conference with italian prime minister matteo renzi in the rose garden, president obama expressed dismay at trump's recent rhetoric over the russian leader. president obama: we think russia is a large, important country a military that is second only to ours, and has to be a part of the solution on the world stage rather than part of the problem. but their behavior has undermined international norms and international rules in ways we have to call them out on. mr. obama said the u.s. has not encroach on russia's legitimate interests. nasa six-point lead over donald trump in the latest national poll. the former secretary of state newstrump 46-40 in the nbc

weekly tracking poll. libertarian gary johnson gets 8% of likely voters, with the green party's jill stein at 4%. in a head-to-head matchup, clinton leads trump 51-43. magazine is endorsing hillary clinton for president, the first time the fashion bible has endorsed a presidential candidate. the editors wrote "we understand clinton has not always been a perfect candidate. yet her fierce intelligence and considerable expense are reflected in policies and positions that are clear, sound, and hopeful." in belgium, authorities have indicted for people on terrorist activities including financing and recruiting fighters for the islamic state in syria. as many as 15 people were detained earlier during searches in three cities. photo prosecutor office says no weapons or explosives were found during the searches. and the u.s. state department is denying any involvement with wikileaks founder julian us on

angeng in an -- julian ass losing internet access at the ecuadorian embassy in london. secretary of state john kerry says that the conversations with officials are untrue. ge is trying to avoid extradition to sweden over an alleged case of sexual abuse. global news 24 hours a day powered by 2600 journalists and analysts in more than 120 countries. corny collins -- im courtney collins. this is bloomberg. ♪ scarlet: we are 30 minutes from the close of trading. i'm scarlet fu. joe: i'm joe weisenthal. matt: i'm matt miller. joe: the question is, would you miss?

-- what'd you miss? inflation may have been underwhelming but earnings are stand out as we head into the close. investors are eyeing yahoo! and intel very closely. and we are going to be speaking smith.tel's stacy the chipmaker is pivoting aggressively as core pc sales and. and it has been a horrible year for bill ackman could even his adversary -- even as his adversaries seem to be plotting emise, should we be counting him out? could bill ackman make a comeback? scarlet: we are heading for the close so let's look at whether stock indexes stand with abigail doolittle. abigail: we see lots of green for the three major averages. higherp 500, nasdaq all with lots of green.

nasdaq close to one person as the tech-heavy index charges forward. let's look at the financials. i socket of strength for u.s. stocks. goldman sachs and blackrock and regent financial trading higher. goldman sachs earnings really stand out. a lot of the strength is driven by fixed income strength come up 49% on a year-over-year basis. on pace to close at an all-time high. one potential catalyst for alphabet trading higher today could be the new smartphone. pixel is receiving lots of praise. alphabet trading nicely higher come on record the big winner is netflix.

shares are trading at levels last seen in december 2015, absolutely surging for the best day in more than three euros. netflix put up a great third quarter. subscribers growth -- numbers come i should say, beat estimates. they get better guidance for the third quarter than was expected. and big praise for david miller. he initiated on the stock two weeks ago with a buy rating, saying this is what he expected. to try yesterday that was a little bit more bearish. we want to look at it today to see what it looks like. perhaps we should have given it more fair treatment to it. we do see that this is netflix caught in his long-term range. lots of uncertainty. in therd quarter beat stand of messy quarters. recently the stock to trade above the 200-day moving average good back into the range over the last couple of days.

this will be one that time will tell but it could be. scarlet: thank you so much, abigail doolittle. matt: what'd you miss? he has not been a good year and a half for bill ackman. down to $11.4 billion thanks in part to massive losses in his portfolio but also because of redemptions. does he have a comeback left in him? bloomberg contributing editor bill cohan wrote an article entitled " is bill ackman toast?" he joins us with inside. tweeted ittory, i out. it has been published for a day now. i wonder if you have heard back from the bill ackman cap because he did not comment to you for the story. bill: well, matt, it is a good question.

i've heard bits and pieces back from them. bill is supremely confident, i think we all know that. let anot going to 13-month that setback derail him from his 50 have in your mission he is on to be like warren buffett. whatever, 13 years into that so he has another 37 or so years to go. he remains agreement confident. he believes he can turn v aleant around. most of his problems are sort of nestled right up there, which aleant, which is had a horrific run. they think they can turn this around. you say confident, a lot of people in your story say everything. the guys looking at an insider -- a lot of people in your story say arrogant. the guy is looking at an insider

trading suit. he is also dealing with huge losses in valley and, which some have said is an unethical trade because that is the company that buys drugs and raises the price 100% or 1000% to make a profit. there is more than one problem for bill ackman. bill: true. he was a he bought into that he would say he bought into val--he would say that he bought into valeant not aware of the jacobin in as and was investing different ceo then he turned out to be. i think the bigger thing is the insider trading case, which smacks of insider trading it of course, i'm not a lawyer so i should not practicing without that license. to me, the federal court in california is going to be deciding that. he made $2.4 billion on having

information about valeant's bid for allergen that others didn't have and to me that smacks of it. but we will see. these rules are very arcane. there is no law. all interpreted by the courts. he beasley doesn't believe he engaged in insider -- he always the doesn't leave he engaged in insider trading. scarlet: of course, his adversaries would point out that he did. your article is remarkable for how many partitions there are from other hedge fund managers. it is unusual to see these guys go on the record to slam someone in their own community. aside from the famous carl icahn-bill ackman debate of a few years ago. look, hedge funds are the ultimate darwinian game. they smell blood in the water related to bill. he does inspire huge amount of schadenfreude. this is an opportunity for them to come out publicly and criticize him because he is

beaten down. he has had a rough 13 months. he had a great 2014. had he not raised something like $6 billion in permanent capital. he would be looking like richard perry, if you ask me, just went out of business. yeah, they're circling, having fun. scarlet: they're circling, having fun. he does have a bit of aggression. who are bill ackman's allies? bill: hmm. of course, scarlet come i don't reveal my sources. there were some hedge fund managers who were crunching in dging in respect of bill, especially with herbalife. some feel he got the intellectual argument right about herbalife, not the reaction of the market. bill is an iconoclast.

he is not well-liked. there are not people who are going to rise to his defense at this moment. this is blood sport. this is darwinian. if they smell blood in the water -- matt: even john mcenroe doesn't like bill ackman. well, 2 hot heads, john mcenroe and bill ackman, and they deserve each other and had quite a grudge match, probably. joe: i'm going back to this sounds like after the jcpenney debacle, a lot of people writing his obituary then and then and that he had a fantastic performance. fundamentally like a different moment for him then after that when it seemed like he was on the ropes and then? at a he went to valeant high point and his whole m.o. is to buy committees like general growth. nobody thought it would amount to anything. . is to buy companies

when they are low or people have given up on them -- joe: like chipotle. e, butyeah, like chipotl that may be indicative of more trouble for them. valeant was against the grain. it totally collapsed. he has used that as a one-off mistake which will not be repeated. it is the message he is given to his limited partners. he is very confident. he remains extremely confident in his bill ackman way. matt: let's not forget, he is bill that she is a billionaire. --he is a billionaire. bill: not this week. matt: hard to pin down the returns. i have the stock on my bloomberg from the ipo. it is down by half.

some of his adversaries have said he is not returning anything. some of his supporters say they are making 15% year on him -- from the good-- from him. bill: we are in this neverland. percentages of return over time. someone talking about absolute return on dollars. when he was a smaller fund in his earlier days at pershing, the amount of money he made was smaller and then the returns were high. now he is a bigger fund and has lost with valeant billions of dollars and people of done the calculations. he has returned close to zero dollars. he disputes this and he does she

think she is making plenty of money for everybody. we will have to see. very interesting story in "vanity fair." bill cohan, also a bloomberg contributing editor. make sure you turn in tomorrow -- tune in tomorrow. definitely some thing you don't want to miss. 2:00 p.m. new york time. scarlet: vanguard has been a known for its low fees and ceo bill mcnabb talks about how lower they could go. this is bloomberg. ♪

matt: what'd you miss?

the rise of a low fee index funds. vanguard started the trend and it averages $3.8 trillion in global assets. erik schatzker sat down with vanguard ceo bill mcnabb and the 2 ss competition in the industry. -- ss to come edition in the industry. assessed competition in the industry. bill: what you can expect his overtime across the board we will continue to lower fees as we create economies of scale. it is typically not a product for product thing, from our perspective. it is a way of being. what customers to look at it on a product byproduct basis. clearly there is a risk. if you don't match, you may lose new assets. that is true, is it not? bill: no, i think clients look at us as somebody who has been talking about this for 40 years and if you look at the inexorable decline of expense ratios, we are equipped to keep

doing it. it is not a one-time or temporary thing. it is the way we exist. and there is no risk, for example, that existing assets walked out the door in search of a cheaper fee? bill: people should be looking for value all the time but investors at vanguard know that over time we will continue to do what is right for them. erik: let's talk about it in those terms. what is the average fee investors pay today to be in a vanguard fund or etf? bill: if you go across the entire 320 chilean dollars -- $3.8 trillion -- when i started it was in the 60's and 70's. see the slope of the line has continued to be pretty consistent, and it really thereasset management, are economies of scale, and a business model is returned as economies of scale to the people who create them. erik: given that trajectory,

where do you think it will be five years from now? bill: hard to put an exact number on it. erik: full parking -- involved working. -- ballparking. bill: less than it is today. erik: clearly zero is the theoretical limit for fee reduction. what is the practical limit? on your broadest, largest minute, what is the fee? bill: i don't know the answer to that today, erik, because the scale and technology continues to evolve. nothing is for free. you have to pay for custody and so forth. as we approach that what we will see these people doing things to collect fees in another area and ,ave more of a headline issue one or two basis points. money is going to be made somewhere else. for us it is about being

transparent, the total cost of ownership. erik: i see. the low-cost fund or etf will be a loss leader and they will make it up elsewhere. bill: i think that is probably already happening. erik: and you are not going to do that? bill: we believe in everyone paying their fair share. if you look at the evolution of the client base, that is what it has been. yrik: when you say with a wr smile it is already happening, who is doing it? bill: you look at the different firms in the different business models, and the size of the funds commit is hard to get if i basis points with some of these etf's. erik: just not big enough. what about competition? it is good for the investors in the short run, the short run, but if only the largest firms can survive, that will reduce choice for investors. bill: that is one of the balancing things, watching the

competitive market evolve around. there will be consolidation. the large firms will have big advantages in terms of scale. there is room for smaller players that are nimble. i don't think we have seen the end of management. i think we have seen the end of high cost management. you can see boutiques playing in that space, people focused on a particular sector of the market be very successful. what kind of firm is a dinosaur? bill: any traditional high cost manager is going to struggle. erik: what about vanguard? bill:bill: we have done everything organically -- erik: i know, that is why i asked the question. never hereever says is an interesting thing, we never have a growth target and we never spend that much time internally.

we spent a lot of time trying to focus on how can we create the most value for our clients. growth has taking care of itself as a byproduct of that. i think we will continue to drive towards that. matt: that was a vanguard ceo bill mcnabb. until earnings are coming up. this is bloomberg. ♪

matt what you -- joe: what'd you miss? whoever wins next months election, the path towards passing your deals may be difficult or undesirable depending on who wins. this is the number of mentions of the word "isolationism" going all the way back to march 2000. it flows of every once in a while, not really surprising. peopleperiods of stress

cite our country is going to be engaged in a new round of isolationism. but look at the popularity of brexit, donald trump -- you see a surge in the story count. the idea that countries will retreat from globalization, from tariffs and barriers, becoming a bigger story in the world. matt: that is interesting. later on i am a chart from the philadelphia fed showing how much partisanship has flared up. right here i have a great chart put together by dan curtis, one of our producers at bloomberg. what this shows use the drag or boost to cpi that you have from these three different components. in purple uc energy -- you see energy. thelue you see core, everything else. in white you seafood. the interesting thing is year-over-year, the drag that energy has been on inflation and

the boost that food has been in white on inflation. even though we have a number of 1.5%, i believe that was the core number. 2.2%, that was the year-over-year change. you can see that energy come even other prices have recovered substantially, has still been a drag on inflation year-over-year. scarlet: this is an incredible breakdown. barely any courtroom until december 20 15 --excuse me, january. matt: well, thank you, dan curtis. scarlet: intel is reporting after the bill and like every company they are trying to turn to high-margin businesses. looking at a snapshot of revenue growth and the white line's overall revenue growth. clientnge line is computing growth, a combination of pc and mobile and communications. index of a majority of sales but it has not had much positive revenue growth.

the red line on top is the data center growth. pc business but- it is inconsistent and that is something people will be watching for after the close. take a look at the major averages. less than four minutes before the close.

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>> we are moments away from the closing bell. u.s. equities head toward their biggest day in almost four weeks. the dollar on speculations the fed would [indiscernible] i am scarlet fu. : i am joe weisenthal. matt: you can watch our coverage on twitter every weekday from four to five eastern. >> we love magic. see stocks recovering from the decline. day wasta point of the the inflation report, consumer matched or slightly missed economist estimates. >> a lot of buildup to this and

then another report. prizes are rising but not like the fire people would have -- >> it was a little bit of a letdown. -- on the other hand equities are up the board. estate was added recently. the biggest gainer was health care. netflix is a clearwater. the subscriber growth beat the estimates. everyone is excited about stranger things. harley davidson a big gainer at 9%. not on takeover talk. the new engine is spurring so many sales in september. supply sales look fantastic. .t the same time, cutting cost higher revenue, lower cost equals big game.

it raises its forecast and has the biggest gain in stock in three years. things are looking to get a little better after it has an open care loss. scarlet: intel just reported results. on that basis analysts were looking for $.67. that is a beat on terms of adjusted earnings per share and also reporting a beat. there is a consensus estimate of $.73. gross margin, which is one metric intel provides, was 64.8%. analysts were looking for 63%. that or profitability from intel than what analysts have been looking for. continue spending what it has indicated as well. when you look at the outlook for we arerth quarter here,

looking at a fourth-quarter revenue of $15.7 billion. analysts were looking for a range of 15.9 billion. that pretty much falls in line with the company. the stock is down 4% after hours, it could be on that sort of -- maybe people were looking more on the outlook. matt: my first job, working for , this stock has had a run-up into these earnings over the last three months. that could be one of the reasons where the stock was down. >> so far it is $1.8 billion of charges realized to date. get back to market recap bond market.

it is not just mediocre but underwhelming cpi report. pressure on the fed. i also want to look at 10 year yields. the story is the higher yields -- we are starting to see it .ver australia, korea, taiwan ada is driving in the currency market. was a seven month high. it wasn't enough to fuel faster right expectations.

the pound actually strengthened. it may have less to keep cutting rates. or to contain that price ride. there is also comments from a u.k. government lawyer that suggests been made to rag on because it faces legal challenges. -- kind of delay , we werejusted eps looking for $.14. the bottom-line figure beating analyst estimates. the estimate was for 860. that is basically in line with analyst estimates. yahoo! getting some guidance for fourth-quarter revenue in the range of 880. this is all very interesting.

the only thing that matters for yahoo! is whether or not for us and still wants to pay $4.83 webion for the company's assets. let's bring in paul sweeney right now. it seems like verizon is losing patience here. bombshelle out with a with 500 billion customers. does for rise and still want everything? >> they still want to buy yahoo!. hacking a material adverse change to the company? certainly give them the option to renegotiate the terms of the deal. >> does this incident provide a pretext to walk away if they

didn't like the numbers they sell. ? if yahoo! was doing gain busters, it must certainly would find a reason. >> we have a business in the secular decline. putting that together with aol, they can actually turn that business around. some misgivings, this potentially could be an opportunity to walk away. together, isget this issue and the disclosure of it, is that animate -- is that a material adverse change? we don't really have anything. been aicle is it has month, let's get some clarification. >> this happened in 2014 just a few years ago and we just found

out about this for weeks ago. been a month, what have you guys to learned -- guys learned? perhaps between the two companies, the lawyers are still talking. there are probably some misgivings. this probably races the pressure to double down and get this deal done. i think that's kind of where we are now. the earnings are probably secondary to this issue, and quite frankly the value of alibaba represents the majority of the value. scarlet bank the interior ration of business assets it's not new. is verizon under pressure to show profitability right away? sayingink what they are is an online business for verizon. tim armstrong is --

and a lot of people are willing to give them the benefit of a doubt that with the user base if yahoo!, with the advertising base of yahoo!, with all the content yahoo! has, we combine that with some of the assets of failed -- of aol. i think the relative small price tag of verizon to get into this online big -- online video business, i think the market is willing to give tim armstrong the benefit of that. >> we appreciate your time today. he runs bloomberg intelligence for us and covers all of these media assets. bring in bloomberg news oliver run for more on this action. what you have noticed is how little clarity ceos are giving. >> this is great. it is based on a report at bank of america.

>> i think it's important because we talk a lot about the fluctuation point. things are going really well so far. we are probably going to leave that hurdle of the earnings growth into the positives. >> the economy that the fed would, why is there so little clarity? we surmised that probably this is due to the election. there is a lot of certainty about the economy at large. got projections in terms of guidance. annual projections are consistent. there has only been about 20 so far.

actually we have a great function. you type that in, you go to these tables, you can actually see what copies have been issuing for guidance to jump in. it is pretty sparse right now. ultimately for companies and corporate executives, they want to know about the economy. until there is more clarity on that. that is probably going to continue to affect this. it would be the icing on the cake if the company issued good guidance. >> and i warned summits, we put a greatble format via job compiling all of this on a daily basis. this is what they used to come up with their consensus view. >> we already know what is .appening

this is a great way to summarize where those corporate executives -- it is something that every earnings season -- it is such a great fixture. are beating 6.6% right now. sales up 1.25%. this is where the inflection is happening. we have had declining earnings for six quarters in a row. aliso far this earnings season, it has only started. we have 52 s&p 500 companies reported. we may see a turnaround. >> thank you so much. falling inock is late trading after it posted earnings.

it initially boosted the stock. president and ceo -- this is bloomberg. ♪

>> let's get to first word news this afternoon. russia's president vladimir putin and german chancellor on: merkel meet in berlin tomorrow for talks on the fighting in ukraine. here is bloomberg's patrick donahue. >> fighting broke out two years ago. they will focus on talks over

ukraine. the kremlin says putin will be open to talking about syria as well. >> donald trump on the campaign trail reassuring supporters. at a rally and colorado where he'll said took a moment to tell his own competitive nature. >> my temperament has always been about my greatest strength. we are doing pretty good in the polls, i don't believe in the polls anymore. i don't believe them. that's the only one they show. believe me, we are doing great. >> trump also told his audience that he will institute a lobbying ban for government officials and will push for term limits for members of congress. and wednesday night at the university of nevada, their

third and final debate. planning to ask questions on debt, immigration, the economy, and a supreme court. global news 24 hours per day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. joe: we have news that the cost of living in the u.s. rose at the fastest pace in five months, rising 0.3% in september. economy overheating? is there a lot of slack. thank you so much for joining us. you have done a lot of interesting research on this current era of the labor market. and the future of labor.

there is this view we are close to full employment, that it could feed into inflation? >> i wouldn't think about that at all? i think there is a lot more slack in the economy. look over the past 12 months, the cpi was up only 1.5%. that was below the target of 2%. that is not a sign of an overheating economy at all. the technology is making it possible to make more more products and services a lot cheaper. a lot of them are free and not even counted. don't see the overheating a lot of people are talking about. massive techat driven inflation. is it monetary policy based or is it something else? you say we are not anywhere close to overheating. does it imply the fed should stay at zero or should we be

thinking about other forms of stimulus and other forms of boosting the economy that may be out of their purview? >> i think we ought to look at the fundamentals pre-it i think the fed has been doing a great job. is what we need to do is look at more fundamental restructuring of the economy. as the technologies come online, there is some big tectonic changes in the kinds of skills that are needed in the labor force. the types of regulations, the types of entrepreneurship. we need these long-term fixes. we should be thinking outside 10, 20 years. are we going to see job losses from tech to robots essentially. our going to see that

technological innovation create more jobs? >> that all depends on our choices. whenever people ask me this prediction question i want to stress that the technology is a tool that can be used to create more job losses and many companies and people are doing that. it can be used to create new jobs. and the way we respond is going to make all the difference. with the industrialization of the economy we responded with mass public education, with new kinds of antitrust and other things to change the ability of the workforce to adapt going forward. we can embrace those new technologies to create lots of new jobs. we are not doing it right now. i think by and large people have been looking at automating existing jobs rather than how they can use this technology to create new goods and services. >> let me ask you a related question, productivity has been

a concern for the fed. is it measured correctly, because a lot of people are saying there are some anyways we -- so many ways we are productive that is not being measured? >> congratulations, scarlett. that is not just a way to -- the way to bruised productivity is having more machines to the workforce. we can enjoy that soccer game and i think there is some significant miss measurement. there is so much free stuff on my smart phone, gps, wikipedia, the gdp statistics, and people spend more and more times that more and more time-consuming cost goods. to do thatll like us restructuring so we can get even higher productivity growth. question, there is a hot

new theory going around that a big contributor to the decline and prime age male labor force participation rate, that there is a lot of guys sitting at home playing video games. is so intellectually satisfying and immersive that jobs just aren't appealing to them. do you buy this? >> there may be some truth to that. it can be overstated, it can be mocked. i do think there is a trade-off between other things. maybe spending a little bit less time working. i know a lot of kids don't bother getting drivers licenses. obviously the video games are more fun than driving a real car. >> maybe it is time to get into the wage discussion. >> back in the day they could have had more fun hunting. >> professor of economics at m.i.t.. fascinating conversation, thank you for joining us.

sharese trivia for you, of this publicly traded central-bank saw a sudden surge in prices, the highest it has seen since 1997. some traders call the stock a collectors item. what is the central bank we are talking about and did you even know that a central-bank could be publicly traded? this is bloomberg.

scarlet: hedge funds are turning bearish, outright bearish on equity futures for the first time since april. let's take a deep dive into the bloomberg, a reminder you can find these charts using the function at the bottom of the screen. the s&p 500 is on the verge of breaking through a lower bound of the trading range. still fairly elevated over a longer term, but certainly at the lower part of the range.

here is what you want to look at. we highlighted where the turn has come. they had been positive, bullish for half a year. now that sentiment has turned sour. they are short a net position of 122 contracts. watch out for how the election changes. i'm looking at something that has confounded a lot of people. and that is a surge. the swiss national bank is publicly traded. >> there are a few publicly traded central banks. and the s&p is searching this year and nobody knows why it doesn't make any sense. there is one series, so clearly there is a tiny dividend. great blog ons a finance and he says what is going on is it does paint is

very tiny dividend and it is a pet -- it is kind of like a perpetual bond. this is kind of like a long-term bond in that this is infinitely more of a dividend than a long-term government bond. >> i thought it was substantial, held by thes 55% canton speed and they count on that dividend for income. i told you about this earlier. partisan conflict index, which is interesting to look at because check it out, donald trump and hillary clinton. the debates come after that and we are at the lowest since november 2015. there is not a lot of discord at the measure -- discord at the fed -- at the federal level. maybe this index is broken. it feels very partisan. scarlet: coming up next, stacy

smith, factoring in operations. joining us on the latest companies quarterly results. ♪

when you're on hold, your business is on hold. that's why comcast business doesn't leave you there. when you call, a small business expert will answer you in about 30 seconds. no annoying hold music. just a real person, real fast. whenever you need them. great, that's what i said.

so your business can get back to business. sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. courtney: president obama responding forcefully to claims made by donald trump. the november residential election is rigged. speaking to a joint conference in the rose garden, mr. obama said the republican nominee would be better off by simply making his case to the electorate, and not publicly complaining about the integrity of the electoral system. pres. obama: i invite mr. trump to stop whining and make his case to get votes. if you got the most votes, it would be my job to welcome mr. trump regardless of what he said about me or my differences with him.

and then escort him to the capital, in which there would be a peaceful transfer of power. trumpey: yesterday asserted there was once gail -- white skill voter fraud. before selecting tim kaine as a running mate, hillary clinton considered putting bill gates, tim cook, and howard schultz on the ticket, according to an e-mail from camping chair john podesta released from wikileaks. bernie sanders and elizabeth warren were also considered. in michigan families have filed a class-action lawsuit against a state and flint school district. they want more help for students whose academic performance and behavior have deteriorated since the city's drinking water was contaminated with lead. lowerxposure can cause academic achievement.

firefighters contain a wildfire in southern colorado. gusty winds helped it spread quickly, destroying one home and forcing the evacuation of hundreds. the wind also granted water dropping helicopters. because of the fire is unknown. iseria's government negotiating for the release of at least 83 girls abducted by boko haram more than two years ago. more than 100 of the schoolgirls or unwilling to leave their captors. authorities say they may be radicalized or shamed to return home because they were forced to marry extremist and have babiess. 21 of the girls have reunited with their families over the weekend. an russia has announced a temporary suspension of the bombing of aleppo, calling for civilians and rebels to leave the besieged city. the russian defense minister said syrian and russian air force is stopped strikes on the city where 250,000 residents are trapped in rebel held eastern neighborhoods.

the announcements came a day after a meeting in berlin between russian president vladimir putin and his counterparts from france, germany, and ukraine to discuss efforts to resolve the war in eastern ukraine. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. scarlet: a recap of today's market action. getting for the s&p, dow, and nasdaq after inflation -- how would you describe it, underwhelming? it certainly showed a pickup in prices. at the same time, it did not beat analyst estimates. matt: this is good for markets, right? the fed does not have to do something in november. joe: right. it was the perfect report for markets. it was consistent with everything else. the economy is not falling off of a cliff. there is nothing suggesting that

the fed has to hike rates. you saw the s&p 500 -- we lost. matt: you like to see more action. real quick we had a couple earnings reports. intel had a positive surprise, and still the shares fell. surp"u type in intel "ee you can see how the stock is performed any number of days after positive running surprise. in this chart you can see only 1/3 of the time five days after a report, has in dell -- has intel been up. you can do the same thing for and see that they are less often a big gainer five days after a report. only one out of the last three times in this chart. it's interesting to look at earnings surprises. scarlet: just to let you know with those earnings reports, estimates,fit beat

maythe revenue outlook not meet estimates because the pc market continues to deteriorate. this is less about the numbers for the quarter past, and more about what kind of information we have learned from the data breach at yahoo!. that deal with verizon will go through. verizon is getting a little antsy about that deal. it really does not know the impact. matt: even if verizon were not getting antsy, they would have to at least act like it. they have the upper hand in negotiations. trumpd you miss?" donald was called a warner from president obama in response to trump's accusations that the elections were rigged because hillary clinton is leading in the polls. what also obama had to

say about the republican nominee and his party. obama: mr. trump rarely surprises me these days. i am much more troubled by the fact that you have republican haveials who historically been adamantly anti-russian, and have attacked me for even engaging them diplomatically, no supporting and in some cases echoing his positions. it is quite a reversal. you will have to ask them how to explain it. matt: joining us is bloomberg's washington correspondent. let me ask first about donald trump"s accusations. his surrogates are saying, no, she just means the media is biased. i've heard a number of them say that from mike pence to barbara mccourt. then donald trump will say no no no, at the polling stations i mean there is fraud going on. as you heard any evidence of that reported? >> there is little evidence of

what scared voter fraud -- widescale voter fraud in the u.s. electoral system. but we have heard this from trump and his surrogates. that there are dead people voting or noncitizens voting. there is no real evidence to support this. that is why we heard the president call donald trump a whiner, saying that he is complaining before the election has even happened. that's something he's trying to push donald trump on and bait him into respondent. it looks like donald trump is trying to pivot, i know it's cliche, showing -- a but towards a convene about ethics reform. colleagueerg news reporting. donald trump plans to advocate term limits. is he making one last shot at

trying to get serious, gets presidential? >> this is probably one of his most consistent arguments. that he wants to shake up washington and get rid of the corruption. he calls hillary clinton ary," arguing that he is someone that can go into washington without the potential conflicts and change things. that is something that is very much on message for him. we will see how long it takes for him to go off message. he is on message for a day or two, then seems to go off message with attacks on his own party or those outside of the political system. scarlet: of course president obama was asked about the latest fbi andons that the state department had a quid pro quo over hillary clinton's e-mail server. what did we learn from the president? >> this with his shortest answer

of the press conference. it was clear he wanted to move on. the allegations about a quid pro quo or not true, and that they are false and baseless attacks by hillary clinton's opponents. it was a very short answer. he was very quick to change the subject. e-mail issue has dogged hillary clinton's campaign for the entire year and a half she has been running. it is clear democrats want to move on. that is why the president did not spend much time on this topic, saying this is not true and that it was basically a political attack by those who are not interested in the facts. matt: i want to switch topics a little bit. staying on the press conference, the president is supporting matteo renzi in these elections in italy. they are coming in a few months, right? the question is, does that help? during the brexit the president was supporting the "remain"

camp. i wonder how vocals is support for matteo renzi was today. >> he came out unequivocally and said the u.s. stands behind the referendum and supports those changes. he says if those changes are devoted into place by the italian people, that renzi should stick around. that is different from what we saw in the u.k. with brexit. he did support renzi during the press conference. i doubt we will see him waiting and more strongly like he did with the brexit vote. he was asked about it and i think he will take a bit of a later step than he did with the u.k.. just because he could have a negative impact as well. scarlet: thank you so much for joining us from washington. quick promotion -- don't miss clinton and trump's duel in the desert. that is what we are calling it. tomorrow with "with all due

respect" beginning 8:30 p.m. eastern with our coverage, the debate being at 9:30 p.m. eastern. this is bloomberg.

lessonsat'd you miss?" learned from the crisis in greece and how they relate to brexit. our next guest says "throughout the crisis, a compromise is achievable." this is a take away from seeing greece. now let us apply this to brexit. joining us is head of research at resolution group. duncan, you have a unique perspective having followed greece very closely, now following brexit.

what are the key parallels? joe. again we are in a situation where most of the eu is in a standoff with one of its members. and what the u.k. once in this position is the least free movement possible. thegovernment wants to end free movement of labor to retain as much access as possible to the european single market. i instantly was put back in the they had aiza, government elected that wanted to end austerity but also stay in the euro. you have these two sides seven of red lines. -- two sides setting up red line. but like in greece you can see the outlines of the compromised deal that sides could come together on. situation, you're more

likely to come to a messy outcome. where the market is at the moment, thinking of what is , it isa hard brexit starting to look more like it. that is where the politics are pushing us now. joe: let's get into the game theory. theoretically one card that greece have to play was that the other euro zone numbers did not want greece to leave. they do not want to set a precedent of a country leaving. with the u.k. leaving the eu, that is down, assuming article 50 is triggered. that in itself is not a point of leverage. does the u.k. have any meaningful leverage in these negotiations? duncan: that is one of the big differences between what we saw in greece and now with brexit. greece -- think about what you said about the european union, they wanted to keep greece in the euro.

but this is an important point -- there will several points last year when it looked like no deal was going to be done and greece would leave. in all of those circumstances what the eurozone members did was make a cynical consolation. they had to say, what do we worry most about? do we worry about the financial contagion of greece leaving the euro, no longer being or do weble, etc., worry more about the idea of political contagion? do we want to be seen as being beaten by a populist government being given too many concessions? you are providing a roadmap which could be followed by populist anti-euro parties in spain, italy, and portugal. joe: which is it here with the u.k.? duncan: on the european policymaking site, whatever it seems like greece was going to go, they were worried about

political contagion. once article 50 is triggered we will see that again. there will be many senior voices in the european union don't want to see britain get some sort of sweetheart deal. they don't want other european countries saying, actually, we want a deal like britain has got. we want to get some of the things that we don't like. whatever the economics of this, there will be a political desire in the european union to make sure present does not get too good of a deal. joe: duncan weldon, head of research at the resolution group. i encourage everybody to check out your writing on that subject. thanks for coming to us late from london. you are digging into intel third quarter? matt: until coming out with a forecast for fourth-quarter sales that may fall short of estimates. that may prove more important than the third-quarter numbers we saw. of course shares fell in the

after-hours. we were all wondering why. click the fourth-quarter outlook may have disappointed the market. that is one of the reasons we see shares moving down in the after hours. bloomberg editor at large cory johnson joins us with symptoms intel. stacy smith from was once the cfo, you must called him about. stacy, great to see you, congratulations on the new gig. let's get to this quarter and the outlook. i don't care about the analyst estimates. what is going on in the pc industry is interesting, that the dust of the pc may be upon us. -- death of the pc may be upon us. you saw reported today is that advanced orders may take away from next quarter. or 90 let me go back 30 days.

we had an outstanding third-quarter. in our view of the second half, it is up significantly from 90 days ago. that strength is a combination from the p businessc, but we also had record revenue in the data center and internet of things group. that is our strategy playing out. specific to the pc segment, we are up, and we originally set document for q3 by $1 billion in revenue. the pc segment is the largest piece about. we are seeing some in market strength, particularly with business pcs. and we are seeing our customers starting to put in it more inventory into place as they anticipate sales in the fourth quarter. we expect a normal pc market. we think some of that in the tory gets consumed and a bit of a below seasonal q4 against the backdrop of a strong second

half. cory: why are pc makers doing such an inventory build that we might have seen in years past? stacy: i when not characterize it as excess inventory. what we have seen is that the pc manufacturers are managing inventory very lately. -- very lightly. they put more inventory in to the port land of sales. -- in to meet demand of sales. put in inventory and we will see that consumed in the fourth quarter. cory: where is that pc strength coming from? stacy: there are pockets of strength all over. domain data from the guidance -- the main data from the guidance we got was that business that it was stronger in mature markets. large enterprises upgrading

computers. when you look at that install base, that has gotten to be fairly old. with the new devices we brought into the market place, they are thin and light with recovery power. that is becoming a compelling upgrade for employees of large companies. cory: what is the effect on margins to those later machines for you? stacy: you can see it in our q3 results. we were a hair shy of 63% gross margin for the country. that is not the high end of -- at the high end of our range. what you are seeing at intel is a combination of and demand and great execution. nanometer process technology, which is the best technology out there, is coming down the cost curve fast. we are executing on restructurings and getting leverage their. that resulted in great top and

bottom line growth for the country. question growth margin is what we consider a softball in the business. [laughter] as we look at other industries, i'm curious about your notions of how automotive will play out. specifically how it relates to gross margin. stacy: another great softball question, thanks for that. let me give you a broader question, then focus on autonomous driving. characterized the next -- what will characterized the next five years is that all these things that used to be disconnected are now smart and connected. the you think about computing required in a fully autonomous car, it is enormous. the cars that are driving around that you can see in cisco -- in san francisco have multiple xeon

processors to provide the computer that is required. it is a big opportunity from that standpoint. others don't understand how much data those connected cars are going to the transmitting back to the cloud, how much analytics will be done. we looked at information earlier -- one million connected cars will generate the same amount of data as 3 billion people will when you get out 4-5 years from now. that doesn't just drive our climate and automotive business, but it drives our cloud and data center business. one of the most exciting things happening right now. cory: let's talk about the data center business. what did you see in this quarter that will happen in the next short period of time? stacy: but we saw in the data

center market is strong growth in the cloud. that is a continuation of a trend we have seen. we have seen growth in networking and storage. those are two places were using virtualization start to kick in we are in essence living in the markets. where we have not had a good presence before. below expeditions was the enterprise segment of the data center. that was weaker than expected. adding that up, we were at 10% growth for q3. that is a pretty robust growth rate. cory: as it relates to the enterprise, how much is going on? how much is white box; a threat? -- box semiconductors a threat? stacy: you have to think about who is supplying the box versus who is supplying the brains of the box. what is interesting about the data center markets is that is is about performance, but energy performance is paramount. we have such a strong technology

leadershipworking -- such a strong leadership where we can provide our customers the advantage of using our architecture. cory: after nine years, you left as cfo. how is intel different from nine years ago? i've been reflecting back, i have been doing this about 10 years if you count me as an assistant cfo. our business was almost entirely driven by the pc industry. today about half of our profits are coming from the data center and from internet of things. we have performed well financially, up $25 billion in revenue. our gross margin used to be in the low 50's. now it is 63%. most importantly our focus on

driving shareholder return, you can really see it. we had a dividend when i became cfo of $.40 per share. now we are over one dollar per share. cory: stacy smith, i appreciate your time. i will toss it back to matt. thanks a lot. much to stacyery smith, the former ceo, the president of manufacturing. tomorrow, a big interview you don't want to miss. another one in the pc arena, michael dell will join us, the ceo and founder of dell. he will talk to eric shafter at 1:00 p.m. eastern for an exclusive interview from the dell emc conference in austin, texas. this is bloomberg. ♪

scarlet: that doesn't for "w hat'd you miss?"

mark: i'm mark halperin. john: and i'm john heilemann. "with all due respect" to donald trump, when it comes to message discipline, it seems like someone on your team has you beat. >> i accept peace. i accept equality. he cares about women. he is kind. he is a gentleman. keep this kind. he is a gentleman. and they wrote lies. i will not allow that. i will not allow people saying lies. it is unfair. it is damaging and it is unfair. ♪