♪ this is "nightly business" sue here. october surprise? the year's tenth month is off in a doozy for investors, and this time around, a volatile presiden race could spawn some scary ups and downs. we'll tell you how to prepare your portfolio. three years after bankruptcy, detroit is showing signs of life. we'll take you there. d taking a chance. how one company gambles on a startup and turns its employees from skeptics into believers. all that and more for monday, october good evening, everyone. and welcome. i'm tyler mathisen. sue herera has the evening off. october, it conjures images of changing leaf colors, fall

sweaters, and some scary moments occasional for investors. after all, october has brought frightful events, like the 1929 stock ma crash, black monday in 1987, and a 500-point drop on the dow, thanks to the so-called asian contagion in 1997. today brought none of those but the month did start out on a down note as investors digest economic in news showing spending fell for a second straight month. tepid manufacturing numbers and oil prices hit a three-month high on renewed optimism opec may reach a deal to cut production a in, the dow jones industri average fell 54 points to 18,253. nasdaq was off a modest 11, and the s&p 500 off 7. david kelley joins us now to talk more about the markets in october and whether ot the upcoming presidential election wi have any meaningful impact on trading this month. he is the chief global strategist at jpmorgan funds. david, always great to see you.

so how be the election? do you think that it has the potentia to it unsettle the markets? well, it could. i mean, we've looked at the data going back to 1990, and october is on average more volatile. that really has a lot to do with october of 2008, really extraord month. other than that, actually electi year october is -- don't tend to be that volatile, relative to, you know, the rest of the year. because usually, you know, people want to keep their pattern dry. also we're dealing with two relative conventional candidates i th this time around, it's a little bit different, because if the secretary clint wins, it will seem much more like a continua of th status quo. i don't th you get much volatili out of that. if donald trump wins, though, th be a lot of uncertaint about exactly what this all means. and, of course, markets hate uncertaint we'll have to watch these poll numbers. if the race tightens up, i think you could see more volatility,

just because of that increase in you point out in your note today that you really can't get prosperous by saving any more. that's a loser's game. so you've got to put a stake in the ground and do something. wh are the somethings i ought to be consideri now with my portfolio? well, i think the first point is really important. that traditionally, you made about 2% over the rate of inflation, jus by keeping money in a savings account, or in a cd. now 2% bow low that. you're losg money every day you wait to decide. we think the u.s. stocks have some potential to run. we like those, particularly as some of the economic numbers overall are actually getting better. an earnings ar doing better. so i think that looks good. but also, long-term, we really like international stocks and emerging markets. they have been held back. but if you look at the global pmi data that came out today, we have numbers from a lot of different countr overall, the global economy does seem to be waking up.

so a lot of international stocks that have lagged behind. >> where internationally between developed mar and emerging markets, which would you tilt toward? >> i think in the long run, probably a little bit towards emerging markets. frankly, they e cheaper and more beaten down. and within developed markets, we really like the european story still, despite the problems of the banking sector. eventually european central bank is going to have to help the european banking system back to health. and when it gets back to health, that will help the european markets a lot. i'm not quite so positive about japan. theye long-term, very significant structural problems. >> give me 30 seconds on where fixed income sits. >> i think you have to have fixed income because something could go wrong. you have to be pretty pragmatic now. things calm down and the stock ma starts moving up, we could have inflation. things like emerging market bonds, high-yield bonds, within the fixed income, what i think is an improving global economy.

>> great advice. thanks very much. david kell with jpmorgan > ao sales in september fell, despite big discounts from labor day sales. detroit automakers, general motors, ford and fee at, chrysler, all posted sales declined year over year. but toyota showed a rise, and nissan a 5% sales gain for the month. au data says overall sales ca in at a adjusted rate of nearly 7.8 million, down from just over 18 million last september. the fake accounts scandal co to plague wg. today the sta of illinois says it wl suspend $30 billion worth of investing for one year. california also suspended its relation for a year. the illinois treasur says wells fargo stands to lose millions from the move and says this might not be the end. >> next up, we're looking at is sending in rp to look at their

books to make sure they're compliant with illinois law and if not, will have problems. >> shares of wells briefly 52-t 4383. sha of deutsche bank took a breather after a furious rally last week when news leaked a po settlement between the bank and u.s. justice department some of that enthusiasm faded over the weekend, and, in fact, accusati flew at the u.s. from german politicians. julia chatterly has more from frankfurt. ♪ >> reporte deutsche bank stocks under pressure once again in the u.s. trading session today. after markets which were shot today from a holiday in germany. i think this is optimism leaking away after the rally we saw on friday amid reports we could see some kind of quick settlemen

deutsche bank and departmejustice. it's going to take a bit more time. there is a silver lining, though. i think that is that after all the rumors swirling, the bar now for investors to be satisfied with a number here is higher. even if it wipes out more than $6 billion worth of cash reserves that deutsche bank has set aside. deutsche bank execs have traveled to washi this week, which is also important, even the geography could play a part in facilitating tas tw the two sides. here in frankfurt, i can tell you the accusations flying thick and fast. the main one being that this is the united states waging economic war on germany. and i can tell you, a big fine here will be seen as politically toxic for angela merkel. get this. from her deputy this weekend, he said, "i don't know whether to laugh or be furious that a bank whose turned speculation into a

business model is now complaing that it's now the victim of speculation. the message here, zero sympathy for deutsche bank and help this bank angela merkel at your peril." e botm line, guys, ultimate we need to see what the settlemen sum is. for "nightly busine report," i' julia chatterly in >> and today on cnbc, jp chase coe says he thinks deutsche bank will be fine. >> there is no reason they shouldn't get over its problems. they have capital play liquidity and we want all these banks to get through because it's better for everybody we move on and help do our jobs. >> the british pound sent reeling today to a 31-year low against the dollar and hitting e euro in three years after theresa may said the

process to withdraw from the european union will start in the first quarr of next year. that means britain will be out of the eu by mid 2019. the supreme court is back for its fall term, and has plenty of big business cases on its docket. hampton pearson takes a l >> reporte sti shorthanded suprt begins the fall term with about 40 cases on the docket, and me o two high-profile business cases involving insider trading and the long-running patent dispute between samsung and apple will be heard in the first two weeks of the new ter first up, insider trading. in salman versus united states, the high court must decide, does a person who leaks inside informatn have to receive a tangible personal benefit for someone who trades on the tip to be libel for insider trading. the justices must resolve conflictg rulings from lower courts.

>> in the u.s. v salman case, the major issue there, what is considered to be a benefit in the sort of framework of insider trading. >> reporte on october 11th, the samsung-apple battle over smartpho powers comes to the supreme court. just how much should is samsung pay apple for infringing on iphone patents used in samsung smartphone samsung wants those damages limited to th value of the three components. apple says it's the whole design of the product that counts. the design patent law dates back to the 19th century, a decision by the supreme court that has a ripple effect across the technolo industry. >> the danger is, in a world of complex products with many different components, you could create a situation where, you know, a company is effectively terrified tha it's going to be hit for all of its profits, even one of those components is later held to be infringing on a

in recent days, the high court added a trademark free speech case involving racial slurs that could involve the ongoing battl over the name of the nfl washington redskins to its calendar. the court public session lasted just a few minutes today. chief justice john roberts announci the beginning of the new term, and the court issuing orders declining to take up the issue of pay for college athletes. and the high court also turned down the obama administration's request to rehear the president' plan to spare deportatn of millions of i am grants in the country illeg court observers say the ideologica split among the eight justices and the need to find consensus could lead to cases being decided on very narrow legal grounds. for "nightly busine" i' hampton pearson at the coming up, hillary clinton takes on big corporate names, behaving badly, she say

♪ new york's attorney general s ordered the trump charitable foundation to stop fund raising in the state immediately. the ag's office says the foundati is not properly register to do so and has 15 days to supply the delinquent paperwork. the trump campaign says it is concerned about the political motivation behind the investigat but the foundation will fully coo well, over the weekend, a "new york report said republic presidential nominee, donald trump, claimed a tax loss of nearly $1 billion back in 1995. the "times" said that loss could mean he paid zero federal income tax for nearly two decades. the move is legal, and eye-openin frank explains how the

tax code can turn losses into >> when most taxpayers lose money or income, they never get it back. but donald trump's latest tax controvers sho that for certain wealthy taxpayers, a loss can actually be a gain. the "new york" reporting over the weekend that trump reported a net operating loss of $916 million in 1995, which he could then use to erase income tas on up to $916 million in earnings over 18 years. and it's all perfec and thanks to a little-known but very lucrative part of the tax code, called the net operating loss, or nol. nol is was first enacted in 1918 and only applied to two years of income at that time. the idea was to allow businesses to it report a loss in one part of the calendar year they could then make up in the next part of the ca year. so nols allowed them to smooth over their tax payments. but over the years, it's expanded and exploded in size.

in 1995, taxpayers could deduct losses for 18 years. now it's more than 20 years. taxpayers claimed about $50 billion in nols in 1996. in 2014, that number had ballooned to nearly $200 billion. the losses are helpful to the wealthy and wealthy business owners like trump whose company and income taxes flow through their personal income tax returns. taxpayers can only apply these losses to companies they n or control like llcs, s-corps and c-corps, not could be confused with investmen losses, which can only be used to offset capital gains, but only reduce your personal income tax by a maximum of $3, real estat developers like trump found ways to turbo charge the nol provision. designated real estate professi like trump can deduct multimillion dollar intere payments on their building loans and depreciation of their real estate so they can report large paper losses while

making huge incomes. while use of nols is not uncommon among the wealthy, the magnitude of trump's losses are almost unheard. accountant have said it's well over $100 million. the trump campaign saying, quote, mr. trump is a highly skilled businessman who has a fiduciar area responsibility to his business, his family and his employees to pay no more tax than legally we still don't know exactly how trump generated the loss, and given that he has refused to release his returns, we may never have an answer to for "nightly busine" >> hillary clinton took on what the campaign calls bad actors, companies like mylan with its epipen price increases and, of course >> look at well really shocking, isn't it? one of the nation's biggest banks bullying thousands of

employees into committing fraud against unsuspe it is outrageous that eight years after a cowboy culture on wall str wreck our economy, we are still seeing powerful bankers playing fast and loose with >> eamon javers joins us now from washington. eamon, what specifically did ms. clinton propose today? >> well, she did a couple of things, tyler. one is by bringing up wells fargo, which is a scandal that's been in the news recently, but that a lot of americans won't have heard of, she was able to e that back to 2008, which is a scandal that a lot of americans will definitely have heard of and are still feeling some pain from. and really hammer home that point politically. but in terms of the specifics, she raised a number of the specific ideas that she would like to see, including getting companies to do more profit sharing with the employees, and also taking on this idea that companies are able to force employees and customers into

arbitratn instead of into the courts. that's somethi she would like to change. we have a sound bite of what she said on that point, and here it is. >> we are not going to let corporat like wells fargo use these fine-print gotchas to escape a and, in fact -- this is now common practice across a lot of industries. >> she also said she would like an exit tax for companies that leave the country, and she would like to do something about companies offshoring jobs, as well, tyler. >> did she pick up on the tax business involving mr. trump at all in her speech? >> she sure did. she said this is donald trump to a t. she said this is a huge boon for the campaign. that's exactly what she did on the campaign tra today. >> mr. trump firing back in his way, saying he has no obligation to pay more than the tax laws insist he do.

>> yeah. trump today said something interest on this point. he said, yes, the tax code is unfair, and i know, because i'm a beneficiary of that unfair tax code. and that's why i'm the guy to fix it. contrasting him with hillary clinton, who he says has worked in government her whole life, and has nev created a job in the public -- in the private sector. >> eamon javers, thanks very much. we appree it. >> you bet. bass pro shops hooks rivalca bellas, where we begin tonight's market focus. bass will pay $5.5 billion, forca bellas, under pressure to put itself up for sale from the hedge fund elliot management. it bought an 11% stake in the company last year. shares of ca bella up to close at 63.18. speaking of deals, henderson group and janice capital will combine a merger of equals. the british-based henderson will buy its u.s. rival, janice, in a $2.5 bil all-stock deal, a

move that will help both firms cut costs. the combined firm will have $320 billio in assets under management janice shares surged more than 12% to close at 1570. facebook's dipped into the e-commer world with the launch of marketplace, a platform that let's users buy and sell goods with other nearby users. marketplac a feature available only on smartphones for now, will provide a more formal space for user-to-user exchange, settler to ebay and craigslist. shares of facebook up 50 cents to 128.77 while shares of ebay fell 1% to 32.56. the european union's antitrust authority said today pick up the investign into the $130 billio merger between dow chemical and dupont after the companies pro the missing informatn requested by th the eu regulator said it will decide whether to approve the deal by february 6th.

shares of dow rose 59 cents to 52.42 while shares of dupont up 87 cents to 67.84. >> for bankruptcy several years ago, the city of detroit is now under going a massive reinvite thanks and as brian sullivan tells us, with the help of the city's public and pr detroit filed for bankruptcy three years ago. but given all the growth, it feels a lot longer ago than that. comp and their workers are once aga movin downtown, and restaura and retailer popping up everywhere. quicken loans founder, dan gilbert, is the man behind much of the rebirth. he had been buying and rebuildi square feet downtown and his greek town casino and hotel complex has become the centerpiece of the action. we asked gilbert how much more still needs >> we always try and prove, no matter who you are, new york

city, always trying to prove things and get things better. of here, certainly downtown, we have made substantial progress downtown, midtown. but the neighborhoods are just a huge part, if not the majority part of detroit. and so, you know, you have to have jobs in the central core, because wheth you live here or live in the neighborhoods, these are where the jobs are. even jobs in those neighborhoods are great, but we have blight coming down in the neighborhoods and we have new residential neighbors actually going up for the first time in decades here. . >> for the first time in 60 years, detroit may have stopped shrinking. population is holding steady. and local college graduates are sticking around, instead of leaving the state to find opportuns elsewhere. this family is another reason why. they founded little caesars pizza and founded the red wings hockey team. their district detroit program has committed more than $1 billion to build apartments, office space, retail and a new hockey arena. and says the chance the detroit pistons basketb team could

also be movi >> i hope it happens. and hope to, you know -- i hope he's got something to announce before long. >> but all this development hasn't come without criticism. while downtow takes off, some complain that the poorer areas are, again, being forgotten. gilbert says that criticism is unfounded. >> it's all connected. i mean, the only difference between the neighborhoods and downtown is, you know, people's -- when you look at a map and say here's the neighbor that's -- here's downtown. basically, one city. the mayor has done a great job of getting that blight down. to me, that was the number-one thing that had to happen. almost 11,000 homes taken down the last few years, two or three years. that needed to come down. there is a more to go. >> it's obvious there is still work to be done. nobody is saying detroit's comeback is complete. far from i r the first tim in a long time, it's beginning to feel like detroit's economic engine is once again firing on all cylinders. for "night" in detroit, michigan, i'm brian su. and up next, we'll show you

how one startup is trying to make it easier for employees and employers to navigate company . ♪ finally tonight, it is open enrollme time for many companies, so what would you if your company said it was droppin one of the big firms to go with an insurance tech startup? as bertha coombs tells us, one video game-maker did just that and loved it. >> only thing i would change there, actually -- >> repor gina hope loves her job, marketing games, like "call of duty." her health insurance was another thing. he child's provider was out of network.

>> i have a son with special needs. it's a learnin process every time som the picture. >> reporte whe they switched to a new insurer, she mentioned to hr that once again the provider was not covered. >> next thing i know, i get an e-mail back that they had signed up my son's provider and brought them in network for me, without me even asking, without me making a phone call. and this year it saved us $17,000. >> reporter: that kind of service is why active vision's hr chief took a chance on collec health. >> we don't have all of the muscle power like a microsoft would have to push a carrier around to push them to do mak sense to us. but i have the mentality that we deserve that kind of treatment. >> reporte launched in 2015, the san francisco-based benefs manager uses a data-driven platform to make managing health benefits easier for both employees and hr departments.

>> we have the luxury of starting from scratch, and we can create a system that's built on modern software that allows us to create that member experien that feels like the best of consumer tech products. >> reporter: they also have the luxury of just focusing on benefits. because they pay larger insurers, like blue cross, to use their medical networks. that allows collective health to focus on using its data to help its clients better understand what's happening with their health and wellness benefits. like a lot of self-insured companies, activician blizzard offers its employees dozens of wellness programs. collecti health helps them weave them all together in order to make them more effective. get somebody wh we recognize fro our claims data, looks like they're going to have a major surgery coming up, we can direct them to get a second opinion. >> r their old insurer was not as proacti. >> our healthy pregnancy utilizatio is triple what it was under our conventional

carriers' watch. i know the cost of members that are continuously engaged is actuallyr by about $800 per member that's continuo enrolled in our healthy incentive program. >> but maybe the biggest payoff? >> i've never raved about my insurance previously. but just -- that they treated me like a person, and that my situation was unique and special -- >> repor for "nightly report," i'm bertha > and that is "nightly for tonight. thanks for bei with us. i'm tyle we appreciate your viewing. .e'll see you back here

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