The plurality he needs. Spain has been at a political impasse for months. Powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. Scarlet we are 30 minutes from the close of trading in the u. S. In, andcks fluctuate the dollar rose to a high. And the question is, whatd you miss 2 of the most valuable Internet Companies are reporting, alphabet and amazon. Those numbers as soon as they cross. Americas favorite pastime may not be a favorite anymore. The nfl is seeing doubledigit declines in television viewership. Is this a blip, or something worse for the league . Worldfamous shopping strip 5th avenue in manhattan standing pretty empty because of the rent. We look at dynamics hurting the rent in the middle of the most prestigious shopping district in the world. As we head towards close, lets look at the major averages. Not too deep in the red, but still read across the board with dow jones down 10 basis points. S p down a bit more, and the nasdaq leading down the market. Ponce down a little bit too. Bonds down a little bit too. Lots of red for the nasdaq. The index at 7 10 of 1 , session lows d days in a row. Towards close, lets look at the major averages. Not too deep in the red, but still read across the board with dow jones down 10 basis points. Three days in a row. Nasdaq. Rishness for the alphabet shares are ahead of its earnings reports after the close. Investors are looking for eight dollars and 62 one cents in adjusted earnings on about 18. 2 billion in revenue. Despite, mosthat analysts are looking for a better than expected quarter. They are expecting to be driven by strong mobile advertising revenue growth. Just recently, the stock put in new record highs, suggesting that pressure is on alphabet to meet or beat. Hashtag, we at this see a beautiful trent over the last seven years. This shows us how bullish investors are. We have seen recently the stock put in a golden cross. This is when the 50 Day Moving Average moves through the 200 Day Moving Average. One in 2012 and one and 15 proved to be pretty bullish. This is not a tell so much on the quarter. There could be some choppiness ahead. Alphabetmediumterm, appears to be positioned from a technical perspective fairly bullishly. And i see amazon i want to know about them. That will be a big report after the bell. Similar to alphabet, amazon has put in alltime record highs. Its analyst becoming more bullish on its prospects around its Cloud Business and ecommerce. Many analysts have taken price targets above 1000. That includes Goldman Sachs. Relative to what investors are looking for relative to earnings, . 78 in adjusted earnings on about 32. 7 billion in revenue. The cloud growth is expected to be a big driver. A survey that the burden of six analysts suggests that revenue should come in north of 3 billion. Questions raised whether the company is spending on investments that should have done them before. Should have been done before. We go into the bloomberg, there is a case where things could get rough for amazon. A year todayis chart. We see a nice uptrend, but recently the stock is starting to push under that uptrend. It tells us if there is anything that great about this quarter, you can see your term selling. With roughly half of s p 500, this earnings season it looks like the longest earnings recession might be over. Some beats the board. An average earning growth of 2. 6 in the s p 500. The chart you are looking at 7 declinesows you 5, in earnings. At least analyst estimate the clients. Estimate declines. Companies are going to beat their estimate. We had a small decline this quarter. And we are going to surpass that. And this is of course a big deal, mostly symbolically. This is not a Huge Positive move in earnings. What it means that for folks worried about what will keep moving lower, and level will indeed not be bottom. Reported, itys looks like they are turning it around. Five quarters in a row of actual decline of earnings. Eps estimatesing so far, 80 78 percent of those reported. , looking at 72 of those reported that have posted revenue growth. The average Earnings Growth is 2. 65 versus a shortfall in the estimates of 0. 4 . This is the easiest way to look at it. Scarlet it puts everything on one screen for you to look at. Test 2. 6 Earnings Growth is what you see in this column. Sales growth is about 2 up as well. You can see how it shakes down by sector. Real estate is the best in terms of sales growth. A new sector in the s p 500. On the profit line, right now it is materials. But a lot of companies are still reportrt still due to in the earnings materials sector. 18 down in sales growth. Chevron due to report tomorrow. As far as big movers, we have seen it netflix jump 19 . Better than expected subscriber growth. Disappointing Sales Results and forecast, lifesciences dropping 17 . They have pretty easy yearoveryear comps. But that is not going to be around forever. Keep that spotlight on earnings. We will find out what corporate americas report cards say about the future of americas economy. As we were just talking about, we were turning the corner for earnings. We have been in this earnings recession, which often times does come for an economic recession. Is that the current tier, or are we out of the woods . I dont think so, i think it is a midcycle paths. This earnings is primarily commodity led. That is flushed through the system now. It looks to be much better. China is always talking about supplyside management. They are never doing it. This time they did do it. Commodities are stronger. The United States, the period of de leveraging since 2009 is over. If you look at bank loans, there loans are growing 8 . We have not seen that in a long time. China is doing better, the u. S. Is doing better, and commodities are firmer. We see several years ahead of Earnings Growth. We have not had a recession since the great recession, but really tepid gdp growth. What moves the needle from 1 or 2 and brings us back to a normalized 3 , or even the 4 at the optimists and republicans are saying they will bring us to . I am not sure that we have to 4 . To 3 to that would be nice. I dont think it is in the cards. We say that the environment will be less slow. It has been like quicksand, it is softer and squishy are then squishierhink and than you would think. When de leveraging proceeds it is softer. So lets slow is the prognosis. Less slow is the prognosis. It will go for a long time. It will be for a number of years. Scarlet that is a measured way of putting it, less slow. Is Asset Allocation dead . Either it spikes or falls at the same time. On bloomberg, the cross asset volatility measure has been dropping along with treasury volatility. Treasury volatility all of a sudden is back to the estimates. Scarlet justify a touch. Just by a touch. Fiscal sloshes to the same five and it goes somewhere else. We saw a rate cycle in august with china back. There is too much money. Arguably these safe places in the bond market. A large rotation lies ahead. Scarlet and a lot of cash on the sidelines. Is that cash enough to keep the rotation out. Blackrock estimates more than 50 trillion in cash. That is a lot of cash. Depending on anyone wants to do anything with it. Rotation, these yield areas of the market get bid on quite a bit. I see that you have a stake in high yields, more than 10 . Example whereer you have stocks and bonds in the same direction what a notice is that if you notice in the past three months, the stock market has had a closer highyield been a bond has. What is driving the highyield market right now that is not just purely rates . When you quote the s p 500, there are a lot of odd stocks. We have had a lot of crosscurrents, more economically sensitive stock markets. Value stocks, acting more like a highyield. They are sensing that better times lie ahead. We have been through a very fearful period. I alluded to republican promises. Donald trump says hes going to get the gdp back to 4 . I remember jeb bush was saying that in the beginning of the campaign. I dont want to ask you if they can look or how serious the promise is, but i want to ask how important this race is to markets. Have they managed to hedge out that risk . Is there any . Markets are ruling out a democratic sweep and are ruling out a trump presidency. Whether we have president clinton with the senate or without the senate, from a market perspective only, that is not a consequential election. Markets think that is status quo. I actually think markets are thinking in the last handful of years, where a democratic president work was either unwilling or unable to make deals with a republican congress. Too was very able and willing to move things through with the republican congress. I do think it will ultimately be a consequential election. From a market perspective for the next several months, they will just treat that as status quo and it will be a yawn. That is michael kelly, levelheaded of Asset Investment at sign bridge. Told you that a team of derivatives traders is said to have generated 300 Million Dollars in revenue, trading derivatives. Windfall produced by the banks did you see banks inventory swap. We will tell you all you need to know about those trades. This is bloomberg. Scarlet lets get back to breaking news that citigroup. Bloomberg news reporting that a small group of derivatives traders generated 300 million of revenue, according to those with direct knowledge of the matter. This was produced by the bank seller Interest Rates swap desk. Is this kind of windfall unusual . It is for wall street this year on swaps trading. We think this is the number one, may be the number two desk on the street for Trading Interest rate swaps. Which in the last couple years have been treated more electronically. With the advent of new rules i for the financial crisis, that pushed a lot of these derivatives trades on to electronic platforms. They get cleared now. That is given citigroup a chance to do a lot more volume in this business. My question is the same as i had when we had this story about the golden trader. Is this prop trading . They are. Certainly if you ask citi, they would say no. Goldman would say no. Thanks in this day and age banks in this day and age are holding positions for a small amount of time mandated precrisis. That is directly related to the volcker rule. To the extent they are taking inventory, that is how you would make money and profit back in back in money in prop the day. Citigroup is trading moreover the day. I think they carry some position overnight, it is a much more higher volume, Higher Turnover business. As opposed to the Goldman Sachs stories, which was one of the most read stories instantly. A traitor was buying junk debt trader was buying junk debt. That sounds like less of a servants to client and more of a bet for the bank. City derivatives they hold those in inventory. To the extent she could hold those as the market went up over days or weeks, he made money on that. Him, certainly if you are with the new york fed, this would meet nearterm demand for clients. Citise got guys from Interest Rates making a profit in the closed in the post volker world seems like it is still possible. Is it a matter of stretching the rules . Here,ant to be careful but what you are seeing is the fruits of years worth of restructuring wall street businesses. The banks had to fire a lot of people. They had to figure out how they would make money with new rules, with the volcker rule. You are starting to see this year, markets are coming back. But you are also seeing that banks have finished their restructuring. Now they have positioned themselves a bit differently. That is why you are seeing these big revenues. Scarlet we know one group is looking forward to bonuses. Thank you so much. The most read story over the last hour. Now its time for the Bloomberg Business flash, a look at some of the biggest stories. Centurylink in advanced talks to merge with level 3 communications. A deal could be announced in the coming weeks according to people who declined to be identified. Level three has a market value of 70 million. Centurylink centurylink with more than 14 million. The maker of marlboro cigarettes will close manufacturing plants in pennsylvania and illinois, affecting five anyone workers. I 581 workers. It did not say how many workers it expects to lay off. It will save the company about 50 billion. They have over a year to look for another job. That is your business flash updates. And Staro Jason Bourne trek have to do with the u. K. Gdp . What is saving the british economy. This is bloomberg. Oliver alphabet reports after the bill. We picked off our favorite alphabet charts. I want to look at the companys reliance on ads, illustrated by this white line that is leagues above. Were showing revenue from licensing of the profits. Even though their trajectory of the ads is high, almost 20 billion in revenue, there is an important tick in the orange line that shows the other business is doing pretty well. It is a small tick relative to this huge line on top, but showing improvement and diversification. Scarlet that is a good point. Google is trying to get into other things such as the cloud. As a Big Tech Company knows, you need those recurring Revenue Streams like the cloud to take over from your proprietary business. Of course advertising, as good as it is, google has to give something more back to investors. Not to mention fund all of its moonshot businesses like google fiber. They are cutting costs because it is not paying off the way they wanted to. Im looking at how hollywood seems to have saved the u. K. Economy in the post brexit Third Quarter. U. K. Gdp rose half of 1 , faster than what economists were looking for, which was a bit lower than that. That is the yellow bar that offset declines in production and construction. I want to show what happened in the Third Quarter. That is the big boost in services. What happened in services . Box Office Receipts for Summer Movies like star trek and jason bourne. Of course this is the only the first tick. You still get to more revisions of u. K. Gdp. Think question is the big question is what they do with Interest Rates. I thought you were going to say what Christmas BoxOffice Season looks like. That will be important to this economy, especially not building or producing anything. I am taking a look at the eurozone. Sooncurrently relationship to be unrelated in its legal relationship as well. Pessimism has turned around for the euro. This week the euro fell within 1 of its yearly low. That was on wednesday. Today we have seen a turnaround over the last couple weeks in calls. This is a look at one month option. Are morerish when puts expensive, bullish when calls are more expensive. People are guessing that the worst might be over for the single currency. Scarlet the market close is next in the u. S. We take a look at the major indexes with less than four minutes until close. This is bloomberg. , the way from the closing bell. Whatd you miss . It is Strong Enough to withstand a shift away from alternate easing monetary policies. I am scarlet fu. Matt i am matt miller. Oliver i am older when it i am oliver renick. Matt you can watch our coverage on twitter every weekday from 4 00 to 5 00 p. M. , assuming you are technologically adept at some things at such things. Oliver could do it without even knowing how. Scarlet thank you oliver renick. Let us begin with market minutes. Was a not seem like it very interesting day when it comes down to it because of the movement. Eight out of 11 major groups finishing down. Real estate, the laggard. That is the real set to have been talking about. A little bit of that move toward the defensive. Oil prices rising. Done real estate has really well this season on earnings, but there were not a out. F earnings they have been driving the mood of equities every day. Take a look at the imap on the bloomberg. To see which way ones are moving the most. Telecom is the big winner. Is the bestea go way to look at earnings in the middle of earnings season. You can find that by Industry Group and growth as well. Scarlet we have some amazon results coming across the bloomberg wire here. Third quarter earningspershare with . 52. Analysts were looking for 78 since because that would . 78. It looks like that is what investors are taking the stock is down by 8 . 32. 7 billion net sales. Met with higher than what analysts had been looking for. Pretty much in mind. Operating income for the period was 575 million. According to Analyst Consensus estimate it should have been 690 million. Perhaps amazon is going back to the idea of profitability being less important than sales. Oliver let us look about outlook as well. They are talking about Fourth Quarter operating income of 1. 2 illion, which is less than 125 billion, which is less 5 billion which is less than their estimate. They are giving a low range to that as well. The outlook, not looking so hot. That is always key. Scarlet let us bring in shelly banjo. She is a commentator. Amazon, how at important is profitability and growing every year . It has certainly been what has been propping up the stocks so much. These companies are never going to do profits and then about last year, when they started breaking out how much aws was them, that is when he saw the stocks take off from 300 to 800, where it is now. They have done this before. He showed you they can do profits. He pulled it back, invested the money into huge projects. Anchor we have shelly banjo hear from if you type in the eye, you get the bloomberg intelligent if you type in bi on the bloomberg that is run by paul sweeney. Actually seeing and growing profits and amazon, it has been years since shareholders have seen that. That was driven by the growth of the Cloud Business. Atis relative to no margin