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tv   Bloomberg Markets Americas  Bloomberg  November 14, 2016 12:00pm-3:31pm EST

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>> ♪ >> from bloomberg world headquarters in new york, we are covering stories from new york, washington and geneva. donald trump set up a power-sharing arrangement with his top staff appointments. secretary of the u.s. department of homeland security, jeh johnson on how his department is preparing for a transition to the donald trump administration. we are seeing deals across the pharmaceutical industries today, breaking down our merger monday in this week's deals. let's get a check where things stand now from julie hyman. >> we had a pause in the postelection rally. at a record,ading and the s&p and the nasdaq have given up any early gains that they were experiencing. a sideways market here, but
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again, we are seeing this phenomenon where there are some big moves in the individual groups. by better thanup 2%, continuing their rally. industrials as a group are also trading at a record in continued discretionary's. on the flipside, technology shares are down 1.8%. big percentage moves on an individual basis. i was curious to look at what kind of group moves we have seen. this goes to the close from last tuesday to see how groups have performed. financials are no surprise, up 11% and talking about getting rid of a lot of regulation. industrial is the second-best on the infrastructure spending that is presumed to come under a trump administration. we have got utilities suffering from those very same higher rates as well as a concern about renewable energy spending, consumer staples falling, real
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again, even though we see the s&p rally by about 1% since then, we see a lot of big divergent moves under the hood. another that caught my eye's retail. we are talking about a lift for, potentially, consumer spending, some of the policies that have been talked about. urban outfitters and nordstrom are rising and some of these companies are coming out with earnings that are still out. take spade is rallying after a company called high risk investors called for -- 70 called tyrus investors maximize value. there have been some interesting moves in commodities. oil continues its losing streak, continuing their losing streak as well although they have moderated but copper is bouncing back after that huge
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winning streak going into last week and then dropping on friday. it is back in today's session. vonnie: thanks for that. let's check in on first word news this afternoon. erik johnson has more. thanks. barack obama leaves tonight on his final foreign trip as president. donald trump's election has up agenda for his journey to greece, germany and peru. assureseaders -- he that trump will be ready to lead. president obama will hold a news conference and will have live coverage on bloomberg television and radio at 3:15 eastern time. house speaker paul ryan is telling lawmakers that it is time to join forces for the new trump administration. the wisconsin republican told
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house republicans he is seeking their support for israel election to speaker. reelection to speaker. theresa may will respond to donald trump selection in a speech tonight. she is expected to say that his victory shows a need for a new approach to globalization but does not ignore working people. may will also argue that changes in the air. -- change is in the air. the trial of a south carolina police officer accused in the shooting death of an armed black motorist -- an unarmed black motorist is entering its third week. cell phone footage shows the shooting of the 50-year-old walter scott being shot in the back while fleeing a traffic stop. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am erik johnson and this is bloomberg. >> time for the bloomberg
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markets deals report. we report on the m&a deals with the biggest players behind them. it is tough to get big deals done this year and that could change under the administration. we have the executive editor from m&a bloomberg global. head of antitrust practices and partner member -- part-time member of family dollar, their acquisition by dollar tree and the acquisition of men's wearhouse. >> we had an election six days ago. big deal as we understand it. if you got a call from a client and they say, what has changed in the antitrust world? what are you saying to them. the question of the day and i say a couple of things. first all, there definitely will be some kind of a change but it is not nearly as big as everyone might think. some people fear that it will
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be. ultimately, and i trust that it is done by professionals, people who have been there for many years, i hope there will be new appointments. i don't think trump is going to look for a professor of antitrust law from trump university to have the antitrust division. likely going to pick an establishment republican who has been there since the bush administration and what we are going to see is a lot like what we saw during the george w. bush administration in terms of antitrust enforcement. but i would say, in response to that call from the client, is that it depends a lot on your industry. is your deal global? do we need to worry about space? it depends on a lot of factors before you decide on a given deal. >> let's look back little bit. i remember in 2009 when obama became president there was a lot
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of noise about greater antitrust authorities and a lot more scrutiny. christine varney made a lot of noise about it that it didn't seem like we saw as much until, say, 2013. why did it take so long for that administration to be more strict? >> i think that was the perception. what changed then was that bill there was appointed to be the head. >> he was more aggressive. >> one of the main differences that i see is these big rock cases. know theour viewers way antitrust works often is by settling cases. but when the government doesn't like where things are going, they have to decide, are we going to settle this case or go to trial? the bushhat early in administration, they had brought a case to trial.
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it has to do with enterprise whether it is because of that or not, later in the bush administration antitrust important policy, -- enforcement policy, that is the big difference. do you sue or settle? >> the obama administration was willing to go to court. they were willing to go to court whether we were talking about halliburton, maker hughes, or at&t. in many cases, they were prepared. halliburton is a good example, a situation where the party is doing that and they thought they had a solution. they were supposed to selloff different assets and the government didn't think that would work. it is there, on those edges of the margins, of the case that you know is going to be challenged, some people think there may be a solution. making the deal makes a big
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difference, who specifically is in charge. >> there are some deals that were blocked in the last two or three years that you think may have been brought under the george w. bush administration or going forward under the next, are there deals that you think were blocks that could have gotten approved? >> it is possible. you mentioned halliburton. another one i have been thinking about is the ge electrolux case. one of the most controversial and famous cases of the bush administration, where those were critical of the antitrust policies in the bush administration was the whirlpool some of ther where facts suggested 70% of the market would be held by this company but it was a proof or at least they didn't challenge it. so if you look at that and gd electrolux, also having to find
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some different types of products, you would think that maybe that would have gone differently. thing to that comparison, you have to be careful because it really matters which deal comes first. if you are the later deal in an industry that gets more concentrated, the deal gets harder and that map goes back to my point earlier. just as much,s are you later in the line of deals? are you early? >> the biggest deal so far of the year is the at&t time warner deal. donald trump singled that out and i spoke to someone who said "our view is that he was kicking cnn." think presidents are usually all that involved in these big situations? a heavy-handedg role? >> no. in normal times, you don't see the president of proving that
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deal. the way it works is there are so many layers involved, in terms of decision-making, that it is unlikely. i'm not telling you the people who do the work, the more low-level staffers or the heads of the various agencies -- of course, they listen to the president and hear the politics. but ultimately, the decision is more professional. there are sometimes unusual circumstances. you might recall in the depths of the financial crisis, we had weekend mergers a very big banks. mergers that have gotten antitrust scrutiny. but that stood out for being very unusual and i expect that as we look at this particular deal, it is going to fall much more along the lines of a professional, thorough investigation. antitrust means it is likely to
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be approved and i wouldn't be surprised if it turns out that way at the end of the day. despite all the bluster. david: jeff mccracken there, executive editor for global m&a. thanks very much. vonnie: coming up, staffing donald trump's administration is the first test. the message he is sending with the hiring of a washington insider as chief of staff. ♪
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vonnie: this is bloomberg markets. i am vonnie quinn. david: it is time for the bloomberg business flash.
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a lawyer from a dozen british retailers accused these up of forcing them to pay hundreds of millions of dollars in what he calls market skewing fees. this comes on the day of a trial in london. top shop says it's these have been set lawfully. luke tons of workers are threatening to strike. says the pilots have been without raises for five years. they say the threat of a strike is incomprehensible. turns out, millennials love cars after all. and 2004n between 1980 would rather own a car than rely on right hailing service is like uber. lift are replacing cabs, not cars. their favorite are the jeep wrangler, the subaru cross track, and that is your bloomberg business flash. trump seems a
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little less rash as he prepares to take over as president. inamed reince priebus as chief of staff. he talked to lesley stahl about how big a job he is taking on. >> it is enormous. i have never done anything like this. it is so big. i realized that this is a whole different life for me now. vonnie: as he gears up to went to the oval office, let's ask steven yaccino about his tactics. it seems like divisions are beginning with healing the all altt with the right -- right with the right. >> he made his first appointments to the white house staff and it was a huge headline. two people are now in this one press release. reince priebus, chief of staff
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of the white house, and stephen bannon, trumps strategist from his campaign and former head of breitbart news. that was a position held by karl rove, david axelrod. this is a really controversial guide. somebody that has already condemning, and very harsh statements from the anti-definition league -- anti-defamation league. the southern poverty law center says this is a mockery of donald trump's promise to bring the country together and you see donald trump straddling these between the establishment peacekeeping that he needs to do is the leader of the country and not letting the alt right side that elected him, the controversial staffers that have helped him get to where he is, he is being loyal to them and making them what he says
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equal partners. >> kellyanne conway is the campaign manager and she was asked about those choices. i think it is a great team and i will continue to work with them. they complement each other and both have the ear of the boss. >> they're talking about how complementry they are and how there could be a power struggle here. >> donald trump has on this before when in his campaign, he creates this power structure in which there are competing forces. we saw this several times in his campaign. they compete for his attention and his decision-making and donald trump seems to be a guy who likes to hear diverse opinions and tactics. ultimately, it is more times than not, he seems like he favors stephen bannon and he has been so close to him throughout this campaign, it will be
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interesting to see how much having him in his ear affects it. vonnie: who are the names that come out? next we will start to hear some more senior advisors and then i think we will start to hear his first cabinet takes. .- cabinet picks every person he places somewhere clears a lane for somebody else. chris christie, newt gingrich, all of these guys, trump fueled some loyalty to them. where he places them kind of direct the rest of the pole pieces -- the puzzle pieces. vonnie: thank you. steven yaccino, bloomberg politics. david: donald trump says the federal reserve causing more problems than solving. this is bloomberg.
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>> this is bloomberg markets. i am vonnie quinn. david: donald trump was highly critical of the federal reserve and as president he will have the power to reshape it and appoint as many as five new members to the court -- the board of governors and that includes a new chairperson to replace janet yellen whose term expires in 2018. joining us now is erin maravich. he is with us from lexington massachusetts. how much power does he have? how'd much does personnel matter. are there indications that janet yellen might not stay on? questions and certainly, mr. trump will have a lot of power in terms of appointing new members to the
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federal open market committee. my guess is janet yellen will stay on for the rest of her term, but they will be under pressure, not to lower rates -- because they can't, obviously -- but because they want to raise rates. ancould be this would be investment for them to raise rates of little more aggressively and also the markets doing some of that already for them because it anticipates more stimulus and higher inflation. in that sense, the fed will probably be extinct with mr. trump but he clearly doesn't like janet yellen. the latest she will stay on his january of 2008 teen -- 2018. under some of the policies that will be put in place by the president-elect, i want to read something that larry summers was talking about. saying "unfortunately, the
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public investment plan would suggest an approach based on tax credits for equity investments that will not cover the most important projects and won't reach the most important investors." so who is scoring this directly? trumps advisors? some economists? larry summers? >> i think most economists would say and even mr. summers would say that anything that would boost infrastructure would be a good thing. how exactly it is done we can debate. i think mr. trump is trying to balance the fact that everything he wants to do will require money on the physical side -- on the fiscal side. he is trying to be creative -- i don't think that is a bad idea -- that i don't think he will be as effective as direct payments.
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i have to say, when president obama did that in 2010, the effects were not that great so maybe getting into some kind of public, private sector partnership may be effective. you are coming up with your outlook as you are forecasting how much it factors into his trade. we heard the protectionist rhetoric. how difficult does that make your job? >> if you take extreme assumptions it could really hurt the economy. raising tariffs against china is not going to happen. i do think trade laws and all kinds of restrictions will be tightened a little bit, not a lot would be my guess. i think, that said, the growth in world trade will be even slower than it has been in the last few years when it was already slow. i think this kind of increased friction will mean even slower world trade growth. andields have been rising rising substantially.
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because of where they will go, given they have already risen and we don't know what is happening next, whether it is fed or market or anything. >> markets may be overestimating the amount of stimulus or the kind of increase in yields. i would guess the markets overreacted a little bit. we'll get them to pull back in the coming weeks. david: thanks very much. coming up, we speak to the department of homeland security secretary johnson on how the department is preparing for the trump administration. this is bloomberg. ♪
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♪ i'm david gura. vonnie: i'm vonnie quinn, this is bloomberg markets. breaking news.
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standard and poor's is saying they will be budget pressures intensifying in future years for new jersey. once again, a minus. let's start with headlines. erik johnson has more from our london newsroom. eric: president-elect donald trump is considering three people to be the department of energy. the transition planning documents obtained by the associated press. harold hamm, north dakota congress and kevin cramer and venture capitalists robert grady. grady is also listed on the documents of a possible to be the interior department. president obama and hillary clinton are reaching out to democrats today. a callsident will host with the democratic national committee according to a notice obtained by politico.
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they were in a separate telephone call with nancy pelosi and houston across. delayingcharges are -- trial on it will be held in may, 2017 instead of february. he walked from his post and afghanistan in 2009 and was held captive by the taliban and its allies for five years. he is facing up to life in prison if convicted of both charges. the brightest moon and nearly 70 years is lighting up the sky around the globe. also known as the super moan. it reached its peak in north america just before dawn today. it reached a summit in asia in the south pacific on monday night. global news 24 hours a day powered by more than 26 hundred journalists and analysts in more than 120 countries. i'm erik johnson and this is bloomberg. vonnie: a quick check on u.s.
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stocks. we have a look at the major indices. all in the red. 500 down, reversing earlier gains. .70%,asdaq is down 0 primarily dragged by apple and other technology stocks. softer ones like facebook and so on. let's go to abigail. speaking of technology drags, that is what we're looking at. facebook, amazon, alphabet, netflix. efflux is down for its fifth day interrupted -- netflix is down for its fifth day interrupted big uncertainty around what a trump administration and is potentially protectionist policies could mean for these
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companies and their international exposure. something that analysts agree with, but he also e-mailed our team earlier with an interesting idea, which is that snapchat, if the company goes public by the end of this year, that the fangs can be used as a source of funds. he expects these stocks to be week into the end of the year. apple is the biggest drag on the nasdaq. s&p 500 and the dow getting a , but apple attention is down three of the last four days. uncertaintybout the of what a trump demonstration could mean for apple. but we did speak earlier today to an analyst over at maxim group and he is bullish. he says this weakness represents an excellent buying opportunity, that there is pent-up demand for the iphone 7. his proprietary survey suggests
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this is especially true within the emerging markets that suggests that could be mid teens year-over-year growth relative to what consensus is looking at now. we go into the bloomberg and we take a look at this chart. in may support be bullish stance on apple. we're looking at a longer-term chart of apple and we see -- it is approaching the 200 day moving average. if you can find that as a level of support as it has done before, perhaps apple will bounce higher. vonnie: thanks for that. david: coming up to secretary jeh johnson. that is coming up next. this is bloomberg. ♪
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♪ this is bloomberg markets. i'm vonnie quinn. david: and i'm david gura. president-elect donald trump has promises, one of which was a wall between u.s. and mexico to control immigration. he said that a fence would suffice in certain areas but in other areas, a wall would be more appropriate. -- more on immigration and let's talk to the secretary here and make a little news because every six months you put out a new national terrorism alert system bulletin that if this is the threat to the united states. you have one coming up tomorrow. can you tell us what the threat is to the united states as we begin the transition to a new administration? sec. johnson: thanks raven the first of all.
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in thisn concerned environment about the prospect of the homegrown violent extremist. the so-called lone wolf committing acts of terrorism inspiredhe homeland, or encouraged by things they see put out by terrorist organizations on the internet. -- and there is a role for the public here -- we encourage the public to remain vigilant, to remain aware. vigilance and public awareness commended addition to all the things we do in homeland security and public safety, can make a difference. the events in new york city and new jersey in september demonstrate this. of that awareness -- if you see something, say something -- can make a difference. some of the rhetoric during the campaign aimed at muslims hurt that effort? sec. johnson: during the i did not comment on
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it and i will continue in that posture. in the current global terrorist environment it is important that we build bridges to the and alties that isil qaeda are attempting to target for recruitment. here in this country we spent a lot of time building bridges to american muslim communities to encourage them come if you see something, say something. to encourage them to participate counteringn extremism efforts. that is something i have been on a mission to do personally in my three years as secretary. so, the answer is not to vilify or drive into isolation or into the shadows american muslim communities, but to bring them in as part of our overall public safety homeland security efforts. mike: what about the group effort, the isis or al qaeda?
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more likely to see an attack from them? we have moved from an environment where we have to be concerned solely about ed attacks fromt overseas that infiltrate our borders, like a 9/11-style attack. to environment it also includes terrace-inspired attacks -- t errorist-inspoired attacks that could strike with no notice. which is why the public soilance and awareness is important and why our efforts to build bridges to american muslim communities has become so important, as well as working with state and local law enforcement with building partnerships with some of the folks i just met with here today who are in private security, to partner with them. we have to be vigilant when it comes to public gatherings in
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public places. mike: helping with some numbers donald trump says he wants to almost immediately report to do 3 million illegal aliens who are criminals. three illegalto aliens who are criminals. are there really that many? sec. johnson: we have prioritize the removal of convicted criminals. we have been focused on those convicted of serious crimes. level of number of the deportations from the interior as we put it has gone down, the percentage of those deported that are convicted criminals have gone up because i have told our immigration enforcement forced to focus on the convicted criminals that are out there. mike: but do we have 3 million of them? sec. johnson: i am not sure where that number comes from. there are an estimated 11 million undocumented in this country. more than half of whom have been
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here more than 10 years. many of whom have not committed serious crimes or any crimes at all. they are here undocumented and they are becoming integrated members of our community. in our administration, we wanted to offer them deferred action, that was something that was in the courts. we have a program now that is quite successful. we want to bring people who are not criminals out of the shadows so they can be accountable and get on the books. but there is definitely a segment of the undocumented population were criminals, who are members of criminal street gangs, we need to prioritize and focus on. that has been our policy entitled the next administration continues to do that. the numbers i have seen suggest you have the capability of deporting about 400,000 to 450,000 people a year. given the resources you have, could you do two to three
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million immediately? you have to: remember, that is the equivalent of the city of chicago. that is a lot of people. we do put somewhere between year from the00 a interior in addition to those apprehended at the border that our border patrol sons back almost immediately. that is a six-figure number. but the direction i think we need to go is to focus on the criminals, and that is the direction we had been going in. mike: what would it cost to do three million? sec. johnson: billions. in our system of government, that the everything executive branch want to do by way of a significant policy change, they need the legislative branch to go along, either by authorization or pro--- or appropriation. government policy is a
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partnership between the branches. they both have to work together to make those things happen. mike: speaking of those caught at the border, there has been a recent surge in illegal immigrants caught at the border. why is that happening? sec. johnson: good question. we have seen increasing numbers this fall -- october was higher than september. a lot of it is the patient -- basic factors -- poverty and violence, a lot of families living central america. a lot of people speculate that the election has played a part, that the election creates a dynamic. we heard some of that from interviews with migrants. i'm reluctant to attribute direct cause and effect to what we see. our job is responded to it as best we can and as what we're doing right now. but very plainly, the push factors in central america, the poverty and violence that
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motivate a seven-year-old unaccompanied child to travel the entire length of mexico to come to the united states, are the principal factors that cause the migration patterns we are seeing. there has been a changing demographic over the past few years, away from mexicans, away from single adults to kids, families from central america. if we're going to seriously address this, more walls, more cannot be your only answer. you have to address the underlying conditions of poverty and violence in central america that motivate so many families and kids to leave in the first place. in charge of the secret service and protecting the president. the demonstrations we have seen after the election, his or any reason to think the threat level will be higher for this president than previous presidents? sec. johnson: well, that is an assessment in progress. is the secrety
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service does not get enough credit for what they do day in and day out. the secret service of the finest agency in the world. there just been through a very busy and intense campaign season. the conventions, the u.s. just the yuan general assembly. the visit from the open -- from the pope. the secret service was responsible for the security of it all. they do a terrific job and they will continue to do so. sure you're looking forward to some time off as well. jeh johnson, thank you very much. back to new york. he is in washington, thank you for that. david: coming up, looking for some art to fill up your wall? this is bloomberg. ♪
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♪ you're watching bloomberg. president-elect donald trump's selection might get a big boost to london's housing market. we will tell you why. -- ie: samsung is obamacare, wef dig into the numbers at president-elect trump to repeal replace president obama's signature health care law. vonnie: donald trump's election may be a boost to the london housing market. says each one victory could lead to the return of international housing investors looking for a safe haven.
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asking prices have fallen for five straight months. expanding software capabilities. buy --reed to they doubled its stake in mentor two months ago and pressure the company to improve value for shareholders. samsung is making a big move into the automotive technology business. it is agreed to by harman international industries. about $1 million in cash, that represents a 28% premium to the closing price on friday. they make high-end car audio and carhe leader in connecting technologies. the chief executive had this to say. >> samsung and us believe leave it -- believe this will maximize our strengths.
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samsung's global scale, r&d capabilities and distribution channels will provide harman the resources to broaden our oil, expand our reach. it has become the most expensive wrist rocket ever stole an option -- said -- wrist watch sold in an auction. it is one of only four known to exist. for our bloomberg quick take, or we provide context and background on issues of interest. has succeeded in lori the number of uninsured americans and has survived a series of supreme court judges. it now faces its biggest threat yet with the election of donald trump. trump has vowed to move to appeal obamacare and replace it
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with a more modest plan. regrets a little will do their best to block any bills that will tear down president obama's signature achievement. a number of rveys have found that uninsured rates have fallen 10%.ly to some of the biggest u.s. health insurers had pulled out at many of the obamacare exchanges, saying they have losing hundreds of millions of dollars. at least one point 4 million people will lose the obamacare plans they bought in the health exchanges for 2016, forcing them to pick new plants. the amount of individuals paying expected to arrive by 22% on average, and 77% will still be able to find plans for less than $100 a month. how to preserve the -- while ensuring access to coverage for
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people to sick or too poor to afford it. making it work required a commendation of subsidies, medicaid and the so-called individual mandate. the unpopular requirement that all requirements pay insurance or pay a fine. replaceys he would subsidies by allowing people to fully deduct their insurance premiums from their taxes. he has moved to a system of medicaid to block grants. and he wants to allow insurance to be sold across state lines. the repeal could result in about 20 million people losing coverage while adding $33 billion a year to the federal debt. you can read more about health care and all of our quick takes at bloomberg.com. ♪ this -- they are expected to
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bring in over $100 million. let's talk about the pieces in this sale. walk us through the bigger pieces on sale. >> most important things we have in the sale, not necessarily in terms of value, although it is its well-being dollar work of art, is clifford still. ,e comes to auction so rarely it is from 1945, 1947. it is really one of the fathers of abstract expressionism. you really shapes our history in the latter half of the 20th century. rare, important, beautiful. david: what is the state of the art auction industry right now? space in the same situation, also volatile? little bit of a volatility since the end of 2014. the oral volumes in the market have considerably gotten smaller.
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the last 18 months have been very good for the art market because we have seen stability return, a little bit more realistic expectations from sellers. the sales on in new york this week are little smaller than they had been before i think the quality of the material is extremely high and it does not seem to be any from where i sit now, any lack of demand. in fact, the buyers in our market seem to be back big-time. your markets are up to your competitors are down. what explains that? >> we invest in the best people we can. a brokeragetively advisory business. having the best people, the best expertise makes you successful. we have set out to do the best we can. from our competitors, we have been very active in producing together. you make the argument that now is the time to sell art? >> we are continuing to see huge
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demand from china in particular. museums a year in china right now. we are seeing this massive appetite for western masterpieces. time to looky good for art for sale. david: thank you for coming in. to nore, just said ipursuiots -- we'll talk to the global head of fx energy is bloomberg. ♪
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♪ vonnie: welcome to bloomberg markets.
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from bloomberg world headquarters in new york we are covering stories from toronto, paris and mosul. what happens to president-elect trump's business is when he is in the white house? plus, his spending -- we break down the market moves. in with the new administration means for u.s. retail. we're just about halfway into the trading session. abigail has the latest. abigail: we're now looking at declines for the dow, s&p 500 and nasdaq. modest declines except for the nasdaq. technologies weighing on that tech heavy index. ,ut bucking that bearish trend
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the small-cap index is outperforming come up nicely. ,fter last week huge 10% rally as are the dow transports. the dow transports up nearly 2% on the day. with the dow transports and the russell 2000 have in common the fact that both of these are built with companies that have more of a domestic base. some investors and strategists may think the company could benefit under the protectionist policies under president-elect trump. much lessst -- faring markets.he emerging we have the emerging market index trading lower today, down 1% after falling last week. this reflects to some degree the possibility that protectionist policies from donald trump's administration could hurt those companies. we have had a huge spike higher in yield and that is causing repricing of risk and in fact
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they could turn off the easy money for the emerging markets that investors have gotten used to. we're seeing some big weakness there. emerging markets index has slipped below its moving average. taking a look at the commodity complex come a mixed share. now down 17%r, from its most recent peak. we have oil close to a bear market. some of this could reflect a continued ideology that iran is unlikely to join any kind of supply cut deal from opec. last week reported record supplies since the international sanctions were lifted in january. some weakness in oil. per tradingve cop higher. last week it in its best weeks in 2011. gold, a little green. uncertainty on what is ahead for the fed and could less accommodation the negative.
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on thelet's check in bloomberg first rolled news. erik johnson has more from london. president-elect donald trump says he was saddened to hear that some of his supporters have intimidated minorities since the election. trump advisor kellyanne conway spoke about the protests earlier today. we should really focus on the will of the people, which was to elect donald trump. folk should do what president obama and hillary clinton ask them to do. unify the company and implement is 100 day plan. anti-trump protesters took to the streets again in a number of cities. immersed in new york, philadelphia, los angeles and others. the rallies were peaceful, for the most part. donald trump is reportedly considering before ceo of world wrestling entertainment, linda
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mcmahon, as secretary of commerce. according to a report from nbc news. twice for senate and was defeated both times. the u.s. will vote on legalization that would extend or 10 years the iran sanctions act. it imposes factions of entities that invest in iran's wheel industry, transport route or so oil radek stepanek. he obama waived the --- one-year marked the anniversary of the islamic state people.that killed 130 paper lanterns with red, white and blue lights were released from a can out and the british singer sting reopened the nightclub where most of the victims were killed. global news 24 hours a day out of my more than 2600 journalists and analysts in more than 120
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countries. i'm erik johnson and this is bloomberg. vonnie: back to markets, the selloff in bonds and emerging markets continues. the next continues to rise committing a nine-month high as it strengthens almost all of its major counterparts. this, following donald trump's victory. joining us now is greg anderson. thank you for joining. i want to have viewers and listeners dip into this for a moment. a great is not having day, the yen is certainly not having a great day. if you change to emerging markets it is a similar picture. turkey is lower. the dollar stronger, emerging markets are weakening. is that going to be the story? greg: -- david: very quickly, stephen hasn't recognized as tributary
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treasury secretary. apologies for and dropping. greg: -- for interrupting. treasury secretary has a big role. i don't know there's a lot out there from what he has said publicly. he has a big task ahead with tax reform and tackling the u.s. china trade issue. back to the dollar rattling on ,rump and why is that, so higher u.s. interest rates is one factor. an important factor. theother factors include trade protectionism -- and i think the really big thing is corporate tax reform, which the corporate tech system in the
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u.s. is not been reformed in 30 years. almost anything you do would make the u.s. market competitive, and -- more competitive, which means a higher dollar. the new treasury secretary will be involved in shaping that any getting it through both houses of congress. what you have investors betting on that any through, betting on the contours of that plan. lcv bet is that -- how safe a bet is that? i would say on infrastructure, i don't know if that is a safe bet. certainly some things will be done. not to live up to at least a portion of the promise. i would say on infrastructure, i don'tbut i th, frankly, is tax reform. i think that is a safer bet that some things will be done. david: i was looking -- decided -- they
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equal at 32ould point base tightening. they said an interest rate increase equal at of 32 points. greg: wow. i would think, go the opposite direction. that infrastructure spending might push up interest rates a little bit. but it will be very expensive for growth. so, you know, the fed can therefore tighten as a result. david: we have seen this as a proxy for the campaign. how much of that weakness is based on tech? is a tied to the proxy side of the u.s. or are there problems in the mexican economy?
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greg: no. peso was the ultimate proxy. really, i think if we had not had elections this year, the andar mex would be at 18.51 blimbing. -- and climbing. we would not be above 20. premium.20% trump vonnie: what do you call both of those? euro, substantially lower. i would think the day after the fed hikes in december would be 103. 105, 104, vonnie: that's not a negative thing for euro. greg: on the exchange rate is a
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good thing. in the uncertainty caused the widening of intel eurozone spread is not something that they wanted to see. don't thinkcome i it has the same downside as the euro. the protest vote has happened in the u.k. and it has yet to happen in the eurozone and there are a lot of elections next year. david: we saw a lot of movement today on the yen. what is the message from that? the figures and the movement of the bank of japan. is thatll, the message actually maybe they have done a right thing by not being too aggressive with monetary policy. say that it is not just the yen's week in a dramatically, it is the whole asian block of currencies. very favorable for them, they're
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finally falling along with the rest of the block. higher u.s. rates. vonnie: quickly, what is your trade of the day? greg: trade of the day -- we have seen corrections everywhere and i do not think we have seen and enough correction, and i would look for that lower. no matter what happens to oil. vonnie: greg anderson, thank you. technicaling up, sectors surprisingly in the red. this is bloomberg. ♪
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♪ this is bloomberg
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markets. i'm david gura. vonnie: and i'm vonnie quinn. it's time for a look at some of the greatesttoes in thnews right now. they have added new stakes in 26 countries. twitter, priceline. the fund also exited holdings in 16 holdings -- companies including expedia. this is according to regulatory filings. traders smell a bargain. it his new the highest since july of 2015. tencent shares are down more than 8% since the september high. cent.t reports -- ten to wait tong told see until president-elect donald stance.arifies his
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this is according to three advisers to chinese lines. chinese companies had a blockbuster year of dealmaking's this year, accounting for billions. that is your latest business flash. david: investors that donald over's unexpected victory hillary clinton would tank be stock market. instead they posted their best week since 2011 and 2014, respectively. but the one sector largely in the red is tech. why is that the case? >> tech stocks are just expensive. you can always say, they just more expensive. but there are notions that silicon valley had really close ties to the obama white house. google certainly had close ties. there was a revolving door between google and the white house.
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including the cto, megan smith. there are a lot of interesting reasons. there has been a focus on immigration kyle important it is to silicon valley. both from an employment standpoint, i desperately for programmers, but also a psychological standpoint where so many tech companies -- intel, google, and hundreds of others, were started by immigrants. technology would be hurt by a truck administration. vonnie: but then you think donald trump is a big user of social media. he is active on twitter, even of the says he will not be as active. also things like he is for less regulations. you would think that would balance out some the -- some of the negatives. cory: where the interesting things, if we see a big cut in taxes, and maybe beneficial for
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the eps of a lot of companies but less over technologies. if you look at the average tax rate by s&p 500, then on a dollar weight basis, tech companies, you find tech companies pay a lot less in taxes. therefore, tax cuts come it might save almost 10% in taxes for s&p 500 companies, it will only save about 3% for tech companies. the company that will benefit the most are the ones who pay the most in taxes and have the most cash overseas. a handful of tech companies have loads of cash overseas. that will be beneficial to them. but there are not a lot of tech companies like that. hasd: of all of them, apple -- david: i was reading a piece about this and the argument being made is these are big,
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then companies that will be just fine. cory: a lot of companies every structured their businesses such as they generate a lot of profits in low tax environment spirit they've gone through this careful machination both through m&a and also the way they set up their businesses to take it vantage of these tax rates. one wonders if they will undo some of those deals if a lower tax rate system regime were in place in the u.s. vonnie: we're be easy for apple to bring back its taxable operations here? a lot of companies could bring that cash back quite a bit. and quickly. but we have had this before. have not ended up with a lot more investment. the money tends to go to dividends and stock buyback. the notion will lead to companies spending more money on themselves has yet to be proven true. david: peter thiel has been
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named to donald trump's transition team. what will that mean between the relationship of washington and silicon valley? cory: it will be interesting to see. you have some interesting people on that panel. we are seeing a lot of change on that transition team, might -- guy who has- he's a very extreme social views that are very much at odds of what peter thiel's are. we will see if they will work together at all. david: thank you. with alle back later the tech headlines. , stephentill ahead lynch and recommended for treasury secretary. ♪ visit bloomberg. ♪
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more on that breaking news. stven mnuchin is said to be recommended for treasury secretary. isning us to discuss this zach of the bloomberg campaign finance team. also many scoops and many interesting stories. presumably he would take the job if he was offered it. is there any conflict? >> steven mnuchin. one thing he has been perfectly clear about through this whole thing to a degree which we very rarely see is he is totally upfront about the fact he wants his job. he told us again and again, if present trump were you offer me something, i would take it. fund called dune buttal, which is sort of not really functioning anymore. it wound down a lot of investments. he is ready for this job.
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david: detail if you would, how steven mnuchin and donald trump came to be and patriots? compatriots? zach: they did a couple of years couple of deals together. when he was not involved in the campaign until april of this year when almost by happenstance he ended up a trump tower for the new york primary results coming in. he ends up on stage with his old friend donald anderson couple days later, trump asked him -- donald, and just a couple days iter, trump asked him and went from there. longtimeng -- a partner at goldman sachs. his father was one of the real pillars of goldman sachs for
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long time. but then he kind of struck out on his own from goldman sachs and became a very successful hedge fund investor. he invested in a lot of movies, everything from "avatar" to "tarzan." can about any movie you think of, there is a good chance he played a role in financing it. then he made this amazing deal in california where he bought this bank that had collapsed during the financial crisis and he and his co-investors made a fortune. david: how interested has he been in politics? he described he is not had a stint in washington yet. operate in that role? zach: you're right, he basically zero experience at all in politics. before this campaign he had democrats money to than republicans. but never all that much, he was never deeply involved. what we know is that he talks
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kind of like a typical conservative. he believes in lower taxes, less government regulation. he called himself and our interviews with him a kind of supply-sider. it sounds like what we will hear from him is a lot more typical republican policies than maybe you would normally associate with donald trump. out,e: i want to point when the treasury secretary comes from wall street the dollar appreciates. do we know anything about what kind of policies he might instigate or what he has been calling for? know.it is really hard to this also hard to note and a brief you'll get from the president. so much of bogus seen over the past few days is a trump's-forth within
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leadership team and within trump smiled himself going to what extent he wants to be populous -- within trump's mind. populist vs. conservative. vonnie: thank you. look at it live shot of the super moon over madrid, spain. seen around the world today. this is bloomberg. ♪ wow, x1 has netflix?
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hey, drop a beat. ♪ show me orange is the new black ♪ ♪ wait, no, bloodline ♪ how about bojack, luke cage ♪ oh, dj tanner maybe show me lilyhammer ♪ ♪ stranger things, marseille, the fall ♪ ♪ in the same place as my basketball? ♪ ♪ narcos, fearless, cooked ♪ the crown, marco polo, lost and found ♪ ♪ grace and frankie, hemlock grove, season one of...! ♪ show me house of cards. finally, you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. live from bloomberg headquarters in new york, i am vonnie quinn. david : erik johnson in the newsroom.
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>> that's according to two to just 22 people -- that's according to two people. in the national finance chairman has been considered the leading figure for the job. barack obama leaves and his final foreign trip as president. he must now reassure global leaders of something he may not quite believe himself, that trump will be ready to lead come january 20. hold a newsama will conference and we will have live coverage on bloomberg television and radio at 3:15 eastern time. issident-elect donald trump
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tosidering oil billionaire lead the department of energy. that is according to the associated press. that document also names a venture account -- venture capitalist as a contender for the top energy job, as well as a pick to lead the interior department. that's according to the global carbon project in norwich here in england. in morocco.are arece greenhouse gases rising to record levels. global news 24 hours a day. i'm erik johnson and this is bloomberg.
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david: leaders promised to cooperate with president-elect trump. earlier today francine lacqua asked bloomberg's finance minister how a trump presidency will affect europe. >> we have to look at the things very seriously and quietly. president trump has made a lot of promises in the campaign. elected, iay he was think the words he chooses and the ideas he defense are pronounced in a more calm way, and obviously he is giving himself a presidential look and outreach. he wants to cooperate with all the countries and i'm very pleased to hear that. all european countries are eager to work with a new president.
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francine: are you worried about the european estential crisis, and more politicians to being elected in europe. will it also give brexit more of a voice? >> i think that the answer to on the one hand and the , if warranted to the american president, is we need more europe -- we need a europe that knows where it wants to go. and we need a eurozone that is stronger. thatve plans on how to do and we need to be united in order to be heard. a are you concerned that trump presidency will mean europe will be heard less? much stronger with
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china, the u.s. is much stronger with the u.k., and you guys suffer in the middle. guest: the european union is to date 500 million people, even after the brexit it will be 440 million people. it is the most important single market in the world. is the closest business partner of the united states, i'm not worried about that. we have to continue to work together on it. we have to do that negotiation, which hasn't even started yet. time being the u.k. is part of the european union and we shouldn't have to take these problems. francine: what red lines are you setting?
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article 50 will be triggered in a couple of months from now. difficultntime it is to know where exactly the united kingdom wants to go. also make sure we have a common mandate to negotiate with the united kingdom. luxembourg's finance minister. vonnie: another bankruptcy this morning. now a new area surfacing. our next guest says the election isn't only about politics, he also says americans are disillusioned either lack of choice and everything. wendy, is it a lack of choice or a lack of funds?
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guest: all the macroeconomic indicators have improved. people have more money in their pocket. it is somewhat disillusioned. they feel between not just political choices but retail a lot of sameness, a lot of categories. think about the broad swath of the country. for most of the country you can see the same kinds of brands, always something cheaper if you want. some of the big boxes around the there is nothing particularly exciting anymore and i think that is the bigger challenge. it is different if you have a lot more money to spend.
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>> how do retailers combat that? guest: i think it is what we were talking about, customized relationships. it is about messaging, it is about we understand your life and lifestyle, it is not about the next deal and the next deal. how to create solutions, whether it is health care products or beauty products or clothes that fit with your life. at the moment it feels like this big box, one-size-fits-all. now you see retailers are adding back to more intimate experience intotheir offers come their products, into the way they talk to people. vonnie: it seems like the ,ow-end and the high-end brands stagnant sales year-over-year. guest: i think one of the things we have all talked about forever and a day is too many stores.
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in the digital age that is absolutely true. i think it is a question of how many physical stores do i need, do i have the right digital proposition. also what retailers need to people aren't just choosing to buy more things. it's not just about acquisition of stuff, it is about is my life easier. i spending more time with family and friends? i think those retailers that have way too many stores on every corner, those that have iny little differentiation merchandise come and those that don't have a very powerful customized digital relationship with their shoppers. tick off the list. thinkt telling you -- i take off the list, how many stores do you really need today to build that a very intimate relationship with your shopper?
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david: you took a trip to london recently and we were amazed at the stories out there. think it isinly i retailers that are creating these immersive experiences. store insmall box local communities, a pleasant experience with values, you trust them in what they say. they are adding more organic products. upping theirreally game and that is working. at the higher end you see people -- that does some extraordinary things. to really create these immersive experiences you can buy online, high price points, low price points, they are the retailers that are getting it right today. fashionare you saying
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isn't as important as it once was? has become, week see now by now -- see now, buy now. guest: they want to wear something that'll make them happier. speed of that is important. it is relevant to my life. that is where the differences today. david: on the latest headline report, what is your sense of how all this [indiscernible] tryt: i think people will to absorb what just happened. to be clear and not unsettled. that starts to make a bit of a difference. it is still very cautious.
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they don't necessarily want more done. vonnie: what does donald trump need in america? guest: theoretically, bringing the jobs back, standing as a country. jobse: do we want textiles back? guest: i think what shoppers are saying, it is a good value, if it satisfied -- if it satisfies what i needed my life, i do prefer it be made in america than somewhere else. funny bank thank you. david: coming up -- vonnie: thank you. coming up -- we head to toronto for the latest. this is bloomberg. ♪
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you can go to -- what we are looking here is the s&p 500 going back to 1990. in red we have the two primary bear markets that have hit bothg that high period came relatively early in the george w. bush first administration and president obama. now that we are in the second longest bull market for the long -- bull market for a long time, this chart may suggest president elect trump would be the next stockarket, so that the
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market is recovering well ahead of his next election. this is a chart of the s&p 500 valuation. as we see the price to earnings is very high, 2010 levels. this suggests the fundamental for the stock market needs to catch up, or there could potentially be a bit of a selloff. -- this is ak at long time chart of the 10 year lee yield -- 10 year yield and white. in white. yield we could be in a situation where
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rates are going to be tightening. it could be an opportunity for a selloff. the bloomberg business flash, the biggest business stories in the news. russia's economy shrank the least. the contraction began at the start of last year. gdp fell 4/10 of a percent in the fourth quarter. off itss shaking longest slump under president vladimir putin, hoping to avoid a period of stagnation. according to the union, pilots of namesake brand's in the company's cargo arm may stop work anytime now. the union has dismissed a company proposal to bring in an arbitrator. may spend $1 million -- spend 100 million dollars for workers that don't want to leave england. law lenders are required by -- by 2019.
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that is the bloomberg business flash. vonnie: canadian prime miste justin trudeau may be approving a transmountain pipeline triple the current capacity. is the managing editor for -- why is trudeau warning about this? think we are seeing an emergence of trudeau the pragmatist. he wants to be seen as a steward of the environment, but you also have to spark some growth. the economy hasn't been growing power a yeark ago. if you are connecting the dots with what he has been doing in the recent weeks, it is looking like he is ready to support this. about aeen talking
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national carbon tax, which he may impose on regions that don't currently have one. he is in caressing spending on marine safety. he has also been backing hydro projects and natural gas projects. all this gives him that social license that he inks he needs to develop these projects. david: talk about the opposition this project has faced. guest: this uld be a big boost to get federal backing. there is a lot of opposition in british columbia and vancouver. mayor of that city has been opposed to this. he's concerned about the increased possibility of a spillage. groups,e the indigenous backing at about 41 groups, they
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are not all speaking with the same voice. still is very real possibility this may wind up in the court. what is donald trump mean for the ceos and the energy pipeline sector in canada? guest: certainly a sea change for the sector. supportern a clear for the kingston xl pipeline, which is good news for trans canada, which has been trying to get that done for years. it looked like it was dead under a -- under obama. there is a gateway pipeline. new lease on life given the backing of trump. that just adds to that momentum.
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david: we talked about that opposition. give us the read of popular opinion. do voters see this as him going counter to that in some way? and what is their sense that some pipeline should be billed? guest: there are some people who say another pipe luncheon effort be billed because you cut off production of the pipeline and production of the oil, which has to beat it to global warning. they are also investing a lot and the industry is investing a lot in new technologies to try to -- still a long way to go there. he seems to be walking a fine line. david: managing editor at bloomberg tv in toronto. what happens to president-elect trump's business while he is in the white house? we will discuss that conflict for our next president. ♪
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vonnie: breaking news, oil is higher, it is in the 43 handle range paid opec -- range. this after reports that iran was going to up its production. 24.69 on brent. david: president-elect donald trump says he is transferring his businesses to his children. they questions remain over what may happen with his businesses and conflicts of interest. carol massar and oliver renick bloomberg
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businessweek. guest: it is an unprecedented conflict of interest. when we think about his specific bigts there are three things. the first is his international licensing agreements. he has licensing and management deals with developers in uruguay, the philippines, south korea. and that could influence his craft. another big thing is his hotel in washington. the federalnsee to government in there. he pays rent back to them to be able to run that hotel. the third one is deutsche bank, with is in negotiations the department of justice. other settlements are coming down the pipeline. trump has about $630 million in debt and half of that is with deutsche bank. oliver: what do we have in terms of precedent and how to deal
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with a president who is going into the white house with all of these assets? do you know what he has to put into a trust, do we know what axis he can -- access his family can have. guest: the closest we have is nelson rockefeller, the newest laws to deal with this came after he served as vice president in 1978, which has a bunch of conflicts of interest rules for everybody in the executive branch except for the president and vice president, who have decided rules like that could prevent them from making the hard decisions that commanders in chief have to make. rarely, if any, concerts of interest that apply to him. anything he does in terms of trying to decisions himself -- to distance himself from his business will be of his own solution. david: hear more from the magazine's reporters and editors every saturday and sunday on
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bloomberg television. vonnie: coming up on bloomberg markets, sean matthews with his on -- and the fed postelection. this bloomberg. ♪
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vonnie: it is 2:00 p.m. in new york. i am scarlet fu. and i am julie hyman. welcome to "bloomberg markets." ♪
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scarlet: we are live in bloomberg world headquarters for the next hour. here is what we're watching. stocks bouncing around today after the s&p 500 posted their best week since 2014. bonds extend their selloff. pushing treasury yields to their highest in more than a year. trump has not yet made a final decision on treasury secretary. we will get the latest on where his transition stance. president obama will be holding a news conference at the clock -- 3:15 p.m. is in time. -- eastern time. u.s. markets close in two hours. abigail doolittle is here with the latest. onds were not trading friday.
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they are doing a little catch-up. stocks are meandering. seen somee have catch-up trading today after that huge rally last week for the s&p 500 and doubt in the nasdaq. modeste are looking at declines after these three major averages opened slightly lower. we're looking at some of the technology names, apple, facebook, google. some believe that the donald trump administration could have reductionist policies that compete with their global interests. amazon is having their fourth down day in a row. however, helping the major averages today are the banks. i give america, jpmorgan, wells fargo, citigroup all trading higher. bank of america trading at
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levels last seen in 2008. a significant rally here. one reason they could be trading higher, the rally in rates. we have been two-year, 10 year, and 30 year yields trading higher. the price of this is consistent with the selloff in bonds. this has to do with the president-elect trump and his administration, the likelihood that it will be progrowth. some uncertainty around what could be had for the fed next. finally, ending on oil. oil had been down earlier. 70% down from its last peak. laste -- 17% down from its eight. we see a recovery here. we see a reversal on the day. behind this is the fact that opec is said to start its final diplomatic push for a supply cut deal.
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something they have been struggling to do so far. >> thank you so much. an interesting reversal in oil today. let's check on first word news. courtney collins has more. bankery: goldman sachs steven manage and has been recommended to serve as treasury secretary. that is according to people familiar with the process. he was the campaign's national finance chairman and is considered the leading candidate for the job. about 25 protesters held a sit in at new york senator chuck schumer's office today. they are demanding that he allow bernie sanders to become the next minority leader. the group is made up of millennials and says it is a successor to occupy wall street. tock schumer is in favor replace harry reid in the next congress. the turkish president has
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suggested holding a referendum on the bid to join the european union. he made his comments today and were in response to remarks by european parliament president martin schulz. he reportedly said that turkey could face economic sanctions based on its crackdown. -- better able to accommodate disabled offenders. the move came at his request. he was serving a six-year prison term for murdering his girlfriend in 2013. prosecutors have repealed -- appealed the sentence which they say is to lenient. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. julie: thank you. let's get back to the great rotation that has been underway.
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check out this chart. stocks have outperformed hans last week for the most since 2011. the yellow circle is that outperformance going back to the biggest since 2011. this on speculation that donald trump's spending plans will stoke inflation. joining us, one of the primary dealers that trade with the new york fed. thank you for coming in. we are seeing that huge move in bonds. is it too big of a move? it is speculative at this point. shawn: in the short term, it might be. long-term, what the economy really needed was fiscal stimulus. now we will see a republican legislature come through and drive fiscal stimulus, which will have long-term implications on people's inflationary expectations, which were incredibly low because we were
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in a zero growth environment. >> do these drive inflation? shawn: they certainly can. if you look at the marketplace, inody anticipated any bump inflation, and now people are thinking along the lines of inflation going higher. coal prices are up. copper has rallied 25%. you see real growth in commodities that you have not in the past. it is speculative in some ways. >> the irony is that the fed has been trying to get inflation going for a long time. it would be interesting if it is the donald trump presidency that does so. i want to talk about the possibility of seeing a hike in december. this is our interest rate ability calculator to look at fed prices iny of the future. 92% is the number as of today.
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that is astonishing to me that it is this high. n: it has been wrong in the past, even at those levels. the expectation that there will be fiscal policy come into play. if you look at what the fed has been saying over the last six months to one year, they were talking about how interest rates could not go lower. they were looking for help from the fiscal side of the equation. i'm pretty sure they will go this time. >> the thing we see with yields, they have been rising since the aftermath of the brexit vote. not at thesame degree as recent days, but give us a glimpse of how investors may have been caught off guard by this sudden surge over the last week. shawn: i was talking about that this morning. we have not heard of anyone being massively offsides. lowuse you were at such
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interest rates, it was hard to be wrong there. really, i think everyone was in line. you have not had any problems or issues from the customer side or anywhere else. i think people were cautious to begin with. >> now that everything has reversed in such dramatic fashion, how do you position yourself, especially when it seems to be a credit trade? unlovedou look at the parts of the world. the bank stocks might pull back at some point in time, but over the long run less regulation will help them. i think the regulatory environment will get easier, not them. bioou look at some of the techs that move aggressively based on expectations, less regulation means they will have higher upside potential. 500e are showing the s&p financials index.
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in equities, it seems like investors are taking the best case scenarios for a trump presidency and republican-controlled congress. how does the valuation picture look right now? >> that is. over the next year or two. your expectation over interest rates will have an impact on what multiples will be. that will be the push and pull that happens over the next year. we are still in a single digit return environment for equity over the next several years. part of that is you are in a high multiple scenario, and you will have interest rates backing up. i certainly think those two things will be pushing and pulling over the next couple of years. of thate also at risk increase in yields and inflation constraining growth to some point? at 2.5%,ar forecast
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but did not change the 2017 or cast because of that risk. >> if you look at the yield curve in general, the places where people borrow money if you are in a single-family home, most of those have already -- so i don't think the impact will be that great. the fear is you will have 150 basis points over the next level years that will have a profound impact on the economy in the equity market. >> do you think a lot of people have pretty much closed out the positions they wted to be in by early november, and the results of the past week have upended that completely? >> i think people were cautious so everyone was -- not sitting on the sidelines, but they did not really have a thought ofcess of getting in and out names. now you have massive sector rotation because the unloved
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sector is the national services stocks and biotech stocks that have really caused people to pour into them because they were underweight. >> do you see signs of panic -- or maybe not panic, but people thinking they have to get in now? >> there is some of that. we are close to topping these sectors. you will see financial services run a little bit longer. their are rotating portfolios. that takes a long time. you are thinking about large-scale money managers who cannot do this in one day. this will dictate where interest rates are. the biggest thing to look at from where equities are going to be is how i do interest rates -- high do interest rates go by year-end? >> is it more difficult to pick the winners and losers of an aca repeal and replace?
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>> they are harder to pick. they usually move in unison. they are highly correlated in a lot of ways. it is really a basket approach. >> thank you so much for coming in. up, donald trump has cast a shadow over a gathering of finance leaders in frankfurt. weighing in on the donald trump affect next. how european stocks ended the day today. gains across the board for the ftse100 anthe dax. this is bloomberg. ♪
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>> this is "bloomberg markets." john: and --
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julie: it is time for a look at some of the biggest business stories in the news. firing london workers who do not want to relocate to arming him england. , england.ham they are required by law to isolate consumer banking unit from riskier units by 2019. awarded $20 million to a whistleblower. the third biggest have ever. they did not provide any information on the person's identity or the company involved, citing federal law that protects confidentiality. they have paid out $130 million since issuing their first reward in 2012. for $915rvice max million. the company is looking to expand digital operations. the deal will help ge automate
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and work with -- greg your business flash update. >> let's head over to frankfurt. they meet against a backdrop of uncertainty over what donald trump will do. volker weiland is the chair of monetary and actual stability. >> i think there is still a lot of uncertainty. we do not know exactly which of his many promises he will be able to implement. overall, the expectation has been somewhat more growth, higher interest rates, and we see that in the bond markets. >> that is obviously the case for the u.s. does that translate to countries across the globe? what is the thinking when it comes to the ecb and other central banks? >> in europe, of course, with the key is and the fear that
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there will be a big increase in protectionism and the u.s. will step back from free trade. that will be bad for europe. germany, and open economy, would be heavily affected. the u.s. would be affected. i don't think we will see that. i cannot imagine a president from engaging in a trade war. that is why i am fairly optimistic. >> how much is a threat of the populist victory of donald trump to the hole european project given we have some important referendums and elections taking place on the continent in the next 12 months? >> clearly brexit was the bigger shock. the donald trump surprised was a surprise, and it is encouraging populists around europe. i think what is key is that the governments get their act together and look more closely
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at what the people want. i think they want more decisions made close to home. i think what is done at the european level delivers a clear win for everyone. more coordination on international police and border control. maybe there will be a push the move forward. >> we have seen a rally in european bankshares and u.s. financials following the victory of donald trump. that seems to be on hope for lighter regulation. do you think he will dismantle the dodd-frank act or not? i am not sure about that, but i think onalance donald trump's administration will mean less regulation or lighter administration. that does not help or hurt europe too much at this point. we are still fairly unstable in
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terms of the banking system. we really need to build up capital and the banking system more. it did not happen here as much as in the u.s. we need to push to build up more capital. >> dallas volker weiland, chair of monetary economics speaking earlier on bloomberg markets. our shares about to rebound for retailers? that is the subject of today's insight. this is bloomberg. ♪
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>> this is "bloomberg markets." for optionse insight with abigail doolittle. >> joining me today is jim strober.
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thank you for joining us today. we have the big election out of the way, the surprising victory of donald trump. a lot of volatility. >> a couple of points to make. first is to look at the implied correlation. this looks at the top 50 components of the s&p 500 by market cap and gauges the market expectation of the correlation of those etf's. when it is high, everything is correlated typically. that is associated with u.s. equities going lower. it spiked very sharply ahead of the election and has collapsed to a new cycle low after the election. historically, that is very positive for u.s. equities, especially long short investors. it is symbolic of dispersion, stocks moving all over the place. represents an outlet environment. questiono would be the
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of what it means for cross asset correlation. i think we have a graph of the move index. this measures u.s. treasury volatility. -- staring atng the long end of the 10 year yield prospects. it's implied volatility has gone with it. graph, this is the move index versus the gsi index. we talk about that a lot. this is a cross asset global measure of volatility. treasury volatility has moved sharply. will that be absorbed in this environment where assets are dispersing, or will we see elevated correlation, u.s. treasury volatility moves up and dollar volatility moves up and across asset classes moves up? that is something we will have to watch and see over the coming several weeks. >> really good chart.
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that goes well beyond the vix. getting to your trade, i know that you are bullish on discount retailers. can you talk to us about this space. components, only eight have been on earnings, check advisor, expedia, netflix. theanalyst focuses on off-price retailers, tjx reporting tomorrow morning. burlington next week. two things to keep in mind, number one is traffic has built steadily through the third quarter. the fourth quarter looks very good for these guys. they have a lot of merchandise they bought last year that was not selling at very good cost. they said a couple weeks ago that they are going to have a tough time competing giving the quality of pricing of this merchandise. these stocks have not moved a lot.
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weeks, kohl's moved last 7.3%. we want to use earnings as a catalyst and go back to january two by upside calls. we do not want to cap are outside in case we see some nuttiness in these names. tjx, january 80 strike calls. you buy those outright and pay about one dollar 15. >> a clean strategy. can you give us the broader retail space? >> xrt is the fighter retail. just got to january and by 46 calls out right. you are paying $.80 for those. that is a clean way to get upside. that is the nonlinear path for the payoff on the options. calls when you buy you buy points. >> great stuff.
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think you for joining us today for options. back to you. >> thank you so much. still ahead, m&a under a donald trump presidency. will it put deals with china on ice? we give you the commodities close. oil coming back a little bit after a steep today loss. getting just 3/10 of 1%. this is bloomberg. ♪
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scarlet: from bloomberg world headquarters in new york,
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this is bloomberg. there has been a notable move and oil today, erasing its losses -- actually, it has now gone back down a little bit as it closes down. it has been interesting. this big leg up came as opec was set to make a last push to try and make some kind of production cut deal happen. we will see if we get more headlines on that in the next couple of days. a little bit of relief and then a little bit of disappointment as the oil markets close-out. agriculture, we have been , which isalm oil getting pummeled today because of added pricing pressure. down 4%. and metals, zinc has been rallying. president-elect trump wants to spur infrastructure investment. we have been watching copper very closely, which has been searching -- surging, along with think. zinc.ng with
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there willculation be a lot more stimulus, specifically infrastructure's jimmy less -- infrastructure stimulus, spending under a trump administration. session rally4 and take a pause on friday, back up again today. scarlet: a big day for m&a on .his monday more than $25 billion with of acquisitions were announced and health care, tech, and financial services. carl weinberg is joining me. jeffberg deals editor mccracken joins us now. this deal was proposed and negotiated long before the election. surprise today. scarlet: having said that, is bigger better in a less tightly regulated financial industry?
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was not that strong in the oil and gas space. we have not had a lot of energy deals. i cannot think of anything other than maybe the ge-baker hughes deal about two weeks ago. scarlet: we have had plenty of deals that fell apart. >> exactly. settle in oil will and companies will start doing deals. if you are perella, you will look at the names in that space. julie: samsung buying harmon, trying to get more automotive assets. fewer crosssee border, international deals going forward? >> the answer is probably -- i don't know. we have heard from a lot of people that have a lot of clients in china here at what they have been advising them is,
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why don't we take a break, and let's see what a trump administration is going to look like. will he label china a currency manipulator? who will be the people he puts in charge of the nhs division? who will be his people? i think we will see fewer, may a halt, if you will, in chinese inbound deals into the united states. if there is a bigger tax proposal down the pike and we see the u.s. companies bringing back all the offshore cash that has been sitting in europe for years and years, if that money starts to come back, you may see fewer deals of u.s. companies buying into europe. they may bring the money back. they will use it for other u.s. companies, acquisition targets. scarlet: you spoke with a runner at cahill gordon today -- with a partner at cahill gordon about antitrust under donald trump. >> i do not think trump is going
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to look for a professor of antitrust law from trump university, for example, to head division. he will probably look for a republican who has been there, and it will look a lot like the george w. bush administration in terms of antitrust enforcement. of what theind us administration of george w. bush look like when it came to deals. >> basically, it scrutinized the deals. it was not as rigorous, if you will, in the scrutiny. under the w administration, maybe 2% of the deals got blocked. under the obama administration, it was over 3%. it is not like the obama administration was all that outside the norm, but they struck down very high-profile deals. at&t and t-mobile.
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halliburton trying to buy baker hughes. they blocked deals that were very high-profile. they were not insignificant deals. scarlet: is it unusual when you're going through an election transition to have a slowdown in m&a? does this happen pretty much every time while people wait for the policies? i in june through august, interviewed people who said it would slow down before the election, and they were completely wrong. scarlet: right. >> october ended up being the busiest month we had ever had in history. it topped what had been the busiest month back in 2007. last week seemed a little quiet as people tried to assess what a trump administration would look like. that here we are and it looks like it looks most mondays. we have samsung and siemens doing good deals in the united states, and neither one of those deals were shocking. they made a lot of sense.
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scarlet: and you can see what happened over the last couple of months. this is on ma go. the volume of deals in october actually picked up to the highest since last november, which was a surprise. >> yet, we had a $40 billion plus deal. the biggest deal of the year so far was announced last month, at&t and time warner. there was no slowdown in october. scarlet: jeff mccracken, thanks so much. now let's check the headlines in bloomberg first word news. ifill hasgwen died. timeas taking an specified off for health reasons. she began her reporting career in the late 1970's, carving out a niche for herself as a political journalist at a time when black journalists and black
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female reporters were ray or in newsrooms. she was 61 years old. president obama and president and we get opinion into of mexico spoke on the phone today. the white house said the discussed taking steps to solidify the relations between the two countries. president-elect donald trump has said he will build a wall on the u.s. southern border and that mexico will pay for it. president of mexico has said the country will not pay for the wall. homeland security secretary jeh knowon says he does not about the estimate used as emigrants. he had this to say when asked about the cost of deporting that many people in a year. >> billions. it is important to remember that in our system of government, virtually everything that the executive branch wants to do by way of significant policy
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change, you need the executive branch to go along. government policy is very much a partnership between the executive and legislative branch . they both have to work together effectively. said u.s.ry johnson policy already prioritizes the deportation of criminals. we will have more of johnson's interview, coming up. the european union has slept travel bans and as it freezes on 17th senior syrian government officials. eu foreign ministers made the move at talks today in brussels. the list includes 13 cabinet members and four ministers of state. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. orrlet: coming up, insider outsider? donald trump's first two hires seem to be a little bit of both. what it means for his
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policymaking, next. this is bloomberg. ♪
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president-elect donald trump's transition begins to take shape. his joints of rice premeds -- reince priebus as chief of staff and steve bannon as strategist straddles the divide. said to behin recommended as treasury secretary by the transition team. let's get more from washington. stop with steven mnuchin. how likely is this role? we had heard that jamie dimon
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was under consideration before he shot that down. >> absolutely. as with all things with the president elect, it comes down to his say-so go and sometimes that comes down to how he is feeling on a particular given day or what the news might be. so it is difficult to say with certainty, but we know that the transition team has gotten , and theyven mnuchin want to put him in there and are moving him forward. it does seem like if he is going to follow the recommendation at a time when the staff up as a little behind, it does seem like it will be mentioned -- steven mnuchin. have somebodyyou like that, some one who is a wall street veteran, although it has been a few years since he has been on wall street, how does that play to trump supporters, the folks who wanted him to "train the swamp," get rid of big banks here couple that with the reince priebus
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appointment, you have a washington insider and a wall street veteran. >> yeah, he kind of went from then the swamp to hire swamp monster. it is unclear how his voters will go. he did things turn the campaign that we thought his supporters might lot -- not like that went along with. reince priebus is as establishment as they come. and steven mnuchin is not just a wall streeter, he is a second generation partner at goldman sachs. so at least upon a resume, it is the kind of person donald trump said he would get rid of an influence in washington. he often had some connection and hollywood.
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it remains to be seen if his supporters will go with it, if they are willing to give him the time now as the staff up happens before the not grecian even the and evenfore happens. time goes on, are we going to see more establishment republicans taking part in the transition team? with rights primas, will he bring in people like paul ryan and mitch mcconnell? thehat we're hearing from trump up team and the transition team as they are trying to balance the various sections of , theepublican party ryan's previous, paul ryan faction -- reince priebus, paul ryan faction. they are basically trying to make sure that they are both represented, make sure they are represented in the way they were in the campaign, in the white
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house, and in may come a time where in the white house, there is a power struggle. i think we will see establishment stepping up, but i think it will be balanced. headline thatt a vladimir putin spoke to donald trump by phone. obviously you do not see that because you are on air. i curious about what donald trump has said about russia since he has won the u.s. election. there were so many reports about alleged connections. >> he has been relatively quiet about that. that is the first i have seen of it, as we speak. he did congratulate the president elect in others. the white house and has said specifically that connections between russia and the president-elect or the campaign .re not necessarily nefarious of course, the content of those does it matter, and that is the kind of headline that will get people talking.
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the president-elect does not talk a lot about russia, although he talked about wanting something like a reset, something hillary obama -- hillary clinton and president obama talked about, trying to improve relations. as we get a readout of the phone call, and might just be congratulations, look forward to working together to tackle international problems, things of that nature. scarlet: all right, thanks so much. appreciate it. we will getting more headlines in the coming days on that transition here at a reminder, we will have coverage of president obama's news conference later today ahead of his trip around the globe. that is at 3:15 p.m. eastern time, at least that is when it is scheduled. have a feeling he will be asked about other things besides his trip. there are a lot of movers
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today despite the fact that the major averages are only modestly down. first, a big rally in retail. kohl's, urban outfitters, nordstrom all shot sharply higher. the first three are on pace or trading at one-year highs, real strengths. behind this could be citi saying there is a "trump bump" that retailers and department stores are likely to benefit under a trump administration, that there could be personal and corporate tax reforms and that could help these companies. in addition, kate spade is trading trip with higher on that urgedhat tire's investors the company to sell itself. thes frustrated that company has been unable to boost profit margins. losers on the day, we're looking at the banks, big internet stocks. facebook, amazon, netflix, and alphabet are all trading lower.
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netflix is down for its fifth day in a row. amazon having its worst four-day slide.-- these companies could digitally be had by the protectionist policies of a trump administration. a lot of uncertainty. and analyst told our team earlier something that could be hurting these stocks, he expects them to be weak to the end of the year, is the possibility of a snapchat ipo and banks could be used as a source of funds, so that could be another reason for the weakness in these big internet stocks. julie: thanks so much. coming up, protecting the homeland under a donald trump presidency -- what will be some of the biggest changes and challenges? the homeland security secretary joins us, next. this is bloomberg. ♪
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julie: this is bloomberg markets. scarlet: president-elect donald trump made headlines this week and by appearing to moderate some of his controversial campaign promises. mike mckee spoke with u.s. home secretary jeh johnson this afternoon. he commented on whether some of the campaign rhetoric at muslims hurt efforts to build ties with the muslim community. sec. johnson: in the current environment, it is important that we build bridges to the communities that isil and al qaeda are attending to target for recruitment. so here in this country, we spend a lot of time building or muslims, toican encourage muslims, to encourage them that if you see something, to encourage them to participate in their own countering violent extremist efforts, and that is something i have been on a mission to do rsonally as secretary. so the answer is not to vilify our drive into isolation or into
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muslimdows american communities, but to bring them in as part of our overall public safety home and security efforts. mike: what about the group ever, the isis or the al qaeda -- are we more or less likely to see an organized attack from abroad? sec. johnson: what i have been saying that for a while is that we have an environment where we have to be concerned solely about terrorist-directed attacks infiltrateas that our borders, we have learned from them, like a 9/11 style attack, to an environment that includes terrorist-inspired attacks, homegrown extremists who could strike in the homeland without a lot of notice to our intelligence community, our law enforcement community, which is why the public vigilance and and why our efforts to build bridges to american muslim
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communities has become so important, as well as working with state and local law-enforcement with building partnerships with some of the folks i just met with here today who are in private security, to partner with them come up because we have to be vigilant when it comes to public gatherings in public places. mike: donald trump says he wants to deport 2 million to 3 million illegal aliens who are criminals. that many illegal aliens who are criminals in the united states? sec. johnson: in fact, we have prioritized the removal of convicted criminals. that has been our policy for the last two years, to focus more sharply on convicted criminals, those convicted of serious crimes. and while the level of the number of deportations from the interior, as we put it, have gone down, the percentage of those deported that are convicted criminals has gone up because i am told our immigration enforcement to focus
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on the convicted criminals that are out there. mike: but do we have 3 million of them? sec. johnson: no, i'm not sure where that number comes from. there are an estimated 11 million undocumented in this country, more than half of whom have been here more than 10 years and many of whom have not committed serious crimes or any crimes at all. undocumented, and they have become integrated members of our community. in our administration, we wanted them deferred action, something that was in the courts. has been quitem successful. we want to do the same thing for parents, to bring these people who are not criminals out of the shadows so they can be accountable and put on the books. but there is a segment of the end documented population who are criminals, members of criminal street aims, who we
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need to prioritize and focus on. that has been our policy, and i hope the next administration continues to do that. mike: then that -- the last number is i have seen suggests you have the capability of deporting about 450,000 people a year. given the resources you have, what would it take -- could you do 2 million to 3 million immediately? sec. johnson: you have to remember, 3 million people is a population the equivalent of the city of chicago, a lot of people. and we deport somewhere between 250,000 to 400,000 a year from the interior, in addition to those who are apprehended at the border that our border patrol have sent back. so that is a six-figure number. again, the direction i think we need to go is to focus on the criminals, and that is the direction we have been going. mike: what would it cost to do up to 3 million and a year? sec. johnson: billions. in our system of government,
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virtually everything that the executive branch wants to do by way of missing the "the change, they need the dutch policy change, they need the legislative branch to go along. so government policies very much a partnership between the executive and legislative branch . they both have to work together effectively. scarlet: that was jeh johnson, department of homeland security secretary. willg up, president obama hold a news conference at 3:15 p.m. washington time. we will have complete coverage across bloomberg platforms. this is bloomberg. ♪
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in new york, p.m. 12:00 p.m. in san francisco, and 8:00 tmn london. welcome to bloomberg markets.
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julie: we are live from bloomberg world headquarters in new york, plus covering stories and lima, washington, and athens . president obama is due to hold a news conference in 15 minutes. he will be taking questions. trump is starting to fill out his white house staff. we will bring you the latest buzz on which business executives could land key cabinet posts, including the recommendation of steven mnuchin for treasury secretary. and we will look into her volatility is headed following trump's surprise victory. we are one hour from the close to trading. abigail doolittle is here with the latest on kind of a sideways session. >> we are looking at some
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greenpeace we opened slightly to the positive, and now we have the close slightly to the positive here the major average spent much of the day in very small decline. being nasdaq is still down ever so slightly but well off of its lows. outperforming the three major averages, after a monster rally last week that have the dow at a new record, which happened again today. the best week for the dow since 2011. digg outperformance in small cap. they wrestled 2000, up to the dow today, carving out in a record high and you grab a sense of how big the of performance is, we go to the bloomberg. we have the russell 2000 over white.t week or so, blue, the s&p 500. the russell 2000 is outperforming. what some investors are a tripping the strength to is the idea that small cap companies within the russell 2000 have more of a domestic base and will
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do well under a protectionist policy under the trump administration. looking at rates, seeing a repricing of risk. we have the rally in rates continuing, meaning bonds are selling off. we see this in the two-year, 10-year, and the 30 have an year, all trading at levels last seen back in january. this could reflect the idea that p could beelect trun spending on growth, plus uncertainty around the fed, whether the accommodation will continue. interestingly, oil had been down earlier today for third day in a row, close to a bear market. but we see a big reversal. we now have all of modestly, up about .2%. opec is said to be trying to use to pull medical ways -- diplomatic ways to seal some
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sort of supply cut. that news taking oil somewhat higher. finally, the bloomberg dollar index, tremendous dollar strength since the election. the bloomberg dollar index up nearly 1%. over the last four days, the bloomberg dollar index gained more than 3%, a huge move in the currency markets, it's best four-day move since 2008 as the dollar is supported by raising rates. thanks, appreciate it. looks like the peso is the only one of the major currencies actually rising versus the dollar today. now first word news. collects russian president vladimir putin spoke with president-elect donald trump via phone today. that is according to the thelin, which says relations between the two countries are satisfactory. officials said mr. putin has high hopes with -- for improved
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relations, describing the two men very much alike as an how they see the world. trump is trying to balance competing factions within the republican party. he has named an establishment figure am a republican national committee chairman reince priebus, as white house chief of staff. the senior counsel will be steve bannon. here is trump's advisor on the appointments. >> i think it is a great team. i will continue to work with them. they complement each other. >> steve bannon was chief executive of trump was a campaign, a favorite of the alternate of right and tea party wing of the gop. about 25 protesters held a the capitol hill office of new york senator chuck schumer, demanding he allow senator bernie sanders of vermont to become the next minority leader post up the group is made up of millennials.
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chuck schumer is a favorite to replace harry reid as minority the next that -- in session of congress. pbs anchor gwen ifill has died of cancer. it was announced last week she would be taking unspecified time off for health reasons. she began her reporting career in the late 1970's, carving out herself as a political journalist as a time when black journalists and black female reporters were rare in newsrooms. she was 61 years old. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. julie: thanks. a reminder, we are awaiting president obama. he will be giving a news conference before his final foreign trip as president. we were have complete coverage
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of his remarks in a field moments. scarlet: the selloff in treasuries making an already richly priced the stock market look even pricier. you will see the fed model, and theuation tool that clocks s&p 500's earnings yields, the white line in the top panel, against treasury rates, the blue line, the 10-year yelled. , theifference, the spread bottom panel, has dropped, now at 2.7 percentage points, the smallest in almost three years. let's get more insight as to what investors are pricing in with michael maroney from state street market advisors. changing in that model is the short-term yields or yields in general are moving term, that the short is, while earnings are going to be a little bit more static. in that scenario, shouldn't stocks be less attractive? is one of manyl
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different valuation models. with interest rates so low, it is hard to tell what interest rates i should use to discount the future roads for stocks. i have beenking, describing stocks as fairly valued for a while now, and certainly with the changes in interest rates, with the fed model, stocks look less attractive relative given some have seenes we postelection. julie: will they look even less attractive once the fed raises if nots many investors, most, are expecting them to do andy samberg? >> what will be interesting if we get the classic buy on the rumor, sell on the move. more than 90% probability that -- that they will be raising rates in december. it will be interesting to see if we see a followthrough on higher
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rates post the fed move. we have seen a very big move in a short amount of time. long in the tooth at this point. scarlet: i wonder to what extent this rotation we have been singing, money moving into financials, away from utilities, away from treasuries, how long does that take? it is been going on since the day after the election. a lot of people are looking for volatility in the days and weeks ahead. weekllolong process? >> it depends on where you started positioning. what is fascinating if somebody yelled inflation and the middle of a crowded movie theater, settle you see bond investors leave for the exits. they are leaving in droves. i-8 knowledge that there are bisonl signs of an upper rates and inflation. i acknowledgment. and i believe that many
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portfolios headed into the election were over allocated for long maturity fixed income and bond proxies, this stocks most correlated with moves in the treasury. investing int in things like real assets and financials that will and if it from higher rates makes a lot of sense. i think we have got a little too far, too fast postelection. i expect to see little bit of a pause here. julie: whether you are looking at financials or real assets from the examples you are giving, would you wait now to see a pullback in those assets before you would see that is a good entry point? is always difficult. i expect that financials, for example, and more recently domestic regional banks will continue to do pretty well in this environment. i think there will be some relief from the regulatory environment. i do believe the earnings-per-share growth and
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the revenue growth has been reasonable and a time we had the yield curve flattening, nest evening, and i think they lend themselves to the consumer. i think they could benefit in this environment. capntioned how well small was doing. i think part of the reason is that small-cap financial companies will be real beneficiaries from this change in the rate environment. the idea about the federal interest rates in december same to be a foregone conclusion. the next meeting is december 14 at 2:00 p.m. in terms of events, i'm going to click on this right here, which shows us which the fed officials will be speaking in the coming days, and it is a wall to wall him of the fed speak, and the double bass. do you expect this omega difference to the markets when everyone is pricing all this spending and infrastructure
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boost? >> i think it will make a difference. i think the countless 17. i think it will make a difference of you get some surprises, either someone who is more hawkish, promising several more rate heights than expected next year and/or get folks that are much more dovish from that perspective, beginning to walk back away from some of those weird given the environment, i am not expecting other one. i expect it to shoot right down the middle and in form folks that we expect to begin raising rates in december, and the outlook for the labor market and inflation continue to improve. should they continue to improve, the fed will leave its options open. scarlet: maximum option allergy, once again. thank you so much for joining us. we will beng up, hearing from president obama. he is set to give a news conference in moments and is expected to take questions. this is bloomberg.
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this is bloomberg markets. julie: we are awaiting a president obama news conference from the white house. the president is set to embark on the european tour and trip to peru this week. i am sure he do not anticipate that the press conference would be on the election so much. -- let'sng in mike bring in mike dorning, the president is having his final foreign trip as a president. is he going to want to talk about that or will he go straight into what he and donald trump discussed when mr. trump went to visit the white house last week?
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about thatbe talking and also what the election of donald trump means. a lot of the foreign trips, foreign leaders will be asking obama, can trump be elected, and what does this mean? obama gave them a assurance is, don't worry, trump will might get elected. so maybe with a bit of a credibility gap, he is now in the position of explaining what this means to foreign leaders, and probably to the extent he can, sharing what trump told him post of one of the things he did in the oval office meeting was asked president-elect tromp if there was any message he wanted to convey to foreign leaders through him. is a discussion of trump going to overwhelm his other agenda? i know he was going to talk thet greek debt agenda, and idea that he is a lame duck >> absolutely. he is a lame-duck, much more so
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even if hillary clinton were going to be president, where the two of them are somewhat simpatico even if there are differences of foreign policy. he is going to be someone who will be trying to wrap up some things. i am sure they will be talking about sanctions against russia. some things that will come up in the interim. knowy, the foreign leaders that his time is running out and that he does not have a lot of leverage to get much done. so they will be looking to the next president, next congress. these international leaders are very much understand the dynamics of power. that is the one thing they are good at. so they will see that here, fisher will stop scarlet: who advises donald trump on policy? do we know? it would presume that president obama will be filling in a lot of the gaps in terms of bringing donald trump up to speed on where the u.s. and these of the country stand?
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>> he has mber of advisors on foreign policy. do not really know who is preeminent vote up among them are jeff sessions, as senate republican. there were some rumors floated that newt gingrich would be potential secretary of state, although there was a lot of pushback against that. the one thing that we know is will while donald trump probably listen to what obama has to tell him about foreign policy, he is not getting his greatnot getting his constructs from president obama. in fact, through much of the campaign, he was completely repudiating the worldview of president obama. so foreign leaders will be looking more to trump's camp and the people around trump to views. trump's president obama may beginning them a lesson about where there are constraints within the american system, where a president trump might moderate his views or be forced to.
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that for insight onto president trump's thinking, it will be people around him. be interesting, especially obama's meeting with angela merkel, because she herself is facing an election. tide ineing popular europe also, marine le pen, for example, in france perhaps has a higher likelihood of getting office there. any idea if he will perhaps have some counsel for angela merkel did in the fact that hillary clinton did not succeed in her race for the white house? what's i am sure there will be some commiserating there, because these european leaders are under many of the same populist pressures. refugees in europe is one of the big reasons for it, which is somewhat of a parallel with the immigration issue in the united states. i am sure there will be some commiserating, some sharing of lessons learned. its own country,
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and most politicians really look to their own knowledge about their own public. kind of interesting though, there have been some reports pen peoplerine le are trying to seek some advice from the trump advisors, but i have not seen whether this have been verified completely yet. there was a lot of writing about that the other day, and that is a bit ironic. scarlet: thank you so much. we're still awaiting on president obama to hold his news conference in the white house briefing room ahead of his final foreign trip as president. julie: we will bring that to you when it begins. we will take it in full. this is bloomberg. ♪
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scarlet: we are awaiting president obama's news conference from the white house. he is said to embark on a european tour, hitting athens, berlin, and then a trip to peru.
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we want to bring in our bloomberg white house correspondent ahead of the news conference. this is a pretty straightforward question for you. i understand going to athens and berlin, but why peru? regionalis this meeting, the asia-pacific , butmic cooperation, aipac there is this regional meeting for asia-pacific leaders, and it is in lima this year. they hit in on germany and greece because they had specific reasons together, but it is an odd geographic pairing, indeed. this is a press conference where the president will take questions, presumably many about donald trump and the transition that is going on. as part of that transition,
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steve bannon has been appointed his chief strategist. there has been criticism of bannon as an alleges -- a legend white supremacist or white nationalist. i wonder how the dynamic is going to play into what goes on in washington and also what questions president obama will be answering today. be very surprised if no one even raises this in a press conference. i do not know what president obama will say, whether he will hold his tongue on this in the idea of not talking to much about the next administration's transition or whether he will speak about this. we have seen the democratic leaders of the house and the senate attacked this choice, ,ecause the breitbart report which he used to lead during his leadership published articles that could excuse it to be anti-semitic and white nationalist. has beennnon
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associated, either fairly or unfairly, with these views. this is part of a larger dynamic in the trump up administration, too, where he is not really showing whether he will go with alt-rightopulous, view that some of his supporters had or a more establishment view here at he has picked two people, mr. bannon and reince priebus, who is the exact opposite, washington establishment. scarlet: mr. insider. paul ryan, speaker of the house -- what happens to him? there is a leadership vote, i believe, this week. is there concern he might not win the leadership vote as it's bigger will have to step down? that itderstanding is looks pretty good for mr. ryan at the moment. one of his close i'll out -- allies was just made white house chief of staff, reince priebus
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with trump winning and having a favorable view at the moment to mr. ryan, i have heard there is not much of a challenge to that. i cover the white house and will not necessarily pick up everything going on in the house, but in washington at large mother has not been much talk of ryan since the election. but before the election, there was more talk about it because of the split within the republican caucus about trump. scarlet: that is mike dorning joining us from washington. julie: the second-largest cigarette seller in the united states is seeking a higher price from british american tobacco. it rejected the $47 million buyout offer as to low. bloomberg reporting this according to people familiar with the matter. both companies are in talks. british american tobacco is willing to increase the price slightly. all of this according to people familiar. andt. owns 42% of reynolds
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disclosed its proposal to purchase the rest of the company back on october 21. we are seeing a little bit of volatility in the shares. they remain lower by nearly 1% at the moment. scarlet: a bit surprising or do you thought it was pretty much a done deal and very controversial about it. meantime, we will watch that, and of course the white house. president obama is getting ready to give a news conference before he departs on his final foreign trip as president. we will keep you posted. this is bloomberg. ♪
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final for a trip. his agenda while he goes to greece and peru. he must reassure global leaders that donald trump will be ready to leave. we will take you to the news conference as soon as he arrives. menuchin medicinova -- has been recommended to service treasury secretary. the choice is said to be a waiting the president elect's final decision. mnuchin has been considered the leading candidate for the job. and democratic representative allies -- want a congressional committee to review the finances of donald trump. in a letter, it was said that he wants to ensure that there is no actual conflict of interest. he says the value to rse

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