from bloomberg's headquarters new york, good afternoon. consumers keeping more money in their pockets october retail sales disappoint. is this a bad sign for the holiday shopping season? a bitter pill for mylan. perrigo shareholders reject a possible takeover bid. first, let's head over to the markets desk with julie hyman for retail talk. julie: one of the things weighing on stocks today. we had retail numbers for individual retailers and the overall economy. advanced retail sales coming in below estimates. around the lows of the session at the moment. i've forgotten to call up the chart. you the will tell

consumer discretionary is the worst-performing group and has been throughout the day. down by more than 2%. technology a close second. one of the worst-performing stocks today, the worst 500'smer in the s&p fossil, down 35% after the watchmaker came up with numbers that missed estimates and its forecast is below estimates as well. it sells jewelry and accessories as well but it was all about watches. david: you've been looking at department stores as well. julie: it has been a rough week. we had macy's numbers on wednesday that pushed department stores down and then kohl's helped matters yesterday. nordstrom hurting again today, down 17% after sales missed estimates. down at nordstrom rack as well.

nordstrom shares down because of weakness,trom rack they're looking at tjx and ro ss stores falling as well today. shares of kohl's up, now calling. numbers.out with its those shares falling as well after the company's outlook for the fourth quarter missed estimates. a lot of this has to do with the changing way people are shopping. this is a look from shopper track. the monthly visits people are making to retailers. go to aer of times you retailer, you can see for the past 18 months, for every month except one, the number of visits have fallen. , bloomberg time

intelligence has look at online sales. you can see the climate has been on over the last several years. still only about 12% total. you are seeing a real shift in the way people are shopping. julie hyman at the markets desk. let's get a check of the first were news. mark crumpton standing by with that. mark: colonel steve warren says officials are reasonably certain that the islamic state militant known as jihadi john was killed in a drone strike in syria. was in factcitizen the masked man who appeared in several videos showing the beheadings of western hostages. the drone attack was one in a string of targeted strikes on islamic state leaders. kickoff meetings in vienna ahead of a critical new round of international diplomatic talks on the crisis in syria. withtary kerry was seen

foreign ministers of turkey and saudi arabia and the u.s. special envoy for syria. this comes before tomorrow's meeting which will include senior officials from 19 nations. is looking toy charter a way towards a cease-fire and a political transition in syria. nt has beenitary age fired because of an improper relationship with a colleague. firedary carter abruptly general ronald lewis on thursday. the inspector general is investigating. moscow isws reports a banning egypt's national carrier from flying to russia. the move comes in the weeks of last month -- in the wake of last month's crash in sinai. wasfinal seconds of the reporting will be sent to a country that has the capability to analyze it.

the investigation team set the recordings include a last second noise. the u.s. postal service is reporting a $5.1 billion loss. there was good news and bad news. revenues were up with an operating profit of $1.2 billion --uesting continued growth reflecting continued growth in the package delivery service. a special surcharge is set to expire next year which promises to cut revenue by $2 billion annually. the volume of mail delivery should continue to shrink. can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. let's return to america's retail woes. sales of retailers less than forecast in october. stores have been especially hard-hit. nordstrom, macy's and jcpenney

in the red today. investors may not find much to cheer about before the start of the holiday shopping season. julie wasback to what saying there at the end of her bit. there is a real distinction between people going to stores and going online for shopping. >> you have online, brick-and-mortar stores online. people spend less online than they do in the store because you don't get all those impulse purchases. you have consumers changing what they are spending on. we saw consumer sentiment up today and retail fell. people are spending more on autos, more on electronics, more fixing up their home. they are not buying clothes or shoes are going into a department store. the drop-off in international forces, those have been propping up these retailers for a while.

they're not coming over like they used to with the dollar where it is at. frederica spoke to what you are talking about. the internationalization. >> we need to find the right balance between the print catalog and the new digitalization that is happening. retail and wholesale is an opportunity for us. david: when you look at lands end and companies like that, how difficult has this process been? embracing an international audience. david: nordstrom way down today. they were out in front on converting that brick-and-mortar to online. they came out with numbers that completely disappointed analyst estimates. shoppers just are not coming. when you are doing everything right online, you have to have

the products that people want and the customers who are looking to pay for it. it has been a real challenge for all these companies. walmart has been spending billions and it is still just a fraction of what amazon is. that is overshadowing a lot of downward trends in retail. what role as amazon playing? >> it is now an issue for ever retailer. not just for bookstores or people buying diapers online. the number of products you can get on amazon, well over millions -- it is a problem for ever retailer. lands end, people going there to buy a coat or boots rather than going into a store. amazon's u.s. sales were $80 billion. that is money that pre-amazon would have been going to all these other retailers out there.

david: these numbers do tend to fluctuate. how much credence should we give them? thising into the holiday, may be set a bad tone for the holiday. some companies are still optimistic about the holidays. it will not be a great year, not the best year ever. ceos that sense among peoplethat these -- might not be spending day today but want to treat their family, a lot to be something special. there is hope that the holidays will be one of those. as the head of walmart stores said, it is the one time of your people have to buy something. year people have to buy something. it is competing for those customers and making sure they have the products that you have the products they want. david: disciplining retail sales gold losesssure --

its luster in the metals round. the fed is to blame. killed in jihadi john a u.s. drone strike. ♪

david: welcome back to bloomberg markets. time for the bloomberg business flash. mattersle familiar with able swag and is working with banks to put together as much as $21.5 billion in short-term financing. volkswagen is working

with banks. employeese bank charged -- latest in the global probe into interest benchmark rigging. charged with conspiracy to defraud -- they will. court 10 or 11. three of canada's largest pension plans agreed to by the company that manages and operates the chicago skyway toll road. they will each own a third of the skyway. the toll road that forms a link between downtown chicago and the southeastern suburbs. the deal will be subject to regulatory approval. you can get more business news at bloomberg.com. let's head back to our markets desk. cisco is the big tech

story of the day after the company came up with earnings that disappointed. they had to bow back the forecast, shares down by the most in two months. the company said it was hurt by the stronger dollar but also said sales in some asian nations and orders and some asian nations were weaker because clients are concerned about demand from china. that hurting the numbers. .lso looking at f5 networks the company had an analyst day yesterday. there are limited catalysts for the stock in the wake of that. the hardware research cycle may provide some incremental growth for the company but it might not be meaningful until 2017. those it shares down by 3.5%. we've seen a lot of volatility in chip stocks recently. a lot of dealmaking. materials on the plus side today. the biggest maker of machinery that makes semiconductors.

the company's forecast for the first quarter beat analyst estimates. that seems to indicate that orders for chipmakers may be improving. -- wegn in that column see volatile demand from chipmakers for the chipmaking equipment as they try to gauge demand from the end markets. this news could be a more positive sign. stocks, pnc's on chief investment officer that we've been talking about retail. numbers out for michigan as welker consumer confidence. what do you make of what we learned today? >> disappointing. you can make up excuses in terms of oil or gasoline sales being lower. at the end of the day, you saw clothing coming in worse. we had some better of the materials. will buy if it is something they want.

it is not the old days when they would borrow against their house and spend on everything. of amazonat narrowing and home depot and others being the beneficiary. pre-announcements from nordstrom's, macy's, those kinds of things. they have severed. david: we have gotten indicators that the economy is doing much better. giving you more confidence? >> i would still say the consumer remains the strong pillar of this economy. in the past, it would go even faster. the domestic economy is pretty strong. consumer spending will grow at 3%. that is still a good number. maybe people would hope it would get to 4%. maybe it is longer until we get to the next recession. david: how are you feeling about stocks generally? >> we still feel good about them in terms of on the net -- short-term, it is tough.

mood of strong dollar, weak commodities. i don't know how long that lasts. i think the fed is mixed up in there. the fed will end up being good news. david: we've talked about retail, talk about energy. seethere sectors that you where you are thinking maybe this is a good time to invest in that particular sector? >> we do like the financials. we've liked them for a while. we got to thinking the fed might move. i think we will finally be there. -- in thesome more retail, we will be interested in getting back into that again. david: how big is that the decision going to be? something potentially earthmoving? upi think they have set us

-- i think the market because of the way futures are indicating, the high probabilities of the move, should not be a big deal. they are trying to walk that tight rope of talking it down a little bit. they are trying to control the dollar and make sure things don't run too far ahead of the meeting. that's where it gets a little difficult. if they manage to talk the arket into less -- it is little more complicated than i thought it was going to be. we think it will be december. david: the last thing i want to ask about is volatility. how you navigate that here in the u.s. and abroad as well. >> we tried to be long-term investors. we are looking for the opportunities in those areas. as we've been grabbing mlps at

, it has not worked out yet, but that is your opportunity. try to take advantage of it. david: i was reading your notes before hand. in a longthat happens bull market like this is people rebounded go into bonds. this time i be different. cycle, you would see interest rates be significantly higher than they are now. then, bonds had less risk to them. year, seemsn the 10 like a fair bit of interest rate risk if things do kind of continue on. it's either the opportunity to think about adding alternative our client is the third leg on the stool in terms of rebalancing. david: thank you very much. loses itsd, mylan

hostile bid for perrigo. or both parties better off alone? we will discuss. ♪

david: welcome back to bloomberg markets. it is a $26 billion deal that evaporated with one shareholder vote. mylan did not get the sport it needed to buy perrigo. since aikins joins me now to talk about it more. one shareholder vote. what happened? -- cynthia kunz joins me now. >> their shareholder bases overlap. there's a lot of overlapping shareholders.

they had to decide, do they give mylan and majority of the shares which would create a greater or give themarea the 80% to control perrigo? it looked like such a long shot that they would get the 80% to control perrigo that a lot of shareholders held back. that is why investors held back and said we will take a pass on this. mylan has to come up with a new plan now. david: you talk to the ceo of perrigo. >> he was delighted by the results. he's looking to do more deals as well. he is quizzed of. he did not rule out transformative m&a deals. he emphasized the consumer side of the business, the bigger goal of the business. otc generic medication, the bigger piece of the business. the piece that was hard to see how it fit with mylan.

mylan could come back in the air. perhaps that might change the equation. could come-- mylan back in a year. along, they have said -- the ceo has been out saying things like we can live without perrigo. they are still scoping out other deals of their own. i would not be surprised if they had something up their sleeve. they probably are going to want to move. in this environment with walgreens and writing merging come in makes sense -- with walgreens and right aid merging, it makes sense. they might stick to the pharmaceutical space. has had its eyes on the target. why was it so interested in perrigo? >> good question.

in some sense, people saw this as an offensive deal. allegan has gotten into another deal. this was thought of as a defensive deal to stop -- there is a generics business that fits in there perhaps they wanted to branch out. mylan needs to diversify. they depend on epipen. we have driven a lot of growth and of increasing the price of a given. -- out of increasing the price of epipen. any other way to find growth. that is what they are looking for. david: another big deal announced. a chinese company going after a non-chinese company. i wonder if you see that in pharmaceuticals as well.

that has not started to play out in the pharmacy's yet. -- pharma space yet. it's been more and commodities and agriculture. pharma think the chinese companies are quite there yet in terms of looking at doing big deals. china could start to become a bigger player in the medical devices. using bigger companies in the medical device space in asia in manufacturing. they could be major players in the u.s. david: thank you so much. cynthia kunz, health care reporter at bloomberg news. reese about china -- worries about china pressures the metals space. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. david: from bloomberg headquarters in new york, this is bloomberg markets.

mark crumpton is at our news desk. mark: the united states says it is "reasonably certain" jihadi john has been killed in an air strike in syria. he is believed to be the masked in videos beheading hostages. a spokesperson told reporters in a video conference from baghdad that an assessment is still being conducted to confirm his death. president obama is meeting today with a group of national security and diplomatic officials about the transpacific trade deal. the group includes former secretaries of state henry kissinger, colin powell, madeleine albright, and james baker. the president plans to enlist the former diplomats to help sell the trade deal here and overseas. hillary clinton is more than halfway to capturing the

democratic presidential nomination. an associated press poll shows mrs. clinton has a clear majority of more than 700 insiders who will vote at the nominating convention. mrs. clinton will debate bernie sanders and martin o'malley saturday night at drake university. the debate will be broadcast on cbs television. fan dual and draft kings are suing to stop a ban. the sports fantasy sites say they will suffer irreparable harm if they are shut down for illegal gambling. they stand to lose $35 million in combined annual revenue. says prices for the city's most expensive homes fell 11.5 percent in the third quarter of 2014. that includes houses and apartments with values of at least $7.6 million. more on these and

other breaking stories 24 hours a day at bloomberg.com. david, back to you. commodities are under pressure again today. let's look at the big movers. oil slipping to two-month lows. coffee prices down 2%. copper extending a slide to a six year low. stay with metals. goldman sachs says only china can rescue metals from further declines. aoper and aluminum are on pullback. joining me to talk about this is richard port from princeton, new jersey. about china, is it not? richard: yes, it is. if you look at most metals, china accounts for over 50% of demand. copper, for example, in the year 2000, copper

accounted for 50 million tons a year and china accounted for less than one million tons of that demand. 2014, the copper market is now 23 million tons and china accounts for 11.3 million. two things jump out. china went from less than 7% of over 50%.nd to the market overall grew by 13 tons and china grew by 50%. until investors really understand what is going on in china and can get a feel for it, we will see a pullback in commodities. david: let me ask you about something we have noticed. a lot of companies are cutting back, scaling back mining

operations. is that something that can mitigate the effect of china's lower demand or is it so -- still insurmountable? richard: companies of talked about curtailing demand, but for copper, for example, bloomberg did a survey of the top 31 copper producers. year-over-year production actually increased 6.1%. haveu look at iron or, you the big three, rio tinto, dhp and valet with third-quarter 3%-8%.ion increases of in fact, valet set a third-quarter production record. until investors start to see companies actually cutting back demand, there is still uncertainty in the market. before i let you go, let me ask you about the role the dollar is playing all of this --

and all of this. richard: this is one bright spot. brazil, and in australia, and south africa, and canada, those producers have all with lower labor costs and other costs that enable them to reduce their cost base but still collect the revenue in dollars. that is actually one of the few bright spots. hand, they have been trying to take costs down to make up for the shortfall in volume. david: thank you very much. -- in russia, capitalism could soon become a pricey

problem. you are looking at the 22 richest billionaires in russia. they are in a world of trouble as they look at their succession plans. since the fall of the soviet union until now, this is the first time folks who have acquired and obtain this level of wealth have had to think about what snacks. there is a host of challenges they face in russia. , atll around the world least 32% of billionaires have to deal with wealth generation transfer. the soviet union is an economy that has grown up in the shadow of vladimir putin and that circulates around relationships. russians are finding that the value of their assets are inextricably tied to those relationships, which cannot necessarily be passed on. to as it's referred intangible capital. >> exactly right. president putin himself has said

very publicly they were acquired at unfair prices. wealththe greatest transfer in history, and these guys purchased these assets, in most cases, for really cheap, assets for $100 million that went on to be worth tens of hundreds of millions of dollars. it is a number of fortunes that need to be dealt with. the question is, with intangible capital, you can't really pass it on because of the relationship with the kremlin or other figures that leading -- that that don't leading advisors don't have. the world, people acquire their wealth by inheriting it from their parents or others. in russia, that's not the case. >> they bought it. of wealtho tradition transfer in the soviet union.

so what are these folks trying to do? lobby for clearer, stricter regulation? are they looking to move their fortunes outsider go public? >> putin has told them -- they are all men -- to take the money back home. in a large amount of cash their tax jurisdiction. by western companies. one billionaire a year ago said that she is in the oil business inhe said i am not investing oil anymore because i can't fight the government. i have to buy assets elsewhere. they are doing a number of maneuvers. they are not just grappling with the issue of being 55, 60, how do i maintain the wealth and make it last another two or three decades? david: any sense they are pushing vladimir putin to write

laws to make this clearer for them going forward? >> yes. it varies among billionaires. one billionaire is not part of the inner circle and he basically said i don't have a seat at the table so i am just getting my assets out. i am looking elsewhere. have a seat at the table are looking for a rule of .aw, some kind of consistency there is a court that is going to uphold the law for asset ownership. whether or not they are successful depends because what a mere putin has a lot of power. david: thank you. we appreciate it. coming up, jihadi john past death is a major symbolic win in the fight against isis, but it is not the only victory this week.

be here at the top of the hour to tell you how to take advantage of potential fed rate hikes.

david: welcome back to bloomberg markets. time for the bloomberg business flash, a look at some of the biggest stories in the business news right now. oaktree capital is considering an ipo. the firm is holding talks with investment banks about listing the company as soon as the first quarter of 2016. lufthansa is hoping for a return to almost normal operations

tomorrow. this after the conclusion of the airlines longest ever strike. than 900 dropped more connections, bringing the total number of cancellations during the long walk out by flight 4700.ants to mountain view police pulled over a google self driving car that was being tested after the goingr noted the car was a road clogging 24 miles per hour. a person is required to sit behind the wheel of self driving cars. you can i'll is get more news at bloomberg.com. -- always get more business news at bloomberg.com. let's go to julie hyman. are all tradingocks down. typically that happens because you get delusion for existing shareholders. shake shack is a prime example.

shares are down after it said it was selling 5.1 million shares of restricted class a stocks held by shareholders. it is also going to issue 21 million shares to stockholders who are also holder of cash holders of llc interests. it's a bit of a complicated structure. this is a company that does not have a huge amount -- it didn't sell that much of itself and its ipo. fitbit said it's going to sell 3 million shares instead of the 7 had planned. that is causing some concern. it is seeing weaker demand. forhe same time, shares existing stockholders remain unchanged. pay comescalled software, a cloud software

company, is bracing for a four and a half million share sale. those shares are down by about 6.5%. all of these companies are relatively recent ipos, so i wanted to look at the bloomberg ipo index. adjusted.0 has been we have talk about -- talked about how this is not a fantastic environment for ipos. this kind of illustrates that. one caveat. this is an imperfect index. it is very heavily weighted toward alibaba, which of course has been underperforming. was a big ipo in year ago. turning to the fight against islamic state, the u.s. believes it has killed the extremist known as jihadi john ending a 's reign ofgure

terror. >> we are certain we have killed the target we intended to kill, jihadi john. it will take some time for us to formally declare that we know we had success. jihadi john is a british man who has been shown beheading captives, many of them americans, in videos shown on the web. joining me to talk more about broke lasts news night. you would think this is someone other governments would be going after. what do we know about how this went down? like for department of defense led the operation, but this shows more about what has been going on behind the scenes. been a major uptick in u.s. forces to identify and take thetop leaders of organization. obviously, he has been a target for a long time after beheading journalist james foley.

he became a symbolic figure in the organization, and when the united states was trying to target. these are the fruits of that labor. they want to target leaders and take them out. a lot of that has to do with notches taking them off the field operationally, but the pr response to this. they feel often inside the government that they are losing that battle. this may help turn that tied. david: this is something the colonel mentioned today in his briefing, talking about jihadi john as a kind of celebrity. >> yes. administration -- >> in many senses. there was certainly a significant blow to their prestige. not a majorwas tactical figure or operational figure. the administration has

been quick to say it is making strides in going after those figures as well. >> i think there is cautious optimism in targeting top leaders. gains.e starting to make they have come under criticism not just from the usual republican side of the aisle, but also under their own -- from their own side of the aisle about how their serious strategy, or lack thereof -- syria strategy, or lack thereof, has not really worked out. now they can show. david: -- now they have results they can show. david: john kerry is going to vienna for a big meeting this weekend. more optimism they are going to make some headway with syriac? syria?

some ideas about rewriting the constitution. i think it heartened some of the officials. there is no easy fix here. interestsdivergent here. that said, they feel like in each of these meetings they have been able to make progress. they feel things are starting to converge and away way they haven't for a long time. they feel this meeting will take them one step closer to something. what that something actually is is kind of a big problem. no one can really define what it will be and what the end game is. thank you very phil mattingly in washington. we will be keeping an ion that -- keeping an eye on that meeting at the white house. coming up, turning to tech.

who is coming out on top? ♪

welcome back to bloomberg markets. wall street versus silicon valley is an ongoing battle in the minds of recent grads. more and more of them are turning to tech. students who consider themselves ethical are avoiding careers in finance because they considered beneath their standards. cory johnson weighs in. what do you make of this trend? folks put into or three years in business school, graduate, now the are to the west instead of the east coast. toey: we see that people go the hot industry. tech is hot. what is interesting is that there is a vibe, as people like

you and i would say, in silicon valley, about the kinds of things businesses are doing there. it's a little ridiculous, but it's sort of the high fluting vibe of i'm not just writing software, i am changing the world. it's a purpose driven company. indeed, there are a lot of companies centered around the notion of being purpose driven, even when they are a total turnkey solution provider for middleware software maker in the cloud. appeal, apparently, two people coming out of business school, and undergrads as well. david: do you notice people in finance seeing this and responding to it? cori: i have heard a number of recruiters talk about how they are working hard on retention in a way they haven't before. money, right?s

going into tech, there is the prospect of making a lot of money. >> when i graduated from college, a lot of friends wanted to make money. that was their goal. that was not's a goal -- not a goal of mine. i became a journalist and as journalists do, i didn't make any money. i think the notion that people go into tech because they don't care about the money is not accurate. they care about the money. they think they are going to make it on the backend in stock options which is why we should be paying attention to the down round square ipo. the initial offering price they are suggesting is below the last level of private equity investment that they took from some big funds. those funds, however, have a guaranteed rate of return. so the bully investors and the employers -- employees are going

to see their shares squeezed down and deluded. that is breaking the age old -- in siliconp valley which is we will pay you less but there will be an ipo and that's when you will get money. we are going to see these down rounds and then b's liquidation squeezings of quietly the equity of these tech workers, and all these kids are going to find that their equity was squeezed down and taken away, there upside went away. they can't buy the house they thought they were going to buy. and they are going to watch their friends who went to wall street make more money up front. we are talking today about fantasy sports with fan dual and draft kings. what is the latest? last weekuld be the in new york state for fantasy football. a bunch of other states are looking at this and following

those efforts. this is an exodus so -- and at -- this is a nexus central crisis for both companies. stential crisis for both companies. get your best in. sunday, sunday, sunday, it's coming. thank you for joining us. cory johnson from bloomberg west. tune in to bloomberg television for more. ♪

welcome to "bloomberg markets."

from bloomberg world headquarters here in new york, good afternoon. i'm betty liu. here is what we are watching at this hour. stocks are headed to their first weekly drop since september. european stocks posted their biggest weekly loss since august. european growth concerns and the fed decision loomed large. chicago drivers will soon be funding the retirements of teachers in canada. north of thelans border are spending $2.8 billion to acquire an eight mile traffic clogged road. and china makes its largest acquisition ever. chemical company is pursuing western companies. an hour away from the close of t o