♪ emma: coming up on "bloomberg best," the stories that shaped the week in business around the world. politics moves market. brazil elect a new president well to many suitors announces lance to step down -- well leader announces plans to step down. >> the latest u.k. budget proclaims to and prosperity. ibm makes a major investment in the cloud. >> this is to me, all about resetting the entire cloud landscape. emma: tech giants are front and center in a patch lineup of earnings reports. >> this next year of a sick investment will take april away from those newsfeed -- this next

euro of basic investment will take people away from newsfeed ads. >> alibaba is not hitched to the economy and the consumption trends. emma: and the end. -- conversations provide insights of what might come next. >> the old stocks have some kind toway to limit your downside riyadh >> a lot of talk about trade wars, but if you look on the ground come at a. >> is still working very well. >> there will still be issues come my love issues. just give me issues. emma: it is all straight ahead on "bloomberg best." >> hello and welcome come i am taylor riggs. this is "bloomberg best," your weekly review of the most important business, news and analysis and interviews from bloomberg television around the world. let's start with a day by day look at the top headlines.

monday began with an unexpected shock when one of europe's longest standing political leaders give notice. >> the end of an era for europe. angela merkel stepping down as ahead of the christian democratic party in december after nearly two decades of the helm. also announcing this morning that she will not seek other political office after her term as german chancellor ends in 2021. issued that the red person to run a country, why should a red person to run the country? >> a good question to put to her. last 12 or 13 years, she has consistently said that the party leadership is necessary bound -- is necessarily bound with being chesler. now she is not running again for reelection as a party leader. she said that you would stay in office as chancellor, and she , buto serve her whole term you already starting to see competitors pop up. >> depending on who gets the

leadership, they could potentially challenge angela merkel for the chancellorship. unless you get someone in as party leader who is strongly supported and able to get the social democrats behind them, we may be looking at months of uncertainty for years to come in germany with this governing coalition. >> there are a host of political developments hitting specific markets around the world. bracing, leaders are for an excursion entry tensions with the u.s.. sources say the white house is planning. another wave of terrorist if the president's talks with president xi jinping fail -- running another whiff of tariffs if talks with the president fails. >> the west month for tech, since october 2008. >> we have a lot of trepidation going into the midterms and add to that, we have a lot of other unresolved issues, from brexit to the italian fiscal situation. we have added some risks in

terms of angela merkel's resignation. there is a lot going on and of t onse, a pervasive weigh markets is concerns about trade and fed tightening. >> facebook shares form from losses to gains in at least trading. founde and user growth early short of estimates although profit beat. investors seem to like what they saw. you.stood out to >> zuckerberg knows this next period for facebook will be a big investment period, that they will have to figure out how to grow in areas beyond facebook is itself the riyadh the understands that although revenue will slow down in the short term, there are bigger opportunities ahead. he said on the earnings call that the way people are sharing on face book, it is going to shift and be more in the ephemeral kind of sharing, like

on instagram stories. he is showing that basically, this next euro of facebook investment will take equal away from those knees -- newsfeed ads, which have been such a big growth driver. >> the bank of japan left its monetary stimulus unchanged as it up dated price forecasts confirm it would not be meeting its inflation target for years to come. policymakers seem to be concerned about rising risks. lots of noise is about financial stability. >> yes, and of course, financial stability is very important coming into this. it has a lot to do with the expectations of the boj to maintain extraordinary stimulus for so long. they are creating instability risk because it is tough for banks to make money in that environment. no change in that key rate as its short and dipped ever so slightly. note change -- no change in the 10 year jgb as well.

the change in the inflation forecast, now the boj doesn't the inflation having a chance for 2%, until at least 2021. their forecast for 2020 was reduced to 1.5%. >> we have the closing bell, you can see a recovery in stocks, building on a seven-day gain. after mr. percent, the dow ended 241 points and the s&p higher by 1%. >> the longest winning streak, two days for the nasdaq, since september 28 bit facebook leading the tech rally today after one of the worst months for the sector. why today, a second day of green? >> these were so beaten up in the selloff, and if you look at nge index which holds the fam names, plus a couple others, everyone of them is higher today. it is a best today streak since 2016.

that if you look at the month, it is also still the worst month since 2016. so two days, compared to one month. >> there may be a need for faster rate hikes in the coming couple of years. it had race at thre 575%. governor mark carney signaling that business remains more weary than consumers about the outcome of the uk's exit from the eu. >> he was definitely more hawkish than he needed to be. -- youally had the help want it to be more dovish and he had the help that we had a disappointing institute for supply management, the lowest since the referendum. i think he is right, with the kind of unemployment data currently enjoys and the with the history of being more rotate inflation than the u.s., once --arly -- the u.s. if some kind of job can be

done on brexit to avoid a cliffhanger up in march, he will probably have to stay in more than people have been expecting. a beating intaken at least trading after posting underwhelming forecast for the holiday a road. shares were also hit by news that the company will stop providing unit cell numbers for iphones, ipads and imax. the unit number billy budged from the fiscal fourth quarter last year even last year you could not get new iphones and this year, we did. >> exactly what it is a number.nting if you step back and think about it, last year at this time, iphones have not even come out yet, iphone x. not affect they has come out, went on sale for about one week and a half or almost two weeks, and still the numbers are flat, it is concerning. but if you look at revenue numbers, of course, upton in and percent. when you look at their data turning percent revenue

growth, you can see exactly why they will stop reporting unit sales. >> the economy added is stronger than estimated 250,000 jobs in october. the unemployment rate holding study. a solid jobs report highlights. the jobsghts our is so report but points not only to higher potential growth. you see this in the labour party up.icipation rate going second, it will make the fed policy discussions even more interesting because that will be the question of how much slack is there still in the labor market. finally, it will make markets more volatile as central banks continue to remove the noise cancellation headphones that they had given up for so long. great for the economy, it comes with its fed policy discussions and will mean that -- it comes against fed policy discussions. up and down. taylor: still ahead, as you review the week on bloomberg

guestavenue capitals explains what he things investors can find is an opportunity. plus, another financial crisis is seeing coming. he tells us write good come from next. and come up we dive deeper into a flood of earnings reports. general motors was one of the companies with a lot to like in the quarterly reports. >> there was an absolutely outstanding quarter. taylor: this is bloomberg. ♪

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taylor: this is "bloomberg best," i am taylor riggs. some morelook at earnings reports, starting with suisse.from credit >> credit suisse's turnaround is running out of steam. revenue and net income missed estimates in the third quarter and of course, little the banks are asking questions about global markets, which boasted an unexpected loss. >> the global markets have been very good at cutting costs. we are still number one in as the defendants the come number two in -- inare still number four time, in cash equities. so we remain a very, very good place to invest. >> so you will hit your target? , a 10%aid that in q2 return on capital in global

markets. given the market conditions come i think it is good. >> hsbc ceo, john flint, has finally delivered the growth investors were going for. revenue was up 9%. it indicates the lender has managed to increase revenue foster them cost in the dust faster than costs. it is also on track to deliver positive news for the year. >> all banks have a huge investment programs at the moment, multibillion-dollar investment programs. part of it is investment for growth. but we are still struggling to understand the roi on these huge investments. so if you are investing so much but all the revenue growth is offset by cost growth and the market does not understand what that cost growth is for, it is tentatively value distractive. if the market buys into the fact that investment is increasing, it is a positive for the shares.

>> let us give you the numbers from b.n.p. paribas. capital a quarter of a percent, 35 basis points. but net income, $2.12 billion, and global markets had its second-worst quarterly revenue since 2016. fixed rate or early contraction in bond trading. >> of course there are some reckless -- lackluster environments in europe on some of the activities and we compensate by deploying our resources efficiently. which is why if you look at the cost, you see the cost again in the specialized businesses of retail. or that they are reducing in retail. >> international australian bank earnings fell the most in a decade on restructuring costs and the bill to clean up misconduct exposed by the bank

inquiry. >> i think our underlying results, stripping the lumpy items, we have grown revenue nearly 2%. investment means that costs have gone up, but that is to invest in technology. i think it is a incredible underlying results. >> this company missed estimates, and is losing its unit. now faces unexpended sec investigation. >> the owner has learned a lot of respect from wall street, from what he did in danahur. but honestly, he was in building motor there. nothing ha he has inherited this labyrinthine conglomerate that he had to unravel the red and think he is up for the task but it will certainly be difficult. i think investors were certainly hoping to hear more from what he did than what they actually got.

maybe they were too optimistic about the ceo hitting the ground running. >> they can live with earnings earlier today and are being rewarded by the marketplace. stock is up 7% because they reported a big beat on expectations, revenues are up 6%, attractive margins. what are highlights for you as cfo of gm? >> it was an absolutely outstanding quarter. we had stents across all of our operating segments. -- we had strengths. it was driven primarily the strength of our pickups which we was only launched. we have had a strong rising environment as well and when you look at china, we had a strong third-quarter equity income of 500 million. gm financial, it continues to perform exceptionally well with a record earnings before

tax of 500 million. what you're seeing is our execution in a challenging environment and is are the numbers we it up today -- we have put up today. >> vw, third-quarter operating profit estimates, sales also beat estimates. a cooling chinese market and new emissions test in europe are also headwinds. you did not cut your outlook and your competitors have. what separates you from bmw and daimler? >> when you from the beginning of the year that the second half would be more challenging and we made a strong foundation the red we obviously traded fairly well. i think the situation might be different, particularly if you look at bmw and mercedes, to have an issue with import duties on exports from the u.s. we don't have that. but i should not comment on

other people's business. we have to fight for every customer and that is what exactly we do until the end of the year. search giant, baidu forecasting below estimates. this on fears that trade tensions will hit advertising sales. take us deeper into the numbers. reportedactually better-than-expected revenue, but the outlook for the fourth quarter disappointed. this is on concern that ad sales amidstart to slow the weaker economy and trade tensions. there is a sense that customers for baidu are starting to become more cautious on those sales particularly around the search engine and the newsfeed aggregation product. >> let us turn to samsung electronics now. just posted a quarterly profit but top analyst estimates. but it warned of weakness in the chief industry -- chip industry. how good are the numbers?

>> definitely a record high, both in terms of operating profit and also from the semi conductor profit. having said that, as you pointed out, there is some concern, increasing concern that prices the nextt softening in two quarters, and it will be challenging for samsung to sustain such a high growth rate in terms of profit. bp having its best days since 2016, earnings crushing, reporting a profit us must estimates and giving the company the confidence to fund its $10.5 billion u.s. show oil deal of cash instead of having to raise equity. >> things look well underpinned. we've had a strong quarter in terms of the plans related out. the finances are in strong enough shape to say that we have optionality when we created the deal to use cash rather than shares. this is a much cleaner transaction now.

it may go through that, and then will use it investment proceed to let the gear and come back down again next year. >> alibaba reporting second-quarter revenue that fell short of estimates, cutting its sales outlook for 2019. the chinese e-commerce giant claiming microeconomic conditions, saying the global economy is in a state of uncertainty. >> what you are seeing is alibaba not hitched to the economy and the consumption trends because what we are doing is digitizing, not only our own platform, but also the traditional retailers platform, enabling our retailers and partners to capture more customers and operate their businesses more efficiently. that is what we call our new retail strategy. that is an area where we are very excited aboutp♪

♪ >> welcome back to "bloomberg best," i am taylor riggs. this week, avenue capital cofounder and ceo mark bradley said done with erik schatzker for an interview. they discussed volatility in the market on the eve of the u.s. midterm elections and he said a slowdown in growth could create

opportunities for bond investors. ♪ slowdown, you're going readye bonds of drop quickly and fries, at least what we will see is we think will be able to try investment grade bonds trading today at par. once there is a problem with bonds moving up, will be of a to raise those at about $.60 on the dollar. >> yes, 60 to $.70 on the dollar. >> that means that there will be issues. more issues, give me issues. >> when does that happen, by how and do rates have to rise, where on the curb are we talking about -- are we talking about what the fed is doing, or a repricing of the middle or long curve?the >> as rates go up, i think it will go up about 100 basis points. >> market rates or? >> just fed funds come and have to raise rates by 100 basis points. as they do that, the cost for

companies, because everything is a floating rate, it starts moving up. what everybody will focus on -- right now what people are focused on is how much of the economy is growing -- how much it is growing by. >> three and a half percent. >> right. if rates are 100 basis points higher and the economy is only growing, let's say, at 2%. that missy economy is constructing by a threat -- that means the economy is contracting by a third. so all everybody will talk about is a slowdown, as opposed to the fact that you are still growing at 2%. was that changes, the psychological change happens, what you will see is the markets will start to focus on a -- when we hitting that? eric: you don't think the psychological changes happening now. we can look at what the fed is going to do with interest rates and if you have a confidence in that, predict that 100 basis points, it may only be 12 months, may not even be 12

months away. >> i think it has started, but you need more issues, you need to have more problems. i think we will start seeing that. >> is a 100 racist white increase overnight lending target, enough to trigger the distract cycle? >> at her know if it is the beginning of the cycle. to use a baseball analogy, if a great now, we are in the second inning on the distress side. eric: very early. >> yes, you want to get to the middle innings but we will get there. the question is how long does it take. ♪ taylor: coming up on "bloomberg best," more of the week's business news from around the world including don down the economic data from china and the eurozone. could the global economy be heading toward a crisis? -- oure to what

next guest subscribes weaponize crash could look like? >> the first casualty would probably be real estate. taylor:this is bloomberg. ♪

i am a family man. i am a techie dad. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. taylor: this is bloomberg best.

i am taylor riggs. is a noun for assessing financial risk and finding vulnerabilities in the markets. prior to 2008, and he sees problems today. he spoke with erik schatzker about why he is sounding the alarm on government debt and be it affect it could have on the global financial system. transferred from individuals to the states. do had at least a way to things, and to lower rates as monetary policy 20, which helped

because the cure of the structural problem was monetary policy and should be there is emergency measures. start tolater, we raise rates because you have to raise rates, you cannot keep them at a low level, it is unhealthy. someone has to pay the price, who will pay the price? a lot of people who benefited from that free money, many corporations. will first be real estate. real estate is very sensitive. the higher-end of real estate has been going down worldwide. people notice when they talk about it, it is not showing in the numbers. quantitative easing increased inequality. >> real estate is most vulnerable. >> higher-end, and then the rest of real estate.

what comes after that? >> the stock market, think about it. >> is that what we are seeing today? >> no. you cannot maintain the stock market in the presence of high interest rates. interest rates typically, my experience as a volatility trader for 35 years, the problem is high interest rate. volatility masks low interest rates. higher,terest rates go buying prices go lower. there is no safety in the bond market. is there anywhere you can see that is safe? be -- tell you what i do. i own some gold just in case.

just to be safe. i own some land that has not appreciated. i do not see anything except watching your cash inflation stocks,nd if you own some kind of way to limit your risks areecause tail bigger than they were in 2007, and before that. taylor: on a more encouraging note, mining executives at the international resources conference in melbourne, australia see positive trends for commodities. this is despite the ominous overhang of trade tensions between the u.s. and china. industry leaders spoke with bloomberg, starting with the ceo of rio tinto.

>> the mood is pretty good. a lot of talk is about trade wars, but if you look on the ground, in terms of aluminum and iron or, in copper, they are full. the chinese machine is working well. surprise thateal the chinese are pushing money into the system. we did not expect it, but it does not matter. produce their own iron ore and 175 millions tons of steel which is the highest ever. looking forward, which is more important, we have no doubt that china will lead the way. aluminum, copper,

and some of the minerals, we see significant upside. even if it is not clear-cut what will happen, it will generate more demand for our product. we are a long-term business. we take the long-term view. >> it feels like a shift from optimistic into investment, despite everything going on with the trade war. >> what we are seeing is that china, there is strong demand at record highs. we are seeing strong demand for iron ore on the back of strong steel production in china. we are investing in our business. that is another indication of

our ongoing investment and confidence in the industry. >> if you look at the physical demand of copper in emerging markets, if you look at growth of copper demand in china, north of 5%. the market is quite strong and robust despite the uncertainties around the trade war. some of that is related to the fact that most of the copper going into emerging markets is , it is put into properties and infrastructure and the expansion of the electrical grid. we had a favorable outlook on copper and believe what is happening in the short term with price, which came down from june and has been trading sideways is the result of the uncertainty around the trade disputes. fundamentally, the outlook for copper in the medium-term is favorable. the question that remains, copper will not be impacted directly why an escalation of the trade war, but to lower economic growth globally, that may have an impact.

the uncertainty has the price where it is today. taylor: with the u.s. elections coming up next tuesday, a ballot initiative in san francisco has been causing a risk in the tech immunity. wouldation -- prop c generate tax revenue for homeless services. it would raise funds with annual rent of you -- revenue of $50 million. twitter ceo jack dorsey has come against prop c. who supports the measure, if he thinks that charge has merit. icna crisis of any quality in san francisco. that is what is striking to me. we have seven billionaires and our city, that is incredible. we have hundreds of billions of dollars of market cap.

we are the largest employer in san francisco, not just the largest tech employer. we have a $100 billion market cap. twitter is worth 20 billion, stripe, 20 billion. thing is these companies can afford it. for us it is a $10 billion tax. these are immaterial amounts to us, $10 billion does not mean anything, that is less than the plane jack dorsey will fly around on. it is the money we need to make a difference in san francisco. is sayingrsey foursquare it becomes unsustainable, and they will not be able to stay in the city, which in his words would be heartbreaking. >> that is what i see with the homeless, the homeless are not getting the treatment they need. they need shelter and mental health treatment.

they need treatment for their addiction. kids on the street is the most touching part, these kids have to get into homes area we have the plan and know how to do it. we have been running successful programs in san francisco for the homeless four years there he and i have been involved with them. tens ofunded millions of dollars, we know how to do it. the mayor needs an emergency funding a $6 million from me to get a shelter open because she is out of money. if you look at other politicos supporting this, nancy pelosi is supporting this, dianne feinstein is supporting this, jackie speier is endorsing this. , we are also supporting it. the region's nation's two largest tech employers here, we are both supporting prop c, it

is right for business because homelessness has been tough on our business.

taylor: this is "bloomberg best." i am taylor riggs. in's roundup top news business and finance. voters in brazil went to the polls to choose a new president, and the results were not close. brazil has elected far right candidate bolsonaro. he had 56% of the vote and will take office on january 1. he wants to privatize assets and reform to fix his ailing economy. do we have details.

the markets on brazilian assets have rallied as a one way that. rally is int response to his economic advisor who wants to privatize everything. we do not have a lot of specifics. they want to privatize over 100 companies in the first year of government, but probably none of the major ones. none of the banks. we do not know how they will do this and how much money it will raise. >> philip hammond has declared austerity is coming to an end. beforelast budget brexit, the british chancellor tried to reassure voters and shore up morale by peppering his speech with a surprise income tax cut. >> the most important thing to remember is the way this money became available is in a change in the calculation of the

forecasts. we should think of this as per unit of gdp, more money created because things are calculated a way that has been amended. this money has been created and will largely be nhs. all of this is uncertain. if growth were to change them and thisre to go badly budget becomes no and void, we are back to square one. great area of uncertainty especially when you have brexit looming. the euro economy grew at its weakest pace in four years. we did not have german inflation data. it poses a problem for the ecb. if you are mario draghi, how do you square that circle? easy.would be relatively inflation, they

are looking in the euro area and doing negative rates to do that. now, inflation seems to be here, so mario draghi will have an easy answer and say we look at inflation, inflation is there so there is no reason for us to change course. then, if the euro area starts to says let's have a temporary slowdown, there was no fundamental change in momentum, it will be a big problem with high inflation and low growth. problem fore a big the ecb enjoy 19, but for now no reason to change course. manufacturing worsening in october. the effects of the trade war with the u.s. hitting home. frontloading is the excuse. >> clearly softness is emerging across the border.

new exports, new orders for exports is weak. the real critical take away from , there is only expected to be further demmer pressure on the china economy because the trade war is only getting going in earnest. the measures the chinese have taken are in the early stages and will take a while before the impact growth on the ground. more pain in the near term before it gets better. >> china's leaders are signaling additional significant -- stimulus measures. recent steps to shore up the economy. >> yesterday evening putting out cheered thent which politburo by xi jinping. the economic situation in china is changing, the downward pressures are increasing, and

they need to proceed with timely steps to counter this. it seems china's policymakers are up in terms of their levels of concern. now view a more aggressive approach as being necessary. >> auto stocks are getting a big boost today, surging on a bloomberg scoop that the world's largest auto market, china, is proposing a tax 25%. how meaningful -- to 5%. how meaningful is this? >> it could help. the trade war has bigger tariffs on cars, and that has raise prices on vehicles in china. the market itself has been slowing down. in some of the big cities, they have limits on registrations because of congestion in the cities. that has slowed sales down. this could help pick things up.

the trade war will create headwinds for anyone selling cars over there, but attacks going from 10% to 5% will get people out to buy some cars. >> yesterday, ibm announced it would require the open source software red hat $34 billion in cash, marking the second largest technology deal ever, ibm's biggest acquisition by far. >> we have been reshaping ibm for this moment. this is the inflection point to do it. if you look at our clients, chapter one of the cloud is over. the cost sitting they wanted to get done is done. market,is a $1 trillion and this is the moment to go after it. they need a hybrid cloud, they need with jim and i do together. we are the true open source portable answer for them.

depth ofe lack, the customer relationships because we are a new player coming up. we lacked deep industry vertical expertise and the overall level that we need to meet our full potential. ibm brings all of that. india looks to defuse tensions. indianual reserve bank of has been locked in a standoff in recent days as a bank regulation and bad loans. india's currency is not performing. what has led to the latest spec? -- latest spat? tightened norms that have hit the power sector companies. what that means is that the state run banks which have 70%

of the banking sector, remember india is going into an election next year. the government is trying to say, the banks need to lend more. can we get them lending so we get growth going into an election year? back on hopesre of a trade truce between the u.s. and china, after one phone call between the leaders. president trump has asked his cabinet to draft a possible trade deal with china and of the g20 summit. >> china responded today, diplomatic language. i think the next thing to look toward will be a speech from president xi jinping on monday at an export expedition. -- exhibition.

tother he uses it as a forum make a comment on trade, he is unlikely to mention the u.s. line name. -- unlikely to mention the u.s. by name. degree of there is a proportionality in this. seen in theave earnings season that is about to wrap up, clear signs of stress related to the tariffs. and to the trade war with china. of internale a lot debate, this is not something resolved and set in stone today.

taylor: this is the function in the bloomberg on the month, and

we see nine of the 11 s&p 500 sectors lower. sectors down 10% or more. official correction in october. are 30,000 functions on the bloomberg and we enjoy showing you our favorite. maybe they will be your favorites to. oo. this function will lead you to our quick take where you can get vast insight into timely topics. here is a quick take from this week. in june, 2018, saudi arabia, the only country that did not allow women to drive. women in the kingdom rejoiced that expected it was not meant to bolster rights as much as the economy. this could make for a formula that brings improvement for women in the mideast.

this is your bloomberg quick take on women's rights in the mideast. prince mohammad bin salman want , which includes adding women to the workforce. women need to be of the drive if they are going to be active in the economy. before the ban was lifted, a lot of women who were active in campaigning for the right of detained, and many have gone into exile. working isore women not mean it will happen quickly. the pressure for women to stay at home remains strong. requirementonsent which requires the dependence to male relatives. winning cannot marry, get a passport, or travel without getting permission from a guardian who could be the

father, husband, uncle, or even her son. 12 of the 15 countries in the world with the lowest level of female workforce participation are in the mideast and africa. getting more women into high-paying jobs may be the key to cultural change. >> the thinking is the more active women are in a economy the more they will help reshape how women are seen in that part of the world. >> many of this came as a result of the arab spring uprising that began in 2010 and 2011. >> women were on the frontlines of the arab spring and fought to have a say in how their society are reshaped. >> progress is most pronounced in tunisia. the country in 2014 the ,onstitution has equal rights

and is parliament overturned legislation. up. pay for speaking womenpt in 2018, complaining about sexual harassment. >> in the optimism that the uprising in egypt, and academic who cautioned about being overly haveistic, she said women been revolutionary in moments in the region. progress is slow and uneven. taylor: that was just one of many quick takes you can find on the bloomberg. you can find them at bloomberg.com along with all the news 24business hours a day. that is all for "bloomberg best."

thank you for watching, i am taylor riggs. this is bloomberg. ♪

emily: i am emily chang in san francisco and this is "bloomberg technology." coming up in the next hour, apple shares take a hit after it reports a lackluster results and the iphone maker says it will no longer share how many iphones it's selling. we talk about the tech giants next era. plus, alibaba blames the global economy saying conditions in a state of uncertainty. we her