scarlet: and the contrast between the two you just painted and the closing print on u.s. equities. you are looking at a drop of 4.5% for the nasdaq. just off of the worst levels of the session. the dow off by 606 points. a correctiontering at one point and the major indexes erasing their advances for the year. the dow and s&p is now negative on 2018. it's the worst day for the dow jones industrial average since october. for the nasdaq, the worst day since all the way back august 2011. the brutality for the companies like netflix is all-important heading into the earnings that we will get breaking. joe: the earnings are going to be very important. you think back to q2 when we had some of the bombs from facebook

and netflix, they did not drag the markets. they fell and the market went up. you have to wonder how much individual company can provide a catalyst for a lift. we have gotten good earnings for some companies in a has changed -- hasn't changed at all. scarlet: it's the outlook that hasn't been changed. it is how subjective you are looking at the outlook. caroline: whether it is peak earnings or all about what they say on the earnings call and what they are conferred -- concerned about in the forward guidance. scarlet: sometime they do it as a way to warn investors and clients they will have to raise prices. why not blame something on the trade war. we discussed this yesterday. it is strategic. joe: always good to have something to blame. scarlet: still with us is scott of guggenheim and a gina martin adams. we are waiting earnings any moment. scott, when you look at the

different earnings coming out, is there anything that catches your eye and gives you confidence in the recession call? scott: i think some of the early warning we see from caterpillar -- tariffs might beginning to bite -- be beginning to bite and everything is not rosy. scarlet: i have to jump in. we have microsoft reporting earnings. the first quarter eps is $1.14 topping estimates of $.96. revenue is better than anticipated at $29.1 billion. analysts were looking at $27.92 billion. it be to on the top line and bottom line. the first order revenue beat the highest estimates as well. of thes no indication second quarter outlook, but capex is just shy of what analysts are looking for. actually, more than just shy. caroline: we give a look on the cloud progress of the business

and how it continues. this is a beat across the board. markets are reacting. this is the story of the markets. look at these great reports. in the gains are already red. that happens with earnings because people see numbers they like. is down a lot, but not nearly as bad as some of the other tech names. it is down 11% from the high which is relative strong outperformance versus some chip names. we see some of the high-quality balance sheet companies like an apple, they are doing fine. scarlet: i interrupted you earlier. you are talking about industrial earnings and how they indicate perhaps things are worse. is that the best gauge of the broader economy? is it still industrials? scott: industrials have played a huge part in the trump program. is the keep these of the momentum given the focus

the administration has to the united states. watching the industrials is kind of an interesting place to look to get a handle on the real economy. thatgina, i was dismissive -- would say this market. there is much more going on the net. -- based onrts earnings season so far, are you seeing signs that things are not that bad or holding in an markets have become way too negative on certain sectors? now, i think it is a sell think later when it comes to companies in general. what i will say is things are not that bad. see 10% we will still earnings growth, maybe 9%. that is not horrible earnings growth. it comes to a 20% number. at the same time, the big bugaboo of the market's

budgets. expenses are rising across the board and at a faster pace than analysts had forecast. we are starting to see estimates deteriorate months ago. they took a nosedive over the last months and the some of these earnings reports come in and the companies are saying we cannot make it to the margin forecasts. margin forecasts are good predictors of the equity market. that is the key. we had have stabilization in the market numbers to have confidence in the outlook. scott: i think that comes full circle back to what i was talking about. the fed is starting to see pressures. this reflects the costs are rising and they cannot afford to look soft against inflation. caroline: i want to dig into the headline we are looking at. the $29 billion from microsoft. their operating income is up 20%. i want to get more perspective from our bloomberg intelligence senior software analyst.

we won't get forward guidance for microsoft until the call. for this quarter, it was record. >> absolutely amazing. we can't imagine a company as large as microsoft growing 18% in constant currency total revenue. the pc revenue is also strong. overall, i don't remember last time i saw microsoft report such storm numbers on sales and on profit also. i'm a you won't comment on the stoxx per se, but the stock is down half a percent after hours. you are saying this is one of the best reports you have seen, and you are going through it and you cannot find anything specifically that would be a warning sign or red flag? >> know, but there is one particular figure, the cloud computing platform grew 27%. in the last four quarters, it was in the high 80's.

almost 2.5 times what the industry is going. microsoft is doing well in the hybrid cloud area. we believe they have an edge over almost everybody out there. is there anything to read in microsoft's first quarter apex? if you are look for something negative, would that be a ?egative headline >> that could be a timing issue. when you see cloud revenue and server revenue so strong, a have to expand the data center footprint. i would not to read too much into it because that is more of a timing issue. caroline: what about in terms of the long-term and strategic investments? they say they are consistent with the driver revenue growth in operating margins.

where do you think the company still needs to penetrate and beef up the rest of their competitors? anurag: they need to do more on the enterprise applications and cloud enterprise applications side. they can beef up some of the other areas such as erp. g.roline: thank you, anura let's dig into what is happening with more earnings for you. one dollar 21 cents coming in just above analyst expectations. earnings per share is $1.23. scarlet: if you had to say something, i suppose that misses the average analyst estimate because it did not beat it. looking at the reaction in the sale price, that is another knee-jerk sale. see lotsf 10% so you

of activity, lots of volume, but investors are looking at everything with a skeptical eye right now. it is striking. joe: it is down 3% and this has been another one of these stocks that has been phenomenal for a long time. it really only started breaking down in early october, but since then, it is breaking down quite hard. scarlet: still with us is scott from guggenheim and gina martin adams. how is the consumer doing? scott: i think the consumer is doing great. you have wages rising, people are getting purchasing power back. have shown real improvement which we have not seen in a long time. i think the consumer is in very good shape. i think this consumer will help drive the economy forward. scarlet: what about rising interest rates? scott: the consumer i don't think is as sensitive to rising rates as business. ,ou look at their liabilities

they are generally fixed in mortgages, credit card rates don't really move with changes in short-term interest rates in the near term, so i don't think they will be as much pinched. the place where they potentially get pinched is an rising prices such as gasoline. for the moment, they are staying ahead. for the time being, they will keep driving the economy. joe: gina, what you make of it when you see the reaction for microsoft like that? selling on what appears to be a number everyone think is really good. gina: i think this is what we were talking about earlier. sell now and think later and wait for capitulation bottom. joe: what happened at the dip? gina: the short run by the dip is over. techve a lot of big companies reporting over the next few days. i thinkout guidance and you mentioned it earlier, it is not about having a great order.

it's about what are you going to do for me in the future because we know things are right now. we are thinking into the next 12 months looking for the catalyst to buy again. scarlet: the economy is doing well, consumer doing well, but the outlook is a little wobbly getting people nervous. thank you so much everyone. scott minard of guggenheim adams,s and gina martin our chief equity strategist. that does it for the closing bell and for me. romaine bostick is stepping in where we will be looking at more earnings after the markets close i including tesla and others.

caroline: tesla reporting its

earnings and we are up after hours. they say they have had an adjusted earnings per share in the positive rather than the loss per share of $.15. they are beating expectations. this is why they brought their earnings forward to today. we are seeing the market remain already reacting -- markets already reacting. romaine: i want to get a look at the cash flow because that was a key number. joe: looking at the report, they have a free crash low -- cash bullets.ing the model three gross margins are reaffirming20% expectations of continued cap net income and free cash flow. the key thing is, it is hard to estimate tesla. we see that on the downside and upside. a lot of people were expecting something good when they brought it forward.

6%, but thisock up is a complicated machine with lots of moving parts. lots more to dive into. caroline: we are seeing a gain of 5.7% on the hour. was free cash flow positive. fortis coming out with its numbers as well. dashboard is coming out with its numbers as well -- out with itsg numbers as well. they just put out a new ceo in the company. we are off only 4/10 of 1%. they are beating expectations. again aheadevenue of expectations, but they're not meeting their margin goals to meet 2020. i want to bring in an important interview going to be conducted by david westin standing by with

a key member of the ford team. the --we're joined by by joined with bob, the cfo. you had a beat on the revenue and earnings per share. it is your highlights from your point of view. bob: highlights would be the revenue that came in 3% better than a year ago driven by strong product mix in north america. moving to martha america, we -- north america, we earned a margin of 8% on lower volume. we had the best quarterly results since 2011, earned a profit in africa, and outside of china and asia-pacific, we also earned a profit of 9%. quite a number of highlights within the results. overall, we feel like we are stabilizing from what was a tough second-quarter and starting to see signs of progress in the work we are

making with the redesign of the business. david: this is a strong story in north america because a mixed revenue. you said apart from china. that is a big apart from. how did you do in the third quarter and how you turn that around? bob: in the third quarter, we lost about $100 million less in china than the second quarter. a 20% reduction in the loss. we have a number of important launches in the quarter. the focus family is launching this quarter and the new escorts. an all-new suv will be positioned at the end of the year. the biggest product onslaught begins this quarter. very exciting way we announced a new ceo for china. he is the former ceo of cherry. a former ford guy in his past, but really deep in experience within china, and very excited to have him lead our china operations going forward.

david: it is in the pipeline as it were. what kind of timing are we looking at before we turn around china to your satisfaction? bob: we're not putting a timeline on it, but i know he will come in and have a strong point of view about where we have opportunities in the business and we have a very strong portfolio of new products coming not only in china but in north america. i'm really excited to see them take advantage of the leverage along with the intense focus on cost and capabilities in china. david: what about europe and latin america? those are the challenges for ford motor company. where are you when those areas? different and the case of europe, we lost about $250 million in the quarter. that was largely around three things. we saw headwinds in turkey, we have a large operation in turkey. also in russia, the impact of

sanctions on the economy there affecting us in the industry. then, we are in the process of launching the focus family is important to europe so we have lunch related expenses in the quarter. as we move into this quarter in the focus gains traction and more and more in the market, we are looking forward to seeing the benefits that provides. america,se of south they are challenged by the external environment, particularly in argentina but also in brazil. the loss flat year-over-year. that was a bit of a victory given the degree to which the external headwinds were blowing against us in that market in the quarter. david: one of the things in your release is that you back off for return invested capital that you had set for 2020. what caused that and how far off of the targets now? bob: we are not backing off of the targets, we back off achievement of the targets by 2020. we are working aggressively to

a.ieve in percent or better margin we have pulled that ahead in the first quarter based on fitness, but we see external headwinds going toinst us and also the flow the issues of china and europe in the second quarter. our expectation will improve those businesses but it will have some impact on achievement of those targets in 2020. david: you talk to couple of times about fitness. will use$7 billion you to restructure the company. when will we have more details on that plan? bob: what we said in the second quarter and it holds true in this quarter, as we redesigned the business we will make announcements when they are ready to be made and share that publicly with all stakeholders. think we will see a clearer picture of the direction we are heading. we know where we are going. we have a good idea of the changes we want to make in the business, but it is very complex

and involves a lot of stakeholders. we believe it is best to execute that redesign to share things as and when they are ready to be announced. david: the last quarter might be the most important to ford. that is as electric vehicles move into mobility. where are you in that process? admitted you are running second. bob: i would not say that we are terribly concerned about where we are versus others. we feel comfortable about the progress we are making on the technology itself. in theally are also process of testing our business model to miami. we announced we will take that into washington dc. i think we fill comfortable we are on track to launch a commercially viable business around this moving people and goods in 2021. i think the progress we are

making is what we had expected. david: can you do that on your own or do you need partners? you have restructured your business a you can theoretically bring investment in. where are you in that process? callwe have set up what we a a llc where we could potentially partner with others. since we made the announcement of that, we received interest from a number of different parties. today, butannounce that is an opportunity and something we are open to. david: there has been a benefit to all of the companies including ford motor because of tax cuts. on the other hand, there are issues with trade. to what extent is that really impeding ford's progress? i know it has increased some of your materials costs. bob: we have benefited from the tax cuts, also from the u.s. mexico-canada trade agreement. the took a huge risk off of

table for us. we would still like to see that agreement addressed on steel and aluminum. to your point, the tariffs have affected us to the tune of about $600 million this year in terms of higher prices and what the overall economic drivers of the market would call for. then, we picked up another couple hundred million dollars of impact on tariffs to and from china. that has caused us to cancel a program we were going to have a product imported from china and met with another $150 million. probably to the tune of about $1 billion on the impact of ford motor company. david: as we approach the end of the year, you look forward to 2019. what you see is the biggest risk for the company and what is the biggest opportunity? what is the biggest upside to your company? the i feel so excited about progress we are making and the picture we are putting together

in terms of this redesign of the business. i can see where it is going, i'm excited about it. it will be different from what we had in the past. i'm excited about the traction we are getting in north america. that is the engine that drives the biggest -- is miss. -- business. we have all of these products coming forward that i think, combined with the redesign will give us the ability to rock. david: thank you so much for joining us. we really appreciate it. that is bob shanks, the cfo of ford motor company. caroline: great interview there. from one car company to another, we will keep a close eye on tesla in terms of a positive number for profit. romaine: that is right. these numbers look good. withitely on the top line free cash flow coming in a profitability for the first time in a couple of years. let's bring in the automotive analyst at consumer edge research joining us by phone.

how sustainable on these results? >> thanks for having me. good afternoon. the model three, they are moving ,ow, is at a higher price point and will come down over time. however, when you look at the magnitude of the cash flow generation and eps beat, even if you overlay some degradation and i would argue expected the degradation and pricing, i do not think there is a meaningful offset that would put them into a position where they cannot meet the cash concerns from the debt perspective. quite frankly, when you look at the demand curve, it has not flattened. everything we can tell from consumer survey work we do, we look at the top five trade-ins and the sales of those vehicles on said decline. -- steady decline.

the demand curve a stronger than three or six months ago. i think this bodes well for the fundamentals of the business. joe: the first line of the release from tesla says it's up his order for tesla. the model three was the best-selling car in the u.s. in terms of revenue. the story they are now telling is that the bulls say they have arrived. our cash flow and scaling issues from your perspective? this is a great quarter for them. i'm glad to see they have achieved profitability. a have a long way to go to becoming a top-tier auto manufacturer. i think they have a top-tier product and a great view on technology. they have a good entrepreneurial cars togetting consumers from dealerships.

i'm glad they stopped tinkering. perhaps what we have this delay of six months versus their prior guidance of 2017 have a lot to do with being focused on the machine. building the machining getting it perfect. just getting it to flow and working on perfection later, that was the key theme in the last three months and one of the reasons we see profitability and cash generation start to really be impressive incrementally. out of the woods, it is probably too soon to say it. caroline: do the shorts come out? jamie: i don't think so. the first question was a question we put into our preview that we anticipated. the model three pricing being high, is it sustainable. i think the shorts will be as loud as ever in the next quarter for sure. driven a lot of the electric vehicles and that is where all the tech and r&d dollars. are going caroline: great to have you -- going.

caroline: great to have you. this is bloomberg. ♪ is bloomberg. ♪

comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers.

"activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. mark: i mark crumpton with bloomberg's first word news. -- lawr current enforcement agencies have .dentified explosive devices is once described as a broader -- discovered near george soros. speak, the packages are being inspected by top explosives experts.

a major federal investigation is underway. the full weight of our toernment is being deployed conduct this investigation and bring those responsible for these despicable acts to justice. we will spare no resources or expense. mark: the president is calling on the nation to come together saying at these times "we have to unify." mr. trump did not mention any of the packages in his remarks. princerabia's crown calls the killing of jamal khashoggi a heinous crime. suggest the crown prince ordered his death in turkey. no wedge prince said will be driven between the saudi's and the turks. israeli prime minister, benjamin netanyahu, is promising to maintain a permanent israeli military force saying if it warned for israeli troops

stationed there, palestinian authorities would be "overrun in two minutes by hamas." addressing a conference, netanyahu said israel did not have its liberty to repeat its mistake in the gaza strip. the first power we will continue to hold is the power of security. -- tiny area west of the jordan. israel alone will be responsible for security. that means it is not just a question of pursuit going into palestinian areas. mark: netanyahu said the palestinian authority "should have all of the powers to govern themselves but none of the powers to threaten us." although the worst is over, the remnants of hurricane willow caused trouble for mexico.

emergency workers have been struggling to read leach -- .each remote beach towns there have been no reports of deaths or missing people, but the 120 mile per hour wind caused extensive damage and knocked out power to many homes and businesses. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. romaine: now we have breaking news here. second largesthe graphics processor is out with earnings. the revenue for q3 came in light. they are giving their forecast expecting revenue to be 1.4 5 billion which would be at the bottom end of what analysts were looking for. they are saying gross margins will improve for the fourth quarter. those revenue comforters --

numbers are coming in well below. joe: in addition to this massive plunge after hours, this was a $32 stock in mid-september. it has been getting killed. romaine: this is still the best performer in the s&p 500. be after thisnot move, but we will see. but it has been incredible. caroline: i like one element. much expectation was driven out of amd and what it means and crypto. blockchain was no driver to amd. it says the related gpu sales in the third quarter were negligible. joe: you have to wonder, whether thosere getting hit if miners are reselling or chips into the markets competing with the original once. caroline: secondhand. joe: for more on today's top stories, a series of suspicious packages were sent to various

democratic politicians as well as cnn. shannon pettypiece joins us from washington. thank you for joining us. what is the latest right now on this developing story? at the: we are here white house and we are waiting to hear from the president as he leaves for a rally in wisconsin. he should be coming out any minute. oftentimes, when he heads to these rallies, he will stop to talk to the press on the way to the helicopter that takes him to air force one. it is possible he might come out and say something. situations, the white house has struggled to set the right tone. the press secretary came out with a statement, the vice president came out with a statement that the president endorsed and retreated. then, there were remarks the president gave but he did not go into detail. we will look to ask them questions heading out to the chopper and also at the rally tonight. that will be a good chance to

see whether the president takes a different tone because we are searching, maybe 12 days until the election. the president's strategy has been to really try to fire up his base and a doing that by hitting these divisive issues like immigration, stoking voter's fears for their physical security. caravanhose being this and the possibility there could be terrorists or violent criminals coming into the united states with this caravan. a divisive approach is the one the white house has been trying to take, but that message is not can look good right now. we will have to see how he balances it. caroline: do you think any of this will have implications for voting at all? shannon: that is a great question because this is coming so close to the midterm election. if nothing else, it changes the storyline for a day or two. we will see how long this goes on.

and withnews cycles the voters having the attention spans so short, something happening like a month ago with the kavanaugh hearings which helped motivate republicans to get engaged in the election, seems like a distant memory. last week, it was to show the -- khashoggi disappearance, but now that looks like that will fade into the background. peopleextent it gets talking, but so much can happen in the next week and a half so it is hard to tell if this will even be in people's minds. caroline: shannon pettypiece, thank you with the latest from the lighthouse -- white house. a punishing stretch for markets. indices are lower yet again as worries continue to spook investors. the s&p 500 erased the gains it made on the year.

let's check in with mike regan. what caught my attention was that the nasdaq had its worst day since 2011. what caught your attention? mike: so much. i think it is another day -- people ask me what causes this so often? i don't think anyone can comfortably say what caused it to be this bad. there are signals you can point to. there was a pretty alarming saying orderse co are slowing down and we don't know if this is the typical semiconductor boom and bust cycle or more related to tariffs. that is a trigger point for a lot of investors. any signaled a trade tensions are starting to bite, and at&t coming out talking about a drop in mobile subscribers. it's hard to see or read.

many other stocks were stockforming, but a big taking a nasty tumble today. sure we will be treated to all sorts of theories about which quad funds people are blaming this time. if you look at all of the people's whose analysis say it will stop at this level, everyone is throwing up their hands saying we don't not know. romaine: if you look at the price action over the last few days, what differences are you seeing now versus recent selloffs? mike: utilities had a good game, partly rates came down to some degree. it was not really this sell everything you have type day. it is a little bit moving back into the defenses. caroline: and the technical indicators or bad. mike: right. everything else was oversold and

we kept selling off. big taremain is not a guy, i'm somewhat the a defender. there are some days were people say there is nothing really to stop this that we can see. that ita lot of concern is hard to identify any support. we are lower year to date. psychologically, that is not the best thing. mike: i'm like a broken record -- joe: i like a broken record on this. can't we just blame the fed? [laughter] joe: jay powell said we are a long way from neutral. were down 10% but fine up until then. our people talking about this? how there is a growing gap on how the fes is the world and how the market sees the world? mike: there is a certain guy washington, d.c. that would agree to view. joe: maybe he has a point. mike: it is certainly in the mix for sure.

notion -- people are not really blinking yet. at a stock flat for the year, is that enough to motivate them to change? it is definitely part of the concern that everyone has. overnights markets index swaps and whatnot, it is -- ang at at a dovish fed more dovish fed than a few weeks ago. we can follow the trends. a strong day in equity market and they could be right back where they were. i do not think the fed is blameless. great analysis their mike regan from our mliv blog. coming up, finding investment options. this is bloomberg. ♪

caroline: a quick check of the latest business flash headlines. at&t reported its first subscriber loss in five quarters. they also posted earnings missing estimates. this is a day after the archrival, verizon, boasted good results. they has also seen an erosion of their paid tv customer base. new york's attorney is suing exxon mobil over climate change. she is including -- accusing them of misleading investors. this comes after more than three years investigations. exxon has called the probe an attempt by bullies to restrict its rights to free speech.

shares of deutsche bank close at a record low. it cut its full-year revenue outlook and backed off a previous target for profitability. deutsche bank is on track for slowest annual topline since the 2008 financial crisis. that is your business flash update. i'm interested by deutsche's numbers. they are finally coming good in terms of rest -- revenue. romaine: i was crunching the numbers i was crunching the numbers today and when you compare some of the margins and the revenue and all the metrics we look at, they are all down from previous quarters. hasy major bank significance. joe: deutsche bank is hitting all-time lows. is a new ceo they came in and six months later, no turnaround. does anyone have any ideas that could change it? caroline: m&a seems to be the

.ne that people are discussing let's talk about investing. the conference in toronto brings together money managers and professionals to raise children for -- money for children with mental health issues. ed is at the conference. >> i'm joined by jeff smith, the es. of star board vloue. your of your position to 5.9%. what you want to see change? jeff: thanks for having me. that company is one we know well. a few years ago, we got involved for the first time. the company had issues, it had a scandal that had a whole bunch of cfos the needed a turnover and they had troubles with their financial statements. we worked with the company to replace a good number of board

members. at the end of the day, there were seven out of eight new board members from when we got involved. then, we brought in a new management team. we know the company well and we brought in the management team, and we think they have done incredibly well. we have done the heavy lifting of the activist part of it. my partner was on the board and he no longer is on the board. we have a lot of confidence in and the management team. then they announced an was a terrificch acquisition diversifying their portfolio into infrastructure and the networking. we think that is terrific. it adds to the growth rate of the business. ed: does that mean the market does not think it is situated? jeff: the stock has more than doubled from one we got involved. when the acquisition was first --ounced, the market

jeff: for us, this is an investment. we have a high confidence level in the company and we saw this as an opportunity to talk about it. i will presented at the conference and talk about why the company is undervalued. great company, a a fantastic management team that executes well. free cash flow0% yield which is based off of the numbers the company just presented at their analyst day last week. more importantly, the company announced or projected the numbers using revenue they could see. they talked about how they were investing in several different call options in their business. one of them is the revenue synergies they are not counting between the two companies.

they also have an investment in 5g. as that's rolls out, they spend a good amount of money on that. we expect they will get returns on that investment but that is projections, but the costs are in their projections. they also have come out with the first armed server which is an alternative to the intel server chip. they have a lot going for them, but the market is still volume them based on possibly lower numbers. ed: let's move on from a single name. how often when you do these is there a merry-go-round of which names you look at? let's talk more generally. you described your own investment path. the value pieces self-evident. jeff: at starboard, being a negativistic, it is important to

have this discipline. you cannot get involved in a company unless you have all three elements. value changes every day. a company will be cheaper and move around, but we will be looking at companies that we believe are going to be cheaper. is that we have to know we will do something different than what management has already done. something they are not planning on doing, we will do creating value at the company. most of the time that means improving cash flow significantly. critically, which is important as an activist, we cannot assume management will be willing to do what we say. we have to assume the worst case which is management will dig in their heels and be unwilling to do what we say, and we cannot get stock. management'sf w unwilling to work with us, do we have a clear path to make a change anyway?

can we win a proxy contest to make the change? ed: that's interesting. for board is known replacing board members. where you knocked over the whole board as the company, you have not run a single one. does that mean corporate america is getting too soft? jeff: i don't think so. i think what has happened is companies and their and visors have gotten really smart. ed: if activists don't have to go to management -- jeff: i would like to say smart. they are identifying which shareholders they need to listen to's and which shareholders they may choose to listen to. believep in the camp i of the ones of the need to listen to. if we get involved in a company, immediately call people who know us. that of the other people at other companies, and it could

also be there divisors. whomever. easy at thisvery point in time. we have been doing this for 17 years. it will be easy for them to find someone, one degree of separation, that has worked with us and knows us. what they will say to them is is real, israel, -- they care about what is in the best interest of the company and creating value. ed: and they might run the proxy fight. jeff: right. so you might as well listen to them and listen to their ideas. on the other side they will say they will run a contest and follow and will most likely win. if you will have to work with them one way or another, figure out if there is way to work with them without going to the contest. that is what we have found in the last four plus years. we have been trying to run contests, we get involved with companies we feel we may have

to, but in each situation, we are reasonable. towe find a board of we come an say your company is undervalued, we want to help and we have ideas and we believe we can help, more often than not, those companies are saying ok, let's see if there is ways we can do it. maybe this accelerate that process and planned. we knew we need to do something differently, maybe do something faster. maybe you guys can help us. ed: let's talk about when an investment does not go the way you hope it goes. how do you balance reputational risk of walking away and looking toothless versus getting out of a bad investment? could you guys are not normal economic interests. you are in there but proclaiming an alternative progress. jeff: we do believe we have a higher burden. is to represent the

interests of the shareholders. the board's job is the same but the reason we have an opportunity is become in some situations, the board is not necessarily fearing the shareholders and they may not be representing their interests to their liking. the shareholders are unhappy with the representation. ed: we talked about this in the past. being more involved in the process. today come the ideas from earnings? -- a lot of our i earnings lot of our earnings come from that's. we don't keep track of a percentage, but get a lot of phone calls from frustrated shareholders. if you are invested in the company and it is going the wrong direction and management does not feel like they are doing the right thing, they want

to have somebody they can complain to. and a somebody preferably who can do something about it. ed: we will get your number on screen. back to you in. jeff, thank you so much. caroline: ed hammond at the e capital event. our next guest is shery ahn. you still have the shanghai composite gaining 3/10 of 1%, and the nikkei is up slightly. you're thinking we may the able to -- and then come to u.s. sessions. we are now bracing ourselves for a big selloff. joe: the big picture is that everywhere else was already in a bear market. mans&p was like the last standing and out it has joined them. we're just catching up to what asia has been experiencing. shery: especially the shanghai

composite. it has been a pretty bad year. it had been one of the worst performers around the world. if not the most. when it comes to some of the people i speak to, they are not very positive to the chinese market just because of weak sentiment, it will take much more to turn around sentiment. especially in this monetary tightening condition coming from the u.s. selloff. but then, there are pockets of value and pockets of life across asia. one of the markets in asia seems to be japan because we are headed toward a strong quarter with a weaker japanese yen as well. caroline: if you want to catch more of shery ahn later, don't miss "bloomberg daybreak: australia" and "bloomberg isa."eak: a joe: i will be looking at economic data coming out at 8:30 a.m. alphabet,mazon,

intel, and a snap all report earnings after the bell. caroline: "what'd you miss?" that's all for -- caroline: that is all for "what'd you miss?" romaine: "bloomberg technology" is next. joe: have a great evening. this is bloomberg. ♪ this is bloomberg. ♪

emily: i am emily chang in san francisco. coming up in the next hour, the nasdaq posts its worst day since 2011. the s&p 500 and the dow wipe out their gains for the year, and tech leads the way down. plus, truly historic. that is how elon musk is describing tesla's third-quarter. their first profit in five years. can they do it again and again?