Place before you go to work. We will take you to a 7 00 a. M. Rave. Good morning, everybody, this is Market Makers. Rave . 0 a. M. Im excited. We should do that one day. For the moment, we are looking at sun Economic News, isn nonmanufacturing index is just out, a gauge of the economys marissa are. Michael mckee has the headline. Quite a good start to the trading day. Pmi comes ining 1058. 7, the best since 2005. This is a broad measure and includes most of the Service Industry. It tells us that the Service Industry is doing well in this country. Take a look at the new orders index, 64. 9 from 61. 2. Business at 70, 60 2. 4. We have not seen numbers like this in about eight years. 62 activity, 62. 4. Capital goods, nondefense x 3. 8 after falling 1. 4 in the prior month. We are making some Real Progress here, looks like some good Economic News to trade him today. Thank you. Now it is time for the top is the stories from around the world. Get that is publishing in two. Ae company will become separate entity and will have a publishing unit including 81 newspapers that will be shut spun up to shareholders. They had been losing ad revenue and reader since 2005. There is a new leader in the Worlds Largest smartphone market. The company is based in beijing and was founded four years ago. The company has won market share by selling cheaper devices directly to consumers. A 72 hour truce is underway in gaza. Israel says it has all that all of its troops and has accomplished one of its missions of destroying tunnels used to launch attacks on israel. Hamas says it has also agreed to the ceasefire. Who recently returned from west africa is in a Isolation Unit at mount sinai hospital today undergoing blood tests to see if he has ebola. Doctors say it is unlikely and they should have the results tomorrow. If nothing else, this raises the awareness of the ebola epidemic that has killed almost 900 people in africa. Testing is critical to containing the disease. But to prevent anyone from getting sick, we would need a vaccine. Joining us is a doctor from the Columbia University epidemiology whoram, as well as someone covers the pharmaceutical industry for bloomberg. Dr. Morris, i know it sounds morbid, but we do live for moments like this, when the disease that you are studying is thrown into the spotlight. Is said that such tragic events are needed for us to Pay Attention to the diseases out there in the world. Im afraid i do not quite live for these events, but of course, i find them interesting. We are trying to prevent and predict a much better. Can we get the obvious out of the way for a moment . How much of a risk does the epidemic in west africa present to the developed world at large, whether its new york city, United States, western europe, even in southern africa, areas outside of the immediate hot zone. I want to point out the story in the new york post. Restrained new york post. Out that he turns is negative, will it be on the front . We can expect people coming from west africa and other places will land in europe or north america, and so it depends on identifying and other countries for that matter. If these people are identified in time and put in isolation, and the caregivers are properly protected against be veryn, there should little risk, virtually no risk. Does that mean we will see new containment policies, people embarking from the planes . Immigration officials have been watching pretty carefully to see who is coming from where, look for any signs, identify these people. I am sure you could tell us more about this, but my understanding is we are being exceptionally cautious right now. That is why we have less risk than these other places. We are being exceptionally cautious. If someone gets sick on the plane, for example, the crew is supposed to let the airport know and there are quarantines tatians in places like stations in places like jfk. Clearly, the greatest risk remains in west africa. Almost 900 people have died. Like another obvious question, but why isnt there a vaccine for ebola . There are a number of reasons. For quite a while, there were many technical hurdles. We did not know how to make a good vaccine or protect people, but now we do. Of course, the economics are a bit of a problem for the vaccine manufacturers. Also, identifying which population should get it. If we traveled there, even though we have little chance of getting ebola, we might take does the economics mean that since only 900 people have been affected, the actual effect is relatively small . The fact that these are sporadic events, relatively small, but unpredictable, and also, these are developing countries where it is obviously hard to charge high prices for the vaccine. We are talking about the vaccine being at the very experimental treatment, let me emphasize, highly experimental treatment that we have used on the patient in atlanta. That is a promising thing, but think about how earlystage this is. A Biotech Company with nine employees, at the very beginning of possibility. And we are talking about bringing these products to developing nations that do not have money to spend on health products. We are still working on extremely basic Health Problems in these countries. Using this vaccine is another thing entirely. Is the problem of a vaccine for a disease like ebola the same as a problem for treating rare diseases, that there is not a payoff for the amount of money intracompany would have to invest . You would rather be a gilead to develop a hepatitis c drug. Even more so with the vaccine because everyone is a little different, has to be tested. We should be introducing newer technologies. We are using mid20th Century Technologies and there are newer technologies the technologies we are using to make vaccine dates back to the 1950s . Some, and some to the later part of the 20th century. Some vaccines are made by more modern technologies. Like influenza . There is only one new influenza vaccine that is made by modern technology that was just approved. The others use older technology. Issue, is a funding lobbying not as intense for this . Part of what we have seen is the economics are not there. This rare treating disease in western africa does lyme disease have a vaccine . You could argue that it is a pretty populous disease. Thats a good question. There was a vaccine developed and it was available for a little while, as well as for dogs, but it is not available now. If there is not one for line disease, which is not rare here, you can imagine how much harder it is to get onto the market an ebola vaccine or something else. The death rate we are seeing is a little under 60 compared to 90 in other ricks. Can you explain why . What is going on in western africa right now . This particular strain of strain,us, the zaire which we have known about for a long time, has a 90 fatality rate untreated. Treatment,gressive especially with doctors without borders, they have had some delicate facilities doing some dedicated facility doing some treatment. If the patient has other infections, they will also treat those. They hydrate the patient. They try to correct that morales in blood clotting. That has led to an improvement. Vaccines economics for are that challenging, does it mean that we are not going to see them . It depends on how much interest or is, if there is enough political or popular pressure or it. What would it take for there to be enough pressure . It is hard to say. An outbreak in a developed nation . Hashe Defense Department partnered with some of these biotech companies. There are often raise National Security concerns and you also have the gates foundation. Billions of dollars. We may not see traditional of pharmaceutical economics come into play here, but it is possible to see some national and charitable interests coming in. Those victims that were brought in are being treated in atlanta. I believe this is the first two times this has been used in a human. We do not know if these people got great Supportive Care or if this treatment will work. It is exciting but it is really early and a huge caveat that goes along with that. There are a few other treatments along the horizon of the missing as well, some using very new technologies. Thank you very much, dr. Morse. Coming up, we will go to washington for the u. S. Africa business for him. With us will be the ceo of the blackstone group, Steve Schwarzman. It is not your grandfathers las vegas. Why gambling is playing a smaller role in the citys economy. The u. S. Africa business to 14have already led billion in pledges between Companies Going into finance, technology, and energy. One Company Investing in africa is the blackstone group. And ceo Steve Schwarzman is with hans nichols at the u. S. Africa business summit in washington. Good morning. Ets get straight to the deal you announced a 5 billion investment in africa. That is a big number, even for blackstone. It is a good size number. It is a number that starts to make a dent in the problem that we will be addressing, which is basically power and electricity for africa. It is probably hard to imagine that 70 of the People Living in Subsaharan Africa do not have electricity. From the perspective of growing up in the developed world myself and probably for most of the viewers, 70 not having electricity is so difficult to contemplate because it impacts development. That gets me to the next question, 5 billion is a lot of money, but why now, is u. S. Investment somewhat late to the game . Have beenly, there two other ways of investment in africa. One was from europe, which has historically been a place as a spear of influence because of geographic location. Second came the chinese with development in almost packages in different countries, for theirent purposes, with own engineers, construction companies, and so forth. The u. S. Is now looking at africa, significantly behind in terms of aggregate embers, numbers, but Many Companies have had long histories there. When are we going to see blackstone opening up offices in africa . I think this is already happening as part of forming our joint venture. We will be opening different offices, and it is a very. Xciting type of activity but the total need for power in africa is 300 billion. So the power initiatives of the current in the administration along with the joint venture is really just scratching the surface of what the full needs are. Talk about the pipeline. In uganda,be hydro wind farms in western africa. What has you excited . We cannot give away our inside information. No one is watching. Just a couple of gentlemen talking. Mike bloomberg would disagree. We have about 10 projects currently in different stages of development. Year, there will be several announcements of what we will be doing. What is your plan for exiting these projects, if it is a hydro dan, lets say, do you run it for 15 years and then pull back and have a local partner . We set them up with strong takes in terms of demand for the power, so it can be capitalized at whatever rate the markets will give us. We typically do not own things forever, because of the nature of the money that is given to us by Pension Funds and sovereign wealth funds, and others. Actually they would like some of their money back at some point, if not all. We build them, finance them, conceptualize them, and eventually we find something. Talking about your investors, take a macro look at the globe. Where are you spending time i dont mean vacation. Where are you investing . Lots of distressed real estate in southern europe. It depends on which business of ours and we are in four different businesses. Private equity, real estate, credit, and hedge fund. One of the most interesting opportunities happens to be in the real estate area right now in europe. They are starting to sell their underlying thet properties. We are doing a large Investment Program there. In private equity, lots of interest in energy and other types of companies that we are building. Energy in europe . Energy globally. Energy happens to be one of the areas where there is simply huge demand for money and not enough money with capability to know how to make those, as intelligent investments. It is not the same as buying, for example, something that you could relate to, a lipstick company. You know its manufacturing and marketing. Energy is highly complicated. If you are finding something below the surface of the earth, bringing it out, construct thing, refining. That is an interesting business with a lot of opportunity. Clearly a lot of opportunities in africa. Opportunities but also danger on the governance side. You look at those countries where they are extracting resources. Gdp per capita does not assess early reflected that. What assurances do you need from heads of state that the government issue will be addressed . Governance is important to matter what you are doing anywhere in the world. You need a stable regime, you need to know what adulations are regulations are. You need the protection of rule of law. In places where you are not comfortable with rule of law, you cannot invest. Some countries dont even have laws but traditions that you can honored thet get best amount of times. So you do not need a letter of the law with international arbitration. You need a culture that you can respect. You would like to have both. That ishe evolution going to have to occur in africa is to provide that level of stability for investors globally. If they can do that, money will come in, and in reasonably large size. We are talking about 14 billion today, 5 billion from you guys. A few years down the line, what are we talking about, will it be a linear progression . I dont know if it will be linear. Most investments are not linear. People start coming in if there is a good experience, more people will come. This will be determined by future events. You could have a significant increase if the next wave of projects works well. Followup that needs to happen from the white house, administration, or frankly, the Business Community . The Business Community is waking up. Africa itself is growing about five percent. If you added the amount of electricity you needed, you could take it up another two percent, three percent. ,hese are high growth rates admittedly, off of a lower pace than in the developed world, but with those types of growth rates, money will find its way there if it is an accommodating environment. Theresident obama over weekend gave an interview talking about the Business Community. I know there has been backandforth between the president and wall street. I wanted to read his comments and get your take on them. I would take the complaints of the Business Community with a grain of salt. If you look at what our policies have been, they have generally been friendly towards business. Our complaints from the Business Community grains of salt . There has been a lot of rhetoric for local purposes. Rom the white house over years. Actually, the environment has been relatively good. I would say, in terms of the number, some of of regulations, some of the responses to different types of things may not suit everyones taste. Nevertheless, business is high. Ring and profits are the stock market basically touched a record. So i think there is balance in this equation. The president is essentially accusing the Business Community of complaining unwanted the. Is that fair . To get involved is probably not the best idea. I thought we were just two gentlemen playing along. We will play pingpong next time. Back to you in new york. Thank you. Thanks to Steve Schwarzman as well. Much more from the u. S. Africa business summit coming up today. Sorenson will talk about commitments his company is making in africa. Kim. Then jim coachinga battle of versus michael kors. Coat shares falling 70 last quarter while michael kors continues to grow at a record pace. Julie hyman is with a now. 17 does not sound very good but the stock is up. Are waiting for coach to turn things around. They hired a new designer last september. Investors have been waiting for that to bear fruit. He has just introduced his new complete collection. Fashion bloggers have been receptive, its a russian of whether they will buy it. That still remains to be seen. At the same time, the mens business is growing. Isnt all about my luxury handbag, or eriks . There is such a thing as a murse. That made my day. The company said its chinese revenue was up 20 . At the same time, closing 70 stores. Cutting down costs and still having growth in those markets. Glimmers of hope on the horizon, but not a full turnaround. Do they have to discount the murse . The first time they did a more significant summer sale on regularly priced merchandise. That seems to have drove some of the traffic but also compressed Gross Margins to some degree. What about michael kors, what is their strategy . They came out with results yesterday and revenue was up 43 , samestore sales growing at a clip that far outpaces that of coach. Revenue growth is slowing to some degree and that is a concern among investors. Grossmpany also said its margins are going to shrink by 50 basis points in the coming fiscal year. There seems to be a couple of thing contributing. One of them is investing in expanding internationally. Another is a normalization of growth, some of its faster selling stores. There is also the question of discounting. , wecompany said yesterday are not doing the deep discounts. But i see all of their stuff at tj maxx. That is what analysts were saying, that they see discounted items. Kors said that that is not really happening but it introduced ball items early in consumer did not really want it, so they were put on sale. So it is kind of confusing what is going on with the discounting pick her. Been somere has equilibrium restored in terms of valuations. Kors trade at a multiple that is not far off coach, a premium at 19