apache -- this would be the largest independent oil and gas loser, the largest deal of this year. both stocks are trading lower. one oil analyst at oppenheimer said it's not a good combination and the market agrees. a defensiveould be move to ward off a potential takeover bid because anadarko has been viewed as a potential takeover target. especially pharmaceutical pumping mentioned yesterday, shares rising today after falling sharply yesterday. he talked about shorting the stock in an interview but it looks like investors were not convinced. on stock actually spiked

heavy volume and the other stock he talked about shorting, today he said that has been repositioned somewhat. michael pearson holding a call today trying to answer calls about his relationship with filler door. those shares look like they are going to finish lower. for more on the markets, i want to had to devise president of eaton vance management. we are a majority of the way through the earnings season and the markets are focused on one going tois the fed raise rates? as a value investor, does it make you happy? maybe now you can differentiate some of these stocks and find real value.

john: i think you are right and that has been a great debate for a long time in the macros of your the fundamentals. as financial stocks come to grip with that, financials can be driven more on their specifics. the fundamentals specific to their company whether rates go up or not. monetary policy is still accommodative either way. betty: you hold the view that interest-rate sensitive stocks could win out in this era of a beginning tightening cycle and even reads could gain -- even reits could gain here? john: that would be a contrarian point of view. they've been selling a good portion of their portfolio into strength and that usually means bad things that this is a company that on its own

fundamentals will prove to be a solid investment over time. dividendtary to their yield, which is a regularly quarterly payment, they are going to do and 11% yield on the special dividend, so that is shareholder friendly. drivingnd that is household formation here? john: they have a lot of opportunities. they are being countercyclical and asset prices are obviously high. betty: another sector i know you are looking at his health care. go throughrd julie some of the health care stocks. where is the value now in health care? would not be looking at valiant or the likes of more controversial price gouging companies.

companies we look at our solid citizens, eli lilly is a good example. enhancing products they are bringing into market. cardiovascular impact, potentially on alzheimer's or breast cancer. ande are segments innovations that are solid and they certainly have not then price gougers. betty: on a final note overall in the markets, with earnings wasn'talmost over, -- it a great earnings season, but is it going to get worse? john: it's a choppy earnings season. we are not seeing a terribly strong topline growth, earnings are supported by a lot of share buybacks. but that said, we have a backdrop where we have a lot of

companies and you have to be selective that you do have strong fundamentals. some are benefiting on the input side like consumer discretionary whether it's relative to fuel or other commodities on the one hand or on the other hand, their consumers are saving money at the gas pump. so they are ready to buy more of their products. there's been a bit of a hiccup and slowdown. with finer strokes, you can certainly find some opportunities. very much.k you that does it for bloomberg markets. "what'd youlose and miss?" is next. john leisure joins the crew. ♪

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scarlet: wei are moments away from the closing bell. i'm scarlet fu. joe: i'm joe weisenthal. alix: and i'm alix steel.

[bell ringing] alix: u.s. stocks closing mixed today. poised between gains and losses. the s&p has lost 10 points of the average price for the last 200 days before racing the decline. joe: but the question is "what'd you miss?" scarlet: we will dig into supply and demand dynamics. plus singles day. china's annual shopping bonanza is upon us. we break down the big number. alix: and the great big screen. joinsle ceo john legere us to discuss his company's new streaming service to get your been john. scarlet: -- to get your binge on. scarlet: but we