♪ david: coming up on "bloomberg best," the stories that shaped the week in business around the world. xi jinping tightens his grip on china's congress. a political gamble seems to pay off for shinzo abe and spain's constitutional showdown takes yet another twist. and the ecb turns its focus to tapering. >> the decision today is for an open-ended program. david: some of the financial world's most important figures hold forth on opportunity and challenges. >> there are places we can actually invest and improve our market share and improve our position. >> i don't think $1 trillion is too big. >> we are now in a transition, a whole different environment. david: a whirlwind week for

earnings reports from banks in silicon valley in the spotlight and european banks as well. >> we are swimming upstream. >> market shares are hanging in there given what the other banks have done. david: it is all straight ahead on "bloomberg best." ♪ david: hello and welcome, i'm david gura. this is "bloomberg best," your weekly update of important business news, analysis and interviews from bloomberg television around the world. let's begin with a day by day look at the top headlines. on monday, the results of at snap election in japan delivered a boost to the ruling party. ♪ >> prime minister shinzo abe's gamble on an early election has paid off. it may have won him a chance to lead japan through 2021. he comes out of this with a presumably stronger mandate. what does that mean for abenomics?

guest: it was really a victory based on one crumbling opposition, but also a referendum on abenomics. we have had six straight quarters of economic growth employment below 3%. , the stock market this up in -- up in areas we have not seen since the late what we will 1990's. likely see a continuation of abenomics, as well as mr. abe's plans to hike that consumption tax, but not until 2019. and also perhaps move, slow moves to revise the pacifist constitution. >> what are the most significant ramifications of the win? guest: i think it has to be something of a green light for the massive economic stimulus program we have seen running in japan over the last few years. the so-called abenomics. it would be a green light for the bank of japan to carry on with their massive asset purchasing program and a green light of course for abe himself to go ahead with a consumption tax increase. the point being he wants to raise taxes not to tackle the

deficit but improve education. to fund social programs. where else we see the stimulus going ahead we may also hear , more calls for greater urgency in japan and urgency pushing stricter reforms. those will be the key challenges for mr. abe going forward. ♪ >> china's communist party has approved a revised charter here nd shining -- and enshrining xi jinping's name under guiding principles. and with thing into a satisfied eluded his predecessors. >> this is the clearest signal we have had up to this point that president xi is going to have a grip on the party, the government, and china well beyond 2022, possibly for decades beyond. this is an easily tarik, and archaic form of wording that has been -- on our -- and esoteric, and archaic form of wording that has been put into

this charter but is consequential. they are saying xi jinping's characteristics are going to be enshrined in the constitution, putting him on the same level in terms of respect by the party as deng xiaoping and as mao zedong. above as you said hu jintao and it is veryver significant. >> xi jinping has closed the 19th party congress, having amassed more power than any leader in a generation. in a break with the 25-year-old succession system, members of the politburo, the ruling committee, will be too old to rule after xi finishes his second term. that opens up the prospect that the president can stay in office beyond 2022. >> the politics of it are clear. he has consolidated power. it is not clear where he will go on the economy agenda. will he actually be emboldened to shake up the state-owned sector? will he actually go hard on putting flows in the economy? if you look at the personality promoted today, they were similar reformers promoted -- >>

-- there were some whose background is not really great for the economy either, so it is a little bit as we were. >> ecb president mario draghi trying to head for the qe exit, but draghi emphasizing the central bank will proceed with caution. mario draghi: the decision today is for an open-ended program and it will not stop suddenly. it is not going to stop suddenly. matt: we got was exactly what the market expected 30 billion in bond purchases per month from jittery from september 3 -- generally through september. that is half of where we are now, and also the ecb maintaining the hold interest rates where they are well past , the end of qe if draghi chooses to end qe at that point. >> he is sort of stuck by the technicals. he could have had an earlier

stop to it. i think you've given himself the flexibility to carry on for longer and possibly increase if it should be needed. deutsche bank struggling to find growth, stocks trading lower. those third-quarter results showing trade revenue found more than expected of the two institutions exceeding the decline seen by the u.s. peers. >> it is a difficult revenue environment. we are swimming upstream in a market that has seen shrinking revenues, particularly financial market revenues. as in think of thus fixed income equities. >> market shares held in there, given what other banks have done. we expect a return to normal levels of volatility and volumes in recovery of market revenues in the investment banking space. >> this is an interesting time. you are putting more risk on a fairly unknown period in history. i think their

difference in share price is the cost delivery. barclays has given us new range. they have lowered their o.t. target. at least with deutsche, they are doing a good job on costs trading for both of them is , weak. >> the motion is adopted. vonnie: the house has adopted the senate budget resolution. this unlocks a fast-track process to achieve republican 's goals to cut taxes by the end of the year. president trump sent out a tweet saying, "big news. budget just passed! >> we are learning republicans in the house will unveil their official tax proposal on november 1, next week. five days later they will take it for a market through the committee process. -- a markup through the committee process. with the passage of this budget they are on pace for tax relief by the end of the year. that is good news for investors, carefully watching this, but how we are going to pay for it does remain to be seen. david: is it realistic to think we will get done by december 31? >> we have a 1000 page bill coming.

we have 9500 registered lobbyists in washington dc, and we have a ticking clock in the background. my sense here is that we are going to get a bill on november 1. they will start a markup the following week, but the market -- but the markup in the house will continue until december at the earliest. the earliest i think they will clear the bill in december at which point we have to get actual passage at the end of the first quarter, beginning of second quarter next year. mark: catalan lawmakers voted for an independent republic. >> today the parliament, the legitimate parliament, which is the result of elections on the 27th of has taken a long-awaited september, and long fought for step. the great majority of politicians fulfilled a mandate, which was validated by elections. >> in madrid the spanish senate , voted to revoke catalonian autonomy. spanish government bonds have

dropped pushing up the yield spread to the widest in a week. >> it is a symbolic move for the parliament. we know that he came under a lot of pressure to do this and they will get sweeping powers over the region starting with the entire catalan government in dismissed from office. the? is with what response -- the question is the response we will get from catalonia. we have seen protesters outside were very happy about this. madrid will tell you this has to stop. what are we going to get in backlash over article 155? he cannot stay in office , the catalan had it probably meant according to madrid. >> the catalan government is claiming to the republic they don't have control over the administration. they have not established the authority takes precedence over the spanish state. the singles we have been having from the government over the last few days have been whether they want to make a gradual takeover of catalonia. their byword throughout the process is that we should be a proportional response. they clearly want to avoid the

violent scenes they saw in october the first when they tried to shut down the the -- shut down the illegal referendum. they need to restore their authority and catalonia and they need to do it quickly. david: still ahead as we review the week on "bloomberg best," david solomon explains how goldman sachs is building its business in europe. plus, a conversation with ray dalio. and a list interviews from the future investment initiative in riyadh. up next, more of the top business headlines. carlyle group announces a succession plan and they clearly put some thought into it. >> having this inside/outside balance is interesting. david: this is bloomberg. ♪

♪ david: this is "bloomberg best," i'm david gura. let's continue our global tour of the week's top business stories in europe, where a you and united kingdom officials are still having trouble

establishing common ground in brexit negotiations. ♪ >> u.k. chancellor philip hammond wrapping up testimony in the house of commons after european council president revived the idea of the uk's staying in the eu. while speaking to matters of the -- members of the european parliament in strasbourg, saying that the outcome of talks was fully in the uk's hands. >> they think the cabinet is exactlyvided on what the u.k. wants as a future trading relationship with the eu. the eu knows until they decide that, they cannot really come to an agreement. when they talk about no brexit or no deal, does it mean everything will fall apart and u.k. will leave the eu messily, or does he mean that somehow things will get reversed and the u.k. will stay after all? both those things we need a lot of things to fall into place. they are certainly not willing get out. -- there are not ruling it out and so far on since the date of

the eu referendum and exit was agreed nobody knows how this is , going to end. ♪ >> excessive speed and the this -- on the disposal of nonperforming loans could derail the recovery in italy's financial system according to the country's finance minister. >> this is absolutely vital for all economies including the italian economy. however my point is that we must , be very careful in getting the speed right, the timing right. if we do it too fast, we could derail the whole system which is now gaining speed and steam. >> it is interesting to hear him talking about the speed of dispersals. there really occurs to me that actually that is not necessarily the major issue, the issue is a lot of the details are being marked at a price way above what it would trade in a market. so in order for the banks to dispose of these loans, that either have to accept a price well below what they have been marked or -- and raise capital theyel the hole, or

need to find a buyer said given the capital. the only buyer that would be able to do that is the state and unfortunately, that is in breach of the rules of the european union. mark: struggling commodity trader agreed to sell its oil business to this group. if we knew it use a medical analogy, is it off life-support? where is it using medical analogies? >> not a trained physician, i would say it is still on life support. we've had some clarity on some key things. the number one thing is the extension of the government waiver which was critical. yes, they have sold of the oil unit, but there are so many conditions attached. so many escrow accounts. so many if's in this scenario. it is very hard to tell how much they will come after it in terms of cash, how much they will actually pay it down. there is an interest in certain bits. not the whole thing, which is why you have this sort of very complex structure. it is not entirely clear what it

is worth. it is not entirely clear what the trading business is worth. therefore there are a lot of question marks around it. around the valuation. but it helps cement its position as a world-class oil trader. >> cisco's m&a spree continues. the tech giant snapping up software maker broadsoft in a deal valued at $1.9 billion, expanding cisco's presence in software and the cloud, a huge priority for the company. talk us to the terms of the deal and what stands out. >> it is a reasonably large premium. i think if you look at it from it wasce back in august, about 28% premium which is a fairly healthy one for this sector right now. it is not a huge deal by cisco standards, but for them it is their 200 takeover in their history, a phenomenal number. usually we see them do smaller private micro deals this is

, unusual as much as it is public. according to sources familiar with the matter, it was a reasonably competitive process. there were other people interested in the asset and that in some ways is reflected in a fairly decent premium that cisco ended up paying. ♪ >> apple's iphone x hit stores next week but a new report of supply struggles is clouding the rollout according to japan's nikkei. initial shipments will only be around half of what was expected this year after it has been battling technical issues involving the models new facial recognition feature. >> there has been news, we heard about the first problems with the display technology about a year ago, that we dug into the story about the 3-d sensor. that is the biggest bottleneck right now. that can't get enough components. coincidentally as the same time as our story went out, the

people who make the modules that going to the phone admitted that it would cause supply constraints, the company did. there is increasing concerns heading into the quarter that they would be slightly worse sales than expected on a launch quarter. ♪ >> carlyle announced a secession plan. these two men will become co-ceos on generally founders first. david rubenstein, who hosts the david rubenstein show, and his partner bill conway will become co-executive chairman. what will this mean for carlyle? >> what is interesting is you that you have this pair of guys, david, one of whom i'm a glenn young can has been with the firm almost his entire adult firm. he joined in the mid-1990's and has seen the growth of carlyle since it's inception in the late 1980's. lee is a bit of a rare bird. he actually did most of his work at a private equity firm, a different one where he was for 20 years before he joined carlyle a few years ago. so having this sort of inside/outside balance is

interesting. >> india's state-run banks the government pledged to inject $32 billion dollars of capital, unprecedented into the lenders. it is catching everybody by surprise but really making a a red headline. >> the indian government's decision to increase the efficient capital by 10 fold has caught almost everybody by surprise. they have already said it is a positive move. equity markets are also cheering this move. the state-run banks have added almost $10 billion in capital markets acquisitions which will help the banks to clear up the bad loans. indian banks are currently saddled with one of the highest rates among all the economies. this will help them clear the balance sheet and probably add more loans in this economy which will help in reviving both the

economy and the bank systems profitability over the next couple of years. ♪ >> the sec says firms can accept research payments from eu clients. the u.s. regulator gave a 30 month reprieve to u.s. firms on the research rules that are coming into effect from >> this january. is basically what wall street brokerages have been pushing for four months here in washington. they got the sec, wall street's main regulator to step in and tell them they are able to accept research payments as will be required under european rules for the european clients, and they will not have to register as investment advisors. if they had to take on that label, it would basically heap on a bunch of additional requirements and it could be costly. they basically did not want to do that. they are getting a reprieve today and i'm sure a lot of these big brokerages are happy. what happens to it half years from now, we don't know. basically we will have to see.

vonnie: president trump is leaning toward appointing jerome powell to be the next chairman of the fed. this according to three people familiar with the matter. we know that we will hear from that definitely before according november 3, to the president himself leaving for asia that day. what would he bring to the fed that janet yellen hasn't got? or that john taylor might bring? >> it is interesting the way you put that. what would he bring that janet yellen hasn't brought? probably nothing. he is not an economist, so he will be basically following the policies that were set in place, and then be influenced by the staff or by people who are appointed as vice chair or anybody would replace yellen if she decides to leave the board. remember, she can stay on if she wants. so probably, you would see it as -- a shorthanded description yellen-lite.

he is not likely to deviate. that makes people happy in perhaps that is what trump is thinking. ♪

♪ david: welcome back to "bloomberg best," i'm david gura. goldman sachs president david solomon come the co-president and cosi sees great potential in 00 his firm to expand their business in europe. he discussed those opportunities in detail with my colleague alix steel. david: there are places we can add market share and one of the things you know is that a portion of our growth initiative is focused on places where we see market share opportunities in equities, or where we see client gaps in places where by adding market resources, we can take market share. yes, we have strong market share across europe and all of our businesses we have good market

, share in sales and trading equity business and investment management business. but there are places we can actually invest and improve our market share and position. and as an organization, we are focused on making those investments and making sure we are creating growth opportunities. it is not just in equities. it is in banking, too. one of the things in banking we have looked at is that we have broad market share and abroad -- a broad footprint but there are also places we can grow that footprint. as market cap expends, there are more that could be under the radar screen. that certainly are billion-dollar type companies and we're looking at our footprint there. in our investment business, we continue to invest in that. >> any specific regions in europe, or just abroad? >> not specifically. alix: you brought up lending. you unveiled this good plan and it seems you are focused on that area analysts are looking for how they judge it. if i am a market participant and i look at goldman and say, are you delivering on your promises,

in terms of your lending business and growing it, what do i look at? david: there are different things you can look at. if you look at the lending business, it is a broad term and touches a lot of activities we engage in with our clients. on one hand, we have made a push over the last three years to broaden our debt capital markets capability and we improved our market share significantly in the capital markets. in fact, if you look at our performance, our nine-month underwriting capability, it has been a record for the firm. that comes of focus over a period of time. we have corporate clients making acquisitions. we are looking to purchase companies in the market. we are committing capital and lending in to them in order to support the business. alix: that means revenue. we can look at revenue? david: revenue is a metric. one of the things i know you are aware of, as we have started

over the course of the last year, we launched about a year ago a consumer platform. , it is a new area of expansion for us. markets by goldman sachs. this is a business where customers who have credit card debt can manage that debt more effectively with a fixed rate, no-fee loan. so we're are very excited about the product, and we have been rolling that product out. we are in the early stage. we are on track to have $200 billion in loans this year, but over time that is a business , that will be a nice contributor to the firm and there will be more information on the growth of the business and its trajectory of the business progresses. david: coming up on "bloomberg best," you want earnings reports? we've got earnings reports. a look back at the hits and misses of a very busy week. plus, conversations with a future investment initiative at the star-studded conference in saudi arabia. >> i look at the 2017, 2018 very differently than how we received -- how we perceived 2007, 2008,

2009. david: this is bloomberg. ♪ is this a phone?

or a little internet machine? it makes you wonder: shouldn't we get our phones and internet from the same company? that's why xfinity mobile comes with your internet. you get up to 5 lines of talk and text at no extra cost. so all you pay for is data. see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. >> i think the boj will be

importing some reflation from the rest of the world in the next year, and that will help them as they comfortably stay on hold with their yield control target as it is. >> how do you see boj policy adapting to what has been a growing economy? six strait quarters of growth. slight growth. inflation is stubbornly low at .7%. >> well, i think that is the point. we can see there is a very difficult process in using growth as a total to get out of the deflationary psychology

japan has been in. if we are right, we are going to be sitting here a year from now with core inflation below 1%. the boj is looking for it to get to 2% not long after that, and that will be a story that says the boj will have to stay here, and hold its policy stands -- stance for a long time, even in the face of what we expect to be good growth. we don't know how far it will run before you jumpstart the economy in terms of reflationary dynamics, but it seems to take more than a year even with good growth. david: that was jpmorgan chief global economist bruce kasman discussing japan in an exclusive interview stephen engle. the epicenter of financial conversation this week had to be at a conference hosted by the kingdom of saudi arabia. some of them sat down with interviews with bloomberg television.

>> there are some european challenges which require european responses, like migration, security, growth, and jobs. there are national responses, which are insufficient. we need to integrate them with a higher policy. yousef: so there is more work that needs to be done to slow down the trend we are seeing? for further autonomy. these are structural problems. >> these are structural problems and there was a window of opportunity to do with them because the european economy is growing at a healthy rate, and there is lots of job creation. we must reform our institutions and make them more flexible. yousef: let's talk about the italian economy. growth projections for the share are at 1.5%. is there any chance we could see

upside to that growth? could it be stronger? >> it could be stronger. there are upside risks and in the coming two years. certainly, there are in our forecast. yousef: so, by how much more do you think it could grow if you gave a rough range? >> if all the reforms were implemented and if all the resources mobilized for public investment were fully spent, we could certainly go up 2%. >> a decade ago, wolfgang schaeuble, the outgoing finance minister of germany, suggested that the rising amount of debt could trigger the next crisis, and of course, he was spot on. are we at that point yet with the accumulation of debt? especially in markets that are not as visible as they used be to financial regulators? that accumulation of debt is getting to a point where we

could be confronting another crisis? >> i look at 2017, 2018 very, very differently than how we perceived 2007, 2008, 2009. the financial institutions were so much more levered and so much less transparent in the 2007-2008 period. i would argue financial institutions in the u.s. have had enormous improvement in their balance sheets, and we should take some comfort in that. yes, people are using leverage and there are investors and institutions that continue to buy long-term assets with short-term liabilities. yes, you should scratch your head over that, but that is an institutional issue. i don't think that is a market risk as much as an investor or institutional risk. >> blackstone has intentions, plans if you will, of doubling its assets in the next five years. to roughly $18 billion. and blackstone has doubled down their assets over the past five years.

so, they are planning to continue on the same pace of growth even though they have become so much larger. where does carlyle find itself in five years? >> rethink our firm is in very good shape. we continue to grow. our quality of investments will continue to be very good, but i do not have a number. >> it is possible blackstone will become a trillion dollar firm. is it also possible for an alternative asset manager to be too big? >> i'm not sure. people thought $20 million was too big. i don't think $1 trillion is too big. i don't know what blackstone or carlyle will be five years or 10 years from now, but i don't know if it will be too big. remember, blackrock is now $6 trillion or something like that under management. who would've thought that something might that would happen? it is hard to say. >> but in principle? >> we are very ambitious and we think we can do a good job for our investors.

i'm sure blackstone will do a very the job for their investors, but we don't have any limits. david: not every wall street superstar was in there this week. ray dalio paid a visit to "bloomberg surveillance" and shared his insights on the market and economy. ray: from 2008 until 2017, we were in a certain type of environment. in that environment, it was one in which there was the pushing of interest rates down to the point of creating negative interest rates, and with a positive carry by doing quantitative easing to push money into the system. 2017 is the transition of an ending of all of that all around the world. we are entering a new era in which there is going to be, and there is the raising of interest rates, and the reducing of quantitative easing. that action that they took in that produce significantly bad real interest rates. 10 year real interest rates are about .5%.

>> next to nothing. >> next to nothing. and the brief even inflation rate for the 10 year is about 10.8%. those numbers are low because of repression in order to get the economy to do that. we are now and a transition. a whole different environment. that is the equivalent of the late stage of a cycle. that is when it is a tightening. tightening has become progressively more concerning because as you move along, there are more and more -- they are more and more difficult to get perfect. >> how much does personality matter at the federal reserve? what does the next fed chair need to focus on when it comes it need to focus on when it comes to the health of the in economy? ray: it can matter a lot. we have the pace at which from fed policy, the pace at which there is an unwinding of the balance sheet. i look at those numbers, and i don't think they will be able to continue at that pace because it is equivalent of something like 2.5% of gdp. if you have that happening at

the same time as increasing budget deficits, we could have an increase of another 1.5% of gdp. that is a big number in the supply demand of bonds. think about that. ok, there will be that amount of effective selling and credit by the federal reserve. tom: are you predicting with the tax reform opposed as douglas keegan talks about, going to 5.6% or 7% gdp? ray: we will almost certainly have a significant move in that direction. so, you can even see it in the market action. in other words, on days where it looks like they are making more progress, days they are making less progress -- there is going to be a larger deficit which means more selling of bonds. at the same time, there is more selling of bonds by the federal reserve in terms of the balance sheet change. i think they will be cautious in this, but when you are talking about this part of the cycle, it is very delicate. ♪

♪ david: you are watching "bloomberg best." i'm david gura. another week, another round of corporate earnings reports. with some silicon valley's biggest companies releasing results. >> a blowout earnings quarter for big tech. amazon, alphabet, intel, and microsoft all beat wall street estimates. >> it was all of the speculation on how amazon would fare. >> there was a lot of anxiety on how that would go. most about how much amazon would spend on it. so, investors i spoke with were pleased that amazon actually made some money, even though they had integration plus one time. that was an indication that he

was not going to be as costly out of the gate a some of them feared. >> walmart is stepping up its competition against amazon. is there any signs it is making a dent? >> that was another wildcard heading into earnings. the message to investors there is walmart might be doing a lot in -- doing a lot and in the bidding a lot, but amazon's growth continues to roar along strong they are predicting a very strong holiday quarter. >> 47% paid click growth is extraordinary for a company this gigantic, and a company that feels like it has been gigantic for years in our life. going up against facebook and amazon, nearly 50% growth is extraordinary. >> it is. it is just extraordinary. it is a global phenomenon. again, the search part of our daily usage of the internet remains extraordinarily robust, even though we are spending much

more time on amazon and facebook. but the core search function is seeing a 40% to 50% increase in clicks. the flipside however is that the pricing on a per click basis is down double digits. when you put that altogether, it turns out the 20% topline growth for alphabet which is extraordinary. >> microsoft push into cloud-based software seems to be paying off. what does this say about the rest of the earnings season? pieter: microsoft has its history in the pc-based computing along with intel and other companies. it has struggled to move beyond that in a number of cases. some of the years have an kind of rough. but this was a strong quarter that they showed they have shifted over to the broad-based -- cloud-based services they have, and it signals more broadly that investors are getting some positive signs as there were concerns about the

valuations of some of these tech companies. they are now getting data points to reassure them there is growth to go in these earnings. >> baidu shares under pressure under the extended session after sales forecasts fell shy of estimates. this coming at a crucial time for the company as they attempt to alter course after a difficult 2016. >> baidu is really changing direction. it has to find a new place to earn money from. it tried that with food and delivery very unsuccessfully, and now it is putting all of its eggs into artificial intelligence being the future. that is what it is really tried to convince shareholders to stay the course, and don't sell the shares just yet. we can actually make this into something worth doing. john: ubs's capital berth has rebounded in the third quarter while investment units soared. >> do we get a buyback from ubs in 2018? >> it is too early to talk about our capital return policy, but i

mentioned in the past, we reached capital levels needed to fulfill regulatory requirements for 2020. capital buildup is done. and so, we are looking to continue to implement our progressive policy on our cash dividend, and eventually complement it with capital returns to share buyback, but it is too early to talk about it. >> clearly, we are coming from a disappointment last quarter. i think investors were reassured to see what drove capital lower last quarter was not repeated. we have seen a reversal above expectations. clearly at this point, that is what investors have been looking for, for the model to now deliver the higher dividends they are not getting from the banks. david: general motors released its earnings over 30 minutes

ago, and it beat estimates. you beat revenue and earnings per share. that is a nice story. what is the real story here? there is some softness in the vehicle market. >> i would say the story from our perspective was that the third quarter was very, very much on plan when you look at production downtime, we had and production being down 26%. within that, we generated solid results at an enterprise-level, $2.5 billion profit. in north america, $2.1 billion 8.3% margins, which demonstrates the resilience of the business, even in a quarter where production was down 26%.

importantly, we took a big step toward getting our dealer inventory in line as we go through the fourth quarter, and we now expect our dealer inventory at the end of 2017 will be lower than 2016, which will set us up for a good start in 2018. david: ford announced its third-quarter earnings, beating estimates on revenue and earnings per share. how much is topline growth and how much is cost control? >> well, the vast majority of it, david, is good cost management and good cost control. we have had over $7 million of good news in terms of cost and a year-over-year basis, inclusive of $300 million in commodity costs. the team did a really, really good job in terms of delivering strong cost performance. the thing that was encouraging across many aspects of cost and across other important parts of our business. we were really excited about that. and we see that as a down payment on our efforts to improve the overall fitness of the company. jon: boeing, the big performing stock on the year. it delivered some solid results as well. the forecast for this year is better. what is driving it? >> the big concern with boeing is that, as they put their

legacy plane off the market and shifted to newer production, bigger jets they were putting out, people were worried we would see a hit to cash. whenever you launch a new plane, that requires a significant amount of upfront. there are costs involved. that is not happening, and boeing has shown significantly better cash flow than what investors were expecting. that is what is really giving people optimism. and they also increased production for their newest jet, and that is making people more comfortable with the fact this strong aerospace cycle will continue to be strong. >> a big third quarter miss for chipotle. eps came in at $.69, well below estimates. hurricanes and a hacker attack took a toll on profit. >> don't forget, we had the virus in virginia.

that was a big part of what happened. they also got it down for the fourth quarter now based on their four year guidance. they say the fourth quarter is going to drop about 1%. part of it they are blaming on the hurricanes in florida, but that is below the 2% we were expecting. so the norovirus is having an impact and that is what we thought. it would delay the recovery moving forward. >> one investor getting burned is billionaire bill ackman. >> he has been in the stock since september 2016. a busy, we have seen a lot of -- obviously, we have seen a lot of turnover in management and directional changes. he has been a part of all that. he has been working with the board to implement those changes. and i think he believes that he is affecting some change of there. some permanent structural changes that will improve the direction of the company. >> the party reported earnings

that beat estimates. the company also reconfirmed its outlets since 2017. >> profitability has risen for the first time in almost three years. what went right for you in the quarter, joe? joe: i feel good about the quarter. all divisions contributed to the growth. our innovative medicines divisions -- we have a couple of new drugs that are firing on all cylinders and generating good growth. our generics business, despite competitive and pricing pressures in the u.s., also grew on the constant currency basis. but i think the best part about the quarter is that our outcome business grew 7% and profit almost 20%. i feel really good about where we are as a company. we are positioned as a focused company. we have a strong pipeline for the future. david: eli lilly reported its third-quarter earnings. they beat estimates on both earnings per share and revenue. and also ticking up its forecast of earnings for the rest of the year. >> the performance of q3 was very strong driven by new products.

top line growth at 9%, driving 19% bottom line growth. we kept productivity in place and only group operating expenses 3%. so, this is a story about our pipeline launching. now, products launched since 2014 are more than 20% of our revenue base and growing rapidly. that is giving us tremendous financial performance in q3 and being able to reinvest in the next wave of innovation and deliver value to the shareholders. david: big oil dealt with third-quarter earnings. exxon mobil topping estimates and edging higher, while chevron posted a miss and cut their guidance. >> most of the majors had a dark time in september. they are jettisoning their nonperforming assets and turning back towards giving shareholders value by delivering profitability and not increasing production at a breakneck pace.

one of those is exxon. they killed it on numbers but they are also increasing cap , which is against the trend of what is going on compared to exxon. >> france total says the balance between crude, supply and demand is finally dissipating as opposed to the highest earnings from pumping oil and gas in two years. meanwhile, italy officials says production will rise to a seven-year high later this year. >> no one is excited by the actual numbers. but there is a much bigger story unfolding. they are reaping the rewards of fairly conservative else sheets, cutting back on spending, firing people, delaying projects, and is now feeding through to the bottom line. ♪

♪ >> we hopped back into the bloomberg, and we take a look at the relative valuation. we see that even after the huge move trading at 11% discount, also trading at an 18% discount. some value investors like to look at that metric. these blue dots suggest that the stock is really devaluing on those metrics, trading toward historical lows. david: there are some 30,000 functions on the bloomberg, and we enjoy showing you our favorites on bloomberg television. maybe they will become your favorites. here is another function you will find useful -- quic go. here is a quick take from this week. >> there is a global trend taking place, a lower percentage of people are smoking cigarettes. this has forced tobacco companies to create products to

keep them profitable. their answer may come in the form of an increasingly popular alternative to smoking, vaping. does that come with its own issues? here's the situation. a chinese pharmacist and smoker developed the e-cigarette in 2003. the device uses no tobacco. a battery heats nicotine liquid which the smoker inhales and exhales a vapor. another alternative uses tobacco, that it is heated to a much lower temperature than a regular cigarette. they are said to have a taste and nicotine boost comparable to traditional cigarettes. those that is better than e-cigarettes. in both devices, there is no burning tobacco, thus, no smoke or tar. the u.s. fda embraced invading -- effectively embraced vaping as a way for smokers to quit. the market for which is estimated at $7 billion a year, and growing rapidly. here is the argument.

some health groups say vaping products may be a gateway for kids to start smoking cigarettes. a government survey showed e-cigarette usage among teenagers increasing before a slight drop in 2011. however, the rise was counterbalanced by a drop of use in conventional tobacco products. according to a 2013 study, they -- vaping may be as effective as nicotine patches for smokers trying to quit. it is too new to be a significant body of research on long-term health effects, but a review of the evidence concluded that vaping is about 95% less harmful than smoking. it is too early to say for sure, but vaping may be the breath of fresh air smokers have been looking for. david: that was just one of the many quick takes you can find on the bloomberg. you can also find them on bloomberg.com along with all the latest business news and analysis 24 hours a day. that will be all for "bloomberg best" this week. thank you for watching.

i'm david gura. this is bloomberg. ♪

♪ >> president trump stoking the ad, saying he will announce successor in coming days. >> sources say he is leaning toward howell, but taylor is still in the race. meanwhile, regaining a parliamentary seat and restoring the majority. apple'