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tv   Bloomberg Markets Americas  Bloomberg  November 25, 2016 12:00pm-2:01pm EST

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from bloomberg world headquarters in new york, we are covering stories from new york to paris and vienna to tokyo. is here and by most accounts this holiday season should be a boon for retailers after three years of shanking spending. pec's final push for a deal. we look ahead to next wednesday's meeting. jaguar is bringing back the original supercar. bloomberg was given exclusivity as sex -- access to the team in the united kingdom. we are close to the end of today's holiday shortened trading session. abigail doolittle joins us now with all of the holiday moves. >> we have nice gains for the u.s. averages, more than halfway through the session at this point. the gains have taken the dow,
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s&p 500, and nasdaq to record highs on pace for another set of record highs for the dow and s&p 500 potentially the fourth in a row. mentioning theh three major averages are on pace for weekly gains as well, the third week of gains in a row. big strength for u.s. stocks. as for one market moving in the opposite direction, we are looking at oil. down nearly 3.5%. what could be going on here for the second day of declines in a row, opec is negotiating to work out the supply cut deal may have been trying to do for quite some time, now negotiating with iran iraq signaleder they will cut supply. this is dragging right now on oil. the downward action we are seeing in oil, not surprisingly, dragging on the s&p 500. energy is down nearly 1%.
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we had some of the big e&p players down significantly, including marathon oil, anadarko. what could happen with oil, we went to the bloomberg. this is a roughly three-year chart of oil. we see that downward plunge when oil had crashed before. we also see in yellow the 200-day moving average. when oil is above, generally positive. back above its 200-day moving again, perhaps suggesting that for the medium to long term, oil is in better shape, but there could be near-term volatility as we are seeing today. vonnie: i think that might be a story next week. thank you. now let's check in on the first word news. katie mcfarlane has accepted the job as president-elect transit national security
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advisor, for miller to people with the matter. ofarlane has a long history national security experience. she will work with michael flynn, who mr. trump named as his national security advisor last week. on monday, the president elect plans to meet with it people, including fcc member paul atkins and john allison, a possible nominee for treasury secretary. as fiveutor in paris men arrested on sunday were planning a terrorist attack in france as early as next week. he said the suspects were getting their orders from an islamic state member based in either iraq or syria. the men were arrested in strasburg and marseille. a judge has found the suspect in the south carolina shootings competent to stand trial jury selection starts monday. of killingused -- nine members after a bible study class last year. florence henderson has died. she play the mom in the iconic
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sitcom "liberties but -- the ."ady bunch was 82. henderson global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i'm taylor riggs. this is bloomberg. doolittle abigail earlier mentioned, stocks are extending their records on slight trading volume. our next guest says we could go from a bump to a santa claus rally. joining us now is the chief strategist at wells fargo. brian, you think stock will go higher. what will be a potential headwind to that outlook? >> i think there are a few on the horizon here. reaction as adverse
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a result of the italian referendum on december 4. that is a risk that is not currently priced into u.s. markets, and if it does get priced in, we could maybe see some short-term softness. the bigger risk is with the federal reserve, when they meet in the middle of december, they signal that they will increase the pace of rate hikes from two, which is the current projection for 2017, to something like three or four. that would likely significantly strengthen the dollar and could have an adverse affect on rates and interest rate sensitive parts of the market. i think some of the italian politics and the federal reserve would be two of the bigger headwinds. we continueming this rally, what is the basis for this rally? i think a lot of it is just returning to the fundamentals. we have been basically trading
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sideways since the beginning of august, a lot of it was people being in wait and see mode as to what was happening with u.s. elections and also with the earnings outlook. we know that the earnings result came in better than a lot were expecting. we are continuing the slow incremental march higher with earnings-per-share, and a presidential election, markets took it in stride, maybe gave people a little bit of a second wind, anticipating tax cuts and regulatory relief that could propel earnings in 2017. nearly there is a risk that if president-elect trump decide to start talking about trade tariffs, building walls instead of building bridges, that could be a headwind to the market. it definitely merits watching every tweet and word that comes from the president-elect. vonnie: the s&p 500 is up 8% year to date, the dow is up as well. you say we are returning to fundamentals, but are we turning
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to company-specific fundamentals, companies will be fundamental reasons for the next several quarters, or is this something different? >> i think a lot of it is due to sentiment. we have seen in the university of michigan consumer expectation survey where they talk about how the people were surveyed after the election were a little more optimistic and upbeat than those who were interviewed before. the same thing applies to investors. it is not purely fundamentals, it never is. it's also about how people perceive the future. that is what we will see going forward. we have seen a repricing of a lot of sectors. going forward, i think it makes more sense to look at the details, the individual names within sectors and industries for opportunities. so you get this repricing of certain sectors, but not everyone will win, and not
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everyone will lose. now you have to do the sifting and winnowing. vonnie: is it an overstatement to say that when the market turns, be it equities, treasuries, it really turns quite substantially and you see a major reversal? what is the risk of something like that happening between now and inauguration day? >> i think there is a material risk of there being a pullback depending on what will be the catalyst for it. will it be because opec negotiations fall apart? will it be because of italian politics? a slightly hawkish fed? i would view those as short-term buying opportunities. when i look at the patterns that the market is tracing out, it is similar to what we saw in 1952 with the election of eisenhower. you also had a weak majority of republicans taking the senate and the house in that election.
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and 8% run-up from election day to the early part of january. then there was a correction. basically, you spent a lot of 2017 recovering from an early correction. that was triggered by political issues. you had the hydrogen bomb being tested, stalin dying. a number of things that triggered it. there are a certain number of catalyst that could trigger it, but i would just say, fasten your seatbelts. vonnie: would you be and on equivocal buyer of u.s. stocks with international exposure, with a stronger dollar that seems to continue to strengthen? deficit.utlook for the >> yes. the deficit does not bother me all that much as far as how it will affect the market. there is no empirical relationship that you can definitively point to the between rising deficits and how
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the stock market performs. inflation performs. stronger dollar could be a headwind to larger cap multinational companies and that is why we have been by more small and mid-cap companies. advising away from emerging markets. however, the opportunity will present itself when the dollar turns weaker. a lot of the strength is probably due to fears of u.s. growth not bleeding over into non-us growth. the way we share u.s. prosperity is through the trade deficit and through a -- slightly stronger dollar. that should help support growth in other countries. between now and inauguration day, we could have a pretty good entry opportunity back into u.s. large caps, and more importantly, into emerging markets. vonnie: is the selloff done in treasuries now? >> i don't think that it is completely done. if you look at how things traced
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out during the taper tantrum, we the 10-year.on i think we could get 2.6%. it's not completely done but i think it's a little overdone and the worst is likely behind us. vonnie: brian jacobsen, thank you. up, has black friday lost its luster? the nation's favorite shopping holiday. this is bloomberg. ♪
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vonnie: this is "bloomberg markets." i'm vonnie quinn. it is time for the latest .loomberg business flash
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european settlement talks are happening with currency markets. it is part of an investigation that has already led to multibillion-dollar fines in the u.s. and the u.k. revisitednd hsbc has said their currency trading was being reviewed by the eu. put out a new offer on the table in an attempt to end the three-day strike by pilots. the airline is offering them a raise tied to reforms the companies pension system. the strike has forced them to cancel 2600 flights and is expected to continue through tomorrow. trump'st-elect donald campaign is offering black friday discounts on its online merchandise store. they are offering 30% discounts in honor of the day. hillary clinton's merchandise store is still operating but is taking a much more low-key approach.
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the year and shopping rush is in full swing today is black friday. one of the busiest shopping days of the year. but as online shopping grows, black friday may be losing some of its luster as people can find bigger bargains online instead of going to the stores. let's bring in lindsey rupp, who covers retail. from awant to quote piece that we had this morning saying that scuffles inside the stores were absent, in stark contrast to a few years ago. does seem that consumers are really embracing the shift to mobile. is that stores are open thursday night, so if you want those doorbuster deals, you are coming out after you finish your turkey on thursday.
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but online we are seeing the numbers come in really strong thursday and also today so far. people are shopping on their phones. you have a bigger screen, it's easier to browse. you can do it in the car waiting for dinner. you can shop anywhere at any time. that is reducing the need to go out and go somewhere. vonnie: it is difficult not to click on the link. what are the methods that retailers are using to lure you in? i am seeing a lot of 20%, 30% discounts. that's fine, but i will not really spend unless i was planning to buy anyway. >> we are seeing discounts this year are deeper than last year. prices are a big lever that people are pulling. a lot of targeted discounts. victoria's secret last night did half off of all bras campaign. we are also seeing campaigns for getting in the store.
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a lot of department stores are relying on those cash giveaways. jcpenney is offering a special for those that came to the store. old navy is doing a similar promotion. they are giving away $100,000 to a surprise customer. vonnie: all anecdotal reports are that consumers stopped spending around the election and certain segments are back and running, perhaps not everyone. it seems immigrants are not spending as much because they are tightening their belts. the future is unforeseeable. >> now that the election is behind us, they will be focused on holiday spending. wages are starting to go up and unemployment is down. gas prices are down. they have money in their pocket, they should be spending. retailers are hoping that we will see them come out strong. the national retail federation is expecting sales to increase
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3.6%. vonnie: is that more than typical? pretty much on pace. not a gang buster number, but it would be good growth. at this point, with all the competition, retailers could use some solid growth. vonnie: we have seen bankruptcies, hearing reports of certain retailers not paying their bills, perhaps late with .heir suppliers is it a case of certain retailers getting it right, and they will be fine, or will retailers not get growth, and they would just be down this time next year? >> it is difficult to kill a brand, but for a lot of people, christmas is a big time. if you don't have a solid holiday and you are already circling the drain -- we saw a lot of retail bankruptcies in january. it could push people over the edge.
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if you are not innovating and making your store fun, reducing your footprint, making your aline website and mobile app pleasant experience for customers to use, you might really be in trouble. vonnie: is black friday something for the luxury segment? >> everybody likes a deal. the quality of the deal you get may be different, but it is a global phenomenon. we are seeing it in the u.k., even in brazil. everybody wants to get in on the game, feel like they have value. vonnie: we still have cyber monday to get through, if people are not sick of typing in their passwords by then. who looks to be a winner? >> amazon is looking good, of course. target. walmart is looking good, all of those value chains. electronics seem strong, toys. we are seeing a pickup in apparel, which would be different. vonnie: that is what brian cornell was saying this morning.
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we will see. lindsey rupp, thank you. still ahead, opec is scrambling to work at its squabbles before their next meeting indiana. what happens to oil if a deal is not done? this is bloomberg. ♪
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vonnie: this is "bloomberg markets." i'm vonnie quinn. the journey to an opec deal is hitting another speed bump. saudi arabia pulled out of talks with russia and other non-opec nations about how to share the burden of a supply cut. that is the sticking point. on top of that, disagreements within the cartel with both iran
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and iraq not 100% sold on cutting production. joining us now is the managing editor for energy and commodities in the americas, tina davis. what a mess. we knew this was going to be the case. saudi arabia deciding it will not talk to -- does this have any location for a final deal? >> it has been a game of whack a mole running up to this meeting. two months ago they agreed in terry to a cut. now the details of who will do what have been causing a lot of speed bumps. saudi arabia making this decision now that they are not going to take part in this extorting meeting planned on monday puts more pressure within opec for them to figure out the details of what they will do long before they have the ministers in on wednesday. vonnie: saudi arabia is really the voice of opec in a lot of ways. it is not just any country not
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taking part, it is the country not taking part. >> for a long time, what saudi arabia said was opec's feelings on the topic. as they have been tried to cut production, it's been focused iraq haveat iran and not been doing, as they try to reach a consensus. in a lot of ways, the upstarts have become much more crucial voices in the discussions. vonnie: what happens to prices if there is no deal? >> you could have two scenarios. if there is a deal, a discussion that prices could hit $60. if not, we may go below $40. it could be a scenario where you win by losing. if there is no deal, you see the price dropped, but that drives competitors out of the market, which could be good for opec in the long run. how are u.s. shale producers looking at this, what do they want, what would be the ideal outcome for those producers that have been on the line about switching back some ranks?
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for opeceal impact is to slash production so you can see prices in the triple digits. that is not likely. what a lot of them would like is sick to dollar oil draws everyone back out. everyone is dusting off their rigs. -- $60 oil draws everyone back out. vonnie: i am sure there are many towns across the midwest that would be desperately happy if that were the case as well, economically speaking. would see more activity in shale, perhaps more offshore. a lot of that has been curtailed since that is the most expensive oil there is. a lot of places where people would be ready to dive back in. vonnie: the opec and not opec ministers start together over the weekend indiana. -- in vienna. we should start to hear rumors and speculation starting tomorrow. anything we should look out for? thing tomorrow is
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the energy minister of algeria meeting in tehran with the iranian minister to see what can be done. of ausly, it is more bilateral meeting, but the algerian minister has been quite fundamental in these discussions, trying to get a production cut agreement. whatever it run does may help to bring the rest of them on board. vonnie: it was originally brokered in algiers, at least it looked like it would be. whether it does or not, i'm sure the oil minister with love for it to be known as the algiers oil agreement. bloomberg will be all over it. coming up, we are back to black friday sales. this is bloomberg. ♪
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beautiful but a little cloudy .here in san francisco beautiful shot right let's start
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with headlines on the bloomberg first word news this afternoon. we will go to our newsroom. the prime minister of hungary says he will no longer be considered a black sheep in the isaiah washington. he says president-elect donald trump has invited him to visit. he became the first european leader to publicly back trump. two trains collided in north iran. helicopters and ambulances rushed the injured to the hospital. the accident occurred in subzero temperatures when a passenger another that stopped at a train station about 150 miles east of tehran. more than 70 people were killed in a car bombing at a gas station in iraq, about 65 people were also injured in the attack. islamic state militants are claiming responsibility for the
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deadliest attack since july when a car bomb killed 300 people in baghdad. a new report underscores just how far japan is from achieving its 2% inflation target rate consumer prices fell in october for the eighth straight month, excluding fresh food, the japanese cpi fell 4/10 of 1%. the government may increase fiscal spending next year to help driving prices. white house christmas tree of the obama administration. it is a 19 foot tall douglas for from pennsylvania. global news 24 hours a day, powered by more than 2600 journalists and analysts in over 120 countries. i'm taylor riggs. this is bloomberg. thanks. let's get a quick check on u.s. stocks. holding onto those highs, up 49 points. the s&p 500 1/4 of a percent higher.
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the nasdaq up 2/10 of 1%. for details, to see with the volume is like, abigail doolittle. abigail: the volume is down today. as are the retail stocks. we have the retail stocks trading lower on black friday. the one exception, it is flipping right around. amazon is the one exception. it is flipping between small gains and losses as the other retailers are all down more than 1%. it appears that e-commerce giant amazon is besting the bricks and mortar shops. lower atat traffic is some of the bricks and mortar tore, perhaps helping explain why some of those stocks are down. you think why this would bode well for amazon, the fact that takes has said this
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giving their online sales were at a record $2 billion, especially for the stocks going forward. when we did some looking back at some of the data in terms of the stock performance of amazon, not so much. amazon is down more than the s&p 500 and retail etf's in the month of december, amazon is in blue. you can see that tremendous underperformance, to dig into what may be behind this, bloomberg intelligence analysts. as for november, when we going to the bloomberg and look at g #btv, this is data based off of first data merchant services. over to the side there is november. in blue we have transaction growth. ticket growth is in blue. we see both are down for the month of november, suggesting perhaps it will be a difficult month. it's unclear whether this black friday weekend and turn these numbers higher.
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we take a quick look at the luxury retailers. we have all three trading lower on this black friday. vonnie: there's always cyber monday to come as well. thanks, abigail. it is black friday and this holiday shopping season could be a boon for retailers. we won't know for a while. 130 7 million consumers will shop in stores or online over the four-day weekend. i spoke to the target chairman and ceo earlier this morning after he rang the opening bell in celebration of the retail extravaganza. strong margin improvement in our third quarter. and 80 basis point improvement in gross margin rate during the quarter. that is driven by really strong mixed management great if we continue to grow categories like apparel where we have seen seven
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straight quarters of market share grain -- again -- last year was our best year in a decade, up over 4% rate when we win with kids and babies in apparel and home, that works out really well from a margin standpoint. from a shipping standpoint we have gone from a couple years ago having just over 100 stores where we used our stores and shipping centers. this year we got over 1000. we have stores conveniently neighborhoods. we think we are well-positioned to meet the consumer needs throughout the holiday season. vonnie: interesting at a time when many retailers and department stores are choosing brick-and-mortar branches, you are opening them. what is behind that strategy? why do you believe that is the correct strategy? >> we are following the u.s. consumer that more and more is moving into urban centers. they're moving back to new york
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city, they are in philadelphia and boston, living to downtown chicago, even minneapolis. they are much smaller. we customize it for the local neighborhood needs. every store custom tailored. tribeca, here in perhaps our most successful new opening. it's about 38,000 square feet. we have really connected with the local guests. we think today's terrific new growth vehicle for us, both in urban centers and on college campuses, where we are opening up across the country. we think we have the opportunity to open hundreds of new smaller urban stores to complement our existing footprint. vonnie: everything you do has to be to a certain extent to compete with amazon as opposed to other retailers. what other investments and how much technology wise are you making in order to beat amazon? >> over the last couple of years
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we are investing billions of dollars in technology and supply chains. we're also investing in improving her in stores or its. we win as a company when we provide our guests a great in-store shopping experience, when we provide the convenience of ordering online and then picking up in one of our 1800 stores, also the ability to quickly shift to their homes. we think that gives them a huge competitive advantage. having stores where you can order and pick up at your convenience, and the assurance that we can get that package to your home in a short period of time. vonnie: what about in-store technology to decipher customer tastes and perhaps follow them around? >> we are testing a number of different new tools and capabilities. it's all about making sure we deliver what a guest is looking for from target. we will continue to test new technology, make sure we make it easy for the guests to shop. when they shop we want to make sure it's inspiring.
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we offer great value. we put those pieces together, people enjoy shopping our brand. vonnie: what categories could have a better mix? we have been hearing about struggles in apparel. anecdotally also hearing there is not a lot new in electronics. what are you appealing to suppliers to build and innovate for you? >> you're always looking for unique products. as we enter the holiday season, in a category like toys, working our great partners at disney, we have had 18 hundred unique proprietary items within our store. we want to make sure we provide great items. we have also been focusing on building our own brand portfolio. in apparel we offer a great new kids' apparel line. we expect that to be a billion-dollar brand in the next year. is a branch we are developing ourselves.
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we think that's critically important to our future success. vonnie: give me a few hard numbers. what is your forecast for margins? >> we think the kind of results would be delivered in the third order, where we continue to grow our market share in apparel and homes and baby and kids. allows us to continue to value but also manage our margins effectively. i feel the team is doing a great job of managing growth margin rate as we go forward. do you anticipate north of 27%? >> and the third quarter are margin rate was closer to 30%. strong margin flow through. a combination of great rates, the mix we are seeing from those and signature categories, making sure we are managing our cost of goods very carefully. vonnie: you mentioned the other that you would love to see
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3% gdp growth in the u.s. but it's a good time for the consumer because of lower gas and food prices. do you anticipate 3% gdp growth next four years under the trump administration? when are you anticipating that? >> i'm very optimistic about the consumer economy. it's a great time to be a consumer in the u.s. hurt the overall gdp growth is solid and i think it will continue to expand. we're seeing good movement and employment. for the u.s. consumer, it's a great time. it's a great time to be a retailer. vonnie: that was the target chairman and ceo. we have breaking news from vienna. delegates telling bloomberg that monday's non-opec meeting is
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canceled. the gathering will now only be attended by opec officials. this is on the heels of saudi arabia pulling out of that meeting opec, non-opec that had been planned. it was to include russia. those disagreements were hampering progress for the actual opec meeting. it looks like that is canceled now. the opec,we're seeing good non-. you will hear more rumors over the weekend. coming up, the original supercar. jaguar's re-creation of a classic, next. this is bloomberg. ♪
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vonnie: you're watching bloomberg. i'm vonnie quinn. nejra: i'm nejra cehic. u.k. economy looks to be resilient in the wake of the back -- brexit vote. gdp low -- rose in a latest quarter. amazon looks to be getting a fiddle -- for cold in the middle east -- foothold in the middle east. is black friday still the holiday shopping frenzy it once was? we look at how contemporary the appeale dulling for consumers. vonnie: the chairman of sweden's bank says there is little chance he will resume merger talks. the dutch government has shown no interest in buying shares of the bank. >> this was an exceptional opportunity to just ask the question whether the dutch government has committed itself
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, which wouldn offer them better liquidity, which would also transform the landscape. it turned out they at least for now were not interested. vonnie: meanwhile, johnson & about a possible takeover. i tell you one has a market value of $17 billion. the company has brought the market 2 new medicines that are poised to become blockbusters. nejra: the british economy showed no third quarter aftereffects from the brexit vote to consumers and businesses both increased their spending. 5/10 of the budget for office responsibility has slashed its forecast for growth next year to1%. 1.4%. the following pound is expected to squeeze consumers by pushing up the cost of imports. london homes are less affordable than ever.
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londoner nearly 14 times their average salary to buy a home. housing prices in london have risen 86% since 2009. the supply of new homes has failed to meet demand from britain and overseas investors. is looking to get a foothold in the high-growth middle east market. people familiar with the matter told bloomberg amazon is in talks to acquire a dubai based retailer. toy had originally planned sell a stake of 30%. neither company is commenting prayed the debut of airbus' biggest plane. its first flight yesterday. it carries 366 people, 44 fewer than boeing 747. a380 are struggling to find buyers.
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vonnie: time for our bloomberg quick take, where we provide context and background on issues and interest. for most of the last decade black friday has been america's biggest shopping day. how contemporary shopping trends are dulling the day's appeal. last year over the four-day weekend thanksgiving through sunday, 103 million people made purchases online compared with million, who visited retail stores. it was the first time online shoppers outnumbered in-store shoppers. it is an increasingly harder sell. recent sales in the u.s. over the 2015 thanksgiving weekendrer the 2015 thanksgiving weekend fell 10%, 20.4 billion dollars. here's the background. nobody is sure exactly how black friday got its name. urban myth claims it marked the first day of profitability for retailers each year when they get into the black.
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november and december account for about 20% of retailers' sales. most years companies are profitable well before the fourth friday of november. in sales. 2005, retailers coined the term cyber monday to discuss a surge in web participants on the first work day after thanksgiving. onlineeasing number of shoppers, particularly those buying on their phones, are skipping the stores entirely. other countries have tradition similar to black friday. many retailers in the british commonwealth open early for boxing day, right after christmas, with deep discounts for customers waiting online. it has been difficult for retailers to export black friday overseas. retailers say the crowds that still show up on thanksgiving night prove they are giving customers what they want despite complaints that they are ruining thanksgiving. customers will have more choice than ever over when and how to shop now. the days of long lines, customer stampedes, and overrun malls that characterized black
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friday's time could be waning. read more about black friday and all of our quick takes on the bloomberg. that is your global business report. head to for more stories. ♪
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this is bloomberg markets. i'm vonnie quinn. jaguar is bringing back the original supercar. using the materials of the original built in 1957. bloomberg was given exclusive access to the team in the u.k. working on bringing back the legendary automobile. ♪ moste xkss is one of the .pecial cars out there
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with only 16 of them being made, they are still rarely seen. if we take the xkss and look hit, in 1954 comedy d-type the tracks and it made a big impact. it would do close on 180 miles an hour. that is phenomenal. . . with only 16 of them being made, in the race we get up to about 175 to 185 miles per hour. >> it was a strong car for america to produce a sports car. the jaguar xkss. 1957, 12th of february, there was a fire in the factory. there were a number of xkss in that fire, to the tune of 9 of
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them. the project has been all about replacing those 9 vehicles. it was the original supercar. i started as a jaguar apprentice way back in 1974. for me it's almost about re-creating a piece of art, because these vehicles are art these days. me, i think it was all about andding an authentic car trying to make the car is accurate as possible. -- possible to the cars that were built in the period. what we are doing on this car is going back to 1955, effectively, and beyond that. all these surfaces, they are all hand-formed.
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or aluminum steel is a very specialist skill. i prefer to call it in art. -- an art. you less of an engineer and more of an artist. so for me it was about trying to build that perfect car, to the period specification in the period way as much as possible. to look to see how today's technology could help us as well. we scanned 4 cars. when you looked at each of those cars, they were slightly different. the team has taken that data and created, in a virtual environment, what this car looks like. enabled us to look at this in a virtual environment and understand what it is we are
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going to build. i want to be able to look around here and see everything as it was. the research we are doing on the fixings. as soon as we announced we were going to build these cars, i think they were sold out that weekend. quickly9 cars that was quite an achievement. if i read mortgage -- remortgage one.use, i couldn't afford that is one million pounds, not dollars. vonnie: that was an exclusive look at the jaguar xkss one. that is one million pounds, not . for more, check out "pursuits," your destination for the finest things in life.
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the market closes next. once you take a quick look at the major averages, less than five minutes to the close. the dow up 3/10 of 1%. the s&p up 1/3 o we also have the nasdaq upf 1%. . 1/3 of 1%. i want to draw your attention to the south african currency, which is 2/10 of 1% stronger now. a few moments ago with you got the news that south africa has moved closer to a dump credit rating. this is bloomberg. ♪ .. ..
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it's 1 p.m. in new york, 6 p.m. in london and 2:00 a.m. in hong kong. you can barely hear me above the roar of the crowd. we are moments away from the closing bell. a look at stocks as we see another day in the green. the s&p 500 up almost 4/10 of 1%. and the nasdaq up one third of 1%. click screen indeed. dow, s&p 500, and nasdaq all trading clue -- trading on the clothes. is put all three averages on record closing highs. 500 thisow and the s&p
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is the fourth record close in a row and the longest such winning streak since 2014. europe's largest biotech firm surged to a record high and closed at a record high having its biggest day ever. and initial takeover offer of $17 billion. stocks trading higher but ctelionly and -- but a trading higher. walmart trading higher. traffic on reports that on black friday are somewhat low debt somewhat -- are somewhat lower than expected.
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they believe that both amazon and walmart are the big winners. we see both of those stocks up. oil, this is one of the more volatile markets. opec is still trying to reach supply cut deals. this not surprisingly is weighing on some of the majors. >> a long weekend to come when it comes to opec and non-opec talks. , tilde has more from our newsroom. trumpsident-elect donald deputy security advisor -- he has a long record of national security experience. she will work with retired
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lieutenant general michael flynn, who trump named as his national security advisor last week. and john allison, a possible nominee for treasury secretary. prosecutor and tara said five men arrested were planning a terrorist attack in france as early as next week. he said the suspects were getting their orders from an islamic state member. the five were arrested in strasburg. -- y age has after being dragged into an influence scandal. top congressional liaisons threaten to -- of pressuringsed for the construction of a building in which he has a stake. south african president will emerge a legal challenge amidst allegations of corruption.
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in judicial inquiry the claims prominent members of his family influenced cabinet appointments and state contracts. ministerss say some may have breached the governor's code of ethics. news 24 hours per day powered by 2600 journalists and analysts in over 120 countries. this is bloomberg. the centralyears banks and financial markets have been closely scrutinized. a symbiotic relationship is about to wind down. joining us is the managing director of developed markets economics. notecently wrote a entitled the end of central-bank accommodation. anybody on the face of it would is the beginning of the end in the u.s.. guest: it is complicated, of course.
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to is sinces down the great recession, the global financial crisis, markets have become very central-bank dependent. but central banks have also become very market dependent. they have acted as if they are terrified of letting markets fall, always ready to step in, always feeling the need to explain constantly what they are going to do. how they have spent months preparing a market for a rate hike. and they have to start the whole process again. they want to move away, they want to be a debt dependent, fundamentals dependent. in the case of the fed that means they want to raise interest rates. and they will.
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it simply means they won't be ready to drop everything in order to prop up markets. that means less accommodation. >> there has always been a symbiotic and parasitic relationship. signals sent in both directions quite often. what really has changed? >> central bankers, notably some are feeling they have gone too far. that in essence markets have bankgiven a veto on action. that means central banks are finding their freedom of action circumscribed. want, whatdo with a they feel the economy needs to do. if you look at the united states, growth is decent.
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it's modest. it is heading in the right direction. the fed cannot begin to monetize monetary policy. when can it do it to? if markets need zero rates all the time, what is the point of markets in that case? explain a chart i'm bringing up on my bloomberg here. it basically shows with central banks have on their balance sheets. compared to the bank of japan it doesn't look so bad when it comes to the european central bank. is that misleading? >> the bank of japan is so extreme. bank,e european central they hold assets equivalent to about a quarter of gdp.
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if they will continue to hold these assets when interest rates begin to normalize, that means they have to pay interest on them to the owners. more to the point, again it distorts markets. we are seeing talk of the scarcity of assets. do we want to end up in a situation where the fed, like a bank of japan owns something owns thee quarters and overwhelming majority of government?
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>> given we have that as a background and a new president-elect and who -- and whole new set of policies, a lot of tax cuts -- what effect do you think tax cuts will officially have? >> you are ready have a situation where you are most leading in decay. if we assume that the new -- which i do think will happen. that will give a further impetus to grow. policy comes in to play, it means the monetary policy never has to be the only game in town. particularly since stronger
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growth will mean higher inflation as the president has already said, the fed is already in striking distance. it gives support to those that move aheadtime to and normalize interest rates. the new normal will be lower interest rates. >> this is all part of one big movement. what is fair value in terms of the premium? is it possible to give me a gas? guest: i wouldn't even begin to gas. expect bond deals to back up further. expect at some stage, when the 10 year yield goes above three or the -- expect
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substantial inflows because you will have a lot of insurance companies and pension funds who will say this may go higher. what that does for the term premium will depend on what happens with equity prices. whatever i say on that is bound to be wrong. >> can you give me a payroll gas for next friday. we have 175 on the bloomberg. >> i forecast this and the 200s. it's a totally random number. it is a lagging indicator. >> at least you are not forecasting some major --
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something majorly different. of theg director developed markets, thank you for joining us. up, a $6.7 billion bid. into the -- date into the firm.
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time for our latest bloomberg business flash, a look at stories in the news right now. the digital payment startup valued at $9 billion.
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the late state investment arm at , leading a $150 million round. in 6 -- existing investors also took part. it has raised more than $450 million to date. owned energyte company is ready to buy gas from russia again. the statement was released after the eu's energy chief. they say representatives of the eu, russia, and the ukraine could get together next month. ukraine is a major transit country for russia, gas and traveling to europe. and america's merchandise trade gap unexpectedly widened at the start of the fourth quarter. that is according to advanced data. expanded 9.6% last month.
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exceeded the estimate in a bloomberg survey. that is the latest business flash. a six point 7 billion takeover bid for the online gaming company that owns poker stars. bloomberg editor at large cory johnson joins us live now with more. give us a little bit of the background here. cory: it is a company in quebec, trading with toronto. popular or somewhat .opular online poker game it had great success for a wild air. bid for theunced a
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company and announced that bid today. the curious part of the story as partners of the bid apparently have never heard of him or the companies themselves. the ceo and founder of this company -- he was the ceo. he was forced out an initial bid. he has been charged with insider trading in quebec. yet another bid for the company today. who has the authority to receive bids and accept -- and discuss bid's? >> the company's board of director was supposed to be looking at this. the curious story of this emerged. the stock has traded both in the u.s. and canada. the bid is about $20 canadian. he made a bid for the company
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back in february. he didn't say who his partners were. then that sits in the table for a while. businesstners for this and series of bids have been strange. an unspecified investor group. a competitor announced they were looking at a merger. then getting forced out of the company during insider trading. their trades were also suspended and being looked at. he emerges with another $18 there with four partners. one of those partners have never heard of him.
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offer, head and , golden weight capital. are the remaining partners. i guess we are supposed to --ieve that even last time at least one of them said they have never heard of the guy. things we'reon going to be following that closely. we hear from the ceo of hudson bay. this is bloomberg.
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black friday starts the mark -- marks the start of the year-end shopping rush. >> we are focused on delivering
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a fantastic experience for our holiday. the superack friday, bowl of retail. we are focused on having great deals and providing terrific customer service. we spoke to the former ceo of bloomingdale's and he spoke about obsession to the price. it is be more of a focus on things like experience. do you share their view. >> we totally agree with them. one of the most dominant forces of our generation is clearly the growth of the internet. we think that is great for us because we focus on and all channel paradigm that combines the storms -- combines the stores in a powerful way. customers come to physical stores, they need to be great physical stores. we are making the investments for these to be terrific experiences. a quarterng to spend
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of a billion dollars just in that one store alone. remodeling those stores and making sure they provide the products. it can't be your grandma's department store. that is only to get them out of their chair into the store. >> he says may be too much focus and too much money has been developed in the online presence and not enough in the physical presence. week? look at the next >> there's no way you can have online expands and expect to compete with other retailers. i love won a friend came to
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visit me and said, do you know what i really envy? it is your people and your dressing rooms. the customer can try things on. it's not everything. some customers are going to choose to be on the internet. the internet is democratic, it is for everyone. electricity like that everyone must use in their business. you have to be great on the internet. guilt or -- she is going to choose. >> this is going to cost you. you have to spend on the online presence and physical presence. >> that is why we have been focused on the department stores, why we have been focused on consolidation.
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that is why we continue to grow through acquisition. scale was imperative to make these investments. 47 -- 124.47, the sale is -- >> people who decide when they can buy it decide it is going to make those purchases. >> there is an opportunity there? >> it would have to be the right company. we are much more focused right now. we made a lot of acquisitions consolidating those. >> we can wrap up by talking about the politics. the s&p 500 has moved. would a consumer move as quickly as wall street has?
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>> we fell into that. whether it is shorts weather, affects apparel. we will focus on what we can't control, which is plenty a lot. vonnie: up next, exclusively from the governor of greece central bank. you are watching bloomberg.
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a little jury but not quite black friday.
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this is bloomberg markets. let's start with the headlines on the bloomberg first word news. >> there appears to be a split in president-elect donald trump's inner circle over who he should nominate for secretary of state. twitterdvisers said via that some people were alarmed about from these possible selection. newt gingrich and mike huckabee have expressed opposition. is pushing for a recount in wisconsin, pennsylvania, and michigan. stein has raised nearly $5 million in her recount effort so far. china is postponing bilateral meetings. this after the neighbor was allowed a four-day visit from the spiritual leader the dalai lama.
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and it is the final white house christmas tree of the obama administration. michelle obama was there as tree was delivered. global news 24 hours per day powered by 26 hundred journalists and analysts in more than 120 countries. this is bloomberg. vonnie: thanks. turning now to greece where are -- banks have rallied significantly on hopes of the doj government and bailout auditors. earlier in athens bloomberg spoke exclusively with an ecb government councilmember and bank of greece councilmember. >> the crashes did not start from the greek banks. they were the victims. from thengent was
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governor banks. now they are much better. they have enough provisions. for the last two quarters we have seen better development. things have started to become better even for banks. as the economy recovers, the development is becoming more benign. >> it is a long workout. >> of course they are a problem, but it is a big opportunity. we have done simulations in the bank of greece. greek banks will not need more capital. on the contrary capital will increase.
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high quality capital will increase in the next few years. >> we have talked about what is theyning on the four-speed were talking about what is happening in brussels. in the market is waiting to see what happens in frankfurt with ecb meeting. december last year it could be argued the ecb did not deliver what the market is looking for. is there a sense on the governing council that we do not want to see a piece of that? >> they should be hard delivered . if you look at numbers, inflation is on the rise in europe. it is better than what we had before. and we have calculated the contribution, the monetary
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policy contribution is quite substantial to this effect. the ecb has delivered. they want to be delivered to now. the ecb takes long-term stamps. you must have trust with the ecb. we are going to discuss the situation, the new focus and then decide what to do. resulttension grown as a of the fact that yields, bond yields have risen? there may be the same requirements to change the parameters of the program. >> it is true the bond prices and bond yields have changed. this has entered a new era.
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the numbers show our policy works. on the all this data eighth of december. of course monetary policy will continue to be accommodating -- 2% or inflation slightly lower. a long distance from this target. it is far too early. one result was a steep yield curve. was that in your mind? >> it is a desirable effect. >> but it does raise borrowing costs. up itgrowth also goes does.
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the most important problem is slow growth. improves, it is expected bond yields are on the rise. yearu talk about the five point of the fact, inflation is not going to get -- janet yellen talks about running a hot economy. but she isn this, overshooting on the inflation story that may be the central that something the ecb can think about as well? europecycle differs in compared to the united states, where we are in the different phase of the cycle. >> would be desirable to point out to the markets that even
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once we get to inflation targets that actually running even beyond that a little bit will be something the banks will tolerate? >> we see a drop in in big bond .ields when are we going to see greek bonds included in the qe program? >> let's see what happens on the of december. of december. it will have something concrete. >> that was the bank greece governor. macy's is finishing down the session 1.7% on the day. it suffered some websites service disruption, which is stealing a setback.
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two minutes ago i went to the website and tried to buy an item and it tried me onto a page with a said there were service disruption -- service disruption. we are looking for a comment from macy's. there we go. coming up, president elect donald trump may be coming down from the trump international tower in toronto. we will tell you why. this is bloomberg.
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vonnie: let's head straight over to abigail doolittle who has a
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chart of the day. abigail: we have a great chart. dowo have the s&p 500 and closing at record highs. we go into the bloomberg and at 47.48.k we have a one-year chart of the s&p 500. on the bottom we have the relative strength index. this is an indicator of momentum. this as a signal to buy or sell stocks. reaches 70 and that is considered to be an overbought note. the s&p 500 climbing above 70. that is pretty reliable trading. lastuy signal over the year, this chart may suggest
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there could be some declines ahead for the s&p 500. timing is difficult. and from a different angle, volume. we have the s&p 500 on top. into after the election it had been pretty high. we have fewer buyers buying the suggesting that sell signal is something to pay attention to and there could be a callback for the s&p 500 and stocks overall. >> thanks for that. it is time for our bay -- for our bloomberg business flash. 's is putting a new offer on the table to end a's -- to end a three-day strike by the pilot. the german airline's offering pilots a raise.
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more than 2600 flights are expected to continue through tomorrow. website has suffered. the development is a setback for the company trying to persuade shoppers and investors that it can handle e-commerce. some visitors were redirected to a page citing heavier traffic. macy's has immediately respond to requests -- hasn't immediately respond to requests for comments. it's part of an investigation that has our lead to a multibillion dollar fine in the u.s. and u.k.. there are currency trading's that are being reviewed by the eu. that is our latest bloomberg business flash. news, a senator for connecticut has sent a
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letter to the attorney general ,oretto rid -- loretta lynch saying a special counsel is to to preventor conflict under the president elect donald trump. blumenthal has sent a letter to the attorney general loretta lynch. a suggested price of at least $222 million. news wrote the story and joins us now from toronto. why is the building being sold? the latest in the trump toronto tower saga here. there was a huge protests that took place and shut down main
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street, which is essentially toronto's wall street. it has been plagued with issues going back to 2012. both from the trump organization, the developers, and the capital came in, purchasing debt on the property. by the way bidding starts at 300 billion canadian. -- 300 million canadian. >> wire they marketing the building with the caveats? how can you market something like that? >> the idea that the trump name, we pride ourselves on multiculturalism. when you have a candidate's year making disparaging remarks, a big deal here in toronto. if you have a buyer who has a
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lot of interest in this property, then it is good to know that they potentially could be about to take the name from the tower. what we don't know is what kind of contracts are in place. fee forld be the cutting that contract as well as getting his name off the tower? >> in the west side of manhattan, the name just came down after a long time of tenants pitching the name should come down. what would be next for the building? >> the two funds we are interested in our blue sky and great eagle. they may actually want to take that and make it into a different kind of five-star hotel brand.
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we have the four seasons. a lot of the hotel units are still available. from the people who own condo units and hotel units and rebranded entirely. >> are there any other buildings or hotels that are seeing the same problem or is this a particular instance? vancouver, the trump tower is open and donald trump has mentioned we have a beautiful building i just opened in canada. it has been quite successful. one of the condo sold. in fact someone climbed that
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tower earlier last year after donald trump made comments about mexicans. >> thank you for that. it is official, president elect donald trump of his selection to serve as deputy counsel security advisor. he is a partner at -- former chairman of the federal election commission. went to the university of notre dame, got his bachelor's and got his jd. katie mcfarland as we learned earlier will serve as deputy national security adviser. they have now come out. we know the president has at least eight meetings on monday,
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including a meeting with john allison, former bbn see ceo. coming up, just telephone or a bull is america's energy infrastructure? and is building more pipelines the answer? -- just how vulnerable is america's energy infrastructure? and is building more pipelines the answer? ♪
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two accidents in alabama show how heavily millions of americans rely on the colonial pipeline for gasoline. talks toer leonard carol massar about his investigation into the pipeline. as the pipeline was built in 1962, at the time it was built it was the largest private-sector infrastructure project in u.s. history. pipeline thatile serves a really vital role in
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the u.s. energy infrastructure. there was a large concentration of oil refineries. this was all away -- all the way across the southeast from atlanta through new york and into new jersey. fuelngly about half of the used along the east coast is transported to the single pipeline. about 50 million people per day depend on it for fuel. one that she said millions of gallons of gasoline gone through the pipeline. >> there was another line that carries an equivalent amount of diesel fuel and products as well. thef you didn't know about
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colonial pipeline this halloween, you probably learned about it because there was an explosion there. >> what is really interesting about what happened on halloween is there was a follow-on effect from a large accident that happened in september. back in late september, this pipeline spring a leak in the state of alabama. when spilling out into the surrounding wood lands. that accident really underscored the importance of this pipeline. they had to shut off the gasoline flow when that leak was discovered. gasoline reserves on the east coast of the united states plunged to the fastest level in u.s. history. fell on the eastern seaboard as gas stations realized they weren't getting back up supplies. colonials tried to fix this
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section of pipe that sprang a leak in september. and they hired a crew to deuce -- to do permanent fixes on this aging section. what happened was really tragic. we don't have all the details yet but we know a crew of nine men was excavating around the movinge and somehow the machine struck the pipeline, it exploded a column of flames shot more than 50 feet in the air. one worker was killed immediately on the site. four other where terribly burned and taken to the nearby town of birmingham to of be treated. >> i hate to say this but you are going to have accidents in any industry.
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>> worrisome is there has been an increase in the number of accidents or explosions we are seeing at the colonial pipeline. can see we are dealing with an aging piece of infrastructure. particularly, something seems to be going on with the public -- with the colonial pipeline company. that's as many leaks as they had in alabama for the previous five years. has been a sharp increase in incidents just in alabama. the company would not comment what is driving that increase. when you pull back and look at the structure as a whole, you are also seeing an increase in accidents year over year.
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you are seeing that these accidents are getting more and more expensive and doing more and more property damage. colonial federal regulators, the national transportation safety board is all investigating this at the same time. they wouldn't tell me what is driving this increase. vonnie: you can check out that story in the latest bloomberg is this week. the macy's website has been experiencing delays and pushing customers to a cute. we have a statement saying they are taking a high volume of online orders and are working quickly to alleviate the issue. black friday deals are available until midnight saturday. thanks for watching bloomberg. ♪
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carol: welcome to bloomberg businessweek. all are: we are coming to you from inside the headquarters in new york. carol: is building more pipelines the answer? oliver: paul manafort is back. the campaign manager for president-elect donald trump never really went away. carol: how the military is handling cyber security training. oliver: all of that, ahead. carol: we're here with the jim ellis. i want to start with the global economics section because europe is really getting kind of a


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