higher.s. stocks closing today. the s&p 500 jumping the most in five weeks. scarlet: the market is on alert after the paris attacks. are doinglobal stock and reaction. alix: fund manager whitney tilton joins us live from the robin hood investors conference. scarlet: what we need to start with this with global equities. this has been an incredible day. asian markets tumbled at the open. as a group the asian stock a six week low. every industry group within that measure declined. not helping was gdp data out of japan that shows it to begin to recession. joe: last week we has the

at friday thursday were ugly. obviously the attack in paris on friday. --opeans stocks ended lower precious talks in particular got hit at the open. but by the end of the day they ended as flat. no change -- expect thisnot have when dubai open. that did not spread to the u.s.. u.s. about the -- is about as 100 day average. joe: even if it had not been for the attack in paris, you might have expected a negative a because of how ugly thursday and friday was going into the weekend. alix: you could say we passed the 50 day. we are due for some kind of

oversold bounce. ,oesn't actually have any legs or is it just a relief rally because we are so beaten out. a lot of people think it is about the dollar. and incredibly surprising day. take a look at how market reaction has been during other periods like this. putting this day and week into perspective. why line 9/11. he saw stocks fall after that it we were in the midst of a recession. ,, the greenline purple line, with the exception of 2008, they continue to climb higher.

those shots and external factors do not trickle down the way one might expect. you expect them to be transformative events and they are important, but in terms of the market reaction they tend to be in stride. alix: i was looking at the dollar, at treasuries and is there any kind of safe haven? money flowing into the u.s. treasuries of the beginning of the day, but all of them were a washout at the end of the day. scarlet: you can see all of these charts and more on twitter. alix: i want to bring in brendan who is on the ground in paris. us started by telling us what the mood is like in paris today. what you just miss was a small crowd behind me singing la marseillaise. a smaller crowd, thinned by the rain. but it was never as big as the one here after the charlie hebdo massacre. a crowd of 1 million and a half

then rallied for solid area. that is not happening. people are uncomfortable being in crowds. last night there were about 500 able here. they heard some firecrackers and there was a panic. people are scared, frankly. the one thing i've heard from everybody, they are going about their normal business. easy traffic behind me. there was commuting today. but people are very open about feelact they did not personally threatened after the charlie hebdo massacre because they were not journalists. they do feel personally threatened now because they are members of the republic of france. does this do to the international support for francois hollande? some strange things are happening in europe right now. he has sort of put a finger in during his speech earlier today. he said because of these measures we have announced for defense we're going to blow through our deficit charge for

this year. that is something he has been what you do for a very long time. he put the rest of the european union on notice. he is not worried about that anymore. onis going out relatively france obviously closed it orders. in the a lot afforded agreement, but i cannot see a way that this is lifted anytime soon, nor is there a move in the country are among people in paris to have that lifted anytime soon. you are seeing borders go up in around friends and around europe, we are really waiting for this indication whether germany will be doing the same privacy joined by this guest or of solidarity -- gesture of solidarity? we will see some bad surprises in the next month or so. scarlet: thank you. we will be checking in with you in the coming days as well. the significant fallout

following the paris attacks on friday, the fresh resident calling for coordinated and systemic order controls. you have slovenia, austria, hungary, germany, they have all tightened security. the fear of the migrant crisis grows more critical. this the end of their open doors? full germany also think about order controls? where do you see this play out? >> schengen has been suspended in many cases. germany, hungary, slovenia, they have all the trading -- tightening border controls, some even putting offense is. are we going to see schengen formally abolished. are you going to see countries unilaterally pull out of it together? this will not be reinstated intime certain, it is a rise

the nationalistic forces within europe. the paris attacks are just the catalyst to the long-running trend. joe: the schengen agreement to open the borders was established we sought as part of the eu ideal. what does this do economically in terms of slowing down the movement of transportation and humans across europe? much economically. but in terms of ease of travel, and person more than anything, that is really going to impede it is this is a pillar of the european union. the foundation of the eu. it was already being chance -- challenged. have number of countries very good reason to close their borders. we have artie seen in bavaria a huge buildup of this.

a giant crisisg of confidence for merkel who saw been open rebellion in her coalition just last week. reversed or policy on the migration issue without even telling her. but even beyond the open borders policy, which is still pretty clear-cut, i think we need to start thinking about next year politicalny is in crisis and going to have to manage the euro zone crisis overall. scarlet: i think it is an interesting contrast between what we are seeing in europe with some of her state closing roads and building fences. the idea that it closes off border to migrants but also the risk is that it pits european countries will against one another. the do not spread that impede the spread of islamic state. suspects, which

may have come in through the refugee flow through greece and is a passport in turkey, if all of that is confirmed, while on the one hand we need to make sure they police the border more recruitsly to prevent for islamic state into the state, but if you start to see things in reverse where militants can actually go through and start working with them in the west, obviously it is very ominous. there is no resolution to it. that is all the more going to drive the nationalist forces in europe, not to mention drive greater military involvement in syria, which ironically only increases the vulnerability of the states involved in the military campaign. they become more targets for islamic state sac in narrative of conflict between the west and global jihad. governorse seeing from several states say we do

not want syrian refugees to relocate to our states. in europe, what are the , to try ton place avoid with these governors fear? >> there are a number of checks. there is into pull in a number of regulatory agencies. according to the dublin agreement, the process them into the country where they entered. other countries, leaving the them, it is inevitable that you're going to see some operatives get through the cracks. that is why you see countries moving toward more physical responses were they say we are defending for now. we might as well build a fence in some cases.

scarlet: how does islamic state one the world -- once the western world to respond? are we playing right into their hands? >> yes and no. illicitne hand, this involvement in the military campaign against islamic state, that will hurt islamic state decision. we have seen cracking down on defined in much more your campaigns with western partners. we will have the groundwork for a big military authorization, where we did the grandeur. overall, if it can create a boots onto get western the ground which are still hard to do, they are bringing them in -- it is not clear-cut to

say it all plays in perfectly. joe: great analysis. alix: thank you for joining us. scarlet: coming up, whitney partner,e managing joins us live from the robin hood investors conference. tonight the eiffel tower is reopened to the public after being closed for two days because of security measures.

alix: i am alix steel. let's get right to mark crumpton with our first word news this afternoon. victim of the fairest terror attacks have been identified. the official death toll now stands at 129. the french president said the violence targeted use and all its diversity. the victims were presented to 19 different nationalities. one of three brothers living to --nish curtis thing about expressing disbelief that his brother was involved in the attacks. >> i cannot tell you why, i cannot tell you how did what he did. we are an open-minded family. we never had any problem with justice brady must understand the tragedy, or parents are in shock, and they don't quite realize what has happened. others died his after detonating his best in a suicide bombing. the other is a fugitive in the

subject of a worldwide manhunt. president oman says he will ask the french parliament to extend his country's state of emergency. the move would increase police flowers and limit public gatherings. he called on the united states, russia, and friends to join forces in fighting against exelixis. yournationaux solidarity, call those responsible for the attacks psychopathic monsters. members of parliament, after addressing lawmakers, he let his countrymen in singing the french national anthem ♪. of course you can get more on these and more breaking stories 24 hours a day at the new bloomberg.com. from the first word desk i marvel at crop -- and mark

crumpton. scarlet: thank you. the robin hood investors conference is underway today and tomorrow with speakers including the top names in the financial industry. stephanie ruhle is there and she is joined by whitney tilson. >> thank you. there are extraordinary people there, but we had to speak to you as you had one of the best calls of the year. his spirit airlines. eight timesnce at earnings, but it is a great business. a lot of customers criticize it because they packed people on the seats don't recline. but it is trading at a little over eight times earnings. stephanie: why has a gun hit so hard? whitney tilson: one of the withtry giants, decided

real low oil prices we have the margin room so we are going to start a price war and try and hurt spirit. littlegiant takes on a guy like spirits they can hurt spirit temporarily. but american airlines unit cost is 50% higher than spirit. so spirit will win that price were eventually. stephanie: people might not like it. are they flying spirit? whitney tilson: it has an incredible growth track record. they are growing the number of seats flown by 30% per year recently. they are slowing method 20%, but when they come into a market their prices are so low, 25% below anybody else, that it inumulates 37% increase demand because people choose to not to drive five hours but to hop on a plane. so they simulate new demand

because they are so low price. stephanie: how do you compare it to ryan air? they have killed it. whitney tilson: exactly. that is why i like spirit. everybody complains about ryan air and how they charge you for everything. -- other ultra low care low-cost carriers are only 3% of the market. this company has room to grow at a higher rate for many years. stephanie: room to grow groep geographically? servingtilson: they are 180 markets today, 200 next year. 300 and five years. i think there is a lot of room to grow. stephanie: you have spirit, but you hate wayfarer. why? whitney tilson: he is a strong word. the not hate because the in same way i hated lumber liquidators. they were

deliberately, knowingly selling a toxic product. stephanie: do you still feel that way? whitney tilson: i do. and i'm still short. interestingly, as i just revealed in my presentation i think wayfarer has a similar problem. i have not tested not only their laminate flooring with some of their furniture which is made with a similar medium density fiberboard core. the governing to assemble furniture that you might buy at ikea. they are selling that on wayfarer, made in china, and it has the same formaldehyde in its core as cheapo flooring. category.n product results back: only three products, but to tested positive. they are selling them not only in their own website, but one of them tested on staples, kohl's,

and walmart website as well. fundamentalou has a issue with what they are selling in the fact that it is toxic? yes.ey tilson: they sell 7 million different products from 7000 different suppliers. i think this is a case of growth run amok where they do not have a proper compliance program. i think i knowingly trafficking in products where you really have to have a tight compliance program if you're going to source composite with products which they then turn to their customers to sell. do isk one way for us to to things. they have two really suspend sales of all composite wood products, mostly furniture. particular any source from china. to start testing those products

like i did. they need to test hundreds and not -- and even thousands of products. secondly they need to hire a chief compliance officer and establish a rigorous and yet less expensive texting and compliance program just like home depot and lowes does. stephanie: you said lumber liquidators cannot come out of this. the reputation is so damaged and flooring is the only business arn. yes.ey tilson: i do not know how big their furniture problem is. this composite word furniture is a big part of the category. mind, formaldehyde tainted furniture is known as toxic as your entire floor that children might be crawling on.

stephanie: could one make the argument, that this is priced in a by opportunity? whitney tilson: i'm sure there will come out with that argument. this with thek at cost compliance program, and start testing these products, i

think that can certainly hurt their fourth quarter and so forth. it will be interesting to see if they do the right thing. companye: do you have a problem outside of this is your? whitney tilson: yes. i think there competitively disadvantaged. i do not see how they can beat with restoration hardware and williams-sonoma that have 600 stores. can go and sit on the sofa, and if you've a product return you to bring it into the store. i do not know how it online only competes with that. in every segment i inc. they are disadvantaged. stephanie: across all businesses

we have seen the flash sale industry have a huge growth rate wayfarer also has those dale sellers, dale -- daily deals that are not super high-end. not want tohe do buy ikea anymore. is this not a solution. whitney tilson: zulily was a profitable business for three consecutive years before he got bought out to wayfarer has never turned a profitable quarter in the past five years or so. analogy would point you would be overstock.com, which has struggled to ever have more than a 12% even a margin. even if 20% of sales. even if sales doubled in the next couple of years it would be in a dollar stock. is the kiss of death

to ever try to compete with amazon? , cans amazon become so big anybody compete? walmart going through what they call a reinvention. they want to be viewed as the new amazon. given the size of the strength -- there arelson: probably certain niches where they are able to establish themselves to the point where amazon tried to kill them, could not kill them off, but thought they could buy them for .iscounted price today, five years later my think that opportunity is gone for wayfarer were in was similar to try to carve out a vertical in the face of direct competition from amazon. high-end, go really where wayfarer is running into

and restoration hardware which are already 50% of their sales online, they are well-established online. i'm failed to see where wayfarer can compete effectively and heard any type of margin to justify its market cap. stephanie: thank you. what a great conversation. from thehitney tilson robin hood investment conference. scarlet: stephanie rolled his at the robin hood conference, and she has been reporting there all day. alix: coming up, the global on today'stegist market action. what happened in the global markets and reaction to the paris tragedy. 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.

brian scarlet fu. let's get to mark crumpton with first world news this afternoon. u.s. secretary of state john kerry is in paris to show american solidarity after last week's deadly terror attacks. he calls those responsible for the carnage psychopathic launchers -- monsters. with thesestake attacks represent. this is not a clash of civilizations. these terrorists have declared war against all civilization. ink: secretary kerry landed the french capital under unusual

security precautions. it is the first such restrictions on journalists for a secretary of state visit to the paris capital. the department wideband applies to all military personnel, civilian employees, contractors, and family members who are sponsored by a specific military command. personnel from coming within 30 miles of the french capital. this symbol of paris has been relit in a lash of red white and blue. the eiffel tower dimmed its s after the paris attacks, but it came back up with the colors of the paris flag. the international space station has taken a power head and spacewalking repairs may be needed to a replacement part must be delivered deal rocket.

crew has been operating normally and is in no danger. get more of these and other breaking news stories 24 hours a day on bloomberg.com. back to you. scarlet: thank you. let's get a recap on how u.s. markets closed. surprisingly, they closed with the strength, the equity indexes editing their slump from the last couple of days. they closed at their highest call 10 industries gaining with energy leading the way. up 3.3%. i do not think anybody would have guessed going into today, especially this weekend, especially given the ugly days thursday friday on the markets, the attacks on friday, it seemed like there was going to be a followthrough fall. of course, this is a pretty startling turnaround. alix: i want to take you inside

the bloomberg terminal for a moment. i'm looking at the forward curve. i want to point out what the market expects over the next few months. look at this decline in volatility that we are expecting to see through december. that is incredible. we do not see that a month ago. a month ago we were seeing a steady rise in the vix. malvo lower volatility, means the call that in the markets may be to stay. of that you got a clue if you looked at the world index. it is pretty startling because you can see there is a leg lower with japan open. and then you can see that big leg of right thereto through -- right thereto thirds of the way through. the biggest highs

in the month. i think you guys did a fantastic top this margin when you report it on the president. we had madrid, london, have 9/11. we have learned that there is not a meaningful market impact from these attacks. because we have these unfortunate precedent, i think that is what the market is looking past this. the other component is energy. i think energy is actually a catalyst for the market at this point. not only does it sure of our inflation expectations, but also the energy does not have as much fear about high-yield market. energyu mentioned, the leading the way is very important today. joe: something that goldman sachs pointed out, they pointed out a new product criteria measure in the market in terms of the number of stocks carrying

and chronically low right now. you can see a few times this century has it been this low. they pointed out stocks like amazon and others are responsible for more than 100% of the game this year. if you exclude those, the essence and would be down another 2%. what do you make of that. can we make a rally with the narrow? anastasia amoroso: we can rally selectively. it has been that for the last five or six years, you could pick any sector and any stock. but what you have today is a very micro market. have a lot of names that are tied to energy, type to china that are negatively affected by the fall we see there. likeis offset by things amazon that are tight the u.s. consumer and technology. the bottom line it a micro market not a macro market. i would expect to see those names diverge quite a bit. times of small

market, we are looking at stocks and better balance sheets, low volatility stocks, vega cap. you agree with that? could seeamoroso: i this play out two ways. the stock that has the higher multiple club and also the earnings momentum such as technology or consumer discretionary, i expect they could lead the way in 2016 as well just like they have in 2015. but the other side of the spectrum is all of those we have priced. the materials, energy, industrials. if you get a catalyst on top of it could valuations, work. joe: you mentioned high-yield. should investors take advantage of this opportunity to grab some yield repair? anastasia amoroso: i think so. 8.2% orseeing is down

so. the situation is better today in the u.s. and europe and other places. you're getting concentrated quite handsomely for it. environment does not cure rate was an absolutely healed and high-yield are compelling. just one other quick thing to add on top of that as we talk about rate increases. we think they are coming in the summer, but if you look at the other side of that equation power forward expectations for future rates continue to come down. that is the case for us and for the fed as well. so in that environment if you can get 8% or north about that is an attractive composition. that be easy for companies to continue raising cash in the debt market? anastasia amoroso: even though

we know the issue in energy, even though we know the issue metal, theand spread is everywhere else. it is a bit more of a head went but you can see the offset to that is company fundamentals outside of energy outside of metals have not deteriorated. if you look at leverage ratios they have risen but not too much. if you look at interest coverage ratios they are looking for a healthy. alix: what he expects the tenure to wind up doing as the fed raises rates? high-yield is such a good bet. anastasia amoroso: they can't react to the move in fed raising rates. but longer-term, if you think about the global way of monitoring -- alix: this shows you the average developer market, and the u.s.

is a little bit about that. but new zealand and australia were around that level. anastasia amoroso: this is a very important chart for the 10 year treasury. fundur penchant -- pension is in trouble, where do you go? theget 6% treasury, and u.s. you were getting 2.2% which is a much better proposition for the same asset. so now investors are coming to the united states and they cannot keep the long rates anchored. alix: interesting. thank you to see you -- thank you. great to see you. one of planing up, is for the year micro prices. ♪

scarlet: i am scarlet fu. it is time for the bloomberg does bloomberg business flash. shares of urban outfitters are falling in after-hours trading. this is after the company posted quarter profit and estimates of that fell short. earlier today the retailer announced plans to get into the restaurant business. let's had shares down as much as 10%. alix: a johnson & johnson drug as won approval for cancer drug for multiple myeloma. liberty global will be buying cable and wireless communication in stock and cash deal valued at $5.3 billion.

this move extensively billionaires and higher the bridge a lot america. they received half of their $1.8 billion in revenue from panama and the caribbean. bloomberg business flash. friends ceased to limit the free flow of people -- seeks to limit the free flow of people across the border after the attacks. slovenia, austria, hungary, and germany have artie tighten controls. so will more countries follow suit? our analyst joins us by phone. -- europeour stand up step up its antiterrorist controls without hurting the flow of refugees? >> that is the challenge. is a security crisis and becomes conflated, not only

in the public's mind. we have seen jean-claude juncker strongela merkel to make statement saying they will continue with the effort. most undoubtedly be used to bolster the european leaders who have not wanted to take part in the resettlement plan. we are talking about 160,000 refugees out of the 60 million forcibly displaced people in the world. joe: even before this attack, something in your research is the rise of the right-wing populism across europe, the rise of the marine le pen type. how much does this event heighten your concern? >> even before this event we have been tracking, as you note the rise of the right-wing parties. in denmark, in sweden, already

in elections earlier this year there was a strong performance on anti-immigration parties. river at the start of the year the markets were worried about the series of the world. look how quickly that has been eclipsed. particularly politics in creditor countries were more of a risk to europe then the periphery in many ways. we have identified and angela merkel exit as a risk. that is a key risk of all of this going long and wrong with refugee policy. alix: what about the risk about exit? i think that is more in the background perhaps. the uk'sr or worse,

sees itself as distinct from these european problems. the u.k. is not a member of the already.agreement it is not obliged to take refugees. i think it has more to do with the atmosphere in that people see was seems a refugees making their way across the altered theythe european union, see it as chaos and disorder, and they associate that with being a european problem. it is a global problem, and you have heard me say before that they are globalizing themselves. scarlet: i want to take a step back because we're focused on islamic state but i wonder where is al qaeda in all of this? the drone strikes seem to have heard al qaeda, but they have strengthened isis. it is not so clear as we say. al qaeda took responsibility for the attacks in paris this year.

but isis is the younger, much more aggressive, and much more expansionist offspring of the al qaeda brand. paris, important about the weight of lebanon, if the extent to which they have taken on that battle out of the so-called caliphate. and to other races where they can hit western targets. alix: this countries do want up closing the borders, where are the refugees going, and what kind of economic ramifications doesn't have for your in the middle east? tina fordham: the question will not be difficult to answer. you can see what she has done so well. attempted balancing act. we have these political signpost

with french and german elections in 2017. your head is going to be crucial. i think they will try to push ahead with the settlement. it will be germany bearing the brunt. sweden has closed at orders with the presidents comments today about suspending the movement. i think we'll see a lot of use of temporary as a qualifier. the overriding urge will be to preserve the schengen agreement because the, plus the euro are the cornerstones of what the european union means. morsentrusion, surveillance, all of these will give way in the security challenges. a real you are seeing shift in terms of getting more serious when thinking about taking on isis. but it is not the only thing in the next year for policymakers. alix: thank you for joining us. scarlet: coming up japan's

economy falls into a second recession. we have the chart that you cannot miss. ♪

joe: i am joe weisenthal. japan's economy contracted in the third quarter, putting the nation into its recession since prime minister shinzo abe took office. in to discuss how this will affect the yen and other currency, brenda kelly, had analyst at the london capital group. thank you for joining us. what you make of that week gdp number? brenda kelly: japan is in a

technical recession, and it is quite a blow for a given that his three arrows have been pointing in the direction for further growth rate. business investment has not pushed higher, it needs to do that and have wage growth to tackle this. but the markets do seem to be basing themselves on the fact that additional long-term is in the offering. about structural reform, and you question how this is going to get them to where they need to go. i think for the time year the dollar yen will not get any much further than the 125 level we saw. in the run-up to this gdp number, and rightly so. onis picking up steam now, expectation that we might see some additional qe from eight in

the coming weeks or even in the first quarter. joe: on the flipside the consumption component was not that bad. if you look at nominal gdp it was actually the highest year-over-year reading in several years is it too soon to dismiss abenomics as a failure? brenda kelly: it is not too soon, but it will be foolhardy to believe that an additional round of easy over the answer to the issue. the underlying price level behind the demographic and the lack of action from the business investing community, what concerns me is it does seem to be very much related to china and lack of global growth. those are the headwinds that seem to be pressing down any optimism for business investment and capital expenditure. for a certain extent i feel this recession, heen may be running out of time.

it is not as bad on the face of it, but i do think you can dress it up by any means you like, but a recession is a recession. joe: i was looking at the eurozone inflation data. if you go inside the terminal, one thing you can see us that despite all the deflation talk and the fact that mario draghi is worried about it, it has been taking up all year. the possible that disinflation story is overblown, and that inflation might be more in the air and people think? brenda kelly: you could also say quantitative easing is actually starting to bear fruit. notable, inn very particular relation to the u.s. dollar. it is no surprise that we are starting to see a certain amount of inflation rear its head. we are quite a distance away from the target.

you would see we are going to see quantitative easing from ecb, as well. joe: thank you. we will be right back. ♪

scarlet: walmart's earnings are due out tuesday morning which makes them the focus of the numbers don't lie segment. it can see the yellow line measures the margin. pushing for walmart to cut cost after last month were casting that earnings would drop as much as 6% over the fiscal year. the ceo is reviewing operations. the forecast for the revenue

growth is three percent to 4%. the bottom part will hold steady while international gets better -- bigger and bigger. not brazilina, and where it is kind all over the place when you look at sales and profit is just as unpredictable. club, which, sam's is the orange line, and has been struggling as well. it is liking behind costco which is the yellow line. they haveon that proposed is spinning off sam's club. small partis a of the overall sales, but it is gaining in significance. case in point, walmart's black friday discounts will be offered online hours before the, available in physical stores. alix: thank you.

youit's all for what missed. we will see back here tomorrow. joe: have a great evening. ♪

♪ john: the global response and saying, and6ers are we are all about paris, and let's get the news from our colleague mark crumpton. john, thank you very much. president obama is at the g-20, showing solidarity -- john kerry is