Americas michael moynahan, and michael dell. Consumers are spending and we feel good about the u. S. Ofweve see plenty opportunity organically to consolidate. Its all straight ahead on bloomberg best. Hello and welcome. Bloomberg best, your mosty review of the important Business News and analysis from around the world. Several investment banks released earnings this week and with the sector coming off a string of lackluster quarters, investors watched anxiously as bank of america reported on monday. Bank of america in the spotlight reporting earnings that Beat Estimates. Revenue from their fixed income trading business was also better onn expected, up by 39 year year. You saw them post betterthanexpected bondtreating revenue, similar citi,t you saw at jpm and but given that they are not as big in the macro products which were such a hit in the corner, this was may be a surprise to the upside given the results. Is it turned around for banks . We are seeing a pattern. They were out of the business and they seem to be surging back. I think we will need to get. Nother quarter of data it has been good for one or two months. Certainly, this is more than that. This is the best it has been in a while, but i think investors will want to see a couple quarters of sustainability on this front. Alix Goldman Sachs reporting a 37 rise in profit from bond trading. The bank i49 percent their fixedm trading unit. Put into context how important fixed income is to goldman. It has been known for a long time is a bond trading shop. They have a lot of money they take from equities as well. It is something where they really need that kind of revenue, and you really cannot discount anything where they have a bad quarter for bond trading and a bad quarter overall. Fixed income trading of 49 , which is huge for them. Ands,thanexpected better than competitors. What you saw a glimpse of this quarter was a little more client activity, people positioning around their views on rates, credit, and you had better quarter on mortgage, better quarter on credit, better quarter on rates. That could go a long way for goldman. Chinas economy remains stable in the third quarter, paving the way for policies which could rain and on excess credit. Which could reign in excess credit. Policymakers gives a bit of wiggle room, space to tackle those debt problems and some of theeign in credit that has been pumped into the system to shore up growth. Chinas policymakers have a little bit of time in which they can start making some of the changes which are needed to prop up stability in the Financial Sector and to rebalance the economy away from the state and enterprises and towards a larger role for the private sector. The question headed into the Fourth Quarter is how much progress they will be able to painfulthose needed reforms. Morgan stanley reporting thirdquarter earnings that Beat Estimates as fixed income trading revenue almost tripled. Stanley as a look across the board, great things all around. Fixed trading, equities trading, everything to do with revenue. All the things looking really good. Investment banking, too, which is a really important business as well as Wealth Management which is a good beat overall, but if you delve into numbers a little bit further, i was looking earlier in the bank is not at the target it wants to be in return on equity. 9 to 11 as the target, and they came in at 8. 7 . A little bit better than last quarter but still something they need to do better on. As we await this rate decision, the immediate estimate is for rates to remain unchanged and they come through right now unchanged. The deposit rate stays at 40. No big surprise. The summary is as follows no change on interest rates. No change to qa. Scheduled to go to march 2017 or in the word of president druggie, beyond in the words of president draghi. They did not discuss the qe horizon at all. They did not discuss tapering of quantitative easing and the market wondering what they actually did discuss. I think they discuss where we are, progress, a couple of interesting points growth, you still see downside risk. I think thats what they discussed. And inflation, as a reminder to put the discussion into context. What did they say . Inflation picking up because of from energy prices. Theres no convincing evidence that underlying inflation is on an upswing. That is the bottom line. Go back to the mission. My main take away is nothing at this stage will wait for the forecast, for the projections. December is when we are going to have to discuss. The eu summit is wrapping in brussels, divisions clearly taking shape among eu leaders. Christian freeman said it looked like the trade agreement with the eu has collapsed, calling it impossible. Lets start with canada. What is going on . This is a small vision of belgium. 3. 5 million people, smaller event new jersey, and that is blocking the canadian trade deal with the eu a few minutes ago, we learned the canadian trade minister has decided to walk out, calling the trade deal impossible, saying that it is clear that the eu at the moment is not capable of negotiating agreement with a country that actually has European Values such as canada. What about brexit and theresa may . Did she sound optimistic that a deal could get done . Obviously, the sale of the canadian trade deal at the moment is a bit of a warning for theresa may because that puts a what kind of on trade deal she will be able to negotiate. Am optimistic that we can achieve a trade deal. I think a deal that is right for the u. K. Could also be right for canada. Show,later in the earnings reports for a number of key Tech Companies in the spotlight. We also sat down this week with two of the worlds most powerful ceos. Bank of americas Brian Moynihan tech titan michael dell. Apple is putting the brakes on its project to develop a self driving car. This is bloomberg. Best. His is bloomberg im alix steel. Have beenbanks calling for consolidation and on monday, a longawaited merger finally went through. Shareholders and italian have backed the merger. The deal marks the nations andest in almost a decade lands a big win for the prime minister, matteo renzi. It was the first merger in almost a decade. If the deal had not gone through, it would not have been a vote of confidence in italys Banking Industry, which is already suffering under the weight of more than 300 billion euros of bad loans. I think it was the bare minimum needed to restore some confidence in this industry right now. How frail are italys banks . And if we do not have resolution for the other banks, do you think the share price will suffer as a result of investors also discounting you guys . Approval think our last saturday was very important, not only for our banks, but for our shareholders, to show a signal to Foreign Investors that it is possible to have consolidation and growth in italy, also without having resolution, soldiers opened the transaction will go ahead with a ce, and if thisen can be sold in the next few months, im sure investors will come back to italy and try to invest in a sector which now has really a tangible book value which is very, very low. Russias biggest listed. Efinery spinning into india they are buying sro oil for 13 billion. 13 billion is the contraction that russias largest listed oil producer along with a consortium of in. Stors is investing it is a big one for them. They are deleveraging their books. India is, of course, emerging as an Important Oil producer and consumer in this region. It is expected to surpass japan as the Third Largest oil producer in the region. Alix now to a bloomberg exclusive. Apple is dramatically scaling back its ambitions to take on detroit. The apple ceo gave the team of engineers permission to build a car, going straight after detroit and tesla and other carmakers. After some struggles internally, there has been a change of direction. Apple has put on hold plans to build a car and is focusing on an underlying self driving system that it could potentially market to other producers. Where do you think they would put this technology . Could they work with ward, for example . It is possible. Fallnd of next year around 2017, apple is going to decide what to do, evaluate the progress of the platform, and i think over the next few years, we will see which carmakers apple is choosing to partner with, if any. In for inflation came the month of september delivering an upside surprise, surging to the highest level in almost teetered years and fueled by a plunging pound. Does it change the calculus for the bank of england . I dont think it should. You have seen two chunks here. A based effect from lower oil costs, but you have also seen a closingn clothing costs. That is a temporary timing effect. We have had some weird weather, so theres not an enormous amount of news for the bank of england. Inflation set to rise and the with for months to come. Saudi arabia is going on a sales spree. The kingdom planning to raise 17. 5 billion dollars as it tries to shore up its battered finances. This is according to people with knowledge of the offering. Saudi arabia receiving bids for as much as 67 billion, beating argentina plus 16. 5 billion sale in april. I think important to know that during the roadshow phase of this sale, saudi arabia went to the u. S. And london. That is how confident the kingdom was when securing a sizable backstop for this issue in the asian market. Here is what a saudi arabia, and abu dhabi had to play pay. Abu dhabi only issue 10year, the saudi arabia for 30 years, 235 basis points over benchmark. This bond issuance is very ipo because the economy itself is based on oil. This is a first step in a very aggressive step into thersifying outside of oils, and bonds themselves are forly just sort of a feint the ipo that the saudis will ultimately go to to increase their capitalization or recapitalization of their oil assets. We are getting yahoo earnings right now popping across the bloomberg here. Thirdquarter adjusted eps was . 20. We were looking for . 14. It looks like the eps number, the bottom line figure beating analyst estimates. This is all very interesting, yahoo earnings, but do not really matter that much. Is only thing that matters is if yahoo still wants to pay for the companys web access. They recently came out with a bombshell that 500 million databases were hacked or a database was hacked with 500 million customers information. Wantshink verizon still to buy, but they want to know what they are buying. The question is is this hacking a material adverse change to the company such that it would require them to walk away from the deal or give them the action to renegotiate the terms of the deal. Lawyers are hashing it out. Does the hacking incident provide verizon with a pretext to walk away . The real question when the lawyers get together, is this hacking issue and the disclosure of a material adverse change to the business such that it would affect the value of the transaction . Elon musk is on the road to autonomy, at least he says he is. He announced last night he plans to equip all new tesla cars with the hardware needed for full self driving capacity, so he will put a lot of cameras in these cars, as i understand it. Thats right, going from one camera per car facing out to now eight of them. He says basically every car is going to have a supercomputer on board able to make whatever it is 40 trillion decisions is second. He is adding all this cost, all this hardware and software and Development Expense into these cars that you cannot use. Most of us are not allowed to let our card to the driving for us in most of america or most of the world. How does he pay for that . Does he raise prices on the cars he is trying to cut prices on . Well see. When he says they might not need more capital this quarter, presumably he already knew that he was undertaking this and adding these expenses, so again, possibly a positive sign. Bloomberg news is reporting that Senior Executives at at t and time warner have in meeting in recent weeks discussing various strategies including a possible merger. This is according to people familiar with the matter who declined to be named. How far along are we in these talks . Pretty early. No banks have been hired yet. Chalk this up to Senior Executives figuring out the art of the possible here. A full acquisition would be a very large deal, although for at t standards, certainly not something that would be seen as too large. But directv not too long ago and this is in the same general ballpark, but i think they are thinking through options, and one of them is a full on acquisition. Arehat type of valuations these assets getting . Six times even to six times bit, 10, 12 six times ebi tda, 10, 12 . More like six. Alix welcome back to bloomberg best. The u. S. Shaving industry has undergone plenty of disruption in the past few years. Gillette still dominates in retail sales, but online sales now account for about 10 of the market. Thats one reason unilever bought Dollar Shave Club for 1 billion a few months ago. Other Young Companies are growing fast as the landscape shifts. One of them is the subject of this week cost small to big. Brandfelt like the big shaving had forgotten about the customer. Aroundad this vision really changing the experience of shaving for guys everywhere. We make our own product, razors, razor blades, shave gel, and we deliver them to people at amazing value. , theted harrys first thing we realized was we had to make amazing razor blades. Without how hard could it be . We could not have been more wrong, so we spent the next six months trying to figure out everything about razors, how they are made, where they are made and what the magic is in a great blade. We launched in a partnership and right after we launched, we realized two things one is we had ideas to make them even better in the second was we were going to have to make even more. At that point, we put together a vision to buy the factory. We are now the only truly integrated the only Truly Vertically Integrated Company in shaving. Reallyt has been complicated, we count our lucky stars every day that we get to be a company that takes feedback and drives it into making better products for them. When we were learning everything , we launched a barbershop in new york. It is only two chairs, small, intimate, and we have amazing barbers. We believe we should innovate the way that our customers want. Get to know somebody really well and he are sitting in your barber chair for 30 minutes and you are talking to them. In shaving, theres one large company. It is gillette. They essentially control the entire market. We do not know if we are going to be the biggest shaving company in the market someday or not. We are still a baby. We want to build a brand that is around for a long time. If that is a Standalone Public Company or private company, we do not know. What we are committed to doing is find a structure that helps us achieve our vision for the longterm. Alix still to come, companies around the world reporting earnings this week. We sort through the numbers and dig into what they mean for the market. Next, some of the weeks best interviews, featuring exclusive conversations with him with Brian Moynahan and michael dell. Your time horizon is very different. This is bloomberg. Lets talk about brexit. Are you hopeful that banks like yourself will have access to the eu market . It needed0 recognized to reregulate the Banking Industry globally, and it has done a lot of that, and it has been a heavy lift by everyone since the financial crisis, but the other important thing they said was lets not reregulate the banks and create barriers to the free flow of capital, if its the flow of capital from singapore to china or paris to london or vice versa. I think the European Union, the u. K. , and the rest of the Major Financial Centers will stay connected to this lets let capital flow freely and not put protectionist barriers. There will be some changes that we will have to adapt to, but the fundamental Global Financial market including the u. K. And the European Union i think will be preserved. Speaking of the u. K. Economy, we saw inflation double last month. What do you expect the bank of england to do in the coming months and into 2017 . Our credit card and debit card picks up about 50 to 60 during the day. Consumer spending has grown 4 plus during the last year, which is a pretty robust number. I think the reduction by the bank of england was the right thing. Inrclays ceo singapore. Barclays is expected to report thirdquarter earnings next week, but this week, bank of america chairman and ceo Brian Moynihan saw his bank beat expectations on thirdquarter profit, but the environment for large Financial Institutions remains challenging. He discussed the state of banking in an exclusive interview with our erik schatzker. Quick revenue has been dropping revenue has been dropping. The only way to boost profit is by cutting costs. Where are we now . Have we bottomed, or is there still further to drop . If you think about us coming off the highs of the revenue basis and the highs and activity, we have probably bottomed. It is really driving incremental revenue growth. You can only grow so fast. Taking a paper process, replace you with digital, and that can go on for a long time. The 20 billion a year we took did not really move the cost structure. Now it is very incremental. The economy does remain a question mark. Client behavior, particularly loan demand, can be a leading indicator. What is it telling you about the outlook right now . The u. S. Economy is driven by consumers. Other countries are trying to consumers and our Customer Base are spending 5 more than they spent this year to date than last year. Does that tell you the Economic Growth environment we have been stuck in is going to accelerate . The other question is what is going on with companies and things like that. Our experts fueled this great platform out here. Higher. R, they were the estimate is pretty much on