betty: here is what we are watching at this hour as we head toward the close. to fileng plans criminal charges against unnamed supplement makers. scaling back on stocks, other hedge fund or czar as well. should you, the average investor? walmart beating earnings estimates. we will look at how retailers are doing it and how they did it. away from the close of trade, ahead of the market debts -- market desk. if you're looking for any kind of direction here -- >> a lot has been thrown at the

market today. we have had various headlines that raised more concerns about terrorism throughout the day, even if they turned out to have nothing to do with terrorist, as is the case with the disturbance on the flight from britain to boston which you will hear more about one moment now, -- about .1%. all the bouncy around it has done between positive and negative if you look at the s&p 500, you look and see the chart now coming toward the lows of the session here. utilities have been week throughout the day here. energy stocks as well as you see oil stocks fall. they held up really well. chesapeake energy in southwestern, downgraded over the outlook of natural gas.

there declines have been .ccelerating throughout the day this is the worst performing single stock in the s&p today, down 8.5%. and alsompetition lower prices on its coffee. been seeing at lot of demand part a lot of companies, specific macro stuff as well as all of it combining two great confusion. betty: you certainly see that as you showed in the markets. julie hyman is in the market desk. let's check in on the headlines. mark crumpton has more from the news desk. mark: the associated press citing the french defense ministry reporting that 10 french fighter jets are carrying out airstrikes on islamic state targets in syria. more details on the developing story as we get them. this comes as president francois

hollande prepares to meet with both president obama and vladimir putin in an effort to crack down on the terror group. john kerry told reporters the current strategy targeting militants behind the paris teller at -- terrorist attacks is working. leaders, weaken out liberated significant communities, communities in syria. border inters of the northern syria, now under the control, we will be working with turkey to close the last portion. mark: french jets attacked for a second straight night. russia launches cruise missiles at islamic state targets here it belgium is deploying up to 300 extra soldiers to help provide

-- in major cities. they would allow people to take different duties. the move would bring the total number of troops in the streets to 520. jeb bush says he would not dan syrian refugees from entering the united states. john fromh mark and all due respect, he separated himself from most republican governors and from his party's presidential field. >> we have systems in place. if there is any kind of concern, we should allow people in. it has been a noble tradition in our country for many years. ban.o not want to the answer is to lead to resolve the problem in syria. that is my focus.

you can see more of the interview from south carolina on with all due respect at 5:00 p.m. new york time right here in bloomberg television. russia is offering $50 million to find out who brought down one of the airliners. the security chief says a homemade down -- bomb broke the pain -- the plane apart. you can get more on these and other breaking stories 24 hours a day on bloomberg.com. i am mark crumpton. betty, back to you. betty: thank you so much. markets, some of the world have his top hedge fund managers are scaling back the u.s. stocks last quarter as markets have tumbled. manager wasge fund quoted as saying, i can see myself getting bearish. i cannot see myself getting bullish. for a closer look at where the today, wey is going

check in with alec young. ok, let's start with you. stan is not the only one saying this. an quite a few people are starting to see maybe >> in the way the markets are headed. johnost vocal has been preparing for a china led downturn. hisold off quite a bit of stock holdings. he left more than half of his stock earnings just in the third quarter. betty: but they are not taking it all down. >> what you see is people saying it might be a better time so the shorts do not show up, we just know what they used to have is

not there anymore. alec: we have been positive throughout the cycle. in a tactical basis, we are getting a little more cautious and from a long-term perspective, we think investors should stay the course. for a tactical perspective, from the end of qe now to the beginning of the tightening process, we think the back drop is pretty sluggish and we don't -- we do not think that is a great performance for risk assets. for people more sensitive in the short run, we think being defensive makes sense here. case forat is the retail investors, your mom and pop, being in these markets? if they follow the smart money, right?

managers areund judged on a quarterly basis. 529 long-term money. you have investors out there having that short-term sensitivity, it does not look like a great set up for risk assets here. betty: they are judged quarter by quarter nec hedge fund managers hit. if you are running a mutual fund, you are seeing slows coming in. a big index fund guy, we had him on earlier and we are seeing record inflows in our fun. >> the reality is they will do better than actively managed funds. if you want equities, the place to go is the index fund.

in to indexring funds. $450 billion are coming into the index fund. $120 billion year today, going out of actively managed funds. betty: if you were going to be cynical, you could say the guys are throwing their money out because they have not been arming. >> is possible. managers are saying this and alligators are saying now is the right time and you want to own hedge funds and we can the markets not going anywhere are not going up for the next two years. someonewhen you want not to take short positions as well. betty: in this regime change, we now see a tightening cycle. isn't this a time where you may want to see more active runs? alec: limiting drawdown when markets are volatile, and i also

think now is a great time to look at alternatives. hedge funds would fall into that category, but there are a lot of other products. 10 or 15%. it is a huge space. anything from mlps to commodity oriented products. there is more of a weathered that has low correlations and financial risk. a wide variety of things can fit in there. funds. equity in a choppy or environment, that is when the products will not miss rarely leave the way in a bull market. they can underperform. we do not necessarily see huge and lasting downside risk for the markets here. we just think it will be more

volatile in the next few months. betty: a little harder. ok. great to see you. -- at bloomberg hedge fund summit would appear much more ahead on bloomberg markets. shares of a vitamin shoppe are plunging on news the justice department failing to file charges. several unnamed supplement makers are we are waiting for the press conference at 3:30 and we will update you as news develops. ♪

betty: welcome back. some ofme for a look at the biggest business stories in the news right now. today.s are off

the daily fantasy sports site announcing moments ago it is suspending pay to play. the enough and comes after an stopped draftal kings from doing business in the state. they lost their case in court. to drive down prices and investor pessimism. the net long dropped 16%. inventories in developed countries expanded to a record 3 billion barrels. monsanto says today it is after the state ford china can made a bid

the world's's largest pesticide maker. the chief operator officer told reporters the company is discussing internally the merits of coming back and making another offer. you can get more business news at bloomberg.com. in just a few moments, holding a press conference to announce enforcement civil actions over the advertising and sale of dietary supplements, and taking a big hit today, gnc vitamin shoppe. i want to turn to anna for more. so far we do not have any names yet that these are the likely defenders here in this case. anna: we do not have any more information on what exactly they will announce or what companies they're going after. hit because they rely on the supplements.

especially, they have been in the water with their own dietary supplements recently. that the attorney general had done some testing from all different products in all different stores and they have come up with ingredients you would not expect. how did this all come about? been a lot ins the supplement industry lately. the food and dredge it -- fda has done work on their side. they are worried about the ones that have maybe drug ingredients on them that actually should not be over-the-counter, or was that have a supplement dan by the

olympics and other sports agencies. that can restore blood pressure and also lead to a heart attack. you have got some states concerned about it and what and the fbin them looking at it from the side of, let's make sure nothing harmful is in there. betty: right, no harmful or legal or banned substances in there. ok. we are awaiting the press conference from the doj and in the meantime, another health-care story are working on involves this drug company that we have all been focused on in the last few weeks. it has to do with valiant not version.well with this >> right. valiant but the company back when the jug was approved in august. the drug did not come on the market until october.

we took a look at the first few weeks of prescription sales for that drug and they were very low. there were about 227 in the first few weeks it has been on the market. we compare that to viagra, which in the first month on the market, it had over half a million prescriptions that were sold. betty: that is a huge difference. what were the projections? to valiant ever say what they were hoping to do in the first month or so with this drug? but the drug company $4 million. they did not say exactly how much they expected to get in the beginning, but they have seen estimates at 100 billion for the force -- for the first quarter of the year. but it does not look like that will be the case. we still obviously have some time to go. it has not done any direct to consumer advertising.

that could change things down the line. right now, there is not a whole lot of interest for this drug. there are a few factors. it will only be meaningfully effective for about 10% more people than a placebo that take it. there is a risk of fainting and a risk of very low pressure. if you drinkrbated alcohol or you are supposed to have not a single drink while you take the drug here at it is a daily pill so you basically have to refrain from alcohol while on it. betty: these are tough requirements in order for this to work. not to mention you said 10% over the placebo effect. it does not sound like a hit just from what you are describing. is a lot riding on the idea that ll? is that yes,e idea

it is not the best drug in the world and will not offer a ton of help but it may bring other drugmakers to the market. maybe they start looking at drugs for this condition for the female sex drive, and that they start working to bring the drug to a market. some companies, maybe they will ease their path through. but the numbers are not super encouraging for them. on twothank you so much big health-care stories. tradeshead, carl icahn his ebay stake in for paypal. should you follow suit? find out how to risk less to make more when bloomberg markets returns. ♪

betty: welcome back. time now for a look into the options market. julie hyman is standing by with more. julie: indeed it is time to do our options insight. joining me is the chief investment officer at recon capital partners are before we get into today's trade, i want to ask you about the market activity we are today. a relatively tight range. headlines about potentially terrorism related events, even if they do not turn out to be terror related, there seems to be trepidation in the market today. i'm curious from the options perspective what you are seeing. >> we are seeing it in the vix market. we have seen vic's beat around the historical level between 19 and 20. a lot of information is out there in the market. really low lows. we are seeing that's being made for the fourth january next up

27. intolling vix here, january, last january was extremely volatile. >> people are not expecting what people call the geopolitical risk now affecting volatility. >> they are not. the market is just a barometer of the future cash flow's they expect from the companies and the earnings have already been out there in the market. know even retailers now are trying to get people into the door to eat some pizza. a lot of things have been priced into the market for this year. volatilityand the will come back in the beginning of january when companies reported. >> let's talk about one company, paypal. a bullish trade or the most

recent news is that ebay and paypal split. paypal's earnings report posts looked pretty good. are you looking at the future prospects for earnings here? reason why isne they just spun off of ebay. , we are on a first name basis. was he was advocating for change. he was able to get the board to separate the company. the company came off with a lot of cash on the bounce sheet so they have a great growth driver in the social media payment platform. revenues are growing about 25% and they are doing extremely well democratizing payments in the emerging markets. that actually impacted western union, when they announced, when paypal announced they were buying zoom. a great treat into april, given that they have already basically come out with earnings this

quarter and are just a brand-new company. ist we would like to do actually go out and buy the 35 call in april as well as sell the 45 call against it. you're getting a three-one payout ratio costing about three point 35, three dollars and $.42 per you're getting a 3-1 payoff issue and he will get earnings and it gives you time to participate with carl icahn. julie: a report that apple might be coming out with a competing product to then mow? >> people are playing with android. a defensive mood -- move. kevin kelly, thank you so much. we will be right back with more. ♪

♪ betty: you are watching "bloomberg market day" and we will start with headlines.

bombod afternoon, twin threats forced the cancellation of a soccer match and concert at stadiums in germany. angela merkel and other officials had been scheduled to attend a game between germany and the netherlands, but the stadium was evacuated after concrete information about a bomb threat and the press reports that a second stadium was evacuated when a bomb threat was received before a concert. and the man that french investigators suspect orchestrated attacks in paris has an extensive resume and is familiar to the intelligence he is the subject of a manhunt. he is linked to a failed assault on a train in august. president obama has ruled out the possibility of sending ground forces to syria and iraq.

the president said a move like that would be a serious mistake that would lead to long-term occupation in those countries. diplomatic pressure would ultimately work. aftercorting oil barrels sanctions are lifted. iran plans to boost oil exports in early 2016. they currently export billions of barrels a day and hope to get back to presentation levels, 2.2 million barrels. and attacking bernie sanders and has health care plan, the proposal to create a single payment system would mean higher taxes, says clinton. wouldrnie sanders says it

save money in the long run because it would end wasteful spending. you can get more on breaking stories at bloomberg.com. back to you. betty: i will head over to the nasdaq or abigail doolittle is standing by with more on the markets, which has been really shocking today. >> that is a good word to use, higher earlier, now the nasdaq has followed others into the red , but let's have a look at one of the worst performers and best performers going into the close. one of the worst, zeno health. this is underweight, with analysts saying that the growth is unsustainable and a shortfall editions coulde weigh on results. this could happen in both 2016 and 2017.

the stock could drop another 25% from current levels, something that makes sense in light of the short interest. turning now to netflix, shares are hired today with communicating to an analyst in bloomberg, two reasons at play for pushing those stocks up. one, a mobility report is out saying that mobile video should grow by 55% annually, between now and 2021 and the report also suggest that netflix in the overall market, they sure could be 20% higher than what investors could look at. and also, it looks as though netflix in australia is going well, they have 2.5 million prescribers since march, that is more than that -- more than what they were looking at. betty: thank you so much. as i mentioned, we are a waiting

a press conference at the department of justice, essentially accusing dietary supplement companies of criminal activity. i believe julie hyman has more details. julie: i do, they have come into settlement with those companies making commentary on weight loss claims, they are closely held companies, not publicly traded companies. the companies are called usp labs and s k labs, they have been charged in this case, accusing marketers of making unsupported claims relating to weight loss supplements. so these are going to be too partial settlements. and the ftc is filing a lawsuit to stop sunrise nutraceuticals from claiming that a product, that it can help cure opiate addiction. this is what is going on. they are also sending warning

letters to 20 companies that sell online for weight loss, but it did not immediately name the companies. as we told you earlier, there were some, that when the public -- department of justice announced these actions, that they are now coming back to some extent. gnc holdings is one of those, stock falling sharply earlier. it is still lower, but it has climbed back up considerably. and there was also speculation about whether it would be a target for downgrade. as well, herbalife another one of those. even after the company said it was not aware of being the target of any kind of action, as you can see that that stock has declined 1.4%. again, ftc announces settlements related to what they said is incorrect weight loss claims, that is for privately held companies, s k labs and another

lab. there is the justice department accusing usp labs and s k labs in this case, right? julie: as far as i can tell, yes. it is the ftc, related to the department of justice. betty: thank you so much. another stock, walmart, which is getting a much-needed boost, raisedsurging after they annual profit forecast. arethe turnaround efforts paying off. marty, what did you make of this? >> i think that walmart is finally doing the things that people hoped. mainly investing in the stores and particularly investing in

e-commerce. one thing to watch, unlike amazon which is effectively making early noise about doing a store in seattle, walmart comes from a different position. , it is achannel base good investment. betty: it was a month ago that everyone was saying that walmart was doing all the wrong things in stores, so i do not get this? >> 40,000 square foot small stores following the populations, the young populations and the bloomberg populations into the city is something they should have done earlier and they are doing it now and there is investment behind that. betty: why did they cut their forecast last month? >> effectively, there are headwinds expected in the retail industry, but what they are doing and the way they are investing in infrastructure, hardware and software, i think that will pay dividends. betty: how the relay this to

other retailers, you mentioned amazon, what about other retailers? >> the business today is in so the luxury or premium, and the mass and these -- discounters, they are doing well. in the middle, that is where it is proving difficult. when you are a discounter, t.j. maxx or h&m, they are pulling the middle customer down. and the same is happening with luxury brands, pulling people up. so effectively -- betty: t.j. maxx is doing very well. h&m. is age and them -- what people are looking at is the department store channel that is the proxy for the american account -- economy, which is not necessarily so. today, people spend money may be

more on experiences, rather than on things and it is retailers that bring value through experience that will be the winners. and i think that the fast action guys that provide that value for money, they have fast experience, that it should that you come into the store and you may not find the product, that is retail theater, but you might find something else. betty: so it is dependent on inventory, you go there and you are like wow, this is a whole new store. you go a week later, different. you do not get that when you go to macy's. >> exactly and e-commerce driven brands like bonobo's, many others that started online, going off-line. warby parker, they are into to a younger customer. and if they are grading this

fun. and pushing value. it is interesting to watch. they are growing. they are lengthening and deepening. betty: i keep hearing that online retailers are having a hard time, all of a sudden. you have the flash sale model that do not work. runway,rs like rent the which had an article today, talking about how their -- and they are running into difficulty. off-line commerce is already difficult, so what is going on online? pure online- the retail is a difficult place to be. betty: it always has been. >> but if you look at department stores, with many headwinds they have had for years, only now we are looking at a little bit of professionalism on those business models and now they are andraging the mobile

catalog to actually get customers. pure play,e just a to have -- to not have that ability to be there any moment anytime, that is the harder proposition. you have to have people like companies like warby parker, doing stores, rolling enrico -- retail. the you do that, customer is likely to shop with you. it pays off. betty: ok, thank you so much. on bloombergad markets, top investors announcing big bets at the robin -- event in new york city. that is next. ♪

♪ betty: good afternoon, welcome back to "bloomberg market day". the top investors announcing big bets at the robin hood investor conference, our own stephanie wu is there with a special guest. neil masonic,ith you just left the stage. kick it off. >> we spend a lot of time looking at investments. technology -- >> a lot of innovation. >> i started in silicon valley, so i feel like -- many years ago. found a lot of innovation, one in the case of sony, an iconic brand. when you look at sony now, versus many years ago, this is not just a walkman.

they have a platform service, playstation, which the vast majority of profits come from the consul and software. five dollars every time you buy a game. when you download those, you get -- they get $15, they are in a market that is taking off. >> the gaming systems is their only business, this is a powerful vertical. it is a brand with a lot of history. what about all of the other verticals? is it value to selloff the gaming business? >> is not just gaming, gaming and their secondary. you take a picture with your apple iphone and eight uses a sunny sensor, cars, they have sunny sensors. that is to 5% of their

profit a year. and the music, which is going toward streaming. it is taking off. their old areas like movies, mobile, all of those are small portions of the pie. and they are also getting out of mobile. >> on the stage, people are looking at sony, why are we talking about sony? >> i think that we associate sunny with old branded consumer electronics, not the platform that is emerging into. and you see it with great companies. >> what do you think of ibm are now? >> they are a very challenged business and i spent a lot of my career in software, if you add up all the innovative companies, apple, amazon, google, all of ofse companies spend 15-30% dollarse dollars -- rnd

-- when you compare that to hewlett-packard, they are only spending 5-10% of revenues on rnd, so they are in a tough bow. they have problems of big data and the cloud, they are not competing aggressively. >> so another iconic brand? >> woolworth, they are a grocery store. 70% of business comes from food and liquor. 7.2%.eir margins, every other growth chart in the world has 5% or 6%. is the most efficient grocery store in the world. they are lean, mean and going after australia. >> where these he will work -- lworth going?

>> we think that it will trade at 12 times it's earning. al, you think it is going down for liquor and food consultant, clearly he does not come for dinner at my house. betty, do you agree? betty: well, i am coming to dinner your house. thank you so much stephanie. tradinge ahead, stocks in the afternoon, are they losing ground to bonds? we will be back. ♪

betty: welcome back. julie hyman has a check on big company movers. julie: we are also looking at a close that is sort of, meh. it seems like traders are not

making a lot of convictions today, at least not a lot of volume with conviction. we did have a number of headlines today related to terrorism scares around the globe, that affected trading. on the plus side, we had better than estimated retail earnings and economic data this morning. if you look, the s&p 500, a lot of bouncing around. levels,bouncing around looks like we will end lower potentially. down to the wire. latebreaking news throughout the session, we will look it -- at the largest supplier of industrial gas that could expand into the united states. airgas, the vast majority of their business is in the u.s. this could be is that if i percent premium to yesterday's

close. and when bloomberg reported a deal with airgas, it they halted theing news, then indeed acquisition was agreed upon. and we have talked about this news regarding weight loss supplements, the department of justice announcing several civil and criminal actions against privately held companies, publicly held companies like gnc reacting to stipulation that they could be a target. betty asked if this was justice the department of justice or the ftc, it looks like both, the department justice has filed an indictment against two companies, usp labs and s k labs. so g is making a recovery of a sort, still down more than 6%. vitamin shoppe trading lower as well, downgraded today.

it will be a bit of a recovery, still down by 4%. sorry for the confusion. , also good to clarify interesting to see how those stocks reacted. thank you. now, we are a few moments away from closing bell, it has been a tough time for stocks. revenue growth in the s&p 500 is forecast to track 4.1% in the third quarter. 's reporter joe joins us now. what are we seeing? i things coming in tighter -- are things coming in tighter. >> yes, it is shrieking. bond yields are rising, tied to what you said, november 4, the possibility the rate hike coming. we saw a 11% of point increase

in bond yield for securities rise after that. that is one end. on the other hand, you mentioned earnings growth forecast to contract this quarter and next quarter, that is something that is compressing this measure and making stocks look less appealing by comparison to bonds. betty: are you already looking at that playing on the markets, or something to come? >> it is something to come, that will not affect day to day trading on the s&p 500 or corporate bonds, it will really hikeill we do get the rate , they will be looking at shipping money out of equity to bonds and it will be one or the other. we are looking at equities saying that advantage. betty: given that yields have come up on corporate bonds, have we all repriced -- already priced in that rate?

will we see a group? -- grow? >> as far as we can tell, there's nothing that compares to the shock when you see it. as will probably be a move, a spike, something like a knee-jerk reaction. it is one thing to expect it, another thing to get it. it might be priced in. betty: once you see it happen, it will change the game. >> exactly. betty: on the earnings side, i know that it is dismal out there, but could in interest-rate rise help earnings? >> a good question, when you look at the growth, the economy is showing strength theoretically and labor could be stronger, so that is something that is robert economy should help corporate profits, it could be a balancing act with what will happen, the preference for bonds over equities or the fact

that people want to buy stock because the economy is in a good place. without that play out today in the market, earlier today we were up nicely, it was like a second straight day of gains, but we have erased that going into the close. what you're looking at other, you have inflation data and people look at initially and say, that means the economy is great, by the end of the day, oh, bad news. tug-of-war ina the stock market over the course of one trading session. betty: i think that you are right. joe, thank you. the market closes up next. ♪

we are moments away from the closing bell. i am scarlet fu. alix: and i am alix steel. joe: and i am joe weisenthal.

[bell rings] u.s. stocks struggling to rebound. joe: "bloomberg west -- miss?t'd you and is there a new goldilocks scenario, and what would make it just right for the fed to raise rates? and the future of the chinese consumer. we have got the charts you cannot miss. but we begin, of course, with the markets. we start the day on a bit of a good sell because we had the big rally yesterday, did go up by a tense of 1% for the s&p 500, and walmart had a and her day. at one point, it had its against