Expected in some coastal areas. Rick pitino has been fired three weeks after the school acknowledged its mens Basketball Program was being investigated as part of a federal corruption probe. They voted to remove the cardinals coach following a board meeting. Thursdays moves in his tenure with the program that included championship013 tarnished by several embarrassing off court incidents. Mumble news powered by journalists and analysts in 120 countries. This is bloomberg. Julia live in new york, im julia chesley. Scarlett im scarlet fu. Joe im Joe Weisenthal. The question is, what did you miss . Scarlett john taylor is said to have made a favorable impression on the president who will interview janet yellen later this week. Netflix, the streaming Video Service reported thirdquarter results. Will it support its skyhigh valuation . Clearinghouses be a risk to Financial Markets . Julia the market providing another year of growth across the globe. Dormant volatility, and geopolitics. Ignoring. What is flying under the radar . Talk to us. What were your views on the meeting . You missed one of the most interesting meetings ive been to for a long time. Everyone agreed the World Economy looks good. The best in 10 years. Growth apart from the u. K. Is stronger now than it was before the crisis. We still have this monetary policy. The Central Banks have given up on the 2 for now. They are flying blind. They do have to wait for two years. They will announce tapering even know they cannot forecast 2 . Joe what was the talk of politics . There is so much discussion about that gap between the political headlines we are seeing and the economy. They dont seem to line up well. A lot of people say to political. You cant run a business can you cant invest with the expectation of nuclear war. What people didnt talk enough about was the economic risk of the u. S. Administration. This is a growth objective based on three real things. Tax cuts, corporate deregulation and protectionism. As an economist you say that is not going to give you 3 growth. I wanted to follow on that idea. There has been where the Trump Administration will pull out of nafta completely. Do you see that priced in anywhere . No. I dont think. What you are seeing now, this is happening now. It feels like a lot of the economy was worried when the one trump got elected. He is ineffective in many ways. But now it feels like desperation is setting in. That whatevers your view on politics, it is not good governing. If you dont like obama and health care, it is not a good way to do it. Nafta is an example. China is a classic example. We thought there was concern there would be a trade war with china and the United States. He got pulled back from the brink. A lower chance he will pull back. Theres almost 200 mexican trade negotiators in town. ,his issue of the component this is not good right now. This is problematic. It is not the end of the world. It doesnt mean 2 growth in america will become run. Become 1. Joe what would it mean . What will that change from a north American Perspective . I dont know. It is difficult to say. , recession probability models gives you 50 over the next two years. If you are messing with nafta the probability of a recession on a slow down significantly in the short term. There is nobody who thinks protectionism is good economic policy. What does that mean for the other trade deals around the globe . I think here is the important thing. Everything i heard in washington. Have isest problem we america has left leadership in multilateralism. So there is no leadership. I heard from european officials saying, some thought there could be american guidance. But there is no leadership in the u. S. Now. What everyone agrees on, multilateralism. Happensrrespective what , they will continue to fly high. Concerns with health care, whatever it is. He said the market has been front running the Central Banks for a long time. Now we come to a state where everything is a buying opportunity. It takes a big crisis for the big correction to happen. When that will happen, who knows . Joe everything will be fine until it is not . When the World Economy is this good, so uniformly growing, history shows it doesnt unravel the market. Julia what about leadership change . Is that going to matter . I dont think it matters for the economy. There is no conceivable way the fed or ecb will remove the punch bowl. They are flying blind. They dont really understand. They are bound to grow slowly. You are referring to the unreliability of models. People thought they understood the ability to make these connections, and the idea of they dont know how it all works. No, you are right. Flat. Rst curve is we dont quite know why. Nothing mentally has changed. Look at germany. Comeap closes and it will fast. If central bankers are flying blind and this gradual remover of stimulus wont hurt isnt there a flaw in the thinking . I think that is right. There is a lot talked about this in washington. Turnkey, these domestic issues, you look across and you can tell the spreads that are incredibly tight. It is uncomfortable. On somethingies that is not a stronger dollar. That is not inconceivable. If trump manages to do it and on, thenhe trade back you almost certainly get a stronger dollar. Than it looks very different. You are sticking with us. Politics are at the forefront of market concerns. This is bloomberg. Politics the main source of risk across europe. Spain will crack down in catalonia. Ad the u. K. Preparing for breakdown in brexit talks. Note from you said when you look at Political Risk in europe, the u. K. Is the single biggest risk by a mile. That comes down to the leadership vacuum we have seen. Undermined the political it has exposed the societyit in british and in labor. I was just in london. London seem fine. People who live there were talking. It sounds like the end of the world . Scarlett london is a bubble. Joe they are the most gloomy. A lot of bankers have been shipped over to look at dublin. They get worried because that is a small town. There is a lot of anxiety about what the future is. People who also watch your program, people in the financial industry. This is the population that is going to be heard. Julia you have infighting with the chancellor and how important is Angela Merkel . Its not like she can say lets push something across the line here. I feel like on the u. K. Side that is a concern for them. The u. K. Is not understood this, the 27 articles, they will not break ranks on this. Possible five minutes to midnight they get together . I think that is possible but they have to deliver the rest of the 27. Veryis why you have to be pessimistic. , but ithink the logic is impossible to see the path from letter a to b. Julia how closely should we be following the shenanigans with spain in catalonia . I am always the most optimistic one. This is the first time were on the bearish one. Why . I cant see this settle down. It is a very big problem. Article 165. Er beenhe financial stuff has taken to madrid. What do you do if you trigger it . What if the new elections give you a bigger majority for independence . Knows it is a dangerous effort to take. Julia you were talking about repatriating powers. The economics lie with catalonia. Although the companies have moved out. To stops that enough the president pushing this too far . He is obviously nervous and playing for time. You have to be optimistic that it ends well but it could be months of provocation. Joe is there a situation where this ends with an independent state . But ituld have to say no is not certain of anything in life. Other eu state well love them back into europe. , itf that were to happen would kill Independence Movement around europe. A bit like brexit. It has been the best thing for proeuropean movements. They can step back and just watch the disaster unfold. And that is what they have done. It is recognized as a spanish issue. I think he has been playing it poorly. He should have brought of the resent. Million who want independence, you cant just ignore them. Constitution, move them to a republic. Something. Move to meet them halfway. Exactly. I was very surprised about that. Question. T as you a this is 30 years from the crash of 1987. You hear people talk about are there things in the market or the economy that we dont see . Structural things that could snap . When you survey what you see, is there anything that gives you anxiety . Quite me bombs ticking time bombs . Chinese debt. I have never seen levels at that number that did not end in tears. But this is sign up. They have the money. They have stopped the outflows. Difficult with china acause they think they have 3 deficit. We think it is 12. I dont think they understand. Julia what actually triggers it . Theyve got control of Interest Rates. Back on. Pulled what would trigger those . They are still warning about chinas debt . , what triggerss it, a slowdown in growth. That will have to wait until the demographic said in. Julia what growth level . Two or 3 . Yeah. Not only did the graphics but urbanization. They said turnarounds, you can get 3 growth. That is difficult if that were to happen. Maybe it will be a bumpy adjusted road. And we know about it 69 months later. You forlsen, thank joining us. Coming up, ruby tuesday stock popping. We will look at our market moves on our stock of the hour. Julia over the Bloomberg Business flash. Joining the race to make passive investing cheaper. They say they have slashed fees on 15 Exchange Traded funds. They are now the least expensive equity fund along with a product from blackrock and charles schwab. In least extensive products the passive investing world. Germanys hello fresh saying it surpass the United States. A gain of . 19 from the previous quarter. It sustains the case and will top blue apron in the third or Fourth Quarter. Scarlet time now for our stock of the hour. Ruby tuesday gaining 18 . I guess it cannot be that much of the surprised it was struggling. You are right about that. Down 25 ahead of this eye out. They have missed for the last six quarters. They closed 109 stores. The buyout is taking the company out of this. The buyout itself is not surprising. In march they open themselves to the possibility of the buyout. The stock rose. The shares are not very high. The current level, we havent even reached. Investors are just happy. This is an extraordinary chart. It shows the rise and fall of ruby tuesday. Casual dining. Take a look at that. A two dollars stock. I love fridays. Is there any value joe is there any value in the restaurants themselves or is it all real estate . That is up for debate. In terms of the real estate. Revamp the menu. The interesting thing about this rise and fall, so many different factors here. The millennial perspective, one reason casual dining has fallen off of the cliff, they want more creative, more healthy food. From an Economic Perspective the average meal at casual dining costs 14, too much for much the america. If we top back into the bloomberg and look at the shares , texas roadway roadhouse, even today after this drop we see shares are still trading at a discount. Market closes next. This is bloomberg. [applause] stocks starting milli fire and the s p at records. Copper at a high. I am julia chatterley. Scarlet i am scarlet fu. And and i am Joe Weisenthal welcome you to our closing bell coverage every weekday from 4 00 to 5 00 eastern. Scarlet market minute, another day of record highs for u. S. Stocks. Julie hyman was joking about sounding like a broken record but every day modest gains in major indexes and recognize. Record highs. The dow up 4 10 of 1 . Consistent with incremental gains. Scarlet a lot of consumer names in focus, appropriate giving that netflix recalls reports earnings letter on the apple up after t bank upgraded the stocks and raisings its price target. They are overweight at keybank. Nordstrom falling five and quarter percent, suspending efforts to take private after struggling to get financing with favorable terms. A sign the Department Store industry is not doing so well with customers and investors. Sears holdings off quite 12 , bruce berkowitz, the largest outside investors stepping down from the board. Pg e, the californiabased. Tility, down more than 7 the wildfires a big concern and california probing a possible role live utility in the deadly wildfire. Mayrts that downed wires have been a trigger for the wildfires. Julia pg e joe lets look at the Government Bond market. Starting in north america. Up 2. 3 . Ields higher, a few different possible factors. That shelen saying still thinks inflation is going to come back one day. Hope springs eternal. Continuing anxiety about mexico. Nd nafta sending yields higher fiveyear yields up to 7. 13 . Interesting charts we do not look at often. This is venezuela. The oil company concerns over the weekend over the legitimacy of Regional Elections and concerns over more sanctions on the country. Incredibly distressed that most things in this country like most things in the country and the bonds of hell that and made payment but some weakness on the concerns. Iraqi bonds. I do not think we have ever talked about them. 2028 euro bonds. Tensions with the kurdistan region in the wake of the independence about. Some disputed oil regions sending yields higher. Scarlet paul sweeney is making a strange face. He has never seen iraqi bonds chart. Julia lets take you to dollar mexico. A year to date chart, the headlines around these nafta negotiations, the peso falling to its weakest level since may. I have a chart to give you a sense of what is going on in terms of the broader em currencies base at where mexico fits. Is the worst performer among emergingmarket currencies against the greenback. That is the monthly performance. Balance, thee United States the mans and where we are headed into the fifth round of talks that will begin in mexico city in the first week of november. A couple more i want to point the naftaada with talks, on the back foot today the banks of canada governors saying growth will moderate after hikes we saw this year and oil rising to a twoweek high. Sterling off by 3 10 of 1 . On commodities, lets run through them real quickly. Oil gaining a bit, though off its early highs in part because of tensions in iraq. Gold selling off on some of these hawkish noises coming out of the fed. Copper futures with a nice day, optimism about growth in china is one possible contributor, 3. 4 . A oneyear chart of latium, the very precious metal, palladium at one point over 1000 per tear, this is an absolute because of its use in certain vehicles and technical purposes. Doing very nicely. Those are todays market minute. Scarlet netflix reporting earnings on time, the numbers that matter are the subscriber additions, for the domestic net since streaming, 850,000, analysts looking for 774,000. On the international side, also better than expected, 4. 5 Million People for the Third Quarter and analyst looking for 3. 7 2 Million People. Netflix is a Fourth Quarter at of 6. 3 million, pretty much in line with analysts were looking for. 6. 2 9 million. That inFourth Quarter, an expected conditions for domestic and international and for the Fourth Quarter, we do not have a breakout for a messy versus international, in line. Julia stop selling off a little stocksstocks joe selling off a little bit, speaking to expectations, a crushed the Third Quarter and the next merely matched expectations. Scarlet the topline numbers, not that it matters, revenue for Third Quarter 2. 99 billion, analysts were looking for 2. 97 billion . Paul, shot with stellar numbers as far as net adds. As we talked about every quarter, a company that is a momentum stocks and momentum tied to the subscriber numbers, not necessarily revenue or eps. International subscribers is where the growth has come over the last several quarters and it is where it will come over the next several years. I see Strong International subscriber growth is the key metric. Subscriber costs increase. A cautious view any Fourth Quarter associated with turn, the fact that they did not raise guidance or the fullyear, suggesting that a Fourth Quarter may come below the street. Scarlet i am a subscriber and did not realize they raised prices. They are pretty good about being able to pass on pricing. They learned how not to do it, to surprise the market. They have condition of their Consumer Base to one dollar per year or two and other offerings in the marketplace from sling and hulu who have centered around this 10, 12, 13 per price point and this company has every year premise raise prices. Scarlet stocks settled on a direction, higher in afterhours trading but still modest historically been joe we talk about revenue numbers and treats the financials as an afterthought. The cash flow burn is still gigantic. That 2. 5 our preview billion negative cash flow losses. As long as they are growing like crazy, market seem to tolerate it. Did they have to turn that around at some point . I think they do, if there is , fair case, up 60 this year the bear case would set on the fact that they are cash flow negative. They lost 1. 6 billion last year. If you look at the bloomberg terminal, it does not show consensus numbers out of wall street to be cash flow positive until 2021. How are they finding the 7 billion per year in programming spent . Going to the bond market but they can only do that for so long. The bull case is, as they continued to as subscribers and drive revenue and profits, that will drive Free Cash Flow to fund the huge investments we are seeing and programming. Julia we look at the programming on a quarterly basis, 13 reasons w