today about wikileaks, releasing thousands of stolen e-mails from clinton's campaign chairman john podesta. bloomberg the campaign has voter suppression operations and lowering the turnout for hillary clinton. campaigns targeting white liberals and black voters -precludes- critical to -- 3 gr oups critical to clinton's path in the white house. a call center scam based in india. callers posed as tax and immigration immigrants, threatening arrest, deportation, or other punishment unless money was made. the scam trick at least 15,000 people into shelling out more than $13 million. acting spain prime minister failed to get a majority in parliament, but will take office after the office on saturday, because the socialists have agreed to abstain, giving him

the plurality he needs. spain has been at a political impasse for months. powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. ♪ scarlet: we are 30 minutes from the close of trading in the u.s. in, andcks fluctuate the dollar rose to a high. >> and the question is, "what'd you miss/" 2 of the most valuable internet companies are reporting, alphabet and amazon. those numbers as soon as they cross. america's favorite pastime may not be a favorite anymore.

the nfl is seeing double-digit declines in television viewership. is this a blip, or something worse for the league? world-famous shopping strip 5th avenue in manhattan standing pretty empty because of the rent. we look at dynamics hurting the rent in the middle of the most prestigious shopping district in the world. ♪ as we head towards close, let's look at the major averages. not too deep in the red, but still read across the board with dow jones down 10 basis points. s&p down a bit more, and the nasdaq leading down the market. ponce down a little bit too. -- bonds down a little bit too. >> lots of red for the nasdaq. the index at 7/10 of 1%, session lows d days in a row.

-- towards close, let's look at the major averages. not too deep in the red, but still read across the board with dow jones down 10 basis points. three days in a row. nasdaq.rishness for the alphabet shares are ahead of its earnings reports after the close. investors are looking for eight dollars and 62 one cents in adjusted earnings on about $18.2 billion in revenue. despite, mosthat analysts are looking for a better than expected quarter. they are expecting to be driven by strong mobile advertising revenue growth. just recently, the stock put in new record highs, suggesting that pressure is on alphabet to meet or beat. hashtag, we at this see a beautiful trent over the last seven years. this shows us how bullish investors are. we have seen recently the stock put in a golden cross. this is when the 50 day moving

average moves through the 200 day moving average. one in 2012 and one and 15 proved to be pretty bullish. this is not a tell so much on the quarter. there could be some choppiness ahead. alphabetmedium-term, appears to be positioned from a technical perspective fairly bullishly. >> and i see amazon -- i want to know about them. that will be a big report after the bell. >> similar to alphabet, amazon has put in all-time record highs. it's analyst becoming more bullish on its prospects around its cloud business and e-commerce. many analysts have taken price targets above $1000. that includes goldman sachs. relative to what investors are looking for relative to earnings, $.78 in adjusted earnings on about $32.7 billion in revenue. the cloud growth is expected to be a big driver. a survey that the burden of six

analysts suggests that revenue should come in north of $3 billion. questions raised whether the company is spending on investments that should have done them before. -- should have been done before. we go into the bloomberg, there is a case where things could get rough for amazon. a year todayis chart. we see a nice uptrend, but recently the stock is starting to push under that uptrend. it tells us if there is anything that great about this quarter, you can see your term selling. with roughly half of s&p 500, this earnings season it looks like the longest earnings recession might be over.

some beats the board. an average earning growth of 2.6% in the s&p 500. >> the chart you are looking at 7 declinesows you 5, in earnings. at least analyst estimate the clients. --estimate declines. companies are going to beat their estimate. we had a small decline this quarter. and we are going to surpass that. and this is of course a big deal, mostly symbolically. this is not a huge positive move in earnings. what it means that for folks worried about what will keep moving lower, and level will indeed not be bottom. reported, ity's looks like they are turning it around. five quarters in a row of actual decline of earnings.

eps estimatesing so far, 80 -- 78 percent of those reported. , looking at 72% of those reported that have posted revenue growth. the average earnings -- growth is 2.65% versus a shortfall in the estimates of 0.4%. this is the easiest way to look at it. scarlet: it puts everything on one screen for you to look at. test 2.6% earnings growth is what you see in this column. sales growth is about 2% up as well. you can see how it shakes down by sector. real estate is the best in terms of sales growth. a new sector in the s&p 500. on the profit line, right now it is materials. but a lot of companies are still

reportrt -- still due to in the earnings materials sector. 18% down in sales growth. chevron due to report tomorrow. as far as big movers, we have seen it netflix jump 19%. better than expected subscriber growth. disappointing sales results and forecast, life-sciences dropping 17%. >> they have pretty easy year-over-year comps. but that is not going to be around forever. keep that spotlight on earnings. we will find out what corporate america's report cards say about the future of america's economy. as we were just talking about, we were turning the corner for earnings. we have been in this earnings recession, which often times

does come for an economic recession. is that the current tier, or are we out of the woods? >> i don't think so, i think it is a mid-cycle paths. this earnings is primarily commodity led. that is flushed through the system now. it looks to be much better. china is always talking about supply-side management. they are never doing it. this time they did do it. commodities are stronger. the united states, the period of de leveraging since 2009 is over. if you look at bank loans, there loans are growing 8%. we have not seen that in a long time. china is doing better, the u.s. is doing better, and commodities are firmer. we see several years ahead of earnings growth. >> we have not had a recession since the great recession, but really tepid gdp growth.

what moves the needle from 1% or 2% and brings us back to a normalized 3%, or even the 4% at the optimists and republicans are saying they will bring us to? >> i am not sure that we have to 4%.to 3% to that would be nice. i don't think it is in the cards. we say that the environment will be less slow. it has been like quicksand, it is softer and squishy are then squishierhink -- and than you would think. when de leveraging proceeds it is softer. so let's slow is the prognosis. -- less slow is the prognosis. it will go for a long time. it will be for a number of years. scarlet: that is a measured way

of putting it, "less slow." is asset allocation dead? either it spikes or falls at the same time. on bloomberg, the cross asset volatility measure has been dropping along with treasury volatility. >> treasury volatility all of a sudden is back to the estimates. scarlet: justify a touch. --just by a touch. >> fiscal sloshes to the same five and it goes somewhere else. we saw a rate cycle in august with china back. there is too much money. arguably these safe places in the bond market. a large rotation lies ahead. scarlet: and a lot of cash on the sidelines. >> is that cash enough to keep the rotation out. >> blackrock estimates more than $50 trillion in cash.

>> that is a lot of cash. depending on anyone wants to do anything with it. rotation, these yield areas of the market get bid on quite a bit. i see that you have a stake in high yields, more than 10%. example whereer you have stocks and bonds in the same direction -- what a notice is that if you notice in the past three months, the stock market has had a closer high-yield been a bond has. what is driving the high-yield market right now that is not just purely rates? >> when you quote the s&p 500, there are a lot of odd stocks. we have had a lot of crosscurrents, more economically sensitive stock markets. value stocks, acting more like a

high-yield. they are sensing that better times lie ahead. we have been through a very fearful period. >> i alluded to republican promises. donald trump says he's going to get the gdp back to 4%. i remember jeb bush was saying that in the beginning of the campaign. i don't want to ask you if they can look or how serious the promise is, but i want to ask how important this race is to markets. have they managed to hedge out that risk? is there any? >> markets are ruling out a democratic sweep and are ruling out a trump presidency. whether we have president clinton with the senate or without the senate, from a market perspective only, that is not a consequential election. markets think that is status quo. i actually think -- markets are

thinking in the last handful of years, where a democratic president work was either unwilling or unable to make deals with a republican congress. too was very able and willing to move things through with the republican congress. i do think it will ultimately be a consequential election. from a market perspective for the next several months, they will just treat that as status quo and it will be a yawn. >> that is michael kelly, levelheaded of asset investment at sign bridge. >> told you that a team of derivatives traders is said to have generated 300 million dollars in revenue, trading derivatives. windfall produced by the bank's did you see -- bank's inventory swap. we will tell you all you need to know about those trades. this is bloomberg. ♪

scarlet: let's get back to breaking news that citigroup. bloomberg news reporting that a small group of derivatives traders generated $300 million of revenue, according to those with direct knowledge of the matter. this was produced by the bank seller interest rates swap desk. is this kind of windfall unusual? >> it is for wall street this year on swaps trading. we think this is the number one, may be the number two desk on the street for trading interest rate swaps. which in the last couple years have been treated more electronically. with the advent of new rules i for the financial crisis, that pushed a lot of these derivatives trades on to electronic platforms. they get cleared now. that is given citigroup a chance

to do a lot more volume in this business. >> my question is the same as i had when we had this story about the golden trader. is this prop trading? >> they are. certainly if you ask citi, they would say no. goldman would say no. thanks in this day and age -- banks in this day and age are holding positions for a small amount of time mandated precrisis. that is directly related to the volcker rule. to the extent they are taking inventory, that is how you would make money and profit back in back in-- money in prop the day. citigroup is trading moreover the day. i think they carry some position overnight, it is a much more higher volume, higher turnover business. >> as opposed to the goldman sachs stories, which was one of

the most read stories instantly. a traitor was buying junk debt -- trader was buying junk debt. that sounds like less of a servants to client and more of a bet for the bank. >> city derivatives -- they hold those in inventory. to the extent she could hold those as the market went up over days or weeks, he made money on that. him, certainly if you are with the new york fed, this would meet near-term demand for clients. citi'se got guys from interest rates -- making a profit in the closed

-- in the post volker world seems like it is still possible. is it a matter of stretching the rules? here,ant to be careful but what you are seeing is the fruits of years worth of restructuring wall street businesses. the banks had to fire a lot of people. they had to figure out how they would make money with new rules, with the volcker rule. you are starting to see this year, markets are coming back. but you are also seeing that banks have finished their restructuring. now they have positioned themselves a bit differently. that is why you are seeing these big revenues. scarlet: we know one group is looking forward to bonuses. thank you so much. >> the most read story over the

last hour. now it's time for the bloomberg business flash, a look at some of the biggest stories. centurylink in advanced talks to merge with level 3 communications. a deal could be announced in the coming weeks according to people who declined to be identified. level three has a market value of $70 million. centurylink -- centurylink with more than $14 million. the maker of marlboro cigarettes will close manufacturing plants in pennsylvania and illinois, affecting five anyone workers. i -- 581 workers. it did not say how many workers it expects to lay off. it will save the company about $50 billion. they have over a year to look for another job. that is your business flash updates. and staro jason bourne trek have to do with the u.k. gdp? what is saving the british economy. this is bloomberg.

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oliver: alphabet reports after the bill. we picked off our favorite alphabet charts. i want to look at the company's reliance on ads, illustrated by this white line that is leagues above. we're showing revenue from licensing of the profits. even though their trajectory of the ads is high, almost $20 billion in revenue, there is an important tick in the orange line that shows the other business is doing pretty well. it is a small tick relative to this huge line on top, but showing improvement and diversification. scarlet: that is a good point. google is trying to get into other things such as the cloud. as a big tech company knows, you need those recurring revenue streams like the cloud to take

over from your proprietary business. of course advertising, as good as it is, google has to give something more back to investors. not to mention fund all of its moonshot businesses like google fiber. they are cutting costs because it is not paying off the way they wanted to. i'm looking at how hollywood seems to have saved the u.k. economy in the post brexit third quarter. u.k. gdp rose half of 1%, faster than what economists were looking for, which was a bit lower than that. that is the yellow bar -- that offset declines in production and construction. i want to show what happened in the third quarter. that is the big boost in services. what happened in services? box office receipts for summer movies like "star trek" and "jason bourne." of course this is the only the first tick.

you still get to more revisions of u.k. gdp. think question is -- the big question is what they do with interest rates. >> i thought you were going to say what christmas box office season looks like. that will be important to this economy, especially not building or producing anything. i am taking a look at the eurozone. sooncurrently relationship to be unrelated in its legal relationship as well. pessimism has turned around for the euro. this week the euro fell within 1% of its yearly low. that was on wednesday. today we have seen a turnaround over the last couple weeks in calls. this is a look at one month option. are morerish when puts expensive, bullish when calls are more expensive.

people are guessing that the worst might be over for the single currency. scarlet: the market close is next in the u.s.. we take a look at the major indexes with less than four minutes until close. this is bloomberg. ♪

, the way from the closing bell. "what'd you miss?" it is strong enough to withstand a shift away from alternate easing monetary policies. i am scarlet fu. matt: i am matt miller. oliver: i am older when it -- i am oliver renick. matt: you can watch our coverage on twitter every weekday from 4:00 to 5:00 p.m., assuming you are technologically adept at some things -- at such things. oliver could do it without even knowing how. scarlet: thank you oliver renick. let us begin with market minutes. was a not seem like it very interesting day when it comes down to it because of the movement. eight out of 11 major groups finishing down. real estate, the laggard. that is the real set to have

been talking about. a little bit of that move toward the defensive. oil prices rising. done real estate has really well this season on earnings, but there were not a out.f earnings they have been driving the mood of equities every day. take a look at the imap on the bloomberg. to see which way ones are moving the most. telecom is the big winner. is the bestea go way to look at earnings in the middle of earnings season. you can find that by industry group and growth as well. scarlet: we have some amazon results coming across the bloomberg wire here. third quarter earnings-per-share with $.52. analysts were looking for 78 since because that would -- $.78.

it looks like that is what investors are taking the stock is down by 8%. $32.7 billion net sales. met with higher than what analysts had been looking for. pretty much in mind. operating income for the period was $575 million. according to analyst consensus estimate it should have been $690 million. perhaps amazon is going back to the idea of profitability being less important than sales. oliver: let us look about outlook as well. they are talking about fourth quarter operating income of 1.2 --illion, which is less than 125 billion, which is less -- 5 billion which is less than their estimate. they are giving a low range to that as well. the outlook, not looking so hot.

that is always key. scarlet: let us bring in shelly banjo. she is a commentator. amazon, how at important is profitability and growing every year? it has certainly been what has been propping up the stocks so much. these companies are never going to do profits and then about last year, when they started breaking out how much aws was them, that is when he saw the stocks take off from 300 to 800, where it is now. they have done this before. he showed you they can do profits. he pulled it back, invested the money into huge projects. anchor: we have shelly banjo hear from -- if you type in the eye, you get the bloomberg intelligent -- if

you type in bi on the bloomberg that is run by paul sweeney. actually seeing and growing profits and amazon, it has been years since shareholders have seen that. that was driven by the growth of the cloud business. atis relative to no margin the core retail business. i think what happened is amazon investors got a little bit used to a profitable earnings coming across every quarter. paul: here we go with filing that back a little bit. we will see a short-term hit the long-term story for amazon, the bulls are still going to be on top of this story. scarlet: we have results from off of that, the parent company of google. if you look at revenue that passes on the partner websites, that came in at $18.3 billion,

better than what analysts were looking for. adjusted, $9.06. the consensus was for $8.61. also that gets most of its revenue from advertising. let us talk about the paid clicks. 5%, excuse me, rose 33%. declined 5%.click 4.8% was the consensus estimate for alphabet cost per click. anchor: let us take a look at the shares here. we saw a big spike up. investors look like they are taking a moment to figure out what is going on with alphabet shares. after hours. the shares, which you can see here, gaining 2% after hours. this is the best way to see what they have done the year to date

and they were up 5% and have fallen recently. . like to look at the comp page google has outperformed of the past five years with dividends. the s&p 500 index by a long shot, google is, or alphabet white and s&p 500 in orange. it is just keeping up with the i.t. sector in s&p 500. oliver: i want to add why it is hard to get a big boost. when you look across the street, it is overwhelmingly bullish. 44 buys on google right now. or alphabet, rather. there is only one cell among that group. when you look at the movement year. they are bullish on it. where is the biggest room for error that alphabet could potentially miss out on here that is going to cost people, here is the one part i was worried about. with today is the a-team google or alphabet or amazon, the two big highest-quality tech

names out there, investors feel most credible with the growth story. to the extent there is concern it might be for some of their new businesses. they have broken apart some of their new business outside the core search is. will any of those new businesses really hit and become a big business for them in the future because you take a look at the valuation, there needs to be a longer-term story here as well. of new: speaking businesses, it is counted as other bets. millionincreased to 196 dollars from 149 million a year ago. losses narrowed. it is moving in the right direction, but it is not going to be a big contributor, is it? paul: no, we are really talking about the core search business. the cost for clicks are down, but the number of clicks are up dramatically. that reflects the migration from the desktop to the mobile environment which i believe google is managing very well. what continues to grow the story, probably over the next

couple of three years for the is youtube the bulls and macleod. -- and the cloud. oliver: does amazon do a lot better in the other bets category? alexa may be amazon's most beloved innovation yet, literally with over two and a 50,000 marriage proposals from customers and -- 250 thousand marriage proposals from customers and counting. matt: he is talking about amazon theory. they also have -- amazon siri and prime. and have done so much more so much more successfully than google has. aws is a $10 billion business. yesterday we had seven years were we did not have competition over here, but competition is coming. google, microsoft, not even quite as vague as amazon, but

they are definitely coming and can get into the business. aws is so important to amazon because that is where they get all the money that you can play with to make those things like alexa and every thing like that. scarlet: we are showing a chart here of amazon prime members. this is an estimate because amazon does not disclose how many prime members it has. there is a base of customers it can draw from and at some point that base is going to go down. shelly: i would've: looking at that which is what happens when amazon hits prime peak -- i at that,olumn looking which is what happens when amazon hits prime to. we are at 30% prime members, and if you take out married members, 46%. certain point, amazon is going to hit that peak

and have to switch strategies from signing people to prime to getting more and more money out of that prime. as were other things come in that matt referenced. had get prime and there's to spend -- how do i get prime members to spend more money with me? it is a bit of a discrepancy. something happens on the way from making the money to delivering it back to shareholders. where are they looking to tighten up some of those costs eating in there? cost.: shipping is a huge that is where you are starting to see amazon get into this business of "we are going to take on ups and fedex," whether it be planes, trains, drones. what have you. that is an expense and also a potential way to cut costs, but in the short term, it will still be an expense. scarlet: final comment on alphabet. when we look at how the company is spending, investing in its

business, will be $2.55 billion. does the trouble that alphabet has had -- matt: we should hold up a sign. alphabet, google, we were talking about amazon. scarlet: does it mean it is going to be less aggressive about expanding into other business lines? paul:alphabet, google, we were talking about amazon. i don't think so. we have to give a lot of credit to the new cfo or relatively new cfo at alphabet. one of the things she has brought to the company is operating expense management control and greater focus on the cost control and margins as well as capital allocation between capex, existing businesses, new businesses, and returning cash to shareholders. both of those things, discipline has been really well received by shareholders and that is going to be important for the somebody going forward and what this company really needed. since she has joined the stock

performed very well there. scarlet: absolutely. amazon shares declining after third-quarter earnings per share misses analyst estimates. amazon web services revenue growth slowing as well, and down by 6%. also the shares have been bouncing around a little bit. revenue and profit topping estimates on the strength of its ads, but everyone sifting through everything here, especially as ultimate makes a shift toward more mobile device generated advertising as opposed to desktop advertising. we have to think our guests. much, paul you very sweeney. i have been looking into bloomberg intelligence data. shelly banjo, great story today on gadfly. next, we will head to toronto and speak with the ontario teachers pension plan chief investment officer. schatzker is there and what he is looking for to move the needle on his $170 billion

behemoth. ♪

anchor: let us had up to toronto. bloombergs erik schatzker is --h younger than larson, john brennan lawson. this is exactly what he would ask. what are you doing about hedge funds? bjarne: we are doing a lot about hedge funds. i guess one of our panelists

here today at the conference is running all of our hedge funds and we have a strong relationship with hedge funds. some years ago, we used to think of them as someone that could invest our money for us, but it has actually changed a lot and we have fewer relationships today i'm a but they are much more strategic in nature and we are really trying to use hedge funds as a source of sharing information on a much more integrated part. erik: there is a prevailing narrative that pension plans have had it with hedge funds. calpers has exited or is exiting the hedge fund portfolio and rhode island is dramatically reducing its hedge fund portfolio. what are you doing about your hedge fund allocation? bjarne: it is more or less unchanged. we have shrunk the number of relationship and fewer, but larger, and more significant relationships, and really, focusing in on getting access to

people because a lot of the smartest people on the globe are working in the hedge fund industry still. still working there. the fee structure is probably going to change and the relationship is going to change, but really, i feel that we have a lot of smart people. that is our biggest asset at ontario teacher, but we have to be able to have long-term strategic relationships with people out there and there is a lot of them in the hedge fund industry. erik: tapping into those smart people, are you questioning the structure of some hedge fund vehicle is any value that you drive -- derive any fees that they charge? bjarne: there's no doubt. the 220 has been discussed. probably still alive, but it needs help to stay alive, probably. returns would help. 0% interest rate is not helping the modernized. i think it is changing. we have more focus on seating your clients and doing stuff thee your focus more on

comp part related to the 20% and the 2% management fees. i think we would like to actually warn people that do break things for us, but reward them for their performance, and not just for managing our money. erik: you like emerging managers, so to speak. are you redeeming from the larger managers? bjarne: it is more about a question about the relationship and people, so you cannot put it like, it is not black and white. funds,o finish on hedge based on your experience, the approach that you are taking and the value that you believe you are still getting, are those pension funds, and there are many, that have given up on hedge funds wrong? bjarne: i do not think you can say so. we have a capital markets department. a big trading desk. a lot of people do some of the same things that you do and hedge funds, and those people, when i talk to them about where they have really been in the sharing, thesiness

idea that it is not about taking a money and giving it to an asset manager and then they do something, it is actually a question about putting the dialogue, trying to figure out why is it that these people are continuously able to get great returns for us? that is really the reason we have a lot of internal people that think in the same way and they benefit a lot from having relationships with these people. i think not all pension funds are set up with a huge capital market department that do trading on their own. publicly us talk about traded a surety's. if your private equity investments can and 30%, and they did, and your real asset portfolio a the structure and property can answer to percent, and it did that can earn 13%, and it did, what is the morality syringes rate world where returns are low, but your liabilities do not change. what is the rationale of investing in publicly traded securities, particularly fixed income? bjarne: do we like the private

areas or the areas where you can get a long time horizon and you can match some of the ones to your liabilities, we like that. we are planning on taking that even to 64% or so in real estate , infrastructure, private capital, because we have a lot of smart people there and we like the asset class, but we like the liquidity as well. we do not want to be in a situation like 2008, not having enough liquidity to be able to post a collateral. itare very focused on having truly diligent process on not being to liquid, so we get into problems. we like the liquid market for their liquidity as well. erik: that said, just to do the math, you are still, nevertheless, planning to shrink your public securities portfolio by several billion dollars. bjarne: we are, but that is not

because of the liquidity. we have done a lot of things to make sure we have enough liquidity. it is due to the fact that we are better at creating value assets and private areas. we have the 25th anniversary for our private capital program plus 20% or 25 years. it is difficult to compete with that so we like to do more but want to make sure we are always liquid so we can always for the lower liquidity requirements. erik: your global investor surveying the world as you do, where do you see the best opportunities to generate return? bjarne: i think it comes down to and getting access to the right people. we are used to being a powerhouse in toronto with a lot of well-educated people here and we have access to them, hiring them, retaining them, but we figured out we need opportunities globally so we opened a long analysis and our hong kong office. the way you source there is 5

billion long-term strategic relationships with guys in asia and europe. it you need smart people working with you. that is what we are looking for. we are looking for the right people to staff our offices in london, hong kong, and the opportunities they will develop over time. focus on relationship before you focus on how to be the next deal. erik: so i asked you about opportunities. it sounds like the greatest opportunity is also the greatest challenge. his hiring good people the is hiringallenge? -- good people the biggest challenge? bjarne: if there is one thing i spend most my time on right now, it is people. can so hire good people, but you see a lot of pension plans, hedge funds, -- erik: there is a lot of competition there. bjarne: there is a lot of competition. when you have all of this in

london, you have in hong kong, you really need to make sure you have a value proposition for those people that make sense likesou compete with the of kkr, morgan stanley, goldman worlds.nd such competition is more fears in london and hong kong than here in toronto. it continues and that is where we can differentiate ourselves. a lot of young people, they like working for pension plans because there is a truly meaningful purpose there. we do well. we can do great things and be number one. she canct and that recognize and make all people in canada have a retirement that is much better than if you work for a different kind of financial institution. making truly meaningful purpose very clear to your employees, that is a matter -- that matters. erik: did he think 15 years ago, you would be saying, young people like to work for pension plans? bjarne: not really.

the world, part of north america, etc. canada, it has been more difficult. young people are changing today. they are not only into money. they are into family, family values, it's a purpose. erik: that gives you an advantage? bjarne: i have been a ceo and a bank that in europe when i worked there. even though i tried for three years to come up with a truly meaningful purpose for the bank, it was much more difficult, but in a pension plan, in that sense, we have a truly meaningful purpose we can use and long-term money. we do not need to flip our portfolio every five years for the long-term part. it gives us an advantage. there is a lot of smart people out there. erik: as we have alluded, ontario teachers was pioneered in the pension plan industry. it develops the direct drive model, bringing the investing activity in house and doing it

yourself, including private equity investment. how does teachers innovate next? what does it need to do to deliver the best return for its beneficiaries? bjarne: we continue to do what ontario teachers has been doing so well for 25 years, continuing to focus on hiring the right people, building relationships in the private area. we expand where it came from, but not resting on our laurels. we try to seek out what is happening next. one thing we figured we needed to change a little bit was the top-down approach to the fun. the effect that how we will balance in the total fund. we are changing our asset mix rainout and introducing all weather kind of portfolio --hers from the top portfolio from the top. becoming, we have added a top-down layer that is a little bit more robust in all kind of

situations and have control. we have the bottom-up part of the fun. i think we really want to differentiate ourselves is doing both, having the top-down, the bottom-up, and meeting and a way that we have not seen any pension plan doing so far. how many pension plans are you aware of that are building this kind of capabilities? bjarne: not a lot, really. they are usually either really good at one or the other. i used to work for one in europe that was really good from the top-down part as well and is trying to figure out how to do well on the bottom apart. bottom-up part. erik: most of it would seem to me to go to hire a qr if they wanted smart data. or if they wanted a systematic strategy. bjarne: the thing that really surprised me the most by joining

ontario teachers with the access to talent here. there is so many smart people. we educated in toronto, so amazing skills. we have accessed august people and at the same time, building a direct bottom-up culture. we have the opportunity to actually succeed here. that would the a thing that could do both in the same planet the same time, being focused on risk management and making money even in circumstances. erik: one question i have been asking is which asset class represents the single biggest risk, what would he say? -- what would you say? tend to likee assets with higher returns and a lot of them, they are equity-centric and do not think everyone thinks about

risk-adjusted returns. we are trying to actually decrease our equity centric focus a little bit, even though we are increasing our private programs, and looking a little classre credit, as a centered into inflation, a little bit more hedge fund like strategies or strategies wit whh are diversified. we are trying to figure out different factors, even fixed incomes. we are increasing our exposure to fixed incomes because everyone has been so long for so long about interest rates. they are not going to go to 2% long about for so into straits. they are not when you go to 2%. a cannot go to minus one or -1.5. people tend to base their decisions on their ability to forecast rates. they have been terrible at that. we cannot forecast interest rates. better to fill out a robust portfolio that would do well even if interest rates stay low.

erik: thank you so much. about is bjarne graven larsen, the chief investment officer. industryehemoth in the of canadian dollars. bloombergs erik schatzker up there at that conference in toronto, one of the biggest in canada, every year. scarlet: we are of course keeping an eye on shares of amazon. forecastrted or holiday sales that may miss analyst estimates. this is a disappointment for those who had driven the stock higher for much of this year. sales for this quarter will be billion dollars. analysts were as many $44.6 billion. we saw the shares drop as much as 9% in extended trading, but it has paired some of those losses. anchor: still, that is a very big drop, 4%. i want to touch on linkedin. --rlet: in the burlington?

remember linkedin? oliver: people aware what their future is. the company did not give much of an estimate looking forward. profit, excluding some items, was $1.18 per share in the quarter, comparing with $.93 analyst estimate. revenue as well, third quarter was 900 and 60 million -- 960 million. 106 million unique visitors going there this month. matt: it probably will never be called microsoft, right? i mean, youtube is on going to be called google. it will no longer trade as linkedin once the deal is closed. siri when the microsoft acquisition would ing searchede b

it. bingnot believe siri searched it. -- alphabet had 1820 $3 billion in quarterly revenue. adjusted.06 in beating on both measures there, as the search business continues to deliver a ton of revenue and profit and offset the spending that google or alphabet makes in its other bets categories, which include the autonomous driving, push, and what else have they got, fiber internet service. they keep losing executives from those big other bets categories. oliver: the moon shoes. scarlet: moon shots. covered all and

covers amazon. let us start with alphabet. alphabet, this is pretty much an advertising company with a couple of other things on the side, isn't it? james: yes, exactly. the way i think about alphabet, the google or business, it is a business, it is a place we can have the most prominent direct response advertising in the world which is identifying with the intent of the customer is and converting on that. what we saw in this quarter is not only solid performance, but an acceleration across all measures from the other quarter with 33%. all in all, you know, it is pretty encouraging to see the transfer -- the trends for the third quarter. matt: do you want to see them continue to invest in these moonshot businesses?

are you happy to see them lose their executive heads and shrink? james: that is a good question. i think they need to maintain agility and stay on the cutting new technology, so i am all for it, as long as the costs are spent in a disciplined fashion. i think we are seeing that was operating losses compared to last year. that is something that has brought to the table. all in all, they need to do everything they can to stay relevant in a disciplined manner. oliver: you have it at a neutral. amazon obviously despite the losses up about 20% on the year. when he think about earnings and the price drop here, and you stay where you are and say this is stock that remains neutral? matt: 44 analysts have a buy.

james: thank you for reminding me. matt: you might be in a great position. the stalk is going to tank after this disappointment. the question that oliver is posing is, do you take advantage of this dip and get back into the stock? james: amazon is the most difficult stock to be neutral on giving the singular trend we are seeing. some of those targets you are seeing in the thousand plus range, you have to assume status quo. benefit, aws was very solid this quarter. give them the benefit of the down internationally, which is an uphillen it is battle in india. you can sharpen the pencil, but

you need to be quite creative. as far as what we do from here, the numbers just came out and i need to go back and look at the model and listen to the call and make a determination after that. oliver: how much is amazon's price rallied. effect as aomentum result of so few options with stocks outperforming. is that what is driving this? is that dangerous to some extent? james: it was about the fundamentals. it was actually revenue posting better than expected in a much clearer path to profitability in all three segments, however, i think the second half of this year after the report, you hit the nail on the head. it is mostly german based off of scarcity value of high-quality -- driven based off of scarcity value of high-quality -- it is that scarcity that kept

the momentum going probably a little bit more than it should, which is why i think we are seeing the pullback. oliver: i wanted to show viewers, you mentioned analyst price target on amazon and it is an average of almost $1000 right now of the 40, i think 49 analysts that we cover here at bloomberg. this is a price chart showing you the 12 month price target in yellow and the actual price in white. amazon has not hit the price target in the last five years. the last time it did that was 2011. analysts are perpetually bullish on this. as soon as it rises, they lifted their target. it just never gets there, james. james: you have done the math there. i have never looked at that chart. you have to assume that nothing stops, and the music keeps playing, and i can do that for north america.

i know for my own personal habits, i am spending more. i can see it in the numbers in aws from the customers we talked to. the 50% incremental margins is a real thing where futures are driving more demand versus price, and pricing was an issue historically, but not anymore. international, i cannot get my head around it and especially this quarter, we went from break even for a long time internationally, but now it was down 3.1%, to a negative report on percent margin in the third quarter. a negative 3.1% margin in the third quarter. scarlet: based on your read of the company and the latest results indicating quarterly earnings beat analyst estimates, who would be the right kind of partner for twitter and how much lower does the price need to be for that to happen? james: thanks for asking that.

basically, i have been shouting from rooftops, i feel like disney is the most appropriate buyer for twitter. not only can it be used as a distribution are for content, but they can operate it at arm's length so twitter can secure their own deals as we move into that world. i am standing by disney as the best buyer for twitter. as far as price is concerned, giving the benefit of the doubt here, comping against the linkedin, but even if you do that, he gets a $15 billion valuation, which implies somewhere around $21. anywhere above that is overpaying. as far as the quarter is concerned, it was a good quarter, but there is still a lot of uncertainty as we look forward. oliver: thank you so much for joining us. james cakmak there.

to emily changer at bloomberg technology. she just finished speaking with a high-level alphabet executive, a little mystery here. emily, give us some of the highlights of your conversation. emily: just got off the phone. this person i spoke with emphasized the incredible growth of mobile, particularly. mobile is continuing to drive revenue growth, especially when it comes to advertising. 42% growth in paid clicks, the strongest we have seen at google, at least in the last couple of years, driven by mobile search and video growth gaining momentum. youtube growing at what this person said was "a significant rate, primarily from true view advertising." they are emphasizing growth they are seeing in cloud and google play. cloud in particular, a huge that google was placing in the mi dst of others. there is great interest in what is going on with the other bets,

ofer, we have seen a lot turnover in the executive brings that the holding companies. the person i spoke with said that the structure has afforded them new opportunities to really bring some transparency to the various operations that they believe that it is very important to create financial milestones before they accelerate on these various projects, and with fiber in particular, we just saw the head of google fiber leave. he will remain an advisor to the company. they believe fiber still represents a huge opportunity, but that what they wanted to do its focus on the potential of the efforts before the accelerating their department -- -- reaccelerating their department. they are now deployed in 12

cities across the country. we have seen a lot of turnover in the other department. the head of google ventures has gone. these are, you know, expensive but potentially high potential operations. when you look at the overall revenue for other bets, it has increased $196 million versus $141 million last year. it has narrowed to $865 million from $980 million a year ago, but the person i spoke with caution and you cannot look at the quarter over quarter, you have to look at it over several quarters, and that is how they are in fact looking at it. know, we spoke what is going on with nest. announced a new home device to take on amazon's alexa . when it comes to their

verily, they are very optimistic about it. the core business, the court google search and advertising business is doing so well that they can justify the spending and experimentation that is happening with these other bets. emily, thank you very much. emily chang from bloomberg technology. scarlet: baidu, the google of china, reporting fourth-quarter revenue. that outlook trails analyst estimates, but the third quarter adjusted eps does beat the consensus. stock is down in after-hours trading. coming up, tv networks are giving away more commercial time now that ratings for live nfl games are not coming in, down double digits from one year ago. why people are not tuning into the biggest draw on television. this is bloomberg. ♪

scarlet: i am scarlet fu. "what'd you miss?" a decline and nfl viewers is forcing networks to giveaway at time. they have plunged 14% among the key demographic. what is driving the drop off? talks it up to a number of things. >> there is probably a little oversaturation. there is sunday morning london games. there's only so much you can digest, i think. the other aspect is that there is a lot of things that go wrong along with the nfl that some people were not served by, whether the colin kaepernick kneeling during the national anthem. is a lot ofe

negatives surrounding the games sometimes. when you look at the numbers, they are very hardy. scarlet: here to discuss this a man with for decades experience as a senior investment banker. thisr, do you think decline is a blip or the flexion or deflection point? >> i think it is the beginning of the end of the football on television. 10 years ago, 95 percent of all american households had television, whether it came over cable or from satellite. porter: that number today is a little less than 80%. the demographic makeup of the united states and you see did nots of people who grow up with american-style football who are watching english premier league, formula one racing, watching the sports -- e-sports.

tens of millions of 18 to 29-year-olds are watching extreme sports right now. drone racing. matt: oliver watches drone racing. he screams it live. streams it live. oliver: are people watching it through other mediums or is it specific to nfl? porter: it has a lot to do with what boomer was talking about. there is oversaturation for a start. the pricing that the nfl has been getting for the television rights have gone through the roof and the reason the networks are paying this is because it was the one reliable viewership magnet that they could count on. that is not going to happen anymore because the ratings have been going down, viewership is going down, and it is also going mobile. nfl has not figured out how to make it mobile. they signed a multibillion-dollar deal with twitter, and was watching?

nobody. shift seeing this radical to mobile devices, ipads, phones , and the nfl is not part of that. disney bought them take -- ba mtech and is ahead of the curve with major league baseball. the nfl is behind the curve. scarlet: our producer, when he streams an an game, does that get counted to ratings? porter: no. that is a problem. mobile sources are not reliable and advertisers do not believe the numbers. nielsen has been the industry standard for 50 years and nobody believes nielsen. they have never been able to go over the top and measure non-linear television audiences. matt: this decline in nfl

viewership ratings, because we are talking about the decline in measurements that we do not trust, doesn't necessarily mean nfl football is less popular even with the kids. playing fantasy and looking on their computers to see what the scores and stats are. are they still, they must be going to the games because the tickets are not getting cheaper. can afford to go to an nfl game today. the kids are growing up with a whole different perspective on sports and football is not number one the way he's to be. way it used to be. look at all the concussion issues high school than colleges are going to have to deal with and it is driving people away from the score. all of the minor sports, i am all across layer. the cross is booming right now osse is booming right now. it is not just a measurement problem. it is able cultural shift right now and non-american youth who

are not born here, immigrants, and do not know anything about football. they are watching soccer and other sports. football -- futball. kidsr: tens of millions of are watching, doing fantasy sports right now and not paying attention to real life nfl football. scarlet: is this a wake-up call to sports leagues order networks? porter: both. not onlystruggling with the declining audiences of football, but of all the near television. they are trying to figure out how to get ready for the next transition in media distribution. scarlet: all right, porter bibb. about the most expensive retail streaks in the

world. this is bloomberg. ♪

anchor: "what'd you miss?" the golden rule of real estate, location. spencer levy is the head of cvre.rch for cbr e -- the headline is this. luxury vfl has been perhaps the number one performing asset tight within commercial -- asset type within commercial real estate. rent have gone up. we are seeing some weakness in certain markets and spending has increased at a decreasing rate. with exposure to latin america, you are seeing downward

pressure on rent and increased concessions from landlords. on 3rd: retail rent avenue is surging. merchants are struggling to pay these record rents because you are talking about people who go in and wander around. anchor: i wonder if fifth avenue might be different from other avenues. is it its own little story? spencer: actually know. -- actually, no. places were the retailers have to be for their brand credibility. oliver: why are those prices able to continue rising? does that be to the wealth disparity that has risen where these luxury stores can maintaining, and their client base? spencer: well has been increasing and we have seen new ts into the market. in 2000,resented 1% but now it is over 30%.

the entrants are wealthier. fifth avenue, he compared it to bond street in london, but what about seattle, austin, portland, oregon? spencer: we are seeing strengthen those as well. thee markets have similar dynamics to what you might see in new york. once you go one ring outside of that, smaller markets, you might see some weakness, so overall, retail has done quite well in the united states because consumers are strong. oliver: i would think as on his i have a store in new york and chicago and in l.a., most of my business is probably going to be on minamata what i am doing, so i need as flagship -- going to be online, the matter what i am doing, so i need those flagships. you are entirely

correct on your basic point which is people are going to fifth avenue or bond street or markets in hong kong for brand awareness. it is to make their brand more valuable. there has been on my growth. how is up playing out in terms of the actual flagship stores versus online sales? spencer: online sales has gone from 1% of all luxury sales to close to 7% today, and i would say that the way retailers look at rent, they look at it as a percentage of sales, and it used to be just percentage of sales in the store, but now they have to look at, is it going to drive online sales at well -- as well? oliver: spencer levy. we will show you cannot miss in the markets. ♪

tomorrow, gdpg up third quarter for the u.s. at 8:30 a.m. anchor: go usa.

mark: i'm mark halperin. john: i'm john heilemann. to alll due respect those people stressing out about the election, a word of advice meditation expert dan harris. namaste.s day -- ♪ john: on the show tonight, coldon foundation in stations, vladimir putin's cyber depredations, and ensuing powers of meditation. but first, the politics of feminization. high-profile women on both sides were out in full force today.