tv Bloomberg Markets Americas Bloomberg November 18, 2016 12:00pm-3:31pm EST
♪ david: from bloomberg world headquarters in new york, coming to you from washington, paris, and frankfurt. jeff sessions is the attorney general and he is also named a national security advisor and cia director. we look forward to his meeting with mitt romney this weekend. president-elect from's policies may improve u.s. productivity. we had to washington for how republicans are pushing medicare reforms. how the changes affect seniors and the insurance industry. abigail doolittle joins us. abigail: we are halfway through the trading session looking at small declines from major
u.s. after they opened ever so slightly higher in the open with lots of expectations that we could see new records set. did see a new intraday high on the nasdaq, but the other two, not so much. weekly games for all three averages, but the dow is less than .1% separating the dow from declining on the week. if the average can hold this level we will look at two weeks of gains. this follows the powerful rally last week. some of this could represent trading for investors. after the rally, where it stands out is against emerging markets equities. in orange we have the top 1000 stocks within the russell 3000, large-cap stocks versus the emerging market equity index. say of this could
investor strategists are expecting the donald trump administration to be protectionist in nature and could help the u.s.-based stocks. when we look at bond yields, we are seeing a spike higher over the last two weeks for the 2-5-10-30-year yield. more than half a percent in two weeks is a stunning move. while this is being perceived as a positive for u.s. stocks, a sign of much-needed tightening and growth, for emerging markets they are more sensitive to interest rates as the easy money drains away. that could explain why some of those stocks are trading lower in the emerging markets. this represents a massive selloff in bonds, they trade in verse. 5046 welook at g #btv the degree of the global bond
selloff. this is the bloomberg multi-verse index. it is a broad bond index. we see the percentage change over two weeks is stunning. the greatest we have seen over 10 years. the huge spike is higher, weighing on emerging markets helping u.s. stocks represented by a massive selloff is global bonds. vonnie: thank you. let's check in on first work news. mark crumpton has more. mark: president-elect trump tout jeff sessions to serve as u.s. attorney general. he could face a tough confirmation process. when he was nominated to be a federal judge in 1980 six he was dog by racial comments he was accused of making while he was ..s. attorney in alabama he denied making the comments and withdrew from consideration. michael flynn is the assistant
to the president for national security affairs. 57-year-old michael flynn is the former head of the u.s. defense agency and a surrogate throughout mr. trump's campaign and a critic of president obama's strategy to combat the islamic state. federal officials outlining steps that went, michigan needs to take before switching its drinking water source. it calls for a three mile interconnection to test water from the new authority for three months. flint. in iraq, troops advance cautiously into eastern mosul facing resistance from the islamic state militants. one soldier was killed. some civilians were seen fleeing the violence. they launched the operation to retake the second largest city one month ago.
global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. david: back to the markets, global bonds headed for the steepest two-week loss in two decades. the u.s. dollar poised for the biggest rally in 15 years against the yen as they prepare for surging inflation's and a soon.ke through whate will happen when donald trump takes up. 280e, a strong dollar, 101 -- 101.28 zero. how much longer will he get, for how long? kristine: forecasting the dollar is difficult. it is happening today and it will affect the economy one year
from now as much as two years down the road because of contracts written on it. is collateralant damage to emerging markets. it suggests some dampening of inflation aspects. i think we are moving into a more inflationary economy. the strong dollar is a dampening effect and wreaking havoc on emerging markets that are raising rates to combat their own currency crisis. you lay on top of that terrifs and it is a complex issue if the dollar dominates or tariffs dominate in terms of the inflation equation. showing the five year five-year forward and the 10 yield. obviously, expectations are higher but there are different expectations. yieldif you are not anticipatig better growth next year because
of donald trump's presidency, what are you expecting for inflation? diane: better growth because we are set up for better growth. i do not think we will get all the infrastructure. there are no shovel-ready projects. i think the markets are ahead of themselves expecting infrastructure development. the corporate tax cut side is more difficult than some think in terms of repatriation and how that could help the u.s. economy. there are lags in terms of the positive things the trumpet administration could do. the regulation on the oil industry will add to a burgeoning recovery in the shell industry -- shale industry. immigration has hurt household .ormation in the united states we are seeing a slowdown, which could be a blow to the housing market. it is about the same economy which i thought we would get
next year, just over 2%. good, but not spectacular. ?here will we get the wildcard the wildcard issues are immigration, deportation, and tariffs. if they follow through on promises with mexico and china and use executive orders to raise tariffs we could have a $320 billion increase in cost to u.s. consumers, a 2% rise in inflation overnight. i am betting that inflation will be higher. we are at a tipping point on wages. i thought it was interesting full yellen said we are at employment, how much do we want? david: a forecast for a new federal reserve. it has been dramatically different if not before. you hear but congress is saying about what they want the fed to focus on. it could be a radically different institution.
diane: this is something the market seems to have almost ignored. the threat to the federal reserve. not only did presidential candidate trump attacked chair yellen specifically and the fed generally, but this is bipartisan. democrats want to clip their wings. you will have someone in the white house that will feed tell a series of initiatives that could make it through in terms of serving the feds independence. one issue of chair yelle being replacedn, we have two seats open the will be replaced by more hawkish representatives that republicans want to put into the fed governor seats. chair yellen will fulfill her term into 2018. is done in 2018. we will have an entirely new leadership any year and a half. that is very early. we could have different legal
restraints on the fed, right down to the decision on monetary policy and how they make interest rate decisions. having congress or elected officials make those decisions instead of independent federal reserve officials. that is a quagmire i do not want to think about. has been orderly, even emerging markets and currencies that have seen massive moves i could the turkish lira. it has been pretty orderly and central banks are watching out. are we in danger of disorderly moves over the next month or two? diane: the real risk is further out. people think about policy decisions as catastrophic, armageddon, or euphoric. equity markets have only looked at the positives of what trump is offering and have blocked out the negatives. not a balanced view. the peaceful transition we saw, which many were not expecting,
helped financial markets. it reverberated in emerging markets because some of the rhetoric was toned down in the wake of the recession -- election, which was useful. all of that is combing. -- calming. i think november 8 added uncertainty going forward. what i saw in washington was democrats fighting each other, republicans don't like each other either. the degree of divisiveness in washington is almost more than i have seen. the social networking fear is unbelievable. it was stunning to see that. there is a unified hope that things can somehow come together and we can do more to help the economy out of washington, which is a positive view. that said, that is undermined the divisions within the two parties, which are substantial
and big ideological differences at what policy should be going forward. --id: you set up than last the last question nicely. we are talking about composition, tax cuts. are you convinced politically it will get through. does the economic argument is it is a good thing done? i'm not convinced. paul ryan has come out of victor. here the stimulus package on tax cuts to pull off the shelf. in the void of policy development on the trump side, that will fill the void. that is where the leverage comes from. in forms some reforms of corporate tax reforms. complications already for repatriation. it will come later and hit more hurdles. on the infrastructure side come the pushback has been tremendous in the republican party. david: thank you.
bloomberg politics'steve. .et's start with pompeo the guy who went to harvard law school. he has a pretty sterling resume. >> it is on his website. you forgot to add that he is a west point graduate, graduated top of his class. he went to harvard law and his conservative. he came into congress in 2010 in the tea party wave formed in the in the sky. -- he sat on house intelligence committees. a lot ofen getting praise from not only republicans, but democrats as well. this is one that is getting bipartisan support. not an enormous amount, but enough to feel like this is a smart guy who is giving donald
trump the benefit of the doubt. he knows this agency and has worked with the material before. i do not hear many people saying this is an outrageous pick. vonnie: a lot of wall streeters are being touted for labor and congress. a new one is the labor secretary? >> eisenberg is posed to meet with trump this weekend. trump is going to his cough course in new jersey later this afternoon -- golf course in new jersey later this afternoon. top people are eisenberg and michelle rees. mitt romney, a vocal critic of donald trump throughout the campaign. someone donald trump has had harsh words for. i don't know if they will hug it out or have a serious conversation. his name is being floated for a
hop cabinet position. world is trying to figure out how serious those are, whether or not this is more photo ops showing the republican party coming together. vonnie: is he hoping to be asked? steve: i think he is taking this seriously. mitt romney has always wanted to serve his country. vonnie: he doesn't like donald trump. he unendorsed the president-elect. steve: he has. he has seen some of the people that have been floated for cabinet positions. i do not know who started that engagement, but i believe the mitt romney folks are honored to be considered and he would love to serve his country, or at least have the conversation about it. he would at least like to talk about his ideas. if he gets a meeting to share
his view of the world and how the government should be run, he has thought about it a lot. he ran for president more than once and knows what he thinks the american posture should be in the world. if he gets a chance to sit with the president-elect, he won't pass that up. the confirmation process looking like for someone like senator jeff sessions? i mentioned michael flynn, he does not have to be confirmed. let's talk about the fight in the senate. steve: jeff sessions was the first an attractive back donald trump. donald trump owes him a lot. he took a lot of incoming fire for donald trump throughout the campaign. sessions, he indicated this is a position he wants and donald trump and his team is taking that seriously. that is part of the reason this
occurred. he ran for a federal judge should before -- judgeship before in alabama. he got through some of the confirmation process and was rejected. one of the few that has been rejected running for federal judge. part was because of comments that he made, racially charged comments. he talked up some of those to being poorly worded and inappropriate jokes. that said, he has been a member of the senate. they will confirm him. that is his people. the judiciary committee. the senate in general, he has ansed good bills, including act that had to do with making sure african-americans were not getting longer sentences than other people charged with drug crimes.
he will point to that. some will raise his past controversial statements, and we will see if those are enough to halt him. vonnie: our bloomberg politics reporter steve yaccino, thank you for joining us. david: coming up president elect donald trump's plan to repeal of obamacare. this is bloomberg. ♪
vonnie: this is "bloomberg markets." i am vonnie quinn. .avid: i am david gura president elect donald trump is expected to repeal obamacare. republican lawmakers have a health care agenda they want to pastor and the lehman dock sessions -- the lame-duck sessions. is alex.s the 21st century cures act, what
is it? >> a package of legislation and into the of cash national institute for health, the federal research agent see, and the fda. it is focusing on speeding drug and device approval to get cures to market. vonnie: lawmakers trying to pass this by the end of the year. what is the rush? alex: they will have a big agenda next year. it will dominate. of energy andd commerce chairman's time as chairman. he wants to get this done. he has become -- it has become a personal goal for him. he worked hard to get this done. a lot of people believe this is offthing he wants to cap
his time as chairman. he is personable and well-liked. a lot of people want to do it for him. david: we heard from the donald trump transition team they want to rip up obamacare and do something different. obviously, that would require congress. what are republican lawmakers saying about the path forward or obamacare? vonnie: what is clear is that necessarily coalescing around a defined plan. republicans are going to make moves early. they can do this through a series of moves, largely through a budget process that led to get through the senate with their majority. they don't need 60 votes to go through budget reconciliation. first they need to pass the 2017 budget. that is not a small list. -- small lift. i think they are altogether.
there are central tenets they will focus on the the individual mandate, health benefits, some underlying tenets of the affordable care act that are their unpopular amongst constituents. there is a lot of agreement they will not lift it immediately. they will seek to immediately pass the bill and delay the enactment to put together their own replacement and restructure the market. david: thank you for your time. megamerger.ng up, a this is bloomberg. ♪
manhattan. first word news with mark crumpton. mark: president-elect donald trump is preparing to settle lawsuits that claim is defunct real estate university was a scam. that's according to a person familiar with the matter. mr. trump will pay $20 million to $25 million to settle a class-action lawsuit for a case filed in 2013 by the new york attorney general who claims he lked students at a $40 billion in and made as much as $5 million from the school. his transition team has reached out to senator jerry moran about the job of agriculture secretary. that's according to a report. senate'sirs the committee on agriculture that includes oversight of the fda. says he had ant
friendly phone conversation with mr. trump two days ago. he says the incoming u.s. leader helped ease concerns over europe's security and relations between the nato allies. calm andd me to stay cooperation between holland and the u.s. will develop well. he will make sure of that. this to me was a very good signal. i am pleased because i have no doubt the u.s. is poland's strategic partner. mark: well they did not specifically discuss guarantees for eastern europe, he said he was reassured by mr. trump whose comments during the campaign raised questions about his commitment to the military alliance. former french president nicolas sarkozy is heading to a presidential primary as a front runner. he will likely face national front leader in the two-way presidential runoff next may. he is attempting an unprecedented comeback after being defeated by incumbent francois hollande in 2012.
global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. vonnie: thank you. we're going to check quickly on u.s. majors as we head towards the halfway point in the u.s. session. the dow is down by about two tens of 1%. the s&p 500 down a quarter. as is the nasdaq, one quarter 1%. most sectors are lower today but modestly. let's get more details from abigail doolittle. abigail: we may have major averages down but we do have some strength within technology. we are looking at two winners on earnings right now. one is salesforce.com. shares are higher, on pace for the best day in a better month. that's after they beat third-quarter estimate by about 14%. bloomberg intelligence analysts
say this has to do with better execution in terms of closing deals and deferred revenue grew by about 23% on a quarter over quarter basis. this it assures investors they could be strong for the current quarter ahead. the company salesforce.com, which sales customer relationship management software and largely in the cloud, they did raise the fourth quarter sales forecast above the street. investors are liking this stock. another tech winner is more bill technologies. they are on pace for the best day of since july 20. they beat third-quarter estimates by 67%. they raised their fourth quarter view by as 62% above the consensus view. and we have susquehanna raising them to positive. niceinks this makes for a
takeout candidate for perhaps $17 per share. whether or not that proves true, we look at 50.41. the stock whip sawing in a range, lots of uncertainty. the bulls and bears duking it out. we do see the stock popping to the top of the range, right around $15 per share. it's a little bit below christopher rollins'takeout idea. perhaps we will see the stock rise right above that range. david: thank you very much. abigail doolittle. draft kings will have completed a merger agreement. -- competedmpleted for 90% of the industry. i can't help but think of antitrust concerns. here we are in a transition to a new presidency. any idea how likely this is to
get approved? >> they are very confident. it will take almost a year if not longer to finalize. one of the reasons for that is antitrust concerns. they will be a giant in the industry, controlling 90%, some estimates 96% to 97%. vonnie: it's also vertically. some of the teams own equity stakes in these companies. >> this is a merging of not just to companies. baseball on the tracking side, and nba within equity holder in fanduel. there are leagues, teams, big-time private equity. this is a big-time merger in the sports world. david: wide merge? i was looking at them today. i was looking at the apps today, squandering my money. >> that is the reason i they merged. they are doing the same stuff
and doing hundreds of millions of dollars competing against each other. competing ads. there are legal concerns about the basic business model. they are spending the same amount of money on and, on lawyers, lobbying and government level. all that stuff can be combined. when they emerge that will be doing less of that. ideally they will be spending more on things like innovation. may be bringing in more money from the best hitters were more confident about the industry now and things of that nature. vonnie: what do we know about numbers? employees, revenue they bring in, users? the typical data we hear about. >> both about 350 employees. draft kings is in boston, fanduel in new york. no one will be laid off or let go. they will operate separate -- separately for a while until the merger is finalized. it will not look too different right now. at some point you will see the companies when they do merge look at some personnel
decisions, make tough decisions. draft king's told us today they are offering incentives for employees to stay. in a lot of areas they are concerned people are going to jump ship now that there is a little bit more turmoil in the industry. david: there is wild enthusiasm for this kind of betting. what is the path of profitability? eben: neither of these companies have ever gotten there. last year when they were raising money hand over fist and people were signing up, the cost of new acquisitions was still high. executives said this morning profitability is more realistic now under this model and we will see if that is true. the path to profitability is building a big enough customer base so you don't have to spend crazy amounts of money to acquire new ones. vonnie: a fascinating story. eben, thank you very much.
tim miller says some financial policies president-elect trump could help restore lagging productivity in the u.s. economy . earlier today in frankfurt he spoke to matt miller. >> the things people are talking about have some potential to affect u.s. productivity. i think it should be focused on u.s. productivity. i think rollback of some regulation to the extent you think some of the regulation might even overdone, i think the republicans are betting they can roll that back and increase u.s. productivity. i think the infrastructure program done properly could provide some public infrastructure which could improve u.s. productivity and drive medium-term growth. some kind of tax reform that would repatriate profits from overseas, that could increase u.s. investment and increase u.s. growth. there is some potential here.
we have a long way to go to see if any of that gets implement it. where we arees more concerned during the campaign, immigration and trade, to me as a macroeconomists those are longer run issues. they do affect the macroeconomy, but it takes a long time to unfold. if you're going to redo trade arrangements, you have to negotiate over a long period of time with other countries. i would see that is a five to 10 year horizon which is kind of outside the box for day-to-day monitoring -- monetary policy. if you have immigration reform and change how we did it, that would be fine. it could have an impact on the macroeconomy. i see that is something that would be slow-moving because it would change who was coming into the country. that would affect the workforce over a longer period of time. i see those as slow-moving issues. the first three is faster moving issues. matt: in the near-term, a tax
cut or tax reform, a boost in spending, $1 trillion on infrastructure. you think that would add to growth, add to inflation? we have seen expectations take off. does this constitute a regime change for the st. louis fed? you talked about different regimes, like a reagan expansionary regime and a new normal regime. would we go back to the reagan years? james: it is way too early to say that but it's got potential to go in that direction. we will keep an eye on that. the things driving the low interest rate regime are low productivity, growth which is been very slow, only one half of a percent for years, and is high liquidity premium on government debt. investors love government debt all around the world and are willing to hold government at negative real returns. that has been declining for decades.
as far as monetary policy is concerned, what we are saying is you should accept the fact we are in this low interest rate regime for now and make monetary policy appropriate for that regime. possible to switch to some kind of higher real interest rate regime later. if that happened, we would have to change voluntary policy. vonnie: jim bullard. euro finance week in germany. david: a supermodel turned philanthropist mission to prevent elephant poaching. this is bloomberg. ♪
♪ vonnie: you are watching bloomberg. mark: this is your global business report. that is if the u.k. sales to secure passport advice for financial services companies after brexit. vonnie: tesla shareholders are overwhelmingly approving the takeover of solar city. the deal with the electric car company into the energy business. mark: we look at the complicated role of house speaker and how much paul ryan can get done now that the public and's -- republicans will control the house, the senate and the white house. next, thee ceo of u.k.'s second-biggest clothing retailers is one of brexit's biggest supporters.
now he's where do the harling direction it has taken that hardline direction they have taken. he is urging a more measured approach. >> we will have to be a little patient. wait for the government to spend the time he needs to spend thinking these things through, talking to partners in europe, working out what is achievable. mark: that's the london stock exchange group at the joint headquarters in an eu country. a post-brexit britain failed to secure passporting for financial services. that's according to a german official who sit exchanges have to be supervised where he conducts business even before the u.k.'s frexit vote -- brexit vote. says the $12 billion deal is binding and remains unchanged. tesla motors has officially moved beyond cars. it is now a clean energy copies after shareholders overwhelmingly approved the acquisition of solar city. the dinner -- deal is valued at
about $2 billion. more than 85% of tesla shareholders voted in favor of the merger. football's riches league has signed a three-year television contrast in -- contract in china. that's according to a person familiar. they say the deal is with digital broadcaster pptv, a unit of stunning holdings. they required a majority stake holding in premium along -- premier milan. they did not request for comment. vonnie: background and issues of interest. historically the u.s. speaker of the house has been revered and presented. in recent years the speaker has been neither exalted nor feared nor able to command his own party. now that president-elect ronald donald trump puts
it all in republican hands, will determine speaker be able to make the speaker's office strongly in. speaker ryan infuriated many republicans by not supporting trump. after he got the nomination some even questioned his party loyalty. this week he was unanimously renominated for the speakers position. he only agreed to run for the job after getting support for some right wing conservatives. here is the background. speaker john boehner resigned from congress in october of 2015 after he was unable to control the conservative wing of the house republican caucus. broke with the caucus on some deals like an increase in federal debt ceiling in 2014, which passed always entirely democratic votes. while facing threats from the conservatives, he told fellow republicans he would resign.
for years there has been a struggle between establishment republicans who have made a career of politics and believe compromise is needed to get things done and hardliners, like members of the freedom caucus that of an angry the leadership has not done enough to smash federal spending. donald trump may not be much help. a $550 billion in spending on infrastructure. and there is the plan to build a wall along the mexico border. its members are arguing for deficit reduction and it will make life difficult for paul ryan. for more about u.s. politics at mi click on the bloomberg. head of bloomberg.com for more stories. ♪
♪ destin crews, she set out with the pursuits team to talk about how she is getting back. take a look. ♪ >> it started up with my agent going to kenya. taking back full of stories and telling me i had to go. he could not stop talking about how amazing it is and that we need to change some things because of the elephant crisis going on. i set of going for myself. i want to see what's going on. ♪ gathered all my
friends and everyone i know in the fashion industry. we came up with a beautiful campaign called "not on my planet." beings tie knots. on my planet,"t we use it for 30,000 elephants killed each year. we tie knots to not forget about elephants. we have one dollar, five dollar, up to whatever you like. we feel like everyone should be able to donate. the great thing about the elephant crisis find it at one of the received proceeds -- 100% of proceeds goes to it. we have been working with them for over five years. they set up the message in a very positive way. and we teach young children around the world to prevent hiv and aids, and how to have safe sex been also break
the taboo and talk about sex, which is not always easy. it feels so good to be a will to give back. i have been very lucky. i was born this way and of course i worked to maintain that, but i think most of it is luck. that is why it is my job to get back. -- give back. ♪ david: she appears in the first expo in bloomberg pursuits that airs this weekend. she's also on bloomberg pursuits magazine. here is the magazine's editorial director. let's talk about how you chose her for the show. and the cover >> we feature a lot of beautiful stuff you can buy. but we also one of the someone actually doing good in getting back from whatever they were doing. he is so successful. she launched in this campaign against elephant poaching. it is done super well. we want to feature her in the magazine.
we dressed her in spectacular clothing. for a number of reasons we are really happy about it and excited. david: you have the show airing on bloomberg television. what can we expect to see on the show? >> it brings our magazine to life. there is a gift guide. we show at bloomberg -- a number of products we feature. we take readers behind-the-scenes of our travel stories and personalities we feature in the magazine. david: you mentioned the gift guide. -- thingshe thin of we can expect? >> we always went to feature gives for the person who has everything. our readers are really successful, they have a lot of stuff. the really special items. everything from a custom telescope to a necklace that cost a million dollars, which is kind of a fantasy gift. really running the gamut of the special items that exist. david: how do you come up with a guy like this? there is so much extraordinary stuff like this.
>> for us we have a person called the market editor who is basically there to know everything that exists in the world of products, fashion, home design. she gives me a huge list of stuff that i have a fun job of picking the best. david: it's been a real treat talking to people from pursuits, talking about experiences in particular. they said is what consumers really work at every end of the spectrum. >> particularly in travel. we feature a trip in this coming issue where we had a writer go to alaska, take three different airplanes. she got to see endangered walruses in the wild which is something you would not expect in normal travel magazines to feature. we really want to feature these things that our readers can go back and say, we had no idea this even existed. this is a once-in-a-lifetime thing and we are excited to learn and go into that trip. that is what our readers want to know about. david: thank you very much and
congratulations on the show. for more, check out pursuits, your destination for the finest things in life. suitesgo on the bloomberg. vonnie: talking about the referendum on december 4. he said is not about government and the outcome is still open due to undecideds. he is convinced the silent majority will decide the outcome. turkey's central bank will take steps in mind that the price stability goals. they issued a statement after an economy meeting. after significant weakening in the last session. bloomberg., this is ♪
vonnie: from bloomberg world headquarters we are covering stories from -- u.s. trade representative michael spellman joins us to discuss the future of the transpacific partnership. tesla officially became a clean energy company yesterday. shareholders approved the acquisition of solar city. the second-biggest surprise in november at the election of donald tru has been the warm reception the president-elect has gotten from visitors and investors. we are more than halfway into the trading day in the u.s.. abigail's humor the latest. abigail: we are looking at higher, exhausted trading for the major averages on this friday. we have the dow, s&p 500 and nasdaq all down ever so slightly.
perhaps tired and exhausted after the big rally last week. we are looking at a rally over the course of the week. all three indexes are on pace for weekly gains. the second in a row. it could come down to the wire for the dow. it is higher by a very small margin and the declines cannot go much more than where they are for the dow to stay positive on the week. we are looking at very small declines. opening slightly higher. there is a small trading range example five very well. these blue bars represent the intraday daily volatility going back over the last six months or so. we see back around to brexit a huge intraday range. big ranges going into the election, after the election very small ranges. investors are on cause. perhaps ahead of the fed decision in december. we could be looking at quiet trading ahead for some time. asked for what is moving the markets today, one of the worst
-- the worst performing sector is health care. sciences, johnson & johnson and merck. all these have hepatitis c drugs, data came out this week. sales were flat for last week. gilead sciences is the biggest player in this market. they have three drugs while the other two each have one. they are reacting to the downside on that data. we look at gaming stocks in toys. activisiongamers, blizzard. both are lower. they released data for the month of october showing hardware sales around gaming felt 20% to about $215 million. this will not be a positive for these companies going into the holiday, or maybe consumers are taking a break. we have hasbro trading lower. get this. on something called the hatchimo.
it is a toy inside of an egg. perhaps parents with small children know about this. it is the toy of a canadian company. is not a tweet hasbrouck that is down on the day, as is mattel. this craze for the hatchimo could be whining on hasbro and mattel. david: thank you for the market update. president obama blocking the selling of new drilling rights in the arctic -- atlantic. preceding as they prepare for transition for a new president. we reported on how the administration is trying to get you through rules limiting bonuses to financial industry services professionals. that is confirmation of a bloomberg skin from two days ago. let's check on the first word news. mark crumpton has more. mark: president-elect donald trump has offered u.s. attorney general to alabama senator jeff sessions, a staunch ally. the president-elect also has selected kansas congress in mike
pompeo to leave the cia, and former military intelligence chief michael flynn as national security advisor. sessions and pompey oh require -- pompeo require senate confirmation. chuck schumer says he is concerned about sessions and what he would do with the department of justice's civil rights division. nato secretary-general says he will probably speak with president-elect trump "very soon." he predicts mr. trump will be committed to the transatlantic military alliance. during the campaign is your trump called nato obsolete and questioned whether european members are contribute enough. cleveland school district will replace hundreds of drinking fountains, restroom faucets and outdoor spigots and other water fixtures. this after a high levels were found. in 60 buildings 9% of drinking water sources in school buildings exceeded standards set
by the environment protection agency. global banking executives are softening their warnings that the u.k.'s withdrawal from the eu for result in an exit is of staff from london. people with knowledge of the contingency plan says they are gaining confidence that theresa may will be able to secure a linking transition period, one that would carry them over from current rules to whatever new terms of trade are agreed to with the eu. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. david: u.s. stocks slipped today. they rallied after donald trump's election victory. rumors they will carry out fiscal stimulus has lifted industries perceived to benefit from economic growth. our next guest said investors should focus on the economic earnings out that over the next
-- output over the next six to 12 months. senior global equity strategist, you are right that there is not much to get excited about here. what is your sense of what is been happening and what is going to happen? scott: if you look at it from where the market closed on november 7 when basically most people but hillary clinton was going to win until today, the market is only a little bit more than 2%. i would say that is noise. what the market did quicker than i expected was to come to its senses and realize most of the legislative, most of the things donald trump what's to push through, many are pro-growth and will take some time. the market was concerned about that in some sectors like maybe financials, and the bond market. they are a little ahead of themselves maybe. what is going to happen is the market will probably close the year higher than where we are now. that is based on the outlook
that the economy is going to continue to slowly improve, earnings growth will be better in 2017 than it was in 2016, and then things the kind of positive. i would have argued whether hillary clinton would have won or donald trump, we would've been sitting here in the s&p 500 either way. vonnie: all that money came out of the bond universe and did not quite go into stocks. where did he go? scott: normally as an equity guide i think bond markets are smarter, but i'm not sure that is the case this time. the stock market has it right. i think probably what is happening is you literally have some money on the sidelines, more on the sidelines that are waiting for things to do. if you look at sectors., it went into the financials it went into industrials. it was make the argument coming at a staples and utilities at the same time.
there are a lot of people sitting on a lot of cash waiting to see a little clearer picture of what might happen here in the near term. as we try to argue whoever would've been president, and donald trump is going to be president, they will have little to do with what the economic outlook in what earnings are going to be in 2017, at least in our opinion. david: hard to believe we are six or seven weeks for the end of the year and it was positioning. scott: i think people who were leaning more defensively, more towards things slowing down or not happening are changing that. we have been trying to lean cyclically for a long time. that has worked out since the middle of february. when you are seeing is people get into things like industrials that were underinvested in, financials which certainly were, and just leaning towards a more cyclical outlook that there
might be reason for the economy to grow faster than 2%. i think it will maybe grow faster than that 2017. i think the stock market is dealing with this the right way. the stock market likes what could happen, but it is focusing on what is likely to happen over the next 12 months. vonnie: was the 10 year yield up 2.3% or so, are dividend paying stocks over? scott: that is certainly part of what has been happening. if you look at it, and i mention that february 11 low in the s&p --, really dividend stocks that play is that over virtually since february 11. i think we don't want our clients being defensive at some point in the future we want them to get defensive again. that play was ever quite a while ago and it think it is over for the new year term -- near-term. david: we are focusing on who
donald trump will pick for his cabinet. what difference does it treasury secretary make for the u.s. economy? scott: you want somebody that has the right view on how the global economy works. there has been a lot of things in this election cycle where this is the end of globalism and all that kind of stuff. it is not the end of globalism. the need to have a treasury secretary in my opinion that has some business experience, some global business experience, that understands the give and take that goes on between these countries in terms of tax regulations, business relationships, all those sorts of things. that is the kind of treasury secretary geithner you need. they need to be an economist, of business person. they need to have had some on the ground experience with how the real world works and not just some textbook they wrote or they studied as a professor in college. david: appreciate your insight.
unfortunately he don't have much to negotiate these days. the last time we talk to hopeful that transpacific partnership with the past in the lame-duck session. michael: we've been working to get ready to be taken up by congress. we are here to go anytime congress is ready, but it is a legislative process now and it's up to the congressional leadership to decide when to bring it forward. was a newthe election data point in that process that has affects on people's perceptions. we want to resolve outstanding issues and are prepared to resolve outstanding issues and build support in congress. mike: it may not be for more than four years. what is plan b? michael: we talked to the other tpp countries. they are very curious and interested in what the perspective of the new
administration is going to be. engageuraged them to with the new administration at the appropriate time. they very much are committed to tpp. it andd already passed others are well down the road of doing so. all feel it's an important initiative that sets high standards for the region. they will continue to work on that. ofe: when we talked a couple weeks ago decent the strategic imperatives what it would help the u.s. drive the rules for trading the 21st century and keep china from taking the preeminent role. at this meeting the chinese are already moving forward to do that and proposing on free trade agreement that does not include the united states. michael: they have been engaged in some time for leading the economic partnership. 16 countries from india to japan. they have accelerated their work to try to conclude that. it's a very different level of standards then tpp.
it doesn't do anything to strengthen environmental protection, intellectual property rights, discipline on government on corporations, whole range of subsidy issues, the additional economy. that's why we've been saying it so important that tpp move forward. it establishes rules that reflect our interest and our values. mike: what do you say to the unemployed steelworker in pennsylvania who says, yeah, yeah, but trade cost me my job. mike: we are -- michael: we are producing more manufactured product than anytime time in our history as of the first quarter this year. is largely a result of technology and automation. there is no doubt globalization has an impact, but trade agreements are how we shape globalization and make sure we are opening markets to exports and how we raise standards in other countries surveys -- so there is a more fair and level playing field for the worker in the u.s. without tvp we are not taking
actions to raise labor or environmental standards. we will face 70% tariffs on auto exports while other countries will face 0% tariffs. on levelingfocused the playing field of our workers so we can produce more in the u.s. and access to 95% of the global consumers outside the u.s. mike: we talk a lot about tpp in these major agreements, that much of your work in trade deal with a lot of smaller agreements that are constantly being negotiated. the environmental goods agreement for example will help move forward trade in products that race a greener planet. michael: we are working on trying to conclude that agreement. it would be about $1 trillion in environment of goods trade and we need tariffs on that. it allows us to produce those products and get them exported more easily. it is good for the environment
because allows for dispersal of technology. it is a win-win situation. we have hard working with china and other countries to reach an agreement. i believe we have made good progress and are hopeful about getting that done. mike: you look back on your years has trade representative and how it is concluded, what you think when you see the anti-globalization? politics sort of saying what you have been doing does not matter? michael: i think we have made a lot of progress over the last eight years and updating the global trading system to reflect the realities of what is going on in the economy and make sure it reflects our interests and our values. the fact that now the tpp will be expanding labor rights of 500 million people around the world is good and of itself and labeling the -- leveling the playing field for our workers. and focused on the oceans, illegal logging and fishing and wildlife trafficking, those are
things we have worked through and are treated agreement and make sure it's a key part of what we do going forward. the concern about globalization and technology, demographics, is all about change. and the anxiety that change creates. that is real and legitimate and a hopeful coming out of the campaign we have seen in the united states that there was more bipartisan interest now in talking about the kind of programs we can pursue to help individuals and communities that are adversely affected by the change wherever it comes from. it comes from automation, demographics, globalization, that would be a positive. mike: i will give you 30 seconds at trump tower, what would you tell the president-elect? not commentill on the president-elect. we look forward to talking with his tray transition team and the contact us. we want as smooth a transition as possible and stand ready to make sure that the information
necessary to do their job on day one. mike: thank you for joining us. back to you in new york. vonnie: thanks for that wonderful interview. we appreciate that with michael spellman. breaking news. alaska air is nearing a settlement with the u.s. on that deal. alaskatock both higher, air about 1% higher right now. the doj had taken issue with the idea that the two with merge, or alaska air would acquire virgin america. the two airlines would expand routes and it would give cross-country routes to both airlines as well. it looks like it will be a done deal by the end of the month. david: tesla gets the green light on its merger with solar city. that puts elon musk closer to a one-stop shop for clean energy. the details of the deal next.
♪ david: this is a bloomberg markets. vonnie: i'm vonnie quinn. tesla and solar city shareholders approved a merger between the two companies. elon musk must work to find synergy between the two. joining us this cory johnson. does he have plans? he seems like he can do what he wants. cory: until the cash runs out. vonnie: will it? has found atreet way to find elon musk over and over again but the businesses have to find themselves. the combination of free cash flow between the company is amazing. just look at tesla and a cash situation. last quarter was is the enormous anomaly. they basically did not pay bills, did not spend money on the factory, i'm exaggerating,
but they significant reduced spending factors that are so important to them. they need to spend the money on these factories to deliver the values they will sell as part of this combined business. but they ratcheted back on the spending big-time last quarter. if you look historically when you look at what's going on, we taken to the bloomberg. you can see what's going on. on instant messaging. and also tesla's cash flow burn is a norm is. when you combine it as their do with solar city's amazing free cash flow burn, is like a tire fire burning cash flow. these guys have got to start spending more money to build these important factories and then gets a product to the market to try to get cash flow back to the businesses. vonnie: is that a solid thesis? it doesn't matter what's happening for now. is a solid to begin with? are: the combined numbers
what's happening. we know that to be true. what could happen in the future? magical things could happen but we know what is happened in the past. if you look at the free cash flow that solar city and tesla have done, we can imagine they will do something different in the future. elon musk wants us to think that. he gives this exciting projections about new products, new cars, new numbers. historically the company has not hit deadlines but they come up with amazing products. but they cost more to make and they sell them for. that is the ultimate problem. david: there were folks that did not want this merger to happen. we spoke to someone who arranged a campaign against it happening. how does this company react to that going forward? cory: this is a story stock were people believe the management despite the numbers.
they believe someday there will be a better future out there and tesla and solar city will bring it. is the greatest story stock for the story trumps the numbers. vonnie: the next time we speak to you with a talk about the alaska virgin merger. cory: i will be on one today. vonnie: you can hear from cory in half an hour reviews is joined by carol massar on bloomberg radio. david: next we speak with the ceo of granite construction as donald trump infrastructure a key part of his plan for the economy. we hear how he sees the benefits to his company. this is bloomberg. ♪
mark: donald trump will be meeting saturday with people [indiscernible] >> these meetings that the president-elect is holding showing he is meeting with some of the best and brightest and most qualified people not only to fill specific roles but also to give advice and counsel on the policies and structure of how to best put together a team and mount a successful agenda. the invitees include mitt romney. the president-elect has tapped centered jeff sessions as attorney general. he could face a tough
confirmation process. by1986 he was dowgged racist comments he made in alabama. he later withdrew from consideration. president obama is headed to an economico attend summit. they agreed to keep in place sanctions against russia challenging president-elect trump to continue working with nato and other multilateral institutions despite his america first campaign alleges. opec members are in doha today. saudi arabia's energy ministry said he believes opec will reach a deal to cut oil output. he said a production ceiling of 32.5 million barrels a day or would speed the balancing of supply and demand.
his counterpart said the group is there a consensus on capping production for at least six months. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. has madeonald trump infrastructure spending a key part of his economic agenda. a key member of the transition discussed terms idea this week. >> the big focus is regulatory changes, looking at the creation of an infrastructure bank to fund infrastructure investments priorities are clear. there hopes the talks
will benefit. joining us is the ceo, james roberts. thanks for joining us. what kind of infrastructure spending do you anticipate? james: thank you. i think whether it is transportation, water infrastructure, whether it is the federal government focusing on the department of defense, there is a marriott of opportunities out there. the devil is in the details to see where the infrastructure plan goes. >> shovel ready projects are not necessarily shovel ready. that was a critique in 2000 8, 2009. what does the outlook look like in terms of the need for the availability to do certain projects? >> there are opportunities to do some shovel ready, relevant to maintenance and upgrading.
it will take more time to develop and design the larger capital improvement projects. there is a combination of both opportunities. bonnie: the market is anticipating you will see some upside. do you have the labor that it will take to complete any additional projects? >> the labor force has been an issue. what happened is during the downturn people migrated towards an environment where they thought they could get a stable type of long-term earnings. they have migrated away from the construction segment but i do believe the workforce is there. if we can create a compelling long-term vision and a financial plan that has the ability to fund long-term, we will be able to find the workforce and create that are the key ingredient. if we can create long-term high-quality jobs which the industry pay does do that i think we will find the
workforce. am sure you will be raising your hand to help that. how do you bridge the gap and make it known that you are available to help with whatever happens? >> we are headquartered in a small community along the central coast but we have offices throughout the entire united states, 20 different business units that handle offices in the northeast to the southeast, the central part, the midwest, and the west as well. our offices are situated in geographically located with vertically integrated materials facilities to help out in any part of the country. theie: is it spinning on part of the government or public private partnership, does it matter? >> there is a combination of both that create ultimate value. public-private partnerships or something we are involved in. there are several projects where
there is private investment and public equity involvement as well. it does not matter on the construction and, the key ingredient is to create the dynamics of the public and private partnership so we can get the funding and the financing in place depending on the individual projects. david: i have been struck reading and talking to analysts on how wide the definition of infrastructure is. we tend to think of bridges and roads, it is broader than that. to has your company adapted the new definition and how do you plan to adapt going forward? >> that is what our strategic plan focused on. we built a new strategic plan 12 months ago and we called ourselves a solutions provider. we have migrated over into the water sector, we have a transmission and distribution program that is in the energy sector. transportationt we have expended that to a focus
program relative to the government, we have a new tunnel division and over the last nine decades we have been focusing on huge transportation product -- project. we have migrated into a host of different infrastructure solutions opportunities and that is what our long-term strategic plan has been focusing on and it is nice to see that, the widespread infrastructure is getting some headlines. bonnie: your involved in the where is mostver, desperately need of infrastructure projects? >> i lottery for anywhere in the u.s., i think that has worked in states that have struggled historically to fund themselves and we talk about in the midwest and the central part of the country where they do not have the economic capability to build the interstate system. the federal government can do a wonderful job to aid in the interstate system as we did back
in 1956. in the hive populated areas, i think you will see more infrastructure, more advanced infrastructure into light rail, high-speed rail, tunneling projects, into the higher urban areas. theie: what do you think infrastructure spending would amount to? the topu look at administration plan of a trillion dollars i have heard then you are hundred billion over five years to one trillion over 10 years. if you look at the associated civil society engineers they will tell you the infrastructure has a d+ rating. the suggest we have -- we infuse $5.5 trillion. minimum,ollars year is that would allow us to have a vision and a plan to get people excited again. talked about a water and tunnel division, do you have a wall division, you have
listened to the rhetoric, there has not been a construction project 1 -- like the one donald trump has proposed. -- the wall would be overseen by the federal government and it would be a department of defense job. they have a division called the homeland security, they would oversee the building of the wall and they have done some work on the border in the past and that is their job and they would most likely hand that off to the army corps of engineers and build it through the standard army corps of engineers environment. the federal government is well to build any kind of military institution. they have the foundation to do it. it is a matter of where their priorities are. david: not a role for your company. >> there is absolutely enrolled. our federal group will build federal work anywhere in the country. we are helping in guam and loving military bases today and
index, a very broad bond index. we see a nice trend, this has yielded to decline but here is the recent selloff, nothing over the last five years that compares to it. $1.8 trillion wiped out. the trendline suggests that the selloff could continue. maybe not right away but at some point this bond index is likely to fall back down to that another suggesting that $2 trillion could be wiped out from the bond markets. something to keep an eye on. as for another great chart that talks about the volatility that we are seeing in the global bond 4979., this is i will make the switch right here on the terminal. this is a great chart. bondve the merrill lynch volatility index. in purple we have the deutsche bank currency volatility index
and in blue we have the vix. wereto august, all three tracking along. after the election we have bond and currency's very volatile. the vix has gone down to lowe's. equities are the tail that wexler. where is bonds and currencies are the foundational asset classes, they are driving forces. the fact we are still seeing volatility could suggest there may be some all till it he for stocks. one last point, it does not come in just one flavor. when we look at short-term volatility it has dropped over the last two weeks 68%, much more so than the vix itself. this is the record of most short-termterms of volatility. lots of volatility going on in the financial markets. abigail with the chart
of the day. hired torclays has help lead the unit. the bank generated $2.2 billion from macro trading the first nine months of 2016 but is up 4% from one year earlier. brookfield asset management says it is prepared to offer $13 a share to -- in cash. can this largest -- they are also prepared to make an offer for another unit. brookfield said it is prepared to enter into a binding agreement by december 6. dool havegs and fan [indiscernible] raisessolidation questions.
terms were not provided. that is your business flash update. bonnie: consumers paid more to sell off their cars in canada and maintain their homes. the consumer price index was at 1.5%. joining us now. inflation that canada is picking up but still a little bit dormant. >> it seems counterproductive to talk about 1% annualized inflation. the trend is up since august. so it is a little bit encouraging on that front, it fits with the view that canada us economy may be picking up some steam in the second half of the year which a lot of economists are hopeful about. 2%lation has not been above
which is the sweet spot for the bank of canada. core inflation is still weak, it is falling but it is true for you look at this report and you add in the more volatile components of inflation, broadly speaking, inflation is on an uptrend but not climbing everywhere. david: what were some notable moves you saw in the numbers? >> food prices are falling, .7% annualized year-over-year. there is a lot of is counting going on right now, they are talking about it in terms of a price war between some of the companiesan retail and the u.s. companies that have come into the market here like costco and walmart. you're seeing for prices drop quite dramatically. vegetables as well. for the purchase -- food purchases in stores fell the greatest amount since july of 1992, down 2.1% which is pretty
dramatic. it is not enough to turn around headline inflation but particularly important but -- because food is an inelastic good. consumers have to buy it. when you see falling food prices it does have a fairly immediate benefit for consumers. bonnie: we talked about it this morning, in the u.s. inflation is playingd shelter a role. what about canada? >> it is very similar. we have had the big housing boom. some people call it a bubble in the major cities in canada. inflation on the housing side has been a fairly constant theme in canada. we have a shelter index rising at an annualized rate of 1.9%, so above that headline inflation rate. if you dig down into that, the cost to replace a home is up 4.1%. property taxes up 2.8 percent so there is inflation coming in on
that front. the head of canada's housing agency today called for more changes to reduce the risks of a housing fall. there is enormous concern in canada about the extent to which canadians have borrowed and what would happen if interest rates suddenly started to rise quite quickly. it is a bit of a catch 22 because the impetus for that borrowing is coming from chronically low interest rates and the low inflation we have seen even at 1.5% annualized. that is still pretty low. from bloombergou canada. lagarde atchristine 315 p.m. eastern. we will bring that to you live. david: reasons for short-term optimism. this is bloomberg. ♪
david: this is bloomberg markets. we look at how some investors are positioning and -- themselves ahead of donald trump's inauguration. peter cory found some reasons for optimism. you laid out the bullish case for a donald trump presidency. those who are bullish see signs of optimism. >> the first thing you have to acknowledge is it is kind of surprising that the markets were his positive after his election as they ended up being. stock market futures fell sharply in the early hours but quickly rebounded and trended upward in the following week. the past couple of days have been roughly flat. that is a little bit of a surprise, let's step back, that is not what people were predicting. that is the first case that the markets are telling us they are not as alarmed by a trump presidency as you might have thought. quoted -- technology
help is a bit -- pivotal this could be. he is not all optimism, there is a sense that there is a pivotal moment in the grand historical sense, there could be a radical change for the u.s. economy. not your average election. the outcome is very much in doubt. i want to be clear that although the article did layout the case for optimism it lays out the case for pessimism. things can definitely go wrong. it is the surprise value that stocks are up, the dollar up, we seem to be moving off fears of deflation exemplified by the rising yields. and then several economists raising the forecast for gdp in 2017 and 2018. mostly on the back of expectations of cuts and taxes -- in taxes and increases in infrastructure spending. david: here we are 10 days out
from that election of last tuesday. what do folks say about wire -- where things are headed, how long this will last, we have been talking at that people are betting on the promise of policy change. our markets beginning to digest that or are they a bit chastened? -- everyot think until day brings new news. one of the key things that trumpss is counting on is will put in a good team that will restrain him from his crazier impulses. and very mixed evidence on that. some of his people are part of the trump coterie, some kind of extremists who worry business so that is kind of a negative. might not really know what is happening until he takes office turningh will be a key point. that is when the suspension of the debt ceiling will come off and republicans in congress are going to have to come up with the deal with the white house
that everyone is happy with. trump is not the deficit hawk that you have seen in congress. david: we see the business of governing underway. when you talk to economists i am curious about what they say how long it will take for a a tax cut or infrastructure package to affect the economy. there is a sense that things could be great, that is far from the case. cuts take effect more quickly. the problem with tax cuts if they are aimed of -- at the upper end of the income scale which they are is they do not have the same multiplier, they do not have the same immediate stimulus to gdp that you get from infrastructure. infrastructure, back to the same old shovel ready argument we had with obama takes longer. orwould not hit until 2018 2019. david: great to speak with you. you can check out his latest article in bloomberg businessweek on newsstands and online.
bonnie: thanks for that. coming up, imf managing director christine lagarde at 3:15 p.m. eastern. the interview at 3:15 p.m. eastern. here some deadlines -- here are -- alsodlines about saying that immigration is another way to grow the u.s. workforce. from richard kaplan in the last few minutes. christine lagarde coming in in more than an hour and 20 minutes. this is bloomberg. ♪
markets. scarlet: we are live in new york over the next hour. we are covering stories out of lima, oklahoma city, and moscow. president-elect donald trump makes his first major cabinet appointments. try meeting with eight major political and business figures this weekend. the apec summit is underway in peru. what does the global community think about a trump presidency? we are live in lima and christine lagarde will join us in the next hour. where does herald him think oil is headed? he sounds off on opec and more in an exclusive interview. markets close in under two hours. let's get the latest from abigail doolittle. abigail: it has been a long two weeks and it is showing in the
indices. not a lot of action in the dow. very slow decline somewhat off of the lows. even with the declines the three averages are in peace for a weekly gain. the question of whether the s&p 500 could put in a new high, the first since august. the nasdaq which was not as closely watched did put in an intraday high. we take a look at an injured a chart of the s&p 500 earlier this morning around the open. the index came ridiculously close to making a new intraday record high or a record close. the index has trailed down a few moments ago, it fell. cap's the index is making a little more to go, two hours to go of trading. we will see if the index can turn around and make that record high. as for what is moving a bit of a mixed bag on earnings, lots of ross stores and salesforce.com.
ross is being bolstered as same sales rose 7%. against said this is [indiscernible] shares are being reported having their best day in about a month. to round it out and take a look at the commodity complex, we are looking at commodities over the last week since the election. there are some clear winners and one loser. oil, copper, and iron trading nicely higher over the last two weeks perhaps on the idea that donald trump's administration will bolster infrastructure. goldman sachs was saying while things commodity related, it could be posted by that move toward improving the infrastructure but gold is down. we have gold at its lowest level since february. perhaps on uncertainty of what is ahead for the fed relative to leadership and policy.
alix: let's check in. mark crumpton has more. mark: president-elect donald army has selected retired general michael flynn. he is the head of the -- former head of the defense intelligence agency and a key military circuit. -- surrogate. he has been a vocal critic of islamic.to combat federal officials are outlining the steps cities need to take before switching the drinking source. it calls for flynn to build a three-mile interconnection so i water from the new water authority. they must also submit a new
water treatment plant. over a dozen people were injured when a train derailed after colliding with a milk truck. it happened near the town of -- miles 125 northeast northeast of amsterdam. the truck driver who was slightly injured was detained for questioning. the final rush of public opinion polls before next month's referencing -- referendum indicates voters are leaning toward reform. the premise to his promise to redesign if voters reject the reforms which he says would streamline government decisions. global news twice for hours a day, powered by more than 26 at -- journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. scarlet: president obama is on his way to lima, peru for the asia-pacific economic corporation form. michael mckee is there speaking
with christine lagarde in the next hour. he joins us now for a preview. narrativeline, the and the focus will be on the president-elect donald trump is having on this gathering. he will cover -- color the conversation in many ways. mike: we will have the leaders of 21 pacific rim nations but donald trump has anyone talking. his anti-trade, anti-globalization platform has a lot of leaders, a lot of the officials i have talked to very there isinterestingly, a divide. the large developed nations are concerned because their populaces are turning away from the free trade that helped them become large and prosperous. the smaller nations are not necessarily worried at this point because they feel they can , theahead without the u.s. chinese in particular are
pushing a trade deal that includes 15 of the 21 nations but does not include the u.s. with that in mind, i asked a short time ago that the u.s. trade representative what he would say to it from supporter when confronted with the idea that china may take the lead, not the u.s.. >> there is no doubt globalization has an impact that trade agreements is how we shape globalization, how we make sure we are opening rockets or exports and how we raise standards in other countries and so there is a more fair and level langfield for that steelworker in the u.s. without tbp we are not taking any action to raise labor standards or environmental standards in other countries. ourill face 70% tariffs on auto exports while other countries will face 0% tariffs in the same market. is focused on leveling the playing field for our workers in our firms so we can access the 95% of the global consumers that live outside the u.s.
he admits tpp is all but dead under the circumstances. they will keep it ready to go, it will not expire, if another president comes along the could revive it. it does not look at for free trade. that will be a major topic here at the meeting. scarlet: on the market side we see this monster rally in the dollar. emerging-market aspects as well as the euro. can you wrap this into us when you talk to christine lagarde in an hour? mike: yes. the question is how much of that growth is offset by a move away from free trade, if free trade were kept in place, that could boost u.s. growth even more. as the u.s. goes, so goes the rest of the world, we a lot of stuff that is made in the other
nations, they would like to see us keep the trade lanes open while we stimulate the economy. mike will interview christine lagarde at 3:15 p.m. new york time. plans tomp has relaunch a stimulus to rebuild the nation's infrastructure. what does that due to the dollar, what does that do to monetary policy? jim bullard is joining us with his take. jim: what we are saying is you should accept the fact that we are in this low interest rate regime and make monetary policy appropriate. that is why we have called for not too many rate increases. it is possible you switch to some kind of higher real interest regime rate later. if that happens than we would have to change monetary policy at that point. expansion comes to
fruition and boost production and if selling more government returns, youp the were talking earlier about the negative real return on one-year government paper at 135 -- -135. low compared to what it was historically. what exactly is driving that is the subject of research. for purposes of thinking about two pointwo years or five years, our approach is that probably that will continue going forward. we will still see slow productivity growth. fiscal change fiscal initiatives might help productivity go higher but we will see. as this thing develops. there is a lot of ifs in your statements, we are very early on. willto know if any of that come. >> do you see the risks to the upside or the downside looking at the dot plot in 2017.
>> i know markets are talking about may the fed would raise rates faster than previously expected. suppose we did that. that would be a reaction to faster growth, that would be a reaction to faster inflation, it would be appropriate monetary policy given those kinds of developments. i think i would like to make a distinction between an appropriate monetary policy that is responding to things that are going on in the economy versus what we are raising rates even though the forecast is not change. into a fastergot raised -- rate rise environment it would be core good reasons. -- for good reasons. on the one hand you oh donald trump a thank you note. on the other hand i wonder if you are concerned about the independence of the fed, there has been a lot of talk about janet yellen and trump's view of her in that role, she said she will stay on. i you concerned about this new administration leaving the fed's
sovereignty attacked? >> we take them on their word at that. we have a big committee, there are a lot of people involved, we have a lot of institutional emery, a lot of analysis that will keep a lot of continuity in monetary policy and we will keep -- that will keep us on arm's-length from the political process. the new administration will have their chance to name new members to the fed, there are two openings on the board now. chair's termed as, been they make a decision at that point. they will have a chance through normal channels to have their influence on the fed. >> the neutral rate has been around 0%. does it begin to rise? scarlet: neutral rate is term i have not heard in the past two
weeks. everyone is trying to price in that playsand how out in asset classes. alix: you can see a 10 basis point move higher in the neutral rate if you see modest growth policy. scarlet: we will have to see what john williams says. texas congressman jeb hensarling major role, will he be friend or foe, what does history tell us? we have some breaking news on the cabinet. former massachusetts senator considered is being for a position. details as they come. this is bloomberg. ♪
alix: time for bloomberg business flash, look at some of the biggest stories. alaska air is close to reaching a settlement with antitrust regulators allowing it to complete its acquisition of virgin america. according to people familiar with the matter. the settlement with the department of justice could be announced by the end of the month. officials were concerned that the deal posed a risk to competition. airbus said it is evaluating the applications of a congressional vote that could block it and boeing from providing jets to iran. the company has not given up on completing its 27 billion dollar order and asked in january. airbus will wait to see how the senate and president obama respond to the house vote. to pull he is close to reaching a settlement with activist investor. -- nearly 10% stake.
the company is looking for new board directors. hhat is your business blacflas update. jeb hensarling has been rumored as one of the potential picks for treasury secretary but it is not completely clear if he would be wall street west hope or its worst nightmare. jesse westbrook joins us from our washington bureau. now, he did hae ve this financial choice act that he proposed but it did not get anywhere. believes government should not be involved in the banking industry. tarp, asvoted against we watched the market crash on the first boat and that is because he does not believe in bank bailouts. he frequently colors his criticism of dodd-frank as it
did not get rid of the problem of banks that were too big to fail. he would -- he is not pro-regulation. he is very anti-regulation. he wants if you believe his word to create a banking system where banks can fail and they do not face a lot of rules but they can fail and it will not wreck the economy. that banks will go handcuff free into the night and do what they want to do under jeb hensarling, is that a real interpretation? jesse: only if they raise billions and billions of dollars of capital, if you believe his choice act. you do not get out of many rules if you maintain the status quo. i do not think many people believe that banks are going to want to go out and raise hundreds of billions of dollars of additional equity. that is a massive pain for the prettyhat are comfortably complying with dodd-frank and still making money. i think they would be just as
happy to keep complying with a lot of the rules. dodd-franke reason is unworkable is it is 2100 pages long, a lot of back-and-forth between the government and the financial industry. japan schilling does not care if the financial industry supports his proposals are not. is that right? interesting. he looks forward to helping donald trump drain the swamp in washington. he is building -- speaking to the lobbying community. he is not a friend of bank lobbyists. when they try to get time with him or weigh in he has very little patience for them. this is not a guy who is going right ofll street piece of legislation for him and then get all the members of the house and the senate to pass, that is not his style. relationship his like with the incoming
administration? supporter.was a forget this, we thought trump would really's's plan to replace dodd-frank, that never happened. there became a lot of talk that he was discussing, japan schilling was discussing his choice act with trump. they have been talking about financial regulation but much does anyone really know what trump thinks about financial regulation or what he wants to do on financial regulation, no one has any idea. scarlet: if he takes another post in the cabinet, who is likely to succeed him? not totally sure. i am not that familiar with house leadership roles and who will slot into that. the viewpoint would be that it a going to be somewhat of
the s&p 500 is within 10 points of putting in a record close, big rally recently, what are your thoughts on stocks overall? >> pre-much everybody is -- pretty much everybody is celebrating in this post trump election world. if you are upset politically when you start making money on it. we have seen a great rotation here in stocks coming from some sectors to other ones. it has been the brussels that has been cheering this on. it is great to see higher air names fueling this rally. it will be here to stay for a little bit longer. trade,: as for the trump can you talk to us about the sectors that are doing well from the rotation and those that are doing less well? guest: we have seen a lot of rotation into the financials. the industrials and surprisingly enough, health care while money has been coming out of consumer discretionary.
i was looking at fund flows in the etf since the election. the health care part is a little bit of a head scratcher. if you think repeal and replace with obamacare, you do not associate that with being bullish for the health-care sector. now that the drug companies can get out of some of this pressure from the pricing they thought they would have under a clinton regime, they are starting to have that relief rally. that is what is boosting health care over there. i am confused why the names are not doing so well. there is going to be a lot of opportunity there. abigail: you think it is oversold. guest: it is absolutely oversold. easy money was hanging out. abigail: helpful analysis. your trade, lululemon, what do you like there? guest: i am a big yogi.
it was a beat up stock and it has been beat up to the $54 level bouncing between 54 and 59. they have earnings coming up and they have guided between 43 and $.44 and that is where all the analysts are. the analyst also say that that is a concerted -- conservative guidance. the numbers will be nice. what i am looking to do with lulu is i am selling a put spread under the price action. $50 put spread50 for a net credit of $.75. as long as shares stay above 5250 which is the -- above the range it has been trading at i will make all of that profit there. abigail: great strategy. have a terrific weekend.
scarlet: abigail doolittle with options insights. let's get the check of how oil prices are trading at the end of this week. .4 of 1%.e up by still stuck in the $44 a barrel range. the: all depends on november 30 meeting. what is the potential of downside? we will hear from sco where he ceo where he thinks oil is headed. this is bloomberg. ♪ wow, x1 has netflix?
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new york. copper is trading lower, set for its first weekly drop in a month as the outlook for higher rates in the u.s. curbs demands for metals. down .9%. chile also saying today that the global copper glut will last for another year in 2017. in soft commodities, corn and wheat both headed for weekly advances. wheat'sproblems with canadian crop. oil up about .6%. that is because the dollar's rally is curbing investor interest. let's look at the relationship between the dollar and oil. it shows that oil in the dollar are the least correlated in a year. prices are on the top channel. the bottom tunnel is the correlation. it is inverted.
a read of one would be in lockstep. an early august, it was at negative 0.6. now it is back to the least correlated, and that is going back one year. quite a change for crude oil. alix: yes, crude oil will live and die by the dollar, but it is also about what opec chooses to do an of over 30. i want to turn with my exclusive interview with a member from continental resources. he told me why he is confident that opec ministers will come together on a deal to curb output. i thinkthe opec deal, that will happen, hopefully this month. that would be good if they get that done. be good in several different ways. alix: why are you so confident? >> i think it makes too much sense for them not to do it.
yes, supply and demand have balanced,to -- have so it is time to do that. i said this before, i have always predicted that about this time supply and demand balance, opec would make a deal. they need to be relevant. if they are not, if they are not, the consequences could be quite severe. meantime, we still get these different headlines. the latest is on thursday, opec members will meet with russia, not ben or iraq will there, nigeria will not be there. do whatand iraq do not is wanted, how do we get a deal? >> well, because the saudis will
torture them. alix: how? >> just like they have been doing. prices and production and how much they produce. iran how saudis can force and iraq to get on board when iran is getting 4 million barrels a day, and iraq is pumping more than we think they are. >> ok, there is a cost of production, and by driving the cost down, you know, $30 a barrel, than they can quell the cost of production. alix: it seems like the solution is for saudi's to flood the market again to pressure iran and iraq. >> they have done that. alix: they can do it again. >> a lot of times. recently, oil got down to pretty cheap, just a three month ago. it has gradually come back.
anyway, they have been through several cycles of those over the last two years. so i think all of them are believers at this time. we will see if that is not the case, but i think it is. it makes so much more sense, you know, to cut a small amount of production. we talking maybe one million barrels a day when they are producing a most 35 million barrels a day. so 3% can raise the price for them. alix: november 30, we get a cut. the price of oil is? ir businessthink the in the future will be to regulate it in a certain band, and i think that band is $55 to
$65. production, if it starts skyrocketing, which i do bringingipate, production up in the u.s. to any significant amount, if it looks to them like they are gaining too much steam here, all they do is open taps again. alix: good point. it sounds like you say saudis will fluctuate and flood the market to get market share and a price strategy were they want a higher price. is that the new saudi then? they were solely focused on the price for decades, and now you think they will vacillate between the two? exactlynk you put it right and in very good terms. it is about prices but also regulating production, keeping
it within a band. i think there's a very good terms you put it in. alix: turning to u.s. shale here, we had the iea director say if opec lifts prices, u.s. shale will flood the market. is that right? >> i do not believe so. alix: tell me why. >> several reasons. when you look back, nobody thought that u.s. producers could have a dip like they have had in the last two but years. you know, they had to have that for survival. they cannot break themselves by taking on more debt. so basically, all of the independent producers here in the u.s. have shown tremendous of thisne for two years
downturn. alix: do you think shale can stay that discipline with $60 oil? >> i do. certainly our company. i speak for me, for continental, our company. we have no intention of going in ling a lot more rigs beyond 60 dollars oil. alix: that was my exclusive interview with continental resources ceo harold hamm. the iea says in a spike you get, shale will flood the market. the shell players do not feel the same way. it will take longer, and they would love to be more disciplined this time. scarlet: i like how he said he is speaking for continental resources. you are skeptical on whether he would accept energy secretary if it was brought to him. what did he say? alix: i got no good answer. but he said he thought a
position should go to some one with a lot of experience in regulation. a lot of it has to do with nuclear stockpiles in the u.s. the real issue is who will be the secretary of interior, because they are responsible for drilling leases and land leases. ok, great, you open up areas on shore, it will not make that much difference. it is the offshore joint that could be material for the oil companies. ideaet: did he have any who that would be? alix: he did. larry nichols, who is based in oklahoma. he told me that larry would want the job if asked. so getting closer. scarlet: donald trump, did you hear that? let's go to mark crumpton. mark: president obama is blocking the sale of new drilling rights in the arctic and atlantic between 2017 and 2022 under a five-year plan for the auctions. oil and gas companies have been
seeking more offshore auctions. the chair of the senate, energy, and natural resources committee joined her states congressional group in criticizing the move, calling it shortsighted. president-elect trump op is preparing to set a lawsuit that claimed to university was a scam. that is according to a person familiar with the matter. he will pay $20 million to $25 million to settle a class-action lawsuit and a case filed in 2013 attorneyw york general, who claims trump up the fraud and students at a $40 million and may have made as much as dollars from the school. the minnesota police officer who killed a black man during a traffic stop is due in court today. he faces second-degree manslaughter charges in the july shooting death of this man, for ootto castile -- philand
castille, whose goal broadcast the aftermath live on facebook. the earthquake in new zealand this we could cost of the insurance industry nearly $4 billion, according to air worldwide. losses are estimated more than $1 million for the insurer. most damage to residences will be covered by the governments earthquake commission. the earthquake lifted the seabed by more than six feet. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. alix: coming up, president elect donald trump starts to fill the top jobs. senator sessions is choice for attorney general, while mike pompeo is picked for cia. mike flynn as nsa director. the latest on the trip up transition, next.
scarlet: this is "bloomberg markets." let's take you to a shot of trump tower in new york city. the lobby is empty right now, kind of weird for that to happen. it was a parade of people over the last couple days. people have been trying to speculate who is being nominated for what positions. taking tole have been the streets over the past few weeks, but a moment of calm. presidentll right, elect donald trump's transition team is taking shape. jeff sessions for attorney general. kansas congressman mike pompeo to head cia. former military intelligence
chief michael flynn as national security advisor. our politics director joins us from washington. he has been following the trump campaign over the last year. all three of those gentlemen are trump up loyalists the people who were with him from the beginning. that, is there a common thread on their positions and outlook? >> they are conservative, not just establishment republicans. these are more ultra conservative. bottom line, in trump up world, loyalty is currency. so all three of these folks are people who have stood by donald trump from the beginning of the campaign. i remember back on the campaign trail in the last year and a half, and i would frequently see all three of these individuals both into donald trump, public and ramping up crowds at campaign rallies and in private townhall settings. clearly, donald trump is rewarding some of his most
ardent supporters with these three picks. it comes with mitt romney, who is not a trump up loyalists, scheduled to meet with the donald this weekend. wormer is he might be offered a secretary of state position. rumor is he might be offered a secretary of state position. alix: that loyalty do not extend to chris christie though. >> i politely push back against some of what i think are inaccurate reports of folks that say a smooth transition is not happening behind the scenes. people that have been there from the getting are indicating otherwise. there was a recent report with lists for past presidents, and it shows donald trump is on pace with that. this was someone who was engulfed in bridgegate and was in charge of leading the transition team. about a week before election, the transition team was clearly
behind, so i think that whole apparatus surrounding the transition team that chris christie led really missed the mark. he was demoted. now you have folks like reince priebus, mike pence, and the congressional and leadership operation on the hill working with steve bannon and kellyanne inway to escher in -- usher the next iteration of the administration. scarlet: mike huckabee, governor of alabama -- governor of arkansas, is currently in trump tower. it is speculated he might be rewarded with an abbasid or ship to israel. odorship toi israel. we also heard that michelle read is supposed to meet with donald
trump -- michelle reed isn't supposed to meet with donald trump. neither of these people supported his campaign. what is a single? shows he is it supporting people that were there with him from the beginning, but i think it also signals something i have heard time the scenes, that this is the president that wants to bring more moderate folks into the fold. i think you are beginning to see that. on the campaign trail, particularly on education, he wants to get rid of common core and wants to reform the education system, and she is a leading voice on this. she has been a national leading voice on this. this is someone who likes to talk to anyone and get a lot of input, and i think you're seeing that now. it is funny to see the revolving doors of trump tower in midtown thinkng quickly, and i some of those folks will end up at 1600 pennsylvania avenue.
alix: what do his supporters think of these picks? >> i think so far, so good, particularly in the think tank world. was aritage foundation favorite of donald trump, ultra conservative in washington, d.c. some of the professor types and some of the wonky types and washington are excited. it will be interesting to see the relationship that donald has with some of these other groups that were not friends of his, such as the club for growth, which is spend a lot of money to try to defeat donald trump. some of the folks in the more conservative vein of thought on the issue of immigration, for example, are looking at what is happening, and they feel pretty confident right now with the transition team. scarlet: donald trump has indicated that he would moderate his approach when it comes to health care, saying he might keep provisions of obamacare that proved to be popular. that --nce he would do
any signs he would do that when it comes to the economy or national security? >> i think donald trump has been consistent on the issue of deregulation, particularly with dodd-frank. my sources singled to me that he is not going to push through a but repeal of dodd-frank, he's going to issue a moratorium on new government regulations. he will have landing teams that will be evaluating all the different regulatory impacts on things like community banks, things like large financial institutions. we heard some of the rumors about who might fill that key treasury secretary real, everyone from stephen lynch and -- steven mnunchin as finest erector. and hence are laying, -- henserling, who is not a friend of big banks. this is more of a tea party conservative.
we will have to wait and see, but he has been somewhat consistent on deregulating financial regulations. alix: thank you very much for joining us. scarlet: coming up, hillary clinton may not have shattered the ultimate last ceiling, but plenty of women have. we will hear from the women who have climbed up. this is bloomberg. ♪
scarlet: this is "bloomberg markets." k, pressurelk the tal points of social change. a pulitzer prize winning journalist recently got stories from successful women executives, capturing their insight in her book "earning it." i caught up with her today. >> what was surprising was the degree to which these women had to overcome a variety of
barriers and obstacles, both professional and personal, in order to succeed. it happened throughout their careers, early, midway, and even at senior levels. the point was, they became better leaders because of it. scarlet: what example of a difficult situation some had to overcome, there was an anecdote who if e-mail ceo with an advertising agency went out with a top executive of one of their clients, one of the biggest clients. she thought being ceo made her impervious of unwanted sexual advances to she was wrong. >> he invited her back to his apartment under a rous. when they got to the company of permit, he attempted to sexually assault her. she escaped without any harm, but she was obviously very shaken. scarlet: what amazed me was the way she resolved it. the resolution was not favorable to both parties.
colleague's inclination was to get rid of the client because we will not put up with that garbage. but it was a fairly small ad agency and one of their biggest clients, so she decided to find a way that he could save face. she called him up and basically said that we are going to continue to serve you as your ad agency, but i am not going to deal with you anymore. you will have to deal with my male colleagues. he was sell and heiress to what happened. he was hung over at that point -- he was so embarrassed. he was hung over at that point, and all he could do was apologize. scarlet: those who do not ask don't get. askings a social cost to for money as a women. you think you are perceived negatively. >> you are. scarlet: to what extent might women share some blame in the
gender takeout? >> i think we bear a lot of blame. i personally did. when i was promoted to management, it never would have tossed my mind to push back see if it was the best they could do or to find out what the competition was making. scarlet: so we do not do enough research. >> that is right. and we do not go in there armed with knowing how good we are at what we do. scarlet: we let ourselves get bullied into a position. >> not the lead -- bullied. it is part of the perception of what makes a good female leader, which she is nice. scarlet: nice is not always, -- not always complimentary with what you need to do to be a good leader. companies have made a lot of headway in the past five years doing more than just paying lip service in promoting women into senior positions.
do you worry that that will be rolled back in the next five years? >> my feeling is that the election is a wake-up call for all working women. we have someone in the white house who did not make working women a high priority, at least from the accounts i have seen. i think this will increase the commitment to try and make things better for women in the workforce, partly because of who is in the white house. scarlet: so it is a case where corporate america can lead the change. >> absolutely. i talk about where male and female ceo's are leading that change. scarlet: up next, christine lagarde in lima, peru. this is bloomberg. ♪
we are live from bloomberg world headquarters in new york, and we're covering stories and lima, washington, amsterdam, and rome. imf director christine lagarde joins us in minutes. how will the election of donald trump and what kind of president will trump be for trade? isn president-elect trump up scheduled to head to bedminster, new jersey, where he will be national golfmp's club this weekend. we had the latest. trump has started naming his cabinet. alabama senator jeff sessions as attorney general. and representative mike pompeo as cia director. democrats are voicing concerns about those selections. scarlet: we are one hour from
the close of trading. we are going to check on markets. it feels very quiet today to but if we take a two-week view, there are tremendous moves. abigail we're looking at very -- abigail: we're looking at very tired trading. not a lot of action very small declines after opening slightly higher. we're now looking at small declines. but absolutely huge moves over the last two weeks. the dow, s&p 500, and nasdaq, look at all the green. the dow is up 5.5%. 2000 up 12.9% over the last week with small caps getting a boost from the auction of donald trump. some say small cap committees receive more revenue from the domestic front and that his protection policy could benefit those companies. so a big two weeks for stocks. out and look that
at the bloomberg dollar index, more strength. this is up over the last two but weeks. the bloomberg dollar index, here we go, over the last two but weeks, of newly 5% on a huge move for a currency, very unusual. it is the first back to back 1% or greater move on the bloomberg dollar index since may of last year, boosted by the rise in rates. a huge rally in rates. 10-yearek view of the yield. it has moved up 56 basis points, more than .5% over the last two but weeks. a big move with expectations that the trump administration will be progrowth and there could be some fed uncertainty around leadership and that sort of thing. .old is down about seven points
alix: thanks so much. let's check your headlines with mark crumpton. friends of donald trump's transition team has reached out to senator jerry moran about becoming agriculture secretary. the kansas republican is reportedly considering the offer. moran chairs the senate subcommittee on agriculture, which includes oversight of the fda. had a friendly phone conversation with the president elect two days ago, saying mr. trump helped ease secured over europe's security and relations between nato's allies. ande told me to stay calm, said he will make sure there is cooperation. i am pleased by this.
i have no doubt that the u.s. is poland's strategic partner. do not specifically discuss your entries for eastern europe, but president duda said he was reassured by president to thend his commitment military alliance. angela merkel may provide more details this weekend about whether she will seek a fourth term. she will hold a news conference sunday in berlin after the first day of a board meeting of the christian democratic union. residents of the town hit by oklahoma's worst earthquake have filed a class-action lawsuit against dozens of energy companies. they blame fracking for earthquakes. at least we seven ebenezer accused of operating wastewater injection wells even though they know the method causes sevenuakes -- at least
energy companies are accused of operating wastewater injection wells. there have been many earthquakes in the area. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: with one hour to go, the s&p 500 looks to end today lower. looking at equities overall, especially smaller stocks, they are not doing the same. cap twin small caps caps growing? growing between small caps and large caps? >> there is some surprise. some say that donald trump will make a switch as soon as he is inaugurated. i think there is a lot of optimism, and the dollar is really weighing on these
international stocks. that is having a big impact you are seeing a huge divergence between small cap and large cap, and that is impacting the market right now. scarlet: that is highlighted in our chart right here. 5058, the white line is the small-cap index. the blue line is the s&p 500. there is that divergence. is weighted on that small-cap. >> there is another sign they might continue to outperform. if you look it short interest, you might say some people are shorting. there is a suggestion that people think there is more room to run here. alix: and look at the bloomberg here, you can see volatility when it comes to treasuries, the yellow line, versus the vix, volatility when it comes to stocks, you can get a feel on
how much volatility in u.s. equities has fallen. >> this is a really important divergence. it happens now and then, but this is the most since 2009. treasuries are taking a hit from sort of this troubled rotation. but one of the biggest things is the expectation that the fed will raise interest rates. scarlet: it is almost near certainty. >> exactly, and that is causing the bond market to go wild, and now the vix is slowly slumping down, creating sort of two different markets that we really have not seen this year. alix: and the other issue is inflation. rates are about inflation. markets do not care about inflation. scarlet: and growth drives everything, especially with small caps. another development is how insurance companies are finally, finally getting on board with the etf revolution. they are late adopters. >> there absolutely late adopters.
this industry looks internally a lot for money management. when they went external, they went to hedge funds, about $17 million in hedge funds. alix: mike huckabee, senator from arkansas, is now speaking in trump tower. former governor, excuse me. >> the only person giving out jobs in this building is president-elect donald trump, not me. any information about our meeting really should come from him. >> [inaudible] concerned with it? like i am going to serve my country, whether i am inside or outside of government. loyal to donald trump, because i believed in him as a candidate and stood by him. i did not come here looking for a job, and i did not campaign
for him because i was needing work. >> [inaudible] : an absolutely wonderful appointment. i give it a standing ovation. jeff sessions is one of the stalwart conservatives in the anate, and he is also been loyal, faithful ally to donald trump throughout this entire campaign. i have considered him one of my favorite senators. i appreciate the clarity with which he brought, especially to the tpp debate when it was going on, and i think that was a great choice. i was thrilled. >> [inaudible] mr. huckabee: three hours, no, i am kidding. and itisiting with him, was long enough, just appropriate. i have got to go. scarlet: that was former governor of arkansas my country
-- mike huckabee speaking to reporters after he visited with president-elect donald trump. he declined to answer questions on whether he would consider a role in the administration. alix: the rumored position he would be up for with the u.s. a visitor to israel. towas governor from 1996 2007. you do not hear his name that much on the campaign trail as a loyalist around trump. scarlet: certainly did not. danny, and to think sorry we got interrupted by breaking news. coming up, imf managing director us, -- lagarde joins christine lagarde joins us, and we will get her take on donald trump's election. this is bloomberg. ♪
scarlet: this is "bloomberg markets." time for the bloomberg business flash, some of the biggest business stories. the election of donald trump has prompted investors to pour into u.s. stock exchange traded funds, attracting $38 billion from the day after the election through yesterday. that is more than half of the $68 billion that etf's collected from the start of 2016 through election day. ergan is a all potential suitor for a surgical products committing, which has also attracted interest from other private equity firms and possible bidders in asia. shares of marv l technology surging after the committee said it will buy back $1 billion in shares and reported earnings
that beat estimates -- shares of marvel technology surging. it will have a new buyback plan over the next year. it replaces a program that had about $115 billion remaining. that is your business flash update. coming up, we have imf managing director christine lagarde. we will get her take on donald trump's election and how this reshapes politics. this is bloomberg. ♪
soon for new jersey, where he will be speaking with folks interviewing for jobs or at least offering counsel. it includes mitt romney, a former schools chancellor michelle reed, among others. mike huckabee just left the building. he is under consideration, according reports -- to reports, to be ambassador to israel. is underway,it starting with the backdrop of donald trump moving into the white house. aipacckee interviewed the secretary executive director and asked if he's concerned about protectionism. am concerned about it, not just in terms of the u.s. but in a bunch of developed economies. either we have not been doing
our job properly and getting our message across and we have to pay more attention to the effects of globalization, but basically at aipac, two decades of opening of trade investment has have half a million people get out of poverty and into the middle class. mike: that is a great statistic, something you can focus on. but how does that help the unemployed steelworker in pennsylvania and the united states? how do you translate what you do to is a buddy who feels like trade has cost them their livelihood? >> we have to communicate better. i think there are a lot of beneficiaries, more so that people suffering. that is clearly not what the message is. we're looking at what we call which is wezation, see trade agreements running into big problems. economies that want to go ahead on these things will.
it is not losing national sovereignty or anything like that. and we're paying more attention to what it does in terms of the effects on the ground. the debate has been about old globalization. are in services, and we're doing a lot work on services stabilization. mike: you mentioned trade deals. transpacific ownership, president obama has to come here and tell everybody it is probably dead. from that? go here are the countries here going to move forward or postpone? which is partru, of the pacific alliance. the economy is growing, and we're learning from them. the will be slow negotiations. tpp, we will hear about it. if it is on the shelf, it does not mean it is dead.
hear about free trade for asia-pacific. it is about how you build on the pillars that were there. if they are not there, this might be a plan b. mike: the united states was the driver for free trade, was the aipac.of a tech. -- of where does it lead the united states now that they will have a leader that is anti-trade? >> it is too early for us to know now. we have the current administration here. andident obama, john kerry, they have given us a good message about moving forward. scarlet: that was the apex secretary executive director. we will be speaking with christine lagarde live from lima in moments. we will discuss donald trump's policies, his views on trade,
and how it impacts the global economy. the s&p 500 ended the week on a down note, but it has been up for u.s. equities, especially small caps. the dollar, no sign of weakness in the rally, extending its advance now. the 10-year yield moving higher, 2.34%. .3% --rude gating gaining .3%. president obama is heading to lima, peru, today for the asia-pacific economic cooperation forum. michael mckee is there now with imf managing director christine lagarde. mike: thank you. christine lagarde has been managing director of the imf since 2011. if there is a global crisis, the imf is usually there to help. but this is a different kind of crisis. everybody talking about donald trump, the anti-globalization
fever squeezing the world. our host in peru says this has to be addressed immediately by the leaders. ms. lagarde: you are right that the imf is trying to be helpful. is to work with the international community. and where we hope to find common and weis around growth have said for a while that growth has to be included. we have observed over the course of time that trade is a huge engine for growth, but it has not been inclusive. some people have been left to the side of the globalization. what we certainly advocate is that growth be inclusive and trade be done on a different page, if you will, where it will also be included. we will pay attention to those with jobs that are eliminated or
displaced. and i think we should be very careful not to mix trade and technology, for instance. there are many more jobs at the moment that are changed deeply and sometimes eliminated because of technology and innovation, because of creativity, which the united states is very good at. we feel very strongly about this inclusive growth, which should also be based on trade, but the different trades, one that pays attention to people. mike: this is a very effective group of nations that come here for apec. do you find that the anti-globalization is a global phenomenon or is it the older, developed countries that are suffering while the younger ones are still interested in open trade? ms. lagarde: what i hear around the world, and we have 189 members, that all of them want more growth.
all of them one more inclusive growth. china was one of the first to add this concept of inclusiveness to growth. it has to apply both globally and also domestically. and whether it is going to be propelled more by concentric, more by trade, more by investment -- more by consumption, it will be about the chemistry and the countries. all the engines will help. mike: do you worry that after that thister trump, could spread to europe with a number of elections next year, including her native france? thelagarde: i have been in private sector for more than 20 years of my life, and i have worked for lots of companies around the world. and the around the world matters. many of the enterprises, whether
they are large corporate accounts or whether they are sme's, they are playing a global game, simply because we used to say the world is a village, and certainly communication, internet, the transparency has brought people together. but i do not think it is a question of not having globalization. it is a question of what globalization it will be, what traded will be, how inclusive that growth will be. that is where i think we have to work together. we have to help as much as we can with our research, with our traction with many countries around the world. mike: what happens to global growth if the u.s. builds walls, either physically or through trade tariffs? ms. lagarde: we have seen many walls come down in the recent past and generally to the benefit of economies. i look at germany. you look at china, the great wall. it is not when it was behind a
great wall that was most -- that it was most successful. private players are interested in large markets, interested in reaching out. we are all interested in having better productivity and more growth. mike: to your revised undergrowth forecast if the u.s. gets into trade wars? ms. lagarde: we're not talking about revision downwards at the moment, no. mike: what about the u.s., if the u.s. withdrawals, what happens to its influence within the imf? ms. lagarde: it is the largest economy in the world, the biggest defense industry, the biggest military power. it's enterprises are involved everywhere -. i think redefining the rules, helping with more inclusive growth, it will be critical.
hope it makes the agenda of various leaders, including the u.s. trump'se other side of economics is fiscal, and you have been calling for that for years. are you pleased with what you have been hearing? ms. lagarde: investing with infrastructure, improving the welfare of people and increasing the income, does a certainly goals we support and adhere to. we would be very happy to see investment in infrastructure, a combination of public incentive and support and private engagement, yeah. mike: what do you think of the rim,nations, the pacific if the u.s. is uncertain about its role? ms. lagarde: there are two sides to it when it comes to land, and all players should be dissidents. -- should be
participants. i certainly hope all countries continue to play together to be on the same page of inclusive growth, welfare am including income. mike: does the imf feel that china is unfairly trading? ms. lagarde: we have just recently seen the rim and the renminbi -- the remember included in the international basket of currencies. we want to make sure the commitment and criteria that applies to that is respected. mike: do you feel the yuan is undervalued? a. lagarde: the renminbi is currency which is more traded and internationally recognized and which is entitled to being in the basket of currencies as much as the sterling or yuan or euro or dollar, and it is more and more recognized around the world. mike: japan, the world has been
waiting for prime minister abe to pull japan out of its doldrums appeared do you have faith he can do that? ms. lagarde: there is certainly a logic in keeping this focus and trying to reach that 2% inflation 2% inflation target ad increasing growth. strongly recommend that jeff and -- japan be included to deal with the issue of labor force, which is in high demand. that would help. mike: people tell me they are discouraged by what is happening, how do you feel now that we are changing administrations? are you encouraged or discouraged about the world economy? ms. lagarde: we have weathered many crises and we are at the time of economic recovery at the
moment it we have always dealt with administrations in the membership and we have worked with all u.s. administrations. actually, one of the leading presidents support in the imf was president reagan appeared so we look -- reagan. so we look forward and we are prepared for that. mike: thank you very much. scarlet? scarlet: thank you. "what'd you miss?" starts now. ♪ scarlet: we are 30 minutes from the close of trading. live from our headquarters in new york. alix: