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tv   Bloomberg Markets Americas  Bloomberg  November 22, 2016 12:00pm-3:31pm EST

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♪ from world headquarters in new york, from new york to tokyo. stocks rise around the world's for by the biggest three-day rally in commodity since may. optimism that opec will cut output at a meeting next week. donald trump outlines executive actions he can take on day one. absent from that list is one of his most controversial plans such as building a wall between the u.s. and mexico and the repeal of obamacare. seeking adventure in the alaskan wilderness come inside a collection of world-class dishing lodges in the last frontier. we're halfway into the trading day, julie hyman on the latest. julie: we hit 19,000 and come back down a little bit, the three averages hit records that now seeing a little changed.
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sometimes we hit resistance when we get up to these big round numbers and have a little bit of a struggle getting above. lower and one of the biggest drags is health care because we have some fundamental headlights on some of these health care companies. patterson companies, a distributor of dental projects that products -- products which -- there was speculation it would sign a deal with amazon. that did not materialize. shares down 20%. medtronic cutting forecast for the full year for earnings. this has been an issue for the company consistently. it is dragging down other device makers, edwards and boston scientific. that drag on the overhaul --
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overall health care group pushing the s&p 500 into the red. we have been watching the bond market closely. we are announcing fed fun futures price with a 1% chance of a rate increase at the fifth december meeting. the five day chart of the two-year yield, gone up for five straight sessions, up nine basis points in that time to 1.08% which means that if you look at one indicator of bonds versus stocks, stocks are getting relatively pricier and perhaps less attractive. this is the s&p 500 earning ,ield versus the 10 year yield the earnings yield of the s&p now below that and the 10 year has climbed. this is one way to look at the relative valuation of stocks to bonds. on the bottom, the dividend yield versus the 10 year yield, the dividend yield on the s&p
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500 and we have seen their a drop in relative value. the other big story has to do with commodities. we are seeing the bloomberg commodity index up for three straight sessions, up 2.5%, its biggest three-day climbed since june. a lot has to do with decline in oil and copper and tin and iron ore. that is a particular commodity which help from a callout from goldman sachs, raising is forecast for iron ore, we saw it straight up in china. here are iron ore futures pricing of my present, goldman sachs saying china infrastructure spending should help boost iron or further going into the first quarter of next year. then it might come back going to the end of next year. a pretty spectacular commodity rally across the board today and over the past several days. vonnie: we are seeing the after effects of currency. thank you. david: breaking news, opec
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meetings taking place next week in vienna and in september, late september, an agreement on a production freeze in principle and there has been back-and-forth on whether opec members will uphold the agreement they signed on september of the 28, iraq, iran, their participation in that agreement has not been settled, something to be discussed at the meeting on tuesday according to delegates. the issue whether iran and iraq will participate in production cuts will be on tuesday. vonnie: debbie's yakker down 1.8%. 120%. crude down >> one of the donald trump's advisers suggest you will not follow through on his pledge to investigate hillary clinton over her emails. kellyanne conway did not dispute and msnbc report that the president-elect will not pursue
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probes into plaintiff's gmail or private foundation. she said it was a good thing that mr. trump can help secretary clinton feel. -- heal. donald trump says he would like to see independence party title for our would do a great job as ambassador to the u.s., says he is uniquely placed to force ties with the trap administration while theresa may says she has an excellent ambassador. chattanooga, tennessee, police arrested the driver of an elementary school bus that crashed yesterday, killing five othersn, two dozen injured. the driver is accused of the hitch of homicide and reckless driving. japan has withstood a particularly deadly earthquake with relatively little impact. it measured 7.4% -- 7.4 and struck off the coast, a home of a googler paracrine crippled by a soon on the earlier.
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it briefly knocked off a cooling facility in a separate location. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. this is bloomberg. david: thank you. u.s. stocks are erasing gains that had earlier push the dow up above 19,000 for the first time ever. two weeks away from election day and investors assessing the donald trump victory. catalyst,u see as the the election two weeks ago, the market was chewing that over, what kick things off yesterday? >> clearly, energy participated in the rally tremendously, on the back of the idea that the communiqué coming out would clearly state production cuts or freezes. that really helped give that extra push for a sector that had been participating but not as
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much as financials. you also have a weaker dollar yesterday, that also helped energy. together it brought it up. today, you heard the news that iran, iraq -- with the fact of the matter is most investors understand that going forward, opec has had a bit of difficulty sticking to the plan. i covered energy years ago and nothing has changed. yesterday you had rusher coming in and supporting the notion that opec -- russia coming in and supporting the notion that opec would support the to indicate, never mind eight couple of weeks ago, a biggest company said why is everyone telling me how much oil we can produce. the market wants to see a communiqué and then maybe sell on the news but clearly the news is not going to be as newsworthy as we had thought. --an, -- again
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your currente position, you worked in politics , you have worked at the imf, you have seen things from every angle. the move in bonds, the move we have seen, does that reflect an immediate impulse or is it something that can stay with us for a while? >> they can stay with us for a while, the best gauge for me is the markets, what are they telling us, not politics, when you work on the trading floor, you see what the market is saying. in a tight trading range, it has been for a long time. it was strange that we had a market that did not move and then the minute the market pivoted -- it is donald trump, let's look at the positives, let's look at strategy and see what that says. you couple that with the notion that the head is going to raise rates. -- the fed is going to raise rates.
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give us a rate hike but it must be underpinned by growth. a rate hike without growth is actually a scenario in which the 10 year yield will pull back at some point. this is what the market wants, to see growth and the underpinning of a positive environment. vonnie: they cannot guarantee that. >> the market knows that and realizes it will look ahead six months and may be a year and will adjust if there is no growth. just because the market. it on election morning and then suddenly went from miserable to euphoric, the market will adjust accordingly. the market is giving this president-elect the benefit of the doubt. david: a strong dollar story. we saw it. stronger by 4% compared to on election day. how long do you expect that to continue? >> it could continue but
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typically what happens is that it will pull back. it will move higher. mind you, while it may not be positive for u.s. exporters ultimately, even for emerging markets, let's face it, it is giving a nice boost to the japanese, a nice boost to the eurozone. currencies do not move on their own. they are always against another. currency abroad has been helpful and you can see how the japanese markets have reacted with a weaker yen. yesterday it again because of earthquake, it should ease out. vonnie: equities, is this a great rotation, a dividend paying type stock? >> absolutely. news,s why yesterday's this is december 1999 all over again. this time around it is literally
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a shift out of sectors that will -- that were associated with the obama administration coming hillary clinton, and moving clearly to the sectors associated with president-elect trump. those are sectors that had been held back financially -- insurance companies. the small mid-cap, the small-cap are for the markets, a gauge or barometer of saying, we are willing to take that bet. we are willing to take the higher dollar but we will see growth and we will go out of that trading range that kept them in a kind of monetary financial equity purgatory. david: thank you. we appreciate you coming. vonnie: coming up, as president-elect donald trump and mike pence continue to meet at trump tower, we examine what we know so far about their agenda for their first 100 days in office. this is bloomberg. ♪
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♪ this is bloomberg markets, i am a vonnie quinn. david: time for the bloomberg business flash, the biggest business stories in the news. sales of previously owned homes in the us unexpectedly rose last month to the highest level since 2007. existing home sales up 2% to an annual rate of 5.6 million, the real estate market could be in line for a slowdown with mortgage rates rising on spec version donald trump's policies may lead to inflation. brexit has battered the wealthy in the u.k., according to credit suisse, the number of dollar millionaires in u.k. fell 15% after the vote to leave the european union, that has rattled the stock market and set the
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town falling with household wealth in u.k. falling to percent in the year that ended in june. gasoline has now had its day, the international energy agency said gasoline consumption all but pete because more efficient cars and the advent of electric vehicles will halt the man growth in the next quarter century, gas account for one in four barrels of oil consumed worldwide. that is your bloomberg business flash update. vonnie: president-elect donald , i amhas just tweeted seriously considering dr. ben carson as the head of hud. he is a great and talented person who loves people. we know that he met today with wyoming representative cynthia lummis and mike pence. probably about to get ready for the meeting with the new york times. dr. ben carson reemerges. what he be a good had secretary
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-- hud secretary? >> ben carson has been an ally to donald trump. them after it became clear that donald trump was on the path to victory so not surprising that donald trump considering some of these individuals who have been loyal to him for prominent positions, others include jeff sessions who is nominated for attorney general, a longtime donald trump supporter, one of the early ones. as far as ben carson for hud secretary, he suggested he does not want to be part of the cabinet. he says he does not believe he is qualified to run an entire agency which is ironic because he ran for president. he thought he was qualified for that. i have not heard much about that, the first time i am hearing of this. obviously there may be something to it since he is the decider. david: there was talk of him becoming the head of health and
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human services and he said he was not interested in we are seeing equitation in the transition team today. carson perhaps changing his mind and donald trump changing his mind several times this morning about meeting with the new york times. he met with anchors an executive's from tv networks yesterday. what have these meetings told us about his relationship with the press going forward? >> that he will have a hostile relationship with the press and uses twitter account to make his misgivings and grievances known. going after the press in the way he has is one of many norms and traditions he has broken on the way to becoming the president-elect. the early indications are that a man who has gotten this far out breaking all these traditions is not going to feel bound by them once he has the power. lineis an important story that everyone should watch for, not only his relationship with the media but also other traditions and norms he is willing to cut corners on or
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potentially break. vonnie: these videos, can we expect them after he is inaugurated and takes office or is this something that might go away? he does not want to do my press conferences but will eventually? >> the last press conference he did was on july 27, it has been more than 100 day since he has done a press conference and now two weeks since he was elected, it is unusual for a president-elect to go this long without a press conference. ant video seems to be attempt by the president-elect to go around the media with whom he has a hostile relationship lately and with whom he has made thenegative feelings about media known on a pretty regular basis and all indications he will continue to do that. david: what did we learn from this iris filing from a trap foundation -- irs filing from the trunk foundation -- trump
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foundation, what is the latest wrinkle in the story? >> this story can i slid a number of reports we have seen about donald trump using the new power he is about to acquire as president to advance his business interests. the trump foundation was a long-running saga that he wants to put -- close the chapter on. we saw a report yesterday from argentina that he had asked the president of argentina a congratulatory call to expedite permits on a building project he had in buenos aires, the president argentina denied that was true and today we have a report from the new york times that president-elect trump asked the british politician nigel protect his scottish golf courses. these are questions that have been raised. they seem likely to be raised mp's business interests
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around the world. vonnie: a great story today on not put asrg, we do much stock in the polls but most u.s. voters saying it is time from donald trump to retire from twitter. the at potus and it will be transferred. @potus will be transferred. david: despite news that iran and iraq not on board, we will discuss the latest news next. ♪
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♪ david: -- vonnie: this is bloomberg markets. oil this are watching afternoon. opec talks in vienna have not resolve the question whether
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iraq and the rent will participate in production cuts. let's bring in our houston bureau chief. speed.up to for the last two months or so since the end of september the focus has been on the meeting indiana. -- eating in vi -- meeting in vienna. >> all this optimism from yesterday has not evaporated but there is a lot less momentum. prices are down $.70 after being up 4% yesterday. everything we were hearing through yesterday was that we were close to an agreement. and even and iraq smaller producers like nigeria and libya were signed on and that the russians were talking about freezing up but although they are not part of opec, that seems a good reason for optimism. today, that has somewhat fallen
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apart. i read and iraq would like -- iran and iraq would like to pump as much as they can't at it is difficult to enforce a ceiling if two of your three largest producers are doing that. doing what are they are -- what are they arguing? >> that special circumstances should allow them to pump at higher numbers. iran coming back from several years of sanctions and has been cranking up production for most of the year and up around 4 million barrels per day. states fighting islamic in the northern section of the country are continuing to pump oil from the southern sections. it takes money to do that. saying those nations are that these are special circumstances and we should be either exempt or get a higher number. if you are trying to keep production down to 32.5 or 33 million barrels per day, it is hard to let two producers go way
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over what they have been doing. -- opca go, aa great function to show you in 3-d as well as literally and numerically, showing what they pump and their targets. what are u.s. producers saying? do they care what the outcome is? are they divorced from what opec does? care for thes outcome is an producers, especially in houston, very concerned about what the global oil situation is going to be. and ihe recount rising believe it was up 19 last week and the new number will be out tomorrow instead of friday because of the holiday. we will see if there will be a jump after that. there is a lot of optimism in
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houston about oil prices in general. and about the ability to make money, even at 50 or 55 or $60 per barrel. i do not think anybody is looking at the global outlook and saying, we are going back to 100. they found some ways to make money at $60, the permian basin doing a good job. that may be where we are. david: thank you very much. our houston bureau chief and energy markets editor on the news that iran and iraq not in agreement with the rest of opec ahead of the meeting in the enough. -- in vienna. this is bloomberg to ♪
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markets." david gura with vonnie quinn. we're looking at the new york times building, donald trump scheduled to arrive at total: 30. his motorcade is on route. doubt on whether you would keep the appointment. canceled it but then the meeting was back on. they said the statement from "the new york times," mr. trump's stock said the meeting is on again. he will meet with our publisher off the record and that session will be followed by an on the record meeting with their journalist and editorial columnists. he is expected anytime in midtown manhattan. vonnie: let's start with headlines on first word news. mark crumpton has more. mark: thank you. a new poll says most americans, 50%, say president-elect trump
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will ultimately do a very good or fairly good job as president. will bring change, but 43% say it will be for the better. the president-elect charitable foundation has admitted to what is known as self dealing, when charitable funds or assets are persons.isqualified according to a report in "the washington post," the foundation answered yes on the 2015 tax form. european union policymakers have stepped up criticism of the uk's plan to leave the block. they say prime minister theresa may's government appears cool about the implications of brexit . declaringawmaker is [indiscernible] canadian prime minister will speed up the plan of coal power plants.
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they will phase out traditional coal power by 2030. it comes as u.s. president-elect wants to back out of climate deals and boost coal production. carolina, an, south closed hearing on the competency of the men accusedf murdering nine black churchgoers in 2015 continues today. the hearings expected to include statements made by doing roof -- roof. a federal judge it will issue a ruling on whether the trial will be continued later this week. news 24 hours a day powered by more than 2600 journalists and analysts in 120 countries. i am mark crumpton. vonnie: thanks. let's have a look at stocks. we have seen records for most indices, low-volume right now. 18,979 below 19,000, come up 22 points. s&p 500 index unchanged at 2197
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and the nasdaq up .20 1%. let's go to abigail doolittle focusing on medical devices. abigail: we may have near records on the day, but one sector not helping today, health care, the worst performing sector in s&p 500. -- nailed it as far as why k health care equipment stocks. s&p 500 health care equipment index down sharply on paper. worst day since august 2011, so a lot of weakness. the reason for the weakness among the device makers, medtronic. the stock has plunged, this comes on an ugly fiscal second quarter. they missed sales, estimate by 1.6%. the third sales missed out of the last four quarters. this time, it has to do with cardiac devices and ibd devices.
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the ceo of medtronic says the company is focusing on "tucked in acquisitions" to drive growth. but a lot of times, they want to see organic growth and not one from acquisitions. we go to the bloomberg and the year to date097, chart, in blue, s&p 500, white, s&p 500 health care equipment index and they are tracking along most of the year in tandem. two things stand out, first, divergence after the election. s&p 500 shot up toward the record high, while device maker index has plunged. index, healthis care device index is now broken. when we look at the orange line, it represents buying support. buyers were willing to support the stocks here, here, here, but today, not so much. 5% weighting, suggesting the
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index could have a hard time holding on to these all-time record highs. vonnie: abigail doolittle, thank you. for a raten high hike by the federal reserve next month. it remains at 100% in the market. earlier, chief fixed income strategist jeff rosenberg looked at the increase to how the fed approaches running high-pressure economy. jeff: if we were not talking about the election results, we would have been talking a lot more about what janet yellen said in october, where she introduced ideas around running the economy a lot harder -- high-pressure economy -- and that is much more accommodated, with the goal of running the economy hot to repair some of the damage done to labor markets , trying to get more people back in the labor markets. the 100% probability for december, yes, that is in the market and means the summer should be a nonevent, except it is about what they forecast in
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terms of future pace of future increases. in december last year, they gave us four. this year, two. and market expectations relative to the fed. jonathan: we pointed that out for you, jeff. going to bloomberg. economic addictions from the fed. the story has been as follows, the market a lot more dovish than the federal reserve. how does that change the next months? i wonder if the market becomes more hawkish than the federal reserve? jeff: the market has been right. the market and the dots have gotten closer. dots aremarket and o less off those front market contracts. that is good news. now, soet has come up
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there's less uncertainty about that impact of the pace of at least the near term increases from the fed. the longer-term issues are bigger story because of trump, the election, changes to the federal reserve. you have many more board seats and governors coming up for renomination for new seats to be held in that will change the tenor of the fed. david: how hot is too hot? jeff: too hot is not the case because inflation is running 2%.w we are running 1.7%, about 1.8% in terms of the fed's preferred measure. their target is 2%, so too hot won't be the conversation that begins once you get inflation above the 2% level. then that debate about are we running a too hot? is the fed by the curve? all that will come back in, but we are trying to get this inflation figure backup. base fx not withstanding, it is
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about the poor level of inflation. if we get core levels up to 2%, maybe we have that conversation. carol: what happens to the neutral rate? kid kicked up a little bit in positive territory, what if it moves up far enough, there is more room to hike. the lower it is, the less they hike. what happens? jeff: what we talk about the long-run equilibrium rate or neutral rate, it is code word for growth and what is the kind of growth to deliver. if we can only deliver low levels of growth, 2%, then what equation is that these low levels of interest rates. if we fundamentally through fiscal policy, productivity changes, structural reform, lest i say immigration or demographic reform, change that outlook on growth, then the neutral rate is not as what we thought and can be higher.
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vonnie: that was blackrock's chief income strategist jeff rosenberg. david: what would happen if congress were to pass a fiscal stimulus package close to full employment? pimcoed and that is what owns treasury inflation protection security. tipsat is why the own because we're hedging for that right tail event, where inflation does pick up. the reality is that these tax packages, the infrastructure spending, they are going to take time, so and likely wants to get implemented, it could take nine months, 12 months for the actual program to be implemented. that is obviously the negatives, which are the trade, the dollar headlands and the immigration. the market is romancing this positive surprise under trump there is aarguing
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lot of uncertainty with regards to protectionism, immigration and trade, and that should dampen some of these high animal spirits you see in the marketplace. carol: you might have been first in front and center with that tips call, but everyone else's jumping on the bandwagon and there has been a monster rally in inflation protected securities. when does it become too expensive and you have to look for alternatives to protect against inflation? have furtherk tips to run. if you look at the breakeven inflation rates on ten-year tips, you are under 2%. or 20 look at the long 10 year history, those break inflation rates. their value should be closer to 2.3% or 2.4%. you probably have another 30 basis points to 40 basis points on upside on tips. what we see in the marketplace, and this is true of equities, reflationary assets are under owned by the marketplace. trump was a big surprise.
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no one was thinking about the possibility of a right tail, higher growth, higher inflation ook and that is why tips can run further. jonathan: i get you are out front on it. we talked about it, by tips, by tips, so the election result played into the central game. when i went to understand, the surprise of pimco, what has he been selling off of the back of the presidential result in the last weeks? what have you been doing in credit more specifically and rotating out of? mark: in general, we were running durations under way, particularly at the front end of the curve because he felt the risk was of higher rates. mainly because of the tightness of the labor market and not so much trump. credit under trump, we want to own more cash and of great quality. i think trump creates right tail and left tail risks. i think they will be fatter under trump with more volatility and uncertainty.
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in credit, that means a great quality. andave been derisking holding more cash and reducing high yields, specifically the energy sector, which has rallied in the triple c sector and we are more concerned about hospitals and with the opportunity lies in the credit market which is to take it manage of the volatility in scale into positions, which are fundamentally strong, which may have been oversold under trump. i would highlight emerging markets, specifically brazil, an area we are constructive on. carol: when you have a stronger dollar, emerging fx selling it off and derisk, how do you make the case for brazil? are: it is an idiosyncratic story. 32% of exports from mexico go to the united states. from brazil, 1.2%, so very much domestically controlled. you go back to 2010, 50% of equity market was linked to
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25modities and now only when -- .25. that economy went through the worst recession of the years. i was recently on the ground meeting with the central bank and meeting with all the biggest companies. over half the biggest companies in brazil have new ceos and cfos under the new president. the key with brazil is inflation is coming down, unlike the united states, with inflationary potential to go higher. with brazil, you have a huge recession and inflation's coming down to about the central bank to lower rates. we think they will lower rates much more than what is priced into the marketplace, so brazil is within emerging markets one country with economic fundamentals are turning in a major way. positivelation and potential surprises on earnings, that is one emerging-market which i think has an upside. david: that was mark kiesel. vonnie: you are looking at live
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pictures of the new york times building, midtown west in manhattan. donald trump, the president-elect, set to meet with "the new york times." he is meeting with the publisher first and then a more open meeting. we are waiting for the president-elect to arrive. "the new york times" reporting trump canceled after being incorrectly told by-line's previous cash by reince priebus -- by reince priebus that conditions were changed but it blew over and out there waiting for the president-elect. the gentleman the lower left with a good seat for the arrival of the president-elect. david: he is supposed to be there till: 30 p.m. coming up -- there at 12:30 p.m. coming up, if you are looking for the nature trip. this is bloomberg. ♪
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david: live from bloomberg world headquarters in new york, i am david gura. vonnie: i am vonnie quinn and this is "bloomberg markets." the man said to be the leading
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candidate for treasury secretary has been accused of shoddy foreclosure practices and 40 business in minority neighborhoods. you may have gotten personally more than $200 million from the a bank for foreclosure machines during the debt of the financial crisis. it is unclear on whether they were worse from other banks, but there is claims that are likely to become under intense scrutiny if nominated. bloomberg wrote about this and we are joined now, is this something that would make an unavoidable? able?appointe be ard to say, but it will question brought up in the senate to approve nominations. into: the detour he took real estate, he had been a goldman sachs, in the movies, how did this happen? thackeray: he was a mortgage
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trader goldman sachs, so he had deep experience -- zachary: he goldmanrtgage trader sachs comes of yet experienced great when the financial experience head, he soaw people running around in the assembled investors, but the bank and made a fortune. vonnie: he was [indiscernible] what was wrong with him buying a bank? tell us where maybe the questionable behavior is. zachary: indymac was a mess when questionand there's no they may terrible loans to lots of people, so some people were going to have to be foreclosed on. while he was in charge, they did something like 36,000 foreclosures. the question is whether things he could have done better, or see an exemplary steward of the bank during this time over the things to improve? david: how long was he with the out?and when did he get
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zachary: he bought it in 2009, invested about 1.5 billion dollars and took more than that and dividends out and sold it for $2.5 billion last year to see i.t. -- cit so they made a fortune. david: do we know? zachary: john paulson bought about one quarter of it and put up 400 million and got back to some dividends and made another 700 million when he sold it, good deal. vonnie: there is a theme surrounding people who surround the president-elect. they invest in distressed companies and countries, a vulture, can you fault them? zachary: at one point, trump was a distressed asset. when they signed on, it was unclear whether the republican party would rally against him. polls showed him far behind hillary clinton and made a long shot that and it paid handsomely. david: we are watching the
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footage added new jersey, a parade of people being brought to donald trump skoff golf course, including many in the running for that treasury position. have things change with regard to the shore bed of becoming treasury secretary and the competing or is it a done deal? a such thing as a done deal. nobody can predict with donald trump will do. managing has been perceived as having an inside track since before the election -- mn asin has been perceived having an inside track since before the election, but wilbur ross has been talked about for the treasury position so it is not over. vonnie: is it the concern on whether someone is or is not a point of all -- not appointable? zachary: republicans have a near majority in the senate,. -- the senate. this is a guy who campaigns for the white working class. a lot of people supported him
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over hillary clinton and they remember the foreclosure crisis and know people who lost their homes. you could imagine amongst his supporters that this could be something not to bring up. david: thank you. vonnie: great story. it is on bloomberg and terms treasury contender. david: still ahead, stephen stanley will look ahead to tomorrow's fed minutes and we will talk about housing data we got this morning. better than many expected. that is next. this is bloomberg. ♪
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david: 1:00 p.m. in new york, 2:00 a.m. in hong kong in 6:00 p.m. in london. i am david gura. vonnie: i am vonnie quinn. welcome to "bloomberg markets."
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♪ vonnie: from bloomberg world headquarters in new york, covering stories out of san francisco to london and rome. december asease by the market implies from reactions to the idea of an interest rate hike, giving it 100% odds. reportspackard quarterly earnings after the bill today and we dig into hp enterprise and numbers cannot line. mario monti speaks to bloomberg and says the current prime minister should stay in power, even if the coming referendum is rejected. more highlights from the interview. we are halfway through the trading day in the u.s. not huge volume but julie hyman has been looking at the move. julie: moves were record-breaking at one stage,
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although, it now, a little bit of needed movement in major averages after the dow touched 19,000 and all three touched record highs. we have seen a little bit of moderation, particularly for the s&p 500, which is little changed, somewhat of a mixed picture. we have been talking about health care, one of the major weights on the s&p 500. the intraday chart tells the story with unchanged reading for the s&p 500. started started -- dip around 11:30 and s&p 500 bounced around the lows before coming to the unchanged level. it is a holiday shortened trading week, not unusual, but low trading volume. bloomberg shows that, average volume, that is what it stands for. the composite ball game today is the blue line. shows where ites
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tracks throughout the day. it is about 10% to 12% below the 20 day average for the s&p 500. a little pullback in volume, even as we reach record levels. something to monitor. the russell 2000 has hit records and now up for 13 straight sessions, about a 14.7% climb in that 13 dayd winning streak is the longest going back 20 years for the index small caps, which has been outperforming since the election. what other stock -- one other stock with a winning streak as amazon. amazon has been one of the stocks that had initially been lagging postelection, along with big cap technology but has come back since then for six straight up days, guinea back about $33 billion in market cap over that time. up another 1% today. the other big mover among asset classes in commodities, declare
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the oil. we have been talking about then use that iran and iraq were not able to come to an immediate agreement on their role in any kind of production freeze plan and has been pushed off to the official opec meeting next tuesday. that sent oil lower, down about 1.5%. interesting that we saw stock prices fall, along with oil, but the s&p 500's recovery to some degree as oil continues to trend lower. david: thanks very much. let's check in on first word news. mark crumpton has more. mark: thank you. president-elect donald trump is holding another round of high-profile interviews today. former new york city rudy giuliani mayor has met with him today. giuliani is being considered for director of national intelligence. mr. trump said he is considering
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dr. ben carson to have the department of housing and urban carson'snt, but dr. aides have said he has no interest in serving and mr. trump's cabinet. president obama is has been urged by immigration advocates seekers before president-elect trump takes office. about 4000 attendees, some as an is two years old, are being held in jail like facilities in texas and pennsylvania. advocates want the president to end the practice of detaining families or order their release. chattanooga, tennessee, said the driver in that school bus crash that killed five elementary school children was going over the 30 mile per limit speed limit. the driver faces homicide crashes -- homicide charges and the crash also injured other students. britain's national health service facing crippling problems because of the biggest deficit ever. have morece deficits than tripled to $2.3 billion in the most recent fiscal year. the british government spending
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watchdog warned that money needed to improve buildings and software will have to be reallocated, and that may affect care. news 24 hours a day, powered by more than 2600 120nalists and analysts in countries. i am mark crumpton. david? david: thanks. economic data out today, sales of previously owned homes climbed to an october to the highest level since february 27 -- 2007. they're propelling demand in the repeat sales market. .oining us is stephen stanley what is your read of what we saw in the housing market? let's put these data in terms of the housing market and what did they tell you? stephen: fundamentals are very good. the data have been surprisingly kind of flat over the course of the year. i have been expecting the pickup
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and it feels like in october we started to see that. had an explosive game and now big numbers for existing home sales. it is ironic because just as we start to get better housing data, people will now worry about with the affected mortgage rates will be. vonnie: will it cramped housing? stephen: the movement, 50 basis points, on the face of star employment and wage growth, not a deal killer, but you have to keep an eye on it. david: his inventory in issue when you talk about real estate? stephen: absolutely. if the -- is concerned about it and it fell to 4.3, so they are tight in terms of supply. vonnie: it has been two weeks since the election and we know who the next president will be.
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most folks have changed economic forecast. what is your latest thinking on how the economy will fare? steven: i think at the margin, most of what has been talked about will be positive. my view has been that the economy has been held back to a the substance of what we had and uncertainty around taxes and regulation. will probably tax take time, but it seems the whole approach with regard to the policy is going to change from day one. i think that is something that will be encouraging to business. we have seen the biggest soft spot in the economy is with business investment and i think this is something that has the potential to help the markets. vonnie: are you suggesting there is enough demand that businesses will spend? and if that is the case, why spending?ey been steven: great question. consumer spending has been strong enough, so you would have expected this is investment to follow but it hasn't.
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i think getting corporate tax reform would be a big plus. not only are corporate tax rates high and the system is complicated, but also, we have gone year after year where everyone is, we will do it this year. if your business and deciding whether to do an investment that pays off over 10 years and you don't know what the tax will be like, that is a negative. i also suspect that this year a lot of folks will hold up to see what happens with the election. maybe not today or tomorrow, but into 2017, just getting that uncertainty after table ought to help with the margin. david: getting some off the table, but are we looking at a ,ime of uncertainty for a while of whether congress will do something and what they will do? and on the heels of that, should they do something over the uncertainty and what impact that has on the economy? stephen: if you are waiting for corporate tax reform, you are supposed to wait longer, right, so it will not be this rig
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explosion forward. i have not really fundamentally changed my economic growth projections at this point. a between them up .1 or .2, but we will mostly see a little bit better perhaps the what we have seen but not fundamentally different right away. vonnie: does it matter to economists forecast growth to fundamental go to the next treasury secretary is? stephen: there will be a knee-jerk reaction in the markets. the one thing, we do not know where the power will be in the administration. love the treasury secretary a major voice in economic policy? will it be someone who kind of drives the tax reform proposal not?rd or that may be coming from somewhere else. i think you kind of have to wait and see, not only with the treasury secretary nominee is but now the whole team comes together and do seems to be driving the car. david: we get minutes from the
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fed tomorrow. was heard on capitol hill talking about fiscal stimulus in a sweeping sense. what he you imagine the conversation is like with the fed on the part of investors and people in the real economy? for this and certainly look like -- what does uncertainty look like for the fed right now? student: i think that the fed's models operate on the demand side of the economy, so when they hear fiscal stimulus, what they have in mind is the old school can you pay someone to dig a ditch and then that money goes in the pocket and that these the economy and we don't need that right now. the economy is not in recession, practically at full employment, as several fed people have noted. dearly isconomy needs it needs help on the supply side. potential growth has been low and there are certain reasons for that that we really cannot
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do much about demographics, for example, but i do think that the tax and regulatory environment has continued its a low productivity growth and the potential growth. you could get -- if you get the right mix of policies, you could get a positive impact on the economy that it would mostly come on the supply side. vonnie: dollar shake their weakness? stephen: i think all those things would point toward dollar strength. we have not talked about negative aspects of trump administration. is there a trade war? do you get immigration reform that leads to a tighter labor market and what we have? there are things that could go in the other direction, but by and large, the things being discussed right now would be dollar positive. vonnie: stephen stanley, chief economist at amherst pierpont, thanks. david: headlines from the meeting between donald trump and "new york times" staff.
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he snuck in the building and the cameras did not catching, but the meeting is in progress. the president-elect is in the red tie. donald trump quoted as saying "i have great respect for "the new york times," tremendous respect. i think i have been treated very times." "the new york another reporter from "the new york times" said he was treated unfairly and he wants to improve that relationship, and he says that it has been 18 months of brutality in a true sense. donald trump there at a meeting with "the new york times," and on the record meeting with reporters for the newspaper. hp and hpming up, enterprise report earnings after the bell. how about companies fared since splitting parts more than one year ago. this is bluebird. ♪ -- this is bloomberg. ♪
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you are watching bloomberg. i am vonnie quinn. barton liftedk global business report. we are watching president-elect donald trump says pulling u.s. support for that chant -- transpacific partnership will be a day one priority. vonnie: and then disney is shelling out the bucks to expand their theme park in hong kong. what does that mean for a big boost to disney's bottom line? mark: why is deflation that for an economy on the surface, cash that can buy you more and falling prices were readily, why could be toxic to global
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economies in today's quick take. vonnie: president elect donald spelled out policy priorities any new video. trump will take aim at the controversial trade agreement. , i willrump: on trade issue notification of intent to his draw from the transpacific partnership, a potential disaster for a country. instead, we will negotiate fair, bilateral trade deals that bring jobs and industry back to american shores. vonnie: trump also wants to limit regulations and says for every new regulation that to old ones must be scrapped -- two old ones must be scrapped. according to credit suisse, the number of millionaires in the u.k. fell 13% after they voted to leave the eu. pound falling. household wealth fell 10% in the u.k. in the year that ended in june. new $1.4 billion to expand the
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disney land resort in hong kong. it will include the first zones." and marvel theme it is the largest division after tv network. threatening to ground flights during the holiday shopping worked the 250 partners for up subsidiary of air transport services groups, which operate 85 today for amazon and may say they have to fly too much because the carrier does not have enough pilot. no comments from the airline. time now for our bloomberg quick take, or we provide background on issues of interest. today, we look at deflation. what is the trouble with falling prices and why should there be of -- they be afraid when the cash in your wallet might be more? in reality, deflation could halt spending and strangle borrowers. as the economy struggles to
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recover from the 2009 recession, global makers discuss how to keep it up a. -- keep it at bay. threaten torices drag out turmoil. in an effort to spur inflation, central banks enacted monetary policies. mario draghi and the ecb unveiled a bond buying program and negative interest rates. denmark, sweden, japan and switzerland also introduced negative rates. deflation can help the consumer, but only when it is limited and temporary. a wideices drop across range over a long time, economic activity can screech to a halt. they cut prices in companies, sliding prices and they squeeze profit margins and add to corporate and government debt burdens. in 2014, ims managing director christine lagarde warned if inflation is a genie, deflation is the ogre that must be fought
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decisively. central bankers find it easier to fight deflation -- fight inflation rather than deflation. policyices rise to past, makers raise interest rates and pull back when the economy slows. when prices soar too fast, it becomes tricky to recalibrate and it could create bubbles. too small,ce seems history tells us it could be a risk. you can read more about her quick takes bite going to the bloomberg. had to for more stories.
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david: this is "bloomberg markets." i am david gura. quarterly earnings after today's closing bell, hp and hp enterprise is put into two companies more than one year ago. the focus of today's numbers,
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the numbers do not lie. let's look at hpe breakdown, it includes storage and networking that comprises 51% of sales. the segment will be spun out and and 37% ofh csc, software will be merged with micro focus. enterprise isd cutting costs and restructuring to increase eps growth and basis tighter corporate budgets and threats from the public cloud. offeringsise's cloud are the other section in the bars that you see, growing within the confines of infrastructure. private cloud spending may reach $20 billion by 2019 as traditional i.t. spending declines. a hybrid model uses a mix of private and public cloud services. they projected will become a $100 billion market, growing at 1.5% annually. 9%'s target of seven point
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may be driven by improved cost structure rather than sales gains. the service seo spin off could accelerate that the magnitude of the expansion. hewlett-packard enterprise the orange line and hp ink, the blue line carpeting the s&p, which is in white, over the last year. it is a small, nimble company focused on hybrid cloud technologies and the ability of internet of things and services. we will talk earnings for both companies after the closing bell today. thanks for that. cory johnson will join us from san francisco with more. how is hp doing since the split from hpe? you have great separation, the stock is doing well, and what the business is doing, which is not doing well and contracting. the avenue engineered some positive guidance to earnings,
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really do inventory. what is important in numbers is [indiscernible] because they can control that with how they manage inventory and the suggestion they will pull inventory. they had an analyst meeting, so the surprise is not high. fundamentally, it is contracting. david: in the context of the cloud generally versus other cloud computing companies? corey: for the hpe business, it is focused on the cloud and providing through the cloud, whether software or other services. that is why this but gets interesting. from the other side, it is still what it has always been, a business of printers. 30% of the revenues from hp come -- hpq come from images, but over 88% of the profits are from selling paper and ink and printers. for all of the pc growth and pc attention they get, only 30% of
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the sales or printers, most of the profits come from sales of printers, paper and ink and has been for two decades. vonnie: we got the news that star board to the stake in hpe. this this make management center? what will they want -- shudder? what do they want? corey: after decades of this is us in the shape that it is, they split it in the two and they would maybe finally figure it out and then a one year later, they have this but it again. essentially, it is the consulting business. is it constantly in rearranging the chairs at hewlett-packard? restructuring charge was back to 2000, one-time restructuring going back to 2000, the state of things that hp and you can imagine they will find more ways to squeeze things out. from a stock basis, you can see itt it has low valuation but
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has no valuation for a reason because business has been in the constant state of disassembling. david: thanks so much, cory johnson. you can hear more in about half an hour, joined by carol massar for "bloomberg markets" on bloomberg radio. vonnie: former italian minister speaks to bloomberg and says the current prime minister should stay in power, even if the referendum is rejected. this is bloomberg. ♪ wow, x1 has netflix?
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vonnie: live from bloomberg headquarters in new york, i am vonnie quinn. david: i am david gura. minutes,eduled for 15 it lasted one hour and a half. away has revealed president obama and president-elect donald trump have once again been in contact. out andl not read confirm every reported meeting or conversation. you the president has had a conversation with the president-elect since the oval office meeting. the: ernest reports that president and the word, at-elect, in his surprise. many say it is time for mr. trump to close the twitter account. think mr. trump should shut down the personal account now that he is president-elect. trump used his social media tool extensively.
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es 15.7 million followers. yale university settled a of aful death lawsuit graduate student killed stays to her wedding in 2009. the case was resolved through mediation. in strangled body was found a wall in a research lab. serving a 44 year prison sentence for killing. islamic state has used chemical weapons in iraq and syria at least 52 times. sayseport from ihs market agents are the most like -- most likely chemicals to be used in most all. global news 24 hours a day part by more than 2600 journalists and analysts in more than 120 countries.
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this is bloomberg. the vote is on ramsey passes constitutional overhaul. today,mberg surveillance -- prime minister's mistake to beat because this is a referendum on it partial -- of the constitution. overturn thed to board with so much of a dramatization. that is, i think, something he know believes -- was wrong.
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i vote no because i believe the new constitution might make the more cumbersome, complicated, and uncertain, not less, and also, i do not like the new senate which we will ring to prominence, the regions which have been highly corrupted on average. say the prime minister should continue. >> and he will. there was a realization that a vote against what has been proposed by the government means that they unlikely government will stay. do you assume he will have to step down? >> this is his own choice. i do not believe at all that he will have to step down. gives today the impression that he might step down, then if
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there are uncertainties, that is his responsibility. >> what comes after this government? what comes after him? is it technical government? a lot more turmoil? >> no. i would expect first of all for him to stay on after all. if they wanted to leave, i would expect the president of the republic to form a new government with a new prime minister very much from spectrum,olitical which is now the ramsey majority. there will be no early elections. they will stay where they are
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supposed to stay in 2016 and there will be a continuation of current policies. and i have been one of the most convinced supporters of the prime minister, especially that they have been quite different from the initial ones, which included the labor notet inform which has given proof of brilliant results so far, i believe it is in the right direction. years, economic reforms have slowed down a lot and the space of fiscal consolidation has slowed down a lot. the outcome of these two years was not really brilliant considering the exchange rate, can etc.
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on oreve he will stay there will not -- or there will be another government. i do hope the policies become more the grist. .> you are a liberal reformist are you not afraid of the power of some of the movements, more extreme either to the right or theyeft, the advancement are having and with any political form oil, they would get into power? >> no. would needower, they to have actual elections and , not a very persuasive statement so far considering the experience in rome. the message i am trying to ramsey or not ramsey,
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italy cannot go on like this. it must more completely go down the path of reforms and fiscal consolidation. >> i respect that point of view but the market seems to say no vote would almost automatically mean that italy would leave the eurozone. >> that is completely a distorted imagination. the five-star moment to go into ae government, call for referendum and to win the referendum, supposing they call a referendum. that, as far as i can see, is out of reality. , know the financial markets
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theyoung, bold, mr. ramsey, policies the financial markets were called for, and though such a nation goes on, the financial markets also have fear pain commission of the economic policies and also take into become that he has powerful of almost populism from the top. the way he speaks about the european union is not dissimilar , the five-star union of the leak used except he has more authority. >> that was the former italy prime minister. sales coming up, retail reinforcing expectations of a rebound in the fourth quarter. this is bloomberg. ♪
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david: this is bloomberg markets. david:vonnie: let's head to julie hyman with her chart of the day. julie: it has to do with the records we have been talking about for the dow, the s&p 500, and the nasdaq. we have seen all three make records on the same day. .t used to happen quite a bit now it took a long break before it happened again. in other words, throughout the 1990's, make those records in tandem. now we are not seeing that appen for almost a decade and
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now making simultaneous records once again. we had a long drought. if you look at the two weeks chart of major averages, that is where we have seen the list come from. the dow, s&p, and nasdaq all rising sharply about the him -- the administration's policy. the s&p up almost 3% and the nasdaq up 3.5% as well. small caps have also been rallying in that time. seen 2000, 1000, the if you lookll cap, at 1000, roque -- large caps, less than the small and the mid-caps, many of which are more oriented in the two-week time since the election. back, one interesting thing we are looking at, it hit 19,000
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today. long times in between the 1000 level increments. back to 1999 here, with help from the bloomberg stocks team, , it we first saw 10,000 only took 35 to get to 11,000. , andhen it took until 2006 then 2013, a series of 1000 increments for the dow jones industrial average. a couple of years to get back to the level once again. it has been interesting how it comes in spurts here, when we quickly see the major averages moving toward next levels and we will see if it happens again. that.: thanks for david: time now for a look at
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some of the biggest business stories in the news right now. speculators are starting to believe opec can reach an agreement next week, setting prices and trading volumes of bullish options searching. close yesterday with its highest bullish reading of brent crude since march. days after a record number of the lunch -- bullish options -- shares of barnes & noble's rising the most in 10 months. made it through the presidential election and slightly better shape than expected. a second-quarter loss of its -- of $.29 per share. analysts produced a 39% deficit. the biggest intraday gain since february. worth at least $24 million when 1, weps down in december yield him a minimum of $5,800
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per hour. the stock biggest selloff since the 2008 financial crisis. $20 million in its personal stake in tyson. that is the bloomberg business flash. innie: canadian retails september with gains driven by auto resales. a .6% increase, the biggest one-month gain since april. joining us for more is bloomberg tv canada anchor amanda. says something quite important about the canadian economy. >> it is a small number. autou strip out autos and parts, it came in flat. economists are pointing out how broad-based it is. they are noting that some of the increase came from jet -- from gasoline prices.
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the big question is whether there are child benefit -- beginning to been sent. what you want is you want people to take the money and spend it. low rates did not do that. seeing checks in hand. it is not enough to say that is absolutely working and it will blow through, but the number as up now, tracking 3.3% gdp growth. david: the history on these benefits is something your prime minister campaigned on. onmagine holding these up how effective they have been so far? the idea ofd on putting more money in the hands of middle-class families. breaksd previous tax that were more broad-based.
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wet we really hope to see, have seen these go home for july, it would appear canadian consumers are saving them rather than spending them. is veryehold debt rate high and the rate has become low. signs that may be in the fourth quarter, that is really good for consumers. sixhigher gas number dollars rate out of the people's pockets. it is not a discretionary expense if you're driving to work. if we can get any of the dollars spent, we would be in good shape. vonnie: october 19, they kept the target base. what might that mean for the central bank? >> if you look at work inside the bloomberg, it is unanimous. it is almost equal if you look at whether we will see a hike
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versus a cut. just this firm us up enough to say the bank will be a cut? do we still need to be stimulating? that you areourse hiking. it weakens the dollar on a regular basis and that is really good for us. david: you spend your data series looking at e-commerce and with that, what did we learn? >> you wonder what proportion of the whole pie is online. a new data set that we will see as we go along, but 2% of the , in this month, up from two. small one.atively it plays into the argument that all is not lost in the online world. when is the next labor
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market report out? >> the big one will be economic growth. one thing that affects candidate is the help of the u.s. economy. we have seen a huge rally in a different number of sectors including financials. .5%.lers have rallied it that could just be a relief rally but there are real structural reasons that might the happening. at gadfly, a wonderful report on this. the average u.s. retail earnings would be 23% higher than last year. is a really reason for this rally going on although it might be early and the tax rate of course is a long way from changing. canada the dollar exchange rate -- we will have to leave that for next time.
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thank you. coo joins to discuss the state of pro basketball. valley fears a trump administration may lead to a brain drain. more on that next. this is bloomberg. ♪
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david: silicon valley is preparing for a brain train -- brain drain unless donald trump changes his tune on immigrants. if tech investors are worried about immigrants, thinking twice about coming to america.
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>> it is it a question on the minds of a lot of people working right now given that this is a place where many immigrants come to work for years at major tech companies of the world. they are often here on visas, and employer-sponsored visa to come and work for six years or so, or for example, it lets mesko and canada were for the u.s. we have a lot of people at silicon valley who are here not of citizens, but we have work authorizations really concerned about what it trump presidency could bring to the major concern this general fear because trump has said things from time to time about how he feels about nafta, but he has not made a lot of strong statements about what his specific plan would bp ready went up with people who are concerned about their future as workers of the united states but are not really sure what happened. there is general concern but not certainty.
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>> any immigration overhaul or immigration efforts that trump will install throughout the country, it will affect everywhere. , it is valley feels like in california with a lot of immigration as well, and tech trust people from around the world. are those things combining to make this potentially a very reactive place to his policies? >> right. what you have is silicon valley is a place where immigrants play , a lot of high school -- immigrants believe they came here specifically because they were drawn to work at silicon valley. you have companies that are recruiting hundreds or thousands of people from overseas. it feels like over home. many feel like a sense of working around immigrants. that peoplehought who may have been on the fence
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about coming to the u.s. and working for a tech company may that is not the u.s., vancouver, or someplace. they do not feel the new sense of being unwelcome, which many of them told me, that they felt the selection made them feel like maybe they were not as welcome as they once thought they were. >> and wonder what it means potentially for the silicon valley economy, on fire. whatever metric you want to use. if thereconcern that is not that access to workers, foreign workers, by tech companies, that we could see a slowdown in silicon valley? the other day, a ceo was saying that silicon valley could be hit extremely hard by any restrictions on the visas most often used to bring workers over.
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that is something that donald trump has said he wants to crack down on. he also said he thought it was important that silicon valley had access to high skilled talent around the world. people are less unsure about what might come next and yes, it could have a huge impact on silicon valley. out theou can check story in the latest issue of bloomberg businessweek. you can hear more from the magazineyou can hear more from e magazine editors sunday on bloomberg television. vonnie: coming up on bloomberg markets, the top ranked the economy, gold, and currencies. he will discuss concerns of the year. this is bloomberg. ♪
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vonnie: 2:00 p.m. in new york, 11 :00 a.m. in san francisco, 7:00 p.m. in london. amanda: welcome to bloomberg markets.
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scarlet: we are live and in new york over the next hour and covering stories out of atlanta and vienna. stocks extended gains and to record territory. the dow cross past 19,000 for the first time in history. a snack and talks for an opec deal -- a snag in talks. iran and iraq may not get on board. president-elect donald trump meets with the new york times today, telling reporters he will not prosecute hillary clinton because it would be divisive. he says he may pull the nation out of climate deals. the market closes in two hours, and we are once again and record territory. julie: stocks have been bouncing around in a tight range today. the s&p was lower for some of the session before bouncing
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back, now up just half of one point. the dow and the nasdaq are a little bit stronger today. more action in specific assets and industry groups. let's talk about something that happened one hour ago, the five-year government auction, $34 billion worth of five-your notes. 1.76% in yields, the highest since december of 2015. this big surge indicates a drop in demand. demand, increase in yield. not surprising given the recent trajectory for bond prices. a couple groups closely linked to what happens with rates are doing pretty well today. telecoms are on the rise. this may be due to the fact about speculation over the new head of the federal communications commission. some analysts have said an
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economist to opposes net neutrality rules is the front runner for the position and is viewed as potentially friendly to the industry. it could be a contributive factor to those shares being higher today. also interest-rate sensitive, and they are heading lower. atrgy being downgraded over bank of america, merrill lynch, on concerns over inflationary pressures. is group is vulnerable to those pressures. we are watching health care. we talked about devices earlier, which are lower on some negative earnings. we're seeing bio techs and specialty pharmaceutical makers taking a hit. if you look at the nasdaq gaslightndex, as our columnist pointed out today, the bio techs have had a hard time sustaining rallies this year. this is a one-your chart, and we have seen some runs, but they have not sustained for that long. have petereds to
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out already. scarlet: we will watch the biotech index. thank you. let's check bloomberg first word news. mark: president-elect donald trump single he has no intention to investigate or prosecute hillary clinton over her use of private email as secretary of state or her family's foundation after he is inaugurated in january. in an interview at the new york times, the president-elect is quoted as saying, i do not want to hurt of the clintons, i really do not. she went through a lot and severed greatly. he continued, i think it would be very divisive for the country. that is according to tweets from the journalists. an advisor suggests he will not follow through on the pledge to investigate mrs. clinton over those emails. confirmed, noty disputing the report that mr. trump would not receive probes into his secretary clinton's email a private foundation.
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conway says it is perhaps a good thing if trump can help secretary clinton heal. the president-elect is medically or who he would like to see is the next british ambassador to the united states. he tweeted that the u.k. independence party leader would do a great job. that he is neatly -- uniquely placed to forge ties with the trump up administration. mr. trump's suggested was criticized, telling parliament that it is a stupid ideak and i have more diplomacy in my little finger. in turkey, the nationalist opposition party is preparing to bidrse president erdogan's for more power. with close to an agreement the ruling party on a new constitution. president ergogan wants to change the political system from a ceremonial presidency to an executive one. in chattanooga, tennessee, a
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school bus driver has been charged with vehicular homicide in the death of five children. authorities say monday's accident happened because the driver was speeding and the bus flipped onto its side and hit a tree. 35 students from kindergarten through fifth grade were on board, more than 20 taken to the hospital. as of this morning, 12 remain hospitalized. 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: let's get back to the markets. oil declining after an opec committee failed to agree on iranian and iraqi production levels. joining us from texas is jason schenker. he has been ranked among the top economic forecasters by bloomberg in many categories, including oil. he will be at the opec ministers meeting later this month. the headline is that they failed
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to reach agreement on iraqi and iranian production levels. it is not over yet, is it? so. don't think i think there will be a really big push into next week. we have the opec meeting on november 30. members will come together and show agreement. whether it results in real production cuts is another question, but i think you will see a lot of photo ops, pr, and press pushing towards, we have a deal and will reduce oil production. today: it was suggested that there would not be any kind of deal before november 30, and the intraday trading price of crude fell off a cliff. what is being priced in? although we have seen gains, it is still a little range round. >> that is right. ever since opec issued that in formal announcement of a meeting on the sidelines of the ief on august 8, prices have found
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support during a time they typically would be falling. that in formal meeting turned into the 170th extraordinary meeting of opec. so you have a big push where opec is really providing what looks like, from a central bank respective, a lot more forward guidance, where they are now making a lot of statements about meetings they're having, about production they are going to cut, agreements they are making. they are trying to add a lot of that it with the goal of next week is a to provide a message to the global market that can support prices until you to february 21, when the contract for wti on the nymex rolls to april. extent: i wonder to what this bounce in oil prices -- after the election, it was as low as $43. now it is $47 76. how much of that is tied to what donald trump says he plans to do
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when it comes to the energy policy? is one of thes few markets that is very isolated from expectations around this. really, i think opec is in the drivers seat for oil. gas, it is different because of the implications for the clean power plan. oil, it is opec, global -- scarlet: we have breaking news. donald trump is leaving his meeting with the "new york times." mark crumpton gave us information about how reporters tweeted that he was not looking to investigate hillary clinton, one of the promises during his campaign. amanda: some of those coming in but alsoof tweets being backed up by kellyanne conway. trump called the investigation divisive, which is an interesting word to use after such a divisive campaign. scarlet: jason, i am sorry to
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interrupt you. you were talking about natural gas. >> natural gas prices are quite exposed, because the clean power plant them a which would have mandated a lot more demand from the utility side, is less likely to be implemented under a trump presidency. it is unlikely to be implemented. that is why i think you have seen a big surge for the coal but also some downward pressure and for nat gas. oil, opec is in the driver's seat for what is going on with prices. amanda: we have seen a rally in commodities that seem to suggest there is some believe that there may be improved economics happening here, that a trump somehowcy will transform the global economy. what is driving this? >> if you look at copper, that started surging before the election, after the purchasing manager indices of manufacturing for china, the eurozone
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manufacturing index, and the ism manufacturing index all showed expansion for the month of october. that is fundamental and means that china, and three of the past four months, have seen month-over-month expansions in the pace of manufacturing growth. that is strong. you have only seen four monthly expansions of growth in the last 24 months. china's manufacturing recession might be over, and that is why industrial metals started surging, even before the election. that is really a global story driving this prices. scarlet: what is unusual is those prices are rising even as the dollar strengthens. you are not seeing that inverse relationship. what do you see for the u.s. dollar? everyone is anticipating that the fed will raise interest rates in december. andere looking at wirp where it will go.
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given the expectation, how much for -- further can the dollar rise? >> i do not expect a december rate hike it i think the rise at the back end of the yield curve will be pressed growth. you have the back end of the yield curve raising on anticipation of deficit spending, tax cuts, more growth, inflation, all these kinds of things. it will take nine months or more before those things can really hit, just based on how long it will take to implement tax cuts or government spending. so you could get higher interest rates where the market will already dampen growth. investment in the u.s. has been in recession for four consecutive quarters. so higher rates of the back end of the yield curve could depress growth in the immediate term before you could get any kind of stimulus from tax cuts or spending. scarlet: thanks to jason schenker, who is joining us from our austin bureau. amanda: the ceo of the atlanta
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hawks will be joining us. this is bloomberg. ♪
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scarlet: this is "bloomberg markets." amanda: turning to the business of sports. the nfl is still a massive ratings draw, but it's number's been slipping. can basketball capitalize? steve koonin is the ceo of the atlanta hawks. they are off to a fast start this year with a 9-4 record. let's start with the next major milestone for the league. you have a tv deal and some
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stuff in place now that looks pretty solid. what is coming up that will determine how you all will fare? >> i think the next big wave of revenue for the league will come with the global expansion of television streaming. the nba is incredibly well-positions, probably better than any other u.s. sport, as a global sport. 113 players come from foreign countries, and countries like china are absolutely mad for basketball. so we are seeing revenue being produced on a global base, which will only continue to grow with exposure in the olympics and more foreign players joining our game. ratings you see an nfl decline, and this is as the nfl extended to broadcast games out of london. is there a sense of concern over the media rights of these live sports broadcasts, that perhaps they have talked up? >> there is a concern
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domestically that there are people cutting the cord and the television is being disrupted in a very different way. the good news is that people are watching less television but not less video, so the nba has the ability to go where they viewers are and where the revenue is. it is something to watch, but it is not a paramount concern. thata: one of the things has changed is the price tickets for your players. the average salary ever higher. where does that cap out for you? what is the expectation between these amazing players and overspending on your team? >> the great news is that we are on a salary-cap system. so when you see these huge salaries, they're still only getting half of the revenue being produced by the league. commissioner, there is tremendous and flow of revenue, and the players are getting half of it. we are all winning. it is doing very well. scarlet: are there any tweaks
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the ownership would like to see? they are close to a bargaining agreement with the union. perspective, we think real estate is an opportunity for growth. taking the tens of thousands of people that come to our game and create a food, l.a. live, drinking, it eating environment in downtown atlanta -- and eating environment in downtown atlanta. we are working with city leaders. so i think the nba is an incredibly attractive sport to today's millennial crowd. it is very digital, every social, and it is very hot. scarlet: you are an atlanta guy. charge of marketing and advertising at coca-cola for decades before spending 14 years at turner. talk about what you have done to leading the ha -- to link the
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hawks financial resurgence to the city of atlanta. >> and professional sports in atlanta, there were a very few people born here, so we really targeted the next generations atlantans, the ones who were born here as this city has exploded in growth to 6.5 million people. 40% of our game ticket buyers are from 18 to 34 years old, youngest in all of sports. we have become a place where diversity and youth are celebrated. amanda: your expertise is in marketing at one of these things -- your expertise is in marketing. one of the things he brought to this market is getting to a more diverse crowd. what else can you do? continue to reinvent ourselves. we are sold out tonight, and a rapper is doing a halftime and postgame concert.
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it is fighting -- finding the leading edge of relevance in bringing people to our game. scarlet: atlanta is a hub of private and public ownership is when it comes to sporting arenas. it feels like atlanta is a place where ideas from fortune 500 70's have come in and moved to fortune 500 companies have come in and moved to sports . talked about that based on the experiences of companies like coca-cola and turner. >> we are the number three market for fortune 500 companies, with 17 headquartered in atlanta. mayor reed understands the power of sports in economic opportunity, job opportunity, and exposure to the city. rossetti's benz has moved to the city, the u.s. headquarters at -- mercedes-benz has moved to the city. you ps delta, coca-cola, a tire company.
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delta, coca-cola, attire khamenei. sports are a key piece in the city. it is wonderful that the hawks are part of that. amanda: good to have you with us. hawks ceo, steve koonin. scarlet: the dow is hovering right around 19,000. you can see it there. when do we get to 20,000? that is the question. this is bloomberg. ♪
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scarlet: this is "bloomberg markets." she is busy trying to pull up a chart right now. amanda: u.s. stocks are extending their record highs. the dow smashing through 19,000
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today. abigail: it is amazing come of these record highs. stocks wereks ago, and pullback mode with the s&p 500 down 5% from its august highs. now we have this rally. we look at the bloomberg, and we see these all-time highs have not come without pains. this is a five-year weekly chart of the s&p 500. a beautiful uptrend. in to 14, investors get uncertain. we see volatile action. maybe it was the taper tantrum from the beginning of 2014. the trend started to reverse, yet we have these all-time highs. a lot of volatility, risk on, risk off. amanda: the s&p today did kind of bounce -- it actually turned slightly negative a few minutes ago.
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abigail: you are right. it will be interesting to see what is ahead. we looking at that on the bloomberg, 4350, a chart of the s&p 500 and the vix. following this up. so you can see that after this period in the summer of complacency, we appear to be a complacency again. the s&p 500 at new all-time highs. the vix at record lows. it suggests maybe divergence will come back together. this certainly suggest that investors have gotten a little bit too complacent. scarlet: it is not unusual to see the vix come down as the s&p 500 spikes higher. a lot of talk that perhaps the vix is not the greatest fear gauge. maybe it is the dollar.
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abigail: that is interesting because everybody has been so bullish on the dollar. sentiment is very bullish right now. we are looking at upper levels on the dollar index. the index may suggest that the dollar could pull back in, in the could be some sort of bearish indication. amanda: and then the interest rates. we are seeing trading being played off of those expectations. abigail: absolutely. we have another chart. this is a long-term chart. of the 500 the us back to 1980 or so. -- i reversed of that. in blue is the s&p 500. in white is the 10-year yields. as we hit lows, shots -- stocks with higher. but now that bonds are yielding
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a little bit more, it offers investors an alternative asset class. it will be interesting to see whether or not stocks can continue at all-time highs if rates continue to climb. scarlet: abigail doolittle, thank you so much. still ahead, we have the commodities close. thatropping on concerns opec may not reach a production cut deal next week, as promised, off by .74%. this is bloomberg. ♪
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>> from bloomberg headquarters in midtown manhattan, this is number markets. i'm scarlet fu. let's get you started with a couple of the movers and -- beginning with cotton. down for a third straight day, off by 1/10 of 1%. there is a widespread belief that production will increase in the u.s. next year. ,oving on gold, falling marginally higher. in anticipation of the federal reserve moving toward raising interest rates in the next month. that is still the broadening theme. you can see we have just paired our losses. we were off earlier by three quarters of 1%, now down one third of 1%. a lot of speculation on when or how the opec deal will come together to cut production next week. the opec committee did not manage to make any agreement this week or today. we will see what happens later this month. certainty,c, not a
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to the fed, were traders say a hike is a done deal. strategist chief joints. where they at, will they run the economy too high? we were not talking about the election results, we would have talked a lot more about what jenna had said in october in a speech where there were ideas about running the economy a lot hotter, running a high-pressure economy. that is a much more accommodative policy with the goal of running the economy hot to repair some of the damage markets to get more people back into the labor markets. in december, yes, the market means december should be a nonevent. it is about what they forecast in terms of future increases. last year, they gave us four. this year, they give us two,
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that is the market expectations and relative to the fed. i see you are about to bring up something. the story over the last couple of years is as follows. thant a lot more dovish the federal reserve. the market becomes little more hawkish, if the market has been right. >> the market has been right. closer with a big increase in the postelection result, now the market less off at least in the front contracts for 2017. that is good news. for a long time, we have the issues of the market. now the market has come up. there is less uncertainty about of the neart least increases from the fed. the longer-term issues are the bigger story. election, changes to the federal reserve.
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governor coming up for renomination, that will change the tenor of the fed. that is a little longer. how hot is too hot or is it too soon to ask? >> inflation is still running below 2%. we will get to 18 in terms of the fed's measure core pe. too hot will be a conversation we begin to have once we begin inflation above the 2% level. then the debate about are we running it too hot, is the fed behind the curve, all of that will come back in. we are still trying to get the inflation figures back up. it is really about core levels of inflation. core levels of inflation up to 2% and then maybe we'll have that conversation. >> if you take a look at the if it moves up far
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enough, that has more to hike here at what happened here? >> when we talk about the idea of the long run it will agree him for neutral rate, it is another code word for growth. growth toe kind of that,r, what comes out of low levels of interest rates. reform,structural changes, immigration reform or demographic, things you can onnge, change the outlook growth in recent, then it is not as low, it is higher. mark crumpton has more from the newsroom. mark: president-elect donald trump says he will keep an open
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mind about whether to pull the united states out of the paris agreement. the global agreement on trying -- on climate change. during a meeting with the editors and reporters of the new york times, mr. trump said again quoting, i'm looking at it very closely. called climate change a hoax and threatened to pull the u.s. out of the agreement. donation,aritable when charitable funds or assets -- mr. trump has his charity acknowledged he has engaged in the practice for 2016 posted to guide star. they could reinforce the nuclear deal before he leaves office. paul ryan and his colleagues made the request in a letter here the republicans say they expect to pass a bill soon
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extend the iranian sanctions and say signing it be the president's only step on iran. north korea is rejecting condemnation by the united nations on its human rights workers. officials say the u.s. is the worst abuser of human rights and european companies are committing crimes against humanity. about thely concerned possibility that new u.n. sanctions would affect their ability to send the much-needed funds back home. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. this is bloomberg. scarlet: coming up, president-elect donald trump gets his day in front of the new york times we will dive into all of his statements and what he is planning when it comes to the future of the federal reserve board. this is bloomberg. ♪
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scarlet: this is bloomberg markets. for a look atow the biggest stories in the news right now. agency's of directv's launching next week. according to people familiar with the matter, it hold out among top media companies. directv now is a package of more than 100 live channels over the internet for $35 per month. hsbc is advising saudi arabia's public pension agency on the sale of its financial health to the country's fund. that is according people familiar with the matter. the public investment fund is required people -- for less of
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the $8 billion investment. a deal has not been reached and the offer may change. the u.s. is reviewing the purchase of german robotics maker by chinese -- committee on foreign investment is still looking on whether to improve the transaction. plans to -- as part of its effort to get regulatory approval. to get the approval by the first quarter. that is your business flash update. amanda: here is julie hyman. julie: i am looking at retail retail etf that tracks the industry, up two point 2% today, one of the best performing etf's that we watch. remember the retail companies are on a bit of a later schedule than much of the rest of the industry, particularly in the s&p 500 and the smaller cap as well. many companies coming out with
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earnings are doing relatively well. there seems to be something of a trend. some companies are missing on the sales side but are beating on management for example. cutting its inventory by 12%, earnings beating estimates in the shares of 16%. mueller's rising after that company's earnings topped estimates as well. there were week sales. dollar tree here, comparable sales rising 1.7%. it was for a gain of 1.4%. elsewhere, we are looking at chicos, the women's clothing retailer there, sales worth an estimated. the total inventories plan to be lower than last year and the earnings-per-share beat estimates. company retailer raising his earnings-per-share forecast and says tighter earnings management, again, going along with the trend. barnes & noble shares up 8%.
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here, the company had a loss that was smaller than had an estimated. index were retail etf once again i should say, the heat map, how does the etf perform what -- month by month? we tend to see strong performance during the holiday season. this is year by year going back in the past four years or so. november 10 to be a relatively strong month here. average,end to sea on a drop in january though it has been a mixed picture. february appears to be the strongest month of the year as we get more and more results from the holiday season. an interesting trend and pattern here throughout the year. we will be watching the retailers as we get all of the holiday numbers. all right. right in line with those gains.
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often calling the coverage of the campaign unfair. and put the meeting back on schedule. during the meeting, trump spoke the numbers -- a number of issues saying he was never a fan of the electoral college and when asked about prosecuting hillary clinton, the -- they said it is not something they feel strongly about. journey us now from washington, to hear was surprised comments about hillary clinton given that it was such a big rallying point for him. he signals he will not pursue investigating hillary clinton. clinic comest mean to others in the republican party who are against the party? >> what i heard first and his supportersat wanted a candidate who was willing to prosecute hillary clinton. perhaps in the proverbial fence
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and not in the literal sense. today'm hearing now including from really -- rudy giuliani is that donald trump is trying to position himself to give himself some wiggle room on this. is trumped political orbit pushing out that he is other issues going on, including infrastructure, a tax land, obamacare. they are making a case that perhaps that is a bigger deal than prosecuting hillary clinton. either way, it is a walk back for president-elect trump. >> you have done some supporting for this today. janet yellen, on how the president-elect plans to fill vacancies. >> telling me that donald trump will be filling the vacancies on the federal reserve board within
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the first three months of his meansency and what that is this will dramatically change the fact, a headache for chairwoman janet yellen. candidly, going to fill one of the positions that key federal reserve banking rep -- advisor positions which have been less vacant ever since this . the bottom line is that changes are coming. not only big and sweeping administration change, but also at the longer your level. the fed will have significant changes in a donald trump administration. it high on hisg to do list. what of that learned from the president-elect's meeting with the new york times? he made comments regarding the paris climate agreement, similar
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to obamacare and how he might keep some provisions. change,inks climate that there is some connection between climate change and human interaction. this meeting particular, what is interesting is policy. -- in thee public it public, there are important conversations that need to be had about transparency with any president. what was interesting about this was when you take away the political theater of it in the tweeting, he did signally work -- a willingness to work across the aisle on issues like climate change. a broader pattern that we saw start with his 60 minutes interview where he signaled he would keep certain portions of the affordable care law act.
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>> he talked about how they discussed policy and he was a lot more specific, yet when he met with netgear -- network executives, it seemed like political theater where he reportedly dressed them down for not giving him fair coverage during the campaign. >> absolutely. and you are alluding to the new out post report that came that described a very combative taking on the network heads. this was a contentious campaign. i was there for just about all of the rallies. the media was clearly in a line of attack against the trunk campaign. it was something he ran against. i declared he was able to do on the campaign trail was to run against a system and he lumped media and henal .as successful with that
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now we are in a different campaign season. how he uses his relationship with the media, freedom of speech is the bedrock of, it will be really interesting to sources you talk to when they are describing this as a reset of sorts. stay tuned. we will and we will bring you back when we get more details. coming up, why wall street bankers who lined up for hillary clinton are now seeing plenty of opportunity underplay -- president-elect trump. this is bloomberg. ♪
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>> you are looking at a live
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shot of the east room of the white house. this is the east room of the white house. president obama will award medals of freedom to distinguish members in the white house. among those receiving the honor, michael melinda gates, jordan, bruce springsteen, and tom hanks. a variety of people. you want to watch the event available at life. go. when donald trump was on the campaign trail, he painted people as greedy criminals. many on wall street change their tune, many now rejoicing at how good they might have it. cohostwhat did you miss joins us because he was so excited about this story. i cannot believe you got some of the people we talked to to tell you things on the record that this was so good i cannot wait. joe: i loved this story so much that i wanted you to be a part of it.
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>> thank you. we interviewed a dozen bankers and asked them, you know, a couple of his ago, donald trump was openly mocking bankers. he would not only do it at rallies where he said these guys love getting away with murder, but remember the closing about aing we talked global cabal to steal your money , we said it is a couple of days later now, how do you feel, and recordcase, it is on the . a banker said, it has been 20 minutes, really devastating, and i moved on because i will make a lot of money. >> he said i'm in the industry and i will get a tax cut. >> when i wrote the end of this story, i said, what a good thing. but a double-dip thing. but listen, i think that is how
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these people feel. only do you have people from goldman sachs on the transition team, but now today, dan could be more pro-bank. has not actually said anything different than what he said on the campaign trail. it is not like he has done a flip on these policies. how much is essentially, stock prices went up so they are reverse engineering a pro-banker policy from the market move? >> i think that is an important question. and of course there are five stages of grief and denial is the first one. ask yourself, is let lease see or arere they accepting they mired in denial? for us, the answer came from the fact that we talked to them about it. they can knowledge that donald trump did things on the trail, like talking about ringing
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glass-steagall back. that was literally in the republican platform. their answer to the question, though, is they basically do not believe donald trump when he does his populist anti-bank's field. bannon, people literally from goldman sachs. what they do believe is his antiregulatory street here they are choosing what to believe and why. >> one thing that has happened all over the place is the markets anticipate what might have been many months from now. case, we see a shift in tone. does it matter to anybody that some of the rhetoric that elected this person are being tossed out immediately? does it matter to anyone in the broader american landscape?
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record, azine, on the leader senator and governor democrat from new jersey, he called -- he told me on the record, a great quote that did not fit into the story, you know, i think that some of trump's biggest fans, people who need him the most, will be the most disappointed. the people who beat him up the most in this case wall street, with rv going to be doing great. joe: they could ultimately still be wrong. pointedon the show and out how people were very excited about george w. bush at first and that did not turn out well and they were negative on obama and the last eight years were awesome. they might just have it all wrong. point. is such a good anyone who thinks they know what donald trump will do, you're crazy. people underestimated him so badly in the primaries and the presidency. all of those celebrating, they
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might not be laughing if , whichteagall comes in is already a possibility. byis anyone offended still the george soros advertisement? >> the thing that came up more than hurt feelings, for example, he said, i'm worried about women in america, immigrants, muslims. those people have been hurt by the thinks donald trump has said, but my family will be fine. >> that says it all. a fantastic read on the bloomberg, available at joe weisenthal will be back in about 30 minutes for u.s. stocks are trading at a record high. we will monitor that events. at 2201.00 ♪
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scarlet: welcome to bloomberg markets. ♪ scarlet: we're live in new york for the next hour. trading volume remains light. increase provision in u.s. discretionary companies? we will look at whether retail stocks will -- president-elect donald trump will meet with the new york times today and talk about climate change. we of all the latest on all things trump. one hour before trading at record highs continuing. >> 10 points, we did below it today, and above it today.
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on pace for record closes. all of them also on that list. a bit of a recovery here, we have in stocks track a little bit of of today. we will get to it in a moment. hitting these record highs, this is a scene we have been taught about on this trait in week. volume is on the bottom and we saw a spike in the days after the election and now we volume come back below the 20 day average. just something to think about. a group that has been holding back gains, particularly the medical device -- medical device maker, what analysts had been estimating, also particular sales missing estimates for the first time the past four orders, the company is seeing declining sales of cardiac devices like
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defibrillators and other devices. even those device makers that do not make similar products are also seen decline. that is a drop some analysts are saying is not justified. a couple other examples of companies following today. we are also watching a consumer theme today as we get earnings from another -- a number of different companies, discretionary and staples. dollar tree coming out with comparable sales that beat estimates. earnings beat estimates. we heard from campbell soup. that company's growth margin expanding despite the drop in the company's sales. 32% for the --p forecast. i promise you we would take a look here. oil coming up off the lows off by one of 1% after news out of that
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preliminary opec meeting seemed to indicate that may be iran and aaq were indeed on board with production agreement. headlines going back and forth and thefront all day past couple of days. oil has been tracking along with those. so much.hank you time now for first word news. mark crumpton has that. mark: the white house revealing president obama and president-elect donald trump have once again been in contact. the white house press secretary has spoken to reporters. reach up to not reporters about every meeting and phone conversation but i can president hasthe had a conversation with the president-elect since the oval office meeting. not in his words a surprise.
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most u.s. voters say now that is thetrump president-elect, he should stop tweeting. 59% say mr. trump should close his personal account. he used twitter extensively during his white house campaign and has 50.7 million followers. a wrongful death lawsuit settled filed by a graduate student killed days before her wedding in 2009. the case was resolved through mediation. 24-year-old annie's strangled body was found stuffed inside a wall in a research lab. 844 year prison sentence served for killing. coal-fired power plants. canada will now phaseout traditional coal power by 2030. donald trump says he wants to back out of climate deals and
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boost coal production. a new report warns that britain's's national health services facing potentially crippling problems because of the biggest deficit ever. the deficit more than tripled to $2.3 million in the latest fiscal year. u.k. government spending watchdog warned that money needed to improve buildings and software will have to be reallocated and that affect care. news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. this is bloomberg. amanda: u.s. stocks are on pace for record closes. the s&p 500 dropping 2200. the dow smashing 19,000 still hovering around that level now. chiefeimer funds investment officer explained the diversions of stocks and bonds markets. hope driving the
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equity market. hopefully, this is the story we have been waiting for for a long time. the point you are making is the risks have risen materially as well. one of the biggest drivers of equity trade was the fact that the earnings ceo was quite substantially higher. if dollars were higher, earnings from overseas assets or u.s. companies go down. right now, we are expecting growth to pick up and therefore continuing to rally. if and when those come in and are not to the levels we would like, and rates are 50 basis point higher, you know, there is a chance for a day of reckoning on that front. records across the board. talk to me about the levels in treasuries and the dollar that you have been thinking about to
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say, if we get there in a sit -- significantly short time, i would say that would weed into this risk rally. >> if we get to 3% in a hurry, before trump takes over, i think we have significant risk. that would be almost 150 basis points moved from the lows for the market to digest the most significant improvement in growth. i think there is substantial risk at that level. >> i want to talk to the price to earnings ratio. earnings, we are betting. we have a wider range of possibilities with donald trump as president. to the good and the bat. typically, when you increase the risk that way, the ratio actually gets driven down. it does not have a natural effect on the equity markets to effectively drive prices down to some extent because of risk. >> absolutely.
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not get the earnings moving relatively quickly, we will have a problem in the market, as i said here the difference between ions and the earnings yield, the reverse of price-earnings ratio, it has shrunk. if it continues to shrink, one of the anchors for equity to do well has fallen apart. to improve and relatively quickly. we shall see. tantrumo the 2013 taper howe we saw this start, fast did it have and how fast it was be this time. >> the reflation story really was not in place. growth was going to be mediocre. the significant change in the trendline, the fed tightening. this is different. see if it comes out that
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way. growth and inflation outlook has andme significantly better rates can rise without killing the equity market. that is the situation we are dealing with. >> at this point, financials are out on hope that you might get a software regulation story. the house care discount on the aospect that you would get president clinton, that comes out for the market. industrials, five past 5:00 this morning, the industry group coming into the open, he said industrials and i scratched my head again, where we your, what is the fundamental driving force taking industrials to an all-time high? >> the safe trades in the market trading. we do not want to buy he anymore because interest rates are rising.
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the premium we were willing to pay for technology kind of diminished. other sectors can grow as fast. it is a rotation out -- rotation out of growth dependent value. focusing on companies that have prospects, significantly changing the trendline for earnings are >> that was oppenheimer funds chief investment officer and head of fixed income. coming up, daniel may see of his powers reduced under a trump presidency. who may be keeping and i am wall wants mr. trump resumes office. ative shot of the east room the white house. president obama about to reward the medal of freedom to tom hanks, entering the room. bill and melinda gates, kareem abdul-jabbar, michael jordan, niro, bruce
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springsteen, among those honored. a packed room in the east room as the president gets ready to award these medals of freedom. this is bloomberg. niro,[applause] ♪
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amanda: this is bloomberg markets. scarlet: timeout for a look at some of the biggest business stories in the news right now. time to cancel almost to fight tomorrow. disrupting travel for 100,000 people. the walkout is set to hit short
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and long-haul services operated by the main brand. they strike by pilots is threatening to ground flights during the holiday shopping season. were for a subsidiary of the workforce group which operate each day. they say they have to fly too much because the carrier does not have enough pilots. no comment from the airline. a five-year bidding process for fighter jets.- they plan to purchase 18 of boeing's super hornets. just -- jets. obama administration has approved the sale of one 100 million and plans to iran. it needs treasury department approval because at least 10% of its components are american-made. meanwhile, still negotiating with iran to file a commitment agreed upon earlier this year.
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that is your business flash update. ofthere has been a ton speculation over who donald trump will pick for treasury secretary. the big banks are focused on another pick. the choice of the first ever federal reserve is chair to oversee wall street. jesse hamilton joins us now from washington bureau. what the position is and why it is so important for wall street. >> the federal reserve has an extensive reach over wall street. for supervision, basically responsible for spearheading all of the fed's regulatory efforts. >> there has been no one in place since it was created because president obama did not think they could get one past the republicans. who has been filling that role during this time? >> the person to network has been the fed governor, who has
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been, you can say, a thorn in because of wall street he has pretty much been pushing some of the toughest regulations in the banking industry since the 2008 financial crisis. because of the fed's unusual he hasnto the industry, been labeled the alpha dog of regulators by one lawmaker. >> address for us the schism in worldviews. on the one hand, donald trump belongs to a segment of the population who thinks the fed is bad and needs to be reined in. on the other hand, he thinks bank's are bad and need to be reined in. the fed is literally housed inside every bank. strategic decisions now get run by federal reserve representatives. which is it?
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>> it has been, to be simple, extremely unclear what we can expect from a trump administration on these issues. on the campaign trail, he talked about rolling back. frank act, but at the same time, he advocated some things that would e-cig if you can't new regulation for the banking industry. everyone is shrugging and waiting to see what happens. names thee some president-elect is considering? he does plan to make this a priority in terms of appointments. >> that is right. he is primarily weighing some names. transition team has been talking about individuals from includestry and they john dugan, the former comptroller of the currency, another key regulator of the wall street bank.
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akin's, he has been as one of theump transition teams responsible for regulators. maybe most disturbingly to the chairman tom, the vice who has been very tough on banks and advocates some ideas that would be frightening for the industry -- >> we will leave it there. thank you so much. let's take you to the white house where president obama is awarding the presidential medal of freedom to distinguish americans on the white house. hanks, melinda and bill gates, michael jordan, bruce springsteen, ellen --
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ellen degeneres, and others. president obama: your patriotism , might have given us more than just places for remembering. new memories, sculptures, chapels, homes, physical acts of poetry, reminding us most important element in art or architecture is human emotion. three minutes before armstrong and aldrin touched down on the moon, apollo 11's winner trigger , red and yellow lights across the board. our astronauts did not have enough time but thankfully, they had margaret hamilton. scientist and a working mom in the 1960's, margaret let the team that created the onboard flight software that allowed the eagle to and safely. keep in mind at this time, software engineering was not even a field yet. so aswere no textbooks margaret says, there was no choice but to be pioneers.
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luckily for us, margaret never stopped pioneering and she symbolizes the generation of who helped send humankind into space. her software architecture echoes in countless technologies today. her example speaks of the american spirit of discovery that exists in every little girl and little boy, who know that somehow to look beyond the heavens is to look deeply within ourselves and figure out just what is possible. hoffert is code. born in 1906, admiral murray hopper followed her mother into mathematics. -- >> that was the president speaking. you can watch the proceedings at the bloomberg five go. still ahead of the options insight, looking at trading consumer discretion companies, rising about 6% on the year.
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this is bloomberg. ♪
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scarlet: time now for options insight. julie: joining me today is dan deming, joining me from the cboe in chicago. good to see you on a day when major averages are making its again. guys on the floor that you are talking to, what is continuing to feel this here? >> i think some of there is a continuation because of stabilization, some of the areas that we are realizing further weakness. realizing stability here, i think that is part of it and also -- also, i think you are
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seeing it broadening out. some of these sectors did not participate to the level of industrials or the banks initially are now playing a little bit of ketchup here you allocated through the sectors, helping to support the rally. >> we have got the fed minutes coming out tomorrow and the jobs report coming up at the end of next week. is the feeling that this could continue to keep going here? >> historically, we are in that time where the market has a tendency to perform pretty well when you roll out into early december. market cansense the continue to build on these gains, particularly when you see what is going on in some of the as the police and the perception in the market that that continue moving forward including policies initiated into early next year. now,nk there is a sense
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risk, and pricey much anticipating now that the market will be able to maintain these levels. this consumer discretionary spider etf. earningseen retail relatively strong here. are you looking for a strong holiday season here? >> i am. it does feel like consumers are turning around. a pick up on retail sales. , that some forward of these areas will continue to benefit. including growth prospects moving into next year. >> luck me through the trade quickly for what you are betting on here. >> i'm looking at a risk reversal. options,me to use looking at selling january 83 call. it buys me a little time here in case there is a little weakness
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in the next couple of months. 8288, ite higher above is really not too much and i get to participate fully to the upside and i get to buy a little time where i see weakness at better levels. >> we will see what happens over the holidays as people get underway on black friday. thank you. we appreciate your time. scarlet: thank you, julie. still had, deutsche bank gives his outlook on the fed minutes and the global economy. this is bloomberg. ♪
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mark: donald trump says he will keep an open mind about whether to pull the united states out of
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the paris agreement. theng a meeting today with publisher, editors, and reporters of the new york times, mr. trump again, i am looking at it very closely. trump the campaign, mr. threatened to pull out of the agreement. president obama has granted clemency to 79 more inmates today. he has reduced sentences for the hundred 61 inmates since october and granted more the 1000 overall. that is more than the last 11 u.s. presidents combined. house republican leaders are urging the president not to take before heonal actions leaves office that would strengthen the iran nuclear deal. the request by house speaker paul ryan and his colleagues were made in a letter that said they expect his soon passed letter -- signing the bill should be the president passes only step. north korea


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