Ebola victim at the hospital and the person is now in isolation. The centers for Disease Control sent a Rapid Response team the next time someone comes down with ebola. For any hospital, anywhere in the country, that has a confirmed case of ebola, we will put a team on the ground within hours with some of the worlds leading experts in how to take care of and protect Health Care Workers from ebola infection. There isnt a warning from the World Health Organization that says a number of ebola cases in west africa may jumped to 10,000 per week by december. New rules aimed at socalled tax aversions may scuttle a 52 billion deal. A drug maker says is portable consider takeover shire. Abbvie says it needs to look at u. S. Regulations that discourage such deals. The news sent the shire shares plunging. A prophet for bank of america. 160 million was reported in net income. Bank of america agreed to a six point 16 point 7 billion settlement of mortgage investigations on Brian Moynihan said the earnings power would become apparent once a got the legal stuff out of the way and under control. Shares of intel are up almost two percent in premarket trading. It projected thirdquarter sales that would beat estimates. Intel also said thirdquarter sales set a record. We are growing the client market and shipped over 100 million microprocessors for the first time in our history and that led to record revenue and 30 operating growth versus one year ago. Bysales are being driven companies, corporate customers who are replacing old pcs with new ones using the latest chips. In hong kong, prodemocracy demonstration turned violent again. Policed used pepper spray on protesters and at least one was repeatedly kicked and beaten down. For a five people were arrested and the demonstrators have been occupying key streets in hong kong for almost three weeks. It seems the activity was dying down but not anymore. The protesters are demanding for your elections from beijing. European stocks are struggling this morning im ascending their losses to a seventh day and falling in tandem with the selloff in european sovereign debt pushing yields higher. That is dragging down u. S. Futures this morning. And we arehas more trying to make some sense out of a pretty disorderly market. Thought it was going to be a fairly calm day but we have u. S. Futures falling over the last two hours and they are now at the lows of the session. It looks like we are setting up or a lower open. The macro nature is a concern but you also have companies perhaps abandoning their tax aversion deals. Some of that is being unwound and it is playing out for the pharma companies. Dow futures are up by 108 points and we continue to monitor this selloff. A big story outside of stocks is falling oil prices, down another four percent yesterday. Brent crude extended its biggest oneday collapse in seven years. Opec is not done a whole lot in terms of arresting this price decline. Instead of cutting production, saudi arabia has been cutting prices leading to questions about whether it will try to gain market share the way it did in 1986. The country has not said that explicitly but that is certainly something having an effect on Certain Companies within the equity markets, specifically energy companies. Some people blame the recent increase inn the the dollar pushing commodities. They say it is hat outstripped the fundamentals. Thank you so much. It looks like the largest tax aversion deal on the books could be scrapped. Considering scrapping its planned takeover of Drugmaker Shire in the u. K. Which would be the biggest yasualty of the u. S. Treasur plan to crack down on tax aversion. Peter cook has been following this story closely. You can say it is a win for jack lew . Not quite yet, but you can effectively say that jack lew has loan up this deal for the moment. Has blown up his deal for the moment. Abbvie said it was effectively going to reconsider the takeover because of changes in the tax rules that jack lew announced back onset timber 22. Timber 22. This caught investors by surprise. Its the biggest drop in 12 years for the company and not everyone expected this would happen. Told a month ago, abbvie its employees this value would this deal would move forward. Comedies are having second thoughts at a closer look at what the tax rule changes are and we see some spillover effect on the shares of other drugmakers that could be in version targets. Is oneneca, for example, and is feeling pressure today because of this action by abbvie. its not a done deal and they are reassessing. Billion fee of this deal breaks apart. Are we going to get any reaction from the Treasury Department . I would not expect any. The treasury does not comment on specific deals but act on september 22, jack lew predicted there would be some companies that reevaluate whether these transactions move forward and that is exactly what the treasury is hoping for. They want to send a message to others. Could the Treasury Department actually go further in trying to target more of these inversions . We heard back on september 22 that these were simply the first steps in its efforts to try to limit inversions or make them less financially attractive. We have an waiting for word on what else they might do. What happened in this instance was they put limits on hopscotch loans, the ability for companies to access foreign earnings and loan it to the new foreign entity. That is what happened here and thats why this deal is not as attractive. Thank you so much. Financials are remaining in focus today with earnings just out from bank of america. The Company Posted a surprise thirdquarter robin on stronger revenue from increased trading. Brian charles is joining us now. He has a market perform rating on bank of america shares and also is erik schatzker. Moynihan has brian finally been vindicated in his strategy. Would you say this Earnings Report says that . I think its too early to take a victory lap. Bank of america still trading at a discounted value. That means investors have values have questions about the bank is future earnings power. The fed has not raised Interest Rates and that would be a big help. He is making progress. If you look at the legacy assets, the socalled bad mortgages that bank of america originated or owns, that numbers going down. The number of 60 days to like what laws is dropped by 44 yearoveryear. He is shrinking expenses and got rid of some 300 branches in the course of the past year. There are some 3600 fewer employees than last quarter which may sound terrible. He has a bloated bank relative to the competition. Thats what he is supposed to be doing. It needs to become a smaller, more efficient and more focused bank. That is what bank of america is doing. It is not out of the woods, look at the money they set aside to take care of the mortgage settlement with the department of justice last quarter and there is still some legacy exposure that they have to deal with but under all of that, there is progress. Maybe with a small peak of progress. Do you agree, brian . I think it was a good quarter i think there will be challenges that Brian Moynihan has to face. He was given a large task when he was made ceo. Ken lewis had acquired countrywide and generated but it was an incredible challenge for several years. With the doj settlement, he has put the focus exposure the company faced a side. There is an 8. 5 billion settlement for customers that requires final approval. For the most part, the legal costs seem to be more wellknown . Yes, the legal costs associated with mortgages. There are costs related to rate manipulation charges and that will be ongoing. Willegal expenses there probably never go away but the mortgage exposure is better. There had been an independent chairman was gone and Brian Moynihan is checking is taking over as chairman of the board which is what jpmorgan has on wells fargo has. Its more in line with his peers. Citigroup now becomes the outlier. Thats a recognition of the job, the good job, it seems that Brian Moynihan has done. You can look at bank of america in and of itself even look at bank of america relative to its peers. In this quarter, it did somewhat well relative to its peers on trading. On equities and fixed income, bank of america had a good quarter. It depends on how they did one year ago. Fixed income trading is up 11 at citigroup which was a positive surprise yesterday. If youll be early rally in citigroup shares. Net Interest Income after wells yesterday,pointed everybody was concerned that bank of america would be subject to the same forces but it increased. Over the previous quarter. Once you take away the litigation charges for this quarter, it was a good quarter. It came in at a one penny loss. Once you take away the charges, they are making progress on their net interest margin, on their asset quality, while Building Quality and adhering to regulations coming online. Ryan mine on is joining a good job. Brian moynihan is doing a good job. I think it was a good quarter. Thank you so much, Brian Charles. A great big thank you to erik schatzker. Facing a, banks are new challengethe rise of electronic payments. We will have the former apple ceo john scully and what he thinks about all of the competition. Hes not just a former apple ceo buddy r. I. M. Pepsico in another life and we ask him how he thinks snacks and soda giants should respond. Stay in the loop. Alipay is looking to make headway in the united states. The companies introducing something calledepass, and electronic Payment System that connects chinese consumers with u. S. Retailers. Bloomberg sat down with the president of alipay to explain this goal. Epass is a basic service to u. S. And european merchants tothat they can use epass have access to chinese consumers. Everyone in china has the alipay account so by allowing u. S. Companies to accept epass as a way of payment, they can transactions with the chinese consumers. To bring this move into context, i want to bring in my guest post this hour, former ceo of oh pepsico and apple, john scully. He is also the author of moonshot. We will go through your book in a moment but i want to get your take on this. I thought this eve pass was interesting. Chinese consumers being able to buy, another way to buy u. S. Products. Is it a matter time before we get American Consumers to buy alibaba from chinese consumers . I think this is a smart move from jack ma. They own a company in a circle of trust. Alipaythe companies is and it touches 800 million customers in china and its about 80 of the ecommerce sales. Its a huge deal over there. Now they are bringing it here and targeting just the chinese consumers. It could well expand way beyond that. Watch very carefully what jack ma does. He is a smart man. Paypal is watching this carefully. It is nowhere when it comes to doing anything in china right now. Youve got alipay and a stronger alibaba coming into the u. S. Market. It is a long as is a short time until paypal disappears . I dont think they will disappear. Its a smart move to split and it will be a valuable company all by itself. Its typical for American Companies to become leaders in china. Jenna picks alternatives to Big Companies like why do and others. It will be hard for paypal to crack the china market but it will do very well in other markets around the world. Another tech company that is getting into the whole mobile payment area is apple. We are waiting for the announcement tomorrow. It sounds like they will unveil more do details on hardware, on the ipad and the imax but people will be focused about what they say about apple pay. Apple is different. Apple requires a special piece of hardware. Its called nfc Near Field Communication and it enables secure wireless transmission over short distances but youve got to get the retailers to install special readers. Apple has cleverly put together 220,000 large retail accounts with the largest retailers, all the major credit cards behind it, so it has laid the foundation carefully. Its a great experience but it will be a long time to build this out to 3 million retail outlets in the u. S. We got this chart which is fascinating which shows the number of accounts apple has versus amazon and others. You would think amazon would have more accounts because it has been around longer. Apple is the white line and it has that much more growth in accounts and that huge gap between apple and amazon just goes to show if there is any company that can conquer that business, wouldnt you think it would be apple . Sure, but you have to remember what you are measuring. Amazon is primarily online whereas apple sells through retail. Has 800 million credit card names on itunes that it can wire into this new world of apple pay. Apple has come up with a great interface, one touch to do it so apple is doing smart things here. There is going to be competition out there and no one will build out a retail infrastructure with new reader devices unless they can work on other products like android, not just apple. Stay with me through the hour because we will talk about more than just apple. Up, scully and coming walmart is holding its annual investor meeting today in the Worlds Largest company is expected to tell shareholders that size does not matter. We have more coming for consumers. Walmart is facing an allstar lawsuit over some of the shoes it sells. Stay in the loop. You are watching in the loop congo on Bloomberg Television, streaming on your phone, your tablet, and bloomberg. Com and now available on apple tv and amazon fire. Good morning, im betty liu. The chipuisition in industry, qualcomm has agreed to csr. K. Chip maker, the deal will help qualcomm expand in the technology for connected appliances. Citigroup co. Resident is planning his departure. He is close to retiring according to a person familiar with the matter in the news comes as the citigroup Mexican Branch fights fraud allegations. The citigroup ceo called the fraud accusations appalling. Nikes converse is suing walmart and h m accusing them and other retailers of selling knockoffs. We all one of those when we were teenagers. To 1917. Ers date back it still current 10 cool. Its 26 points past the hour which means we are on the markets. Investors have a nervous about the market and whether this is a real correction. Is it the beginning of a bear market or a pause onto a further bull run . S p futures are off over half a percent ahead of the opening bell. We are on the markets in 30 minutes. Walmart will host wall street analysts at an investor day where walmarts u. S. Ceo as well as the ceo Doug Macmillan are expected to answer questions on their strategy and outlook. Julie hyman is covering the walmart meeting for us. Scully,h me is john author of the new book, moonshot. He says the customers in control and they will have a better shot at success. That is what walmart is trying to do . And you would think that would be obvious but this represents a change in retail and a change in walmart. Walmart at the Shareholder Meeting earlier this year said before we would present what we would present in the customer, and now is more customer driven. I went to an event recently for walmart where they showcase some of their holiday food items. Items surprised me. You had things like french macaroons. You can buy them frozen at walmart. They had appetizer pops that were frozen p uffs which is at. Mommy e damame Jack Sinclair said our customers wanted all. They want choice, they want these exclusive products but that wanted at a low price. It is interesting that if you look at the income of the walmart shopper, as you would imagine, its lower than at target or whole foods. They still want that stuff. They want the same products. Your book is all about how companies who know the customers are in control, those are the ones that succeed. Is walmart doing a good job at that . I think walmart is just beginning what will have to be a long, tough journey for them. Is making customers smarter than ever before. That means that customers now are paying more attention to what other customers have to say as far as product ratings and referrals and links all these things and is shifting the power to the customer. Someone like walmart who has come out of a different year and been successful in the past, this is a major adjustment. At aturning a big ship critical time and can they turn it fast enough . You have alibaba who will show up on our shores and amazon with incredible success. And they all have great data . Yes, this is walmart scrambling from behind but can kind of change, adaptive and innovative change. Can a big company do that . That is the challenge that walmart is the size. Any kind of change whether it be small or radical is more difficult and the companys ceo has talked about that, steering a ship differently when it is an enormous ship can be difficult to do. Its more than strategy, its all about how to get a culture of urgency. How do you get companies to behave differently and realize that everything they have done in the past may cause them to be a victim of their previous success. You have to be able to think differently and connect the dots and that is about what i talk which ismy walk focused on entrepreneurs but has real applications for Large Companies as well. We have some economic numbers out that i want to bring in. Matt miller is at the breaking news desk. Is at 6. 7 which is really low compared to economist estimates of 20. 25. We are focused on retail sales down more than expected. We were expecting some salesss in retail especially after the big number we had last month. Economists were looking for a rather at 1 10 drop because of a reduction in prices on gas which often boost retail sales and things like elite materials which were the big game or one of the big drivers last month. One of the big drivers last month was auto sales and auto sales this month were fairly subdued. That is why we expected softness but not this much. We got 0. 3 drop which is more than had been anticipated. If you remove auto sales which many people like to do to smooth out the lumps, you see a loss of about 2 10 of one percent. Economists were looking of a dane of the same amount. A gain of the same amount. We should point out that we have been doing better or inline line with what economists ofected last month, 6 10 one percent gain and it was the best we have seen in half a year. Retail sales doing fairly well because of the falling oil prices. This is the kind of thing that will come through and affect a lot of these economic numbers. We are seeing a drop in the retail figures because the Consumer Spending is lower. Consumers can spend more money on other stuff because they save money on gas prices. You will see that come from orbit right now we are seeing a disappointment in retail sales. You will see that play out today in the equities market. You are seeing that in equity futures. You are seeing s p futures in particular now hitting their session lows, down about one percent. We were just lower by half a percent a few moments ago. These are not good numbers and they are going to give some of the investors who are already nervous another excuse to sell into the open today. On another topic, coming up, and at the in use by teenagers and venture capitalists to identify the next big thing. We will hear from the founder and ceo of a Company Called product hunt. Millenials cant seem to get enough of netflix. They will report their earnings and investors want to know if subscriber growth is on the upswing. What to venture capitalists and teenagers have in common . They are all on the prowl for the next big thing and it turns out there is an app to help you with that. Wheret hunt is a website you can rank new app services and products in Silicon Valley. Investors like Google Ventures and greylock use product hunt to stay on top of the latest trends. Are some products hot one day and they are not hot the next . Ryan hoover is the founder and ceo of product hunt. Great to have you with us this morning. My guest toes john scalia staying with me. John scalia staying with me. You are generating a lot of discussion about what the next big thing is. Some of these apps are very interesting for old fogies like me. Teenagers logged on to your site . Teenagers are always looking for the next cool thing. They are very much into mobile apps in particular but also technology more so today. Theyre always looking to find out and introduce things to their friends. They want to feel cool and they want to find the next instagram before everyone else. Here are some of the apps that are being uploaded there is one called morning person where you can get a wakeup call from a real person. That is the purpose of this app. There is another app called ethin which sounds more ridiculous than yo which allows you to send a message to a guy named ethan and he gives you opinions about anything and everything. They are cool apps but are they Cool Companies . This is a great idea and ryan, congratulations for putting this together and getting some big names to have confidence in what you are trying to do. Probably most of these ideas will never end up being products. In order for products to become companies, it takes great people, not just great ideas. What intrigues me about what you an doing is you are building ecosystem where people can show what they are up to. Do you get those ideas that looks very promising that venture capitalists want to invest and how do you help turn a product into a company . First off, its not our job to make them turn it to companies. Most of them should not be companies. Many of them are just weekend run x. Weekend products. Product hunt is a place where you can surf cool and interesting ideas. They companies but hopefully they can inspire people to take those ideas and maybe use it in their own product or create something themselves. You really see diversity of the z thintype apps ethantype companies. I will ask even what he thinks about this show . What trends are you seeing . Im assuming guys a greylock are going there and wondering what are the trends capturing the attention of millennials . There are some trends that are focused on specific use cases. In the context of mobile apps, these are singlepurpose. In the case of ethan, that is as Single Person as you can get. What does well often times are things that are communicated to a specific need and there is a more macro trend in terms of the on demand economy. We see a lot of products that are trying to save you time and those often do really well. Another issue that is underlying all this we talk about venture capitalists and cutest to them to find ideas wherever they can but there is a that there is so much money in the vc world and they are looking for the next big company that they are not starting to funnel money into halfbaked ideas or halfbaked companies because they are all competing. They say theres too much money out there. I think thats true in general but there are a small s iner of really smart vc Silicon Valley who know their way around and can spot good ideas probably faster than most. Even if there is only one good idea out of several hundred, that can be a piece to the puzzle to build a company. Its important to understand that Silicon Valley is an ecosystem, not just a handful of successful companies. People there are networking and comparing ideas and talking about ideas and sharing new product ideas. Very clever is a way to focus in on a part of the market that is difficult for older people like me to get in touch with. The real innovation is coming from people in their early 20s. When i was at apple, the average age of the entire Macintosh Group that created it was 22. Now we see people even younger coming up with really big ideas. I think its a great way to start some ideas. Some of them are crazy but you never know. Ryan is a young guy himself. Or you doing this parttime and now you are going to focus fulltime ands company . Yes, fulltime and maybe more. I was parttime at another job when i was working on this. We only incorporated the company back in late april. Things happen moving fast and now i am dedicated to this for a long time. Good luck to you, ryan hoover, the ceo of product hunt. That is amazing. The new pepsi challenge not a taste test but the issues that the ceo has had to deal with for several months. Kings ofy may be the the american league, the Kansas City Royals are one game away from their first world series entrance in decades. Foggy, fall day this morning in new york. It supposed to be up to almost 80 degrees later for october which is incredible. Anheuserbusch, in bev is thirsty for deals and while many are speculating they are looking to grabsav miller, other options are on the table like maybe buying pepsico. In that has long considered merging with a 142 billion soda and snack company. Deal makes sense financially and strategically is still upper question. Our bloombergn news reporter. With us is john scully who is the former ceo of apps he go ill pepsico. Ill pepsico. Of pepsico. Are these a bunch of bankers out there throwing around this idea that inbev goodbye pepsico . It has been bouncing around for a little bit now. It does not seem like most people taken extremely seriously. Never say never but the idea of book them buying pepsico is further down the list with investors and analysts than Something Like sab miller or cocacola. John scully, you joined this committee right after they emerged with the snacks giant fritolay. They have done pretty well since then. Do you think there is any chance that nelson helps, the activist out there, that says this company should split up. Do you think is a chance of them splitting up . I dont think theres much chance. I think indra is doing a terrific job and has strong control of the company. But i actually think its a positive for an activist like z or curl icon to go in and shake up management and boards to inc. About ways to build value. What happens in big organizations, they dont tend to have the same urgency and the same focus. Look at the overhead of these large corporations, even the wellrun ones like pepsi and say maybe they could be more valuable if you were to look at least in reducing the corporate hold. I think while some of their ideas are pretty far out and probably will not happen, i think activists play a positive role. Earlier this year we had oui at theirindra n headquarters. I want to remind you of what she said about the response to nelson peltz. We have studied it with great care. Its part of a strategic advantage. We have always known it was a strategic advantage. Nowre even more convinced that pepsico is about complementary products that work Better Together and the scale it gives us, the access, the importance retailers place in the Pepsico Partnership is simply spectacular. You look at the stock price of applico, its up 12 so far this year im outperforming the market. You wonder whether that is because the strategy is working so well or is it because nelson peltz has angled for some change . Nobody i speak to would his involvement and agitation has definitely helped that stock. You had him earlier this year firing off a number of letters to the board asking them to drastically cut costs and consolidate headquarters. Then you have had pepsico saying their Business Needs to be together and thats where we will succeed longterm. They went about trying to show they could actually improve indra saidy and she would cut 5 billion out of the company over five years and you had this long drought of both sides digging in. It remains to be seen whether peltz will keep going. Either way he sort of wins because the shares are up. They are, you have doubts whether he can make changes . That theyts unlikely will split. She is doing a good job and its unlikely that if she does not favorite it will happen. When i was at pepsi in the early days, it was all about building the aspirations of the american dream, the pepsi generation and pepsi challenge and indra knew he has a harder challenge indra has a tougher challenge like obesity and littering. A really to be doing good job of holding that together in dealing with these tough issues and steering the company towards new markets like nutrition. I would bet on her right now. They are implementing this multialien dollar costcutting plan or the next five years. If i was a longterm investor, once you get through the cost cutting and that looks great on the bottom line, where is the growth going to come from . Thats right, the big question here is whether this power of one keeping snacks and beverages together can offset some of the additional costs. If you separated them, if you could get more focus on beverages which are struggling in the u. S. This is one of the biggest markets for soft drinks and one that does not grow very fast anymore. Companies are trying to offset that with more new types of products. There is kind of a grinding period where you are figuring out how to transition from one revenue model to another. The question is, can you get more focused with beverages by itself . Peltz has suggested you can. The power of one will be very important for pepsico to show those two together really are the longterm play to keep both growing. All right, thank you so much. Thanks to john scully, the former ceo of apple and pepsico and the author of moonshot. Ive got my autographed copy. The u. S. Government has reservations about a big hotel deal but will spying devices be part of the story . Theorists are coming out and we will have more on that story coming up. The bloomberg big number is 1. 9 billion which is how much a Chinese Insurance Company will pay helton for the new waldorfastoria hotel. What we are learning now is that the u. S. Government is taking a close look at this sale. The new owners plan a major renovation and u. S. Authorities are concerned the chinese will use the opportunity to finance electronic spying devices throughout the hotel. The waldorf is the home of the u. S. Ambassador to the u. N. And it hosts diplomats from the u. S. And the rest of the world. Hmm, there is a concern there. It is 56 is past the hour which means we are on the markets. There are concerns on the market after retail sales came in worse than expected. Was a manufacturing dismal reading. It got s p futures at the lows of the session in the premarket. In 30on the markets minutes. Coming up, bank of america is out with earnings this moaning and the company delivered a surprise profit and we will dive into those numbers. Plus, second u. S. Health worker tested positive for ebola and our hospitals prepared to deal with the deadly spreading virus . Youre watching in the loop, on Bloomberg Television, streaming on your phone, your tablet, and bloomberg. Com and now available on apple tv and amazon fire. Welcome back to in the loop. Here is a look at our top stories futures indicate stocks will open lower. Figures show that consumers are taking a breather from spending and retail sales fell more than forecast in september after a gain in august. N dallas, second Healthcare Worker tested positive for ebola. She is one of dozens exposed. The new patient has been placed in isolation. The cdc said the Health Care Workers were still at risk although the risk was shrinking. While it would not be impossible that some of them would develop the disease, they have now passed through the ended isisk period decreasingly likely that any of them will develop ebola. The first dallas Healthcare Worker to come down with ebola is said to be in Good Condition now. Bank of america posted surprising profit in the Third Quarter with trading revenue stronger than expected. Still, the earnings will held down by legal charges after they agreed to pay 16. 7 billion to settle government mortgage investigations. That was the last major legal hurdle for the banks mortgage business. Bankamerica shares are up slightly in the premarket. A major recall from toyota, they are recalling almost 1. 8 million vehicles worldwide for problems with rakes and fuel systems. Among the models affected l are theexus luxury sedans. Its the first global recall since toyota when under stricter safety provisions. The Worlds Largest chipmaker, intel, projected thirdquarter sales that would be down most estimates and intel is being boosted by Companies Buying personal computers with the latest chips to replace their older machines. The clientrowing market and shipped over 100 million microprocessor for the first time in our history and led to 30 operating margin growth over one year ago. We are 30 minutes away from the start of trading. Lets count you down to the open with the top 10 headlines hitting our radar this morning before the bell. Matt miller, Olivia Sterns are joining me. Number 10 is al;ipay, the Payment System that processes payments on alibaba is allowing thepass, huge number of chinese consumers to buy even more from us. I think its a fascinating way for jack ma to get his business in front of americans are it everybody was thinking about this was wondering how they can sell stuff to americans that he has gone the other way. He is allowing american businesses to sell stuff to chinese consumers. Its such a flipflop but its got to have potential because of the burgeoning middle class in china. They have the money to spend and u. S. Consumers took a little breather as you pointed out. Not what you would have expected and it seems like a stroke of genius. It does, and the newly independent paypal is probably shaking in their river biel booties on this news. They are nowhere in china. Alipay has 550 million registered users which is more people than in the united states. I was joking the other day theres probably 20 million billionaires out there in china. Toper nine is facebook executives leaning into south korea. Their meeting with executives. Facebook visiting samsung . That is an Interesting Team up. I think its a little bit i dont think its odd because its such a huge market and they want to yet involved but i dont think its as interesting as may be facebook visiting apple or some of the other plays they could make. Get involvediously more in samsung because more people are using android, 85 of the market. Do but you like videogames. Oculus has hardwood samsung end up past has partnered with samsung. The press release focused on Sheryl Sandberg and the fact that Sheryl Sandberg met with one of the few female leaders. The female president. Did you catch the fact that facebook and apple will pay for freezing female employees exit . Eggs . They want to have their female workers be able to work longer. Number eight is nike converse. I was at nike died. That was a Bruce Springsteen thing. J . Nt larry bird or dr. I was a prince fan. The actual news is that converse is suing walmart, h m, kmart and others for stealing the design of these hightops, the chuck taylor allstar hightops. I cannot believe this is happening now. Every company has stolen that is on for the last 30 or 40 years. Its like bandaid, its a staple. Schatzker wask wearing some Chuck Taylors the other day on live television. I doubt there were h ms. It was probably wearing the louis vuittons. Imitation is the highest form of flattery. But to your point, why now . That has been going on for decades. Perhaps they need to juice up their sales. They want to consolidate that. Number eight is halo, the londonbased taxi app competing with uber and lyft, werent you alyft driver . For aston martin. They say we are getting out of north america and the code ceo has left the company. Vcs and early about how there is so much money competing in these companies and their was about 100 million funded in hailo in a market that is already nascent. Uber andbillion in they will crush competitors. Now youre seeing it happen. They are doing it. Perhaps thats why they are being aggressive. They to build Critical Mass to scale. That will make the case on why they spurned the Rupert Murdoch takeover. Will he go it alone or could there be another partnership later on . Is he going to look like a genius . I think he wanted my own money. M o money. You always expect them to come with a higher offer but Rupert Murdoch did not. I wonder what they will do with hbo. Will they turn it into something more competitive like a subscriptions rimming service to compete with netflix . What will they do with cnn . Exactly, the original programming i was thinking i was talking about these original programming which are big hits, those are not hbo programs. I could not think of one really popular one and that i thought of veep. Also Silicon Valley is great. But they have not gotten the big hit from the days of the sopranos. Dead premiere had 17 million people. One company that is eating into time warners business is netflix. The companies out with earnings after the bell but will they stay growing at home. Bank of america is out with a surprise in the Third Quarter and we will dive more into the numbers as we continue our countdown to the opening bell. Stay in the loop. We have breaking news lis software is offering is boosting its offer for chiquita brands. They had originally offered 13 and that was rejected so they have come back with a higher bid. We continue our countdown to the opening bell. We are halfway through with number 5 netflix is reporting thirdquarter earnings after the market closed day and Reed Hastings and company remain hungry for subscribers and netflix has shaken up the tv industry and now its setting its sights on upending the movie business. Well investors applaud the latest results . Let me bring in paulkadrowsky. You said you loved Reed Hastings and you think he has done a great job and he has had a you they get mrs. But the thing that passes he has had more hits than misses. Has, his instincts are the thing that counts for me. Most of the time, he makes a major misstep because he tries to low up his own business before his competitors can. A business abandon and thats a reflection of how he saw the future in streaming. He was trying to make sure they got there before someone else can low up his business. Being willing to disrupt yourself is the hallmark of a great ceo. Ways, hecount the bulldozed the Business Model for blockbuster. Thehe is bulldozing Business Model for tv content and the third thing he will do is try to old those the whole model of movies. Will he succeed . I think so. For first demand release movies to show up sooner on streaming services is immense. The evidence for that look at spy that haveent mad statistics. They have pirated movies and its showing up there quickly is First Release films. People are putting recording devices in the back of the theaters for the demand of these things to show up on screaming on streaming services. Breaking that First Release isargo so the time to string shorter is the next big hurdle and i think they will knock it down. Movies are extremely expensive. We are talking about up to 100 million to make a movie. Does netflix has that have that cash . Its more like do they have the subscribers to burn the catch on that. What we will see is netflix making up front payments to studio tube rate that time release window so movies show up sooner but that will be on the back of subscribers who say we are willing to pay a higher price to see firstrun movies sooner in the home. You will see more tiered pricing and new pricing to drive that. Subscribers,bout these are the kind of numbers that any Television Network chief will want. Millennials subscribed to netflix. Right. You would be dying for that as the head of a movie studio. To some of the large u. S. Cable news network to have demographics were the median ages 5868 years old. These are stunning differences. Its a difference of multiple generations. From the standpoint of advertisers, this is making this other area you just dont go there anymore. You focus totally on netflix. Lets bring up that other chart of this whole time shift in doing. Now youve got millenials who not only subscribe to netflix but they are watching any Television Program on a tablet and on their computer and less so on traditional tv. Its us old fogeys who are still watching Bloomberg Television on television. R we are onoku, come on thats exactly right, thats the shift that has happened. , the television is becoming an afterthought were so much of the consumption is happening on every other platform. Thats the way Millennials Want to consume content. It has completely shifted. You look at the numbers and tonight we might see three. 5 million new subscribers added. These are incredible numbers and you compare them to the sorts of numbers at the major cable networks. I must admit, i watch more and more of my tv on netflix. Paulkedrosky. Number onewn to the story continues after this break. Welcome back. Before we get back to the tontdown, let me point you what and markets are doing. European stocks are tanking, down over two percent. Futures are deeply in the red after the retail Sales Numbers and oil again is hitting of fouryear low. We will watch out these Asset Classes do. Results on with barry and he was talking about my fear mongering. I think its fair to use those kind of words. We dont want to scare people. Lets bring in the most important stories as we head toward the open today. Matt miller and Olivia Sterns are joining may. Number four is the citigroup copresident telling colleagues he is close to retiring. Banimex mexican unit had allegations of fraud that were true and its no surprise to many people for him to say he is going to retire because of the allegations. At some point, you make enough money and youre old enough you dont need to sit around and take it anymore. Thats probably not the way you want to go out under fraud allegations. The fraud is connected to a private Security Group that was met to protect consumers. They had cake back some vendors overcharged. In mexico . I am shocked. Look at what happened with walmart. At least the security there did not go to columbia in order prostitutes. Is that legal . It underscores how difficult it is. As large as mexico and is and being a big trading partner, corruption is still a very big issue for any business going into the emerging markets. Especially in a corrupt market. Number three is u. S. Retail sales dropping more than forecast in september. Clothing stores fell 1. 2 . This is no surprise, we have had ebola, the ukraine situation, china, europe no wonder American Consumers are saying i am freaked out and i will not go and buy my latest shoes. To soften the blow, huge part of this is falling gasoline prices. Many times retail sales prices look great because we are forced to pay so much for gas at the pumps. Everyone else in the rest of the world pays much more. Those inflated prices usually hold up retail Sales Numbers prisons gas prices are coming down, the retail Sales Numbers are coming down as well. Its not all bad but i will go ahead and say its a very bad. Its worse than economists expected and that can add to the ine pressure you will see six minutes as the bell opens. Number two is bank of america with a surprised profit in this a 1. 7 ilya and dollar mortgage settlement. We talked with Brian Charles and he said this shows you that bank recoveringis finally from the disastrous countrywide acquisition. It seems as if they are finally getting behind the mortgage costs but how do they grow in the low Interest Rate environment . Thats a big problem facing Brian Moynihan. They have 70 alien dollars of to countrywide. If there were ever another crisis and the firesale, who would want to buy up these distressed banks . Very good question. The next time uncle sam says please buy this for the good of the country, some people might not. We still are very much in that hangover period. E are on the markets welcome back to in the loop. The most important stories before the bell. The markets are the big story. We have had some m a news. Vie says its board will recontender reconsider the takeover of shyer because the u. S. Is tracking down on these tax and version deals. Inversion deals. This is exactly the result that jack lew wanted. Vie could come back with a cheaper deal fior shire. Look at what is happening to astrazeneca shares in london. They went down almost 30 . Thing is thatting , these thought oh no treasury rules are putting them in chains and then i thought, aha maybe they are just looking to get shire on the cheap. There will be fugitives. Trading. E i want to bring in pat dorsey. Markets arethese deep in the red, you say, dont worry about the recent meltdown. About are too emotional stocks, you should not be invested in the stock market at all. You might be the one lone person saying that. Down 7 from the peak. It is not that much volatility. Things cause extended bear markets. Massive overvaluation. Dislocation. Both are hard to argue. The recovery is slow, europe is slowing. Derailsthe threat that fasano we are in . Prussia . Russia . Warningsannot with that erupted going into a recession came out with fou r warnings that you knowingly be going intoould a recession in europe. We have seen a huge selloff lately. Why would you want to be buying . Look at that. I think you need to be selective. If you are looking at a European Industrial that sells only to german customers, that is probably not a good place to be looking. If you are looking at a company doing most of us exports to the onlyor to asia and it is getting whacked because where it is domiciled, that can be a good opportunity. The dow is now down 150 points and we are not even 90 seconds into the start of the trade. Is there not some sort of breakdown happening . Maybe there is Something Else at cause thiss going to meltdown that everyone is going to say was not justified, but it happened. If you could point me to it, i will get worried about it. [laughter] remember what a freak out session sars was 10 years ago. It was a problem. But then you look over the long buyinghat an amazing opportunity that was for anything travel and leisure related. Human ingenuity is pretty good. Ebola if it becomes a larger issue, it will get solved. I think you are not far off base on ebola. It looks like it is spreading relatively slowly outside of africa. What we do see is a dragging effect that europe and asia are going to have on our economy. That is what was being argued, that markets are frothy. It is weird to see Public Officials warn investors that equities are frothy and the could be in effect from the european recession. It looks like u. S. Investors Pay Attention to those counts of numbers. You are absolutely right. They Pay Attention to it on a daytoday trading basis. The question you need to ask as a longterm Equity Investor is how much does it effect valuations . Does it make it worth 20 , 30 less . I think that is a hard argument to make. The two threats were massive overvaluation and economic dislocation. Is this a divergence we are seeing . To putraghi is trying his foot further down on the pedal. If that is not economic dislocation, what is . In europe, things are slowing down. Slowing down does not mean a recap of 2008. Mario draghi has said by any means necessary. Solely tied to European Industrial consumption, european consumer consumption, that is an area you would want to be careful about. Just because something is listing in europe, it doesnt not mean it makes all its money is there. The dow is off almost 300 points. We have lost a 150 points in the few minutes we have been talking. They are obviously not listening to me. [laughter] year yield is running for the exits. This is sheer panic i am seeing in the markets. You are saying is rational, but what you suspect is actually going on here . Are these breakpoints being triggered . Our computers dominating this market and that is why you are seeing this straight down movement . And anare a human being intelligent human being, you would not be doing Something Like this. What would you be doing . It is a good question. We have had five years of pretty benign news. Confluence had the of russian sanctions, oil coming off, ebola, europe slowing down. It is a whole bunch of stuff hitting at once. People are the ones covering the computers. People are going to be freaked out. Their triggering stop losses and people are dumping. Why dont i take some off the table . All rational over the short run. If you are a longterm investor, what you need to Pay Attention the valuation of the equity you are buying, not what is the Price Movement on a daytoday basis. It is good to have a voice of reason like pat wherever i am. S p now giving up ill of its gains year to date. The s p has just turned negative for 2014. That is something i was kind of holding on to. At least we are still up on the year. No longer. It is pretty bad today. I sort of joke about ringing the alarm bells. It is not good. Matt, i think they were listening to you. You were talking about blood bath before the open. I dont like to use the word this seriously, but but does not look good. I was talking to a Hedge Fund Manager who lost a lot and when you have that emotion where you have bigtime Hedge Fund Managers who are losing billions of dollars in a matter of days, that is the emotion that is coming in. That is the selling that comes in. You are absolutely right. Big Hedge Fund Guy and you are getting paid for ,our monthly performance, yes it is looking a little expensive right now, the home in greenwich. But if you are investing for your retirement, if you are investor ring investing for a perpetual goal, it is an opportunity to get cheaper. Thanks for joining us. Thank you. Of reason is getting drowned out in terms of all the selling is going on right now. Points. Is now down 331 this is huge guys. Dont 2 already in the first eight minutes of trade. 96 of stocks are down on the dow. We are seeing broadbased selling all off of what you are seeing in europe. The european markets are getting slaughtered. U. S. Treasuries are yielding less than 2 . Lessn bonds are yielding than 8 10 of 1 . We will be back. Complete meltdown. We are seeing it in the equity and bond markets. Investors are fleeing for the exits. Look at the fear gauge that we have seen over the past month. It has already doubled. It had been relatively stable. It has more than doubled in just the last month. That is todays chart on where it is. It is already up 18 . I want to bring in our chief marcus markets correspondent. Lisa, the 10 year yield is down below 2 . What is going on . It is plunging. It is a massive flight to safety. People are going back to the safe haven bonds. The 10 year treasury. Basically, people are saying, we dont know what we dont know. We dont know if ebola is going to celebrate accelerator not. What wet to show you were talking about. Take a look on the righthand side. That is how much yields have dipped in the last month. A 2011. Retty much we are back at levels before the taper tantrum last year. Investors dont see the prospect for higher rates anytime soon. You have had the dollar strengthening and we have seen the dollar plummeting as well. Movement out of these usbased stocks, weather treasuries, equities, commodities. The Oil Prices Also underpinning this move. In past cycles, Lower Oil Prices meant more economic growth. It might not be the same this time. You mentioned ebola. Connect the dots between ebola and treasuries and oil. Numbers. Look at the about relatively speaking smaller numbers, but it is the panic of is this a sarslike crisis, is this an epidemic . The who is saying you could see 10,000 cases per week now. Thisere is a feeling that is accelerating. The most developed medical country in the world is unable to contain it in its own hospitals. The second u. S. Health care worker. This is sort of raising the specter of how prepared are we and what do we not know about this virus . How can we protect hospital workers in this country . Does it also speak to concern that the Federal Reserve push up Interest Rate increases that so many people are looking for them to do if this continues to fall . Isis, ort is ebola, the european slowdown and possibly recession that is possibly infecting the u. S. Is that being price dan . Yes. People are pushing back their expectations. How could they possibly raise Interest Rates . They are concerned that if they hike rates too soon, they will derail the economy. To, we are gaining steam some degree, but we are not out of the woods yet. We have not reached that work speed where we can be untouchable to the Global Economic slowdown. Everyone talks about october being an awful month for stocks. October 1987. Go back to 1929. People also point out historically that markets tend to hit their lows in october. We could see a lot of excesses coming out and find some kind of bottom. That is a great point. Remember earlier this year that someone said, i think it is healthy. We have been up three times more in these equity markets. It is healthy for us to get this type of correction. Just erased our gains for the year. We may be today in negative territory inequities, volume and just erased our hands on the s p. Even at correction point the s p. 510 . Rection atthe correction point is 10 . This is losing its efficacy in deflationary cycle that could escalate . This is fundamental, rather than just technical. Companies. In the stock market, it also has an outsized presence. It looks like we might have found a little bit of a bottom inequities. The dow was coming back just a little bit. It is now down by about 210 points. Only. Exactly. Much better than compared to the 300plus. Thank you for joining us. Scarlett, stay with me. We will be back in a few moments. We are staying on the markets. Some are saying the market route is tipped off by what is going on in europe. The european markets are deep in the red. We have seen a little bit recovery in the u. S. Markets. Europe is deep in the red. Milan is trading down 3. 6 . A lot of the same catalysts and fear factors. It worker died of ebola in germany yesterday. Disappointing retail sales. In athens, the stock market is down 10 today. A lot of fear there. We could see a line the other another resurgence of the eurozone crisis. The fed is going to sit and watch. Prices are lower. That is good for consumers. Bond prices are down. That should push Mortgage Rates down. Not begterm impact may that bad. The fed is going to wait and watch what happens. Going tore certainly wait. They cannot respond to every single tantrum that is happening in the markets. We are recovering from our lows of the session so far. Early on. There has only been one day in the past seven that the dow industrial has not moved more than 100 points. Were saying it is too quiet, it is too quiet. Well, we have come back and a big way. A big way indeed. Thank you so much. Sterns,ee, olivia scarlet fu. Market makers will be covering the markets our two hour. It is 56 past the hour. Bloomberg television is on the markets. Im matt miller. Lets get you caught up were stocks are. Major, major selloff. More than dow dropped 300 points five minutes into trading. We have gained some of that back. We are still down more than a full 1 . The nasdaq is down 1 as well. Where the losses are much more dramatic is overseas. You take a look in europe. Euro stocks is down 3 . They are all down more than 3 . European markets are getting boiled. I think that word is appropriate. As our bond markets. The move in treasuries are much ine dramatic thant h the move equities. Note,e here the 10year now yielding 2. 02 . It drop down to about 1. 9 for a moment. That is a significant move. Yesterday, we were looking at a 2. 3 yield. A drop in four basis points over the course of an hour is significant. Lisa, let me kick it off with you. You are the bond queen. Does anyone ever call you the bond queen . [laughter] im not sure you want that today. When is the last time we saw a move this significant . People are piling into treasuries. It has been the biggest move since 2011 so far today. There are a lot of questions about whether these are short positions capitulating. People are saying, the u. S. Economy is going to say be slowed down by the economic slowdown globally. Whether these are ebola fears, oil fears. You have to imagine, you were just talking about this, the u. S. Has the most sophisticated medical system out there and yet we are unable to contain ebola among health workers. Two people have got it. Aboutinteresting to talk the spread of this disease and how we contain it. It should be pointed out that two people have gotten it in the u. S. , both of them were dealing with a patient that was in the most severe stages right before death of ebola. The people he spent time with in dallas before hand that he probably lived with and slept with have not gotten it. All that is fair. I was looking through analyst notes and a report on oil prices actually cited ebola as one of the drivers pushing oil prices lower. Not a direct link, per se, but one of the many factors. Oil has rebounded and it is now firmer. Thingsght be a sign of stabilizing as we have seen equities bottom for now. The treasury yield has even come back in little bit eerie and realistically, there is a floor to how low stock markets can go. The stimulus is ongoing. Necessarily at floor for how low stock markets can go. Zero . [laughter] see the interesting to treasury market illustrating everyone running for the exits. It is a stronger illustration then we see currently. We will keep on markets for you all day long. Thank you so much. Im sure i will be seeing much more of you both throughout the day. Market makers is up next. Live from bloomberg headquarters in new york, this is market makers. The carnage resumes on wall street. And so areplunging treasury yields. A Second Health care worker is diagnosed with ebola. Our american hospitals ready for the disease . And what about the impact on other Industries Like airlines. Good morning. It is not a good morning for some of you. You are watchinar