of the cable corporation will talk politics and ports, don peebles. and tesla motors, will be electric carmaker be able to automakerin the capital of the world? discuss buffetl processes strategy. what about his miss step? newsing of, the breaking at mcdonald's. more on the breakdown. sales numbers. mcdonald's.ok at scooting all eps items, coming in at her dollar 51 per share. the estimate from those 21 analyst suite server -- we

, coming in a one point oh $7 billion. a year ago, it was $1.5 billion. down on the revenue on -- and also down from the previous year , $6.99 billion yard looking at it across the region, sales in europe felt a lot worse than estimated. regionlook at the compared with sales 9.9%. about close tos 11%. a little better than expected. ago, we heard sales in the asia-pacific middle east area, close to 15%. they recovered slightly over the course of four weeks. , expected tomonth be negative. >> they are. muchtors really focus

worse, 3.3%. this, investors have said, is because of the meat scandals mcdonald's has faced overseas. >> yes. the company has struggled to a lure customers to their diners, specifically in areas in the asia-pacific region. china, hong kong, japan, it did hurt the reputation of this chain paradise of two analysts, as well as others, and they told me they really need to look to crack down on this pacific issue. this is where there is the most up right potential. there more confident that his lossescan recoup by changing their methods and marketing campaign.

across asia, australia for example, the dollar making it a little more expensive for a consumer. a lot of issues they have to focus on in asia. that heard their fourth-quarter results and they are changing guidance as well. >> thank you so much. our breaking desk on mcdonald's. another look at big copper -- top corporate stories. coca-cola says it will miss long-term targets for profit growth. will need toit refocus on their core operations, revenue is still falling in north america. dropped as well. in the meantime, tim cook

setting off a holiday shopping spree. the last threer months of the year. the demand for the new iphone is staggering, he says. in the meantime, banks and credit card companies were on board for yesterday's launch of apple pay, the multipage system. did you use it? here is barry summers on apple pay. >> i think apple pays a big real. our philosophy is simple -- we are here to help our customers. if they want to put their credit card and debit card on an iphone, we will be there for them. the most important thing for us to is to be responsible. question to pass his will not enact any large-scale stimulus. the slows growth rate in more than five years.

but it be estimates. caselster the government's for measures. >> when i wake up the morning, we keep an eye on china. it is the engine or global growth, whether or not you believe the numbers. bubble it is the largest going on in global right now and one of the largest in history. china's growth cannot be sustained and es been pounding that drum for quite some time. ahead of one of the world buses biggest oil companies has died in a plane crash in moscow. stuck basement -- struck a snowplow. sought thers -- he

biggest in at least 15 years. finally, in south africa, a former olympic want -- runner has been sentenced for five years for killing his girlfriend. he must serve 10 months in jail and then can be sentenced to house arrest. he thought an intruder was in the house when he fired four shots at a closed bathroom door and his girlfriend. ♪ this hour,shaking tom stier, the billionaire former hedge fund manager. he turned to politics and i met with him in northern california at that time. it the biggest donor, the so-called super pac. millioned to spend $50 and is now past that. the donated $15 million and $5

million donations since june of 2013. million to republican causes. he has been a big name in trying to get the keystone oil pipeline killed. thing in politics, midterm elections more than any elections. republicans are counting on the fear factor. according to data for cancer media, 50 terrorism or national security related ads have aired in states like georgia, kentucky, and north carolina. the top five democratic targets, four of them are women. how effective so far have we seen this fear factor by the gop? is veryems to think it

effective because they're running it in so many states. the interesting part of this story is where they are running it. democraticrgeting women. when we talk to republicans, the strategy is to counteract the war on women theme that democrats have successfully been running in these states. the thinking is by getting women to stop thinking so much about the gender side of politics and think more about national security issues, that they can try and narrow some of that cap. we do not know specifically what is having the gap, but we are starting to see the gender gap narrow in swing states, which is of concern to democrats. >> is in this one way for the gop to attack women and say they're weak on terrorism and week on work? >> that is what is implied.

it is not what they are coming out and directly saying. if you look at the context of some of the ads, they are raising concerns about a foundation issue. actually saying it has links to having money to terrorist groups, which independent fact checkers have found is completely false. they're not doing it directly, but certainly indirectly by targeting women and raising questions about just how tough they are and whether -- what it takes to protect the nation. linking them to president obama. his numbers are so far in the tank right now that anything they can do to link any senate democrat to him will be affected. >> the lowell -- the lowest approval rating so far. thank you. politics weird with me this morning, my guest post this morning.

the multibillion-dollar real estate developer and chairman of the board of congressional black caucus, a democrat and donor to several candidates on both sides of the aisle. i know you have been a supporter of the president even though you criticized the democrats as well. hearing what heidi is saying, democrats are vulnerable to approve the senate. >> what you heard, we are talking about just now, how republicans appeal to voters on current issues, not on gender or prior issues. i cannot count how many times my wife has gotten direct mail pieces from candidates about a woman's right -- to choose. that has been settled a long time ago. a democratic candidate. democratic candidates have used this tool to scare women. same thing with african-american

women. we should be looking at how we take the country forward. why don't we ask the question of why there are more women and ceo's. how do we promote more entrepreneurship among women? many of those things that we are not seeing and the democrats should be speaking to and owning that issue and they are not. >> haven't those issues work for the democratic party? they still are effective. >> yes, but i do not think we will have the same traction anymore. we just came off of the worst recession in the country since the great depression. many people are struggling, especially women who are professionals and often worse trying to get ahead of households. realwant to hear about issues affecting them and their families in this country. we have moved beyond many of these issues and the democratic party, at least the party i

knew, has been a forward-looking progressive party. there back and running 1970's and 1980's campaign. that will be in undoing for these candidates. meanwhile, the gop is running a 1980's style campaign. >> it is effective because we all want to be safe here in america. terrorism is the number-one challenge for us globally. talking about that is a current issue. they have a long way to go. african-americans, women, any kind of agenda, it is so dismal. >> the fear factor does not help incumbents. obama has been heavily criticized for not reacting too many issues that have come up in the last 12 months. including the ebola crisis he has been criticized for. couple cases of

ebola in the united states. we have had a thoughtful president who weighed the issues and react to issues based on the circumstances compelling him to do so. we are not in an ebola crisis. class of feels that way. >> we are reactionary. part of that is about the media. the president should be a calming and stabilizing factor in the nation. he is. when thense rapidly circumstances dictated. he is thoughtful. if we run a major corporation, we want him as a stock holder to be calm and deliberate before he makes a rash decision. >> staying with me as my guest host. coming up, strike three, majorly raised ball turning off the next generation of fans. the world series starts. plus, ibm takes a dive.

we will have much more in a moment. ♪

>> in china, the real estate market is facing a tough road ahead. property sales and construction have tumbled and dead, buyers have been is seeking investments outside of the country. where they gone? they are coming to u.s. real estate. the latest megadeal bought by a chinese firm and insurance nearly $2 billion. that purchase underscores a reality. looking for a place to park their cash. still of me is someone who knows a lot about the real estate market. it owns and invests property in major u.s. cities, including your hometown of washington dc.

first off, what do you make of the chinese? you hear about them in chicago and l.a. and new york now. people are saying, are the chinese like the japanese, buying up our land? pursuit of the returns. there is also a diversification play as well. also, my top five are miami, florida. we have never seen many asian buyers in the past. there are more and more coming there to buy. much more to five. york.miami, new see significant chinese investment. >> that make sense. i was talking with a few real

estate investors about this topic and they said, i am not want this hereey in the u.s. they will be happy to see it breakeven. there are losing money. even if they could break even, they would be happy. would you agree? >> no. they are looking for strong returns. let new york office, especially new york, essentially the istinum standard, the chance remote here. they look at it as a great floor. the market is still somewhat volatile. real estate investment is some volatility. they're looking to drive returns. market.cisco is a hot the second strongest in the country. he will see more investment as well. but they are looking to make money like any of us would be.

know you arei developing several projects down there. would you partner with the chinese? >> absolutely. discussion inn the past with chinese investors, a chinese development firm that is also part in china that have an appetite for miami. what is the hottest thing on your radar? >> while everyone is focusing on is maturing.arket not everybody can afford to, nor do they want to buy condos. thing for the next miami. in the more urban centers of miami summit downtown is ashley, we like that. -- on the rental side, the the

place to be. manhattan, i think the story is office. hear the absent. i hear people say you cannot make money in office, but you can in residential. >> prices are so astronomical now and if you look midtown south and all downtown, you are seeing office rents escalating rapidly. there is a tremendous opportunity on that side. there is so much demand for residential in manhattan. but we are becoming the tech center of the east coast. >> to your point, there have been few new office towers don't in manhattan. i'm thinking about the hutson, maybe one of the few i can think of. we will be back with much more. are you watching the world series? >> maybe. >> ok. nine innings worth of america's

his favorite pastime. game fornch of kids watching boring baseball? we will be back. ♪

>> breaking news right now at jpmorgan. euros. seven billion more at the breaking news desk. >> the latest headline come across the terminal regarding the banks being find regarding this scandal. jpmorgan getting the hefty us fine, 17.2 million euros. euros here ation

9.1 7 million euros. two angst avoided penalties. is the one that avoided the penalty for blowing the whistle oh thankstel clutch -- cartel. four banks, jpmorgan getting the largest fines. rbs and jpmorgan were involved in the bilateral cartel case. investigations going for a few months regarding the influence of the swiss franc libor benchmark interest rate. >> thank you so much. in other company news this morning, sears is trying to raise more capital, returning to its billionaire ceo for the first time in a little over a month. it will ensure its balance sheet ahead of the shopping season. $625 million in debt to shareholders. he owns a stake.

than 540 million financial records have been stolen in the last month according to the fbi. business leaders were told "you will be hacked. have a plan." investigating a potential breach of customer credit card data. up to half of the company has been hacked. or will be. a dominican born designer became a u.s. citizen and became the first american to become the top designer at the fashion house. he was 82 years old and battling cancer for several years. it is 26 minutes past the hour. bloomberg television is on the markets. equities rebounding. we climbed up from the lows yesterday. it seems this rally is in place at least for today.

we are on the market again in 30 minutes. tonight, the world series gets underway. the kansas city royals host the kansas city giants. the first page is scheduled for 8:07 p.m. will kids the able to stay up past their bedtime? down with asat focus group of kids to understand the disconnect between them and baseball. ♪ will the prosperity of america's is past time become a thing of the past? baseball has a problem. young people are not tuning in. not even one in 12 call baseball his or her favorite sport. what can the incoming commissioner do to turn things around? today's generation cannot stay focused on nine innings of baseball. i can't even do that and i am

40. some children cannot even spell the word baseball. tonight's game starts at 8:00. we'll probably be over at 11:00, levin: 15, 11:30. up thatallowed to stay late? >> no. >> the rule has not been enforced in the outgoing commissioner's 10 year. .> too much waiting wait, wait, wait. >> no surprise, the game is getting longer. the average ballgame clocked in at three hours in eight minutes. compare that to 1950 when the

average ballgame lasted only two hours and 22 minutes. would taking baseball back be enough to get the kids to watch? question to much would you like to spend watching a baseball game? >> 45 minutes. i was on vacation i went to one and it was so boring that i fell asleep. [laughter] >> what would make baseball more fun for you to watch? of hitters.he pain 0.86 home runs per game. >> two of 13 hitters who topped 40 runs in 1998. the heart of the steroid fueled era. one player, nelson cruz, hit 40 home runs this season. >> everybody watch the game. isabella, how much fun are you having on a scale of one to 10? >> a1.

>>a 3. >> watch the screen. how much fun are you having? >> 2. >> a little more fun than watching the baseball game. >> who is having more fun, the kids or you? >> i was having a good night. >> first off, you do not like baseball that much. >> i used to love it growing up, but as an adult, i am more of a basketball fan. my kids, i have a 20-year-old son, wheeze to go to the baseball games. he has really never been a big baseball fan. my daughter who is 11 does not like baseball.

base.uez was on third other than that, she is not on baseball theory collects all of the kids i spoke to, even the ones who weren't used fans because their parents were, really loved yankees players. one other teams play, nobody cares. it's messy when you have a world where when the giant -- is kansas city? it is not even in kansas. when the giants play the tigers, that was at least an interesting story. nobody watched the world series. the worst rated world series in history. need to do is, the three things kids do not like hum of the games take too long and may continue to take longer and longer. a start way too late.

who will stay up this late to watch again? it is boring. there is not enough action. one kid told me he would watch baseball more if they had more touchdowns. he said it would be better if there were touchdowns. people who watch football think it is slow. basketball. >> all of the sports you just mentioned, kids like them, it even soccer, more than they like baseball. soccer can go two hours and have a 0-0 result. what they need to do is speed up the game. the arizona fall league, to try to keep batters from stepping out of the box too much, to make pictures -- pitchers actually throw it. you say there is not enough diversity in the top tier? >> look at the diversity of the players. think --

>> the owners have to step up or the people have to step up to make a bid. >> one of the topics we talked about earlier, they should be talking to after americans and minorities and women about how to gain great success instead of attacking wealth. we are an aspirational country in an aspirational society and we should be talking about that. >> i was surprised by the number of women at these games. i'm not sure -- but i'm talking about women on their own. these games. >> exactly, that is what they want. they are after that and that is a democratic -- demographic .reviously you just mentioned a couple of great sports that are exciting to watch. >> exactly. football can change and in the last minute of the game. dolphins ande

rodgers threw a touchdown with four seconds left in the game. you will never see that in baseball. you will be waiting forever to watch an outcome change in baseball. >> are you bidding for a team? guys a basketball team? it has got to be a fun market. you make money when you sell them. you've got to enjoy the ride along the way. >> great to see you this morning. and matt, always a pleasure having you on the program. coming up, as warren buffett lost his touch? some are questioning his future? should they? we will be back and talk more about it here in -- about it. ♪

>> the company scrapped its 2015 forecast. expecting declines this year. gains for warren buffett. berkshire hathaway has held a 7% stake since two thousand 11 in ibm. this is a one-two punch for berkshire. -- warren buffett admitted that was a mistake and is he losing his touch as a stock maker? that is the question going around these days. with me this morning is lawrence who wrote a book with hank greenberg on the aig story. >> the tesco situation might be a mistake. people make mistakes and berkshire and buffett made mistakes. too soon to it is tell. he said there is a very good

chance the stock market price will swoon. that is ok for berkshire because ibm is a big repurchase or of its stock. initially got the stake and it was 5.5%. any not think he is losing sleep over it. this.ple ask he has had more misses, high-profile misses, later, in the most recent years, then he did in the earlier years. he bought companies like coca-cola that were big hits for him. he has been less of a stock picker in many ways. >> right. that is the big point i make. people miss understand -- misunderstand. that might have been true in the ,0's 80's and 90's, but now

that is the biggest part of the value in the company. his claim to fame right now is about being a manager. that is what i explain in the book. >> it is almost a venture capitalist, perhaps? >> yes. everyone knows ben graham is one of warren's most important mentors. what is less known is tom murphy, the fellow who built up and wrote the forward to this book. that is an important new klein the book draws out. >> there are always comparisons, who is the next warren buffett? tol ackman says he is trying build a berkshire style come any. i want to hear what he said about that. >> that is not a bad business model if you think about a long-duration investment strategy. we will buy large stakes like we have in the past. matching the duration of our investments. >> you think of yourself more of warren buffett.

>> that is a better choice. carl icahn has done a fabulous job. more like berkshire hathaway than. >> unicef from a lot of managers. >> yes. i've known bill for a long time and i think he is right about that. little section in the book about why that is appealing. berkshirecquired hathaway the beginning, in a. even as late as 1973, he people thought he was a liquidator. he shunned that reputation it ever since he was committed to the long-term model, and it has worked long-term and bill sees that. carl has seen that. >> thank you so much for joining us. and, cominggham,

up, apple pay makes its debut yesterday. the mobile payments system, does it live up to all the hype? we sent olivia sterns on a shopping spree. we checked it out and we give you the results. ♪

>> apple has rolled out iphone pay for the iphone 6 which allows them with a slight -- to pay retailers with a slate of your phone. it is arty place over 220,000 stores. really of those partners ready to roll? olivia sterns went out on day one. to find out, she went shopping. >> apple says my new iphone 6 will completely replace my wallet there i decided to put apple paid to the test there it let's see how much shopping i can get done. my first stop is the disney store.

♪ perfect, thank you. store was easy. one touch and i got all of these. it looks like i might not actually need a wallet. it does not mean i do not actually need a. i think we have got a winner. ♪ it is a little bit longer than i expected. apple paid did not work as my visa debit card. it did work when i read my card as a credit card. either way, i had to sign. but i'm still two for two. a $35 ostrich egg.

♪ here's the deal. apple may work very well. it works so well, it is anti-compacted. i even got a little carried away a few times and had to return things like the ostrich egg. the most impressive part so far is it does save transaction time in stores like whole foods that are mobbed in rush-hour. that can move you more quickly will need a lot more business. thisore stop after all of shopping. my feet are killing me. i need to get aspirin. all right, that is everything. i am out of money and out of time. i need to get home and for that, i'm going to uber.

do you take apple pay? i have no idea. >> no? i cannot get it to work. at least they have my credit card already. >> glad to see she got home safe. for the record, and new -- a google update came out yesterday afternoon. no word if she has gotten it to work. coming up, mcdonald's is rolling it out. mcdonald's sales in the u.s. slumping for a fourth straight quarter. much more straight ahead. ♪

>> we are talking about mcdonald's. shares declining in the free market, the world's is largest restaurant chain said --rd-quarter profit sales

really, -- for more on how the restaurant planned to turn around its is, i want to , both covereslie the company 4s. vanessa, i will start with you. four state quarters -- straight quarters of decline. what will they do? >> this morning, they laid out three points, which more or less summarize things they had artie been doing. they want to improve the menu, elevate the customers -- experience. engage in cymer is more with apps. renovating their restaurants, just to bring mcdonald's to a more 21st century context. for a lot of consumers, they have fallen behind there are also in the u.s. with their social media campaign, there is

a trust issue right now with mcdonald's and their food. you have to answer questions about the quality and whether or not you are indeed eating beef. >> right. ok. they're also facing a lot of price pressures. wererote a piece recently you noted mcdonald's prices have started to go up about 3% in the last 12. is that right? >> that is right. it looks like mcdonald's has been raising prices. they are seeing wage inflation for minimum wage hikes across the u.s. this year so they are having to raise prices. at the same time, it is not a great environment for consumers to be out buying fast food right now. there is a lot of. >> is there anyone talking about on thompson and his leadership and whether the board still supports him?

>> i have not heard too much about that. they have had a lot of management changes lately applied. one of those people, the new people, mike andre, the new head of the u.s. in today passes earnings release, talking about different things they will try here, like new customizable fair, and doing things that are more locally relevant. >> you wrote quite a bit about mcdonald's and have a field -- how they appealed to millenial's. >> mcdonald's is testing right now some customizable items. it is a challenge because they are trying to simplify operations in the kitchen to improve service and speed, to reduce the numbers of errors customers are getting in their orders very they have a big digital push, an important way

to engage my meals, through their mcdonald's that. we spoke about the ordering at the and how that will facilitate quicker services as well. the key component for any app for a restaurant companies whether it will encourage loyalty and what the apps do is aboute company formation what a particular customer is ordering, what they like. >> they have that data. >> right. >> ok. we will see how that cuts down time for mcdonald's customers. vanessa, thank you so much and also to leslie, who covers mcdonald's for us. bloomberg television is on the markets. mcdonald's, that is one of the stocks you want to keep an eye on, as well as ibm and coca-cola announcing restructuring this morning. on the markets again in 30 minutes. it looks like we're headed for a higher open here at much more ahead, including a governor who will vote on whether or not

tesla will sell. who will win out? the dealers or elon musk? we will have more. ♪

>> we're 30 minutes away from the opening bell. stocks will be higher at the open. the s&p looks to extend its biggest three-day rally since april. apple shares are up. the company forecasts record sales. we will speak more about apple in a moment. china's economy faster than expected in the fourth quarter. china rose at an annual rate, the slowest expansion in more than five years. it still beat estimates.

the service industry expanded and the demand for exports is higher. 20 of skeptics remain. went -- plenty of skeptics remain. is the engine for global growth, whether or not you believe the numbers. i think it is the largest credit bubble going on in global right now and one of the largest in history. china's growth cannot be the same. mcdonald's cannot seem to turn around slumping sales in the u.s. profits fell as sales dropped for the fourth straight quarter. sales off more than 3%. in china, a supplier was investigated for changing expiration dates on food and meat. shares are down more than 3%. one of the biggest movers right now in free market. another big mover in the free mcdonald's, and

coca-cola, they posted third-quarter revenue that missed estimates. sales dropped in north america. volume grew less than expected. cut $3 milliono by 2019. coke gained market share in the u.s.. still, there is pushed back because of concerns. for half a century, he just everybody. the designer has died, at 82 years old. the dominican republic and became a u.s. citizen and was known as the guru of glamour. he was the first american designer to become the top designer of a wrench fashion house. the last big roger, a wedding dress. she married george clooney last month. we are 30 minutes away from the start of trading.

before the bell. joining us this morning is the editor,g contributing my guest host for the hour, and olivia sterns. let's kick it off with number 10. this story, they will require that customers make an extra copayment of $16. if they get their prescription filled at a pharmacy. it sells cigarettes and tobacco. bit of alking a little nanny state here with cbs or what? >> stores still sell tobacco products at a disadvantage. cvs wants you to think of them as a place to build up the of being those minute clinics where there is more money to be made here but i am with david. >> a differentiation by saying, we do not believe in cigarettes, and we are a health care company. i think it benefits them

long-term. >> their competitors. say, ok, then do not go to a cvs or a walgreen. come to cvs and fill your prescription. it seems better to go to shareholders with a campaign. >> obviously, this is a smart cvs has health, but calculated they will make a lot more money because tobacco sales are in decline. microsoft, number nine. he is still digging his way out of that terrible comment about a week ago saying that women should not be asking for raises. now everyone is look at his compensation. $84.3 million this year. 11 times from the previous year. did he earn it? >> not yet. he is still just getting started as ceo of microsoft. it is all stocks and they have done fairly well since he came

in. that is why he is making money. >> all i have really heard is him basically announce mobile and cloud. that is obvious. >> yes. it is obvious microsoft took 10 years to do it. quite an achievement. up becauses going they believe in him. >> do think it is tied to stock performance or should compensation be tied to sales? >> that is what shareholders want. >> number eight, amazon, just bezos agreed to a multiyear deal for the sale of lands and digital books. specifics of the agreement were not exposed. the deal maintain the authors share of income. normally, we would not care much about the deal. but we know amazon and jeff bases have been fighting all over how to price the e-books. why do you laugh?

authorsimon and schuster and i care for other reasons. proposal that the author should get 35% and the publisher should get 35% and amazon should get 30%. i have a contract with simon & schuster where i get 20% of e-book sales. i thought amazon deftly trying to play political games favoring the author. when they say they will maintain, they have not told us what percentage is now. i am sure it will not need more than a 25% i've gotten before. i am surprised how the authors felt so strongly. so you disagree. >> i do not think it is as clear-cut. >> dish network customers lost their access to cnn, turner classic movies, and a handful of other channels late monday as the result of a contract is you for turner broadcasting. that is what you get for watching cnn. [laughter]

>> you want to know about ebola. but that is right. that is what you get for what is going on here with the cost. their content costs are rising and this is why they are not able to pay turner for the amount they are demanding. >> i honestly believe right now, turner may feel they are in a strong position to do this because of ebola and everybody watches cnn to get scared about it. >> they are replacing it with msnbc content and that has got to hurt a little bit. point, whiche the is that they are seeing higher box content, the essentially. everyone is doing that. >> everyone in this game is trying to reposition. we are just going to get our content over the top. number six, what is going on here at sears? foring to eddie lampert

more money. they want to so six of $25 million in debt. the third time in a little more than a month they have gone to eddie lampert for more money you can hardly say there is demand. problems, theany parent company of kmart. we talked about the retail world. it is between amazon.com, what can walmart.com do -- the smartest thing sears seems to be doing lately is leasing the property out. >> they are a real estate company. that is it. >> i cannot remember the last time i walked into a sears, a jcpenney, a best i. i hate to say that. >> i walked into a best buy because i left my power for -- my power cord and i had to get one. sears, a dishwasher, it has been a disappointment. -- one time i spent a, >> washing dishes by hand. this over retail environment.

it goes ahead of holiday shopping. apple is predicting a huge christmas. we will dig through apple's massive earnings in a moment. marissa mayer is under a lot of pressure from activists investors. stay in the loop. ♪

>> the apple ceo tim cook is expecting another quarter of record holiday sales after his company crushed it last night. -- 39 million last quarter. 10% declining faster than the steadily dropping ipad.

shares are up more than 24% so far this year. for more, i want to bring back my guest host for the hour. our bloomberg contributing editor. >> happy to be here. >> nobody talks about macintoshes, but what is happening is the success of the iphone grows and grows and reflects a growth on the -- a glow on the entire company. everyone thinks this is the best product. people using windows are increasingly saying, i will use mass. there's so much more beautiful. all your cool friends have them. it has been happening. sales up 21% this quarter. that is something new. they have broken out and i think it is a big deal and that could be the gross is this for apple that people are not paying attention to.

do you know how many pc's are sold every year? 100 million. it is still gigantic. it is not sexy at all. very high margin and high-priced. >> what is interesting is the --nings call, apple noticed they are not going to report individual sales for those products. they will lump them all together. the twitter sphere -- the sphere sphere ask, are they trying to hide something? >> everything apple does is looked at under a microscope. i do not think you could compare the apple watch to the tv right now. he clearly had the momentum. i think it will be a big deal, whether it is a big deal -- it will not be a big deal on a scale of the iphone. that is a crazy concept. but wires and iphone even to work. sell if more

iphones sell. it is an important product. i do not think they're hiding anything. i think it is kind of cool. it is apple moving into fashion, the colors, the preacher brands it is protruding and that will be -- i do not know how the world will respond to that. >> do you think they should break out the sales? >> no. this is what amazon does with the candle. they do not want their competitors to know. is understandable if they could keep the information away from wall street, they will. >> and you are skeptical about apple pay? are so many things that are hard to judge in advance right now. the world is changing so quickly. honestly, i am confused. efforts,e been so many all the credit card companies have tried it.

google is trying it for while. maybe apple's extraordinary brand, may actually do something for payments nobody else could do. i hope it is true. i would love to see payments get easier. >> when you look at something like google wallet, i do not think google why -- google wallet made to the front page. benefit thatnal apple is blessing that might take it over the top. possible.at is no company gets attention mike apple. no company. we have got to see something bigger than that. >> i love my iphone 6. i will say. i do not want it any bigger. my friend mark has one but he is like 66. plus person.

whatever you do next, it has got to be smaller or in your glasses or in your brain. that's all right. stay with me. david fitzpatrick, our bloomberg editor.ed -- not enough americans are loving it. the chains of mcdonald's are still slumping. ♪

>> welcome back. important stories you need to know. me as my guestg host. also, olivia sterns is back in the game. yahoo! ceo marissa mayer's. the company reported earnings after the bell.

she will have to lay out a winner in order to turn around some of her critics who have been brutal >> they are tough on her. she has a tough job. i do not know who has the formula for yahoo!. some people would say she does not. i am worried about that myself. i do not know anyone who has got a clear-cut winning strategy. people still wonder what yahoo! is. is it a content company? a search engine? >> a holding for alibaba shares. >> all investors want to know is what will happen with alibaba. how will they treat remaining face and how with the eel with taxes on it and what will they do with sales? >> he said something interesting. that there is sexist criticism question mark -- criticism? have a think women ceos

double standard. they have to be even better than a man. that is my opinion. i say this to my wife all the time. >> number three, canadian pacific. they will push for consolidation of the railroad industry. important story. we only have four railroads across the country. ao came out and i think conference call this morning and he will say, we have consolidation. everyone looks at the other two railroads. clooney warren buffett's is railroad. they say eventually, we might only have two railroads crisscrossing the country. >> regulators are worried about this. the top seven largest u.s. and canadian railroad companies that generate 90% of the revenue. that sounds like a lot of consolidated power. >> the real business improved

because of the fracking the men the otherl there on hand, costs are coming up and insurance has got to be going up and they have got to get it or becauserd vehicles everyone is worried about the crashes. more competent -- it is a more complicated business. >> number two, mcdonald's. third quarter profits dropping 30%. the fourthing for straight quarter. we were thinking about places we have your have not gone to. i do not remember the last time i stepped into mcdonald's. >> i can. you did a story with the ceo. >> that is one way to go to mcdonald's. you have got to see this woman flip burgers. >> i love mcdonald's. the taste is great. they have done smart things, putting in salads. these companies, coke, mcdonald's, sears, they are tied to an old lifestyle that is

going away. how many people are living the new life and are enough people living the old lifestyle to benefit? question pull a, potbelly. and healthier. incremental steps. >> i am not actually flipping a burger. i am making a make rap. -- a mcwrap. >> how many calories are in that? >> a great point. it was a generation. my generation grew up on it. all that bad for you food. but that was what we ate and that was the culture. collect there is much more awareness about food health now. >> there absolutely is. i have not stepped into a mcdonald's lately. bloomberg -- bloomberg television is on the markets. futures read before the open and ,t looks like we are rallying stuck at these levels. we will take it after last week's turmoil. the top stories at the opening

bell our next. -- our next. -- are next. ♪

>> welcome back. the most important stories you need to know before the opening bell. olivia sterns joining me. number one, we had to talk about the markets. one of the most successful hedge fund managers delivered 19% returns to investors. him.ave got to listen to he says stocks will outperform other equity markets for the rest of the year. he is still bullish on the markets. >> yes. the rally in the dollar has probably run its course. >> long-term, the future of the

u.s. economy is grim. it is an ironic twist. >> it is all relatively speaking, that the u.s. will be relatively better than the rest of the world. the credit bubble he expects will burst. he has been fairly critical of what the fed has been doing. making this not on the other idea that the fed will be there. >> it is funny. over the course of september and august, you saw all the bears on wall street refine their forecast for the s&p. we now have the big selloff last week. it felt like a correction. here come the bolts again. stocks are trading. i want to bring in kevin, the portfolio manager who considers this impressive area to be in right now. first, what do you make of the case here on the u.s.

essentially, our view has been that the u.s. economy will be the place to be. that has been right. the u.s. equity market therefore will also be the place to be. i has been reasonably good as well. if you look around the world, they are struggling. at what point in time does the fed need to tighten? you have got one message that set to tighten. then you have got another message. that the u.s. economy is getting better. eventually, the fed will tighten. >> eventually. they will all die. so when? middle part of next year, you will start to see increased. how fast, and what the paces, but i am really happy to see the u.s. economy is doing better first and foremost. as in equities investor, you

need that or else you do not equity.trong case for >> we always hear about technology is driving the engine of growth. why so bearish on this? was that the earnings growth was not there at the moment. a lot of it has to do with the tech companies having so much overseas, the marketplace is struggling. as a percent of gdp, that has been sliding in the last year. big capital about spending. >> would you say the same about google and amazon? >> each one is different. the trend that ultimately drive tech would be businesses. ultimately, the dollars will be with the larger tech companies. from that point of view, that is what i'm talking about here it >> are you pricing in any kind of action in tech?

to be the trend right now. you heard mark yesterday say tech company will eventually be split up. is not a play based on the fundamental value. >> large-cap tech is cheap. prices, look at their multiples are generally pretty attractive, particularly for larger tech. a breakupalk about value, you are talking about putting a floor under it. talk,ou are hearing that it is really value here. what is missing is earnings dynamic is not really here and the bigger trend talking about business spending as a percent of gdp, it has been going down.

>> thinking about splitting up but also emerging, everyone is focused on yahoo!. there is all this talk about teaming up. we talked with armstrong yesterday. guy who -- who normally -- he was direct with yahoo!. >> new york for tonight, i can tell you that agenda for the board meeting. vindication -- how to operate for the companies in 2015. >> david, does it make sense? >> i do not know if it does. i do not think they are bad.

i would not make that combination. >> big tech companies have to split up. it has to pay to sell its chip business yesterday. it does not fit in the new world. >> what do you like? atwe are really looking health care because demographics are there. that pricescern were held down. when you think about bounce sheets, the balance sheets are good here and a lot of the sheets are in place for better performance in tech. i meant to say health care. >> kevin, thank you so much. up, governor snyder will make his decision on anti-tesla

built today. we will hear from the vice president joining us in just a few moments. ♪

>> all right. michigan, the michigan governor will vote on whether to veto or pass a bill that would prevent tesla motors from selling a stake directly to viewers. of vote comes amid protests elon musk, hoosier wives dead protests in social media. called the bill a raw deal. calling us -- the vice president of business development on the ground in michigan.

me what has been leading up -- what has tesla been doing leading up to the vote today? actions the governor's today. he has the opportunity to veto the bill. that takes his bike today. we have been doing a number of we have been talking to the governor's office and there has been good dialogue. -- not happy about the situation do is have put them in about making this hard decision so close to the election. that has been very productive. there have been a number of suppliers who reach out to the governor's office as well. the issue has been well covered , something with the action itself the legislators took, that took place, the very last moment in the legislature.

there is a good deal of controversy about that. >> you mentioned it has been undercover in the darkness. >> yes. a small amendment was attached to a bill that had been moving for about four months. it has been attached on the last moment on the last day of the legislature. say and i think we understand now that many legislators need to understand what they were voting on. it has not been publicly debated at all. is one of those those bills that say, the dealers just barrierget some kind of to the direction the economy is moving in. he is a smart guy who comes out of the tech industry as well. do you get going he really wants to prove this, that he is

feeling the political pressure and he just does not know if he could get away with it? five i have not spoken to the governor myself. what i get a sense of is this is a controversial issue for the they wish, all things being equal, that there were more time to debate the issue. to -- close to election day, controversial issues such as this, it is just that, controversial. hard to really examine the equities. ofdo not have the time public forum. >> he is running in two leaks. it is a relatively strong challenge. >> i want to bring in the other side, the argument from the auto dealer association. here, he said, consumers buying a new car today, the competition between local dealers in and across

brands is a factory owned, all of its own stores. and buyers would lose all bargaining power. he sees it as anti-competitive if they were of -- if they were to come in.petitors >> that is interesting. to protect this monopoly and he comes in and says, if we were to -- that is ridiculous. all manufacturers are selling , competitives pricing through the brands. the idea that the current system, the monopoly they have, , the fact that they have to go into the dealership. this is one of the most

unpleasant aspects in most polls. >> we have a map here showing where tesla sells directly where is this now a disk you -- a dispute? it is out numbers -- outnumbered in terms of how many state allow you directly. it looks like a battle for tesla. >> not at all. been have seen has inaccurate. we are selling in almost all of the markets. almost all of the markets that are major markets. very productive dialogue with createtors on how we can an opportunity. it is worth saying, what we're doing here, we promote a new technology. to killot doing this

the former dealer system. future, we might even have dealerships. it is just not something we need to do now. volumeselling a medium car. we do not need to have car lots and broad geographies. saying we're open to dealerships. all i am saying is that yuan has suggested a hybrid system in the future is a possibility. we are very pragmatic. what we are trying to do is pragmatic. we are trying to promote a new technology which would not be in the judicial system selling to someone who will sell to someone else aerated -- someone else. in thatwhat is working is what we continue to do. >> thank you so much for joining us, the vice president of business development for general motors. also thanks to my guest host.

>> everybody wants it. if i could afford it, i would want it. >> thank you. remove back -- we will be back in two minutes. ♪

>> it is time for the global outlook. we keep our eyes on shares this morning. also, cutting sales forecast, same global economy will remain 2015.nging all of us as coca-cola battles weakness in the emerging market, namely in latin america. the bloomberg news reporter follows coca-cola for us from atlanta. some restructuring here. some of the restructuring david winters has been lobbing at coca-cola right? >> s. he has been leaning on coke pretty heavily, as have many

analysts and investors concerned with global growth slowing, as it is in emerging markets having trouble. know what is happening with developing markets when it comes to sugary soft race in places like latin america. we are concerned places are not responding quick enough to those challenges. >> what will we do? how is the streamlining going to >> one of the key things they announced today is that they're going to step up cost-cutting efforts. pepsico has been a lot more aggressive in saying they will cut $5 billion over the next five years to increase productivity and profitability. coke has been slower to that. the ceo of coca-cola has been slower, and he stepped up right now to say he will get read billion in annual costs by 2019. that should add more cash potentially to shareholders.

there are questions as to whether that will be plowed back into business. investors said it will be a waste, or whether that will go back to shareholders. five the shares have not been doing that that. yes, there have been a few dips throughout the year so far. up until the latest in the last five weeks, coca-cola shares were trading higher. >> yes. just lisa go hit an all-time high. it was unthinkable several years ago that they would ever get anywhere near the four dollar mark where they had been before him andes split that 90's. a lot of that was because, when you talk to analysts investors, they were expecting coca-cola to become more aggressive at some point to fix these problems, even if they take too long now. you see that reflected in the shares. stock to be in with this kind of volatility we

see now. >> on the pepsi side, as you say, they have been more aggressive. they had one activist investor -- by splitting up. >> that is right. one of the big cases they're making as well, you can/costs more aggressively and consolidate headquarters. we saw a similar action called for yesterday, coca-cola and why it is spending money to renovate headquarters. one of the other things i should mention is we saw -- it will be a lot more aggressive in laying out plans to take north american distribution modelers often books in north america and sold back. selling the majority of those by 2017. has been with that by 2020. investors will be glad to see

more clarity there as well. cai thank you for joining us. that does it for today. tomorrow, chicken wings, craft beer and big bucks. i will speak with the ceo about growth innovation in football. and discuss a latest investment in a new private equity firm. what is he putting his money in? that is tomorrow right here on bloomberg television. ♪

>> it is 56 past the hour. bloomberg television is on the markets. the trading day, and let's get you caught up with where the stocks are currently trading. the u.s. markets are slower on the way up.

a day of gains, up about 1%, driven higher by those energy stocks. fallinges, minute hand, as more stimulus for the ecb decreases the demand for safer asset. it has been a great year to be the marketplace for his best return since 2002. how long can the rally last? let's address the question. .isa, you cover that before we go into struggling returns, latest date for what an interesting day it is for the people are going back to peripheral debt for italy, spain, people are in france. they're basically rallying around the idea that the european bank is covering bonds for the european nation. the bank is trying to celebrate stimulus to prevent another inflationand ignite

will do more. there have been inflationary trends in europe and it has been a time for people. classes interesting. wind is the price into the markets? >> it had been priced into the market and that was one of the that had been driving returns for most of the year. italian and greek debt has rallied throughout most of the year. this month has been different. people have been moving away from it for a referral debt leading up to this latest action of the ecb, concerned the ecb was not willing to act quickly and sufficiently enough to prevent the slower growth we're seeing. today, people are reversing some of the movements we have been seeing earlier this month, where they have moved away from the riskier sovereign debt. a morenow moving back to traditional, risk on environment on the backs of the european central bank. bankis a classic central

put option. five or six years now? access. one of the biggest gainers. >> for all this year, the german jet -- german debt has been the biggest gainer. the debt previous to this month has been -- they gainers. u.s. treasuries, especially the longer dated bonds, have been amazing winners this year. there is a question of how much longer that could last. >> what are the signs of both analysts telling you when this rally might fizzle? >> we saw a dramatic move with treasury yields plunging. how much of that was capitulation and how much is that actually international investors piling a safe haven, a safe haven for u.s. treasuries? it is not totally we are whether all of the shorts have been been out of the market. have, there's more

potential for yields to rise more. >> what are they tell you, one side or the other? >> analyst expect yields to rise. .eally not significantly rising press ok. we will have to leave it there. our debt expert, thank you so much. on the markets again in 30 minutes. market makers is up next. ♪

♪ live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. robin hoodly at the conference. we are looking at some of the best picks including american airlines. not enough americans are loving it. asonald's profits plummet u.s. sales continued to fall. >> the world series gets underway. answer the question, why is striking out with the kids?